Document:

Exhibit 10.26

 

CONFIDENTIAL

Stock Option Agreement

SLM Corporation Incentive Plan

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

If to the Corporation to:

 

Director, Stock Plans

Sallie Mae

12061 Bluemont Way

Reston, VA 20190

Fax: (703) 984-5170

 

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

 

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

 

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

 

	
   

  	
  SLM
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  

  	
   

  
	
   

  	
  BY: Thomas J.
  Fitzpatrick

  
	
   

  	
  Chief Executive Officer

  

 

 

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

 

2Exhibit 10.27

 

SLM CORPORATION

Change in Control Severance Plan for Senior Officers

 

 

ARTICLE 1

 

NAME, PURPOSE AND EFFECTIVE DATE

 

1.01                        Name
and Purpose of Plan.  The
name of this plan is the SLM Corporation Change in Control Severance Plan for
Senior Officers (the “Plan”).  The
purpose of the Plan is to provide compensation and benefits to certain senior
level officers of SLM Corporation upon certain change in control events of SLM
Corporation (the “Corporation”).

 

1.02                        Effective
Date.  The effective date
of the Plan is January 1, 2006.  The
compensation and benefits payable under this Plan are payable upon Change in
Control events that occur after the effective date of this Plan.

 

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

 

ARTICLE 2

 

DEFINITIONS

 

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

 

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

 

2.02                        “Board
of Directors”  means the
Board of Directors of SLM Corporation.

 

2.03                        “Bonus”  means the greater of: (a) the average of
the annual bonuses earned under the SLM Corporation Incentive Plan or any
successor plan for the two-year period prior to a Change in Control or (b) the
average of the annual bonuses earned under the SLM Corporation Incentive Plan
or any successor plan, including a comparable annual incentive plan of a
Successor Corporation, for the two-year period prior to the Eligible Officer’s
Termination Date.

 

1

 

2.04                        “Equity Acceleration Change in Control” 
means an occurrence of any of the following events: (a) an
acquisition (other than directly from the Corporation) of any voting securities
of the Corporation (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 Corporation, immediately after
which such person 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 Corporation’s then outstanding Voting Securities; (b) approval
by the Corporation’s stockholders of a merger, consolidation or reorganization
involving the Corporation and the corporation resulting from the merger,
consolidation or reorganization (the “Surviving Corporation”) does not assume
the SLM Corporation Incentive Plan; (c) approval by the Corporation’s
stockholders of merger, consolidation or reorganization involving the
Corporation and the Surviving Corporation assumes the SLM Corporation Incentive
Plan but, either (I) the stockholders of the Corporation immediately before
such merger, consolidation or reorganization own, directly or indirectly
immediately following such merger, consolidation or reorganization, less than
fifty percent (50%) 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 (II) less than a majority of the
members of the Board of Directors of the Surviving Corporation were directors
of the Corporation immediately prior to the execution of the agreement
providing for such merger, consolidation or reorganization; (d) approval
by the Corporation’s stockholders of a complete liquidation or dissolution of
the Corporation; or (e) such other events as the Board of Directors or a
Committee of  the Board of Directors from
time to time may specify.

 

2.05                        “Cash Acceleration Change
in Control”  means, in addition to an occurrence of an
Equity Acceleration Change in Control event as defined above, (a) the sale
of all or substantially all of the assets of the Corporation or (b) with
regard only to an Eligible Officer whose primary responsibilities are within a
business segment as described in the Corporation’s financial statements, the
sale of all or substantially all of the assets of such a business segment.

 

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

 

2.07                        “Termination of Employment For Good Reason” 
means an
Eligible Officer’s decision to resign from his employment due to (a) a
material reduction in the position or responsibilities of Eligible Officer; (b) a
reduction in Eligible Officer’s Base Salary or a material

 

2

 

reduction in Eligible
Officer’s compensation arrangements or benefits, (provided that variability in
the value of stock-based compensation or in the compensation provided under the
SLM Corporation Incentive Plan or a successor plan shall not be deemed to cause
a material reduction in compensation); or (c) a relocation of the Eligible
Officer’s primary work location to a distance of more than seventy-five (75)
miles from its location as of the date of this Plan without the consent of
Eligible Officer, unless such relocation results in the Eligible Officer’s
primary work location being closer to Eligible Officer’s then primary residence
or does not substantially increase the average commuting time of Eligible
Officer.

