EMPLOYEE BENEFITS AGREEMENT BY AND AMONG VIAD CORP, MONEYGRAM INTERNATIONAL, INC. AND TRAVELERS EXPRESS COMPANY, INC. DATED AS OF [ ], 2004
Exhibit 10.1
BY AND AMONG
VIAD CORP,
MONEYGRAM INTERNATIONAL, INC.
AND
TRAVELERS EXPRESS COMPANY, INC.
DATED AS OF [ ], 2004
TABLE OF CONTENTS
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ARTICLE I | DEFINITIONS
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1.01. | Terms Defined in the Separation and Distribution Agreement
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1.02. | General
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1.03. | Plan Names
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ARTICLE II | ASSIGNMENT OF EMPLOYEES
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2.01. | Employees
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2.02. | Resignation of Officers and Directors
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2.03. | Change of Control Severance Arrangements
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2.04. | Severance Pay and Termination Liabilities
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ARTICLE III | QUALIFIED PLANS
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3.01. | Savings Plan and ESOP
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3.02. | Defined Benefit Plans
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ARTICLE IV | NONQUALIFIED PENSION PLANS
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4.01. | SERPs
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4.02. | Deferred Compensation Plan and Viad Corp
Supplemental TRIM Plan
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4.03. | Administration
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ARTICLE V | WELFARE BENEFITS
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5.01. | End of Participation in Viad Welfare Plans
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5.02. | MoneyGram Plans
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5.03. | Certain Executive Medical Benefits
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ARTICLE VI | OPTIONS AND OTHER INCENTIVE COMPENSATION
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6.01. | Stock Options
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6.02. | Restricted Stock
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6.03. | Other Terms and Conditions
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6.04. | Tax Deductions
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6.05. | Viad Corp Employee Equity Trust
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6.06. | Viad Corp Management Incentive Plan
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ARTICLE VII | DIRECTORS’ PLANS
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7.01. | Deferred Compensation Plan
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7.02. | Charitable Award Program
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ARTICLE VIII | MISCELLANEOUS
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8.01. | Miscellaneous Plans
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8.02. | Post-Distribution Liabilities
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8.03. | Preservation of Rights to Amend or Terminate Plans
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8.04. | Other Liabilities
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8.05. | Audit and Dispute Resolution
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8.06. | Effect if Distribution Does Not Occur
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8.07. | Incorporation of Separation and Distribution Agreement |
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Provisions
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8.08. | Indemnification; Joint and Several Liability
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8.09. | Cost-Sharing
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8.10. | Certain MoneyGram Common Stock
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Schedule I: | Certain MoneyGram Employees |
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THIS EMPLOYEE BENEFITS AGREEMENT, dated as of [ ], is by and among Viad Corp, a Delaware corporation (“Viad”), MoneyGram International, Inc., a Delaware corporation (“MoneyGram”), and Travelers Express Company, Inc., a Minnesota corporation (“TECI”).
1.01. Terms Defined in the Separation and Distribution Agreement. The following terms shall have the meanings assigned to them in the Separation and Distribution Agreement (as defined in the second paragraph of this Agreement) (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
Affiliate
Code
Distribution
Distribution Date
Effective Time
Former MoneyGram Businesses
Former Viad Business
Group
IRS
Liabilities
MoneyGram Common Stock
MoneyGram Group
NYSE
Representative
Subsidiary
Viad Common Stock
Viad Group
1.02. General. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
Active Supplemental TRIM Participant: Any Viad Employee who is not, as of the Distribution Date, employed by GES Exposition Services, Inc. or Exhibitgroup/Giltspur, a division of Viad Corp.
Adjusted Viad Option: as defined in Section 6.01(a).
Administrating Party: as defined in Section 8.05(a).
Agreement: this Employee Benefits Agreement, including Schedule I hereto.
Assumed Deferred Compensation Plan Liabilities: as defined in Section 4.02.
Assumed SERP Obligations: as defined in Section 4.01.
Assumed Supplemental TRIM Liabilities: as defined in Section 4.02.
Auditing Party: as defined in Section 8.05(a).
Deferred Compensation Plan: the Viad Corp Deferred Compensation Plan.
MoneyGram: as defined in the first paragraph of this Agreement.
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MoneyGram Director: any individual who is a director of MoneyGram immediately after the Distribution.
MoneyGram Employee Equity Trust: as defined in Section 6.05.
MoneyGram Employee: any individual who as of the Distribution Date is an employee of any member of either Group who (1) is on the payroll of any member of the MoneyGram Group or (2) is listed on Schedule I.
