Document:

exv10w30

 

EXHIBIT 10.30

RETAINER AGREEMENT

     THIS RETAINER AGREEMENT (the “Agreement”) is entered into by and between Anthony P.
Terracciano (“Terracciano”) and SLM Corporation, a corporation organized and existing under the
laws of the State of Delaware (the “Company”).

     WHEREAS, on January 7, 2008 (the “Commencement Date”), the Board of Directors of the Company
(the “Board”) appointed Terracciano as a director and to serve as non-executive Chairman of the
Board;

     WHEREAS, the Company and Terracciano wish to enter into an agreement documenting the terms of
Terracciano’s compensation for service as Chairman;

     NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and
intending to be legally bound, the parties, subject to the terms and conditions set forth herein,
agree as follows:

     1. Term. The term of this Agreement shall be the period beginning on the Commencement Date,
and ending on the earlier of the cessation of Terracciano’s service as Chairman of the Board or the
third anniversary of the Commencement Date (the “Term”).

     2. Duties. During the Term, Terracciano shall serve as non-executive Chairman of the Board.
Terracciano agrees to assume such duties and responsibilities of the Chairman as set forth in the
Company’s by-laws and governance guidelines and as may be reasonably assigned to Terracciano from
time to time by the Board in a manner consistent with applicable legal and corporate governance
standards, which responsibilities shall include presiding at meetings of the Board, serving as
liaison between management and the Board and participating in communications with the Company’s
significant shareholders.

     3. Commitment. During and throughout the Term, Terracciano will use good faith efforts to
discharge the duties and responsibilities assigned to Terracciano hereunder faithfully and to the
best of his ability and will devote such time, attention, skill and efforts to the business and
affairs of the Company as he determines in good faith is necessary. The Company and Terracciano
currently anticipate that Terracciano’s duties to the Company will occupy approximately 20% of
Terracciano’s regular business time.

     4. Other Business Activities. It is understood that Terracciano will be a director and not an
employee of the Company. For the avoidance of doubt, during the Term, Terracciano will be
permitted to render services to other persons, so long as such activities do not significantly
interfere with Terracciano’s performance of his responsibilities under this Agreement.
Notwithstanding anything herein to the contrary, Terracciano’s service as Chairman shall not limit
or affect his ability to engage in those activities in which he was engaged prior to his
appointment as Chairman, including serving as a director of IKON Office Solutions, Inc., TradeCard
Inc., and Knoll, Inc., and serving on the Board of Trustees of Monmouth Medical Center, and
activities in connection with (i) serving on corporate, civic or charitable boards or

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committees provided that such service shall not result in a conflict of interest or violate
applicable law, (ii) delivering lectures, fulfilling speaking engagements or teaching at
educational institutions and (iii) managing personal investments; provided, however, that any such
activities in clauses (i) – (iii) do not significantly interfere with Terracciano’s performance of
his responsibilities pursuant to this Agreement. In recognition of the time to be devoted to
service as Chairman, Terracciano agrees not to serve on any additional boards of directors without
prior notice to and approval by the Nominations and Governance Committee of the Board (which
approval will not be unreasonably withheld).

     5. Annual Cash Retainer. During the Term, Terracciano shall be entitled to receive an annual
director’s fee of $600,000 for services as Chairman, which shall be paid quarterly, in advance in
cash in accordance with the Company’s normal practice for non-employee directors in effect from
time to time (the “Annual Cash Retainer”).

     6. Equity Compensation.

          6.1 Grant. On the Commencement Date, Terracciano was granted a stock option award covering
five hundred thousand (500,000) shares of the Company’s common stock (the “Stock Option”) and a
stock award covering two hundred thousand (200,000) shares of the Company’s common stock (the
“Stock Award”), in each case, pursuant to the terms of the Company’s Directors Stock Plan (the
“Plan”).

          6.2 Option Exercise Price; Net Exercise of Option. The Stock Option has a per share exercise
price equal to $17.83, which price was the per share closing price of the Company’s common stock on
the Commencement Date. Terracciano shall be entitled to pay the exercise price in cash to the
extent sufficient shares are available for issuance under all awards then outstanding under the
Plan or in any event by the Company withholding from the shares of common stock otherwise issuable
to the optionholder upon the exercise of the Stock Option (or portion thereof) the whole number of
shares (rounded up) having a fair market value (as determined pursuant to the Plan) on the date of
exercise sufficient to satisfy the exercise price. If the withheld shares are more than sufficient
to satisfy the exercise price the Company shall make such arrangement as it determines appropriate
to credit such amount for the optionholder’s benefit.

          6.3 Vesting Schedule. The Stock Option and the Stock Award were not vested and the Stock
Option was not exercisable at the time of grant. Subject to Terracciano’s continuous service as a
member of the Board through each applicable vesting date, the Stock Option shall vest and become
exercisable and the Stock Award shall vest and the shares subject thereto shall become free of any
restrictions or limitations in three equal installments on the first, second and third
anniversaries of the Commencement Date.

          6.4 Stock Option Expiration. Subject to earlier termination pursuant to Section 8, the Stock
Option will expire and cease to be exercisable on January 6, 2018 (the “Option Expiration Date”).

          6.5 Anti-Dilution Adjustments. If the outstanding securities of the class subject to the
Stock Option and Stock Award are increased, decreased or exchanged for or

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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 merger, consolidation, 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 the number of shares subject to the Stock Option and Stock Award and the exercise price
of the Stock Option shall be appropriately adjusted by the Compensation Committee of the Board.

          6.6 Other Terms and Conditions. The Stock Option and the Stock Award shall be subject to the
terms and conditions set forth in this Agreement. To the extent not addressed or provided
otherwise in this Agreement, the Stock Option and the Stock Award shall also be subject to the
terms and conditions of the Plan (including the administrative terms).

     7. Other Benefits.

          7.1 Expenses and Business Support. The Company agrees to reimburse Terracciano for all
reasonable business expenses incurred by Terracciano in performing his duties pursuant to this
Agreement, in accordance with the Company’s generally applicable expense reimbursement policies.
When Terracciano is performing services as Chairman of or on behalf of the Company, the Company
will provide Terracciano with appropriate travel arrangements, including use of the corporate jet.

          7.2 Office Support. During the Term, Terracciano shall be provided with an office at the
Company’s primary executive offices of a size and with furnishings and other appointments as
provided to the most senior executives of the Company, and other administrative support at the
Company’s headquarters commensurate with Terracciano’s position.

