Document:

Document

ITERIS, INC.

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT

RECITALS

A.    The Board has adopted the Iteris, Inc. 2016 Omnibus Incentive Plan (as amended from time to time, the “Plan”) for the purpose of retaining the services of selected Employees, non-employee members of the Board or the board of directors of any Parent or Subsidiary and consultants and other independent advisors in the service of the Corporation (or any Parent or Subsidiary).
B.    The Participant is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s issuance of an equity incentive award under the Plan to the Participant.
C.    All capitalized terms in this Agreement shall have the meaning assigned to them in Paragraph 17.
NOW, THEREFORE, it is hereby agreed as follows:
a.Grant of RSUs.  The Corporation hereby grants to the Participant, as of the Grant Date, an award of restricted stock units (“RSUs”) under the Plan.  Each RSU represents the right to receive one share of Common Stock (the “Share”) on the distribution date specified in this Agreement.  Each RSU is hereby granted in tandem with a corresponding dividend equivalent, as further described in Paragraph 5 of this Agreement (the “Dividend Equivalents,” and together with the RSUs, the “Award”). The number of RSUs subject to the Award, the applicable vesting schedule for those RSUs, the date on which Shares underlying those vested RSUs shall become issuable to the Participant and the remaining terms and conditions governing the Award shall be as set forth in this Agreement.
AWARD SUMMARY
1

						
	Grant Date:	__________
	Number of RSUs Subject to Award:	__________
	Vesting Schedule:	[To be specified in individual agreements]
	Issuance Schedule:	The Shares underlying the RSUs in which the Participant vests in accordance with the vesting schedule above shall be issued as provided in Section 2 below (the date of such issuance, the “Issue Date”).  The issuance of the Shares shall be subject to the Corporation’s collection of all applicable Withholding Taxes.  The procedures pursuant to which the applicable Withholding Taxes are to be collected are set forth in Paragraph 8 of this Agreement.

b.Issuance Schedule.    
(a)    Except as provided in Paragraph 2(b) below, and subject to Paragraph 6 below, the Shares underlying the RSUs in which the Participant vests in accordance with the vesting schedule above shall be issued within thirty (30) days after the date on which the RSUs vest in accordance with the vesting schedule set forth above.  
(b)    Notwithstanding any other provision of this Agreement or the Plan to the contrary, in the event the Participant has previously made a valid election to defer receipt of all or any portion of the Shares subject to the RSUs in accordance with the terms of the Iteris, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) and the deferral election form specified by the Corporation thereunder, upon vesting of the RSUs the Corporation will not issue the Shares to the Participant pursuant to Paragraph 2(a), but will instead credit to the Participant’s applicable Stock Unit Account (as defined in the Deferred Compensation Plan) an equal amount of Deferred Stock Units (as defined in the Deferred Compensation Plan) to be paid, issued or delivered at the times and in the manner as set forth in the Deferred Compensation Plan and the Participant’s applicable deferral election thereunder, both of which are incorporated herein by this reference.  
c.Limited Transferability.  Prior to the actual issuance of the Shares pursuant to RSUs which vest hereunder, the Participant may not transfer any interest in the Award or the underlying Shares; provided, however, any Shares issuable pursuant to vested RSUs hereunder but which otherwise remain unissued at the time of the Participant’s death may be transferred pursuant to the provisions of the Participant’s will or the laws of inheritance or to the Participant’s designated beneficiary or beneficiaries of this Award.  The Participant may also direct the Corporation to issue stock certificates for any Shares which become issuable hereunder to one or more designated Family Members or a trust established for the Participant and/or his or her Family Members.  The Participant may make a beneficiary designation or certificate directive for this Award at any time by filing the appropriate form with the Plan Administrator or its designee.
d.Cessation of Service; Death; Disability.  
2

(a)    Except as set forth in Paragraph 4(b) and Paragraph 6, should the Participant cease Service for any reason prior to vesting in one or more RSUs subject to this Award, then the Award will be immediately cancelled with respect to those unvested RSUs, and the number of RSUs will be reduced accordingly.  The Participant shall thereupon cease to have any right or entitlement to receive any Shares under those cancelled RSUs.  
(b)    In the event of the Participant’s cessation of Service due to death or Permanent Disability, a pro-rata portion of the RSUs shall vest on the date of such cessation of Service.  The total number of RSUs subject to this Award which shall be vested upon a cessation from Service due to death or Permanent Disability shall be equal to the RSUs that had already vested in accordance with the vesting schedule of this Award (the “Already Vested RSUs”) plus any additional RSUs (the “Additional Vested RSUs”) which may vest as described in this Paragraph 4(b).  The Additional Vested RSUs which shall vest under this Paragraph 4 shall be calculated as the product of (1) and (2) and reduced by (3), where (1) is the total number of RSUs originally subject to this Award and (2) is a fraction, the numerator of which is the number of calendar days from the Grant Date through the date of Participant’s cessation of Service and the denominator is the number of calendar days in the full vesting period set forth in the Award Summary above (e.g., the period of time following the Grant Date that would be required to elapse in order for the RSUs to be fully vested absent Participant’s intervening cessation of Service), and (3) is equal to the Already Vested RSUs. 
e.Stockholder Rights; Dividend Equivalents.  
    (a)    Subject to Paragraph 5(b) below, Participant shall not have any stockholder rights, including voting or dividend rights, with respect to the Shares underlying the RSUs subject to the Award until Participant becomes the record holder of those Shares following their actual issuance upon the Corporation’s collection of the applicable Withholding Taxes.
    (b)    (i)    Each RSU granted hereunder is hereby granted in tandem with a corresponding Dividend Equivalent, which Dividend Equivalent shall remain outstanding from the Grant Date (or later date of grant of such Dividend Equivalent right) until the earlier of the settlement or forfeiture of the underlying RSU. Each Dividend Equivalent will entitle Participant to receive additional RSUs equal to the value of any dividends, whether in cash, securities or other property (other than shares of Common Stock), if any, that Participant would have received in respect of each Share underlying the RSUs subject to the Award, had such Share been outstanding on the applicable record date for such dividend. 
        (ii)    When such dividends are so declared, the following shall occur:
            (A)    On the date that the Corporation pays a cash dividend in respect of outstanding Shares, the Corporation shall credit Participant with an additional number of RSUs as Dividend Equivalents equal to the quotient of (1) the total number of RSUs subject to this Award but not yet distributed (including any additional RSUs credited as 
3

Dividend Equivalents), multiplied by the per Share dollar amount of such dividend, divided by (2) the Fair Market Value of a Share on the date such dividend is paid. 

            (B)    On the date that the Corporation pays any other type of dividend in respect of outstanding Shares (other than in shares of Common Stock), the Corporation shall credit the Participant in an equitable manner based on the total number of RSUs subject to this Award but not yet distributed (including any additional RSUs credited as Dividend Equivalents), as determined in the sole discretion of the Plan Administrator and in accordance with the Plan. 

