Exhibit 10.1
EMPLOYMENT
AGREEMENT
Agreement made and entered into this
16th day of June, 2009, (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 wishes to
become employed by the Company and the Company wishes to employ the
Executive 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 The term of the
Executive’s employment hereunder shall commence on a date
after the Effective Date, but not later than October 1, 2009
(the “Employment Term Effective Date”), and shall
continue through December 31 of the calendar year in which the
second anniversary of the Employment Term Effective Date occurs
(the “Initial Term of Employment”); 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 Employment Term
Effective Date, the Executive shall serve the Company in the
position of President and Chief Operating Officer
(“COO”).
2.2 During the Term of Employment,
the Executive shall be employed and have such titles and authority,
perform such duties, discharge such responsibilities and render
such services as are assigned to the Executive from time to time by
the Company.
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 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 Company’s Global Compliance Officer in accordance with
the terms of the Company’s Code of Conduct.
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
hereunder 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”), excluding
the CEO, 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 employees of the Company at the
Executive’s level, 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.
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.
2
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 other employees of the Company at the
Executive’s level, 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.
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;
3
(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) 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 assignment to a position for
which the Executive is not qualified or a materially lesser
position than the position held by the Executive (although duties
may differ without giving rise to a termination by the Executive
for Good Reason);
4
(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;
(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; or
(e) the failure by the Company to
offer the Executive a promotion to Chief Executive Officer of the
Company on or before June 30, 2010, provided however, that any
such offer need not become effective prior to January 1,
2011.
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 hereunder, such voluntary 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
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:
(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
6
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, 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, 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 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.
7
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 Employment Term 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 (subject to any
previously elected deferrals under the MasterCard Incorporated
Deferral Plan), 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 (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, prior
to the payment of an annual 2009 bonus, the Executive’s
Severance Pay shall include a payment of $1,200,000.00 (one million
two hundred thousand dollars) in lieu of the Average Bonus Payment.
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
8
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
t
