CONFIDENTIAL AGREEMENT AND RELEASE
Exhibit 10.48
Xxxx X. Xxxxx
SLM Corporation and its subsidiaries, predecessors, and affiliates (collectively “SLM”) and I
have reached the following confidential understanding and agreement. In exchange for the Plan
Benefits and other consideration listed below, I promise to comply fully with the terms of this
Confidential Agreement and Release (“Agreement and Release”). In exchange for my promises, SLM
agrees to provide me with the Plan Benefits and other consideration listed below, to which I am not
otherwise entitled.
(1) Plan Benefits and other consideration: Unless I have revoked this Agreement and
Release pursuant to Section (9) below, pursuant to the SLM Corporation Executive Severance
Plan for Senior Officers (“Plan”), SLM will pay me severance in the following manner: a
total amount of $1,905,000, less withholding taxes and other deductions required by law.
Such severance payment will be made in a lump sum no earlier than my official termination
date or the eighth calendar day after my signature on this Agreement and Release.
(2) Unless I have revoked this Agreement and Release pursuant to Section (9) below, SLM
will pay me an additional payment of $825,000 as my 2010 MIP Bonus, less withholding taxes
and other deductions required by law. Such additional payment will be made in a lump sum no
earlier than my official termination date or the eighth calendar day after my signature on
this Agreement and Release.
(a) Rehiring: If I am rehired as an employee of SLM or any of its subsidiaries or
affiliates within the 18 month period following my termination, I hereby agree to repay the
cash amount identified in Section 1, $1,905,000, divided by 18 multiplied by the number of
months remaining in the 18 month period following my termination, adjusted and reduced by
the amount of taxes paid and withheld on that sum, within 30 days after rehire, as a
condition of rehire to SLM or any of its subsidiaries or affiliates.
(b) Medical/Dental/Vision Continuation: My current medical, dental, and vision
coverage will continue through the end of the month of my termination. The first day of the
month following my Termination Date, February 1, 2011, I will have the right to continue my
current medical, dental, and vision coverage through COBRA for up to 18 months. Under the
Plan, if I properly elect COBRA continuation coverage, SLM will pay the employer portion of
the total cost of my medical, dental and vision insurance premiums for the 18 month period
of February 1, 2011 through July 31, 2012.
(c) Benefit Programs: I waive future coverage and benefits under all SLM disability
programs, but this Agreement and Release does not affect my eligibility for other SLM
medical, dental, life insurance, retirement, and benefit plans. Whether I sign this
Agreement and Release or not, I understand that my rights and continued participation in
those plans will be governed by their terms, and that I generally will become ineligible for
them shortly after my termination, after which I may be able to purchase continued coverage
under certain of such plans. I understand that except for the benefits that may be due
under the 401(k) plans, deferred compensation, equity or pension plans to which I may be
entitled under SLM’s standard employee benefit plans for similarly situated employees and
executives, that I will not receive any other wage, PTO, or other similar payments from SLM
or any of the entities discussed in Section (3).
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(d) For SLM equity vesting purposes, SLM deems my January 31, 2011 termination a job
abolishment. SLM represents that on January 24, 2011, the Compensation and Personnel
Committee of the Board of Directors of SLM approved a modification to equity treatment upon
employment termination (“Modification”). The parties intend for me to be a beneficiary of
that Modification. In the event that I do not receive the intended benefit of the
Modification, the parties will negotiate in good faith an alternative arrangement equivalent
to the value the Modification would have provided me.
(e) Subject to any earlier payment provisions set forth above, and except for the
benefits and payments described in 2(b) (medical/dental/vision continuation) and
2(c)(benefit programs), all payments or reimbursements described in Sections (1) and (2)
shall be paid to me on or before the eighth calendar day and no later than the twenty-first
calendar day after my signature on this Agreement and Release.
