12061 Bluemont Way

Reston, Virginia 20190

 

April 11, 2008

 

Dear Shareholder:

 

We cordially invite you to attend SLM Corporation’s Annual Meeting of Shareholders on Thursday, May 8, 2008 at 11:00 a.m. at the Corporation’s offices located at 12061 Bluemont Way, Reston, Virginia 20190.

 

At the meeting, shareholders will vote on a number of important matters. Please take the time to read carefully each of the proposals described in this proxy statement.

 

Thank you for your investment in Sallie Mae.

 

Sincerely,

 

Anthony P. Terracciano
Chairman of the Board of Directors

 

12061 Bluemont Way

Reston, Virginia 20190

 

April 11, 2008

 

SLM CORPORATION

 

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held On May 8, 2008

 

 

To our Shareholders:

 

The 2008 Annual Meeting of Shareholders of SLM Corporation will be held at the Corporation’s offices, 12061 Bluemont Way, Reston, Virginia 20190 on Thursday, May 8, 2008 beginning at 11:00 a.m., local time. At the meeting, holders of the Corporation’s outstanding common stock will consider and vote on the following matters:

 

 

All record holders of shares of SLM Corporation common stock at the close of business on March 31, 2008 are entitled to vote at the meeting.

 

If you are a shareholder of record, your admission card is attached to your proxy card. You will need to bring it with you to the meeting.

 

If your shares are held by a bank or broker, please bring to the meeting your statement evidencing your beneficial ownership of SLM Corporation common stock and photo identification.

 

Your participation in the Annual Meeting is important. We urge you to vote your proxy at your earliest convenience. You may vote by mail, telephone or over the Internet, depending on how your share ownership is recorded. If you plan to attend the Annual Meeting, please advise my office directly at (703) 984-6785.

 

Mary F. Eure

Corporate Secretary

PROXY STATEMENT

Important Notice Regarding the Availability of Proxy Materials For the

Annual Meeting of Shareholders to be Held on May 8, 2008

 

The proxy statement and annual report on Form 10-K

are available at http://www.salliemae.com/about/investors/annualreports

 

The Board of Directors of SLM Corporation (the “Corporation” or “Sallie Mae”) solicits your proxy to conduct business at the Corporation’s Annual Meeting to be held at the Corporation’s offices, 12061 Bluemont Way, Reston, Virginia 20190 on Thursday, May 8, 2008 at 11:00 a.m., local time.

 

This proxy statement includes information about the Corporation’s:

 

 

We have also enclosed the Corporation’s Annual Report on Form 10-K (the “Form 10-K”), which provides financial results for 2007. The proxy statement and Form 10-K are available at www.salliemae.com under “Investors, Annual Reports.” You may obtain additional copies by contacting the Office of the Corporate Secretary, SLM Corporation, 12061 Bluemont Way, Reston, Virginia, 20190.

 

This proxy statement, the Form 10-K, and the accompanying proxy card are being mailed to SLM Corporation shareholders beginning about April 11, 2008.

 

PROPOSAL 1—ELECTION OF DIRECTORS

 

At the 2008 Annual Meeting, 15 directors are to be elected to hold office until the 2009 Annual Meeting and until their successors have been elected or appointed. The 15 persons nominated by the Board for election at the 2008 Annual Meeting are listed below, with brief biographies. All of the 15 nominees are currently serving as Sallie Mae directors. Mr. Anthony P. Terracciano was appointed to the Board on January 9, 2008. On March 20, 2008, Mr. Charles L. Daley resigned from the Board and Messrs. Michael E. Martin and Frank C. Puleo were appointed to the Board. On March 24, 2008, Mr. Benjamin J. Lambert, III resigned from the Board. On March 31, 2008, Mr. Howard H. Newman was appointed to the Board. The Board wishes to thank Messrs. Daley and Lambert for their dedicated service to the Corporation. Messrs. Terracciano, Martin, Puleo and Newman were first identified as possible nominees by non-management directors.

 

We do not know of any reason why any of the nominees would be unable to serve. However, if any of the nominees should become unavailable to serve as a director, the Board may designate a substitute nominee or reduce the size of the Board. If the Board designates a substitute nominee, the persons named as proxies will vote “FOR” that substitute nominee.

 

Required Vote

 

As set forth in the Corporation’s By-laws, a majority of votes cast is required in the election of directors in an uncontested election. A nominee will be elected to the Board if the number of votes “FOR” the nominee exceeds the number of shares voted “AGAINST” the nominee’s election. You may

cumulate your vote and cast all your votes “FOR” one nominee or you may distribute your votes among the nominees in any manner.

 

If cumulative voting is applied at the Annual Meeting, the persons named as proxies may cumulate votes and cast such votes in favor of the election of some or all of the Board’s nominees in their sole discretion, except that a shareholder’s votes will not be cast for a nominee as to whom such shareholder instructs that such votes be withheld or be cast “AGAINST” or “ABSTAIN.” For additional information, see “General Information; About Voting” at the end of this proxy statement.

 

For elections at which the majority vote standard applies, the Nominations and Governance Committee has established procedures under which a currently serving director tenders his or her resignation, which resignation shall be effective only if he or she is not re-elected, and the resignation is accepted by the Board. If any of the 15 nominees fails to receive a majority of the votes cast “FOR” his or her election, the Nominations and Governance Committee of the Board of Directors will make a recommendation to the Board on whether to accept or reject the nominee’s resignation, which shall be automatically tendered upon the certification of the election results. The Board will act on the Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results.

 

Unless marked to the contrary, proxies received will be voted “FOR” the nominees named in this proxy statement in order to elect all of the nominees or the maximum number possible.

 

Board Recommendation

 

The Board of Directors recommends a vote “FOR” the election of the 14 nominees named below. Proxies will be so voted unless shareholders specify a contrary choice on their proxy card.

 

 

 

 

PROPOSAL 2—AMENDMENT TO THE SLM CORPORATION
CERTIFICATE OF INCORPORATION

 

At the Annual Meeting, shareholders will be asked to approve amending Article Six of the Company’s Certificate of Incorporation (the “Charter”) to increase the maximum Board size from fifteen (15) to sixteen (16). The Board of Directors has approved the proposed amendment and declared it to be advisable.

