Exhibit 10.18

MASTERCARD INTERNATIONAL INCORPORATED

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Amended and Restated as of January 1, 2008, Unless Otherwise Provided

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MASTERCARD INTERNATIONAL INCORPORATED

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

TABLE OF CONTENTS

 

             Page      ARTICLE I         DEFINITIONS   

1.1

     Definitions    1

1.2

     Rules of Construction    6      ARTICLE II         ELIGIBILITY AND
PARTICIPATION   

2.1

     Eligibility    7

2.2

     Notice    7

2.3

     Participation    7      ARTICLE III         RETIREMENT BENEFIT AND DEATH
BENEFIT   

3.1

     Determination of Retirement Benefit    9

3.2

     Death Benefit    9      ARTICLE IV         FORM AND TIMING OF PAYMENT   

4.1

     Retirement Benefit    10

4.2

     Acceleration or Delay in Payment    10      ARTICLE V         VESTING   

5.1

     General Rule    11

5.2

     Exceptions    11

5.3

     Active Employment    11

 

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       ARTICLE VI           ADMINISTRATION   

6.1

     Committee    12

6.2

     Claim and Appeal Procedures    12      ARTICLE VII         FUNDING   

7.1

     General Rule    15      ARTICLE VIII         AMENDMENT; TERMINATION   

8.1

     Amendment    16

8.2

     Termination    16      ARTICLE IX         GENERAL PROVISIONS   

9.1

     Payments to Minors and Incompetents    17

9.2

     No Contract    17

9.3

     Non-Alienation of Benefits    17

9.4

     Tax Withholding    17

9.5

     Captions    17

9.6

     Severability    17

9.7

     Notices    17

9.8

     Construction    17

9.9

     Governing Law    18

Appendix A – Calculation of the Offset

Appendix B – Actuarial Assumptions and Factors

Appendix C – Hypothetical Prior Employer Benefit for Sample Participant

 

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PREAMBLE

Effective November 18, 1999, MasterCard International Incorporated (the
“Company”) established a nonqualified defined benefit pension plan referred to
as the Supplemental Executive Retirement Plan (the “Plan” or “SERP”) for the
benefit of key executives of the Company. Various amendments to the Plan were
adopted in December 2004 and December 2005. Effective as of January 1, 2008, the
Plan is amended and restated pursuant to the Applicable Transition Relief to
clarify certain provisions relating to time of payment and to adopt amendments
intended to avoid the imposition on any person of any tax or interest payment
pursuant to Section 409A of the Code.

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ARTICLE I

DEFINITIONS

1.1 Definitions. The following words and phrases when used in the Plan shall
have the meanings indicated in this Article I. Capitalized terms defined in MAP
and not otherwise defined in this Article I have the meanings assigned thereto
in MAP and capitalized terms defined in the Restoration Program and not
otherwise defined in this Article I have the meanings assigned thereto in the
Restoration Program, if so indicated in the Plan.

“Actuarial Equivalent” means a benefit of equal value, in accordance with the
actuarial assumptions and factors set forth in Appendix B.

“Administrator” means the person designated by the Committee in accordance with
Article VI.

“Affiliate” means all members of a controlled group of corporations (as defined
in Section 414(b) of the Code) and all commonly controlled trades or businesses
(as defined in Section 414(c) of the Code), provided that, for purposes of a
Separation from Service, in applying Section 1563(a)(1), (2), and (3) of the
Code for purposes of determining a controlled group of corporations under
Section 414(b) of the Code the language “at least 50 percent” shall be used
instead of “at least 80 percent” each place it appears in Section 1563(a)(1),
(2) and (3) of the Code, and in applying Section 1.414(c)-2 of the Treasury
Regulations, for purposes of determining trades or businesses (whether or not
incorporated) that are under common control for purposes of Section 414(c) of
the Code, “at least 50 percent” shall be used instead of “at least 80 percent”
each place it appears in Section 1.414(c)-2 of the Treasury Regulations.

“Applicable Transition Relief” means the following transition guidance, as
applicable, with respect to the application of Section 409A (i) I.R.S. Notice
2005-1, I.R.B. 274 (published as modified on January 6, 2005), (ii) the preamble
to the proposed Treasury Regulations under Section 409A (70 F.R.
57930; October 4, 2005), (iii) I.R.S. Notice 2006-79, I.R.B. 2006-43 and
(iv) I.R.S. Notice 2007-86, I.R.B. 2007-46.

“Beneficiary” means the Participant’s Spouse or other person who is designated
by the Participant as eligible to receive the Participant’s Retirement Benefit
upon the death of the Participant; provided, however, that if the Participant
does not designate a Beneficiary prior to his death or there is no surviving
Beneficiary, the Beneficiary shall be the Participant’s spouse, if he is married
on the date of his death and the Participants estate, if he is not married on
the date of his death.

“Benefit Starting Date” means the date on which a Retirement Benefit or
Pre-Vesting Date Benefit, as the case may be, is paid pursuant to Article IV.

“Board” means the Global Board of Directors of the Company.

“CAO” means the Chief Administrative Officer (Central Resources) of the Company.

