1
Exhibit 3.2(b)
BYLAWS
PREAMBLE
AMENDED AND RESTATED BYLAWS OF MASTERCARD INTERNATIONAL
INCORPORATED (THE "CORPORATION")
================================================================================
PREAMBLE
The purposes for which this Corporation is formed shall include the following:
1. To facilitate the interchange of card privileges on an international
basis.
2. To facilitate the entry into the card businesses by members and
prospective members without regard to size and at minimum risk and cost.
3. To promote the development of sound practices in the operation of the card
programs of its members by establishing high standards.
2
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
ARTICLE I--MEMBERSHIP
SEC.1 ELIGIBILITY. The following are eligible to become Class A Members or
Affiliate Members of this Corporation:
(a) Effective for entities applying for membership on or after 15 July
1993, any corporation or other organization that is a financial
institution that is authorized to engage in financial transactions
under the laws and/or government regulations of the country, or any
subdivision thereof, in which it is (i) organized or (ii)
principally engaged in business. "Financial transactions" for
purposes of this section shall mean the making of commercial or
consumer loans, the extension of credit, the effecting of
transactions with payment services cards, the issuance of travelers
cheques, or the taking of consumer or commercial deposits. Any such
financial institution must have the requisite right, power, and
authority, corporate and otherwise, to function as a member of this
Corporation and to engage in any activities contemplated by that
financial institution that would utilize one or more of this
Corporation's marks (each, a "Mark") and services. Any such
financial institution also must be regulated and supervised by one
or more governmental authorities and/or agencies authorized and
empowered to establish and/or enforce rules regarding financial
transactions and the financial condition, activities, and practices
of entities engaging in such financial transactions. With respect to
any financial institution that does not take deposits, it shall be a
further requirement that financial transactions constitute
substantially all of the business conducted by such institution. In
the event any of the foregoing eligibility criteria would violate
the laws or regulations of any country, then the Board of Directors
may adopt, consistent with the safety and soundness objectives
reflected above, by a two-thirds vote, eligibility criteria that
comply with the laws and regulations of such country. The Board of
Directors, by a two-thirds vote, shall have the right, but not the
obligation, to modify the above membership eligibility criteria on a
regional or country-by-country basis for any reason. Notwithstanding
the foregoing, a Regional Board of MasterCard Incorporated or any
other entity responsible for licensing within a region (hereinafter
"Membership Entity") shall have the right to propose different
membership eligibility criteria on a regional or country-by-country
basis, which eligibility criteria shall not become effective until
approved by a two-thirds vote of the Board of Directors. Any region
or country specific membership eligibility criteria that are so
adopted shall be set forth as an exhibit to these bylaws. A
subsequent amendment of such eligibility criteria shall require a
two-thirds vote of the Board of Directors. Furthermore, any such
membership eligibility criteria so adopted may be withdrawn by the
Board of Directors by a majority vote; provided that, as part of
such vote, at least two-thirds of the directors who are not from the
region with the eligibility criteria at issue have voted to withdraw
such criteria.
2
3
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
(b) Any entity that is directly or indirectly controlled by one or more
members described in Article I, Section 1 (a) and that is engaged,
or proposes to engage, on behalf of or through one or more of those
members in operating programs utilizing one or more of this
Corporation's Marks or its services and related activities.
SEC.2 APPLICATION FOR CLASS A MEMBERSHIP OR AFFILIATE MEMBERSHIP.
(a) Any financial institution or other entity eligible for membership as
provided in Article I, Section 1, may apply to become a Class A
Member or Affiliate Member of this Corporation in the class or
classes that it may elect and for which it is eligible under Article
I, Section 3. Applications for Class A Membership or Affiliate
Membership must be made in the form and include all of the
information that the Board of Directors may from time to time
require. An application must be accompanied by the correct licensing
and initiation fee or fees.
(b) An applicant for Class A Membership or Affiliate Membership in any
class must agree, and by execution and submission of an application
for Class A Membership or Affiliate Membership it shall have agreed,
that it will comply with all applicable provisions of the
Certificate of Incorporation, bylaws, rules and regulations, and
published policies of this Corporation as in effect from time to
time.
(c) A completed application for Class A Membership or Affiliate
Membership must, if practical, be considered at the next regularly
scheduled meeting of the Board of Directors, or, if applicable, of
the Regional Board or board of a Membership Entity, after receipt of
the application.
(d) A majority vote of the directors present at a meeting of the Board
of Directors is required to elect an applicant to Class A Membership
or Affiliate Membership. The foregoing notwithstanding, if election
to Class A Membership or Affiliate Membership in this Corporation in
a region has been delegated to a Regional Board of the Class B
member (a "Regional Board"), a majority vote of the directors
present at a meeting of the Regional Board is required to elect an
applicant to Class A Membership or Affiliate Membership. The action
taken on all applications must be recorded in the minutes of the
meeting of the Board of Directors that acted upon it and, if any
application is disapproved, the reasons therefor must be stated in
those minutes.
3
4
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
(e) Prior to consideration of a Class A Membership or Affiliate
Membership application by the Board of Directors, or, if applicable,
a Regional Board, the President of this Corporation or his designee
may permit, in the absolute discretion of that person, any eligible
applicant that has submitted a properly completed Class A Membership
or Affiliate Membership application, including the appropriate
license agreement or agreements, to utilize this Corporation's
Marks, and to participate in this Corporation's activities as if it
were a Class A Member or Affiliate Member, but with no right to vote
during that interim period. Any such interim authorization is
subject to the subsequent approval or disapproval of the application
by the Board of Directors or, if applicable, the Regional Board.
Prior to being granted such authorization, the applicant must agree,
and by commencement of MasterCard activities it shall have agreed,
to comply during this interim period (and thereafter as necessary)
with the applicable bylaws, rules and regulations, and published
policies of this Corporation and to discontinue immediately any such
utilization and participation if its application is not approved.
All damages, losses, and liability arising directly or indirectly,
or consequentially, from any interim utilization and participation
and from the disapproval will be solely at the applicant's risk and
expense, and neither this Corporation nor its Board of Directors nor
any Regional Board shall have any responsibility for those damages,
losses, or liabilities.
SEC.3 MEMBERSHIP; CLASSES; OBLIGATION TO BECOME MEMBER.
(a) OBLIGATION TO PARTICIPATE. Each member of this Corporation must
participate in one or more classes of membership. The classes of
membership are card membership and travelers cheque membership.
(b) The following are the classes of membership in this Corporation:
CARD MEMBERSHIP. Each card member shall participate in the card activities
of this Corporation using the MasterCard Mark and other such Marks that
the card member is authorized to use (each, an "Authorized Mark"). There
are the following categories of card membership:
(i) ASSOCIATION MEMBER--an entity that is eligible for, and is
elected by the Board of Directors to, membership pursuant to
Sections 1 (b) and 2 (d), respectively, of this Article I and
that participates or proposes to participate directly in the
card activities of this Corporation. An Association Member
shall be a Class A Member of this Corporation.
(ii) PRINCIPAL MEMBER--a financial institution that is eligible
for, and is elected by the Board of Directors to, membership
pursuant to Sections 1 (a) and 2 (d), respectively, of this
Article I and that participates or
4
5
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
proposes to participate directly in the card activities of
this Corporation. A Principal Member shall be a Class A Member
of this Corporation.
(iii) AFFILIATE MEMBER--financial institution or other entity that
is eligible for, and is elected by the Board of Directors to,
membership pursuant to Article I, Sections 1 and 2 (d), and
that participates or proposes to participate indirectly
through an association member or a principal member, in the
card activities of this Corporation.
