Exhibit 10.9

MONEYGRAM INTERNATIONAL, INC.
EXECUTIVE SEVERANCE PLAN (TIER II)

     1. PURPOSE: To provide management continuity by inducing selected
Executives to remain in the employ of MoneyGram International, Inc. (the
“Corporation”) or one of its subsidiaries pending a possible Change of Control
of the Corporation, effective as of June 30, 2004.

     2. OBJECTIVES: To ensure in the event of a possible Change of Control of
the Corporation, in addition to the Executive’s regular duties, that he may be
available to be called upon to assist in the objective assessment of such
situations, to advise management and the Board of Directors (the “Board”) of the
Corporation as to whether such proposals would be in the best interests of the
Corporation its subsidiaries and its shareholders, and to take such other
actions as management or the Board might determine reasonably appropriate and in
the best interests of the Corporation and its shareholders.

     3. PARTICIPATION: Participation in this Executive Severance Plan (Tier II)
(this “Plan”) will be limited to selected Executives (each referred to herein as
“Executive”) whose importance to the Corporation during such periods is deemed
to warrant good and valuable special consideration by the Chief Executive
Officer of the Corporation. Each such Executive’s participation shall be
evidenced by a certificate (“Certificate”) issued by the Corporation, each of
which is incorporated herein by reference as if set forth in its entirety. In
the event an Executive shall become ineligible hereunder, his Certificate shall
be surrendered promptly to the Corporation.

     4. DEFINITION OF CHANGE OF CONTROL: For purposes of this Plan, a “Change of
Control” shall mean any of the following events:

        (a) An acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either: (1) the then

 

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outstanding shares of common stock of the Corporation (the “Outstanding
Corporation Common Stock”) or (2) the combined voting power of the then
Outstanding Voting Securities of the Corporation entitled to vote generally in
the election of Directors (the “Outstanding Corporation Voting Securities”);
excluding, however, the following: (A) any acquisition directly from the
Corporation or any entity controlled by the Corporation other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Corporation or
any entity controlled by the Corporation, (B) any acquisition by the Corporation
or any entity controlled by the Corporation, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Corporation or
any entity controlled by the Corporation or (D) any acquisition pursuant to a
transaction which complies with clauses (1), (2) and (3) of Section 4(c); or

        (b) A change in the composition of the Board such that the individuals
who, as of the effective date of the Plan, constitute the Board (such Board
shall be hereinafter referred to as the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board; provided, however, for purposes
of this section 4(b), that any individual who becomes a member of the Board
subsequent to the effective date of the Plan, whose election or nomination for
election by the Corporation’s shareholders was approved by a vote of at least a
majority of those individuals who are members of the Board and who were also
members of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of the Incumbent
Board; but provided further, that any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board shall not be so considered as a
member of the Incumbent Board, or

 

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        (c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Corporation
(a “Corporate Transaction”) excluding, however, such a Corporate Transaction
pursuant to which (1) all or substantially all of the individuals and entities
who are the beneficial owners, respectively, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities immediately prior to
such Corporate Transaction (the “Prior Shareholders”) beneficially own, directly
or indirectly, more than 60% of, respectively, the outstanding shares of Common
Stock and the combined voting power of the then Outstanding Voting Securities
entitled to vote generally in the election of Directors, as the case may be, of
the Corporation or other entity resulting from such Corporate Transaction
(including, without limitation, a corporation or other entity which as a result
of such transaction owns the Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be, (2) no Person
(other than the Corporation or any entity controlled by the Corporation, any
employee benefit plan (or related trust) of the Corporation or any entity
controlled by the Corporation or such corporation or other entity resulting from
such Corporate Transaction) will beneficially own, directly or indirectly, 20%
or more of, respectively, the outstanding shares of Common Stock of the
Corporation or other entity resulting from such Corporate Transaction or the
combined voting power of the Outstanding Voting Securities of such Corporation
or other entity entitled to vote generally in the election of Directors except
to the extent that such ownership existed prior to the Corporate Transaction and
(3) individuals who were members of the Incumbent Board will constitute at least
a majority of the members of the Board of Directors of the Corporation resulting
from such Corporate Transaction; and further excluding any disposition of all or
substantially all of the assets of the Corporation

