8-KMaterial AgreementsExhibits & Filings

Mastercard Inc 8-K Report, Material Agreement (Nov 19, 2004)

Filed November 19, 2004For Securities:MA

Summary

This 8-K filing from November 19, 2004, details two key events for Mastercard Inc. (MA). Firstly, the company amended its Value Appreciation Program (VAP), a long-term incentive plan for senior executives. The amendments, effective October 1, 2004, allow VAP assets to be invested in broader investment funds rather than solely in member financial institution stocks. This provides participants with greater flexibility in investment choices and clarifies exercise timing and administrative aspects of the plan. Secondly, the filing announces the appointment of Donald L. Boudreau as a full voting director to the Global Board, representing the U.S. region. Mr. Boudreau, formerly Chairman Emeritus and a non-voting advisory director, fills a vacancy. His appointment is notable given his prior executive role at Chase Manhattan Bank USA, N.A., a significant Mastercard member and customer, and the ongoing business relationship between Mastercard and Chase.

Key Highlights

  • 1Mastercard amended its Value Appreciation Program (VAP) effective October 1, 2004.
  • 2The VAP amendments allow for investment in broader investment funds, moving beyond just member financial institution stocks.
  • 3Participants in the VAP will have increased flexibility regarding the exercise of their share units.
  • 4Donald L. Boudreau was elected as a full voting director to the Global Board, representing the U.S. region.
  • 5Mr. Boudreau's appointment fills a vacancy on the board and he previously served as a non-voting advisory director.
  • 6The filing notes Mr. Boudreau's past executive role at Chase Manhattan Bank USA, N.A., a key Mastercard member and customer.
  • 7Mastercard generated approximately $153 million in net fees from Chase and its affiliates in 2003.

Frequently Asked Questions

The VAP is a long-term incentive plan for senior executives that awards share units. These units are tied to the performance of an underlying investment. The recent amendments allow these investments to be made in broader investment funds instead of exclusively in the stock of Mastercard's member financial institutions, offering participants more flexibility.

Mr. Boudreau's election as a full voting director is significant as he previously served as a non-voting advisory director. His appointment fills a board vacancy and brings him into a voting capacity. His background as Chairman Emeritus and former executive at Chase Manhattan Bank USA, N.A. (a major Mastercard member and customer) adds a layer of consideration to his directorship.

The filing highlights that Chase Manhattan Bank USA, N.A. is both a stockholder and a principal member of Mastercard. The company earns substantial fees from Chase and its affiliates for payment programs. The appointment of Donald L. Boudreau, a former executive of Chase, to the board is notable given this significant business relationship.

The amendments to the Value Appreciation Program (VAP) were effective October 1, 2004. The reporting of Donald L. Boudreau's appointment to the Global Board is dated November 18, 2004.