 

The proposed amendment is set forth in italics in a portion of the Charter that is attached as Attachment A. A summary of the proposed amendment is described below. Shareholders are urged to read carefully Attachment A. A copy of the complete Charter is available from the Corporate Secretary.

 

Summary of Proposed Amendment

 

Article Six of the Charter currently provides, in part, that the number of directors shall be not less than eleven (11) and no more than fifteen (15). The proposed amendment to the Charter would instead permit the number of directors to be no more than sixteen (16).

 

Reason for the Proposal

 

The Board has determined that it is in the best interest of shareholders to bring new talent to the Board. As set forth in Proposal 1—Election of Directors, the Board recently appointed three individuals, Messrs. Martin, Newman and Puleo, for initial Board service with skills and experience that will enhance the governance of the Corporation. The amendment to the Charter will enable the Board to further enhance the governance of the Corporation by adding an additional Board member at a later time. While the Nominations and Governance Committee is evaluating several potential director candidates, it has not as of the date of this proxy statement selected any persons who would be named as directors if the proposed amendment to the Charter is approved.

 

Required Vote

 

The affirmative vote of the holders of a majority of the shares of common stock outstanding on March 31, 2008, is required to approve this proposal. Unless marked to the contrary, proxies received will be voted “FOR” this proposal.

 

Board Recommendation

 

The Board of Directors recommends a vote “FOR” the approval of the Amendment to the SLM Corporation Certificate of Incorporation.

 

CORPORATE GOVERNANCE

 

Role and Responsibilities of the Board of Directors

 

The role of the Board of Directors is to promote sustainable, long-term growth of the Corporation in the interest of its shareholders. The primary responsibilities of the Board are:

 

 

 

To guide and assist the Board in performing its responsibilities, the Board has adopted governance guidelines and established Board committees. These governance tools are discussed below.

 

Board Governance Guidelines

 

The Board’s governance has been guided by a set of principles initially adopted in 1997. The Board’s revised guidelines are published at www.salliemae.com under “About Us, Investors, Corporate Governance” and a written copy may be obtained by contacting the Corporate Secretary. The Board reviews the guidelines annually. Among other matters, the guidelines provide the following:

 

 

Director Independence

 

For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with the Corporation. The Board has established guidelines to assist it in determining director independence, which conform with and in some cases are more stringent than the independence requirements of the New York Stock Exchange (“NYSE”) listing standards. The Corporation’s director independence guidelines are included in the Board’s governance guidelines that are published at www.salliemae.com under “About Us, Investors, Corporate Governance” and are listed below.

The Board has determined that the following individuals (that is, all of the nominees standing for election at the 2008 Annual Meeting, other than Mr. Lord) are independent of the Corporation because such nominees have no material relationships with the Corporation: Mses. Bates and Gilleland and Messrs. Diefenderfer, Goode, Hunt, Martin, Munitz, Newman, Porter, Puleo, Schoellkopf, Shapiro, Terracciano and Williams. The Board made this determination based on the following:

 

 

In making its determination regarding independence, the Board took into account the following relationships: Mr. Hunt was an executive officer of the predecessor of the Corporation until 1990; Messrs. Goode, Hunt and Shapiro serve as board members or trustees of charitable organizations that received charitable gifts under the Corporation’s charitable gift program described in this proxy statement. None of these individuals, or their spouses, are employed by the organizations and the gifts were well below the thresholds in the Board’s independence standards. Mr. Lord is not independent because of his employment relationship with the Corporation.

 

Board Meetings

 

During 2007, the Board of Directors met 24 times. Each of the incumbent directors attended at least 75 percent of the total number of meetings of the Board and committees on which they serve. Directors are expected to attend the Annual Meeting and all members of the Board, other than Mr. Munitz, attended the Annual Meeting in May 2007.

 

Board Committees

 

The Board has established the following committees (the “Core Standing Committees”) to assist in its oversight responsibilities:

 

 

Each committee has a Board-approved written charter, which sets forth the respective committee’s functions and responsibilities. Committee charters are published at www.salliemae.com

under “About Us, Investors, Corporate Governance.” Shareholders may obtain a written copy of a committee charter by contacting the Corporate Secretary.

 

An annual work plan is created from the charters of each Core Standing Committee so that responsibilities of the committees are addressed at appropriate times throughout the year. Agendas for meetings are based on each committee’s annual work plan and any other current matter the Committee Chair or management believes should be addressed at the meeting. The work of each committee is regularly reported to the full Board by the Committee Chair.

 

In addition to the Core Standing Committees, the Board has established several additional committees: the Executive Committee, which meets at least quarterly with the Audit Committee to review the Corporation’s earnings prior to their release to the public and on an as-needed basis; the Preferred Stock Committee, which meets at least once each year to oversee the interests of the Corporation’s preferred stock holders; and during 2007, the Board established the Transaction Committee to assist the Board in the evaluation and negotiation of a merger of the Corporation.

 

The current membership of the Core Standing Committees, and the number of meetings held in 2007, is as follows:

 

 

 

A description of the function of each committee follows.

 

Audit Committee.  The Audit Committee represents and assists the Board in fulfilling its responsibilities by providing oversight relating to: (1) the assessment and management of certain business risks, including financial, operational, litigation and regulatory risks; (2) the integrity of the Corporation’s financial reporting; (3) the Corporation’s system of disclosure controls and system of internal controls regarding financial, accounting, legal compliance and ethics; (4) the independent accountant qualifications, independence and performance; (5) the performance of the Corporation’s internal audit function; (6) the Corporation’s compliance with legal and regulatory requirements; (7) the review of related persons transactions; and (8) the preparation of the report of the Committee for the Corporation’s annual proxy statement, as required by the Securities and Exchange Commission (“SEC”).

 

The Board has determined that all the members of the Audit Committee are independent under the Corporation’s governance guidelines and NYSE listing standards and that all members of the Audit Committee satisfy the heightened independence standards for audit committee members under the NYSE listing standards. In addition, the Board has determined that Ms. Bates and Messrs. Diefenderfer, Porter, and Williams qualify as audit committee financial experts within the meaning of the SEC regulations. None of the Committee members serves on the audit committee of more than three public companies.

