MoneyGram 2005 Annual Report Download - page 92

Download and view the complete annual report

Please find page 92 of the 2005 MoneyGram annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 155

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
in effect at the time of grant. Compensation cost, net of expected forfeitures, is recognized using a straight-line method over the vesting or service period.
2005 2004 2003
Expected dividend yield 0.2% 0.2% 1.8%
Expected volatility 24.1% 25.2% 30.4%
Risk-free interest rate 3.8% 3.2% 2.7%
Expected life 5 years 5 years 5 years
Following is a summary of stock option activity:
Weighted-
Weighted Average Aggregate
Average Remaining Intrinsic
Exercise Contractual Value
Shares Price Term ($000)
Options outstanding at December 31, 2004 5,596,741 17.99
Granted 408,286 20.51
Exercised (878,779) 16.28
Forfeited (242,986) 19.39
Options outstanding at December 31, 2005 4,883,262 $ 18.42 5.28 years $ 37,382
Options exercisable at December 31, 2005 3,738,568 $ 18.29 4.78 years $ 29,133
The weighted-average grant date fair value of an option granted during 2005, 2004 and 2003 was $5.95, $5.49 and $4.00, respectively. The total intrinsic
value of options exercised during 2005 and 2004 was $5.1 million and $4.5 million, respectively. Cash received from option exercises during 2005, 2004 and
2003 was $15.0 million, $1.7 million and $3.7 million, respectively. The tax benefit realized for the tax deductions from option exercises totaled $1.8 million,
$1.6 million and $0.6 million for 2005, 2004 and 2003.
The Company has granted both restricted stock and performance-based restricted stock. The vesting of restricted stock is typically three years from the date of
grant. The vesting of performance-based restricted stock is contingent upon the Company obtaining certain financial thresholds established on the grant date.
Provided the incentive performance targets established in the year of grant are achieved, the performance-based restricted stock awards granted subsequent to
2002 will vest in a three-year period from the date of grant in an equal number of shares each year. Vesting could accelerate if performance targets are met at
certain achievement levels. The performance-based restricted stock awards granted in 2002 will vest in 2006 and 2007 in an equal number of shares each year.
Future vesting in all cases is subject generally to continued employment with MoneyGram or Viad. Holders of restricted stock and performance-based
restricted stock have the right to receive dividends and vote the shares, but may not sell, assign, transfer, pledge or otherwise encumber the stock. On the
Distribution Date, the Company's Chairman of the Board was granted a restricted stock award under the 2004 Omnibus Incentive Plan for 50,000 shares of
common stock, of which 25,000 shares vested immediately and 25,000 shares will vest on June 30, 2006. On June 30, 2005, the Company's Chairman of the
Board was granted a restricted stock award under the 2005 Omnibus Incentive Plan for 50,000 shares of common stock, of which 25,000 shares vested
immediately and 25,000 shares will vest in May 2006. F-38