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EXHIBIT 10.7
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(this “ Agreement ”) is made and entered into as
of May 12, 2008, by and between William M. Sheedy (the “
Executive ”) and Visa Inc., a Delaware corporation
(the “ Company ”).
WITNESSETH
THAT:
The Company has determined
that it is in the best interests of the Company and its
shareholders to assure that the Company shall have the continued
dedication of the Executive. Therefore, in order to accomplish
these objectives, the Executive and the Company desire to enter
into this Agreement.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth
below, and for other good and valuable consideration, it is hereby
covenanted and agreed by the Executive and the Company as
follows:
1. Effective Date .
The “ Effective Date ” shall mean May 12,
2008.
2. Employment Period .
The initial term of the Executive’s employment shall commence
on the Effective Date and end on the third anniversary of the
Effective Date (the “ Initial Employment Period
”), unless terminated earlier pursuant to Section 5 of
this Agreement; provided, however, that as of the expiration
date of each of (i) the Initial Employment Period and
(ii) if applicable, any Renewal Period (as defined below), the
Employment Period shall automatically be extended for a one-year
period (each, a “ Renewal Period ”), unless
either party gives at least 90 days written notice prior to such
expiration date of its intention not to renew the Employment Period
(the Initial Employment Period and each subsequent Renewal Period
shall constitute the “ Employment Period ”).
Notwithstanding the foregoing, in the event of a “Change of
Control” of the Company (as defined in the Visa Inc. 2007
Equity Incentive Compensation Plan) the Employment Period shall be
the longer of the then-Employment Period or the two-year
anniversary of such Change of Control. The Employment Period shall
automatically end upon termination of Executive’s employment
for any reason.
3. Position and Duties
. (a) During the Employment Period, the Executive shall serve
as the Global Head of Corporate Strategy and Business Development
of the Company, with such authority, power, duties and
responsibilities as are commensurate with such positions and as are
customarily exercised by a person holding such positions in a
company of the size and nature of the Company. During the
Employment Period, the Executive shall (i) report directly to
the Chief Executive Officer of the Company or his designee and
(ii) perform his duties at the Company’s corporate
offices in San Francisco, California.
(b) During the Employment
Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote all
of his attention and time during normal business hours to attention
to serving in the positions described in Section 3(a) and
shall perform his duties faithfully and efficiently.
Notwithstanding the foregoing provisions of this Section 3(b),
the Executive may (i) serve as a director, trustee or officer
or otherwise participate in not-for-profit educational, welfare,
social, religious and civic organizations; and (ii) manage
personal investments, to the extent that such other activities,
either individually or in the aggregate, do not inhibit or
interfere with the performance of the Executive’s duties
under this Agreement, or to the knowledge of the Executive conflict
in any material way with the business or policies of the Company or
any subsidiary or controlled affiliate thereof (the “
Affiliated Entities ”).
4. Compensation .
Subject to the terms of this Agreement, while the Executive is
employed by the Company, the Company shall compensate the Executive
for his services as follows:
(a) Base Salary .
During the Employment Period, the Executive shall receive an annual
base salary (“ Annual Base Salary ”) of not less
than $475,000. During the Employment Period, the Executive’s
Annual Base Salary shall be reviewed annually by the Compensation
Committee (the “ Compensation Committee ”) of
the Board of Directors of the Company (the “ Board
”) for increase, but not decrease. The term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base
Salary as in effect from time to time, including any increases.
Such Annual Base Salary shall be payable in monthly or more
frequent installments in accordance with the Company’s
payroll policies applicable to executive officers.
(b) Annual Incentive
Payment . With respect to each fiscal year of the Company
ending during the Employment Period, the Executive shall be
eligible to receive an annual cash incentive payment (the “
Annual Incentive Payment ”). The Executive’s
target Annual Incentive Payment opportunity shall be no less than
75% of the Executive’s Annual Base Salary (the “
Target Incentive Payment ”), with such percentage
subject to increase (but not decrease) as determined by the
Compensation Committee. The actual Annual Incentive Payment may be
higher or lower than the Target Incentive Payment based on actual
performance as determined by the Compensation Committee in
accordance with the Visa Inc. Incentive Plan or any substitute or
successor plan thereto.
