Document:

exv10w5

 

Exhibit 10.5

MONEYGRAM INTERNATIONAL, INC.

2004 OMNIBUS INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

As Amended                    

(ISO)

     MoneyGram International, Inc. (Corporation), a                     corporation,
grants to                     (Grantee) the option (Option) to purchase from the
Corporation, pursuant to the MoneyGram International, Inc. 2004 Omnibus
Incentive Plan (Plan), at the price of $                    per share (Option Price)                    
Shares of its Common Stock, par value $.01 (Common Stock) through the exercise
of this Option in accordance with the terms and conditions hereinafter set
forth.

     1. Option Period and Termination of Employment of Grantee. The period
during which this Option may be exercised (Option Period) is the period
beginning on the date hereof and ending seven (7) years from such date, subject
to Section 2 below, and during this period this Option may be exercised only by
the Grantee personally and while an employee of the Corporation or a subsidiary
or division thereof (Affiliate), except that:

          (a) If the Grantee ceases to be an employee of the Corporation or any
Affiliate of the Corporation for any reason, excluding death, disability,
retirement and termination of employment for Cause (as defined in the Plan),
the option rights hereunder (as they exist on the day the Grantee ceases to be
such an employee) may be exercised only within a period of three (3) months
thereafter, subject to the notice requirements and forfeiture provisions set
forth below, or prior to the expiration of the Option Period, whichever shall
occur sooner. If the employment of the Grantee is terminated for Cause, all
the option rights hereunder shall expire immediately upon the giving to the
Grantee of notice of such termination.

          (b) If the Grantee ceases to be an employee of the Corporation or any
Affiliate of the Corporation due to disability or death, or dies within the
three month or five year periods referred to in Sections (a) and (c) of this
Section 1, the option rights hereunder (as they exist immediately prior to the
Grantee’s death) may be exercised by the Grantee or by the Grantee’s personal
representative only during a period of twelve (12) months thereafter in the
case of death and only during a period of three (3) years thereafter in the
case of disability, provided, if the Grantee dies within such three-year
period, any unexercised option held by the Grantee will, notwithstanding the
expiration of such three-year period, continue to be exercisable to the extent
to which it was exercisable at the time of death for a period of twelve (12)
months from the date of such death, subject in each case to the notice
requirements set forth below, or prior in each case to the expiration of the
Option Period, whichever shall occur sooner.

          (c) If the Grantee ceases to be an employee of the Corporation or any
Affiliate of the Corporation by reason of retirement, the option rights
hereunder (as they exist on the day the Grantee ceases to be such an employee)
may be exercised only within a period of five (5) years thereafter, subject to
Section 1(d) and Section 2(c) below and further subject to the notice
requirements and non-compete and forfeiture provisions set forth below, or
prior to the expiration of the Option Period, whichever shall occur sooner, and
in every case subject to Section 5(h) of the Plan.

          (d) If this Option is exercised after the expiration of the exercise
periods that apply for purposes of Section 422 of the Code, it will thereafter
be treated as a Nonqualified Stock Option.

     2. Method of Exercise of this Option. This Option may be exercised in
the manner hereinafter prescribed, in whole or in part, at any time or from
time to time, during the Option Period as follows.

          (a) 20% of the Shares hereby optioned at any time after one year from the
date hereof,

          (b) 20% of the Shares hereby optioned at any time two years from the date
hereof,

(ISO)1

 

          (c) 20% of the Shares hereby optioned at any time three years from the
date hereof,

          (d) 20% of the Shares hereby optioned at any time four years from the date
hereof, and

          (e) the balance of the Shares hereby optioned at any time after five years
from the date hereof, provided that 100 Shares, or the total number of Shares
remaining unpurchased hereunder, if less than 100 Shares, is the minimum number
which may be purchased hereunder at any one time. This Option shall not be
exercisable prior to the expiration of one year from the date of grant, except
as otherwise specified in the Plan. All purchases hereunder must be completed
within the time periods prescribed herein for the exercise thereof.

          (f) Notwithstanding Sections (a), (b), (c), (d) and (e) of this Section 2
if the Grantee ceases to be an employee of the Corporation by reason of death,
disability or retirement, this Option (to the extent valid and outstanding as
of the date such Grantee ceases to be an employee) if not then exercisable
shall become fully exercisable to the full extent of the original grant;
provided, however, that if such date such Grantee ceases to be an employee is
within six months of the date of grant of a particular Stock Option held by a
Grantee who is an officer or director of the Corporation and is subject to
Section 16(b) of the Exchange Act this Option shall not become fully
exercisable until six months and one day after such date of grant.

