Visa 2009 Annual Report Download - page 103

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2009
(in millions, except as noted)
In March 2008, the Company completed its IPO with the issuance of 446,600,000 shares of class A common stock at a net offering price of $42.77 (the
IPO price of $44.00 per share of class A common stock, less underwriting discounts and commissions of $1.23 per share). The Company received net
proceeds of $19.1 billion from the IPO, of which $13.4 billion was used to partially redeem shares of class B and class C common stock in March 2008 and
$3.0 billion was used to fund the litigation Escrow Account as discussed below.
In October 2008, the remaining $2.7 billion in IPO proceeds were utilized to fund the redemptions of class C (series II) and class C (series III) common
stock. The Company used IPO proceeds to redeem all class C (series II) common stock, which was purchased for a cash payment of $1.138 billion and the
return to Visa Europe of the class C (series II) common stock subscription receivable outstanding. The Company also used $1.508 billion for redemptions of
35,263,585 shares of class C (series III) common stock at a redemption price of $42.77 per share as was required by the Company's certificate of
incorporation as then in effect. Following the October 2008 redemption, the remaining 27,499,203 shares of class C (series III) and class C (series IV)
common stock outstanding automatically converted into shares of class C (series I) common stock on a one-to-one basis. In December 2008, upon adoption of
the Fifth Amended and Restated Certificate of Incorporation, shares of class C (series I) common stock were designated as class C common stock with no
series designation.
Class B Common Stock
The class B common stock is not convertible or transferable until the later of March 25, 2011 or the date on which all of the covered litigation has been
finally resolved, although the Company's board of directors may make exceptions to this transfer restriction after resolution of all covered litigation. This
transfer restriction is subject to limited exceptions, including transfers to other class B stockholders. After termination of the restrictions, the class B common
stock will be convertible into class A common stock if transferred to a person that was not a Visa member or similar person or affiliate of a Visa member or
similar person. Upon such transfer, each share of class B common stock will automatically convert into a number of shares of class A common stock based
upon the applicable conversion rate in effect at the time of such transfer.
Funding of the Litigation Escrow Account
Immediately following the IPO in March 2008, the conversion rate applicable to class B common stock was reduced to 0.7143 class A share for each
class B share. The conversion rate was adjusted to reflect the initial deposit of $3.0 billion into the Escrow Account. Further adjustment of the conversion rate
occurs upon: (i) the completion of any follow-on offering of class A common stock completed to increase the size of the Escrow Account resulting in a further
corresponding decrease in the conversion rate; or (ii) the final resolution of the covered litigation and the release of funds remaining on deposit in the Escrow
Account to the Company resulting in a corresponding increase in the conversion rate. On December 16, 2008, the Company's stockholders approved and
adopted the Company's Fifth Amended and Restated Certificate of Incorporation which permits the Company greater flexibility in funding the Escrow
Account. See Note 4—Retrospective Responsibility Plan.
On December 19, 2008, the Company funded the Escrow Account with $1.1 billion, which reduced the conversion rate applicable to Visa's class B
common stock from 0.7143 class A share per class B share to 0.6296 class A share per class B share. With respect to the number of shares of class A
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