EXHIBIT 3.1b
AMENDED AND RESTATED
BYLAWS
OF
MASTERCARD INCORPORATED
A DELAWARE CORPORATION
ADOPTED , 2002
ARTICLE I
OFFICES
Section 1. The registered office of the Corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The Corporation may also
have offices at such other places, within or outside of the State of Delaware,
as the Board of Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of stockholders shall be held at the registered
office of the Corporation, or at such other place within or outside of the State
of Delaware as may be fixed from time to time by the Board of Directors.
Section 2. Annual meetings of stockholders shall be held at such date and
time as may be fixed by the Board of Directors, at the offices of the
Corporation, or at such other date and time as may be fixed by the Board of
Directors. At each annual meeting of stockholders, the stockholders shall elect
Directors and transact such other business as may properly be brought before the
meeting.
Section 3. Written notice of each annual meeting of stockholders, stating
the place, date and hour of the meeting, as well as the means of acceptable
remote participation, shall be given in the manner set forth in ARTICLE XV of
these Bylaws. Such notice shall be given not less than 10 nor more than 60 days
before the date of the meeting to each stockholder entitled to vote at the
meeting.
Section 4. Special meetings of stockholders may be called at any time for
any purpose or purposes by written request of the Chairman of the Board of
Directors or the President and Chief Executive Officer of the Corporation, or by
the Secretary of the Corporation upon the written request of at least 33 1/3% of
the Board of Directors, or upon the written request of the holders of at least
25% of all outstanding shares entitled to vote on the action proposed to be
taken. Such written requests shall state the time, place and purpose or purposes
of the special meeting, the person or persons calling the special meeting and
that the special meeting so called shall be limited to the purpose or purposes
set forth in the demand.
Section 5. Written notice of each special meeting of stockholders shall be
given in the manner set forth in ARTICLE XV of these Bylaws. Such notice shall
be given not less than 10 nor more than 60 days before the date of the meeting
to each stockholder entitled to vote at the meeting. Each such notice of a
special meeting of stockholders shall state the place, date and hour of a
meeting, the person or persons calling the meeting and the purpose or purposes
for which the meeting is called, as well as the means, if any, of acceptable
remote participation as may be determined by the Board of Directors.
Section 6. Except as otherwise required by law or the Certificate of
Incorporation, the presence in person or by proxy of holders of at least a
majority of the shares entitled to vote at a meeting of stockholders shall be
necessary, and shall constitute a quorum, for the transaction of business at
such meeting. If a quorum is not present or represented by proxy at any meeting
of stockholders, then the holders of a majority of the shares entitled to vote
at the meeting who are present in person or represented by proxy may adjourn the
meeting from time to time until a quorum is present. An adjourned meeting may be
held later without notice other
than announcement at the meeting, except that if the adjournment is for more
than 30 days, or if after the adjournment a new record date is fixed for the
adjourned meeting, notice of the adjourned meeting shall be given in the manner
set forth in ARTICLE XV to each stockholder of record entitled to vote at the
adjourned meeting. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, and the subsequent withdrawal
of any stockholder or the refusal of any stockholder to vote shall not affect
the presence of a quorum at the meeting.
Section 7. At any meeting of stockholders, each stockholder having the
right to vote shall be entitled to vote in person, by proxy or by such means, if
any, of remote communication as may be determined by the Board of Directors.
Except as otherwise provided by law or in the Certificate of Incorporation or
these Bylaws, each stockholder shall be entitled to one vote for each share of
stock entitled to vote standing in his name on the books of the Corporation.
Except as otherwise provided by law or in the Certificate of Incorporation, any
matter shall be determined by the vote of a majority of the shares that are
voted with regard to it at a meeting where a valid quorum is present, subject to
any limitations of the voting power of stockholders imposed by the terms of the
Certificate of Incorporation.
Section 8. Any action required or permitted to be taken by the stockholders
at any annual or special meeting of the stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted, and shall be delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business or an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by registered or certified mail, return
receipt requested.
Section 9. The Board of Directors may fix a date as the record date for
determination of the stockholders entitled (i) to notice of, or to vote at, any
meeting of stockholders, (ii) to express consent to, or dissent from, corporate
action in writing without a meeting or (iii) to receive payment of any dividend
or other distribution or allotment of any rights or to take or be the subject of
any other action. The record date must be on or after the date on which the
Board of Directors adopts the resolution fixing the record date and in the case
of (i), above, must be not less than 10 nor more than 60 days before the date of
the meeting, in the case of (ii), above, must be not more than 10 days after the
date on which the Board of Directors fixes the record date, and in the case of
(iii), above, must be not more than 60 days prior to the proposed action. If no
record date is fixed, then the record date will be as provided by law. A
determination of stockholders entitled to notice of, or to vote at, any meeting
of stockholders that has been made as provided in this Section will apply to any
adjournment of the meeting, unless the Board of Directors fixes a new record
date for the adjourned meeting.
ARTICLE III
SHARE OWNERSHIP
Section 1. As of the close of business, New York time, on the last day of
the three-year period (the "Transition Period") beginning on the first business
day of the fiscal quarter following the Closing Date (as defined in the Share
Exchange and Integration Agreement by and among the Corporation, MasterCard
International Incorporated and Europay International S.A., dated as of
, 2002, (as amended, modified, supplemented or restated from time to
time, the "Integration Agreement")), each outstanding share of Class B Common
Stock of the Corporation, $.01 par value per share (a "Class B share"), other
than any Class B shares that constitute ec Picto Stock (as defined in the
Integration Agreement), shall automatically be converted into one share of Class
A Common Stock of the Corporation, $.01 par value per share (a "Class A share").
All Class A shares shall then be reallocated among the holders of Class A shares
in accordance with the terms and subject to the conditions set forth in Sections
1.4(b) and 1.4(d) of the Integration Agreement. In connection with any
reallocation of Class A shares, any stockholder whose ownership of Class A
shares is reduced as a result of the reallocation will transfer the excess
number of Class A shares to the Corporation, which shall then deliver Class A
shares to any stockholder that is entitled to an additional number of Class A
shares as a result of the reallocation.
