Document:

Exhibit 10.25

 

SLM Corporation

DIRECTORS STOCK PLAN

Effective May 19,
2005

 

1.                                       PURPOSE

 

The
purpose of the SLM Corporation Directors Stock Plan (the “Plan”) is to advance
the interests of SLM Corporation (formerly USA Education, Inc., renamed on
May 17,2002), a Delaware corporation (hereinafter the “Company”), by
enabling the Company to attract, retain and motivate qualified individuals to
serve on the Company’s Board of Directors and to align the financial interests
of such individuals with those of the Company’s stockholders by providing for
or increasing their proprietary interest in the Company.  The stock options granted pursuant to this
Plan are not qualified under Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).

 

2.                                       DEFINITIONS

 

“Board” means the Board of Directors of the
Company.

 

“Committee”
means the Board and/or a committee of the Board acting pursuant to its
authorization to administer this Plan under Section 7.

 

“Common Stock”
means the Company’s Common Stock, par value $.20, as presently constituted,
subject to adjustment as provided in Section 9.

 

“Fair Market
Value” means, as of any date, and unless the Committee shall specify otherwise,
the closing market price for the Common Stock reported for that date on the
composite tape for securities listed on the New York Stock Exchange or, if the
Common Stock did not trade on the New York Stock Exchange on the date in
question, then for the next preceding date for which the Common Stock traded on
the New York Stock Exchange.

 

“Non-Employee
Director” means a member of the Board or a member of the Board of Directions of
a subsidiary of the Company who is not at the time also an employee of the
Company or any of its direct or indirect majority-owned subsidiaries
(regardless of whether such subsidiary is organized as a corporation,
partnership or other entity).  For
purposes of this Plan, the Chairman of the Board’s status as an employee shall
be determined by the Committee.

 

3.                                       SHARES
SUBJECT TO THE PLAN

 

Subject to adjustment as provided in Section 9,
the maximum number of shares of Common Stock which may be issued pursuant to
this Plan shall not exceed 9,300,000; provided that no more than 4,500,000 of
such shares may be issued in the form of stock grants under the Plan.  Shares issued under this Plan may be
authorized and unissued shares of Common Stock or shares of Common Stock
reacquired by the Company.  All or any
shares of Common Stock subject to a stock option or stock grant which for any
reason are not issued or are reacquired under the stock option or stock grant
may be made subject to a stock option or stock grant under the Plan.  The number of shares of Common Stock issued
upon the exercise of “replacement options”, i.e. options granted to purchase a
number of shares of Common Stock equal to the number of shares of Common Stock
used to exercise an underlying stock option (either shares previously owned or
shares acquired pursuant to the exercise of the underlying option and sold in
order to exercise e.g., such as in a so-called “cashless exercise”), shall not
reduce the aggregate number of shares authorized under the Plan.

 

4.                                       PARTICIPANTS

 

Any person who is a Non-Employee Director
shall be eligible for the award of stock options and/or stock grants hereunder.

 

5.                                       NON-EMPLOYEE
DIRECTOR AWARDS

 

The Committee may provide for stock options
and/or stock grants to be awarded to Non-Employee Directors in consideration
for their service to the Company.  The
Committee shall determine to which Non-Employee Directors any such stock options
and/or stock grants shall be awarded hereunder (any such person, a “Participant”).  The Committee shall specify the number of
shares subject to each stock option or stock grant provided for under this Section 5,
or the formula pursuant to which such number shall be determined, the
Participants to receive any such award, the date of award and the vesting and
expiration terms applicable to such stock option or stock grant.  The Committee may provide that the exercisability
of a stock option or the vesting of a stock award or of shares issued or
issuable upon exercise of a stock option is subject to the satisfaction of such
conditions or the occurrence of such other events as the Committee specifies,
including, without limitation, the passage of time, continued service,

 

 

the price of the Common Stock meeting or
exceeding a specified level, the achievement of other performance goals or the
satisfaction of an event or condition within the control of the Participant or
within the control of others. The award of stock options or stock grants
hereunder may, but need not, be conditioned on the Non-Employee Director
electing to forego his or her right to all or any part of his or her cash
retainer or other fees.  Subject to
adjustment pursuant to Section 9, the maximum number of shares of Common
Stock subject to stock options and stock grants awarded under this Plan during
any calendar year to any person on account of his or her service as a
Non-Employee Director, other than stock options or stock grants that a Non-Employee
Director has elected to receive in lieu of cash retainer or other fees, shall
not exceed 262,500 shares.