          7.3 Other Support. During the Term, Terracciano shall be provided (i) secretarial assistance
at a location convenient to him, and (ii) payment for one-fifth (or such greater amount as approved
from time to time by the Board of Directors) of the cost of a car and driver reasonably acceptable
to him; provided that the cost of the services described in this paragraph shall be reasonably
consistent with the estimates previously provided to the Company.

          7.4 Indemnification. The Company shall indemnify, defend and hold harmless Terracciano from
and against any expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or investigative,
arising from or out of or relating to Terracciano’s performance, service or status as a director
and/or Chairman of the Company or in any other capacity, including serving at the request of the
Company Corporation as a director or officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise to the maximum extent
permitted under applicable law. In furtherance of the foregoing, the Company shall enter into its
standard form of Director’s Indemnification Agreement with Terracciano.

     8. Effect of Service Event.

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          8.1 If a Service Event occurs during the Term and notwithstanding anything herein to the
contrary, Terracciano’s right to the Annual Cash Retainer and other support referred to in Section
7.3 shall vest and shall be paid and/or provided for the remainder of the scheduled Term (as if the
Service Event had not occurred) in accordance with this Agreement notwithstanding any cessation of
Terracciano’s service as Chairman of the Board.

          8.2 Notwithstanding anything herein to the contrary, the Stock Option shall become immediately
fully vested and exercisable and the Stock Award shall become immediately fully vested and the
shares subject thereto free of any restrictions (a) upon Terracciano’s death or Disability, or (b)
upon a Service Event, provided that after any such acceleration upon a Service Event Terracciano
shall hold the net number of shares received upon any exercise of the Stock Option and vesting of
the Stock Award (net of any shares disposed of to pay estimated taxes and to pay the Stock Option
exercise price) until the earlier of (i) the date his service as a director ceases and (ii) the
date the Stock Option and Stock Award would have become vested and exercisable if the Service Event
had not occurred.

          8.3 Upon the cessation of Terracciano’s service as a member of the Board for Cause or for any
reason other than death, Disability or upon or following a Service Event, any then unvested portion
of the Stock Option and Stock Award (after taking into account any vesting acceleration pursuant to
Section 8.2) shall immediately expire, cease to be exercisable and be forfeited back to the
Company; provided, however, that the then vested portion of the Stock Option shall remain
outstanding and exercisable until the Option Expiration Date. In addition, the Stock Option shall
immediately expire and cease to be exercisable, and any then unvested portion of the Stock Award
shall immediately be forfeited, upon the removal of Terracciano from the position of Chairman of
the Board for Cause.

          8.4 Definitions.

          (a) For purposes of this Agreement, “Service Event” shall mean:

     (i) the failure of the Company’s stockholders to reelect Terracciano as a
member of the Board (other than as a result of conduct that constitutes Cause (as
defined below));

     (ii) removal of Terracciano from the position of Chairman of the Board without
Cause

     (iii) a Change in Control; or

     (iv) the failure of any successor to assume this Agreement pursuant to Section
13 hereof.

          (b) For purposes of this Agreement, “Cause” shall mean:

     (i) the continued failure of Terracciano to perform substantially the duties of
Chairman (other than any such failure resulting from incapacity due to physical or
mental illness), after a written demand for substantial performance is delivered to
Terracciano by the Board which specifically identifies the manner in

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which the Board believes that Terracciano has not substantially performed
Terracciano’s duties;

     (ii) the willful engaging by Terracciano in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the Company; or

     (iii) conviction of a felony or guilty or nolo contendere plea by Terracciano
with respect thereto.

For purposes of this Section 8.4(b), no act or failure to act, on the part of
Terracciano, shall be considered “willful” unless it is done, or omitted to be
done, by Terracciano in bad faith or without reasonable belief that Terracciano’s
action or omission was in the best interests of the Company. For purposes of this
Agreement, any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by
Terracciano in good faith and in the best interests of the Company. The removal of
Terracciano from the position of Chairman of the Board shall not be deemed to be
for Cause unless and until there shall have been delivered to Terracciano a copy of
a resolution duly adopted by the affirmative vote of not less than two-thirds of
the entire membership of the Board (not including Terracciano) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
Terracciano and Terracciano is given an opportunity, together with counsel, to be
heard before the Board), finding that, in the good faith opinion of the Board,
Terracciano has engaged in the conduct described above, and specifying the
particulars thereof in detail.

          (c) For purposes of this Agreement, “Change in Control” shall mean an occurrence of one or
more of the following events:

     (i) an acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “person or group” (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than an
employee benefit plan of the Company, immediately after which such person or group
has “beneficial ownership’’ (within the meaning of Rule ,136-3 under the Exchange
Act) of more than fifty percent (50%) of the combined voting power of the Company’s
then outstanding Voting Securities;

     (ii) approval by the stockholders of (i) a merger, consolidation or
reorganization involving the Company, unless the Company resulting from such merger,
consolidation or reorganization (the “Surviving Corporation”) shall adopt or assume
the Plan and this Option and either (A) the stockholders of the Company immediately
before such merger, consolidation or reorganization own, directly or indirectly
immediately following such merger, consolidation, or reorganization, at least
seventy-five percent (75%) of the combined voting power of the Surviving Corporation
in substantially the same proportion as their ownership immediately before such
merger, consolidation or reorganization, or

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(B) at least a majority of the members of the Board of Directors of the
Surviving Corporation were directors of the Company immediately prior to the
execution of the agreement providing for such merger, consolidation or
reorganization, or (ii) a complete liquidation or dissolution of the Company; or

     (iii) such other events as the Committee or the Board from time to time may
specify.

             (d) For purposes of this Agreement, “Disability” shall mean: the absence of Terracciano from
Chairman’s duties with the Company for 180 consecutive days as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a physician selected by the
Company or its insurers and reasonably acceptable to Terracciano or Terracciano’s legal
representative.

     9. Certain Additional Payments by the Company.

          9.1 Anything in this Agreement to the contrary notwithstanding and except as set forth below,
in the event that the Company determines in good faith that any payment or distribution by the
Company to or for the benefit of Terracciano (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but determined without regard
to any additional payments required under this Section 9) (a “Payment”) would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code) or
any interest or penalties are incurred by Terracciano with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then Terracciano shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by Terracciano of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, Terracciano retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 9.1, if it
shall be determined that Terracciano is entitled to a Gross-Up Payment, but that the Payments do
not exceed 110% of the greatest amount (the “Reduced Amount”) that could be paid to Terracciano
such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment
shall be made to Terracciano and the Payments, in the aggregate, shall be reduced to the Reduced
Amount by reducing the Annual Cash Retainer (with the last installments being reduced first).

