MasterCard Board of Directors Approves $500 million Share Repurchase

MasterCard Incorporated announced that its Board of Directors approved an amendment to its certificate of incorporation designed to facilitate an accelerated, orderly conversion of Class B common stock into Class A common stock for subsequent sale. In a related decision, the Board approved two additional items for 2007: the conversion of up to 13.4 million shares of Class B common stock into Class A common stock, and the repurchase of up to $500 million of Class A common stock in open market transactions, each of which is subject to stockholder approval of the amendment to the certificate of incorporation at the Company’s June 7, 2007 annual meeting of stockholders.

"We are pleased with the Board’s proposal to stockholders which will enable a coordinated and structured conversion from Class B common stock to Class A common stock," said MasterCard President and Chief Executive Officer Robert W. Selander. "This plan reflects our strong business results and cash position and demonstrates our commitment to manage our capital structure in a manner that creates value for all shareholders."

Through "conversion transactions," in amounts and at times to be designated by the Company, current holders of shares of Class B common stock who elect to participate would be eligible to convert their shares on a one- for-one basis into shares of Class A common stock for subsequent sale to public investors within no more than 30 days. MasterCard Class B shareholders would not be allowed to participate in any Class A shareholder vote during this "transitory" ownership period.

The number of shares of Class B common stock eligible for conversion transactions would be determined by the Company and limited to an annual aggregate number of up to 10% of the total combined outstanding shares of Class A and Class B common stock, based upon the total number of shares outstanding as of December 31st of the prior calendar year. In addition, prior to May 31, 2010, a conversion transaction would not be permitted that would cause shares of Class B common stock to represent less than 15% of total outstanding shares of Class A and Class B common stock outstanding.

Class B common stock, which is held by the Company’s financial institution customers, currently represents approximately 41% of the total outstanding common stock of MasterCard Incorporated. Under the terms of the Company’s existing certificate of incorporation, holders of Class B common stock are permitted, subject to a right of first refusal, to convert their shares into an equal number of shares of publicly traded Class A common stock at any time after May 31, 2010, the fourth anniversary of the Company’s IPO. The new proposal removes the right of first refusal requirement and would allow the Company, subject to the aggregate annual share amounts and other ownership percentage limitations mentioned above, to permit conversion of Class B common stock into an equal number of shares of Class A common stock, and sale of such newly issued shares to eligible purchasers, prior to May 31, 2010.

The Company’s proposal for the amendment of its certificate of incorporation has been included in a preliminary proxy statement filed today with the Securities and Exchange Commission ("SEC"). Adoption of the proposed amendment requires the affirmative vote of the holders of at least a majority of the outstanding shares of each of the Company’s Class A and Class B common stock as well as a majority of the votes cast by holders of the Company’s Class M common stock, which is also held by financial institution customers.