(3) Release: In consideration of the Plan Benefits and other consideration described above in
Sections (1) and (2), I agree to release SLM, and all of its subsidiaries, affiliates,
predecessors, successors, and all related companies, and all of its former and current officers,
employees, directors, and employee benefit programs (and the trustees, administrators, fiduciaries,
and insurers of such programs) of any of them (collectively “Released Parties”) from all actions,
charges, claims, demands, damages or liabilities of any kind or character whatsoever, known or
unknown, which I now have or may have had through the date I sign this Agreement and Release except
claims that the law does not permit me to waive by signing this Agreement and Release. For example,
I am releasing all common law contract, tort, or other claims I might have, as well as all claims I
might have under the Age Discrimination in Employment Act (ADEA), the WARN Act, Title VII of the
Civil Rights Act of 1964, Sections 1981 and 1983 of the Civil Rights Act of 1866, National Labor
Relations Act (NLRA), the Americans with Disabilities Act (ADA), Family and Medical Leave Act, the
Employee Retirement Income Security Act of 1974 (ERISA), individual relief under the Xxxxxxxx-Xxxxx
Act of 2002, individual relief under The American Recovery and Reinvestment Act of 2009, or
individual relief under the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act of 2010,
Delaware Fair Employment Practices Act, Delaware Equal Pay Law, Handicapped Persons Employment
Protection Act, and Delaware Discrimination in Employment Act and any other federal, state or local
laws. I further waive any right to payment of attorneys’ fees, which I may have incurred. It is
understood and agreed that by entering into this Agreement and Release, SLM does not admit any
violation of law, or any of employee’s rights, and has entered into this Agreement and Release
solely in the interest of resolving finally all claims and issues relating to my employment and
separation.
SLM and I, the Parties (“Parties”), expressly agree however, that nothing in this Agreement
and Release shall preclude my participation as a member of a class in any suit or regulatory action
brought against the Released Parties arising out of or relating to any alleged securities
violations or diminution in the value of SLM securities.
SLM agrees that the release under this Section (3) shall not cover and I reserve and do not
waive my rights, directly or indirectly to seek further indemnification and/or contribution under
the By-Laws of SLM. SLM hereby reaffirms that I am entitled to indemnification after termination of
my employment, for actions taken in my capacity as an officer of SLM Corporation or applicable SLM
Corporation subsidiaries under the bylaws of the applicable subsidiary or SLM (subject to the
provisions of the By-Laws, which limit indemnity in certain circumstances).
SLM acknowledges that the SLM’s Board of Directors passed a resolution on March 20, 2008
pertaining to the advancement of legal expenses for certain officers including me. I hereby agree
to repay such legal fees and expenses advanced on my behalf by SLM and incurred by me in relation
to
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(i) the consolidated class action styled In Re SLM Securities Litigation (formerly known as
Xxxxxx X. Xxxxx v. SLM Corp., Xxxxxx X. Xxxx, Xxxxxxx Xxxxxxx (C.E.) Xxxxxxx and Xxxxxx X. Autor
(S.D.N.Y., 08-CV-01029)) (ii) the putative class actions relating to SLM’s 401(k) Plans (currently
styled as In Re SLM ERISA Litigation (formerly known as Slaymon v. SLM Corporation et al.
(S.D.N.Y., 08-CV-4334), Cordero v. SLM Corporation et al. (S.D.N.Y., 08-CV-7285), and Xxxxx v. SLM
Corporation et al. (S.D.N.Y. 08-CV-7846)); and (iii) any related investigation or other proceeding
that may subsequently be initiated by the SEC or other governmental or regulatory agencies as well
as any shareholder or other private party litigation filed prior to the date hereof or subsequently
in connection with related matters (collectively, the “Matters”), if it should ultimately be
determined that I am not entitled to indemnification under SLM’s bylaws, or otherwise. The
foregoing undertaking shall cover each request for advancement of expenses submitted on or after
the date hereof by the undersigned with respect to the Matters and shall supersede any undertaking
(if any) made by the undersigned prior to the date hereof.
(4) Covenant Not To Xxx: I agree not to xxx the Released Parties with respect to any claims,
demands, liabilities or obligations released by this Agreement and Release. The Parties agree,
however, that nothing contained in this covenant not to xxx or elsewhere in this Agreement and
Release shall:
(a) prevent me from challenging, under the Older Workers Benefits Protection Act
(29 U.S.C. § 626), the knowing and voluntary nature of my release of any age claims in this
Agreement and Release before a court, the Equal Employment Opportunity Commission (“EEOC”),
or any other federal, state, or local agency;
(b) prevent me from enforcing any future claims or rights that arise under the Age
Discrimination in Employment Act (“ADEA”) after I have signed this Agreement and Release; or
(c) prohibit or restrict me from: (i) making any disclosure of information required
by law; (ii) filing a charge, testifying in, providing information to, or assisting in an
investigation or proceeding brought by any governmental or regulatory body or official; or
(iii) from testifying, participating in or otherwise assisting in a proceeding relating to
an alleged violation of any federal or state employment law or any federal law relating to
fraud or any rule or regulation of the Securities and Exchange Commission or any
self-regulatory organization.
