*Exhibit 10.16*
**RETIREMENT AND CONSULTING AGREEMENT**
This Retirement and Consulting Agreement is made as of this 6th day ofDecember, 2002, by and between MBNA Corporation, a Maryland corporation withits head office in Wilmington, Delaware (together with its affiliateshereinafter the “Corporation”), and Charles M. Cawley (the “Executive”).
The Executive founded MBNA America Bank, N.A., (the “Bank”), the Corporation’sprincipal subsidiary, in 1982 and has served for many years as the leader ofthe Corporation and the Bank, serving as President and director of theCorporation since its formation and initial public offering in 1991 and mostrecently as its Chief Executive Officer, and serving as Chairman and ChiefExecutive Officer of the Bank from 1991 to 2002 and President from 1985 to2002.
In consideration of the Executive’s long standing service and leadership, theCorporation desires to provide certain benefits to the Executive following hisretirement from the Corporation. In addition, the Corporation desires tocontinue to have the exclusive benefit of the Executive’s advice, counsel andservices following his retirement.
In consideration of the above matters and for other good and valuableconsideration, the sufficiency of which each of the parties acknowledge, theCorporation and the Executive, intending to be legally bound hereby, agree tothe following terms and conditions.
1.    Consulting Services.
Following the Executive’s retirement from the Corporation, the Executive agreesto be available to provide such consulting services to the Corporation as maybe reasonably requested by the Corporation. The terms of such consultingservices, including the scope, times and compensation, shall be as mutuallyagreed to by the Corporation and the Executive.
2.    Post-Retirement Benefits.
Beginning on the Executive’s retirement date, and continuing for the remainderof the Executive’s life, the Corporation agrees to provide the Executive withthe benefits described below. Upon the death of the Executive, the Corporationagrees to provide these same benefits to the Executive’s spouse for theremainder of the spouse’s life.
     (a)  Office and Administrative Support. The Corporation will provide atits expense an office, including furnishings and equipment, comparable to theExecutive’s principle office at the Corporation immediately prior to hisretirement. Such office will be at a Corporation facility selected by theExecutive. The Corporation will also provide at its expense a full timeassistant and a full time secretary selected by and reporting to the Executive.Such assistant and secretary shall be employed by the Corporation, with
 

 

compensation and benefits comparable to those provided to the Executive’s staffimmediately prior to his retirement, and with periodic increases incompensation and benefits comparable to those provided to other administrativestaff for senior executives at the Corporation.
     (b)  Security Services. The Corporation will provide to the Executive andmaintain and monitor at its expense home security systems (includingappropriate fencing and gates, lighting and alarms) at each of the Executive’spersonal residences comparable to the existing security services provided tothe Executive, or if greater, the security services provided to the Executiveimmediately prior to his retirement. The Corporation will provide to theExecutive a driver trained in personal protection and acceptable to theExecutive in his sole discretion for personal travel at such times as theExecutive may request.
     (c)  Airplane Use. The Corporation will permit the Executive to usecorporate aircraft (owned or leased by the Corporation at its expense) for allcorporate business travel and for all personal travel, including personaltravel of members of the Executive’s family and others chosen by the Executive(whether or not the Executive is on the flight), at any times and for travel toany destination the Executive chooses. The Corporation need not make anaircraft available for the Executive’s exclusive use and may provide anaircraft that is suitable for the particular travel and number of passengerschosen in size and range, provided that the aircraft is a jet and not smallerthan any corporate aircraft (owned or leased by the Corporation). TheExecutive agrees to give at least 12 hours notice of any travel for which theExecutive requests a corporate aircraft, except for travel in response to apersonal emergency. The Corporation will pay the cost for all corporatebusiness and personal use. The Executive will reimburse the Corporation forall personal use attributed to the Executive in excess of $250,000 per calendaryear (pro rated for the first calendar year if the Executive’s retirement doesnot begin on or about the start of a calendar year). For purposes of thisAgreement, the cost of personal use will be determined using applicable IRSmethods and rates. For purposes of calculating the above $250,000 threshold,no cost will be included for a person accompanying at the request of theCorporation an executive traveling on business, notwithstanding that under IRSrequirements the Corporation would be required to impute income to theexecutive for the person’s travel.
     (d)  Medical Benefits. The Corporation will provide, at its cost, to theExecutive until age 65 and his spouse until age 65 the medical benefitsprovided to employees of the Corporation generally. The Corporation willprovide, at its cost, to the Executive after age 65 and his spouse after age 65Medicare supplemental health insurance coverage.
