Exhibit 10.4

 

Navient Corporation

Executive Severance Plan for Senior Officers

As Amended and Restated Effective May 24, 2018

ARTICLE 1

NAME, PURPOSE AND EFFECTIVE DATE

1.01.Name and Purpose of Plan. The name of this plan is the Navient Corporation
Executive Severance Plan for Senior Officers (“Plan”). The purpose of the Plan
is to provide compensation and benefits to certain senior level officers of
Navient Corporation (the “Corporation”) and its affiliates upon employment
termination.

1.02.Effective Date. The effective date of the Plan is May 1, 2014.  The Plan
was amended and restated effective May 24, 2018, to make certain clarifying
changes. The compensation and benefits payable under the Plan are payable upon
certain employment terminations that occur after the effective date of this
Plan.

1.03.Employment Contracts Govern; Change in Control Severance Plan. To the
extent that an Eligible Officer is a party to an employment or other contract or
agreement that provides for any severance payments upon such Eligible Officer’s
termination of employment with the Corporation or any of its subsidiaries, then
that contract or agreement governs, and not this Plan. Upon the expiration of
such contract or agreement, this Plan will govern. In addition, an Eligible
Officer shall not be entitled to receive benefits more than once under this Plan
as a result of holding titles with multiple entities with the Corporation and
the group of companies under common control with the Corporation. In addition,
to the extent that the Change in Control Severance Plan for Senior Officers
provides for severance payments upon an Eligible Officer’s termination of
employment with the Corporation or any of its subsidiaries, then that Plan will
govern, and not this Plan.

1.04.ERISA Status. This Plan is intended to be an unfunded plan that is
maintained primarily to provide severance compensation and benefits to a select
group of “management or highly compensated employees” within the meaning of
Sections 201, 301, and 401 of the Employee Retirement Income Security Act of
1974 (“ERISA”), and therefore to be exempt from the provisions of Parts 2, 3,
and 4 of Title I of ERISA.

ARTICLE 2

DEFINITIONS

The following words and phrases have the following meanings unless a different
meaning is plainly required by the context:

2.01.“Average Bonus” means the annualized performance bonus compensation
calculated under this Plan for the rolling 24-month period immediately prior to
the Eligible

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Officer’s Termination Date, including as a full month the month during which the
Termination Date occurs. Only bonuses paid or payable under the Corporation’s
annual management incentive plan will be used for purposes of calculating
Average Bonus under this Plan; any other bonus payments will be disregarded. An
example of a calculation of the Average Bonus portion of a Severance Payment
according to the Plan is attached hereto as Exhibit A. For purposes of
calculating Average Bonus under this Plan for the current fiscal year, the
Eligible Officer’s base salary and target bonus at the Termination Date will be
used and the Corporate performance scores from all completed quarters during the
relevant portion of the fiscal year will be used. Notwithstanding anything to
the contrary herein, if an Eligible Officer has fewer than 24 months of
employment with the Corporation as of his or her Termination Date, then “Average
Bonus” means the annualized performance bonus compensation calculated as
described above but prorated for the portion of the rolling 24-month period that
is represented by the time from the Eligible Officer’s date of hire to the
Eligible Officer’s Termination Date. An example of a calculation of the Average
Bonus portion of a Severance Payment according to the previous sentence is
attached hereto as Exhibit B.  

2.02.“Base Salary” means the annual base rate of compensation payable to an
Eligible Officer at the time of a Termination Event, such annual base rate of
compensation not reduced by any pre-tax deferrals under any tax-qualified plan,
non-qualified deferred compensation plan, qualified transportation fringe
benefit plan under Code Section 132(f), or cafeteria plan under Code Section 125
maintained by the Corporation, but excluding the following: incentive or other
bonus plan payments, accrued vacation, commissions, sick leave, holidays, jury
duty, bereavement, other paid leaves of absence, short-term disability payments,
recruiting/job referral bonuses, severance, hiring bonuses, long-term disability
payments, payments from a nonqualified deferred compensation plan maintained by
the Corporation, or amounts paid on account of the exercise of stock options or
on account of the award or vesting of restricted or performance stock or other
stock-based compensation.

