Document:

Exhibit 10.22

 

The AES
Corporation

2004

Restoration Supplemental Retirement Plan

 

 

The AES
Corporation

 

2004

Restoration Supplemental Retirement Plan

 

Article I.
– General Provisions

 

1.1                                 Establishment
and Purpose

 

The AES Corporation hereby establishes The AES
Restoration Supplemental Retirement Plan (the “Plan”) on the terms and
conditions hereinafter set forth.   The
Plan is designed primarily for the purpose of providing benefits for a select
group of management and highly compensated employees of the Company and its
Subsidiaries and is intended to qualify as a “top hat” plan under Sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).

 

1.2                                 Definitions

 

“Bonus Compensation”
means, as determined in the sole discretion of the Committee, such annual bonus
or other bonus Compensation paid to a Participant.

 

“Beneficiary” means the person or persons designated by a
Participant as his beneficiary hereunder in accordance with the provisions of Article V.

 

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

 

“Change in Control” means
the occurrence of one or more of the following events: (i) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company to any
person or group (as that term is used in Section 13(d)(3) of the
Exchange Act) of Persons; (ii) a Person or group (as so defined) of
Persons (other than management of the Company on the date of the adoption of
this Plan or their affiliates) shall have become the beneficial owner of more
than 35% of the outstanding voting stock of the Company; or (iii) during
any one-year period, individuals who at the beginning of such period constitute
the Board (together with any new director whose election or nomination was
approved by a majority of the directors then in office who were either
directors at the beginning of such period or who were previously so approved,
but excluding under all circumstances any such new director whose initial
assumption of office occurs as a result of an actual or threatened election
contest or other actual or threatened solicitation of proxies or consents by or
on behalf of any individual, corporation, partnership or other entity or group)
cease to constitute a majority of the Board of Directors.

 

“Code” means the
Internal Revenue Code of 1986, as amended, and any successor code or law.

 

“Committee” means
the Compensation Committee of the Board, or such other committee designated by
the Board to discharge the duties of the Committee hereunder.

 

“Company” means The
AES Corporation, a Delaware Corporation,
or any successor thereto.

 

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“Company Match”
means the employer matching contributions contributed to the Participant’s
account under the Qualified Plan for the Plan Year.

 

“Compensation” shall,
unless otherwise determined by the Committee, have the meaning assigned thereto
in the Qualified Plan (determined without regard to any amounts voluntarily
deferred under the terms of this Plan to the extent necessary to carry out the
terms and intent of this Plan).

 

“Deferral Account”
means the bookkeeping account(s) established on behalf of a Participant to
track the Participant’s deferred compensation benefits under the Plan.

 

“Deferral Election”
means an election by a Participant to
defer Compensation in accordance with the provisions of Section 2.2 of the
Plan.

 

“Deferrals” shall
have the meaning ascribed thereto in Section 2.2(b) hereof.

 

“Disability” means
a Participant: (1) is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or to
last for a continuous period of not less than 12 months; or (2) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than 3
months under an accident and health plan of the Company or its Subsidiaries.

 

“Disability
Date” means the date
on which a Participant’s employment terminates due to Disability.

 

“Distribution Date” means the
date on which distributions to a Participant are to commence.  Distribution Dates are determined according
to each Participant’s Deferral Account elections or as otherwise provided under
the terms of the Plan.

 

“Distribution Option” means the
form in which payments to a Plan Participant are to be paid.  Distribution Options are determined according
to each Participant’s Deferral Account elections or as otherwise provided under
the terms of the Plan.

 

“Earnings” shall
have the meaning ascribed thereto in Section 2.4(b) of the Plan.

 

“Insolvency” means,
with respect to the Company: (1) an adjudication of bankruptcy; (2) the
assignment for the benefit of creditors of or by the Company; (3) a
material part of all of the property of the Company becomes subject to the
control and direction of a receiver, which receivership is not dismissed within
sixty (60) days of such receiver’s appointment; or (4) the filing by the
Company of a petition for relief under any federal or other bankruptcy or other
insolvency law or for an arrangement with creditors.

 

“Key Employee”
means a key employee (as defined in Section 416(i) of the Code
without regard to paragraph (5) thereof) of the Company.

 

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“Participant” means any employee
who has satisfied the eligibility requirements set forth in Section 1.4 of
the Plan.

 

“Person” means
any individual, corporation, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

 

“Plan Year” means
the twelve-month period beginning each January 1.

 

“Profit Sharing Contribution”
means the annual discretionary employer profit sharing contribution allocated
to the accounts of participants under the Qualified Plan for a Plan year.

 

“Qualified Plan”
means The AES Corporation Profit Sharing and Stock Ownership Plan, as amended,
or such other plan as designated by the Committee.

 

“Retirement” means
a Participant’s termination of employment with the Company for any reason on or
after the date such Participant attains age fifty-nine and a half (591⁄2).

 

“Subsidiary” means any entity in
which the Company owns or otherwise controls, directly or indirectly, stock or
other ownership interests having the voting power to elect a majority of the
board of directors, or other governing group having functions similar to a
board of directors, as determined by the Committee.

 

“Unforeseeable Emergency”
means a severe financial hardship
to the Participant resulting from an illness or accident of the Participant,
the Participant’s spouse, or a dependent (as determined under Section 152(a) of
the Code) of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.

 

1.3                                 Administration.

 

(a)                                  The
Committee shall administer the Plan and have sole and absolute authority and
discretion to decide all matters relating to the administration of the Plan,
including, without limitation, determining the rights and status of
Participants or their beneficiaries under the Plan.  The Committee is authorized to interpret the
Plan, to adopt administrative rules, regulations, and guidelines for the Plan,
and may correct any defect, supply any omission or reconcile any inconsistency
or conflict in the Plan.  The Committee’s
determinations under the Plan need not be uniform among all Participants, or
classes or categories of Participants, and may be applied to such Participants,
or classes or categories of Participants, as the Committee, in its sole and
absolute discretion, considers necessary, appropriate or desirable.  All determinations by the Committee shall be
final, conclusive and binding on the Company, the Participant and any and all
interested parties.

 

(b)                                 The
Committee may delegate such of its powers and authority under the Plan to the
Company’s officers as it deems necessary or appropriate.  In the event of such delegation, all
references to the Committee in this Plan shall be deemed references to such
officers as it relates to those aspects of the Plan that have been delegated.

 

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(c)                                  Any action
taken by the Committee with respect to the rights or benefits under the Plan of
any Participant shall be revocable by the Committee as to payments not yet made
to such person, and acceptance of any deferred compensation benefits under the
Plan constitutes acceptance of and agreement to the Committee’s or the Company’s
making any appropriate adjustments in future payments to such person (or to
recover from such person) any excess payment or underpayment previously made to
him.

 

(d)                                 Notwithstanding
any provision of the Plan to the contrary, if any benefit provided under this
Plan is subject to the provisions of Section 409A of the Code and the
regulations issued thereunder, the provisions of the Plan shall be
administered, interpreted and construed in a manner necessary to comply with Section 409A
and the regulations issued thereunder (or disregarded to the extent such provision
cannot be so administered, interpreted or construed).

 

1.4                                 Eligibility
and Participation.

 

(a)                                  Participation
in the Plan is limited to officers and key management employees of the Company
and its Subsidiaries who are designated by the Committee as eligible to
participate in the Plan and who are within the category of a select group of
management and highly compensated employees as referred to in Sections 201(2),
301(a)(3) and 401(a)(1) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”).

 

(b)                                 A
Participant shall cease to be a Participant upon receiving payment for the full
amount of benefits to which the Participant is entitled under the Plan.  If the Committee determines a Participant is
no longer eligible to actively participate in the Plan, he shall not be
entitled to make Deferral Elections or accrue additional supplemental matching
contributions or supplemental profit sharing awards under Article II of
the Plan.

 

Article II.
– Supplemental Retirement Benefits

 

2.1                                 Supplemental
Profit Sharing Contribution.

 

(a)                                  In the event
that the Profit Sharing Contribution for a Participant under the Qualified Plan
is limited by the application of Section 401(a)(17) or Section 415
for any Plan Year, the Participant shall receive a supplemental profit sharing
award under this Plan for such Plan year equal to the difference between: (i) the
Profit Sharing Contribution actually made to the Participant; and (ii) the
Profit Sharing Contribution that would have been made to the Qualified Plan on behalf
of such Participant for such Plan Year if the Section 401(a)(17)
limitations and the Section 415 limitations were not contained
therein.  Supplemental profit sharing
awards shall be credited to the Participant’s Retirement Account established
and maintained under the Plan.