            (iii)    Dividend Equivalents credited as additional RSUs shall be subject to the same vesting terms, deferral election, distribution terms and risks of forfeiture as the underlying RSUs to which they relate (e.g., the same vesting requirements as the underlying RSUs), shall thereafter be considered “RSUs” subject to this Award, and shall also carry corresponding Dividend Equivalent rights.

f.Change in Control. 
i.Any RSUs subject to this Award at the time of a Change in Control may, as determined by the Plan Administrator in its sole discretion, be (i) assumed by the successor corporation (or parent thereof), (ii) canceled and substituted with an award granted by the successor corporation (or parent thereof), (iii) otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction or (iv) replaced with a cash retention program of the Corporation or any successor corporation (or parent thereof) which preserves the Fair Market Value of the underlying Shares at the time of the Change in Control and provides for subsequent payout of that value in accordance with the vesting schedule set forth in Paragraph 1.  
ii.To the extent the Award is not assumed, substituted, continued or replaced in accordance with Paragraph 6(a), the RSUs then subject to this Award shall automatically vest in full immediately prior to (and contingent upon) the closing of the Change in Control and, unless Paragraph 2(b) applies, shall be paid and settled immediately prior to (and contingent upon) the closing of the Change in Control.  
iii.The Plan Administrator shall have the authority to provide that any escrow, holdback, earn-out or similar provisions in the definitive agreement effecting the Change in Control shall apply to any cash payment made under any cash retention program described in subsection (a) above to the same extent and in the same manner as such provisions apply to a holder of a Share.
iv.Immediately following the consummation of the Change in Control, unless Paragraph 2(b) applies, this Award shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction.
4

v.If the Award is assumed in connection with a Change in Control or otherwise continued in effect, then the RSUs subject to the Award shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities which the Shares subject to those RSUs immediately prior to the Change in Control would have been converted in consummation of such Change in Control had those Shares actually been issued and outstanding at that time.  To the extent that the actual holders of the Corporation’s outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation (or parent thereof) may in connection with the assumption or continuation of this Award and subject to the Plan Administrator’s approval, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control, provided such common stock is readily traded on an established U.S. securities market.
vi.If the Award is assumed, substituted for, continued or replaced in connection with a Change in Control, and if the Participant incurs an involuntary termination by the Corporation or its successor other than as a result of Participant’s Misconduct, or the Participant voluntarily terminates employment for Good Reason, in each case within eighteen (18) months following the effective date of a Change in Control of the Corporation, then such additional number of RSUs shall vest as of the date of termination as is equal to the number of RSUs as would have vested during the two (2) year period following the date of termination had Participant remained in Service with the Corporation or its successor during such period. 
vii.This Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
g.Adjustment in Shares.  Should any change be made to the outstanding Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, or should the value of outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any merger, consolidation, reincorporation or other reorganization, then equitable adjustments shall be made to the total number and/or class of securities issuable pursuant to this Award in such manner as the Plan Administrator deems appropriate in order to reflect such change, and those adjustments shall be final, binding and conclusive.
h.Withholding of Taxes.  
i.Subject to Paragraph 8(d)(ii), upon the applicable Issue Date, the Corporation shall issue to or on behalf of the Participant a certificate (which may be in electronic form) for the applicable number of Shares, subject, however, to the Corporation’s collection of the applicable Withholding Taxes. The Corporation shall have the right to require the Participant 
5

to pay to the Corporation the amount of any Withholding Taxes in respect of the Shares or to take whatever action it deems necessary to protect the interests of the Corporation in respect of such Withholding Tax liabilities, in accordance with this Paragraph 8.  
ii.If the Participant is not a Section 16 Insider at the time such obligation for Withholding Taxes arises, the Participant may elect to satisfy all or a portion of the Corporation’s obligation for Withholding Taxes in one or more of the following forms:
1.in cash or check made payable to the Corporation; 
2.by requesting that the Corporation withhold from the Shares otherwise deliverable to the Participant a number of whole Shares having a Fair Market Value as of the Issue Date, not in excess of the amount of such Withholding Taxes determined by using the applicable minimum statutory withholding rates, or such other amount or rate determined by the Corporation (the “Share Withholding Method”) (provided, however, that in no event shall the withholding rate exceed the maximum individual statutory tax rate in the applicable jurisdiction at the time of such Withholding Taxes (or such other rate as may be required to avoid the liability classification of the RSUs under generally accepted accounting principles in the United States of America); provided, further, that the number of Shares withheld by the Corporation under the Share Withholding Method shall be rounded up to the nearest whole Share to the extent rounding up to the nearest whole Share does not result in the liability classification of the RSUs under generally accepted accounting principles in the United States of America); or
3.subject to compliance with applicable law and the Corporation’s insider trading policies, through a special sale and remittance procedure pursuant to which the Participant shall concurrently provide instructions (A) to a brokerage firm (with such brokerage firm reasonably satisfactory to the Corporation for purposes of administering such procedure in compliance with the Corporation’s pre-clearance or pre-notification policies) to effect the immediate sale of a number of Shares issuable upon settlement of the RSUs and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Withholding Taxes payable in respect of the settlement of the RSUs on the Issue Date and (B) to the Corporation to deliver the certificates for the Shares to be sold directly to such brokerage firm on the settlement date in order to complete the sale.
    Notwithstanding the foregoing, if the Corporation’s obligations for Withholding Taxes are not satisfied by the Participant prior to the date on which the obligation for Withholding Taxes arises, and the Participant is not a Section 16 Insider at such time, the Corporation may satisfy the Corporation’s obligation for Withholding Taxes using the Share Withholding Method without further action by the Participant.
6

