Exhibit 10.25

SALLIE MAE 401(k) SAVINGS PLAN

— Plan Document —

Effective as of January 1, 2010

(Incorporating Plan Amendments through September 1, 2009)

Restatement as of January 1, 2010

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TABLE OF CONTENTS

 

         Page  

ARTICLE 1  

 

NAME AND EFFECTIVE DATE

     1    1.01    

Name of Plan

     1    1.02    

Effective Date

     1   

ARTICLE 2  

 

DEFINITIONS

     4    2.01    

Affiliated Employer

     4    2.02    

Aggregation Group

     5    2.03    

Authorized Leave of Absence

     5    2.04    

Beneficiary

     5    2.05    

Board of Directors

     6    2.06    

Code

     6    2.07    

Compensation

     6    2.08    

Corporation

     7    2.09    

Determination Date

     7    2.10    

Direct Rollover

     7    2.11    

Disability

     7    2.12    

Effective Date

     8    2.13    

Eligible Retirement Plan

     8    2.14    

Eligible Rollover Distribution

     9    2.15    

Employee

     10    2.16    

Employee Account

     11    2.17    

Employee Contribution

     12    2.18    

Employer

     12    2.19    

Employer Core Contribution

     12    2.20    

Employer Discretionary Profit-Sharing Contribution

     13    2.21    

Employer Matching Contribution

     13    2.22    

Employment Commencement Date

     13    2.23    

ERISA

     13    2.24    

Five Percent Owner

     13    2.25    

Fund

     13    2.26    

Highly Compensated Employee

     14    2.27    

Hour of Service

     15    2.28    

Investment Advisory Committee

     16    2.29    

Key Employee

     16    2.30    

Leased Employee

     17    2.31    

Named Fiduciary

     17    2.32    

Non-deferred Compensation

     17    2.33    

Non-Key Employee

     20    2.34    

Normal Retirement Age

     20    2.35    

One Percent Owner

     20    2.36    

Participant

     20   

 

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TABLE OF CONTENTS

(continued)

 

         Page   2.37    

Pension Plan

     21    2.38    

Period of Service

     21    2.39    

Period of Severance

     21    2.40    

Permissive Aggregation Group

     22    2.41    

Plan

     22    2.42    

Plan Administrator

     22    2.43    

Plan Year

     22    2.44    

Qualified Beneficiary

     22    2.45    

Qualified Non-Elective Contribution

     22    2.46    

Reemployment Commencement Date

     23    2.47    

Required Aggregation Group

     23    2.48    

Retirement Committee

     23    2.49    

Rollover Contribution

     23    2.50    

Service Contract Act Contribution

     23    2.51    

Severance from Service Date

     23    2.52    

Terminated Participant

     24    2.53    

Top Heavy Group

     24    2.54    

Top Heavy Plan

     25    2.55    

Trust Agreement

     26    2.56    

Trustee

     26    2.57    

Valuation Date

     26    2.58    

Vested Benefit

     26    2.59    

Year of Participation

     26    2.60    

Year of Vesting Service

     26   

ARTICLE 3  

 

ELIGIBILITY & PARTICIPATION

     28    3.01    

Eligibility

     28    3.02    

Participation

     29    3.03    

Re-employment of Terminated Participant or Former Employee and Change in
Employment Status

     30    3.04    

Transfer of Participant to Another Employer

     32    3.05    

Transfer of Participant to an Affiliated Employer

     32    3.06    

Transfer of Participant from Affiliated Employer

     32   

ARTICLE 4  

 

CONTRIBUTIONS

     33    4.01    

Employer Contributions

     33    4.02    

Rollover Contributions

     35    4.03    

Distribution of Employee Contributions that Exceed the Statutory Limitation

     36    4.04    

Change of Contribution Rate and Suspension of Contributions

     37   

 

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TABLE OF CONTENTS

(continued)

 

         Page   4.05    

Payment to the Trustee

     38    4.06    

Safe Harbor Requirements

     38    4.07    

Maximum Benefit and Contribution Limitations

     39   

ARTICLE 5  

 

INVESTMENT ELECTIONS AND ACCOUNTS OF PARTICIPANTS

     42    5.01    

Participant Investment Elections

     42    5.02    

Investment Alternatives

     42    5.03    

Allocation to Accounts

     42    5.04    

Determination of Account Balances Binding

     44    5.05    

Participation of Additional Employers

     44    5.06    

Voting Rights of Corporation Stock

     44   

ARTICLE 6  

 

IN-SERVICE WITHDRAWALS AND LOANS

     45    6.01    

Withdrawals from Voluntary Contribution and Participant Contribution
Sub-Accounts

     45    6.02    

Withdrawals from Rollover Contribution Sub-Accounts

     45    6.03    

Withdrawals from Employer Matching Contribution Sub-Accounts, Employer
Discretionary Profit-Sharing Contribution Sub-Accounts, Employer Core
Contribution Sub-Accounts, and Service Contract Act Contribution Sub-Accounts

     46    6.04    

Hardship Withdrawals from Employee Contribution Sub-Accounts

     47    6.05    

Loans

     51   

ARTICLE 7  

 

VESTING

     52    7.01    

Vesting

     52    7.02    

Re-employment of Former Participants

     53   

ARTICLE 8  

 

DISTRIBUTIONS

     54    8.01    

Earliest Time for and Method of Distribution of Benefits

     54    8.02    

Time of Payment

     54    8.03    

Distribution of Small Benefits

     55    8.04    

Latest Time for Distribution

     56    8.05    

Missing Participant or Beneficiary

     57    8.06    

Election of Direct Rollover of a Vested Benefit

     58   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

ARTICLE 9  

 

PLAN ADMINISTRATION

     59    9.01    

Retirement Committee

     59    9.02    

Powers and Duties of the Retirement Committee

     59    9.03    

Investment Advisory Committee

     59   

ARTICLE 10  

 

CONTROL AND MANAGEMENT OF ASSETS

     60    10.01    

In General

     60   

ARTICLE 11  

 

FIDUCIARY LIABILITY INSURANCE AND INDEMNIFICATION

     61    11.01    

Fiduciary Liability Insurance

     61    11.02    

Indemnity

     61   

ARTICLE 12  

 

AMENDMENTS TO OR TERMINATION OF THE PLAN

     62    12.01    

Right of Corporation to Amend or Terminate the Plan

     62    12.02    

Termination of Plan

     63    12.03    

Withdrawal of an Employer

     63    12.04    

Plan-to-Plan Transfer

     64   

ARTICLE 13  

 

TOP HEAVY PROVISIONS

     65    13.01    

Top Heavy Plan Requirements

     65    13.02    

Top Heavy Minimum Contribution Requirement

     65    13.03    

Top-Heavy Provisions

     65   

ARTICLE 14  

 

MISCELLANEOUS

     66    14.01    

Rights of Employees

     66    14.02    

Notice of Address

     66    14.03    

Data

     66    14.04    

Merger

     66    14.05    

Fund to be for the Exclusive Benefit of Participants

     67    14.06    

Facility of Payment

     68    14.07    

Restrictions on Alienation

     68    14.08    

Headings

     68    14.09    

Construction

     69    14.10    

Exclusion and Severability

     69    14.11    

Special Rule Relating to Rights Under USERRA

     69    14.12    

Application of Forfeitures

     69   

 

-iv-

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TABLE OF CONTENTS

(continued)

 

         Page  

ARTICLE 15  

 

SPECIAL PROVISIONS APPLICABLE TO CORPORATE TRANSACTIONS

     71    15.01    

Special Vesting Provisions

     71    15.02    

Spousal Consent for In-Service Withdrawal

     72    15.03    

USA Group Special Provisions

     72    15.04    

Southwest Student Services Corporation Special Provisions

     73   

ARTICLE 16  

 

SIGNATURE

     74   

APPENDIX A

 

SALLIE MAE 401(K) SAVINGS PLAN PARTICIPATING EMPLOYERS

     75   

APPENDIX B

 

ADDITIONAL PROVISIONS RELATED TO REQUIRED MINIMUM DISTRIBUTIONS

     76   

 

-v-

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ARTICLE 1

NAME AND EFFECTIVE DATE

1.01 Name of Plan. Effective November 1, 1997, this Plan shall be known as the
Sallie Mae 401(k) Savings Plan. Prior to November 1, 1997, the Plan was known as
the Student Loan Marketing Association Employees’ Thrift and Savings Plan.

This Plan is a profit-sharing plan. This Plan is intended to qualify as a
participant-directed account plan under section 404(c) of ERISA.

1.02 Effective Date. The Effective Date of the Plan is April 1, 1974. The Plan
was amended and restated to reflect statutory changes that are generally
effective January 1, 1997, (except to the extent an amendment required by a
statutory enactment is effective on a later date, as stated herein), and to
reflect administrative changes to the Plan. The Plan was restated as of
February 28, 1999, to reflect amendments made to the Plan after January 1, 1997
and effective on February 28, 1999 unless otherwise stated herein. The Plan was
further restated as of December 31, 1999 to reflect amendments through
December 31, 1999, and the Plan was further restated as of December 31, 2001 to
reflect amendments through December 31, 2001. The Plan was further amended by
the First Amendment to the Sallie Mae 401(k) Savings Plan to comply with the
Economic Growth and Tax Relief Reconciliation Act of 2001, and to incorporate
certain other plan design changes. The Plan was further amended by the Second
Amendment to the Sallie Mae 401(k) Savings Plan, effective as of January 1, 2003
or as otherwise provided, to incorporate certain plan design changes. The Plan
was thereafter amended as of January 1, 2006 to incorporate changes to the
optional forms of benefit and for purposes of further defining eligibility and
vesting service for new participants added to the plan as a result of
acquisition.

 

Page 1    Restatement as of January 1, 2010    

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The Plan was further restated as of September 1, 2006, to reflect amendments
through January 1, 2006. The Plan (as most recently restated as of September 1,
2006, to reflect amendments through January 1, 2006) was then amended as
follows: (1) by the First Amendment, effective as of January 1, 2006, or as
otherwise provided, to incorporate certain changes required by the final
regulations issued under section 401(k) of the Code; (2) by the Second
Amendment, effective as of August 1, 2007, to incorporate changes related to a
freeze in eligibility and participation under the Plan; (3) by the Third
Amendment, effective as of October 1, 2008, to make changes to the definition of
Compensation and the amount of Employer Core Contributions and Employer Matching
Contributions; (4) by the Fourth and Fifth Amendments, effective as of
January 1, 2008, to clarify the administrative provisions of the Plan and to
comply with the final regulations issued under section 415 of the Code; (5) by
the Sixth Amendment, effective as of September 1, 2009, to reflect a special
employer discretionary contribution (a “Service Contract Act Contribution”)
exclusively for employees designated by the Corporation as government contract
employees; (6) by the Seventh Amendment, effective January 1, 2007 and
January 1, 2008, to incorporate certain changes required by the Pension
Protection Act of 2006; (7) by the Eighth Amendment, effective for distributions
on and after January 1, 2003, to comply with the final regulations issued under
section 401(a)(9) of the Code; and (8) by the Ninth Amendment, effective
January 1, 2009, to clarify how the Plan has been administered. The Plan is
hereby further amended and restated, effective as of January 1, 2010, to reflect
the merger of the Sallie Mae 401(k) Retirement Savings Plan into the Plan, to
restore the eligibility and participation provisions, and to reflect amendments
through January 1, 2010.

 

Page 2    Restatement as of January 1, 2010    

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Except as may otherwise be provided by ERISA or other law or the terms of this
Plan, the benefit of a Terminated Participant who terminated his employment with
an Employer before the effective date of an amendment shall be governed by the
provisions of the Plan as in effect on the date of such termination.

 

Page 3    Restatement as of January 1, 2010    

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ARTICLE 2

DEFINITIONS

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

2.01 Affiliated Employer. “Affiliated Employer” means:

(a) any corporation which is in the same “controlled group of corporations”, as
defined in section 414(b) of the Code, as an Employer, but which is not an
Employer;

(b) any trade or business which is under common control, as defined in section
414(c) of the Code, with an Employer, but which is not an Employer;

(c) any employer that is a member of an affiliated service group, as defined in
section 414(m) of the Code, that includes an Employer, but which is not an
Employer; or

(d) any other entity that is required to be aggregated with an Employer pursuant
to regulations under section 414(o) of the Code, but which is not an Employer.

A corporation, a trade or business, an employer or an entity is an Affiliated
Employer for all purposes under the Plan only during the period or periods when
the corporation is a member of the same controlled group of corporations as an
Employer, when the trade or business is under common control with an Employer,
when the employer is a member of an affiliated service group that includes an
Employer, or when the entity is required to be aggregated with an Employer. For
purposes of Section 4.07, the definitions prescribed by sections 414(b) and
414(c) of the Code shall be modified as provided by section 415(h) of the Code.

 

Page 4    Restatement as of January 1, 2010    

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2.02 Aggregation Group. “Aggregation Group” means either a Required Aggregation
Group or a Permissive Aggregation Group.

2.03 Authorized Leave of Absence. “Authorized Leave of Absence” means:

(a) a leave of absence of an employee approved by an Employer or Affiliated
Employer in accordance with rules that apply on a uniform basis to all similarly
situated employees; or

(b) a leave of absence of an employee as required by the Veteran Re-employment
Rights Act or other applicable law.

