Document:

Exhibit 10.24

 

Sallie Mae Deferred Compensation
Plan for Key Employees

Restatement Effective January 1, 2005

 

ARTICLE 1. PURPOSE

 

Section 1.1. SLM
Corporation (formerly named SLM Holding Corporation and USA Education, Inc.)
offers the Sallie Mae Deferred Compensation Plan for Key Employees (the “Plan”)
to certain key employees for the purpose of planning for retirement and other
personal expenses on a tax-favored basis. 
The Plan became effective January 1, 1998 and is hereby
restated effective January 1, 2005.

 

ARTICLE 2. DEFINITIONS

 

Section 2.1 The
following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

 

Affiliate. “Affiliate”
means any firm, partnership, or corporation that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with the Company, provided such Affiliate is designated as such
by the Committee. “Affiliate” also includes any other organization similarly
related to the Company that is designated as such by the Committee.

 

Beneficiary. “Beneficiary”
means the person or persons designated as such in accordance with Section 13.3.

 

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

 

Bonus. “Bonus”
means any performance-based compensation earned pursuant to the SLM Corporation
Incentive Plan, any successor plan to the SLM Corporation Incentive Plan, and
any other performance-based compensation designated by the Committee as
eligible to be deferred pursuant hereto.

 

Bonus Deferral. “Bonus
Deferral” means that portion of Bonus which a Participant has made an election
to defer receipt of pursuant to the terms of this Plan.

 

Code. “Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

Committee. “Committee”
means the Sallie Mae Deferred Compensation Plan Committee.

 

Company. “Company”
means SLM Corporation and any Affiliate, unless the Affiliate has made an
affirmative election not to adopt the Plan. A Company may revoke its
participation in the Plan at any time, but until such revocation, all the
provisions of the Plan and amendments thereto shall apply to the Eligible
Employees of the Company. In the event a Company revokes its participation in
the Plan, the Plan shall be deemed terminated only with respect to such
Company.

 

Disabled.  Effective January 1, 2005, “Disabled”
has the meaning giving in section 409A of the Code.

 

Distribution Option. “Distribution
Option” means one of the two distribution options which are available under the
Plan, consisting of the Retirement Distribution Option and the In-Service
Distribution Option, both described in Section 7.

 

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Distribution Option Account. “Distribution
Option Account” or “Account” means the account or accounts established on
behalf of a Participant, on the books of the Company, pursuant to Section 5.1,
which shall be comprised of a Retirement Distribution Account and/or one or
more In-Service Distribution Accounts.

 

Distribution Option Period. “Distribution
Option Period” means, with respect to the In-Service Distribution Account only,
a period of five Plan Years for which an Eligible Employee elects, in the
Enrollment Agreement for the first such Plan Year, the time and manner of
payment of amounts credited to the Eligible Employee’s In-Service Distribution
Option Account for all Plan Years in the Distribution Option Period.

 

Earnings Crediting Options. “Earnings
Crediting Options” means the deemed investment options selected by the
Participant from time to time pursuant to which deemed earnings are credited to
the Participant’s Distribution Option Account.

 

Eligible Employee. “Eligible
Employee” means an Employee who is a member of the group of selected management
and/or highly compensated Employees of the Company and who is designated by the
Committee as eligible to participate in the Plan.

 

Employee. “Employee”
means any individual employed by the Company, in accordance with the personnel
policies and practices of the Company, including citizens of the United States
employed outside of their home country and resident aliens employed in the
United States; provided, however, that to qualify as an “Employee” for purposes
of the Plan, the individual must be a member of a group of “key management or
other highly compensated employees” within the meaning of Sections 201, 301,
and 401 of the Employee Retirement Income Security Act of 1974, as amended.

 

End Termination Date. “End
Termination Date” means the date of termination of a Participant’s Service with
the Company and its Affiliates and shall be determined without reference to any
compensation continuation arrangement or severance benefit arrangement that may
be applicable.

 

Enrollment Agreement. “Enrollment
Agreement” means the authorization form, in form and substance, satisfactory to
the Committee, which an Eligible Employee files in order to participate in the
Plan.

 

In-Service Distribution Account. “In-Service
Distribution Account” means the account maintained on behalf of a Participant
for each Distribution Option Period to which Salary and/or Bonus Deferrals are
credited, pursuant to the In-Service Distribution Option.

 

In-Service Distribution Option. “In-Service
Distribution Option” means the Distribution Option, pursuant to which benefits
are payable in accordance with Section 7.2.

 

Incentive Plan. “Incentive
Plan” means the SLM Corporation Incentive Plan adopted by the Company,
including any amendments thereto and any plan adopted in substitution or
replacement thereof, pursuant to which bonuses will be determined for certain
management employees.

 

Participant. “Participant”
means an Eligible Employee who has filed a complete Enrollment Agreement with
the Committee or its designee, in accordance with the provisions of Section 4,
and who is making Salary and/or Bonus Deferrals into the Plan. In the event
that the Participant becomes incompetent, the term shall mean his personal
representative or guardian, who shall have the rights of a Participant, except
the right to change the form and timing of the commencement of benefits elected
by the Participant on the Enrollment Agreement. In the event of the death of a
Participant, the term shall mean his Beneficiary, who shall have the rights of
a

 

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Participant, except the right to change the form
and timing of the commencement of benefits elected by the Participant on the
Enrollment Agreement. An individual shall remain a Participant until that
individual has received full distribution of any amount credited to the
Participant’s Account.

 

Plan. “Plan”
means this plan, called the Sallie Mae Deferred Compensation Plan for Key
Employees, as amended from time to time.

 

Plan Year. “Plan Year”
means the 12-month period beginning on each January 1 and ending on the
following December 31.

