Document:

EXHIBIT 10.9.1

 

Exhibit 10.9.1

ADDENDUM TO EMPLOYMENT AGREEMENT

     Agreement
made and entered into this 28th day of February, 2005 (the “Effective Date”), by
and between MasterCard International Incorporated, a Delaware corporation (the “Company”) and
Robert W. Selander (the “Executive”).

W I T N E S S E T H

     WHEREAS, the Executive and the Company wish to modify the terms of that certain Employment
Agreement entered into between the Executive and the Company, dated August 10, 2001, (the
“Employment Agreement”);and

     WHEREAS, the Executive and the Company wish to ensure that this Addendum complies with the
American Job Creation Act of 2004;

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
agree to modify the Employment Agreement as follows:

     1. In addition to any compensation due and owing the Executive pursuant to Paragraph 3 of the
Employment Agreement, subject to the Executive’s execution of a Separation Agreement and Release in
material terms substantially in the form annexed to the Employment Agreement, other than any
modifications which may be required to effectuate such release based upon changes in law or to
preserve claims which have not yet accrued based exclusively upon the Executive’s continuing
employment, if any,

 

 

following the effective date of such release, the Company shall pay the Executive a lump sum
payment of 10 million dollars ($10,000,000), less any payroll deductions required by law
(hereinafter referred to as the “Retention Payment”) as soon as reasonably practicable following
the date of the termination of the Executive’s employment, but no less than ten (10) days following
the Executive’s execution and delivery to the Company of such Separation Agreement and Release, and
in no event later than two and one half months following the end of the year in which the
“Retention Date” occurs (as such term is defined in Paragraph 1(a) below, provided that the
Executive:

	 	(a)  	remains employed by the Company (provided the Executive is
then not under suspension pursuant to the terms of the Employment Agreement)
in the position of CEO (or such other position to be designated by the Board
of Directors of the Company (the “Global Board”)), until a date to be
designated by the Global Board, in its sole discretion, occurring between and
including April 9, 2010, and April 9, 2011 (the “Retention Date”);

	 	(b)  	provides to the reasonable satisfaction of the Global Board:
(i) any requested assistance to the Global Board in identifying a successor
CEO; and (ii) assistance, as requested in writing by the Global Board, in the
process of transitioning the Executive’s duties and responsibilities to his
successor through and including the Retention Date; and

	 	(c)  	the Company achieves , on average, no less than target level
performance, as determined by the Compensation Committee of

2

 

	 	   	the Global Board and measured under the Annual Incentive Compensation Plan
(“AICP”) (or its equivalent under any replacement plan), from and
including 2004 through the date of termination of the Executive’s
employment, but in no event later than the Retention Date. (Should the
Executive’s employment terminate prior to December 31 of a given year,
such partial year’s performance shall be measured based upon the AICP
forecasted score utilized by the corporate finance department for purposes
of accruing AICP bonus expense for the most recently completed calendar
quarter prior to the Executive’s date of termination.)

     2. In addition to any payments and benefits to which the Executive is entitled pursuant to
Paragraph 5(b)(i) of the Employment Agreement in the event of the Executive’s employment is
terminated prior to the Retention Date due to the Executive’s death in accordance with the terms
set forth in Paragraph 5(a)(i) of the Employment Agreement, the Executive’s estate, subject to
execution of a release by the legal representative of the Executive’s estate substantially in the
form required by Paragraph 1 above, shall be entitled to payment of a pro rata portion (based upon
completed calendar quarters worked between July 1, 2004 and December 31, 2010) of the Retention
Payment described in Paragraph 1 above.

     3. In addition to any payments and benefits to which the Executive is entitled pursuant to
Paragraph 5(b)(ii) of the Employment Agreement in the event the Executive’s employment is
terminated prior to the Retention Date due to Disability in accordance with the terms set forth in
Paragraph 5(a)(ii) of the Employment Agreement, the

3

 

Executive, subject to execution of a Separation Agreement and Release by the Executive (or by
the Executive’s legal representative in the event the Executive is incapacitated and incapable of
executing a Separation Agreement and Release) as required by Paragraph 1 above, shall be entitled
to payment of a pro rata portion (based upon completed calendar quarters worked between July 1,
2004 and December 31, 2010) of the Retention Payment described in Paragraph 1 above.

     4. In addition to any payments and benefits to which the Executive is entitled pursuant to
Paragraph 5(b)(v) of the Employment Agreement in the event Executive’s employment is terminated
prior to the Retention Date by the Company (for a reason other than death, Disability or Cause), in
accordance with the terms set forth in Paragraph 5(a)(iv) of the Employment Agreement, or if the
Executive terminates his employment with Good Reason in accordance with the terms set forth in
Paragraph 5(a)(v) of the Employment Agreement, the Executive, subject to the Executive’s execution
of a Separation Agreement and Release, as required by Paragraph 1 above, shall be entitled to
payment of a pro rata portion (based upon completed calendar quarters worked between July 1, 2004
and December 31, 2010) of the Retention Payment described in Paragraph 1 above.