2.04 Beneficiary. “Beneficiary” means the person, persons or entity, including
one or more trusts, last designated, on a form supplied by the Retirement
Committee, by a Participant as a beneficiary, co-beneficiary or contingent
beneficiary to receive benefits payable under the Plan in the event of the death
of the Participant; provided, however, that in the case of a married
Participant, the Beneficiary shall be the Participant’s surviving spouse, unless
the surviving spouse consents, on a form supplied by the Retirement Committee,
to the designation of another Beneficiary or Beneficiaries. The spouse’s consent
must acknowledge the effect of such designation, must be witnessed by a Plan
representative or a notary public, and, unless the spouse executes a general
consent, must acknowledge the specific non-spouse Beneficiary, if any, including
any class of Beneficiaries or any contingent Beneficiaries. A general consent to
permit the Participant to change his Beneficiary without any requirement of
further consent by his spouse is valid only if the spouse acknowledges that the
spouse has a right to limit consent to a specific Beneficiary and the spouse
voluntarily relinquishes that right. Notwithstanding the above, if it is
established to the satisfaction of a Plan representative that such consent may
not be

 

Page 5    Restatement as of January 1, 2010    

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obtained because there is no spouse or because the spouse cannot be located, no
consent will be required. Spousal consent is also not required if the
Participant is legally separated or the Participant has been abandoned, within
the meaning of local law, and the Participant has a court order to such effect.
If the spouse is legally incompetent to give consent, the spouse’s legal
guardian, even if the guardian is the Participant, may give consent.

If no designation of a Beneficiary is in effect at the time of death of the
Participant, or if no person, persons or entity so designated shall survive the
Participant, the Beneficiary shall be the Participant’s surviving spouse, if
any, or if there shall be no such surviving spouse, the Beneficiary shall be the
estate of the Participant.

2.05 Board of Directors. “Board of Directors” or “Board” means the Board of
Directors of the Corporation.

2.06 Code. “Code” means the Internal Revenue Code of 1986, as amended.

2.07 Compensation. “Compensation” means, for the portion of a Plan Year during
which an Employee is a Participant, the gross amount of base salary, overtime,
shift differential, bonus and commissions paid by the Employer to an Employee
for services rendered as an Employee to or on behalf of the Employer, including
payments for sick leave, vacation, holidays, jury duty, bereavement and other
paid leaves of absence, short-term disability payments, recruiting/job referral
bonuses, plus any amount that is deferred or reduced pursuant to a salary
reduction agreement in respect of which the Employer makes contributions to this
Plan or to a cafeteria plan within the meaning of section 125 of the Code,
except that Compensation shall not include severance, hiring bonuses, long-term
disability payments, any amount deferred or paid under a nonqualified deferred
compensation plan maintained by the Employer; amounts paid on

 

Page 6    Restatement as of January 1, 2010    

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account of the Corporation’s Vacation Sell Program; or amounts paid on account
of the exercise of stock options or on account of the award or vesting of
restricted stock or other stock-based compensation. The annual Compensation of
each Participant taken into account under the Plan shall not exceed $245,000
(for 2010), adjusted as of January 1 of each calendar year pursuant to sections
401(a)(17) and 415(d) of the Code.

2.08 Corporation. “Corporation” means SLM Corporation or any other person, firm
or corporation which may succeed to the business of SLM Corporation by merger,
consolidation or otherwise and which, by appropriate action, shall adopt the
Plan, except that prior to May 17, 2002, “Corporation” means USA Education,
Inc., prior to July 31, 2000, “Corporation” means SLM Holding Corporation, and
prior to August 7, 1997, “Corporation” means Student Loan Marketing Association.

2.09 Determination Date. “Determination Date” means, with respect to any Plan
Year, (i) the last day of the immediately preceding Plan Year, or (ii) in the
case of the first Plan Year of the Plan, the last day of such Plan Year.

2.10 Direct Rollover. “Direct Rollover” means a payment by the Plan of an
Eligible Rollover Distribution to the Eligible Retirement Plan specified by the
Participant or a Qualified Beneficiary.

2.11 Disability. “Disability” means a mental or physical condition for which an
individual receives disability benefits for total and permanent disability under
either (a) the Federal Social Security Act or (b) any welfare plan maintained by
the Employer that provides long-term disability benefits.

 

Page 7    Restatement as of January 1, 2010    

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2.12 Effective Date. “Effective Date” means April 1, 1974, the date when this
Plan first became effective.

2.13 Eligible Retirement Plan. “Eligible Retirement Plan” means an individual
retirement account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, a qualified trust described in section
401(a) of the Code, an eligible deferred compensation plan described in section
457(b) of the Code that is maintained by an eligible employer described in
section 457(e)(1)(A) of the Code and that agrees to separately account for
amounts rolled into such plan from this Plan, an annuity contract described in
section 403(b) of the Code, or a Roth IRA if the rollover requirements of
sections 402(c) and 408A of the Code (as applicable) are met, that accepts the
Participant’s or Qualified Beneficiary’s Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to a surviving spouse
who is not an alternate payee under a qualified domestic relations order, as
defined in section 414(p) of the Code, an Eligible Retirement Plan is an
individual retirement account described in section 408(a) of the Code or an
individual retirement annuity described in section 408(b) of the Code.

In the case of an Eligible Rollover Distribution to a Qualified Beneficiary who
is the Participant’s or Terminated Participant’s surviving spouse, or spouse or
former spouse who is an alternate payee under a qualified domestic relations
order (as defined in section 414(p) of the Code), an Eligible Retirement Plan
shall be defined in the same manner as if such Qualified Beneficiary were the
Employee. However, in the case of an Eligible Rollover Distribution to any other
Qualified Beneficiary, an “Eligible Retirement Plan” shall include only an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, or a Roth
IRA, if the rollover requirements of sections 402(c) and 408A of the Code (as
applicable) are met.

 

Page 8    Restatement as of January 1, 2010    

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2.14 Eligible Rollover Distribution. “Eligible Rollover Distribution” means any
distribution of all or any portion of a Participant’s Vested Benefit, except
that an Eligible Rollover Distribution does not include: any distribution that
is one of a series of substantially equal periodic payments, made not less
frequently than annually, for the life, or life expectancy, of the Participant
or the Participant’s designated beneficiary or the joint lives (or joint life
expectancies) of the Participant and the Participant’s designated beneficiary,
or for a specified period of ten years or more; any distribution, to the extent
such distribution is required under section 401(a)(9) of the Code; the portion
of any distribution that is not includible in gross income, determined without
regard to the exclusion for net unrealized appreciation with respect to employer
stock; and any amount distributed on account of hardship.

Notwithstanding any provision of the Plan to the contrary, a portion of a
distribution shall not fail to be an Eligible Rollover Distribution merely
because the portion consists of voluntary employee contributions that are not
includible in gross income; provided, however, such portion may be transferred
only to an individual retirement account or annuity described in sections 408(a)
or (b) of the Code, a qualified retirement plan (either a defined contribution
plan or a defined benefit plan) described in section 401(a) or 403(a) of the
Code, or an annuity contract described in section 403(b) of the Code that agrees
to separately account for amounts so transferred and earnings thereon, including
separately accounting for the portion of such distribution which is includible
in gross income and the portion of such distribution which is not so includible.

 

Page 9    Restatement as of January 1, 2010    

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2.15 Employee. “Employee” means any person who is employed by an Employer.
Notwithstanding the prior provision, the following classifications of employees
are excluded:

(a) any such person who is a member of a unit of employees covered by a
collective bargaining agreement where retirement benefits have been the subject
of good faith collective bargaining between the collective bargaining agent and
an Employer, unless such collective bargaining agreement expressly provides for
the inclusion of such persons as Participants in the Plan;

(b) any such person who is a Leased Employee;

(c) any such person who is treated by an Employer as a Leased Employee,
independent contractor, or employee of a third party other than the Employer or
Affiliated Employer, even if such person is later determined to have been a
common law employee of the Employer;

(d) any Employee who is hired in order to participate in a training program
established for the purpose of training and recruiting future full-time
Employees, such as intern, co-op, mentor or any other similar program that may
be implemented by the Employer; and

(e) any Employee employed on a temporary or periodic basis, by the Corporation
or by any Affiliated Employer, where such Employee from time to time accepts, at
his or her discretion, job assignments having a fixed and limited duration, such
as (but not limited to) special project(s) to cover illness, vacation or other
temporary vacancies or unusual or cyclical employment needs, at potentially
varying rates of compensation commensurate with each job assignment and who is
classified in the Employer’s records as a “temporary employee.”

 

Page 10    Restatement as of January 1, 2010    

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When used in the Plan without an initial capital letter, the term “employee”
means any person who is employed by an Employer or Affiliated Employer under the
common-law standard.

2.16 Employee Account. “Employee Account” means a separate account maintained
for each Participant which is composed of the following sub-accounts (to the
extent amounts are credited to any such sub-account):

(a) an Employee Contribution sub-account, which consists of the Employee
Contributions contributed to the Plan pursuant to Section 4.01(a);

(b) an Employer Matching Contribution sub-account, which consists of the
Employer Matching Contributions contributed to the Plan pursuant to
Section 4.01(b);

(c) an Employer Discretionary Profit-Sharing Contribution sub-account, which
consists of the Employer Discretionary Profit-Sharing Contributions contributed
to the Plan pursuant to Section 4.01(c);

(d) an Employer Core Contribution sub-account, which consists of the Employer
Core Contributions contributed to the Plan pursuant to Section 4.01(d);

(e) a Rollover Contribution sub-account, which consists of a Participant’s
Rollover Contributions contributed to the Plan pursuant to Section 4.02;

(f) a participant contribution sub-account, which consists of the participant
contributions contributed to the Plan prior to January 1, 1982;

(g) a voluntary contribution sub-account, which consists of the voluntary
contributions contributed to the Plan prior to January 1, 1987;

 

Page 11    Restatement as of January 1, 2010    

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(h) a Qualified Non-Elective Contribution sub-account, which consists of any
Qualified Non-Elective Contributions that were previously contributed to the
Plan as necessary to pass the nondiscrimination tests described in sections
401(k)(3), 401(k)(12), 401(m)(2), or 401(m)(11) of the Code; and

(i) a Service Contract Act Contribution sub-account, which consists of the
Service Contract Act Contributions contributed to the Plan pursuant to
Section 4.01(g).

Each sub-account shall be adjusted as of each Valuation Date to reflect
investment earnings or losses thereon and any other applicable adjustments
thereto, including such allocations described in Section 5.03.

From time to time, additional sub-accounts may be established and maintained for
recordkeeping purposes to protect optional forms of benefits, rights and
features as may be required upon plan asset transfers arising from mergers and
acquisitions.

2.17 Employee Contribution. “Employee Contribution” means a contribution made to
the Plan by an Employer pursuant to an Employee’s salary deferral election.

2.18 Employer. “Employer” means the Corporation or any wholly- or majority-owned
subsidiary of the Corporation or any organization affiliated with or associated
with the Corporation which adopts the Plan and becomes a party to it with the
written approval of the Corporation. A list of the Employers as of the date of
this restatement is attached hereto as Appendix A.

2.19 Employer Core Contribution. “Employer Core Contribution” means a
contribution to the Plan by the Employer in accordance with Section 4.01(d).

 

Page 12    Restatement as of January 1, 2010    

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2.20 Employer Discretionary Profit-Sharing Contribution. “Employer Discretionary
Profit-Sharing Contribution” means a contribution to the Plan by the Employer in
accordance with Section 4.01(c).

2.21 Employer Matching Contribution. “Employer Matching Contribution” means a
contribution to the Plan by the Employer in accordance with Section 4.01(b),
which matches in whole or in part an Employee Contribution made to the Plan on
behalf of an Employee.

2.22 Employment Commencement Date. “Employment Commencement Date” means the date
an employee first performs an Hour of Service for an Employer or Affiliated
Employer.

2.23 ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended from time to time.

2.24 Five Percent Owner. “Five Percent Owner” means any person who owns (or is
considered as owning within the meaning of section 318 of the Code, as modified
by substituting “5 percent” for “50 percent” in section 318(a)(2)(C) of the
Code) more than five percent (5%) of the outstanding stock of an Employer or any
Affiliated Employer or stock possessing more than five percent (5%) of the total
combined voting power of all stock of an Employer or any Affiliated Employer, or
any person who owns more than five percent (5%) of the capital or profits
interest in any Affiliated Employer that is not a corporation.

2.25 Fund. “Fund” means the trust fund established under the Trust Agreement and
funded by Employer and Employee contributions and from which benefits are to be
paid.

 

Page 13    Restatement as of January 1, 2010    

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2.26 Highly Compensated Employee. “Highly Compensated Employee” means an
employee who is a highly compensated active employee or highly compensated
former employee, within the meaning of section 414(q) of the Code and the
regulations thereunder. A Highly Compensated Employee includes any active
employee who:

(a) was a Five Percent Owner at any time during the current Plan Year or the
preceding Plan Year, or

(b) for the preceding Plan Year, received Non-deferred Compensation from the
Employer in excess of $110,000 (for 2010), as adjusted pursuant to sections
414(q) and 415(d) of the Code, and was in the top-paid group of employees for
such preceding Plan Year.

The top-paid group of employees is the group consisting of the top twenty
percent (20%) of employees when ranked on the basis of Non-deferred Compensation
paid during such preceding Plan Year, excluding the following employees:

(i) employees who have not completed six (6) months of service;

(ii) employees who normally work less than seventeen and one-half (17 1/2) hours
per week;

(iii) employees who normally work during not more than six (6) months during any
Plan Year;

(iv) employees who have not attained age 21; and

(v) except to the extent provided in regulations, employees who are included in
a unit of employees covered by an agreement which the Secretary of Labor finds
to be a collective bargaining agreement between employee representatives and the
Employer.

 

Page 14    Restatement as of January 1, 2010    

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A former employee shall be a Highly Compensated Employee if (i) such employee
was a Highly Compensated Employee when such employee separated from service, or
(ii) such employee was a Highly Compensated Employee at any time after attaining
age fifty-five (55). Whether or not a former employee is a Highly Compensated
Employee shall be determined in accordance with applicable regulations as in
effect for that determination year.