 

2.08                        “Termination Date”  has the following meaning.  For purposes of a “Termination by Eligible
Officer For Good Reason,” Termination Date means the date that the Eligible
Officer submits his written notice of resignation to the Corporation; provided,
however, that if the decision to resign is due to clause (a) of the
definition of “Termination by Eligible Officer For Good Reason,” the
Termination Date means the date that is six months following the date that the
Eligible Officer submits his written notice of resignation to the
Corporation.  For purposes of a “Termination
of Employment by Corporation Without Cause,” Termination Date means the date
the Corporation delivers written notice of termination to the Eligible Officer.

 

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

 

ARTICLE 3

 

ELIGIBILITY
AND BENEFITS

 

3.01                        Eligible
Officers.  Officers of SLM
Corporation with the titles of Senior Vice President, Executive Vice President,
President and/or Chief Operating Officer at the time of a Change in Control are
eligible for benefits under this Plan (the “Eligible Officers”).  Thomas J. Fitzpatrick, Chief Executive
Officer, is not an Eligible Officer under this Plan and any compensation and
benefits due to Mr. Fitzpatrick upon a change in control of the
Corporation shall be paid under the terms of the employment agreements dated January 1,
2002 and June 1, 2005.  C.E. Andrews
is an Eligible Officer under this Plan and is entitled to the greater of the
payments and benefits under this Plan or the payments and benefits due upon a
change in control pursuant to the employment agreement between Mr. Andrews
and the Corporation, dated February 24, 2003.

 

3.02                        Single
Trigger Change-in-Control Benefits.  Upon an Equity Acceleration Change in
Control, all outstanding and unvested equity awards held by an Eligible Officer
and granted under the SLM Corporation Management Incentive Plan or the SLM
Corporation Incentive Plan shall become vested and non-forfeitable.

 

3.03                        Double Trigger Change-in-Control Benefits.  An Eligible Officer shall be entitled to
receive a severance payment (the “Severance Payment”) and continuation of
medical and dental insurance benefits if within the first 24-month period after
the occurrence of a Cash Acceleration Change in Control, either: (I) the
Eligible Officer gives written notice of his

 

3

 

Termination of
Employment for Good Reason, provided that if such notice is on account of a
decision to resign due to clause (a) of the definition of “Termination by
Eligible Officer For Good Reason,” such Eligible Officer continues his
employment for a 6-month period following the delivery of such notice or (II)
upon a Termination of  Eligible Officer’s
Employment Without Cause.

 

(a)  The amount of the Severance Payment
shall equal two times the sum of the Eligible Officer’s Base Salary and Bonus
plus a cash payment equal to the Eligible Officer’s target annual bonus amount
for the year in which the Termination Date occurs, such target bonus amount to
be prorated for the full number of months in the final year that the Eligible
Officer was employed by the Corporation. 
The Severance Payment shall be made to the Eligible Officer in a single
lump sum cash payment following the date that the Eligible Officer becomes
entitled to a Severance Payment.

 

(b)  For 24 months following the Eligible
Officer’s Termination Date, the Eligible Officer and his eligible dependents or
survivors shall be entitled to continue to participate in any medical and
dental insurance plans generally available to the senior management of the
Corporation, as such plans may be in effect from time to time on the terms
generally applied to actively employed senior management of the Corporation,
including any Eligible Officer cost-sharing provision.  Eligible Officer shall cease to be covered
under the foregoing medical and/or dental insurance plans if he becomes
eligible to obtain coverage under medical and/or dental insurance plans of a
subsequent employer.

 

(c)  All payments and benefits provided
under this Section 3.03 are conditioned on the Eligible Officer’s
continuing compliance with this Plan and the Eligible Officer’s execution (and
effectiveness) of a release of claims and covenant not to sue and  non-competition and non-solicitation
agreements substantially in the form provided in Exhibit A upon
termination of employment.

