MasterCard 2009 Annual Report Download - page 118

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except percent and per share data)
Ownership and Governance Structure
Equity ownership and voting power of the Company’s shares were allocated as follows as of December 31:
2009 2008
Equity
Ownership
General
Voting
Power
Equity
Ownership
General
Voting
Power
Public Investors (Class A stockholders) ............. 74.2% 87.7% 65.7% 86.3%
Principal or Affiliate Members (Class B
stockholders) ................................ 15.4% 0.0% 23.9% 0.0%
Foundation (Class A stockholders) ................. 10.4% 12.3% 10.4% 13.7%
Class B Common Stock Conversions
At the annual meeting of stockholders of the Company on June 7, 2007, the Company’s stockholders
approved amendments to the Company’s certificate of incorporation designed to facilitate an accelerated, orderly
conversion of Class B common stock into Class A common stock for subsequent sale. Through “conversion
transactions,” in amounts and at times designated by the Company, current holders of shares of Class B common
stock who elect to participate will be eligible to convert their shares, on a one-for-one basis, into shares of
Class A common stock for subsequent sale or transfer to public investors, within a 30 day “transitory” ownership
period. Holders of Class B common stock are not allowed to participate in any vote of holders of Class A
common stock during this “transitory” ownership period. The number of shares of Class B common stock
eligible for conversion transactions is limited to an annual aggregate number of up to 10% of the total combined
outstanding shares of Class A common stock and Class B common stock, based upon the total number of shares
outstanding as of December 31 of the prior calendar year. In addition, prior to May 31, 2010, a conversion
transaction will not be permitted that will cause the number of shares of Class B common stock to represent less
than 15% of the total number of outstanding shares of Class A common stock and Class B common stock
outstanding.
During 2007, the Company implemented and completed two separate conversion programs in which 11,387
shares, of an eligible 13,400 shares, of Class B common stock were converted into an equal number of shares of
Class A common stock and subsequently sold or transferred to public investors.
In February 2008, the Company’s Board of Directors authorized the conversion and sale or transfer of up to
13,100 shares of Class B common stock into Class A common stock in one or more conversion programs during
2008. In May 2008, the Company implemented and completed a conversion program in which all of the 13,100
authorized shares of Class B common stock were converted into an equal number of shares of Class A common
stock and subsequently sold or transferred by participating holders of Class B common stock to public investors.
In February 2009, the Company’s Board of Directors authorized the conversion and sale or transfer of up to
11,000 shares of Class B common stock into Class A common stock. In May 2009, the Company implemented
and completed a conversion program in which 10,871 shares of Class B common stock were converted into an
equal number of shares of Class A common stock and subsequently sold or transferred to public investors.
Notwithstanding the conversion transactions completed during 2007, 2008 and 2009, commencing on the
fourth anniversary of the IPO, each share of Class B common stock will be convertible, at the holder’s option,
into a share of Class A common stock on a one-for-one basis. In February 2010, the Company’s Board of
Directors authorized programs to facilitate conversions of shares of Class B common stock on a one-for-one
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