2.27 Hour of Service. “Hour of Service” means:

(a) Each hour for which an employee is directly or indirectly paid, or entitled
to payment, by an Employer or Affiliated Employer for the performance of duties;

(b) Each hour for which no duties were performed but for which back pay,
irrespective of mitigation of damages, has either been awarded or agreed to by
an Employer or Affiliated Employer, which hours shall be credited for the Plan
Year to which the award or agreement pertains; and

(c) Each hour for which an employee is directly or indirectly paid, or entitled
to payment, by an Employer or Affiliated Employer for a period during which no
duties are performed, irrespective of whether the employment relationship has
terminated, due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence, which hours
shall be credited for the Plan Year in which payment is made or due. An hour for
which an employee is directly or indirectly paid, or entitled to payment, on
account of a period during which no duties are performed shall not be credited
to the employee if such payment is made or due under a plan maintained solely
for the purpose of complying with applicable workers’ compensation, unemployment
compensation, or disability insurance laws; and Hours of Service shall not be
credited for a payment which solely reimburses an employee for medical or
medically related expenses incurred by the employee.

 

Page 15    Restatement as of January 1, 2010    

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The same Hours of Service shall not be credited under (a) or (c) above, as the
case may be, and under (b) above. Nothing herein shall be construed as denying
an employee credit for an Hour of Service if credit is required by ERISA or
other Federal law.

Notwithstanding anything in this Section 2.27 to the contrary, Hours of Service
shall be calculated and credited pursuant to section 2530.200b-2 of the
Department of Labor regulations which are incorporated herein by reference.

2.28 Investment Advisory Committee. “Investment Advisory Committee” means the
committee described in Section 9.03.

2.29 Key Employee. “Key Employee” means, for any Plan Year, any employee or
former employee of an Employer or an Affiliated Employer or beneficiary of such
employee who, at any time during such Plan Year is:

(a) an officer of an Employer or an Affiliated Employer having annual
Non-deferred Compensation greater than $160,000, as adjusted annually by the
Commissioner of Internal Revenue; provided that no more than 50 employees shall
be treated as officers for such purpose;

(b) a Five Percent Owner within the meaning of sections 416(i)(1)(A)(ii) and
(B)(i) of the Code and the regulations thereunder; or

(c) a One Percent Owner having aggregate annual Non-deferred Compensation of
more than $150,000, within the meaning of section 416(i)(1)(A)(iii) and (B)(ii)
of the Code and the regulations thereunder.

 

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2.30 Leased Employee. “Leased Employee” means any person, other than an employee
of an Employer or Affiliated Employer, who pursuant to an agreement between an
Employer or Affiliated Employer and any other person (“leasing organization”)
has performed services for an Employer or Affiliated Employer on a substantially
full-time basis for a period of at least one year and such services are
performed under the primary direction or control of the Employer or Affiliated
Employer. A Leased Employee shall be considered an employee of an Employer or an
Affiliated Employer to the extent required by ERISA and/or the Code.

2.31 Named Fiduciary. “Named Fiduciary” means the Retirement Committee and the
Trustee, but only with respect to the specific responsibilities of each for the
administration of the Plan and Fund. The fiduciary responsibility of the
Retirement Committee shall be as set forth in Articles 9 and 10. The fiduciary
responsibility of the Trustee shall be as set forth in the Trust Agreement.

2.32 Non-deferred Compensation. “Non-deferred Compensation” includes all of the
following:

(a) The employee’s wages, salaries, fees for professional services, and other
amounts received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment with the
Employer to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements or other expense
allowances under a non-accountable plan (as described in Treas. Reg.
Section 1.62-2(c)).

 

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(b) In the case of an employee who is an employee within the meaning of section
401(c)(1) of the Code and the regulations thereunder, the employee’s earned
income (as defined in section 401(c)(2) of the Code and the regulations
thereunder).

(c) Amounts described in sections 104(a)(3), 105(a), and 105(h) of the Code, but
only to the extent that these amounts are includible in the gross income of the
employee.

(d) Amounts paid or reimbursed by the Employer for moving expenses incurred by
an employee, but only to the extent that, at the time of the payment, it is
reasonable to believe that these amounts are not deductible by the Employer
under section 217 of the Code.

(e) The value of a non-qualified stock option granted to an employee by the
Employer, but only to the extent that the value of the option is includible in
the gross income of the employee for the taxable year in which granted.

(f) The amount includible in the gross income of an employee upon making the
election described in section 83(b) of the Code.

(g) The amount of any elective deferral (as defined in section 402(g)(3) of the
Code), and any amount which in contributed or deferred by the Employer at the
election of the employee and which is not includible in the gross income of the
employee by reason of section 125, 132(f)(4), or 457 of the Code.

(h) Amounts that are includible in the gross income of an employee under the
rules of section 409A or 457(f)(1)(A) of the Code or because the amounts are
constructively received by the employee.

 

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The following items are not included in the definition of compensation:

(i) Except to the extent required to be included in the definition of
compensation by section 415(c)(3)(D) of the Code, contributions made by the
Employer to a plan of deferred compensation (including a simplified employee
pension described in section 408(k) of the Code or a simple retirement account
described in section 408(p) of the Code, and whether or not qualified) to the
extent that, before the application of the section 415 limitations to that plan,
the contributions are not includible in the gross income of the employee for the
taxable year in which contributed. Additionally, any distributions from a plan
of deferred compensation (whether or not qualified) are not considered as
compensation for purposes of section 415 of the Code, regardless of whether such
amounts are includible in the gross income of the employee when distributed.
However, any amounts received by an employee pursuant to an unfunded
non-qualified plan are permitted to be considered as compensation for section
415 purposes in the year the amounts are actually received, but only to the
extent such amounts are includible in the gross income of the employee.

(ii) Amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or other property) held by an employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture (see
section 83 of the Code and the regulations thereunder).

(iii) Amounts realized from the sale, exchange or other disposition of stock
acquired under a statutory stock option (as defined in Treas. Reg. §1.421-1(b)).

(iv) Except to the extent required to be included in the definition of
compensation by section 415(c)(3)(D) of the Code, other amounts which receive
special tax benefits, such as premiums for group-term life insurance (but only
to the extent that the

 

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premiums are not includible in the gross income of the employee and are not
salary reduction amounts that are described in section 125 of the Code), or
other items of remuneration that are similar to any of the items listed in
paragraphs (i) through this (iv).

The annual Non-deferred Compensation of each employee taken into account under
the Plan shall not exceed the first $245,000 (for 2010) of such Non-deferred
Compensation, as adjusted annually by the Commissioner of Internal Revenue
pursuant to sections 401(a)(17) and 415(d) of the Code.

2.33 Non-Key Employee. “Non-Key Employee” means any employee or former employee
of an Employer or an Affiliated Employer or beneficiary of such employee who is
not a Key Employee, within the meaning of section 416(i)(2) of the Code and the
regulations thereunder.

2.34 Normal Retirement Age. “Normal Retirement Age” means age sixty-five (65).

2.35 One Percent Owner. “One Percent Owner” means any person who would be a Five
Percent Owner if “one percent (1%)” were substituted for “five percent (5%)”
each place it appears.

2.36 Participant. “Participant” means any Employee who has satisfied the
eligibility requirements for the Plan as provided under Article 3 and who
(a) has elected to participate in the Plan by enrolling in the Plan as described
in Section 3.02(a), and/or (b) who has received an allocation of Employer
Discretionary Profit-Sharing Contributions, Employer Core Contributions, or
Service Contract Act Contributions, as applicable. The term Participant, as used
throughout this Plan document, shall also include Terminated Participants where
the context reasonably requires.

 

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2.37 Pension Plan. “Pension Plan” means any defined benefit plan or any defined
contribution plan established by an Employer or an Affiliated Employer and
qualified under section 401 of the Code.

2.38 Period of Service. “Period of Service” means the period that begins on an
employee’s Employment Commencement Date, or Reemployment Commencement Date, with
an Employer or Affiliated Employer and ends on his Severance from Service Date,
and includes the employee’s total number of years and months of service,
crediting each completed and partial month as a full month. In the event an
employee has a Severance from Service Date followed by a Reemployment
Commencement Date within twelve (12) months of such Severance from Service Date,
the Period of Severance shall be treated as a Period of Service. In addition, if
an employee is on an Authorized Leave of Absence and subsequently experiences a
Severance from Service Date, but later has a Reemployment Commencement Date
within twelve (12) months of the day he was first absent from employment because
of the Authorized Leave of Absence, then the period from the Severance from
Service Date until the Reemployment Commencement Date shall be treated as a
Period of Service.

2.39 Period of Severance. “Period of Severance” shall be the period beginning on
the Severance from Service Date and ending on the employee’s next Reemployment
Commencement Date.

 

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2.40 Permissive Aggregation Group. “Permissive Aggregation Group” means a
Required Aggregation Group that also includes a Pension Plan of an Employer or
an Affiliated Employer which, although not required to be included in the
Required Aggregation Group, is treated by an Employer or an Affiliated Employer
as being part of such Required Aggregation Group, provided that such Required
Aggregation Group would continue to meet the requirements of sections 401(a)(4)
and 410(b) of the Code with such Pension Plan being taken into account.

2.41 Plan. “Plan” means this Sallie Mae 401(k) Savings Plan and all authorized
amendments, except that, prior to November 1, 1997, Plan shall mean the Student
Loan Marketing Association Employees’ Thrift and Savings Plan and all authorized
amendments.

2.42 Plan Administrator. “Plan Administrator” means the Retirement Committee.

2.43 Plan Year. “Plan Year” means the twelve (12) month period beginning on
January 1 and ending on December 31.

2.44 Qualified Beneficiary. “Qualified Beneficiary” means a Participant’s or
former Participant’s surviving spouse, or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, or, effective January 1, 2010, non-spouse designated beneficiary
(as defined in section 401(a)(9)(E) of the Code).

2.45 Qualified Non-Elective Contribution. “Qualified Non-Elective Contribution”
means a previous contribution by an Employer that was made to enable the Plan to
meet the nondiscrimination tests described in sections 401(k)(3), 401(k)(12),
401(m)(2), or 401(m)(11) of the Code.

 

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2.46 Reemployment Commencement Date. “Reemployment Commencement Date” means the
date an employee first performs an Hour of Service for an Employer or Affiliated
Employer following a Period of Severance.

2.47 Required Aggregation Group. “Required Aggregation Group” means (i) each
Pension Plan of an Employer or an Affiliated Employer in which a Key Employee is
a Participant, and (ii) each other Pension Plan of an Employer or an Affiliated
Employer which enables any Pension Plan described in the immediately preceding
clause (i) to meet the requirements of section 401(a)(4) or 410(b) of the Code.

2.48 Retirement Committee. “Retirement Committee” means the committee appointed
to administer the Plan as provided in Article 9.

2.49 Rollover Contribution. “Rollover Contribution” means any rollover account
or rollover contribution as defined in section 402(c)(4), 403(a)(4) or 408(d)(3)
of the Code.

2.50 Service Contract Act Contribution. “Service Contract Act Contribution”
means a contribution to the Plan by the Employer in accordance with
Section 4.01(g).

2.51 Severance from Service Date. “Severance from Service Date” means:

(a) the date on which an employee’s employment is terminated for any reason,
other than an Authorized Leave of Absence; or

(b) in the case of an Authorized Leave of Absence, the earlier of (i) the first
anniversary of the first date of an Authorized Leave of Absence, or (ii) in the
event an employee fails to return to employment with an Employer or Affiliated
Employer on or before the expiration of an Authorized Leave of Absence, the date
following the date on which an Authorized Leave of Absence expires; or

 

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(c) in the case of an absence from work which is due to the pregnancy of the
employee, the birth of a child of the employee, the adoption of a child by the
employee, or the caring for a child by the employee for a period beginning
immediately following the birth or adoption of the child, and which extends
beyond the first anniversary of the first day of such absence from work, the
second anniversary of the first date on which the employee commenced such
absence from work.

2.52 Terminated Participant. “Terminated Participant” means a Participant who
has ceased to be an employee.

2.53 Top Heavy Group. “Top Heavy Group” means, with respect to any Plan Year, an
Aggregation Group if, as of the Determination Date with respect to such Plan
Year, (i) the sum of (1) the present value of the cumulative accrued benefits
under all Pension Plans included in such Aggregation Group, determined in
accordance with section 416(g) of the Code and the regulations thereunder, and
(2) the aggregate of the accounts of Key Employees under all defined
contribution plans included in such Aggregation Group, as determined in
accordance with section 416(g) of the Code and the regulations thereunder,
exceeds (ii) sixty percent (60%) of a similar sum determined for Key Employees
and Non-Key Employees; provided, however, that if any employee is a Non-Key
Employee with respect to any Pension Plan for any Plan Year, but such employee
was a Key Employee with respect to such Pension Plan for any prior Plan Year,
any accrued benefit for such employee and any account of such employee shall not
be taken into account for purposes of the foregoing determination; and provided
further, that if any employee

 

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has not performed any service for any Employer or Affiliated Employer
maintaining the Pension Plan at any time during the one (1)-year period ending
on the Determination Date, any accrued benefit for such employees and any
account of such employees shall not be taken into account. For purposes of
determining the present value of the cumulative accrued benefit for any
employee, or the amount of the account of any employee, such present value or
amount shall be increased by the aggregate distributions made with respect to
such employee under the Pension Plan during the one (1)-year period (or, in the
event such distribution is made for a reason other than severance from
employment, death, or disability, during the five (5)-year period) ending on the
Determination Date. The preceding sentence shall also apply to distributions
under a terminated Pension Plan which if it had not been terminated would have
been required to be included in the Aggregation Group.

2.54 Top Heavy Plan. “Top Heavy Plan” means a plan included in a Top Heavy
Group, except that (a) a simple retirement account as described in section
408(p) of the Code is not a Top Heavy Plan, and (b) a plan that consists solely
of a cash or deferred arrangement which meets the requirements of section
401(k)(12) or 401(k)(13) of the Code and matching contributions with respect to
which the requirements of section 401(m)(11) or 401(m)(12) are met is not a Top
Heavy Plan, except that if such plan described in this paragraph (b) would be
treated as a Top Heavy Plan because it is a member of an Aggregation Group that
is a Top Heavy Group, contributions under the plan may be taken into account in
determining whether any other plan in the Aggregation Group meets the
requirements of section 416(c)(2) of the Code.

 

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2.55 Trust Agreement. “Trust Agreement” means the agreement, including all
authorized amendments, entered into by the Trustee and the Corporation pursuant
to which the Fund is established and maintained.

