Offer Letter - Banga

Employment Agreement - Banga

Severance Agreement

Change in Control Agreement

  
 
 
 

EX-10.1 3 dex101.htm OFFER LETTER BETWEEN AJAYPAL BANGA AND MASTERCARD INC.

Exhibit 10.1

Richard Haythornthwaite

Chairman

MasterCard Worldwide

2000 Purchase Street

Purchase, NY 10577-2509

tel. 1-914-249-2000

www.mastercard.com

April 12, 2010

Mr. Ajaypal Banga

Re: Promotion to Chief Executive Officer        

Dear Ajay:

On behalf of the Board of Directors, I am pleased to offer you the position of President and Chief Executive Officer (“CEO”) of MasterCard International Incorporated and MasterCard Incorporated, effective July 1, 2010. In addition, we are delighted with your election to the Company’s Board of Directors, effective immediately.

The terms of the Company’s offer include modifications to your existing employment agreement which are summarized in the attached schedule. Following receipt of your counter-signature in the space provided below, indicating your acceptance of the Company’s offer, we anticipate entering into a new employment agreement with you. The new agreement would supersede your existing agreement and set forth, in detail, the terms of the Company’s offer summarized in the attached schedule.

On behalf of the Board of Directors, I wish to express our tremendous optimism for the future of the Company under your leadership. We are impressed with your strong performance to date and look forward to working with you during this important period of transition for the Company.

 

Sincerely,

/s/ Richard Haythornthwaite

Richard Haythornthwaite

Chairman of the Board

 

ACCEPTED AND AGREED:

/s/ Ajaypal Banga

Ajaypal Banga

April 12, 2010

Date signed


SCHEDULE OF TERMS MODIFYING EMPLOYMENT AGREEMENT BETWEEN AJAYPAL BANGA AND MASTERCARD INTERNATIONAL INCORPORATED, DATED JUNE 16, 2009 AND OFFER LETTER DATED JUNE 15, 2009

Subject to your acceptance of the offer, as set forth in the accompanying letter, dated April 12, 2010, the following modifications will be made, effective July 1, 2010, to the current terms and conditions of your employment:

1. Your base salary will be increased from $800,000 to $900,000.

2. Your target bonus, as a percentage of your salary, will remain at 150%, with a revised target amount of $1,350,000.

3. Your perquisite allowance is subject to review each year by the Human Resources and Compensation Committee of the Board of Directors. It is anticipated that your perquisite allowance will increase from $35,000 in 2010 to $45,000 in 2011.

4. Upon your promotion to the position of Chief Executive Officer on July 1, 2010, you will be granted a one-time Long Term Incentive award of 12,000 Restricted Stock Units (“RSU’s”), subject to the terms and conditions of the MasterCard Incorporated Long-Term Incentive Plan and the award agreement. These RSU’s will have a four year cliff vesting schedule. Further details will be contained in the award agreement provided to you at the time of the grant.

5. Based upon business requirements of this position, you will, as of July 1, 2010, have the use of an executive car service. Should you avail yourself of this service for commutation, you will be required to track usage and will be responsible for tax purposes. Further details concerning the external company car service will be provided to you in a separate communication.

 
 
 
 
 

EX-10.1 2 dex101.htm EMPLOYMENT AGREEMENT

Exhibit 10.1

EMPLOYMENT AGREEMENT

Agreement made and entered as of the 1st day of July, 2010, (the “Effective Date”) by and between MasterCard International Incorporated, a Delaware corporation (the “Company”) and Ajaypal Banga (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Executive previously entered into an employment agreement with the Company dated June 16, 2009 in which the Executive agreed to serve the Company as its President and Chief Operating Officer (the “COO Employment Agreement”) ; and

WHEREAS, the Executive became employed by the Company pursuant to the COO Employment Agreement on August 31, 2009 (the “Employment Commencement Date”); and

WHEREAS, the Executive and the Company wish to continue the employment of the Executive and beginning on the Effective Date, employ the Executive as the Company’s President and Chief Executive Officer and amend and restate the COO Employment Agreement on the terms and conditions specified herein;

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

1. Term of Employment.

1.1 Commencing on the Effective Date and continuing through December 31, 2012 (the “Initial Term of Employment”) the Company agrees to continue to employ the Executive and the Executive agrees to accept such continued employment and serve the Company, in such capacities, with such duties and authority, for such period, at such level of compensation and with such benefits, and upon such other terms and subject to such other conditions, as are herein set forth; provided, however, that unless the Company or the Executive provides the other with written notice of termination of this Agreement at least ninety (90) days prior to any date on which this Agreement would otherwise expire, the term of employment hereunder shall be automatically extended for a one (1) year period from each such date (each such one year period, an “Extended Term of Employment”) (the Initial Term of Employment, together with any Extended Term(s) of Employment, shall be hereinafter referred to collectively as the “Term of Employment”).

2. Capacities, Duties and Authority.

2.1 Effective on the Effective Date, the Executive shall serve the Company in the positions of President and Chief Executive Officer (“CEO”) of the Company and MasterCard Incorporated.


2.2 During the Term of Employment, in his capacity as CEO, the Executive shall have such authority, perform such duties, discharge such responsibilities and render such services as are customary to and consistent with such position, subject to the authority and direction of the Board of Directors or its designee.

2.3 During the Term of Employment, the Executive shall render his services diligently, faithfully and to the best of his ability, devoting thereto substantially all of his business time, energy and skills to the Company; provided, however, that nothing herein shall preclude the Executive from (i) making and managing personal investments, (ii) serving in any capacity with any civic, educational or charitable organization so long as such activities are disclosed, in writing, to the Company’s General Counsel and the Company’s Global Compliance Officer in accordance with the terms of the Company’s Code of Conduct, as may be amended from time to time, (the “Company’s Code of Conduct”) and do not conflict with the interests of the Company, the terms of the Company’s Code of Conduct or interfere with the performance of the Executive’s duties and obligations hereunder, including, but not limited to the obligations set forth in Paragraph 6 hereof; or (iii) serving as an outside corporate director so long as such service is disclosed in writing to, and approved in writing by, the Nominating and Corporate Governance Committee of the Board of Directors.

3. Compensation.

3.1 During the Term of Employment, the Executive shall be paid a base salary, payable in accordance with the regular payroll practices of the Company. During the Term of Employment, the Human Resources and Compensation Committee of the Board of Directors (the “Compensation Committee”) shall annually review the Executive’s performance and determine, in its sole discretion, whether or not to increase the Executive’s base salary and, if so, the amount of such increase. Once increased, the Executive’s base salary may not thereafter be decreased, except if the Compensation Committee determines, in its sole discretion, to reduce the base salary of substantially all members of the Executive Committee of the Company (“EC”), provided, however, in no event shall such reduction(s) of base salary by the Compensation Committee exceed, in the aggregate during the Term of Employment, ten (10%) percent of the Executive’s base salary then in effect. The Executive’s base salary as in effect from time to time is hereinafter referred to as the “Base Salary.”

3.2 During the Term of Employment, the Executive shall be eligible to participate in such annual and/or long-term bonus or incentive plan(s) as is or may be generally made available to other senior level executives of the Company, based upon performance goals or other criteria, terms and conditions as may be established by the Company, in its sole discretion. Such bonus or incentive payment will be payable on terms as may be established by the Company, in accordance with the terms and conditions of such plans as may be in effect from time to time.

 

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3.3 The Executive shall be eligible, annually during the Term of Employment, for vacation, without loss or diminution of compensation, in accordance with Company policy then in effect.

3.4 Subject to the following terms, the Executive will receive the second installment of the Executive’s sign-on bonus in the amount of $2,100,000 (less lawful deductions), not later than September 30, 2010, contingent upon the Executive’s continued performance of services for the Company through that date. If within twelve (12) months of the date the Executive receives the payment described in this Section 3.4: (i) the Executive’s employment is terminated for “Cause” as defined in Section 5.1.3 below; or (ii) the Executive voluntarily resigns pursuant to Section 5.1.6 below, the Executive will be obligated to return to the Company the net amount received by the Executive in connection with the payment described in this Section 3.4 within (30) days of the date of such termination or resignation, as the case may be.

4. Employee Benefit Programs.

4.1 During the Term of Employment, the Executive shall be eligible to participate in and shall have the benefit of all the Company’s employee compensation or benefit plans and programs as are or may be generally made available to the Company’s other senior level executives, subject to the eligibility criteria set forth therein, as such compensation or benefit plans or programs may be amended or terminated in the sole discretion of the Company from time to time.

4.2 During the Term of Employment, the Executive shall be eligible to participate in the Company’s executive perquisite program, in accordance with the terms and conditions of such program as may be in effect from time to time, and as approved by the Compensation Committee.

4.3 Nothing in this Paragraph 4 shall be construed to require the Company to establish, maintain or continue any compensation or benefit plan, program or arrangement. Except as otherwise expressly provided by their terms, such compensation or benefit plans, programs or arrangements are subject to modification or termination by the Company at any time.

5. Termination of Employment; Change in Control.

5.1 The Executive’s employment hereunder shall terminate:

5.1.1 upon the death of the Executive;

5.1.2 at the option of the Company, upon the disability of the Executive, which for the purposes of this Agreement shall be defined as set forth under the MasterCard Long-Term Disability Benefits Plan, as it may be amended from time to time (“Disability”). Any dispute concerning whether the Executive is deemed to have suffered a Disability for purposes of this Agreement shall be resolved in accordance with the dispute resolution procedures set forth in the MasterCard Long-Term Disability Benefits Plan.

 

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5.1.3 at the option of the Company, and effective upon the giving of written notice by the Company to the Executive of such exercise, for “Cause”, or effective on such other date as may be specified in such written notice (“Notice of Termination for Cause”), which, for purposes of this Agreement, shall mean:

(a) the willful failure by the Executive to perform his duties or responsibilities (other than due to Disability);

(b) the Executive’s engaging in serious misconduct that is injurious to the Company including, but not limited to, damage to its reputation or standing in its industry;

(c) the Executive’s having been convicted of, or entered a plea of guilty or nolo contendere to, a crime that constitutes a felony, or a crime that constitutes a misdemeanor involving moral turpitude;

(d) the material breach by the Executive of any written covenant or agreement with the Company not to disclose any information pertaining to the Company; or

(e) the breach by the Executive of the Code of Conduct, the Supplemental Code of Conduct, any material provision of this Agreement, or any material provision of the following Company policies: non-discrimination, substance abuse, workplace violence, nepotism, travel and entertainment, corporation information security, antitrust/competition law, enterprise risk management, accounting, contracts, purchasing, communications, investor relations, immigration, privacy, insider trading, financial process and reporting procedures, financial approval authority, whistleblower, anti-corruption and other similar Company policies, whether currently in effect or adopted after the date of this Agreement.

The Company’s Notice of Termination For Cause shall state the date of termination and identify the grounds upon which the termination is based.

5.1.4 at the option of the Company, for a reason other than death, Disability or Cause, effective ninety (90) days after the giving of written notice of such exercise or immediately upon the Company’s tender to the Executive of written notice and ninety (90) days’ Base Salary in lieu of such notice period, which shall be payable in a lump sum on the Date of Termination;

5.1.5 at the option of the Executive, effective ninety (90) days after the giving of written notice to the Company of the grounds for termination for Good Reason by the Executive, which grounds, as specified by the Executive, have not been cured by the Company during such ninety (90) day period; provided, however, that the Executive gave notice to the Company of the event(s) constituting Good Reason within sixty (60)

 

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days after such event(s) (or within sixty (60) days after a Change in Control, which for purposes of this Agreement shall be defined as set forth under the MasterCard Incorporated 2006 Long-Term Incentive Plan as it may be amended from time to time (“LTIP”), if the events giving rise to the Executive’s termination for Good Reason occurred during the six (6) month period preceding a Change in Control), failing which the Executive will be deemed to have waived his rights with respect to such event(s). The Company may waive all or part of the ninety (90) day notice required to be given by the Executive hereunder by giving written notice to the Executive. Unless waived by the Company, failure by the Executive to give notice of termination for Good Reason in compliance with this Paragraph, shall render the Executive ineligible to receive the payment and benefits provided under Paragraphs 5.2.5(b)-(e). For purposes of this Agreement “Good Reason” shall mean the occurrence at any time of any of the following without the Executive’s prior written consent:

(a) the removal from the principal position held by the Executive on the Effective Date and assignment to a position constituting a material diminution of responsibility and authority (although duties may differ without giving rise to a termination by the Executive for Good Reason);

(b) a material reduction in the Executive’s annual Base Salary except that a 10 percent reduction, in the aggregate, over the Term of Employment as set forth in Section 3.1 hereof shall not be treated as a material reduction;

(c) the relocation of the Executive’s principal place of employment to a location more than fifty (50) miles from the Executive’s principal place of employment (unless such relocation does not increase the Executive’s commute by more than twenty (20) miles), except for required travel on the Company’s business to an extent substantially consistent with the Executive’s business travel obligations as of the date of relocation; or

(d) the failure by the Company to obtain an agreement from any successor to the Company to assume and agree to perform any employment agreement between the Executive and the Company.

