EXECUTIVE INCENTIVE PLAN



 



Exhibit 10.1


MASTERCARD INTERNATIONAL INCORPORATED



EXECUTIVE INCENTIVE PLAN

Plan Document



As Amended and Restated Effective January 1, 2003




	1.	 	Purpose
	 
	 	 	The Executive Incentive Plan (the “Plan”) is designed to support the
strategic commitment to attract, retain and motivate senior executives of
MasterCard International Incorporated (the “Company”) and Affiliated
Employers by providing a long-term incentive opportunity that is based on
the Company’s and/or Affiliated Employer’s achievement of its
quantitative and qualitative long-term performance goals.
	 
	2.	 	Definitions
	 
	 	 	For purposes of this Plan, the following terms shall have the meanings
set forth below:
	 
	 	 	“Affiliated Employer” shall mean (i) any corporation which is a member of
a controlled group of corporations (as defined in Section 414(b) of the
Code), which includes the Company, (ii) any trade or business (whether or
not incorporated), which is under common control (as defined in Section
414(c) of the Code) with the Company, (iii) any organization (whether or
not incorporated) which is a member of an affiliated services group (as
defined in Section 414(m) of the Code) which includes the Company, and
(iv) any other entity required to be aggregated with the Company pursuant
to regulations under Section 414(o) of the Code.
	 
	 	 	“Board” shall mean the Global Board of Directors.
	 
	 	 	“Cause” shall mean (i) the willful failure by the Participant to
substantially perform his duties as an employee of the Employer (other
than due to physical or mental illness) after reasonable notice to the
Participant of such failure, (ii) the Participant’s engaging in serious
misconduct that is injurious to the Company or an Affiliated Employer
including, but not limited to, damage to its reputation or standing in
its industry, (iii) the Participant’s having been convicted of, or
entered a plea of nolo contendere to a crime that constitutes a felony or
(iv) the material breach by the Participant of any written covenant or
agreement with the Company or an Affiliated Employer not to disclose any
information pertaining to the Company and/or its Affiliated Employers.
	 
	 	 	“Change in Control” means:



 






 





	 	 	(i)     if (a) at any time three stockholders have become entitled to cast at
least 45 percent of the votes eligible to be cast by all the stockholders
of MasterCard Incorporated on any issue, (b) at any time, a plan or
agreement is approved by the stockholders of MasterCard Incorporated to
sell, transfer, assign, lease or exchange (in one transaction or in a
series of transactions) all or substantially all of the Company’s or
MasterCard Incorporated’s assets, (c) at any time, a plan is approved by
the stockholders of MasterCard Incorporated for the sale, liquidation or
dissolution of the Company or MasterCard Incorporated or (d) at any time
MasterCard Incorporated shall cease to be the sole class B member of the
Company or otherwise cease to control substantially all voting rights in
the Company. The foregoing notwithstanding, a reorganization in which
the stockholders of MasterCard Incorporated continue to have all of the
ownership rights in the continuing entity shall not in and of itself be
deemed a “Change in Control” under (b), (c) and/or (d);
	 
	 	 	(ii)     the approval by the stockholders of MasterCard Incorporated of any
consolidation or merger of MasterCard Incorporated in which MasterCard
Incorporated is not the continuing or surviving corporation or pursuant
to which shares of stock of MasterCard Incorporated would be converted
into cash, securities or other property, other than a merger in which the
holders of the stock immediately prior to the merger will have the same
proportionate ownership interest (i.e., still own 100% of total) of
common stock of the surviving corporation immediately after the merger;
	 
	 	 	(iii)     any “person” (as defined in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than
MasterCard Incorporated or a subsidiary or employee benefit plan or trust
maintained by MasterCard Incorporated any of its subsidiaries, becoming
(together with its “affiliates” and “associates”, as defined in Rule
12b-2 under the Exchange Act) the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than
twenty-five percent (25%) of the stock of MasterCard Incorporated
outstanding at the time, without the prior approval of the board of
directors of MasterCard Incorporated; or
	 
	 	 	(iv)     a majority of the voting directors of MasterCard Incorporated
proposed on a slate for election by stockholders of MasterCard
Incorporated are rejected by a vote of such stockholders.
	 