2.56 Trustee. “Trustee” means the individual or entity designated as Trustee
under the terms of the Trust Agreement, or any successor Trustee which is a
party to the Trust Agreement.

2.57 Valuation Date. “Valuation Date” means any date that the New York Stock
Exchange is open for trading.

2.58 Vested Benefit. “Vested Benefit” means the portion of a Participant’s
Employee Account that is non-forfeitable.

2.59 Year of Participation. “Year of Participation” means a twelve (12)-month
period beginning on the date an employee first becomes a Participant in the
Plan. If a Participant has a Severance from Service Date and does not receive a
distribution of his Plan benefit, he shall continue to be credited with Years of
Participation as long as his Plan benefit remains in the Plan. In the event a
Participant has a Severance from Service Date, receives a distribution of his
Plan benefit, and subsequently has a Reemployment Commencement Date, his Years
of Participation upon his reemployment shall be calculated from his Reemployment
Commencement Date and shall not include Years of Participation credited before
his Reemployment Commencement Date.

2.60 Year of Vesting Service. “Year of Vesting Service” means a twelve
(12) month Period of Service, aggregating all Periods of Service, and crediting
each completed and partial month as a full month of service. Years of Vesting
Service shall also include any years of vesting service from a prior employer
recognized by the Plan in effect prior to January 1, 2010.

 

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If an employee has a Period of Severance that exceeds twelve (12) months, his
prior Years of Vesting Service shall be used to determine his vesting percentage
as of his Reemployment Commencement Date only if (a) he was vested in any
portion of his Employee Account derived from Employer contributions, as of his
Severance from Service Date, or (b) his latest Period of Severance as of his
Reemployment Commencement Date is either (i) less than five (5) years, or (ii) a
shorter period of time than his Period of Service, immediately before the date
such Period of Severance began.

With respect to employees re-employed on or after September 1, 2000, an
employee’s prior Years of Vesting Service shall be used to determine his Years
of Vesting Service as of his date of re-employment; provided that such prior
Years of Vesting Service shall not include any Years of Vesting Service
previously disregarded by reason of a prior Period of Severance.

Wherever used in this instrument, 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 a plural word shall be deemed to include the
singular and plural in all cases where the context requires.

 

Page 27    Restatement as of January 1, 2010    

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ARTICLE 3

ELIGIBILITY & PARTICIPATION

3.01 Eligibility.

(a) Employee Contributions. An Employee shall be eligible to elect to have
Employee Contributions made on his behalf beginning on any date coincident with
or next following the date the Employee is credited with a one (1) month Period
of Service with an Employer; provided that such Employee is an Employee on such
date and satisfies the requirements of Section 3.02.

(b) Employer Matching Contributions. A Participant shall be eligible to receive
Employer Matching Contributions beginning with the first pay period coincident
with or next following the date the Participant completes a twelve (12) month
Period of Service with an Employer, provided that the Participant is an Employee
on such date.

(c) Employer Core Contributions. An Employee shall be eligible to receive
Employer Core Contributions equal to 1% of the Participant’s Compensation on a
pay period basis once the Employee has completed a one (1) month Period of
Service.

(d) Service Contract Act Contributions. Effective September 1, 2009, any
Employee (1) who is eligible to elect to have Employee Contributions made on his
behalf in accordance with Section 3.01(a), and (2) who is designated by the
Corporation to be a government contract employee, shall be eligible to receive
Service Contract Act Contributions in an amount necessary to meet the
requirements of the Federal Service Contract Act.

 

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3.02 Participation.

(a) General. To become a Participant, an Employee must enroll in the Plan
pursuant to procedures promulgated by the Retirement Committee, including making
a salary reduction election whereby the Employee elects to reduce his
Compensation by an amount permitted under Section 4.01(a) and the Employer
agrees to contribute such amount to the Plan on behalf of the Employee.

An Employee who is eligible to become a Participant in the Plan, in accordance
with Section 3.01, will become a Participant as soon as administratively
feasible after the date he completes the enrollment procedures described above.

(b) Employer Discretionary Profit-Sharing Contributions and Employer Core
Contributions. An Employee who is eligible to become a Participant in the Plan,
in accordance with Section 3.01, will become a Participant without completing
the enrollment procedures described above upon receiving an allocation of
Employer Discretionary Profit-Sharing Contributions in accordance with
Section 4.01(c) hereof or an Employer Core Contribution in accordance with
Section 4.01(d) hereof.

(c) Service Contract Act Contributions. An Employee who is eligible to become a
Participant in the Plan, in accordance with Section 3.01, will become a
Participant without completing the enrollment procedures described above upon
receiving an allocation of Service Contract Act Contributions in accordance with
Section 4.01(g) hereof.

 

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3.03 Re-employment of Terminated Participant or Former Employee and Change in
Employment Status.

(a) Change in Employment Status: Eligibility for Employee Contributions.
Effective January 1, 2010, if an employee or a former employee who has completed
a one (1)-month Period of Service, but who was not an Employee on the date
coinciding with or next following the date on which the employee completed such
service requirement, becomes or again becomes an Employee on or after January 1,
2010, then such Employee shall be eligible to become a Participant and have
Employee Contributions made on his behalf as of the first day he becomes or
again becomes an Employee; provided that he completes the enrollment process to
become a Participant in the Plan, in the manner described in Section 3.02. In
the case of such a Participant, his Employer will commence making Employee
Contributions on his behalf as soon as administratively feasible following
receipt of the Participant’s salary reduction authorization.

(b) Change in Employment Status: Eligibility for Matching Contributions.
Effective January 1, 2010, if an employee or a former employee who has completed
a twelve (12)-month Period of Service, but who was not an Employee on the date
coinciding with or next following the date on which the employee completed such
service requirement, becomes or again becomes an Employee on or after January 1,
2010, then such Employee shall be eligible to receive Employer Matching
Contributions as of the first day he becomes or again becomes an Employee;
provided that he completes the enrollment process to become a Participant in the
Plan, in the manner described in Section 3.02.

(c) Re-employment of Terminated Participant: Eligibility for Employee
Contributions. Effective January 1, 2010, if a Terminated Participant again
becomes an

 

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Employee on or after January 1, 2010, then such Employee shall be eligible to
become a Participant and have Employee Contributions made on his behalf as of
the first day he again becomes an Employee; provided that he completes the
enrollment process to become a Participant in Plan, in the manner described in
Section 3.02. In the case of such a Participant, the Employer will commence
making Employee Contributions on his behalf as soon as administratively feasible
following receipt of the Participant’s salary reduction authorization.

(d) Re-employment of Terminated Participant: Eligibility for Matching
Contributions. Effective January 1, 2010, if a Terminated Participant who had
completed a twelve (12)-month Period of Service again becomes an Employee on or
after January 1, 2010, then such Employee shall be eligible to receive Employer
Matching Contributions as of the first day he again becomes an Employee;
provided that he completes the enrollment process to become a Participant in the
Plan, in the manner described in Section 3.02.

(e) Effective January 1, 2010, with respect to Employees re-employed on or after
January 1, 2010, an Employee’s prior Period of Service shall be used to
determine his Period of Service as of his date of re-employment; provided that
such Period of Service shall not include any Period of Service previously
disregarded by reason of a prior Period of Severance.

(f) A Terminated Participant or former Employee who has a Period of Severance,
and whose prior Period of Service is not reinstated as described above, must
meet the eligibility requirements of Section 3.01 before becoming a Participant
in the Plan.

Notwithstanding the foregoing provisions of this Section 3.03, the terms of the
Plan in effect prior to January 1, 2010 shall determine an individual’s
eligibility for benefits under the Plan prior to January 1, 2010.

 

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3.04 Transfer of Participant to Another Employer. A Participant who transfers
from one Employer to another Employer will continue to be a Participant in the
Plan.

3.05 Transfer of Participant to an Affiliated Employer. A Participant who
transfers from an Employer to Upromise, Inc. or Asset Performance Group, LLC on
or after July 1, 2007 shall remain a Participant in the Plan upon such transfer,
and shall continue to be a Participant in the Plan until such Participant
terminates employment or is reclassified to an ineligible classification set
forth in Sections 2.15(a)-(e).

3.06 Transfer of Participant from Affiliated Employer. A Participant who
transfers to an Employer from an Affiliated Employer shall receive credit under
the Plan for service with such Affiliated Employer as if the Participant’s
service was for the Employer.

 

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ARTICLE 4

CONTRIBUTIONS

4.01 Employer Contributions.

(a) Employee Contributions. For each Plan Year, the Employer shall contribute to
the Plan on behalf of each Participant an amount equal to a whole percentage up
to seventy-five percent (75%) of a Participant’s Compensation, pursuant to the
salary reduction authorization of the Participant; provided, however, that the
aggregate amount of Employee Contributions contributed to the Plan and to all
other plans, contracts and arrangements maintained by the Employer on behalf of
any Participant for any calendar year shall not exceed the dollar limit
contained in section 402(g)(5) and 415(d) of the Code in effect for such
calendar year, except to the extent permitted under section 414(v) of the Code.
The Employer will begin contributing Employee Contributions to the Plan
commencing as soon as administratively feasible following receipt of the
Participant’s salary reduction authorization. All Employee Contributions will be
credited to the Participant’s Employee Contribution sub-account. The Participant
will at all times be fully vested in his Employee Contribution sub-account.

(b) Employer Matching Contributions. The Employer will contribute to the Plan
for each Participant eligible to receive Employer Matching Contributions (on a
pay period basis) an amount equal to one hundred percent (100%) of the
Participant’s Employee Contributions that do not exceed 3% of Compensation, plus
fifty percent (50%) of the Participant’s Employee Contributions that exceed 3%
of Compensation but that do not exceed 5% of Compensation. Employer Matching
Contributions are intended to satisfy the safe harbor nondiscrimination
requirements of section 401(k)(12) of the Code and shall be 100% vested

 

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when made. In compliance therewith, the Employer shall provide each eligible
Employee with notice of the Employee’s rights and obligations under the Plan
(which notice may be provided through electronic media), within a reasonable
period of time before the beginning of each Plan Year (or, in the Plan Year an
Employee first becomes eligible, within a reasonable period before becoming
eligible), in accordance with the requirements of section 401(k)(12) of the Code
(and the regulations and other guidance issued thereunder). Notwithstanding
anything in the Plan to the contrary, effective January 1, 2009, no true-up
Employer Matching Contributions may be made to a Participant who is eligible to
receive Employer Matching Contributions in accordance with this Section 4.01(b).

(c) Employer Discretionary Profit-Sharing Contributions. From time to time, the
Employer may make an Employer Discretionary Profit-Sharing Contribution to the
Fund. All allocations of Employer Discretionary Profit-Sharing Contributions
determined above shall be credited to the Employee’s Employer Discretionary
Profit-Sharing Contribution sub-account, which sub-account shall at all times be
fully vested.

(d) Employer Core Contributions. The Employer shall make Employer Core
Contributions in accordance with and on behalf of each eligible Employee
described in Section 3.01(c) hereof, which Employer Core Contributions shall
become 100% vested upon a Participant’s completion of one (1) Year of Vesting
Service.

(e) Other Employer Contributions. The Employer may also make additional
contributions to the Plan to correct any errors; provided that such additional
contributions are in the best interest of the Participants.

 

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(f) Employee Catch-Up Contributions. Effective January 1, 2002, all Participants
who are eligible to make Employee Contributions under this Plan and who have
attained age 50 before the close of the calendar year shall be eligible to make
catch-up contributions in accordance with, and subject to the limitations of,
section 414(v) of the Code. Such catch-up contributions shall not be taken into
account for purposes of the Plan implementing the required limitations of
sections 402(g) and 415 of the Code. The Plan shall not be treated as failing to
satisfy the provisions of the Plan implementing the requirements of section
401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by
reason of the making of such catch-up contributions. Employer Matching
Contributions shall be made with respect to amounts contributed as catch-up
contributions.

(g) Service Contract Act Contributions. Effective September 1, 2009, the
Employer may make a Service Contract Act Contribution to the Plan on behalf of
each eligible Employee described in Section 3.01(d). All allocations of Service
Contract Act Contributions shall be credited to an Employee’s Service Contract
Act Contribution sub-account, which sub-account shall at all times be fully
vested.

4.02 Rollover Contributions. An Employee may file an application with the Plan’s
third party administrator to have the Trustee accept his Rollover Contribution,
even if he has not satisfied the eligibility requirements to become a
Participant. Any such request shall state the amount of the Rollover
Contribution and include a statement that such contribution qualifies as a
Rollover Contribution. In addition, the Retirement Committee may require the
Employee to submit such other evidence and documentation as the Retirement
Committee and the Trustee determine is necessary to insure that the contribution
qualifies as a Rollover Contribution.

 

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If the Retirement Committee and the Trustee accept the Rollover Contribution,
the Employee’s Rollover Contribution shall be credited to the Employee’s
Rollover Contribution sub-account. The Employee shall elect to direct the
investment of his Rollover Contribution among the investment alternatives as are
then currently available. The Employee shall at all times be fully vested in his
Rollover Contribution sub-account.

In addition to distributions from a qualified plan described in section 401(a)
or 403(a) of the Code that are otherwise includible in gross income or a
“conduit IRA” containing those assets, the Plan will accept Rollover
Contributions (including direct Rollover Contributions in accordance with
section 401(a)(31) of the Code), subject to the Retirement Committee’s
determination that such amounts meet the requirements for Rollover
Contributions, of (1) distributions from an annuity contract described in
section 403(b) of the Code that are otherwise includible in gross income,
(2) distributions from an eligible plan under section 457(b) of the Code which
is maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state, that are
otherwise includible in gross income and (3) distributions from an individual
retirement account or annuity described in section 408(a) or (b) of the Code
that are otherwise includible in gross income. The Plan will not accept as
Rollover Contributions amounts consisting of after-tax employee contributions.