 

Compensation and Personnel Committee.  The Compensation and Personnel Committee (or the “Compensation Committee”): (1) assists the Board in fulfilling its responsibilities relating to human

resources, compensation and benefit matters concerning the Corporation and its subsidiaries; (2) discharges the Board’s responsibilities relating to compensation of the Corporation’s executives; (3) considers and makes recommendations to the Board with respect to its own compensation; and (4) prepares the report of the Committee for the Corporation’s annual proxy statement, as required by the SEC.

 

The Board of Directors has determined that all Committee members are independent under the Corporation’s governance guidelines and NYSE listing standards.

 

The Compensation Committee considers executive and director compensation on an annual basis, culminating in decisions in January of each year. Also, throughout the year, the Committee considers executive compensation as warranted by personnel changes.

 

The Board sets compensation for directors. The Compensation Committee sets compensation for officers at the level of Senior Vice President and above. The Chief Executive Officer or his delegate sets pay for all other employees.

 

The Compensation Committee retains a compensation consultant to advise it. The current compensation consultant is Semler Brossy Consulting Group LLC. The Committee has directed Semler Brossy to: (1) recommend a peer group of companies that may be used for benchmarking executive and director compensation (the “Peer Group”); (2) inform the Committee about the marketplace for the amount and form of director and executive compensation; (3) inform the Committee of trends in executive and director compensation; (4) update the Committee on legislative and regulatory changes that impact director and executive compensation; and (5) provide its views on the reasonableness of amounts and forms of director and executive compensation. At the request of the Committee, Semler Brossy is available to management to assist in determining how the Corporation’s pay philosophy and program should apply to the Vice President level and below.

 

The processes to consider compensation for executive officers and directors are as follows:

 

Annual Executive Compensation:  The process for the annual review of executive compensation is discussed on page 14 of this proxy statement.

 

Annual Director Compensation:  The Compensation Committee annually reviews director compensation of the Peer Group. After discussion with the Committee’s consultant and management, the Committee recommends director compensation to the Board.

 

Promotions/New Hires:  Throughout the year, as the Corporation’s executive talent needs change, promotions and/or new hires at the level of Senior Vice President and above may occur. In these cases, a Compensation Committee meeting is convened to consider the appropriate amount and form of compensation for each individual. Management recommends an arrangement to the Committee for its consideration. Typically, the Committee’s consultant does not attend these meetings, but may give its input on the proposed arrangement to management and the Committee Chair.

 

Finance and Operations Committee.  The Finance and Operations Committee assists the Board in fulfilling its responsibilities and providing oversight relating to capital management, financing strategy and the general operations of the business.

 

Nominations and Governance Committee.  The Nominations and Governance Committee assists the Board in establishing appropriate standards for the governance of the Corporation, the operations of the Board and the qualifications of directors. The Committee also identifies individuals qualified to become Board members and recommends to the Board the director nominees for each annual meeting of shareholders.

 

The Board has determined that all of the members of the Nominations and Governance Committee are independent under the Corporation’s governance guidelines and NYSE listing standards.

Nominations Process

 

The Nominations and Governance Committee considers director candidates recommended in good faith by shareholders. The Committee also receives suggestions for candidates from Board members. Candidates are evaluated based on the needs of the Board and the Corporation at that time, given the then-current mix of Board members. When evaluating a candidate, factors that the Nominations and Governance Committee looks for and considers, include, but are not limited to, a nominee’s:

 

 

To recommend a candidate, shareholders should send, in writing, the candidate’s name, credentials, contact information, and his or her consent to be considered as a candidate to the Chairman of the Nominations and Governance Committee, in care of the Corporate Secretary at SLM Corporation, 12061 Bluemont Way, Reston, VA 20190. The shareholder should also include his or her contact information and a statement of his or her share ownership. The Nominations and Governance Committee considers and evaluates candidates recommended by shareholders in the same manner that it considers and evaluates other director candidates.

 

Shareholder Communications with the Board

 

Shareholders and other interested parties may submit communications to the Board of Directors, all non-management directors, the Lead Independent Director, the Chairman of the Board, or any other individual member of the Board by contacting the Chairman of the Board or the Lead Independent Director in writing at the following address: Office of the Chairman of the Board or Office of the Lead Independent Director, SLM Corporation, 12061 Bluemont Way, Reston, VA 20190. The Corporate Secretary will review all communications from our shareholders. Communications relevant to our business and operations, as determined by the Corporate Secretary, will be forwarded to the Board or individual members, as appropriate.

 

Related Persons Transactions

 

Review and Approval of Related Persons Transactions.  The Corporation has a written policy regarding review and approval of related persons transactions. The policy is published at www.salliemae.com under “About Us, Investors, Corporate Governance.”

 

Transactions covered by the policy are transactions involving the Corporation in excess of $120,000 in any year in which any director, director nominee, executive officer, greater-than-5% beneficial owner, and their respective immediate family members has or have a direct or indirect interest (other than as a director or less-than-10% owner of an entity). Transactions that are considered routine are “pre-approved” under the policy. For example, certain loans made in the ordinary course of our business to executive officers, directors and their family members are

considered related persons transactions and may require proxy disclosure, but are pre-approved under the policy.

 

The policy provides that the Audit Committee initially reviews a proposed related persons transaction and makes a recommendation to the full Board regarding whether to approve the transaction. In considering a transaction, the Audit Committee takes into account whether a transaction would be on terms generally available to an unaffiliated third party under the same or similar circumstances.

 

Transactions.  The following transactions were entered into under the terms of the foregoing policy:

 

During 2007, the son of Thomas J. Fitzpatrick, CEO through May 22, 2007, was employed by a Corporation subsidiary as a regional sales manager and received a base salary of $65,000 and incentive compensation of $120,000.

 

In August 2007, the Corporation sold to Mr. Fitzpatrick a townhouse property located in Reston, Virginia for $537,500. The Board of Directors approved the sale after determining that the sale was on terms no less favorable than terms generally available to an unaffiliated third-party under similar circumstances.

 

REPORT OF THE AUDIT COMMITTEE

 

The Audit Committee has reviewed and discussed with management and the Corporation’s independent accountant, PricewaterhouseCoopers LLP, the Corporation’s audited financial statements as of and for the year ended December 31, 2007. The Committee also discussed with PricewaterhouseCoopers LLP, the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T, and with and without management present, discussed and reviewed the results of the independent accountant’s examination of the financial statements.