 

3.04.                     Tax Effect of Payments. (a) 
Excise Tax Gross-Up.  If, as a result of
payments provided for under or pursuant to this Plan together with all other payments
in the nature of compensation provided to or for the benefit of an Eligible
Officer under any other agreement in connection with a Equity Acceleration
Change in Control and/or Cash Acceleration Change in Control (the “Total
Payments”), the Eligible Officer 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 Equity Acceleration Change in Control and/or Cash
Acceleration Change in Control, including any excise tax under Section 4999
of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the “Code”) and any successor or comparable provision, then, in
addition to any other benefits provided under or pursuant to this Plan or
otherwise, the Corporation (including any successor to the Corporation) shall
pay to the Eligible Officer at the time any such payments are made, an amount
equal to the amount of any such taxes imposed or to be imposed on the Eligible
Officer (the amount of any such payment, the “Parachute Tax Reimbursement”).  In addition, the Corporation (including any
successor to the Corporation) shall “gross up” such Parachute Tax Reimbursement
by paying to the Eligible Officer 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 the Eligible Officer as a result of the Parachute Tax Reimbursement
being

 

4

 

paid or payable to the
Eligible Officer and/or as a result of the additional amounts paid or payable
to the Eligible Officer pursuant to this sentence, such that after payment of
such additional taxes the Eligible Officer shall have been paid on a net
after-tax basis an amount equal to the Parachute Tax Reimbursement.

 

(b)  Determination by Auditors.  All mathematical determinations and all
determinations of whether any of the Total Payments are “parachute payments”
(within the meaning of section 280G of the Code) that are required to be
made under this Section 3, shall be made by the independent auditors
retained by the Corporation most recently prior to the Change in Control (the “Auditors”),
who shall provide their determination (the “Determination”), together with
detailed supporting calculations, both to the Corporation and to the Eligible
Officer promptly following the Eligible Officer’s Termination Date, if
applicable, or such earlier time as is requested by the Corporation. Any
Determination by the Auditors shall be binding upon the Corporation and the
Eligible Officer, absent a binding determination by a governmental taxing
authority that a greater or lesser amount of taxes is payable by the Eligible
Officer. The Corporation shall pay the fees and costs of the Auditors. If the
Auditors do not agree to perform the tasks contemplated by this Section 3,
then the Corporation shall promptly select another qualified accounting firm to
perform such tasks.

 

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

 

ARTICLE 4

 

WELFARE BENEFIT COMMITTEE

 

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

 

4.02                        Powers.
The Committee shall have full power, discretion and authority to interpret,
construe and administer the Plan and any part hereof, and the Committee’s
interpretation and construction hereof, and any actions hereunder, shall be
binding on all persons for all purposes. 
The Committee shall provide for the keeping of detailed, written minutes
of its

 

5

 

actions.  The
Committee, in fulfilling its responsibilities may (by way of illustration and
not of limitation) do any or all of the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 5

 

CLAIM FOR
BENEFITS UNDER THIS PLAN

 

5.01                        Claims
for Benefits under this Plan.  
A condition precedent to receipt of severance benefits is the execution
of an unaltered release of claims in form and substance prescribed by the
Corporation.  If an Eligible Officer
believes that an individual should have been eligible to participate in the
Plan or disputes the amount of benefits under the Plan, such individual may
submit a claim for benefits in writing to the Committee within sixty 60 days
after the individual’s termination of employment.  If such claim for benefits is wholly or
partially denied, the Committee shall within a reasonable period of time, but
no later than 90 days after receipt of the written claim, notify the individual
of the denial of the claim.  If an
extension of time for processing the claim is required, the Committee may take
up to an additional 90 days, provided that the Committee sends the individual
written notice of the extension before the expiration of the original 90-day
period.  The notice provided to the
individual will describe why an extension is required and when a decision is
expected to be made.  If a claim is
wholly or partially denied, the denial notice: 
(1) shall be in writing, (2) shall be written in a manner
calculated to be understood by the individual, and (3) shall contain (a) the
reasons for the denial, including specific reference to those plan provisions
on which the denial is based; (b) a description of any additional
information necessary to complete the claim and an explanation of why such
information is necessary; (c) an explanation of the steps to be taken to
appeal the adverse determination; and (d) a statement of the individual’s
right to bring a civil action under section 502(a) of ERISA following
an adverse decision after appeal.  The
Committee shall have

