As filed with the Securities and Exchange Commission on June 17, 1999
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
SLM HOLDING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 52-2013874
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
11600 SALLIE MAE DRIVE 20193
(Zip Code)
RESTON VIRGINIA
(Address of Principal Executive Offices)
SALLIE MAE DEFERRED COMPENSATION PLAN FOR KEY EMPLOYEES
(Full Title of the Plan)
MARIANNE M. KELER
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
SLM HOLDING CORPORATION
11600 SALLIE MAE DRIVE
RESTON, VA 20193
(Name and Address of Agent for Service)
(703) 810-3000
(Telephone Number, Including Area Code, of Agent for Service)
Copies to:
RONALD O. MUELLER, ESQ.
Gibson, Dunn & Crutcher LLP
1050 Connecticut Avenue, NW, Suite 900
Washington, DC 20036
(202) 955-8500
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE PRICE FEE
- -----------------------------------------------------------------------------------------------------------------------------
SLM Holding Corporation
Deferred Compensation Plan $25,000,000 100% $25,000,000 $6,950
Obligations (1)
- -----------------------------------------------------------------------------------------------------------------------------
(1) The Sallie Mae Deferred Compensation Plan Obligations are unsecured
obligations of SLM Holding Corporation to pay deferred compensation in the
future in accordance with the terms of the Sallie Mae Deferred Compensation
Plan for Key Employees.
INTRODUCTION
This Registration Statement on Form S-8 is filed by SLM Holding
Corporation, a Delaware corporation (the "Company" or the "Registrant"),
relating to $ 25,000,000 of unsecured obligations of the Company to pay deferred
compensation in the future (the "Obligations") in accordance with the terms of
the Company's Deferred Compensation Plan for Key Employees (the "Plan").
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Omitted from this Registration Statement in accordance with the Note to
Part I of Form S-8.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Omitted from this Registration Statement in accordance with the Note to
Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which the Company previously filed with the
Securities and Exchange Commission (the "Commission"), are incorporated in this
Registration Statement by reference and made a part of this Registration
Statement:
(a) The Company's latest Annual Report on Form 10-K for the fiscal year ended
December 31, 1998; and
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") since the end of the fiscal year
covered by the Annual Report referred to in (a) above.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
hereto, which indicates that all securities offered hereunder have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents.
For purposes of this Registration Statement, any document or any
statement contained in a document incorporated or deemed to be incorporated
herein by reference shall be deemed to be modified or superseded to the extent
that a subsequently filed document or a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
herein by reference modifies or supersedes such document or such statement in
such document. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
II-1
ITEM 4. DESCRIPTION OF SECURITIES.
$25,000,000 of Obligations are being registered under this Registration
Statement to be offered to certain eligible employees of the Company pursuant to
Plan. The Obligations are general unsecured obligations of the Company to pay
deferred compensation in the future in accordance with the terms of Plan from
the general assets of the Company, and rank equally with other unsecured and
unsubordinated indebtedness of the Company from time to time outstanding.
Under the Plan, the Company will provide eligible employees the
opportunity to enter into agreements for the deferral of a specified percentage
of their compensation. The Sallie Mae Compensation and Personnel Committee of
the Board of Directors (the "Committee") may select from management and other
highly compensated employees who may participate in the Plan (each a
"Participant"). The Committee will administer the Plan and will establish rules
and regulations governing the Plan and Participants.
A Participant's interest in a deferred compensation account, and thus the
Participant's right to the Obligations, generally cannot be transferred,
alienated or assigned, nor are they subject to attachment, execution,
garnishment or other such equitable legal process, except in the case of certain
qualified domestic relations orders.
A Participant is permitted to defer up to 85% of his or her base salary
and 100% of his or her bonus earned under the Company's Management Incentive
Plan (after required payroll withholdings and deductions).
A Participant will make two elections during each year. One election will
relate to base salary (which may, at the Participant's election, include other
income that may be treated as ordinary income). Each Participant will have the
opportunity to make this election annually on a date determined by the Committee
to defer salary to be earned in the following year. The second election will
relate to bonus amounts. The election with respect to a bonus earned in one year
and paid in the next succeeding year must be filed by June 30 of the year in
which such bonus is earned.