4.03 Distribution of Employee Contributions that Exceed the Statutory
Limitation. If any amount constituting “excess deferrals”, within the meaning of
section 402(g) of the Code, is required to be included in the gross income of a
Participant under section 402(g)(1) of the Code for any taxable year of the
Participant, the Participant shall notify the Retirement Committee of such
excess deferrals by March 1 following the close of the taxable

 

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year with respect to which the excess deferrals were made, and the Retirement
Committee shall direct the Trustee to distribute, in accordance with section
402(g)(2) and the regulations thereunder, to the Participant, not later than the
next following April 15, the amount of excess deferrals allocated to the Plan
for such taxable year, including any income allocable thereto for the taxable
year. No Employer Matching Contributions shall be made with respect to such
excess deferrals; or if Employer Matching Contributions have been made with
respect to such excess deferrals, they shall be forfeited. In all events, the
income attributable to excess deferrals will be determined in accordance with
section 402(g) of the Code and the regulations issued thereunder.

4.04 Change of Contribution Rate and Suspension of Contributions. A Participant
may elect to change the percentage rate of salary reduction specified in his
salary reduction authorization or to suspend his Employee Contributions in the
manner prescribed by the Retirement Committee. Any such change will become
effective as soon as administratively feasible.

A Participant may elect to suspend all of his Employee Contributions, which
results in the cancellation of the salary reduction authorization between the
Participant and the Employer, in accordance with procedures promulgated by the
Retirement Committee. Any such suspension will become effective as soon as
administratively feasible. A Participant whose Employee Contributions have been
suspended as provided in this paragraph may reinstate such contributions in
accordance with procedures promulgated by the Retirement Committee, which shall
be effective as soon as administratively feasible.

 

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See Section 6.04 for a discussion of the mandatory suspension of contributions
following a hardship withdrawal.

4.05 Payment to the Trustee. Employee Contributions shall be transmitted to the
Trustee as soon as administratively feasible, but in no event later than the
fifteenth (15th) business day of the month following the month in which the
Employee Contributions would otherwise have been payable to the Participant in
cash. Employer Matching Contributions shall be transmitted to the Trustee no
later than the date prescribed by law for the filing of the Corporation’s
Federal tax return for the year for which the contribution is made, including
extensions of such time granted by the Internal Revenue Service. Employer
Discretionary Profit-Sharing Contributions and Service Contract Act
Contributions, if made for a particular year, shall be transmitted to the
Trustee no later than December 31 of the year after the year for which the
contribution is made. Notwithstanding the foregoing, in no event shall Employee
Contributions or Employer Matching Contributions be contributed to the Trust
(i) before the Participant has made a salary reduction election pursuant to
Sections 3.02 and 4.01(a), or (ii) before the earlier of (A) the Participant’s
performance of services that relate to the Compensation that, but for the
Participant’s salary reduction election, would have been paid to the Participant
or (B) the date the Compensation is made currently available to the Participant.

4.06 Safe Harbor Requirements. The Plan is intended to satisfy the safe harbor
requirements in accordance with section 401(k)(12) of the Code, and as such is
not subject to the nondiscrimination testing under section 401(k)(3) of the
Code.

 

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4.07 Maximum Benefit and Contribution Limitations.

(a) In accordance with the requirements of section 415 of the Code and the final
regulations issued on April 5, 2007 thereunder (which are hereby incorporated by
reference), in no event shall the contributions made to a Participant’s Employee
Account for any Plan Year exceed the amount permitted under section 415 of the
Code. As of January 1 of each calendar year, the dollar limitation under section
415(c)(1)(A) of the Code, as adjusted pursuant to section 415(d) of the Code,
shall become effective under the Plan.

(b) For the purposes of section 415 of the Code and this Section 4.07,
compensation means wages as reported in Box 1 on Form W-2, or in such other box
or on such other form as may be designated for purposes of withholding tax by
the Federal government. Compensation shall also include elective deferrals, as
defined in section 402(g) of the Code, and amounts that are excluded from
compensation under section 125 or 457 of the Code. Effective January 1, 2008,
the definition of compensation for purposes of applying the limitations under
section 415 of the Code shall comply with Treasury Regulations §
1.415(c)-2(d)(4) and shall be subject to the following:

(i) Compensation for a limitation year shall also include the following amounts
if paid by the later of 2 1/2 months after the Participant’s severance from
employment or the end of the limitation year that includes the date of the
Participant’s severance from employment: payments of regular compensation for
services during the Participant’s regular working hours, or compensation for
services outside the Participant’s regular working hours (such as overtime or
shift deferential), commissions, bonuses, or other similar payments; provided
that, absent a severance from employment, the payments would have been made to
the Participant while the Participant continued employment with the Corporation
or an Affiliated Employer.

 

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(ii) Any payment not described in Section 4.07(b)(i) above will not be included
in compensation if paid after the Participant’s severance from employment, even
if paid by the later of 2 1/2 months after the date of severance from employment
or the end of the limitation year that includes the date of the severance from
employment; provided, however, that compensation shall include amounts paid by
the Corporation or an Affiliated Employer to an individual who does not
currently perform services for the Corporation or an Affiliated Employer by
reason of qualified military service (within the meaning of section 414(u)(5) of
the Code) to the extent such amounts do not exceed the amounts the individual
would have received if the individual had continued to perform services for the
Corporation or Affiliated Employer rather than entering qualified military
service.

(iii) Compensation shall not include amounts in excess of the applicable dollar
limit under section 401(a)(17) of the Code, as adjusted by the Internal Revenue
Service for increases in the cost of living determined in accordance with
section 401(a)(17)(B) of the Code and the regulations and other guidance issued
thereunder.

(c) The limitation year, as defined in section 415 of the Code, for the Plan
shall be the Plan Year. If for any Plan Year the limitation of this Section 4.07
shall be exceeded, then the Plan shall correct such excess in accordance with
the Employee Plans Compliance Resolution System (EPCRS) as set forth in Revenue
Procedure 2008-50 or any superceding guidance.

 

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(d) If a Participant also participates in another tax-qualified defined
contribution plan maintained by the Corporation or an Affiliated Employer (as
modified by application of section 415(h) of the Code), the various plans shall
be considered a single defined contribution plan and the otherwise applicable
limitation on the contributions made to a Participant’s Employee Account for any
Plan Year under this Plan shall be adjusted as follows:

(i) If the Participant previously participated in another tax-qualified defined
contribution plan maintained by the Corporation or an Affiliated Employer (as
modified by the application of section 415(h) of the Code) within the same
limitation year prior to becoming a Participant in the Plan, the otherwise
applicable limitation on the contributions made to a Participant’s Employee
Account for any Plan Year under this Plan for that limitation year shall be
reduced by the amount of annual additions (within the meaning of section
415(c)(2) of the Code) allocated under any such other defined contribution plan
for that limitation year; and

(ii) If, at any point during a limitation year, a Participant ceases being a
Participant in the Plan and becomes a participant in another tax-qualified
defined contribution plan maintained by the Corporation or an Affiliated
Employer (as modified by the application of section 415(h) of the Code) within
the same limitation year, the otherwise applicable limitation on annual
additions (within the meaning of section 415(c)(2) of the Code) under any such
other defined contribution plan for that limitation year shall be reduced by the
amount of the contributions made to a Participant’s Employee Account for any
Plan Year allocated under the Plan for that limitation year.

 

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ARTICLE 5

INVESTMENT ELECTIONS AND ACCOUNTS OF PARTICIPANTS

5.01 Participant Investment Elections. At such time and in such manner as
designated by the Retirement Committee, a Participant may elect to direct the
investment of his Employee Account balance among the investment alternatives
provided for in accordance with Section 5.02. In the event no investment
election is received, a Participant’s Employee Account shall be invested in an
investment fund as available from time to time, which has been designated as a
default investment fund by the Retirement Committee, and may constitute a
qualified default investment alternative within the meaning of section 404(c)(5)
of ERISA.

5.02 Investment Alternatives. The Retirement Committee will direct the Trustee
as to the specific investment alternatives which may be available from time to
time. Notwithstanding the foregoing, Corporation stock shall be one of the
investment alternatives. Each Participant shall inform the Trustee of his
investment election and the Trustee shall allocate his Employee Account
accordingly.

5.03 Allocation to Accounts. As of each Valuation Date, the Trustee shall
determine the fair market value of the Fund, as well as the fair market value of
the Employee Account of each Participant. The value of the Employee Account of
each Participant as of a Valuation Date, shall be equal to the value of such
Account as of the last Valuation Date, plus or minus all applicable adjustments,
including the following:

(a) Allocation of Investment Earnings and Expenses. The Participant’s Employee
Account shall be credited with the amount of investment income, any realized or
unrealized capital gains or losses and any expenses since the last Valuation
Date, in accordance with a policy promulgated by the Retirement Committee.

 

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(b) Allocation of Employer Contributions. The Employee Contribution sub-account,
Employer Matching Contribution sub-account, Employer Discretionary
Profit-Sharing Contribution sub-account, Employer Core Contribution sub-account,
and Service Contract Act Contribution sub-account, if any, of each Participant
shall be credited with any Employee Contributions, Employer Matching
Contributions, Employer Discretionary Profit-Sharing Contributions, Employer
Core Contributions, and Service Contract Act Contributions respectively, which
have been contributed thereto in accordance with Section 4.01 and allocated to
the Participant’s Employee Account. Employee Contributions, any Employer
Matching Contributions which are based on the Employee Contributions, Employer
Discretionary Profit-Sharing Contributions, Employer Core Contributions, and any
Service Contract Act Contributions shall be allocated to the Employee Account as
of the Trustee’s receipt of such contributions. The Qualified Non-Elective
Contribution sub-account contains any Qualified Non-Elective Contributions that
were previously contributed and allocated to the Participant’s Employee Account.

(c) Allocation of Loan Repayments. The appropriate sub-accounts of the Employee
Account of each Participant shall be credited with all loan repayments, such
repayments being credited towards both principal and interest.

(d) Allocation of Withdrawals and Distributions. The appropriate sub-accounts of
the Employee Account of each Participant shall be charged with any withdrawals
or loans made pursuant to Article 6 and with any distributions made pursuant to
Article 8 since the last Valuation Date.

 

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5.04 Determination of Account Balances Binding. In determining the value of the
Fund and Employee Accounts, the Trustee and the Retirement Committee shall
exercise their best judgment, and all such determinations of value in the
absence of bad faith shall be binding upon all Participants and their
Beneficiaries.

5.05 Participation of Additional Employers. Subject to Section 14.12, in the
event that affiliated or subsidiary organizations become signatory hereto, the
Trustee may invest all funds without segregating assets between or among
signatory Employers.

5.06 Voting Rights of Corporation Stock. Each Participant and Terminated
Participant or, in the event of his death, his Beneficiary shall have the right
to direct the Trustee as to the manner in which whole shares of common stock of
the Corporation allocated to his Employee Account as of the record date are to
be voted on each matter brought before an annual or special shareholders’
meeting. Before each such meeting of shareholders, the Trustee shall cause to be
furnished to each Participant, Terminated Participant and Beneficiary a copy of
the proxy solicitation material, together with a form requesting directions on
how such shares of Corporation stock allocated to such Participant’s account
shall be voted on each such matter. Upon timely receipt of such directions, the
Trustee shall on each such matter vote, as directed, the number of shares of
Corporation stock allocated to such Participant’s Employee Account, and the
Trustee shall have no discretion in such matter. The Trustee shall establish
procedures as are necessary to maintain the confidentiality from the Employer of
the directions of individuals. The Trustee shall vote allocated shares for which
it has not received direction and unallocated shares of Corporation stock in the
same proportion as directed shares are voted, and shall have no discretion in
such matter.

 

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ARTICLE 6

IN-SERVICE WITHDRAWALS AND LOANS

6.01 Withdrawals from Voluntary Contribution and Participant Contribution
Sub-Accounts. A Participant is entitled to make up to two withdrawals each Plan
Year, on any business date, from his voluntary contribution sub-account and up
to two withdrawals each Plan Year, on any business date, from his participant
contribution sub-account; provided, however, that after the withdrawal, his
Vested Benefit equals or exceeds the amount of the security for his loans, if
any, under Section 6.05. The amount credited to his voluntary contribution
sub-account and participant contribution sub-account shall be determined on the
date of the withdrawal. Any amount withdrawn by a Participant under this
Section 6.01 shall be deemed to have been first withdrawn from his voluntary
contributions, then from his participant contributions, then from the investment
earnings on his voluntary contributions, and finally from the investment
earnings on his participant contributions. Withdrawals from the voluntary
contribution sub-account and the participant contribution sub-account may be in
cash or in Corporation stock. Withdrawals shall be made from the investment
funds in which the sub-account is invested in accordance with a policy
promulgated by the Retirement Committee, except that a Participant may not
receive a distribution from the Corporation stock fund, if he is restricted from
trading in the Corporation stock fund at the time of the distribution. The
Retirement Committee may establish a minimum amount that may be withdrawn under
this Section 6.01, or under this Section 6.01 and any other Section of Article
6, in the aggregate.

6.02 Withdrawals from Rollover Contribution Sub-Accounts. A Participant is
entitled to make up to two withdrawals each Plan Year, on any business day, from
his Rollover

 

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Contribution sub-account; provided, however, that after the withdrawal his
Vested Benefit equals or exceeds the amount of the security for his loans, if
any, under Section 6.05. The number of withdrawals permitted under this
Section 6.02 shall be decreased by the number of any withdrawal from a
Participant’s voluntary contribution or participant contribution sub-accounts
pursuant to Section 6.01, unless the withdrawal pursuant to this Section 6.02 is
made on the same date as the withdrawal pursuant to Section 6.01. The amount
credited to his Rollover Contribution sub-account shall be determined on the
date of the withdrawal. Withdrawals from the Rollover Contribution sub-account
may be made only in cash. The Participant may make a withdrawal from his
Rollover Contribution sub-account provided that the Participant elects to
withdraw, or has already withdrawn, one hundred percent (100%) of the amounts
credited to his voluntary contribution and participant contribution
sub-accounts. Withdrawals shall be made from each investment fund in accordance
with a policy promulgated by the Retirement Committee, except that a Participant
may not receive a distribution from the Corporation stock fund if he is
restricted from trading in Corporation stock on the date of the distribution.
The Retirement Committee may establish a minimum amount that may be withdrawn
under this Section 6.02, or under this Section 6.02 and any other Section of
Article 6 in the aggregate.