          9.2 Subject to the provisions of Section 9.3, all determinations required to be made under
this Section 9, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by the Company’s independent auditors or such other registered public accounting firm selected
by the Company and acceptable to Terracciano (such acceptance not to be unreasonably withheld) (any
such firm, the “Accounting Firm”) which shall provide detailed supporting calculations both to the
Company and Terracciano within 15 business days of the receipt of notice from the Company that
there has been a Payment, or such earlier time as is requested by the Company. All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid

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by the Company to Terracciano within five days of the later of (a) the due date for the
payment of any Excise Tax, and (b) the receipt of the Accounting Firm’s determination, but in no
event later than December 31 of the year following the year in which the Excise Tax is due. Any
determination by the Accounting Firm shall be binding upon the Company and Terracciano. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 9.3 and Terracciano thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of Terracciano.
Terracciano shall report Payments on Terracciano’s tax returns in a manner consistent with the
Company’s treatment of such payments for tax purposes.

          9.3 Terracciano shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10 business days after
Terracciano is informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. Terracciano shall not pay such
claim prior to the expiration of the 30-day period following the date on which it gives such notice
to the Company (or such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies Terracciano in writing prior to the expiration of such
period that it desires to contest such claim, Terracciano shall:

	 	(a)	 	give the Company any information reasonably requested by the
Company relating to such claim;
	 
	 	(b)	 	take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company;
	 
	 	(c)	 	cooperate with the Company in good faith in order effectively to
contest such claim; and
	 
	 	(d)	 	permit the Company to participate in any proceedings relating to
such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold Terracciano harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this Section 9.3, the
Company shall control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and

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may, at its sole option, either direct Terracciano to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and Terracciano agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that if the Company
directs Terracciano to pay such claim and sue for a refund, the Company shall advance the amount of
such payment to Terracciano, on an interest-free basis and shall indemnify and hold Terracciano
harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of Terracciano with respect to which such
contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and Terracciano shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

          9.4 If, after the receipt by Terracciano of an amount advanced by the Company pursuant to
Section 9.3, Terracciano becomes entitled to receive any refund with respect to such claim,
Terracciano shall (subject to the Company’s complying with the requirements of Section 9.3)
promptly pay to the Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Terracciano of an amount advanced
by the Company pursuant to Section 9.3, a determination is made that Terracciano shall not be
entitled to any refund with respect to such claim and the Company does not notify Terracciano in
writing of its intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

     10. No Other Compensation; Full Settlement; No Mitigation.

          10.1 Except as set forth in Sections 5 through 9 above, Terracciano shall have no right to any
other remuneration from the Company in respect of his services as non-executive Chairman of the
Board or as a director of the Company during the Term. Upon the cessation of Terracciano’s service
as a member of the Board, Terracciano shall not be entitled to any additional compensation pursuant
to this Agreement, except to the extent described in Sections 5 through 9 above.

          10.2 The Company may withhold from any amounts payable to Terracciano such Federal, state,
local or foreign taxes as shall be required to be withheld pursuant to any applicable law or
regulation, if any, but the Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not otherwise be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may
have against Terracciano or others.

          10.3 In no event shall Terracciano be obligated to seek outside employment or take any other
action by way of mitigation of the amounts payable to Terracciano under any of

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the provisions of this Agreement and, such amounts shall not be reduced whether or not
Terracciano obtains outside employment.

     11. Other Agreements. Terracciano represents and warrants to the Company that there are no
restrictions, agreements or understandings whatsoever to which Terracciano is a party or by which
he is bound that would prevent or make unlawful Terracciano’s execution of this Agreement or
Terracciano’s service hereunder.

     12. Survival of Provisions. The provisions of this Agreement shall survive the cessation of
Terracciano’s service hereunder and the payment of all amounts payable and delivery of all
compensation and benefits pursuant to this Agreement incident to any such cessation.

     13. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors or permitted assigns and Terracciano and his executors,
administrators or heirs. Terracciano may not assign any obligations or responsibilities under this
Agreement or any interest herein, by operation of law or otherwise, without the prior written
consent of the Company. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no such succession had
taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.

     14. Notices. All notices required to be given to any of the parties of this Agreement shall
be in writing and shall be deemed to have been sufficiently given, subject to the further
provisions of this Section 14, for all purposes when presented personally to such party, or sent by
facsimile transmission, any national overnight delivery service, or certified or registered mail,
to such party at its address set forth below:

	 	 	 	 	 
	 

	 	(a)
	 	If to Terracciano:
	 
	 	 	 	 
	 

	 	 	 	Anthony P. Terracciano
	 
	 	 	 	 
	 

	 	(b)
	 	If to the Company:
	 
	 	 	 	 
	 

	 	 	 	SLM Corporation
	 

	 	 	 	Sallie Mae, Inc.
	 

	 	 	 	12061 Bluemont Way
	 

	 	 	 	Reston, VA 20190
	 

	 	 	 	Attention: General Counsel
	 

	 	 	 	Fax No. (703) 984-7695

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Such notice shall be deemed to be received when delivered if delivered personally, upon electronic
or other confirmation of receipt if delivered by facsimile transmission, the next business day
after the date sent if sent by a national overnight delivery service, or three (3) business days
after the date mailed if mailed by certified or registered mail. Any notice of any Change of such
address shall also be given in the manner set forth above. Whenever the giving of notice is
required, the giving of such notice may be waived in writing by the party entitled to receive such
notice.

     15. Entire Agreement; Amendments; Waiver. This Agreement, the terms and conditions of the
Plan as referenced in Section 6 of this Agreement, and any other documents, instruments or other
writings delivered or to be delivered in connection with this Agreement as specified herein
constitute the entire agreement among the parties with respect to the subject matter of this
Agreement and supersede all prior and contemporaneous agreements, understandings, and negotiations,
whether written or oral, with respect to the terms of Terracciano’s service hereunder. This
Agreement may be amended or modified only by a written instrument signed by all parties hereto.
The waiver of the breach of any term or provision of this Agreement shall not operate as or be
construed to be a waiver of any other or subsequent breach of this Agreement.

     16. Governing Law. This Agreement shall be governed and construed as to its validity,
interpretation and effect by the laws of the State of Delaware.