 

6.                                       TERMS
AND CONDITIONS OF STOCK OPTIONS AND STOCK GRANTS

 

(a)                                  General
Terms and Conditions:  Stock options
and stock grants awarded pursuant to the Plan need not be identical but each
stock option and stock grant shall be subject to the following general terms
and conditions:

 

(1)                                  Terms
and Restrictions Upon Shares:  The
Committee may provide that the shares of Common Stock issued upon exercise of a
stock option or receipt of a stock grant shall be subject to such further
conditions, restrictions or agreements as the Committee in its discretion may
specify prior to the exercise of such stock option or receipt of such stock
grant, including without limitation, deferrals on issuance, conditions on
vesting or transferability, and forfeiture or repurchase provisions.  The Committee may establish rules for
the deferred delivery of Common Stock upon exercise of a stock option or
receipt of a stock grant with the deferral evidenced by use of “Stock Units”
equal in number to the number of shares of Common Stock whose delivery is so
deferred.  A “Stock Unit” is a
bookkeeping entry representing an amount equivalent to the Fair Market Value of
one share of Common Stock.  Stock Units
represent an unfunded and unsecured obligation of the Corporation except as
otherwise provided by the Committee. 
Settlement of Stock Units upon expiration of the deferral period shall
be made in Common Stock or otherwise as determined by the Committee.  The amount of Common Stock, or other
settlement medium, to be so distributed may be increased by an interest factor
or by dividend equivalents.  Until a
Stock Unit is settled, the number of shares of Common Stock represented by a
Stock Unit shall be subject to adjustment pursuant to Section 9.

 

(2)                                  Transferability
of Option:  Unless otherwise provided
by the Committee, each stock option shall be transferable only by will or the
laws of descent and distribution.

 

3)                                      Other
Terms and Conditions:  No holder of a
stock option or stock grant shall have any rights as a stockholder with respect
to any shares of Common Stock subject to a stock option or stock grant
hereunder until said shares have been issued. 
Stock options and stock grants may also contain such other provisions,
which shall not be inconsistent with any of the foregoing terms, as the Board
or the Committee shall deem appropriate. 
The Committee may waive conditions to and/or accelerate exercisability
of a stock option or stock grant, either automatically upon the occurrence of
specified events (including in connection with a change of control of the
Company) or otherwise in its discretion. 
No stock option or stock grant, however, nor anything contained in the
Plan, shall confer upon any Participant any right to serve as a director of the
Company.

 

(b)                                 Stock
Option Price:  The exercise price for
each stock option shall be established by the Committee or under a formula
established by the Committee.  The
exercise price shall not be less than the Fair Market Value of the stock on the
date of grant.  The exercise price shall
be payable in cash, by payment under an arrangement with a broker where payment
is made pursuant to an irrevocable direction to the broker to deliver all or
part of the proceeds from the sale of the option shares to the Company, by the
surrender of shares of Common Stock owned by the option holder exercising the
option and having a fair market value on the date of exercise equal to the
exercise price but only if such will not result in an accounting charge to the
Company, or by any combination of the foregoing.  In addition, the exercise price shall be
payable in such other form(s) of consideration as the Committee in its
discretion shall specify, including without limitation by loan (as described in
Section 8) or by techniques that may result in an accounting charge to the
Company.

 

(c)                                  Stock
Grant Terms:  Stock grants under the
Plan may, in the sole discretion of the Committee, but need not, be conditioned
upon the Participant paying cash or cash-equivalent consideration or agreeing
to forego other compensation for the Shares covered by the stock grant.  Stock grants under the Plan may be subject to
such conditions, restrictions or other vesting terms as are established in the
sole discretion of the Committee, including, without limitation, the passage of
time, continued service, the price of the Common Stock meeting or exceeding a
specified level, the achievement of other performance goals or the satisfaction
of an event or condition within the control of the Participant or within the
control of others.

 

 

7.                                       ADMINISTRATION
OF THE PLAN

 

The Plan shall be administered by the Board,
except that as provided herein the Plan may be administered by a Committee of the
Board, as appointed from time to time by the Board.  The Board shall fill vacancies on and from
time to time may remove or add members to the Committee.  The Committee shall act pursuant to a
majority vote or unanimous written consent.