5.1.6 at the option of the Executive, effective ninety (90) days after the giving of written notice to the Company of the exercise of such option for a reason other than Good Reason as set forth in Paragraph 5.1.5, above (“Voluntary Resignation”). The Company may waive all or part of the ninety (90) day notice required to be given by the Executive hereunder by giving written notice to the Executive. Unless waived by the Company, failure by the Executive to give notice of termination by Voluntary Resignation in compliance with this Paragraph, shall render the Executive ineligible to receive the payment and benefits provided under Paragraphs 5.2.4(c).

5.1.7 if within sixty (60) days subsequent to the termination of the Executive’s employment for death, Disability, Good Reason, Voluntary Resignation or otherwise, it is determined that the Executive could have been terminated for Cause

 

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hereunder, such termination shall be recharacterized and treated as a termination for Cause for all purposes hereunder. Prior to the implementation of such recharacterization, the Company shall provide the Executive with notice and the reason(s) for the recharacterization and at least five (5) days to provide a written response to the Company. Thereafter, the Company may take appropriate legal action to seek recompense for any payments or benefits improperly paid to the Executive, his estate or beneficiaries hereunder, as the case may be. Following a judicial determination, the prevailing party in any action under this Paragraph 5.1.7, shall be entitled to be reimbursed by the non-prevailing party for reasonable legal fees and expenses incurred by the prevailing party in connection with the judicial proceeding seeking to enforce the provisions of this Paragraph 5.1.7.

5.1.8 on the last day of the calendar year in which the Executive attains the age of sixty-five (65) (“Mandatory Retirement”), at which time the Executive shall be required to retire.

5.2 Obligations of the Company upon Termination of Employment.

5.2.1 Death. In the event of the Executive’s death during the Term of Employment, the Term of Employment shall end as of the date of the Executive’s death and his estate or beneficiaries, as the case may be, shall be entitled to receive the following lump sum payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), as soon as practicable, but in no event later than thirty (30) days following the Date of Termination:

(a) Base Salary earned but not paid prior to the date of his death;

(b) payment for all accrued but unused vacation time up to the date of his death;

(c) the target annual incentive bonus payable for the year in which the Executive’s death occurs and the prior year, if not already paid; and

(d) such additional benefits, if any, to which the Executive is expressly eligible following the termination of the Executive’s employment on account of death, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company.

5.2.2 Disability. If the Executive’s employment is terminated due to Disability during the Term of Employment, either by the Company or by the Executive, the Term of Employment shall end as of the date of the termination of the Executive’s employment (as provided in Paragraph 5.1.2 of this Agreement) and the Executive shall be entitled to receive the following lump sum payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), as soon as practicable, but in no event later than thirty (30) days following the Date of Termination:

 

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(a) Base Salary earned but not paid prior to the Date of Termination;

(b) payment for all accrued but unused vacation time up to the Date of Termination;

(c) a pro rata portion (based upon completed calendar months worked prior to the date of disability) of the annual incentive bonus payable for the year in which the Executive’s termination of employment occurs and the prior year, if not already paid, based upon the actual performance of the Company for the applicable performance period (and taking into account the terms of the Plan including but not limited to the discretion of the Compensation Committee to reduce such bonus amount) as contemplated in accordance with the requirements of Section 162(m) of the Code, with such amount payable when the incentive bonus is regularly paid to similarly situated employees for such year; and

(d) such additional benefits, if any, to which the Executive is expressly eligible following the termination of the Executive’s employment on account of Disability, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company.

5.2.3 Cause. If the Company terminates the Executive’s employment for Cause in accordance with the terms set forth in Paragraph 5.1.3 above, the Term of Employment shall end as of the Date of Termination and the Executive shall be entitled to receive the following lump sum payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), as soon as practicable, but in no event later than thirty (30) days following the Date of Termination:

(a) Base Salary earned but not paid prior to the Date of Termination;

(b) payment for all accrued but unused vacation time up to the Date of Termination; and

(c) such additional benefits, if any, to which the Executive is expressly eligible following the termination of the Executive’s employment by the Company for Cause, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company.

5.2.4 Voluntary Resignation or Non Renewal by The Executive. If the Executive terminates his employment by Voluntary Resignation, in accordance with the terms set forth in Paragraph 5.1.6 above or elects not to renew the Term of Employment in accordance with Section 1.1, the Term of Employment shall end as of the Date of Termination; and the Executive shall be entitled to receive the following lump sum payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), as soon as practicable, but in no event later than thirty (30) days following the Date of Termination:

 

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(a) Base Salary earned but not paid prior to the Date of Termination;

(b) payment for all accrued but unused vacation time up to the Date of Termination; and

(c) such additional benefits, if any, to which the Executive is expressly eligible following the termination of the Executive’s employment by Voluntary Resignation, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company.

5.2.5 Without Cause, With Good Reason or Upon Non-Renewal by the Company. If, during the Initial Term of Employment or any Extended Term of Employment ending on or before December 31 of the calendar year in which the fifth anniversary of the Effective Date occurs: (i) the Executive’s employment is terminated by the Company (other than for Cause or Disability) in accordance with the terms set forth in Paragraph 5.1.4 above; (ii) the Executive terminates his employment with Good Reason in accordance with the terms set forth in Paragraph 5.1.5 above; or (iii) the Company elects to not extend the Term of Employment in accordance with Paragraph 1.1 (whether before or after a Change in Control), the Term of Employment shall end as of the Date of Termination and the Executive shall be entitled to:

(a) the following payments following the Date of Termination: (i) a lump sump payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), within thirty (30) days following the Date of Termination of all Base Salary earned but not paid prior to the Date of Termination; (ii) a lump sum payment within thirty (30) days following the Date of Termination equal to all accrued but unused vacation time up to the Date of Termination; and (iii) a pro rata portion (based upon actually completed calendar months worked) of the annual incentive bonus payable for the year in which the Executive’s termination of employment occurs based on the actual performance of the Company for the applicable performance period as determined by the Compensation Committee and payable in accordance with the regular bonus pay practices of the Company, as contemplated in accordance with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) and to the extent not already paid, the annual incentive bonus for the year immediately preceding the year in which the Executive’s Date of Termination occurs, payable in the amount and at the time such bonus would have been paid per the terms of the existing plan;

(b) subject to the Executive’s execution (without revocation) of the Separation Agreement and Release as set forth in Paragraph 5.2.5(f), severance pay, in the form of Base Salary continuation and payment, of an amount equivalent to the average annual incentive bonus received by the Executive with respect to the prior two years of the Executive’s employment by the Company (the “Average Bonus Payment”), payable on a schedule in accordance with the regular payroll practices (but in no event less frequently than monthly) and annual incentive bonus pay practices of the Company

 

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(such Base Salary continuation and Average Bonus Payment being collectively referred to herein as “Severance Pay”) for a twenty-four (24) month period following the Executive’s Date of Termination (the “Severance Pay Period”). If the Executive’s employment terminates under the circumstances set forth in Paragraph 5.2.5 above, after the payment of an annual 2009 bonus, but prior to the payment of an annual 2010 bonus, the Executive’s Severance Pay shall include a payment equivalent to the actual 2009 bonus received by the Executive in lieu of the Average Bonus Payment. Each Severance Pay installment payment shall be deemed a separate payment for Section 409A of the Code. Notwithstanding the foregoing, to the extent required under Section 409A of the Code, payments of the Severance Pay shall commence no earlier than the first day of the seventh month following the Executive’s Date of Termination (or such earlier date as is permitted under Section 409A of the Code) (with the first such payment being a lump sum equal to the aggregate payments the Executive would have received during such six-month period if no such delay had been imposed) in accordance with Section 409A(a)(2)(B)(i) of the Code. In the event that the Executive dies prior to receipt of all Severance Pay due hereunder, any remaining Severance Pay due to the Executive under this Paragraph 5.2.5(b) shall be paid to the Executive’s estate or beneficiaries, as the case may be, in a lump sum as soon as practicable following the Executive’s death but in no event later than ninety (90) days following the date of the Executive’s death;

(c) subject to the Executive’s execution (without revocation) of the Separation Agreement and Release, as set forth in Paragraph 5.2.5(f), payment on the Executive’s behalf, for the monthly cost of the premiums for coverage under the Consolidated Omnibus Reconciliation Act of 1985, as amended (“COBRA”), for a period equivalent to the eighteen (18) month COBRA period (twenty-nine (29) month period, if the Executive is disabled under the Social Security Act within the first sixty (60) days of the continuation period) or the Severance Pay Period, whichever is shorter (the “Medical Benefits”), provided, however, such coverage shall not be provided if during such period the Executive is or becomes ineligible under the provisions of COBRA for continuing coverage; and provided, further, that if the Executive is eligible for Retiree Health Coverage under the MasterCard Retiree Health Plan, the Company shall pay the full cost of such Retiree Health or COBRA coverage, as applicable, during the Severance Pay Period and thereafter, retiree contribution levels provided under the provisions of the Retiree Health Plan shall apply;

(d) subject to the Executive’s execution (without revocation) of the Separation Agreement and Release, as set forth in Paragraph 5.2.5 (f), reasonable outplacement services, to be provided by a firm selected by the Company, at a level generally made available to executives of the Company for the shorter of the Severance Pay Period or the period he remains unemployed;

(e) such other benefits, if any, to which the Executive is expressly eligible following the termination of the Executive’s employment by the Company without Cause, by the Executive with Good Reason or by the Company Upon Non-Renewal, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company. (other than any severance payments payable under the terms of any benefit plan, including, but not limited to, the MasterCard International Incorporated Severance Plan).

 

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(f) The Company’s obligations to make payments and provide benefits under Paragraphs 5.2.5(b)-(e) are conditioned on the Executive or his legal representative’s execution (without revocation) of a separation agreement and general release of claims (“Separation Agreement and Release”) in substantially the form annexed hereto, provided that if the Executive should fail to execute such Separation Agreement and Release within sixty (60) days following the Date of Termination, the Company shall not have any obligation to make the payments and provide the benefits contemplated under Paragraphs 5.2.5(b)-(e). Benefits under Paragraphs 5.2.5(b)-(e) that are not subject to Section 409A of the Code shall be accumulated and paid on the first scheduled payment date following expiration of the revocation period for the Separation Agreement and Release, and any subsequent payments shall continue, and any payments subject to Section 409A of the Code shall be made, on the payment dates set forth in Paragraphs 5.2.5(b)-(e).

(g) If the Term of Employment ends on a date after December 31, 2014, because: (i) the Executive’s employment is terminated by the Company (other than for Cause or Disability) in accordance with the terms set forth in Paragraph 5.1.4 above; (ii) the Executive terminates his employment with Good Reason in accordance with the terms set forth in Paragraph 5.1.5 above; or (iii) the Company elects to not further extend the Term of Employment in accordance with Paragraph 1.1 (whether before or after a Change in Control), the Term of Employment shall end as of the Date of Termination and the Executive shall be entitled to only those payments and benefits provided in Paragraphs 5.2.5(a) and (e) of this Agreement.