 

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“Cause” means (a) the willful failure by the Participant to perform his duties
or responsibilities (other than due to Disability), (b) the Participant’s
engaging in serious misconduct that is injurious to the Company or an Affiliate
including, but not limited to, damage to its reputation or standing in its
industry; (c) the Participant’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 Participant of any written covenant or agreement with the Company or an
Affiliate not to disclose any information pertaining to the Company and/or its
Affiliates, or (e) the breach by the Participant of the Code of Conduct, 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, foreign corrupt
practices act, enterprise risk management, accounting, contracts, purchasing,
communications, investor relations, immigration, privacy, insider trading, and
similar policies, whether currently in effect or later adopted.

“Change of Control” means the occurrence of any of the following events, but
shall specifically exclude a Public Offering:

(i) The acquisition by any individual entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of equity
securities of the Company representing more than 30 percent of the voting power
of the then outstanding equity securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”), provided, however, that for purposes of this subsection (i) the
following acquisitions shall not constitute a Change of Control: (A) any
acquisition by the Company, (B) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, and (C) an acquisition pursuant to a transaction
which complies with clauses (A), (B), and (C) of subsection (iii); or

(ii) A change in the composition of the Board as of the Effective Date (the
“Incumbent Board”) that causes less than a majority of the directors of the
Company then in office to be members of the Incumbent Board, provided, however,
that any individual becoming a director subsequent to the Effective Date, whose
election, or nomination for election by the Company’s shareholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or

(iii) Consummation of a reorganization, merger, or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or
the purchase of assets or stock of another entity (“A Business Combination”), in
each case, unless immediately following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Voting Securities immediately prior to such Business
Combination will beneficially own, directly or indirectly, more than 50 percent
of the then outstanding combined voting power of the then outstanding voting
securities

 

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entitled to vote generally in the election of directors (or equivalent governing
body, if applicable) of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such transaction
owns the Company or all of substantially all of the Company’s assets directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Voting Securities, (B) no person (excluding any employee benefit plan
(or related trust) of the Company or such entity resulting from such Business
Combination) will beneficially own, directly or indirectly, more than a majority
of the combined voting power of the then outstanding voting securities of such
entity except to the extent that such ownership of the Company existed prior to
the Business Combination, and (C) at least a majority of the members of the
board of directors (or equivalent governing body, if applicable) of the entity
resulting from such Business Combination will have been members of the Incumbent
Board at the time of the initial agreement, or action of the Board, providing
for such Business Combination; or

(iv) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

For purposes of this definition, “Public Offering” means any public offering of
any class or series of the Company’s equity securities pursuant to a
registration statement filed by the Company under the Securities Act or Exchange
Act.

“Chief Administrative Officer” means the Chief Administrative Officer of the
Company.

“Chief Executive Officer” means the Chief Executive Officer of the Company.

“Code” means the Internal Revenue Code of 1986, as amended, and the rulings and
regulations thereunder.

“Committee” means the committee of the Board designated by the Board to
administer the Plan. Unless the Board shall determine otherwise, the Committee
shall be Compensation Committee.

“Company” means MasterCard International Incorporated, and its Affiliates.
Wherever the context of the Plan so states or requires, “Company” also means
“Affiliate”.

“Disability” means a “disability” as such term or a similar term is defined
under the long-term disability plan of the Company or an Affiliate applicable to
the Participant at the time of determination.

“Eligible Employee” means an Employee of the Company who satisfies the
requirements of Section 2.1.

“Effective Date” means January 1, 2008.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rulings and regulations thereunder.

 

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“Final 48-Month Average Base Pay” means an annual amount, determined in
accordance with the formula P/4, where “P” is the sum of a Participant’s Base
Pay earned during the forty-eight consecutive months immediately preceding the
month in which the Participant’s Separation from Service occurs. Notwithstanding
anything in this definition to the contrary, if a Retirement Benefit is payable
prior to completion of forty-eight months of SERP service as a Participant on
account of (a) accelerated vesting pursuant to Section 5.2 or the Participant’s
Disability, if earlier, or (b) the termination of the Plan pursuant to
Section 8.2, “P” shall be an amount equal to the sum of “X” and “Y” where: “X”
is the Participant’s actual aggregate Base Pay earned through the date on which
the applicable event described in (a) or (b) above occurs; and

 

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“Y” is the assumed aggregate Base Pay earned for the N future months. For
purposes of determining Y,

 

  > “N” is equal to the difference between forty-eight and the number of months
of earned Base Pay included in X; and

 

  > the assumed aggregate Base Pay is the sum of the monthly Base Pay that would
be earned for N months, using the rate of Base Pay in effect on the applicable
date set forth in (a) or (b) above, which rate of Base Pay is increased by 5% on
each March 1 occurring between such applicable date and the date on which the
Participant would have earned forty eight months of Base Pay as a Participant.

“Good Reason” has the meaning set forth in the definition of Termination for
Good Reason.

“MAP” means the MasterCard Accumulation Plan, effective as of January 1, 2000,
and as the same may be amended from time to time.

“Notice” means the Notice of Participation that is sent to an Eligible Employee
pursuant to Section 2.2.

“Offset” means an amount equal to the sum of the (a) Participant’s Account
Balance under MAP, (b) Participant’s Restoration-Related Benefit, (c) lump-sum
Actuarial Equivalent of the Participant’s Social Security Primary Insurance
Amount and (d) Participant’s Prior Employer Benefit. The Offset shall be
determined in accordance with Appendix A.

“Participant” means an Eligible Employee who has received a Notice pursuant to
Article II.

“Plan” or “SERP” means the MasterCard International Supplemental Executive
Retirement Plan.

“Pre-Age 60 Death Benefit” has the meaning set forth in Section 3.2(c).

