Exhibit 10.2
SLM CORPORATION
2009-2012 INCENTIVE
PLAN
SECTION 1. PURPOSE OF
PLAN
The purpose of the SLM Corporation
2009-2012 Incentive Plan (“Plan”) is to enable SLM
Corporation (the “Corporation”) to attract, retain and
motivate its employees and to further align the interests of the
Corporation’s employees with those of the shareholders of the
Corporation by providing for or increasing their proprietary
interest in the Corporation.
SECTION 2. ADMINISTRATION OF THE
PLAN
2.1 Composition of
Committee. The Plan shall be administered by the Board of
Directors and/or the Compensation and Personnel Committee of the
Board of Directors of SLM Corporation (the
“Committee”). The Committee shall act pursuant to a
majority vote or unanimous written consent. Notwithstanding the
foregoing, with respect to any Award that is not intended to
satisfy the conditions of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)
or Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”), the Committee may appoint one or
more separate committees (any such committee, a
“Subcommittee”) composed of one or more directors of
the Corporation, (who may but need not be members of the Committee)
and may delegate to any such Subcommittee(s) the authority to grant
Awards, as defined in Section 5.1 hereof, under the Plan to
Employees, as defined in Section 4, to determine all terms of
such Awards, and/or to administer the Plan or any aspect of it. Any
action by any such Subcommittee within the scope of such delegation
shall be deemed for all purposes to have been taken by the
Committee. The Committee hereby designates the Secretary of the
Corporation and the head of the Corporation’s human resource
function to assist the Committee in the administration of the Plan,
and may grant authority to such persons to execute agreements
evidencing Awards made under this Plan or other documents entered
into under this Plan on behalf of the Committee or the Corporation.
In addition, the Committee may delegate any or all aspects of the
day-to-day administration of the Plan to one or more officers or
employees of the Corporation, and/or to one or more
agents.
2.2 Powers of the
Committee. Subject to the express provisions of this
Plan, the Committee shall be authorized and empowered to do all
things necessary or desirable in connection with the administration
of this Plan with respect to the Awards over which such Committee
has authority, including, without limitation, the
following:
(a) to prescribe, amend and
rescind rules and regulations relating to this Plan and to define
terms not otherwise defined herein; provided that, unless the
Committee shall specify otherwise, for purposes of this Plan
(i) the term “fair market value” shall mean, as of
any date, the closing price for a Share, as defined in
Section 3.1 hereof, reported for that date on the composite
tape for securities listed on national exchange on which the
Corporation’s common stock is primarily listed (the
“National Exchange”), or if the Common Stock did not
trade on the National Exchange on the date in question, then for
the next preceding date for which the Common Stock traded on the
National Exchange; and (ii) the term “Corporation”
shall mean SLM Corporation and its subsidiaries and affiliates,
unless the context otherwise requires;
(b) to determine the Employees
to whom Awards shall be granted hereunder and the timing of any
such Awards;
(c) to grant Awards and
determine the terms and conditions thereof, including the number of
Shares subject to Awards and the exercise or purchase price of such
Shares and the circumstances under which Awards become exercisable
or vested or are forfeited or expire, which terms may but need not
be conditioned upon the passage of time, continued employment, the
satisfaction of performance criteria, the occurrence of certain
events, or other factors;
(d) to establish and verify the
extent of satisfaction of any performance goals applicable to
Awards or other conditions applicable to the grant, issuance,
exercisability, vesting and/or ability to retain any
Award;
(e) to prescribe and amend the
terms of the agreements evidencing Awards made under this Plan
(which need not be identical) and the terms of or form of any
document or notice required to be delivered to the Corporation by
Participants under this Plan;
(f) to determine the extent to
which adjustments are required pursuant to Section 12
hereof;
(g) to interpret and construe
this Plan, any rules and regulations under the Plan and the terms
and conditions of any Award granted hereunder, and to make
exceptions to any such provisions if the Committee, in good faith,
determines that it is necessary to do so in light of extraordinary
circumstances and for the benefit of the Corporation;
(h) to approve corrections in
the documentation or administration of any Award;
(i) to require or permit
Participant elections and/or consents under this Plan to be made by
means of such electronic media as the Committee may
prescribe; and
(j) to make all other
determinations deemed necessary or advisable for the administration
of the Plan.