5.2.6 Termination Upon Mandatory Retirement. In the event the Executive’s employment with the Company ends upon Mandatory Retirement, the Executive shall be eligible for the following lump sum payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan) as soon as practicable, but in no event later than thirty (30) days following the Date of Termination:

(a) Base Salary earned but not paid prior to the Date of Termination;

(b) payment for all accrued but unused vacation time up to the Date of Termination;

(c) the annual incentive bonus payable for the year in which the Executive’s termination of employment occurs and the prior year, if not already paid, based upon the actual performance of the Company for the applicable performance period (and taking into account the terms of the Plan including but not limited to the discretion of the Compensation Committee to reduce such bonus amount) as contemplated in accordance with the requirements of Section 162(m) of the Code, with such amount payable when the incentive bonus is regularly paid to similarly situated employees for such year; and

 

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(d) such additional vested benefits to which the Executive is expressly entitled following the termination of the Executive’s employment, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company, provided, however, in no event shall the Executive be entitled to any payment or benefit provided pursuant to Paragraphs 5.2.5(b), (c) and (d) of this Agreement.

5.3 Except as expressly provided by Paragraph 5.2, any payment or benefit provided under Paragraph 5.2 hereof shall be in lieu of any other severance, bonus or other payments, perquisites or benefits, including any further accruals or vesting thereof, to which the Executive might then or, in the future, be eligible pursuant to this Agreement or any statutory or common law claim. In order to preserve the parties’ respective legal rights in the event of a dispute, the Executive acknowledges and agrees that in the event the parties dispute whether the Executive shall be eligible to a payment hereunder, such payment shall not be deemed to be earned or otherwise vest hereunder until such time as the dispute is determined by a final judgment of a court of competent jurisdiction or otherwise resolved. The foregoing shall not be deemed to prohibit a court of competent jurisdiction from awarding prejudgment interest under circumstances in which it may deem it appropriate to do so.

5.4 Notwithstanding anything to the contrary herein, if the Company has reason to believe that there are circumstances which, if substantiated, would constitute Cause as defined herein, the Company may suspend the Executive from employment immediately upon notice for such period of time as shall be reasonably necessary for the Company to ascertain whether such circumstances are substantiated. During such suspension, the Executive shall continue to be paid the compensation and provided all benefits hereunder in accordance with the regular payroll and benefit practices of the Company, except that the Company’s obligation to pay any incentive bonus that would otherwise be payable during the period of suspension shall be held in abeyance pending the conclusion of the Company’s investigation. If the Executive has been indicted or otherwise formally charged by governmental authorities with any felony, the Company may, in its sole discretion, and without limiting the Company’s discretion to terminate the Executive’s employment for Cause (provided it has grounds to do so under the terms of Paragraph 5.1.3 hereof), suspend the Executive without continuation of any compensation or benefits hereunder (except health benefits, which shall be continued during the period of suspension), pending final disposition of such criminal charge(s). Upon receiving notice of any such suspension, the Executive shall promptly leave the premises of the Company and remain off such premises until further notice from the Company. In the event the Executive is suspended as a result of such charges, but is later acquitted or otherwise exonerated, the Company shall pay to the Executive any compensation withheld pursuant to this Paragraph 5.4, with interest, calculated from the date such compensation was suspended at the prime lending rate in effect on the date the Executive is acquitted or exonerated, and provide benefits withheld from the Executive

 

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during the period of the Executive’s suspension, if any. Such payments and benefits shall be paid and/or provided within thirty (30) days of the date of the Executive’s acquittal or exoneration and shall be limited with respect to the period of up to two (2) years from the date of suspension.

5.5 Notwithstanding anything to the contrary contained herein, the date of termination for purposes of payment of deferred compensation under any Company deferred compensation plans shall be determined in accordance with the terms of such plans.

6. Acknowledgements; Confidential Information; Competitive Activities; Non Solicitation.

6.1 The Executive acknowledges and agrees as follows:

6.1.1 The Company is in the payments industry and provides such services both nationally and internationally without limitation to any geographic area.

6.1.2 Since the Company would suffer irreparable harm if the Executive left the Company’s employ and solicited the business and/or employees of the Company or otherwise interfered with business relationships of the Company, it is reasonable to protect the Company against such activities by the Executive for a limited period of time after the Executive leaves the Company.

6.1.3 The covenants contained in Paragraphs 6.2, 6.3, 6.4 and 6.5 below are reasonably necessary for the protection of the Company and are reasonably limited with respect to the activities they prohibit, their duration, their geographical scope and their effect on the Executive and the public. The purpose and effect of the covenants simply are to protect the Company for a limited period of time from unfair competition by the Executive.

6.2 Confidentiality.

6.2.1 For the purposes of this Agreement, all confidential or proprietary information concerning the business and affairs of the Company, including, without limitation, all trade secrets, know-how and other information generally retained on a confidential basis by the Company concerning its designs, products, methods, techniques, systems, engineering data, software codes and specifications, formulae, processes, inventions and discoveries, business plans, pricing, product plans and the identities of, and the nature of the Company’s dealings with, its members, suppliers and customers, whether or not such information shall, in whole or in part, be subject to or capable of being protected by patent, copyright or trademark laws, shall constitute “Confidential Information.” The Executive acknowledges that he has had and, will from time to time have access to and has obtained and will in the future obtain knowledge of certain Confidential Information, and that improper use or revelation thereof by the Executive, during or after the termination of his employment by the Company, could cause serious injury to the business of the Company. Accordingly, the Executive agrees that, unless

 

12


otherwise required by law, he will forever keep secret and inviolate all Confidential Information which shall have come or shall hereafter come into his possession, and that he will not use the same for his own private benefit, or directly or indirectly for the benefit of others, and that he will not disclose such Confidential Information to any other person. If the Executive is legally compelled (by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose any of the Confidential Information, he shall provide the Company with prompt prior written notice of such legal requirement, so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this paragraph. In any event, the Executive may furnish only that portion of the Confidential Information which the Executive is advised by legal counsel is required, and he shall exercise his best efforts to obtain an order or assurance that confidential treatment will be accorded such Confidential Information as is disclosed. Notwithstanding anything contained herein which may be to the contrary, the term “Confidential Information” does not include any information which at the time of disclosure is generally available to and known by the public, other than as a result of a disclosure directly or indirectly by the Executive.

6.2.2 Notwithstanding the foregoing, nothing herein shall preclude the Executive from (i) making any disclosure as required by law or legal process; or (ii) participating, cooperating, or testifying in any action, investigation, or proceeding by or before, or providing information to, any governmental agency or legislative body, any self-regulatory organization, or the Company’s Law Department or the Global Ethics and Compliance Officer in the General Counsel’s Office; provided, however, that upon the Executive’s obtaining notice of a requirement to take any action pursuant to Section 6.2.2(i) or (ii), the Executive shall, to the extent permitted by law, provide the Company with immediate written notice of any required disclosures, subpoenas, or any other legal process, which notice shall include a copy of any such disclosure request, subpoena, or other legal process.

6.3 In addition to the acknowledgments by the Executive set forth in Paragraph 6.1 above, the Executive acknowledges that the services provided by him for the Company are a significant factor in the creation of valuable, special and unique assets which are expected to provide the Company with a competitive advantage. Accordingly, the Executive agrees that for the Term of Employment through the duration of the Severance Pay Period or in the event the Executive is ineligible for Severance Pay pursuant to Paragraphs 5.2.3, 5.2.4 or 5.2.5 (g) above or fails to execute (without revocation) a Separation Agreement and Release in accordance with Paragraph 5.2.5(f) above, notwithstanding the Executive’s eligibility for Severance Pay, for a period of twelve (12) months, the Executive will not directly or indirectly for himself or any third party invest in, own, become employed by, or render any consulting, advisory or other services to, or for the benefit of, any business or activity that competes with any business or activity (i) engaged in by the Company or, (ii) to the knowledge of the Executive, that the Company has undertaken efforts to engage in and/or plan, without regard to geographic limitation. This prohibition includes, but is not limited to the Executive becoming an investor in, owner of, employed by, or directly or indirectly performing services for the following, including their subsidiaries, affiliates, and successors: (i)

 

13


VISA Inc., VISA Europe, American Express, Discover, China Union Pay, JCB, Diners Club International, PayPal, Revolution, Tempo, Bill Me Later, Inc., First Data Corporation, Metevant, Star Network Inc. or NYCE (ii) any other payment card business or processor; (iii) any company or other entity in the payments business that holds a seat on the Board of Directors of VISA Inc. or VISA Europe; or (iv) any company or other entity that is a party to a brand dedication agreement (the term of which is two years or more) with VISA Inc., VISA Europe or American Express and (x) whose VISA or American Express branded volume, as of the Date of Termination of the Executive’s employment, is equal to or greater than 75% of the total volume generated by cards issued by such company or (y) pursuant to the terms of such brand dedication agreement is contractually obligated to increase its VISA or American Express branded volume up to an amount equal to or greater than 75% of the total volume generated by cards issued by such company during the term of such brand dedication agreement. Further, it shall not be deemed a violation of the Agreement for the Executive to have beneficial ownership of less than 1% of the outstanding amount of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on a national securities exchange or quoted on an inter-dealer quotation system. The Executive acknowledges and agrees that the non-compete provision set forth herein is intended to limit competition by the Executive to the maximum extent permitted by law. If it shall be finally determined by any court of competent jurisdiction that the scope or duration of any limitation contained herein is too extensive to be legally enforceable, then the Executive agrees that the provisions shall instead be construed to be confined to such lesser scope or duration as shall be legally enforceable, and the Executive hereby consents to the enforcement of such limitation as so modified.

6.4 During the Term of Employment, and thereafter for the duration of the Severance Pay Period, or in the event that the Executive is ineligible for Severance Pay pursuant to Paragraphs 5.2.3, 5.2.4 or 5.2.5 (g) above or fails to execute (without revocation) a Separation Agreement and Release in accordance with Paragraph 5.2.5(f) above, notwithstanding the Executive’s eligibility for Severance Pay, for a period of twelve (12) months following the Executive’s Date of Termination, the Executive shall not himself, or by assisting any other person to, directly or indirectly, (a) hire or cause to be hired any level 5 or higher level employee, agent, consultant or representative of the Company, (b) solicit, induce, recruit or encourage any other level 5 or higher level employee, agent, consultant or representative to leave the service of the Company for any reason, or (c) induce any customer, supplier or other person with whom the Company is engaged in business, or to the knowledge of the Executive planned or proposed to engage in business, to terminate any commercial relationship with the Company or cease to accept or issue its products and/or use its services.

6.5 The Executive acknowledges and agrees as follows:

6.5.1 The Executive agrees to promptly disclose to the Company any and all discoveries, developments, inventions, products, services, processes, formulas, and improvements thereof, (“Inventions”) whether or not patentable, relating to the

 

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products, services, commercial or other endeavors of the Company, its subsidiaries and affiliates, which the Executive may invent, discover, develop or learn in connection with the Executive’s employment. The Executive agrees that such inventions are the exclusive and absolute property of the Company and that the Company will be the sole and absolute owner of all intellectual property rights, including patent and any and all other rights in connection therewith. The Executive agrees to give all reasonable assistance in the preparation and/or execution of any papers the Company may request to reflect such interest and to secure patent or other protection for such Inventions.

6.5.2 The Executive understands that in the course of employment, the Executive may prepare writings, drawings, diagrams, designs, specifications, manuals, instructions and other materials, and computer code and programs (“Works”). Such Works are “works made for hire “under United States copyright law and the Company shall be the owner of the Executive’s entire right of authorship in such Works. If such Works are deemed by operation of law not to be “works made for hire,“ the Executive hereby assigns to the Company the Executive’s entire right of authorship, including copyright ownership in such Works and agrees to execute any document deemed necessary by the Company in connection therewith.

6.6 In the event that the Company determines, in good faith, that the Executive has breached his obligations under Paragraphs 6.2, 6.3, 6.4 or 6.5, the Company shall be under no obligation to provide any further Severance Pay or provide any further payments or benefits otherwise due under Paragraphs 5.2.5(b)–(d) above, during the remainder of the Severance Pay Period. In the event of a judicial determination that the Executive has breached his obligations under Paragraphs 6.2, 6.3, 6.4 or 6.5, in addition to any damages or other relief otherwise available to the Company, the Executive shall be obligated to reimburse the Company for the Severance Pay previously received from the Company with respect to any period of time during the Severance Pay Period in which the Executive has been found by the court to have been in breach. In addition, following a judicial determination, the prevailing party shall be entitled to be reimbursed by the non-prevailing party for reasonable legal fees and expenses incurred by the prevailing party in connection with the judicial proceeding seeking to enforce the provisions of Paragraph 6 hereof.