 

The Committee received and reviewed the written disclosures and the letter from PricewaterhouseCoopers LLP required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees), as adopted by the PCAOB in Rule 3600T, and has discussed with the accountant the accountant’s independence, including relationships that may have an impact on the accountant’s objectivity and independence.

 

Following the reviews and discussions referred to above, the Committee recommended to the Board of Directors that the financial statements referred to above be included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2007 for filing with the SEC.

 

Audit Committee

William M. Diefenderfer, III, Chairman

Ann Torre Bates

Ronald F. Hunt

A. Alexander Porter, Jr.

Barry L. Williams

 

PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Corporation’s independent accountant is selected by the Audit Committee. On January 31, 2008, the Audit Committee appointed PricewaterhouseCoopers LLP as the Corporation’s independent accountant for 2008, subject to ratification by the Corporation’s shareholders.

This proposal is put before the shareholders because the Board believes that it is a good corporate practice to seek shareholder ratification of the selection of the independent accountant. If the appointment of PricewaterhouseCoopers LLP is not ratified, the Audit Committee will evaluate the basis for the shareholders’ vote when determining whether to continue the firm’s engagement.

 

Representatives of PricewaterhouseCoopers LLP are expected to attend the Annual Meeting and to respond to appropriate questions from shareholders present at the meeting and will have an opportunity to make a statement if they desire to do so.

 

Independent Accountant

 

Fees for services performed for the Corporation by its independent accountant, PricewaterhouseCoopers LLP, for fiscal year ended December 31, 2007, and for fiscal year ended December 31, 2006, are set forth below.

 

Principal Independent Accountant’s Fees and Services
		2007				2006
Audit		$	6,261,369			$	6,114,947
Audit Related			3,079,060				3,494,830
Tax			31,300				157,815
All Other			—				—
Total		$	9,371,729			$	9,767,592

 

Audit fees were for professional services rendered for the audits of the consolidated financial statements of the Corporation and statutory and subsidiary audits, issuance of comfort letters, consents, income tax provision procedures, and assistance with review of documents filed with the SEC.

 

Audit Related fees were for assurance and other services related to service provider compliance reports, trust servicing and administration reports, employee benefit plan audits, due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, internal control reviews, attest services that are not required by statute or regulation, and consultations concerning financial accounting and reporting standards.

 

Tax fees were for services related to tax compliance, tax planning, and state tax assistance.

 

All Other fees for the years ended December 31, 2007 and December 31, 2006 were $0.

 

Auditor Fees Pre-approval Policy.  In 2002, the Audit Committee adopted a formal policy concerning approval of audit and non-audit services to be provided by the independent accountant to the Corporation. The policy requires that all services to be provided by the Corporation’s independent accountant be pre-approved by the Audit Committee or its Chair. Each approval must describe the non-audit services provided and set a dollar limit for the services. The Committee, or its Chair, pre-approved all audit and non-audit services provided by PricewaterhouseCoopers LLP during 2007. The Committee receives regular reports from management regarding the actual provision of non-audit services by PricewaterhouseCoopers LLP that have been pre-approved by the Committee.

 

Required Vote

 

The affirmative vote of the holders of a majority of the shares of common stock present or represented and entitled to be voted at the Annual Meeting is required to ratify the appointment of PricewaterhouseCoopers LLP. Unless marked to the contrary, proxies received will be voted “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as independent account for 2008.

 

Board Recommendation

 

The Board of Directors of the Corporation recommends a vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as independent accountant for 2008.

EXECUTIVE AND DIRECTOR COMPENSATION

 

Executive Compensation

 

Introduction

 

2007 presented many challenges to Sallie Mae and its executive management team. The Corporation entered into a merger agreement, which ultimately was not consummated. The College Cost Reduction and Access Act of 2007 was enacted, changing the profitability of the federally guaranteed student loan business. The Corporation began to curtail making non-traditional loans in response to losses in that business line. The credit markets came to a virtual standstill. Public equity offerings were executed during the last week of the year.

 

The executive management team itself experienced significant turnover. The Corporation was led by three different CEOs. Four of the five Named Executive Officers (the “NEOs”) for 2006 were not serving as executive officers at the end of 2007. The NEOs for 2007¹ were called to respond to shifting business objectives in the areas of corporate finance, sales and marketing, as well as increased demands on leadership, dedication and flexibility in managing the Corporation during a difficult time.

 

The Compensation Committee sought to balance the need to retain executives while recognizing that the final operating results for the year ended with underperformance in several key categories including “core earnings”² net income, fee income and the student loan spread. In addition to receiving lower than expected bonuses, the executive management team experienced significant loss in the value of outstanding equity awards that had been acquired and held over a number of years.

 

The remainder of this report explains the compensation decisions made for the NEOs reported in this proxy statement. The report provides context and perspective for the numerical information contained in the compensation tables that follow.

 

Compensation Reported in 2007: Process and Decisions Made

 

Process

 

The process for determining compensation reported in the tables that follow began in January 2007. At a meeting of the Compensation Committee in mid-January 2007, the Committee heard a report from its consultant, Semler Brossy, about executive pay at other companies, using data from a custom selected group (the “Peer Group”)³and a financial services industry survey (the “Survey Group”).⁴ The nature and scope of Semler Brossy’s role as a consultant and the material elements of the direction provided to Semler Brossy are disclosed in the “Board Committees” section of this proxy statement. The data were used to inform the Committee about the marketplace for executive pay and

 

 

¹  NEOs for 2007 are the individuals who served as principal executive officer and principal financial officer at any time during 2007, the three most highly compensated executive officers, other than the principal executive officer and principal financial officer who served in these capacities as of December 31, 2007, and two additional individuals who would have been among the highest compensated executive officers, except that they were not serving as executive officers at December 31, 2007. For this purpose, “compensation” means the amount disclosed in the “Total” column of the Summary Compensation table in this proxy statement less the amounts disclosed in the Change in Pension Value column of that same table.

²  A description of “core earnings” treatment and a full reconciliation to the GAAP income statement can be found in the Company’s Annual Report on Form 10-K at the Company’s website as referenced on page 1 of this proxy statement.