 

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“Prior Employer Benefit” means a hypothetical retirement benefit designed to
represent the lump-sum retirement benefit that a Participant would have received
from a prior employer, as set forth in Appendix A and Appendix C.

“Retirement Benefit” has the meaning set forth in Section 3.1.

“Restoration Program” means the MasterCard International Incorporated
Restoration Program, effective February 1, 1995, as amended and restated
effective January 1, 2007, and as the same may be amended from time to time and
any successor thereto.

“Restoration-Related Benefit” means an aggregate amount equal to the sum of the
following amounts:

(a) the amount that is the difference between the (i) lump-sum value of a
Participant’s accrued benefit, as of December 31, 1999, under the Prior Plan
Terms, without regard to the limits of Sections 401(a)(17) and 415 of the Code,
as determined by the Company and (ii) such Participant’s Initial Account Balance
in MAP; and

(b) the amount that is the sum of each amount that shall be determined annually,
beginning as of January 1, 2000, in accordance with the formula A-B, where “A”
is the sum of (i) the vested Pay Credit that a Participant would have received
for the calendar year, if the Limits (as defined under the Restoration Program)
did not apply to the Participant for such year and (ii) the MAP Adjustment
Bonus, if any (as defined under the Retirement Restoration Plan), for such
calendar year; and “B” is the Pay Credit actually credited to the Participant’s
MAP Account for such calendar year.

The amounts determined in paragraphs (a) and (b) are each accumulated with 8%
interest to the Participant’s Separation from Service, or 60th birthday, if
later.

“Section 409A Compliance” has the meaning set forth in Section 4.4.

“Separation from Service” means a separation from service with the Company and
its Affiliates that meets the requirements of the default provisions of Treasury
Regulation Section 1.409A-(1)(h) or the successor thereto.

“SERP Service” means an Employee’s Service while a Participant, commencing on
such Employee’s first day of participation in the Plan as set forth in the
Notice.

“Social Security Primary Insurance Amount” means the annual primary insurance
amount that would be paid to a Participant under the Social Security Act, based
on such Participant’s available compensation, at age sixty-two (62), without
regard to whether such amount is actually paid. If a Participant incurs a
Separation from Service either before or after attaining age sixty-two (62), the
Social Security Primary Insurance Amount shall be the Actuarial Equivalent of
such Participant’s age sixty-two (62) Social Security Primary Insurance Amount.
In determining the Social Security Primary Insurance Amount for a Participant,
the Committee shall assume that the Participant’s earnings for purposes of
Social Security were greater than the Social Security wage base for all years
through the earliest of the Participant’s:

 

 

(a)

60th birthday or Separation from Service, if later;

 

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  (b) date of death;

 

  (c) date of Termination Due to a Change of Control; and

 

  (d) attainment of age sixty-two (62).

“Termination Due to a Change of Control” means a Termination Without Cause or a
Termination for Good Reason, in each during the period beginning on the date
that is six months before and ending on the date that is two years after a
Change of Control.

“Termination for Good Reason” means a Participant’s Separation from Service for
one or more of the following reasons: the occurrence of the following without
the Participant’s prior written consent: (a) assignment to a position for which
the Participant is not qualified or a lesser position than the position held by
the Participant six months before the Change in Control (although duties may
differ without giving rise to a Termination for Good Reason), (b) a reduction in
the Participant’s annual base salary from that in effect six months before the
Change in Control; (c) the relocation of the Participant’s principal place of
employment to a location more than fifty (50) miles from the Participant’s
principal place of employment (unless such relocation does not increase the
Participant’s commute by more than twenty (20) miles) six months before the
Change in Control, except for required travel on the Company’s business to an
extent substantially consistent with the Participant’s business travel
obligations as of such day; 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 Participant and the Company or any Affiliate.

“Termination Without Cause” means a Participant’s Separation from Service for
any reason other than Good Reason, death, retirement, Disability or Cause.

“Vesting Date” means the date, determined in accordance with Article V, as of
which a Participant’s Retirement Benefit is fully vested and non-forfeitable.

1.2 Rules of Construction. The masculine gender shall be construed to include
the feminine gender, and the singular form of a word shall be deemed to include
the plural form, unless the context requires otherwise. Unless indicated
otherwise, references herein to articles and sections are to articles and
sections of the Plan.

 

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ARTICLE II

ELIGIBILITY AND PARTICIPATION

2.1 Eligibility. An Employee of the Company, other than the Chief Executive
Officer, shall become an Eligible Employee if (a) such Employee is a participant
in MAP and (b) the Chief Executive Officer, with the approval of the Committee,
selects and approves the Employee for participation in the Plan. The Chief
Executive Officer shall become an Eligible Employee upon the approval of the
Committee. Without limiting the generality of the foregoing, an Employee who
incurs an Employment Commencement Date or Reemployment Date after June 30, 2007
or is otherwise not eligible to participate in MAP shall not be an Eligible
Employee. Any individual who is not an Eligible Employee shall not participate
in, or accrue any benefit under, the Plan

2.2 Notice. An Eligible Employee’s participation in the Plan shall be evidenced
by a Notice addressed to such Eligible Employee that shall comply with, and be
subject to, the provisions of the Plan.

2.3 Participation.

(a) Continuing Participants. Any individual on January 1, 2008 who was a
participant in the Plan immediately prior to January 1, 2008 shall be a
Participant in the Plan on January 1, 2008, subject to the terms and provisions
hereof. An individual who is not an Eligible Employee shall not participate in
or receive any benefit under the Plan.