6.7 For the purposes of this Agreement, the period of restriction of confidentiality or proprietary information and competition is intended to limit disclosure and competition by the Executive to the maximum extent permitted by law. If it shall be finally determined by any court of competent jurisdiction ruling on this Agreement that the scope or duration of any limitation contained in this Agreement is too extensive to be legally enforceable, then the parties hereby agree that the provisions hereof shall be construed to be confined to such scope or duration (not greater than that provided for herein) as shall be legally enforceable, and the Executive hereby consents to the enforcement of such limitations as so modified.

6.8 The Executive acknowledges that any violation by him of the provisions of this Paragraph 6 would cause serious and irreparable damage to the Company. He

 

15


further acknowledges that it might not be possible to measure such damage in money. Accordingly, the Executive agrees that, in the event of a breach or threatened breach by the Executive of the provisions of this Paragraph, the Company may seek, in addition to any other rights or remedies, including money damages or specific performance, an injunction or restraining order, without the need to post any bond or other security, prohibiting the Executive from doing or continuing to do any acts constituting such breach or threatened breach.

7. Reimbursement of Business Expense.

During the Term of Employment, subject to and in accordance with the Company’s policies with regard to such matters, the Executive is authorized to incur reasonable business expenses in carrying out his duties and responsibilities under the Agreement, and the Company shall promptly reimburse him for all such properly documented business expenses incurred in accordance with the Company’s travel and business expense reimbursement policy in connection with carrying out the business of the Company.

8. Indemnity.

The Company shall indemnify the Executive, to the fullest extent permitted by the General Corporation Law of the State of Delaware, for any acts or omissions taken or made by the Executive during the Term of Employment, within the scope of his authority under this Agreement.

9. Miscellaneous.

9.1 This Agreement shall be construed and enforced in accordance with the laws of the State of New York without reference to principles of conflict of laws. Any legal suit, action or proceeding by or against any party hereto arising out of or relating to this Agreement and/or the Separation Agreement and Release shall be instituted in a federal or state court in the State of New York, and each party hereto waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding and each party hereto irrevocably submits to the jurisdiction of any such court in any suit, action or proceeding.

9.2 The Executive acknowledges and agrees that he is and will be bound to the terms of the Company’s Code of Conduct, Supplemental Code of Conduct and any other agreements he has executed or may execute in the future regarding confidentiality, trade secrets, inventions, restrictions on competition, solicitation or which create other post-employment obligations, including, but not limited to any agreement executed in connection with the Executive’s past or future participation in the Company’s LTIP.

9.3 Upon the Effective Date, this Agreement, the offer letter to the Executive from the Company, dated April 12, 2010, the MasterCard Incorporated Long Term Incentive Plan Non-Competition and Non-Solicitation Agreement, dated June 15, 2009, and the MasterCard International Incorporated Non-Disclosure Agreement and

 

16


Assignment, dated June 15, 2009, shall incorporate the complete understanding and agreement between the parties with respect to the subject matter hereof and thereof and supersede any and all other prior or contemporaneous agreements, written or oral, between the Executive and the Company or any predecessor thereof, with respect to such subject matter, including but not limited to the COO Employment Agreement and the offer letter to the Executive from the Company, dated June 15, 2009. No provision hereof may be modified or waived except by a written instrument duly executed by the Executive and the Company.

9.4 The Executive acknowledges that before entering into this Agreement he has received a reasonable period of time to consider this Agreement and has had sufficient time and an opportunity to consult with any attorney or other advisor of his choice in connection with this Agreement and all matters contained herein, and that he has been advised to do so if he so chooses. The Executive further acknowledges that this Agreement and all terms hereof are fair, reasonable and are not the result of any fraud, duress, coercion, pressure or undue influence exercised by the Company, that he has approved and entered into this Agreement and all of the terms hereof on his own free will, and that no promises or representations have been made to him by any person to induce him to enter into this Agreement other than the express terms set forth herein.

9.5 The Company shall be eligible to deduct and withhold from all compensation payable to the Executive pursuant to this Agreement all amounts required to be deducted and withheld therefrom pursuant to any present or future law, regulation or ordinance of the United States of America or any state or local jurisdiction therein or any foreign taxing jurisdiction.

9.6 Paragraph headings are included in this Agreement for convenience of reference only and shall not affect the interpretation of the text hereof.

9.7 Any and all notices, demands or other communications to be given or made hereunder shall be in writing and shall be deemed to have been fully given or made when personally delivered, or on the third business day after mailing from within the continental United States by registered mail, postage prepaid, addressed as follows:

If to the Company:

MasterCard International Incorporated

2000 Purchase Street

Purchase, New York 10577

 

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Attention: General Counsel

with a copy to:

MasterCard International Incorporated

2000 Purchase Street

Purchase, New York 10577

Attention: Chief Human Resources Officer

If to the Executive:

Ajaypal Banga

Either party may change the address to which any notices to it shall be sent by giving to the other party written notice of such change in conformity with the foregoing.

9.8 This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which together shall constitute one and the same instrument.

9.9 This Agreement may be assigned by the Company to, and shall inure to the benefit of, any successor to substantially all the assets and business of the Company as a going concern, whether by merger, consolidation or purchase of substantially all of the assets of the Company or otherwise, provided that such successor shall assume the Company’s obligations under this Agreement. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

9.10 Notwithstanding any other provision of this Agreement, if any payment, compensation or other benefit provided to the Executive in connection with his employment termination is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the Executive is a specified employee as defined in Section 409A(a)(2)(b)(i) of the Code, no part of such payments shall be paid before the day that is six (6) months plus one (1) day after the Date of Termination (such date, the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to the Executive during the period between the Date of Termination and the New Payment Date shall be paid to the Executive in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement. If the Executive dies during the period between the Date of Termination and the New Payment Date, the amounts withheld on account of Section 409A of the Code shall be paid to the Executive’s estate or beneficiaries, as the case may be, within thirty (30) days of the Executive’s death.

 

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9.11 This Agreement is intended to comply with the requirements of Section 409A of the Code, and, specifically, with the separation pay exemption and short term deferral exemption of Section 409A, and shall in all respects be administered in accordance with Section 409A. Notwithstanding anything in the Agreement to the contrary, distributions may only be made under the Agreement upon an event and in a manner permitted by Section 409A of the Code or an applicable exemption. All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A. For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. In no event may the Executive, directly or indirectly, designate the calendar year of a payment. All reimbursements and in-kind benefits provided under this Agreement and the Separation Agreement and Release shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement or the Separation Agreement and General Release, as applicable), (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

IN WITNESS WHEREOF, each of the Company and the Executive has executed this Agreement to become effective on the Effective Date.

 

 

 

 

 

MASTERCARD INTERNATIONAL

INCORPORATED

/s/ Ajaypal Banga

 

 

By:

 

/s/ Stephanie E. Voquer

Ajaypal Banga

 

 

 

Stephanie E. Voquer

 

 

 

Chief Human Resources Officer

 

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EX-10.5 6 ex105-06302012.htm AMENDED AND RESTATED MASTERCARD INTERNATIONAL INCORPORATED EXECUTIVE SEVERANCE PLAN

Exhibit 10.5

 

Amended and Restated MasterCard International Incorporated Executive Severance Plan

The Amended and Restated MasterCard International Incorporated Executive Severance Plan (the “Plan”) sets forth the guidelines for MasterCard International Incorporated (“MasterCard” or the “Company”) with respect to severance payments and/or benefits to certain of its employees who meet the eligibility requirements set forth in the Plan. At all times, payments under the Plan shall be made solely from the general assets of the Company.

Effective Date

The Plan was effective as of August 1, 2009, and is amended and restated as of June 5, 2012.

Eligibility

Members of the Executive Committee of MasterCard or a successor group, who are not subject to an employment agreement (or other similar agreement) which addresses their eligibility for severance and who are designated in writing by the Chief Executive Officer (“CEO”) of MasterCard shall be eligible to participate in the Plan (“Eligible Members”). Eligible Members shall not be eligible to participate in, and receive any severance benefits under, the Amended and Restated MasterCard International Incorporated Severance Plan.

Qualification

An Eligible Member will be entitled to receive “Severance Payments” (as defined below) if:

a.

the Eligible Member is terminated by the Company without “Cause” (as such term is defined in the “Definitions” section); or

 

b.

the Eligible Member terminates his or her employment with the Company for “Good Reason” (as such term is defined in the “Definitions” section);

 

the Eligible Member’s employment may be terminated at the option of the Eligible Member, effective ninety (90) days after the giving of written notice to the Company by such Eligible Member of the grounds for termination for Good Reason, which grounds, as specified by the Eligible Member, have not been cured by the Company during such ninety (90) day period; provided, however, that such Eligible Member gave notice to the Company of the event(s) constituting Good Reason within sixty (60) days after such event(s).

 

the Company may waive all or part of the ninety (90) day notice required to be given by the Eligible Member hereunder by giving written notice to such Eligible Member.

Disqualifying Events

Notwithstanding the foregoing, an Eligible Member shall not be entitled to receive Severance Payments if any of the following disqualifying events occur; provided, however, that such Eligible Member shall

 

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nevertheless be eligible to receive certain accrued payments (as described below).

a.

the Eligible Member’s employment is terminated due to death or, at the option of the Company, upon the “Disability” (as such term is defined in the “Definitions” section) of the Eligible Member;

 

b.

the Eligible Member elects to voluntarily terminate his or her employment with the Company or a successor for any reason other than for Good Reason (“Voluntary Resignation”) or Mandatory Retirement;

 

c.

the Eligible Member’s employment with the Company is terminated for Cause;

 

the Eligible Member’s employment may be terminated for Cause by the Company, effective upon the giving of written notice by the Company to the Eligible Member of such termination for Cause, or effective upon such other date as specified therein (“Notice of Termination for Cause”). The Company’s Notice of Termination For Cause shall state the date of termination and the basis for the Company’s determination that the Eligible Member’s actions establish Cause hereunder.

 

if within sixty (60) days subsequent to the termination of the Eligible Member’s employment for death, Disability, Good Reason or Voluntary Resignation or otherwise, the Company determines that the Eligible Member could have been terminated for Cause, such voluntary termination shall be recharacterized as a termination for Cause, upon the giving of written notice to the Eligible Member and the Eligible Member is provided at least five (5) days to provide a written response to the Company. Thereafter, the Company may take appropriate legal action to seek recompense for any Severance Payments improperly paid to the Eligible Member, his estate or beneficiaries hereunder. Following a judicial determination, the prevailing party in any action under this paragraph, shall be entitled to be reimbursed by the non-prevailing party for reasonable legal fees and expenses incurred by the prevailing party in connection with the judicial proceeding seeking to enforce the provisions of this paragraph.

 

notwithstanding anything to the contrary herein, if the Company has reason to believe that there are circumstances which, if substantiated, would constitute Cause as defined herein, the Company may suspend the Eligible Member from employment immediately upon notice for such period of time as shall be reasonably necessary for the Company to ascertain whether such circumstances are substantiated. During such suspension, the Eligible Member shall continue to be paid the compensation and provided all benefits in accordance with the regular payroll and benefit practices of the Company; provided, however, that if the Eligible Member has been indicted or otherwise formally charged by governmental authorities with any felony, the Company may, in its sole discretion, and without limiting the Company’s discretion to terminate the Eligible Member’s employment for Cause (provided it has grounds to do so under the terms of this “Disqualifying Events” section, paragraph (c), suspend the Eligible Member without continuation of any compensation or benefits (except health benefits, which shall be continued during the period of suspension), pending final disposition of such criminal charge(s). Upon receiving notice of any such suspension, the Eligible Member shall promptly leave the premises of the Company and remain off such premises until further notice from the Company. In the event the Eligible Member is suspended as a result of such charges, but is later acquitted or otherwise exonerated from

 

2


 

such charges, the Company shall pay to the Eligible Member such compensation, with interest, calculated from the date such compensation was suspended at the prime lending rate in effect on the date the Company receives notice from the Eligible Member of such acquittal or exoneration, and provide benefits withheld from the Eligible Member during the period of the Eligible Member’s suspension, if any, all of which shall be paid and provided within thirty (30) days of the date of the Eligible Member’s acquittal or exoneration from criminal charges that resulted in his suspension shall be limited with respect to the period of up to two (2) years from the date of suspension;

d.

the failure by the Eligible Member to give a timely notice of termination for Good Reason (as described above); or

 

e.

the Eligible Member becomes employed by a Company Entity.