     17. Severability. Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement or such
provisions, and any such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

     18. Miscellaneous.

          18.1 Terracciano agrees that during the Term and for a period of two years thereafter (the
“Restricted Period”) he shall not solicit any employee of the Company to separate employment with
the Company or to pursue any business or employment not involving the Company. Terracciano
acknowledges that any breach by him of this Section 18.1 will cause continuing and irreparable
injury to the Company for which monetary damages would not be an adequate remedy. Terracciano
shall not, in any action or proceeding by the Company to enforce this Section 18.1, assert the
claim or defense that an adequate remedy at law exists. In the event of such breach by
Terracciano, the Company shall have the right to enforce the provisions of this Section 18.1 by
seeking injunctive or other relief in any court, and this Agreement shall not in any way limit
remedies at law or in equity otherwise available to the Company. In the event that the provisions
of Section 18.1 should ever be adjudicated to exceed the time or other limitations permitted by
applicable law in any applicable jurisdiction, then such provisions shall be deemed reformed in
such jurisdiction to the maximum time or other limitations permitted by applicable law.

          18.2 The section headings in this Agreement are for convenience only; they form no part of
this Agreement and shall not affect its interpretation. This Agreement may be

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executed in any number of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute one and the same
instrument.

     19. Arbitration. Any dispute or claim, other than those referred to in Section 18.1, arising
out of or relating to this Agreement or otherwise relating to the service relationship between
Terracciano and the Company (including but not limited to any claims under Title VII of the Civil
Rights Act of 1964, as amended; the Americans with Disabilities Act; the Age Discrimination in
Employment Act; the Family Medical Leave Act; and the Employee Income Retirement Security Act)
shall be submitted to Arbitration, in Fairfax County, Virginia, and except as otherwise provided in
this Agreement shall be conducted in accordance with the rules of, but not under the auspices of,
the American Arbitration Association. The arbitration shall be conducted before an arbitration
tribunal comprised of three individuals, one selected by the Company, one selected by Terracciano,
and the third selected by the first two. The parties and the arbitrators selected by them shall
use their best efforts to reach agreement on the identity of the tribunal within ten (10) business
days of either party to this Agreement submitting to the other party a written demand for
arbitration. The proceedings before the tribunal shall take place within twenty (20) business days
of the selection thereof. Terracciano and the Company agree that such arbitration will be
confidential and no details, descriptions, settlements or other facts concerning such arbitration
shall be disclosed or released to any third party without the specific written consent of the other
party, unless required by law or court order or in connection with enforcement of any decision in
such arbitration. Any damages awarded in such arbitration shall be limited to the contract measure
of damages, and shall not include punitive damages. To the full extent permitted by law, the
Company shall pay, as incurred, (i) the costs of the arbitrators, and (ii) all reasonable legal
fees and expenses which Terracciano may reasonably incur as a result of any contest (regardless of
the outcome thereof provided that Terracciano has acted in good faith and that the Company is
provided with such evidence of fees and expenses as it may reasonably require) by the Company,
Terracciano or others of the validity or enforceability of, or liability under, any provision of
this Agreement or any guarantee of performance thereof (including as a result of any contest by
Terracciano about the amount of any payment pursuant to this Agreement), plus in each case interest
on any payment required by this Section 19 that is not paid by the Company within fifteen days
after receipt of written notice from Terracciano requesting such payment at the applicable Federal
rate provided for in Section 7872(f)(2)(A) of the Code.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed effective as of the day
and year first written above.

	 	 	 	 	 
	ANTHONY P. TERRACCIANO	 	 
	 
	 	 	 	 
	/s/ Anthony P. Terracciano
	 	 
	 	 	 
	 
	 	 	 	 
	SLM CORPORATION	 	 
	 
	 	 	 	 
	By: 	/s/ Michael E. Sheehan	 	 
	 	 	 	 
	Title:
	 	Senior Vice President and General Counsel	 	 

12exv10w31

 

EXHIBIT 10.31

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between Albert L. Lord, a
resident of the Commonwealth of Virginia (“Executive”), and SLM Corporation, a corporation
organized and existing under the laws of the State of Delaware (the “Company”).

     WHEREAS, the Board of Directors of the Company (“Board”) wishes to retain Executive as Chief
Executive Officer of the Company, and Executive wishes to accept such employment with the Company,
in each case, on the terms set forth herein;

     NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and
intending to be legally bound, the parties, subject to the terms and conditions set forth herein,
agree as follows:

     1. Employment and Term. Executive hereby agrees to be employed as Chief Executive Officer of
the Company, and the Company hereby agrees to retain Executive as Chief Executive Officer.
Executive’s employment under this Agreement may be maintained through Sallie Mae, Inc. (“Sallie
Mae”) or another wholly owned subsidiary of the Company used to employ the Company executives, and
in such case any reference in this Agreement to employment or termination of employment with the
Company shall be deemed to include employment or termination of employment with Sallie Mae or such
other subsidiary. The term of Executive’s employment with the Company under this Agreement shall
be the period commencing on March 20, 2008 (the “Commencement Date”) and ending on the earlier of
December 31, 2010 and the effective date of any termination pursuant to the provisions of Section
11 (the “Term”).

     2. Duties. During the Term, Executive will have the title of Chief Executive Officer of the
Company. Executive agrees to assume such duties and responsibilities as may be reasonably assigned
to Executive from time to time by the Board, which duties shall include principal executive
management responsibility for the Company. As requested by the Board, Executive shall assume such
additional positions with respect to subsidiaries of the Company as necessary or appropriate in
furtherance of his responsibilities. In addition, during the Term, subject to re-election by a
vote of stockholders, Executive shall continue to serve on the Board as Vice Chairman thereof.

     3. Other Business Activities. During the Term, Executive agrees to devote such time,
attention, skill and efforts to the business and affairs of the Company as may be required by the
Board and/or necessary to discharge the duties and responsibilities assigned to Executive
hereunder. Executive shall serve the Company faithfully and to the best of his ability.
Notwithstanding anything herein to the contrary, Executive’s service as Chief Executive Officer of
the Company shall not limit or affect his ability to engage in those activities in which he was
engaged prior to accepting employment as Chief Executive Officer of the Company, and with prior
notice to the Executive Committee of the Board, activities in connection with (i) service as a
volunteer, officer or director or in a similar capacity of any charitable or civic organization,

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(ii) managing personal investments, and (iii) serving as a director, executor, trustee or in
another similar fiduciary capacity for a non-commercial entity; provided, however, that any such
activities do not conflict with or materially interfere with Executive’s performance of his
responsibilities and obligations pursuant to this Agreement. Executive may engage in any other
business activity or pursuit, directly or indirectly, including serving as a director of
BearingPoint, Inc. and, with approval of the Board, serving as a director of any other
publicly-traded corporation.