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Section 2. For purposes of these Bylaws, the Global Proxy Calculation shall
be calculated for each successive 12-month period beginning on the first day of
the Transition Period; provided, however, that for Global Proxy Calculations for
periods ending after the second anniversary of the end of the Transition Period,
the Board of Directors may elect to use the Corporation's fiscal year as the
basis for the Global Proxy Calculation. The Global Proxy Calculation for each
stockholder of MasterCard International Incorporated shall be equal to the sum
obtained by adding (A) .25 multiplied by a fraction, the numerator of which is
such stockholder's Gross Dollar Volume (GDV) and the denominator of which is the
Corporation's Gross Dollar Volume (GDV) attributable to all stockholders of the
Corporation, plus (B) .25 multiplied by a fraction, the numerator of which is
such stockholder's Gross Acquiring Volume (GAV) and the denominator of which is
the Corporation's Gross Acquiring Volume (GAV) attributable to all stockholders
of the Corporation, plus (C) .50 multiplied by a fraction, the numerator of
which is the sum of (1) the Revenues Paid by such stockholder to the Corporation
and its consolidated subsidiaries relating to all matters other than travelers
cheque programs, plus (2) two times the Revenues Paid by the stockholder to the
Corporation and its consolidated subsidiaries relating to travelers cheque
programs, and the denominator of which is the sum of (1) the Revenues Paid by
all stockholders to the Corporation and its consolidated subsidiaries relating
to all matters other than travelers cheque programs, plus (2) two times the
Revenues Paid by all stockholders to the Corporation and its consolidated
subsidiaries relating to travelers cheque programs, in each case for the
applicable period. No Gross Dollar Volume (GDV) or Gross Acquiring Volume (GAV)
shall be attributable to travelers cheque programs for purposes of the Global
Proxy Calculation. The Board of Directors may fix a record date for the purposes
of determining those stockholders of record whose Gross Dollar Volume (GDV),
Gross Acquiring Volume (GAV) and Revenues Paid shall be included in determining
a Global Proxy Calculation for a particular period, which record date shall not
be more than 30 days prior to the end of any such period. Only actual, as
opposed to estimated, Gross Dollar Volume (GDV) and Gross Acquiring Volume (GAV)
and Revenues Paid information will be used in determining the Global Proxy
Calculation for each stockholder.
The Corporation, acting through relevant employees selected by the Chief
Executive Officer from time to time, shall compute the Global Proxy Calculation
for each stockholder for each applicable 12 month period and provide written
notice to each stockholder of the results of such computation within 120 days
after the end of the 12-month period to which the computation relates. The
Corporation's computation of the Global Proxy Calculation shall be considered
final and binding on all stockholders unless the Board of Directors determines
that an error was made in the computation, in which case the Corporation's
computation shall be corrected in accordance with the directions of the Board of
Directors.
"Gross Dollar Volume" means processed and non-processed issued Volumes
(including domestic and international retail purchases, cash transactions,
convenience checks, on-us transactions, intra-processor transactions, local use
only transactions and balance and commercial funds transfers) that occur as a
result of one or more of (A) a transaction involving any one of the
Corporation's brands (e.g., MasterCard(R), Eurocard(R), Maestro(R), Cirrus(R)
and ec Picto(R)) or (B) a non-MasterCard branded transaction involving a card
which includes any one of the Corporation's brand logos as well as other payment
brand logos, provided that such other payment brands are not in direct
competition with any of the Corporation's brands, as determined by the
Corporation.
"Gross Acquiring Volume" means processed and non-processed acquired Volumes
(including domestic and international retail purchases, cash transactions, on-us
transactions, intra-processor transactions and local use only transactions) that
occur as a result of one or more of (A) a transaction involving any one of the
Corporation's brands (e.g., MasterCard(R), Eurocard(R), Maestro(R), Cirrus(R)
and ec Picto(R)) or (B) a non-MasterCard branded transaction involving a card
which includes any one of the Corporation's brand logos as well as other payment
brand logos, provided that such other payment brands are not in direct
competition with any of the Corporation's brands, as determined by the
Corporation.
"Revenues Paid" for any period means, with respect to a particular
stockholder, all revenues of the Corporation on a consolidated basis, calculated
in accordance with U.S. GAAP, that are generated by the activities of that
stockholder, other than (1) any fees or other charges associated with the
termination of that stockholder's membership in MasterCard International
Incorporated, (2) Integration Assessments (as defined
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in Section 4(d) of Article VI of the Bylaws of MasterCard International
Incorporated) paid by that stockholder, (3) other assessments, fees and charges
paid by that stockholder in its capacity as a member of MasterCard International
Incorporated if those assessments, fees or charges were imposed on less than all
of the members of MasterCard International Incorporated (except for assessments,
fees and charges pertaining to business development, ordinary course of business
and other matters deemed to be includable by the management of MasterCard
International Incorporated in its sole discretion) and (4) fines and penalties
paid by that stockholder (except as determined in the sole discretion of the
management of MasterCard International Incorporated).
"card fee assessment" means a bona fide, non de minimis fee expressed as a
fixed amount in connection with a card.
"volume-based assessment" means a bona fide, non de minimis assessment
typically expressed as a percentage of the Gross Dollar Volume (GDV) or Gross
Acquiring Volume (GAV) associated with a particular type of transaction.
"Volumes" means the following four types of volumes in the specified
percentages:
a. Type 1 shall include 100% of all (1) volumes on cards that include
a MasterCard(R) brand logo and that are subject to volume-based assessments
or card fee assessments, (2) Maestro(R) and Cirrus(R) processed debit
volumes and (3) Maestro(R) and Cirrus(R) debit volumes that are subject to
volume-based assessments, so long as Maestro(R), a Permitted Purse Brand
and/or Cirrus(R) is the sole acceptance brand on the card.
b. Type 1A shall include 75% of all ec Picto(R) volumes and other
similar debit volumes that in each case have been converted to Maestro(R)
volumes so long as Maestro(R), a Permitted Purse Brand and/or Cirrus(R) is
the sole acceptance brand on the card and the card is subject to card fee
assessments.
c. Type 2 shall include the following percentages of all volumes for
regional debit brands owned (or in the case of the initial allocation of
shares to be owned) solely by the Corporation on cards that include a
Maestro(R) and/or Cirrus(R) logo; provided that such cards are subject to
volume-based assessments or card fee assessments; and provided, further,
that for calculations for the last year of the Transition Period through
the year ending on the second anniversary of the end of the Transition
Period, there is a binding written commitment to remove all acceptance
brand logos, other than the Maestro(R) brand logo, the Cirrus(R) brand logo
or a Permitted Purse Brand logo, on the cards not later than the fifth
anniversary of the first fiscal quarter beginning after the fiscal quarter
in which the Closing Date occurs:
(i) 40% of such volumes for the last year of the Transition Period;
(ii) 30% of such volumes for the year ending on the one-year
anniversary of the end of the Transition Period;
(iii) 20% of such volumes for the year ending on the two-year
anniversary of the end of the Transition Period; and
(iv) 10% of such volumes for subsequent years.
d. Type 3 shall include 1% of (i) volumes for regional debit brands
not owned by the Corporation on cards that include a Maestro(R) and/or
Cirrus(R) brand logo and are subject to volume-based assessments or card
fee assessments and (ii) volumes for balance and commercial funds transfers
relating to cards that are subject to volume-based assessments or card fee
assessments.