Amount and Duration of Severance

a.

Accrued Payments

An Eligible Member shall be entitled to the following accrued payments following the Date of Termination (as such term is defined in the “Definitions” section) regardless of whether the Eligible Member has been rendered ineligible for receipt of the Severance Payments due to a disqualifying event (as described above):

Death, Disability or Mandatory Retirement

If the Eligible Member’s employment is terminated on account of his or her death, due to Disability, or upon Mandatory Retirement, the Eligible Member or his or her estate and/or beneficiaries, as applicable, shall be entitled to receive the following lump sum payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), within thirty (30) days following the Date of Termination:

“Base Salary” (as such term is defined in the “Definitions” section) earned but not paid prior to the Date of Termination;

 

payment for all accrued but unused vacation time up to the Date of Termination;

 

(x) in the event of the Eligible Member’s death, the target annual incentive bonus payable for the year in which the Eligible Member’s death occurs, (y) in the event of termination due to Disability, a pro rata portion (based upon completed calendar months worked prior to the date of Disability) of the target annual incentive bonus payable for the year in which the Eligible Member’s Date of Termination occurs, or (z) in the event of Mandatory Retirement, a pro rata portion (based upon actually completed calendar months worked) of the annual incentive bonus payable for the year in which the Eligible Member’s termination of employment occurs based upon the actual performance of the Company for the applicable performance period (and taking into account the terms of the annual incentive plan, including but not limited to the discretion of the Compensation Committee to reduce such bonus amount) as contemplated in accordance with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), with such amount payable when the annual incentive bonus is regularly paid to similarly employees for such year;

 

3


 

to the extent not already paid, the annual incentive bonus for the year immediately preceding the year in which the Eligible Member’s Date of Termination, with such amount payable when the annual incentive bonus is regularly paid to similarly employees for such year; and

 

such additional benefits, if any, to which the Eligible Member is expressly eligible following the termination of the Eligible Member’s employment on account of death, Disability or Mandatory Retirement, as applicable, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company.

Cause or Voluntary Resignation

If the Company terminates the Eligible Member’s employment for Cause or the Eligible Member terminates his or her employment by Voluntary Resignation, the Eligible Member shall be entitled to receive the following lump sum payment, as soon as practicable, but in no event later than thirty (30) days following the Date of Termination:

Base Salary earned but not paid prior to the Date of Termination;

 

payment for all accrued but unused vacation time up to the Date of Termination; and

 

additional benefits, if any, to which the Eligible Member is expressly eligible following his termination for Cause or by Voluntary Resignation, as applicable, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company.

Without Cause or For Good Reason

If the Company terminates the Eligible Member’s employment without Cause or the Eligible Member terminates his or her employment for Good Reason, the Eligible Member shall be entitled to the following payments following the Date of Termination:

a lump sump payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), within thirty (30) days following the Date of Termination of all Base Salary earned but not paid prior to the Date of Termination;

 

a lump sum payment within thirty (30) days following the Date of Termination equal to all accrued but unused vacation time up to the Date of Termination;

 

a pro rata portion (based upon actually completed calendar months worked) of the annual incentive bonus payable for the year in which the Eligible Member’s Date of Termination occurs based on the actual performance of the Company for the applicable performance period as determined by the Compensation Committee and payable in accordance with the regular bonus pay practices of the Company, as contemplated in accordance with the requirements of Section 162(m) of the Code; and

 

to the extent not already paid, the annual incentive bonus for the year immediately preceding the year in which the Eligible Member’s Date of Termination occurs, payable in the amount and at the time such bonus would have been paid had the Eligible Member remained employed.

 

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b.

Severance Payments

If the Eligible Member is entitled to receive severance payments and/or benefits as provided under the “Qualification” section, and has not been rendered ineligible for receipt of such severance payments and/or benefits due to a disqualifying event (as described above), the Eligible Member shall be entitled to the following payments (the “Severance Payments”):

1. Severance Pay

The Eligible Member shall be entitled to receive (i) Base Salary continuation for an eighteen (18) month period following the Eligible Member’s Date of Termination (the “Severance Pay Period”), and (ii) payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), of an amount equal to 1.5 times the annual incentive bonus paid to such Eligible Member for the year prior to the year in which the Eligible Member’s Date of Termination occurs (the “Bonus Payment”) payable ratably over the Severance Pay Period in accordance with the annual incentive bonus pay practices of the Company; (such Base Salary continuation and Bonus Payment being collectively referred to herein as “Severance Pay”)

 

2. Medical Benefits Continuation

The Eligible Member shall be entitled to payment by the Company on the Eligible Member’s behalf, for the monthly cost of the premiums for coverage under the Consolidated Omnibus Reconciliation Act of 1985, as amended (“COBRA”), for a period equivalent to the eighteen (18) month COBRA period (twenty-nine (29) month period, if the Eligible Member is disabled under the Social Security Act within the first sixty (60) days of the continuation period) or the Severance Pay Period, whichever is shorter (the “Medical Benefits”), provided, however, such coverage shall not be provided if during such period the Eligible Member is or becomes ineligible under the provisions of COBRA for continuing coverage; and provided, further, that if the Eligible Member is eligible for Retiree Health Coverage under the MasterCard Retiree Health Plan, the Company shall pay the full cost of such Retiree Health or COBRA coverage, as applicable, during the Severance Pay Period and thereafter, retiree contribution levels provided under the provisions of the Retiree Health Plan shall apply.

3. Outplacement Services

The Eligible Member shall be entitled to reasonable outplacement services, to be provided by a firm selected by the Company, at a level generally made available to executives of the Company for the shorter of the Severance Pay Period or the period he or she remains unemployed.

4. Additional Payments

The Company reserves the right, in its sole discretion, to increase severance payments for up to an additional six months for Eligible Members. Additional payments may be conditioned upon any additional criteria as the Company may determine in its sole discretion.

The Eligible Member shall be entitled to such other benefits, if any, to which such Eligible Member is expressly eligible following the termination of the Eligible Member’s employment by the Company without Cause, by the Eligible Member with Good Reason, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company (other than any severance payments payable under the terms of any benefit plan, including, but

 

5


 

not limited to, the Amended and Restated MasterCard International Incorporated Severance Plan).

5. Separation Agreement and Release

The Company’s obligations to make payments and provide benefits under this “Severance Payments” section, paragraphs (1)-(3), are conditioned upon the Eligible Member’s execution (without revocation) of the Company’s separation agreement and release of all claims related to the Eligible Member’s employment or the termination thereof in a form satisfactory to MasterCard (the “Separation Agreement and Release”), which Separation Agreement and Release shall include a non-competition restriction and a non-solicitation restriction for a period no less than the Severance Pay Period (taking into account any additional payment periods pursuant to Section 4 above), as more fully described in such Separation Agreement and Release, provided that if the Eligible Member should fail to execute such Separation Agreement and Release within sixty (60) days following the Date of Termination, the Company shall not have any obligation to make the payments and provide the benefits contemplated under this “Severance Payments” section, paragraphs (1)-(3).

Rehired Eligible Members

If, following an Eligible Member’s Date of Termination, an Eligible Member is rehired by the Company or any Company Entity or is retained by the Company or any Company Entity as a consultant, his or her Severance Pay, Medical Benefits, outplacement services, and any additional payments under this Plan will cease and be forfeited as of the date of reemployment or the effective date of the consultancy, and no further severance payments and/or benefits will be paid or provided by the Company to such Eligible Member.

Income Taxes

Accrued payments and Severance Payments are subject to all applicable foreign, federal, state, and local tax withholding and generally are taxable income to the Eligible Member.

Section 409A of the Code

Notwithstanding any other provision of the Plan, if any payment, compensation or other benefit provided to the Eligible Member in connection with his or her employment termination is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the Eligible Member is a specified employee as defined in Section 409A(a)(2)(b)(i) of the Code, no part of such payments shall be paid before the day that is six (6) months plus one (1) day after the Date of Termination (such date, the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to the Eligible Member during the period between the Date of Termination and the New Payment Date shall be paid to the Eligible Member in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of the Plan. If the Eligible Member dies during the period between the Date of Termination and the New Payment Date, the amounts withheld on account of Section 409A of the Code shall be paid to the Eligible Member’s beneficiary within thirty (30) days of the Eligible Member’s death.

Notwithstanding the preceding paragraph, up to two (2) times the lesser of: (i) the Eligible Employee’s Base Salary for the year preceding the year in which the Date of Termination occurs; and (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Date of Termination occurs, shall be paid in accordance with the

 

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schedule set forth in the “Severance Payments” section, paragraph (1), without regard to such six (6) month delay.

The Plan is intended to comply with the requirements of Section 409A of the Code, and, specifically, with the separation pay exemption and short term deferral exemption of Section 409A of the Code, and shall in all respects be administered in accordance with Section 409A of the Code. Notwithstanding anything in the Plan to the contrary, distributions may only be made under the Plan upon an event and in a manner permitted by Section 409A of the Code or an applicable exemption. All payments to be made upon a termination of employment under the Plan may only be made upon a “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, the right to a series of installment payments under the Plan shall be treated as a right to a series of separate payments. In no event may the Eligible Member, directly or indirectly, designate the calendar year of a payment. All reimbursements and in-kind benefits provided under the Plan shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during the Eligible Member’s lifetime (or during a shorter period of time specified in the Plan), (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

Administration of Plan

The “Plan Administrator” (as such term is defined in the “Definitions” section) shall have the exclusive right, power, and authority, in its sole and absolute discretion, to administer, apply, and interpret the Plan and to decide all matters arising in connection with the operation or administration of the Plan to the extent not retained by MasterCard as set forth herein. Without limiting the generality of the foregoing, the Plan Administrator shall have the sole and absolute discretionary authority to:

take all actions and make all decisions with respect to the eligibility for, and the amount of, severance and benefits payable under the Plan;

 

formulate, interpret and apply rules, regulations, and policies necessary to administer the Plan in accordance with its terms;

 

decide questions, including legal or factual questions, with regard to any matter related to the Plan;

 

construe and interpret the terms and provisions of the Plan and all documents which relate to the Plan and decide any and all matters arising thereunder including the right to remedy possible ambiguities, inconsistencies or omissions;

 

investigate and make such factual or other determinations as shall be necessary or advisable for the resolution of appeals of adverse determinations under the Plan; and

 

process, and approve or deny, claims for severance and benefits under the Plan.

All determinations made by the Plan Administrator as to any question involving their respective responsibilities, powers and duties under the Plan shall be final and binding on all parties, to the

 

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maximum extent permitted by law. All determinations by MasterCard referred to in the Plan shall be made by MasterCard in its capacity as an employer and settlor of the Plan.

Modification or Termination of Plan

MasterCard reserves the right in its sole and absolute discretion, to amend, modify, or terminate the Plan, in whole or in part, including any or all of the provisions of the Plan, for any reason, at any time, by action of the Plan Administrator. Any amendments to the Plan must be approved in writing by the Human Resource Compensation Committee of MasterCard.

Claims and Appeal Procedures

The Plan Administrator shall make a determination in connection with the termination of employment of any Eligible Member as to whether a benefit under the Plan is payable to such Eligible Member, taking into consideration any determination made by the Company as to the circumstances regarding the termination, the Company’s decision as to whether or not to pay a benefit under the “Qualification” section, the “Disqualifying Events” section, or the potential applicability of a disqualifying event, and as to the amount of payment. The Plan Administrator shall advise any Eligible Member it determines is entitled to severance and benefits under the Plan and the amount of such severance and benefits. The Plan Administrator may delegate any or all of its responsibilities under this section.