MoneyGram Former Employee: any individual who is neither a MoneyGram Employee nor a Viad Employee, but (1) at any time before the Distribution Date, was employed by any member of either Group and, immediately before the termination of such employment, was on the payroll of any member of the MoneyGram Group or (2) as of the Distribution Date is, or at any time before the Distribution Date was, employed in any of the Former MoneyGram Businesses.
MoneyGram Individual: any MoneyGram Employee or MoneyGram Former Employee.
MoneyGram Plan: any Plan maintained or contributed to by any member of either Group prior to the Distribution Date primarily for the benefit of MoneyGram Individuals.
MoneyGram Post-Distribution Value: the closing per-share price at which the MoneyGram Common Stock trades on the NYSE on the first trading day after the Distribution Date.
MoneyGram Restricted Stock: as defined in Section 6.02(a).
MoneyGram Savings Plan: as defined in Section 3.01(b).
MoneyGram Stock Units: stock units representing hypothetical shares of MoneyGram Common Stock.
New MoneyGram Option: as defined in Section 6.01(a).
Non-parties: as defined in Section 8.05(b).
Payments: as defined in Section 8.05(a).
Plan: any plan, policy, arrangement, contract or agreement providing benefits (including bonuses, deferred compensation, incentive compensation, savings, stock purchases, pensions, profit sharing or retirement or other retiree benefits, including retiree medical benefits) for any group of employees or former employees or individual employee or former employee, or the beneficiaries and/or dependents of any such employee or former employee, whether formal or informal or written or unwritten and whether or not legally binding, and including any means, whether or not legally required, pursuant to which any benefit is provided by an employer to any employee or former employee or the beneficiaries and/or dependents of any such employee or former employee.
Pre-Spin Option: as defined in Section 6.01(a).
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Separation and Distribution Agreement: as defined in the second paragraph of this Agreement.
TECI: as defined in the first paragraph of this Agreement.
Transition Period: as defined in Section 3.01(d).
Viad: as defined in the first paragraph of this Agreement.
Viad Employee: any individual who as of the Distribution Date is an employee of any member of the Viad Group, other than a MoneyGram Employee.
Viad Equity Plans: the Viad Corp 1992 Stock Incentive Plan and the 1997 Viad Corp Omnibus Incentive Plan.
Viad ESOP: the Viad Corp Employees’ Stock Ownership Plan.
Viad ESOP Loan: the loan that is outstanding under the Loan and Guarantee Agreement dated as of June 20, 1995, as amended June 30, 1995 and May 31, 2000, among The Dial Companies Employees’ Stock Ownership Plan Trust (now the trust for the Viad ESOP), The Dial Corp (now Viad) and Wachovia Bank of North Carolina, N.A.
Viad Former Employee: any individual who as of the Distribution Date is not a MoneyGram Employee, a MoneyGram Former Employee or a Viad Employee, but either (1) at any time before the Distribution Date was an employee of any member of either Group or (2) as of the Distribution Date is, or at any time before the Distribution Date was, employed in a Former Viad Business.
Viad Individual: any Viad Employee or any Viad Former Employee.
Viad Miscellaneous Plans: any Viad Plan other than (1) the Viad Savings Plan, (2) the Viad ESOP, (3) the Viad Corp Retirement Income Plan, (4) the Viad SERPs, (5) the Viad Corp Supplemental TRIM Plan, (6) the Deferred Compensation Plan, (7) the Viad Welfare Plans, (8) the Viad Corp Flexible Compensation Plan, (9) the Viad Equity Plans, (10) the Viad Corp Management Incentive Plan, (11) the Viad Corp Employee Equity Trust, (12) the Deferred Compensation Plan for Directors of Viad, (13) the Viad Corp Director’s Charitable Award Program, and (14) the Viad Corp Director’s Matching Gift Program.
Viad Option: an option to purchase shares of Viad Common Stock granted pursuant to a Viad Equity Plan, together with any stock appreciation right or limited stock appreciation right issued in connection therewith.
Viad Plan: any Plan maintained or contributed to by any member of either Group prior to the Distribution Date, other than a MoneyGram Plan.
Viad Post-Distribution Value: the closing per-share price at which the Viad Common Stock trades on the NYSE on the first trading day after the Distribution Date; provided, that if the reverse stock split referred to in Viad’s proxy statement dated March 31, 2004, has occurred prior to the close of trading on the first trading day after the Distribution Date, the Viad Post-Distribution Value shall equal such price divided by four.