iii.If the Participant is a Section 16 Insider at the time such obligation for Withholding Taxes arises, the Corporation shall satisfy the Corporation’s obligation for Withholding Taxes under this Paragraph 7 (including Paragraph 7(d)) using the Share Withholding Method using the applicable minimum statutory withholding rates, or such other amount or rate determined by the Corporation prior to the applicable vesting date (provided, however, that the prior approval of the Compensation Committee shall be required for the use of any other withholding rate pursuant to this Paragraph 7(c)).
iv.(i)     Notwithstanding the provisions of subparagraphs (b) and (c) of this Paragraph 8, the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the vesting of the RSUs (the “Employment Taxes”) shall in all events be collected from the Participant no later than the last business day of the calendar year in which the RSUs vest hereunder (provided, however, that the satisfaction of the Participant’s Employment Taxes upon vesting of the RSUs in the event the Participant has elected to defer receipt of the Shares under Paragraph 2(b) will be handled in the manner provided in Paragraph 8(d)(ii) below and not pursuant to this Paragraph 8(d)(i)).  Accordingly, to the extent the Issue Date for one or more vested RSUs is to occur in a year subsequent to the calendar year in which those RSUs vest, the Participant shall, on or before the last business day of the calendar year in which the RSUs vest, deliver to the Corporation a check payable to its order in the dollar amount equal to the Employment Taxes required to be withheld with respect to those RSUs.  The provisions of this Paragraph 8(d) shall be applicable only to the extent necessary to comply with the applicable tax withholding requirements of Code Section 3121(v). 
(ii)     If the Participant elected to defer receipt of the Shares under Paragraph 2(b), the Employment Taxes will be due upon vesting in the RSUs, but prior to the Issue Date.  In particular, upon vesting, Employment Taxes will be due even if the Participant has elected deferred delivery of the Shares issuable upon settlement of the RSUs.  If Shares subject to the RSUs are issued on an accelerated basis to satisfy the Employment Taxes under this Paragraph 8(d)(ii), then the Participant will also have income tax on such Shares as wages and the corresponding income tax withholding provisions of applicable state, local or foreign tax laws (together with the Employment Taxes, the “Employment-Related Taxes”) also apply.  If the Participant defers receipt of the Shares under Paragraph 2(b), (A) unless the Participant is a Section 16 Insider at the time such obligation for Employment Taxes arises, the Participant’s Employment-Related Taxes shall first be satisfied by the deduction of such amounts from other compensation payable to the Participant, and (ii) to the extent the other compensation payable to the Participant is determined by the Corporation to be insufficient to satisfy the Participant’s Employment-Related Taxes, or if Participant is a Section 16 Insider at the time such obligation for Employment-Related Taxes arises, the Participant’s acceptance of this Agreement constitutes the Participant’s instruction and authorization to the Corporation to satisfy the Employment-Related Taxes using the Share Withholding Method through the accelerated issuance and withholding of Shares otherwise issuable pursuant to the RSUs having a Fair Market Value not in excess of the amount necessary to satisfy the Employment-Related Taxes determined by using the applicable minimum statutory withholding rates.
7

v.Except as otherwise provided in Paragraph 6, the settlement of all RSUs which vest under the Award shall be made solely in shares of Common Stock.  In no event, however, shall any fractional Shares be issued.  Accordingly, the total number of Shares to be issued pursuant to the Award shall, to the extent necessary, be rounded down to the next whole Share in order to avoid the issuance of a fractional Share. 
vi.If the Participant elected to defer receipt of the Shares under Paragraph 2(b), the application of this Paragraph 8 to the RSUs shall be subject to any additional limitations on such withholding that may be contained in the Deferred Compensation Plan to the extent necessary to comply with Section 409A.
i.Compliance with Laws and Regulations.  
i.The issuance of Shares pursuant to the Award shall be subject to compliance by the Corporation and the Participant with all applicable requirements of law relating thereto and with all applicable regulations of any Stock Exchange on which the Common Stock may be listed for trading at the time of such issuance.
ii.The inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common Stock pursuant to this Award shall relieve the Corporation of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.  The Corporation, however, shall use its best efforts to obtain all such approvals.
j.Successors and Assigns.  Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and the Participant, the Participant’s assigns and the legal representatives, heirs and legatees of the Participant’s estate and any beneficiaries of the Award designated by the Participant.
k.Notices.  Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices.  Any notice required to be given or delivered to the Participant shall be in writing and addressed to the Participant at the address indicated on the Corporation’s personnel records.  All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
l.Construction.  This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan.  All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this Award.  
8

m.Governing Law.  The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without resort to that state’s conflict-of-laws rules.
n.Stockholder Approval.  If the Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may be issued under the Plan as last approved by the stockholders, then this Award shall be void with respect to such excess Shares, unless stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of the Plan.
o.Employment at Will.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate the Participant’s Service at any time for any reason, with or without cause.
p.Section 409A.  
    (a)    It is intended that all of the payments payable under this Agreement satisfy an exemption from, or comply with Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date, “Section 409A”), and, notwithstanding any other provision of the Plan or this Agreement, the Plan and this Agreement (and any definitions hereunder) will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A (including to incorporate the terms and conditions required by Section 409A. Neither the time nor form of distribution of Shares with respect to the RSUs may be changed, except as may be permitted by the Plan Administrator in accordance with the Plan and Section 409A of the Code and the Treasury Regulations thereunder.  
    (b)    Unless a valid deferral election is made by the Participant pursuant to Section 2.2(b) above, it is intended that all of the payments payable under this Agreement satisfy, to the greatest extent possible, the exemption from the application of Section 409A of the Code (together with any Treasury Regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date, “Section 409A”), provided under Treasury Regulations 1.409A-1(b)(4), and, accordingly,  the Shares issuable pursuant to the RSUs hereunder shall be distributed to Participant no later than the later of:  (i) the fifteenth (15th) day of the third month following Participant’s first taxable year in which such RSUs are no longer subject to a substantial risk of forfeiture, and (ii) the fifteenth (15th) day of the third month following first taxable year of the Corporation in which such RSUs are no longer subject to substantial risk of forfeiture, as 
9

determined in accordance with Section 409A and any Treasury Regulations and other guidance issued thereunder. 
    (b)    For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), unless the Participant elected to defer receipt of the Shares under Paragraph 2(b), each payment that Participant may be eligible to receive under this Award shall be treated as a separate and distinct payment. 
    (c)    Notwithstanding any provision to the contrary in the Plan or this Agreement, to the extent any payments to Participant pursuant to this Agreement constitute “non-qualified deferred compensation” subject to Section 409A, then, to the extent required by Section 409A of the Code, no amount shall be payable upon Participant’s termination of employment unless such termination constitutes a “separation from service” as defined in Section 409A (“Separation from Service”).  
    (d)    Notwithstanding any provision to the contrary in this Agreement, if Participant is deemed by the Corporation at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forth herein are deemed to constitute “non-qualified deferred compensation,” then, to the extent required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, the delivery of Shares upon such Separation from Service shall be delayed until the earliest of (i) the expiration of the six-month and one day period measured from the date of Participant’s Separation from Service with the Corporation, (ii) the date of Participant’s death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation.  No interest shall be due on any amounts so deferred.
    (e)    Notwithstanding any provision to the contrary in this Agreement, if any of the payments triggered upon the occurrence of a Change in Control set forth herein are deemed to constitute “non-qualified deferred compensation,” then, to the extent required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such Change in Control must also constitute a “change in control event” (as defined in Treasury Regulation §1.409A-3(i)(5)).
        (f)    If a Disability constitutes a payment event with respect to any portion of the RSUs which constitute a deferral of compensation and is subject to Section 409A, the Disability must also constitute a “disability,” as defined in Treasury Regulation §1.409A-1(a)(5) to the extent required by Section 409A.

        (g)    Dividend Equivalent rights and any amounts that may become distributable in respect thereof shall be treated separately from the RSUs and the rights arising in connection therewith for purposes of the designation of time and form of payments required by Section 409A.