TRAVELERS CHEQUE MEMBERSHIP. Travelers Cheque Member--a financial
institution or other entity that is eligible for, and is elected by the
Board of Directors to, membership pursuant to Article I, Sections 1 and 2
(d), respectively, and that participates or proposes to participate
directly in the travelers cheque program of this Corporation. A Travelers
Cheque Member shall be a Class A Member of this Corporation.
Each travelers cheque member may have one or more entities, financial or
otherwise, affiliated with it for the purpose of the travelers cheque
program. These affiliated entities will not be travelers cheque members.
(c) OBLIGATION TO BECOME MEMBER. Subject to Article I, Section 2(e), a
financial institution or other entity that is eligible for
membership as provided in Section 1 of this Article I shall not
participate in any of the card activities of this Corporation nor
use any of the Marks unless and until it becomes a card member of
this Corporation in accordance with Section 7.03 of CHAPTER 7 of the
BYLAWS AND RULES manual.
Subject to Article I, Section 2(e), a financial institution or other
entity that is eligible for membership as provided in Section 1 of this
Article I shall not participate in any of the travelers cheque activities
of this Corporation nor use any of the travelers cheque trademarks of this
Corporation unless and until it becomes a travelers cheque member of this
Corporation, except those entities affiliated with a travelers cheque
member's program, as provided in Article I, Section 3 (b).
SEC.4 GENERAL OBLIGATIONS OF MEMBERSHIP. Each member must comply with the
following obligations of membership:
(a) Each member shall provide, upon request, to this Corporation, or its
designee, information with respect to any of the member's programs
utilizing the Marks, except that compliance with the foregoing shall
not require any member to furnish any information, the disclosure of
which, in the opinion of this Corporation's independent outside
legal counsel, is likely to create a significant potential legal
risk to this Corporation and/or its member(s). Each travelers
cheques member shall also be required to disclose such information
as to entities affiliated with it for the purpose of its travelers
cheques program. To the extent that such information is the member's
proprietary information, it shall be treated
5
6
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
with the degree of care deemed (i) appropriate based upon the
sensitivity of the information and (ii) necessary to maintain its
confidentiality. Such degree of care shall under no circumstances be
less than that which this Corporation accords its own proprietary
information.
(b) Each member shall promptly pay to this Corporation all fees, dues,
assessments, and other obligations when due.
(c) Each member shall comply in all respects with all bylaws, rules and
regulations, and published policies of this Corporation in effect
from time to time.
SEC.5 SPECIFIC OBLIGATIONS OF CARD MEMBERSHIP.
(a) Within one year of becoming a member and at all times thereafter,
each association member and principal member must itself, taken
together with its affiliate members as if they were a single card
member, have satisfied the minimum obligations of its category of
card membership as established from time to time by the Board of
Directors and as set forth in CHAPTER 7 of the MasterCard BYLAWS AND
RULES manual.
(b) Each card member shall at all times meet the minimum financial
requirements established by the Board of Directors for all members.
The Board of Directors, in its discretion, may establish different
or additional financial requirements for (i) a category of financial
institutions, organizations, or corporations that are described in
Article I, Section 1, or (ii) an individual member or prospective
member of this Corporation in the manner set forth in Section 7.07
of CHAPTER 7 of the BYLAWS AND RULES manual, so long as the Board of
Directors determines that different or additional requirements are
reasonably required to evidence the financial integrity of that
category of financial institutions, corporations, or other
organizations or of an individual member or prospective member of
this Corporation.
(c) Each card member shall, in accordance with this Corporation's rules
and regulations and published policies:
(i) Accept records of transactions arising from the use of
MasterCard cards issued by other members from any of its
merchants that it has authorized to honor MasterCard cards,
and require all such merchants to honor all properly presented
MasterCard cards without discrimination;
(ii) Accept and pay for records of transactions received from other
members arising from the use of any MasterCard cards issued by
it;
(iii) Give cash disbursements without discrimination to all holders
of properly presented MasterCard cards; and
6
7
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
(iv) Provide authorization service respecting its own cards for
other members, and provide authorization service for any
merchants that it has authorized to honor MasterCard cards
(each such merchant must not have at any given time more than
one telephone number to call for authorizations for MasterCard
cards unless the President or his designee has authorized the
use of more than one such number after a determination that
the multiplicity of numbers will not cause merchant
confusion).
(d) Each card member must actively promote this Corporation's card
program.
(e) Each card member must comply in all respects with (i) the rules,
regulations, and other directives associated with the MasterCard
Marks as may be amended from time to time, including, but not
limited to, the MasterCard BYLAWS AND RULES manual, the
MasterCard/Cirrus ATM Participation Rules and the Cirrus WORLDWIDE
OPERATING RULES and (ii) the rules and regulations adopted in
connection with the Authorized Marks as such term is defined in
Article I, Section 3(b).
(f) Notwithstanding the foregoing requirements, no provision of these
bylaws or of the rules and regulations or published policies of this
Corporation requires any card member to undertake any activity that
is prohibited by applicable law or regulation. However, the Board of
Directors may require a member to undertake a reasonable and not
prohibited activity in the place of any prohibited activity.
(g) Each association and principal member that has members affiliated
with it must cause each of its affiliate members to comply with the
obligations of card membership of this Corporation that are
applicable to that affiliate, and the association and principal
member will be liable to this Corporation and to all other members
for all activities of its affiliate members with respect to card
programs operated and activities engaged in by such affiliate
members through the association or principal member including,
without limitation, any failure by the affiliate member to comply
with the obligations of card membership. If any member affiliated
with an association or principal member ceases that affiliation, the
association or principal member will nonetheless be obligated
pursuant to the rules and regulations and published policies of this
Corporation to acquire from other members records of transactions
arising, whether before or after the cessation, from the use of
MasterCard cards issued by that former affiliate member.
(h) Except to the extent any such liability or obligation has been
previously satisfied by its principal member, each affiliate member
shall be responsible for the liabilities and obligations arising out
of, or in connection with, its card programs, irrespective of any
(i) action taken by it to satisfy such liability or
7
8
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
obligation with the principal member or (ii) agreements between the
principal and affiliate member.
SEC.6 SPECIFIC OBLIGATIONS OF TRAVELERS CHEQUE PROGRAM MEMBERSHIP.
(a) Each travelers cheque member must commit to sell
MasterCard(R) Travelers Cheques.
(b) Each travelers cheque member is responsible for the payment of all
MasterCard Travelers Cheques that it issues unless otherwise
provided herein or in the MasterCard Travelers Cheques Operating
Rules and shall maintain sufficient financial equity to ensure that
its travelers cheques will be paid and shall comply with all
applicable banking and other laws and regulations and the Travelers
Cheques Operating Rules. With respect to such travelers cheques
members, the Board of Directors may establish different or
additional financial requirements (i) for a category of financial
institutions, corporations, or other organizations that are
described in Section 1 of this Article I or (ii) an individual
member or prospective member of this Corporation, so long as the
Board of Directors determines that different or additional
requirements are reasonably required to evidence the financial
integrity of that category of financial institutions, corporations
or other organizations, or of an individual member or prospective
member of this Corporation.
(c) Each travelers cheque member must invest the proceeds of sales of
travelers cheques in accordance with good banking practice and in
compliance with all applicable banking and other laws and
regulations and the Travelers Cheque Operating Rules.
(d) Each travelers cheque member must in accordance with the Travelers
Cheque Operating Rules:
1. issue and sell MasterCard Travelers Cheques;
2. issue MasterCard Travelers Cheque refunds;
3. accept and cash MasterCard Travelers Cheques;
4. provide authorization and investigation services regarding
MasterCard Travelers Cheques.
(e) Each travelers cheque member must actively promote the MasterCard
Travelers Cheque program.
SEC.7 TRANSFERABILITY OF MEMBERSHIP. Membership in this Corporation is not
transferable or assignable, whether by sale, consolidation, merger,
operation of law, or otherwise.