 

Retirement Distribution Account. “Retirement
Distribution Account” means the account maintained on behalf of a Participant
to which Salary and/or Bonus Deferrals and Supplemental Company Contributions
are credited, pursuant to the Retirement Distribution Option.

 

Retirement Distribution Option. “Retirement
Distribution Option” means the Distribution Option, pursuant to which benefits
are payable in accordance with Section 7.1.

 

Salary. “Salary”
means the total amount of cash remuneration paid by the Company to an Eligible
Employee for any calendar year of employment as base salary and/or severance
payments, including the Participant’s contributions of Salary under this Plan,
any elective deferrals, as defined in section 402(g) of the Code, and
any compensation contributed on behalf of an Eligible Employee to any cafeteria
plan, as defined in section 125 of the Code, maintained by the Company or
an Affiliate, but not taking into account any Company contributions to a
defined benefit plan or supplemental defined benefit plan, any fringe benefits,
moving and relocation expenses and other forms of welfare benefits.

 

Salary Deferral. “Salary
Deferral” means that portion of Salary as to which a Participant has made an
annual election to defer receipt of, pursuant to the terms of this Plan.

 

Sallie Mae. “Sallie
Mae” means SLM Corporation

 

Service. “Service”
means the period of time during which an employment relationship exists between
an Employee and the Company, including any period during which the Employee is
on an approved leave of absence, whether paid or unpaid. “Service” also
includes employment with an Affiliate if an Employee transfers directly between
the Company and the Affiliate.

 

Supplemental Company
Contributions. “Supplemental Company Contributions”
means those contributions made by the Company and credited to the Retirement
Distribution Account of certain Participants, pursuant to Section 4.4.

 

Valuation Date. “Valuation
Date” means the last day of any Plan Year and any other date selected by the
Committee.

 

ARTICLE 3. 
ADMINISTRATION OF THE PLAN AND DISCRETION

 

Section 3.1. The
Committee shall have full power and authority to interpret the Plan, to
prescribe, amend and rescind any rules, forms and procedures as it deems necessary
or appropriate for the proper administration of the Plan, and to make any other
determinations and to take any other actions as it deems necessary or advisable
in carrying out its duties under the Plan. All action taken by the Committee
arising out of, or in connection with, the administration of the Plan or any rules adopted
thereunder, shall, in each case lie within its sole discretion, and shall be
final, conclusive and binding upon any Company, the Board, all Employees, all
Beneficiaries of Employees and all persons and entities having an interest
therein. Notwithstanding any provision in this Plan to the contrary, the
Committee shall have no authority to take any action or make any

 

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decision which impacts solely on the Plan
benefits of the members of the Committee. In addition, no member of the
Committee shall have authority to take action or make any decision which
impacts solely on the Plan benefits of the member of the Committee.

 

Section 3.2. Members of
the Committee shall serve without compensation for their services unless
otherwise determined by the Board. All expenses of administering the Plan shall
be paid by the Company.

 

Section 3.3. Sallie Mae
shall indemnify and hold harmless each member of the Committee from any and all
claims, losses, damages, expenses (including counsel fees) and liability
(including any amounts paid in settlement of any claim or any other matter with
the consent of the Board) arising from any act or omission of such member,
except when the same is due to gross negligence or willful misconduct.

 

Section 3.4. Any
decisions, actions or interpretations to be made under the Plan by the
Committee shall be made in its respective sole discretion, not as a fiduciary,
and need not be uniformly applied to similarly situated individuals and shall
be final, binding and conclusive on all persons interested in the Plan.

 

ARTICLE 4. PARTICIPATION

 

Section 4.1. Election
to Participate: Salary Deferrals.    Annually,
all Eligible Employees will be offered the opportunity to defer Salary to be
earned in the following Plan Year. Any Eligible Employee may enroll in the
Plan, effective as of the first day of a Plan Year, by filing a complete and
fully executed Enrollment Agreement with Sallie Mae’s Human Resources
Department or a Plan administrator selected by Sallie Mae by a date established
by the Committee, but in no event later than the last day of the preceding Plan
Year. Pursuant to said Enrollment Agreement, the Eligible Employee shall elect (a) the
percentage of Salary to be deferred (pursuant to payroll reduction, and after
required payroll taxes have been deducted), such percentage to be stated as a
whole number, and (b) the Distribution Option applicable to such Salary
Deferrals. A Participant shall allocate his or her Salary Deferrals between the
Distribution Options in increments of ten percent, provided, however, that 100
percent of such deferrals may be allocated to one or the other of the
Distribution Options.

 

The Committee may establish
minimum or maximum amounts that may be deferred under this Section and may
change such standards from time to time. Any such limits shall be communicated
by Sallie Mae to the Eligible Employees prior to the commencement of a Plan
Year.

 

Once a Participant files
an Enrollment Agreement with respect to Salary to be earned in the subsequent
Plan Year, he may not change the percentage of Salary to be deferred or the
allocation of such deferrals between the Distribution Options, except that he
may file an election to suspend Salary Deferrals. Any such election to suspend
Salary Deferrals shall be effective with respect to the first pay period that
begins at least 30 days following the date on which such request to suspend
Salary Deferrals is received by Sallie Mae’s Human Resources Department or the
Plan administrator selected by Sallie Mae. Any suspension shall be effective
for the remainder of the Plan Year.

 

Section 4.2. Election
to Participate: Bonus Deferrals. Annually, all Eligible Employees will be
offered the opportunity to defer Bonus earned in such Plan Year and payable in
the following Plan Year. An Enrollment Agreement to make such Bonus Deferrals
must be filed by such date established by the Committee, but in no event later
than the last day of the second quarter of the Plan Year in which such Bonus is
earned. Pursuant to said Enrollment Agreement, the Eligible Employee shall
elect (a) the percentage of Bonus to be deferred (pursuant to payroll
reduction, and after required payroll taxes have been deducted), such
percentage to be stated as a whole

 

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number, and (b) the Distribution Option
applicable to such Bonus Deferrals. A Participant shall allocate his or her
Bonus Deferrals between the Distribution Options in increments of ten percent,
provided, however, that 100 percent of such deferrals may be allocated to one
or the other of the Distribution Options.

