Document:

EX-10.2

 

EXHIBIT 10.2

Tower Group, Inc.

2004 Long Term Equity Compensation Plan

(as amended and restated, effective May 15, 2008)

Restricted Stock Units Award Agreement

			
	SECTION 1.	 	AWARD OF RESTRICTED STOCK UNITS

     (a)     Restricted Stock Units. Subject to the terms and conditions set forth in the Notice of
Restricted Stock Units Award and this Restricted Stock Units Award Agreement (together, the
“Agreement”), the Company grants to the Grantee on the Grant Date the Restricted Stock Units (the
“RSUs” or “Award”) set forth in the Notice of Restricted Stock Units Award. The Award represents
the opportunity to receive Shares to the extent the RSUs are earned based on performance over the
Performance Period and the Grantee satisfies the requisite service requirements over the remaining
Period of Restriction. These performance and service conditions are described in Sections 2 and 3
hereof.

     (b)     Plan and Defined Terms. The RSUs are granted pursuant to the Plan, a copy of which the
Grantee acknowledges having received. All terms and conditions applicable to the RSUs set forth in
the Plan and not set forth herein are hereby incorporated herein by reference. To the extent any
provision hereof is inconsistent with a provision of the Plan, the provision of the Plan will
govern. All capitalized terms used in this Agreement and not otherwise defined herein shall have
the meanings ascribed to them in the Plan.

			
	SECTION 2.	 	DETERMINATION OF NUMBER OF RESTRICTED STOCK UNITS EARNED

     (a)     Performance Period. The number of Shares the Grantee has the opportunity to receive is
based on the number of RSUs earned over the Performance Period. The number of RSUs earned over the
Performance Period is determined pursuant to the formula in subsection (b) below.

     (b)     Formula. The number of RSUs earned during the Performance Period (“Earned RSUs”) will vary
from 0% to 200% of the target number of RSUs awarded, as provided in the Notice of Restricted Stock
Units Award (the “Target Award”). The number of Earned RSUs will be based on the degree of
achievement of the following four performance measures during the Performance Period: (i) return on
equity, (ii) gross premiums written, (iii) diluted operating earnings per share and (iv) diluted
book value per share. Each performance measure will be equally weighted (25% for each measure).
Notwithstanding anything herein to the contrary, in no event shall the number of Earned RSUs exceed
200% of the Target Award. Subject to the limitation in the prior sentence, the number of Earned
RSUs shall be determined by adding the number of RSUs Earned with respect to each of the
performance measures, determined in accordance with the following tables (performance results
between levels will be interpolated):

 

 

	 	 	 
	Return on Equity	 	Earned RSUs (% of Target)
	__%
	 	62.5%
	__%
	 	50%
	__%
	 	25%
	__% and below
	 	0%

	 	 	 
	Gross Premiums Written	 	Earned RSUs (% of Target)
	$___
	 	62.5%
	$___
	 	50%
	$___
	 	25%
	$___ and below
	 	0%

	 	 	 
	Diluted Operating Earnings Per Share	 	Earned RSUs (% of Target)
	$__ and above
	 	62.5%
	$__
	 	50%
	$__
	 	25%
	$___ and below
	 	0%

	 	 	 
	Diluted Book Value Per Share	 	Earned RSUs (% of Target)
	$___ and above
	 	62.5%
	$___
	 	50%
	$___
	 	25%
	$___ and below
	 	0%

     (c)     Performance Measures. For purposes of Section 2(b), the performance measures shall be
determined as follows:

     (i)     Return on equity shall be determined by dividing (A) the Company’s net
operating income for the calendar year covered by the Performance Period (the “Applicable
Year”) by (B) average stockholders’ equity for the Applicable Year. Operating net income
shall be determined in accordance with generally accepted accounting principles in the
United States excluding realized gains and losses from investments and extraordinary gains
and losses. Average stockholders’ equity shall equal the sum the stockholders’ equity at the
beginning and end of the Applicable Year divided by two. If equity capital is either raised
or repurchased in the Applicable Year, a quarterly average of stockholders’ equity will be
used.

     (ii)   Gross premiums written means the amount of gross premium written
recorded by the Company in its financial statements for the Applicable Year, plus the amount
of premium produced by Tower Risk Management Corp. (or other managing agency owned by the
Company) that is not included in the Company’s gross premium written amount plus the amount
of net retained Program business premium.

     (iii)  Diluted operating earnings per share means the Company’s diluted
earnings per share for the Applicable Year as determined in accordance with generally
accepted accounting principles in the United States excluding realized gains and losses from
investments and extraordinary gains and losses.

