MoneyGram 2005 Annual Report Download - page 83

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
MoneyGram common stock until they become exercisable. Once they become exercisable, the rights will allow its holder to purchase one one-hundredth of a
share of MoneyGram series A junior participating preferred stock for $100.00. The rights become exercisable ten days after a person or group acquires, or
begins a tender or exchange offer for, 15 percent or more of the Company's outstanding common stock. In the event a person or group acquires 15 percent or
more of the Company's outstanding common stock, and subject to certain conditions and exceptions more fully described in the Rights Agreement, each right
will entitle the holder (other than the person or group acquiring 15 percent or more of the Company's outstanding common stock) to receive, upon exercise,
common stock of either MoneyGram or the acquiring company having a value equal to two times the exercise price of the rights. The rights are redeemable at
any time before a person or group acquires 15 percent or more of MoneyGram's outstanding common stock at the discretion of the Company's Board of
Directors for $0.01 per right and will expire, unless earlier redeemed, on June 30, 2014. After a person or group acquires 15 percent or more of MoneyGram's
outstanding common stock, but before that person or group owns 50 percent or more of MoneyGram's outstanding common stock, the Board of Directors may
extinguish the rights by exchanging one share of MoneyGram common stock or an equivalent security for each right (other than rights held by that person or
group). Each one one-hundredth of a share of MoneyGram preferred stock, if issued, will not be redeemable, will entitle holders to quarterly dividend
payments of the greater of $0.01 per share or an amount equal to the dividend paid on one share of MoneyGram common stock, will have the same voting
power as one share of MoneyGram common stock and will entitle holders, upon liquidation, to receive the greater of $1.00 per share or the payment made on
one share of MoneyGram common stock.
Preferred Stock: MoneyGram's Certificate of Incorporation provides for the issuance of up to 5,000,000 shares of undesignated preferred stock and up to
2,000,000 shares of series A junior participating preferred stock. Undesignated preferred stock may be issued in one or more series, with each series to have
those rights and preferences, including, without limitation, voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences,
as shall be determined by unlimited discretion of MoneyGram's Board of Directors. Series A junior participating preferred stock has been reserved for
issuance upon exercise of preferred share purchase rights. At December 31, 2005, no preferred stock is issued or outstanding.
Common Stock: MoneyGram's Certificate of Incorporation provides for the issuance of up to 250,000,000 shares of common stock with a par value of $0.01.
On the Distribution Date, MoneyGram was recapitalized such that the 88,556,077 shares of MoneyGram common stock outstanding was equal to the number
of shares of Viad common stock outstanding at the close of business on the record date. Stockholders' equity at December 31, 2003 and 2002 represented
Viad's capital structure consisting of 200,000,000 common shares authorized and 99,739,925 shares issued with a $1.50 par value.
The holders of MoneyGram common stock are entitled to one vote per share on all matters to be voted upon by its stockholders. The holders of common stock
have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. The
determination to pay dividends on common stock will be at the discretion of the Board of Directors and will depend on our financial condition, results of
operations, cash requirements, prospects and such other factors as the Board of Directors may deem relevant.
During 2005 and 2004, the Company paid $6.1 million and $1.8 million, respectively, in dividends on its common stock. Prior to the spin, dividends totaling
$15.6 million and $31.6 million were paid in 2004 and 2003, respectively, on Viad common stock. On February 16, 2006, the Board of Directors declared a
quarterly cash dividend of $0.04 per share to be paid on April 1, 2006 to stockholders of record on March 16, 2006.
Treasury Stock: Through June 30, 2004, treasury stock represented Viad common stock repurchased and held by the Company. On November 18, 2004, the
Board of Directors authorized a plan to repurchase, at the Company's discretion, up to 2,000,000 shares of MoneyGram International, Inc. common stock with
the intended effect of returning value to the stockholders and reducing dilution caused by the issuance of stock in connection with stock-based compensation
described in Note 15. On August 19, 2005, the Company's Board of Directors increased its share buyback authorization by 5,000,000 shares to a total of
7,000,000 shares. During 2005, the Company F-29