Sallie Mae 2015 Annual Report Download - page 33

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The holders of our preferred stock have rights that are senior to those of our common shareholders.
At December 31, 2015, we had issued and outstanding 3.3 million shares of our 6.97 percent Cumulative Redeemable
Preferred Stock, Series A and 4.0 million shares of our Floating-Rate Non-Cumulative Preferred Stock, Series B.
Our preferred stock is senior to our shares of common stock in right of payment of dividends and other distributions. We
must be current on dividends payable to holders of preferred stock before any dividends can be paid on our common stock. In
the event of our bankruptcy, dissolution or liquidation, the holders of our preferred stock must be satisfied before any
distributions can be made to our common shareholders.
Our ability to pay dividends on our common stock can be subject to regulatory restrictions.
We have not paid dividends on our common stock since the Spin-Off and we do not expect to do so for the foreseeable
future. However, should we choose to do so, we are dependent on funds obtained from the Bank to fund dividend payments.
Regulatory and other legal restrictions may limit our ability to transfer funds freely, either to or from our subsidiaries. In
particular, the Bank is subject to laws and regulations that authorize regulatory bodies to block or reduce the flow of funds to
us, or that prohibit such transfers altogether in certain circumstances. These laws, regulations and rules may hinder our ability
to access funds that we may need to make payments on our obligations. The FDIC has the authority to prohibit or to limit the
payment of dividends by the banking organizations they supervise, including us and our bank subsidiaries.
Restrictions on Ownership
The ability of a third-party to acquire us is limited under applicable U.S. and state banking laws and regulations.
Under the Change in Bank Control Act of 1978, as amended (“CIBC Act”), the FDIC’s regulations thereunder, and
similar Utah banking laws, any person, either individually or acting through or in concert with one or more other persons, must
provide notice to, and effectively receive prior approval from, the FDIC and UDFI before acquiring “control” of us. In practice,
the process for obtaining such approval is complicated and time-consuming, often taking longer than six months, and a
proposed acquisition may be disapproved for a variety of factors, including, but not limited to, antitrust concerns, financial
condition and managerial competence of the applicant, and failure of the applicant to furnish all required information. Under
the FDIC’s CIBC Act regulations, control is rebuttably presumed to exist, and notice is required, where a person owns, controls
or holds with the power to vote 10 percent or more of any class of our voting shares and no other person owns, controls or holds
with the power to vote a greater percentage of that class of voting shares.
Item 1B. Unresolved Staff Comments
None.