| o |
Preliminary
Proxy Statement
|
| o |
Confidential,
for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
|
| o |
Definitive
Proxy Statement
|
| o |
Definitive
Additional Materials
|
| x |
Soliciting
Material Pursuant to Rule
14a-12
|
| x |
No
fee required.
|
|
| o |
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was determined):
|
|
|
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
|
(5)
|
Total
fee paid:
|
|
| o |
Fee
paid previously with preliminary materials.
|
|
| o |
Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee
was paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its filing.
|
|
|
(1)
|
Amount
Previously Paid:
|
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
|
(3)
|
Filing
Party:
|
|
|
(4)
|
Date
Filed:
|
|
|
Q.
|
What
will happen to my stock options?
|
|
A.
|
Vested
options: If you have options which are currently vested, or
will vest between now and the transaction closing, you can either
exercise
them at the current market price or wait until the transaction
closes for
a final option payment. If you hold your options until the
close, you will automatically receive a final option payment
based on the
amount by which $60 exceeds your option price, multiplied by
the number of
options you have outstanding, less taxes.
|
|
Unvested
stock options: Unvested stock options will vest upon
closing of the transaction. At close, employees will
automatically receive a final option payment. The final option
payment will be based on the difference between your option price
and $60,
multiplied by the number of options you have outstanding, less
taxes.
|
|
|
Q.
|
Do
the
Net-Settled Options that show up in my Merrill Lynch account
as Stock
Appreciation Rights (SAR) get treated
differently?
|
|
A.
|
No.
All stock
options are treated the same way (see question above).
|
|
Q.
|
How
am
I taxed for my stock option exercise or final option
payment?
|
|
A.
|
You
are taxed
at ordinary income rates. The taxation is the same for an
option exercise or a final option payment at closing. To check
your individual tax rates, log onto your Merrill Lynch account
(www.benefits.ml.com) and click on “Individual Plan Information”
which will list your current tax withholding rates.
|
|
Q.
|
Do
I
have to accept my options before they are exercised or I receive
my final
option payment?
|
|
A.
|
Yes.
To accept
any pending grants, log onto your Merrill Lynch account
(www.benefits.ml.com) and click on the pending grants highlighted
in the “alert” section of the main login page.
|
|
Q.
|
Do
I
have to open my Merrill Lynch brokerage account before my options
are
exercised?
|
|
A.
|
Yes.
Instructions on how to open a Merrill Lynch account and create
a User ID
can be found on the Sallie Mae Intranet
(http://salliemaecentral.com/legal/esop/pdfs/User%20ID%20Creation%20and%20Account%20Opening_JPEG_.pdf)
. If you have problems establishing your account, contact the
Merrill
Lynch call center at 1-877-SLM-ESOP.
|
|
Q.
|
Can
I
buy or sell shares in the open market?
|
|
Yes.
You can
buy and sell SLM stock in the market at any time, as long as
you are not
subject to the trading window or are not in possession of material
non-public information. If you are subject to the trading
window, you will be notified when you are able to
trade.
|
|
|
Q.
|
What
happens to shares that I already own in my brokerage
account?
|
|
A.
|
If
you do not
otherwise sell these shares before the transaction close, you
will be
required to go through the steps and procedures applicable to
all
shareholders in order to receive $60 per share after the closing.
Amounts
payable for shares in your brokerage account will be deposited
into your
brokerage account after the transaction close.
|
|
Q.
|
What
are the tax consequences of exercising options or receiving the
final
option payment?
|
|
A.
|
Both
transactions are taxable events and are taxed at ordinary income
rates. Taxes are withheld for both transactions. If
you receive a final option payment, taxes will be withheld and
this income
will flow through your paycheck and show up as income on your
year-end
W2. Option exercises require additional federal tax reporting
which is detailed on the Sallie Mae Intranet at
http://salliemaecentral.com/humanres/benefits/stock/index.htm.
|
|
Q.
|
I
have a portion of my 401(k) balance invested in the Sallie Mae
Stock
Fund. What happens to that
investment?
|
|
A.
|
At
this time,
employees are not required to make any changes to a 401(k) savings
account, as we continue to be a publicly traded company until
the
transaction closes. The Sallie Mae Stock Fund continues to be
an investment option in the 401(k) plan. At closing employees’
401(k) investments in the stock fund will be liquidated based
on the $60
per share purchase price. The proceeds will be deposited in the
401(k) money market for you to re-designate.
|
|
Q.
|
Can
I
make changes into or out of the Sallie Mae Stock fund in the
401(k)
Plan?
|
|
A.
|
Yes,
provided
that you are not subject to a trading window or are not in possession
of
material non-public information you can continue to buy and sell
shares in
the 401(k) Plan until the transaction
closing.
|