          On or before the expiration of the Option Period specified herein, written
notice of the exercise of this Option with respect to all or a part of the
Common Stock hereby optioned may be mailed or delivered to the Corporation by
the Grantee in substantially the form attached hereto or in such other form as
the Corporation may require, properly completed and among other things stating
the number of Shares of Common Stock with respect to which the Option is being
exercised, and specifying the method of payment for such Common Stock. The
notice must be mailed or delivered prior to the expiration of this Option.

          Before any stock certificates shall be issued, the entire purchase price
of the Common Stock purchased shall be paid to the Corporation. Certificates,
registered in the name of the purchaser for the Common Stock purchased, will be
issued to the purchaser as soon as practicable thereafter. Failure to pay the
purchase price for any Common Stock within the time specified in said notice
shall result in forfeiture of the Grantee’s right to purchase the Common Stock
at a later date and the number of Shares of Common Stock which may thereafter
be purchased hereunder shall be reduced accordingly.

          The purchase price may be paid either entirely in cash or in whole or in
part with unrestricted Common Stock already owned by the Grantee. If the
Grantee elects to pay the purchase price entirely in cash, he will be notified
of the purchase price by the Corporation. If the Grantee elects to pay the
purchase price either substantially all with Common Stock or partly with Common
Stock and the balance in cash, he will be notified by the Corporation of the
fair market value of the Common Stock on the exercise date and the amount of
Common Stock or cash payable. Within five business days after the exercise
date, the Grantee shall deliver to the Corporation either cash or Common Stock
certificates, in negotiable form, at least equal in value to the purchase
price, or that portion thereof to be paid for with Common Stock, together with
cash sufficient to pay the full purchase price. Only full Shares of Common
Stock shall be utilized for payment purposes.

     3. Forfeiture and Repayment Provisions.

          (a) Certification. The right to exercise this Option shall be conditional
upon certification by the Grantee at time of exercise that the Grantee has read
and understands the forfeiture and repayment provisions set forth in this
Section 3, that the Grantee has not engaged in any misconduct or acts contrary
to the Corporation as described below, and that Grantee has no intent to leave
employment with the Corporation or any of its Affiliates for the purpose of
engaging in any activity or providing any services which are contrary to the
spirit and intent of Section 3(b).

(ISO)2

 

          (b) Non-Compete. Unless a Change of Control (as defined in the Plan)
shall have occurred after the date hereof:

               (i) In order to better protect the goodwill of the Corporation and its
Affiliates and to prevent the disclosure of the Corporation’s or its
Affiliates’ trade secrets and confidential information and thereby help insure
the long-term success of the business, the Grantee, without prior written
consent of the Corporation, will not engage in any activity or provide any
services, whether as a director, manager, supervisor, employee, adviser, agent,
consultant, owner of more than five (5) percent of any enterprise or otherwise,
for a period of two (2) years following the date of the Grantee’s termination
of employment with the Corporation or any of its Affiliates, in connection with
the manufacture, development, advertising, promotion, design, or sale of any
service or product which is the same as or similar to or competitive with any
services or products of the Corporation or its Affiliates (including both
existing services or products as well as services or products known to the
Grantee, as a consequence of the Grantee’s employment with the Corporation or
one of its Affiliates, to be in development):

                    (1) with respect to which the Grantee’s work has been directly concerned
at any time during the two (2) years preceding termination of employment with
the Corporation or one of its Affiliates, or

                    (2) with respect to which during that period of time the Grantee, as a
consequence of the Grantee’s job performance and duties, acquired knowledge of
trade secrets or other confidential information of the Corporation or its
Affiliates.

               (ii) For purposes of the provisions of Section 3(b), it shall be
conclusively presumed that the Grantee has knowledge of information he or she
was directly exposed to through actual receipt or review of memos or documents
containing such information, or through actual attendance at meetings at which
such information was discussed or disclosed.

               (iii) The Corporation is authorized to suspend or terminate this Option
and any other outstanding stock option or stock appreciation right held by the
Grantee prior to or after termination of employment if the Grantee engages in
any conduct agreed to be avoided pursuant to the provisions of Section 3(b) at
any time within the two (2) years following the date of the Grantee’s
termination of employment with the Corporation or any of its Affiliates.

               (iv) If, at any time within two (2) years after the date of the Grantee’s
termination of employment with the Corporation or any of its Affiliates,
Grantee engages in any conduct agreed to be avoided pursuant to the provisions
of Section 3(b), then any gain (without regard to tax effects) realized by
Grantee from the exercise of this Option, in whole or in part, shall be paid by
Grantee to the Corporation. Grantee consents to the deduction from any amounts
the Corporation or any of its Affiliates owes to Grantee to the extent of the
amounts Grantee owes the Corporation hereunder.