     4. Base Salary. The Company shall pay Executive at the annual rate of $1,250,000 (the “Base
Salary”). The Base Salary shall be inclusive of all applicable income, Social Security and other
taxes and charges which are required by law or requested to be withheld by Executive and which
shall be withheld and paid in accordance with the Company’s normal payroll practice for its
similarly situated executives as in effect from time to time.

     5. Annual Incentive Compensation. Executive did not participate in any of the Company’s
annual incentive compensation plans for 2007. Beginning January 1, 2008, Executive shall
participate at the chief executive officer level in the Company’s annual incentive compensation
program(s) for executive officers as provided in the SLM Corporation Incentive Plan as such may be
amended from time to time (the “Incentive Plan”), subject to the limitations and conditions set
forth therein or in any successor plan.

     6. For purposes of this Agreement, “Change of Control” shall mean an occurrence of one or more
of the following events:

     (i) an acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “person” or “group”
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934) other than an employee benefit plan of the Company, immediately after which
such person or group has “Beneficial Ownership” (within the meaning of Rule 13d-3
under the Exchange Act) of more than fifty percent (50%) of the combined voting
power of the Company’s then outstanding Voting Securities; or

     (ii) within any 12-month period, the individuals who were directors of the
Company as of the date the Board approved this Agreement (the “Incumbent Directors”)
ceasing for any reason other than death, disability or retirement to constitute at
least a majority of the Board, provided that any director who was not a director as
of the date the Board approved this Agreement shall be deemed to be an Incumbent
Director if such director was appointed or nominated for election to the Board by,
or on the recommendation or approval of, at least a majority of directors who then
qualified as Incumbent Directors, provided further that any director appointed or
nominated to the Board to avoid or settle a threatened or actual proxy contest shall
in no event be deemed to be an Incumbent Director; or

     (iii) consummation of a merger, consolidation, or reorganization involving the
Company that results in the stockholders of the Company immediately before such
merger, consolidation or reorganization owning, directly

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or indirectly, immediately following such merger, consolidation or
reorganization, less than fifty percent (50%) of the combined voting power of the
corporation which survives such transaction as the ultimate parent entity, unless
Executive remains Chief Executive Officer, co-Chief Executive Officer, or Chairman
of the corporation which survives such transaction as the ultimate, parent entity
and prior to the satisfaction of all such conditions, the Board determines that such
transaction shall not constitute a Change of Control; or

     (iv) a sale of all or substantially all of the assets of the Company.

     7. Other Benefits.

          (a) Retirement Plans. During the Term, to the extent permissible under the terms of the
applicable plans, Executive shall be entitled to participate in all tax-qualified and
non-tax-qualified pension plans maintained or contributed to by the Company or for the benefit of
its executives, including without limitation, the Sallie Mae Cash Account Retirement Plan and the
Sallie Mae Supplemental Cash Account Retirement Plan (collectively, the “the Company Pension
Plans”), in accordance with the terms of the Company Pension Plans as they may be amended from time
to time in the discretion of the Company.

          (b) Medical Insurance. During the Term, Executive shall be entitled to participate in any
medical and dental insurance plans generally available to the senior management of the Company, in
accordance with the terms of such plans as they may be amended from time to time in the discretion
of the Company.

          (c) Other Benefit Plans. Executive shall be entitled to receive or participate in such
further savings, deferred compensation, health or welfare benefit plans offered to the Company’s
senior management generally, in accordance with the terms of such plans as they may be amended from
time to time in the discretion of the Company.

          (d) Expenses. The Company agrees to reimburse Executive for all reasonable, ordinary and
necessary business expenses incurred by Executive in performing his duties pursuant to this
Agreement, in accordance with the Company’s reimbursement policies generally applicable to
management personnel. In no event shall any such reimbursement be paid later than the end of the
calendar year following the year in which the expense was incurred.

     8. No Other Compensation. Except as set forth in Sections 4, 5, and 7 above, Executive shall
have no right to any other remuneration from the Company in respect of his services as Chief
Executive Officer or as a director of the Company during the Term.

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     9. Nondisclosure of Confidential Information.

          (a) Executive and the Company acknowledge that Executive will, in the course of his
employment, come into possession of confidential, proprietary business and technical information,
and trade secrets of the Company and its Affiliates, as defined in Section 9(b) (the “Proprietary
Information”). Proprietary Information includes, but is not limited to, the following:

	 	•	 	Business procedures. All information concerning or relating to the way the Company
and its Affiliates conduct their business, which is not generally known to the public
or within the industry or trade in which the Company or its Affiliates compete (such as
the Company contracts, internal business procedures, controls, plans, licensing
techniques and practices, supplier, subcontractor and prime contractor names and
contacts and other vendor information, computer system passwords and other computer
security controls, financial information, distributor information, and employee data)
and the physical embodiments of such information (such as check lists, samples, service
and operational manuals, contracts, proposals, printouts, correspondence, forms,
listings, ledgers, financial statements, financial reports, financial and operational
analyses, financial and operational studies, management reports of every kind,
databases, employment or personnel records, and any other written or machine-readable
expression of such information as are filed in any tangible media).
	 
	 	•	 	Marketing Plans and Customer Lists. All information not generally known to the
public or within the industry or trade in which the Company or its Affiliates compete
pertaining to the Company’s and its Affiliates’ marketing plans and strategies;
forecasts and projections; marketing practices, procedures and policies; goals and
objectives; quoting practices, procedures and policies; and customer data including the
customer list, contracts, representatives, requirements and needs, specifications, data
provided by or about prospective customers, and the physical embodiments of such
information.
	 
	 	•	 	Business Ventures: All information not generally known to the public or within the
industry or trade in which the Company or its Affiliates operate concerning new product
development, negotiations for new business ventures, future business plans, and similar
information and the physical embodiments of such information.
	 
	 	•	 	Software. All information relating to the Company’s and its Affiliates’ software or
hardware in operation or various stages of research and development, which are not
generally known to the public or within the industry or trade in which the Company or
its Affiliates compete and the physical embodiments of such information.
	 