 

Subject to the express provisions of this
Plan, the Committee shall be authorized and empowered to do all things
necessary or desirable in connection with the administration of this Plan,
including, without limitation:  (a) to
prescribe, amend and rescind rules relating to this Plan and to define
terms not otherwise defined herein; (b) to prescribe the form of
documentation used to evidence any stock option or stock grant awarded
hereunder, including provision for such terms as it considers necessary or
desirable, not inconsistent with the terms established by the Board; (c) to
establish and verify the extent of satisfaction of any conditions to
exercisability applicable to stock options or to receipt or vesting of stock
grants; (d) to determine whether, and the extent to which, adjustments are
required pursuant to Section 9 hereof; and (e) to interpret and
construe this Plan, any rules and regulations under the Plan and the terms
and conditions of any stock option or stock grant awarded hereunder, and to
make exceptions to any procedural provisions in good faith and for the benefit
of the Company.  Notwithstanding any
provision of this Plan, the Board may at any time limit the authority of the
Committee to administer this Plan.

 

All decisions, determinations and
interpretations by the Board or, except as to the Board, the Committee
regarding the Plan, any rules and regulations under the Plan and the terms
and conditions of any stock option or stock grant awarded hereunder, shall be
final and binding on all Participants and holders of stock options and stock
grants.  The Board and the Committee may
consider such factors as it deems relevant, in its sole and absolute
discretion, in making such decisions, determinations and interpretations including,
without limitation, the recommendations or advice of any officer or other
employee of the Company and such attorneys, consultants and accountants as it
may select.

 

8.                                       LOANS

 

The Company may, if authorized by the
Committee, make loans for the purpose of enabling a Participant to exercise
stock options and, if applicable, receive stock awarded under the Plan and to
pay the tax liability resulting from a stock option exercise or stock grant
under the Plan.  The Committee shall have
full authority to determine the terms and conditions of such loans.  Such loans may be secured by the shares of
Common Stock received upon exercise of such stock option or receipt of such
stock grant.

 

9.                                       ADJUSTMENT
OF AND CHANGES IN THE STOCK

 

If the outstanding securities of the class
then subject to this Plan are increased, decreased or exchanged for or
converted into cash, property or a different number or kind of shares or
securities, or if cash, property or shares or securities are distributed in
respect of such outstanding securities, in either case as a result of a
reorganization, reclassification, dividend (other than a regular, quarterly
cash dividend) or other distribution, stock split, reverse stock split,
spin-off or the like, or if substantially all of the property and assets of the
Company are sold, then, unless the terms of such transaction shall provide
otherwise, the maximum number and type of shares or other securities that may
be issued under this Plan shall be appropriately adjusted.  The Committee shall determine in its sole
discretion the appropriate adjustment to be effected pursuant to the
immediately preceding sentence.  In
addition, in connection with any such change in the class of securities then
subject to this Plan, the Committee may make appropriate and proportionate
adjustments in the number and type of shares or other securities or cash or
other property that may be acquired pursuant to stock options and stock grants
theretofore awarded under this Plan and the exercise price of such stock
options or price, if any, of such stock grants.

 

No right to purchase or receive fractional
shares shall result from any adjustment in stock options or stock grants
pursuant to this Section 9.  In case
of any such adjustment, the shares subject to the stock option or stock grant
shall be rounded up to the nearest whole share of Common Stock.

 

10.                                 REGISTRATION,
LISTING OR QUALIFICATION OF STOCK

 

In the event that the Board or the Committee
determines in its discretion that the registration, listing or qualification of
the shares of Common Stock issuable under the Plan on any securities exchange
or under any applicable law or governmental regulation is necessary as a
condition to the issuance of such shares under the stock option or stock grant,
the stock option or stock grant shall not be exercisable or exercised in whole
or in part unless such registration, listing, qualification, consent or
approval has been unconditionally obtained.

 

 

11.                                 TAXES

 

The Board or Committee may make such
provisions or impose such conditions as it may deem appropriate for the
withholding or payment by a Participant of any taxes which it determines are
necessary or appropriate in connection with any issuance of shares under this
Plan, and the rights of a holder of a stock option or stock grant in any shares
are subject to satisfaction of such conditions. The Company shall not be
required to issue shares of Common Stock or to recognize the disposition of
such shares until such obligations are satisfied.  At the Participant’s election, any such
obligations may be satisfied by having the Company withhold a portion of the
shares of Common Stock that otherwise would be issued to the holder of the
stock option or stock grant upon exercise of the stock option or vesting or
receipt of the stock grant or by surrendering to the Company shares of Common
Stock previously acquired.  The Company
and any affiliate of the Company shall not be liable to a Participant or any
other persons as to any tax consequence expected, but not realized, by any
Participant or other person due to the receipt of any stock options or shares
awarded hereunder.