10

q.Definitions.  Defined terms used herein without definition shall have the meanings given to such terms in the Plan.  In addition, the following definitions shall be in effect under the Agreement:
i.Agreement shall mean this Restricted Stock Unit Issuance Agreement.
ii.Good Reason shall mean (unless otherwise defined in an employment or other agreement between the Corporation and the Participant): Participant’s voluntary resignation from the Corporation upon any of the following events without Participant’s written consent: [(i) a material reduction in the Participant’s authority, duties or responsibilities (and not simply a change in title or reporting relationships); (ii) a material reduction in the Participant’s base salary (for the avoidance of doubt, a greater than ten (10%) percent reduction in the level of base salary shall constitute a material reduction in the Participant’s compensation, unless the reduction is part of a Corporation-wide reduction that affects all similarly situated employees in substantially the same proportion; (iii) a relocation of the Participant’s principal place of work to a location that would increase the Participant’s one-way commute from his or her personal residence to the new principal place of work by more than fifty (50) miles; or (iv) any breach by the Corporation of its obligations under any employment agreement with Participant that results in a material negative change to Participant.]1 / [(i) a material reduction in the Participant’s base salary (for the avoidance of doubt, a greater than ten (10%) percent reduction in the level of base salary shall constitute a material reduction in the Participant’s compensation, unless the reduction is part of a Corporation-wide reduction that affects all similarly situated employees in substantially the same proportion; or (ii) a relocation of the Participant’s principal place of work to a location that would increase the Participant’s one-way commute from his or her personal residence to the new principal place of work by more than fifty (50) miles.]2 Notwithstanding the foregoing, “Good Reason” shall only be found to exist if the Participant provides written notice (each, a “Good Reason Notice”) to the Corporation identifying and describing the event resulting in Good Reason within ninety (90) days of the initial existence of such event, the Corporation does not cure such event within thirty (30) days following receipt of the Good Reason Notice from the Participant and the Participant terminates his or her employment during the ninety (90)-day period after the Participant’s delivery of the Good Reason Notice. If the Participant does not terminate his or her employment for Good Reason within ninety (90) days after delivery of the Good Reason Notice, then the Participant will be deemed to have waived his or her right to terminate for Good Reason with respect to such grounds.
iii.Grant Date shall mean the date the RSUs are awarded to Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.
iv.Issue Date shall have the meaning indicated in Paragraph 1 of the Agreement.

1 First alternative to apply for employees who are participants in executive severance plans.
2 Second alternative to apply for all other employees.
11

v.Notwithstanding any contrary definition of “Misconduct” set forth in the Plan, Misconduct for purposes of this Agreement shall mean (unless otherwise defined in an employment or other agreement between the Corporation and the Participant): (i) Participant’s misappropriation of the Corporation’s funds or property, or any attempt by Participant to secure any personal profit related to the business or business opportunities of the Corporation without the informed, written approval of the Audit Committee of the Board; (ii) any unauthorized use or disclosure by Participant of confidential information or trade secrets of the Corporation (or any parent of the Corporation); (iii) Participant’s gross negligence or reckless misconduct in the performance of Participant’s duties; (iv) Participant’s willful failure to comply with any valid and legal directive of the Board or the person to whom Participant reports; (v) Participant’s conviction of, or plea of nolo contendre to, any felony or misdemeanor involving moral turpitude or fraud, or of any other crime involving material harm to the standing or reputation of the Corporation; (vi) any other willful misconduct by Participant that the Board determines in good faith has had a material adverse effect upon the business or reputation of the Corporation; or (vii) any other material breach or violation by the Participant of any employment agreement with the Corporation or any other material written policy of the Corporation; provided, however, that the Corporation shall have provided the Participant with written notice that such breach or violation has occurred, and the Participant has been afforded at least ten (10) business days to cure such breach or violation. Notwithstanding the foregoing, (A) the cure period shall not apply to violations of the Corporation’s code of conduct, code of ethics or prohibition against unlawful harassment, and (B) such cure period shall only apply to breaches, violations, failures or neglect that in the Board’s sole judgment are capable of or amenable to such cure. Notwithstanding the foregoing, prong (b) of this definition is not intended to, and shall be interpreted in a manner that does not, limit or restrict a Participant from exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the 1934 Act).
vi.Participant shall mean the person to whom the Award is made pursuant to the Agreement.
vii.RSU shall have the meaning set forth in Paragraph 1 of the Agreement.
viii.Withholding Taxes shall mean (i) the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the vesting of RSUs under the Award and (ii) the federal, state and local income taxes required to be withheld by the Corporation in connection with the issuance of the Shares underlying those vested RSUs (or any other property).  

12

IN WITNESS WHEREOF, the parties have executed this Agreement on the respective dates indicated below.
						
		ITERIS, INC.

By:      

Print Name:     

Title:     

		PARTICIPANT

    

Print Name:         
Date:         

13EX-4.2

 Exhibit 4.2 

NAVIENT CORPORATION, 

as Company, 
 and

 THE BANK OF NEW YORK MELLON, 

as Trustee 
  

 
 TWELFTH
SUPPLEMENTAL INDENTURE 
 Dated as of February 2, 2021 

to 
 INDENTURE 

Dated as of July 18, 2014 
  

 
 4.875% Senior
Notes due 2028 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	 ARTICLE 1.
	  

	
	DEFINITIONS	  

			
	Section 1.1.	  	Definition of Terms	  	 	3	 
	
	ARTICLE 2.	  

	
	GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES	  

			
	Section 2.1.	  	Designation and Principal Amount	  	 	5	 
	Section 2.2.	  	Maturity	  	 	5	 
	Section 2.3.	  	Further Issues	  	 	5	 
	Section 2.4.	  	Form of Payment	  	 	6	 
	Section 2.5.	  	Global Securities	  	 	6	 
	Section 2.6.	  	Interest	  	 	6	 
	Section 2.7.	  	Authorized Denominations	  	 	6	 
	Section 2.8.	  	Redemption	  	 	6	 
	Section 2.9.	  	Repurchase Upon Change of Control	  	 	6	 
	Section 2.10.	  	Appointment of Agents	  	 	8	 
	
	ARTICLE 3.	  

	
	FORM OF NOTES	  

			
	Section 3.1.	  	Form of Senior Notes	  	 	8	 
	
	ARTICLE 4.	  

	
	ORIGINAL ISSUE OF NOTES	  

			
	Section 4.1.	  	Original Issue of Senior Notes	  	 	9	 
	
	ARTICLE 5.	  

	
	MISCELLANEOUS	  

			
	Section 5.1.	  	Ratification of Indenture	  	 	9	 
	Section 5.2.	  	Trustee Not Responsible for Recitals	  	 	9	 
	Section 5.3.	  	Governing Law	  	 	9	 
	Section 5.4.	  	Separability	  	 	9	 
	Section 5.5.	  	Counterparts	  	 	9	 
		
	 EXHIBIT A – Form of 2028 Senior Notes 
	  	 	A-1	 

  
 i 

 TWELFTH SUPPLEMENTAL INDENTURE, dated as of February 2, 2021 (this
“Supplemental Indenture”), between Navient Corporation, a Delaware corporation (the “Company”), and The Bank of New York Mellon, a New York banking corporation, as trustee (the “Trustee”). 