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Viad Retiree Life Insurance Plan: The Viad Corp Group Life Insurance Plan for Retired Employees and Long Term Disability Benefits Recipients.
Viad Retiree Medical Plan: Any of the Viad Indemnity Retiree Medical Plan, the Viad Indemnity Medical Plan (out of area) or the Viad POS Medical Plan, to the extent applicable to retired employees and their beneficiaries and dependents.
Viad Savings Plan: the Viad Corp Capital Accumulation Plan.
Viad SERPs: The Viad Corp Supplemental Pension Plan, the Premier Cruise Lines Supplemental Executive Retirement Plan, the Aircraft Services International Supplemental Executive Retirement Plan, the Greyhound Leisure Services Inc. Key Management Deferred Compensation Plan, the Restaura, Inc. Key Management Deferred Compensation Plan, the Restaura, Inc. Voluntary Retirement Plan, the ProDine, Inc./Glacier Park, Inc. Supplemental Executive Retirement Plan, and the individual pension arrangements reflected in ledger item 2650-515 on the Viad Corp general ledger.
Viad Stock Units: stock units representing hypothetical shares of Viad Common Stock.
Viad Welfare Plan: any Viad Plan that is a Welfare Plan.
Welfare Plan: any Plan that is a “welfare plan” within the meaning of Section 3(1) of ERISA, whether or not such Plan is subject to ERISA.
1.03. Plan Names. The names of specific Plans used herein are capitalized (but not defined above in this Article I).
ARTICLE II
ASSIGNMENT OF EMPLOYEES
2.01. Employees. Viad and MoneyGram shall take all steps necessary or appropriate so that to the extent practicable, all MoneyGram Employees are employed by a member of the MoneyGram Group not later than as soon as practicable after the Distribution Date; provided, however, that nothing herein shall give to any individual a right of employment, or continued employment, by any member of the MoneyGram Group or the Viad Group.
2.02. Resignation of Officers and Directors. Except as otherwise agreed by the parties hereto or as otherwise provided in the Separation and Distribution Agreement, effective not later than immediately before the Distribution Date, (1) all Viad Employees who are acting as directors or officers of any member of the MoneyGram Group shall resign from such positions with the MoneyGram Group and (2) all MoneyGram Employees who are acting as directors or officers of any member of the Viad Group shall resign from such positions with the Viad Group.
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2.03. Change of Control Severance Arrangements. Effective as of the Distribution Date, all MoneyGram Employees shall cease to be participants in the Viad Corp Executive Severance Plans.
2.04. Severance Pay and Termination Liabilities.
(a) No Severance. Viad, MoneyGram and TECI agree that, with respect to individuals who, in connection with the Distribution, cease to be employees of the Viad Group and become employees of the MoneyGram Group, such cessation shall not be deemed a severance of employment from either Group for purposes of any Plan that provides for the payment of severance, salary continuation or similar benefits.
3.01. Savings Plan and ESOP.
(b) MoneyGram Savings Plan. MoneyGram shall take, or cause to be taken, all action necessary and appropriate to establish a defined contribution savings plan (the “MoneyGram Savings Plan”) to accept the transfers of assets and liabilities provided for in this Section 3.01 and to provide benefits, effective as of the Distribution Date, for all MoneyGram Individuals and beneficiaries thereof who, immediately prior to the Distribution Date, were participants in or otherwise entitled to benefits under the Viad Savings Plan. The MoneyGram Savings Plan shall be substantially the same, in all material respects, as the Viad Savings Plan. Without limiting the generality of the foreoing, the MoneyGram Savings Plan initially shall offer investment choices comparable to those offered by the Viad Savings Plan. TECI and MoneyGram agree that each such MoneyGram Individual and beneficiary shall be, to the extent applicable, entitled, for all purposes under the Viad Savings Plan, to be credited with the term of service credited to him or her as of the Distribution Date under the terms of the Viad Savings Plan or the Viad ESOP, as applicable, as if such service had been rendered to the MoneyGram Group. Viad agrees to provide MoneyGram, as soon as practicable after the Distribution Date (with the cooperation of MoneyGram to the extent that relevant information is in the possession
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of the MoneyGram Group), with a list of the MoneyGram Individuals who were, to the best knowledge of Viad, participants in or otherwise entitled to benefits under the Viad Savings Plan immediately prior to the Distribution Date. Viad shall also provide MoneyGram with such additional information (in the possession of the Viad Group and not already in the possession of the MoneyGram Group) as may be reasonably requested by MoneyGram and necessary in order for the MoneyGram Group to establish and administer the MoneyGram Savings Plan effectively; provided, that such request is made by MoneyGram within 60 days after completion of the asset transfer to the MoneyGram Savings Plan required by this Section 3.01; and provided, further, that MoneyGram reimburses Viad for all costs incurred by Viad in providing such information.