 

12.                                 ARBITRATION
AND APPLICABLE LAW

 

Any claim, dispute or other matter in
question of any kind relating to this Plan shall be settled by arbitration
before a single arbitrator and otherwise conducted in accordance with the Rules of
the American Arbitration Association, which proceedings shall be held in the
city in which the Company’s executive offices are located.  Notice of demand for arbitration shall be
made in writing to the opposing party and to the American Arbitration
Association within a reasonable time after the claim, dispute or other matter
in question has arisen.  In no event
shall a demand for arbitration be made after the date when the applicable
statute of limitations would bar the institution of a legal or equitable
proceeding based on such claim, dispute or other matter in question.  The decision of the arbitrator shall be final
and may be enforced in any court of competent jurisdiction. This Plan and any
rights hereunder shall be interpreted and construed in accordance with the laws
of the State of Delaware and applicable federal law.

 

13.                                 EFFECTIVE
DATE, AMENDMENT AND TERMINATION OF PLAN

 

This Plan shall become effective upon its
adoption by the Board, subject to approval by a majority of the outstanding
shares of the Company present, or represented by proxy, and entitled to vote at
a meeting of the Company’s stockholders. 
Unless earlier suspended or terminated by the Board, no stock options or
stock grants may be awarded after the tenth anniversary of the date the Plan is
approved by the Company’s stockholders. 
The Board may periodically amend the Plan as determined appropriate,
without further action by the Company’s stockholders except to the extent
required by applicable law.  Notwithstanding
the foregoing, and subject to adjustment pursuant to Section 9, unless
approved by the Company’s stockholders, (a) the Plan may not be amended to
materially increase the number of shares of Common Stock authorized for
issuance under the Plan and (b) the exercise price of stock options
outstanding under the Plan may not be reduced or adjusted downward, whether
through amendment, cancellation or replacement grants or any other means.Exhibit 10.26

 

SALLIE MAE

EMPLOYEES’ STOCK PURCHASE PLAN

Amended and Restated as of May
19, 2005

 

1.                                       PURPOSE

 

The purpose of this
Sallie Mae Employees’ Stock Purchase Plan (the “Plan”) is to motivate employees
of SLM Corporation (formerly USA Education, Inc., renamed on May 17, 2002) (the
“Corporation”) and designated subsidiaries listed on Appendix A (collectively
the “Employers”) to achieve corporate goals and to encourage equity ownership
in the Corporation by employees of the Corporation and the Employers in order
to increase their proprietary interest in the Corporation’s success.

 

2.                                       ADMINISTRATION

 

(a)          The
Plan shall be administered by the Sallie Mae Employees’ Stock Purchase Plan
Committee (the “Committee”), which shall be appointed by the Corporation’s
Board of Directors.  In addition to its
duties with respect to the Plan stated elsewhere in the Plan, the Committee
shall have full authority, consistent with the Plan, to interpret the Plan, to
promulgate such rules and regulations with respect to the Plan as it deems
desirable, to delegate its responsibilities hereunder to appropriate persons
and to make all other determinations necessary or desirable for the
administration of the Plan.  All
decisions, determinations and interpretations of the Committee shall be binding
upon all persons.

 

(b)         The
rights to purchase stock (“Options”) that are granted under this Plan shall
constitute non-qualified stock options that are not intended to qualify under
Section 423 of the Internal Revenue Code of 1986.

 

3.                                       SHARES
SUBJECT TO THE PLAN

 

The stock that may be
purchased under the Plan is common stock, $.20 par value, of the
Corporation.  The aggregate number of
shares that may be purchased is 7,625,000 (which, pursuant to Paragraph 4, was
adjusted for a 7 to 2 stock split effective January 2, 1998, decreased by
4,500,000 on November 6, 2002 (1,500,000 pre-split), adjusted for a 3 to 1
stock split effective June 20, 2003, and decreased by 1,000,000 shares on May
19, 2005) subject to any further adjustment pursuant to Paragraph 4.  Such shares may be previously-issued stock
reacquired by the Corporation, authorized, but unissued stock, or stock that is
purchased on the open market by the Corporation.