The Committee may, in its sole and
absolute discretion, without amendment to the Plan, waive or amend
the operation of Plan provisions respecting exercise after
termination of employment or service to the Corporation or an
Affiliate and, except as otherwise provided herein, adjust any of
the terms of any Award. The Committee may also (A) accelerate
the date on which any Award granted under the Plan becomes
exercisable or (B) accelerate the vesting date or waive or
adjust any condition imposed hereunder with respect to the vesting
or exercisability of an Award, provided that the Committee, in good
faith, determines that such acceleration, waiver or other
adjustment is necessary or desirable in light of extraordinary
circumstances.
2.3 Determinations of the
Committee. All decisions, determinations and
interpretations by the Committee or the Board regarding the Plan,
any rules and regulations under the Plan and the terms and
conditions of or operation of any Award granted hereunder, shall be
final and binding on all Participants, beneficiaries, heirs,
assigns or other persons holding or claiming rights under the Plan
or any Award. The Committee or the Board, as applicable, shall
consider such factors as it deems relevant, in its sole and
absolute discretion, to making such decisions, determinations and
interpretations including, without limitation, the recommendations
or advice of any officer of the Corporation or Employee and such
attorneys, consultants and accountants as it may select.
2.4 No Repricing.
Notwithstanding anything in the Plan to the contrary, no
Award outstanding under the Plan may be repriced, regranted through
cancellation, including cancellation in exchange for cash or other
Awards, or otherwise amended to reduce the exercise price
applicable thereto (other than with respect to adjustments made in
connection with a transaction or other change in the
Corporation’s capitalization as described in
Section 12) without the approval of the
Corporation’s shareholders.
SECTION 3. STOCK
SUBJECT TO PLAN
3.1 Aggregate Limits.
Subject to adjustment as provided in Section 12, at any
time, the aggregate number of shares of the Corporation’s
common stock, $.20 par value (“Shares”), issued
and issuable pursuant to all Awards granted under this Plan shall
not exceed 10,000,000, plus any Shares authorized to be issued
under the SLM Corporation Incentive Plan and the SLM Corporation
Management Incentive Plan (the “Prior Plans”) that are
not actually issued under the Prior Plans by reason of
cancellation, forfeiture or net-settlement of Awards. The Shares
subject to the Plan may be either Shares reacquired by the
Corporation, including Shares purchased in the open market, or
authorized but unissued Shares.
3.2 Code
Section 162(m) Limits. The maximum amount payable
pursuant to that portion of an Incentive Bonus Award granted under
this Plan for any calendar year to any Employee that is intended to
satisfy the requirements for “performance based
compensation” under Code Section 162(m) shall not exceed
three million dollars ($3,000,000). In each calendar year an
Employee may be granted Awards under this Plan relating up to his
or her Annual Limit. A Participant’s Annual Limit, in any
calendar year, shall equal one million
(1,000,000) shares.
3.3 Issuance of Shares.
For purposes of Section 3.1, the aggregate number of
Shares issued under this Plan at any time shall equal the number of
Shares actually issued upon exercise or settlement of an Award. The
aggregate number of Shares available for Awards under this Plan at
any time shall not be reduced by (i) Shares subject to Awards
that have been terminated, expired unexercised, forfeited or
settled in cash, (ii) Shares subject to Awards (or Prior Plan
Awards) that have been retained or withheld by the Corporation in
payment or satisfaction of the exercise price, purchase price or
tax withholding obligation of an Award (or Prior Plan Award), or
(iii) Shares subject to Awards (or Prior Plan Awards) that
otherwise do not result in the issuance of Shares in connection
with payment or settlement thereof. In addition, Shares that have
been delivered (either actually or by attestation) to the
Corporation in payment or satisfaction of the exercise price,
purchase price or tax withholding obligation of an Award (or Prior
Plan Award) shall be available for Awards under this
Plan.
SECTION 4. PERSONS
ELIGIBLE UNDER PLAN
Only employees of the Corporation
shall be eligible to be considered for the grant of Awards under
the Plan. For purposes of the administration of Awards, the term
“Employee” shall also include a former Employee or any
person (including any estate) who is a beneficiary of a former
Employee. A “Participant” is any Employee to whom an
Award has been made and any person (including any estate) to whom
an Award has been assigned or transferred pursuant to
Section 11.1.