In determining the proportionate share of each stockholder of Europe of (i)
the European Regional Proxy Amount (as defined in the Integration Agreement) for
purposes of the reallocation contemplated by Section 1.3 of the Integration
Agreement and (ii) the European Regional Proxy Amount for each year of the
Transition Period other than the last year of the Transition Period, ec Picto(R)
Volumes shall be accorded a weighting of 10% (unless those volumes satisfy the
criteria of Type 1A or Type 2 Volumes, in which case those volumes shall be
accorded the weighting contemplated by those Types, as appropriate). Thereafter,
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ec Picto(R) Volumes shall be accorded the weighting determined in accordance
with the definitions of the Types of Volumes described above.
For each Global Proxy Calculation, all Volumes described above will be
included in calculating Gross Dollar Volume and Gross Acquiring Volume whether
those Volumes are assessed directly or the cards to which they relate are
subject to card fee assessments of the type contemplated by the applicable type
of Volume. In addition, for each Global Proxy Calculation performed prior to the
expiration of the Transition Period, Volumes of the types described above will
be included even if they are not subject to volume-based or card fee
assessments.
"Permitted Purse Brand" means a brand representing a stored value
application that is permitted to be used by members of MasterCard International
Incorporated under the Bylaws and Rules of MasterCard International
Incorporated.
For purposes of determining the Global Proxy Calculation, the conversion of
Euros into U.S. dollars will be based on the average exchange rate during the
twenty-day period ending on the day prior to the applicable measurement date
(the "Prevailing Exchange Rate"), provided that during the Transition Period and
for two years thereafter, the Prevailing Exchange Rate shall be $.9565 U.S. = 1
Euro for so long as 1 Euro is not less than $.9065 U.S. and not greater than
$1.0065 U.S. (the "Currency Conversion Band"). In the event that the Prevailing
Exchange Rate does not fall within the Currency Conversion Band, the currency
conversion rate to convert Euros to U.S. Dollars will be $.9565 adjusted by the
difference between such Prevailing Exchange Rate and the upper/lower limit of
the Currency Conversion Band, as applicable.
For purposes of determining the Global Proxy Calculation during the
Transition Period and for two years thereafter, amounts denominated in the
currency of a country within the Europe Region (as defined in the Integration
Agreement) other than the Euro shall first be converted into Euros and
subsequently converted into U.S. dollars in accordance with the previous
paragraph.
Class A shares and Class B shares may be held only by Class A members of
MasterCard International Incorporated and, with the prior approval of the Board
of Directors, their Designated Affiliates. A Designated Affiliate of a Class A
member is an Affiliate (as defined in the Certificate of Incorporation) of the
Class A member to whom the Class A member transfers its stock in the Corporation
in order to satisfy applicable regulatory requirements that prohibit the Class A
member from holding stock in the Corporation.
No fractional shares of Class A Stock or Class B Stock shall be issued or
delivered by the Corporation, and any fractional share interests shall be
rounded in such manner as the management of the Corporation shall determine in
its sole discretion.
Section 3. During the Transition Period, no shares may be sold,
transferred, pledged, hypothecated or assigned (including any assignment of the
right to receive shares) except that (i) a stockholder may sell, transfer,
pledge, hypothecate or assign (including any assignment of the right to receive
shares), as applicable, all, but not less than all, of its shares to the
acquirer of its card portfolio in connection with a transfer by a stockholder of
all or substantially all of such stockholder's card portfolio, (ii) if a
stockholder that was a principal member becomes an affiliate member of another
principal member, such stockholder may sell, transfer, pledge, hypothecate or
assign (including any assignment of the right to receive shares), as applicable,
all, but not less than all, of its shares to the principal member with whom it
becomes affiliated, (iii) if a stockholder that was a principal member and had
one or more affiliate members ceases to be a principal member and one or more of
its affiliate members thereupon become principal members, such stockholder may
sell, transfer, hypothecate or assign (including any assignment of the right to
receive shares), as applicable, all, but not less than all, of its shares to
such former affiliate members, (iv) if a stockholder is prohibited by applicable
regulatory requirements from holding stock in the Corporation, such stockholder
may sell transfer, pledge, hypothecate or assign (including any assignment of
the right to receive shares), as applicable, all, but not less than all, of its
shares to a Designated Affiliate so long as the Board of Directors has given its
prior approval to the transaction; and (v) a stockholder may sell, transfer,
pledge, hypothecate or assign (including any assignment of the right to receive
shares), as applicable, all, but not less than all, of its shares to a Class A
member that is an affiliate of such stockholder so long as the Board of
Directors has given its prior approval to
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the transaction; provided, however that for the purposes of this clause (v), the
term "affiliate" shall be deemed to mean any parent company that directly or
indirectly owns 80% or more of the voting power and economic interests in such
stockholder, and any entity of which such stockholder or any of such parents
owns 80% or more of the voting power and economic interests. If, during the
Transition Period, a stockholder ceases to be a member of MasterCard
International Incorporated (voluntarily or otherwise), such stockholder's shares
in the Corporation shall be transferred to the Corporation from such stockholder
at a cost to the Corporation equal to the aggregate par value of the shares
transferred to the Corporation, effective as of the first business day after the
date such stockholder's membership in MasterCard International Incorporated was
terminated. If, following the expiration of the Transition Period, a stockholder
ceases to be a member of MasterCard International Incorporated (voluntarily or
otherwise), the Corporation shall have the right, in its sole discretion, to
elect to direct such stockholder to transfer to the Corporation for cash all of
such stockholder's shares for an amount equal to the book value of such
stockholder's shares based on the Corporation's financial statements most
recently filed with the U.S. Securities and Exchange Commission. The Corporation
shall make such election by delivering a written notice to such stockholder
within 20 days after such stockholder's membership in MasterCard International
Incorporated was terminated. If the Corporation makes such election, then the
Corporation shall deliver the payment price in cash to such stockholder within
20 days after delivering its written election notice. Upon delivery of the
payment price, all of such stockholder's rights as a stockholder of the
Corporation shall immediately cease. In the event that the Corporation does not
make such election, such stockholder will be required to com ply with the
procedures set forth in Section 4.
