MasterCard 2010 Annual Report Download - page 51

Risks Related to our Class A Common Stock and Governance Structure
Future sales of our shares of Class A common stock could depress the market price of our Class A
common stock.
The market price of our Class A common stock could decline as a result of sales of a large number of shares
in the market or the perception that such sales could occur. These sales, or the possibility that these sales may
occur, also might make it more difficult for us or our stockholders to sell equity securities in the future. As of
February 16, 2011, we had 123,656,120 outstanding shares of Class A common stock, of which 13,108,364
shares were owned by The MasterCard Foundation (the “Foundation”). Under the terms of the donation, the
Foundation became able to sell its shares of our Class A common stock commencing on the fourth anniversary of
the consummation of the IPO in May 2006 to the extent necessary to comply with charitable disbursement
requirements. Under Canadian tax law, the Foundation is generally required each year to disburse at least 3.5%
of its assets not used in administration of the Foundation in qualified charitable disbursements. However, the
Foundation has obtained permission from the Canadian tax authorities to defer its annual disbursement
requirement for up to ten years and meet its total deferred disbursement obligations at the end of the ten-year
period. Despite this permission to defer annual disbursements, the Foundation may decide to meet its
disbursement obligations on an annual basis or to settle previously accumulated obligations during any given
year. In addition, the Foundation will be permitted to sell all of the remaining shares held by it starting twenty
years and eleven months after the consummation of the IPO.
The market price of our common stock could 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, regulation or legislative activity;
• potential acquisitions by us of other companies; and
• developments in our industry.
There are terms in our charter documents and under Delaware law that could be considered anti-
takeover provisions or could have an impact on 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 or any other class or series of our stock with general voting power, or more than 15% of our total
voting power. Further, except in limited circumstances, 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 stockholders are not entitled to the right to cumulate votes in the election of directors;
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