2.03.“Board of Directors” means the Board of Directors of Navient Corporation.

2.04.“For Cause” means a determination by the Committee (as defined herein) that
there has been a willful and continuing failure of an Eligible Officer to
perform substantially his duties and responsibilities (other than as a result of
Eligible Officer’s death or Disability) and, if in the judgment of the Committee
such willful and continuing failure may be cured by an Eligible Officer, that
such failure has not been cured by an Eligible Officer within ten (10) business
days after written notice of such was given to Eligible Officer by the
Committee, or that Eligible Officer has committed an act of Misconduct (as
defined below). For purposes of this Plan, “Misconduct” means: (a) embezzlement,
fraud, conviction of a felony crime, pleading guilty or nolo contendere to a
felony crime, or breach of fiduciary duty or deliberate disregard of the
Corporation’s Code of Business Code; (b) personal dishonesty of Eligible Officer
materially injurious to the Corporation; (c) an unauthorized disclosure of any
Proprietary Information; or (d) competing with the Corporation while employed by
the Corporation or during the Restricted Period, in contravention of the
non-competition and non-solicitation agreements substantially in the form
provided in Exhibit C upon termination of employment.

2.05.“Termination of Employment For Good Reason” means: (a) a material reduction
in the position or responsibilities of the Eligible Officer not including a
change in title only; (b) a material reduction in Eligible Officer’s Base Salary
or a material reduction in Eligible Officer’s compensation arrangements
(provided that variability in the value of stock-based compensation or

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in the compensation provided under the Navient Corporation 2014 Omnibus
Incentive Plan or a successor plan will not be deemed to cause a material
reduction in compensation); or (c) a relocation of the Eligible Officer’s
primary work location to a distance of more than seventy-five (75) miles from
its location as of the date of this Plan without the consent of Eligible
Officer, unless such relocation results in the Eligible Officer’s primary work
location being closer to Eligible Officer’s then primary residence or does not
substantially increase the average commuting time of Eligible Officer. If an
Eligible Officer continues his or her employment with the Corporation for more
than six months after the occurrence of an event described above that
constitutes a Termination for Good Reason, then the Eligible Officer shall be
deemed to have given his or her consent to such event and the Eligible Officer
shall not be eligible for a Severance Payment under this Plan as a result of
that event and shall be deemed to have waived all rights in regard to such
event.

2.06.“Termination Date” means the Eligible Officer’s last date of employment
with the Corporation.

2.07.“Termination of Eligible Officer’s Employment Without Cause” means
termination of an Eligible Officer’s employment by the Corporation for any
reason other than “For Cause” or on account of death or disability, as defined
in the Corporation’s long-term disability policy in effect at the time of
termination (“Disability”).

ARTICLE 3

ELIGIBILITY AND BENEFITS

3.01.Eligible Officers. Officers of Navient Corporation and its wholly-owned
subsidiaries with the Navient corporate title of Senior Vice President or above
are eligible for benefits under this Plan (each an “Eligible Officer”).

3.02.Severance Benefits.  (a)  An Eligible Officer will be entitled to receive a
severance payment (“Severance Payment”) and continuation of medical, dental and
vision insurance benefits and outplacement services, all as provided herein,
after any of the following events (each a “Termination Event”): (I) Termination
of Employment for Good Reason, provided that if such termination is on account
of a decision to resign due to clause (a) of the definition of “Termination by
Eligible Officer For Good Reason,” such Eligible Officer continues his or her
employment for a transition period mutually agreed to by the Corporation and the
Executive Officer or (II) upon a Termination of Eligible Officer’s Employment
Without Cause or (III) upon mutual agreement of the Corporation and an Eligible
Officer.