Section 4. An entity that became or becomes a Class A member of MasterCard
International Incorporated from and after January 1, 2001 until the end of the
Transition Period shall be eligible to be allocated Class A shares as of the end
of the Transition Period based upon its Global Proxy Calculation in accordance
with such procedures as may be determined by the Board. From and after the end
of the Transition Period, each stockholder shall be free to sell, transfer,
pledge, hypothecate or assign (including any assignment of the right to receive
shares), as applicable, its shares to any person permitted to hold such shares.
Following the expiration of the Transition Period, each stockholder must
maintain an ownership percentage of the Corporation's outstanding common stock
that is no less than 75% and no more than 125% of the percentage represented by
such stockholder's most recent Global Proxy Calculation by purchasing or selling
shares, if necessary, in accordance with procedures to be established by the
Board of Directors within 12 months after receiving notice from the Corporation
that such stockholder is not in compliance with this section. If a stockholder
holds shares as the result of a transfer made pursuant to clauses (iv) or (v) of
the first sentence of Article III, Section 3 of these Bylaws, then the
percentage ownership test described in the preceding sentence shall be
calculated based upon the aggregate Global Proxy Calculation of the stockholder
and the Class A member(s) that transferred shares to the stockholder. If a
stockholder is unable to satisfy the requirement that it own no more than 125%
of the percentage represented by such stockholder's most recent Global Proxy
Calculation, the selling stockholder shall be obligated to accept the highest
price offered to such stockholder for such number of shares of Common Stock as
is necessary to enable such stockholder to satisfy such requirement.
Section 5. The Board of Directors shall establish procedures for the
purchase or sale of shares following the expiration of the Transition Period.
ARTICLE IV
BOARD OF DIRECTORS
Section 1. The business of the Corporation will be managed by the Board of
Directors, which may exercise all of the powers of the 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 stockholders or (ii) specifically delegated as provided in these Bylaws.
Section 2. a. The Board of Directors shall consist of such number of
persons, as shall be determined by the Board of Directors from time to time. The
Board of Directors initially shall consist of 18 persons.
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b. Each Director shall be an officer of a member institution of MasterCard
International Incorporated or an individual otherwise uniquely qualified to
provide guidance as to the Corporation's affairs. During the Transition Period,
one-third of the total number of Directors shall be officers of stockholders of
the Corporation or member institutions from the Corporation's Europe region, as
defined in the Integration Agreement ("Europe"), one-third of the total number
of Directors shall be officers of stockholders of the Corporation or member
institutions from the Corporation's U.S. region, the President and Chief
Executive Officer shall be a Director and the remaining Directors shall be
apportioned among officers of Stockholders of the Corporation or member
institutions from the Corporation's other regions in accordance with the
percentage of the Corporation's outstanding stock owned by the stockholders of
each such region; provided, however, that in calculating the percentage of
outstanding stock owned by the stockholders of each region, transfers of shares
made pursuant to clauses (iv) or (v) of the first sentence of ARTICLE III,
Section 3 of these Bylaws shall be disregarded. After the Transition Period, the
President and Chief Executive Officer shall be a Director and the remaining
Directors shall be apportioned among officers of stockholders from the
Corporation's regions in accordance with the percentage of the Corporation's
outstanding stock owned by the stockholders of each such region, subject to
Article EIGHTH of the Certificate of Incorporation; provided, however, that in
calculating the percentage of outstanding stock owned by the stockholders of
each region, transfers of shares made pursuant to clauses (iv) or (v) of the
first sentence of ARTICLE III, Section 3 of these Bylaws shall be disregarded.
As used in these Bylaws, the phrase "entire Board of Directors" shall mean the
total number of directors, other than honorary members of the Board of Directors
(if any), that the Corporation would have if there were no vacancies.
Section 3. There shall not be more than two representatives from any one
Class A member of MasterCard International Incorporated, including its
Affiliates and its affiliate members of MasterCard International Incorporated
that are sponsored by such Class A member, on the Board of Directors.
Section 4. No individual may serve as a Director of the Corporation or of
any regional board if that individual also is a director (including a regional
board director), officer or other employee of or consultant to a competitor of
the Corporation, or if that individual is a director, officer or other employee
of or consultant to an institution that is represented on the global board of
directors or U.S. regional board of directors of a competitor. For this purpose,
a competitor of the Corporation is an entity that owns and/or operates a payment
card program competitive with the Corporation's comparable card programs, as
determined by the Corporation, and that is not itself a stockholder of the
Corporation.
Section 5. During the Transition Period, the regional president of Europe
and, if approved by the Board of Directors, one officer of the Corporation other
than the President and Chief Executive Officer, shall serve as honorary members
of 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.
Section 6. The Corporation's Nominating Committee will consider and
nominate individuals to serve as Directors of the Corporation for approval by
the Corporation's stockholders at the annual meeting of stockholders based upon
proposals made by each regional board of the Corporation. In the event of a
disagreement between a regional board and the Corporation's Nominating Committee
with respect to a nominee(s) from that region, the chairman of the regional
board and the Corporation's Nominating Committee shall attempt to resolve the
dispute through direct consultation. If no resolution is reached promptly, the
Corporation's Nominating Committee shall present its recommended slate of
Directors to the Board of Directors and shall advise the Board of Directors of
any disagreement with respect to the nominees from any specific region. The
Board of Directors shall make the final determination with respect to any
dispute regarding a nominee for Director from a region.
Section 7. The Board of Directors, by the affirmative vote of a majority of
the Directors then in office, and irrespective of any personal interest of any
of its members, may establish reasonable compensation of any or all Directors
for services to the Corporation as Directors.
Section 8. The term of any Director who, after election to the Board of
Directors of the Corporation, subsequently fails to meet the requirements of
Sections 2, 3 or 4 of this ARTICLE IV or Article EIGHTH of
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the Corporation's Certificate of Incorporation, shall terminate automatically at
the time that the Director so failed to qualify; provided, however, that the
Board of Directors may appoint that terminated Director to fill the vacancy
caused by the termination until the next annual meeting of stockholders unless
such termination resulted from the failure to satisfy the requirements of
Section 4 of this ARTICLE IV or Article EIGHTH of the Corporation's Certificate
of Incorporation.
Section 9. A vacancy in the Board of Directors, by reason of an increase in
the number of Directors or by reason of the death, resignation, removal or
termination of the term of a director, may be filled by the Board of Directors
in a manner consistent with the requirements of Sections 2, 3, and 4 of this
ARTICLE IV and Article EIGHTH of the Corporation's Certificate of Incorporation.
Each Director shall hold office until a successor is elected and qualified, or
until the Director's earlier death, resignation, removal or automatic
termination of his term. A Director may resign at any time by written notice to
the Corporation addressed to the President and Chief Executive Officer or the
Secretary.
