Document:

exv10w9

 

Exhibit 10.9

MONEYGRAM INTERNATIONAL, INC.

EXECUTIVE SEVERANCE PLAN (TIER II)

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

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

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

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

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

 

 

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

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

 

 

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

 

 

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

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

     5. DEFINITIONS:

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

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

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

 

 

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

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

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

 

 

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

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

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

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

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

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

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

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

 

 

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

        7. BENEFIT ENTITLEMENTS:

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

 

 

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

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

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

 

 

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

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

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

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

 

 

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

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

 

 

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

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

 

 

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

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

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

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

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

 

 

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

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

 

 

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

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

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

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

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

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

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

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

 

 

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

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

 

 

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     11. SUCCESSORS:

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

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

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

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

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

 

 

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

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

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

     16. ACCEPTANCE: By acceptance of participation in this Plan, an Executive
agrees to give a minimum of four (4) weeks’ notice to the Corporation or any of
its subsidiaries in the event of his voluntary resignation.exv10w10

 

Exhibit 10.10

MONEYGRAM INTERNATIONAL, INC.

SUPPLEMENTAL 401(k) PLAN

1. Purpose of the Plan

The purpose of the Supplemental 401(k) Plan (the Plan) is to provide a select
group of management or highly compensated employees who are officers and key
employees of MoneyGram International, Inc. (the Company) and its subsidiaries
with an opportunity to accumulate pre-tax savings for retirement.

2. Administration of the Plan

The Plan shall be administered by the Compensation Advisory Committee (the
Committee) the members of which shall be appointed by the Chief Executive
Officer of the Company. Subject to the express provisions of the Plan, 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 those officers and key
employees of the Company and its subsidiaries as designated by the Company’s
President and Chief Executive Officer and whose annual compensation limits the
elective deferrals they may contribute to the MoneyGram International, Inc.
401(k) Plan as contained in Section 402 of the Internal Revenue Code, and whose
timely written requests to defer the receipt of compensation, which may be owed
to them for services rendered, are honored in whole or in part by the
Committee, in its sole discretion. A written request for deferral under
paragraph 4 shall not be timely in any event unless it is duly submitted to the
Committee before the services to which the base salary to be deferred is
related have been rendered.

 

 

(b) If a participant in the Plan shall (1) sever his or her employment with the
Company or one of its subsidiaries during or following such employment, (2)
engage in any activity in competition with the Company 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 Company,
his or her participation in the Plan shall automatically terminate, and the
Committee may direct, in its sole discretion, that he or she be paid in a lump
sum the aggregate amount credited to his or her deferred compensation account
as of the date his or her employment is severed or the Committee determines
that he or she has engaged in such competitive activity or that his or her
employer is no longer a subsidiary of the Company.

4. Requests for Deferral

All requests for deferral of compensation must be made in writing 30 days prior
to the beginning of each quarter and shall be in such form and shall contain
such terms and conditions as the Committee may determine. Each such request
shall specify the percentage or dollar amount of base salary if any, but in no
event shall the amount to be deferred in a Plan year be greater than the lesser
of (i) $41,000, or the amount specified by the Internal Revenue Service under
Code Section 415, Defined Contribution Annual Maximum, less the total amount of
all contributions of whatever nature, to the Participant’s 401(k) Plan account
during the same time period, or (ii) 50% of the participant’s base salary in
the Plan year. Each such request shall also specify (1) the date when payment
of the aggregate amount credited to the deferred compensation account is to
commence (which shall not be earlier than age 55 nor later than the actual
retirement date) and (2) whether such payment is then to be made in a lump sum
or in quarterly or annual installments, and the period of time (not in excess
of ten years) over which the installments are to be paid. The Committee shall
not, under any circumstances, accept any request for deferral greater than the
limits defined above, or any request which is not in writing or which is not
timely submitted.

5. Deferral of Compensation

The Committee shall notify each individual who has submitted a request for
deferral of compensation 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 percentage of his or her 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 compensation 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, and if
payment is to be made in installments, the period of time over which the
installments will be paid. Upon subsequently being advised of the existence of
special circumstances which are beyond the participant’s control and which
impose a 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.

2

 

6. Deferred Compensation Account

	(a)	 	A deferred compensation account shall be maintained for each participant
of this Plan by his or her employer. The employer shall credit to each
participant’s account the following amounts, as appropriate:

     (i) The deferral duly elected under this Plan on the date the participant
would have received such deferral as base salary;

     (ii) Based on the provision of the 401(k) Plan in effect at the time, an
amount with respect to the deferrals in (1), above, calculated on the same
basis as the employer’s then current matching contribution on elective
deferrals under the 401(k) Plan on the first day of each quarter. In no event
shall this amount exceed the maximum amount of matching contributions which
would be available, assuming the participant elects the maximum deferrals
allowed under 401(k) and the limitations on elective deferrals contained in
Code Section 402 do not apply, less the amount of actual matching contributions
made by the employer to the participant’s 401(k) account, if any, for the same
period;

     (iii) Based on the provisions of the 401(k) Plan in effect at the time,
and not withstanding the amount, if any, of deferrals in (i) above, an amount
equal to the employer matching contributions which would have been made to the
participant’s 401(k) Plan account based on the amount of elective deferrals
actually made by said participant to the 401(k) Plan, but for the application
of Code Section 401(a)(17) or any other similar law on the first day of each
quarter; and

     (iv) Interest on the participant account balance at a per annum rate equal
to the yield as of January 1, April 1, July 1, and October 1 on Merrill Lynch
Taxable Bond Index-Long Term Medium Quality (A3) Industrial Bonds or such other
rate the Committee may determine in its sole discretion, credited quarterly
prior to the termination of the participant’s deferral period, or if the
deferred compensation account is to be paid in installments, prior to the
termination of such installment period.

(b) The Company or employer, as the case may be, shall not be required to
physically segregate any amounts of money or property or otherwise provide for
funding of any amounts credited to the deferred compensation accounts of
participants in the Plan. Participants have no claim, interest or right to any
particular funds or property that the Company or any employer may choose to
reserve or otherwise use to provide for its liabilities under this Plan and the
participants of this Plan shall have the rights of general creditor only with
respect to their interests in the Plan.

7. 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
compensation 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.

3

 

8. Nonassignability of Participant 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. In the event of any attempt to assign or
transfer any right, interest or benefit under the Plan, or to subject any such
right, interest or benefit to a debt, obligation, liability or default of a
participant, his or her participation in the Plan shall terminate on the date
such an attempt is made, and he or she shall be paid in a lump sum the
aggregate amount credited to his or her deferred compensation account as of
that date.

9. Rights of Participants

A participant in the Plan shall have only those rights, interest or benefits as
are expressly provided in the Plan. This Plan does not create for any employee
or participant any right to be retained in service by any Company nor affect
the right of any such Company to discharge any employee or participant from
employment.

10. Amendment, Suspension or Termination of the Plan

(a) The Board of Directors of the Company (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 consent of a participant, adversely affect such participant’s right to
receive payment of the entire amount credited to his or her deferred
compensation 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.

(b) Any action by MoneyGram International, Inc., under the Plan may be by
resolution of its Board of Directors, or by any person or persons duly
authorized by resolution of said Board to take such action.

11. Effective Date

The Plan shall become effective on the date of its approval by the Board or on
such other date as the Board may direct. The Plan year is January 1 to
December 31.

	 	 	 
	

	 	MONEYGRAM INTERNATIONAL, INC.
	 
	 	 
	

	 	By: /s/ Teresa H. Johnson
	

	 	
 
	

	 	Title: Vice President and General Counsel

4

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