MasterCard 2008 Annual Report Download - page 52

and only upon the affirmative vote of at least 80% in voting power of all the shares of stock then entitled
to vote at an election of directors, voting together as a single class;
• our stockholders are not entitled to the right to cumulate votes in the election of directors;
• holders of our Class A common stock are not entitled to act by written consent;
• our stockholders must provide timely notice for any stockholder proposals and director nominations;
• we have adopted limited liability provisions that eliminate the personal liability of directors and the
members of our European Board for monetary damages for actions taken as a director or member, with
certain exceptions; and
• a vote of 80% or more of all of the outstanding shares of our stock then entitled to vote is required to
amend certain sections of our amended and restated certificate of incorporation and for stockholders to
amend any provision of our bylaws.
A substantial portion of our voting power is held by the Foundation, which is restricted from selling
shares for an extended period of time and therefore may not have the same incentive to approve a corporate
action that may be favorable to the other public stockholders. In addition, the ownership of Class A common
stock by the Foundation and the restrictions on transfer could discourage or make more difficult acquisition
proposals favored by the other holders of the Class A common stock.
The Foundation owns 13,496,933 shares of Class A common stock, representing, as of February 12, 2009,
approximately 14% of our general voting power. The Foundation may not sell or otherwise transfer its shares of
Class A common stock prior to the date which is twenty years and eleven months following the IPO, except to
the extent necessary to satisfy its charitable disbursement requirements starting on the fourth anniversary of the
IPO. The directors of the Foundation are required to be independent of us and our members. The ownership of
Class A common stock by the Foundation, together with the restrictions on transfer, could discourage or make
more difficult acquisition proposals favored by the other holders of the Class A common stock. In addition,
because the Foundation is restricted from selling its shares for an extended period of time, it may not have the
same interest in short or medium-term movements in our stock price as, or incentive to approve a corporate
action that may be favorable to, our other stockholders.
The holders of our Class M common stock have the right to elect up to three of our directors and to
approve significant corporate transactions, and their interests in our business may be different from those of
our other stockholders.
Our amended and restated certificate of incorporation requires us to obtain the approval of the holders of our
Class M common stock, voting separately as a class, for a variety of enumerated actions. For example, the
approval of the holders of our Class M common stock is required to make certain amendments to our certificate
of incorporation, to approve the sale, lease or exchange of all or substantially all of our assets, to approve the
consummation of mergers or consolidations of MasterCard or for us to cease to engage in the business of
providing core network authorization, clearing and settlement services for branded payment card transactions. In
addition, the holders of our Class M common stock have the right to elect up to three of our directors. Because
shares of the Class M common stock do not have any economic rights, the holders of the Class M common stock
may not have the same incentive to approve a corporate action that may be favorable for the holders of Class A
common stock, or their interests may otherwise conflict with those of the holders of Class A common stock.
Certain aspects of our European operations are managed by the European Board which has been elected
by the European holders of Class M common stock and which may reach different decisions than our Board
of Directors.
Certain aspects of our European operations, including review of membership applications, establishment of
intraregional operating rules and implementation of certain intraregional product and enhancement developments
and affinity and co-branding rules are managed by or under the direction of our European Board. The European
42