Mastercard 8-K 2012
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 13, 2012
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Item 1.01 Entry into a Material Definitive Agreement
On July 13, 2012, MasterCard Incorporated (the Company) and its operating subsidiary, MasterCard International Incorporated (MasterCard International and, together with the Company, MasterCard), entered into a Memorandum of Understanding (the MOU) to settle the current U.S. merchant class litigation in the Eastern District of New York in case captioned MDL 1720. Separately, MasterCard has also reached an agreement in principle to settle all claims brought by the individual merchant plaintiffs.
The MOU sets out a binding obligation to enter into a settlement agreement (the Class Settlement Agreement) in the form attached to the MOU. The settlement is subject to: (1) the successful completion of certain appendices, (2) the successful negotiation of a settlement agreement with the individual merchant plaintiffs, (3) final court approval of the class settlement and (4) any necessary internal approvals for the parties.
MasterCards share of the cash portion of the settlements will total $790 million on a pre-tax basis. As a result, MasterCard will incur an additional $20 million pre-tax charge in its second quarter 2012 financial statements. MasterCard had previously recorded a $770 million charge in its fourth quarter 2011 financial statements. MasterCards financial obligation was based upon the allocation of financial responsibility that was set out in the judgment and settlement sharing agreements that were executed in February 2011 by the Company, MasterCard International and, as applicable, Visa, Inc., Visa U.S.A. Inc., Visa International Service Association and MasterCards customer banks that are parties thereto. Pursuant to those agreements, MasterCards responsibility is for 12% of a global settlement of the matter. The $790 million obligation represents MasterCards 12% share of the class settlement set forth in the Class Settlement Agreement of $6.05 billion, along with its 12% share of the cash portion settlement with the individual merchant plaintiffs.
The Class Settlement Agreement includes the following terms, among others:
The above description does not purport to be complete and is qualified in its entirety by reference to the MOU, a copy of which is filed as Exhibit 10.1 hereto and is incorporated
herein by reference. The MOU includes a copy of the Class Settlement Agreement which the parties have committed to execute, subject to the conditions described above.
Item 8.01 Other Events
On July 13, 2012, the Company issued a press release announcing that it had entered into the MOU. A copy of the press release, which describes the MOU and the settlement, is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.