 

(b)                                 The award
for any Plan year shall be deemed to be made as of the day the Profit Sharing
Contribution is made under the Qualified Plan, and shall be deemed invested in
Company stock.  Supplemental profit
sharing awards are not required to remain invested in Company stock and a
Participant may subsequently change his investment designations as permitted
under Section 2.4(b).

 

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2.2                                 Supplemental
Deferral Elections.

 

(a)                                  Each Participant
shall be eligible to elect to defer Compensation under the Plan with respect to
a Plan Year in accordance with the terms of the Plan and the rules and
procedures established by the Committee. 
Deferral Elections under the Plan are entirely voluntary and are irrevocable once made.

 

(b)                                 A
Participant may make a Deferral Election by filing a written or electronic
election with the Committee directing the Company to reduce the Participant’s
Compensation and to credit the amount of any such reduction (the “Deferrals”)
to the Deferral Accounts established and maintained for such Participant
pursuant to Section 2.4 of the Plan. 
Deferral Elections hereunder shall be made in accordance with the terms
of the Plan and the rules established by the Committee, and must be filed
not later than December 31 of the calendar year preceding the Plan Year to
which the election relates (or at such other times as may be established by the
Committee).  Notwithstanding, for the
first Plan Year in which a Participant is eligible to participate in the Plan,
a Participant’s initial Deferral Election may be made within thirty (30) days
after the date the Participant becomes eligible to participate in the Plan and
shall apply only to Compensation for services performed after the date of such
election.  Unless otherwise determined by
the Committee, a separate
Deferral Election must be filed each Plan Year.

 

(c)                                  Deferrals
shall be credited to each Participant’s Deferral Accounts as of such time or
times determined by the Committee; provided, however, that Deferrals shall be
credited to each Participant’s Deferral Accounts not later than thirty (30)
days after the date on which such Compensation would have otherwise been
paid.  Deferrals shall be deemed to be
invested in accordance with a Participant’s investment designations as
permitted under Section 2.4(b).

 

(d)                                 Unless
otherwise determined by the Committee, a Participant may elect to defer up to
50% of Compensation (exclusive of Bonus Compensation) and up to 80% of Bonus
Compensation paid to the Participant.

 

(e)                                  Notwithstanding
the foregoing and unless otherwise determined by the Committee, a Deferral
Election shall automatically terminate on the earliest to occur of: (1) the
termination of a Participant’s employment for any reason; (2) the
Insolvency of the Company; (3) the Committee’s determination that the
Participant is no longer eligible to participate in the Plan; (4) the
termination or discontinuance of the Plan; or (5) a Change in Control.

 

2.3                                 Supplemental
Company Matching Awards.

 

(a)                                  With respect
to each Plan Year and to the extent provided under this Section 2.3, the
Company shall annually credit a supplemental matching contribution (“Supplemental
Match”) to each eligible Participant’s Deferral Accounts.  To be eligible for a Supplemental Match, a
Participant must have made a Deferral Election for the Plan Year and be
employed on December 31st of the Plan Year (or have terminated during the
Plan Year due to Retirement, death or Disability).

 

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(b)                                 The amount
of the Supplemental Match shall be equal to: (i) the Company Match that
would have been awarded under the Qualified Plan, taking into account the
Participant’s Deferral Election and the maximum percentage of Compensation for
matching awards permitted under the Qualified Plan, if the Participant’s
Compensation and elective contributions to the Qualified Plan were not subject
to the Section 401(a)(17) and 402(g) limitations under the Qualified
Plan; less (ii) the maximum Company Match available for award to the
Participant under the Qualified Plan.

 

(c)                                  The
Supplemental Match will be allocated to the Participant’s Deferral Accounts in
the same proportion as the Participant’s Deferrals are allocated among the
Participant’s Deferral Accounts and shall be deemed invested in Company
stock.  Supplemental Matching
contributions are not required to remain invested in Company stock and a
Participant may subsequently change his investment designations as permitted
under Section 2.4(b).

 

2.4                                 Deferral
Accounts/Earnings

 

(a)                                  Unless
otherwise determined by the Committee, the Company shall maintain on behalf of
each Participant as many as three (3) separate Deferral Accounts which
accounts shall be designated Special Purpose Account #1, Special Purpose
Account #2 and Retirement Account.  A
Participant may elect to allocate his Deferrals among such Deferral Accounts
and may have a different Distribution Date and Distribution Option for such
Deferral Accounts as provided under Article III.

 

(b)                                 The Participant’s
Deferral Account shall be adjusted by an amount equal to the amount that would
have been earned (or lost) if the amounts deferred under this Plan had been
invested in hypothetical investments designated by the Participant from time to
time, based on a list of hypothetical investments provided by the Committee
from time to time (such hypothetical earnings or losses shall be referred to as
“Earnings”).  The Participant shall
designate the investments used to measure Earnings from the list of authorized
investments provided by the Committee by completing the appropriate form (or
electronically via the Plan’s website) or in such other manner as the Committee
may designate from time to time.  The
Participant may change such designations at such times as are permitted by the
Committee, provided that the Participant shall be entitled to change such
designations at least quarterly. 
Earnings shall be credited to the Participant’s Deferral Accounts at
least annually (or more frequently at the discretion of the Company).  Earnings shall be credited to Deferral
Accounts until all payments with respect to such account have been made under
this Plan.  Neither the Company nor the
Committee shall act as a guarantor, or be liable or otherwise responsible for
the investment performance of the designated investments (including any losses
sustained by a Participant) with respect to a Participant’s Deferral Accounts.

 

(c)                                  Each
Participant shall at all times be 100% vested in his Deferral Accounts and the
Earnings thereon.

 

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Article III. – Distributions

 

3.1                                 Distribution Dates.

 

(a)                                  Distribution
Dates shall be established and determined in accordance with the Participant’s
Deferral Account elections. 
Distributions from Special Purpose Accounts shall be paid annually
commencing on or about February 1 of the year following the year
designated by the Participant as his Distribution Date.  Distributions from Retirement Accounts are
payable on or about February 1 of the year following a Participant’s
Retirement.  Notwithstanding, a
Distribution Date must be on or before February 1 of the year following
the calendar year in which the Participant obtains age 70.

 

(b)                                 Notwithstanding
the foregoing or any Plan provision to the contrary, distributions to Key
Employees upon separation from service (including termination and Retirement)
may not be made before the date that is 6 months after the date of separation
from service (or, if earlier, the date of death of the employee).

 

3.2                                 Distribution
Option/Manner of Payment.

 

The Distribution Option for Deferral Accounts shall be
determined in accordance with such election procedures as are established by
the Committee and distributions shall, at the Participant’s option, be paid in
the form of a lump sum or in annual installments over a period of 2-to-15
years; provided, however, that the Distribution Option must be established at
the time of initial deferral.  All
payments under the Plan shall be made in cash.

 

3.3                                 Modification
of Distribution Elections.

 

(a)                                  A
Participant has the right to change any Distribution Date or Distribution
Option associated with a Special Purpose Account previously designated by the
Participant pursuant to this Article III; provided,
however, that: (1) any new Distribution Date must be later in
time than the Distribution Date previously designated; (2) all payments
that otherwise would have begun on the Distribution Date previously designated
must, after such change, begin on the new Distribution Date; (3) the new
Distribution Option can extend, but not accelerate payments; (4) the
Participant must file an election designating the new Distribution Date and
Distribution Option not later than one year prior to the Distribution Date
previously designated; and (5) the new election must also provide that the
new Distribution Date be a minimum of five years later than the existing
Distribution Date.  Any such election
shall be made in accordance with such rules and procedures as are
established by the Committee and shall not take effect for at least twelve (12)
months after the date on which such election is made

 

(b)                                 A
Participant cannot change the Distribution Option associated with his
Retirement Account originally designated pursuant to Section 3.2.  The Distribution Date for Retirement Accounts
must remain payable on or about February 1 of the year following a
Participant’s Retirement.

 

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(c)                                  A
Participant cannot postpone the commencement of distributions beyond February 1
of the year following the calendar year in which the Participant obtains age
70.

 

3.4                                 Termination.

 

Notwithstanding the foregoing provisions, in the event
a Participant’s employment terminates for any reason (other than death) prior
to the Participant reaching Retirement eligibility, the Participant will
receive a lump sum payment of all amounts credited to the Participant’s
Deferral Accounts.  Such payments will be
made as soon as administratively practicable following such termination,
subject to the rules applicable to Key Employees.