Deferrals will be credited to a hypothetical account established for each
Participant. Earnings and losses will be based upon the hypothetical investment
options elected by the Participant. There are currently 27 investment options,
including an option to invest in SLM Holding Corporation stock. Participants may
direct the manner in which their deferrals are deemed invested from among these
investment options, and may change their investment directions from time to time
in accordance with procedures established by the Committee. A Participant may
make a separate investment election with respect to his or her salary deferrals
and bonus deferrals.
Deferrals of compensation are credited, at the election of the
Participant, to two different accounts: (a) the Retirement Distribution Account
and (b) the In-Service Distribution Account. Each year, the Participant may make
an election with respect to how much of his or her deferrals will be credited to
each account. Once amounts are deferred into a particular account, those amounts
and the earnings thereon, cannot be moved to the other account. The election
with respect to the allocation of deferrals between the two accounts cannot be
changed during the year. Account balances are not segregated from the Company's
general assets. The right of each Participant to receive payments is that of a
general, unsecured creditor of the Company.
II-2
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VIII of the Registrant's By-Laws provides for indemnification of
the officers and directors of SLM Holding Corporation to the fullest extent
permitted by applicable law. Section 145 of the Delaware General Corporation Law
provides, in relevant part, that a corporation organized under the laws of
Delaware shall have the power, and in certain cases the obligation, to indemnify
any person who was or is a party or is threatened to be made a party to any suit
or proceeding because such person is or was a director, officer, employee or
agent of the corporation or is or was serving, at the request of the
corporation, as a director, officer, employee or agent of another corporation,
against all costs actually and reasonably incurred by him in connection with
such suit or proceeding if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal proceeding, he or she had no
reason to believe his or her conduct was unlawful. Similar indemnity is
permitted to be provided to such persons in connection with an action or suit by
or in right of the corporation, provided such person acted in good faith and in
a manner he or she believed to be in or not opposed to the best interests of the
corporation, and provided further (unless a court of competent jurisdiction
otherwise determines) that such person shall not have been adjudged liable to
the corporation.
The directors and officers of the Registrant and its subsidiaries are
covered by a policy of insurance under which they will be insured, within the
limits and subject to certain limitations, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities that might be imposed as a result of such actions, suits or
proceedings in which they are parties by reason of being or having been
directors or officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description
- ----------- -----------
4.1 Sallie MaeDeferred Compensation Plan for Key Employees
5.1 Opinion of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1).
23.2 Consent of Independent Public Accountants (Ernst & Young LLP).
23.3 Consent of Independent Public Accountants (Arthur Andersen LLP).
24 Power of Attorney (contained on signature page hereto).
II-3
ITEM 9. UNDERTAKINGS.
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Corporation certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, there-unto
duly authorized, in the City of Reston, Commonwealth of Virginia, on this 17TH
day of June, 1999.
SLM HOLDING CORPORATION
By: /s/ ALBERT L. LORD
---------------------------------
Name: Albert L. Lord
--------------------------
Title: Chief Executive Officer
--------------------------
Each person whose signature appears below constitutes and appoints
Marianne M. Keler and Mary F. Eure, and each of them, his or her true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, severally, for him or her and in his or her name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ ALBERT L. LORD Chief Executive Officer June 4, 1999
------------------ (Principal Executive Officer)
Albert L. Lord
/s/ MARK G. OVEREND Chief Financial Officer June 4, 1999
------------------- (Principal Financial and
Mark G. Overend Accounting Officer:
/s/ EDWARD A. FOX Chairman of the Board of June 4, 1999
----------------- Directors
Edward A. Fox
/s/ JAMES E. BRANDON Director June 4, 1999
--------------------
James E. Brandon
/s/ CHARLES L. DALEY Director June 8, 1999
--------------------
Charles L. Daley
/s/WILLIAM M. DIEFENDERFER,III Director June 6, 1999
------------------------------
William M. Diefenderfer, III
/s/ DIANE SUITT GILLELAND Director June 7, 1999
-------------------------
Diane Suitt Gilleland
/s/ ANN TORRE GRANT Director June 4, 1999
-------------------
Ann Torre Grant
/s/ RONALD F. HUNT Director June 5, 1999
------------------
Ronald F. Hunt
/s/ BENJAMIN J. LAMBERT, III Director June 4, 1999
----------------------------
Benjamin J. Lambert, III
/s/ MARIE V. MCDEMMOND Director June 4, 1999
----------------------
Marie V. McDemmond
/s/ BARRY A. MUNITZ Director June 4, 1999
-------------------
Barry A. Munitz
/s/ A. ALEXANDER PORTER Director June 4, 1999
-----------------------
A. Alexander Porter
/s/ WOLFGANG SCHOELLKOPF Director June 4, 1999
------------------------
Wolfgang Schoellkopf
/s/ STEVEN L. SHAPIRO Director June 7, 1999
---------------------
Steven L. Shapiro
/s/ RANDOLPH H. WATERFIELD, JR. Director June 4, 1999
-------------------------------
Randolph H. Waterfield, Jr.