Claim Procedures

Each Eligible Member or his or her authorized representative (each, the “Claimant”) claiming severance and benefits under the Plan who has not been advised of such severance and benefits by the Plan Administrator or who is not satisfied with the amount of any severance and benefits awarded under the Plan is eligible to file a written claim with the Plan Administrator.

Within ninety (90) days after receiving the claim, the Plan Administrator will decide whether or not to approve the claim. The ninety (90)-day period may be extended by the Plan Administrator for an additional ninety (90)-day period if special circumstances require an extension of time to consider the claim. If the Plan Administrator extends the ninety (90)-day period, the Claimant will be notified in writing before the expiration of the initial 90‑day period as to the length of the extension and the special circumstances that necessitate the extension.

If the claim is denied, the Plan Administrator shall set forth in writing or electronically the reasons for the denial; the relevant provisions of the Plan on which the decision is made; a description of the Plan’s claim appeal procedures; and if additional material or information is necessary to perfect the claim, an explanation of why such material or information is necessary. The notice will also include a statement regarding the procedures for the Claimant to file a request for review of the claim denial as set forth in the “Appeal Procedures” section and the Claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) following a claim denial on appeal.

Appeal Procedures

If a claim has been denied by the Plan Administrator and the Claimant wishes further consideration and review of his or her claim, he or she must file an appeal of the denial of the claim to the Plan Administrator no later than sixty (60) days after the receipt of the written notification of the Plan Administrator’s denial. In correlation with his or her appeal, the Claimant may request the opportunity to

 

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review relevant documents prior to submission of a written statement, submit documents, records and comments in writing, and receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the Claimant’s claim for severance and benefits under the Plan. The review of the appeal by the Plan Administrator will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial review of the claim.

The Plan Administrator will notify the Claimant in writing or electronically of its decision with respect to its review of the appeal within sixty (60) days of the receipt of the request for a review of the claim. Due to special circumstances, the Plan Administrator may extend the time to reach a decision with respect to the appeal of the claim denial, in which case the Plan Administrator will notify the Claimant in writing before the expiration of the initial 60‑day period as to the length of the extension and the special circumstances that necessitate such extension and render a decision as soon as possible, but not later than one hundred twenty (120) days following the receipt of the Claimant’s request for appeal.

If the appeal is denied, the Plan Administrator will set forth in writing or electronically the specific reasons for the denial and references to the relevant Plan provisions on which the determination of the denial is based. The notice will also include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim, and a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA.

Exhaustion of Remedies under the Plan

A Claimant wishing to seek judicial review of an adverse benefit determination under the Plan, whether in whole or in part, must file any suit or legal action, including, without limitation, a civil action under Section 502(a) of ERISA, within one (1) year of the date the final decision on the adverse benefit determination on review is issued or should have been issued or lose any rights to bring such an action. If any such judicial proceeding is undertaken, the evidence presented shall be strictly limited to the evidence timely presented to the Plan Administrator. A Claimant may bring an action under ERISA only after he or she has exhausted the Plan’s claims and appeal procedures.

Miscellaneous Provisions

Neither the establishment of this Plan, nor any modification thereof, nor the payment of any severance and benefits hereunder, shall be construed as giving to any Eligible Member, or other person, any legal or equitable right against the Company or any current or former officer, director, or employee thereof, and in no event shall the terms and conditions of employment by the Company of any Eligible Member be modified or in any way affected by this Plan.

 

The records of the Company with respect to employment history, compensation, absences, illnesses, and all other relevant matters shall be conclusive for all purposes of this Plan.

 

The respective terms and provisions of the Plan shall be construed, whenever possible, to be in conformity with the requirements of ERISA, or any subsequent laws or amendments thereto. To the extent not to conflict with the preceding sentence, the construction and administration of the Plan shall be in accordance with the laws of the state of New York applicable to contracts made and to be performed within the state of New York (without reference to its conflicts of law provisions).

 

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Nothing contained in this Plan shall be held or construed to create any liability upon the Company to retain any employee in its service or to change the employee-at-will status of any employee. All employees shall remain subject to discharge or discipline to the same extent as if the Plan had not been put into effect. An employee’s failure to qualify for or receive a severance and benefits hereunder shall not establish any right to (i) continuation or reinstatement, or (ii) any benefits in lieu of severance and benefits.

Definitions

Terms

Definitions

Base Salary

The Eligible Member’s annual base salary as in effect from time to time.

Cause

•the willful failure by the Eligible Member to perform his or her duties or responsibilities (other than due to Disability);

•the Eligible Member’s engaging in serious misconduct that is injurious to the Company including, but not limited to, damage to its reputation or standing in its industry;

•the Eligible Member’s having been convicted of, or entered a plea of guilty or nolo contendere to, a crime that constitutes a felony, or a crime that constitutes a misdemeanor involving moral turpitude;

•the material breach by the Eligible Member of any written covenant or agreement with the Company not to disclose any information pertaining to the Company; or

•the breach by the Eligible Member of the Code of Conduct, the Supplemental Code of Conduct, any material provision of the Plan, or any material provision of the following the Company policies: non-discrimination, substance abuse, workplace violence, nepotism, travel and entertainment, corporation information security, antitrust/competition law, enterprise risk management, accounting, contracts, purchasing, communications, investor relations, immigration, privacy, insider trading, financial process and reporting procedures, financial approval authority, whistleblower, anti-corruption and other similar the Company policies, whether currently in effect or adopted after the Effective Date of the Plan.

Company

MasterCard International Incorporated.

Company Entity

Any entity (including any subsidiary, affiliate or joint venture) in which the Company has a direct or indirect ownership interest of not less than 20%.

Disability

Disability shall be defined as set forth under the MasterCard Long-Term Disability Benefits Plan, as it may be amended from time to time.

Any dispute concerning whether the Eligible Member is deemed to have suffered a Disability for purposes of the Plan shall be resolved in accordance with the dispute resolution procedures set forth in the MasterCard Long-Term Disability Benefits Plan.

 

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Good Reason

The occurrence of any of the following without the prior written consent of the Eligible Member:

•the assignment to a position for which the Eligible Member is not qualified or a materially lesser position than the position held by the Eligible Member (although duties may differ without giving rise to a termination by the Eligible Member for Good Reason);

•a material reduction in the Eligible Member’s annual Base Salary except that a 10 percent reduction, in the aggregate, over the period of the Eligible Member’s employment shall not be treated as a material reduction;

•the relocation of the Eligible Member’s principal place of employment to a location more than fifty (50) miles from the Eligible Member’s principal place of employment (unless such relocation does not increase the Eligible Member’s commute by more than twenty (20) miles), except for required travel on the Company’s business to an extent substantially consistent with the Eligible Member’s business travel obligations as of the date of relocation.

Mandatory Retirement

The last day of the calendar year in which the Eligible Member attains the age of sixty-five (65).

MasterCard

MasterCard International Incorporated.

Plan Administrator

Group Head Global Rewards of MasterCard.

Date of Termination

The date on which the Eligible Member incurs a termination of employment as described in the “Qualification” section or such other date on which an Eligible Member incurs a “separation from service” determined using the default provisions set forth in Section 1.409A-1(h) of the Treasury Regulations. Pursuant to such default provisions, an Eligible Member will be treated as no longer performing services for the Company when the level of services he or she performs for the Company decreases to a level equal to 20% or less of the average level of services performed by such Eligible Member during the immediately preceding 36 months. 

 

Your Rights Under ERISA

The Department of Labor has issued regulations that require the Company to provide you with a statement of your rights under ERISA with respect to this Plan. The following statement was designated by the Department of Labor to satisfy this requirement and is presented accordingly.

As a participant in the Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants are entitled to:

Receive Information About Your Plan and Benefits

1.

Examine, without charge, all Plan documents and copies of all documents filed by the Company with the Department of Labor. This includes annual reports and Plan descriptions. All such documents are available for review in your Human Resources Department.

 

2.

Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including copies of the latest annual report (Form 5500 Series) and an updated summary plan description. The Plan Administrator may charge you a reasonable fee for the copies.

 

3.

Receive a summary of the Plan’s annual financial report. Once each year, the Plan Administrator will send you a Summary Annual Report of the Plan’s financial activities at no charge.

Prudent Action by Fiduciaries

 

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In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called fiduciaries of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants.

No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension or welfare benefit or exercising your rights under ERISA.

Enforcing Your Rights

If your claim for severance and benefits is denied or ignored in whole or in part, you have a right to receive a written explanation of the reason for the denial, to obtain copies of documents related to the decision without charge, and to appeal any denial, all within certain time schedules. You have the right to have your claim reviewed and reconsidered. You also have the right to request a review of the denial of your claim as explained in the “Appeal Procedures” section. No one, including your employer or any other person, may discriminate against you in any way to prevent you from obtaining severance and benefits under the Plan or exercising your rights under ERISA.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within thirty (30) days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for severance and benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court after you have exhausted the Plan’s claims and appeal procedures as described in the section “Claims and Appeal Procedures” hereof. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the Department of Labor, or you may file suit in a federal court.

The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance with Your Questions

If you have any questions about the Plan, you should contact the Plan Administrator through your Human Resources Department. They will be glad to help you. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest Area Office of the Employee Benefits Security Administration, Department of Labor, listed in your telephone directory, or you may contact:

The Division of Technical Assistance and Inquiries

Employee Benefits Security Administration,

Department of Labor

200 Constitution Avenue, N.W., Room 5N625

Washington, DC 20210

1-866-444-EBSA (1-866-444-3272)

www.dol.gov/ebsa (for general information)

www.askebsa.dol.gov (for electronic inquiries)

 

You may also obtain certain publications about your rights and responsibilities under ERISA by calling

 

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the publications hotline of the Employee Benefits Security Administration at 1-866-444-3272.

Administrative Facts

Topic

Description

Plan Name

Amended and Restated MasterCard International Incorporated Executive Severance Plan

Plan Sponsor

MasterCard International Incorporated 
2000 Purchase Street 
Purchase, NY 10577 USA

Source of Contributions to Plan

Employer payments from corporate assets

Employer Identification Number

 

Plan Number

______

Plan Administrator

Group Head Global Rewards 
MasterCard International Incorporated 
2000 Purchase Street 
Purchase, NY 10577 USA

Agent for Receiving Service of Legal Process

General Counsel, Chief Franchise Officer & Corporate Secretary 
MasterCard International Incorporated 
2000 Purchase Street 
Purchase, NY 10577 USA

 

Contact Information

If you have questions about this Plan, please contact your department’s HR Business Partner. If you do not know who your HR Business Partner is, call People Services and they will provide you with this information.

People Services

Phone:    

Fax:    

E-Mail:    

 

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EX-10.6 7 ex106-06302012.htm AMENDED AND RESTATED MASTERCARD INTERNATIONAL INCORPORATED CHANGE IN CONTROL SEVERANCE PLAN

Exhibit 10.6

 

Amended and Restated MasterCard International Incorporated Change in Control Severance Plan

The Amended and Restated MasterCard International Incorporated Change in Control Severance Plan (the “Plan”) sets forth the guidelines for MasterCard International Incorporated (the “MasterCard”) and certain of its Affiliates and subsidiaries that have elected to participate in the Plan (the “Participating Employers” and collectively with MasterCard, “the Company”) with respect to change in control severance payments and benefits to certain of their employees who meet the eligibility requirements set forth in the Plan. At all times, payments under the Plan shall be made solely from the general assets of the Company.

Effective Date

The Plan was effective as of August 1, 2009, and is amended and restated as of June 5, 2012.

Adoption

Affiliates and subsidiaries of MasterCard may adopt this Plan upon approval by the Severance Plan Committee. The list of the Participating Employers as of the Effective Date is attached to this Plan as Exhibit A.

Eligibility

The following employees of the Company are eligible to participate in the Plan (“Eligible Employees”):

Employees who are not subject to an employment agreement (or other similar agreement) which addresses their eligibility for severance, and prior to a “Change in Control” (as such term is defined in the “Definitions” section), are nominated by the Chief Executive Officer (“CEO”) of MasterCard for participation in the plan and are selected in writing by the Human Resources and Compensation Committee as eligible to participate in the Plan, provided that the written selection by the Human Resources and Compensation Committee must be made at least six (6) months preceding a Change in Control. Such selection shall be made in the Human Resources and Compensation Committee’s sole and absolute discretion.