(c) Annual Long-Term
Incentive Awards . With respect to each fiscal year of the
Company ending during the Employment Period, the Executive shall be
eligible to receive an annual long-term incentive award (the
“ Annual LTI Award ”) with a target value of no
less than $750,000 (based on the grant date value of any such
Annual LTI Award as determined in accordance with the
Company’s standard valuation methodology and procedures for
equity and equity-based awards as applied consistently with respect
to other executive officers of the Company). The Executive’s
Annual LTI Awards shall be determined by the Compensation Committee
on the same basis as, and shall have terms and conditions no less
favorable than those that apply to, other situated executive
officers of the Company.
(d) Employee Benefits,
Fringe Benefits and Perquisites . During the Employment Period,
the Executive shall be entitled to employee benefits, fringe
benefits and perquisites on a basis that is no less favorable than
those provided to other executive officers of the
Company.
(e) Expense
Reimbursement . During the Employment Period, the Company shall
reimburse the Executive for all reasonable expenses incurred by him
in the performance of his duties in accordance with the
Company’s policies applicable to other executive officers of
the Company.
(f) Vacation . During
the Employment Period, the Executive shall be eligible for
paid-time off in accordance with the Company’s
policy.
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(g) Indemnification .
The Company shall indemnify the Executive to the maximum extent
permitted under the General Corporate Law of Delaware for acts
taken within the scope of his employment. To the extent that the
Company obtains coverage under a director and officer
indemnification policy, the Executive shall be entitled to such
coverage on a basis that is no less favorable than the coverage
provided to any other officer or director of the
Company.
5. Termination of
Employment . (a) Death or Permanent Disability .
The Executive’s employment shall terminate automatically upon
the Executive’s death during the Employment Period. If the
Company determines in good faith that the Permanent Disability of
the Executive has occurred during the Employment Period (pursuant
to the definition of Permanent Disability set forth below), it may
provide the Executive with written notice in accordance with
Section 11(f) of this Agreement of its intention to terminate
the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive (the “ Disability Effective Date ”),
provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement, “
Permanent Disability ” shall have such meaning as
under the Company’s disability plan in which the Executive
participates or, if the Executive does not participate in any such
plan, shall mean the absence of the Executive from the
Executive’s duties with the Company on a full-time basis for
180 consecutive business days as a result of incapacity due to
mental or physical illness, as determined by a physician selected
by the Company or its insurers and acceptable to the Executive or
the Executive’s legal representative.
(b) Cause . The
Company may terminate the Executive’s employment during the
Employment Period either with or without Cause. For purposes of
this Agreement, “ Cause ” shall mean:
(i) the failure of the
Executive to perform the Executive’s duties with the Company
or one of the Affiliated Entities (other than any such failure
resulting from incapacity due to physical or mental illness),
provided, however , that following a Change of Control of
the Company, any such failure will only serve as the basis for a
termination for Cause if it is willful;
(ii) the willful engaging by
the Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company;
(iii) the Executive’s
conviction of, or plea of guilty or nolo contendere
to, a charge of commission of a felony; or
(iv) the Executive’s
disclosure of confidential information in violation of the
Company’s written policies which is demonstrably injurious to
the Company.
For purposes of this
provision, no act or failure to act, on the part of the Executive,
shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive’s action or omission was
in the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by
the Board or upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held
for such purpose (after
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reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct
described in clauses (i), (ii) or (iv) above, and
specifying the particulars thereof in detail.
(c) Good Reason .
Subject to the limitations in the immediately following sentence,
the Executive’s employment may be terminated by the Executive
during the Employment Period with or without Good Reason. For
purposes of this Agreement, “ Good Reason ”
shall mean (in the absence of the written consent of the Executive)
the occurrence of any of the following events or circumstances
during the two year period following a Change of Control of the
Company:
(i) the assignment to the
Executive of any duties inconsistent with the Executive’s
positions (including status, offices, titles and reporting
requirements), authority, duties or responsibilities from those in
effect in effect immediately prior to such Change of Control or any
action by the Company which results in a diminution in any of the
foregoing as in effect immediately prior to such Change of Control,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and that is remedied by
the Company promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the
Company to comply with any of the provisions of Section 4 of
this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and that is remedied
by the Company promptly after receipt of notice thereof given by
the Executive;
(iii) the Company’s
transfer of the Executive’s primary office by more than 50
miles from the location set forth in Section 3(a) of this
Agreement;
(iv) any other material
breach of this Agreement by the Company; or
(v) any failure by the
Company to comply with Section 10(b) of this
Agreement.