Except with respect to the proviso in Section (3) regarding alleged securities violations and
notwithstanding anything to the contrary in this paragraph, I hereby waive and release any right to
receive any personal relief (for example, money) as a result of any investigation or proceeding of
the U.S. Department of Labor, EEOC, U.S. Department of Education, or any federal, state, or local
government agency or court. Further, with my waiver and release of claims in this Agreement and
Release, I specifically assign to the Released Parties my right to any recovery arising from any
such investigation or proceeding.
(5) Additional Representations and Promises: I further acknowledge and agree that:
(a) I agree to return all SLM and Released Parties’ property in my possession or
control to them.
(b) Other than previously disclosed to SLM’s General Counsel or SLM’s Board of
Directors, I hereby represent and warrant that I have not reported any illegal or
potentially illegal conduct or activities to any supervisor, manager, department head, human
resources representative, director, officer, agent or any other representative of SLM, any
member of the
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legal or compliance departments, or to the Code of Business Conduct hotline and have no
knowledge of any such illegal or potentially illegal conduct or activities. I have disclosed
to SLM any information I have concerning any conduct involving SLM that I have reason to
believe may be unlawful or that involves any false claims to the United States. I promise
to cooperate fully in any investigation SLM undertakes into matters occurring during my
employment with SLM. I understand that nothing in this Agreement and Release prevents me
from cooperating with any U.S. government investigation. In addition, to the fullest extent
permitted by law, I hereby irrevocably assign to the U.S. government any right I might have
to any proceeds or awards in connection with any false claims proceedings against SLM.
(c) If I breach any provisions of this Agreement and Release, I agree that I will pay
for all costs incurred by SLM or any entities or individuals covered by this Agreement and
Release, including reasonable attorneys’ fees, in defending against my claim and seeking to
uphold my release.
(d) I promise to keep the terms of this Agreement and Release completely confidential
except as may be required or permitted by statute, regulation or court order.
Notwithstanding the foregoing, I may disclose such information to my immediate family and
professional representatives, so long as they are informed and agree to be bound by this
confidentiality clause. This Agreement and Release shall not be offered or received in
evidence in any action or proceeding in any court, arbitration, administrative agency or
other tribunal for any purpose whatsoever other than to carry out or enforce the provisions
of this Agreement and Release.
(e) I further promise not to disparage SLM, its business practices, products and
services, or any other entity or person covered by this Agreement and Release.
(f) I understand that SLM in the future may change employee benefits or pay. I
understand that my job may be refilled.
(g) I have not suffered any job-related wrongs or injuries, such as any type of
discrimination, for which I might still be entitled to compensation or relief in the future.
I have properly reported all hours that I have worked and I have been paid all wages,
overtime, commissions, compensation, benefits, and other amounts that SLM or any Released
Party should have paid me in the past.
(h) I intentionally am releasing claims that I do not know I might have and that, with
hindsight, I might regret having released. I have not assigned or given away any of the
claims that I am releasing.
(i) If SLM or I successfully assert that any provision in this Agreement and Release
is void, the rest of the Agreement and Release shall remain valid and enforceable unless the
other party to this Agreement and Release elects to cancel it. If this Agreement and Release
is cancelled, I will repay the Plan Benefits I received for signing it.
(j) If I initially did not think any representation I am making in this Agreement and
Release was true, or if I initially was uncomfortable making it, I resolved all my concerns
before signing this Agreement and Release. I have carefully read this Agreement and Release,
I fully understand what it means, I am entering into it knowingly and voluntarily, and all
my representations in it are true. SLM would not have signed this Agreement and Release but
for my promises and representations.
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(6) Arbitration of Disputes: Except with respect to the proviso in Section (3) concerning
securities litigation, SLM and I agree to resolve any disputes we may have with each other through
final and binding arbitration. For example, I am agreeing to arbitrate any dispute about the
validity of this Agreement and Release or any discrimination claim, which means that an Arbitrator
and not a court of law will decide issues of arbitrability and of liability with respect to any
claim I may bring; provided, however, that either party may pursue a temporary restraining order
and/or preliminary injunctive relief, with expedited discovery where necessary, in a court of
competent jurisdiction to protect common law or contractual trade secret or confidential
information rights and to enforce the post-employment restrictions in Section (7). I also agree to
resolve through final and binding arbitration any disputes I have with SLM, its affiliates, or any
current or former officers, employees or directors who elects to arbitrate those disputes under
this subsection. Arbitrations shall be conducted by JAMS (also known as Judicial Arbitration &
Mediation Services) in accordance with its employment dispute resolution rules. This agreement to
arbitrate does not apply to government agency proceedings, but does apply to any lawsuit I might
bring, including but not limited to any lawsuit related to a government agency proceeding. By
agreeing to this Agreement and Release, I understand that I am waiving my right to a jury trial.