³  Sixteen companies comprise the Corporation’s Peer Group. These companies are: Affiliated Computer Services, AFLAC, Inc., Bank of New York, BB&T Corp., Capital One, Charles Schwab & Co., Inc., CIT Group Inc., Countrywide Financial, Fannie Mae, Fifth Third Bancorp, First Data, Freddie Mac, Mellon Financial, PNC Financial Services, State Street Corporation and Sun Trust Banks, Inc. The companies are in the financial services and data processing sectors with revenues, assets, net income, market value and workforce size that are within a range of the Corporation’s. The executive and director compensation data of the Peer Group is generally as reported in proxy statements filed in 2006, reporting pay for 2005. Semler Brossy makes adjustments and updates to the data as appropriate in their judgment.

⁴  Sixty-six companies in the financial services industry with assets greater than $50 billion comprise the Survey, which is a Towers Perrin executive compensation database. These companies include banks, insurance companies, payment processors, federally-chartered financial institutions and money managers. The Corporation purchases this survey data from Towers Perrin and Towers Perrin is not retained by the Corporation as a compensation consultant.

to determine if pay at the Corporation was fair and reasonable. The data were not used to set pay at the Corporation at a particular percentile relative to executive pay reported in the Peer Group or Survey Group.

 

After hearing the consultant’s report and reviewing the Corporation’s performance for 2006, a discussion regarding the performance of each member of the executive management team occurred between members of the Committee, the CEO and the Senior Vice President for Human Resources. The CEO made recommendations to the Committee for base salaries, equity awards and performance bonuses for other NEOs. As a result of this process, base salaries and equity awards for 2007, which are reported in the tables that follow, were set.

 

With respect to the base salary of the NEOs, the Committee considered the current salaries of each NEO, the extent to which an NEO had taken on additional responsibilities during 2006 or was expected to take on additional responsibilities in 2007, and based on internal pay equity made subjective adjustments as it determined appropriate. The adjustments made for each NEO are discussed in the “Decisions Made” section that follows.

 

The process for granting 2007 equity awards began with an evaluation of the Corporation’s total equity budget. The Corporation has a policy of setting an annual equity budget of no more than two percent of the Corporation’s common stock outstanding as an appropriate allocation of shareholders’ equity to the workforce. At December 31, 2006, 410.6 million shares were outstanding. For 2007, the Corporation’s annual equity budget was 8.1 million shares.

 

The Corporation’s annual equity grants generally are divided equally among management and rank-and-file employees. In 2007, total grants covering approximately 4.2 million shares were made to management employees. Grants were not made to rank-and-file employees because the Corporation signed the merger agreement with the J.C. Flowers investor group, which prohibited equity grants prior to the scheduled time for making the rank-and-file employee grants.

 

The 4.2 million shares allocated to the management group were further allocated across each officer level. The allocation was based on the amount of responsibility and risk associated with each officer level and the number of individuals in each officer level. The allocation resulted in a grant guideline that the Committee followed to determine actual awards. The grant guideline for stock options awards for the NEOs was 25,000 options. The grant guideline for performance stock was 6,500 shares. Disclosure about whether an NEO was granted more or less than the grant guideline and why is in the “Decisions Made” section that follows.

 

Vesting of stock option awards is tied to an increase in the Corporation’s share price. So that the Corporation may use the Black-Scholes valuation methodology for accounting purposes, the options vest upon the eight anniversary of their grant date. Vesting of performance stock is tied to achieving the Corporation’s “core earnings” net income business plan target.

 

In January 2007, the Committee established the 2007 performance bonus plan (the “2007 Bonus Plan”), in conjunction with the Board of Directors’ approval of the 2007 annual business plan. The 2007 Bonus Plan was established under the shareholder-approved SLM Corporation Incentive Plan.⁵ All members of management, approximately 950 employees, were eligible to participate in the 2007 Bonus Plan.

 

 

⁵  In order to allow for tax deductibility of bonuses paid to the NEOs, the 2007 Bonus Plan set the achievement of positive core earnings net income and a maximum bonus that may be earned by any individual in a given year. The maximum individual bonus is the lesser of $5 million and one percent of the Corporation’s “core earnings” net income for the year ($560 million for 2007). The Committee then used its discretion and paid bonuses less than that amount. This tax-planning tool has been used since 1997 and frees the Committee to make decisions that it believes are appropriate from a business perspective, rather than decisions that are constrained or limited by the tax code.

At the time the original 2007 Bonus Plan was established, key measures for corporate success, which were adopted as performance metrics for the 2007 Bonus Plan, were determined to be:

 

 

These metrics were considered by management and the Board to be key operating drivers that would reflect management’s performance. Management reported these, and other business drivers, at the conclusion of each calendar quarter in the Corporation’s earnings releases. Year-to-date performance as measured against the 2007 Bonus Plan was presented to the officers of the Corporation at semi-annual meetings and to the Compensation Committee throughout the year.

 

The purposes of establishing the 2007 Bonus Plan and communicating results against the Plan were to: 1) inform all management employees about the performance of the Corporation as a whole; 2) unite the workforce around common goals; and 3) set expectations about the level of bonus compensation that might be made at year end. As with past years, the 2007 Bonus Plan was not used to determine individual bonuses. Instead, individual bonuses were determined based primarily on individual performance, in the context of the extent to which the 2007 Bonus Plan targets were met.

 

The announcement of the merger agreement with the J.C. Flowers investor group had a significant impact on the Corporation’s business, primarily its student loan spread. To respond to this, the Compensation Committee modified the 2007 Bonus Plan to take into account the expenses of the transaction and the importance of closing the transaction.

 

Throughout the year, directors had contact with members of the executive management team at one-on-one meetings to prepare for Board and Committee meetings, at Board and Committee meetings themselves, investor conferences, other corporate events, and on an ad hoc basis, as directors sought information from or gave guidance to members of management. This contact enabled directors to observe first hand the communication, analytical and leadership skills of the management team. Also, each regularly scheduled Board meeting included a session with the CEO during which time the CEO discussed the challenges of the business and how members of the management team were addressing the challenges. These sessions were followed by executive sessions of the independent directors, during which independent Board members discussed among themselves the CEO’s performance. These interactions served to inform the Compensation Committee when they approached pay decisions in January 2008.