 

If at any time the number of shares to be purchased in
an Offering Period, as defined in Paragraph 5(b), causes the total number of
shares offered under the Plan to exceed the above stated limit, then the number
of shares that may be purchased by each Participant, as defined in Paragraph
5(d), in that Offering Period shall be reduced pro rata.

 

4.                                       ADJUSTMENTS
FOR CHANGES IN CAPITALIZATION

 

                                                If
there is a change in the number or kind of outstanding shares of the
Corporation’s stock by reason of a legislative action, stock dividend, stock
split, recapitalization, merger, consolidation, combination or other similar
event, appropriate adjustments shall be made by the Committee to the number and
kind of shares subject to the Plan, the kind of shares under Options then
outstanding, the Purchase Price, as defined in Paragraph 7, and other relevant
provisions, to the extent that the Committee, in its sole discretion,
determines that such change makes such adjustments necessary or equitable.

 

5.                                       DEFINITIONS

 

(a)          Eligible
Compensation.  The term “Eligible
Compensation” shall mean the regular salary and hourly wages (calculated at the
regular hourly rate, paid to an employee whose regularly scheduled work week
includes overtime hours, provided that the regular hours plus the overtime
hours worked in any pay period do not exceed 80 hours), including payments for
sick leave, vacation, holidays, jury duty, bereavement and other paid leaves of
absence, and, beginning with the November 3, 2000 pay date, commissions paid by
an Employer to a Participant during the Offering Period.  “Eligible Compensation” shall not include
short term disability payments made pursuant to the Sallie Mae Employees’
Comprehensive Welfare Benefit Plan and severance payments made pursuant to the
Sallie Mae Employee Severance Plan.

 

(b)         Quarterly
Entry Date.  The term “Quarterly Entry
Date” shall mean February 1, May 1, August 1 and November 1.

 

(c)          Offering
Period.  The term “Offering Period” shall
mean the 24-month period beginning with each Quarterly Entry Date.

 

(d)  Purchase
Date.  The term “Purchase Date” shall mean
the last day of an Offering Period, except if the New York Stock Exchange is
closed on the last day of an Offering Period, the Purchase Date shall mean the
immediately preceding trading day on the New York Stock Exchange.

 

(e)          Participant.  The term “Participant” shall mean an eligible
employee who elects to participate in the Plan pursuant

 

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to Paragraph 9.

 

6.                                       ELIGIBILITY

 

As of September 1,
1997, all regular full-time and regular part-time employees of the Corporation
or the Employers shall be eligible to participate in the Plan beginning with
the first Quarterly Entry Date following their employment with the Corporation
or an Employer; provided, however, the employee must commence employment prior
to the enrollment deadline and must complete the enrollment procedures prior to
the enrollment deadline for such Quarterly Entry Date.  Notwithstanding the prior sentence, the
following individuals shall not be eligible to participate in the Plan:

 

(a)        any
individual whose services are performed for the Employer pursuant to a contract
between the Employer and another entity, and whom the Employer treats as a
leased employee;

 

(b)       any
individual that the Employer treats as an independent contractor;

 

(c)        temporary
employees;

 

(d)       as
of September 18, 1997, members of the Boards of Directors of the Corporation,
the Employers, and the Student Loan Marketing Association, unless otherwise
eligible as regular full-time or part-time employees; and

 

(e)        Effective
November 1, 2001, employees assigned to perform services under the Management
Services Agreement between Sallie Mae Servicing Corporation and the National
Student Loan Clearinghouse.

 

7.                                       PURCHASE
PRICE

 

The Purchase Price
per share shall be equal to the fair market value of a share of common stock on
the first business day of the Offering Period on which the New York Stock
Exchange is open, less 15 percent of such fair market value.  Unless otherwise determined by the Board of
Directors of the Corporation or the Committee, the fair market value of a share
of common stock on a particular date shall be deemed to be the closing price of
a share of common stock as recorded by the New York Stock Exchange Composite
Transaction Tape on such date or, if no closing price has been recorded on such
date, on the day immediately following the day on which such a closing price
was recorded.