(d) Cooperation and Filings. In connection with the transfer described in Section 3.01(c), Viad, MoneyGram and TECI shall cooperate in making any and all appropriate filings required under the Code or ERISA, and the regulations thereunder, and any applicable securities laws and take all such action as may be necessary and appropriate to cause such transfer to take place as soon as practicable after the Distribution Date; provided, however, that such transfer shall not take place until as soon as practicable after the later of (1) the expiration of a 30-day period following the date of filing of any required Forms 5310-A (or any successor form thereto) with the IRS and (2) the earlier of (A) the receipt of a favorable IRS determination letter with respect to the qualification of the MoneyGram Savings Plan under Section 401(a) of the Code or (B) the receipt by Viad of an opinion of counsel reasonably satisfactory in form and substance to Viad and MoneyGram to the effect that such counsel believes the MoneyGram Savings Plan is qualified under Section 401(a) of the Code. Viad, MoneyGram and TECI agree to provide to such counsel such information in the possession of the Viad Group and the MoneyGram Group, respectively, as may be reasonably requested by such counsel in connection with the issuance of such opinion. Viad and MoneyGram shall cooperate to ensure that during the period from the Distribution Date until the the asset transfers provided for in Section 3.01(c) are completed (the “Transition Period”), the participation in the Viad Savings Plan by MoneyGram Individuals continues without unnecessary disruption. Without limiting the generality of the foregoing: (i) Viad shall cause distributions in respect of terminated or retired participants who are MoneyGram Individuals to continue to be made, on behalf of the MoneyGram Group, from the Viad Savings Plan and the Viad ESOP during the Transition Period in accordance with applicable law and pursuant to plan provisions; (ii) Viad and
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MoneyGram shall cooperate and take all steps necessary or appropriate to ensure that to the extent reasonably practicable, during the Transition Period, (A) MoneyGram Individuals continue to be able to direct the investment of their accounts and (B) MoneyGram Individuals who have participant loans from the Viad Savings Plan can continue to make loan repayments through payroll deductions and otherwise in accordance with the terms of those loans, in each case in accordance with the provisions of applicable law and the Viad Savings Plan; and (iii) Viad and MoneyGram shall cooperate and take all actions necessary or appropriate to ensure that appropriate communications to participants regarding the implementation of this Section 3.01 (including with respect to any “blackout” period that may be imposed) are provided in a timely manner and as required by applicable law.
3.02. Defined Benefit Plans.
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(c) MoneyGram shall, to the extent reasonably practicable, continue to permit participant contributions by Viad Individuals to Viad Welfare Plans providing post-retirement benefits to be withheld from distributions from the Viad Corp Retirement Income Plan.
ARTICLE IV
NONQUALIFIED PENSION PLANS
4.01. SERPs. Effective as of the Distribution Date: TECI shall assume and be solely responsible for (A) all obligations under the Viad SERPs to MoneyGram Individuals, Viad Former Employees and beneficiaries thereof, and (B) all obligations to pay benefits to Viad Employees and beneficiaries thereof under the Viad Corp Supplemental Pension Plan, as in effect on the Distribution Date, using Final Average Earnings and Covered Compensation at termination of employment with Viad and all of its Subsidiaries or, in the case of payment before termination of employment, as of the date of the payment (in either case including Final Average Earnings and Covered Compensation based on earnings on and after the Distribution Date to the extent applicable), and Credited Service through the Distribution Date (collectively, the “Assumed SERP Obligations”). The benefits included in the Assumed SERP Obligations shall be fully vested as of the Distribution Date. For purposes of this Section 4.01, the capitalized terms “Final Average Earnings,” “Subsidiaries,” “Covered Compensation” and “Credited Service” shall have the meanings assigned to them under the Viad Corp Supplemental Pension Plan, as in effect on the Distribution Date.