 

6

 

full discretion consistent with their fiduciary
obligations under ERISA to deny or grant a claim in whole or in part.  If notice of denial of a claim is not
furnished in accordance with this section, the claim shall be deemed denied and
the claimant shall be permitted to exercise his rights to review pursuant to Section 9.02
and 9.03.

 

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

 

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

 

5.04                        Exhaustion.  An individual must exhaust the Plan’s claims
procedures prior to bringing any claim for benefits under the Plan in a court
of competent jurisdiction.

 

ARTICLE 6

 

MISCELLANEOUS

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)  Notwithstanding anything herein to the
contrary, the Board of Directors may, in its sole discretion, amend the Plan
(which amendment shall be effective upon its adoption or at such other time
designated by the Board of Directors) at any time prior to an Equity
Acceleration Change in Control and/or Cash Acceleration Change in Control as
may be necessary to avoid the

 

8

 

imposition of the
additional tax under Section 409A(a)(1)(B) of the Code; provided,
however, that any such amendment shall be implemented in such a manner as to
preserve, to the greatest extent possible, the terms and conditions of the Plan
as in existence immediately prior to any such amendment.

 

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

 

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

 

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

 

9

 

Exhibit A

 

AGREEMENT AND RELEASE

 

SLM
Corporation has established the SLM Corporation Change in Control Several Plan
for Senior Officers (the “Plan”).  As a
condition to receiving compensation and benefits set forth in the Plan (the “Plan
Benefits”), I agree as follows:

 

(1)                                  In
consideration of the Plan Benefits, I promise and agree to release SLM
Corporation, its subsidiaries, affiliates, predecessors, successors, and any
related companies, (collectively “SLM”) and the former and current officers,
employees, directors, and benefits plan trustees of any of them from all
actions, causes of action, suits, claims or demands that I ever had, now have
or may have in the future, based on my employment with SLM, or with any of the
other entities described above, or based on the termination of that
employment.  I understand this includes
the release of any rights or claims I may have under the Age Discrimination in
Employment Act (“ADEA”), which prohibits age discrimination in employment; the
Americans with Disabilities Act (“ADA”), which prohibits discrimination on the
basis of disability; the Family and Medical Leave Act (“FMLA”), which provides
certain job protections for employees who take medical or family leave; Title
VII of the Civil Rights Act of 1964 (“Title VII”), which prohibits
discrimination in employment based on race, color, national origin, religion
and sex; applicable state employment discrimination laws; the Uniformed
Services Employment and Reemployment Rights Act of 1994, as amended; the
Vietnam Era Veteran’s Readjustment Act of 1974 which prohibits discrimination
on the basis of veteran status; the Worker Adjustment and Retraining
Notification Act (“WARN”), which provides certain notice requirements for plant
closings and mass layoffs; claims for individual relief under the
Sarbanes-Oxley Act of 2002; claims pursuant to any other federal, state, or
local laws regarding discrimination based on age, race, color, sex, disability,
pregnancy, religion, national origin, creed, familial status, public assistance
status, ancestry, matriculation, political affiliation, genetic information,
atypical hereditary cellular or blood trait, veteran status, personal
appearance, family responsibilities, use of lawful products outside the
workplace, sexual orientation, marital status, or any  unlawful basis, and claims for alleged
violations of any other local, state or federal law, regulation, ordinance,
public policy or common law duty having any bearing whatsoever upon the terms
and conditions of, and/or the cessation of my employment with SLM or any of the
other entities covered by this Agreement and Release.