(b)The amount of the Severance Payment will equal the sum of the Eligible
Officer’s Base Salary plus the Eligible Officer’s Average Bonus times a
multiplier plus a cash payment equal to the Eligible Officer’s target annual
bonus amount for the year in which the Termination Date occurs, such target
bonus amount to be prorated for the full number of months in the final year that
the Eligible Officer was employed by the Corporation. The multiplier for
Eligible Officers with the title of Chief Executive Officer will be two (2). The
multiplier for all other Eligible Officers will be one (1). Contingent upon
signing the Confidential Agreement and Release, the Severance Payment will be
made to the Eligible Officer in a single lump sum cash payment within forty-five
(45) calendar days after the Eligible Officer’s Termination Date.
Notwithstanding anything to the contrary herein, in no event shall a Severance
Payment paid to an

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Eligible Officer hereunder exceed the Eligible Officer’s Base Salary plus
incentive bonus multiplied by three (the “Payment Limit”), and if a Severance
Payment hereunder were to exceed such amount, then such payment shall be reduced
to the highest amount that does not exceed the Payment Limit.

(c)For eighteen (18) months (or twenty-four (24) months if the Eligible Officer
is the Chief Executive Officer) following the Eligible Officer’s Termination
Date, the Eligible Officer and his or her eligible dependents or survivors will
be entitled to continue to participate in any medical, dental and vision
insurance plans generally available to the senior management of the Corporation,
as such plans may be in effect from time to time on the terms generally applied
to actively employed senior management of the Corporation, including any
Eligible Officer cost-sharing provision; provided that if the Corporation
determines it cannot provide such continued coverage without potentially
violating applicable law, the Corporation shall in lieu thereof provide to the
Eligible Officer a taxable monthly payment in an amount equal to the portion of
the monthly premium that the Corporation would otherwise be required to pay
under this Section 3.02(c) to continue the Eligible Officer’s coverage by such
medical, dental and vision benefit plans (based on the premium for the first
month of coverage following the Eligible Officer’s Termination Date), which
payment will commence in the month following the month in which the Eligible
Officer’s Termination Date occurs and end on the final day of the applicable
continuation period described in this Section 3.02(c).  An Eligible Officer and
his or her eligible dependents will cease to be covered under the foregoing
medical, dental and/or vision insurance plans (or, if taxable medical payments
are being provided as described above, will cease to receive such payments) if
he or she becomes eligible to obtain coverage under medical, dental and/or
vision insurance plans of a subsequent employer.

(d)An Eligible Officer will be entitled to receive outplacement services from
the Corporation or the Corporation’s service provider(s.)

(e)All payments and benefits provided under this Section 3.02 are conditioned on
the Eligible Officer’s continuing compliance with this Plan and the Eligible
Officer’s execution (and effectiveness) of a release of claims and covenant not
to sue and non-competition and non-solicitation agreements substantially in the
form provided in Exhibit C hereto.

3.03.Section 409A. Notwithstanding anything herein to the contrary, to the
extent that the Committee determines, in its sole discretion, that any payments
or benefits to be provided hereunder to or for the benefit of an Eligible
Officer who is also a “specified employee” (as such term is defined under
Section 409A(a)(2)(B)(i) of the Code or any successor or comparable provision)
would be subject to the additional tax imposed under Section 409A(a)(1)(B) of
the Code or any successor or comparable provision, the commencement of such
payments and/or benefits will be delayed until the earlier of (x) the date that
is six months following the Termination Date or (y) the date of the Eligible
Officer’s death (such date is referred to herein as the “Distribution Date”). In
the event that the Committee determines that the commencement of any of the
benefits or payments to be provided under Section 3.02(c) are to be delayed
pursuant to the preceding sentence, the Corporation will require the Eligible
Officer to bear the full cost of such benefits until the Distribution Date at
which time the Corporation will reimburse the Designated Employee for all such
costs.

