exv10w7



 





Exhibit 10.7




MONEYGRAM INTERNATIONAL, INC.

DEFERRED COMPENSATION PLAN

AS STATED July 1, 2004




1. PURPOSE OF THE PLAN.




     The purpose of the Deferred Compensation Plan (the “Plan”) is to provide a
select group of management or highly compensated employees of MoneyGram
International, Inc. (the “Corporation”), and its subsidiaries with an
opportunity to defer the receipt of incentive compensation awarded to them
under the Management Incentive Plan and certain other incentive plans of
MoneyGram International, Inc. and its subsidiaries (the “Incentive Plans”) or
such other substitute plans as may be adopted by the Corporation (“successor
plans”) and thereby enhance the long-range benefits and purposes of the
incentive awards. Each plan year shall extend from January 1 through December
31 of each calendar year, except that the first plan year shall begin on July
1, 2004 and shall end on December 31, 2004.



2. ADMINISTRATION OF THE PLAN.




     The Plan shall be administered by a committee appointed by the Chief
Executive Officer of the Corporation (hereinafter the “Compensation Advisory
Committee” or the “Committee”). Subject to the express provisions of the Plan,
and the Incentive Plans or successor plans, the Committee shall have the
authority to adopt, amend and rescind such rules and regulations, and to make
such determinations and interpretations relating to the Plan, which it deems
necessary or advisable for the administration of the Plan, but it shall not
have the power to amend, suspend or terminate the Plan. All such rules,
regulations, determinations and interpretations shall be conclusive and binding
on all parties.



3. PARTICIPATION IN THE PLAN.




     (a) Participation in the Plan shall be restricted to a select group of
management or highly compensated employees of the Corporation or one of its
subsidiaries who are participants in certain Incentive Plans, including the
Management Incentive Plan, and any other bonus or bonuses or similar or
successor plans, who have been selected in writing by the Chief Executive
Officer of the Corporation to participate in the Plan, and whose timely written
requests to defer the receipt of all or a portion of any incentive compensation
which may be awarded to them, are honored in whole or in part by the Committee.
Any individual whose request for deferral is not accepted or honored by the
Committee, whether for failure of timely submission or for any other reason,
shall not become a participant in the Plan, and the Committee’s determination
in this regard shall be conclusive and binding.



     (b) Participants may defer incentive compensation into a cash account and,
if designated by the Committee, into a stock unit account.



 








 





     (c) If a participant in the Plan shall 1) sever, voluntarily or
involuntarily, his or her employment with the Corporation or one of its
subsidiaries other than as a result of disability or retirement, 2) engage in
any activity in competition with the Corporation or any of its subsidiaries
during or following such employment, or 3) remain in the employ of a
corporation which for any reason ceases to be a subsidiary of the Corporation,
the Committee may at any time thereafter direct, in its sole and exclusive
discretion, that his participation in the Plan shall terminate, and that he or
she be paid in a lump sum the aggregate amount credited to his or her deferred
incentive cash account as of the date such participation is terminated and that
he or she be paid shares of MoneyGram International, Inc. Common Stock
(“Common Stock”) equal to the aggregate number of stock units credited to his
or her deferred stock unit account as of the date such participation is
terminated (with any fractional unit being settled by cash payment). The
Committee is authorized to establish and implement a policy and procedures for
administration of this paragraph, including, but not limited to, a policy
regarding small account balance cash-outs.



     (d) The Corporation and each participating subsidiary shall be solely
liable for payment of any benefits and, except as may be otherwise determined
by the Committee, for maintenance of deferred incentive accounts pursuant to
paragraph 7, with respect to its own employees who participate in the Plan. In
the event a participant leaves the employ of the Corporation or a participating
subsidiary (“former employer”) and is subsequently employed by another
employer, the Corporation or another subsidiary of the Corporation (“new
employer”), the former employer may agree to transfer and the new employer may
agree to assume the benefit liability reflected in such participant’s deferred
incentive account, without the consent of such participant and subject to the
approval of the Committee, in its sole discretion. In the event of such a
transfer and assumption of liability, the former employer shall have no further
liability for any benefit under the Plan to its former employee or otherwise
with respect to such transferred account.



