MasterCard 2015 Annual Report Download - page 76

MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
70
Ownership and Governance Structure
Equity ownership and voting power of the Company’s shares were allocated as follows as of December 31:
2015 2014
Equity Ownership
General Voting
Power Equity Ownership
General Voting
Power
Public Investors (Class A stockholders) . . . . . . . . . . . . . . 87.7% 89.4% 86.6% 89.4%
Principal or Affiliate Customers (Class B stockholders) . 1.9% —% 3.2% —%
The MasterCard Foundation (Class A stockholders). . . . 10.4% 10.6% 10.2% 10.6%
Class B Common Stock Conversions
Shares of Class B common stock are convertible on a one-for-one basis into shares of Class A common stock. Entities eligible to
hold MasterCard’s Class B common stock are defined in the Company’s amended and restated certificate of incorporation
(generally the Company’s principal or affiliate customers), and they are restricted from retaining ownership of shares of Class A
common stock. Class B stockholders are required to subsequently sell or otherwise transfer any shares of Class A common stock
received pursuant to such a conversion.
The MasterCard Foundation
In connection and simultaneously with its 2006 initial public offering (the “IPO”), the Company issued and donated 135 million
newly authorized shares of Class A common stock to The MasterCard Foundation (the “Foundation”). The Foundation is a private
charitable foundation incorporated in Canada that is controlled by directors who are independent of the Company and its principal
customers. Under the terms of the donation, the Foundation became able to resell the donated shares in May 2010 and to the
extent necessary to meet charitable disbursement requirements dictated by Canadian tax law. Under Canadian tax law, the
Foundation is generally required to disburse at least 3.5% of its assets not used in administration each year for qualified charitable
disbursements. However, the Foundation obtained permission from the Canadian tax authorities to defer the giving requirements
for up to ten years, which was extended in 2011 to fifteen years. The Foundation, at its discretion, may decide to meet its
disbursement obligations on an annual basis or to settle previously accumulated obligations during any given year. The Foundation
will be permitted to sell all of its remaining shares beginning twenty years and eleven months after the consummation of the
IPO.
Stock Repurchase Programs
In June 2012, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase
up to $1.5 billion of its Class A common stock (the “June 2012 Share Repurchase Program”), which became effective in June 2012.
On February 5, 2013, the Company’s Board of Directors approved a share repurchase program authorizing the Company to
repurchase up to $2 billion of its Class A common stock (the “February 2013 Share Repurchase Program”), which became effective
in March 2013.
On December 10, 2013, the Company’s Board of Directors approved a new share repurchase program authorizing the Company
to repurchase up to $3.5 billion of its Class A common stock (the “December 2013 Share Repurchase Program”), which became
effective in January 2014.
On December 2, 2014, the Company’s Board of Directors approved a new share repurchase program authorizing the Company
to repurchase up to $3.75 billion of its Class A common stock (the “December 2014 Share Repurchase Program”), which became
effective in January 2015.
On December 8, 2015, the Company’s Board of Directors approved a new share repurchase program authorizing the Company
to repurchase up to $4 billion of its Class A common stock (the “December 2015 Share Repurchase Program”), which became
effective in February 2016.
We typically complete a share repurchase program before a new program becomes effective.