Sallie Mae 2015 Annual Report Download - page 236

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(iii) the expiration of a period of years not shorter than three years. For the
avoidance of doubt, payment shall commence on the first day of the calendar
year elected by the Director; provided, however, that the Director may not
elect a calendar year that is earlier than the third calendar year following the
date of the Deferral Election.
For purposes of the Plan, a Director shall not be considered to cease to be a Director
unless the cessation of the Director’s service as a Director constitutes a separation
from service within the meaning of Section 409A.
A Director may not designate the taxable year of distribution except to the extent
permitted in Section 3(B)(iii).
A Director shall not be allowed to receive the Deferred Account before the expiration
of the Deferral Period, unless the Director meets the requirements of a hardship as
provided in Section 6, nor shall a Director be allowed to defer his Deferred Account
beyond the Deferral Period.
C. Investment Election
(i) Cash Account. If the Director elects to have all or a portion of his Deferred
Account invested in cash:
The Corporation shall maintain a separate memorandum account (the “Cash
Account”), reflecting the Corporation’s liability to the Director for the
deferred earnings. All deferred earnings that are invested in cash shall be
credited to the Cash Account at the time such earnings would have been paid
but for the Deferral Election. Amounts credited to the Cash Account shall
earn interest, compounded quarterly, on March 31st, June 30th, September
30th, and December 31st, at an effective rate equal to the quarterly average
of the monthly five-year Treasury Constant Maturity Rate listed on the
Federal Reserve Statistical Release H.15.
(ii) Stock Account. If the Director elects to have all or a portion of his Deferred
Account invested in Common Stock:
The Corporation shall maintain a separate memorandum account (the “Stock
Account”), reflecting the Corporation’s liability to the Director for the
Deferred Account, measured in accordance with the value of Common Stock.
All deferred earnings that are invested in Common Stock shall be converted
into a number of shares (or fraction thereof) of Common Stock and such
number of shares shall be credited to the Stock Account at the time such
earnings would have been paid but for the Deferral Election. The Stock
Account will be credited with additional shares determined by reference to
any dividends paid on or adjustments to Common Stock through the date of
distribution. The conversion of deferred earnings, dividends, or other cash