 

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pursuant to a spin-off, split-up or similar transaction (a “Spin-off”) if,
immediately following the Spin-off, the Prior Shareholders beneficially own,
directly or indirectly, more than 80% of the outstanding shares of Common Stock
and the combined voting power of the then Outstanding Voting Securities entitled
to vote generally in the election of directors of both entities resulting from
such transaction, in substantially the same proportions as their ownership,
immediately prior to such transaction, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities; provided, that if another
Corporate Transaction involving the Corporation occurs in connection with or
following a Spin-off, such Corporate Transaction shall be analyzed separately
for purposes of determining whether a Change of Control has occurred;

        (d) The approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.

     5. DEFINITIONS:

                  (a) For purposes of this Plan, “Cause” with respect to an
Executive shall mean:

                  (i) The willful and continued failure of the Executive to
perform substantially the Executive’s duties with the Corporation or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
improvement is delivered to the Executive by the Board or the Chief Executive
Officer of the Corporation which specifically identifies the manner in which the
Board or Chief Executive Officer believes that the Executive has not
substantially performed the Executive’s duties, or

                  (ii) The willful engaging by the Executive in illegal conduct
or gross misconduct which is materially and demonstrably injurious to the
Corporation. For purposes of this Section 5(a), no act or failure to act, on the
part of the Executive, shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief

 

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that the Executive’s action or omission was in the best interests of the
Corporation. Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or upon the instructions of the Chief
Executive Officer or a senior officer of the Corporation or based upon the
advice of counsel for the Corporation shall be conclusively presumed to be done,
or omitted to be done, by the Executive in good faith and in the best interests
of the Corporation. The cessation of employment of the Executive shall not be
deemed to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board (excluding the
Executive if he is a member of the Board) at a meeting of the Board called and
held for such purpose (after reasonable notice is provided to the Executive and
the Executive is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good-faith opinion of the Board, the Executive
is guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.

                  (b) For purposes of the Plan, “Good Reason” with respect to an
Executive shall mean:

                  (i) The assignment to the Executive of any duties inconsistent
in any respect with the Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities immediately
prior to the Change of Control, or any other action by the Corporation or any of
its subsidiaries which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Corporation or the applicable subsidiary promptly after receipt
of notice thereof given by the Executive;

 

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          (ii) Any reduction of the Executive’s base salary, annual bonus,
incentive opportunities, retirement benefits, welfare or fringe benefits below
the highest level enjoyed by the Executive during the 120-day period prior to
the Change of Control;

          (iii) The Corporation’s or one of its subsidiaries requiring the
Executive to be based at any office or location other than that at which he was
based immediately prior to the Change of Control or the Corporation’s or one of
its subsidiaries requiring the Executive to travel to a substantially greater
extent than required immediately prior to the Change of Control;

          (iv) Any purported termination by the Corporation or one of its
subsidiaries of the Executive’s employment otherwise than as expressly permitted
by this Plan; or

          (v) Any failure by the Corporation to comply with and satisfy Section
11(c) of this Plan.

For purposes of this Plan, any good faith determination of “Good Reason” made by
an Executive shall be conclusive with respect to that Executive.

     6. ELIGIBILITY FOR BENEFITS: Benefits as described in Section 7 shall be
provided in the event the Executive’s employment with the Corporation or any of
its subsidiaries is terminated:

        (a) Involuntarily by the Corporation or the applicable subsidiaries
without Cause (a “Without Cause Termination”); or

        (b) By the Executive for Good Reason (a “Good Reason Termination”)
provided that such termination occurs within eighteen months after a Change of
Control; and provided, further, that in no event shall a termination as a
consequence of an Executive’s death, disability, or Retirement (as defined in
the next sentence) entitle the Executive to benefits under this Plan.
“Retirement” shall mean the Executive’s voluntary retirement at or after his
normal retirement

 

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date under the Corporation’s or a subsidiary’s retirement plan or, if the
Executive does not participate in any such plan that provides for a normal
retirement date, at or after age 65.

