Exhibit 10.1
Navient Corporation 2014 Omnibus Incentive Plan
Performance Stock Unit Agreement
Pursuant to the terms and conditions of the Navient Corporation 2014 Omnibus Incentive Plan, amended and restated as of May 24, 2018 (the “Plan”), the Compensation and Human Resources Committee (the “Committee”) of the Navient Corporation Board of Directors (“Board”) hereby grants to ________________ (the “Grantee”) on _____________, 2023 (the “Grant Date”) an award (the “Award”) of __________ shares of Performance Stock Units (“PSUs”), which represent the right to acquire shares of common stock of Navient Corporation (the “Corporation”) subject to the following terms and conditions of this Performance Stock Unit Agreement (the “Agreement”):
Performance Metric* | Weight | Percentage of PSUs Vesting** | |||
0% | 50% | 100% | 150% | ||
Net Student Loan Cash Flows | 40% | Less than | $4.254 billion | $5.033 billion | $5.813 billion |
Return on Equity | 20% / 20% / 20% | Less than | 12.5% | 14.5% | 16.5% or greater |
* Net Student Loan Cash Flows performance targets and range for 2023-2025 in the aggregate. Return on Equity (ROE) performance target and range for 2023 only. ROE performance targets and ranges for 2024 and 2025 to be established by the Committee at the beginning of each respective year, with each year’s performance counting 1/3 towards the total 60% weight. Vesting of any PSUs earned based on ROE performance for a given year remain subject to Grantee’s continued employment through the Vesting Date, subject to the terms below.
** For points between each performance level, the vesting percentages will be interpolated. Subject to application of rTSR Modifier (defined below).
(as defined below) for the Performance Period, as shown in the following performance chart:
Corporation’s TSR Percentile Rank* | rTSR Modifier |
75th or higher | 120% |
70th | 116% |
65th | 112% |
60th | 108% |
55th | 104% |
50th | 100% |
45th | 96% |
40th | 92% |
35th | 88% |
30th | 84% |
25th or lower | 80% |
* For points between each performance level, the vesting modifier will be interpolated.
For example, if the vesting percentage based on Net Student Loan Cash Flows and Return on Equity as determined above is 100%, and if the Corporation’s TSR for the Performance Period ranks in the 60th percentile when compared to the TSRs of the Comparator Group for the Performance Period, then 108% of the PSUs would vest.
“Total shareholder return” or “TSR” shall equal the quotient of ((X – Y) + Z) / Y, where X equals the average closing price of a share of stock during December 2025, including any dividends paid on a share of stock in the underlying entity reinvested on the ex-dividend date, Y equals the average closing price of a share of stock during December 2023, including any dividends paid on a share of stock in the underlying entity reinvested on the ex-dividend date, and Z equals the total value of dividends paid on a share of stock during the period from the start of the beginning average period through the end of the Performance Period as if reinvested on the ex-dividend date, subject to adjustments for stock splits and other similar events.
The Corporation’s “Comparator Group” shall mean all companies in the S&P 400 Financials Index as of the first day of the Performance Period (“Peer Companies”), modified to take into account mergers, acquisitions, spin-offs and other similar events as follows:
If not previously vested, the Award will continue to vest, and will be settled in shares of the Corporation’s common stock, subject to the original performance goals and Performance Period set forth above, and on the original vesting terms and vesting dates set forth above, in the event that the Grantee’s employment is terminated by the Corporation (or a Subsidiary) for any reason other than for Cause.
If not previously vested, a portion of the Award (as determined below) will continue to vest, and will be settled in shares of the Corporation’s common stock, subject to the original performance goals and Performance Period set forth above, and on the original vesting terms and vesting dates set forth above, in the event that the Grantee voluntarily ceases to be an employee of the Corporation (or a Subsidiary) due to Retirement. For purposes of the immediately preceding sentence: (i) the entire Award will continue to vest if the Grantee ceases employment on or after the third anniversary of the Grant Date; (ii) two-thirds of the Award will continue to vest if the Grantee ceases employment on or after the second anniversary (but before the third anniversary) of the Grant Date; (iii) one-third of the Award will continue to vest if the Grantee ceases employment on or after the first anniversary (but before the second anniversary) of the Grant Date; and (iv) no portion of the Award will vest if the Grantee ceases employment before the first anniversary of the Grant Date.
If not previously vested, the Award will vest, and will be settled in shares of the Corporation’s common stock, at the target levels set forth above, upon death or Disability (provided that such Disability qualifies as a “disability” within the meaning of Treasury Regulation Section 1.409A-3(i)(4)). Shares of the Corporation’s common stock issued in settlement of PSUs that vest upon death or Disability will not be subject to the mandatory one-year holding period described above.
The Award shall be forfeited upon termination of employment due to Cause.
If to the Corporation to:
Navient Corporation
Attn: Human Resources, Equity Plan Administration
123 Justison Street
Wilmington, DE 19801
If to the Grantee, to (i) the last address maintained in the Corporation’s Human Resources files for the Grantee or (ii) the Grantee’s mail delivery code or place of work at the Corporation (or its subsidiaries).
NAVIENT CORPORATION
By:
Jack Remondi
President and Chief Executive Officer
Accepted by:
Date