 

3.5                                 Unforeseeable
Emergency.

 

The Committee may, upon request of the Participant,
cause to be paid to such Participant an amount equal to all or any part of the
amounts credited to such Participant’s Deferral Accounts if the Committee
determines, in its absolute discretion based on such reasonable evidence that
it shall require, that such a payment or payments is necessary for the purpose
of alleviating the consequences of an Unforeseeable Emergency occurring with
respect to the Participant.  The amounts
distributed with respect to an Unforeseeable Emergency may not exceed the
amount necessary to satisfy the emergency plus amounts necessary to pay taxes
on the distribution, after taking into account the extent to which the hardship
is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant’s assets (to the extent
liquidation would not itself cause severe financial hardship).

 

3.6                                 Change in
Control.

 

Notwithstanding the foregoing provisions, upon a
Change in Control the Participant will receive a lump sum payment of all of the
amounts credited to the Participant’s Deferral Accounts.  Such payment will be paid in a lump sum
within thirty (30) days of the Change in Control.

 

3.7                                 Death.

 

The Beneficiary or Beneficiaries of a Participant
shall be entitled to receive the unpaid balance of the Participant’s Deferral
Accounts to which the Participant was entitled at his death, payable according
to the Participant’s elections, if the Participant dies on or after age
591⁄2.  In the event of a Participant’s
death prior to obtaining Retirement eligibility, the value of the Participant’s
Deferral Accounts will be paid to the Participant’s beneficiary in a lump sum
as soon as administratively practicable. 
If the Beneficiary is the Participant’s estate, then the unpaid balance
of the Participant’s Deferral Accounts will be paid in a lump sum to the
Participant’s estate as soon as administratively practicable (regardless of
whether the Participant obtained Retirement age).  The Participant shall designate his
Beneficiary in accordance with the provisions of Article V.

 

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Article IV.
– Funding By Company

 

4.1                                 Unsecured
Obligation of Company.

 

(a)                                  Any benefit
payable pursuant to this Plan shall be paid from the general assets of the
Company.  Nothing contained in this Plan
and no action taken pursuant to the provisions of this Plan shall create a
trust of any kind or a fiduciary relationship between any Participant (or any
other interested person) and the Company or the Committee, or require the
Company to maintain or set aside any specific funds for the purpose of paying
any benefit hereunder.  To the extent
that a Participant or any other person acquires a right to receive payments
from the Company under this Plan, such right shall be no greater than the right
of any unsecured general creditor of the Company.

 

(b)                                 If
the Company maintains a separate fund or makes specific investments, including
the purchase of insurance insuring the life of the a
Participant, to assure its ability to pay any benefits due under this
Plan, neither the Participant nor the Participant’s beneficiary shall have any
legal or equitable ownership interest in, or lien on, such fund, policy,
investment or any other asset of the Company. 
The Company, in its sole discretion, may determine the exact nature and
method of informal funding (if any) of the obligations under this Plan.  If the Company elects to maintain a separate
fund or makes specific investments to fund its
obligations under this Plan, the Company reserves the right, in its sole
discretion, to terminate such method of funding at any time, in whole or in
part.

 

4.2                                 Cooperation
of Participant.

 

If the Company, in its sole
discretion, elects to invest in a life insurance, disability or annuity policy
on the life of Participant to assist it with the informal funding of its
obligations under this Plan, Participant shall assist the Company, from time to
time, promptly upon the request of the Company, in obtaining such insurance
policy by supplying any information necessary to obtain such policy as well as
submitting to any physical examinations required therefore.  The Company shall be responsible for the
payment of all premiums with respect to any whole life, variable, or universal
life insurance policy purchased in connection with this Plan unless otherwise
expressly agreed.

 

Article V.
– Beneficiaries

 

5.1                                 Beneficiary
Designations.

 

A designation of a Beneficiary
hereunder may be made only by an instrument (in form acceptable to the
Committee) signed by the Participant and filed with the Committee prior to the
Participant’s death.  In the absence of
such a designation and at any other time when there is no existing Beneficiary
designated hereunder, the unpaid value of the Participant’s Deferral
Accounts to which the Participant was entitled at his death shall be distributed to the Participant’s
estate.  A Beneficiary who dies or which
ceases to exist shall not be entitled to any part of any payment thereafter to
be made to the Participant’s Beneficiary unless the Participant’s designation
specifically provides to the contrary.  If two or more persons designated
as a Participant’s Beneficiary are in existence with respect to a single
Deferred Compensation Benefit, the amount of any payment to the Beneficiary

 

9

 

under this Plan shall be
divided equally among such persons, unless the Participant’s designation
specifically provides to the contrary. 
The Beneficiary Designations must be the same for all Deferral Accounts
under the Plan.

 

5.2                                 Change in
Beneficiary.

 

A Participant may, at any
time and from time to time, change a Beneficiary designation hereunder without
the consent of any existing Beneficiary or any other person. Any change in
Beneficiary shall be made only by an instrument (in form acceptable to the
Committee) signed by the Participant, and any change shall be effective only if
received by the Committee prior to the death of the Participant.

 

Article VI.
– Claims Procedures

 

6.1                                 Claims for
Benefits.

 

The Committee shall determine the rights of any
Participant to any deferred compensation benefits hereunder.  Any Participant who believes that he has not
received the deferred compensation benefits to which he is entitled under the
Plan may file a claim in writing with the Committee.  The Committee shall, no later than 90 days
after the receipt of a claim (plus an additional period of 90 days if required
for processing, provided that notice of the extension of time is given to the
claimant within the first 90-day period), either allow or deny the claim in
writing.  If a claimant does not receive
written notice of the Committee’s decision on his claim within the above-mentioned
period, the claim shall be deemed to have been denied in full.

 

A denial of a claim by the Committee, wholly or
partially, shall be written in a manner calculated to be understood by the
claimant and shall include:

 

(a)                                  the specific
reasons for the denial;

 

(b)                                 specific
reference to pertinent Plan provisions on which the denial is based;

 

(c)                                  a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or information
is necessary; and

 

(d)                                 an
explanation of the claim review procedure and the time limits applicable to
such procedures, including a statement of the claimant’s right to bring a civil
action under Section 502(a) of ERISA.

 

6.2                                 Appeal
Provisions.

 

A claimant whose claim is denied (or his duly
authorized representative) may within 60 days after receipt of denial of a
claim file with the Committee a written request for a review of such
claim.  If the claimant does not file a
request for review of his claim within such 60-day period, the claimant shall
be deemed to have acquiesced in the original decision of the Committee on his
claim, the decision shall become final and the claimant will not be entitled to
bring a civil action under Section 502(a) of

 

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ERISA..  If such
an appeal is so filed within such 60-day period, the Company (or its delegate)
shall conduct a full and fair review of such claim.  During such review, the claimant (or the
claimant’s authorized representative) shall be given the opportunity to review
all documents that are pertinent to his claim and to submit issues and comments
in writing.

 

The Company shall mail or deliver to the claimant a
written decision on the matter based on the facts and the pertinent provisions
of the Plan within 60 days after the receipt of the request for review (unless
special circumstances require an extension of up to 60 additional days, in
which case written notice of such extension shall be given to the claimant
prior to the commencement of such extension). 
Such decision shall be written in a manner calculated to be understood
by the claimant, shall state the specific reasons for the decision and the
specific Plan provisions on which the decision was based and shall, to the
extent permitted by law, be final and binding on all interested persons.  If the decision on review is not furnished to
the claimant within the above-mentioned time period, the claim shall be deemed
to have been denied on review.

 

Article VII.
– Miscellaneous

 

7.1                                 Withholding.

 

The Company shall have the right to withhold from any
deferred compensation benefits payable under the Plan or other wages payable to
a Participant an amount sufficient to satisfy all federal, state and local tax
withholding requirements, if any, arising from or in connection with the
Participant’s receipt or vesting of deferred compensation benefits under the
Plan.