          (c) Misconduct. Unless a Change of Control shall have occurred after the
date hereof:

               (i) The Corporation is authorized to suspend or terminate this Option and
any other outstanding stock option or stock appreciation right held by the
Grantee prior to or after termination of employment if the Corporation
reasonably determines that during the Grantee’s employment with the Corporation
or any of its Affiliates:

                    (1) Grantee knowingly participated in misconduct that causes a
misstatement of the financial statements of MoneyGram International,
Inc. or any
of its Affiliates or misconduct which represents a material violation of any
code of ethics of the Corporation applicable to the Grantee or of the
              
      compliance program or similar program of the Corporation; or

(ISO)3

 

     (2) Grantee was aware of and failed to report, as required by any
code of ethics of the Corporation applicable to the Grantee or by the
             
       compliance program or similar program of the
Corporation, misconduct that causes a misstatement of the financial
statements of MoneyGram International, Inc. or any of its Affiliates or
misconduct which represents a material knowing violation of any code of
ethics of the Corporation applicable to the Grantee or of the Always
Honest compliance program or similar program of the Corporation.

               (ii) If, at any time after the Grantee exercises this Option in whole or
in part, the Corporation reasonably determines that the provisions of Section
3(c) apply to the Grantee, then any gain (without regard to tax effects)
realized by the Grantee from such exercise shall be paid by Grantee to the
Corporation. The Grantee consents to the deduction from any amounts the
Corporation or any of its Affiliates owes to the Grantee to the extent of the
amounts the Grantee owes the Corporation under this paragraph 3.

          (d) Acts Contrary to Corporation. Unless a Change of Control shall have
occurred after the date hereof:

               (i) The Corporation is authorized to suspend or terminate this Option and
any other outstanding stock option or stock appreciation right held by the
Grantee prior to or after termination of employment if the Corporation
reasonably determines that Grantee has acted significantly contrary to the best
interests of the Corporation, including, but not limited to, any direct or
indirect intentional disparagement of the Corporation.

               (ii) If, at any time within two (2) years after the Grantee exercises this
Option in whole or in part, the Corporation reasonably determines that Grantee
has acted significantly contrary to the best interests of the Corporation,
including, but not limited to, any direct or indirect intentional disparagement
of the Corporation, then any gain (without regard to tax effects) realized by
the Grantee from such exercise shall be paid by Grantee to the Corporation.
The Grantee consents to the deduction from any amounts the Corporation or any
of its Affiliates owes to the Grantee to the extent of the amounts the Grantee
owes the Corporation under this Section 3.

          (e) The Corporation’s reasonable determination required under Sections
3(c)(i) and (ii) and 3(d)(i) and (ii) shall be made by the Human Resources
Committee of the Corporation’s Board of Directors, in the case of executive
officers of the Corporation, and by the Chief Executive Officer and Corporate
Compliance Officer of the Corporation, in the case of all other officers and
employees.

     4. Non-Transferability of this Option. This Option may not be assigned,
encumbered or transferred, in whole or in part, except by the Grantee’s will or
in accordance with the applicable laws of descent and distribution or as
otherwise provided under the Plan.

     5. Limit on Grant. The aggregate fair market value (determined as of the
time the Option is granted) of Common Stock for which any Grantee may be
granted one or more Incentive Stock Options first exercisable in this year or
in any calendar year thereafter shall not exceed $100,000.

     6. Adjustments for Changes in Capitalization of Corporation. The Common
Stock covered by this Option is, at the option of the Corporation, either
authorized but unissued or reacquired Common Stock. In the event of any
merger, reorganization, consolidation, recapitalization, stock dividend, stock
split, extraordinary distribution with respect to the Common Stock or other
change in corporate structure affecting the Common Stock, during the Option
Period, the number of Shares of Common Stock which may thereafter be purchased
pursuant to this Option and the purchase price per share, shall be
appropriately adjusted, or other appropriate substitutions shall be made, and
the determination of the Board of Directors of the Corporation, or the Human
Resources Committee of the Board of Directors (Committee), as the case may be,
as to any such adjustments shall be final, conclusive and binding upon the
Grantee.

(ISO)4

 

     7. Notice of Sale. The Grantee or any person to whom the Option or the
Shares shall have been transferred by will or by the laws of descent and
distribution or as otherwise provided under the Plan promptly shall give notice
to the Corporation in the event of the sale or other disposition of Shares
within two (2) years from the date of grant of such Option or within one year
after the transfer of the Shares to Grantee. Such notice shall specify the
number of Shares sold or otherwise disposed of, the date of disposition and the
total proceeds received, and be directed to the Tax Department, MoneyGram
International, Inc., 1550 Utica Avenue, Suite 100, Minneapolis, MN 55416.