 

The Committee may
establish minimum or maximum amounts that may be deferred under this Section and
may change such standards from time to time. Any such limits shall be
communicated by Sallie Mae to the Eligible Employees prior to the commencement
of a Plan Year.

 

Once a Participant files
an Enrollment Agreement with respect to Bonus earned in the Plan Year, he may
not change the percentage of Bonus to be deferred or the allocation of such
deferrals between the Distribution Options.

 

Section 4.3. Newly
Eligible Employees. The Committee may, in its discretion, permit Employees
who first become Eligible Employees after the beginning of a Plan Year to
enroll in the Plan for that Plan Year by filing a complete and fully executed
Enrollment Agreement, in accordance with Sections 4.1 and 4.2, as soon as
practicable following the date the Employee becomes an Eligible Employee but,
in no event later than 30 days after such date. Any election by an Eligible
Employee, pursuant to this Section, to defer Salary shall apply only to such
amounts as are earned by the Eligible Employee after the date on which such
Enrollment Agreement is filed. Notwithstanding anything in this Section to
the contrary, a newly Eligible Employee shall not be eligible to elect to defer
any Bonus earned in the Plan Year in which he first becomes an Eligible
Employee, if he becomes an Eligible Employee after June 30 of the Plan
Year.

 

Section 4.4. Supplemental
Company Contributions. The Company may make a Supplemental Company
Contribution, if necessary, to make up for any contributions under a Sallie Mae
401(k) Savings Plan and the Retirement Plan that a Participant would have
received in such plans if he had not elected to make Salary Deferrals or Bonus
Deferrals pursuant to the terms of this Plan. Any Supplemental Company
Contribution shall be credited to the Retirement Distribution Account.

 

Section 4.5. Transfers
from Other Plans of Deferred Compensation. The Company may credit an
Eligible Employee with an amount under this Plan equal to the amount credited
under a prior plan of deferred compensation maintained by the Company or its predecessor
on behalf of a selected group of management and highly compensated employees.
Any such amount shall be credited to the Retirement Distribution Account.

 

ARTICLE 5. DISTRIBUTION OPTION ACCOUNTS

 

Section 5.1. Distribution
Option Accounts. The Committee shall establish on its books a hypothetical
account for a Participant. This account shall be referred to as the
Distribution Option Account. Each Distribution Option Account shall be
comprised of one or more sub-accounts. One sub-account shall be referred to as
the Retirement Distribution Account. Generally, the distribution of amounts
credited to the Retirement Distribution Account shall be subject to Section 7.1.
The other sub-accounts shall be referred to as In-Service Distribution
Accounts. One In-Service Distribution Account shall be established for each
five-year Distribution Option Period. Supplemental Company Contributions, when
credited, are credited only to the Retirement Distribution Account.

 

Section 5.2. Earnings
on Distribution Option Accounts. A Participant’s Distribution Option
Account shall be credited with earnings in accordance with the Earnings
Crediting Options, elected by the Participant from time to time, until such
Account is fully distributed. Participants may allocate their Retirement
Distribution Account and/or each of their In-Service Distribution Accounts
among the Earnings Crediting Options available under the Plan only in
accordance with

 

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rules and procedures adopted by the
Committee. The deemed rate of return, positive or negative, credited under each
Earnings Crediting Option is based upon the actual investment performance of
such Earnings Crediting Option, and shall equal the total return of such
Earnings Crediting Option, net of asset based charges, including, without
limitation, money management fees, fund expenses and mortality and expense risk
insurance contract charges. The Company reserves the right, on a prospective
basis, to add or delete Earnings Crediting Options.

 

Section 5.3. Earnings
Crediting Options. Notwithstanding that the rates of return credited to
Participants’ Distribution Option Accounts under the Earnings Crediting Options
are based upon the actual performance of the Earnings Crediting Options, the Company
shall not be obligated to invest any Salary or Bonus Deferrals, Supplemental
Company Contributions, or any other amounts, in such Earnings Crediting
Options.

 

Section 5.4. Changes
in Earnings Crediting Options. 
Subject to limitations set forth in Section 12, a Participant may
change the Earnings Crediting Options to which his Distribution Option Account
is deemed to be allocated with whatever frequency is determined by the
Committee, which shall not be less than four times per Plan Year.  Each such change may include (a) reallocation
of the Participant’s existing Retirement Distribution Account and In-Service
Distribution Accounts among the Earnings Crediting Options, and/or (b) reallocation
of Earnings Crediting Options with respect to amounts to be credited to the
Participant’s Account in the future, as the Participant may elect.  Any such change must be in accordance with
the rules and procedures adopted by the Committee.

 

Section 5.5. Valuation
of Accounts. The value of a Participant’s Distribution Option Account as of
any Valuation Date shall equal the amounts theretofore credited to such
Account, including any earnings (positive or negative) deemed to be earned on
such Account in accordance with Section 5.2 through the Valuation Date
preceding such date, less the amounts therefore deducted from such Account.

 

Section 5.6. Statement
of Accounts. The Committee shall provide to each Participant, not less
frequently than annually, a statement in such form as the Committee deems
desirable setting forth the balance standing to the credit of each Participant
in each of his Distribution Option Account.