(b) New Participants. An Eligible Employee who does not become a Participant in
accordance with Section 2.3(a) and who incurs an Employment Commencement Date or
Reemployment Date prior to June 30, 2007 and who receives a Notice pursuant to
Section 2.2 shall become a Participant as of the date specified in the Notice,
subject to the terms and conditions hereof.

(c) Duration. Except as may otherwise be provided in the Notice or in
Section 2.3(d) or Section 2.3(e), an individual shall continue to be a
Participant as long as such individual is entitled to a Retirement Benefit under
the Plan, notwithstanding that such Participant may have incurred a Separation
from Service.

(d) Cessation. Notwithstanding any provision in the Plan to the contrary:

(i) an Employee, other than the Chief Executive Officer, shall cease to be a
Participant and shall forfeit all rights to any Retirement Benefit if the Chief
Executive Officer makes the decision to terminate the Participant’s employment,
for any reason, with or without Cause, unless a written agreement between such
Participant and the Company in effect at the time the Participant terminates
employment provides otherwise; and

(ii) the Chief Executive Officer shall cease to be a Participant and shall
forfeit all rights to a Retirement Benefit if the Board makes the decision to
terminate the Chief Executive Officer’s employment for any reason, with or

 

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without Cause, unless a written agreement between the Chief Executive Officer
and the Company in effect at the time he terminates employment provides
otherwise.

(e) Effect of Reemployment. Notwithstanding anything in the Plan to the
contrary, a Participant who incurs a Separation from Service for any reason and
subsequently incurs a Reemployment Date shall not become an Eligible Employee
and shall not earn any benefit under the Plan by reason of such Reemployment
Date.

 

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ARTICLE III

RETIREMENT BENEFIT AND DEATH BENEFIT

3.1 Determination of Retirement Benefit.

(a) Chief Executive Officer. The Retirement Benefit payable to a Participant who
is the Chief Executive Officer is an amount equal to the lump sum Actuarial
Equivalent of a life annuity equal to 100% of the Chief Executive Officer’s
Final 48-Month Average Base Pay, reduced by the amount of such Chief Executive
Officer’s Offset, determined in accordance with Appendix A.

(b) Participants Other than Chief Executive Officer. The Retirement Benefit
payable to a Participant, other than the Chief Executive Officer, , is an amount
equal to the lump sum Actuarial Equivalent of a life annuity equal to 80% of the
Participant’s Final 48-Month Average Base Pay, reduced by the amount of such
Participant’s Offset, determined in accordance with Appendix A.

3.2 Death Benefit.

(a) Following Age 60 and Prior to Benefit Starting Date. In the event of the
death of a Participant after his 60th birthday who, as of the date of death has
not incurred a Benefit Starting Date, the Retirement Benefit that would have
been payable to such Participant as of the date of death in accordance with
Section 3.1 shall be payable to such Participant’s Beneficiary.

(b) Following Benefit Starting Date. In the event of the death of a Participant
who has incurred a Benefit Starting Date and has received payment of his entire
Retirement Benefit, no death benefit shall be payable from the Plan to such
Participant’s Beneficiary.

(c) Pre-Age 60 Death Benefit. In the event that a Participant who is an Eligible
Employee dies prior to his 60th birthday (regardless of whether his Separation
from Service is due to his death), the Pre-Age 60 Death Benefit payable to the
Participant’s Beneficiary shall be equal to:

(i) if the Participant is the Chief Executive Officer, as of the date of his
death or was the Chief Executive Officer as of his Separation from Service, 75%
of the Actuarial Equivalent of the Retirement Benefit calculated in accordance
with Section 3.1(a); provided, however, that the Offset shall be determined in
accordance with Appendix A and

(ii) if the Participant is not the Chief Executive Officer as of the date of his
death or was not the Chief Executive Officer as of his Separation from Service,
75% of the Actuarial Equivalent of the Retirement Benefit calculated in
accordance with Section 3.1(b); provided, however, that the Offset shall be
determined in accordance with Appendix A.

 

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ARTICLE IV

FORM AND TIMING OF PAYMENT

4.1 Retirement Benefit. Subject to Section 4.2, effective for Benefit Starting
Dates on or after January 1, 2008:

(a) Form. For Benefit Starting Dates due to a Participant’s Separation from
Service for any reason, his Retirement Benefit, if vested pursuant to Article V,
shall be paid in the form of a single lump sum.

(b) Benefit Starting Date. Subject to Section 4.2, the Benefit Starting Date
with respect to the vested Retirement Benefit of a Participant who has incurred
a Separation from Service for any reason shall be on the first day of the month
following the date that is the later of (i) six months after the Participant’s
Separation from Service and (ii) the Participant’s 60th birthday or, in the
event of the Participant’s death, the date that would have been the
Participant’s 60th birthday. If, pursuant to Appendix A, the Offset is
determined as of a date prior to the Participant’s Benefit Starting Date, the
Participant’s Retirement Benefit shall include interest at the Thirty-Year
Treasury Rate for the period between the Separation from Service and Benefit
Starting Date. Except as set forth in this Section 4.1(b), payment of a
Participant’s Retirement Benefit shall not include interest.

