Exhibit 10.2
MasterCard International Incorporated Change in Control
Severance Plan
The 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 is effective as of
August 1, 2009.
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
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Eligibility
The following employees of the
Company are eligible to participate in the Plan (“Eligible
Employees”):
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Employees whose terms and
conditions of employment are not governed by an employment
agreement with the Company and who have been selected prior to a
“Change-in-Control” (as such term is defined in the
“Definitions” section), in writing, by the Chief
Executive Officer (“CEO”) of MasterCard or by the Human
Resources and Compensation Committee, as eligible to participate in
the Plan, provided that the written selection by the CEO must be
made at least six (6) months preceding a Change-in-Control.
Such selection shall be made in the CEO’s or the Human
Resources and Compensation Committee’s sole and absolute
discretion.
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Qualification
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a.
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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
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b.
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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.
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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 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
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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).
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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.
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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.
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a.
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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;
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b.
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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;
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c.
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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;
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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;
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d.
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the failure by
the Eligible Employee to give notice of termination for Good Reason
(as described above); or
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e.
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the Eligible
Employee is subject to the Company’s Mandatory Retirement
policy and retires thereunder.
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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.
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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
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:
The Eligible Employee shall be
entitled to the following payments following the Date of
Termination (as such term is defined in the
“Definitions” section):
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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;
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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;
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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 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
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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.
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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”).
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c.
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Medical
Benefits Continuation
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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 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.
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.
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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 MasterCard
International Incorporated Severance Plan).
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f.
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Separation
Agreement and Release
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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).
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.
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.
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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 discretionary authority to:
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take all actions and make all
decisions with respect to the eligibility for, a
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