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ARTICLE 4

COMMITTEE

4.01.Committee. The Plan will be administered by the Employee Benefits Fiduciary
Committee, appointed by and serving at the pleasure of the Board of Directors
and consisting of at least three (3) officers of the Corporation (the
“Committee”).

4.02.Powers. The Committee will have full power, discretion and authority to
interpret, construe and administer the Plan and any part hereof, and the
Committee’s interpretation and construction hereof, and any actions hereunder,
will be binding on all persons for all purposes. The Committee will provide for
the keeping of detailed, written minutes of its actions. The Committee, in
fulfilling its responsibilities may (by way of illustration and not of
limitation) do any or all of the following:

(i)allocate among its members, and/or delegate to one or more other persons
selected by it, responsibility for fulfilling some or all of its
responsibilities under the Plan in accordance with Section 405(c) of ERISA;

(ii)designate one or more of its members to sign on its behalf directions,
notices and other communications to any entity or other person;

(iii)establish rules and regulations with regard to its conduct and the
fulfillment of its responsibilities under the Plan;

(iv)designate other persons to render advice with respect to any responsibility
or authority pursuant to the Plan being carried out by it or any of its
delegates under the Plan; and

(v)employ legal counsel, consultants and agents as it may deem desirable in the
administration of the Plan and rely on the opinion of such counsel.

4.03.Action by Majority. The majority of the members of the Committee in office
at the time will constitute a quorum for the transaction of business. All
resolutions or other actions taken by the Committee will be by the vote of the
majority at any meeting or by written instrument signed by the majority.

ARTICLE 5

CLAIM FOR BENEFITS UNDER THIS PLAN

5.01.Claims for Benefits under this Plan. A condition precedent to receipt of
severance benefits is the execution of an unaltered release of claims in form
and substance prescribed by the Corporation. If an Eligible Officer believes
that an individual should have been eligible to participate in the Plan or
disputes the amount of benefits under the Plan, such individual may submit a
claim for benefits in writing to the Committee within sixty 60 days after the
individual’s termination of employment. If such claim for benefits is wholly or
partially denied, the Committee will within a reasonable period of time, but no
later than 90 days after receipt of the written claim, notify the individual of
the denial of the claim. If an extension of time for processing the claim is
required, the Committee may take up to an additional 90 days, provided that the
Committee sends

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the individual written notice of the extension before the expiration of the
original 90-day period. The notice provided to the individual will describe why
an extension is required and when a decision is expected to be made. If a claim
is wholly or partially denied, the denial notice: (1) will be in writing,
(2) will be written in a manner calculated to be understood by the individual,
and (3) will contain (a) the reasons for the denial, including specific
reference to those plan provisions on which the denial is based; (b) a
description of any additional information necessary to complete the claim and an
explanation of why such information is necessary; (c) an explanation of the
steps to be taken to appeal the adverse determination; and (d) a statement of
the individual’s right to bring a civil action under section 502(a) of ERISA
following an adverse decision after appeal. The Committee will have full
discretion consistent with their fiduciary obligations under ERISA to deny or
grant a claim in whole or in part. If notice of denial of a claim is not
furnished in accordance with this section, the claim will be deemed denied and
the claimant will be permitted to exercise his rights to review pursuant to
Sections 5.02 and 5.03.

5.02.Right to Request Review of Benefit Denial. Within 60 days of the
individual’s receipt of the written notice of denial of the claim, the
individual may file a written request for a review of the denial of the
individual’s claim for benefits. In connection with the individual’s appeal of
the denial of his benefit, the individual may submit comments, records,
documents, or other information supporting the appeal, regardless of whether
such information was considered in the prior benefits decision. Upon request and
free of charge, the individual will be provided reasonable access to and copies
of all documents, records and other information relevant to the claim.