	 	•	 	Litigation. Information which is not a public record and is not generally known to
the public or within the industry or trade in which the Company or its Affiliates
compete regarding litigation and potential litigation matters and the physical
embodiments of such information.

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	 	•	 	Policy Information. Information not of a public nature regarding the policies and
positions that have been or will be advocated by the Company and its Affiliates with
government officials, the views of government officials toward such policies and
positions, and the status of any communications that the Company or its Affiliates may
have with any government officials.
	 
	 	•	 	Information Not Generally Known. Any information which (a) is not generally known
to the public or within the industry or trade in which the Company or its Affiliates
compete, (b) gives the Company or its Affiliates a significant advantage over its or
their competitors, or (c) has significant economic value or potentially significant
economic value to the Company or its Affiliates, including the physical embodiments of
such information.

          (b) Executive acknowledges that the Proprietary Information is a valuable and unique asset of
the Company and its Affiliates. Executive agrees that he will not, at any time during his
employment or after the termination of his employment with the Company, without the prior written
consent of the Company or its Affiliates, as applicable, either directly or indirectly divulge any
Proprietary Information for his own benefit or for any purpose other than the exclusive benefit of
the Company and/or its Affiliates.

     10. Agreement Not to Compete.

          (a) Executive agrees that he shall not compete with the Company or its Affiliates during the
Term and for a period of two years thereafter (the “Restricted Period”).

          (b) For the purposes of this Section 10, “compete” shall mean directly or indirectly through
one or more intermediaries (i) working or serving as a director, officer, employee, consultant,
agent, representative, or in any other capacity, with or without compensation, on behalf of one or
more entities engaged in the Company’s Business (as defined below) in the United States, Canada, or
any other country where the Company (including any Affiliate) either engages in the Company’s
Business at the time of Executive’s termination or where the Company, at the time of Executive’s
termination, has developed a business plan or taken affirmative steps to engage in the Company’s
Business; (ii) soliciting any employees, customers, or business partners of the Company, inducing
any customer or business partner of the Company to breach a contract with the Company or any
principal for whom the Company acts as agent to terminate such agency relationship; and/or (iii)
making statements about the Company or its management reasonably determined by the Board to be
disparaging. For purposes of this provision, the term “the Company’s Business” shall mean any
business activity or line of business similar to the type of business conducted by the Company,
Sallie Mae, and/or their Affiliates at the time of Executive’s termination of employment or which
the Company, Sallie Mae and/or their Affiliates at the time of Executive’s termination of
employment or within one year prior thereto have planned to enter into or conduct. Executive
expressly agrees that the markets served by the Company, Sallie Mae and their Affiliates extend
nationally and to Canada and are not dependent on the geographic location of the executive
personnel or the businesses by which they are employed and that the restrictions set forth in this
Section 10 are reasonable and are no greater than are required for the protection of the Company,
Sallie Mae, and its Affiliates. For purposes of this Agreement, the term “Affiliate” shall be
deemed to refer to the Company,

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and any entity (whether or not existing on the date hereof) controlling, controlled by or
under common control with the Company.

     11. Termination of Employment. Executive shall be employed by the Company under this
Agreement on an at-will basis meaning that Executive’s employment by the Company may be terminated
by Executive or the Company at any time during the Term, with or without cause, and with or without
notice. Upon termination, Executive shall be entitled only to such compensation and benefits as
described in this Section 11. Upon mutual agreement, Executive may remain employed by the Company
after December 31, 2010 pursuant to any terms mutually agreed upon.

          11.1 Disability and Death.

          (a) Disability. If Executive is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not less than 12 months, or is, by
reason of any medically determinable physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than 3 months under the Company’s disability
plan available generally to all employees (any such situation, “Disability”), the Company may
terminate Executive’s employment hereunder. The determination of whether the Executive has a
Disability under this Agreement shall be made by the Compensation Committee, which shall consider
the information presented by Executive’s personal physician and by any other advisors, including
any other physician, which the Compensation Committee determines appropriate. The determination of
the Compensation Committee shall be final and binding, unless it is determined to have been
arbitrary and capricious. If the employment of Executive terminates during the Term due to the
Disability of Executive, the Company shall provide to Executive (i) whatever benefits are available
to him under any disability benefit plan(s) applicable to him at the time of such termination to
the extent Executive satisfies the requirements of such plan(s), and (ii) the payments set forth in
Section 11.1(c).

          (b) Death. If Executive dies during the Term, the Company shall pay to Executive’s executors,
legal representatives or administrators the payments set forth in Section 11.1(c). Except as
specifically set forth in this Section 11.1 or under applicable laws, the Company shall have no
liability or obligation hereunder to Executive’s executors, legal representatives, administrators,
heirs or assigns or any other person claiming under or through him by reason of Executive’s death,
except that Executive’s executors, legal representatives or administrators will be entitled to
receive any death benefit payable to them as beneficiaries under any insurance policy or other
benefits plans in which Executive participates as an employee of the Company and to exercise any
rights afforded them under any benefit plan then in effect.

          (c) Payment Upon Disability or Death. Upon termination of the employment of Executive due to
death or Disability during the Term, the Company shall pay an amount equal to all accrued but
unpaid Base Salary through the date of termination of employment, plus a portion of the Target
Annual Incentive Compensation (as defined in Section 11.2(d)) pro-rated for the year through the
date of termination.

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          11.2 Termination By Company Without Cause; Termination By Executive For Good Reason.

          (a) Termination By Company Without Cause. The Company may terminate Executive’s employment
hereunder at any time for any reason other than Cause upon written notice to Executive
(“Termination Without Cause”).

          (b) Termination By Executive For Good Reason. Executive may terminate his employment
hereunder at any time For Good Reason (“Termination For Good Reason”). For purposes of this
Agreement, Good Reason shall mean (i) a material reduction in the position or responsibilities of
Executive, provided that a Change of Control (including the fact that the Company’s stock is not
publicly held or is held or controlled by a single stockholder as a result of a Change of Control)
shall not of itself be deemed a material reduction in the position or responsibilities of
Executive; (ii) a material reduction in the Base Salary; (iii) a substantial failure of the Company
to perform any material provision of this Agreement; or (iv) a relocation of the Company’s
executive offices to a distance of more than seventy-five (75) miles from its location as of the
date of this Agreement without the consent of Executive, unless such relocation results in the
Company’s executive offices being closer to Executive’s then primary residence or does not
substantially increase the average commuting time of Executive.