 

Section 5.7. Distribution
from Accounts. The Participant’s Distribution Option Account shall be
reduced by the amount of payments made by the Company to the Participant or the
Participant’s Beneficiary pursuant to this Plan. Any distribution made to or on
behalf of a Participant from his Distribution Option Account in an amount which
is less than the entire balance of any such Account shall be made pro rata from
each of the Earnings Crediting Options to which such Account is then allocated.

 

ARTICLE 6. DISTRIBUTION OPTIONS

 

Section 6.1. Election
of Distribution Option. In the first Enrollment Agreement filed with the
Committee, an Eligible Employee shall elect the time and manner of payment
pursuant to which the Eligible Employee’s Distribution Option Account will be
paid. The Eligible Employee may elect that deferrals be paid either in
accordance with the Retirement Distribution Option, or the In-Service Distribution
Option. Any deferrals to be paid in accordance with the Retirement Distribution
Option shall be maintained in the Retirement Distribution Account. Any
deferrals to be paid in accordance with the In-Service Distribution Option
shall be maintained in an In-Service Distribution Account, one such In-Service
Distribution Option being established for each Distribution Option Period.

 

Section 6.2. Retirement
Distribution Option.  Initial
elections as to time and manner of payment for a Retirement Distribution
Account shall be applicable to all amounts in the Retirement

 

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Distribution Account.  With regard to amounts deferred into the
Retirement Distribution Account prior to January 1, 2005 and earnings credited
to such amounts, an election to change the time and manner of payment will be
effective if such an election is filed at least six months prior to termination
of employment and in the Plan Year preceding the Plan Year in which the
Participant’s termination of employment occurs. 
With regard to amounts deferred into the Retirement Distribution Account
on and after January 1, 2005, and earnings credited to such amounts, an
election to change the time and manner of payment of such amounts:  1) must delay distribution of such amount for
at least 5 years beyond the original distribution date; 2) must be made at
least 12 months before the original distribution date; and 3) will not be
effective until 12 months after the new election.  Once a Participant terminates employment, he
may not change his election with respect to the timing and manner of payment of
his Retirement Distribution Account.

 

Section 6.3. In-Service
Distribution Option. The time and manner of payment elected with respect to
an In-Service Distribution Account must be elected on the Enrollment Agreement
at the time Salary or Bonus Deferrals are first directed into the In-Service
Distribution Account. The election of the time and manner of payment will be
applicable to all amounts in the In-Service Distribution Account and cannot be
changed until the Distribution Option Period has terminated and a new
Distribution Option Period has begun, at which time, a new In-Service
Distribution Account shall be established for future deferrals.

 

Amounts credited to the
In-Service Distribution Account must be deferred for at least two years.
Therefore, if a Participant selects a commencement date that is not at least
two years beyond the last day of the Distribution Option Period, then any
deferrals that would be made within two years of the elected commencement date
shall automatically be credited to the Retirement Distribution Account.

 

Amounts credited to the
In-Service Distribution Account must remain in the In-Service Distribution
Account for at least two years. In the event a Participant’s In-Service
Distribution Account includes amounts deferred within two years of the date on
which the Participant has elected a distribution of his In-Service Distribution
Account, deferrals in an amount equal to the deferrals made within the prior
two-year period, measured from the date of distribution, and earnings
attributable to such amounts, shall remain credited to the In-Service
Distribution Account until all such deferrals have been credited to the Plan
for two years, at which time, they shall be distributable as soon as
administratively feasible in accordance with the Participant’s election.

 

ARTICLE 7. DISTRIBUTION OF BENEFITS TO
PARTICIPANTS

 

Section 7.1.  Benefits Under the Retirement Distribution
Option. Benefits under the Retirement Distribution Option shall be paid to
a Participant as follows.  The
Participant’s Retirement Distribution Account shall be distributed in one of
the following methods, as elected by the Participant in accordance with Section 6.2:  (i) in a lump sum, (ii) in annual
installments, or (iii) in accordance with any formula elected by the
Participant that is mathematically derived and is acceptable to Sallie Mae’s
Human Resources Department or a Plan administrator selected by Sallie Mae;
except that amounts deemed to be allocated to Sallie Mae stock as an Earnings
Crediting Option shall be made in a lump sum in Sallie Mae stock as provided in
Section 12.  A Participant’s
Retirement Distribution Account must be distributed in full before the end of
the fortieth year following the year in which the Participant terminates
employment.

 

Except
as provided in Section 12.1, the Participant’s Retirement Distribution
Account shall be distributed as elected by the Participant in accordance with Section 6.2:
(1) 12 months following termination of employment, or (2) January 31st
of the year following the year in which the Participant attains a stated age,
as elected by the Participant and at least 12 months following termination of
employment.

 

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A lump sum benefit shall
equal the value of the Retirement Distribution Account as of the Valuation Date
immediately preceding the date of payment. 
The first annual installment payment shall equal (i) the value of
such Retirement Distribution Account as of the Valuation Date immediately
preceding the date of payment, divided by (ii) the number of annual
installment payments elected by the Participant in the Enrollment Agreement,
pursuant to which such Retirement Distribution Account was established.  The remaining annual installments shall equal
(i) the value of such Retirement Distribution Account as of the Valuation
Date immediately preceding Plan Year divided by (ii) the number of
installments remaining.