ARTICLE V
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. The first meeting of each newly-elected Board of Directors shall
be held immediately following the annual meeting of stockholders at the place of
such annual meeting of stockholders. 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 3 of this ARTICLE V.
Section 2. 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.
Section 3. 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 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 special meeting of the Board of Directors called to consider a
matter that requires immediate action of the Board of Directors may be called on
at least 24 hours' notice if the matter does not require the approval of greater
than a simple majority of the Directors.
Section 4. Whenever notice of a meeting of the Board of Directors is
required, the notice shall be given in the manner set forth in ARTICLE XV of
these Bylaws and shall state the purpose or purposes, place, date and hour of
the meeting.
Section 5. Except as otherwise required by law or the Certificate of
Incorporation or other provisions of these Bylaws, a majority of the entire
Board of Directors shall constitute a quorum for the transaction of business
and, except as provided in Sections 1 and 2 of ARTICLE VI below, the vote of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the Board of Directors. If a quorum is not present at any
meeting of Directors, then a majority of the Directors present at the meeting
may adjourn the meeting from time to time, without notice of the adjourned
meeting other than announcement at the meeting. One or more Directors may
participate in a meeting of the Board of Directors by means of conference
telephone or similar communication device. To the extent permitted by law, a
Director participating in a meeting by conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear each other will be deemed present in person at the meeting and all acts
taken by him or her during his or her participation shall be deemed taken at the
meeting. The place of any meeting held by means of conference telephone or
similar communications equipment pursuant to this Section 5 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.
Section 6. 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 of Directors or the
8
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 of Directors or of that committee.
ARTICLE VI
SPECIAL VOTING MATTERS
Section 1. The following actions shall require approval of at least 75% of
the Directors present at a meeting at which a quorum is present:
a. any modification to Section 2b of ARTICLE IV of these Bylaws; and
b. any modification to this Section 1.
Section 2. The following actions shall require approval of at least 66 2/3%
of the Directors present at a meeting at which a quorum is present:
a. Establishing or eliminating regional boards;
b. any modification to the RGO (Regional, Global and Operations)
planning, budgeting and reporting methodology;
c. any modification to the overall size of the Board of Directors
referred to in Section 2a of ARTICLE IV of these Bylaws;
d. any issuance of Class A Shares or Class B Shares in excess of the
number of shares to which a stockholder would be entitled under the Global
Proxy Calculation;
e. any decision to overrule a decision taken by a regional board that
was permitted to be taken in accordance with Section 6 of ARTICLE VII of
these Bylaws;
f. any decision to overrule a recommendation made by the Debit
Advisory Board that was permitted to be taken in accordance with Section 4
of ARTICLE IX of these Bylaws; and
g. any modification to this Section 2.
ARTICLE VII
REGIONAL BOARDS AND MANAGEMENT
Section 1. The Board of Directors may establish or designate in accordance
with Section 2a of ARTICLE VI, one or more bodies to act as regional boards of
directors and exercise those powers and authorities delegated to them by the
Board of Directors of the Corporation or MasterCard International Incorporated.
The general purpose of each regional board is to manage the Corporation's brand
and product strategies on a regional level. The regional boards shall not be
boards of any incorporated entity. The initial powers and authorities of the
Corporation's regional boards are set forth below in Section 4.
Section 2. Initially, there will be six regional boards: Asia/Pacific;
Canada; Europe; Latin America; Middle East/Africa; and the United States. Each
region shall have corporate staff responsible for all activities within the
region, including, without limitation, coordination and support of member
programs within the region. The members of each regional board shall be elected
by the stockholders of that region.
Section 3. Each regional board shall establish an annual regional budget
for the following year, which budget shall provide sufficient funds to (i)
vigorously promote the Corporation's brands 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 budgets will be
by assessments and other fees (including, without limitation, transaction and
operations fees) paid to the Corporation or its consolidated subsidiaries. If
budgeting authority has not been delegated to a regional board in a particular
region, the annual budget for that region shall be reviewed and approved by the
Board of Directors of the Corporation. The Corporation's entire annual budget
incorporating all regional budgets shall be submitted to the Board of Directors
for its
9
approval no later than 30 days prior to the fiscal year to which it applies. In
its review of the Corporation's entire 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 the Corporation's brands and
programs in that region and an appropriate method of funding such expenses.
Section 4. Each regional board shall have the authority to manage the
following activities, and any other activities that the Board of Directors may
delegate from time to time, within its region, provided that (i) such activities
shall affect and apply only to the affairs of the regional members licensed, and
applicants for a license, within such region and to transactions taking place
entirely within such region and then only with respect to MasterCard(R),
Cirrus(R) and Maestro(R) payment products (other than travelers cheques),
services, programs and activities and (ii) such activities have not otherwise
been delegated to the management of the Corporation:
a. MEMBERSHIP. Review all completed applications for membership in
MasterCard International Incorporated submitted by entities headquartered
in the specific region. The regional board also shall have the power and
authority to act upon any requests from regional members of MasterCard
International Incorporated regarding change of membership status (other
than termination) and class of membership. Only the Board of Directors of
the Corporation or MasterCard International Incorporated shall have the
right to terminate a member's membership in MasterCard International
Incorporated and license or license to participate in MasterCard(R),
Cirrus(R) and Maestro(R); however, the regional boards shall have the right
to recommend such terminations to the Board of Directors of the
Corporation.
b. FINES AND DISCIPLINARY ACTIONS. Power and authority to (1)
establish and approve fines and disciplinary actions for intraregional
violations of the Corporation's or MasterCard International Incorporated's
bylaws, rules, policies or procedures by regional members of MasterCard
International Incorporated within the specific region and (2) recommend
terminations of such regional members of MasterCard International
Incorporated to the Board of Directors of the Corporation.
c. ANNUAL EXPENSE BUDGET. Power and authority and obligation to
approve an annual budget for the specific region within the time frames
needed to approve the entire annual budget of the Corporation. Such
regional budget shall comply with the practices, policies and procedures of
the Corporation and MasterCard International Incorporated.
d. ASSESSMENTS AND FEES. Power, authority and obligation to fix,
impose and collect assessments and fees from regional members of MasterCard
International Incorporated within the specific region in order to fund the
region's budget. This power shall extend to interregional transactions in
which a regional member of MasterCard International Incorporated is
involved.
e. SURPLUS FUNDS. Power and authority to determine the distribution
of a portion of any revenues in excess of budgeted amounts in any year,
provided that such distribution is consistent with the Corporation's
reinvestment policy for excess funds then in effect or such other amount as
agreed with the President and Chief Executive Officer of the Corporation.