          (c) In the event of a Termination Without Cause or a Termination For Good Reason, the Company
shall pay to Executive within (i) forty-five (45) days after termination an amount equal to all
accrued but unpaid Base Salary through the date of termination of employment, plus a portion of the
Target Annual Incentive Compensation pro-rated for the year through the date of termination, and
(ii) subject to Section 21, forty-five (45) days after termination an amount equal to the
Multiplier times the Compensation Amount (as such terms are defined in Section 11.2(d) below).

          (d) The Multiplier is defined as the number obtained by dividing by twelve the number of full
months remaining in the Term at the time of Executive’s termination of employment but in no event
shall the Multiplier be less than one. The Target Annual Incentive Compensation shall be a cash
payment equal to the value of the chief executive officer target bonus under the Incentive Plan.
The Compensation Amount is defined as the sum of (i) the annual Base Salary of Executive as in
effect immediately prior to Executive’s termination of employment, and (ii) the Target Annual
Incentive Compensation.

          11.3 Change of Control.

          (a) In the event a Termination Without Cause (as defined in Section 11.2(a)) or a Termination
For Good Reason (as defined in Section 11.2(b)) occurs during the Term of this Agreement and
following a Change of Control, Executive shall be entitled to receive, subject to Section 21,
forty-five (45) days after termination an amount equal to the Multiplier, which shall not be less
than one, times the Compensation Amount, as such terms are defined in Section 11.2(d).

          (b) If, as a result of payments provided for under or pursuant to this Agreement together with
all other payments in the nature of compensation provided to or for the

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benefit of Executive under any other agreement in connection with a Change of Control,
Executive becomes subject to taxes of any state, local or federal taxing authority that would not
have been imposed on such payments but for the occurrence of a Change of Control, including any
excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) and any
successor or comparable provision, then, in addition to any other benefits provided under or
pursuant to this Agreement or otherwise, the Company (including any successor to the Company) shall
pay to Executive at the time any such payments are made under or pursuant to this or the other
agreements, an amount equal to the amount of any such taxes imposed or to be imposed on Executive
(the amount of any such payment, the “Parachute Tax Reimbursement”). In addition, the Company
(including any successor to the Company) shall “gross up” such Parachute Tax Reimbursement by
paying to Executive at the same time an additional amount equal to the aggregate amount of any
additional taxes (whether income taxes, excise taxes, special taxes, employment taxes or otherwise)
that are or will be payable by Executive as a result of the Parachute Tax Reimbursement being paid
or payable to Executive and/or as a result of the additional amounts paid or payable to Executive
pursuant to this sentence, such that after payment of such additional taxes Executive shall have
been paid on a net after-tax basis an amount equal to the Parachute Tax Reimbursement. The amount
of any Parachute Tax Reimbursement and of any such gross-up amounts shall be determined by a
registered public accounting firm selected by the Compensation Committee (in conjunction with the
Audit Committee) of the Board of Directors, whose determination, absent manifest error, shall be
treated as conclusive and binding absent a binding determination by a governmental taxing authority
that a greater or lesser amount of taxes is payable by Executive.

          11.4 Termination For Cause; Termination By Executive Without Good Reason.

          (a) Termination for Cause. The Company may terminate the employment of Executive for Cause at
any time during the Term. For purposes of this Agreement, Cause shall mean a determination by the
Board of Directors that there has been a willful and continuing failure of Executive to perform
substantially his obligations under this Agreement (other than as a result of Executive’s death or
Disability) and, if in the judgment of the Board of Directors such willful and continuing failure
may be cured by Executive, that such failure has not been cured by Executive within ten (10)
business days after written notice of such was given to Executive by the Board of Directors, or
that Executive has committed an act of Misconduct (as defined below). For purposes of this
Agreement, “Misconduct” shall mean: (i) embezzlement, fraud, commission of a felony, breach of
fiduciary duty or deliberate disregard of material Company rules; (ii) personal dishonesty of
Executive materially injurious to the Company; (iii) an unauthorized disclosure of any Proprietary
Information; or (iv) competing with the Company while employed by the Company or during the
Restricted Period, in contravention of Section 10.

          (b) Termination By Executive Without Good Reason. Executive may terminate his employment
hereunder at any time without Good Reason (as defined in Section 11.2(b)) (“Termination Without
Good Reason”).

          (c) In the event the Company terminates Executive’s employment with Company for Cause or by
Executive Without Good Reason, Executive shall receive all accrued and vested but unpaid Base
Salary and benefits as of the effective date of termination.

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          11.5 Board of Directors Service. Subject to re-election by a vote of stockholders, Executive
shall continue to serve on the Board of Directors through the Term and as a condition to the
payment of any termination benefits under this Agreement shall offer to tender his resignation from
the Board of Directors upon expiration of the Term, or upon any earlier termination of his
employment, which resignation may or may not be accepted.

     12. Other Agreements. Executive represents and warrants to the Company that:

          (a) There are no restrictions, agreements or understandings whatsoever to which Executive is a
party or by which he is bound that would prevent or make unlawful Executive’s execution of this
Agreement or Executive’s employment hereunder, or which are or would be inconsistent or in conflict
with this Agreement or Executive’s employment hereunder, or which would prevent, limit or impair in
any way the performance by Executive of his obligations hereunder.

          (b) Executive shall disclose the existence and terms of the restrictive covenants set forth in
this Agreement to any employer by whom Executive may be employed during the Term (which employment
is not hereby authorized) or during the Restricted Period as defined in the Agreement Not to
Compete by and between Executive and the Company set forth in Section 10 hereof.

     13. Survival of Provisions. The provisions of this Agreement, including without limitation
those set forth in Sections 9, 10, 12, 13, 14, 15, 22, and 24 hereof, shall survive the
termination of Executive’s employment hereunder and the payment of all amounts payable and delivery
of all post-termination compensation and benefits pursuant to this Agreement incident to any such
termination of employment.