8
9
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
SEC.8 OTHER PROGRAMS.
(a) No card member that is also involved in another card program may
discriminate against this Corporation or its card members in favor
of the other program. A card member is not required to participate
in any other program of any type offered by this Corporation or by
any other organization.
(b) A travelers cheque member is not required to participate in any
other program of any type offered by this Corporation or by any
other organization.
SEC.9 VOLUNTARY TERMINATION OF MEMBERSHIP.
(a) A member may withdraw as a card member or as a travelers cheque
member or as both; a member that is a member of more than one class
of membership may withdraw from one or more class or classes of
membership and remain a member in another class of membership.
(b) In order to withdraw from one or more classes of membership, the
member must give written notice addressed to the President or the
Secretary of this Corporation, preferably by registered or certified
mail, return receipt requested, but any other manner of delivery may
be used. The notice must, with reasonable clarity, state that it is
a notice of termination and must be received by the President or the
Secretary. The notice must:
(i) specify the class or classes of membership from which the
member is withdrawing;
(ii) fix a date on which a withdrawal from a class of membership
will be effective, and this date must be at least 30 days
after the notice was received by this Corporation; and
(iii) be otherwise in the form as may be required from time to time
by the Board of Directors.
SEC.10 INVOLUNTARY TERMINATION OF MEMBERSHIP. A member may be expelled from card
membership or from travelers cheque membership, or from any or all
classes of membership, by the affirmative vote of two-thirds of the
entire Board of Directors. The expulsion will be effective upon delivery,
or an inability to deliver after a reasonable attempt to do so, of
written or actual notice, and the written notice must be provided
expeditiously and promptly after the Board of Directors has voted the
expulsion. The reasons for the expulsion must be stated with reasonable
specificity in the notice and in the minutes of the meeting at which the
action was taken.
9
10
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
SEC.11 AUTOMATIC TERMINATION OF MEMBERSHIP. A member's membership in all
classes of membership in this Corporation shall automatically terminate
forthwith if:
(a) the member suspends payments within the meaning of Article IV of the
Uniform Commercial Code as in effect at the time in the State of
Delaware, regardless of whether, in fact, the member is subject to
the provisions thereof; or
(b) the member takes the required action by vote of its directors,
stockholders, members, or other persons with the legal power to do
so, or otherwise acts, to cease operations and to wind up the
business of the member, such membership termination to be effective
upon the date of the vote or other action; or
(c) the member fails or refuses to make payments in the ordinary course
of business or becomes insolvent, makes an assignment for the
benefit of creditors, or seeks the protection, by the filing of a
petition or otherwise, of any bankruptcy or similar statute
governing creditors' rights generally; or
(d) the government or the governmental regulatory authority having
jurisdiction over the member serves a notice of intention to suspend
or revoke, or suspends or revokes, the operations or the charter of
the member; or
(e) a liquidating agent, conservator, or receiver is appointed for the
member, or the member is placed in liquidation by any appropriate
governmental, regulatory, or judicial authority.
A card member's license authorizing it to use one or more Authorized Marks
shall terminate in the event the member fails to actively participate in
card activities using such Authorized Mark. If all of a member's licenses
are terminated, card membership is automatically terminated on the
effective date of termination of the last remaining license.
The travelers cheques membership of an entity shall automatically
terminate in the event of termination of its license authorizing it to use
the MasterCard trademark in its travelers cheques program.
SEC.12 LIABILITIES OF TERMINATED MEMBERS.
(a) A member whose membership in any class is terminated:
(i) shall have no further rights after the effective date of that
termination as a member in that class, except as may be
provided in the rules and regulations and published policies
of this Corporation applicable to that class in order to
permit the orderly winding up of its business as a member of
that class;
10
11
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
(ii) shall not be entitled to any refund of dues, fees,
assessments, or other payments and will remain liable for, and
must promptly pay to this Corporation (a) any and all
applicable dues, fees, assessments, or other charges as
provided in these bylaws or as may be specified in the
applicable rules and regulations and published policies of
this Corporation and (b) all other charges, debts,
liabilities, and other amounts arising or owed in connection
with the member's program(s), whether arising, due, accrued,
or owing before or after termination of such membership;
(iii) shall continue to remain liable for the period that may be
specified in, and in accordance with, the applicable rules and
regulations and published policies of this Corporation to
other members for all obligations arising, whether before or
after the membership termination, from the use of any cards
bearing any of the Marks issued by it, or any travelers
cheques issued or sold by it;
(iv) must promptly take appropriate action, in accordance with the
applicable rules and regulations and published policies of
this Corporation to give notice of the termination to the
holders of cards bearing any of the Marks issued by it as a
member of the class in which its membership is terminated and
to its merchants that it has authorized to honor cards bearing
any of the Marks or, in the case of a terminated travelers
cheque member, to give notice of the termination to those
organizations and institutions affiliated with it;
(v) must forthwith cancel such cards; and,
(vi) take such further action as may be required of a terminated
member hereunder and under the applicable rules and
regulations and published policies of this Corporation, or as
may be required of the terminated member by the Board of
Directors of this Corporation.
(b) If an association or principal member that has affiliate members
terminates its membership in one or more classes of membership, the
terminated member must cause each of the affiliate members (that are
of the same class or classes with respect to which the membership of
the association or principal member has terminated) to take the
actions required of a terminated member under this Article I,
Section 12 unless that affiliate member promptly becomes an
affiliate of another association or principal member of the same
class or itself becomes an association or principal member of the
same class.
11
12
BYLAWS
ARTICLE I--MEMBERSHIP
================================================================================
(c) An applicant that has been authorized to use an Authorized Mark and
to participate in the activities associated with such an Authorized
Mark on an interim basis pursuant to this Article I, Section 2(c),
but whose application is not approved, is subject to the provisions
of this Article I, Section 12, except that all initiation and
membership fees paid in connection with the denied application must
be promptly returned to the applicant.
SEC.13 EXAMINATION AND AUDITS OF MEMBERS. The Board of Directors, in its sole
discretion, and without having any duty to do so, may from time to time
order an audit or other examination of any member. Any financial audit
will be conducted by independent accountants selected by the Board of
Directors, and the standards and scope of that audit will be established
by the Board of Directors. All fees and expenses incurred in connection
with any examination or audit will be paid by the member that was
examined or audited. Neither persons on the Board of Directors nor this
Corporation nor its employees will be liable or responsible in any manner
to any or all of the members of this Corporation or to others for any
failure to cause any examination or audit to be conducted or for any
action or failure to take action following such examination or audit.
SEC.14 LICENSES. Each successful applicant for membership shall, as a
condition of such membership, execute the then-effective license
applicable to the class of membership to which it has been elected and
assist MasterCard in recording such license if required in the country of
license. With respect to individual applicants for membership, the Board
of Directors or Regional Board, as the case may be, may add additional
requirements or limitations to the standard member license as it
reasonably deems appropriate. Any entity using any of the Marks must have
a license or other written authorization from this Corporation to do so
or must be using such Mark pursuant to authorization from an entity
having the power to authorize it to do so.
12
13
BYLAWS
ARTICLE II--BOARD OF DIRECTORS
================================================================================
ARTICLE II--BOARD OF DIRECTORS
SEC.1 POWERS. The business of this Corporation will be managed by the Board of
Directors, which may exercise all of the powers of this Corporation and do
all lawful acts and things as are not (i) by statute, the Certificate of
Incorporation, or these bylaws directed or required to be exercised or
done by the members or (ii) specifically delegated as provided in the
Bylaws of this Corporation.
SEC.2 ELECTION; VACANCIES; TERM OF OFFICE. Subject to this Corporation's
Certificate of Incorporation, the directors will be elected by the Class B
Member at the annual meeting of members.