4.2 Acceleration or Delay in Payment. Notwithstanding anything in Article IV to
the contrary, neither the Committee nor the CAO shall have the discretionary
authority to accelerate or delay payment of a Retirement Benefit except to the
extent that the Committee or the CAO determines in its discretion, that any such
acceleration or delay, as the case may be, will not cause a Participant or other
person to incur any tax, interest payment or penalty pursuant to Section 409A
(“Section 409A Compliance”). For purposes of acceleration upon the termination
of the Plan following a change in control event, pursuant to this Section 4.2,
“change in control event” shall have the meaning assigned thereto under the
default definitions set forth in Section 409A.

 

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ARTICLE V

VESTING

5.1 General Rule. Except as otherwise provided in Section 5.2 or as may be
established by the Committee, in its discretion:

(a) a Participant shall be vested in his Retirement Benefit on the Vesting Date,
which shall be the first of the month coinciding with or next following both his
completion of four (4) years of SERP Service while actively employed by the
Company and his 60th birthday while actively employed by the Company; and

(b) a Participant who ceases to be actively employed by the Company prior to his
completion of four (4) years of SERP Service or prior to his 60th birthday in
accordance with this Article V shall forfeit his Retirement Benefit.

5.2 Exceptions. Notwithstanding anything to the contrary in Section 5.1, a
Participant’s Retirement Benefit shall be fully vested and nonforfeitable upon a
Participant’s:

(a) a Termination Without Cause or a Termination for Good Reason, solely to the
extent that a written agreement between the Participant and the Company in
effect on the date of such Termination expressly provides for such accelerated
vesting;

(b) Termination Due to a Change of Control;

(c) Separation from Service due to his Disability; and

(d) Separation from Service due to his death.

5.3 Active Employment. For purposes of this Article V only, a Participant shall
cease to be actively employed by the Company upon the occurrence of a Separation
from Service.

 

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ARTICLE VI

ADMINISTRATION

6.1 Committee.

(a) Responsibilities. The Plan shall be administered by the Committee, which
shall be responsible for the interpretation of the Plan and establishment of the
rules and regulations governing the administration thereof, which
responsibilities shall include: (a) to determine eligibility to participate in,
and the amount of benefit to be provided to any Participant under, the Plan;
(b) to make and enforce such rules and regulations as it shall deem necessary or
proper for the efficient administration of the Plan; (c) to determine all
questions arising in connection with the Plan, to interpret and construe the
Plan, to resolve ambiguities, inconsistencies or omissions in the text of the
Plan, to correct any defects in the text of the Plan and to take such other
action as may be necessary or advisable for the orderly administration of the
Plan; (d) to make any and all legal and factual determinations in connection
with the administration and implementation of the Plan; (e) to review actions
taken by any other person to whom authority is delegated under the Plan; and
(f) to employ and rely on legal counsel, actuaries, accountants and any other
agents as may be deemed to be advisable to assist in the administration of the
Plan. The Committee’s decision in any matter involving the administration,
interpretation and application of this Plan shall be final and binding on all
parties. Neither the Committee nor any member thereof nor the Company shall be
liable for any action or determination made in good faith with respect to the
Plan or the rights of any person under the Plan.

(b) Authority of Members. The members of the Committee may authorize one or more
of their number to execute or deliver any instrument, make any payment or
perform any other act that the Plan authorizes or requires the Committee to do,
including, without limitation, the retention of counsel and other agents as it
may require in carrying out the provisions of the Plan.

(c) Authority to Delegate. Any responsibility or authority assigned to the
Committee under the Plan may be delegated to any other person or persons, by
name or in the case of a delegation to an employee of the Company by title or
position with the Company, consistent with the by-laws or other procedures of
the Committee; provided that such delegation is revocable by the Committee at
any time, in its discretion.

(d) Records and Expenses. The Committee or its designees shall keep such records
as may be necessary for the administration of the Plan and shall furnish such
periodic information to Participants as may be necessary or desirable, in the
sole discretion of the Committee. All expenses of administering the Plan shall
be paid by the Company and shall not affect a Participant’s right to, or the
amount of, benefits.

6.2 Claim and Appeal Procedures.

(a) Benefit Claims. In the event any person or his authorized representative
(the “Claimant”) disputes the amount of or his entitlement to, any benefits
under the Plan or their

 

12

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method of payment, such person shall be required to file a claim in writing with
the Administrator for the benefits to which he believes he is entitled, setting
forth the reason for his claim. The Claimant shall have the opportunity to
submit written comments, documents, records and other information relating to
the claim and shall be provided, upon request and free of charge, reasonable
access to and copies of all documents, records or other information relevant to
the claim. The Administrator will consider the claim and within ninety days of
receipt of such claim, unless special circumstances exist, the Administrator
will inform such person of its decision with respect to the claim. In the event
of special circumstances, the response period can be extended for an additional
ninety days, as long as the Claimant receives before the end of the initial
ninety-day period, written notice advising of the special circumstances and the
date by which the Administrator expects to make a determination (the “Extension
Notice”). If the Administrator denies the claim, the Administrator will give to
such person (i) a written notice setting forth the specific reason or reasons
for the denial of the claim, including references to the applicable provisions
of the Plan on which the determination was based, (ii) a description of any
additional material or information necessary to perfect such claim along with an
explanation of why such material or information is necessary, (iii) appropriate
information as to the procedure to be followed for review of such claim by the
Committee, including time limits applicable to such procedures, and (iv) a
statement of the Claimant’s right to commence a civil action under
Section 502(a) of ERISA following an adverse benefit determination on appeal.