(7) Confidentiality, Intellectual Property, Non-Competition, and Non-Solicitation: Except
as required or permitted by statute, regulation or court order, or pursuant to written consent
given by SLM’s General Counsel, I agree not to disclose to anyone else any of the information or
materials which are proprietary or trade secrets of SLM or are otherwise confidential. In
addition, in consideration of the Plan Benefits, I hereby acknowledge that I previously signed an
Agreement Regarding Confidentiality, Intellectual Property, and Non-Solicitation and that I
continue to be bound by the terms of that agreement except as modified in this Section (7).
Notwithstanding the foregoing, in consideration of the Plan Benefits and other consideration in
Sections (1) and (2), I agree as follows: I shall not, directly or indirectly, compete with SLM or
its subsidiaries or affiliates for a period of twenty-four (24) months after the date of
termination of my employment for whatever reason (“Restricted Period”). For the purposes of this
Section (7), “compete” means owning, managing, operating, financing, working, consulting, advising,
representing, or providing the same or similar services with or without compensation in any
capacity as those I provided to SLM within the last two (2) years of my employment engaged in the
same business conducted by SLM at the time of my termination.
In further consideration of the Plan Benefits and other consideration in Sections (1) and (2)
in this Agreement and Release, I agree that for twenty-four (24) months after my date of
termination of my employment for whatever reason (collectively, the “Non-Solicitation Employee
Period”) that I shall not solicit or encourage any employee with whom I communicated within the
last year of my employment to leave the employ of SLM, or hire any such employees. Further, for a
period of twenty-four (24) months following the termination of my employment with the SLM, I shall
not, directly or indirectly, contact or accept business that SLM could otherwise perform from any
of SLM’s customers or prospective customers with whom I communicated within the last two (2) years
of my employment.
I expressly agree that the markets served by SLM extend nationally are not dependent on the
geographic location of the personnel or the businesses by which they are employed and that the
restrictions set forth in this Section (7) have been designed to be reasonable and are no greater
than are required for the protection of SLM and do not prevent me from earning a livelihood by
working in positions that do not compete with SLM. In the event that a court shall determine that
any provision of the Agreement and Release is unenforceable, the Parties shall request that the
court construe this Agreement and Release in such a fashion as to render it enforceable and to
revise time, geographic and functional limits to those minimum limits that the court believes are
reasonable to protect the interests of SLM. I acknowledge and agree that this covenant has unique,
substantial and immeasurable value
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to SLM, that I have sufficient skills to provide a livelihood for me while this covenant
remains in force, and that this covenant will not interfere with my ability to work consistent with
my experience, training, and education. To enable SLM to monitor compliance with the obligations
imposed by this Agreement and Release, I further agree to inform in writing Xxxxxx Mae’s Senior
Vice President, Human Resources of the identity of my subsequent employer(s) and my prospective job
title and responsibilities prior to beginning employment. I agree that this notice requirement
shall remain in effect for twenty-four (24) months following the termination of my employment.
In the event that the Board of Directors of SLM or its successor reasonably determines that I
have violated any of the post-employment restrictions of the Agreement and Release or if a court at
my request determines that all or a substantial part of such restrictions are held to be
unenforceable, I will return to SLM 50% (less withholdings previously withheld by law) of the cash
Plan Benefits. The illegality, unenforceability, or ineffectiveness of any provision of this
Section (7) shall not affect the legality, enforceability, or effectiveness of any other provision
of this Agreement and Release. Notwithstanding the confidentiality provisions identified in
Section 5(d) of this Agreement and Release, I may disclose my SLM restrictive covenants to
prospective employers and agree that SLM may provide a copy of this Agreement and Release to my
prospective or future employers.
(8) Review Period: I hereby acknowledge (a) that I initially received a copy of the original
draft of this Agreement and Release on or before January 25, 2011 and an amended version on January
31, 2011; (b) that I was offered a period of 45 calendar days to review and consider it; (c) that I
understand I could use as much of the 45 calendar day period as I wish prior to signing; and (d)
that I was strongly encouraged to consult with an attorney in writing before signing this Agreement
and Release, and understood whether or not to do so was my decision. I waive any rights to further
time to consider the Agreement and Release.