 

Two Compensation Committee meetings were held in January 2008, just as they had been in January 2007. At the first meeting in early January 2008, the Committee heard a report from its consultant on executive pay for the Peer Group and Survey Group. Final year-end results against the 2007 Bonus Plan were reported and discussed. A discussion occurred between the Committee, the CEO and the Senior Vice President for Human Resources regarding individual performance. A second meeting was held nine days later, at which time the Committee, among other things, awarded bonuses based on performance in 2007, which are reported in the tables that follow. As explained above, the Compensation Committee did not use the final 2007 Bonus Plan score, 34 percent out of a possible 100 percent, to make individual pay decisions. Rather, the Committee used this information to understand how well the management team performed against the 2007 Bonus Plan and to determine, in general, how large the bonuses should be in relation to the award targets for superior performance.

 

Decisions Made

 

Key considerations of each NEO’s individual performance and how that performance resulted in pay decisions are as follows.

Mr. Lord.  Executive compensation decisions regarding Mr. Lord were out of the ordinary course of business and reflected the unique situation in which the Corporation found itself in the fourth quarter of 2007. There was uncertainty as to whether the transaction with the J.C. Flowers investor group would close. The credit markets were tightening. The impacts of the passage of the College Cost Reduction and Access Act of 2007 were being felt. A significant restructuring of the executive management team was underway. Given the circumstances, the Board of Directors believed it was imperative to re-engage Mr. Lord in the full-time management of the Corporation in the event the Flowers transaction did not close.

 

After consultation with the Board of Directors and Semler Brossy, the Compensation Committee set Mr. Lord’s base salary at $250,000 per month and granted him 4.5 million stock appreciation rights. The Committee determined this to be appropriate compensation in light of the complexity of the situation and the possibility that the arrangement would be short-term, terminating at the close of the Flowers transaction. The uncertainty of the outcome of the Flowers transaction and the immediate need for a change in executive leadership overrode corporate tax and accounting goals that the Committee typically achieves in the Corporation’s compensation program.

 

Two months later, the Flowers transaction had been terminated, public equity offerings had been executed, stabilizing the capital position of the Corporation, and the Board appointed a new Chairman. As the Corporation’s situation had somewhat stabilized, the Compensation Committee normalized Mr. Lord’s compensation. Mr. Lord’s base salary was adjusted to $105,000 per month, an amount the Committee determined to be fair and reasonable based on Mr. Lord’s responsibilities and experience, and he became eligible for a performance bonus of up to four times base salary. Mr. Lord tendered back to the Corporation the stock appreciation rights and they were cancelled.

 

Mr. Andrews.  In January 2007, Mr. Andrews’ base salary was set at $475,000 for his responsibilities as Chief Financial Officer. This base salary was in the lower one-half of his peer group and consistent with the Committee’s philosophy of paying lower than market base salaries. In recognition of the responsibilities of the Chief Financial Officer and Mr. Andrews’ position as the second in command to the CEO, he received equity awards that were above the grant guidelines for executive vice presidents. Mr. Andrews received 40,000 stock options and 8,000 shares of performance stock.

 

During 2007, Mr. Andrews experienced an unusual year. He stepped up at a very difficult time and assumed the role of chief executive officer upon Mr. Fitzpatrick’s departure in May 2007. The Corporation reported lower than expected financial results for the first quarter. Day-to-day operation of the Corporation was subject to covenants in the merger agreement with the J.C. Flowers investor group. Due diligence activity requested by the investor group added to management’s responsibilities. Mr. Andrews met the challenges of working towards closing the transaction and running the business, at the same time. He accomplished this with the understanding that his future employment with the new owners was uncertain.

 

In recognition of Mr. Andrews’ assumption of the CEO duties, the Compensation Committee increased his annual base salary from $475,000 to $750,000. Also, in recognition of the fact that his future as chief executive officer under the new owners was uncertain, the Compensation Committee enhanced his severance benefit upon a change in control.

 

In January 2008, the Compensation Committee awarded Mr. Andrews a performance bonus of $900,000, as compared to his 2006 bonus of $620,000, reflecting both his duties as Chief Financial Officer from January to May and as CEO from May to mid-December. His 2007 bonus was substantially lower than his target of $1,700,000, reflecting the performance of the Corporation.

 

Mr. Fitzpatrick. Payments made to Mr. Fitzpatrick during 2007 were pursuant to the terms of the employment agreement entered into on May 19, 2005. This agreement is described on pages 26 and 37 of this proxy statement. No decisions were made in 2007 regarding compensation reported in this proxy statement other than a decision to enter into a short-term consulting agreement following his termination of employment.

Ms. McCormack.  Ms. McCormack resigned her position as an executive officer in December 2007. Had Ms. McCormack been an executive officer at December 31, 2007, she would have been one of the highest paid executive officers in the Corporation, and, therefore, her compensation is reported in this proxy statement. Based on contributions she made throughout the year, negotiations in connection with her separation from the Corporation and corporate performance, her bonus for 2007 was $300,000, compared to $500,000 in 2006.

 

Mr. Moehn.  Mr. Moehn resigned his position as an executive officer in December 2007. Had Mr. Moehn been an executive officer at December 31, 2007, he would have been one of the highest paid executive officers in the Corporation, and, therefore, his compensation is reported in this proxy statement. Based on contributions he made throughout the year, negotiations in connection with his separation from the Corporation and corporate performance, his bonus for 2007 was $285,000, compared to $425,000 in 2006.

 

Mr. Autor.  In January 2007, the Committee set Mr. Autor’s base salary at $350,000, below the median for the peer group and consistent with internal pay equity for executive vice presidents with similar levels of responsibilities. He was awarded equity grants slightly below the grant guideline, based on his level of responsibility at the end of 2006, which included management of the information technology division and corporate procurement, as well as leadership of the federal student loan consolidation line of business.

 

For most of 2007, Mr. Autor continued to be responsible for management of the information technology division and also became responsible for overseeing the call center division and corporate marketing. In December, upon the departure of several executives, including Ms. McCormack and Mr. Moehn, Mr. Autor’s responsibilities were significantly increased to include originations, servicing, school implementations, technical sales, lender sales and the guarantor services line of business. He was awarded a bonus of $400,000 for 2007, the same bonus amount he received in 2006, reflecting his high level of performance but also the shortfall in the Corporation’s overall performance.