 

7.2                                 No Guarantee
of Employment.

 

Nothing in this Plan shall be construed as
guaranteeing future employment to any Participant.  Without limiting the generality of the
preceding sentence, except as otherwise set forth in a written agreement, a
Participant continues to be an employee of the Company solely at the will of the
Company subject to discharge at any time, with or without cause.  The benefits provided for herein for a Participant shall not be deemed
to modify, affect or limit any salary or salary increases, bonuses, profit
sharing or any other type of compensation of a Participant in any manner
whatsoever.  Nothing contained in this
Plan shall affect the right of a Participant to participate in or be covered by
or under any qualified or nonqualified pension, profit sharing, group, bonus or
other supplemental compensation, retirement or fringe benefit Plan constituting
any part of the Company’s compensation structure whether now or hereinafter
existing.

 

7.3                                 Payment to
Guardian.

 

If a benefit payable hereunder is payable to a minor,
to a person declared incompetent or to a person incapable of handling the disposition
of his property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of such
minor, incompetent or person.  The
Committee may require such proof of incompetency, minority, incapacity

 

11

 

or guardianship, as it may deem appropriate prior to
distribution of the benefit.  Such
distribution shall completely discharge the Company from all liability with
respect to such benefit.

 

7.4                                 Assignment.

 

No right or interest under this Plan of any
Participant or Beneficiary shall be assignable or transferable in any manner or
be subject to alienation, anticipation, sale, pledge, encumbrance or other
legal process or in any manner be liable for or subject to the debts or
liabilities of the Participant or Beneficiary.

 

7.5                                 Severability.

 

If any provision of this Plan or the application
thereof to any circumstance(s) or person(s) is held to be invalid by a court of
competent jurisdiction, the remainder of the Plan and the application of such
provision to other circumstances or persons shall not be affected thereby.

 

7.6                                 Amendment
and Termination.

 

The Company may at any time
(without the consent of any Participant) modify, amend or terminate any or all of the provisions of this Plan;
provided, however, that no modification, amendment or termination of
this Plan shall adversely affect
the rights of a Participant under the Plan without the consent of such
Participant.   Notwithstanding the foregoing or any
provision of the Plan to the contrary, the Company may at any time (without the
consent of any Participant) modify, amend or terminate any or all of the provisions of this Plan to the extent necessary to conform the
provisions of the Plan with Section 409A of the Code regardless of whether
such modification, amendment or termination of this Plan shall adversely affect the rights of
a Participant under the Plan.

 

7.7                                 Exculpation
and Indemnification

 

The Company shall indemnify and hold harmless the members
of the Committee from and against any and all liabilities, costs and expenses
incurred by such persons as a result of any act, or omission to act, in
connection with the performance of such person’s duties, responsibilities and
obligations under the Plan, other than such liabilities, costs and expenses as
may result from the gross negligence, willful misconduct, and/or criminal acts
of such persons.

 

7.8                                 Confidentiality.

 

In further consideration of
the benefits available to each Participant under this Plan, each Participant
shall agree that, except as such may be disclosed in financial statements and
tax returns, or in connection with estate planning, all terms and provisions of
this Plan, and any agreement between the Company and the Participant entered
into pursuant this Plan, are and shall forever remain confidential until the
death of Participant; and the Participant shall not reveal the terms and
conditions contained in this Plan or any such agreement at any time to any
person or entity, other than his respective financial and professional advisors
unless required to do so by a court of competent jurisdiction or as otherwise
may be required by law.

 

12

 

7.9                                 Leave of
Absence.

 

The Company may, in its sole
discretion, permit a Participant to take a leave of absence for a period not to
exceed one year.  Any such leave of
absence must be approved by the Company. 
During this time, the Participant will still be considered to be in the
employ of the Company for purposes of this Plan.

 

7.10                           Gender and
Number.

 

For purposes of interpreting the provisions of this
Plan, the masculine gender shall be deemed to include the feminine, the
feminine gender shall be deemed to include the masculine, and the singular shall
include the plural unless otherwise clearly required by the context.

 

7.11                           Governing
Law.

 

Except as otherwise preempted by the laws of the
United States, this Plan shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to its conflict of law
provisions.

 

7.12                           Effective
Date.

 

The effective date of the Plan is generally January 1,
2005; provided, however, that the effective date of the Plan for purposes of
determining contributions under Section 2.1 of the Plan shall be January 1,
2004.

 

 

	
   

  	
  The AES Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Jay Kloosterboer

  
	
   

  	
   

  	
  Title:

  	
  Vice President and

  Chief Human Resources Officer

  
						

 

13Exhibit 4.3

 

SLM
CORPORATION

 

OFFICERS’ CERTIFICATE

 

This
certificate is furnished to JPMorgan Chase Bank, National Association, formerly
known as JPMorgan Chase Bank and The Chase Manhattan Bank, in its capacity as
trustee (the “Trustee”), pursuant to Section 2.02(c) of the
Indenture, dated as of October 1, 2000, as amended or supplemented (the “Indenture”),
between SLM Corporation, formerly known as USA Education, Inc. (the “Company”),
and the Trustee.

 

By
resolution dated May 10, 2001, the Board of Directors of the Company
authorized the Company to develop a medium term note program or programs and to
issue and sell medium term notes and authorized certain officers or any one of
their designees to take or cause to be taken actions under such resolution. By
officers’ certificate dated October 31, 2001, the Company established,
pursuant to Section 2.02 of the Indenture, the terms of securities
designated as Medium Term Notes, Series A (the “Medium Term Notes”),
of the Company with an aggregate initial public offering price of up to
$3,000,000,000. By officers’ certificate dated August 20, 2002 and
pursuant to Section 2.02 of the Indenture, the Company amended the terms
of the Medium Term Notes to increase the aggregate initial public offering
price of the Medium Term Notes by $102,000,000. By officers’ certificate dated September 13,
2002 and pursuant to Section 2.02 of the Indenture, the Company amended
the terms of the Medium Term Notes to increase the aggregate initial public
offering price of the Medium Term Notes by an amount not to exceed
$10,000,000,000, for an aggregate total of $13,000,000,000. By officers’
certificate dated August 6, 2003 and pursuant to Section 2.02 of the
Indenture, the Company amended the terms of the Medium Term Notes to increase the
aggregate initial public offering price of the Medium Term Notes by an amount
not to exceed $20,000,000,000, for an aggregate total of $33,000,000,000, plus
any increases from time to time under Rule 462(b) under the General Rules and
Regulations under the Securities Act of 1933, as amended.

 

The
undersigned, C.E. Andrews, Executive Vice President, Finance, Accounting and
Risk Management, and Mary F. Eure, Vice President and Corporate Secretary of
the Company, hereby make this certificate in order to set forth the terms of
$75,000,000 aggregate principal amount of the Company’s CPI-Linked Medium Term
Notes, due January 16, 2018 ($25 Par), to be issued on January 17,
2006 (the “Notes”).

 

A.            The resolution of the Board of
Directors of the Company authorizing the issuance from time to time of the
Company’s Medium Term Notes is attached as Exhibit A to this
certificate.

 

B.            The terms of the Notes, including
the principal amount, maturity date, and method for calculating and paying
interest, are as set forth on the pricing supplement attached as Exhibit B
to this certificate.

 

C.            The Notes shall be evidenced by the
Medium Term Note, Series A, Master Note previously delivered to the
Trustee, a copy of which is attached as Exhibit C to this
certificate.

 

D.            Each of the undersigned (i) has
read Section 2.02 and other relevant provisions of the Indenture, (ii) has
examined documents and made inquiries of officers of the Company or its
affiliates in order to ascertain compliance with Section 2.02 of the
Indenture, (iii) is of the opinion that the signing officer has made such
examination and investigation as the signing officer deems necessary to enable
such officer to express an informed opinion as to whether the conditions of Section 2.02
of the Indenture have been complied with, and (iv) is of the opinion that
the requirements of Section 2.02 of the Indenture have been complied with.

 

IN
WITNESS WHEREOF, we have executed this certificate as of January 10, 2006.

 

 

	
  /s/ C. E. Andrews

  	
   

  	
  /s/ Mary F. Eure

  	
   

  
	
  C.
  E. Andrews

  	
  Mary
  F. Eure

  
	
  Executive
  Vice President

  	
  Vice
  President and Corporate Secretary

  
	
  Finance,
  Accounting and Risk Management

  	
  SLM
  Corporation

  
	
  SLM
  Corporation

  	
   

  

 

 

Exhibit A

 

USA Education, Inc.