6.03 Withdrawals from Employer Matching Contribution Sub-Accounts, Employer
Discretionary Profit-Sharing Contribution Sub-Accounts, Employer Core
Contribution Sub-Accounts, and Service Contract Act Contribution Sub-Accounts. A
Participant who has completed five (5) Years of Participation in the Plan as of
the date of a withdrawal and who has elected to withdraw, or has already
withdrawn, one hundred percent (100%) of the amounts credited to his voluntary
contribution, participant contribution, and

 

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Rollover Contribution sub-accounts is entitled to make up to two withdrawals
(per sub-account type) each Plan Year, on any business day, of any part or all
of the amount credited to each of the following sub-accounts: his Employer
Matching Contribution sub-account (with respect to Employer Matching
Contributions made prior to January 1, 2003 only) (referred to as “Pre-2003
Employer Matching Contributions”), his Employer Discretionary Profit-Sharing
Contribution sub-account, his Employer Core Contribution sub-account and his
Service Contract Act Contribution sub-account, if applicable; provided, however,
that after the withdrawal his Vested Benefit equals or exceeds the amount of the
security for his loans, if any, under Section 6.05. The amount credited to his
Pre-2003 Employer Matching Contribution sub-account, his Employer Discretionary
Profit-Sharing Contribution sub-account, his Employer Core Contribution
sub-account, and his Service Contract Act Contribution sub-account shall be
determined on the date of withdrawal. Withdrawals from the Pre-2003 Employer
Matching Contribution sub-account, the Employer Discretionary Profit-Sharing
Contribution sub-account, the Employer Core Contribution sub-account and the
Service Contract Act Contribution sub-account may be made only in cash.
Withdrawals shall be made from the investment funds in accordance with a policy
promulgated by the Retirement Committee, except that a Participant may not
receive a distribution from the Corporation stock fund, if he is restricted from
trading in Corporation stock on the date of distribution.

6.04 Hardship Withdrawals from Employee Contribution Sub-Accounts. In the event
of financial hardship, a Participant may apply to the Plan’s third party
administrator for the distribution of part or all of the value of the vested
portion of his Employee Account (excluding amounts credited to his Employer
Matching Contribution sub-account and earnings thereon as

 

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well as earnings attributable to amounts credited to his Employee Contribution
sub-account on or after January 1, 1989) determined as of the date of his
hardship withdrawal; provided, however, that the Participant elects to withdraw,
or has already withdrawn, one hundred percent (100%) of the amount he is able to
withdraw from his voluntary contribution, participant contribution, Rollover
Contribution, Pre-2003 Employer Matching Contribution, Employer Discretionary
Profit-Sharing Contribution, Employer Core Contribution, and Service Contract
Act Contribution sub-accounts, and provided that after the withdrawal his Vested
Benefit equals or exceeds the amount of the security for his loans, if any,
under Section 6.05. In addition, a hardship withdrawal will only be permitted if
the Participant has applied for or received the maximum amount of loans
available pursuant to the terms of the Plan. In accordance with procedures
established by the Plan’s third party administrator, a Participant’s hardship
withdrawal date is the business day coincident with or immediately following the
date the Plan’s third party administrator approves his application for the
hardship withdrawal. Hardship withdrawals may be made only in cash. Hardship
withdrawals shall be made from the investment funds in accordance with a policy
promulgated by the Retirement Committee, except that no hardship distribution
may be made from the Corporation stock fund if the Participant is restricted
from trading in Corporation stock at the time he requests the distribution.

A distribution will be on account of financial hardship if the distribution is
made both on account of an immediate and heavy financial need of the Participant
and is necessary to satisfy such financial need. A distribution from the Plan
under this Section 6.04 may be made only for the following types of financial
hardships:

(a) expenses for (or necessary to obtain) medical care described in section
213(d) of the Code previously incurred by the Participant, his spouse or his
dependents (as defined in section 152 of the Code and, for taxable years
beginning on or after January 1, 2005, without regard to sections 152(b)(1),
152(b)(2), and 152(d)(1)(B) of the Code), which expenses are not covered by
insurance;

 

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(b) costs directly related to the purchase of a principal residence for the
Participant, excluding mortgage payments;

(c) payment of tuition, related educational fees, and room and board expenses
for up to the next twelve months of post-secondary education for the
Participant, his spouse, children, or dependents (as defined in section 152 of
the Code and, for taxable years beginning on or after January 1, 2005, without
regard to sections 152(b)(1), 152(b)(2), and 152(d)(1)(B) of the Code);

(d) payments necessary to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage on that residence; or

(e) funeral or burial expenses for the Participant’s deceased parent, spouse,
children or dependents (as defined in section 152 of the Code and, for taxable
years beginning on or after January 1, 2005, without regard to section
152(d)(1)(B) of the Code);

(f) expenses for the repair of damage to the Participant’s principal residence
that would qualify for the casualty deduction under section 165 of the Code
(determined without regard to whether the loss exceeds 10% of adjusted gross
income); or

 

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(g) other events that qualify as a financial hardship distribution as provided
for in revenue rulings, notices or other documents of general applicability
published by the Internal Revenue Service under section 401(k) of the Code.

A distribution from the Plan for a financial hardship will not exceed the amount
required to relieve the financial hardship, taking into account the extent such
hardship may be satisfied from other resources that are reasonably available to
the Participant. The amount of an immediate and heavy financial need may include
any amounts necessary to pay any Federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution. Unless the
Plan’s third party administrator has actual knowledge to the contrary, a
distribution will be treated as necessary to satisfy a financial need if the
Participant represents in writing or such other form as may be required by the
Plan’s third party administrator that his financial hardship cannot reasonably
be relieved:

(i) through reimbursement or compensation by insurance or otherwise;

(ii) by liquidation of the Participant’s assets;

(iii) by cessation of Employee Contributions;

(iv) by other distributions or nontaxable loans from plans maintained by his
Employer or by any other employer, or by borrowing from commercial sources on
reasonable commercial terms in an amount sufficient to satisfy the need; or

(v) by cash dividends, if any, paid on the shares of Corporation stock in the
Participant’s Employee Account and available for distribution.

A need cannot reasonably be relieved by one of the actions listed immediately
above if the effect would be to increase the amount of the need.

 

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The Employee Contributions of a Participant who makes a hardship withdrawal will
be suspended for the six (6) calendar-month period immediately following the
date of his hardship withdrawal. Upon the termination of the six
(6) calendar-month period of suspension, a Participant shall be eligible to
re-elect to have Employee Contributions made on his behalf in accordance with
Section 3.01(a).

6.05 Loans. The Retirement Committee will make loans available to all
Participants who are parties in interest, as defined in section 3(14) of ERISA,
on a reasonably equivalent basis. Such loans will be adequately secured, bear a
reasonable rate of interest and be made in accordance with the rules in the Plan
Loan Program Procedures, which is incorporated herein by reference.

 

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ARTICLE 7

VESTING

7.01 Vesting. The amounts, if any, credited to a Participant’s voluntary
contribution, participant contribution, Employee Contribution, Employer Matching
Contribution, Employer Discretionary Profit-Sharing Contribution, Service
Contract Act Contribution, Qualified Non-Elective Contribution, and Rollover
Contribution sub-accounts are nonforfeitable. Notwithstanding the foregoing,
matching contributions made to the Sallie Mae Retirement Savings Plan on behalf
of a Participant prior to July 1, 2004 and transferred to the Participant’s
Employee Account under this Plan on or as soon as practicable after January 1,
2010 shall become vested in accordance with the following schedule:

 

Years of Vesting Service

   Percent Vested  

Less than one

     0 % 

1 year

     0 % 

2 years

     50 % 

3 years

     100 % 

and matching contributions made to the Pioneer Credit Recovery 401(k) Savings
Plan that were transferred to the Sallie Mae Retirement Savings Plan on
January 1, 2005 and again transferred to the Participant’s Employee Account
under this Plan on or as soon as practicable after January 1, 2010 shall become
vested in accordance with the following schedule:

 

Years of Vesting Service

   Percent Vested  

Less than one

     0 % 

1 year

     20 % 

2 years

     40 % 

3 years

     60 % 

4 years

     80 % 

5 years

     100 % 

 

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A Participant shall become one hundred percent (100%) vested in any amounts
credited to his Employer Core Contribution sub-account upon the Participant’s
completion of one (1) Year of Vesting Service.

Notwithstanding the foregoing, a Participant shall become 100% vested in all
amounts in the Participant’s Employee Account upon the earlier of the
Participant reaching Normal Retirement Age or upon the Participant’s Severance
from Service Date, when such severance is due to the Participant’s death or
Disability.

7.02 Re-employment of Former Participants. If a Terminated Participant choose
not to receive a distribution of his Vested Benefit following his Severance from
Service Date and who was not one hundred percent (100%) vested in his Employer
Matching Contribution sub-account is reemployed by an Employer and again becomes
an Employee, any amount forfeited at the date of prior termination shall be
contributed to his Employer Matching Contribution sub-account, effective as of
the date of reemployment.

 

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ARTICLE 8

DISTRIBUTIONS

8.01 Earliest Time for and Method of Distribution of Benefits.

(a) Except in the case of distributions under Article 6, a Participant’s Vested
Benefit may be distributed from the Plan no earlier than the Participant’s
termination of employment, death, Disability, or upon his attainment of age
59 1/2.

(b) A Participant’s entire Plan vested account balance shall be distributable on
account of the Participant’s severance from employment, regardless of when the
severance from employment occurred. However, such a distribution shall be
subject to the other provisions of the Plan regarding distributions, other than
any provisions that required a separation from service before such amounts may
be distributed.

Distributions shall be made in a lump sum, reduced by the outstanding balance of
any loan. The Participant or his Beneficiary may elect to have the Participant’s
Vested Benefit paid (a) all in cash, (b) all in Corporation stock or (c) in a
combination of cash and Corporation stock. If the Participant or Beneficiary
elects to receive Corporation stock, fractional shares of Corporation stock will
be paid in cash to the Participant or his Beneficiary.

8.02 Time of Payment. Upon a Participant’s termination of employment,
Disability, or death, the Participant (or his Beneficiary in the case of death)
may request a distribution of benefits and such distribution shall be made as
soon as administratively feasible after the Trustee receives such request for
distribution; except as provided in Section 8.03, a distribution shall not be
made to the Terminated Participant, without his consent, before he attains his
Normal Retirement Age, unless the distribution is made after the Plan terminates
and the Employer

 

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and/or Affiliated Employer do not maintain another defined contribution plan, as
defined in section 414(i) of the Code, other than an employee stock ownership
plan, as defined in section 4975(e)(7) of the Code. The amount of the
distribution will be the Participant’s Vested Benefit as of the date of
distribution.

If a Participant does not request to receive his Vested Benefit at his Severance
from Service Date, then the Participant’s Employee Account will continue to be
subject to adjustments in accordance with Section 5.03.

8.03 Distribution of Small Benefits. Notwithstanding anything in Section 8.02 to
the contrary, and effective only with respect to distributions made on or after
March 28, 2005, if the Participant’s vested Employee Account balance does not
exceed $1,000, his Employee Account balance shall be distributed to him after
his Severance from Service Date without his request. If the Participant’s vested
Employee Account balance exceeds $1,000, then any mandatory distribution of his
Employee Account balance before his Normal Retirement Age, to the extent such
mandatory distribution is an Eligible Rollover Distribution subject to section
401(a)(31) of the Code, shall be automatically rolled over to an individual
retirement account.

Effective for distributions made after December 31, 2001 (except for purposes of
an automatic rollover to an individual retirement account, as described in the
preceding paragraph), the net value of the vested portion of a Participant’s
account balance shall be determined without regard to that portion of the
account that is attributable to rollover contributions (and earnings allocable
thereto) within the meaning of sections 402(c), 403(a)(4), 403(b)(8),
408(d)(3)(A)(ii), and 457(e)(16) of the Code.

 

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8.04 Latest Time for Distribution. In no event may a distribution under this
Article to a Participant begin later than the sixtieth (60th) day after the
latest of the close of the Plan Year in which:

(a) occurs the date on which the Participant attains his Normal Retirement Age;

(b) occurs the fifth (5th) anniversary of the date on which the Participant
commenced participation in the Plan; or

(c) the Participant terminates his service with an Employer or Affiliated
Employer and is not then reemployed by another Employer or Affiliated Employer.

Notwithstanding the foregoing or any other provision in the Plan, in accordance
with section 401(a)(9) of the Code and regulations thereunder, including the
minimum distribution incidental benefit requirement of section 401(a)(9)(G) of
the Code and Treasury Regulations §§ 1.401(a)(9)-1 through 1.401(a)(9)-9,
benefit payments shall be made or commenced not later than April 1 of the
calendar year following the later of (i) the calendar year in which a
Participant attains age seventy and one-half (70 1/2 ), or (ii) the calendar
year in which the Participant retires; provided, however, that benefit payments
to a Five Percent Owner shall be made or commence to be made no later than
April 1 of the calendar year following the calendar year in which the
Participant attains age seventy and one-half (70 1/2). Plan benefits made in
accordance with this provision shall be distributed over the life expectancy of
the Participant. The Participant’s life expectancy will be recalculated annually
in accordance with section 401(a)(9)(D) of the Code. If minimum distributions
have begun to a Participant pursuant to this paragraph, upon his subsequent
termination of employment, his Vested Benefit will be paid to

 

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him under the rules in Sections 8.01 and 8.02, but not less rapidly than is
required by section 401(a)(9) of the Code. In the case of a Participant’s death,
the Participant’s entire Vested Benefit will be paid to his Beneficiary within
five (5) years of the Participant’s date of death.