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
- ------- ----------- -------------
4.1 Sallie Mae Deferred Compensation Plan
for Key Employees. ___
5.1 Opinion of Gibson, Dunn & Crutcher LLP. ___
23.1 Consent of Gibson, Dunn & Crutcher LLP (contained in
Exhibit 5.1). ___
23.2 Consent of Independent Public Accountants (Ernst &
Young LLP). ___
23.3 Consent of Independent Public Accountants (Ernst &
Young LLP). ___
24 Power of Attorney (contained on signature page hereto). ___
EXHIBIT 4.1
SALLIE MAE
Deferred Compensation Plan
for Key Employees
ARTICLE 1. PURPOSE
SECTION 1.1. In recognition of the services provided by certain key
employees and to make additional retirement benefits available to such
employees, on a tax-favored basis, SLM Holding Corporation hereby adopts a
deferred compensation plan (the "Plan"), effective December 8, 1998.
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 12.3.
BOARD. "Board" means the Board of Directors of SLM Holding Corporation.
BONUS. "Bonus" means any bonus earned pursuant to the Management
Incentive Plan and any other bonus designated by the Committee as eligible to be
deferred pursuant hereto.
BONUS DEFERRAL. "Bonus Deferral" means that portion of Bonus as to
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, as appointed by the Board to administer the Plan. A list of the
members of the Committee is attached hereto as Exhibit A.
COMPANY. "Company" means SLM Holding Corporation and any Affiliate,
unless the Affiliate has made an affirmative election not to adopt the Plan. A
list of the Affiliates that are Companies on the date hereof is attached hereto
as Exhibit B. 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. "Disabled" means a mental or physical condition which
qualifies a Participant for a disability retirement benefit under the Retirement
Plan.
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.
DISTRIBUTION OPTION ACCOUNT. "Distribution Option Account" or "Account"
means the account 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.
EFFECTIVE DATE. "Effective Date" means the effective date of the Plan
which is December 8, 1998.
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. A list of the Eligible Employees is attached hereto as Exhibit C.
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.
-2-
ENROLLMENT AGREEMENT. "Enrollment Agreement" means the authorization
form, in form and substance, satisfactory to the Committee, which an Eligible
Employee files with the Committee 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.
MANAGEMENT INCENTIVE PLAN. "Management Incentive Plan" means the 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 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. "Retirement" means the termination of the Participant's
Service with the Company (for reasons other than death) at or after becoming
eligible for the immediate payment of a retirement benefit from the Retirement
Plan.
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.
-3-
RETIREMENT DISTRIBUTION OPTION. "Retirement Distribution Option" means
the Distribution Option, pursuant to which benefits are payable in accordance
with Section 7.1.
RETIREMENT PLAN. "Retirement Plan" means the Sallie Mae Pension Plan,
as it may be amended from time to time.
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, 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 Holding 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
-4-
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 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 the Committee 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 the Committee to the Eligible Employees
prior to the commencement of a Plan Year.
-5-
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 the Committee.
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, except for the bonus earned for 1998,
which may be deferred by special election on or before December 31, 1998.