(b) Appeal of Denial. Any Claimant whose claim is denied by the Administrator
and who wishes to appeal such denial must request a review of the
Administrator’s decision by filing a written request with the Committee for such
review within sixty days after his receipt of the written denial of the claim.
Such request for review shall contain and the review by the Committee shall
consider all comments, documents, records and other information relating to the
claim that the Claimant wishes the Committee to review, without regard as to
whether such information was submitted or considered in the initial review of
the claim by the Administrator. In connection with that review, the Claimant
shall be provided, upon request and free of charge, reasonable access to and
copies of all documents, records or other information relevant to the claim.
Written notice of the Committee’s decision shall be provided to the Claimant
within sixty days following receipt of the request for review by the Committee.
In the event of special circumstances, the response period can be extended for
an additional sixty days, as long as the Claimant receives an Extension Notice
before the end of the initial sixty-day period. Any decision of the Committee
shall be in writing and shall include (i) the specific reasons for the adverse
determination, (ii) references to applicable Plan provisions on which the
determination was based, (iii) 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 (iv) a
statement of the Claimant’s right to bring an action under Section 502(a) of
ERISA following an adverse benefit determination on review and a description of
the applicable limitations period under the Plan.

(c) Limitation of Action. 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 year of the date the final decision on
the adverse benefit determination on review is issued or should have been issued
under Section 6.2(b) 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

 

13

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evidence timely presented to the Benefits Committee. Notwithstanding anything in
the Plan to the contrary, a Claimant must exhaust all administrative remedies
available to such Claimant under the Plan before such Claimant may seek judicial
review pursuant to this Section 6.2(c) and Section 502(a) of ERISA.

(d) Authority of Administrator. In carrying out its responsibilities under
Section 6.2(a), the Administrator shall have the authority set forth in
Sections 6.1(a), 6.1(c) and 6.1(d).

 

14

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ARTICLE VII

FUNDING

7.1 General Rule. The Plan is an unfunded arrangement and is subject to the
claims of the general creditors of the Company. No portion of any funds set
apart for a Participant or Beneficiary pursuant to this Article shall be the
property of such Participant or Beneficiary until distribution thereof has been
made to such individual. Further, the rights of a Participant or Beneficiary
shall be limited to those of a general, unsecured creditor of the Company who
has a claim equal to the value of the Participant’s Retirement Benefit.
Retirement Benefits shall be payable from the general assets of the Company, or
from such other funding vehicle established for such purpose as described above,
or both. Except as may be otherwise determined by the Board in its sole
discretion pursuant to this Article VII, neither the Company, the Committee nor
any other person shall have any duty to set apart or invest any funds for the
purpose of providing benefits pursuant to the terms of the Plan.

 

15

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ARTICLE VIII

AMENDMENT; TERMINATION

8.1 Amendment.

(a) General Rule. The Committee shall have the right to amend the Plan for any
reason, at any time and from time to time; provided, however, that an amendment
shall not cause a reduction in the Retirement Benefit that would have been
payable to a Participant prior to such amendment.

(b) Section 409A. Each of the Committee and the Chief Administrative Officer
shall have the unilateral right, without the consent of any Participant or
Beneficiary, to the extent that the Committee or Chief Administrative Officer
deems necessary, appropriate or desirable to ensure Section 409A Compliance, to
amend or modify the Plan; provided that such amendments or modifications do not
materially increase Retirement Benefits under the Plan or materially increase
costs for the Company and may be effected in a manner that results in
Section 409A Compliance. Any determinations made by the Committee or the Chief
Administrative Officer under this Section 8.1(b) shall be final, conclusive and
binding on all persons.

8.2 Termination. The Committee may terminate the Plan at any time and for any
reason. Any such action by the Committee shall be undertaken by a resolution
duly adopted at a meeting of the Committee, or by written consent of the
Committee, in lieu of a meeting, as the case may be. In the event of a
termination of the Plan, each Participant shall be eligible to receive a
Retirement Benefit, notwithstanding that the Participant may not satisfy the
requirements of Article V as of such date; provided, however, that the
determination date for purposes of the Offset shall be the date on which the
Plan is terminated. If the Plan is terminated, payment of benefits under the
Plan shall be in accordance with Article IV, unless the Committee, in its
discretion, determines to accelerate payment and such acceleration may be
effected in a manner that will result in Section 409A Compliance.

 

16

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ARTICLE IX

GENERAL PROVISIONS

9.1 Payments to Minors and Incompetents. If any Participant or Beneficiary
entitled to receive any benefits hereunder is a minor or is deemed by the
Committee or is adjudged to be legally incapable of giving valid receipt and
discharge for such benefits, they will be paid to such person or institution as
the Committee may designate or to a duly appointed guardian. Such payment shall,
to the extent made, be deemed a complete discharge of any such payment under the
Plan.

9.2 No Contract. This Plan shall not be deemed a contract of employment with any
Participant, and no provision hereof shall affect the right of the Company to
terminate a Participant’s employment.

9.3 Non-Alienation of Benefits. No amount payable to, or held under the Plan for
the account of, any Participant or Beneficiary shall be subject, in any manner,
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge the same shall be void. No amount payable to, or held
under the Plan for the account of, any Participant shall be subject to any legal
process of levy or attachment.