WHEREAS, the Company and the Trustee executed and delivered the base indenture, dated as of July 18, 2014 (the “Base
Indenture”, as supplemented by this Supplemental Indenture, the “Indenture”), to provide for the issuance of the Company’s debt securities (the “Securities”), to be issued in one or more series; 

WHEREAS, the Company and the Trustee executed and delivered the first supplemental indenture, dated as of November 6, 2014, to
provide for the establishment of two series of its notes under the Base Indenture known as its “5.000% Senior Notes due 2020” and its “5.875% Senior Notes due 2024”; 

WHEREAS, the Company and the Trustee executed and delivered the second supplemental indenture, dated as of March 27, 2015 (the
“Second Supplemental Indenture”), to provide for the establishment of a series of its notes under the Base Indenture known as its “5.875% Senior Notes due 2021”; 

WHEREAS, the Company and the Trustee executed and delivered the third supplemental indenture, dated as of July 29, 2016, to
provide for the establishment of a series of its notes under the Base Indenture known as its “6.625% Senior Notes due 2021”; 

WHEREAS, the Company and the Trustee executed and delivered the fourth supplemental indenture, dated as of September 16, 2016, to
provide for the establishment of a series of its notes under the Base Indenture known as its “7.250% Senior Notes due 2023”; 

WHEREAS, the Company and the Trustee executed and delivered the fifth supplemental indenture (the “Fifth Supplemental
Indenture”), dated as of March 7, 2017, to provide for the establishment of a series of its notes under the Base Indenture known as its “6.500% Senior Notes due 2022”; 

WHEREAS, the Company and the Trustee executed and delivered the sixth supplemental indenture, dated as of March 17, 2017, to issue
additional 5.875% Senior Notes due 2021 under the Base Indenture and the Second Supplemental Indenture; 
 WHEREAS, the Company and
the Trustee executed and delivered the seventh supplemental indenture, dated as of May 26, 2017, to provide for the establishment of a series of its notes under the Base Indenture known as its “6.750% Senior Notes due 2025”; 

WHEREAS, the Company and the Trustee executed and delivered the eighth supplemental indenture, dated as of June 9, 2017, to issue
additional 5.865% Senior Notes due 2021 under the Base Indenture and the Second Supplemental Indenture; 
 WHEREAS, the Company and
the Trustee executed and delivered the ninth supplemental indenture, dated as of December 4, 2017, to issue additional 6.500% Senior Notes due 2022 under the Base Indenture and the Fifth Supplemental Indenture; 

  
 1 

 WHEREAS, the Company and the Trustee executed and delivered the tenth supplemental
indenture, dated as of June 11, 2018, to provide for the establishment of a series of its notes under the Base Indenture known as its “6.750% Senior Notes due 2026”; 

WHEREAS, the Company and the Trustee executed and delivered the eleventh supplemental indenture, dated as of January 27, 2020, to
provide for the establishment of a series of its notes under the Base Indenture known as its “5.00% Senior Notes due 2027”; 

WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a new series of its notes
under the Base Indenture to be known as its “4.875% Senior Notes due 2028” (the “Senior Notes”), the form and substance and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and
this Supplemental Indenture; 
 WHEREAS, the Board of Directors of the Company pursuant to the 2021 Business Plan, adopted
December 7, 2020, and certified by the Secretary’s Certificate, executed December 9, 2020, have duly authorized the issuance of the Senior Notes and has authorized the proper officers of the Company to execute any and all appropriate
documents necessary or appropriate to effect each such issuance; 
 WHEREAS, the Company and Navient, LLC, entered into an Agreement
and Plan of Merger on October 16, 2014, pursuant to which Navient, LLC merged with and into the Company, with the Company as the surviving corporation (the “Merger”); 

WHEREAS, as a result of the Merger, the Company assumed Navient, LLC’s obligations under an indenture, dated October 1, 2000
and an amended and restated indenture, dated April 25, 2006; 
 WHEREAS, this Supplemental Indenture is being entered into
pursuant to the provisions of Section 14.01 of the Base Indenture; 
 WHEREAS, the Company has requested and hereby requests
that the Trustee execute and deliver this Supplemental Indenture; and 
 WHEREAS, all things necessary to make this Supplemental
Indenture a valid and legally binding agreement of the Company, in accordance with its terms, and to make the Senior Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid and legally binding obligations of the
Company, have been performed, and the execution and delivery of this Supplemental Indenture has been duly authorized in all respects. 

NOW THEREFORE, in consideration of the premises and the purchase and acceptance of the Senior Notes by the Holders thereof, and for the
purpose of setting forth, as provided in the Base Indenture, the forms and terms of the Senior Notes, the Company covenants and agrees, with the Trustee, as follows: 

  
 2 

 ARTICLE 1. 

DEFINITIONS 

Section 1.1. Definition of Terms. Unless the context otherwise requires: 

(a) each term defined in the Base Indenture has the same meaning when used in this Supplemental Indenture; 

(b) the singular includes the plural and vice versa; 

(c) headings are for convenience of reference only and do not affect interpretation; and 

(d) a reference to a Section or Article is to a Section or Article of this Supplemental Indenture unless otherwise indicated. 

(e) The following terms have the meanings given to them in this Section 1.1(e): 

(i) “Board of Directors” means the board of directors or comparable governing body of the Company; provided
that if the Company is a wholly-owned subsidiary of another person, the Board of Directors means the board of directors or comparable governing body of such person. 

(ii) “Change of Control” means the occurrence of any of the following: (1) direct or indirect sale,
transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries taken as a whole to any
“person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than to the Company or one of its subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation)
the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Company or one of its subsidiaries becomes the beneficial owner, directly or indirectly, of more than 50% of the
then-outstanding number of shares of the Company’s voting stock; (3) the Company consolidates with, or merges with or into, any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), or any
“person” (as that term is used in Section 13(d)(3) of the Exchange Act) consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction in which any of the outstanding voting stock of the Company or
such other “person” (as that term is used in Section 13(d)(3) of the Exchange Act) is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the voting stock of the
Company outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the voting stock of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act)
immediately after giving effect to such transaction; (4) the first day on which a majority of the members of the Company’s Board of Directors are not Continuing Directors; or (5) the adoption of a plan relating to the liquidation or
dissolution of the Company; provided, 

  
 3 

 
however, that a transaction will not be deemed to involve a Change of Control if (A) the Company becomes a wholly owned subsidiary of a holding company and (B) the holders of the voting
stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s voting stock immediately prior to that transaction. For purposes of this definition, “voting stock” means
capital stock or other equity interests of any class or kind the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of the Company, even if the
right to vote has been suspended by the happening of such a contingency. 
 (iii) “Change of Control Triggering
Event” means the occurrence of both (i) a Change of Control and (ii) a Ratings Downgrade Event. 
 (iv)
“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company who (1) was a member of the Board of Directors of the Company on the date of the issuance of the Senior Notes;
or (2) was nominated for election or elected to the Board of Directors of the Company with the approval of a majority of the Continuing Directors who were members of such Board of Directors of the Company at the time of such nomination or
election (either by specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director). 