SEC.3 NUMBER. The authorized number of directors constituting the entire Board
of Directors shall be equal to such number of directors as are authorized
to constitute the entire Board of Directors of MasterCard Incorporated.
SEC.4 COMPENSATION OF DIRECTORS. Directors shall receive such compensation from
this Corporation as the Board of Directors may from time to time
establish.
SEC.5 QUORUM. The presence of not less than a majority of the total number of
directors entitled to vote at any meeting shall be necessary and
sufficient to constitute a quorum for the transaction of business at such
meeting. Except as otherwise provided by law or these bylaws, the vote of
a majority of the voting directors present shall decide any question that
may come before the meeting. A majority of the voting directors present at
any meeting, although less than a quorum, may adjourn the meeting from
time to time without notice other than announcement at the meeting.
SEC.6 PROCEDURE. The order of business and all other matters of procedure at
every meeting of the Board of Directors may be determined by the presiding
officer.
SEC.7 MEETINGS OF THE BOARD OF DIRECTORS.
(a) The first meeting of each newly-elected Board of Directors shall be
held immediately following the annual meeting of members. If the
meeting is held at the place of the meeting of members, then no
notice of the meting need be given to the newly-elected directors.
If the first meeting is not held at that time and place, then it
shall be held at a time and place specified in a notice given in the
manner provided for notice of special meetings of the Board of
Directors as set forth in Section 7(c) of this ARTICLE II.
(b) Regular meetings of the Board of Directors may be held upon such
notice, or without notice, at such times and at such places within
or outside of the State of Delaware as shall from time to time be
determined by the Board of Directors.
(c) Special meetings of the Board of Directors, whether to be held in
person or by telephone or similar communications equipment, may be
called by the Chairman
13
14
BYLAWS
ARTICLE II--BOARD OF DIRECTORS
================================================================================
of the Board of Directors or the President and Chief Executive
Officer on at least five days' notice to each Director and shall be
called by the Chairman or the President and Chief Executive Officer
upon the written request of not less than 33 1/3% of the entire
Board of Directors; provided, however, that any meeting called to
consider a matter that requires the immediate action of the Board of
Directors and that does not require the approval of greater than a
simple majority of the Directors may be called on at least 24 hours'
notice.
(d) Whenever notice of a meeting of the Board of Directors is required,
the notice shall be given in the manner set forth in Section 7(e) of
this ARTICLE II and shall state the purpose or purposes, place, date
and hour of the meeting.
(e) Any notice to a director may be given personally, by telephone, by
mail, facsimile transmission, telex, telegraph, cable or similar
instrumentality or electronic transmission to such director's
residence or usual place of business. A notice will be deemed given
when actually given in person or by telephone; when transmitted by a
legible transmission, if given by facsimile transmission; when
transmitted, answerback received, if given by telex; on the day when
delivered to a cable or similar communications company; three
business days after delivery to a courier service; or on the fifth
business day after the day when deposited with the United States
mail, postage prepaid, directed to the director at his business
address, facsimile number, electronic mail address or telex number
or at such other address, facsimile number, electronic mail address
or telex number as the director may have designated to the Secretary
in writing as the address or number to which notices should be sent.
Notice given by any form of electronic transmission shall be deemed
given when directed to the director.
(f) Any director may waive notice of any meeting by signing a written
waiver or by electronic transmission, whether before or after the
meeting. In addition, attendance at a meeting will be deemed a
waiver of notice unless the director attends for the purpose,
expressed to the meeting at its commencement, of objecting to the
transaction of any business because the meeting is not lawfully
called or convened.
SEC.8 ENFORCEMENT OF PAYMENT OF FEES, ASSESSMENTS, AND OTHER OBLIGATIONS. The
Board of Directors may apply any sums due to a member from this
Corporation toward payment of any fees, assessments, and other
obligations owed to this Corporation by that member or its affiliates.
SEC.9 ADOPTION OR AMENDMENT OF RULES AND REGULATIONS. Except as otherwise
provided herein or as specifically delegated by the Board of Directors or
except as provided in a rule or in rules approved by the Board of
Directors, only the Board of Directors may adopt or amend the rules and
regulations.
14
15
BYLAWS
ARTICLE II--BOARD OF DIRECTORS
================================================================================
SEC.10 APPROVAL OF INDEBTEDNESS. In addition to the authority of the Board of
Directors, the Executive Committee, if formed, shall have the authority
to approve the guarantee of indebtedness for money borrowed by this
Corporation. This Corporation shall not incur or guarantee any
indebtedness for money borrowed except with the prior approval of either
the Executive Committee or Board of Directors in any specific case,
unless pursuant to a written policy approved by the Executive Committee
or Board of Directors. In the event of approval by the Executive
Committee of indebtedness by this Corporation as contemplated above, the
Board of Directors shall be informed of such action at its next Board
meeting; however, the provision of, or failure to provide, such
information to the Board of Directors shall not affect the validity of
such indebtedness.
15
16
BYLAWS
ARTICLE II--BOARD OF DIRECTORS
================================================================================
SEC.11 MEETINGS BY CONFERENCE TELEPHONE. Directors, and directors serving
on committees of the Board of Directors, may participate in a meeting of
the Board, or the committee, by means of conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other. Such participation will constitute
presence in person at that meeting for the purpose of constituting a
quorum and for all other purposes. The place of any meeting held pursuant
to this Section 11 will be deemed to be the place stated in the notice
thereof so long as at least one director or, as the case may be, one
committee person, is present at that place at the time of that meeting.
SEC.12 ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if all members of the Board or
the committee, as the case may be, who are entitled to vote, consent
thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or of that committee.
16
17
BYLAWS
ARTICLE III--OFFICERS
================================================================================
ARTICLE III--OFFICERS
SEC.1 ELECTION AND APPOINTMENT. Subject to the provisions of Section 1(a)
below regarding the election and term of the Chairman of the Board of
Directors, the Board of Directors shall, annually at its first meeting
following the annual meeting of stockholders, elect a Chairman of the
Board of Directors, a President and Chief Executive Officer and a
Secretary; and the Board of Directors may at that meeting, and thereafter,
elect a Chairman Emeritus, Chief Operating Officer, up to two
vice-chairmen of the Board of Directors, a Treasurer and such other
officers as it may from time to time deem advisable. Except as prohibited
by law, any two or more offices may be held by the same person. No officer
except the Chairman of the Board of Directors, the Vice-Chairmen, if any,
and the President and Chief Executive Officer need be a Director of the
Corporation.
(a) THE CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the Board of
Directors shall be elected to an initial term of two years and shall be
eligible to be reelected annually thereafter. The Chairman of the Board of
Directors shall preside at all meetings of the members of the Board of
Directors and shall perform such other duties as are properly assigned to
him by the Board of Directors.
(b) THE VICE CHAIRMAN OF THE BOARD OF DIRECTORS. The Board of Directors
may elect up to two Vice Chairmen of the Board of Directors. The Vice
Chairmen shall have such powers assigned to them by the Chairman or by the
Board of Directors. In the absence of the Chairman, the Chairman shall
designate one of the Vice Chairmen to preside at meetings of the Board of
Directors.
(c) THE CHAIRMAN EMERITUS. The Corporation may have a Chairman Emeritus
who shall be elected by the Board of Directors and shall be entitled to
receive notice of all meetings of the Board of Directors and shall be
permitted to attend and participate in all meetings of the Board of
Directors, but shall not be entitled to vote. The Chairman Emeritus must
have retired as an officer of a member of the Corporation while serving as
a member of the Board of Directors of the Corporation and must have served
as Chairman of the Board of Directors of the Corporation for at least two
years.