     5. Notwithstanding any contrary provision set forth in Paragraphs 6(c), (d) and (e) of the
Employment Agreement and regardless of the Executive’s satisfaction of the conditions necessary for
receipt of the Retention Payment or actual receipt of the Retention Payment or any pro rata portion
thereof, each of the Executive’s obligations under Paragraphs 6(c) (Non-Compete) and 6(d)
(Non-Solicitation) shall, in all events,

4

 

continue for a period of thirty-six (36) months following the Executive’s date of termination
for any reason; provided however:

     (a) in the event the Company terminates Executive’s employment for Cause, pursuant to
Paragraph 5(a)(iii) of the Employment Agreement, Executive’s obligations under Paragraphs 6(c)
(Non-Compete) and 6(d) (Non-Solicitation) shall continue for periods of six (6) months and twelve
(12) months following Executive’s date of termination, respectively, as presently provided by the
Employment Agreement following Executive’s termination for Cause; or

     (b) if Executive submits his Voluntary Resignation pursuant to Paragraph 5(a)(vi) of the
Employment Agreement, but only if such Voluntary Resignation is on account of a change in strategic
direction of the Company, initiated and implemented by the Global Board, following Executive’s
delivery to the Global Board of advance written objection to such change, Executive’s obligations
under Paragraphs 6(c) (Non-Compete) and 6(d) (Non-Solicitation) shall, be limited to a period of
twelve (12) months following Executive’s date of termination.

     6. In the event the stock of the Company or of MasterCard Incorporated shall have become
publicly traded on an established securities market on or before the date of the termination of the
Executive’s employment, to the extent required by section 409A(2)(B)(i) of the Internal Revenue
Code, any distribution required by this Addendum shall not be made before the date which is six (6)
months after the date of termination of the Executive’s employment.

     7. Except as expressly modified herein, the terms of the Employment Agreement shall remain in
full force and effect. Nothing herein shall be deemed to create

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an obligation by the Company to: (i) employ the Executive for any definite term or (ii) provide any
pay or benefits to the Executive upon the termination his employment to which he was not previously
entitled under the Employment Agreement, other than the Retention Payment (or pro rata portion
thereof) expressly described herein.

     IN WITNESS WHEREOF, each of the Company and the Executive has executed this Addendum to become
effective on the Effective Date.

	 	 	 	 	 
	 	 	MASTERCARD INTERNATIONAL INCORPORATED
	 
	 	 	 	 
	/s/ Robert W. Selander

	 	By:
	 	/s/ Michael Michl
	

	 	 	 	

	Robert W. Selander

	 	 	 	Michael Michl
	

	 	 	 	Executive Vice President,
	

	 	 	 	Central Resources

6EXHIBIT 10.14

 

Exhibit 10.14

MASTERCARD INTERNATIONAL

ANNUAL INCENTIVE COMPENSATION PLAN (AICP)

As Amended and Restated Effective January 1, 2005

Overview

The Annual Incentive Compensation Plan (AICP) rewards employees for successfully achieving
performance goals that are in direct support of corporate and business unit/region goals.
Incentive opportunity amounts vary depending upon position and market practices and are awarded
annually, based on performance.

Criteria

The AICP is based on three basic measurement categories:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	n
	 	Overall MasterCard corporate performance
	 	 	 
	 

	 	 	 
	 	 
	 	 	 
	

	 	 	n
	 	Business unit/region performance	 	 	 
	 

	 	 	 
	 	 
	 	 	 
	

	 	 	n
	 	Participant’s individual contribution	 	 	 
	 	 	 	 	 	 	 

MasterCard performance is based on the delivery of three annual corporate objectives:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	n
	 	Implementing Corporate Strategy
	 	 	 
	 

	 	 	 
	 	 
	 	 	 
	

	 	 	n
	 	Achieve Financial Targets	 	 	 
	 

	 	 	 
	 	 
	 	 	 
	

	 	 	n
	 	Enhancing Organizational Capabilities	 	 	 
	 	 	 	 	 	 	 

Business unit/region performance is based on the achievement of pre-established goals defined in
the annual business plan for each group that are directly linked to the corporate objectives.

To be considered for an award, participants must establish a set of aggressive individual
performance objectives/goals (that are directly linked to their business unit/region goals) and
deliver successful results. Pay out opportunities for all participants are funded based upon the
achievement of corporate goals (50%) and business unit goals (50%)*. Individual awards vary
significantly to recognize individual contributions. Along with demonstration of the MasterCard
operating principles and related competencies (e.g., interpersonal, communication, leadership,
knowledge, self-management, thinking, administrative and motivation), results will be the driver
for earning an award. Awards are not guaranteed.

*EVP, or its equivalent level is 75% corporate, 25% business unit; CEO is 100% corporate.