(v) “DTC” shall have the meaning assigned to it in Section 2.5. 

(vi) “Fitch” means Fitch Ratings, Inc., or any successor rating agency. 

(vii) “Investment Grade Rating” means a rating by Moody’s equal to or higher than Baa3 (or the equivalent
under a successor rating category of Moody’s), a rating by S&P equal to or higher than BBB- (or the equivalent under any successor rating category of S&P), a rating by Fitch equal to or higher
than BBB- (or the equivalent under any successor rating category of Fitch), and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the Company under
the circumstances permitting the Company to select a replacement agency and in the manner for selecting a replacement agency, in each case as set forth in the definition of “Rating Agencies”. 

(viii) “Moody’s” means Moody’s Investors Service, Inc., or any successor rating agency 

(ix) “Navient Corporation” means Navient Corporation, or any successor. 

(x) “Rating Agencies” means (1) Moody’s, S&P and Fitch; and (2) if any or all of
Moody’s, S&P or Fitch ceases to rate the Senior Notes or fails to make a rating of the Senior Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization”
within the meaning of Section 3(a)(62) under the Exchange Act, that the Company selects (pursuant to a resolution of the Company’s Board of Directors) as a replacement agency for any of Moody’s, S&P or Fitch, or all of them, as
the case may be. 

  
 4 

 (xi) “Ratings Downgrade Event” means, on any date during
the Trigger Period, the Senior Notes being downgraded by at least one modifier (a modifier being plus, neutral or minus for S&P or Fitch, 1, 2 or 3 for Moody’s and a similar modifier by any other Rating Agency) by any two of the three
Rating Agencies from the rating on the Senior Notes by each such Rating Agency on the date prior to the first day of the Trigger Period; provided that no Ratings Downgrade Event shall be deemed to occur, if either (i) the rating on the Senior
Notes by each Rating Agency that downgraded its rating is an Investment Grade Rating after the downgrade or (ii) in respect of a particular Change of Control, the Rating Agency or Agencies (as applicable) that downgraded the Senior Notes
announce or confirm or inform the Trustee in writing that the reduction was not the result, in whole or in part, of any event or circumstance comprised of, or arising as a result of, or in respect of, the applicable Change of Control. 

(xii) “S&P” means S&P Global Ratings, or any successor rating agency. 

(xiii) “Trigger Period” means the period commencing one day prior to the first public announcement by the
Company of a Change of Control or an arrangement that could result in a Change of Control and ending 60 days following consummation of the Change of Control (which period will be extended following consummation of a Change of Control for so long as
the rating of the Senior Notes is under announced consideration for possible downgrade by any of the Rating Agencies as the result, in whole or in part, of any event or circumstance comprised of, or arising as a result of, or in respect of, the
applicable Change of Control). 
 ARTICLE 2. 

GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES 

Section 2.1. Designation and Principal Amount. There is hereby authorized and established a new series of Securities under the
Base Indenture, designated as the “4.875% Senior Notes due 2028”, which is not limited in aggregate principal amount. The initial aggregate principal amount of the Senior Notes to be issued under this Supplemental Indenture shall be
limited to $500,000,000. Any additional amounts of the series to be issued shall be set forth in a Company Order. 
 Section 2.2.
Maturity. The stated maturity of principal for the Senior Notes will be March 15, 2028. 
 Section 2.3. Further
Issues. The Company may from time to time, without the consent of the Holders of the series of Senior Notes, issue additional notes of such series. Any such additional notes will have the same ranking, interest rate, maturity date and other
terms as the series of Senior Notes. Any such additional notes, together with the series of Senior Notes herein provided for, will constitute a single series of Securities under the Indenture. 

  
 5 

 Section 2.4. Form of Payment. Principal of, premium, if any, and interest on the
Senior Notes shall be payable in U.S. dollars. 
 Section 2.5. Global Securities. Upon the original issuance, the Senior Notes
will be represented by one or more Global Securities. The Company will issue the Senior Notes in denominations of $2,000 and in integral multiples of $1,000 in excess thereof and will deposit the Global Securities with the Trustee as custodian for
The Depository Trust Company (“DTC”), in New York, New York, and register the Global Securities in the name of DTC or its nominee. 

Section 2.6. Interest. The Senior Notes will bear interest (computed on the basis of a
360-day year consisting of twelve 30-day months) from February 2, 2021 at the rate of 4.875% per annum, payable semiannually in arrears; interest payable on each
Interest Payment Date will include interest accrued from February 2, 2021, or from the most recent Interest Payment Date to which interest has been paid or duly provided for; the Interest Payment Dates on which such interest shall be payable
are March 15 and September 15, commencing on September 15, 2021; and the record date for the interest payable on any Interest Payment Date is the immediately preceding March 1 and September 1, as the case may be, commencing
on September 1, 2021. 
 Section 2.7. Authorized Denominations. The Senior Notes shall be issuable in denominations of
$2,000 and in integral multiples of $1,000 in excess thereof. 
 Section 2.8. Redemption. The Senior Notes are subject to
redemption at the option of the Company as set forth in the forms of Senior Notes attached hereto as Exhibit A. 
 Section 2.9.
Repurchase Upon Change of Control. 
 (a) If a Change of Control Triggering Event occurs, unless the Company has exercised its right,
if any, to redeem the Senior Notes in full, the Company shall offer (the “Change of Control Offer”) to repurchase any and all of each Holder’s Senior Notes (equal to $2,000 or an integral multiple of $1,000 above that amount)
at a repurchase price in cash equal to 101% of the aggregate principal amount of the Senior Notes repurchased plus accrued and unpaid interest, if any, to, but not including, the date of repurchase (the “Change of Control Payment”).
Within 30 days following any Change of Control Triggering Event, the Company shall be required to mail a notice to each Holder of the Senior Notes to the address of such Holder appearing in the Registrar, with a copy to the Trustee or otherwise in
accordance with the procedures of DTC, describing the transaction or transactions that constitute the Change of Control Triggering Event and offering to repurchase such Senior Notes on the date specified in the notice, which date will be no less
than 30 days and no more than 60 days from the date such notice is mailed (the “Change of Control Payment Date”), with the following information: 

(i) a Change of Control Offer is being made pursuant to this Section 2.9 and that all Senior Notes properly tendered
pursuant to such Change of Control Offer will be accepted for payment; 
 (ii) the repurchase price and the Change of Control
Payment Date; 

  
 6 

 (iii) any Senior Note not properly tendered will remain outstanding and
continue to accrue interest; 
 (iv) unless the Company defaults in the payment of the Change of Control Payment, all Senior
Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on, but not including, the Change of Control Payment Date; 