 

8.                                       OPTION
TO PURCHASE STOCK

 

On each Quarterly
Entry Date, the Corporation will offer eligible employees, who are not then
participating in the Plan, the opportunity to elect to participate in the
Plan.  Each eligible employee who elects
to participate will receive an Option to purchase on the Purchase Date the
number of full and/or fractional shares of common stock that a Participant’s Purchase
Savings Account, as defined in Paragraph 10, will purchase at the Purchase
Price.

 

9.                                       ENROLLING
IN THE PLAN

 

An eligible
employee may elect to participate in the Plan by completing the enrollment
procedures established by the Committee before the enrollment deadline
announced for each Quarterly Entry Date.

 

A Participant
shall elect a percentage to be deducted regularly from his or her Eligible
Compensation and deposited in his or her Purchase Savings Account, as defined
by Paragraph 10, provided that the Participant must elect an initial payroll
deduction of no less than one percent (1%) of his or her Eligible Compensation.

 

A Participant may
elect to change his or her payroll deduction percentage on a biweekly basis, as
limited by Paragraph 11.

 

Unless a
Participant changes his or her payroll deduction percentage or ceases
participation in the Plan in accordance with Paragraph 14, a Participant’s
payroll deductions, as limited by Paragraph 11, and his or her initial
enrollment elections will continue until the end of the Offering Period.  At the end of the Offering Period and if a
Participant’s contribution percentage for that Offering Period is 1% or more, a
Participant shall automatically be re-enrolled for the next Offering Period and
payroll deductions will continue at the same percentage unless the Participant
changes the amount of his or her payroll deduction or ceases participation in
the Plan in accordance with Paragraph 14.

 

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10.                                 PURCHASE
SAVINGS ACCOUNT

 

Pursuant to the
enrollment procedures established by the Committee, the Participant will direct
his or her Employer to deposit, or cause to be deposited, payroll deductions in
a money market account (hereinafter called “Purchase Savings Account”) with a
third party designated by the Corporation (the “Third-Party Designate”).  The Participant may not make other deposits
to his or her Purchase Savings Account. Purchase Savings Accounts may be
adjusted for earnings, losses, and administrative fees and expenses under terms
stated by the Third-Party Designate.

 

A Participant may
make withdrawals from his or her Purchase Savings Account under terms stated by
the Third-Party Designate or in accordance with Paragraph 14 and the procedures
established by the Committee. Withdrawals may be made in an amount no less than
$200. The Participant shall direct all requests for withdrawals to the
Third-Party Designate in accordance with the procedures established by the
Committee or the Third-Party Designate and disbursements shall be made by the
Third-Party Designate as soon as possible after the end of the month in which
the withdrawal requests are received.

 

11.                                 MAXIMUM
CONTRIBUTIONS

 

A Purchase Savings
Account shall include payroll deductions adjusted for earnings, losses, and
expenses on the account. The maximum amount that a Participant shall contribute
to his or her Purchase Savings Account is $10,000 per 24-month Offering Period;
provided, however, that effective November 1, 2001, no more than 25 percent of a
Participant’s Eligible Compensation may be contributed to the Plan.  Contributions other than by payroll
deductions, are not permitted.

 

12.                                 STOCK
PURCHASES

 

In accordance with
the applicable procedures established by the Committee, each Participant shall
purchase all of the shares that he or she is entitled to purchase as a result
of participation in the Plan and subsequently the Corporation shall withhold a
sufficient number of shares to cover his or her current federal, state, and
local tax liability.  On the Purchase
Date, the Third-Party Designate shall cause the funds then on deposit in the
Participant’s Purchase Savings Account, as adjusted for earnings, losses, or
expenses, to be applied to the total Purchase Price of the shares.

 

Taxes in the required
amount will be withheld from the proceeds of any and all shares sold and will
be paid to the appropriate government agency.

 

If the Purchase
Price exceeds the fair market value per share on the Purchase Date, the
Participant shall be deemed to have elected not to exercise the options set
forth in this Paragraph and the entire balance of the Participant’s Purchase
Savings Account then on deposit, as adjusted for earnings, losses, or expenses,
will be refunded to the Participant.

 

The common stock
purchased on the Purchase Date will be issued and credited to a brokerage
account established by the Corporation on behalf of the Participant and
maintained by the Third-Party Designate A Participant holding any shares beyond
the expiration of the Offering Period may direct the Third-Party Designate to
sell any or all shares held in his or her Stock Account at any time after the
expiration of the Offering Period, unless
restricted from trading in Corporation stock at that time.