(9) Revocation of Claims: I understand that I may revoke the waiver of the Age Discrimination
in Employment Act (ADEA) claims made in this Agreement and Release within seven (7) days of my
signing. My waiver and release of claims under ADEA shall not be effective or enforceable and I
will not receive 70% of the cash payments described in Section (1) and Section (2) above.
Revocation of claims can be made by delivering a written notice of revocation to Xxxxx Xxxxxxxx,
Senior Vice President, Administration, Xxxxxx Xxx, Inc., 000 Xxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000.
(10) I acknowledge that I have read and understand all of the provisions of this Agreement
and Release. This Agreement and Release represents the entire agreement between the Parties
concerning the subject matter hereof and shall not be altered, amended, modified, or otherwise
changed except by a writing executed by both Parties. I understand and agree that this Agreement
and
Release, if not timely revoked pursuant to Section (9), is final and binding when executed by me. I
sign this document freely, knowingly and voluntarily. I acknowledge that I have not relied upon
any representation or statement, written or oral, not set forth in this Agreement and Release. If
any provision of this Agreement and Release is held by a court of competent jurisdiction or by an
arbitrator to be contrary to law, the remainder of that provision and the remaining provisions of
this Agreement and Release will remain in full force and effect to the maximum extent permitted by
applicable law. This Agreement and Release is governed by federal laws and the laws of the
Commonwealth of Virginia.
(11) In addition, in consideration of the Plan Benefits and other consideration described
above, I further agree to cooperate with SLM, its affiliates, and its legal counsel in any legal
proceedings currently pending or brought in the future against SLM, including, but not limited to:
(1) participation as a witness; (2) drafting, producing, and reviewing documents; (3) assisting
with interviews, depositions, discovery, hearings, and trial; and (4) contacting SLM. This
includes, but is
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not limited to the In Re SLM Corporation Securities Litigation, In Re SLM Corporation ERISA
Litigation, Xxxxxx x. Xxxxxx Xxx, Inc., Xxxxxxxxx v. SLM Corporation et al., and litigation
relating to customers of for-profit schools filed against SLM. In the event I am requested, with
reasonable notice, to travel as part of this litigation cooperation, SLM agrees to pay my
reasonable out of pocket expenses.
(12) In addition, in consideration of the payments and agreements described above and for
additional consideration in the form of a retainer of $16,666 per calendar month, payable to me on
or before the tenth (10th) day of each calendar month, SLM agrees to retain me for, and I agree to
provide, consulting services to SLM during the twenty-four (24) months starting on February 1, 2011
(February 1, 2011 — January 31, 2013). The $16,666 monthly payment shall be deemed a retainer
paid to assure that I keep myself available to provide these services, and SLM shall pay this
monthly retainer to me regardless of the precise number of days, if any, it directs me to provide
the services. The parties will work in good faith to set the times when these services will be
provided, but the total amount of time directed shall not exceed ten (10) calendar days per
calendar month. During this period, I agree to provide telephone and local, in-person consulting
services to SLM. In the event I am requested, with reasonable notice, to travel as part of these
consulting services, SLM agrees to pay my reasonable out of pocket expenses. I recognize and agree
that my obligations under Section (11) concerning legal proceedings and litigation are not to be
considered or deemed consulting services under this Section. I may terminate this Section (12)
with or without cause upon 14 days written notice to the SVP, Human Resources of SLM. In the event
of termination by me, with or without cause, SLM will not be obligated to pay me further under this
Section (12). The other terms of this Agreement and Release, including, but not limited to
Sections (7) and (3), are not affected by any such termination by me. In the event that the Board
of Directors of SLM or its successor reasonably determines that I have violated any of the
post-employment restrictions of the Agreement and Release or if a court at my request determines
that all or a substantial part of such restrictions are held to be unenforceable, I agree that SLM
will not be obligated to pay me further under this Section (12).
Before you sign this Agreement and Release, please take it home, read through each section and
carefully consider it. SLM recommends that you discuss it with your personal attorney (any personal
attorney fees are not covered under the terms of this agreement). You have up to 45 calendar days
to consider this Agreement and Release. You may not make any changes to the terms of this Agreement
and Release. By signing this Agreement and Release, you will be waiving any claims whether known or
unknown.
/s/ Xxxx X. Xxxxx
|
1/31/11 | |
| Date | ||
/s/ Xxxxxx Xxxx
|
1/31/11 | |
Al Lord Vice Chairman and Chief Executive Officer SLM Corporation |
Date |
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