Meeting of the Board of
Directors

May 10, 2001

 

5/01-2/1-2

 

RESOLUTIONS

 

(Pertaining to the Creation and Authorization of a Medium Term Note Program
or Programs)

 

WHEREAS,
the Board of Directors has determined that it is in the best interest of the
Corporation to develop alternative financing sources for origination and purchases
of education-related and other loans by its subsidiaries (other than the
Student Loan Marketing Association), repurchases of stock and other permitted
general corporate purposes;

 

NOW,
THEREFORE, BE IT RESOLVED, that the Corporation is hereby directed to explore
and develop a medium term note program or programs;

 

FURTHER
RESOLVED, that the Corporation and its subsidiaries (other than the Student
Loan Marketing Association) shall be authorized in connection with such medium
term note program or programs: (1) to issue and sell medium term notes,
including but not limited any debt (which may or may not be designated as a
medium term note) issued under a registration statement or debt exempt from
registration requirements, (2) to establish and borrow under credit,
letter of credit or other liquidity facilities or other credit enhancement, (3) to
use the proceeds of such medium term note issuances to repurchase the
Corporation’s common shares, originate and purchase education-related and other
loans, notes or other assets through subsidiaries (other than the Student Loan
Marketing Association), to make loans or advances to the Corporation’s
subsidiaries, or for other permitted general corporate purposes, (4) to
sell, transfer, pledge or otherwise encumber any and all of such student loans,
notes or other assets, (5) to execute and deliver all instruments and
agreements that may be necessary, appropriate or desirable (including, without
limitation, global securities definitive form certificates representing the
medium term notes, other forms of notes or evidences or debt, distribution
agreements, terms agreements, indentures, credit enhancement or liquidity
facility agreements and any other agreements with administrative or
distribution agents, ratings agencies, placement agents, underwriters, trustees
or other agents), (6) to file one or more registration statements on Form S-3
and any pre- or post- effective amendment thereto with the Securities and
Exchange Commission with regard to the securities described herein, and (7) to
take all other actions and to do all other things necessary, appropriate or
desirable in connection with and to accomplish the foregoing;

 

FURTHER RESOLVED, that in
furtherance of the development and establishment of such a program or programs,
the Chief Executive Officer, any Executive Vice President, the Chief Financial
Officer or any one of their respective designees (collectively, the “Authorized
Officers”) are authorized to take or cause to be taken any and all such actions
as such officer or officers may deem necessary or desirable to carry out the
purpose and intent of the forgoing resolutions, and any and all actions
heretofore taken by any one or more of such Authorized Officers in connection
with the transactions contemplated herein are hereby ratified, approved and
confirmed.

 

 

Exhibit B

 

	
  Pricing
  Supplement No. 8 dated January 12, 2006

  	
   

  	
  Filed under Rule 424(b)(5)

  
	
  (to Prospectus
  dated January 5, 2005

  	
   

  	
   File No. 333-107132

  
	
  and
  Prospectus Supplement dated June 9, 2005)

  	
   

  	
   

  

 

SLM Corporation

Medium Term
Notes, Series A

CPI-Linked Notes due January 16, 2018 ($25 Par)

 

	
  Principal Amount:

  	
  $75,000,000

  	
  Floating Rate Notes:   ý

  	
  Fixed Rate Notes:         o

  	
  Other:              o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Original Issue Date:

  	
  January 17, 2006

  	
  Closing Date:          January 17,
  2006

  	
  CUSIP Number:  78442P 60 1

  
	
   

  	
   

  	
   

  	
   

  
	
  Maturity Date:

  	
  January 16, 2018

  	
  Option to Extend Maturity:     ý     No

  	
  Specified Currency:  U.S. Dollars

  
						

 

Interest
Rate Applicable to the Notes:

 

The Interest
Rate for the Interest Period beginning on the Closing Date will be 6.398%.  Beginning February 15, 2006, the Interest
Rate on the Notes will be adjusted monthly and will be linked to changes in the
Consumer Price Index.  The Interest Rate
for the Notes for each month thereafter will be a rate determined as of the
applicable Interest Determination Date pursuant to the following formula:

 

[(CPIt
– CPIt-12) / CPIt-12] + Spread

 

Where:

 

CPIt = Current Index Level of CPI (as defined below), as reported on
Bloomberg CPURNSA;

 

CPIt-12
= Index Level of CPI 12 months prior to CPIt;; and

 

Spread
=  2.05%.

 

In no case,
however, will the Interest Rate for the Notes be less than the Minimum Interest
Rate, which will be 0.00%.

 

We
will apply to list the Notes on the New York Stock Exchange.  For additional information, see “Listing
Information” on page 3 of this Pricing Supplement.

 

Investing
in the Notes involves a number of risks. 
Before you invest, you should read this entire Pricing Supplement and
the attached prospectus and prospectus supplement.  In particular, you should read the “Risk
Factors” beginning on page 6 of this Pricing Supplement and make certain
that the Notes are a suitable investment for you.

 

Obligations of SLM Corporation and its subsidiaries
are not guaranteed by the full faith and credit of the United States of
America. Neither SLM Corporation nor any of its subsidiaries is a government-sponsored
enterprise or an instrumentality of the United States of America.

 

	
  Merrill Lynch & Co.

  	
   

  	
  Morgan Stanley

  	
   

  	
  Wachovia Securities

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Joint Book-Running Managers

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  January 12, 2006

  	
   

  	
   

  

 

 

	
  Index Maturity:

  	
   

  	
  Not Applicable.

  
	
   

  	
   

  	
   

  
	
  Interest Payment Date(s):

  	
   

  	
  February 15, 2006, the 15th
  of each month thereafter occurring prior to January 2018 and during January
  2018, the Maturity Date.  If the 15th
  of a month or the Maturity Date is not a Business Day, we will pay the
  interest on the next Business Day.  No
  interest will accrue on that payment for the period from and after the
  original Interest Payment Date to the date we make the payment.

  
	
   

  	
   

  	
   

  
	
  Interest Period(s):

  	
   

  	
  Interest will accrue from
  the 15th of each month (or the Original Issue Date, in the case of
  the first Interest Period) to but excluding the 15th of the
  following month (or the Maturity Date, in the case of the last Interest
  Period).

  
	
   

  	
   

  	
   

  
	
  Interest Rate Reset
  Period:

  	
   

  	
  Monthly, beginning
  February 15, 2006.

  
	
   

  	
   

  	
   

  
	
  Spread:

  	
   

  	
  2.05%.

  
	
   

  	
   

  	
   

  
	
  Minimum Interest Rate:

  	
   

  	
  0.00%.

  
	
   

  	
   

  	
   

  
	
  Maximum Interest Rate:

  	
   

  	
  Not Applicable.

  
	
   

  	
   

  	
   

  
	
  Reset Date(s):

  	
   

  	
  The 15th of each month
  during the term of the Notes, beginning February 15, 2006, with no
  adjustment, and provided that there will be no Reset Date in January 2018.

  
	
   

  	
   

  	
   

  
	
  Interest Determination
  Date(s):

  	
   

  	
  Each Reset Date.

  
	
   

  	
   

  	
   

  
	
  Redeemable at the option
  of the Company:

  	
   

  	
  ý

  	
  No

  	
  Redemption Price:

  	
  Not Applicable.

  
	
   

  	
   

  	
  o

  	
  Yes

  	
  Redemption Dates:

  	
  Not Applicable.

  
	
  Repayment at the option of
  the Holder:

  	
   

  	
  ý

  	
  No

  	
  Repayment Price:

  	
  Not Applicable.

  
	
   

  	
   

  	
  o

  	
  Yes

  	
  Repayment Dates:

  	
  Not Applicable.

  

 

	
  Day Count Convention:

  	
   

  	
  Actual/Actual.

  
	
   

  	
   

  	
   

  
	
  Form:

  	
   

  	
  DTC Book-entry.

  
	
   

  	
   

  	
   

  
	
  Denominations:

  	
   

  	
  $25 and integral multiples
  thereof.

  
	
   

  	
   

  	
   

  
	
  CUSIP Number:

  	
   

  	
  78442P 60 1.

  
	
   

  	
   

  	
   

  
	
  ISIN Number:

  	
   

  	
  US78442P6016.

  
	
   

  	
   

  	
   

  
	
  Issue Price:

  	
   

  	
  100.00%.

  
	
   

  	
   

  	
   

  
	
  Agents’ Discount:

  	
   

  	
  2.50%.

  
	
   

  	
   

  	
   

  
	
  Net Proceeds:

  	
   

  	
  $73,125,000.

  
	
   

  	
   

  	
   

  
	
  Concession:

  	
   

  	
  2.00%.