     14. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors or permitted assigns and Executive and his executors, administrators
or heirs. The Company shall require any successor or successors expressly to assume the
obligations of the Company under this Agreement. For purposes of this Agreement, the term
“successor” shall include the ultimate parent corporation of any corporation involved in a merger,
consolidation, or reorganization with or including the Company that results in the stockholders of
the Company immediately before such merger, consolidation or reorganization owning, directly or
indirectly, immediately following such merger, consolidation or reorganization, securities of
another corporation, regardless of whether any such merger, consolidation or reorganization is
deemed to constitute a Change of Control for purposes of this Agreement. Executive may not assign
any obligations or responsibilities under this Agreement or any interest herein, by operation of
law or otherwise, without the prior written consent of the Company. At any time during the Term,
the Company may provide, without the prior written consent of Executive, that Executive shall be
employed pursuant to this Agreement by any of its Affiliates instead of or in addition to Sallie
Mae or the Company, and in such case all references herein to the “Company” shall be deemed to
include any such entity, provided that such action shall not relieve the Company of its obligation
to make or cause an Affiliate to make or provide for any payment to or on behalf of Executive
pursuant to this Agreement. The Board may assign any or all of its responsibilities hereunder to
any committee of the Board, in which case references to Board shall be deemed to refer to such
committee.

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     15. Notices. All notices required to be given to any of the parties of this Agreement shall
be in writing and shall be deemed to have been sufficiently given, subject to the further
provisions of this Section 15, for all purposes when presented personally to such party, or sent by
facsimile transmission, any national overnight delivery service, or certified or registered mail,
to such party at its address set forth below:

     (a) If to Executive:

          Albert L. Lord

     (b) If to the Company:

          SLM Corporation

          Sallie Mae, Inc. 

          12061 Bluemont Way 

          Reston, VA 20190 

          Attention: General Counsel

          Fax No. (703) 984-7695

Such notice shall be deemed to be received when delivered if delivered personally, upon electronic
or other confirmation of receipt if delivered by facsimile transmission, the next business day
after the date sent if sent by a national overnight delivery service, or three (3) business days
after the date mailed if mailed by certified or registered mail. Any notice of any change of such
address shall also be given in the manner set forth above. Whenever the giving of notice is
required, the giving of such notice may be waived in writing by the party entitled to receive such
notice.

     16. Entire Agreement. This Agreement and any other documents, instruments or other writings
delivered or to be delivered in connection with this Agreement as specified herein constitute the
entire agreement among the parties with respect to the subject matter of this Agreement and
supersede all prior and contemporaneous agreements, understandings, and negotiations, whether
written or oral, with respect to the terms of Executive’s employment by the Company.

     17. Amendments; Waiver. This Agreement may be amended or modified only by a written
instrument signed by all parties hereto. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or subsequent breach of
this Agreement.

     18. Governing Law. This Agreement shall be governed and construed as to its validity,
interpretation and effect by the laws of the Commonwealth of Virginia.

     19. Severability. Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement or such

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provisions, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

     20. Section Headings. The section headings in this Agreement are for convenience only; they
form no part of this Agreement and shall not affect its interpretation.

     21. Effect of Section 409A of the Code. Notwithstanding anything to the contrary in this
Agreement, if the Company determines (a) that on the date Executive’s employment with the Company
terminates or at such other time that the Company determines to be relevant, the Executive is a
“specified employee” (as such term is defined under Section 409A of the Code) of the Company and
(b) that any payments to be provided to Executive pursuant to this Agreement are or may become
subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or
penalties imposed under Section 409A of the Code (“Section 409A Taxes”) if provided at the time
otherwise required under this Agreement then such payments shall be delayed until the date that is
six months after date of the Executive’s “separation from service” (as such term is defined under
Section 409A of the Code) with the Company, or such shorter period that, as determined by the
Company, is sufficient to avoid the imposition of Section 409A Taxes.

     22. Counterparts. This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such counterparts together shall
constitute one and the same instrument.

     23. Specific Enforcement; Extension of Period. Executive acknowledges that the restrictions
contained in Sections 9 and 10 hereof are reasonable and necessary to protect the legitimate
interests of the Company and its Affiliates and that the Company would not have entered into this
Agreement in the absence of such restrictions. Executive also acknowledges that any breach by him
of Sections 9 or 10 hereof will cause continuing and irreparable injury to the Company for which
monetary damages would not be an adequate remedy. Executive shall not, in any action or proceeding
by the Company to enforce Sections 9 or 10 of this Agreement, assert the claim or defense that an
adequate remedy at law exists. In the event of such breach by Executive, the Company shall have
the right to enforce the provisions of Sections 9 and 10 of this Agreement by seeking injunctive or
other relief in any court, and this Agreement shall not in any way limit remedies at law or in
equity otherwise available to the Company. In the event that the provisions of Sections 9 or 10
hereof should ever be adjudicated to exceed the time, geographic, or other limitations permitted by
applicable law in any applicable jurisdiction, then such provisions shall be deemed reformed in
such jurisdiction to the maximum time, geographic, or other limitations permitted by applicable
law.

     24. Arbitration. Any dispute or claim, other than those referred to in Section 23, arising
out of or relating to this Agreement or otherwise relating to the employment relationship between
Executive and the Company (including but not limited to any claims under Title VII of the Civil
Rights Act of 1964, as amended; the Americans with Disabilities Act; the Age Discrimination in
Employment Act; the Family Medical Leave Act; and the Employee Income Retirement Security Act)
shall be submitted to Arbitration, in Fairfax County, Virginia, and except as otherwise provided in
this Agreement shall be conducted in accordance with the rules of, but not under the auspices of,
the American Arbitration Association. The arbitration shall be

11

 

conducted before an arbitration tribunal comprised of three individuals, one selected by the
Company, one selected by Executive, and the third selected by the first two. The parties and the
arbitrators selected by them shall use their best efforts to reach agreement on the identity of the
tribunal within ten (10) business days of either party to this Agreement submitting to the other
party a written demand for arbitration. The proceedings before the tribunal shall take place
within twenty (20) business days of the selection thereof. Executive and the Company agree that
such arbitration will be confidential and no details, descriptions, settlements or other facts
concerning such arbitration shall be disclosed or released to any third party without the specific
written consent of the other party, unless required by law or court order or in connection with
enforcement of any decision in such arbitration. Any damages awarded in such arbitration shall be
limited to the contract measure of damages, and shall not include punitive damages. The parties
shall equally divide the costs of the arbitrators, and each party shall bear his or its attorneys’
fees and other costs, except that the arbitrators may specifically direct one party to bear the
entire cost of the arbitration, including all attorneys’ fees, if the arbitrators determine that
such party acted in bad faith.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the day and year first
written above.

	 	 	 	 	 
	SLM Corporation	 	 
	By:

	 	/s/ Michael Sheehan
	 	/s/ Albert L. Lord
	 

	 	 
	 	 
	Title:

	 	Senior Vice President and General Counsel
	 	Albert L. Lord

12

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