     8. Effect of Change in Control. (a) In the event of a Change in Control
(as defined in the Plan), this Option (to the extent outstanding as of the date
such Change in Control is determined to have occurred) if not then exercisable
and vested shall become fully exercisable and vested to the full extent of the
original grant.

          (b) Notwithstanding any other provision of the Plan, during the 60-day
period from and after a Change in Control (the “Exercise Period”), the Grantee
shall have the right, whether or not this Option is fully exercisable and in
lieu of the payment of the exercise price for the Shares of Common Stock being
purchased under the Option and by giving notice to the Corporation, to elect
(within the Exercise Period) to surrender all or part of the Option to the
Corporation and to receive cash, within 30 days of such notice, in an amount
equal to the amount by which the Change in Control Price (as defined in the
Plan) per share of Common Stock on the date of such election shall exceed the
exercise price per share of Common Stock under the Option (the “Spread”)
multiplied by the number of Shares of Common Stock granted under the Option as
to which the right granted hereunder shall have been exercised; provided,
however, that if the Change in Control is within six months of the date of
grant of a particular Option held by a Grantee who is an officer or director of
the Corporation and is subject to Section 16(b) of the Securities Exchange Act
of 1934 no such election shall be made by such Grantee with respect to such
Option prior to six months from the date of grant. Notwithstanding any other
provision hereof, if the end of such 60-day period from and after a Change in
Control is within six months of the date of grant of an Option held by a
Grantee who is an officer or director of the Corporation and is subject to
Section 16(b), such Option shall be canceled in exchange for a cash payment to
the Grantee, effected on the day which is six months and one day after the date
of grant of such Option, equal to the Spread multiplied by the number of Shares
of Common Stock granted under the Option.

     9. Plan and Plan Interpretations as Controlling. This Option and the
terms and conditions herein set forth are subject in all respects to the terms
and conditions of the Plan, which are controlling. The Plan provides that the
Board may amend the Plan, and that the Committee may interpret it and establish
regulations for the administration thereof; provided that no such amendment or
regulation shall impair the rights of any Grantee under an Option without the
Grantee’s consent, except an amendment for purposes of compliance with the
federal securities laws. The Grantee, by acceptance of this Option, agrees to
be bound by said Plan and such Board and Committee actions.

     10. Termination of the Plan; No Right to Future Grants. By entering into
this Option Agreement, the Grantee acknowledges: (a) that the Plan is
discretionary in nature and may be suspended or terminated by the Corporation
at any time; (b) that each grant of an Option is a one-time benefit which does
not create any contractual or other right to receive future grants of Options,
or benefits in lieu of Options; (c) that all determinations with respect to any
such future grants, including, but not limited to, the times when the Option
shall be granted, the number of Shares subject to each Option, the Option
price, and the time or times when each Option shall be exercisable, will be at
the sole discretion of the Corporation; (d) that the Grantee’s participation in
the Plan shall not create a right to further employment with the Grantee’s
employer and shall not interfere with the ability of the Grantee’s employer to
terminate the Grantee’s employment relationship at any time with or without
cause; (e) that the Grantee’s participation in the Plan is voluntary; (f) that
the value of the

(ISO)5

 

Options is an extraordinary item of compensation which is outside the scope of
the Grantee’s employment contract, if any; (g) that the Option is not part of
normal and expected compensation for purposes of calculating any severance,
resignation, bonuses, pension or retirement benefits or similar payments; (h)
that the right to purchase Common Stock ceases upon termination of employment
for any reason except as may otherwise be explicitly provided in the Plan or
this Option Agreement; (i) that the future value of the Shares is unknown and
cannot be predicted with certainty; (j) that if the underlying Shares do not
increase in value, the Option will have no value; and (k) the foregoing terms
and conditions apply in full with respect to any prior Option grants to
Grantee.

     11. Governing Law. This agreement is governed by and is to be construed
and enforced in accordance with the laws of Minnesota.

          This Option may not be exercised whenever such exercise or the issuance of
any of the optioned would be contrary to law or the regulations of any
governmental authority having jurisdiction.

IN WITNESS WHEREOF, MONEYGRAM INTERNATIONAL, INC. has caused this Option to be
duly executed in its name.

Dated: 

	 	 	 	 	 
	 	MONEYGRAM INTERNATIONAL, INC.

 	 
	 	
	 
	 	By:  	PHILIP MILNE
 	 
	 	 	President and 	 
	 	 	Chief Executive Officer 	 
	 

ATTEST:

	 
	

Secretary or Assistant Secretary

This Incentive Stock Option Agreement shall be effective only upon execution by
the Grantee and delivery to and receipt by the Corporation.

ACCEPTED AND AGREED:

	 
	

Grantee

(ISO)6exv10w6

 

United States Version

Exhibit 10.6

MONEYGRAM INTERNATIONAL, INC.