f. ADDITIONAL FUNDING. Power and authority to levy additional
assessments, fees or both upon regional members of MasterCard International
Incorporated within the region for the purpose of generating additional
funds above budgeted revenue in order to fund regional initiatives not
provided for in the region's annual budget. This power shall extend to
interregional transactions in which a regional member of MasterCard
International Incorporated is involved.
g. INTRAREGIONAL INTERCHANGE FEES. Power and authority to approve
intraregional interchange fees, subject to applicable regulatory
requirements.
h. INTRAREGIONAL OPERATING RULES. Power and authority to adopt
intraregional variances to the Corporation's operating rules, policies and
procedures that apply to MasterCard(R), Cirrus(R) and Maestro(R), to the
extent they apply only to members of MasterCard International Incorporated
of a specific region and their transactions effected wholly within a
specific region, which rules, policies and procedures cover
10
the standards and procedures governing how a specific transaction is
initiated and processed, and how any related disputes are resolved. Such
rules may not have any effect, intended or unintended, outside the region.
i. INTRAREGIONAL PRODUCT AND ENHANCEMENT DEVELOPMENT. Power and
authority to approve intraregional products and enhancement services
involving the creation and ongoing management of new regional payment
vehicles and enhancement services that add value to new and existing
products.
j. AFFINITY AND CO-BRANDING RULES. With respect to MasterCard(R),
Cirrus(R) and Maestro(R) branded products only, the power and authority to
approve specific affinity and co-branding rules for the card programs of
members of MasterCard International Incorporated within the specific
region.
k. REGIONAL BOARD PROCESSES. Obligation to establish the procedures
and requirements for managing the regional board and its activities, which
shall be set forth in the regional board rules and shall include quorum
requirements, minimum vote requirements and the creation and seating of
committees.
Section 5. The delegation of the powers and authorities upon the regional
boards as described in this ARTICLE VII, and the delegation of any other powers
or authorities that may be delegated upon one or more regional boards by the
Corporation's Board of Directors from time to time, is conditioned upon
compliance by the regional board with all applicable laws and all of the
requirements set forth in the Corporation's Certificate of Incorporation, rules
and regulations, these Bylaws and MasterCard International Incorporated's
certificate of incorporation, bylaws and membership and licensing rules and
regulations, and any other policies of the Corporation or MasterCard
International Incorporated, including the rules and regulations applicable to
Cirrus(R) and Maestro(R). Such delegated power and authority may not be
delegated by the regional boards. Management of the Corporation shall establish
the processes supporting the regional boards in their exercise of such delegated
power and authority.
Section 6. Any decision of a regional board, to the extent such decision is
within the scope of power and authority delegated to such regional board by the
Board of Directors of the Corporation, shall be effective unless and until the
Board of Directors of the Corporation, in accordance with Section 2 of ARTICLE
VI, determines otherwise, provided that the approval or adoption of any action,
rule or policy that could be expected, in the reasonable judgment of the Board
of Directors of the Corporation, to have an effect in more than one region or
that in the reasonable judgment of the Board of Directors of the Corporation is
inconsistent with a published policy, practice or strategy of the Corporation,
shall not become effective (or shall be declared ineffective if already in
effect) unless and until such action, rule or policy has been ratified by the
Board of Directors of the Corporation. Only the Corporation's management shall
be authorized to enter into a business arrangement with a stockholder or a
member of MasterCard International Incorporated that it can be reasonably be
determined will relate to activities that will be conducted in, or have an
effect in, more than one region, subject to any parameters as may be determined
by the Board of Directors. Nothing contained in this Section 6 shall be
construed to limit the authority of the Board of Directors of the Corporation to
revoke or amend the power and authority delegated upon the regional boards.
Section 7. Each region shall have a regional president selected by the
President and Chief Executive Officer of the Corporation, subject to the
concurrence of the regional board. In the event of a disagreement between a
regional board and the President and Chief Executive Officer of the Corporation
with respect to a nominee for regional president, the chairman of the regional
board and the President and Chief Executive Officer of the Corporation shall
attempt to resolve the dispute through direct consultation. If no resolution is
reached promptly, the President and Chief Executive Officer of the Corporation
shall present his recommendation for regional president to the Board of
Directors and shall advise the Board of Directors of any disagreement with
respect to such selection. The Board of Directors shall only approve the
selection of the President and Chief Executive Officer upon the affirmative vote
of two-thirds of the entire Board of Directors with respect to any dispute
regarding the President and Chief Executive Officer's disputed selection for a
regional president. Each regional president shall report to the President and
Chief Executive Officer of the Corporation or such other member or members of
the Corporation's management as the President and Chief Executive Officer of the
Corporation may determine. Each regional president shall assist the
Corporation's Board of Directors and management and the regional board in
implementing the decisions and policies of the
11
Corporation's Board of Directors and management and the regional board (within
the scope of power and authority delegated by the Corporation's Board of
Directors) that affect the region. Notwithstanding anything herein to the
contrary, during the Transition Period, the regional president for Europe shall
report only to the President and Chief Executive Officer of the Corporation and
shall be a member of the Corporation's Global Executive Management Group. Any
termination of a regional president by the President and Chief Executive Officer
of the Corporation shall require the concurrence of the regional board, which
shall not be unreasonably withheld.
ARTICLE VIII
COMMITTEES
Section 1. The Board of Directors may designate from among its members an
Executive Committee, Audit Committee, Nominating Committee, Compensation
Committee and other committees to serve at the pleasure of the Board of
Directors.
a. EXECUTIVE COMMITTEE. The Executive Committee, if formed, shall comprise
the Chairman of the Board of Directors, the Vice Chairmen of the Board of
Directors, the President and Chief Executive Officer (for so long as he or she
is a Director of the Corporation) and such other number of Directors as the
Board of Directors shall establish from time to time so that the composition of
the Executive Committee generally reflects the regional composition of the
Corporation's stockholders. To the extent permitted by law, the Executive
Committee shall have all the authority of the Board of Directors, except that it
will not have the power or authority to approve or recommend an amendment to the
Corporation's Certificate of Incorporation or an agreement or plan of merger or
consolidation, to recommend the sale, lease or exchange of all or substantially
all of the Corporation's property and assets, to recommend the dissolution of
the Corporation or a revocation of dissolution, to amend these Bylaws or to take
any action that would require the affirmative vote of greater than a simple
majority of the members of the Board of Directors present at a meeting at which
a quorum is present.
b. AUDIT COMMITTEE. The Audit Committee, if formed, shall comprise such
number of Directors as the Board of Directors may appoint to it. The Audit
Committee will be responsible for reviewing the reports of the Corporation's
auditors and for performing such other duties as are assigned to it by the Board
of Directors.