        7. BENEFIT ENTITLEMENTS:

        (a) Lump Sum Payment: On or before the Executive’s last day of
employment with the Corporation or any of its subsidiaries, the Corporation or
the applicable subsidiary will pay to the Executive as compensation for services
rendered a lump sum cash amount (subject to any applicable payroll or other
taxes required to be withheld) equal to (i) two times the sum of (x) Executive’s
highest annual salary fixed during the period Executive was an employee of the
Corporation or any of its subsidiaries, plus (y) the greater of (A) the largest
amount awarded to him in a year as cash bonus (whether or not deferred and
regardless of deferral election) under the Corporation’s Management Incentive
Plan during the preceding four years (or if the Executive has not been employed
for at least four full fiscal years, all of the completed full fiscal years
during which the Executive has been employed), or (B) the target bonus under the
Corporation’s Management Incentive Plan for the fiscal year in which the Change
of Control occurs, plus (z) the greater of (I) the largest amount awarded to
Executive in a year as cash bonus (whether or not deferred and regardless of
deferral election) under the Corporation’s Performance Unit Incentive Plan
during the preceding four years or if the Executive has not been employed for at
least four full fiscal years, all of the completed full fiscal years during
which the Executive has been employed, or (II) the aggregate value of shares
when earned during a performance period under any performance-related Restricted
Stock award during the preceding four years or if the Executive has not been
employed for at least four fiscal years, all of the completed full fiscal years
during which the Executive has been employed, or (III) the aggregate value at
the time of grant of the target shares awarded under the Corporation’s
performance-related Restricted Stock programs for the fiscal year in which the
Change of Control occurs, multiplied by (ii) a fraction, the numerator of which
is 24

 

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minus the number of full months from the date of the Change of Control through
the last day of the Executive’s employment, and the denominator of which is 24.

        (b) Employee Plans: The Executive’s participation in life, accident,
health, compensation deferral, automobile, club membership, and financial
counseling plans of the Corporation, or the applicable subsidiary, if any,
provided to the Executive immediately prior to the Change of Control or his
termination, shall be continued, or equivalent benefits provided, by the
Corporation or the applicable subsidiary at no direct cost or tax cost to the
Executive in excess of the costs that would be imposed on the Executive if he
remained an employee for a period (the “Severance Period”) of two years times a
fraction, the numerator of which is 24 minus the number of full months from the
date of the Change of Control through the last day of the Executive’s
employment, and the denominator of which is 24. The Executive’s participation in
any applicable qualified or nonqualified retirement and/or pension plans and any
deferred compensation or bonus plan of the Corporation or any of its
subsidiaries, if any, shall continue only through the last day of employment.
Any terminating distributions and/or vested rights under such plans shall be
governed by the terms of the respective plans. For purposes of determining the
eligibility of the Executive for any post-retirement life and health benefits,
the Executive shall be treated as having attained an additional two years of age
and service credit, in each case as of the last day of the Executive’s
employment.

        (c) Special Retirement Benefits: If the Executive is, immediately prior
to his termination of employment, an active participant accruing benefits under
any qualified and/or nonqualified defined benefit retirement plans
(collectively, the “Retirement Plans”), then the Executive or his beneficiaries
shall be paid Special Retirement Benefits as and when the Executive or such
beneficiaries become entitled to receive benefits under the Retirement Plans (as
defined below), equal to the excess of (i) the retirement benefits that would be
payable to the Executive or

 