2004 OMNIBUS INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

As Amended                    

(NQ)

     MoneyGram International, Inc. (Corporation), a                     corporation,
grants to                    (Grantee) the option (Option) to purchase from the
Corporation, pursuant to the MoneyGram International, Inc. 2004 Omnibus
Incentive Plan (Plan), at the price of $                    per share (Option Price)
                    Shares of its Common Stock, par value $0.01 each (Common Stock)
through the exercise of this Option in accordance with the terms and conditions
hereinafter set forth.

     1. Option Period and Termination of Employment of Grantee. The period
during which this Option may be exercised (Option Period) is the period
beginning on the date hereof and ending seven (7) years from such date, subject
to Section 2 below, and during this period this Option may be exercised only by
the Grantee personally and while a director or an employee of the Corporation
or a subsidiary or division thereof (Affiliate), except that:

     (a) If the Grantee ceases to be a director or an employee of the
Corporation or any Affiliate of the Corporation for any reason, excluding
death, disability, retirement and termination of employment for Cause (as
defined in the Plan), the option rights hereunder (as they exist on the day the
Grantee ceases to be a director or employee) may be exercised only within a
period of three (3) months thereafter, subject to the notice requirements and
forfeiture provisions set forth below, or prior to the expiration of the Option
Period, whichever shall occur sooner. If Grantee is an employee and is
terminated for Cause, all the option rights hereunder shall expire immediately
upon the giving to such Grantee of notice of such termination.

     (b) If the Grantee ceases to be a director or an employee of the
Corporation or any Affiliate of the Corporation due to death, or dies within
the three month or three year periods referred to in Sections (a) or (c) of
this Section 1, the option rights hereunder (as they exist immediately prior to
the Grantee’s death) may be exercised by the Grantee’s personal representative
only during a period of twelve (12) months thereafter in the case of death and
only during a period of three (3) years thereafter in the case of disability,
provided, if the Grantee dies within such three-year period, any unexercised
option held by the Grantee will, notwithstanding the expiration of such
three-year period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve (12) months from the
date of such death, subject in each case to the notice requirements set forth
below, or prior in each case to the expiration of the Option Period, whichever
shall occur sooner.

     (c) If the Grantee ceases to be a director or an employee of the
Corporation or any Affiliate of the Corporation by reason of disability, the
option rights hereunder (as they exist on the day the Grantee ceases to be such
director or employee) may be exercised only within a period of three (3) years
thereafter, subject to Section 2(c) below and further subject to the notice
requirements set forth below, or prior to the expiration of the Option Period,
whichever shall occur sooner.

     (d) If the Grantee ceases to be a director or an employee of the
Corporation or any Affiliate of the Corporation by reason of retirement, the
option rights hereunder (as they exist on the day the Grantee ceases to be such
director or employee) may be exercised only within a period of five (5) years
thereafter, subject to Section 2(c) below and further subject to the notice
requirements and non-compete and forfeiture provisions set forth below, or
prior to the expiration of the Option Period, whichever shall occur sooner.

(USA NQ 1)

 

United States Version

     2. Method of Exercise of this Option. This Option may be exercised in the
manner hereinafter prescribed, in whole or in part, at any time or from time to
time, during the Option Period as follows.

     (a) 20% of the Shares hereby optioned at any time after one year from the
date hereof,

     (b) 20% of the Shares hereby optioned at any time two years from the date
hereof,

     (c) 20% of the Shares hereby optioned at any time three years from the
date hereof,

     (d) 20% of the Shares hereby optioned at any time four years from the date
hereof, and

     (e) the balance of the Shares hereby optioned at any time after five years
from the date hereof, provided that 100 Shares, or the total number of Shares
remaining unpurchased hereunder, if less than 100 Shares, is the minimum number
which may be purchased hereunder at any one time. This Option shall not be
exercisable prior to the expiration of one year from the date of grant, except
as otherwise specified in the Plan. All purchases hereunder must be completed
within the time periods prescribed herein for the exercise thereof.

     (f) Notwithstanding Sections (a), (b), (c), (d) and (e) of this Section 2
if the Grantee ceases to be a director or an employee of the Corporation by
reason of death, disability or retirement, this Option (to the extent valid and
outstanding as of the date such Grantee ceases to be a director or an employee)
if not then exercisable shall become fully exercisable to the full extent of
the original grant; provided, however, that if such date such Grantee ceases to
be a director or an employee is within six months of the date of grant of a
particular Stock Option held by a Grantee who is an officer or director of the
Corporation and is subject to Section 16(b) of the Exchange Act this Option
shall not become fully exercisable until six months and one day after such date
of grant.