	 	 	“Committee” shall mean a committee of the Board designated by the Board
to administer the Plan. Unless the Board shall determine otherwise, the
Committee shall be the Compensation Committee.
	 
	 	 	“Determination Date” shall have the meaning set forth in Section 5.
	 
	 	 	“Disability” shall mean total and permanent disability in accordance with
the Company’s or an Affiliated Employer’s long-term disability plan.



 






 





	 	 	“Employer” shall mean the Company or an Affiliated Employer that adopts
the Plan with the approval of the Board. Appendix A contains a list of
each Employer.
	 
	 	 	“Participant” shall mean an eligible employee to whom a Performance Unit
award has been granted.
	 
	 	 	“Performance Levels” shall mean, with respect to the Performance Measures
(on an aggregate basis), the following degrees of achievement: Below
Threshold, Minimum Threshold, Target and Superior.
	 
	 	 	“Performance Measures” shall mean one or more performance goals
established by the Committee with respect to each award of Performance
Units.
	 
	 	 	“Performance Period” shall mean, with respect to each award of
Performance Units, the three-year period beginning on the date such award
is granted or such other period as may be established by the Committee at
the time of grant.
	 
	 	 	“Performance Unit” shall mean a performance unit award granted under the
Plan.
	 
	 	 	“Post-Performance Period” shall have the meaning set forth in Section
7(b).
	 
	 	 	“Retirement” shall mean retirement pursuant to the terms of the
MasterCard Accumulation Plan.
	 
	 	 	“Twelve-Month Cycle” shall mean any twelve-month period ending with an
anniversary date of the date of a grant of a Performance Unit award that
occurs on or before the end of the Vesting Period with respect to that
award.
	 
	 	 	“Unit Value” shall be the value of a Performance Unit as determined in
accordance with Section 5.
	 
	 	 	“Vesting Period” shall mean, with respect to each grant of Performance
Units, the period, as set forth in the certificate or written agreement
provided to the Participant with respect to the grant, beginning on the
date of grant and ending with the date the award is 100 percent vested.
	 
	3.	 	Eligibility
	 
	 	 	Employees who are designated Senior Vice President or higher are eligible
for participation in any Performance Period provided they have achieved
the minimum performance evaluation rating required for participation as
determined by the Committee and have been designated to the appropriate
level by March 31 of the calendar year. In addition, the Committee
and/or the Chief Executive Officer may designate any other employee as
eligible to participate in the Plan.



 






 







	4.	 	Performance Unit Awards




	 	(a)	 	Subject to the provisions of this Plan, each Performance Unit
award shall be determined by the CEO of the Company with approval by
the Committee and evidenced by a certificate or written agreement
provided to each Participant. Subject to Sections 6 and 7 of the
Plan, each Performance Unit grant shall entitle a Participant to
receive a cash payment equal to the Unit Value of such Performance
Unit. Unit Value shall be determined in accordance with Section 5.
	 
	 	(b)	 	The Committee shall specify the terms and conditions of each
award of Performance Units, including the applicable vesting
schedule, Performance Period, Performance Measures and Performance
Levels. The Committee may condition the grant of a new award on the
surrender of an outstanding award. Any such new award shall be
subject to the terms and conditions specified by the Committee at
the time the new award is granted, in accordance with the provisions
of the Plan and without regard to the terms of the surrendered
award.




	5.	 	Unit Value




	 	(a)	 	Unless otherwise provided by the Committee at the time of
grant, the Unit Value of a Performance Unit shall be determined
based upon the achievement of Performance Levels as of the
Determination Date as follows.




	 	 	 	 	 
	Performance Level	 	Unit Value
	
	 	

	Below Threshold
	 	$	0	 
	Threshold
	 	$	50	 
	Target
	 	$	100	 
	Superior
	 	$	200	 




	 	 	 	Determinations as to the achievement of Performance Levels shall
be made by the Committee in its sole discretion. The Committee
will determine the Unit Value based on interpolation in the event
that performance between threshold and target or target and
superior is achieved.
	 