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his beneficiaries under the Retirement Plans if the Executive’s employment had
continued during the Severance Period, all of his accrued benefits under the
Retirement Plans (including those attributable to the Severance Period) were
fully vested, and his final average compensation is equal to the Deemed Final
Average Compensation, as defined below, over (ii) the total qualified and
unqualified benefits actually payable to the Executive or his beneficiaries
under the Retirement Plan. The “Deemed Final Average Compensation” means the
Executive’s final average compensation computed in accordance with the
Retirement Plans, except that the amount specified in Section 7(a) shall be
considered as having been paid to the Executive as “compensation” in equal
monthly installments during the Severance Period. All Special Retirement
Benefits shall be unfunded and payable solely from the general assets of the
Corporation or its appropriate subsidiary, and are not intended to meet the
qualification requirements of Section 401 of the Internal Revenue Code. The
amount of the Special Retirement Benefits shall be determined using actuarial
assumptions no less favorable to the Executive than those used in the qualified
Retirement Plan immediately prior to the Change of Control.

        (d) Outplacement: The Executive shall be provided with outplacement
benefits in accordance with those offered to Executives immediately prior to the
Change of Control.

        (e) Minimum Benefit Entitlement: Notwithstanding anything to the
contrary in this Section 7, and except as provided in Section 8(a), in no event
shall an Executive’s severance benefit under this Plan be less than the benefits
(if any) such Executive would have received in accordance with the severance
policy of the Corporation or applicable subsidiary in effect immediately prior
to the Change of Control.

     8. TAXES: (a) Anything in this Plan to the contrary notwithstanding, and
except as set forth below, in the event it shall be determined that any of an
Executive’s Payment(s) would be subject to the Excise Tax, then the Executive
shall be entitled to receive an additional payment (the

 

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“Gross-Up Payment”) in an amount such that, after payment by the Executive of
all taxes (and any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon such Executive’s
Payments. Notwithstanding the foregoing provisions of this Section 8(a), if it
shall be determined that the Executive is entitled to the Gross-Up Payment, but
that the Parachute Value of all Payments does not exceed 110% of the Executive’s
Safe Harbor Amount, then no Gross-Up Payment shall be made to the Executive and
the amounts payable under this Plan shall be reduced so that the Parachute Value
of all of such Executive’s Payments, in the aggregate, equals the Executive’s
Safe Harbor Amount. The reduction of the amounts payable hereunder, if
applicable, shall be made by first reducing the Executive’s Payments under
Section 7(a), unless an alternative method of reduction is elected by the
Executive, and in any event shall be made in such a manner as to maximize the
Value of all Payments actually made to the Executive. For purposes of reducing
the Payments to the Safe Harbor Amount, only amounts payable under this Plan
(and no other Payments) shall be reduced. If the reduction of the amounts
payable under this Plan would not result in a reduction of the Parachute Value
of all Payments to the Executive’s Safe Harbor Amount, no amounts payable to
such Executive under this Plan shall be reduced pursuant to this Section 8(a)
and the Gross-Up Payment shall be made to the Executive. The Corporation’s
obligation to make Gross-Up Payments under this Section 8 shall not be
conditioned upon the Executive’s termination of employment.

        (b) Determination By Accountant. Subject to the provisions of Section
8(c)ii, all determinations required to be made under this Section 8, including
whether and when a Gross-Up Payment to any Executive is required, the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the Corporation’s auditor or another nationally
recognized accounting firm appointed by the Corporation (the

 

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“Accounting Firm”). In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Executive may appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). The Accounting Firm shall
provide detailed supporting calculations both to the Corporation and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment or such earlier time as is requested by the
Corporation. All fees and expenses of the Accounting Firm shall be borne solely
by the Corporation. Any Gross-Up Payment, as determined pursuant to this
Section 8, shall be paid by the Corporation to the applicable Executive within
five days of the receipt of the Accounting Firm’s determination. Any
determination by the Accounting Firm shall be binding upon the Corporation and
the applicable Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder it is possible that Gross-Up Payments that will not
have been made by the Corporation should have been made (the “Underpayment”),
consistent with the calculations required to be made hereunder. In the event the
Corporation exhausts its remedies pursuant to Section 8(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for the benefit of
the Executive.