SECTION 5. PLAN
AWARDS
5.1 Award Types.
The following arrangements or benefits are authorized under
the Plan if their terms and conditions are not inconsistent with
the provisions of the Plan: Stock Options, Stock Appreciation
Rights, Incentive Bonuses, Performance Stock, Performance Stock
Units, Restricted Stock and Restricted Stock Units. Such
arrangements and benefits are sometimes referred to herein as
“Awards.” Incentive Bonuses, Performance Stock,
Performance Stock Units, Restricted Stock and Restricted Stock
Units are also referred to as “Share Awards”. Each type
of Award is defined as follows:
Stock Options:
A Stock Option is a right
granted under Section 6 to purchase a number of Shares at such
exercise price, at such times, and on such other terms and
conditions as are specified in or determined pursuant to the
agreement evidencing the Award (the “Award Agreement”).
Options intended to qualify as Incentive Stock Options
(“ISOs”) pursuant to Code Section 422 and Options
which are not intended to qualify as ISOs (“Non-qualified
Options”) may be granted under Section 6 as the
Committee in its sole discretion shall determine.
Stock Appreciation
Rights: A Stock
Appreciation Rights is a right granted under Section 7 that
entitles the Participant to receive, in cash or Shares or a
combination thereof, as determined by the Committee, value equal to
or otherwise based on the excess of (i) the fair market value
of a specified number of Shares at the time of exercise over
(ii) the exercise price of the right, as established by the
Committee on the date of grant, at such times, and on such other
terms and conditions as are specified in or determined pursuant to
the Award Agreement evidencing the Award.
Incentive Bonus:
An Incentive Bonus is a bonus
opportunity awarded under Section 8 pursuant to which an
Employee may become entitled to receive an amount based on
satisfaction of such performance criteria as are specified in the
Award Agreement evidencing the Award.
Performance Stock:
Performance Stock is an award
of Shares made under Section 9, the grant, issuance, retention
and/or vesting of which is subject to such performance and other
conditions as are expressed in the Award Agreement evidencing the
Award.
Performance Stock
Units: A
Performance Stock Unit is an award made under Section 9
denominated in units of Shares under which the issuance of Shares
(or cash in lieu thereof) is subject to such performance and other
conditions as are expressed in the Award Agreement evidencing the
Award.
Restricted Stock:
Restricted Stock is an award
of Shares made under Section 10, the grant, issuance,
retention and/or vesting of which is subject to certain
restrictions, as are appropriate in the Award Agreement evidencing
the Award.
Restricted Stock
Units: A Restricted
Stock Unit is an award made under Section 10 denominated in
units of Shares under which the issuance of Shares (or cash in lieu
thereof) is subject to such conditions (including continued
employment) and terms as the Committee deems appropriate in the
Award Agreement evidencing the Award.
5.2 Grants of Awards.
An Award may consist of one such arrangement or benefit or
two or more of them in tandem or in the alternative.
SECTION 6. STOCK OPTION
GRANTS
The Committee may grant an Option or
provide for the grant of an Option, either from time-to-time in the
discretion of the Committee or automatically upon the occurrence of
specified events, including, without limitation, the achievement of
performance goals, the satisfaction of an event or condition within
the control of the recipient of the Award, within the control of
others or not within the person’s control.
6.1 Award Agreement.
Each Award Agreement evidencing an Option shall contain
provisions regarding (a) the number of Shares which may be
issued upon exercise of the Option, (b) the purchase price of
the Shares and the means of payment for the Shares, (c) the
term of the Option, (d) such terms and conditions of
exercisability as may be determined from time to time by the
Committee, (e) restrictions on the transfer of the Option and
forfeiture provisions, and (f) such further terms and
conditions, in each case not inconsistent with the Plan as may be
determined from time to time by the Committee. Award Agreements
evidencing ISOs shall contain such terms and conditions as may be
necessary to comply with the applicable provisions of
Section 422 of the Code.
6.2 Option Price.
The purchase price per Share of the Shares subject to each
Option granted under the Plan shall equal or exceed
100 percent of the fair market value of such Stock on the date
the Option is granted, except that in the case of Options granted
to employees upon a merger or acquisition, the purchase price may
be higher or lower than the fair market value of the Stock on the
date the Option is granted if such purchase price is required to
assume or substitute options held by employees of the acquired
Corporation at the time of the acquisition.
6.3 Option Term.
The “Term” of each Option granted under the Plan,
including any ISOs, shall not exceed ten (10) years from the
date of its grant.