	 	(b)	 	The Committee shall determine the Performance Level achieved
for a Performance Period during the 60 day period following the
Determination Date. Except as otherwise provided by the Committee,
the Determination Date shall be the last day of the Performance
Period to which a Performance Unit relates; provided that, if a
Participant terminates employment prior to the end of the
Performance Period, the Determination



 






 





	 	 	 	Date with respect to any Performance Units relating to such
Performance Period (provided such Performance Units have not been
forfeited pursuant to Section 6 by reason of such termination)
shall be deemed to be the last day of employment and the
Performance Level achieved with respect to any such Performance
Units shall be deemed to be Target.




	6.	 	Vesting




	 	(a)	 	Each Performance Unit shall vest subject to such terms and
conditions as the Committee may, in its sole discretion, determine;
provided that, unless otherwise provided by the Committee at the
time of award, Performance Units which relate to a three-year
Performance Period shall vest in annual increments according to the
following schedule if the Participant completes 1,000 hours of
service in each Twelve-Month Cycle and is employed by the Employer
on the last day of the respective Twelve-Month Cycle:




	 	 	 	 	 
	Twelve-Month	 	 	 	 
	Cycle Ending	 	 	 	 
	on the Following	 	 	 	 
	Anniversary of	 	% of Performance
	the Date of Grant	 	Units Vested
	
	 	

	1st Anniversary
	 	 	26 2/3	%
	2nd Anniversary
	 	 	26 2/3	%
	3rd Anniversary
	 	 	26 2/3	%
	4th Anniversary
	 	 	0	%
	5th Anniversary
	 	 	20	%




	 	(b)	 	Except as otherwise determined by the Committee or as
provided below, unvested Performance Units relating to the
Twelve-Month Cycle in which a Participant terminates employment, and
subsequent Twelve-Month Cycles during the Vesting Period for the
award, shall be forfeited upon termination of employment.
	 
	 	(c)	 	Notwithstanding the foregoing, if a Participant ceases to be
employed during a Twelve-Month Cycle, but is rehired either during
the same Twelve-Month Cycle or during a subsequent Twelve-Month
Cycle in the Vesting Period for the same award of Performance Units,
the Participant shall be eligible to vest in the Performance Units
under that award that relate to the Twelve-Month Cycle of rehiring
and subsequent Twelve-Month Cycles if the Participant otherwise
meets the terms and conditions specified in the award and completes
1,000 hours of service in and is employed on the last day of the
Twelve-Month Cycle; provided, however, that, in order to vest in the
Performance Units relating to the final Twelve-Month Cycle in the
Vesting Period, the Participant must be employed on



 






 





	 	 	 	the first and last day of that final Twelve-Month Cycle and have
completed 1,000 hours of service during that final Twelve-Month
Cycle.
	 
	 	(d)	 	Notwithstanding the foregoing, upon a Participant’s
termination of employment due to death or Disability, all of the
Participant’s Performance Units shall immediately vest and none
shall be forfeited.
	 
	 	(e)	 	Notwithstanding the foregoing, upon a Participant’s
termination of employment due to Retirement, all of the
Participant’s Performance Units (with the exception of any
Performance Units granted with no vesting until the end of the
Performance Period) shall immediately vest and none shall be
forfeited, as long as Participant has at least six months of service
in the Performance Period. The Committee shall retain the
discretion to allow in particular cases immediate vesting under this
Section 6(e) to a Participant holding Performance Units that have no
vesting until the end of the Performance Period.
	 
	 	(f)	 	Notwithstanding the foregoing, upon a Participant’s
termination of employment for Cause, all vested but unpaid
Performance Units held by the Participant shall be forfeited in
full, without any right to payment from the Company. The Committee
in its sole discretion shall determine whether a termination was for
“Cause”.
	 
	 	(g)	 	Notwithstanding the foregoing, upon a Participant’s voluntary
termination other than by reason of Disability, all vested but
unpaid Performance Units held by a Participant who violates the
noncompetition provisions set forth in Section 7(c) below, shall be
forfeited in full.
	 
	 	(h)	 	In the event of a Change in Control, as defined in Section 2
above, key executives defined in the MasterCard Change of Control
policy or who are parties to a “Change-in-Control” agreement with
the Company or an Affiliated Employer shall be eligible for 100%
vesting in all unvested awards.