 

Section 7.2. Benefits
Under the ln-Service Distribution Option. Benefits under the In-Service
Distribution Option shall be paid to a Participant as follows:

 

(a) In-Service
Distributions. In the case of a Participant who continues in Service with the
Company, the Participant’s In-Service Distribution Account for any Distribution
Option Period shall be paid to the Participant between January 1 and January 31
of the Plan Year irrevocably elected by the Participant in the Enrollment
Agreement pursuant to which such In-Service Distribution Account was
established, in one lump sum or in annual installments payable over 2, 3, 4, or
5 years. Any lump sum benefit payable in accordance with this paragraph shall
be paid between January 1 and January 31 of the Plan Year elected by
the Participant in accordance with Section 6.3, in an amount equal to the
value of such In-Service Distribution Account as of the Valuation Date
immediately preceding the date of payment. Annual installment payments, if any,
shall commence between January 1 and January 31 of the Plan Year as
elected by the Participant in accordance with Section 6.3, in an amount
equal to (i) the value of such In-Service Distribution Account as of the
Valuation Date immediately preceding the date of payment, divided by (ii) the
number of annual installment payments elected by the Participant in the
Enrollment Agreement pursuant to which such In-Service Distribution Account was
established. The remaining annual installments shall be paid between January 1,
and   January 31 of each succeeding
year in an amount equal to (i) the value of such In-Service Distribution
Account as of the Valuation Date immediately preceding Plan Year divided by (ii) the
number of installments remaining.

 

(b)  A
Participant may also elect on the Enrollment Agreement to have his In-Service
Distribution Account paid in the form of a lump sum if he should terminate
Service prior to his Retirement.  With
regard to amounts deferred into an In-Service Distribution Account prior to January 1,
2005, and earnings credited to such amounts, such lump sum will be distributed
in Sallie Mae stock no later than 60 days following termination of Service for
Participants who are Executive Officers for purposes of proxy disclosure. For
other Participants, such lump sum will be distributed as soon as
administratively feasible following the date that is 12 months from the End
Termination Date and such an election shall be subject to the provisions of Section 6.3.

 

ARTICLE 8. DISABILITY

 

Section 8.1. In the
event a Participant becomes Disabled, the Participant’s right to make any
further deferrals under this Plan shall terminate. The Participant’s Retirement
Distribution Account, if any, shall be distributed to the Participant in
accordance with Section 7.1.  The
Participant’s In-Service Distribution Accounts, if any, will be distributed to
the Participant in accordance with Section 7.2(a), without regard to the
fact that the Participant became Disabled.

 

ARTICLE 9. SURVIVOR BENEFITS

 

Section 9.1. Death
of Participant Prior to the Commencement of Benefits. In the event of a
Participant’s death prior to the commencement of benefits in accordance with Section 7,
benefits shall be paid to the Participant’s Beneficiary, as determined under Section 13.3,
pursuant to

 

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Section 9.2 or 9.3, whichever is
applicable, in lieu of any benefits otherwise payable under the Plan to or on
behalf of such Participant. The Participant’s Beneficiary shall be treated as
the Participant for purposes of the Plan and shall have the authority to elect
the Earnings Crediting Options in the same manner as the Participant. In
addition, the Beneficiary may elect to receive an accelerated distribution,
pursuant to Section 11, or an Emergency Benefit, pursuant to Section 10.
However, the Beneficiary shall not be entitled to change the form and timing of
distribution as elected on the Enrollment Agreement.

 

Notwithstanding any
provisions in this Section 9 to the contrary, in the event there is no
designated Beneficiary, or the Beneficiary has predeceased the Participant, the
Participant’s Distribution Option Account shall be distributed to the
Participant’s estate in the form of a lump sum as soon as administratively
feasible following the Participant’s death.

 

Section 9.2. Survivor
Benefits Under the Retirement Distribution Option. A Participant may elect
on the Enrollment Agreement the time and manner of payment of his Retirement
Distribution Account in the event he dies prior to the commencement of
distributions from such Retirement Distribution Account pursuant to Section 7.1.
The Participant may elect that his Retirement Distribution Account be paid to
his Beneficiary (a) in a lump sum as soon as practicable following the
Participant’s death, or (b) in the form, and at the time, that the
Retirement Distribution Account would have been payable to the Participant. The
amount of any lump sum benefit payable in accordance with this Section shall
equal the value of such Retirement Distribution Account as of the Valuation
Date immediately preceding the date on which such benefit is paid. The amount
of any annual installment benefit payable in accordance with this Section shall
equal (a) the value of such Retirement Distribution Account as of the
Valuation Date immediately preceding the date on which such installment is
paid, divided by (b) the number of annual installments remaining to be
paid pursuant to the election of the Participant.

 

Section 9.3. Survivor
Benefits Under the In-Service Distribution Option. A Participant may elect
on the Enrollment Agreement the time and manner of payment of his In-Service
Distribution Account in the event he dies prior to the commencement of
distributions from such In-Service Distribution Account pursuant to Section 7.2.
The Participant may elect that his In-Service Distribution Account be paid to
his Beneficiary (a) in a lump sum as soon as practicable following the
Participant’s death, or (b) in the form, and at the time, that the
In-Service Distribution Account would have been payable to the Participant. The
amount of any lump sum benefit payable in accordance with this Section shall
equal the value of such Retirement Distribution Account as of the Valuation
Date immediately preceding the date on which such benefit is paid. The amount
of any annual installment benefit payable in accordance with this Section shall
equal (a) the value of such Retirement Distribution Account as of the
Valuation Date immediately preceding the date on which such installment is
paid, divided by (b) the number of annual installments remaining to be
paid pursuant to the election of the Participant.

 

Section 9.4. Death
of Participant After Benefits Have Commenced. In the event a Participant
dies after annual installments from his Distribution Option Account have
commenced, but before the entire balance of such Account has been paid, any
remaining installments shall continue to be paid to the Participant’s
Beneficiary, as determined under Section 13.3, at such times and in such
amounts as they would have been paid to the Participant had he survived.