-2-

 

     (iv) Diluted book value per share means the Company’s total stockholders’
equity as of the end of the Applicable Year divided by the number of shares of common stock
then outstanding plus the appropriate common stock equivalents of stock options and warrants
using the treasury stock method as determined in accordance with generally accepted
accounting principles in the United States.

			
	SECTION 3.	 	VESTING, FORFEITURE AND TRANSFER RESTRICTIONS

     (a)     Vesting and Delivery of Shares. The Award shall become vested as to 1/3 of the Earned RSUs
on each of December 31, 2009, December 31, 2010, and December 31, 2011. For avoidance of doubt, any
RSUs not earned in accordance with Section 2 are deemed forfeited as of the end of the Performance
Period and the Grantee will not be eligible to vest in such forfeited RSUs. Subject to the terms of
the Plan and Sections 3(b), 3(f), 3(g), and 5(a) hereof, upon or as soon as practicable after
vesting of any Earned RSUs hereunder (but in no event later than March 15th of the
calendar year following the end of the Period of Restriction applicable to such RSUs), payment with
respect to the vested RSUs shall be made in Shares (one Share for each RSU), free of all
restrictions otherwise imposed by this Agreement.

     (b)     Termination of Employment; Forfeiture. If the Grantee’s employment is terminated for any
reason other than death, Disability (as defined below) or termination by the Company (or a
Subsidiary, as applicable) without Cause (as defined below), the Grantee shall forfeit any RSUs
that are subject to a Period of Restriction (not vested) at the time of such termination of
employment. If the Grantee’s employment terminates due to the Grantee’s death or Disability, or if
the Grantee’s employment is terminated by the Company (or a Subsidiary, as applicable) without
Cause at any time during the Performance Period, then the Grantee will be deemed to have earned a
prorated portion of the Target Award and will receive a number of Shares equal to such amount as
soon as practicable (but no later than sixty (60) days after) the date of termination of
employment. The amount of the prorated award shall be determined by multiplying (i) the Target
Award by (ii) a fraction, the numerator of which is the number of full months that had elapsed
during the Performance Period as of the date of employment termination and the denominator of which
is 12. If the Grantee’s employment terminates due to the Grantee’s death or Disability, or if the
Grantee’s employment is terminated by the Company (or a Subsidiary, as applicable) without Cause at
any time after the Performance Period but during the Period of Restriction applicable to any
portion of this Award, then any Earned RSUs then subject to the Period of Restriction shall
immediately vest on the date of the Grantee’s termination of employment, and payment with respect
to such RSUs shall be made in Shares as soon as practicable (but no later than sixty (60) days
after) the date of termination of employment.

-3-

 

     (c)     Definition of “Cause.” If the Grantee has an employment agreement with the Company or a
Subsidiary, the term “Cause” shall have the meaning ascribed to such term in the Grantee’s
employment agreement. If the Grantee’s employment agreement does not define the term “Cause,” or if
the Grantee does not have an employment agreement with the Company or a Subsidiary, the term
“Cause” shall mean (i) the willful engaging by the Grantee in misconduct that is injurious to the
Company or a Subsidiary (monetarily or otherwise), (ii) the Grantee’s conviction of, or pleading
guilty or nolo contendere to, a crime involving moral turpitude or a felony, (iii) any serious or
continuing breach by the Grantee of any material term of any agreement with the Company or
Subsidiary or any confidentiality, non-solicitation, or non-competition covenant to which the
Grantee is subject, or (iv) the Grantee’s failure to perform, in a timely, professional and
competent manner, (A) the orders’ or requests of the Board; (B) the orders or requests of the CEO
or the Grantee’s direct supervisor; or (C) any material duties under any agreement with the Company
or a Subsidiary.

     (d)     Definition of “Disability.” The Grantee’s employment shall be deemed to have terminated
due to the Grantee’s Disability if, in the Company’s sole discretion, the Grantee becomes unable to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, and the Grantee is entitled to long-term disability
benefits under the Company’s long-term disability plan or policy, as in effect on the date of
termination of Grantee’s employment, and as a result, the Grantee’s employment is terminated.

     (e)     Transfer Restrictions. During the applicable Period of Restriction, the RSUs may not be
sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed
of.