 

I understand
this also includes a release by me of claims for breach of express or implied
contract, Fair Labor Standards Act, defamation, negligent hiring,
investigation, retention, or supervision, fraudulent or negligent
misrepresentation, intentional interference with an advantageous business
relationship, assault, battery, false imprisonment, fraud, false arrest, Fair
Credit Reporting Act, invasion of privacy, wrongful discharge, constructive
discharge, breach of an implied covenant of good faith and fair dealing,
promissory estoppel, public policy tort, negligent or intentional infliction of
emotional distress, or other claims for personal injury and any claims under
the Employee Retirement Income Security Act of 1974 (except for claims under
the Employee Retirement Income Security Act for benefits due under the terms of
an

 

10

 

employee benefit plan).  This release is intended to cover all claims
in existence as of the date of this Agreement, including both claims that I
know about and those I may not know.

 

I further represent that I have not filed any
complaints, charges, or lawsuits against SLM, or any of the entities or
individuals covered by this Agreement and Release, with any governmental
agency, self-regulating agency or any court, and promise that I will not do so
at any time hereafter regarding any matter covered by this Agreement and
Release; provided, however, that this shall not limit me from bringing an
action for the sole purpose of (a) enforcing my rights under this Agreement
and Release or (b) enforcing any claims that arise under the Age
Discrimination in Employment Act after I have signed this Agreement and
Release.   I further represent that I
have incurred no work-related injury.  I
further waive any right to payment of attorneys’ fees, which I may have
incurred, other than any rights I may have under the By-Laws of the
Corporation. It is understood and agreed that by entering into this Agreement
and Release, SLM does not admit any violation of law, or any of employee’s
rights, and has entered into this Agreement and Release solely in the interest
of resolving finally all claims and issues relating to employee’s employment
and separation. I agree to return all
company property in my possession.

 

I have not
reported any illegal conduct or activities to any supervisor, manager,
department head, human resources representative, director, officer, agent or
any other representative of SLM, to any member of the legal or compliance
departments, or to the Code of Business Conduct hotline and have no knowledge
of any such illegal conduct or activities.

 

(2)                                  If I break my
promises in the preceding section of this Agreement and Release and file a
complaint, charge or lawsuit based on a legal claim that I have released, I
agree that I will pay for all costs incurred by SLM or any entities or
individuals covered by this Agreement and Release, including reasonable
attorneys’ fees, in defending against my claim. Nothing in this Agreement
prohibits or restricts me from: (a) making any disclosure of information
required by law; (b) testifying in, providing information to, or assisting
in an investigation or proceeding brought by any governmental or regulatory
body or official; or (c) from testifying, participating in or otherwise
assisting in a proceeding relating to an alleged violation of any federal or
state employment law or any federal law relating to fraud or any rule or
regulation of the Securities and Exchange Commission or any self-regulatory
organization.  Notwithstanding anything
to the contrary in this paragraph, I hereby waive and release any right to
receive any relief as a result of my participating in any investigation or
proceeding of the U.S. Department of Labor, EEOC, or any federal, state, or
local government agency or court.

 

I further agree that any dispute regarding
any aspect of this Agreement and Release or any act which allegedly has or
would violate any provision of this Agreement and Release (“arbitrable dispute”)
will be submitted to arbitration in Fairfax County, Virginia in accordance with
the rules of the American Arbitration Association, as the exclusive remedy
for such claims or dispute. This Agreement and Release shall be governed in all
respects by the substantive laws of the Commonwealth of Virginia, without
regard to its provisions relating to conflict of laws.  This Section (2) does not apply to
disputes concerning the Age Discrimination in Employment Act (ADEA).

 

11

 

(3)                                  I understand and
agree that this Agreement and Release, if not timely revoked, is final and
binding when executed by me.  I promise
not to thereafter challenge its enforceability. As a further limitation on my
rights to make such a challenge, I promise that before attempting to challenge
its enforceability, I shall tender initially to SLM by certified check
delivered to Joni Reich, SVP, Administration, all monies received by me
pursuant to this Agreement and Release, exclusive of the vacation payout and
final paycheck, and invite SLM to retain such monies and agree with me to
cancel this Agreement and Release.  Such
tender by me is a condition precedent to my challenging any portion of this
Agreement and Release.  In the event SLM
accepts this offer, it shall retain such monies and the Agreement and Release
shall be canceled.  In the event SLM does
not accept this offer, it shall so notify me, and shall place such monies in an
interest-bearing escrow account pending resolution of the dispute between me and
SLM as to whether this Agreement and Release shall be set aside and/or
otherwise rendered unenforceable. In the event I do not prevail in any action
to challenge this Agreement and Release, I understand that I am not entitled to
receive back any portion of the amount tendered by me pursuant to this Section (3).
This paragraph does not apply to disputes concerning the Age Discrimination in
Employment Act (ADEA).