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 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 the Committee 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.
-6-
SECTION 4.4. SUPPLEMENTAL COMPANY CONTRIBUTIONS. The Company may make a
Supplemental Company Contribution, if necessary, to make up for any
contributions under the 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 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
-7-
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. 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 theretofore
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
-8-
an In-Service Distribution Account, one such In-Service Distribution Option
being established for each Distribution Option Period.
SECTION 6.2. RETIREMENT DISTRIBUTION OPTION. Any time and manner of
payment elected with respect to a Retirement Distribution Account shall be
applicable to all amounts in the Retirement Distribution Account. Such an
election may be changed at any time prior to Retirement by filing a new election
with the Committee; provided, however, that any such election change will only
be effective if it is filed at least six months prior to Retirement and in the
Plan Year preceding the Plan Year during which occurs the Participant's
Retirement. Once a Participant terminates Services on account of Retirement, he
may not change his election with respect to the timing and manner of payment of
his Retirement Distribution Account.
Amounts credited to the Retirement Distribution Account must
remain in the Retirement Distribution Account for at least two years. In the
event a Participant's Retirement Distribution Account includes amounts deferred
within two years of the date on which the Participant has elected a distribution
of his Retirement Distribution Account, deferrals in an amount equal to the
deferrals made within the two-year period, measured from the date of
distribution, and earnings attributable to such amounts, shall remain credited
to the Retirement 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.
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
-9-
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:
(a) BENEFITS UPON RETIREMENT. In the case of a Participant whose
Service with the Company terminates on account of his Retirement, 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,
prior to the date of the Participant's Retirement: (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 the Committee.
However, a Participant's Retirement Distribution Account must be distributed in
full before the end of the fortieth year following the year in which occurs the
Participant's Retirement. The Participant's Retirement Distribution Account
shall be distributed, as elected by the Participant, no later than January 31 of
the Plan Year immediately following (1) the Plan Year during which occurs the
Participant's Retirement, or (2) the Plan Year in which the Participant attains
an age specified in the Enrollment Agreement, provided the Participant's
Retirement has occurred. 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.
(b) BENEFITS UPON TERMINATION OF EMPLOYMENT. A Participant may
also elect on the Enrollment Agreement to have his Retirement Distribution
Account paid in the form of a lump sum if he should terminate Service prior to
his Retirement. Such lump sum will be distributed as soon as administratively
feasible following the date that is 12 months from the End Termination Date.
Such an election shall be subject to the provisions of Section 6.2, treating,
for this purpose, his End Termination Date as his Retirement.
SECTION 7.2. BENEFITS UNDER THE IN-SERVICE DISTRIBUTION OPTION.
Benefits under the In-Service Distribution Option shall be paid to a Participant
as follows:
-10-
(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
commencing no later than 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 not later than 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 not later than 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 not later than 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) BENEFITS UPON TERMINATION OF EMPLOYMENT. 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. Such lump sum will be distributed as soon as administratively
feasible following the date that is 12 months from the End Termination Date.
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 as of the date for which the Participant is first eligible to receive
a disability retirement benefit from the Retirement Plan. The Participant's
Retirement Distribution Account, if any, shall be distributed to the Participant
in accordance with Section 7.1(a), treating the day on which he first becomes
eligible for a disability benefit from the Retirement Plan as his retirement
date. 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,
-11-
benefits shall be paid to the Participant's Beneficiary, as determined under
Section 12.3, pursuant to 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, assuming the Participant retired at age 65. 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
-12-
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 12.3, 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 12.9 (the "Emergency Benefit"). For purposes of this Plan, an
unforeseeable financial emergency is an unexpected need for cash arising from an
illness, casualty, loss, sudden financial reversal, or other such unforeseeable
occurrence. Cash needs arising from foreseeable events, such as the purchase of
a house or education expenses for children, shall not be considered to be the
result of an unforeseeable financial emergency. 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. However, no Emergency Benefit may be
distributed from deferrals, and earnings attributable to such deferrals, that
have been credited to the Plan less than two years. 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. It is intended that the Committee's
determination as to whether a Participant has suffered an "unforeseeable
financial emergency" shall be made consistent with section 457(d)(1)(A)(iii) of
the Code.