3.    Non-competition.
For as long as the Corporation provides the benefits and payments providedunder this Agreement (the “Restricted Period”), unless otherwise agreed inwriting by the Corporation, the Executive will not, directly or indirectly, inany capacity (including as director, officer, employee, stockholder, partner,owner, consultant or advisor) provide
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services of any kind, anywhere in the world, to any issuer of MasterCard, VISA,American Express, Discover Card or any other type of credit card or chargecard, any bank or other lender which makes consumer loans of any kind, anyinsurance company or agency which issues or markets personal lines insurancepolicies, or any affiliate of any such entity. These services include, but arenot limited to, services relating to (i) sales, endorsement, co-branding orsimilar agreements, (ii) product development and marketing, (iii) creditapproval and collections, (iv) customer service, (v) funding or other treasurymatters, (vi) loan portfolio acquisitions, mergers or other acquisitions, (vii)financial, legal or accounting matters, or (viii) acquisition of or advice orassistance to others to acquire the Corporation or the Bank or beneficialownership of 10% or more of the Corporation’s Common Stock. In addition, theExecutive agrees that during the Restricted Period, the Executive will notprovide services to any affinity group or commercial organization, or anyaffiliate of such entity, relating to an affinity or co-branded credit card,consumer loan or personal lines insurance program with the Corporation or anyother entity. The Executive agrees that these restrictions are reasonable.
4.    Confidentiality.
(a)  Following the end of the Executive’s employment by the Corporation, orsooner upon request of the Corporation, the Executive will deliver to theCorporation the originals and all copies of all records and other documentsacquired in the Executive’s capacity as an employee of the Corporation whichrelate to the Corporation or its business, customers, vendors or employees andwhich are in the Executive’s possession or within the Executive’s control,other than records and other documents which (i) are a matter of public record,(ii) relate directly and primarily to the Executive’s compensation and benefitsas an employee of the Corporation, (iii) the Corporation gives the Executivepermission to retain in the Executive’s possession, or (iv) are needed toperform consulting services as contemplated under Section 1 of this Agreement.The Executive shall not retain or deliver to any other person any copies of anysuch records or documents. Upon the Executive’s request made following the endof the Executive’s employment, the Corporation will promptly provide to theExecutive a copy of each document that (i) relates directly to the Executive’scompensation and benefits as an employee of the Corporation; (ii) is needed bythe Executive to perform consulting services as contemplated under Section 1 ofthis Agreement; or (iii) is requested by the Executive and is not deemedconfidential by the Corporation in its sole discretion. Section 4(b) willapply to any documents delivered by the Corporation to the Executive pursuantto clauses (i) and (ii) of the preceding sentence.
     (b)  The Executive will not use for the Executive’s benefit or for thebenefit of any person other than the Corporation, and, except as necessary orappropriate in the performance of his duties to the Corporation, including as aconsultant as contemplated under Section 1 of this Agreement, will not everdisclose to any person any confidential information concerning the Corporation.The Executive acknowledges that all information concerning the Corporation,its plans, programs, policies, finances, customers, vendors, employees andbusiness shall be deemed confidential unless a matter
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of public record or unless publicly known otherwise than through a breachby the Executive of this Agreement. Disclosure which otherwise wouldconstitute a breach of this Section 4 shall not be deemed a breach thereof tothe extent such disclosure is required by law.
     (c)  The obligations of the Executive under this Section 4 shall survivethe termination of this Agreement without regard to the basis for suchtermination.
5.    Term.
     (a)  The Executive may terminate this Agreement at any time upon writtennotice to the Corporation of such termination, provided that the provisions ofparagraph 4 shall survive the termination of this Agreement, without regard tothe reason for such termination.
     (b)  The Corporation may terminate Section 1 of this Agreement concerningconsulting services from the Executive at any time upon written notice to theExecutive of such termination. The Corporation may not otherwise terminatethis Agreement unless the Executive materially breaches this Agreement and theExecutive fails to cure such breach within thirty (30) days after receipt ofnotice thereof from the Board of Directors of the Corporation as authorized bynot less than two-thirds (2/3) of all of the members thereof and there is adetermination of such breach in a binding and final judgment, order or decreeof a court or other agency of competent jurisdiction, in effect afterexhaustion or lapse of all rights of appeal.