 

(4)                                  This Agreement and
Release shall not be offered or received in evidence in any action or
proceeding in any court, arbitration, administrative agency or other tribunal
for any purpose whatsoever other than to carry out or enforce the provisions of
this Agreement.

 

(5)                                  I further promise not
to disparage SLM or any other entity or person covered by this Agreement and
Release.

 

(6)                                  In addition, in
consideration of the Plan Benefits, I hereby assign to SLM my entire right,
title, and interest in any idea, concept, trade secret, technique, invention,
design, computer programs and related documentation, other works of authorship,
mask works, and the like (all hereinafter called “Developments”), made
conceived, written, or otherwise created solely or jointly by me, whether or
not such Developments are patentable, subject to copyright protection or
susceptible to any other form of protection which: (a) relate to the
actual or anticipated business or research or development of SLM or (b) are
suggested by or resulted from any task assigned to me or work performed by me
for or on behalf of SLM. The above provisions concerning assignment of Developments
apply to Developments created while I have been employed by one or more of SLM’s
affiliates, subsidiaries, predecessors or successors in an executive,
managerial, professional, product or technical planning, marketing,
administrative, sales, technical, research, programming, or engineering
capacity (including development, product, manufacturing, systems, applied
science, and field engineering).  I
acknowledge that the copyright and any other intellectual property right in
designs, computer programs and related documentation, and other works of
authorship, created within the scope of my employment, belong to SLM by
operation of law.  In connection with any
of the Developments assigned I will, on SLM’s request, promptly execute a
specific assignment of title to SLM or its designee, and do anything else
reasonably necessary to enable SLM or such designee to acquire, transfer,
maintain, secure, and enforce a patent, copyright or other form of protection
in the United States and in other countries. I agree to assist SLM in
obtaining, securing, perfecting, maintaining, and/or enforcing such
intellectual property, and agree to execute all documents and give witness
where necessary.  In the event SLM is unable, after reasonable efforts to secure my
signature on

 

12

 

any letter patent, copyright, or other
analogous protection relating to an invention, whether because of my physical
or mental incapacity or for any other reason whatsoever, I hereby irrevocably
designate and appoint SLM and its duly authorized officer and agents as my
agent and attorney-in-fact, to act for any in SLM’s behalf and stead to execute
and file any such application or applications and to do all lawfully permitted
acts to further prosecution and issuance of letter patent, copyright or other
analogous protection thereon with the same legal force and effect as if
executed by me.  In
addition, I agree to promptly notify SLM’s General Counsel in writing of any
patent or patent application in which I am an inventor, but which is not
assigned by this paragraph, and which discloses or claims any Development made,
conceived, or written while I was employed by SLM.  SLM and its licensees, successors, or assigns
(direct or indirect) are not required to designate me as an author of any
Development which is subject to this paragraph, when it is distributed,
publicly or otherwise, or to secure my permission to change or otherwise alter
its integrity.  I hereby waive and release,
to the extent permitted by law, all rights in and to such designation and any
rights I may have concerning modifications of such Developments.  I understand that any rights, waivers,
releases, and assignments herein granted and made by me are freely assignable
by SLM and are for the benefit of SLM and its subsidiaries, licensees,
successors, and assigns.

 

(7)                                  Except
as required by statute, regulation or court order, or pursuant to written
consent given by SLM’s General Counsel, I agree not to disclose to anyone else
any of the information or materials which are proprietary or trade secrets of
SLM or are otherwise confidential.  In
addition, in consideration of the Plan Benefits, I hereby acknowledge that I
previously signed confidentiality, intellectual property, and non-solicitation
agreements with SLM and that I continue to be bound by the terms of those
agreements.