ARTICLE 11. ACCELERATED DISTRIBUTION
SECTION 11.1. AVAILABILITY OF WITHDRAWAL PRIOR TO THE COMMENCEMENT OF
DISTRIBUTIONS. Upon the Participant's written election, the Participant may
elect to withdraw all or a portion of
-13-
the Participant's Distribution Option Account 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.
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 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 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. MISCELLANEOUS
SECTION 12.1. 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.
-14-
SECTION 12.2. 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;
(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
-15-
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 12.3. 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 12.4. 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 12.5. 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.
SECTION 12.6. 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.
-16-
SECTION 12.7. 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 12.8. 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 12.9. 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 12.10. 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 12.11. 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.
-17-
SECTION 12.12. 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 12.13. 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 12.14. 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.
SECTION 12.15. 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.
-18-
IN WITNESS WHEREOF, this instrument has been duly executed as of the
8th day of December, 1998.
SLM HOLDING CORPORATION
BY: /s/ Marianne M. Keler
----------------------
NAME: Marianne M. Keler
--------------------
TITLE: Senior Vice President and General Counsel
------------------------------------------
-19-
GIBSON, DUNN & CRUTCHER LLP
LAWYERS
1050 CONNECTICUT AVENUE, N.W.
WASHINGTON, D.C. 20036-5306
202-955-8500
FACSIMILE: 202-467-0539
WRITER'S DIRECT DIAL NUMBER OUR FILE NUMBER
(202) 955-8500 C88815-00004
June 17, 1999
SLM Holding Corporation
11600 Sallie Mae Drive
Reston, VA 20193
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the registration statement on Form S-8 (the
"Registration Statement") to be filed by SLM Holding Corporation, a Delaware
corporation (the "Company"),with the Securities and Exchange Commission (the
"Commission") in connection with the registration under the Securities Act of
1933, as amended (the "Act"), of $25,000,000 of general unsecured obligations
(the "Obligations") of the Company to pay deferred compensation in the future in
accordance with the Sallie Mae Deferred Compensation Plan for Key Employees (the
"Plan").
We have examined the original, or a photostatic or certified copy, of
such records of the Company, certificates of officers of the Company and of
public officials and such other documents as we have determined relevant and
necessary as the basis for the opinion set forth below. In such examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon our examination mentioned above, and in reliance thereon,
we are of the opinion that the Obligations being offered under the Plan, when
issued and sold in accordance with the terms set forth in the Registration
Statement and the Plan, and, when (a) the Registration Statement has become
effective under the Act, (b) the pertinent provisions of any applicable state
securities laws have been complied with, (c) the Company has received the
full consideration for the issuance of the Obligations (including amounts
withheld from compensation pursuant to instructions of participants in the
Plan), the Obligations so issued will be valid and binding obligations of the
Company, enforceable in accordance with their terms as amended from time to
time, except as enforcement thereof may be limited by bankruptcy, insolvency
or other laws of general applicability relating to or affecting enforcement
of creditors' rights or by general principles of equity.
We consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to our firm appearing on the cover
of the Registration Statement. In giving this consent, we do not admit that we
are within the category of persons whose consent is required under Section 7 of
the Act or the General Rules and Regulations of the Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
-------------------------------
GIBSON, DUNN & CRUTCHER LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 of our report dated January 14, 1999 included in the
SLM Holding Corporation's 1998 Annual Report to Shareholders which is
incorporated by reference into SLM Holding Corporation's Form 10-K for the year
ended December 31, 1998.
/s/ Arthur Andersen LLP
Washington, D.C.
June 17, 1999
EXHIBIT 23.3
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the SLM Holding Corporation Deferred Compensation Plan
for Key Employees of our report dated January 13, 1997, with respect to the
consolidated financial statements of SLM Holding Corporation included in its
Annual Report (Form 10-K) for the year ended December 31, 1998 filed with the
Securities and Exchange Commission.
Washington, D.C. /s/ Ernst & Young LLP
June 14, 1999
