Visa 2014 Annual Report Download - page 46

Future sales of our class A common stock, or the end of transfer restrictions on our class B
common stock, could result in dilution to holders of our existing class A common stock, which
could adversely affect their rights and depress the market price of our class A common stock.
The market price of our class A common stock could fall as a result of many factors. Under our
retrospective responsibility plan, upon final resolution of our covered litigation, all class B common
stock will become convertible into class A common stock. Future offerings of our class A common
stock or the end of the transfer restrictions on our class B common stock would increase the number of
class A common stock outstanding, which could adversely affect the market price and dilute the voting
power of our existing class A common stock. The market price of our class A common stock may also
suffer from the perception that such an increase in the number of class A common stock outstanding
could occur in the future.
If funds are released from escrow after the resolution of the litigation covered by our
retrospective responsibility plan, the value of our class A common stock will be diluted.
Under our retrospective responsibility plan, funds still in the escrow account after the resolution of
all covered litigation will be released back to us. At that time, each share of class B common stock will
become convertible into shares of class A common stock, benefiting the holders of class B common
stock. This in turn will result in dilution of the interest of holders of class A common stock. The amount
of funds released and the market price of our class A common stock will determine the extent of the
dilution.
Holders of our class B and C common stock have voting rights concerning certain significant
corporate transactions, and their interests in our business may be different from those of
holders of our class A common stock.
Although their voting rights are limited, holders of our class B and C common stock can vote on
certain significant transactions. These include a proposed consolidation or merger, a decision to exit
our core payments business and any other vote required under Delaware law. The holders of these
shares may not have the same incentive to approve a corporate action that may be favorable to the
holders of class A common stock, and their interests may otherwise conflict with holders of class A
common stock.
Anti-takeover provisions in our governing documents and under Delaware law could delay or
prevent a takeover attempt or a change in control.
Provisions contained in our current certificate of incorporation, in our current bylaws and under
Delaware law could delay or prevent a merger or acquisition that our stockholders may consider
favorable. For instance, except for limited exceptions, no person may beneficially own more than 15%
of our class A common stock (or 15% of our total outstanding common stock on an as-converted
basis), unless our board of directors approves the acquisition of such shares in advance. In addition,
except for common stock previously issued in connection with our reorganization to Visa Members, as
defined in our current certificate of incorporation, no competitor or an affiliate of a competitor may hold
more than 5% of our total outstanding common stock on an as-converted basis.
Our ability to pay regular dividends to holders of our common stock in the future is subject to
the discretion of our board of directors and will be limited by our ability to generate sufficient
earnings and cash flows.
Since August 2008, we have paid cash dividends quarterly on our class A, B and C common
stock. The payment of dividends, if any, is subject to the discretion of our board of directors after taking
into account various factors, including, but not limited to, our financial condition, operating results,
capital requirements, covenants in our debt instruments and other factors that our board of directors
may deem relevant. If, as a result of these factors, we cannot generate sufficient earnings and cash
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