 

ARTICLE 10. EMERGENCY BENEFIT

 

Section 10.1.  In the event that the Committee, upon written
request of a Participant, determines, in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Company
shall pay to the Participant from the vested portion of his Distribution Option
Account, as soon as practicable following such determination, an amount
necessary to meet the emergency, after deduction of any and all taxes as may be
required pursuant to Section 13.9 (the “Emergency Benefit”), and after
taking into account the extent to which such hardship is or may

 

9

 

be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause
severe financial hardship). Effective for all determinations made on and after January 1,
2005, an unforeseeable financial 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 defined in section 152(a) of
the Code), loss of the Participant’s property due to casualty, or similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the
control of the Participant. Emergency Benefits shall be paid first from the
Participant’s In-Service Distribution Accounts, if any, in the order in which
such Accounts would otherwise be distributed to the Participant. If the
distribution exhausts the In-Service Accounts, the Retirement Distribution
Account may be accessed. With respect to that portion of any Distribution
Option Account which is distributed to a Participant as an Emergency Benefit in
accordance with this Section, no further benefit shall be payable to the
Participant under this Plan. Notwithstanding anything in this Plan to the
contrary, a Participant who receives an Emergency Benefit in any Plan Year shall
not be entitled to make any further Salary or Bonus Deferrals for the remainder
of such Plan Year.

 

ARTICLE 11. ACCELERATED DISTRIBUTION FOR
AMOUNTS DEFERRED BEFORE JANUARY 1, 2005

 

Section 11.1. Availability
of Withdrawal prior to the Commencement of Distributions.   With regard to amounts deferred into a
Participant’s Distribution Option Account before January 1, 2005 and
earnings credited to such amounts, upon the Participant’s written election, the
Participant may elect to withdraw all or a portion of the amounts at any time
prior to the time such Distribution Option Account is otherwise payable under
the Plan, provided the conditions specified in Sections 11.3, 11.4, and 11.5
are satisfied. However, no amount may be distributed from deferrals, and earnings
attributable to such deferrals, that have been credited to the Plan less than
two years.  Amounts deferred into a
Participant’s Distribution Option Account on and after January 1, 2005 and
earnings credited to such amounts may not been withdrawn under this Article 11.

 

Section 11.2. Acceleration
of Periodic Distributions.  Upon the
Participant’s written election, the Participant or Participant’s Beneficiary
who is receiving installment payments under the Plan may elect to have all or a
percentage of the remaining installments that are attributable to amounts
credited to the Participant’s Distribution Option Account before January 1,
2005 distributed in the form of an immediately payable lump sum, provided the
condition specified in Sections 11.3, 11.4 and 11.5 are satisfied.

 

Section 11.3. Forfeiture
Penalty. In the event of a withdrawal pursuant to Section 11.1, or an
accelerated distribution pursuant to Section 11.2, the Participant shall
forfeit from the sub-account of his Distribution Option Account from which the
withdrawal is made an amount equal to 10% of the amount of the withdrawal or
accelerated distribution, as the case may be. The forfeited amount shall be
deducted from the applicable sub-account prior to giving effect to the
requested withdrawal or acceleration. The Participant and the Participant’s
Beneficiary shall not have any right or claim to the forfeited amount, and the
Company shall have no obligation whatsoever to the Participant, the Participant’s
Beneficiary or any other person with regard to the forfeited amount.

 

Section 11.4. Minimum
Withdrawal. In no event shall the amount withdrawn in accordance with Section 11.1
or 11.2 be less than 25% of the amount credited to the Participant’s
Distribution Option Account immediately prior to the withdrawal.

 

Section 11.5. Suspension
from Deferrals. In the event of a withdrawal pursuant to Section 11.1
or 11.2, a Participant who is otherwise eligible to make deferrals under Section 4
shall be prohibited from making any deferrals with respect to the Plan Year
immediately following the Plan Year during which the withdrawal is made, and
any election previously made by the Participant

 

10

 

with respect to deferrals for the Plan Year of
the withdrawal shall be void and of no effect with respect to subsequent Salary
and Bonus Deferrals for such Plan Year.

 

ARTICLE 12. EARNINGS CREDITING OPTION BASED
ON COMPANY STOCK

 

Section 12.1. Insiders.  Effective February 1, 2001 and
notwithstanding any other provision of the Plan, elections by “Insiders”
(Participants who, as of February 1, 2001, and at any time subsequent to February 1,
2001, are considered by the Company to be subject to Section 16b of the
Securities Exchange Act of 1934)  to have
their Distribution Option Account deemed to be invested in Company stock may
not be changed for the entire period of time that the Distribution Option
Account is maintained.  With regard to
amounts deferred into the Plan before January 1, 2005 and earnings
credited to such amounts, any portion of an Insider’s Distribution Option
Account deemed to be invested in Company stock shall be distributed in a lump
sum, in the form of Company stock within 60 days of separation from
Service.  With regard to amounts deferred
into the Plan on and after January 1, 2005 and earnings credited to such
amounts, any portion of an Insider’s Distribution Option Account deemed to be
invested in Company stock shall be distributed in a lump sum, in the form of
Company stock at least 12 months following termination of employment.

 

Section 12.2. Vice
Presidents and Above. 
Notwithstanding any other provision of the Plan, effective: 1) as of September 1,
2002; and 2) for Participants who, as of September 1, 2002 and at any time
subsequent to September 1, 2002, are or become Vice President and above –
any portion of such a Participant’s Distribution Option Account deemed to be
invested in Company stock may not be changed to another investment option for
the entire period of time that the Distribution Option Account is maintained
and shall be distributed in a lump sum in the form of Company stock at least 12
months following termination of employment.

 

ARTICLE 13. MISCELLANEOUS

 

Section 13.1. Amendment
and Termination. The Plan may be amended, suspended, discontinued or
terminated at any time by the Committee; provided, however, that no such
amendment, suspension, discontinuance or termination shall reduce or in any
manner adversely affect the rights of any Participant with respect to benefits
that are payable or may become payable under the Plan based upon the balance of
the Participant’s Accounts as of the effective date of such amendment,
suspension, discontinuance or termination.