  
	
   

  	
   

  	
   

  
	
  Reallowance:

  	
   

  	
  N/A.

  
	
   

  	
   

  	
   

  
	
  Calculation Agent:

  	
   

  	
  SLM Corporation.

  
	
   

  	
   

  	
   

  
	
  Trustee:

  	
   

  	
  JPMorgan Chase Bank,
  National Association, formerly known as JPMorgan Chase Bank and The Chase
  Manhattan Bank.

  

 

2

 

	
  Underwriting:

  	
   

  	
  We have agreed to sell to
  the agents named below (for whom Wachovia Capital Markets, LLC is acting as
  representative), and each of the agents has severally agreed to purchase from
  us, the respective principal amount of the Notes set forth opposite its name
  below:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Principal Amount

  	
   

  
	
   

  	
   

  	
  Agents

  	
   

  	
  of Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce,
  Fenner & Smith Incorporated

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
  Morgan Stanley &
  Co. Incorporated

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
  Wachovia Capital Markets,
  LLC

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
   

  	
   

  	
   

  
	
  Listing Information:

  	
   

  	
  Prior to this offering, there
  has been no public market for the Notes. We will apply to list the Notes on
  the New York Stock Exchange, which we refer to as the NYSE in this Pricing
  Supplement. While we expect the Notes to be approved for listing on the NYSE,
  subject to official notice of issuance, we cannot assure you that the
  application will be granted. If the listing is accepted, we expect trading of
  the Notes on that exchange to begin within 30 days of the Closing Date, which
  is January 17, 2006.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Wachovia Capital Markets,
  LLC has advised us that they intend to make a market in the Notes prior to
  the commencement of trading on the NYSE. However, Wachovia Capital Markets,
  LLC will have no obligation to make a market in the Notes and may cease market
  making activities, if commenced, at any time.

  
	
   

  	
   

  	
   

  
	
  Trading Characteristics:

  	
   

  	
  The Notes are expected to
  trade at a price that takes into account the value, if any, of accrued but
  unpaid interest. Therefore, purchasers will not pay and sellers will not
  receive accrued and unpaid interest with respect to the Notes that is not
  included in the trading price thereof. Any portion of the trading price of a
  Note received that is attributable to accrued interest will be treated as
  ordinary interest income for federal income tax purposes and will not be
  treated as part of the amount realized for purposes of determining gain or loss
  on the disposition of that Note.

  
	
   

  	
   

  	
  The trading price of the
  Notes is likely to be sensitive to the level of interest rates generally. If
  interest rates rise in general, the trading price of the Notes may decline to
  reflect the additional yield requirements of the purchasers. Conversely, a
  decline in interest rates may increase the trading price of the Notes.

  

 

An affiliate
of one of the agents has entered into a swap transaction in connection with the
Notes.  We will receive compensation from
that transaction, including a fee payable by that affiliate to us, on or before
the Closing Date.

 

HOW IS THE INTEREST RATE CALCULATED FOR THE NOTES?

 

Beginning on February 15,
2006, the interest rate on the Notes will be adjusted monthly and will be
linked to changes in the CPI (as defined below). For each such Interest Period,
the interest rate will be the rate determined as of the applicable Interest
Determination Date pursuant to the following formula:

 

[(CPIt – CPIt-12) / CPIt-12] + Spread

 

	
  Where:

  	
   

  
	
   

  	
  CPIt = Current
  Index Level of CPI, as reported on Bloomberg CPURNSA;

  
	
   

  	
   

  
	
   

  	
  CPIt-12 = Index
  Level of CPI 12 months prior to CPIt; and

  
	
   

  	
   

  
	
   

  	
  Spread = 2.05%.

  

 

3

 

In no case, however, will
the interest rate for the Notes be less than the Minimum Interest Rate, which
is 0.00%.

 

CPIt for any
Reset Date is the CPI for the
third calendar month prior to that Reset Date as published and reported in the
second calendar month prior to that Reset Date or as otherwise determined as
described in this Pricing Supplement. 
For example, for the Interest Period from and including February 15,
2006 to and including March 14,
2006, CPIt will be the CPI for November 2005 and CPIt-12
will be the CPI for November 2004. 
The CPI for November 2005 was published by BLS (as defined below)
and reported on Bloomberg CPURNSA in December 2005 and the CPI for November 2004
was published and reported in December 2004.

 

All values used in the
interest rate formula for the Notes will be rounded to the nearest fifth
decimal place (one-one hundred thousandth of a percentage point), rounding
upwards if the sixth decimal place is five or greater (e.g., 9.876555% (or
..09876555) would be rounded up to 9.87656% (or .0987656) and 9.876554% (or .09876554) would be
rounded down to 9.87655% (or .0987655)). 
All percentages resulting from any calculation of the interest rate will
be rounded to the nearest third decimal place (one thousandth of a percentage
point), rounding upwards if the fourth decimal place is five or greater (e.g.,
9.8765% (or .098765) would be rounded up to 9.877% (or .09877) and 9.8764% (or .098764) would be rounded
down to 9.876% (or .09876)).  All dollar
amounts used in or resulting from such calculation on the Notes will be rounded
to the nearest cent (with one-half cent being rounded upward).

 

WHO PUBLISHES THE CONSUMER PRICE INDEX AND WHAT DOES IT MEASURE?

 

The Consumer Price Index,
for purposes of the Notes, is the non-seasonally adjusted U.S. City Average All
Items Consumer Price Index for All Urban Consumers (the “CPI”), published
monthly by the Bureau of Labor Statistics of the U.S. Department of Labor (the “BLS”)
and reported on Bloomberg CPURNSA or any successor service.  The BLS makes almost all Consumer Price Index
data publicly available.  This
information may be accessed electronically on the BLS home page on the
internet at http://www.bls.gov/cpi/. The CPI for a particular month is
published during the following month.

 

According to publicly
available information provided by the BLS, the CPI is a measure of the average
change in consumer prices over time for a fixed market basket of goods and
services, including food, clothing, shelter, fuels, transportation, drugs and
charges for the services of doctors and dentists.  User fees (such as water and sewer service)
and sales and excise taxes paid by the consumer are also included.  Income taxes and investment items such as
stocks, bonds and life insurance are not included.  In calculating the index, price changes for
the various items are averaged together with weights that represent their
importance in the spending of urban households in the United States.

 

The contents of the market
basket of goods and services and the weights assigned to the various items are
updated periodically by the BLS to take into account changes in consumer
spending patterns.  The CPI is expressed
in relative terms in relation to a time base reference period for which the
level is set at 100.0.  The base
reference period for the Notes is the 1982-1984 average.

 

HOW HAS THE CONSUMER PRICE INDEX PERFORMED HISTORICALLY?

 

The following table sets
forth the value of the CPI from January 1998 to November 2005, as
published by the BLS and reported on Bloomberg CPURNSA:

 

	
  MONTH

  	
   

  	
  2005

  	
   

  	
  2004

  	
   

  	
  2003

  	
   

  	
  2002

  	
   

  	
  2001

  	
   

  	
  2000

  	
   

  	
  1999

  	
   

  	
  1998

  	
   

  
	
  January

  	
   

  	
  190.7

  	
   

  	
  185.2

  	
   

  	
  181.7

  	
   

  	
  177.1

  	
   

  	
  175.1

  	
   

  	
  168.8

  	
   

  	
  164.3

  	
   

  	
  161.6

  	
   

  
	
  February

  	
   

  	
  191.8

  	
   

  	
  186.2

  	
   

  	
  183.1

  	
   

  	
  177.8

  	
   

  	
  175.8

  	
   

  	
  169.8

  	
   

  	
  164.5

  	
   

  	
  161.9

  	
   

  
	
  March

  	
   

  	
  193.3

  	
   

  	
  187.4

  	
   

  	
  184.2

  	
   

  	
  178.8

  	
   

  	
  176.2

  	
   

  	
  171.2

  	
   

  	
  165.0

  	
   

  	
  162.2

  	
   

  
	
  April

  	
   

  	
  194.6

  	
   

  	
  188.0

  	
   

  	
  183.8

  	
   

  	
  179.8

  	
   

  	
  176.9

  	
   

  	
  171.3

  	
   

  	
  166.2

  	
   

  	
  162.5

  	
   

  
	
  May

  	
   

  	
  194.4

  	
   

  	
  189.1

  	
   

  	
  183.5

  	
   

  	
  179.8

  	
   

  	
  177.7

  	
   

  	
  171.5

  	
   