5.03.Disposition of Claim. The Committee will deliver to the individual a
written decision on the claim promptly, but not later than 60 days after the
receipt of the individual’s written request for review, except that if there are
special circumstances which require an extension of time for processing, the
60-day period will be extended to 120 days; provided that the appeal reviewer
sends written notice of the extension before the expiration of the original
60-day period. If the appeal is wholly or partially denied, the denial notice
will: (1) be written in a manner calculated to be understood by the individual,
(2) contain references to the specific plan provision(s) upon which the decision
was based; (3) contain a statement that, upon request and free of charge, the
individual will be provided reasonable access to and copies of all documents,
records and other information relevant to the claim for benefits; and (4)
contain a statement of the individual’s right to bring a civil action under
section 502(a) of ERISA.

5.04.Exhaustion. An individual must exhaust the Plan’s claims procedures prior
to bringing any claim for benefits under the Plan in a court of competent
jurisdiction.  No lawsuit shall be brought against the Plan, the Committee or
the Corporation after 60 days from receipt of the final decision on a claim
appeal.

ARTICLE 6

MISCELLANEOUS

6.01.Successors.  (a)  Any successor (whether direct or indirect and whether by
purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Corporation’s business and/or assets, or all or
substantially all of the business and/or assets of a business segment of the
Corporation will be obligated under this Plan in the same manner and to the same
extent as the Corporation would be required to perform it in the absence of a
succession.

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(b)This Plan and all rights of the Eligible Officer hereunder will inure to the
benefit of, and be enforceable by, the Eligible Officer’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

6.02.Creditor Status of Eligible Officers. In the event that any Eligible
Officer acquires a right to receive payments from the Corporation under the
Plan, such right will be no greater than the right of any unsecured general
creditor of the Corporation.

6.03.Facility of Payment. If it will be found that (a) an Eligible Officer
entitled to receive any payment under the Plan is physically or mentally
incompetent to receive such payment and to give a valid release therefor, and
(b) another person or an institution is then maintaining or has custody of such
Eligible Officer, and no guardian, committee, or other representative of the
estate of such person has been duly appointed by a court of competent
jurisdiction, the payment may be made to such other person or institution
referred to in (b) above, and the release will be a valid and complete discharge
for the payment.

6.04.Notice of Address. Each Eligible Officer entitled to benefits under the
Plan must file with the Corporation, in writing, his post office address and
each change of post office address. Any communication, statement or notice
addressed to such Eligible Officer at such address will be deemed sufficient for
all purposes of the Plan, and there will be no obligation on the part of the
Corporation to search for or to ascertain the location of such Eligible Officer.

6.05.Headings. The headings of the Plan are inserted for convenience and
reference only and shall have no effect upon the meaning of the provisions
hereof.

6.06.Choice of Law. The Plan shall be construed, regulated and administered
under the laws of the State of Delaware (excluding the choice-of-law rules
thereto), except that if any such laws are superseded by any applicable Federal
law or statute, such Federal law or statute shall apply.

6.07.Construction. Whenever used herein, a masculine pronoun shall be deemed to
include the masculine and feminine gender, a singular word shall be deemed to
include the singular and plural and vice versa in all cases where the context
requires.

6.08.Termination; Amendment; Waiver.  (a)  Prior to the occurrence of a
Termination Event, the Board of Directors, or a delegated Committee of the
Board, may amend or terminate the Plan at any time and from time to time.
Termination or amendment of the Plan will not affect any obligation of the
Corporation under the Plan which has accrued and is unpaid as of the effective
date of the termination or amendment. Unless and until a Termination Event shall
have occurred, an Eligible Officer shall not have any vested rights under the
Plan or any agreement entered into pursuant to the Plan.

(b)From and after the occurrence of a Termination Event, no provision of this
Plan shall be modified, waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by the Eligible Officer and by an
authorized officer of the Corporation (other than the Eligible Officer). No
waiver by either party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a waiver of
any other condition or provision or of the same condition or provision at
another time.