          On or before the expiration of the Option Period specified herein, written
notice of the exercise of this Option with respect to all or a part of the
Common Stock hereby optioned may be mailed or delivered to the Corporation by
the Grantee in substantially the form attached hereto or in such other form as
the Corporation may require, properly completed and among other things stating
the number of Shares of Common Stock with respect to which the Option is being
exercised, and specifying the method of payment for such Common Stock. The
notice must be mailed or delivered prior to the expiration of this Option.

          Before any stock certificates shall be issued, the entire purchase price
of the Common Stock purchased shall be paid to the Corporation. Certificates,
registered in the name of the purchaser for the Common Stock purchased, will be
issued to the purchaser as soon as practicable thereafter. Failure to pay the
purchase price for any Common Stock within the time specified in said notice
shall result in forfeiture of the Grantee’s right to purchase the Common Stock
at a later date and the number of Shares of Common Stock which may thereafter
be purchased hereunder shall be reduced accordingly.

          The purchase price may be paid either entirely in cash or in whole or in
part with unrestricted Common Stock already owned by the Grantee. If the
Grantee elects to pay the purchase price entirely in cash, he will be notified
of the purchase price by the Corporation. If the Grantee elects to pay the
purchase price either substantially all with Common Stock or partly with Common
Stock and the balance in cash, he will be notified by the Corporation of the
fair market value of the Common Stock on the exercise date and the amount of
Common Stock or cash payable. Within five business days after the exercise
date, the Grantee shall deliver to the Corporation either cash or Common Stock
certificates, in negotiable form, at least equal in value to the purchase
price, or that portion thereof to be paid for with Common Stock, together with
cash sufficient to pay the full purchase price. Only full Shares of Common
Stock shall be utilized for payment purposes.

          To the extent permissible under applicable tax, securities, and other
laws, the Corporation may, in its sole discretion, permit Grantee to satisfy a
tax withholding requirement by surrendering Shares, including Shares to which
Grantee is entitled as a result of the exercise of this Option, in such manner
as the Corporation shall choose in its discretion to satisfy such requirement.

(USA NQ 2)

 

United States Version

     3. Forfeiture and Repayment Provisions. Unless a Change of Control (as
defined in the Plan) shall have occurred after the date hereof:

     (a) Certification. The right to exercise this Option shall be conditional
upon certification by the Grantee at time of exercise that the Grantee has read
and understands the forfeiture and repayment provisions set forth in this
Section 3, that the Grantee has not engaged in any misconduct or acts contrary
to the Corporation as described below, and that Grantee has no intent to leave
employment with the Corporation or any of its Affiliates for the purpose of
engaging in any activity or providing any services which are contrary to the
spirit and intent of Section 3(b).

     (b) Non-Compete. Unless a Change of Control (as defined in the Plan)
shall have occurred after the date hereof:

          (i) In order to better protect the goodwill of the Corporation and its
Affiliates and to prevent the disclosure of the Corporation’s or its
Affiliates’ trade secrets and confidential information and thereby help insure
the long-term success of the business, the Grantee, without prior written
consent of the Corporation, will not engage in any activity or provide any
services, whether as a director, manager, supervisor, employee, adviser, agent,
consultant, owner of more than five (5) percent of any enterprise or otherwise,
for a period of two (2) years following the date of the Grantee’s termination
of employment with the Corporation or any of its Affiliates, in connection with
the manufacture, development, advertising, promotion, design, or sale of any
service or product which is the same as or similar to or competitive with any
services or products of the Corporation or its Affiliates (including both
existing services or products as well as services or products known to the
Grantee, as a consequence of the Grantee’s employment with the Corporation or
one of its Affiliates, to be in development):

               (1) with respect to which the Grantee’s work has been directly concerned
at any time during the two (2) years preceding termination of employment with
the Corporation or one of its Affiliates, or

               (2) with respect to which during that period of time the Grantee, as a
consequence of the Grantee’s job performance and duties, acquired knowledge of
trade secrets or other confidential information of the Corporation or its
Affiliates.

          (ii) For purposes of the provisions of Section 3(b), it shall be
conclusively presumed that the Grantee has knowledge of information he or she
was directly exposed to through actual receipt or review of memos or documents
containing such information, or through actual attendance at meetings at which
such information was discussed or disclosed.

          (iii) The Corporation is authorized to suspend or terminate this Option
and any other outstanding stock option or stock appreciation right held by the
Grantee prior to or after termination of employment if the Grantee engages in
any conduct agreed to be avoided pursuant to the provisions of Section 3(b) at
any time within the two (2) years following the date of the Grantee’s
termination of employment with the Corporation or any of its Affiliates.

