Exhibit 10.26


 


CONFIDENTIAL


Stock Option Agreement

SLM Corporation Incentive Plan

Net-Settled, Price-Vested Options – 1 Year Minimum - 2006


 


A.           Option
Grant.  Stock Options (the “Options”)
for a total of «Total_Option_Granted»
shares of Common Stock, par value $.20, of SLM Corporation (the “Corporation”)
are hereby granted, to «FIRST_NAME» «LAST_NAME»
(the “Optionee”), subject in all respects to the terms and provisions of the
SLM Corporation Incentive Plan (the “Plan”), which is incorporated herein by
reference, and this Stock Option Agreement (the “Agreement”).  The
Options are non-qualified stock options and are not incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended.


 


B.             Option
Price.  The purchase price per share
is «Option Price» dollars
(the “Option Price”).


 


C.             Grant
Date. The date of grant of these Options is «Grant Date»  (the “Grant Date”).


 


D.            Vesting;
Exercisability.  The Options are not
vested as of the Grant Date.  All Options
vest upon the earlier of: (1) the Corporation’s Common Stock price
reaching a closing price equal to or greater than «Premium Vesting Price» per share for five days, but no sooner
than one year from the Grant Date; (2) eight years from the Grant Date or (3) Optionee’s
death, Disability or Involuntary Termination, unless the Options are terminated
earlier in accordance with the provisions of the Plan or this Agreement.


 


•                  Upon termination of employment for
any reason, other than death, Disability or Involuntary Termination, any
unvested Options will not vest and will be canceled.


 


•                  Upon termination of employment for
Misconduct, any Options, vested or unvested, are forfeited.


 


•                  Upon termination for death or
Disability, vested Options are exercisable until the earlier of: (1) the
Expiration Date; or (2) one year from the date of termination.


 


•                  Upon termination for all reasons
except death or Disability, vested Options are exercisable until the earlier
of: (1) the Expiration Date; or (2) three months from the date of
termination.


 


E.              Expiration.
These Options expire ten years from the Grant Date (the “Expiration Date”),
subject to the provisions of the Plan and this Agreement, which may provide for
earlier expiration in certain instances, including Optionee’s termination of
employment.


 


F.              Non-Transferable;
Binding Effect.  These Options may
not be transferred except as provided for in the Plan, and may be
exercised during the lifetime of the Optionee only by him or her.  The terms of these Options shall be binding
upon the executors, administrators, heirs, and successors of the Optionee.


 


G.             Net-Settlement upon Option Exercise; Taxes.  These
Options shall be exercised only in accordance with the terms of this
Agreement.  Each exercise must be for no
fewer than fifty (50) Options, other than an exercise for all remaining Options.  Upon exercise of all or part of the Options,
the Optionee shall receive from the Corporation the number of shares of Common
Stock resulting from the following formula: 
the total number of Options exercised less the sum of “Shares for the
Option Cost” and “Shares for Taxes”, rounded up to the nearest whole
share.  “Shares for the Option Cost”
equals the Option Price multiplied by the number of Options exercised divided
by the fair market value of SLM common stock at the time of exercise.   “Shares for Taxes” equals the tax liability
(the statutory withholding maximum) divided by the fair market value of SLM
common stock at the time of exercise. 
Optionee shall receive cash for any resulting fractional share amount.  As a condition to the issuance of shares of
Common Stock of the Corporation pursuant to these Options, the Optionee agrees
to remit to the Corporation at the time of any exercise of these Options any
taxes required to be withheld by the Corporation under federal, state, or local
law as a result of the exercise of these Options.


 


H.            Vesting
Upon Change In Control. 
Notwithstanding anything to the contrary in this Agreement, any of the
Options which have not otherwise become exercisable shall become immediately
exercisable upon a Change in Control of the Corporation, as defined in the Plan.


 


I.                 Board
Interpretation.  The Optionee hereby
agrees to accept as binding, conclusive, and final all decisions and
interpretations of the Board of Directors of the Corporation and, where
applicable, the Compensation and Personnel Committee of the Board of Directors
(the “Committee”) concerning any questions arising under this Agreement or the
Plan.


 


J.                Amendments
for Accounting Charges: The Committee reserves the right to unilaterally
amend this Agreement to reflect any changes in applicable law or financial
accounting standards.