(v) Holders electing to have any Senior Notes repurchased pursuant to a Change of Control Offer will be required to surrender
such Senior Notes, in the form set forth in Exhibit A entitled “Option of Holder to Elect Purchase”, on the reverse of such Senior Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to
the close of business on the third business day preceding the Change of Control Payment Date; 
 (vi) Holders will be
entitled to withdraw their tendered Senior Notes and their election to require the Company to repurchase such Senior Notes, provided that the Paying Agent receives, not later than the close of business on the last day of the Change of Control Offer
period, a facsimile transmission, an email or a letter setting forth the name of the Holder of Senior Notes, the principal amount of Senior Notes tendered for repurchase, and a statement that such Holder is withdrawing his tendered Senior Notes and
his election to have such Senior Notes repurchased; 
 (vii) if such notice is mailed prior to the occurrence of a Change of
Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and 
 (viii)
that Holders whose Senior Notes are being repurchased only in part will be issued new Senior Notes equal in principal amount to the unpurchased portion of the Senior Notes surrendered, which unpurchased portion must be equal to $2,000 in principal
amount or an integral multiple of $1,000 in excess thereof. 
 (b) While the Senior Notes are in global form and the Company makes an offer
to repurchase all of the Senior Notes pursuant to the Change of Control Offer, a Holder may exercise its option to elect for the repurchase of the Senior Notes through the facilities of DTC, Euroclear and Clearstream, subject to their rules and
regulations. 
 (c) The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control
Triggering Event if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Supplemental Indenture applicable to a Change of Control Offer made by the
Company and the third party repurchases on the applicable date all Senior Notes properly tendered and not withdrawn under such Change of Control Offer, provided that a failure by such third party to comply with the requirements of such Change of
Control Offer and to complete such Change of Control Offer shall be treated as a failure by the Company to comply with its obligations to offer to repurchase the Senior Notes unless the Company promptly makes an offer to repurchase the Senior Notes
at 101% of the principal amount thereof plus accrued and 

  
 7 

 
unpaid interest, if any, to, but not including the date of repurchase, which shall be no later than 30 days after the third party’s scheduled Change of Control Payment Date, or (2) a
notice of redemption has been given pursuant to the Indenture as described under Section 4.03 of the Base Indenture, unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary
herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control. 
 (d) The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the
repurchase of Senior Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control repurchase provisions of this Supplemental Indenture, the
Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under Section 2.9 of this Supplemental Indenture by virtue thereof. 

(e) On the Change of Control Payment Date, the Company shall, to the extent permitted by law, 

(i) accept or cause a third party to accept for payment all Senior Notes properly tendered pursuant to the Change of Control
Offer; 
 (ii) deposit or cause a third party to deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Senior Notes properly tendered; and 
 (iii) deliver or cause to be delivered to the Trustee the
Senior Notes properly accepted, together with an Officers’ Certificate stating the principal amount of Senior Notes being repurchased. 

(f) The Paying Agent shall promptly deliver to each Holder of Senior Notes the Change of Control Payment for such Senior Notes. The Company
shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 

Section 2.10. Appointment of Agents. The Trustee will initially be the Security Registrar and Paying Agent for the Senior Notes.

 ARTICLE 3. 
 FORM
OF NOTES 
 Section 3.1. Form of Senior Notes. The Senior Notes and the Trustee’s Certificate of Authentication to
be endorsed thereon, are to be substantially in the form set forth in Exhibit A hereto. 

  
 8 

 ARTICLE 4. 

ORIGINAL ISSUE OF NOTES 

Section 4.1. Original Issue of Senior Notes. The Senior Notes may, upon execution of this Supplemental Indenture, be executed by
the Company and delivered to the Trustee for authentication, and the Trustee shall, upon Company order, authenticate and deliver such Senior Notes as in such Company order provided. 

ARTICLE 5. 

MISCELLANEOUS 

Section 5.1. Ratification of Indenture. The Base Indenture, as supplemented by this Supplemental Indenture, is in all respects
ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided; provided that the provisions of this Supplemental Indenture apply solely with respect to
the Senior Notes. 
 Section 5.2. Trustee Not Responsible for Recitals. The recitals and statements herein contained are made by
the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. 

Section 5.3. Governing Law. This Supplemental Indenture and each Senior Note shall be deemed to be contracts made under the law of
the State of New York, and for all purposes shall be governed by and construed in accordance with the law of said State. 

Section 5.4. Separability. In case any provision in the Indenture or in the Senior Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

Section 5.5. Counterparts. This Supplemental Indenture may be executed in any number of counterparts each of which shall be an
original; but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or electronic (i.e. “pdf”or “tif”)
transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. The exchange of copies of this Supplemental Indenture and
of signature pages that are executed by manual signatures that are scanned, photocopied or faxed or by other electronic signing created on an electronic platform (such as DocuSign) or by digital signing (such as Adobe Sign) shall constitute
effective execution and delivery of this Supplemental Indenture for all purposes. Signatures of the parties hereto that are executed by manual signatures that are scanned, photocopied or faxed or by other electronic signing created on an electronic
platform (such as DocuSign) or by digital signing (such as Adobe Sign) shall be deemed to be their original signatures for all purposes of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original. Anything in this
Supplemental Indenture or the Senior Notes to the 

  
 9 

 
contrary notwithstanding, for the purposes of the transactions contemplated by this Supplemental Indenture, the Senior Notes and any document to be signed in connection with this Supplemental
Indenture or the Senior Notes (including the Senior Notes and amendments, supplements, waivers, consents and other modifications, Trustee’s Certificate of Authentication, Officer’s Certificates, Company Orders and Opinions of Counsel and
other issuance, authentication and delivery documents) or the transactions contemplated hereby may be signed by manual signatures that are scanned, photocopied or faxed or other electronic signatures created on an electronic platform (such as
DocuSign) or by digital signature (such as Adobe Sign) and contract formations on electronic platforms approved by the Trustee, and the keeping of records in electronic form, are hereby authorized, and each shall be of the same legal effect,
validity or enforceability as a manually executed signature in ink or the use of a paper-based recordkeeping system, as the case may be. 

  
 10 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, all as of the day and year first above written. 
  

			
	NAVIENT CORPORATION, as Company
		
	By:	 	/s/ Stephen J. O’Connell
		 	Name:   Stephen J. O’Connell
		 	Title:     Senior Vice President and Treasurer
	
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:	 	/s/ Laurence J. O’Brien
		 	Name:   Laurence J. O’Brien
		 	Title:     Vice President

 EXHIBIT A 

[FORM OF FACE OF SECURITY] 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

  
 Exhibit A-1 

 CUSIP No. 63938C AL2 

NAVIENT CORPORATION 

4.875% SENIOR NOTES DUE 2028 
  

					
	No.	 		  	 $
 As revised by the

Schedule of Increases
 or Decreases in

Global Security
 attached hereto

 Interest. Navient Corporation, a Delaware corporation (herein called the “Company,”
which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum
of                million dollars ($                ), as revised by the Schedule of
Increases or Decreases in Global Security attached hereto, on March 15, 2028 and to pay interest thereon from February 2, 2021 or from the most recent Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on March 15 and September 15 in each year, commencing September 15, 2021, at the rate of 4.875% per annum, until the principal hereof is paid or made available for payment. 

