MasterCard 2013 Annual Report Download - page 35

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Risks Related to our Class A Common Stock and Governance Structure
The market price of our common stock could be volatile.
Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as
the factors listed below, among others, could affect the market price of our common stock:
• the continuation of adverse 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 earnings estimates, investors' perceptions, recommendations by securities analysts or our failure
to achieve analysts' earnings 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.
Our organizational documents and Delaware law contain terms and provisions 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 customer or former customer of MasterCard, or any operator, customer 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;
• our stockholders are not entitled to act by written consent;
• a vote of 80% or more of all of the outstanding shares of our stock then entitled to vote is required for
stockholders to amend any provision of our bylaws; and
• any representative of a competitor of MasterCard or of the Foundation is disqualified from service on our
board of directors.
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.
As of February 6, 2014, the Foundation owned 119,214,210 shares of Class A common stock, representing
approximately 10.4% of our general voting power. The Foundation may not sell or otherwise transfer its shares of
Class A common stock prior to April 26, 2026 (twenty years and eleven months following the IPO), except to the extent
necessary to satisfy its charitable disbursement requirements, for which purpose earlier sales are permitted. The directors
of the Foundation are required to be independent of us and our customers. The ownership of Class A common stock
by the Foundation, together with the restrictions on transfer, could discourage or make more difficult acquisition