 

13.                                 STOCK
ACCOUNT REPORTS AND DELIVERY OF SHARES

 

So long as the
Stock Accounts are established, the Third-Party Designate will maintain
individual Stock Accounts for each Participant and will provide periodic
statements of account no less often than annually.  All dividends credited to a Participant’s
Stock Account shall be automatically reinvested in accordance with the
procedures established by the Committee. 
If a Participant does not wish to have the dividends credited to his or
her Stock Account automatically reinvested, the Participant must contact the
Third-Party .  Delivery of stock will be
made under terms stated by the Third-Party Designate.

 

14.                                 CEASING
PARTICIPATION IN THE PLAN

 

A Participant may
cease participation in the Plan at any time prior to the Purchase Date by
following the applicable procedures established by the Committee, in which
event payroll deductions will cease and the entire balance of the Participant’s
Purchase Savings Account then on deposit, as adjusted for earnings, losses, or
expenses, will promptly be refunded to the Participant.

 

An eligible
employee who has ceased participation in the Plan may reenter the Plan by
following the enrollment procedures established by the Committee, subject to
Paragraph 9.  However, such an employee
may not reenter the Plan earlier than the second Quarterly Entry Date following
the date on which participation ceased; any elections associated with the

 

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employee’s re-enrollment
will be effective beginning with such second Quarterly Entry Date.

 

15.                                 TERMINATION
OF EMPLOYMENT

 

(a)          Except
as provided in paragraph (b) below, in the event that a Participant’s
employment terminates, before the applicable Purchase Date, such employee’s
participation under the Plan shall terminate immediately and within a reasonable
time thereafter, the employee will be paid in cash the value of his or her
Purchase Savings Account then on deposit, as adjusted for earnings, losses, or
expenses; provided, however, that a Participant who transfers employment between
Employers shall not be deemed to have terminated employment for the purposes of
this Paragraph.

 

(b)         Notwithstanding
the foregoing, if any termination of employment is for reasons of death, total
and permanent disability or retirement, as defined herein, the employee (or in
the case of death, his or her estate) shall have the right within the Offering
Period that ends which is closest to 1 year from the date of his or her
termination, or the original Offering Period, whichever is earlier, pursuant to
Paragraph 12, to purchase all of the shares which he or she is entitled to
purchase at the Purchase Price as a result of his or her participation in the
offering with the funds then on deposit in his or her Purchase Savings Account,
as adjusted for earnings, losses, or expenses, or to receive in cash such
funds.  Solely at the discretion of the
Committee, a former employee may be permitted to purchase shares under other
circumstances, under terms determined solely by the Committee.

 

(c)          For the
purposes of this Paragraph, a Participant is considered totally and permanently
disabled within the meaning of the Corporation’s long-term disability policy
applicable at the time to Optionee, as may be amended from time to time.  The determination of the Committee as to an
individual’s Disability and the date thereof shall be conclusive on all of the
parties.

 

(d)         For the
purposes of this Paragraph, an employee will be considered to terminate on
account of retirement if he or she is at least the normal retirement age under
Corporation’s qualified pension plan at the time of termination of employment.

 

16.                                 NO
TRANSFER OR ASSIGNMENT OF EMPLOYEE’S RIGHTS

 

Except as
specified in Paragraph 17, an employee’s rights under the Plan are his or hers
alone and may not be transferred or assigned to, or availed of, by any other
person.

 

17.                                 ESTATE
AS BENEFICIARY

 

The designated
beneficiary of a Participant’s Purchase Savings Account shall be the
Participant’s estate.  A Participant may
not designate another person as his or her beneficiary or joint tenant with
rights of survivorship.

 

18.                                 CLAIMS
PROCEDURES

 

A Participant may
appeal the denial of benefits under this Plan by submitting a written statement
appealing the decision, normally within 60 days of the denial of the benefit by
the Committee.  In the written statement,
the Participant must state reasons why the claim should not have been
denied.  Also, the written statement
should be accompanied by any documents, additional information or comments that
might be helpful to the Committee.  In
this manner, the Committee intends to afford any Participant or beneficiary
whose claim for benefits has been denied a reasonable opportunity for a review
of the decision.   Written appeals must
be sent to:

 

The Employee Stock Purchase Plan Committee

c/o The General Counsel’s Office

SLM Corporation

12061 Bluemont Way

Reston, VA 20190

 

The Committee will
review a Participant’s appeal and will promptly notify such Participant in
writing of the decision.  Normally, this
decision will be made within 60 days of receipt of an appeal, but this period
may be extended to no more than 120 days if special circumstances require
additional time.  In such a case, the
Participant will be notified before the end of the initial 60-day period of the
reasons for the extension.