Qualification

a.

the Eligible Employee is terminated by the Company or by the Company’s successor without “Cause” (as such term is defined in the “Definitions” section), and such termination occurs within six (6) months preceding, or within two (2) years following, a Change in Control, or

 

b.

the Eligible Employee terminates his or her employment with the Company or with the Company’s successor for “Good Reason” (as such term is defined in the “Definitions” section), and such termination occurs within six (6) months preceding, or within two (2) years following, a Change in Control.

 

The Eligible Employee’s employment may be terminated at the option of the Eligible Employee, effective ninety (90) days after the giving of written notice to the Company by

 

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such Eligible Employee of the grounds for termination for Good Reason, which grounds, as specified by the Eligible Employee, have not been cured by the Company during such ninety (90) day period; provided, however, that such Eligible Employee gave notice to the Company of the event(s) constituting Good Reason within sixty (60) days after such event(s) (or within sixty (60) days after a Change in Control, if the events giving rise to the Eligible Employee’s termination for Good Reason occurred during the six (6) month period preceding a Change in Control).

The Company may waive all or part of the ninety (90) day notice required to be given by the Eligible Employee hereunder by giving written notice to such Eligible Employee.

Circumstances of Ineligibility

Notwithstanding the foregoing, an Eligible Employee shall not be entitled to receive a Change in Control Pay (as defined below) if any of the following Circumstances of Ineligibility apply to such Eligible Employee.

a.

the Eligible Employee’s employment is terminated due to death or, at the option of the Company, upon the “Disability” (as such term is defined in the “Definitions” section) of the Eligible Employee;

 

b.

the Eligible Employee elects to voluntarily terminate his or her employment with the Company or a successor for any reason other than for Good Reason;

 

c.

the Eligible Employee’s employment with the Company or a successor is terminated for Cause, at any time preceding or following a Change in Control;

 

The Eligible Employee’s employment may be terminated for “Cause” by the Company, upon the authority of MasterCard’s CEO, effective upon the giving of written notice by the Company to the Eligible Employee of such termination for “Cause”, or effective upon such other date as specified therein (“Notice of Termination for Cause”). The Company’s Notice of Termination For Cause shall state the date of termination and the basis for the Company’s determination that the Eligible Employee’s actions establish Cause hereunder.

 

d.

the failure by the Eligible Employee to give notice of termination for Good Reason (as described above); or

 

e.

the Eligible Employee becomes employed by a Company Entity.



In no event shall a Change in Control of the Company alone, without a related termination of employment, give rise to any Change- in-Control Pay and benefits under the Plan. 


Amount and Duration of Change in Control Severance Payments

If the Eligible Employee is entitled to receive a Change in Control Pay, and has not been rendered

 

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ineligible for receipt of such Change in Control Pay due to a Circumstance of Ineligibility, the Eligible Employee shall be entitled to the following payments:

a.

Accrued Payments

The Eligible Employee shall be entitled to the following payments following the Date of Termination (as such term is defined in the “Definitions” section):

a lump sump payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), within thirty (30) days following the Date of Termination of all “Base Salary” (as such term is defined in the “Definitions” section) earned but not paid prior to the Date of Termination;

 

a lump sum payment within thirty (30) days following the Date of Termination equal to all accrued but unused vacation time up to the Date of Termination;

 

a pro rata portion (based upon actually completed calendar months worked) of the annual incentive bonus payable for the year in which the Eligible Employee’s termination of employment occurs based on the actual performance of the Company for the applicable performance period as determined by the Human Resources and Compensation Committee and payable in accordance with the regular bonus pay practices of the Company, as contemplated in accordance with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”); and

 

to the extent not already paid, the annual incentive bonus for the year immediately preceding the year in which the Eligible Employee’s Date of Termination occurs, payable in the amount and at the time such bonus would have been paid had he or she remained employed.

 

b.

Change in Control Pay

The Eligible Employee shall be entitled to receive (i) Base Salary continuation, and (ii) payment (subject to any previously elected deferrals under the MasterCard Incorporated Deferral Plan), of an amount equivalent to the average annual incentive bonus received by such Eligible Employee with respect to the prior two (2) years of the Eligible Employee’s employment by the Company (the “Average Bonus Payment”), payable on a schedule in accordance with the regular payroll practices (but in no event less frequently than monthly) and annual incentive bonus pay practices of the Company (such Base Salary continuation and Average Bonus Payment being collectively referred to herein as “Change in Control Pay”) for, and with respect to a twenty-four (24) month period following the Eligible Employee’s Date of Termination ( the “Change in Control Pay Period”). Notwithstanding the foregoing, each payment of Change in Control Pay to which the Eligible Employee becomes entitled pursuant to this Plan shall be reduced, dollar for dollar, by each severance payment, if any, to which such Eligible Employee becomes entitled under the Amended and Restated MasterCard International Incorporated Executive Severance Plan or the Amended and Restated MasterCard International Incorporated Severance Plan.

c.

Medical Benefits Continuation

The Eligible Employee shall be entitled to payment by the Company on the Eligible Employee’s behalf, for the monthly cost of the premiums for coverage under the Consolidated Omnibus Reconciliation Act of 1985, as amended (“COBRA”), for a period equivalent to the eighteen (18) month COBRA period (twenty-nine (29) month period, if the Eligible Employee is disabled under the Social Security Act within

 

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the first sixty (60) days of the continuation period) or the Change in Control Pay Period, whichever is shorter (the “Medical Benefits”), provided, however, such coverage shall not be provided if during such period the Eligible Employee is or becomes ineligible under the provisions of COBRA for continuing coverage; and provided, further, that if the Eligible Employee is eligible for Retiree Health Coverage under the MasterCard Retiree Health Plan, the Company shall pay the full cost of such Retiree Health or COBRA coverage, as applicable, during the Change in Control Pay Period and thereafter, retiree contribution levels provided under the provisions of the Retiree Health Plan shall apply.

d.

Outplacement Services

The Eligible Employee shall be entitled to reasonable outplacement services, to be provided by a firm selected by the Company, at a level generally made available to executives of the Company for the shorter of the Change in Control Pay Period or the period he or she remains unemployed.

e.

Additional Payments

The Eligible Employee shall be entitled to such other benefits, if any, to which such Eligible Employee is expressly eligible following the termination of the Eligible Employee’s employment by the Company without Cause, by the Eligible Employee with Good Reason, payable or made available under such terms and conditions as may be provided by the then existing plans, programs and/or arrangements of the Company (other than any severance payments payable under the terms of any benefit plan, including, but not limited to, the Amended and Restated MasterCard International Incorporated Severance Plan).

f.

Separation Agreement and Release

The Company’s obligations to make payments and provide benefits under this “Amount and Duration of Change in Control Severance Payments” section, paragraphs (b)-(d), are conditioned upon the Eligible Employee’s execution (without revocation) of the Company’s separation agreement and release of all claims related to the Eligible Employee’s employment or the termination thereof in a form satisfactory to MasterCard (the “Separation Agreement and Release”), which Separation Agreement and Release shall include a 2-year non-competition restriction and a 2-year non-solicitation restriction, as more fully described in such Separation Agreement and Release, provided that if the Eligible Employee should fail to execute such Separation Agreement and Release within sixty (60) days following the Date of Termination, the Company shall not have any obligation to make the payments and provide the benefits contemplated under this “Amount and Duration of Change in Control Severance Payments” section, paragraphs (b)-(d).

Rehired Eligible Employees

If, following an Eligible Employee’s Date of Termination, an Eligible Employee is rehired by the Company or any Company Entity or is retained by the Company or any Company Entity as a consultant, his or her Change in Control Pay, Medical Benefits and outplacement services under this Plan will cease and be forfeited as of the date of reemployment or the effective date of the consultancy, and no further severance payments and/or benefits will be paid or provided by the Company to such Eligible Employee.

Income Taxes

The change in control severance payments and benefits provided hereunder are subject to all applicable foreign, federal, state, and local tax withholding and generally are taxable income to the Eligible Employee.

 

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Section 409A of the Code

Notwithstanding any other provision of the Plan, if any payment, compensation or other benefit provided to the Eligible Employee in connection with his or her employment termination is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the Eligible Employee is a specified employee as defined in Section 409A(a)(2)(b)(i) of the Code, no part of such payments shall be paid before the day that is six (6) months plus one (1) day after the Date of Termination (such date, the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to the Eligible Employee during the period between the Date of Termination and the New Payment Date shall be paid to the Eligible Employee in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of the Plan. If the Eligible Employee dies during the period between the Date of Termination and the New Payment Date, the amounts withheld on account of Section 409A of the Code shall be paid to the Eligible Employee’s beneficiary within thirty (30) days of the Eligible Employee’s death.

Notwithstanding the preceding paragraph, Change in Control Pay in an amount up to two (2) times the lesser of: (i) the Eligible Employee’s Base Salary for the year preceding the year in which the Date of Termination occurs; and (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Date of Termination occurs, shall be paid in accordance with the schedule set forth in the “Amount and Duration of Change in Control Severance Payments” section, paragraph (b), without regard to such six (6) month delay.

The Plan is intended to comply with the requirements of Section 409A of the Code, and, specifically, with the separation pay exemption and short term deferral exemption of Section 409A of the Code, and shall in all respects be administered in accordance with Section 409A of the Code. Notwithstanding anything in the Plan to the contrary, distributions may only be made under the Plan upon an event and in a manner permitted by Section 409A of the Code or an applicable exemption. All payments to be made upon a termination of employment under the Plan may only be made upon a “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, the right to a series of installment payments under the Plan shall be treated as a right to a series of separate payments. In no event may the Eligible Employee, directly or indirectly, designate the calendar year of a payment. All reimbursements and in-kind benefits provided under the Plan and the Separation Agreement and Release shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during the Eligible Employee’s lifetime (or during a shorter period of time specified in the Plan or the Separation Agreement and Release, as applicable), (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

Administration of Plan

The “Plan Administrator” (as such term is defined in the “Definitions” section) shall have the exclusive right, power, and authority, in its sole and absolute discretion, to administer, apply, and interpret the Plan and to decide all matters arising in connection with the operation or administration of the Plan. Without limiting the generality of the foregoing, the Plan Administrator shall have the sole and absolute

 

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discretionary authority to:

take all actions and make all decisions with respect to the eligibility for, and the amount of, Change in Control Pay and benefits payable under the Plan;

 

formulate, interpret and apply rules, regulations, and policies necessary to administer the Plan in accordance with its terms;

 

decide questions, including legal or factual questions, with regard to any matter related to the Plan;

 

to construe and interpret the terms and provisions of the Plan and all documents which relate to the Plan and to decide any and all matters arising thereunder including the right to remedy possible ambiguities, inconsistencies or omissions; and

 

except as specifically provided to the contrary in the “Claims and Appeal Procedures” section, process, and approve or deny, claims for change in control severance payments and benefits under the Plan.

All determinations made by the Plan Administrator as to any question involving their respective responsibilities, powers and duties under the Plan shall be final and binding on all parties, to the maximum extent permitted by law. All determinations by MasterCard referred to in the Plan shall be made by MasterCard in its capacity as an employer and settlor of the Plan.

Modification or Termination of Plan

MasterCard reserves the right in its sole and absolute discretion, to amend, modify, or terminate the Plan, in whole or in part, including any or all of the provisions of the Plan, for any reason, at any time, by action of the Human Resources and Compensation Committee of MasterCard. Notwithstanding the foregoing, for a two year period following a Change in Control, no amendment, modification or termination of the Plan which may have a detrimental effect on the rights or benefits payable to any Eligible Employee may be made without such Eligible Employee’s written consent.