 

Mr. Feierstein.  In January 2007, Mr. Feierstein was promoted to senior vice president, with responsibility over private credit loan products. His base salary was set at $235,000, based on internal pay equity and his brief tenure with the Corporation and in his position. His equity awards were above the grant guidelines for senior vice presidents in recognition of the key revenue raising and risk management responsibilities of his new position.

 

Upon the departure of several executives in December 2007, he was appointed to lead the sales and marketing functions of the Corporation. In light of the increased responsibilities and contributions as a senior officer during 2007, Mr. Feierstein was awarded a bonus of $350,000, compared to $150,000 as a Vice President in 2006.

 

Mr. Lavet.  In January 2007, the Committee set Mr. Lavet’s base salary at $300,000, below the median for the peer group and consistent with internal pay equity for senior vice presidents with similar levels of responsibilities. He was awarded equity grants above the grant guidelines for senior vice presidents due to the level of risk and responsibilities of the general counsel position.

 

During 2007, Mr. Lavet was actively involved in three major initiatives: managing the Corporation’s legal affairs while the J.C. Flowers investor group transaction was pending, the legislative process to re-authorize the federal student loan program, and federal and state investigations of the student lending industry. Mr. Lavet performed at a high level under the circumstance of uncertainty about his future employment under new ownership.

 

In evaluating Mr. Lavet’s performance for the year, the Compensation Committee awarded him a regular performance bonus of $400,000 an increase from his 2006 bonus of $360,000, along with a special bonus related to the proposed transaction with the J.C. Flowers investor group of $150,000 for a total award of $550,000. In making this award, the Committee recognized the extraordinary legal challenges and external scrutinies which were skillfully responded to by Mr. Lavet and the legal team.

Other Information

 

The following information outlines the objectives of the Corporation’s executive compensation program and the individual elements of compensation that comprise the program.

 

Objectives of the Corporation’s Executive Compensation Program

 

The primary objective of the Corporation’s executive compensation program is to drive corporate performance. Other objectives of the program are to: align the interests of executives with shareholders; attract and retain executives; offer competitive levels of total compensation; and recognize length of service with the Corporation.

 

The program rewards individual performance, in the context of the extent to which the goals of the annual performance bonus plan are achieved and share price performance is sustained.

 

Objectives of the Elements of Compensation

 

The executive compensation program includes seven elements of pay. Each element and the reason the Corporation pays the element is listed below.

 

 

The Change in Control Severance Plan applies to officers at the level of Senior Vice President and above. The plan is designed to reduce the possibility that executives might preemptively seek jobs at other corporations and to retain executives through the finalization and integration of a change in ownership of the Corporation, providing for continuity of management in the event of a change in control.

 

Upon a change in control, as defined in the plan, all outstanding and unvested equity awards held by participants become vested and non-forfeitable. If termination of employment for reasons defined in the plan occurs within 24 months of a change in control of the Corporation, the participant is entitled to receive a lump sum cash payment equal to two times his or her base salary and annual

 

 

⁶ The Corporation’s defined contribution savings program provides for contributions to tax-deferred, savings-style accounts from both the Corporation and employees. A tax-qualified plan and a non-qualified plan comprise the program. The investment risk of the program is borne by employees.

⁷ The Corporation’s defined benefit retirement program is funded solely by corporate contributions. A tax-qualified plan and a non-qualified plan comprise the program. The Corporation bears the investment risk of this program.

performance bonus. A participant will also be entitled to receive a pro-rated portion of his or her target annual performance bonus for the year in which the termination occurs, as well as continuation of medical insurance benefits for a two-year period. The Change in Control Severance Plan, which pays benefits, generally, equal to “two times” compensation is consistent with industry practice. The benefits payable under the plan do not affect decisions regarding other compensation and benefits.

 

 

The Corporation also provides benefit programs that are available to all full-time employees on the same terms and conditions, such as medical and dental benefits, life insurance, disability insurance and an employee stock purchase plan. Because these benefits are not a component of our executive compensation program, these benefits are not described in this CD&A.

 

Role of Each Element of Compensation Relative to the Corporation’s Overall Compensation Objectives and Other Elements

 

Seven elements of pay comprise the executive compensation program. How each of the seven elements of pay described above serves the Corporation’s overall compensation objectives and how each element relates to other elements is described below.

 

 

 

Share Ownership Guidelines

 

The Corporation has share ownership guidelines for non-management members of the Board of Directors and for officers at the level of Senior Vice President and above. Non-management members of the Board are expected to own at least 15,000 shares of the Corporation’s common stock. All of the non-management board members meet this guideline, other than Messrs. Martin, Newman and Puleo, who were recently appointed to The Board.

 

The ownership guidelines for officers, which are expected to be achieved over a five-year period, are:

 

 

The guidelines encourage continued ownership of a significant amount of the Corporation’s common stock acquired through equity awards, tying stock-based compensation to the Corporation’s objective of encouraging ownership.

 

The following shares and share units count towards the ownership guidelines: shares held in brokerage accounts; vested shares credited to deferred compensation accounts; shares credited to qualified retirement plan accounts; performance stock and performance stock units that vest upon the achievement of performance goals count upon vesting; on an after-tax basis, restricted stock and RSUs that vest solely upon the passage of time count upon grant; and on an after-tax basis, the extent to which vested stock options are “in-the-money.”

 

At February 29, 2008, one of the NEOs satisfied the ownership guidelines.

 

Equity Grant Practices

 

The Corporation grants stock options upon the following circumstances: annually, on a performance basis to eligible officers and employees (“Annual Option Grants”); upon initial hire; officer promotions; and acquisitions (“Event Driven Option Grants”).

 

Annual Option Grants:  With the exception of Mr. Lord’s 2007 grant, which was made upon the Board’s decision to appoint him as Executive Chairman, all management Annual Grants were made at the regularly-scheduled January Committee meeting in conjunction with annual performance evaluations of the management team. In the case of all management Annual Grants, the grant price is equal to the Corporation’s closing stock price on the date of the applicable meeting.

Until 2006, rank-and-file Annual Grants were made at year-end or at the conclusion of the Corporation’s annual peak loan processing season. In all of these cases, the grant price was equal to the Corporation’s closing stock price on the grant date. For 2006, options were granted in conjunction with annual performance reviews for the rank-and-file employees. The grant price was the Corporation’s closing stock price the first trading day following the Corporation’s effective date for merit reviews. A rank-and-file grant was not made in 2007 due to restrictions in the merger agreement with the J.C. Flowers investor group.

