MoneyGram 2015 Annual Report Download - page 24

Table of Contents
Any restructuring actions and cost reduction initiatives that we undertake may not deliver the expected results and these actions may adversely affect our
business operations.
We have undertaken and expect to continue to undertake various restructuring activities and cost reduction initiatives in an effort to better align our organizational
structure and costs with our strategy. These initiatives can be substantial in scope and disruptive to our operations, and they can involve large expenditures. In
fiscal years 2015 and 2014, we incurred restructuring charges of $5.0 million and $16.3 million , respectively. Such activities could result in significant disruptions
to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of our strategic objectives and the
results of our operations. If we do not fully realize or maintain the anticipated benefits of any restructuring plan or cost reduction initiative, our business could be
adversely affected.
Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business.
We are required to certify and report on our compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, which requires annual management
assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm addressing the
effectiveness of our internal control over financial reporting. If we fail to maintain the adequacy of our internal controls, as such standards are modified,
supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over
financial reporting in accordance with Section 404. In order to achieve effective internal controls we may need to enhance our accounting systems or processes,
which could increase our cost of doing business. Any failure to achieve and maintain an effective internal control environment could have a material adverse effect
on our business.
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, 2015 , THL held 44.6 percent of our outstanding common shares and 38.2 percent of our outstanding shares on a fully-converted basis (if all
of the outstanding shares of D Stock were converted to common shares), excluding treasury shares held by the Company. Together, the Investors’ ownership
percentage on a fully-converted basis is 52.6 percent as of December 31, 2015. Additionally our Amended and Restated Certificate of Incorporation provides that
as long as the Investors have a right to designate directors to our Board of Directors pursuant to the Amended and Restated Purchase Agreement, dated as of March
17, 2008, among the Company and the several Investor parties named therein, THL has the right to designate two to four directors (such directors, the "THL
Representatives"), who each have equal votes and who together have a total number of votes equal to the number of directors as is proportionate to the common
stock ownership (on an as-converted basis) of the Investors (rounded to the nearest whole number), unlike the other members of our Board of Directors who have
only one vote each. THL has appointed three of the nine members of our Board of Directors, each THL Representative currently has multiple votes, and the THL
Representatives together currently hold a majority of the votes of our Board of Directors.
We cannot provide assurance that the interests of THL will coincide with the interests of other holders of our common stock and THL’s substantial control over us
could result in harm to the market price of our common stock by delaying, deferring or preventing a change in control of our company; impeding a merger,
consolidation, takeover or other business combination involving our company; or entrenching our management and Board of Directors.
We have a significant number of salable common shares and D Stock held by the Investors relative to our outstanding common shares.
As of December 31, 2015 , there were 53.2 million outstanding common shares, excluding treasury shares (or 62.1 million common shares if the outstanding D
Stock were converted into common shares). In accordance with the terms of the Registration Rights Agreement, dated March 25, 2008, among the Company and
the Investor parties named therein, we have an effective Registration Statement on Form S-3, or the Registration Statement, that permits the offer and sale by the
Investors of all of the common shares and D Stock currently held by the Investors. As of December 31, 2015 , THL held 23.7 million shares of our common stock
and Goldman Sachs held 71,282 shares of D Stock, which are convertible into 8.9 million shares of our common stock. The Registration Statement also permits us
to offer and sell, from time to time, up to $500 million of our common stock, preferred stock, debt securities or any combination of these securities. Sales of a
substantial number of common shares, 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.
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