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Mastercard Inc 8-K Report, Material Agreement (Jul 18, 2006)

Filed July 18, 2006For Securities:MA

Summary

Mastercard Incorporated (MA) filed an 8-K on July 18, 2006, primarily to report on the approval of its 2006 Non-Employee Director Equity Compensation Plan at its Annual Meeting of Stockholders. This plan aims to attract and retain qualified directors by aligning their interests with those of the company's shareholders through equity-based compensation. The plan involves granting deferred stock units (DSUs) to non-employee directors, with specific grant values tied to the company's Class A common stock price. Under the approved plan, each non-employee director elected at the annual meeting, or continuing their term, will receive DSUs valued at $100,000, with the Chairman of the Board receiving $150,000. The number of DSUs awarded is calculated by dividing these dollar amounts by the average of the high and low stock prices on the grant date. For the 2006 meeting, eight non-employee directors were awarded 2,565 DSUs each, and the Chairman received 3,850 DSUs, which are set to settle in Class A common stock on July 18, 2010, or upon termination of service, subject to director election.

Key Highlights

  • 1Approval of the 2006 Non-Employee Director Equity Compensation Plan by stockholders at the Annual Meeting.
  • 2The plan is designed to attract and retain talented non-employee directors and align their interests with shareholders.
  • 3Non-employee directors will receive equity compensation in the form of Deferred Stock Units (DSUs).
  • 4DSUs are awarded annually, with a value of $100,000 for regular directors and $150,000 for the Chairman.
  • 5The number of DSUs granted is based on the company's Class A common stock price at the time of the annual meeting.
  • 6Awards are settled in Class A common stock, typically on the fourth anniversary of the grant date or upon termination of service.
  • 7Specific grants were made to eight non-employee directors and the Chairman on July 18, 2006.

Frequently Asked Questions

The primary purpose of the plan is to attract and retain highly qualified individuals to serve as non-employee directors for Mastercard Incorporated, and to further align their interests with those of the company's stockholders through equity compensation.

Non-employee directors receive compensation in the form of Deferred Stock Units (DSUs). The value of the DSUs granted is $100,000 for each director, and $150,000 for the Chairman of the Board, calculated based on the company's Class A common stock price on the annual meeting date.

The Deferred Stock Units awarded under the plan will generally be settled in shares of Mastercard's Class A common stock. Directors can elect to have them settled either on the fourth anniversary of the award date or 60 days after their termination of service as a director. If no election is made, the default settlement date is the fourth anniversary of the grant.

On July 18, 2006, eight non-employee directors (David R. Carlucci, Manoel Luiz Ferrão de Amorim, Bernard S.Y. Fung, Richard Haythornthwaite, Norman McLuskie, Marc Olivié, Mark Schwartz, and Edward Suning Tian) each received 2,565 Deferred Stock Units. The Chairman of the Board received 3,850 Deferred Stock Units.