          (iv) If, at any time within two (2) years after the date of the Grantee’s
termination of employment with the Corporation or any of its Affiliates,
Grantee engages in any conduct agreed to be avoided pursuant to the provisions
of Section 3(b), then any gain (without regard to tax effects) realized by
Grantee from the exercise of this Option, in whole or in part, shall be paid by
Grantee to the Corporation. Grantee consents to the deduction from any amounts
the Corporation or any of its Affiliates owes to Grantee to the extent of the
amounts Grantee owes the Corporation hereunder.

(USA NQ 3)

 

United States Version

     (c) Misconduct. Unless a Change of Control shall have occurred after the
date hereof:

          (i) The Corporation is authorized to suspend or terminate this Option and
any other outstanding stock option or stock appreciation right held by the
Grantee prior to or after termination of employment if the Corporation
reasonably determines that during the Grantee’s employment with the Corporation
or any of its Affiliates:

               (1) Grantee knowingly participated in misconduct that causes a
misstatement of the financial statements of MoneyGram International, Inc. or
any of its Affiliates or misconduct which represents a material violation of
any code of ethics of the Corporation applicable to the Grantee or of the
                    compliance program or similar program of the Corporation; or

               (2) Grantee was aware of and failed to report, as required by any code of
ethics of the Corporation applicable to the Grantee or by the
                    compliance program or similar program of the Corporation,
misconduct that causes a misstatement of the financial statements of MoneyGram
International, Inc. or any of its Affiliates or misconduct which represents a
material knowing violation of any code of ethics of the Corporation applicable
to the Grantee or of the                     compliance program or similar
program of the Corporation.

          (ii) If, at any time after the Grantee exercises this Option in whole or
in part, the Corporation reasonably determines that the provisions of Section
3(c) applies to the Grantee, then any gain (without regard to tax effects)
realized by the Grantee from such exercise shall be paid by Grantee to the
Corporation. The Grantee consents to the deduction from any amounts the
Corporation or any of its Affiliates owes to the Grantee to the extent of the
amounts the Grantee owes the Corporation under this Section 3.

     (d) Acts Contrary to Corporation. Unless a Change of Control shall have
occurred after the date hereof:

          (i) The Corporation is authorized to suspend or terminate this Option and
any other outstanding stock option or stock appreciation right held by the
Grantee prior to or after termination of employment if the Corporation
reasonably determines that Grantee has acted significantly contrary to the best
interests of the Corporation, including, but not limited to, any direct or
indirect intentional disparagement of the Corporation.

          (ii) If, at any time within two (2) years after the Grantee exercises this
Option in whole or in part, the Corporation reasonably determines that Grantee
has acted significantly contrary to the best interests of the Corporation,
including, but not limited to, any direct or indirect intentional disparagement
of the Corporation, then any gain (without regard to tax effects) realized by
the Grantee from such exercise shall be paid by Grantee to the Corporation.
The Grantee consents to the deduction from any amounts the Corporation or any
of its Affiliates owes to the Grantee to the extent of the amounts the Grantee
owes the Corporation under this Section 3.

     (e) The Corporation’s reasonable determination required under Sections
3(c)(i) and (ii) and 3(d)(i) and (ii) shall be made by the Human Resources
Committee of the Corporation’s Board of Directors, in the case of executive
officers of the Corporation, and by the Chief Executive Officer and Corporate
Compliance Officer of the Corporation, in the case of all other officers and
employees.

     4. Non-Transferability of this Option. This Option may not be assigned,
encumbered or transferred, in whole or in part, except by the Grantee’s will or
in accordance with the applicable laws of descent and distribution or as
otherwise provided or permitted under the Plan, except that a Grantee holding a
Non-Qualified Stock Option may designate as the transferee of any such Option
any member of such Grantee’s “Immediate Family”(as defined in Rule 16a, as
promulgated by the Commission under the Exchange Act) or to a trust whose
beneficiaries are members of such Grantee’s Immediate Family, without payment
of consideration, to have the power to exercise such Option, and be subject to
all the conditions of such Option prior to such designation, such power to
exercise to become effective only in the event that such optionee shall die
prior to exercising such Option.

(USA NQ 4)

 

United States Version

     5. Adjustments for Changes in Capitalization of Corporation. The Common
Stock covered by this Option is, at the option of the Corporation, either
authorized but unissued or reacquired Common Stock. In the event of any
merger, reorganization, consolidation, recapitalization, stock dividend, stock
split, extraordinary distribution with respect to the Common Stock or other
change in corporate structure affecting the Common Stock during the Option
Period, the number of Shares of Common Stock which may thereafter be purchased
pursuant to this Option and the purchase price per share, shall be
appropriately adjusted, or other appropriate substitutions shall be made, and
the determination of the Board of Directors of the Corporation, or the Human
Resources Committee of the Board of Directors, as the case may be, as to any
such adjustments shall be final, conclusive and binding upon the Grantee.