Notwithstanding the preceding paragraph, if the amount of the payment required
to commence on the date determined under the above paragraph cannot be
ascertained by such date, a payment retroactive to such date shall be made no
later than sixty (60) days after the earliest date on which the amount of such
payment can be ascertained.

With respect to minimum required distributions under the Plan made on or after
January 1, 2003 for calendar years beginning on or after January 1, 2003, the
Plan will apply the minimum distribution requirements of section 401(a)(9) of
the Code in accordance with Appendix B to the Plan and the requirements of
section 401(a)(9) of the Code and Treasury Regulations §§ 1.401(a)(9)-1 through
1.401(a)(9)-9.

8.05 Missing Participant or Beneficiary. Unclaimed benefits shall be canceled
and applied to reduce Employer contributions if the Retirement Committee has not
been able to locate the payee after making reasonable efforts to do so, in
accordance with a procedure adopted by the Retirement Committee. Upon the
cancellation of unclaimed benefits, the Plan shall have no further liability to
pay the benefit. However, if the payee later submits a claim for his benefit,
the canceled benefit shall be reinstated, without any adjustment for interest or
earnings, and the Employer shall make an additional contribution to the Plan to
fund the reinstated benefit. Notwithstanding anything in this Section to the
contrary, in the event any portion of such an Employee Account has been paid to
the State pursuant to the State’s escheat laws, to the extent permitted under
Federal law, the Employee Account will not be reinstated upon the payee’s filing
of a claim, and the payee must look to the State for payment.

 

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8.06 Election of Direct Rollover of a Vested Benefit. Notwithstanding any
provision of the Plan to the contrary, a Participant or Qualified Beneficiary
may elect, at the time and in the manner prescribed by the Retirement Committee,
to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Participant or Qualified Beneficiary
in a Direct Rollover.

 

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ARTICLE 9

PLAN ADMINISTRATION

9.01 Retirement Committee. The Plan will be administered by the Retirement
Committee appointed by, and serving at the pleasure of, the Board.

9.02 Powers and Duties of the Retirement Committee. The Retirement Committee
shall have the discretion to determine all matters relating to eligibility and
benefits under the Plan and shall have the discretion to determine all matters
relating to the interpretation and operation of the Plan. Decisions of the
Retirement Committee shall be binding unless arbitrary or capricious. In
addition, the Retirement Committee shall have the responsibilities and duties
described in the Charter of the Retirement Committee, as amended from time to
time.

9.03 Investment Advisory Committee. The Investment Advisory Committee is a
subcommittee of the Retirement Committee described in the Charter of the
Retirement Committee, as amended from time to time. The Retirement Committee has
delegated certain responsibilities to the Investment Advisory Committee,
including the responsibility to (i) recommend funding and investment policies
and objectives; (ii) recommend a fund structure for Plan assets; (iii) recommend
investment managers and investment consultants; (iv) review investments and
recommend changes to the Retirement Committee; (v) assist in providing
investment education to Participants; and (vi) monitor and report on the
Trustee’s performance.

 

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ARTICLE 10

CONTROL AND MANAGEMENT OF ASSETS

10.01 In General.

(a) Trustee. All assets of the Plan shall be held by the Trustee pursuant to the
terms of the Trust Agreement not inconsistent herewith. The Trustee shall follow
the policies and guidelines of the Retirement Committee with respect to the
choice of investment alternatives. Each Participant or Beneficiary shall have
the right to direct the Trustee with respect to the investment of his Employee
Account and the Trustee shall follow the investment directions of the
Participant or Beneficiary in accordance with ERISA section 404(c). In the event
the Participant or Beneficiary fails to provide an investment direction, the
Trustee shall invest the Employee Account in the default investment fund
selected by the Retirement Committee, which may constitute a qualified default
investment alternative fund within the meaning of section 404(c)(5) of ERISA.

(b) Named Fiduciary for Investment. The Retirement Committee shall develop the
overall policies and guidelines for the investment of Plan assets, including the
selection of the investment alternatives which are to be made available to
Participants.

 

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ARTICLE 11

FIDUCIARY LIABILITY INSURANCE AND INDEMNIFICATION

11.01 Fiduciary Liability Insurance. The Plan may purchase insurance for its
fiduciaries or for itself to cover liability or losses occurring by reason of
the act or omission of a fiduciary, if such insurance permits recourse by the
insurer against such a fiduciary who has committed a breach of fiduciary duties.
A fiduciary may purchase insurance to cover his own liability for any act or
omission. Each Employer may purchase insurance to cover potential liability of
one or more persons who serve in a fiduciary capacity with respect to the Plan.
Nothing in this Section shall be construed as requiring the purchase of any
insurance.

11.02 Indemnity. The Employers may, consistent with applicable law, indemnify
the members of the Board, the members of the Retirement Committee, and the
members of the Investment Advisory Committee from any liability, loss or other
financial consequence with respect to any act or omission relating to the Plan
by means other than the provision of fiduciary liability insurance; except that
to the extent any such liability, loss or consequence results from a person’s
gross negligence or willful misconduct, such person shall not be so indemnified.
The provisions of Section 11.01 shall apply, to the extent applicable, prior to
the provisions of this Section 11.02.

 

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ARTICLE 12

AMENDMENTS TO OR TERMINATION OF THE PLAN

12.01 Right of Corporation to Amend or Terminate the Plan. While it is the
intention of the Corporation to continue the Plan indefinitely, the Corporation
reserves the right to terminate its contributions or terminate the Plan in whole
or in part at any time by an instrument in writing pursuant to authority of a
vote of the Board of Directors. The Corporation reserves the right to amend the
Plan pursuant to authority granted to the Corporation. The Corporation has
delegated the authority to amend the Plan to, collectively and individually, the
Chief Executive Officer, any Executive Vice President, the Chief Financial
Officer, the General Counsel of the Corporation and their designees; provided,
however, that any amendment that substantially changes the benefits or costs of
the Plan must be reported to the Compensation and Personal Committee of the
Board prior to adoption. However, the Plan shall not be amended in such manner
as would cause or permit any part of the Fund to be diverted to purposes other
than for the exclusive benefit of Participants of the Plan and their
Beneficiaries, nor in such manner as would cause or permit any portion of such
corpus to revert to, or become the property of, any Employer prior to the
satisfaction of all liabilities under the Plan with respect to such Participants
or to increase the duties or liabilities of the Trustee without its written
consent. Unless otherwise required or permitted by law, no amendment to the Plan
shall decrease a Participant’s account balance or eliminate an optional form of
distribution notwithstanding the preceding sentence. Furthermore, no amendment
to the Plan shall have the effect of decreasing a Participant’s vested interest
determined without regard to such amendment as of the later of the date such
amendment is adopted, or the date it becomes effective. Notwithstanding any
provision of the Plan to the

 

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contrary, effective on or after August 9, 2006, no amendment shall decrease a
Participant’s or Terminated Participant’s accrued benefit under the Plan as of
the applicable amendment date, or otherwise place greater restrictions or
conditions on a Participant’s or Terminated Participant’s right to protected
benefits under section 411(d)(6) of the Code, even if the amendment merely adds
a restriction or condition that is otherwise permitted under the vesting rules
in sections 411(a)(3) through (11) of the Code.

12.02 Termination of Plan. In the event that the Plan is terminated or partially
terminated or in the event of a complete discontinuance of contributions, the
right of all Participants, or those Participants so affected in the case of a
partial termination, to benefits accrued under the Plan as of the date of such
termination, partial termination or discontinuance of contributions, shall be
non-forfeitable; and after providing for the expenses of the Plan, the remaining
assets of the Plan shall be allocated by the Retirement Committee. Upon complete
termination of the Plan, the Retirement Committee shall liquidate the entire
Fund as soon as administratively practical if the Employers and Affiliated
Employers do not maintain another defined contribution plan, as defined in
section 414(i) of the Code, other than an employee stock ownership plan, as
defined in section 4975(e)(7) of the Code.

12.03 Withdrawal of an Employer. Each Employer which adopts the Plan shall have
the right at any time to terminate the Plan as to its employees or to withdraw
its share of assets from the Fund while the Plan continues in effect for the
employees of each other Employer. In the event of such withdrawal or
termination, such Employer shall deliver to the Corporation and the Retirement
Committee, at least thirty (30) days prior to the effective date of such
termination or withdrawal, a certified copy of the vote of its governing body
authorizing such termination or

 

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withdrawal. The Retirement Committee will advise the Trustee to segregate a
portion of the Fund representing the interest of the Employees of such Employer
in the Fund. The Trustee, as directed by the Retirement Committee, shall
transfer such assets to a fund exempt under section 501 of the Code for purposes
of providing benefits for such Employees under another plan, or if no such fund
exists, distribute such assets currently to the Employees of the withdrawing
Employer.

12.04 Plan-to-Plan Transfer. Upon the sale of substantially all of the assets
and liabilities of an Employer, the Retirement Committee may, upon the written
request of the purchaser of such assets and liabilities, instruct the Trustee to
segregate a portion of the Fund representing the interest in the Fund of
Employees who continue employment with such purchaser and to transfer such
portion of the Fund to the plan of such purchaser; provided, however, that such
purchaser represents to the Retirement Committee that the plan is qualified
under section 401(a) of the Code and that the benefit of each Employee
immediately after the transfer shall be at least equal to the benefit the
Employee was entitled to immediately before the transfer.

 

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ARTICLE 13

TOP HEAVY PROVISIONS

13.01 Top Heavy Plan Requirements. Notwithstanding any other provision of the
Plan, if for any Plan Year the Plan is determined to be a Top Heavy Plan, then
the top heavy minimum benefit requirement of section 416(c) of the Code, as set
forth in Section 13.02, shall apply.

13.02 Top Heavy Minimum Contribution Requirement. For any Plan Year with respect
to which the Plan is determined to be a Top Heavy Plan, with respect to each
Employee who is a Non-Key Employee for such Plan Year, the Top Heavy
requirements shall be met by providing, under the defined benefit plan sponsored
by the Corporation and qualified under section 401(a) of the Code , the minimum
accrued benefit derived from employer contributions necessary to satisfy the
benefit requirement of section 416(c) of the Code.

13.03 Top-Heavy Provisions.

(a) This Section 13.03 shall apply for purposes of determining whether the plan
is a Top-Heavy Plan under section 416(g) of the Code and whether the Plan
satisfies the minimum benefits requirements of section 416(c) of the Code.

(b) Minimum Benefits/Matching Contributions. Employer matching contributions
shall be taken into account for purposes of satisfying the minimum contribution
requirements of section 416(c)(2) of the Code, and the Plan. The preceding
sentence shall apply with respect to matching contributions under the Plan or,
if the Plan provides that the minimum contribution requirement shall be met in
another plan, such other plan. Employer matching contributions that are used to
satisfy the minimum contribution requirements shall be treated as matching
contributions for purposes of the actual contribution percentage test and other
requirements of section 401(m) of the Code.

 

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ARTICLE 14

MISCELLANEOUS

14.01 Rights of Employees. Nothing herein contained shall be deemed to give any
employee the right to be retained in the employ of the Employer or to interfere
with the right of the Employer to discharge such employee at any time, nor shall
it be deemed to give the Employer the right to require the employee to remain in
its employ, nor shall it interfere with the employee’s right to terminate his
employment at any time.

14.02 Notice of Address. Each person entitled to benefits under the Plan must
inform the Retirement Committee, in accordance with a procedure adopted by the
Retirement Committee, of his post office address and each change of post office
address. Any communication, statement or notice addressed to such person at such
address shall be deemed sufficient for all purposes of the Plan, and there shall
be no obligation on the part of the Employer, the Retirement Committee or
Trustee to search for or to ascertain the location of such person.

14.03 Data. Each person entitled to benefits under the Plan must furnish to the
Retirement Committee such documents, evidence, or other information as the
Retirement Committee considers necessary or desirable for the purposes of
administering the Plan or to protect the Plan. The Retirement Committee shall be
entitled to rely on representations made by employees, Participants and
Beneficiaries with respect to age, marital status and other personal facts,
unless it knows said representations are false.

14.04 Merger. This Plan shall not be merged into, or consolidated with, nor
shall any assets or liabilities be transferred to, any plan under circumstances
resulting in a transfer of assets

 

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or liabilities from this Plan to another plan, unless immediately after any such
merger, consolidation or transfer, each Participant would, if the Plan had then
terminated, receive a benefit immediately after the merger, consolidation or
transfer which would be equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer, if
the Plan had then terminated.

14.05 Fund to be for the Exclusive Benefit of Participants. The contributions
of the Employers to the Fund shall be for the exclusive purpose of providing
benefits to the Participants and their Beneficiaries and no part of the Fund
shall revert to the Employers, except as follows:

(a) if a contribution is made to the Fund by an Employer under mistake of fact,
such contribution shall be returned within one (1) year after its payment; or

(b) if any part or all of a contribution is disallowed as a deduction under
section 404 of the Code with respect to an Employer, then to the extent of such
disallowance it may be returned to the Employer within one (1) year after the
disallowance. Employer contributions made to the Plan are conditioned on
deductibility under section 404 of the Code. Notwithstanding the prior sentence,
at the election of the Employer, contributions that are not deductible under
section 404 of the Code solely because of section 404(a)(7) of the Code may be
maintained in the Plan, provided such contributions do not exceed the greater of
(i) the amount of contributions not in excess of six percent (6%) of
compensation (within the meaning of section 404(a) of the Code) paid or accrued
(during the taxable year for which the contributions were made) to beneficiaries
under the Plan, or (ii) the sum of Employer Matching Contributions plus the
amount of contributions described in section 402(g)(3)(A) of the Code.

 

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14.06 Facility of Payment. If it shall be found that (a) a person entitled to
receive any payment under the Plan is physically or mentally incompetent to
receive such payment and to give a valid release thereof, and (b) another person
or an institution is then maintaining or has custody of such person, 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 of such other person or institution shall be a valid and complete
discharge for the payment.