     (f)     Employment Agreement. Notwithstanding the foregoing, if the terms of any employment or
other agreement between the Grantee and the Company or a Subsidiary provides more favorable terms
concerning the impact of the Grantee’s termination of employment on the Grantee’s Award, the terms
of such employment or other agreement shall govern, subject to the following modifications. If the
Grantee’s employment terminates during the Performance Period, and the employment agreement or
other agreement provides for the acceleration of vesting of the Award upon such termination, then
the Grantee will be deemed to have had a termination of employment without Cause and shall earn a
prorated portion of the Target Award and will receive a number of Shares equal to such amount as
soon as practicable (but no later than sixty (60) days after) the date of termination of
employment. The amount of the prorated award shall be determined by multiplying (i) the Target
Award by (ii) a fraction, the numerator of which is the number of full months that had elapsed
during the Performance Period as of the date of employment termination and the denominator of which
is 12. If the Grantee’s employment terminates after the Performance Period, and the employment or
other agreement provides for the acceleration of vesting of the Award, then any Earned RSUs then
subject to the Period of Restriction shall immediately vest on the date of the Grantee’s
termination of employment, and payment with respect to such RSUs shall be made in Shares as soon as
practicable (but no later than sixty (60) days) after the date of termination.

-4-

 

     (g)     Six Month Delay for Specified Employees. To the extent Grantee is a “specified employee,”
as defined in Section 409A(a)(2)(B)(i) of the Code, notwithstanding the timing of payment provided
in any other section of this Agreement, no payment, distribution or benefit under this Agreement
that constitutes a distribution of “deferred compensation” (within the meaning of Treasury
Regulation Section 1.409A-1(b)) upon “separation from service” (within the meaning of Treasury
Regulation Section 1.409A-1(h)), after taking into account all available exemptions, that would
otherwise be payable during the six-month period after such separation from service, will be made
during such six-month period, and any such payment, distribution or benefit will instead be paid on
the first business day after such six-month period.

			
	SECTION 4.	 	RIGHTS OF THE GRANTEE

     The Grantee shall not have any privileges of a holder of Shares of the Company with respect to
the Shares payable hereunder, including without limitation any right to vote such Shares, to
receive dividends, to receive Dividend Equivalents, or to receive other distributions in respect
thereof, until the date of the issuance of Shares to the Grantee. Nothing in the Agreement shall
confer upon the Grantee any right to continue as an employee of the Company or any Subsidiary or to
interfere in any way with any right of the Company to terminate the Grantee’s employment at any
time.

			
	SECTION 5.	 	MISCELLANEOUS PROVISIONS

     (a)     Tax Withholding. In accordance with Article 17 of the Plan (or a successor provision), the
Committee shall have the power and the right to deduct or withhold, or require the Grantee to remit
to the Company, an amount sufficient to satisfy any federal, state and local taxes (including the
Grantee’s FICA obligations) required by law to be withheld with respect to this Award. The Grantee
may elect that, upon the lapse of a Performance Period, the withholding requirement be satisfied by
directing the Company to withhold from the Shares that would otherwise be delivered hereunder a
number of Shares having a Fair Market Value equal to the minimum statutory withholding that could
be imposed on the transaction. Any such election by a Grantee shall be irrevocable, made in writing
and signed by the Grantee.

     (b)     Ratification of Actions. By accepting this Agreement, the Grantee and each person claiming
under or through the Grantee shall be conclusively deemed to have indicated the Grantee’s
acceptance and ratification of, and consent to, any action taken under the Plan or this Agreement
by the Company, the Board, the Committee or any designee thereof.

     (c)     Notice. Any notice to be served hereunder shall be given personally in writing to the
Grantee or to the Secretary of the Company (as the case may be) or shall be couriered or posted by
registered mail to the Company (to the attention of its Secretary) at its principal executive
office or to the Grantee at the address that he most recently provided in writing to the Company.
Any such notice sent by post shall be deemed served three days after it is posted, and, in proving
such service, it shall be sufficient to prove that the notice was properly addressed and put in the
post or couriered.

     (d)     Choice of Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, as such laws are applied to contracts entered into and performed in
such jurisdiction, without giving effect to conflicts of law principles.

     (e)     Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.

-5-

 

     (f)     Modification or Amendment. This Agreement may only be modified or amended by written
agreement executed by the parties hereto; provided, however, that the adjustments permitted
pursuant to Section 4.3 of the Plan (or a successor provision) may be made without such written
agreement.

     (g)     Severability. In the event any provision of this Agreement shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of
this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid
provision had not been included.

     (h)     References to Plan. All references to the Plan shall be deemed references to the Plan as
may be amended from time to time.