6.    Taxes.
The Corporation shall report amounts paid by the Corporation to the Executiveor the benefits received by the Executive under this Agreement as required bylaw. The Corporation may withhold from any amounts payable to the Executiveall federal, state or local taxes or payments as may be required by law or asmay be expressly authorized by the Executive to be withheld, deducted orreduced from those amounts. The Executive shall be responsible for all taxeson all amounts paid by the Corporation to the Executive or the benefitsreceived by the Executive under this Agreement.
     7.    Other Terms.
     (a)  This Agreement represents the entire agreement, and supersedes allprior and contemporaneous agreements and understandings, relative to the samesubject matter. Except as set forth below, this Agreement does not affect oramend prior agreements as to the Corporation’s benefit plans availablegenerally to employees, the Corporation’s Supplemental Executive RetirementPlan if applicable, split dollar insurance agreements if applicable, stockoption and restricted stock agreements if applicable, and any ExecutiveDeferred Compensation Plan agreements with the Executive. Notwithstanding thepreceding sentence, the Corporation and the Executive agree that the term“competition” in the Corporation’s Supplemental Executive Retirement Plan andin the
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Policies adopted under the Corporation’s 1997 Long Term Incentive Planshall be interpreted to include the activities described in Section 3 of thisAgreement, and this agreement concerning the term “competition” shall surviveany termination of this Agreement.
     (b)  This Agreement may not be amended or changed, and neither party shallbe deemed to have waived any provision of this Agreement, unless the amendmentor change or waiver is set forth in a writing signed by a duly authorizedofficer of the Corporation and by the Executive. The failure of either partyto enforce any term of this Agreement shall not constitute a waiver of anyrights or deprive the party of the right to insist thereafter upon strictadherence to that or any other term of this Agreement, nor shall a waiver ofany breach of this Agreement constitute a waiver of any preceding or succeedingbreach.
     (c)  The Executive acknowledges that the Executive has read andunderstands each provision of this Agreement and has had an opportunity forcounsel of the Executive’s choice to review this Agreement and that no promisesor inducements have been made for the Executive to sign this Agreement exceptas expressly set forth in this Agreement.
     (d)  This Agreement shall be interpreted under the laws of the State ofDelaware, without regard to principles of conflicts of laws.
     (e)  The Executive agrees that any breach by the Executive of anyprovision of Section 3 or Section 4 of this Agreement would cause theCorporation irreparable damage and that no remedy available at law would beadequate for such violation. Accordingly, in addition to any other remediesavailable at law or in equity or under any Corporation benefit or compensationplan or this Agreement, the Corporation may immediately seek enforcement ofthis Agreement in a court of appropriate jurisdiction by means of specificperformance or injunction, without posting of a bond, or otherwise.
     (f)  It is the intention of the parties that this Agreement shall beenforceable to the fullest extent allowed by law. In the event that a courtholds any provision of Section 3 or Section 4 of this Agreement to beunenforceable, the parties agree that, if allowed by law, that provision shallbe reduced to the degree necessary to render it enforceable without affectingthe rest of this Agreement, and, if such reduction is not allowed by law, theparties shall promptly agree in writing to a provision to be substitutedtherefor which will have an effect as close as possible to the invalidprovision that is consistent with applicable law. The invalidity orunenforceability of any provision of this Agreement shall not affect or limitthe validity and enforceability of the other provisions hereof.
     (g)  The Corporation shall pay all costs and expenses, includingreasonable attorneys’ fees, of the Corporation and the Executive in connectionwith any legal proceeding or action, whether or not instituted by theCorporation or the Executive, relating to the interpretation or enforcement ofany provision of this Agreement, provided that if the Executive instituted theproceeding and the judge, arbitrator or other person presiding over theproceeding affirmatively finds that the Executive instituted the proceeding inbad
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faith, the Executive shall pay all costs and expenses, includingreasonable attorneys’ fees, of the Executive and the Corporation.
     (h)  This Agreement may not be assigned by the Executive. This Agreementshall inure to the benefit of and be enforceable by the Executive’s spouse andhis or her estate and legal representatives. This Agreement shall inure to thebenefit of and be binding upon and enforceable by the Corporation’s successorsand assigns, including any successor through merger or purchase ofsubstantially all the assets of the Corporation.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the datefirst above written.   EXECUTIVE  /s/ Charles M. Cawley