14.07 Restrictions on Alienation. Except with respect to the (1) creation,
assignment, or recognition of a right to a benefit payable with respect to a
Participant pursuant to a qualified domestic relations order (as defined in
section 414(p) of the Code) and, (2) the creation, assignment, or recognition of
a right to a benefit payable to the Plan pursuant to section 401(a)(13)(C) of
the Code, no benefit payable under the Plan to any person shall be subject to
any manner of anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be void; and no such benefit
shall in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any person nor shall it be subject to
attachment or legal process for, or against, any person, and the same shall not
be recognized under the Plan. Distributions may be made to an alternate payee
pursuant to a qualified domestic relations order (as defined in section 414(p)
of the Code) before the Participant attains the earliest retirement date, as
defined in section 414(p)(4)(B) of the Code, under the Plan.

14.08 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.

 

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14.09 Construction. The Plan shall be construed, regulated and administered
under the laws of the Commonwealth of Virginia, except that if any such laws are
superseded by any applicable Federal law or statute, such Federal law or statute
shall apply.

14.10 Exclusion and Severability. Each provision hereof shall be independent of
each other provision hereof and if any provision of the Plan proves to be, or is
held by any court, or tribunal, board or authority of competent jurisdiction to
be void or invalid as to any Participant or group of Participants, such
provision shall be disregarded and shall be deemed to be null and void and not
part of the Plan. However, such invalidation of any provision shall not
otherwise impair or affect the Plan or any of the other provisions or terms
hereof.

14.11 Special Rule Relating to Rights Under USERRA. Notwithstanding any
provision in this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with section 414(u) of the Code.

14.12 Application of Forfeitures. Forfeitures arising under the Plan with
respect to an Employer’s Participants shall be applied, at the discretion of
that Employer, either to reduce that Employer’s contributions in such
proportions as that Employer may direct or to pay administrative expenses of the
Plan. Non-vested amounts shall be forfeited from a Participant’s Employee
Account upon the earlier of (a) the date the entire vested portion of the
Participant’s Employee Account is distributed and (b) the date the Participant
incurs a five (5)-year Period of Severance; provided that in the event such
forfeiture occurs as of the date the entire vested portion of the Participant’s
Employee Account is distributed, such previously forfeited amount (without any
adjustment for earnings) shall be reinstated on behalf of the Participant only
if such

 

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Participant becomes re-employed before he incurs a five (5)-year Period of
Severance, and the Participant repays back to the Plan the entire amount of the
previous distribution before the earlier of (1) five years after the first date
on which the Participant is subsequently reemployed by the Employer, or (2) the
close of the first five (5)-year Period of Severance commencing after the date
of distribution.

 

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ARTICLE 15

SPECIAL PROVISIONS APPLICABLE TO CORPORATE TRANSACTIONS

15.01 Special Vesting Provisions. The following provisions shall apply in
determining a Participant’s Vested Benefit.

(a) Former Employees of EFCI, Inc. Any Employee who becomes an employee of
Education First Marketing L.L.C., effective January 1, 1997, shall be one
hundred percent (100%) vested in his Employee Account at all times, provided his
immediately preceding employer was EFCI, Inc. Notwithstanding the foregoing,
amounts in any such Employee’s Employer Core Contribution sub-account shall
become one hundred percent (100%) vested upon the Employee’s completion of one
(1) Year of Vesting Service.

(b) Employees of Kaludis Consulting Group, Inc. Any Employee of Kaludis
Consulting Group, Inc. whose Employment Commencement Date is prior to January 1,
1998, shall be one hundred percent (100%) vested in his Employee Account at all
times. However, if an Employee described in the prior sentence incurs a
Severance from Service Date and is subsequently reemployed by the Employer, any
benefit accrued on or after the Reemployment Commencement Date shall not be
subject to this special vesting provisions, but shall be subject to the general
vesting provisions described in Article 7. Notwithstanding the foregoing,
amounts in any such Employee’s Employer Core Contribution sub-account shall
become one hundred percent (100%) vested upon the Employee’s completion of one
(1) Year of Vesting Service.

(c) Former Employees of USA Group. Individuals who were employed by USA Group on
July 31, 2000, and who became eligible to be Participants in the Plan on
August 1, 2000 shall be one hundred percent (100%) vested in any Employer
Matching Contributions at all times.

 

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15.02 Spousal Consent for In-Service Withdrawal. With respect to any Employee
employed by HEMAR Insurance Corporation of America, any in-service withdrawal or
loan pursuant to Article 6, and any distribution pursuant to Article 8, requires
spousal consent.

15.03 USA Group Special Provisions.

(a) EIP Account Provisions. The following provisions shall apply to individuals
who were employed by USA Group on July 31, 2000, who were eligible to and became
Participants in the Plan on August 1, 2000, and who had “EIP Accounts” under the
USA Group Plan (as described in Supplement C to the USA Group Plan (“Supplement
C”))(hereinafter referred to as USA Group/EIP Participants.

(i) Vesting. USA Group/EIP Participants shall be 100% vested in their EIP
Accounts as of August 1, 2000.

(ii) In-Service Withdrawals. USA Group/EIP Participants shall be permitted to
take in-service withdrawals of the amounts credited to their EIP Accounts at any
time in the form of a single lump sum representing all or a portion of the
amount credited to the EIP Account in accordance with procedures established by
the Retirement Committee. This provision shall become effective the earlier of
January 1, 2003, or the date that is 90 days after the USA Group/EIP
Participants have received a summary of material modifications describing these
amendments that satisfies the requirements of 29 CFR 2520.104b-3. Until that
date, USA Group/EIP Participants shall be permitted to take in-service
withdrawals and/or distributions of amounts credited to their EIP Accounts in
accordance with the terms of Section C-6 (a) of Supplement C and procedures
established by the Retirement Committee.

 

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(iii) Distributions. USA Group/EIP Participants shall be permitted to take
distributions of amounts credited to their EIP Accounts only in the form of a
single lump sum representing the entire amount credited to the EIP Account
following their termination of employment and in accordance with procedures
established by the Retirement Committee. This provision shall become effective
the earlier of January 1, 2003, or the date that is 90 days after the USA
Group/EIP Participants have received a summary of material modifications
describing these amendments that satisfies the requirements of 29 CFR
2520.104b-3. Until that date, USA Group/EIP Participants shall be permitted to
take distributions of amounts credited to their EIP Accounts in accordance with
the terms of Sections C-7 and C-8 of Supplement C and procedures established by
the Retirement Committee.

15.04 Southwest Student Services Corporation Special Provisions. With respect to
any individual who is employed by Southwest Student Services Corporation on
March 31, 2005, and who becomes a Participant in the Plan on April 1, 2005, such
individual shall be 100% vested in his Southwest plan account transferred to the
Plan.

 

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ARTICLE 16

SIGNATURE

The Plan as herein amended and restated has hereby been approved and adopted to
be effective as of the dates set forth herein this 9th day of December, 2010.

 

/s/ Jon Kroehler

 

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APPENDIX A

SALLIE MAE 401(K) SAVINGS PLAN

PARTICIPATING EMPLOYERS

As of the date of this Plan restatement the following Employers participate in
the Sallie Mae 401(k) Savings Plan:

 

1. Sallie Mae, Inc. (excluding Employees of the portfolio management division)

 

2. Student Assistance Corporation

 

3. SLM Education Credit Management Corporation

 

4. SLM Financial Corporation

 

5. HEMAR Insurance Corporation of America (Prior to July 7, 2006)

 

6. Education Debt Services, Inc. (Prior to January 1, 2004)

 

7. Noel-Levitz, Inc. (Prior to August 1, 2007)

 

8. Education One Group, Inc. (Prior to August 6, 2004)

 

9. First Trust Financial, Inc. (Effective as of January 1, 2003 and Prior to
May 12, 2003)

 

10. GRP Financial Services (Prior to January 1, 2010)

 

11. Academic Management Services Corporation (Effective as of November 18, 2003)

 

12. Sallie Mae Home Loans (formerly known as Pioneer Mortgage, Inc.) (Effective
as of January 1, 2004)

 

13. Student Loan Finance Association (Effective as of December 13, 2004)

 

14. Northwest Education Loan Association (Effective as of December 13, 2004)

 

15. Southwest Student Services Corporation (Effective as of April 1, 2005)

 

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APPENDIX B

ADDITIONAL PROVISIONS RELATED TO REQUIRED MINIMUM DISTRIBUTIONS

Effective for calendar years on and after January 1, 2003, the minimum required
distributions made to Participants pursuant to Section 8.04 of the Plan shall be
made in accordance with the following provisions:

B.1 The Vested Benefit of each Participant who is a five percent (5%) owner (as
defined in section 416(i) of the Code, but without regard to the top-heavy
status of the Plan) shall be distributed or shall commence to be distributed, in
accordance with section 401(a)(9) of the Code and the regulations issued
thereunder, no later than the April 1 following the close of the calendar year
in which the Participant attains age 70 1/2, regardless of whether his
employment is terminated as of such date. The Vested Benefit of each Participant
who is not a five percent (5%) owner shall be distributed or shall commence to
be distributed, in accordance with section 401(a)(9) of the Code and the
regulations issued thereunder, no later than the April 1 following the later of:
(i) the calendar year in which the Participant attains age 70 1/2, or (ii) the
calendar year in which the Participant terminates employment. All distributions
under this Plan shall comply with the incidental death benefit requirements of
section 401(a)(9)(G) of the Code and the regulations (including Treasury
Regulation §1.401(a)(9)-2) and other guidance issued thereunder.

B.2 The provisions of this Section B.2 will apply for purposes of determining
required minimum distributions for calendar years beginning with the 2003
calendar year. The requirements of this Section B.2 will take precedence over
any inconsistent provisions of the Plan. All distributions required under this
Section will be determined and made in accordance with the Treasury Regulations
under section 401(a)(9) of the Code.

 

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(a) Time and Manner of Distribution. The Participant’s entire interest will be
distributed, or begin to be distributed, to the Participant no later than the
Participant’s Required Beginning Date. If the Participant dies before
distributions begin, the Participant’s entire interest will be distributed, or
begin to be distributed, no later than as follows:

(1) If the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary, then distribution of the Participant’s Vested Benefit shall be made
to the surviving spouse pursuant to Section 8.04 of the Plan.

(2) If the Participant’s surviving spouse is not the Participant’s sole
Designated Beneficiary, then distribution of the Participant’s Vested Benefit
shall be made to the Designated Beneficiary pursuant to Section 8.04 of the
Plan.

(3) If there is no Designated Beneficiary as of the date of the Participant’s
death, the Participant’s Vested Benefit will be distributed pursuant to Sections
2.04, 8.04 and 8.05 of the Plan.

(4) If the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Section B.2(a), other than
Section B.2(a)(1), will apply as if the surviving spouse were the Participant.

For purposes of this Section B.2(a) and Section B.2(d), unless Section B.2(a)(4)
applies, distributions are considered to begin on the Participant’s Required
Beginning Date. If Section B.2(a)(4) applies, distributions are considered to
begin on the date distributions are required to begin to the surviving spouse
under Section B.2(a)(1).

 

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(b) Forms of Distribution. Unless the Participant’s interest is distributed in a
single sum on or before the Required Beginning Date, as of the first
Distribution Calendar Year distributions will be made in accordance with
Sections B.2(c) and B.2(d).

(c) Required Minimum Distributions During Participant’s Lifetime. During the
Participant’s lifetime, the minimum amount that will be distributed for each
Distribution Calendar Year is the lesser of:

(1) the quotient obtained by dividing the Participant’s 401(a)(9) Account
Balance by the distribution period in the Uniform Lifetime Table set forth in
section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s age
as of the Participant’s birthday in the Distribution Calendar Year; or

(2) if the Participant’s sole Designated Beneficiary for the Distribution
Calendar Year is the Participant’s spouse, the quotient obtained by dividing the
Participant’s 401(a)(9) Account Balance by the number in the Joint and Last
Survivor Table set forth in section 1.401(a)(9)-9 of the Treasury Regulations,
using the Participant’s and spouse’s attained ages as of the Participant’s and
spouse’s birthdays in the Distribution Calendar Year.

Required minimum distributions will be determined under this Section B.2(c)
beginning with the first Distribution Calendar Year and up to and including the
Distribution Calendar Year that includes the Participant’s date of death.

 

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(d) If the Participant dies on or after the date distributions begin, the
Participant’s entire remaining interest under the Plan will be distributed in
accordance with Section B.2(a).

(e) For purposes of this Section B.2, the following terms shall have the
meanings as set forth below unless the context requires otherwise:

(1) Designated Beneficiary: the individual who is the Beneficiary and is the
Designated Beneficiary under section 401(a)(9) of the Code and section
1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.

(2) Distribution Calendar Year. a calendar year for which a minimum distribution
is required. For distributions beginning before the Participant’s death, the
first Distribution Calendar Year is the calendar year immediately preceding the
calendar year which contains the Participant’s Required Beginning Date. For
distributions beginning after the Participant’s death, the first Distribution
Calendar Year is the calendar year in which distributions are required to begin
under Section B.2(a). The required minimum distribution for the Participant’s
first Distribution Calendar Year will be made on or before the Participant’s
Required Beginning Date. The required minimum distribution for other
Distribution Calendar Years, including the required minimum distribution for the
Distribution Calendar Year in which the Participant’s Required Beginning Date
occurs, will be made on or before December 31 of that Distribution Calendar
Year.

(3) Participant’s 401(a)(9) Account Balance. the Vested Benefit balance as of
the last valuation date in the calendar year immediately preceding the
Distribution Calendar Year (valuation calendar year) increased by the amount of
any contributions made and

 

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allocated or forfeitures allocated to the Vested Benefit balance as of dates in
the valuation calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after the valuation date. The
Vested Benefit balance for the valuation calendar year includes any amounts
rolled over or transferred to the Plan either in the valuation calendar year or
in the Distribution Calendar Year if distributed or transferred in the valuation
calendar year.

(4) Required Beginning Date. the date specified in Section 8.04 of the Plan, as
applicable.

 

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