Eligibility

MasterCard employees are eligible to participate in one annual incentive plan
simultaneously (i.e., AICP, Sales Incentive Plan (SIP), MasterCard Advisors Incentive Plan (MAIP)).

	 	 	 
	Confidential

	 	Page 1

 

 

Incentive Pool Allotments

Corporate performance is determined by evaluating actual results versus established, measurable
objectives. Annual corporate performance is determined by identifying how well MasterCard
performed against each annual corporate objective. These results determine the size of the total
incentive dollar pool.

Business unit/region performance results are also evaluated. The average of all business
unit/region performance results will not exceed the total corporate performance results. These
results determine how much of the total incentive dollar pool is allocated to each business
unit/region.

Target AICP Opportunities

Target incentive opportunity percentages vary depending upon job and market practices. Each band
can accommodate multiple target amounts. Once corporate and business unit performance is
determined, target incentive opportunity percentages are used to determine funding levels and
should not be interpreted as guaranteed payments to individuals. If MasterCard performance is
higher or lower than target and business unit/region performance is higher or lower than target,
the funded levels will be adjusted accordingly.

	 	 	 
	Jobs in Band	 	Target
	A
	 	20%+
	B
	 	20%+
	C
	 	10%, 15%, 20+%
	D
	 	3%, 5%, 10+%
	E
	 	2%, 3%, 5+%
	F
	 	2%, 3%, 5%
	G
	 	2%

Incentive Payouts

Once it has been determined that performance warrants an award, managers will use target
percentages as a guideline when determining individual payouts; however, each target percentage has
an associated range of opportunity that an individual can earn – from 0% of target up to a maximum
of 200% of target.

Incentive payouts will vary significantly around the target. Senior management has the discretion
to decline awarding an annual incentive, as appropriate. For example, if the employee performance
has not met the minimum level of performance, management has the discretion to decline making an
award. Depending on the level of performance achieved, an award may be made of up to 200% of
target.

	 	 	 
	If the target is	 	The payout range is
	20%
	 	0% - 40%
	15%
	 	0% - 30%
	10%
	 	0% - 20%
	5%
	 	0% - 10%
	3%
	 	0% - 6%
	2%
	 	0% - 4%

	 	 	 
	Confidential

	 	Page 2

 

 

General Information

	n	 Eligible employees are not entitled to automatic payouts under the
plan. To realize a payout, an employee must make a significant
contribution; and, in terms of that contribution, successfully
demonstrate MasterCard’s competencies. Generally, participants
must earn at least a “Successful”, or its equivalent performance
rating in order to be eligible to receive an incentive payout. An
employee who receives a “Needs Improvement”, or its equivalent
rating generally does not qualify for an award. However,
MasterCard reserves the discretion to make an award in appropriate
circumstances to an employee rated below “Successful”, or its
equivalent. For example, if an employee who received a “Need
Improvement” performance rating improves based on a specific
time-bound action plan, an incentive can be awarded pending
approval by the Business Unit Head and the Chief Administrative
Officer.
	 
	n	 Awards will be prorated on a quarterly basis for employees not in
the AICP plan for the full calendar year. The proration schedule
appears below:

	 	 	 	 	 	 
	 
	 	Hire Hire Date (previous year)	 	 	Incentive Payout	 
	 	January – March
	 	 	100%	 
	 	April – June
	 	 	75%	 
	 	July – September
	 	 	50%	 
	 	October – December
	 	 	25%	 
	 

	 	An employee who has a career move into a new position that results in a higher incentive target
will have his or her new incentive target prorated on a quarterly basis based on the date of the
career move.

	n	 Any employee who resigns or whose employment is terminated for any
reason prior to the date incentives are paid, is ineligible to
receive an AICP award. If an employee has received notice of
termination prior to the date an award is paid and has been
offered a severance package in writing, and if such an employee
would otherwise be eligible to receive an award under this plan,
he or she will be required to sign an agreement and release in a
form acceptable to MasterCard, in order to receive the award.
	 
	n	The Compensation Committee of the Board evaluates and determines
MasterCard’s corporate performance. If corporate performance is
below a threshold level of 50% of corporate goal attainment,
incentives will not be paid. The Committee also approves the
commensurate compensation recommendations for MasterCard
executives.
	 
	n	The CEO will appraise business unit/region contributions toward
achieving overall MasterCard goals.

	 	 	 
	Confidential

	 	Page 3

 

 

	n	Senior management will appraise individual performance
contributions toward the achievement of corporate and business
unit/region goals and will have the discretion to adjust incentive
awards.
	 
	n	 Any employee who moves into a new position with a lesser target
incentive opportunity will be grandfathered at their current
incentive opportunity for the remainder of the calendar year.
	 
	n	 MasterCard reserves the right to interpret the plans provisions at
its sole discretion and to change or amend this policy at any
time, for any reason.

	 	 	 
	Confidential

	 	Page 4

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