Visa 2008 Annual Report Download - page 44

Table of Contents
reflected in such holder's class A common stock that would result from the decrease in the total number of shares of class A common stock into which the
class B common stock may be converted after any potential adjustments, as the case may be. Such a deemed distribution would be characterized as a dividend
to such holder, for U.S. federal income tax purposes, to the extent the deemed distribution is treated as paid out of our current or accumulated earnings and
profits, as determined under U.S. federal income tax principles. Any remaining, portion of such a deemed distribution will be treated first as a tax-free return
of such holder's adjusted tax basis in our class A common stock and thereafter as gain. We will take the position that the potential adjustments do not give rise
to deemed distributions under Section 305 of the Code to holders of our class A common stock.
The trading market for our class A common stock could be adversely affected because provisions of our amended and restated certificate of
incorporation may limit the market-making ability of broker-dealers that are affiliated with Visa members.
Our amended and restated certificate of incorporation provides that no person that is a Visa member or affiliated with a Visa member will be permitted
to beneficially own more than 5% of the aggregate outstanding class A common stock or certain other voting stock (or securities convertible or exchangeable
into such stock) at any time, subject to a limited number of exceptions. This restriction may limit the ability of a broker-dealer that is affiliated with a Visa
member to act as a market-maker in our class A common stock, although this restriction will not prevent such a broker-dealer from executing trades on an
agency basis on behalf of third parties. This restriction could adversely affect the trading market for the class A common stock.
All shares of class A common stock acquired by a Visa member, an affiliate of a Visa member or a similar person will be converted automatically
into class C common stock and, as a result, will generally not be transferable until March 25, 2011 and will lose substantially all its voting rights.
All shares of common stock acquired by a Visa member, an affiliate of a Visa member or any person that is an operator, member or licensee of any
general purpose payment card system that competes with us, or any affiliate of such a person, in each case to the extent, acting as a principal investor, will be
converted automatically into class C common stock. Under the terms of our amended and restated certificate of incorporation, class C common stock is not
transferable (subject to exceptions, including transfers to other class C stockholders) until March 25, 2011, unless our board makes an exception to this
transfer restriction. After this date has passed, the class C common stock will be convertible into class A common stock only if transferred to a person that was
not, immediately after our October 2007 reorganization, a Visa member, an affiliate of a Visa member or any person that is an operator, member or licensee of
any general purpose payment card system that competes with the Company, or any affiliate of such a person. Upon such transfer, each share of class C
common stock will convert into one share of class A common stock.
Until March 25, 2011, six of our 17 directors will be individuals elected or nominated by our regions. In addition, holders of our class B common
stock and class C common stock have voting rights concerning certain significant corporate transactions, and their interests in our business may be
different than those of holders of our class A common stock.
Our amended and restated certificate of incorporation provides that, until March 25, 2011, six of our 17 directors will be individuals elected or
nominated by our regions. Although holders of class B and class C common stock do not have any right to vote on those matters on which stockholders
generally are entitled to vote, such holders have the right to cast a number of votes equal to the number of shares of class B common stock or class C common
stock, as applicable multiplied by the
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