 

(8)                                  I agree not to
compete with SLM for the Restricted Period, which is defined as the   two-year period beginning with the date of
my termination of employment with SLM.  “Compete”
shall mean directly or indirectly through one or more intermediaries (a) 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 SLM’s Business (as defined below) in the United
States, Canada, or any other country where SLM either engages in SLM’s Business
at the time of my termination or where SLM, at the time of my termination, has
developed a business plan or taken affirmative steps to engage in SLM’s
Business; (b) soliciting any current employees, customers, or business
partners of SLM, soliciting any former employees of SLM who were employed by
SLM within 12 months of my date of termination of employment, inducing any
customer or business partner of SLM to breach a contract with SLM or any
principal for whom SLM acts as agent to terminate such agency relationship;
and/or (c) making statements about SLM or its management reasonably
determined by the Board of Directors to be disparaging.  For purposes of this provision, the term “SLM’s
Business” shall mean any business activity or line of business similar to the
type of business conducted by SLM at the time of my termination of employment
or which SLM at the time of my termination of employment or within one year
prior thereto have planned to enter into or conduct.  I expressly agree that the markets served by
SLM extends nationally, to Canada, and any other country where SLM is engaged
in business at the time of my termination of employment and are not dependent
on the geographic location of the executive personnel or the

 

13

 

businesses by which they are
employed and that the restrictions set forth in this Section (8) are
reasonable and are no greater than are required for the protection of SLM.

 

(9)                                  I hereby acknowledge (a) that
I initially received a copy of the original draft of this Agreement and Release
on or before [INSERT
DATE]; (b) that I was offered a period of 21 days to
review and consider it; (c) that I understand I could use as much of the
21 day period as I wish prior to signing; and (d) that I was strongly
encouraged to consult with an attorney before signing this Agreement and
Release, and understood whether or not to do so was my decision.

 

(10)                            I understand that I may
revoke the waiver of the Age Discrimination in Employment Act (ADEA) claims
made in this Agreement within seven (7) days of my signing.  Such revocation can be made by delivering a
written notice of revocation to Joni Reich, Senior Vice President,
Administration, Sallie Mae, Inc., 12061 Bluemont Way, MDC V5102, Reston,
VA 20190.  For this revocation to be
effective, written notice must be received by Ms. Reich no later than the
close of business on the seventh day after the Agreement is signed. If I revoke the waiver of the Age Discrimination
in Employment Act (ADEA) claims made in this Agreement and Release within seven
(7) days of my signing, my waiver and release of claims under the ADEA shall
not be effective or enforceable and I will not receive 70% of the Plan
Benefits.

 

(11)                            If any provision of this
Agreement and Release is held by a court of competent jurisdiction or by an
arbitrator to be contrary to law, the remaining provisions of this Agreement
and Release will remain in full force and effect.

 

(12)                            These documents set forth
the entire agreement between SLM and me, and I believe the agreement to be fair
and reasonable.  This Agreement and
Release may not be modified or canceled in any manner, except in writing signed
by both SLM and me.  I sign these
documents freely, knowingly and voluntarily. 
I acknowledge that I have not relied upon any representation or statement,
written or oral, not set forth in these documents.

 

(13)                            In addition, in consideration of the payments and
benefits described above, I further agree to cooperate with Sallie Mae, Inc.
(“SMI”), its affiliates, and its legal counsel in any legal proceedings
currently pending or brought in the future against SMI, including, but not
limited to: (1) participation as a witness; (2) drafting, producing,
and reviewing documents; (3) assisting with interviews; and (4) contacting
SMI.

 

I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTAND
ALL OF THE PROVISIONS OF THIS AGREEMENT AND RELEASE, AND THAT I AM VOLUNTARILY
ENTERING INTO IT.

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date

  
	
  [INSERT NAME]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Joni Reich

  Senior Vice President, Administration

  SLM Corporation

  	
   

  	
  Date

  

 

14

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