        (c) Notification Required. The Executive shall notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Corporation of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10 business
days after the Executive is informed in writing of such claim. The Executive
shall apprise the Corporation of the nature of such claim and the date on which
such claim is requested to be paid. The Executive shall not pay such claim prior
to the

 

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expiration of the 30-day period following the date on which the Executive gives
such notice to the Corporation (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Corporation
notifies the Executive in writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:

          (i) Give the Corporation any information reasonably requested by the
Corporation relating to such claim,

          (ii) Take such action in connection with contesting such claim as the
Corporation shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Corporation,

          (iii) Cooperate with the Corporation in good faith in order to
effectively contest such claim, and

          (iv) Permit the Corporation to participate in any proceedings relating
to such claim; provided, however, that the Corporation shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
(including interest and penalties) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 8(c)ii, the Corporation shall control all proceedings
taken in connection with such contest and, at its sole discretion, may pursue or
forgo any and all administrative appeals, proceedings, hearings and conferences
with the applicable taxing authority in respect of such claim and may, at its
sole discretion, either direct the Executive to pay the tax claimed and sue for
a refund, or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a

 

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determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Corporation shall
determine; provided, however, that if the Corporation directs the Executive to
pay such claim and sue for a refund, the Corporation shall pay the amount of
such payment to the Executive, and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax, (including
interest or penalties) imposed with respect to such payment or with respect to
any imputed income in connection with such payment; and provided, further that
any extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Corporation’s control of the contest shall be limited to issues with respect to
which a the Gross-Up Payment would be payable hereunder and the Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.

        (d) Repayment. If, after the receipt by the Executive of a Gross-Up
Payment or an amount paid by the Corporation pursuant to Section 8(c), the
Executive becomes entitled to receive any refund with respect to the Excise Tax
to which such Gross-Up Payment relates or with respect to such claim, the
Executive shall (subject to the Corporation’s complying with the requirements of
Section 8(c), if applicable,) promptly pay to the Corporation the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount paid by
the Corporation pursuant to Section 8(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and the
Corporation does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then the Executive shall

 

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not be required to repay such amount to the Corporation, but the amount of such
payment shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

        (e) Withholding. Notwithstanding any other provision of this Section 8,
the Corporation may, in its sole discretion, withhold and pay over to the
Internal Revenue Service or any other applicable taxing authority, for the
benefit of each Executive, all or any portion of any Gross-Up Payment.

        (f) Definitions: The following terms shall have the following meanings
for purposes of this Section 8. “Excise Tax” shall mean the excise tax imposed
by Section 4999 of the Code, together with any interest or penalties imposed
with respect to such excise tax.

        “Parachute Value” of a Payment shall mean the present value as of the
date of the change of control for purposes of Section 280G of the Code of the
portion of such Payment that constitutes a “parachute payment” under Section
280G(b)(2), as determined by the Accounting Firm for purposes of determining
whether and to what extent the Excise Tax will apply to such Payment.

        A “Payment” shall mean any payment or distribution in the nature of
compensation (within the meaning of Section 280G(b)(2) of the Code) to or for
the benefit of an Executive, whether paid or payable pursuant to this Plan or
otherwise.

        The “Safe Harbor Amount” of an Executive means 2.99 times the
Executive’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

        “Value” of a Payment shall mean the economic present value of a Payment
as of the date of the change of control for purposes of Section 280G of the
Code, as determined by the Accounting Firm using the discount rate required by
Section 280G(d)(4) of the Code.