 

Event Driven Option Grants:  In the case of Event Driven Grants, the grant price is equal to the Corporation’s closing stock price on the date of the event. With regard to business acquisitions, the grant date for options is the date of the close of the acquisition.

 

Documentation of Option Grants:  The Compensation Committee has authority to grant options under the plans. In certain cases, the Committee has delegated grant-making authority to a Plan Subcommittee. The Plan Subcommittee is currently comprised of Mr. Lord, in his role as Vice Chairman of the Board. An explanation of the types of grants made by the Compensation Committee and the Plan Subcommittee and the documentation process for each follows.

 

Grants by the Committee:  The Compensation Committee makes the Annual Grant to all management employees and new hires and promotion grants to employees at the Senior Vice President level and above. The Compensation Committee makes these grants pursuant to its responsibilities to set executive management pay and in order to preserve the tax deductibility of option compensation.

 

Grants by the Subcommittee:  The Plan Subcommittee makes grants typically in three situations: the Annual Grant to rank-and-file employees, upon acquisitions, and upon new hires and promotions below the Senior Vice President level. In all cases, the Plan Subcommittee has been previously authorized by the Compensation Committee to make these grants. This process is designed to use the regularly-scheduled meetings of the Compensation Committee for consideration of equity grants and to avoid the need to call interim Committee meetings for actual documentation of the grant.

 

Performance Stock Awards:  The Committee typically awards performance stock at a regularly-scheduled January Committee meeting in conjunction with annual performance evaluations of the management team. Performance stock is granted based on the Corporation’s closing stock price on the date of the applicable meeting.

 

Compensation and Personnel Committee Report

 

The Compensation and Personnel Committee of the Board of Directors has reviewed the Compensation Discussion and Analysis and discussed that Analysis with management. Based on its review and discussions with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Corporation’s Annual Report on Form 10-K for 2007 and the Corporation’s 2008 proxy statement.

 

Compensation and Personnel Committee
Earl A. Goode, Chairman
Diane Suitt Gilleland
Barry A. Munitz
Wolfgang Schoellkopf
Steven L. Shapiro

SUMMARY COMPENSATION TABLE

 

The table below summarizes certain information on compensation awarded to, earned by or paid to each of the NEOs for the fiscal year ended December 31, 2007. For those individuals who were also NEOs in 2006, compensation information for the year ended December 31, 2006 is included. For Mr. Lord’s compensation prior to serving as CEO, see “Director Compensation.”

 

 

 

 

 

 

 

 

 

 

 

 

The combination of both plans provides NEOs with a two percent employer contribution and up to a six percent charitable contribution on base salary and annual performance bonus, up to total covered compensation of $725,000, with the exception of Ms. McCormack, who was provided up to a six percent charitable contribution on total annual base salary.

 

 

 

 

 

 

 

GRANTS OF PLAN-BASED AWARDS

 

 

 

 

NARRATIVE DISCUSSION OF COMPENSATION ARRANGEMENTS

 

Individually-negotiated compensation arrangements were in force during 2007 for four NEOs: Messrs. Lord, Andrews and Fitzpatrick and Ms. McCormack. A summary of each of these arrangements follows:

 

Mr. Lord.  On November 26, 2007, the Corporation agreed that, as compensation for Mr. Lord agreeing to serve as Executive Chairman for a two-year period. Mr. Lord would receive annual cash compensation of $3,000,000 and SARs covering 4.5 million shares of SLM common stock with an exercise price of $46.00, a substantial premium to the closing price for the Corporation’s common stock on the date of grant of $36.87. The vesting provisions of the SARs , which are tied primarily to stock price appreciation, are disclosed in a footnote to the “Grants of Plan-Based Awards” table in this proxy statement. Mr. Lord was not eligible for incentive compensation under the Corporation’s Incentive Compensation Plan, but was eligible to participate in the Corporation’s other benefit programs on the same terms and conditions of other officers. On December 14, 2007, Mr. Lord assumed the role of Chief Executive Officer and Vice Chairman of the Board of Directors. On January 31, 2008, Mr. Lord’s compensation arrangement was modified by reducing his annual cash

compensation to $1,250,000, granting him eligibility for participation in the 2008 Bonus Plan at the chief executive officer level and entitling him to a severance arrangement comparable to the arrangements provided to previous chief executive officers. On March 3, 2008, Mr. Lord tendered to the Corporation the SARs and the SARs were cancelled. On March 20, 2008, the term of Mr. Lord’s agreement was extended to December 31, 2008.

 

Mr. Fitzpatrick.  On May 19, 2005 the Corporation entered into an employment agreement with Mr. Fitzpatrick to serve as Chief Executive Officer. The term of the agreement was for the three-year period beginning June 1, 2005 and ending May 31, 2008. The agreement superseded the employment agreement entered into in January 2002 between the Corporation and Mr. Fitzpatrick as Chief Operating Officer.

 

The material terms of the employment agreement provided for grants of equity awards. A total of 2,300,000 stock options and 200,000 RSUs were granted under the agreement. The material terms of these equity awards are described in footnotes to the “Grants of Plan-Based Awards” table and the “Outstanding Equity Awards at 2007 Fiscal Year End” table in this proxy statement.

 

The employment agreement provided for payments and benefits upon Mr. Fitzpatrick’s termination of employment. These are described in the “Pension Benefits” and the “Actual Payments Upon Termination of Employment” table in this proxy statement.

 

Mr. Andrews.  Mr. Andrews is entitled to two individually-negotiated benefits: a retirement benefit, which is disclosed in the “Pension Benefits at 2007 Fiscal Year End” table in this proxy statement and an enhanced cash severance benefit under the Change in Control Severance Plan for Senior Officers, which is disclosed in the “Potential Payments Upon Termination or Change in Control” table in this proxy statement.

 

Ms. McCormack.  Ms. McCormack was entitled to an individually-negotiated retirement benefit. The present value of this benefit, $173,000, was paid to Ms. McCormack upon her termination of employment and is disclosed in the “Actual Payments Upon Termination of Employment” table in this proxy statement.

 

OUTSTANDING EQUITY AWARDS AT 2007 FISCAL YEAR-END

 

The table below sets forth information regarding options and stock awards that were outstanding as of December 31, 2007.