 

Section 13.2. Claims
Procedure.

 

(a)          Claim

 

A person who believes
that he is being denied a benefit to which he is entitled under the Plan
(hereinafter referred to as a “Claimant”) may file a written request for such
benefit with the Plan Administrator, setting forth the claim.

 

(b)         Claim
Decision

 

Upon receipt of a claim,
the Plan Administrator shall advise the Claimant that a reply will be
forthcoming within ninety (90) days and shall, in fact, deliver such reply
within such period. The Plan Administrator may, however, extend the reply
period for an additional ninety (90) days for reasonable cause.

 

If the claim is denied
in whole or in part, the Claimant shall be provided a written opinion, using
language calculated to be understood by the Claimant, setting forth:

 

(1)          The specific
reason or reasons for such denial:

 

11

 

(2)          The specific
reference to pertinent provisions of this Agreement on which such denial is
based;

 

(3) A description of any additional
material or information necessary for the 
Claimant to perfect his claim and an explanation why such material or
such information is necessary; and

 

(4) Appropriate information as to the steps
to be taken if the Claimant wishes to submit the claim for review.

 

(c)          Request for
Review

 

Within sixty (60) days
after the receipt by the Claimant of the written opinion described above, the
Claimant may request in writing that the Committee review the determination of
the Plan Administrator. The Claimant or his duly authorized representative may,
but need not, review the pertinent documents and submit issues and comment in
writing for consideration by the Committee. If the Claimant does not request a
review of the initial determination within such sixty (60) day period, the
Claimant shall be barred and estopped from challenging the determination.

 

(d) Review of
Decision

 

Within sixty (60) days
after the Committee’s receipt of a request for review, it will review the
initial determination. After considering all materials presented by the
Claimant, the Committee will render a written opinion, written in a manner
calculated to be understood by the Claimant, setting forth the specific reasons
for the decision and containing specific references to the pertinent provisions
of this Agreement on which the decision is based. If special circumstances require
that the sixty (60) day time period be extended, the Committee will so notify
the Claimant and will render the decision as soon as possible, but no later
than one hundred twenty (120) days after receipt of the request for review.

 

Section 13.3. Designation
of Beneficiary. Each Participant may designate a Beneficiary or
Beneficiaries (which Beneficiary may be an entity other than a natural person)
to receive any payments which may be made following the Participant’s death.
Such designation may be changed or canceled at any time without the consent of
any such Beneficiary. Any such designation, change or cancellation must be made
in a form approved by the Committee and shall not be effective until received
by the Committee, or its designee. If no Beneficiary has been named, or the
designated Beneficiary or Beneficiaries shall have predeceased the Participant,
the Beneficiary shall be the Participant’s estate. If a Participant designates
more than one Beneficiary, the interests of such Beneficiaries shall be paid in
equal shares, unless the Participant has specifically designated otherwise.

 

Section 13.4. Limitation
of Participant’s Right. Nothing in this Plan shall be construed as
conferring upon any Participant any right to continue in the employment of the
Company, nor shall it interfere with the rights of the Company to terminate the
employment of any Participant and/or to take any personnel action affecting any
Participant without regard to the effect which such action may have upon such
Participant as a recipient or prospective recipient of benefits under the Plan.
Any amounts payable hereunder shall not be deemed salary or other Salary to a
Participant for the purposes of computing benefits to which the Participant may
be entitled under any other arrangement established by the Company for the
benefit of its employees.

 

Section 13.5. No
Limitation on Company Actions. Nothing contained in the Plan shall be
construed to prevent the Company from taking any action which is deemed by it
to be appropriate or in its best interest. No Participant, Beneficiary, or
other person shall have any claim against the Company as a result of such
action.

 

12

 

Section 13.6. Obligations
to Company. If a Participant becomes entitled to a distribution of benefits
under the Plan, and if at such time the Participant has outstanding any debt,
obligation, or other liability representing an amount owing to the Company,
then the Company may offset such amount owed to it against the amount of
benefits otherwise distributable, to the extent permissible under State law.
Such determination shall be made by the Committee.

 

Section 13.7. Nonalienation
of Benefits. Except as expressly provided herein, no Participant or
Beneficiary shall have the power or right to transfer (otherwise than by will
or the laws of descent and distribution), alienate, or otherwise encumber the
Participant’s interest under the Plan, except pursuant to a domestic relations
order that would qualify as a Qualified Domestic Relations Order under section 414(p)
of the Code. The Company’s obligations under this Plan may not be assigned or
transferred except to (a) any corporation or partnership which acquires
all or substantially all of the Company’s assets or (b) any corporation or
partnership into which the Company may be merged or consolidated. The
provisions of the Plan shall inure to the benefit of each Participant and the
Participant’s Beneficiaries, heirs, executors, administrators or successors in
interest.

 

Section 13.8. Protective
Provisions. Each Participant shall cooperate with the Company by furnishing
any and all information requested by the Company in order to facilitate the
payment of benefits hereunder, taking such physical examinations (for insurance
purposes) as the Company may deem necessary and taking such other relevant
action as may be requested by the Company. If a Participant refuses to
cooperate, the Company shall have no further obligation to the Participant
under the Plan, other than payment to such Participant of the then current
balance of the Participant’s Distribution Option Accounts in accordance with
his prior elections.

 

Section 13.9. Withholding
Taxes. The Company may make such provisions and take such action as it may
deem necessary or appropriate for the withholding of any taxes which the
Company is required by any law or regulation of any governmental authority,
whether Federal, state or local, to withhold in connection with any benefits
under the Plan, including, but not limited to, the withholding of appropriate
sums from any amount otherwise payable to the Participant (or his Beneficiary).
Each Participant, however, shall be responsible for the payment of all
individual tax liabilities relating to any such benefits.

