MasterCard 2008 Annual Report Download - page 51

In addition, our amended and restated certificate of incorporation provides that holders of our Class B common
stock would be eligible, through “conversion transactions” in amounts and at times to be designated by the
Company, to convert their shares of Class B common stock into shares of our Class A common stock on a
one-for-one basis for subsequent transfer or sale to an eligible holder, subject to annual aggregate and other limits.
The Company completed two such voluntary conversion programs during 2007 and one such program during 2008
and has announced that it expects to provide such a program in 2009. After May 31, 2010, holders of our Class B
common stock will have the option to convert all of their shares of Class B common stock into shares of Class A
common stock on a one-for-one basis for subsequent sale to the public, without aggregate amounts or similar
limitations. All of the shares of Class A common stock issuable upon conversion of such shares will be freely
tradable without restriction or registration under the Securities Act by persons other than our affiliates. These future
sales, or the perception that such sales may occur, could depress the market price of our Class A common stock.
The market price of our common stock may be volatile.
Securities markets worldwide experience significant price and volume fluctuations and have experienced
increased volatility in connection with recent unpredictable economic events around the world. This market
volatility, as well as the factors listed below, among others, could affect the market price of our common stock:
• the continuation of unprecedented economic events around the world in financial markets as well as
political conditions and other factors unrelated to our operating performance or the operating
performance of our competitors;
• quarterly variations in our results of operations or the results of operations of our competitors;
• changes in earning estimates, investors’ perceptions, recommendations by securities analysts or our
failure to achieve analysts’ earning estimates;
• the announcement of new products or service enhancements by us or our competitors;
• announcements related to litigation;
• potential acquisitions by us of other companies; and
• developments in our industry.
Anti-takeover provisions in our charter documents and Delaware law could delay or prevent entirely a
takeover attempt or a change in control.
Provisions contained in our amended and restated certificate of incorporation and bylaws and Delaware law
could delay or prevent entirely a merger or acquisition that our stockholders consider favorable. These provisions
may also discourage acquisition proposals or have the effect of delaying or preventing entirely a change in
control, which could harm our stock price. For example, subject to limited exceptions, our amended and restated
certificate of incorporation prohibits any person from beneficially owning more than 15% of any of the Class A
common stock, the Class B common stock or any other class or series of our stock with general voting power, or
more than 15% of our total voting power. Further, no member or former member of MasterCard International, or
any operator, member or licensee of any competing general purpose payment card system, or any affiliate of any
such person, may beneficially own any share of Class A common stock or any other class or series of our stock
entitled to vote generally in the election of directors. In addition,
• our board of directors is divided into three classes, with approximately one-third of our directors elected
each year;
• up to three of our directors (but no more than one-quarter of all directors) are elected by the holders of
our Class M common stock;
• any representative of a competitor of MasterCard or of the Foundation is disqualified from service on
our board of directors;
• our directors, other than the directors elected by the holders of our Class M common stock (who may be
removed without cause by the holders of the Class M common stock), may be removed only for cause
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