Exhibit 10.1
MasterCard International Incorporated Executive Severance
Plan
The 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 is effective as of
August 1, 2009.
Eligibility
Members of the Executive Committee
of MasterCard or a successor group, who do not have a written
employment agreement with the Company 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 MasterCard Incorporated Severance Plan.
Qualification
An Eligible Member will be entitled
to receive “Severance Payments” (as defined below)
if:
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a.
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the Eligible
Member is terminated by the Company without “Cause” (as
such term is defined in the “Definitions” section);
or
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b.
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the Eligible
Member terminates his or her employment with the Company for
“Good Reason” (as such term is defined in the
“Definitions” section);
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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).
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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.
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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 nevertheless be eligible
to receive certain accrued payments (as described
below).
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a.
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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;
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b.
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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”);
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c.
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the Eligible
Member’s employment with the Company is terminated for
Cause;
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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.
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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.
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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 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
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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;
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d.
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the failure by
the Eligible Member to give a timely notice of termination for Good
Reason (as described above); or
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e.
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the Eligible
Member is subject to the Company’s Mandatory Retirement
policy and retires thereunder.
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Amount and Duration of
Severance
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:
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“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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payment for all accrued but
unused vacation time up to the Date of Termination;
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(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;
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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 Member’s Date of Termination, with
such amount payable when the annual incentive bonus is regularly
paid to similarly employees for such year; and
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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.
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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:
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Base Salary earned but not paid
prior to the Date of Termination;
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payment for all accrued but
unused vacation time up to the Date of Termination; and
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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.
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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:
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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 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 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
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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 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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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 not limited to, the 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
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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).
Income Taxes
Accrued payments and Severance
Payments are subject to all applicable federal, state, and local
tax withholding and generally are taxable income to the
Eligible