 

4

 

19.                                 TERMINATION
AND AMENDMENTS TO PLAN

 

(a)        The
Corporation may at any time terminate the Plan or change the aggregate number
of common shares that may be purchased under the Plan.

 

(b)       The
Committee may at any time or times amend the Plan (including amendments to
Appendix A to add or delete designated subsidiaries).

 

(c)        Nothing
contained in this Plan shall be construed to prevent the Corporation from
taking any corporate action which is deemed by the Corporation to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any rights granted under the Plan.  No employee, beneficiary or other person
shall have any claim against the Corporation as a result of any such action.

 

20.                                 INDEMNITY

 

The Corporation
shall, consistent with applicable law, indemnify members of the Committee from
any liability, loss or other financial consequence with respect to any act or
omission relating to the Plan to the same extent and subject to the same
conditions as specified in the indemnity provisions contained in the By-Laws
and Regulations of the Corporation.

 

21.                                 LIMITATIONS
ON SALE OF STOCK PURCHASED UNDER THE PLAN

 

The Plan is
intended to provide common stock for investment and not for resale.  The Corporation does not, however, intend to
restrict the sale of the stock other than in accordance with the Corporation’s
general policies regarding the sale of the Corporation’s stock.  The employee assumes the risk of any
market fluctuations in the price of such stock.

 

22.                                 PAYMENT
OF EXPENSES RELATED TO PLAN

 

The cost, if any,
of withdrawals from a Purchase Savings Account, delivery of shares to a
Participant or commissions upon the sale of stock shall be paid by the
Participant using such service.  Other
expenses associated with the Plan, if any, in the discretion of the Committee,
will be allocated as deemed appropriate by the Committee.

 

23.                                 OPTIONEES
NOT STOCKHOLDERS

 

Neither the
granting of an Option to an employee, nor the deductions from his or her pay
shall cause such employee to be a stockholder of the shares covered by an
Option until such shares have been purchased by and issued to him or her.

 

24.                                 FEDERAL
AND STATE INCOME TAX REQUIREMENTS

 

The Employers, in
accordance with Sections 3102(a) and 3402(a) of the Internal Revenue Code of
1986 and applicable state law, are required to withhold from the wages of
participating employees, in any payroll period in which compensation is deemed
received by the employee, employment and income taxes with respect to the
amount that is considered compensation includable in the employee’s gross
income.  An employee will be required to
pay over to the Corporation or his or her Employer funds sufficient to meet any
tax obligation if any employee’s current compensation or amounts withheld from
the Purchase Savings Account or option exercise are not sufficient to meet the
employment and income tax withholding obligation.

 

25.                                 NO
EMPLOYMENT RIGHTS

 

Nothing in the
Plan shall confer upon any employee any right to continued employment, or
interfere with the right of the Corporation or the Employers to terminate his
or her employment at any time, for any reason.

 

26.                                 EFFECTIVE
DATE

 

Except as
otherwise provided herein, the effective date of this Plan is November 1,
2001.  This Plan was previously amended
and restated on November 2, 1989, August 12, 1991, November 20, 1992,
January 2, 1998, October 5, 1998, September 22, 2000, November 1, 2001,
November 6, 2002,  June 20, 2003 and May
19, 2005.

 

5

 

APPENDIX A

DESIGNATED SUBSIDIARIES

 

Sallie Mae, Inc.

 

Sallie Mae Servicing
Corporation

 

Effective January 1,
2001, Student Loan Funding Resources

 

SLM Financial Corporation

 

Effective January 1,
2001, Student Assistance Corporation

 

Effective January 1,
2001, Noel-Levitz

 

Effective January 1,
2001, Education Debt Services Inc.

 

NM Education Loan
Corporation

 

Effective January 1, 2001
Education One Group

 

HEMAR Insurance
Corporation of America

 

Education Debt Services,
Inc.

 

Effective January 31,
2002, General Revenue Corporation

 

Effective January 2,
2002, Pioneer Credit Recovery

 

Effective January 1,
2001, True Careers, Inc.

 

6

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