9.4 Tax Withholding. The Company may withhold from any payments hereunder such
amount as it may be required to withhold under applicable federal, state, local
or foreign law, and transmit such withheld amounts to the appropriate taxing
authority. In lieu thereof, the Company shall have the right, to the extent
permitted by law, to withhold the amount of such taxes from any other sums due
from the Company to the Participant upon such terms and conditions as the
Committee may prescribe.

9.5 Captions. The captions contained in the Plan are inserted only as a matter
of convenience and for reference and in no way define, limit, enlarge or
describe the scope or intent of the Plan or in any way affect the construction
of any provision of the Plan.

9.6 Severability. If any provision of the Plan is held invalid or unenforceable,
its invalidity or unenforceability will not affect any other provision of the
Plan, and the Plan will be construed and enforced as if such provision had not
been included.

9.7 Notices. Each Participant shall be responsible for furnishing the Committee
with the current and proper address for the mailing of notices and delivery of
agreements and payments. Any notice required or permitted to be given shall be
deemed given if directed to the person to whom addressed at such address and
mailed by regular United States first class mail, postage prepaid. If any item
mailed to such address is returned as undeliverable to the addressee, mailing
shall be suspended until the Participant furnishes the proper address.

9.8 Construction. The Plan is intended to be an unfunded deferred compensation
arrangement for a select group of management or highly compensated employees and
therefore exempt from the requirements of Sections 201, 301 and 401 of ERISA.
Whenever the terms of the Plan require the payment of an amount by a specified
date, the Company shall

 

17

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use reasonable efforts to make the payment by that date. The Company shall not
be (i) liable to the Participant or any other person if such payment is delayed
for administrative or other reasons to a date that is later than the date so
specified by the Plan or (ii) required to pay interest or any other amount in
respect of such delayed payment. In no event shall the Company permit the delay
of a payment unless such delay may be effected in a manner that will result in
Section 409A Compliance.

9.9 Governing Law. The provisions of the Plan shall be interpreted, construed
and administered under the laws of the State of New York applicable to contracts
entered into and performed in such state, and to the extent that ERISA,
Section 409A of the Code and other federal laws do not apply.

 

18

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APPENDIX A

CALCULATION OF THE OFFSET

A.1. General Rule. Subject to Section A.2 of this Appendix A, the following
provisions apply with respect to calculation of the Offset:

A.1(a) Account Balance. The Account Balance under MAP is determined as of the
later of the Participant’s (i) Separation from Service and (ii) 60th birthday,
or the date that would have been the Participant’s 60th birthday.

A.1(b) Retirement Restoration -Related Benefit. The Retirement
Restoration-Related Benefit is an amount equal to the bonuses, accumulated with
interest, as recorded for each Participant, as of the later of the Participant’s
(i) Separation from Service and (ii) 60th birthday, or the date that would have
been the Participant’s 60th birthday.

A.1(c) Social Security Primary Insurance Amount. The Actuarial Equivalent of the
Social Security Primary Insurance Amount is the lump-sum Actuarial Equivalent of
the Social Security Primary Insurance Amount, as defined in Section 1.1 of the
Plan, as of the later of the Participant’s (i) Separation from Service and
(ii) 60th birthday, or the date that would have been the Participant’s 60 th
birthday.

A.1(d) Prior Employer Benefit.

(i) The Prior Employer Benefit shall be equal to an amount determined as of the
later of the Participant’s (i) Separation from Service and (ii) 60th birthday,
or the date that would have been the Participant’s 60th birthday:

 

Years of Service

   % of Prior
Base Pay

1–2

   3.25

3–4

   4.00

5–9

   5.00

10–14

   6.00

15–19

   8.00

20–34

   11.00

All amounts are assumed to be allocated to the Participant on December 31 of
each year and are credited with the Interest Crediting Rate, as defined in
Section A.1(d)(ii). A calculation of the hypothetical Prior Employer Benefit for
a sample Participant is set forth in Appendix C.

 

A-1

--------------------------------------------------------------------------------

(ii) Definitions. For purposes of determining the Prior Employer Benefit, the
following definitions shall apply:

“Interest Crediting Rate” means the rate at which a Participant’s Prior Employer
Benefit accumulates. For purposes of the Plan, an interest rate of 8.0% per
year, up to the Participant’s Vesting Date, shall be used.

“Prior Base Pay” means the assumed prior earnings of a Participant during his
Years of Service. The Prior Base Pay for a calendar year is determined by taking
an Eligible Employee’s annual rate of Base Pay from the Company as of the
Participant’s Employment Commencement Date or, if applicable, Reemployment Date
(adjusted for prior service with the Company), and multiplying such annual rate
by the factor [(1.10)^(A–B)], where “A” is the prior calendar year for which
Base Pay is being determined and “B” is the date of participation in the Plan.

“Years of Service” means each calendar year beginning with the calendar year in
which the Participant attains age 25 through the calendar year preceding the
Participant’s Employment Commencement Date or, if applicable, Reemployment Date
(adjusted for prior service with the Company).

 

A-2

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APPENDIX B

ACTUARIAL ASSUMPTIONS AND FACTORS

B.1 Prior to December 31, 2002, the Actuarial Equivalent shall be determined by
the following assumptions:

(a) Mortality: the mortality table prescribed by the Commissioner of the
Internal Revenue Service for purposes of Revenue Ruling 95-6.

(b) Interest: the average annual interest rate on thirty-year Treasury
securities, rounded to the nearest one-hundredth of one percent, for the month
of August preceding the first day of the calendar year in which the
determination is made.