     6. Effect of Change in Control. (a) In the event of a Change in Control
(as defined in the Plan), this Option (to the extent outstanding as of the date
such Change in Control is determined to have occurred) if not then exercisable
and vested shall become fully exercisable and vested to the full extent of the
original grant.

     (b) Notwithstanding any other provision of the Plan, during the 60-day
period from and after a Change in Control (the “Exercise Period”), the Grantee
shall have the right, whether or not this Option is fully exercisable and in
lieu of the payment of the exercise price for the Shares of Common Stock being
purchased under the Option and by giving notice to the Corporation, to elect
(within the Exercise Period) to surrender all or part of the Option to the
Corporation and to receive cash, within 30 days of such notice, in an amount
equal to the amount by which the Change in Control Price (as defined in the
Plan) per share of Common Stock on the date of such election shall exceed the
exercise price per share of Common Stock under the Option (the “Spread”)
multiplied by the number of Shares of Common Stock granted under the Option as
to which the right granted hereunder shall have been exercised; provided,
however, that if the Change in Control is within six months of the date of
grant of a particular Option held by a Grantee who is an officer or director of
the Corporation and is subject to Section 16(b) of the Securities Exchange Act
of 1934 no such election shall be made by such Grantee with respect to such
Option prior to six months from the date of grant. Notwithstanding any other
provision hereof, if the end of such 60-day period from and after a Change in
Control is within six months of the date of grant of an Option held by a
Grantee who is an officer or director of the Corporation and is subject to
Section 16(b), such Option shall be canceled in exchange for a cash payment to
the Grantee, effected on the day which is six months and one day after the date
of grant of such Option, equal to the Spread multiplied by the number of Shares
of Common Stock granted under the Option.

     7. Plan and Plan Interpretations as Controlling. This Option and the
terms and conditions herein set forth are subject in all respects to the terms
and conditions of the Plan, which are controlling. The Plan provides that the
Board may amend the Plan, and that the Committee may interpret it and establish
regulations for the administration thereof; provided that no such amendment or
regulation shall impair the rights of any Grantee under an Option without the
Grantee’s consent, except an amendment for purposes of compliance with the
federal securities laws. The Grantee, by acceptance of this Option, agrees to
be bound by said Plan and such Board and Committee actions.

     8. Termination of the Plan; No Right to Future Grants. By entering into
this Option Agreement, the Grantee acknowledges: (a) that the Plan is
discretionary in nature and may be suspended or terminated by the Corporation
at any time; (b) that each grant of an Option is a one-time benefit which does
not create any contractual or other right to receive future grants of Options,
or benefits in lieu of Options; (c) that all determinations with respect to any
such future grants, including, but not limited to, the times when the Option
shall be granted, the number of Shares subject to each Option, the Option
price, and the time or times when each Option shall be exercisable, will be at
the sole discretion of the Corporation; (d) that the Grantee’s participation in
the Plan shall not create a right to further employment with the Grantee’s
employer and shall not interfere with the ability of the Grantee’s employer to
terminate the Grantee’s employment relationship at any time with or without
cause; (e) that the Grantee’s participation in the Plan is voluntary; (f) that
the value of the Options is an extraordinary item of compensation which is
outside the scope of the Grantee’s employment contract, if any; (g) that the
Option is not part of normal and expected compensation for purposes of
calculating any severance, resignation, bonuses, pension or

(USA NQ 5)

 

United States Version

retirement benefits or similar payments; (h) that the right to purchase Common
Stock ceases upon termination of employment for any reason except as may
otherwise be explicitly provided in the Plan or this Option Agreement; (i) that
the future value of the Shares is unknown and cannot be predicted with
certainty; (j) that if the underlying Shares do not increase in value, the
Option will have no value; and (k) the foregoing terms and conditions apply in
full with respect to any prior Option grants to Grantee.

     9. Governing Law. This agreement is governed by and is to be construed
and enforced in accordance with the laws of Minnesota.

          This Option may not be exercised whenever such exercise or the issuance of
any of the optioned Shares would be contrary to law or the regulations of any
governmental authority having jurisdiction.

IN WITNESS WHEREOF, MONEYGRAM INTERNATIONAL, INC. has caused this Option to be
duly executed in its name.

Dated: 

	 	 	 	 	 
	 	MONEYGRAM INTERNATIONAL, INC.

 	 
	 	
	 
	 	By:  	PHILIP MILNE
 	 
	 	 	President and 	 
	 	 	Chief Executive Officer 	 
	 

ATTEST:

	 
	

Secretary or Assistant Secretary

This Non-Qualified Stock Agreement shall be effective only upon execution by
the Grantee and delivery to and receipt by the Corporation.

ACCEPTED AND AGREED:

	 
	

Grantee

(USA NQ 6)

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