6.4 Option Vesting.
Options granted under the Plan shall be exercisable at such
time and in such installments during the period prior to the
expiration of the Option’s Term as determined by the
Committee in its sole discretion. The Committee shall have the
right to make the timing of the ability to exercise any Option
granted under the Plan subject to such performance requirements as
deemed appropriate by the Committee. At any time after the grant of
an Option the Committee may, in its sole discretion, reduce or
eliminate any restrictions surrounding any Participant’s
right to exercise all or part of the Option.
6.5 Option
Exercise.
(a) Partial Exercise.
An exercisable Option may be exercised in whole or in part.
However, an Option shall not be exercisable with respect to
fractional Shares and the Committee may require, by the terms of
the Award Agreement, a partial exercise to include a minimum number
of Shares.
(b) Manner of Exercise.
All or a portion of an exercisable Option shall be deemed
exercised upon delivery to the representative of the Corporation
designated for such purpose by the Committee all of the following:
(i) notice of exercise in such form as the Committee
authorizes specifying the number of Shares to be purchased by the
Participant, (ii) payment or provision for payment of the
exercise price for such number of Shares, (iii) such
representations and documents as the Committee, in its sole
discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act of 1933, as
amended, and any other federal, state or foreign securities laws or
regulations, (iv) in the event that the Option shall be
exercised pursuant to Section 11.1 by any person or persons
other than the Employee, appropriate proof of the right of such
person or persons to exercise the Option, and (v) such
representations and documents as the Committee, in its sole
discretion, deems necessary or advisable to provide for the tax
withholding pursuant to Section 14. Unless provided otherwise
by the Committee, no Participant shall have any right as a
shareholder with respect to any Shares purchased pursuant to any
Option until the registration of Shares in the name of such person,
and no adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash,
securities or other property) or distributions or other rights for
which the record date is prior to the date such Shares are so
registered.
(c) Payment of Exercise
Price. To the extent authorized by the Committee, the
exercise price of an Option may be paid in the form of one of more
of the following, either through the terms of the Award Agreement
or at the time of exercise of an Option: (i) cash or certified
or cashiers’ check, (ii) Shares that have been held by
the Participant for such period of time as the Committee may
specify, (iii) other property deemed acceptable by the
Committee, (iv) a reduction in the number of Shares or other
property otherwise issuable pursuant to such Option, (v) any
combination of (i) through (iv).
SECTION 7. STOCK
APPRECIATION RIGHTS
Stock Appreciation Rights may be
granted to Participants from time to time either in tandem with or
as a component of other Awards granted under the Plan
(“tandem SARs”) or not in conjunction with other Awards
(“freestanding SARs”) and may, but need not, relate to
a specific Option granted under Section 6. The provisions of
Stock Appreciation Rights need not be the same with respect to each
grant or each recipient. Any Stock Appreciation Right granted in
tandem with an Award may be granted at the same time such Award is
granted or at any time thereafter before exercise or expiration of
such Award. All freestanding SARs shall be granted subject to the
same terms and conditions applicable to Options as set forth in
Section 6 and all tandem SARs shall have the same exercise
price, vesting, exercisability, forfeiture and termination
provisions as the Award to which they relate. Subject to the
provisions of Section 6 and the immediately preceding
sentence, the Committee may impose such other conditions or
restrictions on any Stock Appreciation Right as it shall deem
appropriate. Stock Appreciation Rights may be settled in Shares,
cash or a combination thereof, as determined by the Committee and
set forth in the applicable Award Agreement.
SECTION 8. INCENTIVE
BONUS
Incentive Bonus Awards may be
granted at any time and from time to time prior to the termination
of the Plan to Participants as determined by the
Committee.
8.1 Incentive Bonus
Award. Each Incentive Bonus Award shall contain
provisions regarding (a) the target and maximum amount payable
to the Employee as an Incentive Bonus, (b) the performance
criteria and level of achievement versus these criteria which shall
determine the amount of such payment, (c) the period as to
which performance shall be measured for determining the amount of
any payment, (d) the timing of any payment earned by virtue of
performance, (e) restrictions on the alienation or transfer of
the Incentive Bonus prior to actual payment, (f) forfeiture
provisions, and (g) such further terms and conditions, in each
case not inconsistent with the Plan as may be determined from time
to time by the Committee.
8.2 Performance
Criteria. The Committee shall establish the performance
criteria and level of achievement versus these criteria, which
shall determine the maximum amount payable under an
Incentive