     9. PAYMENT OBLIGATIONS ABSOLUTE: Except as expressly provided in Section 13
and 14, the Corporation’s or subsidiary’s obligation to pay the Executive the
benefits hereunder and to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counter-claim, recoupment, defense
or other right which the Corporation or any of its subsidiaries may have against
him or anyone else. All amounts paid or payable by the Corporation or one of its

 

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subsidiaries hereunder shall be paid without notice or demand. Each and every
payment made hereunder by the Corporation or subsidiary shall be final and the
Corporation or subsidiary will not seek to recover all or any part of such
payment(s) from the Executive or from whosoever may be entitled thereto, for any
reason whatsoever. No Executive shall be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Plan, and the obtaining of any such other employment shall in no event
effect any reduction of the Corporation’s or subsidiary’s obligations to make
the payments and arrangements required to be made under this Plan. The
Corporation or applicable subsidiary may at the discretion of the Chief
Executive Officer of the Corporation enter into an irrevocable, third-party
guarantee or similar agreement with a bank or other institution with respect to
the benefits payable to an Executive hereunder, which would provide for the
unconditional payment of such benefits by such third party upon presentment by
an Executive of his Certificate (and on such other conditions deemed necessary
or desirable by the Corporation or such subsidiary) at some specified time after
termination of employment. Such third-party guarantor shall have no liability
for improper payment if it follows the instructions of the Corporation or such
subsidiary as provided in such Certificate and other documents required to be
presented under the agreement, unless the Corporation or such subsidiary, in a
written notice, has previously advised such third-party guarantor of the
determination by its Board of Directors of ineligibility of the Executive in
accordance with Section 14.

     10. CONTINUING OBLIGATIONS: It shall be a condition to the entitlement of
an Executive to any benefits under this Plan that he agree to retain in
confidence any confidential information known to him concerning the Corporation
and its subsidiaries and their respective businesses as long as such information
is not publicly disclosed, except as required by law.

 

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     11. SUCCESSORS:

        (a) The benefits provided under this Plan are personal to the Executives
and without the prior written consent of the Corporation shall not be assignable
by any Executive otherwise than by will or the laws of descent and distribution.
This Plan shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.

        (b) This Plan shall inure to the benefit of and be binding upon the
Corporation and its successors and assigns.

        (c) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to assume
expressly and agree to perform this Plan in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place. As used in this Plan, Corporation shall mean the
Corporation as hereinbefore defined and any other person or entity which assumes
or agrees to perform this Plan by operation of law, or otherwise.

     12. SEVERABILITY: Any provision in this Plan which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     13. OTHER PLANS AND AGREEMENTS: Notwithstanding any provision herein to the
contrary, in the event the Executive’s employment with the Corporation or
applicable subsidiary terminates and the Executive is entitled to receive
termination, separation or other like amounts from the Corporation or any of its
subsidiaries pursuant to any contract of employment, generally prevailing
separation pay policy, or other program of the Corporation or applicable
subsidiary, all such amounts shall be applied to and set off against the
Corporation’s or applicable

 

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subsidiary’s obligation set forth in Section 7 of this Plan. Nothing in this
Section 13 is intended to result in set-off of pension benefits, supplemental
executive retirement benefits, disability benefits, retiree benefits or any
other plan benefits not directly provided as termination or separation benefits.

     14. AMENDMENT AND TERMINATION: This Plan may be amended or terminated by
action of the Board. This Plan shall terminate with respect to an Executive if
the Chief Executive Officer of the Corporation determines that the Executive is
no longer a key executive to be provided a severance agreement and so notifies
the Executive by certified mail at least thirty (30) days before participation
in this Plan shall cease. Notwithstanding the foregoing, no such amendment,
termination or determination may be made, (and if made, shall have no effect)
(i) during the period of thirty-six months following any Change of Control or
(ii) during any period of time when the Corporation has knowledge that any third
person has taken steps reasonably calculated to effect a Change of Control,
until such third person has abandoned or terminated his efforts to effect a
Change of Control as determined by the Board in good faith, but in its sole
discretion.

     15. GOVERNING LAW: This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Plan are not part of the
provisions hereof and shall have no force or effect.

     16. ACCEPTANCE: By acceptance of participation in this Plan, an Executive
agrees to give a minimum of four (4) weeks’ notice to the Corporation or any of
its subsidiaries in the event of his voluntary resignation.