(d) THE PRESIDENT AND CHIEF EXECUTIVE OFFICER. The Corporation shall have
a President who also shall be the Chief Executive Officer of the
Corporation. The President shall have general overall supervision of all
business of the Corporation and shall have such powers and duties as
usually pertain to such office or as may be assigned to him by the Board
of Directors. In the absence of the Chairman and the Vice-Chairmen, the
President shall perform the duties and exercise the powers of the Chairman
of the Board of Directors.
(e) THE CHIEF OPERATING OFFICER. The Corporation may have a Chief
Operating Officer who shall be elected by the Board of Directors. The
Chief Operating Officer shall report directly to the President and Chief
Executive Officer and shall have such
17
18
BYLAWS
ARTICLE III--OFFICERS
================================================================================
responsibilities as shall be assigned from time to time by the President
and Chief Executive Officer.
(f) THE TREASURER. The Corporation may have a Treasurer who shall be
elected by the Board of Directors. The Treasurer shall have the care and
custody of all moneys and securities of the Corporation. S/he shall cause
to be entered in records to be kept for that purpose full and accurate
accounts of all moneys received by her/him and paid by her/him on account
of the Corporation. S/he shall make and sign such reports, statements and
documents as may be required by her/him of the Board of Directors or by
the laws of the United States, the State of Delaware or any other state or
country, and shall perform such other duties as usually pertain to such
office or as may be assigned to him/her by the Board of Directors. The
Treasurer shall be bonded in the manner and amount prescribed by the Board
of Directors. The reports and records of the Treasurer shall be audited as
of the end of each fiscal year and at such other times as the Board of
Directors may direct by independent certified public accountants selected
by the Board of Directors or by a committee of members designated by the
Chairman of the Board of Directors with the approval of the Board of
Directors.
(g) THE SECRETARY. The Corporation shall have a Secretary who shall be
elected by the Board of Directors. The Secretary shall issue notices of
meetings of members and of the Board of Directors when such notices are
required by law or these Bylaws. The Secretary shall attend all meetings
of the members and of the Board of Directors and keep the minutes thereof.
S/he shall affix the Corporation's seal to such instruments as require the
seal and shall perform such other duties as usually pertain to such office
or as may be assigned to her/him by the Board of Directors or as may
otherwise be provided for in these Bylaws.
SEC.2 TERM OF OFFICE. Subject to the provisions of Section 1(a) above regarding
the election and term of the Chairman of the Board of Directors, each
officer shall be elected by the Board of Directors and shall hold office
until the earliest of such individual's death, resignation, removal or the
first meeting of the Board of Directors following the next annual meeting
of stockholders. Any officer may be removed at any time, either with or
without cause, by the Board of Directors. If any office becomes vacant for
any reason, the vacancy may be filled by the Board of Directors.
SEC.3 RESIGNATIONS. Any officer may resign at any time by giving written notice
to the Board of Directors or to the President and Chief Executive Officer.
Such resignation shall take effect at the time specified in the notice or,
if no time is specified, at the time of receipt of the notice, and the
acceptance of such resignation shall not be necessary to make it
effective.
SEC.4 SECURITY. The Corporation may secure the fidelity of any or all of its
officers or agents by bond or otherwise. In addition, the Board of
Directors may require any officer, agent or employee to give security for
the faithful performance of his duties.
18
19
BYLAWS
ARTICLE III--OFFICERS
================================================================================
SEC.5 TEMPORARY TRANSFER OF POWERS AND DUTIES. In the event of an absence or
illness of any officer, or for any other reason that the Board of
Directors or the President and Chief Executive Officer may deem
sufficient, the Board of Directors or the President and Chief Executive
Officer may temporarily assign the powers and duties of that officer to
any other officer or to any Director.
19
20
BYLAWS
ARTICLE III--OFFICERS
================================================================================
SEC.6 COMPENSATION. The compensation of the elected officers shall be fixed by
the Board of Directors or a committee thereof. The compensation of other
employees of the Corporation shall be fixed by the President and Chief
Executive Officer (subject to the oversight of the Board of Directors).
All employee incentive programs shall be approved by the Board of
Directors or a committee thereof.
20
21
BYLAWS
ARTICLE IV--COMMITTEES
================================================================================
ARTICLE IV--COMMITTEES
SEC.1 DIRECTORS' COMMITTEES. The Board of Directors may designate from among its
members an Executive Committee, Audit Committee, Compensation Committee
and other committees to serve at the pleasure of the Board of Directors.
If the Board of Directors designates an Executive Committee, Audit
Committee or Compensation Committee, and there exists a corresponding
committee of the Class B Member, such committee shall have the same
members as, and authorities similar to, the corresponding committee of the
Class B Member. Any other committees, to the extent formed, shall have
such authority as the Board of Directors grants them. The Board of
Directors shall have power at any time to change the membership of any
committees, to fill vacancies in their membership and to discharge any
committees.
SEC.2 CARD STANDING COMMITTEES. The President of this Corporation may appoint as
many representatives of the members as he determines to the standing
committees described below to consider card matters, and all persons
appointed to these standing committees serve on them at the pleasure of
the President. In selecting representatives for these committees, the
President shall seek to include persons with experience and levels of
expertise appropriate for the subject matter of the particular committee
and shall also seek to include representatives of members from various
regions in order to reflect the Corporation's global nature.
(a) INTERNATIONAL OPERATIONS COMMITTEE. The International Operations
Committee will analyze procedural and operational problems involved
in the worldwide interchange of card privileges among card members
and report its conclusions and recommendations to the President.
(b) INTERNATIONAL SECURITY COMMITTEE. The International Security
Committee will investigate security problems involved in the
worldwide interchange of card privileges among card members and
report its conclusions and recommendations to the President.
SEC.3 PROCEDURES. Each committee shall keep regular minutes of its proceedings
and report to the Board of Directors as and when the Board of Directors
shall require. Unless the Board of Directors otherwise provides, notice
requirements for meetings of committees shall be the same as notice
requirements for meetings of the Board of Directors. Unless the Board of
Directors otherwise provides, a majority of the members of any committee
may determine its actions and the procedures to be followed at its
meetings (which may include a procedure for participating in meetings by
conference telephone or similar communications equipment by which all
persons participating in the meeting can hear each other).
SEC.4 NOTICE OF DIRECTORS' COMMITTEES MEETINGS. Unless the Board of Directors
directs otherwise, notice requirements for meetings of directors'
committees shall be the same
21
22
BYLAWS
ARTICLE IV--COMMITTEES
================================================================================
as notice requirements for meetings of the Board of Directors as set forth
in Article II, Sections 6 and 8.
22
23
BYLAWS
ARTICLE V--MEETINGS
================================================================================
ARTICLE V--MEETINGS
SEC.1 ANNUAL MEETING OF MEMBERS. The annual meeting of members, for the election
of directors and for the transaction of such other business as may
properly come before the meeting, shall be held at such date and time as
may be fixed by the Board of Directors, at the principal business office
of this Corporation, or at such other place as the Board of Directors
shall determine.
SEC.2 SPECIAL MEETINGS OF MEMBERS. Special meetings of members, except as
otherwise provided by law, may be held at the principal business office of
this Corporation or elsewhere, and may be called at any time by a written
request of one-third of the Board of Directors, or by the Chairman of the
Board or the President. A special meeting may also be called at the
request in writing of members having 25% or more of the total number of
votes eligible to be cast as of the date of such request. Such requests
from the Board of Directors or members shall state the person or persons
calling the meeting and the purpose or purposes of the proposed meeting.
Business transacted at a special meeting shall be confined to the topics
stated in the call and matters germane thereto.
SEC.3 PROCEDURES. The order of business and all other matters of procedure at
every meeting of members may be determined by the presiding officer.