	7.	 	Payment




	 	(a)	 	Except as otherwise determined by the Committee at the time
of grant of a Performance Unit, or as otherwise elected by the
Participant pursuant to Section 7(d) below, within 60 days of the
determination of the Unit Value in accordance with Section 5,
Participant shall receive a cash payment in respect of each vested
Performance Unit equal to such Unit Value for the completed
Performance Period.
	 
	 	(b)	 	Except as otherwise determined by the Committee at the time
of grant of a Performance Unit, or as otherwise elected by the
Participant pursuant to



 






 





	 	 	 	Section 7(d) below, (i) if Participant remains employed such that
he or she vests in Performance Units for a Twelve-Month Cycle in
the portion of the Vesting Period that extends beyond the
Performance Period (the “Post-Performance Period”) or (ii) if a
Participant terminates employment due to death or Disability
during the Post-Performance Period, the Participant shall receive,
within 60 days of the end of the Vesting Period, or termination,
as the case may be, an additional cash payment in respect of each
Performance Unit which has not yet been paid pursuant to paragraph
(a) above equal to the Unit Value.
	 
	 	(c)	 	In the event a Participant voluntarily terminates employment
other than by reason of Disability, no payment otherwise due under
Section 7(a) or (b) above shall be made before 120 days after such
voluntary termination. In the event that, during the 120 days
following such voluntary termination, the Participant directly or
indirectly engages or invests in any business or activity that is
directly or indirectly in competition with any business or activity
engaged in by the Company or an Affiliated Employer, including, but
not limited to, any credit, charge, chip, or debit card business or
processor, the Participant’s Performance Units shall not be paid
and, pursuant to Section 6(g) above, shall be forfeited in full.
For purposes of the preceding sentence, the Participant shall be
deemed to be engaged in any business which any person for whom he
shall perform services is engaged. Notwithstanding the foregoing,
nothing herein shall prohibit the Participant from having a
beneficial ownership interest of less than 3% of the outstanding
amount of any class of securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if
such securities are listed on a national securities exchange or
quoted on an inter-dealer quotation system. The Participant shall
not be treated as engaged or invested in any business in competition
with that of the Company or an Affiliated Employer if the
Participant performs services or engages in business or activities
for a MasterCard member, provided that the MasterCard member is not
a party to a brand dedication agreement with VISA USA, VISA
International, American Express, JCB, Discover, Diners Club, Carte
Blanche or any other competitor of the Company or an Affiliated
Employer, the term of which is two years or more. In the event
that, during the 120 days following such voluntary termination, the
Participant does not engage in or invest in any such competitive
business or activity, and certifies to that effect on forms provided
by the Company, the Participant’s Performance Units shall be paid.
	 
	 	(d)	 	Payments of Performance Units under Sections 7(a) and 7(b)
above are eligible for deferral under the terms and conditions of
the MasterCard International Incorporated Deferral Plan, as amended
from time to time. In the event a Participant who has made a
Deferred Performance Units Election under the MasterCard
International Incorporated Deferral Plan



 






 





	 	 	 	voluntarily terminates employment, Sections 6(g) and 7(c) will
apply to those payments that, in the absence of the Deferred
Performance Units Election, would have been paid in the 120 days
following termination.




	8.	 	Term
	 
	 	 	The Plan shall be effective as of January 1999. Amendments to the Plan
generally shall be effective on their adoption. Section 6(g) and Section
7(c), as added to the Plan effective July 9, 2001, shall apply to
Performance Units awarded beginning January 1, 2002. The amendments to
the Plan made effective as of December 12, 2001, shall apply to all
Performance Units awarded in 2001 as well as to Performance Units awarded
thereafter.
	 
	9.	 	Administration




	 	(a)	 	The Committee shall determine, in its sole discretion, any question
arising in connection with the interpretation or application of
the provisions of the Plan and its decisions or actions in respect
thereof shall be conclusive and binding upon any and all
Participants and their beneficiaries, successors and assigns, and
all other persons. All resolutions or actions taken by the
Committee shall be by affirmative vote or action of a majority of
the members of the Committee.
	 
	 	(b)	 	The Committee may delegate to one or more officers or
managers of the Company, or to a committee of such officers or
managers, the authority, subject to such terms and limitations as
the Committee shall determine, to take any actions the Committee has
the authority to take under the Plan.
	 
