MoneyGram 2009 Annual Report Download - page 114

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company has a minimum required contribution of approximately $2.6 million for the defined benefit pension plan in 2010, and will
continue to make contributions to the SERPs and the postretirement benefit plans to the extent benefits are paid. Aggregate benefits paid
for the unfunded plans are expected to be $4.4 million in 2010.
Employee Savings Plan — The Company has an employee savings plan that qualifies under Section 401(k) of the Internal Revenue Code
of 1986, as amended. Contributions to, and costs of, the 401(k) defined contribution plan totaled $3.7 million, $3.7 million and
$3.4 million in 2009, 2008 and 2007, respectively. MoneyGram does not have an employee stock ownership plan.
Deferred Compensation Plans — Under the Deferred Compensation Plan for Directors of MoneyGram International, Inc., non-employee
directors were allowed to defer all or part of their retainers, fees and stock awards in the form of stock units or cash prior to 2009. In
2007, the plan was amended to require that a portion of the retainer received by non-employee directors be deferred in stock units. In
2008, the plan was amended to state that directors who join the Board on or after March 24, 2008 shall not be eligible to participate in the
plan. Effective January 1, 2009, voluntary deferrals of director fees and stock unit retainers under the plan were permanently
discontinued. Deferrals made prior to 2009 will remain in the plan until such amounts become distributable in accordance with the
Director's deferral elections. Under the Deferred Compensation Plan for Management, certain employees may defer their base
compensation and incentive pay 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. 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 the Company's 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. The Company has rabbi trusts associated with each deferred compensation plan which are funded through voluntary
contributions by the Company. At December 31, 2009 and 2008, the Company had a liability related to the deferred compensation plans
of $2.8 million and $2.6 million, respectively, recorded in the "Accounts payable and other liabilities" component in the Consolidated
Balance Sheets. The rabbi trusts had a market value of $10.0 million and $9.2 million at December 31, 2009 and 2008, respectively,
recorded in "Other assets" in the Consolidated Balance Sheets.
Note 12 — Mezzanine Equity
Preferred Stock — In connection with the recapitalization, the Company issued 495,000 shares of B Stock and 265,000 shares of B-1
Stock to the Investors for a purchase price of $495.0 million and $265.0 million, respectively. As a result of the issuance of the Series B
Stock, the Investors had an equity interest of approximately 79 percent on March 25, 2008. With the accrual of dividends, the Investors
had an equity interest of approximately 82 percent and 80 percent on December 31, 2009 and 2008, respectively. In addition, the
Company capitalized $107.5 million of transaction costs, including $7.5 million paid through the issuance of 7,500 shares of B-1 Stock to
Goldman Sachs. The B Stock is convertible into shares of common stock of the Company at a price of $2.50 per share, subject to
adjustment. The B-1 Stock is convertible into B Stock by any stockholder other than Goldman Sachs. While held by Goldman Sachs, the
B-1 Stock is convertible into Series D Participating Convertible Preferred Stock ("Series D Stock"), which is a non-voting common
equivalent stock.
The Series B Stock pays a cash dividend of 10 percent. At the Company's option, dividends may be accrued through March 25, 2013 at a
rate of 12.5 percent in lieu of paying a cash dividend. If the Company is unable to pay the dividends in cash after March 25, 2013,
dividends will accrue at a rate of 15 percent. The Company anticipates that it will accrue dividends on the Series B Stock for at least the
next 12 months. While no dividends have been declared as of December 31, 2009, the Company has accrued dividends through a charge
to "Additional paid-in capital" as
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