B.2 Effective as of December 31, 2002, the Actuarial Equivalent shall be
determined by the following assumptions:

(a) Mortality: the mortality table in effect under MAP for purposes of
determining the Annuity Factor under MAP as of the date on which the
determination is made.

(b) Interest: the average annual interest rate in effect under MAP for purposes
of determining the Annuity Factor under MAP as of the date on which the
determination is made.

 

B-1

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APPENDIX C

HYPOTHETICAL PRIOR EMPLOYER BENEFIT

FOR A SAMPLE PARTICIPANT

 

Name

   Sample
Participant

Date of Birth

   1/1/45

Date of Hire

   7/1/98

Date of SERP Entry

   1/1/00

Base Pay at Hire

   $300,000

Date Vested in SERP

   1/1/05

Salary Regression

   10.00%

Interest on Account

   8.00%

 

                            Hypothetical Prior Employer Benefit

Year

     Age
Attained      Assumed
Prior Base
Pay      Prior ER
Service
at EOY      Allocation
Percentage     Beginning
of Year
Balance      End of Year
Allocation      Interest
on
Account      End of Year
Balance

1970

     25      $ 20,805      1      3.25 %   $ 0      $ 676      $ 0      $ 676

1971

     26      $ 22,885      2      3.25 %   $ 676      $ 744      $ 54      $
1,474

1972

     27      $ 25,173      3      4.00 %   $ 1,474      $ 1,007      $ 118     
$ 2,599

1973

     28      $ 27,690      4      4.00 %   $ 2,599      $ 1,108      $ 208     
$ 3,915

1974

     29      $ 30,459      5      5.00 %   $ 3,915      $ 1,523      $ 313     
$ 5,751

1975

     30      $ 33,505      6      5.00 %   $ 5,751      $ 1,675      $ 460     
$ 7,886

1976

     31      $ 36,855      7      5.00 %   $ 7,886      $ 1,843      $ 631     
$ 10,360

1977

     32      $ 40,540      8      5.00 %   $ 10,360      $ 2,027      $ 829     
$ 13,216

1978

     33      $ 44,594      9      5.00 %   $ 13,216      $ 2,230      $ 1,057
     $ 16,503

1979

     34      $ 49,053      10      6.00 %   $ 16,503      $ 2,943      $ 1,320
     $ 20,766

1980

     35      $ 53,958      11      6.00 %   $ 20,766      $ 3,237      $ 1,661
     $ 25,664

1981

     36      $ 59,354      12      6.00 %   $ 25,664      $ 3,561      $ 2,053
     $ 31,278

1982

     37      $ 65,289      13      6.00 %   $ 31,278      $ 3,917      $ 2,502
     $ 37,697

1983

     38      $ 71,818      14      6.00 %   $ 37,697      $ 4,309      $ 3,016
     $ 45,022

1984

     39      $ 79,000      15      8.00 %   $ 45,022      $ 6,320      $ 3,602
     $ 54,944

1985

     40      $ 86,900      16      8.00 %   $ 54,944      $ 6,952      $ 4,396
     $ 66,292

1986

     41      $ 95,590      17      8.00 %   $ 66,292      $ 7,647      $ 5,303
     $ 79,242

1987

     42      $ 105,149      18      8.00 %   $ 79,242      $ 8,412      $ 6,339
     $ 93,993

1988

     43      $ 115,664      19      8.00 %   $ 93,993      $ 9,253      $ 7,519
     $ 110,765

1989

     44      $ 127,230      20      11.00 %   $ 110,765      $ 13,995      $
8,861      $ 133,621

1990

     45      $ 139,953      21      11.00 %   $ 133,621      $ 15,395      $
10,690      $ 159,706

1991

     46      $ 153,948      22      11.00 %   $ 159,706      $ 16,934      $
12,776      $ 189,416

1992

     47      $ 169,343      23      11.00 %   $ 189,416      $ 18,628      $
15,153      $ 223,197

1993

     48      $ 186,277      24      11.00 %   $ 223,197      $ 20,490      $
17,856      $ 261,543

1994

     49      $ 204,905      25      11.00 %   $ 261,543      $ 22,540      $
20,923      $ 305,006

1995

     50      $ 225,395      26      11.00 %   $ 305,006      $ 24,793      $
24,400      $ 354,199

1996

     51      $ 247,934      27      11.00 %   $ 354,199      $ 27,273      $
28,336      $ 409,808

1997

     52      $ 272,727      28      11.00 %   $ 409,808      $ 30,000      $
32,785      $ 472,593

1998

     53      $ 300,000           0.00 %   $ 472,593      $ 0      $ 37,807     
$ 510,400

1999

     54        N/A           0.00 %   $ 510,400      $ 0      $ 40,832      $
551,232

2000

     55        N/A           0.00 %   $ 551,232      $ 0      $ 44,099      $
595,331

2001

     56        N/A           0.00 %   $ 595,331      $ 0      $ 47,626      $
642,957

2002

     57        N/A           0.00 %   $ 642,957      $ 0      $ 51,437      $
694,394

2003

     58        N/A           0.00 %   $ 694,394      $ 0      $ 55,552      $
749,946

2004

     59        N/A           0.00 %   $ 749,946      $ 0      $ 59,996      $
809,942

2005

     60        N/A           0.00 %   $ 809,942      $ 0      $ 0      $ 809,942

Balance at 01/01/2005 = $809,942

                          

 

C-1