SEC.4 QUORUM. At every meeting of members, except as otherwise provided by law
or these bylaws, the presence in person or by proxy of members having a
majority of the votes entitled to be cast at the meeting shall constitute
a quorum for the transaction of business. Once a quorum is noted as
present, it is not broken by the subsequent withdrawal of members. Except
as otherwise provided by law, the Certificate of Incorporation, or these
bylaws, a majority of the votes cast decides any question that may come
before a meeting, assuming a quorum is present.
SEC.5 ADJOURNMENTS. The members entitled to vote who are present by
representative or by proxy at any meeting of members, whether or not they
constitute a quorum, have the power by a majority of the votes present to
adjourn the meeting to another time or place, and notice of the adjourned
meeting need not be given if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned meeting,
members may transact any business that might have been transacted at the
original meeting. If the adjournment is for more than 30 days, a notice of
the adjourned meeting must be given to each member entitled to vote at the
meeting.
23
24
BYLAWS
ARTICLE V--MEETINGS
================================================================================
SEC.6 VOTING. Except as otherwise provided in this Corporation's Certificate of
Incorporation or as otherwise provided by law, no member other than the
Class B Member shall be entitled to vote on any matter for which the
members are entitled to vote. To the extent members other than the Class B
Member are entitled to vote, all association members and principal members
and travelers cheque members (as those members are defined in these
bylaws) shall be eligible to vote by representative (i.e., the senior
officer of the member present at the meeting) or by proxy. On the date of
such meeting, each member eligible to vote will have the right to cast the
number of votes equal to the number of shares of Voting Stock, as such
term is defined in the Class B Member's certificate of incorporation, such
member holds in the Class B Member.
SEC.7 NOTICE OF MEETINGS OF MEMBERS.
(a) Any notice to a member shall be given personally, by mail, facsimile
transmission, telex, telegraph, cable or similar instrumentality or
by electronic transmission. A notice will be deemed given when
actually given in person; when transmitted by a legible
transmission, if given by facsimile transmission; when transmitted,
answerback received, if given by telex; on the day when delivered to
a cable or similar communications company; three business days after
delivery to a courier service; or on the fifth business day after
the day when deposited with the United States mail, postage prepaid,
directed to the member at such member's address, facsimile number,
electronic mail address or telex number as it appears on the records
of members or at such other address, facsimile number, electronic
mail address or telex number as the member may have designated to
the Secretary in writing as the address or number to which notices
should be sent. Notice given by a posting on electronic network
together with separate notice to the member of such specific
posting, shall be deemed given upon the later of (A) such posting
and (B) the giving of such separate notice. Notice given by any
other form of electronic transmission shall be deemed given when
directed to the member.
(b) Any person may waive notice of any meeting by signing a written
waiver or by electronic transmission, whether before or after the
meeting. In addition, attendance at a meeting will be deemed a
waiver of notice unless the person attends for the purpose,
expressed to the meeting at its commencement, of objecting to the
transaction of any business because the meeting is not lawfully
called or convened.
24
25
BYLAWS
ARTICLE V--MEETINGS
================================================================================
SEC.8 CONSENT OF MEMBERS IN LIEU OF MEETING. Any action that is required to, or
may, be taken at any meeting of members may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting
forth the action so taken, is signed by members eligible to vote on that
action having not less than the minimum number of votes that would be
necessary to authorize or take that action at a meeting at which all
members eligible to vote thereat were present and voted. Prompt notice of
the taking of action by less than a unanimous written consent of all of
the members entitled to vote on an action must be given to those members
entitled to vote that did not so consent in writing.
25
26
BYLAWS
ARTICLE VI--REGIONS, FEES AND ASSESSMENTS
================================================================================
ARTICLE VI--REGIONS, FEES AND ASSESSMENTS
SEC.1 REGIONS. In connection with the administration of its worldwide business,
this Corporation has divided the world into six geographic regions,
namely, Asia/Pacific, Canada, Europe, Latin America, Middle East/Africa,
and the United States. Each region has assigned corporate staff
responsible for all activities within the region, including, without
limitation, coordination and support of member programs within the region.
SEC.2 MASTERCARD MEMBERSHIP FEES. Each card member of this Corporation must pay
the joining fee and other fees as may be established from time to time by
the Board of Directors, including, by way of example and not limitation,
those fees described in Section 7.09 of CHAPTER 7 of the MasterCard BYLAWS
AND RULES manual. Each new travelers cheque member must pay the
then-effective travelers cheque joining fee and other fees as established
from time to time by the Board of Directors of this Corporation.
SEC.3 ANNUAL BUDGET, FEES, ASSESSMENTS AND EXPENSES RELATING TO CERTAIN LOSSES.
(a) Utilizing the RGO (Regional, Global, and Operations) planning,
budgeting, and reporting methodology approved by the Board of
Directors of the Class B Member, the individual regions will prepare
annual expense budgets with revenue programs and strategic pricing
initiatives sufficient to meet the funding requirements. The
proposed regional budgets will be supportive of Regional
Board-directed marketing programs and will include sufficient
resources to fund the assignments of global and operations expenses.
Operations expenses are generally assigned on a user-pay basis.
Except as contemplated by Section 3(b), global expenses are
generally assigned by use of an equitable distribution mechanism
that incorporates the value of worldwide brand awareness programs
and card utility support.
(b) Global expenses of the Corporation or the Class B Member that relate
to losses suffered by, or liabilities of, the Corporation or the
Class B Member arising out of or related to a breach by the
Corporation, the Class B Member or Europay International SA of any
of their respective representations, warranties, covenants and
agreements contained in the Share Exchange and Integration
Agreement, dated as of _____________, 2001, among the Corporation,
the Class B Member and Europay International SA (the "Integration
Agreement") shall be assigned by an equitable distribution mechanism
similar to the mechanism used for assigning other global expenses;
provided, however, that:
26
27
BYLAWS
ARTICLE VI--REGIONS, FEES AND ASSESSMENTS
================================================================================
(i) if the losses and liabilities arise out of or are related to a
breach by the Corporation or the Class B member and exceed, in
the aggregate, $21 million, then the global expenses in the
amount of the excess shall be allocated solely to regions
other than the Europe region; and
(ii) if the losses and liabilities arise out of or are related to a
breach by Europay International SA and exceed, in the
aggregate, $7 million, then the global expenses in the amount
of the excess shall be allocated solely to the Europe region.
(c) Annually, each Regional Board shall establish a regional budget for
the following year, which budget shall provide sufficient funds to
(i) vigorously promote the brand and fund the other regional
programs, initiatives, and activities and (ii) fund the region's
assignment of centrally managed expenses. The method of funding the
regional budget will be by assessment and other fees (including,
without limitation, transaction and operations fees) paid to this
Corporation or the Class B member by the members in the region. Each
member within a region shall pay not less than the amount
established as the minimum assessments and fees payable by each
member within the region. If budgeting authority has not been
delegated to a Regional Board in a region, the annual budget for the
region shall be reviewed and approved by the Board of Directors of
the Corporation.
This Corporation's entire Annual Budget incorporating all regional budgets
shall be submitted to the Board of Directors for its approval at least 30
days prior to the fiscal year to which it applies. In its review of such
Annual Budget, the Board of Directors shall, among other things, ensure
that each final regional budget provides for the appropriate level of
expenses assigned to the region and the level of expenditures necessary to
appropriately support this Corporation's brands and programs in that
region and an appropriate method of funding such expenses.
SEC.4 ASSESSMENTS.
(a) In addition to establishing the Annual Budget of this Corporation as
described in Section 3 above, the Board of Directors at any time,
and from time to time, may fix and impose assessments on all or some
lesser number of the members (other than the Class B member) of this
Corporation for expenses and liabilities that relate to the ordinary
activities of the Corporation, including, without limitation,
expenses and liabilities related to counterfeit insurance premiums,
advertising and penalties for violation of the bylaws, rules and
regulations or other published policies of the Corporation. Subject
to Section 4(c) and (e), the Board of Directors may fix a separate
rate or basis of assessment for members of different regions, as
well as for members within a region.