c. NOMINATING COMMITTEE. The Nominating Committee shall comprise such
number of Directors as the Board of Directors may appoint to it. In selecting
Directors to serve on the Nominating Committee, the Board of Directors shall
seek to include individuals representing stockholders that conduct business in
multiple regions of the world, as well as individuals representing stockholders
that reflect the regional composition of the Corporation's stockholders, and
shall include representation from each region representing greater than 20% of
the most recent Global Proxy Calculation. The Nominating Committee will be
responsible for nominating persons to serve as Directors and members of the
Debit Advisory Board as described in ARTICLE IX. In addition, the Nominating
Committee may recommend individuals to serve on the standing committees. In
making nominations, the Nominating Committee will seek, consistent with the
qualifications required of Directors and committee members, to give the
stockholders in each geographic region reasonable representation, taking into
account, among other things, the number of shares of the Corporation's stock
owned by the stockholders in each region.
d. COMPENSATION COMMITTEE. The Compensation Committee, if formed, shall
comprise such number of Directors as the Board of Directors may elect to it. The
Compensation Committee may be responsible for fixing the compensation of the
elected officers of the Corporation and approving any employee incentive
programs. The compensation of all other employees will be fixed by the
Corporation's President and Chief Executive Officer (subject to the oversight of
the Board of Directors).
e. 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.
12
Section 2. 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).
Section 3. Any action of a committee may be taken without a meeting if
written consent to the action signed by all the members of the committee is
filed with the minutes of the committee.
ARTICLE IX
DEBIT ADVISORY BOARD
Section 1. For an intended term of three years, the Corporation shall have
a Debit Advisory Board which will be responsible for providing advice to the
Board of Directors in the following areas:
a. the development and expansion of the Corporation's debit programs
globally;
b. global program and brand strategies, policies, rules and technology
standards for the Corporation's debit programs consistent with the
standards for the Corporation's other products set by the Board of
Directors; and
c. the performance and evaluation of the Corporation's Debit Brand
Management Group (or other group within the Corporation performing similar
functions).
For purposes of these Bylaws, the term "debit programs" shall mean the issuance
and acceptance of ATM and point-of-sale electronic payment devices that access
deposit accounts owned by an issuing member of MasterCard International
Incorporated under a trademark and/or service mark owned or managed, directly or
indirectly, by the Corporation or one of its subsidiaries.
Section 2. Beginning on or after the two-year anniversary of the creation
of the Debit Advisory Board, the Board of Directors shall review the performance
of the Debit Advisory Board and consider, in its sole discretion, whether, and
on what terms, to continue the Debit Advisory Board, with the understanding that
it is the intent of the Corporation that the Debit Advisory Board will continue
for a third year.
Section 3. During the first year of the existence of the Debit Advisory
Board, the Debit Advisory Board shall be comprised of the members of the Board
of Directors of Maestro International Incorporated in effect upon the date of
adoption of these Bylaws. The Nominating Committee will nominate individuals to
serve as members of the Debit Advisory Board beginning with the second year of
the Debit Advisory Board for approval by the Board of Directors. In selecting
nominees for service on the Debit Advisory Board, the Nominating Committee will
give due consideration to representatives from key stockholders of the
Corporation that support the Corporation's debit products, as measured by the
Global Proxy Calculation. Prior to presenting such nominations, the Nominating
Committee shall seek recommendations for candidates for the Debit Advisory Board
from the regional boards and shall duly consider all such recommendations. In
the event of a disagreement between a regional board and the Nominating
Committee with respect to a nominee(s) from that region, the chairman of the
regional board and the Nominating Committee shall attempt to resolve the dispute
through direct consultation. If no resolution is reached promptly, the
Nominating Committee shall present its recommended slate of Nominating Committee
members and shall advise the Board of Directors of any disagreement with respect
to the nominees from any specific region. The Board of Directors shall make the
final determination with respect to any dispute regarding a regional nominee.
Section 4. Any recommendation of the Debit Advisory Board, to the extent
such recommendation is within the scope of power and authority delegated to the
Debit Advisory Board by the Board of Directors of the Corporation and is not
inconsistent with a published policy, practice or procedure, shall be effective
unless
13
and until the Board of Directors of the Corporation, in accordance with Section
2(f) of ARTICLE VI, overrules such recommendation.
ARTICLE X
OFFICERS
Section 1. 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 from among its members,
a President and Chief Executive Officer and a Secretary; and the Board of
Directors may at that meeting, and thereafter, elect a Chairman Emeritus, up to
two Vice-Chairmen of the Board of Directors, a Chief Operating Officer, 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-CHAIRMEN 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 MasterCard International Incorporated 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 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. He or she shall cause to be
entered in records to be kept for that purpose full and accurate accounts of all
moneys received by him or her and paid by him or her on account of the
Corporation. He or she shall make and sign such reports, statements and
documents as may be required by 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 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.
14
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 stockholders and of the Board of Directors when such notices are required by
law or these Bylaws. The Secretary shall attend all meetings of the stockholders
and of the Board of Directors and keep the minutes thereof. He or she 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.
Section 2. 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.
Section 3. 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.
Section 4. 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.
Section 5. 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.
Section 6. 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.
ARTICLE XI
CERTIFICATES FOR SHARES
Section 1. In the discretion of the Board of Directors, the shares of stock
of the Corporation may be represented by certificates, in such form as the Board
of Directors may from time to time prescribe, signed by the Chairman of the
Board of Directors, or the President and Chief Executive Officer or a Vice
President and by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary and bearing any legends as may be prescribed by the
Certificate of Incorporation or otherwise.
Section 2. In the event that the shares of stock of the Corporation are not
represented by certificates, the name, address and number and class of shares
owned by each stockholder shall be set forth in the books and records of the
Corporation, as such may be amended from time to time by the Corporation to
reflect any change in the name, address and/or number or class of shares owned
by each stockholder.
Section 3. Any or all signatures upon a certificate may be a facsimile.
Even if an officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall cease to be that
officer, transfer agent or registrar before the certificate is issued, that
certificate may be issued by the Corporation with the same effect as if he or
she or it were that officer, transfer agent or registrar at the date of issue.
Section 4. The Board of Directors may direct that a new certificate be
issued in place of any certificate issued by the Corporation that is alleged to
have been lost, stolen or destroyed. When doing so, the Board of Directors may
prescribe such terms and conditions precedent to the issuance of the new
certificate as it deems
15
expedient, and may require a bond sufficient to indemnify the Corporation
against any claim that may be made against it with regard to the allegedly lost,
stolen or destroyed certificate or the issuance of the new certificate.