The Executive’s mental or physical
incapacity following the occurrence of an event described above in
clauses (i) through (v) shall not affect the
Executive’s ability to terminate employment for Good Reason
and the Executive’s death following delivery of a Notice of
Termination for Good Reason shall not affect the Executive’s
estate’s entitlement to any severance payments or benefits
under Section 6(a) of this Agreement.
(d) Notice of
Termination . Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with
Section 11(f) of this Agreement. For purposes of this
Agreement, a “ Notice of Termination ” means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination
date (which date shall be not more than 30 days after the giving of
such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights
hereunder.
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(e) Date of
Termination . “ Date of Termination ” means
(i) if the Executive’s employment is terminated by the
Company for Cause, or by the Executive with or without Good Reason,
the date of receipt of the Notice of Termination or any later date
specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive’s employment is terminated by
the Company other than for Cause or Permanent Disability, the Date
of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the
Executive’s employment is terminated by reason of death or
Permanent Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the
case may be. The Company and the Executive shall take all steps
necessary (including with regard to any post-termination services
by the Executive) to ensure that any termination described in this
Section 5 constitutes a “separation from service”
within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the “ Code ”), and
notwithstanding anything contained herein to the contrary, the date
on which such separation from service takes place shall be the
“Date of Termination.”
6. Obligations of the
Company upon Termination . (a) Good Reason; without
Cause . Subject to the Executive’s execution of the
“Waiver and Release” attached hereto as Exhibit A (the
“ Waiver and Release ”) no later than 60 days
after the Date of Termination, if, during the Employment Period,
the Company shall terminate the Executive’s employment
without Cause or the Executive shall terminate employment for Good
Reason:
(i) the Company shall pay to
the Executive in a lump sum in cash within 30 days after the Date
of Termination (or, if later, five days after the effective date of
the Waiver and Release), the aggregate of the following
amounts:
A. the sum of (1) the
Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (2) any annual
incentive payment earned by the Executive for a prior award period
to the extent not theretofore paid and not theretofore deferred,
(3) any accrued and unused vacation pay and (4) any
business expenses incurred by the Executive that are unreimbursed
as of the Date of Termination (the sum of the amounts described in
clauses (1), (2), (3) and (4) shall be hereinafter
referred to as the “ Accrued Obligations
”);
B. the product of
(1) the Target Incentive Payment and (2) a fraction, the
numerator of which is the number of days that have elapsed in the
fiscal year of the Company in which the Date of Termination occurs
as of the Date of Termination, and the denominator of which is 365
(the “ Pro-Rata Incentive Payment ”);
provided, however, in the event that the Executive is a
“covered employee” within the meaning of
Section 162(m) of the Code (a “ Covered Employee
”) during the fiscal year of the Company in which the Date of
Termination occurs, the Pro-Rata Incentive Payment shall
(i) be determined based on the Company’s actual
performance for the fiscal year of the Company in which the Date of
Termination occurs on the same basis as other executive officers
and (ii) be paid at such time as the Company otherwise makes
incentive payments for such fiscal year;
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C. the amount equal to two
times the sum of (1) the Executive’s Annual Base Salary
and (2) the Target Incentive Payment (the “ Severance
Payment ”); and
(ii) notwithstanding anything
to the contrary contained in any stock incentive plan or grant or
award agreement, as applicable (collectively, the “ Equity
Benefits ”):
A. In the event that the
Executive is not a Covered Employee during the fiscal year of the
Company in which the Date of Termination occurs, (1) all stock
options, restricted stock, restricted stock units and other
equity-based compensation awards outstanding as of the Date of
Termination and held by the Executive (including, without
limitation, any equity awards granted to the Executive in
connection with the IPO and any Annual LTI Awards) shall vest in
full and all restrictions thereon shall lapse ( provided
that any delays in payment or settlement set forth in such grant or
award agreements that are required under Section 409A of the
Code shall remain effective), and all stock options shall remain
exercisable for the remainder of their full term and (2) any
cash-based long-term incentive awards shall vest in full and
amounts in respect thereof shall be paid on the date the amounts