27
28
BYLAWS
ARTICLE VI--REGIONS, FEES AND ASSESSMENTS
================================================================================
(b) The Board of Directors at any time, and from time to time, may fix
and impose special assessments for all or any portion of the
Corporation's and the Class B Member's expenses and liabilities
arising out of extraordinary events, such as settlements or
judgments in major litigations and catastrophic occurrences that may
cause significant risk or damage to the Corporation and the Class B
Member ("Special Assessments"). In no event shall the aggregate
cumulative liability of all members (including terminated members as
described in Article I, Section 12) for Special Assessments imposed
on all members from and after _______, 2001, exceed two times the
Class B Member's consolidated Worldwide Annual Revenue; provided,
however, that the foregoing limitation shall not apply to (i)
assessments contemplated by Article VI, Section 3(b) and Article VI,
Section 4(d) of these Bylaws, (ii) assessments contemplated by
ARTICLE NINTH(b) of the Corporation's Certificate of Incorporation
and (iii) assessments for expenses and liabilities relating to
conduct engaged or alleged to have been engaged in by the
Corporation prior to _________, 2001 (whether or not such conduct
continues after ____________, 2001). "Worldwide Annual Revenue"
means the highest amount of revenue paid to the Class B Member and
its subsidiaries in any of the three 12-month periods covered by the
three most recent Global Proxy Calculations less any Special
Assessments previously paid by the members.
(c) With respect to any Special Assessment imposed on less than all of
the members, in no event shall a member be required to contribute to
a Special Assessment, in an amount greater than eight times revenue
paid to the Class B Member and its subsidiaries by that member
during the 12-month period covered by the most recent Global Proxy
Calculation; provided, however, that the foregoing limitation shall
not apply to (i) assessments contemplated by Article VI, Section
3(b) and Article VI, Section 4(d) of these Bylaws, (ii) assessments
contemplated by ARTICLE NINTH(b) of the Corporation's Certificate of
Incorporation and (iii) assessments for expenses and liabilities
relating to conduct engaged or alleged to have been engaged in by
the Corporation prior to _________, 2001 (whether or not such
conduct continues after ____________, 2001).
(d) An "Integration Assessment" is an assessment of the members of the
Corporation's Europe region or its regions other than Europe, as the
case may be, to compensate the Corporation and/or the Class B Member
for losses suffered by, or liabilities of, the Corporation and/or
the Class B Member, in excess of the amounts contemplated by Article
VI, Section 3(b), arising out of or related to a breach of the
representations, warranties, covenants and agreements contained in
the Integration Agreement, but only to the extent such losses and
liabilities have not been satisfied by an allocation of expenses in
accordance with Article VI, Section 3(b).
28
29
BYLAWS
ARTICLE VI--REGIONS, FEES AND ASSESSMENTS
================================================================================
(e) In determining whether to impose a Special Assessment on this
Corporation's members for obligations that are associated with a
particular region(s) or member(s), the Board of Directors must first
consider whether it is appropriate and consistent with the interests
of this Corporation and its members to allocate the obligations for
such assessment first to the region(s) and/or member(s) concerned
before extending the assessment to this Corporation's other regions
and/or members.
(f) In the event a member violates a rule for which an assessment is
expressly provided, the President or his designee shall warn the
member of the violation. If, subsequent to this warning, the member
shall continue to violate the rule, this Corporation shall draft on
the member in the amount of the assessment unless the member can
demonstrate that it could not reasonably avoid the violation. Any
member wishing to dispute the finding of violation or the resulting
assessment shall have a right to have such finding or assessment
reviewed by the Board of Directors at its next regularly scheduled
meeting following the date of the assessment. In the event a member
wishes to exercise its right of review, it must so advise the
Secretary, by registered or certified mail, at least 30 days prior
to the Board meeting. The findings of the Board of Directors shall
be final.
(g) Any Special Assessments of the members will require authorization of
the Board of Directors as follows:
(i) when the Special Assessment is less than or equal to one times
the "Worldwide Annual Revenue," by a simple majority of the
Board of Directors; and
(ii) when the Special Assessment is greater than one times the
"Worldwide Annual Revenue" but less than or equal to two times
annual revenue, by a two-thirds majority of the entire Board
of Directors.
SEC.5 PRORATING ASSESSMENTS AND OTHER FEES.
(a) An association or principal member must pay all assessments,
operating fees, and other fees applicable to its MasterCard programs
for the calendar year in which it becomes such a member.
(b) If an association or principal member transfers to affiliate status
with another member, any remaining assessments, operating fees, and
other fees that the transferring member would have been obligated to
pay had it remained an association or principal member to the end of
the year will, but without duplication, become additional
assessments, operating fees, and other fees to be paid by the member
with which the transferring member has become affiliated. If an
affiliate of a member transfers and becomes a new association member
or
29
30
BYLAWS
ARTICLE VI--REGIONS, FEES AND ASSESSMENTS
================================================================================
principal member, the assessments, operating fees, and other fees of
the transferring member will, when paid, be credited or refunded, as
the case may be, to the member with which it had been affiliated to
avoid duplicate payment of assessments and fees on the same volume.
However, no such credit or refund will reduce the assessments,
operating fees, and other fees of an association or principal member
below the minimum assessments, operating fees, and other fees
established pursuant to Article VI, Section 3.
(c) In imposing any additional assessment, the Board of Directors may in
its discretion make a provision for prorating the assessment to
reflect periods of membership.
SEC.6 PAYMENT DATES. Fees and assessments must be paid on the date or dates and
in the installments (if any) as the Board of Directors or staff may
prescribe.
SEC.7 CERTIFICATION OF ACCOUNTS AND VOLUMES. Each association member and
principal member must file with this Corporation a certified statement of
(i) the aggregate number of its active MasterCard card accounts (as
defined in Section 8 of this Article VI) and the active MasterCard card
accounts of the card members affiliated with it, (ii) its Gross Acquiring
Volumes, as defined in the Bylaws of the Class B Member, and (iii) its
Gross Dollar Volumes, as defined in the Bylaws of the Class B Member, as
of such date or dates or for such period or periods as the Board of
Directors may require from time to time. Each travelers cheque member must
file with this Corporation a certified statement of the aggregate sales of
MasterCard Travelers Cheques as of such date or dates or for such period
or periods as the Board of Directors may require from time to time.
SEC.8 ACTIVE MASTERCARD CARD ACCOUNTS. Active MasterCard card accounts as of a
given date are those accounts accessed by cards bearing one or more
trademarks of this Corporation on which accounts (i) one or more
transactions have been completed and/or (ii) a fee has been paid by the
cardholder to the issuer of the card during the 12 full months prior to
the date of the request to the members for this information.
SEC.9 MASTERCARD TRAVELERS CHEQUE SALES. MasterCard Travelers Cheques sales are
the total sales of a travelers cheque member of its MasterCard Travelers
Cheque sales directly by itself and through its sales agents for any given
period of time as determined by the Board of Directors.
SEC.10 TERMINATION FEE.