-6-EX-4.1

 

Exhibit 4.1

SECOND AMENDMENT TO RIGHTS AGREEMENT

     This
SECOND AMENDMENT TO RIGHTS AGREEMENT (this “Amendment”) is
entered into as of March 17,
2008, between MoneyGram International, Inc., a Delaware corporation (the “Company”), and Wells
Fargo Bank, N.A., as rights agent (the “Rights Agent”).

RECITALS

     WHEREAS, the Company and the Rights Agent are parties to that certain Rights Agreement, dated
as of June 30, 2004 (the “Rights Agreement”); and

     WHEREAS, the Company and the Rights Agent entered into the First Amendment to Rights Agreement
on February 11, 2008, (the “First Amendment”) in connection with the Purchase Agreement (as defined
below); and

     WHEREAS, the several investors listed on Schedule A hereto and the Company contemplate
entering into the Amended and Restated Purchase Agreement (as defined below) that provides for,
among other things, the purchase by the Investors of shares of a new series of convertible
preferred stock of the Company, the Series B Participating Convertible Preferred Stock, par value
$0.01 per share, and shares of a new series of convertible preferred stock of the Company, the
Series B-1 Participating Convertible Preferred Stock, par value $0.01 per share; and

     WHEREAS, Section 27 of the Rights Agreement permits the Company, from time to time and at any
time prior to such time as any person becomes an Acquiring Person, to supplement or amend the
Rights Agreement without the approval of any holders of the Rights Certificates; and

     WHEREAS, the Board of Directors of the Company has determined that it is in the best interests
of the Company and its shareholders to modify the terms of the Rights Agreement to exempt the
Purchase (as defined below), the Amended and Restated Purchase Agreement and all of the
transactions contemplated thereby from the application of the Rights Agreement, and in connection
therewith the Company is entering into this Amendment and directing the Rights Agent to enter into
this Amendment; and

     WHEREAS, all acts and things necessary to make this Amendment a valid agreement, enforceable
according to its terms have been done and performed, and the execution and delivery of this
Amendment by the Company and the Rights Agent have been in all respects duly authorized by the
Company and the Rights Agent.

     NOW, THEREFORE, in consideration of the premises and mutual agreements herein set forth, the
parties hereby agree that First Amendment shall have no further effect and shall be replaced with
the following:

     A. Amendment of Section 1. Section 1 of the Rights Agreement is supplemented to add
the following definitions in the appropriate locations:

 

 

(i) “Amended and Restated Purchase Agreement” shall mean the Amended and Restated
Purchase Agreement, dated as of March 17, 2008, by and between the Company and the
Investors as it may be amended or supplemented from time to time.

(ii) “Excluded Securities” shall mean (A) shares of Series B Preferred Stock,
(B) shares of Series B-1 Preferred Stock, (C) Common Shares issued upon conversion of
shares of Series B Preferred Stock, (D) shares of Series D Preferred Stock issued
upon conversion of shares of Series B Preferred Stock or shares of Series B-1
Preferred Stock, (E) Common Shares issued upon conversion of shares of Series D
Preferred Stock, and (F) Common Shares (and options, warrants or other rights to
acquire Common Shares, or securities convertible into or exercisable or exchangeable
for, Common Shares) (1) issued as a dividend or distribution on any shares referred
to in (A) through (E) of this definition or (2) acquired by an Investor in
connection with such Investor’s exercise of rights under Section 4.7 of the Amended
and Restated Purchase Agreement.

(iii) “Investors” shall mean the several investors listed on Schedule A hereto
(together with their respective successors and assigns and transferees of Excluded
Securities; in each case, who are Affiliates or Associates of any such Investors or
who are Affiliates of Thomas H. Lee Partners, L.P. ) (and each, an “Investor”).

(iv) “Purchase Agreement” shall mean the Purchase Agreement, dated as of February
11, 2008, by and between the Company and the Investors listed on Schedule A hereto,
as it may be amended or supplemented from time to time.

(v) “Purchase” shall mean all of the transactions contemplated by the Amended and
Restated Purchase Agreement.

(vi) “Series B Preferred Stock” shall mean the shares of Series B Participating
Convertible Preferred Stock of the Company, par value $0.01 per share, issuable
pursuant to the Amended and Restated Purchase Agreement and the shares of Series B
Preferred Stock issuable upon conversion of shares of Series B-1 Preferred Stock.

(vii) “Series B-1 Preferred Stock” shall mean the shares of Series B-1 Participating
Convertible Preferred Stock of the Company, par value $0.01 per share, issuable
pursuant to the Amended and Restated Purchase Agreement.

(viii) “Series D Preferred Stock” shall mean the shares of Series D
Participating Convertible Preferred Stock of the Company, par value $0.01 per share,
issuable pursuant to the conversion of shares of Series B-1 Preferred Stock, and
issuable pursuant to the conversion of shares of Series B Preferred Stock.