	 	(c)	 	Members of the Committee or its delegates shall be fully
protected in relying in good faith upon the advice of counsel and
shall incur no liability with respect to the Plan except for their
own gross negligence or willful misconduct in the performance of
their duties. The Company shall defend, indemnify and hold
harmless each member of the Committee or its delegates against any
and all claims, liabilities and costs (including attorney fees)
arising in connection with their administration of the Plan except
for such member’s own gross negligence or willful misconduct.




	10.	 	General Provisions




	 	(a)	 	Nothing in this Plan or in any instrument executed pursuant
hereto shall confer upon any person any right to continue in the
employment or other service of the Company or an Affiliated
Employer, or shall affect the right of the Company or an Affiliated
Employer to terminate the employment or other service of any person
at any time with or without cause.



 






 





	 	(b)	 	The grant of Performance Units shall not confer upon a Participant
any of
the rights of a stockholder of the Company or an Affiliated
Employer, and no shares of stock shall be issued pursuant to
Performance Units. The rights of a Participant under the Plan
shall be no greater than the rights of a general unsecured
creditor of the Company or Affiliated Employer.
	 
	 	(c)	 	In the event a Participant is employed or resides in a country with
laws that prescribe certain requirements for long-term incentives
to qualify for advantageous tax treatment, the Committee may at
its discretion modify the terms of an award to be made under the
Plan and procure assumption of any of the Company’s obligations
hereunder by an affiliate company, in a manner consistent or
inconsistent with the terms of the Plan, for the purpose of
qualifying the award under such laws of such country; provided,
however, that to the extent possible, the overall terms and
conditions of such an award should not be made more favorable to
the recipient than would be permitted if the award had been
granted under this Plan as herein set forth.
	 
	 	(d)	 	Participants shall be solely responsible for the payment of any taxes
due in connection with the Plan; provided, however, that the
Company shall make such provisions as it may deem appropriate for
the withholding of any taxes which the Company determines it or an
Affiliated Employer is required to withhold in connection with any
award under the Plan.
	 
	 	(e)	 	By accepting any benefits under the Plan, each Participant, and
each person claiming under or through him, shall be conclusively
deemed to have indicated his acceptance and ratification of, and
consent to, all provisions of the Plan and any action or decision
under the Plan by the Company, an Affiliated Employer, their
agents and employees, and the Committee.
	 
	 	(f)	 	The validity, construction, interpretation and administration of the
Plan and any awards under the Plan and of any determinations or
decisions made thereunder, and the rights of all persons having or
claiming to have any interest herein or thereunder, shall be
governed by, and determined exclusively in accordance with, the
laws of New York (determined without regard to its conflict of
laws provisions).
	 
	 	(g)	 	This Plan shall be binding upon and inure to the benefit of
the Company, its affiliated companies and their successors or
assigns, and all Participants and their beneficiaries, successors,
and assigns and all other persons claiming under or through any of
them.
	 
	 	(h)	 	The value of Performance Unit awards shall not be treated as



 






 





	 	 	 	compensation and/or salary for purposes of calculating a
Participant’s benefits under any of the Company’s or an Affiliated
Employer’s other benefit plans, policies or programs.
	 
	 	(i)	 	The use of the masculine gender shall also include within its
meaning the feminine. The use of the singular shall include
within its meaning the plural and vice versa.




	11.	 	Amendment and Termination
	 
	 	 	This Plan may be amended or terminated by the Board at any time, for any
reason and in any respect; provided, however, that no such amendment or
termination of this Plan shall affect adversely any award of Performance
Units theretofore granted without the written consent of the holder
thereof. Notwithstanding the foregoing:




	 	(a)	 	The methodology for determining Performance Units and Unit
Value may be changed, on a prospective basis, at any time.
	 
	 	(b)	 	Upon termination of the Plan, the Board may provide for the
immediate termination of all outstanding Performance Units in
exchange for a cash payment equal to the then value of the
Performance Units that are outstanding and vested (pursuant to
Section 6) at the time of termination.



 






 






APPENDIX A



EMPLOYERS



MasterCard International Incorporated



MasterCard International, LLC