Sallie Mae 2015 Annual Report Download - page 192

(c) All payments and benefits provided under this Section 3.03 are conditioned on
the Eligible Officer’s continuing compliance with this Plan and the Eligible Officer’s execution
(and effectiveness) of a release of claims and covenant not to sue and non-competition and non-
solicitation agreements substantially in the form provided in Exhibit A upon termination of
employment.
3.04.Tax Effect of Payments.
(a) No Excise Tax Gross-Up. In the event it is determined that any compensation by
or benefit from the Corporation to the Eligible Officer or for the Eligible Officer's benefit, whether
pursuant to the terms of this Plan or otherwise (“Total Payments”), (i) constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of 1986 as amended
(the “Code”) and (ii) would be subject to taxes of any state, local or federal taxing authority that
would not have been imposed but for a change of control, including any excise tax under Section
4999 of the Code, and any successor or comparable provision (“Excise Tax”), then the Eligible
Officer's benefits under this Plan or otherwise shall be either (x) delivered in full or (y) delivered
as to such lesser extent which would result in no portion of the Total Payments being subject to
Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state
and local income taxes and the Excise Tax, results in the receipt by the Executive on an after-tax
basis of the greatest amount of benefits, notwithstanding that all or some portion of the Total
Payments may be taxable under Section 4999 of the Code. In the event that the payments and/or
benefits are to be reduced pursuant to this Section 3.04(a), such payments and benefits shall be
reduced such that the reduction of after-tax compensation to be provided to the Eligible Officer as
a result of this Section 3.04(a) is minimized. In applying this principle, the reduction shall be made
in a manner consistent with the requirements of Section 409A of the Code and where two (2)
economically equivalent amounts are subject to reduction but payable at different times, such
amounts shall be reduced on a pro rata basis but not below zero. In addition, the Company may in
its discretion, include in the lesser benefits paid under (y) above, a reasonable cushion amount to
take into account that the final value of the benefits delivered to the Executive Officer could be
determined at a later point in time. Each Eligible Officer shall cooperate fully with the Company
to determine the benefits applicable under this Section.
(b) Determination by Auditors. All mathematical determinations and all
determinations of whether any of the Total Payments are “parachute payments” (within the meaning
of Section 280G of the Code) that are required to be made under this Section 3, shall be made by
the independent auditors retained by the Corporation most recently prior to the Change in Control
(the “Auditors”), who shall provide their determination (the “Determination”), together with detailed
supporting calculations, both to the Corporation and to the Eligible Officer promptly following the
Eligible Officer’s Termination Date, if applicable, or such earlier time as is requested by the
Corporation. Any Determination by the Auditors shall be binding upon the Corporation and the
Eligible Officer, absent a binding determination by a governmental taxing authority that a greater
or lesser amount of taxes is payable by the Eligible Officer. The Corporation shall pay the fees and
costs of the Auditors. If the Auditors do not agree to perform the tasks contemplated by this Section