     B. Amendment of the definition of “Acquiring Person”. The definition of “Acquiring
Person” in Section 1(a) of the Rights Agreement is amended by adding the following sentence at the
end thereof:

2

 

     “Notwithstanding anything in this Agreement to the contrary, no Investor nor any of its
Affiliates or Associates shall be deemed to be an Acquiring Person and no Distribution Date
or Shares Acquisition Date shall be deemed to occur, in each case, solely by virtue of (i)
the approval, execution or delivery of the Purchase Agreement or the Amended and Restated
Purchase Agreement, (ii) the consummation of the Purchase or (iii) the consummation of any
other transaction contemplated in the Amended and Restated Purchase Agreement or by the
respective Certificates of Designations, Preferences and Rights of the Series B Preferred
Stock, the Series B-1 Preferred Stock and the Series D Preferred Stock, including, without
limitation, acquisition by the Investors of beneficial ownership of Excluded Securities.”

     C. Amendment of Section 3. Section 3 of the Rights Agreement is amended to add the
following sentence at the end thereof as Section 3(d):

     “(d) Nothing in this Agreement shall be construed to give any holder of the Rights or
any other Person any legal or equitable rights, remedies or claims under this Agreement by
virtue of the approval, execution or delivery of the Purchase Agreement or the Amended and
Restated Purchase Agreement or by virtue of any of the transactions provided for by the
Amended and Restated Purchase Agreement, including, without limitation, the consummation
thereof, the conversion of shares of Series B Preferred Stock into Common Shares, conversion
of shares of Series B-1 Preferred Stock into shares of Series B Preferred Stock, conversion
of shares of Series B-1 Preferred Stock into shares of Series D Preferred Stock, conversion
of shares of Series B Preferred Stock into shares of Series D Preferred Stock, and
conversion of shares of Series D Preferred Stock into Common Shares;”

     D. Effectiveness. This Amendment shall be deemed effective as of the date first
written above, as if executed on such date. To the extent that the terms and provisions of the
Rights Agreement do not conflict with the terms and provisions of this Amendment, then such terms
and provisions shall remain in full force and legal effect. To the extent that there is a conflict
between the terms and provisions of the Rights Agreement and this Amendment, the terms and
provisions of this Amendment shall govern for purposes of the subject matter of this Amendment
only.

     E. Miscellaneous. This Amendment may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. This Amendment shall be
deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such state applicable to contracts to be
made and performed entirely within such state. If any provision, covenant or restriction of this
Amendment is held by a court of competent jurisdiction or other authority to be invalid, illegal or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment
shall remain in full force and effect and shall in no way be effected, impaired or invalidated.
Except as otherwise expressly provided herein, or unless the context otherwise requires, all terms
used herein have the meanings assigned to them in the Rights Agreement. The Rights Agent and the
Company hereby waive any notice requirement under the Rights Agreement pertaining to the matters
covered by this Amendment.

3

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
attested, all as of the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Attest:	 	MONEYGRAM INTERNATIONAL,
	 	 	INC.
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Teresa H. Johnson
	 	 
	 	By:
	 	/s/ Philip W. Milne
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name:  Teresa H. Johnson
	 	 	 	 	 	Name:  Philip W. Milne	 	 
	 

	 	Title:    Executive Vice
President,
            General Counsel & Secretary
	 	 	 	 	 	Title:    Chairman, President
and
             Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Attest:	 	WELLS FARGO BANK, N.A.
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Christine A. Garrick
	 	 
	 	By:
	 	/s/ John D. Baker
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name:  Christine A. Garrick
	 	 	 	 	 	Name:  John D. Baker	 	 
	 

	 	Title:    Assistant
Vice President
	 	 	 	 	 	Title:    Vice President	 	 

4

 

SCHEDULE A

Investors

THOMAS H. LEE EQUITY FUND VI, L.P.

THOMAS H. LEE PARALLEL FUND VI, L.P.

THOMAS H. LEE PARALLEL (DT) FUND VI, L.P.

GS CAPITAL PARTNERS VI FUND, L.P.

GS CAPITAL PARTNERS VI OFFSHORE FUND, L.P.

GS CAPITAL PARTNERS VI GmbH & Co. KG

GS CAPITAL PARTNERS VI PARALLEL, L.P.

GSMP V ONSHORE US, LTD.

GSMP V OFFSHORE US, LTD.

GSMP V INSTITUTIONAL US, LTD.

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]