MoneyGram 2007 Annual Report Download - page 116

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Deferred Compensation Plans — Viad had a deferred compensation plan for its non-employee directors and a deferred compensation
plan for certain members of management which allowed for the deferral of compensation in the form of stock units or cash. In connection
with the deferred compensation plans, Viad funded certain amounts through a rabbi trust. In connection with the spin-off, the Company
paid a dividend of $7.3 million to Viad, which was used to pay certain liabilities under the deferred compensation plans. The Company
assumed liabilities totaling $6.6 million related to the plans and retained rabbi trust assets totaling $5.5 million. Subsequent to the spin-
off, the Company adopted a deferred compensation plan for certain employees and its non-employee directors. In 2007, the plan for
employees was amended to incorporate the deferred compensation obligations that were assumed under the Viad plan. Under the
Deferred Compensation Plan for Directors of MoneyGram International, Inc., non-employee directors may defer all or part of their
retainers, fees and stock awards in the form of stock units or cash. In 2007, the plan was amended to require that a portion of the retainer
received by non-employee directors be deferred in stock units. Director deferred accounts are payable upon resignation from the Board.
In 2005, the Board of Directors approved a deferred compensation plan for certain employees which allows for the deferral of base
compensation in the form of cash. In addition, the Company makes contributions to the participants' accounts for profit sharing
contributions beyond the IRS qualified plan limits. Beginning with the 2006 plan year, eligible employees may defer incentive pay in the
form of cash. Management deferred accounts are generally payable on the deferral date based upon the timing and method elected by the
participant. Deferred stock unit accounts are credited quarterly with dividend equivalents and will be adjusted in the event of a change in
our capital structure from a stock split, stock dividend or other change. Deferred cash accounts are credited quarterly with interest at a
long-term, medium-quality bond rate. Both deferred compensation plans are unfunded and unsecured and the Company is not required to
physically segregate any assets in connection with the deferred accounts. At December 31, 2007 and 2006, the Company had a liability
related to the deferred compensation plans of $8.8 million and $9.9 million, respectively, recorded in the "Accounts payable and other
liabilities" component in the Consolidated Balance Sheets. The rabbi trust had a market value of $13.6 million and $12.1 million at
December 31, 2007 and 2006, respectively, recorded in "Other assets" in the Consolidated Balance Sheets.
Note 13 — Stock-Based Compensation
As of the Distribution Date, each Viad option that immediately prior to the Distribution Date was outstanding and unexercised was
adjusted to consist of two options: (1) an option to purchase shares of Viad common stock and (2) an option to purchase shares of
MoneyGram common stock. The exercise price of the Viad stock option was adjusted by multiplying the exercise price of the old stock
option by a fraction, the numerator of which was the closing price of a share of Viad common stock on the first trading day after the
Distribution Date (divided by four to reflect the post-spin Viad reverse stock split) and the denominator of which was that price plus the
closing price for a share of MoneyGram common stock on the first trading day after the Distribution Date. The exercise price of each
MoneyGram stock option equals the exercise price of each old stock option times a fraction, the numerator of which was the closing price
of a share of MoneyGram common stock on the first trading day after the Distribution Date and the denominator of which was that price
plus the closing price of a share of Viad common stock on the first trading day after the Distribution Date (divided by four to reflect the
post-spin Viad reverse stock split). These MoneyGram options are considered to have been issued under the MoneyGram International,
Inc. 2004 Omnibus Incentive Plan. MoneyGram will take all tax deductions relating to the exercise of stock options and the vesting of
restricted stock held by employees and former employees of MoneyGram, and Viad will take the deductions arising from options and
restricted stock held by its employees and former employees.
On May 10, 2005, the Company's stockholders approved the MoneyGram International, Inc. 2005 Omnibus Incentive Plan, which
authorizes the issuance of awards of up to 7,500,000 shares of common stock. Effective upon the approval of the 2005 Omnibus Incentive
Plan, no new awards may be granted under the 2004 Omnibus Incentive Plan. The 2005 Omnibus Incentive Plan provides for the
following types of awards to officers, directors and certain key employees: (a) incentive and nonqualified stock options; (b) stock
appreciation rights; (c) restricted stock and
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