(a) CARD MEMBERSHIP. Any card member that ceases to be a member of this
Corporation, whether voluntarily or involuntarily, must:
(i) pay any amounts otherwise payable as provided in these bylaws
or the rules and regulations of this Corporation;
30
31
BYLAWS
ARTICLE VI--REGIONS, FEES AND ASSESSMENTS
================================================================================
(ii) pay any charges incurred and assessments approved but not yet
billed to that member (or attributable to that member if it is
affiliated with an association or principal member);
(iii) reimburse this Corporation for any disbursements made on its
behalf; and
(iv) pay the greater of US $500 or the sum of:
(1) the highest total amount the member was billed and/or
paid (or would have been billed or paid, in the case of
an affiliated member, had it been a principal member) as
(a) assessments (other than Special Assessments for
which such terminated member shall remain liable
in accordance with Article VI, Section 4); and
(b) fees and charges for services provided directly or
indirectly by this Corporation respecting the
member's MasterCard (charge card, debit services,
and otherwise) activities and other fees included
within the region's annual budget, in a single
year during the four calendar years preceding the
year in which the termination is effective, or in
that year itself; if the member has not been a
MasterCard member for one or more calendar years,
as of the date on which the termination is
effective, this amount will be equal to the total
billed or paid, or that would have been billed or
paid in the case of an affiliate member had it
been a principal member, in the 12 calendar months
preceding the month in which the termination is
effective; and
(2) a pro rata share (defined as the percentage derived by
dividing the highest number of the terminating member's
MasterCard votes in a single year during the four
calendar years preceding the year in which the
termination is effective, or in that year itself, by the
total number of MasterCard votes for the year in which
the termination is effective) of any long-term
obligations, including leases and loans of all types
(excepting contracts and leases covered in subsection
(4) below), but not giving any effect to present values
of future payments or to any escalation provision, of
this Corporation and its subsidiaries as of the end of
the month preceding the date on which the termination is
effective; and
31
32
BYLAWS
ARTICLE VI--REGIONS, FEES AND ASSESSMENTS
================================================================================
(3) any federal, state, local, or other government taxes or
charges that are attributable to the above amounts; and
(4) termination charges and penalties arising from the
cancellation of contracts and leases for equipment and
supplies arranged for or entered into in order to
accommodate, or on behalf of, the terminating member.
(b) MINIMUM TERMINATION FEES. The minimum termination fee established in
the preceding section applies to each card member, including each
affiliate member, except that if an association or principal member
terminates simultaneously with some or all of the members affiliated
with it, or if a group of members affiliated with an association or
principal member simultaneously and jointly terminate, the minimum
termination fee will apply to the group, as if the terminating
members were but a single member.
(c) TRAVELERS CHEQUE MEMBERSHIP. With respect to any travelers cheque
member that ceases to be a travelers cheque member of MasterCard,
such member must pay any direct charges resulting from the
termination from the program and must pay for the costs to be
incurred in the spin-down payments of its outstanding travelers
cheques and any assessments or fees applicable to it as a result of
it having been a travelers cheque member of this Corporation.
(d) UNBILLED ASSESSMENTS. The Board may in its sole discretion excuse a
withdrawing member from paying an assessment approved after the date
of the member's notice of termination and on or before the date on
which the termination is effective.
(e) NOTICE OF TERMINATION. A notice of termination must be in writing,
addressed to the President or the Secretary of this Corporation, and
be provided this Corporation so as to have been received at least 30
days before the effective date of termination set forth in the
notice letter as provided in Section 9 of Article I.
(f) INTERIM PARTICIPATION. An applicant that receives permission to
participate in the activities of this Corporation will not be
subject to the provisions of this Section 10 until its application
is approved by the Board of Directors.
(g) TERMINATION OF CORPORATION. Subject to the Board of Directors'
right, but not obligation, to establish members' obligations on
termination of this Corporation, the provisions of this Section 10
shall not apply, except with respect to those members whose notice
of termination has previously become effective in accordance with
Section 10(e) above in the event of any voluntary or involuntary
liquidation, dissolution, or winding up of this Corporation or the
voluntary or involuntary cessation of all or substantially all of
the activities of this Corporation.
32
33
BYLAWS
ARTICLE VII--MISCELLANEOUS PROVISIONS
================================================================================
ARTICLE VII--MISCELLANEOUS PROVISIONS
SEC.1 FISCAL YEAR. The fiscal year of this Corporation is the calendar year.
SEC.2 INDEMNIFICATION. This Corporation will, to the full extent permitted by
the General Corporation Law of the State of Delaware, indemnify all
persons whom this Corporation may indemnify pursuant thereto.
Notwithstanding the foregoing, the indemnification provided by this
Section 2 will not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any agreement, or under any
vote of members or of disinterested directors of this Corporation or
otherwise.
SEC.3 CORPORATE SEAL. The seal of this Corporation will be circular in form with
the words "MasterCard International Incorporated" around the outer margin
and the words and figures "Corporate Seal 1966 Delaware" in the center.
SEC.4 CORPORATE SYMBOL. The symbol of this Corporation will be the word
"MasterCard" superimposed across a red circle overlapping a yellow circle
in the form adopted by the Board of Directors as the corporate symbol of
this Corporation.
SEC.5 DEFINITIONS. The term "card" when used herein means a device, complying
with the specifications set forth in the rules and regulations, which may
be used to pay for goods and/or services and to obtain cash through access
of the cardholder's credit, charge, or depository account with the issuer
of the card.
The term "entire Board of Directors" when used herein in connection with
voting requirements shall refer to the number of directors authorized to
serve as directors by the Board of Directors less any vacancies and any
directors not entitled to vote on such issue. In the event a vote is
specified to be taken by the Board of Directors without reference to the
"entire Board of Directors," then the number of votes required shall be
calculated based upon the number of directors voting at the meeting which
a quorum is present.
The term "rules and regulations" when used herein means the rules part,
which is separate from the bylaws part, of the Corporation's BYLAWS AND
RULES manual, the provisions set forth in the OPERATIONS MANUAL and the
provisions set forth in any other manual prepared in connection with any
program or service or activity of this Corporation and published to the
membership from time to time, for example, and not by way of limitation,
the SECURITY PROCEDURES AND SYSTEMS manual and the AUTHORIZATION SYSTEM
MANUAL.
A "published policy" is one that has been disseminated by bulletin,
letter, or other form of written communication to, at least, the principal
members that, along with their affiliate members, are affected by such
policy.
33
34
BYLAWS
ARTICLE VII--MISCELLANEOUS PROVISIONS
================================================================================
SEC.6 AMENDMENT OF BYLAWS. The Board of Directors or the Class B Member may
adopt, amend or repeal these bylaws, provided, however, that in order to
(i) adopt, amend, or repeal the maximum aggregate cumulative liability for
all members for Special Assessments as described in Article VI, Section
4(b) or this provision of these bylaws the approval of at least 75% of the
members of the Board of Directors present at a meeting at which a quorum
is present and the approval of a majority of the outstanding shares of MC
Global Class A Stock and, prior to and including the Transition Date,
shares of MC Global Class B Stock (as each such term is defined in the
Integration Agreement), voting together as a single class, shall be
required and (ii) adopt, amend or repeal the cumulative maximum liability
for each member for Special Assessments as described in Article VI,
Section 4(c) or this provision of these bylaws the affirmative vote of at
least two-thirds of the Board of Directors present at a meeting at which a
quorum is present shall be required. In addition, and not by way of
limitation of the foregoing, the Class A Members, by the affirmative vote
of at least two-thirds of the voting power held by the Class A Members, as
determined in accordance with Section 6 of Article V, present at a meeting
at which a quorum is present, may amend Article I of the bylaws or this
sentence.
SEC.7 INCONSISTENT PROVISIONS; LICENSES. In the event of an inconsistency
between a provision of these bylaws and a provision in any member
MasterCard license, the provisions of these bylaws shall prevail and the
member license shall be deemed to have been amended so as to be consistent
with the bylaws provision. In the event of an inconsistency between a
provision of the rules, regulations, or other directives associated with
Marks other than the MasterCard Mark and the license for such Mark granted
to a Member, the provision of such rules, regulations, and other
directives shall prevail and the license shall be deemed to have been
amended so as to be consistent with the rules provision.
34