4. REQUESTS FOR DEFERRAL.




     All requests for deferral of incentive awards must be made in writing
prior to November 15 of the year in which the bonus is being earned and shall
be in such form and shall contain such terms and conditions as the Committee
may determine. Each such request shall specify the dollar amount or the
percentage to be deferred of incentive award which would otherwise be received
in the following calendar year, but the deferral amount must be in an amount
equal to or greater than the lesser of $10,000 or 25% of the incentive award.
Each such request shall also specify 1) the date (no later than the employee’s
actual retirement date) when payment of the aggregate amount credited to the
deferred incentive account is to commence, 2) whether such payment is then to
be made in a lump sum or in quarterly or annual installments, 3) if payment is
to be made in installments, the period of time (not in excess of ten years)
over which the installments are to be paid, and 4) if the participant is
permitted to defer incentive compensation into a stock unit account, the
portion of the deferred incentive compensation which shall be treated as a cash
account under



2









 





paragraph 7(b) and the portion which shall be treated as a stock unit
account under paragraph 7(c). If the participant has requested that a portion
of the deferred incentive compensation be placed in a stock unit account, such
request shall also include acknowledgment that such stock unit account will be
settled in Common Stock of the Corporation, and that such stock unit account
cannot be converted to a cash account in the future. The Committee shall,
under no circumstances, accept any request for deferral of less than $1,000 of
an incentive award or any request which is not in writing or which is not
timely submitted.




5. DEFERRAL AND PAYMENT OF INCENTIVE AWARDS.




     The Committee shall, prior to December 15 of the year in which the bonus
is being earned, notify each individual who has submitted a request for
deferral of an incentive award whether or not such request has been accepted
and honored. If the request has been honored in whole or in part, the
Committee shall advise the participant of the dollar amount or percentage of
his or her incentive compensation which the Committee has determined to be
deferred. The Committee shall further advise the participant of its
determination as to the date when payment of the aggregate amount credited to
the participant’s deferred incentive account is to commence, whether payment of
the amount so credited as of that date will then be made in a lump sum or in
quarterly or annual installments, if payment is to be made in installments, the
period of time over which the installments will be paid, and if the participant
is permitted to defer incentive compensation into a stock unit account, whether
the deferred incentive account shall be treated as a cash account or a stock
unit account or split between cash and stock units. Upon subsequently being
advised of the existence of special circumstances which are beyond the
participant’s control and which impose an unforeseen severe financial hardship
on the participant or his or her beneficiary, the Committee may, in its sole
and exclusive discretion, modify the deferral arrangement established for that
participant to the extent necessary to remedy such financial hardship.



     If the participant has elected to defer incentive compensation in the form
of cash, the Corporation shall distribute a sum in cash to such participant,
pursuant to his or her election provided for in paragraph 4. If the
participant has elected to defer incentive compensation in the form of stock
units, the Corporation shall distribute to such participant, pursuant to his or
her election provided for in paragraph 4, shares of Common Stock of the
Corporation equal to the number of stock units being settled in such
installment (with any fractional unit being settled by cash payment).



6. CONVERSION OF CASH ACCOUNT BALANCE.




     Each participant who is permitted to defer incentive compensation into a
stock unit account may, not more than once a year or such other period as is
determined by the Committee, by written notice delivered to the Committee,
convert the aggregate balance or any portion thereof in his or her deferred
compensation cash account (either before or after installment payments from the
account may have commenced) from an account in the form of cash to an account
in the form of stock units in an amount equal



3









 





to the cash balance or specified portion thereof divided by the closing
price of the Common Stock of the Corporation (as reported for the New York
Stock Exchange-Composite Transactions) on the last trading day of the quarter
in which such notice is given, said account to then accrue dividend equivalents
as set forth in paragraph 7(c) below; provided however, that no such notice of
conversion (“Conversion Notice”) (a) may be given within six months following
the date of an election by such participant, if an Executive Officer of the
Corporation, with respect to any plan of the Corporation, that effected a
Discretionary Transaction (as defined in Rule 16b-3(f) under the Securities
Exchange Act of 1934) that was a disposition or (b) may be given after an
individual ceases to be an employee of the Corporation . The stock unit
account will be settled in Common Stock of the Corporation and such stock unit
account cannot be converted to a cash account in the future.