  	
  166.2

  	
   

  	
  162.8

  	
   

  
	
  June

  	
   

  	
  194.5

  	
   

  	
  189.7

  	
   

  	
  183.7

  	
   

  	
  179.9

  	
   

  	
  178.0

  	
   

  	
  172.4

  	
   

  	
  166.2

  	
   

  	
  163.0

  	
   

  
	
  July

  	
   

  	
  195.4

  	
   

  	
  189.4

  	
   

  	
  183.9

  	
   

  	
  180.1

  	
   

  	
  177.5

  	
   

  	
  172.8

  	
   

  	
  166.7

  	
   

  	
  163.2

  	
   

  
	
  August

  	
   

  	
  196.4

  	
   

  	
  189.5

  	
   

  	
  184.6

  	
   

  	
  180.7

  	
   

  	
  177.5

  	
   

  	
  172.8

  	
   

  	
  167.1

  	
   

  	
  163.4

  	
   

  
	
  September

  	
   

  	
  198.8

  	
   

  	
  189.9

  	
   

  	
  185.2

  	
   

  	
  181.0

  	
   

  	
  178.3

  	
   

  	
  173.7

  	
   

  	
  167.9

  	
   

  	
  163.6

  	
   

  
	
  October

  	
   

  	
  199.2

  	
   

  	
  190.9

  	
   

  	
  185.0

  	
   

  	
  181.3

  	
   

  	
  177.7

  	
   

  	
  174.0

  	
   

  	
  168.2

  	
   

  	
  164.0

  	
   

  
	
  November

  	
   

  	
  197.6

  	
   

  	
  191.0

  	
   

  	
  184.5

  	
   

  	
  181.3

  	
   

  	
  177.4

  	
   

  	
  174.1

  	
   

  	
  168.3

  	
   

  	
  164.0

  	
   

  
	
  December

  	
   

  	
   

  	
   

  	
  190.3

  	
   

  	
  184.3

  	
   

  	
  180.9

  	
   

  	
  176.7

  	
   

  	
  174.0

  	
   

  	
  168.3

  	
   

  	
  163.9

  	
   

  

 

4

 

This historical data is
presented for information purposes only. 
Movements in the CPI that have occurred in the past are not necessarily
indicative of changes that may occur in the future.  Actual changes in the CPI may be less than or
greater than those that have occurred in the past.

 

WHAT IF THE CONSUMER PRICE INDEX IS NOT REPORTED OR IS REVISED, REBASED
OR DISCONTINUED?

 

If the CPI is not reported
on Bloomberg CPURNSA for a particular month by 3:00 PM on an Interest
Determination Date, but has otherwise been published by the BLS, SLM
Corporation, in its capacity as the calculation agent, will determine the CPI
as published by the BLS for such month using a source it deems appropriate.

 

In determining the final CPI
reference value used to determine the interest rate on each applicable Interest
Determination Date, the Calculation Agent will use the most recently available
value of the CPI for the relevant month, even if such value has been adjusted
from a prior reported value for that month. 
In contrast, the initial CPI reference value for each Interest
Determination Date will always be the final CPI reference value for the
preceding Interest Determination Date, even if such value has been adjusted
since that preceding Interest Determination Date.  For the first Interest Determination Date in February 2006,
the initial CPI reference values will be 197.6, the CPI level for November 2005
and 191.0, the CPI level for November 2004.  If the CPI level for either of these dates
are adjusted after the date of this Pricing Supplement, the interest rate
determined on the first Interest Determination Date will not be revised, and in
the case of a subsequent downward adjustment in the CPI, you will not receive
any additional interest on the first Interest Payment Date or any other
Interest Payment Date.

 

The BLS occasionally rebases
the CPI.  The CPI was last rebased in January 1988.  The current standard reference base period is
1982-1984 = 100.  Prior to the release of
the CPI for January 1988, the standard reference base was 1967 = 100.  If the BLS changes the base reference period
of the CPI during the time the notes are outstanding, the Calculation Agent
will continue to calculate the increase or decrease in the CPI using the
existing base year of 1982-1984 as long as the old CPI is still published.  The conversion to the new reference base does
not affect the measurement of the percentage change in a given index series
from one point in time to another, except for rounding differences.  Thus rebasing might affect the published “headline”
number often quoted by the financial press , however, the inflation calculation
for the Notes should not be adversely affected by any such rebasing because
changes in the old-based CPI can be calculated by using the percentage changes
of the new rebased CPI.

 

If the old-based CPI is not
published, the Calculation Agent will calculate inflation using the new based
CPI.  However, as stated above, the
conversion to a new reference base does not affect the measurement of the percentage
changes in a given index series from one time period to another, except for
rounding differences.

 

If, while the Notes are
outstanding, the CPI is discontinued or, if in the opinion of the BLS, as
evidenced by a public release, the CPI is substantially altered, the Calculation
Agent will determine the interest rate on the Notes by reference to a
substitute index.  The Calculation Agent
will determine the substitute index, in its sole discretion, by a computation
methodology that the Calculation Agent determines will as closely as reasonably
possible replicate the CPI or is another methodology which is in accordance
with general market practice at the time. 
In doing this, the Calculation Agent may (but is not required to) determine
the substitute index by selecting any substitute index that is chosen by the
Secretary of the Treasury for the Department of The Treasury’s Inflation-Linked
Treasuries, as described at 62 Federal Register 846-874 (January 6, 1997).

 

5

 

RISK FACTORS

 

The Notes are subject to
special considerations.  An investment in
securities indexed to the consumer price index entails significant risks that
are not associated with similar investments in conventional floating rate or
fixed-rate debt securities.  Accordingly,
prospective investors should consult their financial and legal advisors as to
the risks entailed by an investment in consumer price indexed-linked notes and
the suitability of the Notes in light of their particular circumstances.

 

	
  THE
  INTEREST RATE ON THE NOTES MAY, IN SOME CASES, BE ZERO.

  	
   

  	
  Interest payable on the
  Notes is linked to changes in the level of the CPI during twelve-month
  measurement periods.

  
	
   

  	
   

  	
  If the CPI does not
  increase during a measurement period, which is likely to occur when there is
  little or no inflation, owners of the Notes will receive interest payments
  for that interest period equal to the Spread, which is 2.05%.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If the CPI decreases
  during a relevant measurement period, which is likely to occur when there is
  deflation, owners of the Notes will receive interest payments for that
  interest period less than the Spread. 
  In some cases, owners of the Notes could receive only the Minimum
  Interest Rate, which is 0.00%.

  
	
   

  	
   

  	
   

  
	
  THE
  INTEREST RATE ON THE NOTES MAY BE BELOW THE RATE OTHERWISE PAYABLE ON SIMILAR
  FIXED OR FLOATING RATE DEBT SECURITIES.

  	
   

  	
  The interest rate on the
  Notes, including the Minimum Interest Rate, may be below what we would
  currently pay if we issued non-callable senior debt securities with a fixed
  or floating rate and similar maturity to that of the Notes. Any interest
  payable in excess of the Minimum Interest Rate on the Notes will be based
  upon the difference in the level of the CPI determined as of the measurement
  dates specified in the formula listed above, plus the Spread.

  
	
   

  	
   

  	
   

  
	
  THE
  HISTORICAL LEVELS OF THE CPI ARE NOT AN INDICATION OF THE FUTURE LEVELS OF
  THE CPI AND THOSE LEVELS MAY CHANGE SUBSTANTIALLY.

  	
   

  	
  Holders of the Notes will
  receive interest payments that will be affected by changes in the CPI. Such
  changes may be significant. Changes in the CPI are a function of the changes
  in specified consumer prices over time, which result from the interaction of
  many factors over which we have no control.

  

  The historical levels of the CPI are not an indication of the future levels
  of the CPI during the term of the Notes. In the past, the CPI has experienced
  periods of volatility, sometimes even on a monthly basis. This volatility may
  occur in the future. Fluctuations and trends in the CPI that have occurred in
  the past are not necessarily indicative, however, of fluctuations that may
  occur in the future.

  
	
   

  	
   

  	
   

  
	
  THE
  INTEREST RATE IS BASED UPON THE CPI. THE CPI ITSELF AND THE WAY THE BLS
  CALCULATES THE CPI MAY CHANGE IN THE FUTURE OR THE CPI MAY NO
  LONGER BE PUBLISHED.