would have otherwise been paid had the Executive remained employed
with the Company (or, if earlier, his death);
B. In the Event that the
Executive is a Covered Employee during the fiscal year of the
Company in which the Date of Termination occurs:
(1) all stock options
outstanding as of the Date of Termination and held by the Executive
(including, without limitation, any stock options granted to the
Executive in connection with the IPO and any Annual LTI Awards)
shall vest in full and become immediately exercisable for the
remainder of their full term;
(2) all equity-based
compensation awards other than stock options (including, without
limitation, any such awards granted to the Executive in connection
with the IPO and any Annual LTI Awards) that are outstanding as of
the Date of Termination and held by the Executive which are not
intended to be “qualified performance-based
compensation” within the meaning of Treasury Regulation
Section 1.162-27(e) (such awards, “ Qualified
Performance Awards ”) shall vest in full and all
restrictions thereon shall lapse ( provided that any delays
in payment or settlement set forth in such grant or award
agreements that are required under Section 409A of the Code
shall remain effective);
(3) all equity-based
compensation awards other than stock options (including, without
limitation, any stock options granted to the Executive in
connection with the IPO and any Annual LTI Awards) which are
intended to be Qualified Performance Awards shall remain
outstanding and shall continue to vest (or be forfeited) in
accordance with the terms of the applicable award agreement;
and
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(4) notwithstanding anything
in subsections (2) and (3) above, any cash-based
long-term incentive awards which were granted to the Executive
prior to the Effective Date shall vest in full and amounts in
respect thereof shall be paid on the date the amounts would have
otherwise been paid had the Executive remained employed with the
Company (or, if earlier, his death).
(iii) the Company shall
provide the Executive and his eligible dependents with continued
health care benefits under the Company’s health care benefits
program for two years following the Date of Termination (such
continued health care benefits, the “ Medical Benefits
”) as follows: (A) during the first 18 months following
the Date of Termination (the “ Initial Benefits
Continuation Period ”) such health care benefits shall be
provided at the Company’s sole expense consistent with the
Company’s practice under the Company’s severance plan
(as in effect on the Effective Date); and (B) during the
six-month period immediately following the Initial Benefits
Continuation Period (but not beyond the Executive’s
attainment of age 65) (the “ Subsequent Benefits
Continuation Period ”), such health care benefits shall
be provided under the Company’s plans, programs, practices
and policies providing health care benefits in the manner required
by Section 4980B of the Code or other applicable law (“
COBRA Coverage ”), as if the Executive’s
employment with the Company had terminated as of the end of the
Initial Benefits Continuation Period, and the Company shall take
such actions as are necessary to cause such COBRA Coverage not to
be offset by the provision of benefits under this
Section 6(a)(iii) and to cause the period of COBRA Coverage
under the Company’s health care benefit plans to commence at
the end of the Initial Benefits Continuation Period. The Executive
shall be responsible for the payment of any COBRA premium during
the Subsequent Benefits Continuation Period, provided that
the Company shall make a lump sum payment to the Executive within
ten days of the end of the Initial Benefits Continuation Period
(unless the Executive has theretofore died) equal to the cost of
such premiums, plus an income tax gross-up thereon so that the
Executive retains an amount equal to the cost of such premiums;
and
(iv) to the extent not
theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or
agreement of the Company and the Affiliated Entities through the
Date of Termination, and, to the extent the Executive satisfies any
“retirement” based rule of any of the foregoing that
provides for more beneficial treatment to the Executive, the
Executive shall be afforded such more beneficial treatment (such
other amounts and benefits and such more beneficial treatment shall
be hereinafter referred to as the “ Other Benefits
”).
Notwithstanding the foregoing provisions
of this Section 6(a), in the event that the Executive is a
“specified employee” within the meaning of
Section 409A of the Code (as determined in accordance with the
methodology established by the Company as in effect on the Date of
Termination) (a “ Specified Employee ”), the
Severance Payment and, to the extent the Executive is not a Covered
Employee for the fiscal year of the Company in which the Date of
Termination occurs, the Pro-Rata Incentive Payment shall instead be
paid to the Executive, with interest on any delayed payment at the
applicable federal rate provided for in Section 7872(f)(2)(A)
of the Code (“ Intere
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