7. DEFERRED INCENTIVE ACCOUNT.




     (a) A deferred incentive account shall be maintained by his or her
employer for each participant in the Plan, and there shall be credited to each
participant’s account, on the date incentive compensation is paid, the
incentive award, or portion thereof, which would have been paid to such
participant on said date if the receipt thereof had not been deferred. If the
account is to be a stock unit account, the incentive compensation award shall
be converted into stock units by dividing the closing price of the
Corporation’s Common Stock (as reported for the New York Stock Exchange
Composite Transactions) on the day such incentive award is payable into such
incentive award.



     (b) If the participant has elected to defer incentive compensation in the
form of cash, there shall be credited on the last day of the quarter to each
participant’s account, an interest credit on his or her deferred incentive
award at the interest rates determined by the Committee to be payable during
each calendar year, or portion thereof, prior to the termination of such
participant’s deferral period or, if the amount then credited to his or her
deferred incentive account is to be paid in installments, prior to the
termination of such installment period. Interest will be paid on a prorated
basis for amounts withdrawn from the account during the quarter, with the
remaining balance accruing interest for the duration of the quarter. The
interest credit for the following quarter shall be a rate equal to the yield as
of March 31, June 30, September 30, and December 31 on Merrill Lynch Taxable
Bond Index — Long Term Medium Quality (A3) Industrial Bonds, unless and until
otherwise determined.



     (c) If a participant has elected to defer incentive compensation in the
form of stock units, then, in the event of a dividend paid in cash, stock of
the Corporation (other than Common Stock) or property, additional credits
(dividend equivalents) shall be made to the participant’s stock unit account
consisting of a number of stock units equal to the amount of such dividend per
share (or the fair market value, on the date of payment, of dividends paid in
stock or property), multiplied by the aggregate number of stock units credited
to such participant’s deferred compensation account on the record date for the
payment of such dividend, divided by the last closing price of the



4









 





Corporation’s Common Stock (as reported for the New York State
Exchange-Composite transactions) prior to the date such dividend is payable to
stockholders. After payment of deferred compensation commences, dividend
equivalents shall accrue on the unpaid balance thereof in the same manner until
all such deferred compensation has been paid.




     (d) In the event of a dividend of Common Stock declared and paid by the
Corporation, an additional credit shall be made to the participant’s stock unit
account of a number of stock units equal to the number of shares of the
Corporation’s Common Stock which the participant would have received as a stock
dividend had he or she been the owner on the record date for the payment of
such stock dividend of the number of shares of Common Stock equal to the number
of units in such stock unit account on such date. After payment of deferred
compensation commences, additional credits for stock dividends shall accrue on
the unpaid balance thereof in the same manner until all such deferred
compensation has been paid.



     (e) The Plan shall at all times be unfunded. The Corporation shall not be
required to segregate physically any amounts of money or otherwise provide
funding or security for any amounts credited to the deferred incentive accounts
of participants in the Plan.



8. CHANGE OF CONTROL OR CHANGE IN CAPITALIZATION.




     (a) If a tender offer or exchange offer for shares of Common Stock of the
Corporation (other than such an offer by the Corporation) is commenced, or if
the stockholders of the Corporation shall approve an agreement providing either
for a transaction in which the Corporation will cease to be an independent
publicly owned corporation or for a sale or other disposition of all or
substantially all the assets of the Corporation (“Change of Control”), a lump
sum cash payment shall be made to each participant participating in the Plan of
the aggregate current balance of his or her deferred compensation cash account
accrued on the date of the Change of Control, notwithstanding any other
provision herein. If the participant has elected to defer compensation in the
form of stock units, the Corporation shall distribute to such participant
shares of Common Stock of the Corporation equal to the number of stock units in
such participant’s stock unit account on the day preceding the date of the
Change of Control (with any fractional unit being settled by cash payment).
Any notice by a participant to change or terminate his or her election to defer
Compensation on or before the date of the Change of Control shall be effective
as of the date of the Change of Control, notwithstanding any other provision
herein.