Method of Payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Record Date for such interest, which shall be the March 1 or September 1, as the case
may be, immediately preceding the relevant Interest Payment Date, commencing on September 1, 2021. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice
thereof having been given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, all as more fully provided in said Indenture. Payment of the principal of (and premium, if any) and any such interest on this
Security will be made at the Corporate Trust Office in U.S. Dollars. 
 Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 

Authentication. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

  
 Exhibit A-2 

 IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly
authorized officer. 
  

			
	February 2, 2021
	
	NAVIENT CORPORATION
		
	By:	 	 
		 	Name:
		 	Title:

  

			
	TRUSTEE’S CERTIFICATE OF AUTHENTICATION
	
	Dated: February 2, 2021
	
	THE BANK OF NEW YORK MELLON 
		
		 	as Trustee, certifies that this is one of the Securities referred to in the Indenture.
		
	By:	 	 
		 	Authorized Signatory

  
 Exhibit A-3 

 [FORM OF REVERSE OF SECURITY] 

Indenture. This Security is one of a duly authorized issue of securities of the Company (herein called the
“Securities”), issued and to be issued in one or more series under an Indenture, dated as of July 18, 2014, among Navient Corporation (the “Company”) and The Bank of New York Mellon, as trustee (herein called
the “Trustee”, which term includes any successor trustee under the Indenture), as supplemented and amended by the Twelfth Supplemental Indenture, dated February 2, 2021 (as so supplemented, herein called the
“Indenture”), between the Company and the Trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, initially limited in
aggregate principal amount to $500,000,000. 
 Optional Redemption. 

At any time or from time to time prior to June 15, 2027 (nine months prior to the stated maturity of the Securities) (the “Par
Call Date”) the Securities of this series are subject to redemption at the Company’s option, in whole or in part, at a Redemption Price equal to the greater of (i) 100% of the principal amount to be redeemed plus accrued and unpaid
interest thereon to the Redemption Date, and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (exclusive of interest accrued to the Redemption Date) that would be
due if such Securities matured on the Par Call Date, discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30 day months) at the applicable Treasury Rate (as
defined below) plus 50 basis points, plus accrued and unpaid interest on the principal amount being redeemed to the Redemption Date. 
 In
addition, at any time on or after the Par Call Date, the Securities of this series are subject to redemption at the Company’s option, in whole or in part, at a Redemption Price equal to the sum of (i) 100% of the principal amount to be
redeemed, plus (ii) accrued and unpaid interest thereon to the Redemption Date. 
 For purposes of determining the optional redemption
price, the following definitions are applicable: 
 “Treasury Rate” means, with respect to any Redemption Date for the
Securities, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such Redemption Date. 
 The Treasury Rate will be calculated on the third
business day preceding the Redemption Date. 

  
 Exhibit A-4 

 “Comparable Treasury Issue” means the U.S. Treasury security or securities
selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Securities being redeemed (assuming the Securities matured on the Par Call Date) that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining terms of the Securities. 

“Comparable Treasury Price” means, with respect to any Redemption Date: 

(a) the average, as determined by the Independent Investment Banker, of the Reference Treasury Dealer Quotations for such Redemption Date,
after excluding the highest and lowest Reference Treasury Dealer Quotations, or 
 (b) if the Independent Investment Banker is unable to
obtain at least four such Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations obtained by the Independent Investment Banker. 

“Independent Investment Banker” means J.P. Morgan Securities LLC, Barclays Capital Inc and RBC Capital Markets, LLC, as
specified by the Company, or if these firms are unwilling or unable to select the applicable Comparable Treasury Issue or average of the Reference Treasury Dealer Quotations, an independent investment banking institution of national standing
appointed by the Company. 
 ‘‘Reference Treasury Dealer’’ means J.P. Morgan Securities LLC, Barclays Capital Inc
and RBC Capital Markets, LLC (and their respective successors) plus one other or their affiliates which are primary U.S. government securities dealers (each a “Primary Treasury Dealer”), provided however, that if any of the
foregoing shall cease to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer. 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date for the
Securities, an average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for the Securities (expressed in each case as a percentage of its principal amount) quoted in writing to the
Independent Investment Banker at 5:00 p.m., New York City time, on the third business day preceding such redemption date. 
 Notice of any
redemption will be sent at least 15 days but not more than 60 days before the redemption date to each registered holder of Securities to be redeemed. Unless the Company defaults in payment of the redemption price, on and after the redemption date,
interest will cease to accrue on the Securities or portions of the Securities called for redemption. If fewer than all of the Securities are to be redeemed, the Trustee will select, not more than 60 days prior to the redemption date, the particular
Securities or portions thereof for redemption from the outstanding Securities not previously called by such method as the Trustee deems fair and appropriate. Any call redemption may, at the Company’s discretion, be conditioned upon the
occurrence of one or more conditions precedent. 
 Defaults and Remedies. If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. 

  
 Exhibit A-5 

 Repurchase Upon a Change of Control. Upon the occurrence of a Change of
Control Triggering Event, the Holders of the Securities will have the right to require that the Company purchase such Holder’s outstanding Securities, in whole or in part, at a purchase price of 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to, but not including, the date of purchase. 
 Amendment, Modification and Waiver. The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon
the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. 

Restrictive Covenants. The Indenture does not limit the issuance of debt of the Company or any of its Subsidiaries. 

Denominations, Transfer and Exchange. The Securities of this series are issuable only in registered form without coupons in
denominations of $2,000 and in integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of
Securities of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 
 As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the Registrar accompanied by a written request for
transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 No service charge shall be made for
any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 

Persons Deemed Owners. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary. 

  
 Exhibit A-6 

 Miscellaneous. The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the conflicts of law rules of said State. 
 All terms used in this
Security and not defined herein shall have the meanings assigned to them in the Indenture. 

  
 Exhibit A-7 

 OPTION OF HOLDER TO ELECT PURCHASE 

If you want to elect to have this Security repurchased by the Company pursuant to Section 2.9 of the Supplemental Indenture, check the
box below: 
 ☐Section 2.9 

If you want to elect to have only part of the Security purchased by the Company pursuant to Section 2.9 of the Supplemental Indenture,
state the amount you elect to have repurchased: 
  

			
	$ ________________
		
	 Date: __________________
	 	
		 	 Your
Signature:                                       
                     

		 	   (Sign exactly as your name appears

  on the face of this Note)

		
		 	 Tax Identification
No.:                                        
          

	
	 Signature Guarantee*: _____________________________

  

	*	 Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to
the Trustee). 

  
 Exhibit A-8 

 SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY 

The following increases or decreases in this Global Security have been made: 

 

									
	 Date of Exchange
	  	 Amount of increase in
Principal Amount of
this Global
Security
	  	 Amount of decrease
in Principal Amount
of this
Global
Security
	  	 Principal Amount of
this Global Security
following
each
decrease or increase
	  	 Signature of
authorized signatory
of
Trustee

  
 Exhibit A-9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00320-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00320-of-00352.parquet"}]]