 

Section 13.10. Unfunded
Status of Plan. The Plan is intended to constitute an “unfunded” plan of
deferred Salary for Participants. Benefits payable hereunder shall be payable
out of the general assets of the Company, and no segregation of any assets
whatsoever for such benefits shall be made. Notwithstanding any segregation of
assets or transfer to a grantor trust, with respect to any payments not yet
made to a Participant, nothing contained herein shall give any such Participant
any rights to assets that are greater than those of a general creditor of the
Company.

 

Section 13.11. Severability.
If any provision of this Plan is held unenforceable, the remainder of the Plan
shall continue in full force and effect without regard to such unenforceable
provision and shall be applied as though the unenforceable provision were not
contained in the Plan.

 

Section 13.12. Government
Law. The Plan shall be construed in accordance with the laws of the
Commonwealth of Virginia, without reference to the principles of conflict of
laws.

 

Section 13.13. Headings.
Headings are inserted in this Plan for convenience of reference only and are to
be ignored in the construction of the provisions of the Plan.

 

Section 13.14. Gender,
Singular or Plural. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, or neuter, as the identity of the person
or persons may require. As the context may require, the singular may read as
the plural and the plural as the singular.

 

13

 

Section 13.15. Notice.
Any notice or filing required or permitted to be given to the Plan
Administrator or the Committee under the Plan shall be sufficient if in writing
and hand delivered, or sent by registered or certified mail, to the Human
Resources Department, or to such other entity as the Plan Administrator or the
Committee may designate from time to time. Such notice shall be deemed given as
to the date of delivery, or, if delivery is made by mail, as of the date shown
on the postmark on the receipt for registration or certification.

 

This Plan was originally
adopted effective January 1, 1998. 
This Plan restatement includes amendments made on June 30, 1999, October 1,
2000, February 1, 2001, September 1, 2002 and amendments effective January 1,
2005, to comply with the American Jobs Creation Act of 2004.

 

14Exhibit 10.25

 

SLM Corporation Incentive Plan

Performance Stock Term Sheet

“Core” Net Income Target

 

Pursuant
to the terms and conditions of the SLM Corporation Incentive Plan (“IP”), the
Compensation and Personnel Committee (the “Committee”) hereby grants to           
(the “Recipient”)               
shares of common stock of SLM Corporation (“Performance Stock”) on January 26,
2006 (“Grant Date”) subject to the following terms and conditions:

 

•                  The
Performance Stock shall vest upon the attainment of “core” net income targets
as set forth in each of the Corporation’s annual business plans for 2006, 2007
and 2008.  A target amount of 25 percent
of the Performance Stock shall vest upon the achievement of the 2006 “core” net
income target; a target amount of 25 percent of the Performance Stock shall
vest upon the achievement of the 2007 “core” net income target and a target
amount of 50 percent of the Performance Stock shall vest upon achievement of
the 2008 “core” net income target.  To
the extent the “core” net income target is under- or over-achieved in any year,
the target number of shares of Performance Stock that may vest in that year
shall be interpolated on a straight-line basis. 
For example, if 90 percent of the
2006 “core” net income target is achieved, 90 percent of 25 percent of the
Performance Stock shall vest.  Examples
of various vesting scenarios are attached for illustration purposes.

 

•                  Any shares of Performance Stock that remain
unvested upon the Scheduled Vesting Date for the 2008 “core” net income target,
as defined below, shall be forfeited.

 

•                  The Scheduled Vesting Date for the Performance
Stock tied to the achievement of the 2006 “core” net income target shall be the
later of the first anniversary of the Grant Date and the date the Compensation
and Personnel Committee certifies to the achievement of this target; the
Scheduled Vesting Date for the Performance Stock tied to achievement of the
2007 “core” net income target shall be the later of the second anniversary of
the Grant Date and the date the Compensation and Personnel Committee certifies
to the achievement of this target; and the Scheduled Vesting Date for the
Performance Stock tied to the achievement of the 2008 “core” net income target
shall be the later of the third anniversary of the Grant Date and the date the
Compensation and Personnel Committee certifies to the achievement of this
target.

 

•                  Except as provided below, if the Recipient ceases
to be an employee of the Corporation (or one of its subsidiaries) for any
reason, he/she shall forfeit any shares of Performance Stock that have not
vested as of the date of such termination of employment.

 

•                  Unless previously vested pursuant to
the foregoing provisions, the Performance Stock will vest upon Involuntary
Termination due to Job Abolishment/Layoff, Death, Disability or Change in
Control, all as those terms are defined in the IP and subject to the provisions
of the IP.  All shares of Performance
Stock, whether vested or unvested, shall be forfeited upon termination of
employment due to Misconduct, as defined in the IP.

 

•                  The Recipient of the Performance
Stock shall transfer a sufficient number of shares of the Corporation’s stock
to satisfy the income and employment tax withholding requirements that accrue
upon the Performance Stock becoming vested and transferable, and the
Compensation and Personnel Committee hereby approves the transfer of such
shares to the Corporation for purposes of SEC Rule 16b-3.

 

•                  Dividends declared on unvested shares
of Performance Stock will be paid to the Recipient as additional compensation
and are taxed as ordinary income. 
Dividends declared on vested shares of Performance Stock will be paid to
the holder and taxed as dividend income.

 

•                  Solely for the purpose of complying
with section 162(m) of the Internal Revenue Code, the pre-established
performance goals for vesting of each tranche of Performance Stock shall be the
achievement of “Core” net income for 2006, 2007 and 2008, as applicable (the “162(m)
performance goals”).  The Committee has
discretion to reduce the number of shares of Performance Stock vesting upon the
achievement of each 162(m) performance goal.

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