 


K.            Securities
Law Compliance; Restrictions on Resale’s of Option Shares.  The Corporation may impose such restrictions,
conditions or limitations as it determines appropriate as to the timing and
manner of any exercise of the Option and/or any resales by the Optionee or
other subsequent transfers by the Optionee of any shares of Common Stock issued
as a result of the exercise of the Option, including without limitation (a) restrictions
under an insider trading policy, (b) restrictions that may be necessary in
the absence of an effective registration statement under the Securities Act of
1933, as amended, covering the Option and/or the Common Stock underlying the
Option and (c) restrictions as to the use of a specified brokerage firm or
other agent for exercising the Option and/or for such resales or other
transfers.  The sale of the shares
underlying the Option must also comply with other applicable laws and
regulations governing the sale of such shares.


 


L.              Data
Privacy. As an essential term of this Option, the Optionee consents to the
collection, use and transfer, in electronic or other form, of personal data as
described in this Option Agreement for the exclusive purpose of implementing,
administering and managing Optionee’s participation in the Plan.  By entering into this Agreement and accepting
the Option, the Optionee acknowledges that the Corporation holds certain
personal information about the Optionee, including, but not limited to, name,


 


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home
address and telephone number, date of birth, social security number or other
identification number, salary, tax rates and amounts, nationality, job title,
any shares of stock held in the Corporation, details of all options or any
other entitlement to shares of stock awarded, canceled, exercised, vested,
unvested or outstanding, for the purpose of implementing, administering and
managing the Plan (“Data”).  Optionee
acknowledges that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these
recipients may be located in jurisdictions that may have different data privacy
laws and protections, and Optionee authorizes the recipients to receive,
possess, use, retain and transfer the Data, in electronic or other form, for
the purposes of implementing, administering and managing the Plan, including
any requisite transfer of such Data as may be required to a broker or other
third party with whom the Optionee or the Corporation may elect to deposit any
shares of Common Stock acquired upon exercise of the Option.  Optionee acknowledges that Data may be held only
as long as is necessary to implement, administer and manage the Optionee’s
participation in the Plan as determined by the Corporation, and that Optionee
may request additional information about the storage and processing of Data,
require any necessary amendments to Data or refuse or withdraw the consents
herein, in any case without cost, provided however, that refusing or
withdrawing Optionee’s consent may adversely affect Optionee’s ability to
participate in the Plan.


 


M.         Electronic
Delivery.  The Corporation may, in
its sole discretion, decide to deliver any documents related to any options
granted under the Plan by electronic means or to request Optionee’s consent to
participate in the Plan by electronic means. Optionee hereby consents to
receive such documents by electronic delivery and, if requested, to agree to
participate in the Plan through an on-line or electronic system established and
maintained by the Corporation or another third party designated by the
Corporation, and such consent shall remain in effect throughout Optionee’s term
of service with the Corporation and thereafter until withdrawn in writing by
Optionee.


 


N.            Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of Delaware, without
giving effect to principles of conflicts of law.


 


O.            Notices.  All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given if personally delivered, telefaxed or telecopied to, or,
if mailed, when received by, the other party at the following addresses:


 


If to the Corporation to:


 


Director, Stock Plans


Sallie Mae


12061 Bluemont Way


Reston, VA 20190


Fax: (703) 984-5170


 


If to
the Optionee, to (i) the last address maintained in the Corporation’s
Human Resources files for the Optionee or (ii) the Optionee’s mail
delivery code or place of work at the Corporation.


 


P.              Miscellaneous.  In the event that any provision of this
Agreement is declared to be illegal, invalid or otherwise unenforceable by a
court of competent jurisdiction, such provision shall be reformed, if possible,
to the extent necessary to render it legal, valid and enforceable, or otherwise
deleted, and the remainder of this Agreement shall not be affected except to
the extent necessary to reform or delete such illegal, invalid or unenforceable
provision.  The headings in this
Agreement are solely for convenience of reference, and shall not constitute a
part of this Agreement, nor shall they affect its meaning, construction or effect.
The Optionee shall cooperate and take such actions as may be reasonably requested by the Corporation in order
to carry out the provisions and purposes of the Agreement.  The Optionee is responsible for complying
with all laws applicable to Optionee, including federal and state securities
reporting laws.


 


The Optionee must contact Merrill Lynch to accept the terms of this
grant.  Merrill Lynch can be contacted at
www.benefits.ml.com or by phone at 1-877-SLM-ESOP. If Optionee fails to accept
the terms of this grant, the Options may not be exercised.


 


	
   

  	
  SLM
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  

  	
   

  
	
   

  	
  BY: Thomas J.
  Fitzpatrick

  
	
   

  	
  Chief Executive Officer

  



 


 


Copies of the Plan Document and Prospectus are available on the Sallie
Mae Stock Options Intranet site located at
http://salliemaecentral.com/legal/esop/plandocs.htm.  Paper copies of these documents can be
obtained by contacting the Plan Administrator by sending an email to
stock.options@slma.com, or to request by fax to (703) 984-5170.


 


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