     (b) Any recapitalization, reclassification, split-up, spin-off, sale of
assets, combination or merger not otherwise provided for herein which affects
the outstanding shares of Common Stock of the Corporation or any other relevant
change in the capitalization of the Corporation shall be appropriately adjusted
for by the Board of Directors of this Corporation, and any such adjustments
shall be final, conclusive and binding.



5









 





9. DESIGNATION OF BENEFICIARY.




     Each participant in the Plan shall deliver to the Committee a written
instrument, in the form provided by the Committee, designating one or more
beneficiaries to whom payment of the amount credited to his or her deferred
incentive account shall be made in the event of his or her death. Unless the
Committee shall otherwise determine, such payments shall be made in such
amounts and at such times as they would otherwise have been paid to the
participant if he had survived.



10. NONASSIGNABILITY OF PARTICIPATION RIGHTS.




     No right, interest or benefit under the Plan shall be assignable or
transferable under any circumstances other than to a participant’s designated
beneficiary in the event of his or her death, nor shall any such right,
interest or benefit be subject to or liable for any debt, obligation, liability
or default of any participant. The payments, benefits or rights arising by
reason of this Plan shall not in any way be subject to a participant’s debts,
contracts or engagements, and shall not be subject to attachment, garnishment,
levy, execution or other legal or equitable process.



11. RIGHTS OF PARTICIPANTS.




     A participant in the Plan shall have only those rights, interests or
benefits as are expressly provided in the Plan and in the Incentive Plans or
successor plans. The Plan shall be deemed to be ancillary to the Incentive
Plans or successor plans and the rights of participants in the Plan shall be
limited as provided in the Incentive Plans or successor plans. The right of a
participant or designated beneficiary to receive a distribution hereunder shall
be an unsecured claim against the general assets of the Corporation. All
amounts credited to an account shall constitute general assets of the
Corporation and may be disposed of by the Corporation at such time and for such
purposes as it may deem appropriate.



12. CLAIMS FOR BENEFITS.




     Claims for benefits under the Plan shall be filed with the Committee.
Written notice of the disposition of a claim shall be furnished the claimant
within 60 days after the application therefor is filed. In the event the claim
is denied, the reasons for the denial shall be specifically set forth.
Pertinent provisions of this Plan shall be cited. In addition, the written
notice shall describe any additional material or information necessary for the
claimant to perfect the claim (along with an explanation of why such material
or information is needed), and the written notice will fully describe the claim
review procedures of paragraph 13 below.



13. CLAIM REVIEW.




     Any claimant who has been denied a benefit shall be entitled, upon request
to the Committee, to receive a written notice of such action, together with a
full and clear statement of the reasons for the action. The claimant may also
review this Plan if he or she chooses. If the claimant wishes further
consideration of his or her position, he or she may request a hearing. The
request, together with a written statement of the



6









 





claimant’s position, shall be filed with a Committee member no later than
60 days after receipt of the written notification provided for above. The
Committee shall schedule an opportunity for a full and fair hearing of the
issue within the next 60 days. The decision following the hearing shall be
made within 60 days and shall be communicated in writing to the claimant. If
the claimant requests, the hearing may be waived, in which case the Committee’s
decision shall be made within 60 days from the date on which the hearing is
waived and shall be communicated in writing to the claimant.




14. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.




     The Board of Directors of the Corporation (the “Board”) may from time to
time amend, suspend or terminate the Plan, in whole or in part, and if the Plan
is suspended or terminated, the Board may reinstate any or all provisions of
the Plan, except that no amendment, suspension or termination of the Plan
shall, without the consent of a participant, adversely affect such
participant’s right to receive payment of the entire amount credited to his or
her deferred incentive account on the date of such Board action. In the event
the Plan is suspended or terminated, the Board may, in its discretion, direct
the Committee to pay to each participant the amount credited to his or her
account either in a lump sum or in accordance with the Committee’s prior
determination regarding the method of payment.



15. EFFECTIVE DATE.




     The Plan shall become effective on July 1, 2004.




IN WITNESS WHEREOF, the undersigned authorized officer has signed
this document on July 1, 2004, effective as of July 1, 2004 .



	 	 	 
	

	 	MONEYGRAM INTERNATIONAL, INC.
	 
	 	 
	

	 	By: /s/ Teresa H. Johnson
	

	 	

	

	 	Its: Vice President and General Counsel








7