MoneyGram 2013 Annual Report Download - page 24

Table of Contents
Risks Related to Ownership of Our Stock
THL owns a substantial percentage of our common stock, and its interests may differ from the interests of our other common stockholders.
As of December 31, 2013
, THL held approximately 62.8 percent of our common shares outstanding. On a fully diluted basis, they held
approximately 50.9 percent of the Company. As a result, THL is able to determine the outcome of matters put to a stockholder vote, including
the ability to elect our directors, determine our corporate and management policies, including compensation of our executives, and determine,
without the consent of our other stockholders, the outcome of any corporate action submitted to our stockholders for approval, including
potential mergers, acquisitions, asset sales and other significant corporate transactions. THL also has sufficient voting power to amend our
organizational documents. We cannot provide assurance that the interests of THL will coincide with the interests of other holders of our common
stock. THL’
s concentration of ownership may discourage, delay or prevent a change in control of our Company, which could deprive our
stockholders of an opportunity to receive a premium for their common stock as part of a sale of our Company and might reduce our share price.
In view of their significant ownership stake in the Company, THL has appointed three members to our Board of Directors. Our current Board
consists of nine directors, three of which have been appointed by THL, one of which is our Chief Executive Officer, and five of which are
independent. Our Certificate of Incorporation provides that, as long as the Investors have a right to designate directors to our Board, THL shall
have the right to designate two to four directors who shall each have equal votes and who shall have such number of votes equal to the number
of directors as is proportionate to the Investors’ common stock ownership, calculated on a fully-
converted basis, as if all of the shares of D Stock
were converted to common shares. Therefore, each director designated by THL will have multiple votes and each other director will have one
vote.
We have significant overhang of salable common stock and D Stock held by the Investors relative to the public float of our common stock.
The trading market for our common stock was first established in June 2004. The public float in that market now consists of approximately
62.3
million shares issued and 58.0 million shares outstanding as of December 31, 2013
. In accordance with the terms of the Registration Rights
Agreement entered into between us and the Investors at the closing of the 2008 Recapitalization, we have an effective registration statement on
Form S-
3 that permits the offer and sale by the Investors of all of the common stock or D Stock currently held by the Investors. The Investors
have sold 10.9 million shares of common stock pursuant to this registration statement, which leaves the Investors with 50.0 million shares of
common stock that can still be sold pursuant to the registration statement. The registration statement also permits us to offer and sell up to
$500
million
of our common stock, preferred stock, debt securities or any combination of these securities, from time to time, subject to market
conditions and our capital needs. Sales of a substantial number of shares of our common stock, or the perception that significant sales could
occur (particularly if sales are concentrated in time or amount), may depress the trading price of our common stock.
Our charter documents and Delaware law contain provisions that could delay or prevent an acquisition of the Company, which could inhibit
your ability to receive a premium on your investment from a possible sale of the Company.
Our charter documents contain provisions that may discourage third parties from seeking to acquire the Company. These provisions and specific
provisions of Delaware law relating to business combinations with interested stockholders may have the effect of delaying, deterring or
preventing certain business combinations, including a merger or change in control of the Company. Some of these provisions may discourage a
future acquisition of the Company even if stockholders would receive an attractive value for their shares or if a significant number of our
stockholders believed such a proposed transaction to be in their best interests. As a result, stockholders who desire to participate in such a
transaction may not have the opportunity to do so.
Our board of directors has the power to issue series of preferred stock and to designate the rights and preferences of those series, which
could adversely affect the voting power, dividend, liquidation and other rights of holders of our common stock.
Under our certificate of incorporation, our board of directors has the power to issue series of preferred stock and to designate the rights and
preferences of those series. Therefore, our board of directors may designate a new series of preferred stock with the rights, preferences and
privileges that the board of directors deems appropriate, including special dividend, liquidation and voting rights. The creation and designation
of a new series of preferred stock could adversely affect the voting power, dividend, liquidation and other rights of holders of our common stock
and, possibly, any other class or series of stock that is then in existence.
22