Claims and Appeal Procedures

The Plan Administrator shall make a determination in connection with the termination of employment of any Eligible Employee as to whether a benefit under the Plan is payable to such Eligible Employee, taking into consideration any determination made by the Company as to the circumstances regarding the termination, the Company’s decision as to whether or not to pay a benefit under the “Qualification” section, paragraph (c), or the potential applicability of any Circumstances of Ineligibility, and as to the amount of payment. The Plan Administrator shall advise any Eligible Employee it determines is entitled to change in control severance payments and benefits under the Plan and the amount of such Change in Control Pay and benefits. The Plan Administrator may delegate any or all of its responsibilities under this section.

Claim Procedures

Each Eligible Employee or his or her authorized representative (each, the “Claimant”) claiming change in control severance payments and benefits under the Plan who has not been advised of such change in control severance payments and benefits by the Plan Administrator or who is not satisfied with the

 

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amount of any change in control severance payments and benefits awarded under the Plan is eligible to file a written claim with the Plan Administrator.

Within ninety (90) days after receiving the claim, the Plan Administrator will decide whether or not to approve the claim. The ninety (90)-day period may be extended by the Plan Administrator for an additional ninety (90)-day period if special circumstances require an extension of time to consider the claim. If the Plan Administrator extends the ninety (90)-day period, the Claimant will be notified in writing before the expiration of the initial 90‑day period as to the length of the extension and the special circumstances that necessitate the extension.

If the claim is denied, the Plan Administrator shall set forth in writing or electronically the reasons for the denial; the relevant provisions of the Plan on which the decision is made; a description of the Plan’s claim appeal procedures; and if additional material or information is necessary to perfect the claim, an explanation of why such material or information is necessary. The notice will also include a statement regarding the procedures for the Claimant to file a request for review of the claim denial as set forth in the “Appeal Procedures” section and the Claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) following a claim denial on appeal.

Appeal Procedures

If a claim has been denied by the Plan Administrator and the Claimant wishes further consideration and review of his or her claim, he or she must file an appeal of the denial of the claim to the Plan Administrator no later than sixty (60) days after the receipt of the written notification of the Plan Administrator’s denial. In correlation with his or her appeal, the Claimant may request the opportunity to review relevant documents prior to submission of a written statement, submit documents, records and comments in writing, and receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the Claimant’s claim for severance and benefits under the Plan. The review of the appeal by the Plan Administrator will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial review of the claim.

The Plan Administrator will notify the Claimant in writing or electronically of its decision with respect to its review of the appeal within sixty (60) days of the receipt of the request for a review of the claim. Due to special circumstances, the Plan Administrator may extend the time to reach a decision with respect to the appeal of the claim denial, in which case the Plan Administrator will notify the Claimant in writing before the expiration of the initial 60‑day period as to the length of the extension and the special circumstances that necessitate such extension and render a decision as soon as possible, but not later than one hundred twenty (120) days following the receipt of the Claimant’s request for appeal.

If the appeal is denied, the Plan Administrator will set forth in writing or electronically the specific reasons for the denial and references to the relevant Plan provisions on which the determination of the denial is based. The notice will also include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim, and a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA.

Exhaustion of Remedies under the Plan

A Claimant wishing to seek judicial review of an adverse benefit determination under the Plan, whether in

 

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whole or in part, must file any suit or legal action, including, without limitation, a civil action under Section 502(a) of ERISA, within one (1) year of the date the final decision on the adverse benefit determination on review is issued or should have been issued or lose any rights to bring such an action. If any such judicial proceeding is undertaken, the evidence presented shall be strictly limited to the evidence timely presented to the Plan Administrator. A Claimant may bring an action under ERISA only after he or she has exhausted the Plan’s claims and appeal procedures.

Miscellaneous Provisions

Neither the establishment of this Plan, nor any modification thereof, nor the payment of any change in control severance payments and benefits hereunder, shall be construed as giving to any Eligible Employee, or other person, any legal or equitable right against the Company or any current or former officer, director, or employee thereof, and in no event shall the terms and conditions of employment by the Company of any Eligible Employee be modified or in any way affected by this Plan.

 

The records of the Company with respect to employment history, compensation, absences, illnesses, and all other relevant matters shall be conclusive for all purposes of this Plan.

 

The respective terms and provisions of the Plan shall be construed, whenever possible, to be in conformity with the requirements of ERISA, or any subsequent laws or amendments thereto. To the extent not to conflict with the preceding sentence, the construction and administration of the Plan shall be in accordance with the laws of the state of New York applicable to contracts made and to be performed within the state of New York (without reference to its conflicts of law provisions).

 

Nothing contained in this Plan shall be held or construed to create any liability upon the Company to retain any employee in its service or to change the employee-at-will status of any employee. All employees shall remain subject to discharge or discipline to the same extent as if the Plan had not been put into effect. An employee’s failure to qualify for or receive a change in control severance payments and benefits hereunder shall not establish any right to (i) continuation or reinstatement, or (ii) any benefits in lieu of change in control severance payments and benefits.

Definitions

Terms

Definitions

Affiliates

Any corporation which is included in a controlled group of corporations (within the meaning of Section 414(b) of the Code) which includes MasterCard and any trade or business (whether or not incorporated) which is under common control with MasterCard (within the meaning of Section 414(c) of the Code); provided that for purposes of this definition the ownership test percentage shall be 50% rather than 80%.

Base Salary

The Eligible Employee’s annual base salary in effect at the time of termination, except in the case of a termination of employment by the Eligible Employee for Good Reason based on a reduction of the Eligible Employee’s annual base salary, “Base Salary” shall mean the annual base salary in effect immediately prior to such reduction.

Change in Control

A change in control as set forth in the MasterCard Incorporated 2006 Long-Term Incentive Plan as it may be amended from time to time (“LTIP”).

 

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Cause

•    the willful failure by the Eligible Employee to perform his or her duties or responsibilities (other than due to Disability);

•    the Eligible Employee’s engaging in serious misconduct that is injurious to the Company including, but not limited to, damage to its reputation or standing in its industry;

•    the Eligible Employee’s having been convicted of, or entered a plea of guilty or nolo contendere to, a crime that constitutes a felony, or a crime that constitutes a misdemeanor involving moral turpitude;

•    the material breach by the Eligible Employee of any written covenant or agreement with the Company not to disclose any information pertaining to the Company; or

•    the breach by the Eligible Employee of the Code of Conduct, the Supplemental Code of Conduct, any material provision of the Plan, or any material provision of the following the Company policies: non-discrimination, substance abuse, workplace violence, nepotism, travel and entertainment, corporation information security, antitrust/competition law, enterprise risk management, accounting, contracts, purchasing, communications, investor relations, immigration, privacy, insider trading, financial process and reporting procedures, financial approval authority, whistleblower, anti-corruption and other similar the Company policies, whether currently in effect or adopted after the Effective Date of the Plan.

Company

MasterCard and its Affiliates and subsidiaries.

Company Entity

Any entity (including any subsidiary, affiliate or joint venture) in which the Company has a direct or indirect ownership interest of not less than 20%.

Disability

Disability shall be defined as set forth under the MasterCard Long-Term Disability Benefits Plan, as it may be amended from time to time.

Any dispute concerning whether the Eligible Employee is deemed to have suffered a Disability for purposes of the Plan shall be resolved in accordance with the dispute resolution procedures set forth in the MasterCard Long-Term Disability Benefits Plan.

Good Reason

The occurrence of any of the following without the prior written consent of the Eligible Employee:

•    the assignment to a position for which the Eligible Employee is not qualified or a materially lesser position than the position held by the Eligible Employee (although duties may differ without giving rise to a termination by the Eligible Employee for Good Reason);

•    a material reduction in the Eligible Employee’s annual Base Salary except that a 10 percent reduction, in the aggregate, over the period of the Eligible Employee’s employment shall not be treated as a material reduction; or

•    the relocation of the Eligible Employee’s principal place of employment to a location more than fifty (50) miles from the Eligible Employee’s principal place of employment (unless such relocation does not increase the Eligible Employee’s commute by more than twenty (20) miles), except for required travel on the Company’s business to an extent substantially consistent with the Eligible Employee’s business travel obligations as of the date of relocation.

MasterCard

MasterCard International Incorporated.

Participating Employers

The Affiliates and subsidiaries of MasterCard that have adopted the Plan upon approval by the Severance Plan Committee.

Plan Administrator

Group Head Global Rewards of Mastercard.

Severance Plan Committee

The Severance Plan Committee serves as an advisory committee to the Plan Committee and consists of at least one member of the law, finance and human resources departments of MasterCard.

 

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Date of Termination

The date on which the Eligible Employee incurs a termination of employment as described in the “Qualification” section or such other date on which an Eligible Employee incurs a “separation from service” determined using the default provisions set forth in Section 1.409A-1(h) of the Treasury Regulations. Pursuant to such default provisions, an Eligible Employee will be treated as no longer performing services for the Company when the level of services he or she performs for the Company decreases to a level equal to 20% or less of the average level of services performed by such Eligible Employee during the immediately preceding 36 months. 

 

Your Rights Under ERISA

The Department of Labor has issued regulations that require the Company to provide you with a statement of your rights under ERISA with respect to this Plan. The following statement was designated by the Department of Labor to satisfy this requirement and is presented accordingly.

As a participant in the Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants are entitled to:

Receive Information About Your Plan and Benefits

1.

Examine, without charge, all Plan documents and copies of all documents filed by the Company with the Department of Labor. This includes annual reports and Plan descriptions. All such documents are available for review in your Human Resources Department.

 

2.

Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including copies of the latest annual report (Form 5500 Series) and an updated summary plan description. The Plan Administrator may charge you a reasonable fee for the copies.

 

3.

Receive a summary of the Plan’s annual financial report. Once each year, the Plan Administrator will send you a Summary Annual Report of the Plan’s financial activities at no charge.

Prudent Action by Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called fiduciaries of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants.

No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension or welfare benefit or exercising your rights under ERISA.

Enforcing Your Rights

If your claim for change in control severance payments and benefits is denied or ignored in whole or in part, you have a right to receive a written explanation of the reason for the denial, to obtain copies of documents related to the decision without charge, and to appeal any denial, all within certain time schedules. You have the right to have your claim reviewed and reconsidered. You also have the right to request a review of the denial of your claim as explained in the “Appeal Procedures” section. No one, including your employer or any other person, may discriminate against you in any way to prevent you from obtaining change in control severance payments and benefits under the Plan or exercising your rights under ERISA.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request

 

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materials from the Plan and do not receive them within thirty (30) days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for change in control severance payments and benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court after you have exhausted the Plan’s claims and appeal procedures as described in the section “Claims and Appeal Procedures” hereof. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the Department of Labor, or you may file suit in a federal court.

The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance with Your Questions

If you have any questions about the Plan, you should contact the Plan Administrator through your Human Resources Department. They will be glad to help you. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest Area Office of the Employee Benefits Security Administration, Department of Labor, listed in your telephone directory, or you may contact:

The Division of Technical Assistance and Inquiries

Employee Benefits Security Administration,

Department of Labor

200 Constitution Avenue, N.W., Room 5N625

Washington, DC 20210

1-866-444-EBSA (1-866-444-3272)

www.dol.gov/ebsa (for general information)

www.askebsa.dol.gov (for electronic inquiries)

 

You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration at 1-866-444-3272.

 

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Administrative Facts

Topic

Description

Plan Name

Amended and Restated MasterCard International Incorporated Change in Control Severance Plan

Plan Sponsor

MasterCard International Incorporated 
2000 Purchase Street 
Purchase, NY 10577 USA

Source of Contributions to Plan

Employer payments from corporate assets

Employer Identification Number

 

Plan Number

______

Plan Administrator

Group Head Global Rewards 
MasterCard International Incorporated 
2000 Purchase Street 
Purchase, NY 10577 USA

Agent for Receiving Service of Legal Process

General Counsel, Chief Franchise Officer & Corporate Secretary 
MasterCard International Incorporated 
2000 Purchase Street 
Purchase, NY 10577 USA

 

Contact Information

If you have questions about this Plan, please contact your department’s HR Business Partner. If you do not know who your HR Business Partner is, call People Services and they will provide you with this information.

People Services

Phone:    

Fax:    

E-Mail:    

 

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EXHIBIT A 

PARTICIPATING EMPLOYERS

 

 

 

MasterCard Incorporated

MasterCard Technologies, LLC

MasterCard Advisors, LLC

 

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