Section 5. The Corporation or a transfer agent of the Corporation, upon
surrender to it of a certificate representing shares, duly endorsed and
accompanied by proper evidence of lawful succession, assignment or authority of
transfer, shall issue a new certificate to the person entitled thereto, and
shall cancel the old certificate and record the transaction upon the books of
the Corporation.
Section 6. The Corporation shall for all purposes be entitled to treat a
person registered on its books, as the owner of shares, with the exclusive
right, among other things, to receive dividends and to vote with regard to those
shares, and the Corporation shall be entitled to hold a person registered on its
books as the owner of shares and shall not be bound to recognize any equitable
or other claim to, or interest in, shares of its stock on the part of any other
person, whether or not the Corporation shall have express or other notice of the
claim or interest of the other person, except as otherwise provided by the laws
of Delaware.
ARTICLE XII
INDEMNIFICATION
Section 1. The Corporation shall indemnify any person who was or is made a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that the person is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise to the fullest extent permitted by
Delaware law.
Section 2. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that the person is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise to the fullest extent
permitted by Delaware law.
Section 3. To the extent that a present or former director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections 1
and 2 of this ARTICLE, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by the person in connection therewith.
Section 4. Any indemnification under Sections 1 and 2 of this ARTICLE
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in
Sections 1 and 2. Such determination will be made, with respect to a person who
is a director or officer at the time of such determination, (1) by a majority
vote of the Board of Directors who were not parties to such action, suit or
proceeding even though less than a quorum, or (2) by a committee or such
Directors designated by majority vote of such Directors, even though less than a
quorum, or (3) if there are no such Directors, or if such Directors so direct,
by independent legal counsel (compensated by the Corporation) in a written
opinion or (4) by the stockholders.
Section 5. Expenses (including attorneys' fees) incurred by any director,
officer, employee or agent in defending a civil, criminal, administrative or
investigative action, suit or proceeding, or threat thereof, may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding in the specific case upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount if it shall
ultimately be determined that such person is not entitled to be indemnified by
the Corporation as authorized in this ARTICLE. Such expenses (including
attorney's fees) incurred by a former
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director, officer, employee or agent may be paid upon such terms and conditions,
if any, as the Corporation deems appropriate.
Section 6. The indemnification and advancement of expenses provided by, or
granted pursuant to, the other Sections of this ARTICLE shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office.
Section 7. The Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the Corporation would have the power to
indemnify such person against such liability under the provisions of this
ARTICLE.
Section 8. References in this ARTICLE to "the Corporation" will include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger that, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents so that any person who is
or was a director, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, will stand in the same position under the
provisions of this ARTICLE with respect to the resulting or surviving
corporation as such person would have with respect to such constituent
corporation if its separate existence had continued.
Section 9. For purposes of this ARTICLE, references to "other enterprises"
will include employee benefit plans; references to "fines" will include any
excise taxes assessed on a person with respect to an employee benefit plan;
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of a subsidiary of the
Corporation and any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan will be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this ARTICLE.
Section 10. The indemnification and advancement of expenses provided by, or
granted pursuant to, this ARTICLE shall, unless otherwise provided, when
authorized or ratified continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
Section 11. Except as specifically permitted by applicable law, no person
who is or was a director, officer, employee, agent or member of any committee of
the Corporation shall be indemnified in any way if such person has brought the
action or proceeding against the Corporation, its directors, officers,
employees, agents or any committee of the Corporation.
Section 12. The provisions of this ARTICLE will be deemed retroactive and
will include all acts of the directors, officers, employees or agents of the
Corporation since the date of incorporation.
ARTICLE XIII
GENERAL PROVISIONS
Section 1. The corporate seal shall be circular in form with the words
"MasterCard Incorporated" around the outer margin and the words and figures
"CORPORATE SEAL 2001 DELAWARE" in the center and such other appropriate legend
as the Board of Directors may from time to time determine. Unless prohibited by
the Board of Directors, a facsimile of the corporate seal may be affixed or
reproduced in lieu of the corporate seal itself.
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Section 2. The fiscal year of the Corporation shall be the calendar year.
Section 3. The symbol of the 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 the Corporation.
Section 4. As used in these Bylaws, the term "card" means a device,
complying with the specifications set forth in the rules and regulations of
MasterCard International Incorporated, which may be used to pay for goods and/or
services and to obtain cash through access of the cardholder's credit, charge or
depositary account with the issuer of the cards.
Section 5. As used in these Bylaws, the phrase "published policy" is one
that has been disseminated by bulletin, letter or other form of written or
electronic communication to, at least, the stockholders and/or the Class A
members of MasterCard International Incorporated that, along with their
affiliate members, if any, are affected by such policy.
Section 6. The books of the Corporation, except such as are required by law
to be kept within the State of Delaware, may be kept at such place or places
within or outside of the State of Delaware as the Board of Directors may from
time to time determine.
ARTICLE XIV
AMENDMENTS
Section 1. The Board of Directors, by the affirmative vote of a majority of
the entire Board of Directors at any meeting of the Board of Directors at which
a quorum is present, or by action without a meeting if all of the Directors
consent in writing to that action, may adopt, amend or repeal any provision of
these Bylaws, except that (i) any amendment or repeal of Section 1 of ARTICLE VI
shall require the affirmative vote of at least 75% of the Directors present at a
meeting at which a quorum is present, (ii) any amendment or repeal of Section 2
of ARTICLE VI shall require the affirmative vote of at least 66 2/3% of the
Directors present at a meeting at which a quorum is present and (iii) any
amendment or repeal of Section 2 of ARTICLE III shall be subject to the terms
and conditions of Article EIGHTH of the Corporation's Certificate of
Incorporation.
Section 2. The stockholders, by the affirmative vote of a majority of the
votes cast at any meeting of the stockholders at which a quorum is present or by
action without a meeting in accordance with these Bylaws, may adopt, amend or
repeal any provision of these Bylaws; provided, however, that any amendment or
repeal of Section 2 of ARTICLE III shall be subject to the terms and conditions
of Article EIGHTH of the Corporation's Certificate of Incorporation.
ARTICLE XV
NOTICES
Section 1. To the extent permitted by applicable law, any notice to a
stockholder may 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 stockholder at such
stockholder's address, facsimile number, electronic mail address or telex number
as it appears on the records of stockholders or at such other address, facsimile
number, electronic mail address or telex number as the stockholder 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 stockholder 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 stockholder.
Section 2. 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
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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.
Section 3. 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.
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