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(c)Notwithstanding anything herein to the contrary, the Board of Directors may,
in its sole discretion, amend the Plan (which amendment shall be effective upon
its adoption or at such other time designated by the Board of Directors) at any
time prior to a Termination Event as may be necessary to avoid the imposition of
the additional tax under Section 409A(a)(1)(B) of the Code; provided, however,
that any such amendment shall be implemented in such a manner as to preserve, to
the greatest extent possible, the terms and conditions of the Plan as in
existence immediately prior to any such amendment.

6.09.Whole Agreement. This Plan contains all the legally binding understandings
and agreements between the Eligible Officer and the Corporation pertaining to
the subject matter thereof and supersedes all such agreements, whether oral or
in writing, previously entered into between the parties.

6.10.Withholding Taxes. All payments made under this Plan will be subject to
reduction to reflect taxes required to be withheld by law.

6.11.No Assignment. The rights of an Eligible Officer to payments or benefits
under this Plan shall not be made subject to option or assignment, either by
voluntary or involuntary assignment or by operation of law, including (without
limitation) bankruptcy, garnishment, attachment or other creditor’s process, and
any action in violation of this Section 6.11 shall be void.

 

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Exhibit A

Example “Average Bonus” Calculation for Long-serving Employee

1.

Assumptions:

 

 

Annual salary = $200,000

 

 

Management Incentive Plan (MIP) Bonus Target = 75% of annual salary ($150,000)

 

 

Current Corp MIP Score = 80% (score for the most recent quarter-end in current
year)

 

 

Hire Date = August 1, 2000

 

 

Termination Date = August 1, 2020

 

 

2019 MIP Bonus (paid in 2020) = $150,000

 

 

2018 MIP Bonus (paid in 2019) = $150,000

2.

Compute 2020 (current year) Estimated MIP Bonus:  

 

 

MIP Bonus Target ($150,000) * Current Corp MIP Score (80%) = $120,000

3.

Define 24-month period for termination date of August 1, 2020:  

 

 

8 months in 2020*

 

 

All 12 months of 2019

 

 

4 months of 2018

4.

Prorate each year’s MIP Bonus:  

 

 

2020:  8 months @ $120,000

$80,000

 

 

 

2019: 12 months @ $150,000

$150,000

 

 

 

2018:  4 months @ $150,000

$50,000

 

 

 

Total: 24 months

$280,000

 

5.

Annualize 24-month Total (divide by 2):  

 

 

$280,000 ÷ 2 = $140,000 = Average Bonus

*Includes the entire month in which the termination date falls.

 

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Exhibit B

“Average Bonus” Calculation for Recently Hired Employee

1.

Assumptions:  

 

 

Annual salary = $200,000

 

 

Management Incentive Plan (MIP) Bonus Target = 75% of Annual Salary ($150,000)

 

 

Current Corp MIP Score = 80% (score for the most recent quarter-end in current
year)

 

 

Hire Date = August 1, 2019

 

 

Termination Date = August 1, 2020

 

 

2019 MIP Bonus (paid in 2020) = $62,500 (Employee received pro-rated bonus based
on 5 months of employment at 2019 Corp MIP Score of 100%)

 

 

2018 MIP Bonus (paid in 2019) = $0

2.

Compute 2020 (current year) Estimated MIP Bonus:  

 

 

MIP Bonus Target ($150,000) * Current Corp MIP Score (80%) = $120,000

3.

Define 24-month period for termination date of August 1, 2020:

 

 

8 months in 2020*

 

 

All 12 months of 2019

 

 

4 months of 2018

4.

Prorate each year’s MIP Bonus:  

 

 

2020:  8 months @ $120,000

$80,000

 

 

 

2019: 12 months @ $62,500

$62,500

 

 

 

2018:  4 months @ $0

$0

 

 

 

Total: 24 months

$142,500

 

5.

Annualize 24-month Total (divide by 2):  

 

 

$142,500 ÷ 2 = $71,250 = Average Bonus

*Includes the entire month in which the termination date falls.

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