  	
   

  	
  There can be no assurance
  that the BLS will not change the method by which it calculates the CPI. In
  addition, changes in the way the CPI is calculated could reduce the level of
  the CPI and lower the interest payments with respect to the Notes. Accordingly,
  the amount of interest, if any, payable on the Notes, and therefore the value
  of the Notes, may be significantly reduced. If the CPI is substantially
  altered (as determined in the sole discretion of the Calculation Agent), a
  substitute index will be employed to calculate the interest payable on the
  Notes.

  

 

6

 

ADDITIONAL UNITED STATES FEDERAL

INCOME TAX CONSIDERATIONS

 

Set forth below is a summary
of some U.S. federal income tax considerations relevant to the beneficial owner
of the Notes that is a U.S. holder (as defined in the accompanying Prospectus
Supplement). This summary does not address investors that may be subject to
special tax rules or investors that hold the Notes as part of an integrated
investment. This summary supplements the discussion contained in the
accompanying Prospectus Supplement under the heading “United States Federal
Taxation.”

 

We intend to treat the Notes
as “variable rate debt instruments” for U.S. federal income tax purposes.
Assuming the Notes are so treated, under the Treasury regulations governing
variable rate debt instruments that bear interest that is unconditionally
payable at least annually at a single objective rate, payments of interest on
the Notes will be taxable to a U.S. holder as ordinary interest income at the
time that such payments are accrued or received, in accordance with the U.S.
holder’s method of tax accounting. In the case of a U.S. holder that uses the
accrual method of tax accounting, the amount of interest accrued during an
accrual period will be determined by assuming that the Notes bear interest at a
fixed interest rate that reflects the yield that is reasonably expected for the
Notes, and the interest allocable to the accrual period will be adjusted to
reflect the interest actually paid during the accrual period. A U.S. holder may
submit a written request to the address set forth under “Where You Can Find
More Information” in the accompanying Prospectus Supplement to obtain the “reasonably
expected” rate for the Notes. Assuming the Notes are treated as variable rate
debt instruments, upon the disposition of a Note by sale, exchange, redemption,
or repayment of principal at maturity, a U.S. holder will generally recognize
taxable gain or loss equal to the difference between the amount realized on the
disposition (other than amounts attributable to accrued interest) and the U.S.
holder’s adjusted tax basis in the Notes. Prospective investors should consult
the discussion under the heading “United States Federal Taxation – Tax
Consequences to U.S. Holders – Variable Rate Notes” and “United States Federal
Taxation – Tax Consequences to U.S. Holders – Sale, Exchange or Retirement of
the Notes” in the accompanying Prospectus Supplement.

 

Alternatively, it is
possible that the Notes could be treated as “contingent payment debt
instruments” (“CPDI”) for U.S. federal income tax purposes. Under the CPDI
rules, a U.S. holder would be required to include in income each year an
accrual of interest at the “comparable yield” for the Notes (determined at the
time of issuance of the Notes) for a comparable non-contingent note issued by
us. To the extent the comparable yield were to exceed the interest actually
paid on a Note in any taxable year, a U.S. holder could recognize ordinary
interest income for that taxable year in excess of the cash actually paid on
the Note during that taxable year. In addition, any gain realized by a U.S.
holder on the sale or other taxable disposition of a Note (including as a
result of payments made at maturity) generally would be characterized as
ordinary income, rather than as capital gain.

 

THE PRECEDING DISCUSSION IS ONLY A SUMMARY OF CERTAIN
OF THE TAX IMPLICATIONS OF

AN INVESTMENT IN THE NOTES.  PROSPECTIVE
PURCHASERS ARE URGED TO CONSULT WITH

THEIR OWN TAX ADVISORS PRIOR TO INVESTING TO DETERMINE THE TAX IMPLICATIONS OF

SUCH AN INVESTMENT IN LIGHT OF SUCH INVESTOR’S PARTICULAR CIRCUMSTANCES.

 

7

 

SLM Corporation

 

 

Exhibit C

 

EXCEPT AS OTHERWISE PROVIDED
IN SECTION 2.15 OF THE INDENTURE, THIS MASTER NOTE MAY BE TRANSFERRED
IN WHOLE, BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE DEPOSITARY OR TO A
SUCCESSOR DEPOSITARY OR TO 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) TO THE ISSUER 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
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

USA EDUCATION, INC.

MEDIUM TERM NOTE, SERIES A

 

MASTER NOTE

 

	
  October 31, 2001

  	
   

  
	
  (Date
  of Issuance)

  	
   

  

 

USA
EDUCATION, INC., a corporation organized and existing under the laws of the
State of Delaware (the “Company”), for value received, hereby promises to pay
to CEDE & CO., or
registered assigns: (i) on each principal payment date, including each
amortization date, redemption date, repayment date, maturity date and extended
maturity date, as applicable, of each obligation
identified on the records of the Issuer (which records are maintained by The
Chase Manhattan Bank, in its capacity as paying agent (the “Paying Agent”)),
the principal amount then due and payable for each such obligation, and (ii) on
each interest payment date, if any, the interest then due and payable, on the
principal amount for each such obligation. Payment shall be made by wire
transfer of United States dollars to the registered owner, or in immediately
available funds or the equivalent to a party authorized by the registered owner
and in the currency other than United States dollars as provided for in each
such obligation, by the Paying Agent without the necessity and surrender of
this Master Note (the “Master Note”).

 

REFERENCE
IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS MASTER NOTE SET FORTH ON THE
REVERSE HEREOF AND TO THE TERMS OF THE PROSPECTUS SUPPLEMENT AND PRICING
SUPPLEMENT(S), WHICH ARE INCORPORATED HEREIN BY REFERENCE.

 

This
Master Note shall be governed by and construed in accordance with the laws of
the State of New York. This Master Note is a valid and binding obligation of
the Issuer.

 

 

Unless the
certificate of authentication hereon has been executed by The Chase Manhattan
Bank, the Trustee under the Indenture, or its successor thereunder by the
manual signature of one of its authorized signatories, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

Dated:
October 31, 2001

 

 

	
   

  	
  USA EDUCATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John F. Remondi

  	
   

  
	
   

  	
  Name: John F. Remondi

  
	
   

  	
  Title:
  Executive Vice President &

  Chief Financial Officer

  

 

 

	
   

  	
  By:

  	
  /s/ Mary F. Eure

  	
   

  
	
   

  	
  Name: Mary F. Eure

  
	
   

  	
  Title: Corporate Secretary

  

 

2

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes referred to in the
within-mentioned Indenture.

 

	
   

  	
  THE CHASE MANHATTAN BANK, as

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  

 

3

 

[Reverse of Note]

 

USA EDUCATION, INC.

 

MEDIUM TERM NOTES, SERIES A

 

MASTER NOTE

 

This Master Note is one of a duly authorized
issue of notes (the “Notes”) of the Company issued under the Indenture, dated
as of October 1, 2000 (the “Base Indenture”), as amended prior to the date
hereof (collectively, the “Indenture”), between the Company and The Chase
Manhattan Bank, as trustee (the “Trustee,” which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and limitations of rights thereunder of the Company, the Trustee and the
Holders of the Notes (the “Holders”), and the terms upon which the Securities
are, and are to be, authenticated and delivered. Capitalized terms used and not
otherwise defined in this Master Note have the meanings ascribed to them in the
Indenture.

 

The Trustee shall calculate the interest
payable hereon in accordance with the foregoing and will confirm in writing
such calculation to the Company and the Paying Agent (if other than the
Trustee) immediately after each determination. All determinations made by the
Trustee shall be, in the absence of manifest error, conclusive for all purposes
and binding on the Company and Holders.

 

If an Event of Default with respect to the Notes shall occur and be
continuing, the Trustee, by notice to the Company, or the Holders of at least
25% in principal amount of all of the outstanding Notes, by notice to the
Company and the Trustee, may declare the principal of all the Notes due and
payable in the manner and with the effect provided in the Indenture.

 

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 at any time by the Company and the
Trustee with the consent of the Holders of a majority in aggregate principal
amount of the Notes at the time outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Notes at the time outstanding, on behalf of the Holders
of all Notes, 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 Master Note shall be
conclusive and binding upon such Holder and upon future Holders of this Master
Note and of any Note issued upon the registration of transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Master Note.

 

Holders may not enforce their rights pursuant to the Indenture or the
Notes except as provided in the Indenture. No reference herein to the Indenture
and no provision of this Master Note or the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Master Note at the time, place, and rate, and
in the coin or currency, herein prescribed.

 

4

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