4.02. Deferred Compensation Plan and Viad Corp Supplemental TRIM Plan. Effective as of the Distribution Date: (1) TECI shall establish or designate one or more nonqualified deferred compensation plans that are substantially similar in all material respects to the Deferred
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Compensation Plan and the Viad Corp Supplemental TRIM Plan to provide benefits to MoneyGram Individuals and beneficiaries thereof; (2) all MoneyGram Individuals shall cease to be entitled to accrue further benefits or make further deferrals under the Viad Corp Supplemental TRIM Plan; and (3) TECI shall assume and be solely responsible for all Assumed Deferred Compensation Plan Liabilities and all Assumed Supplemental TRIM Liabilities (as those terms are defined in the next two sentences). The term “Assumed Deferred Compensation Plan Liabilities” means all liabilities under the Deferred Compensation Plan to MoneyGram Individuals and beneficiaries thereof. The term “Assumed Supplemental TRIM Liabilities” means (A) all liabilities under the Viad Corp Supplemental TRIM Plan to MoneyGram Individuals, Inactive Supplemental TRIM Participants and beneficiaries thereof, and (B) a portion of the total benefit liabilities under the Viad Corp Supplemental TRIM Plan to each Active Supplemental TRIM Participant or beneficiary thereof whose benefits under the applicable plan become payable at any time after the Distribution Date, equal to the account balance of such Active Supplemental TRIM Participant under the Viad Corp Supplemental TRIM Plan as of the Distribution Date, as adjusted for earnings experience thereafter through the date of final payment to such Active Supplemental TRIM Participant or beneficiary thereof. The benefits included in the “Assumed Deferred Compensation Plan Liabilities” are fully vested, and the benefits included in the Assumed Supplemental TRIM Obligations shall be fully vested as of the Distribution Date. Effective as of the Distribution, the portion of each account under the Deferred Compensation Plan that consists of Viad Stock Units shall be credited with a number of MoneyGram Stock Units equal to the number of shares of MoneyGram Common Stock that would have been distributed with respect to such Viad Stock Units in the Distribution, had they been actual outstanding shares of Viad Common Stock.
4.03. Administration. Except as specifically provided in the last sentence of Section 4.02, the benefits of Viad Individuals and beneficiaries thereof under the Viad SERPs, the Deferred Compensation Plan and the Viad Corp Supplemental TRIM Plan shall at all times be determined in accordance with the terms of the applicable Viad SERP, the Deferred Compensation Plan or the Viad Corp Supplemental TRIM Plan, as applicable, as the same may be amended from time to time by Viad; provided, that to the extent that any such amendment made after the date hereof results in an increase in such benefits, the entire cost of such increase shall be borne by Viad and the amounts payable by TECI hereunder shall be computed as if such amendment had not been made. Such benefits shall be administered as follows:
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5.01. End of Participation in Viad Welfare Plans. As of the Distribution Date, the participation by MoneyGram Individuals in the Viad Welfare Plans shall cease, and the MoneyGram Group shall cease to be participating employers in the Viad Welfare Plans.
5.02. MoneyGram Plans. Effective as of the Distribution Date, (a) MoneyGram shall establish Welfare Plans to provide benefits to MoneyGram Individuals, which, except as Viad and MoneyGram may otherwise agree, shall be substantially similar in all material respects to the Viad Welfare Plans (including without limitation the Viad Retiree Medical Plan and the Viad Retiree Life Insurance Plan) in which such MoneyGram Individuals participated immediately before the Distribution Date, and (b) MoneyGram shall establish Welfare Plans to provide certain benefits as specified in Section 5.03. As of the Distribution Date, MoneyGram and its Welfare Plans shall assume or retain, or cause one or more members of the MoneyGram Group to assume or retain, as the case may be, and shall be solely responsible for, or cause its insurance carriers to be responsible for, all liabilities and obligations whatsoever of either Group, whether incurred before, on or after the Distribution Date in connection with claims under any Viad Welfare Plan in respect of any MoneyGram Individual or beneficiary or dependent thereof, and the Viad Group shall cease to have any liability or obligation with respect thereto.
5.03. Certain Executive Medical Benefits. As of the Distribution Date, TECI and its Welfare Plans shall assume and be solely responsible for all liabilities and obligations whatsoever of either Group to provide benefits under the Viad Corp Limited Executive Medical Plan, including without limitation with respect to claims incurred on or after the Distribution
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Date. However, except as provided below, Viad or a Representative of Viad shall continue to administer the Viad Corp Limited Executive Medical Plan, including determining the benefits of each Viad Individual or beneficiary thereof that become due thereunder and notifying TECI of the amounts that it is required to pay pursuant to this Section 5.03. TECI shall pay, or cause to be paid, such amounts (in each case, including any applicable employer payroll taxes and withholding and paying to the appropriate governmental authorities any taxes or other amounts required to be withheld therefrom) as directed by Viad or such Representative of Viad. Notwithstanding the foregoing, if at any time after the Distribution Date Viad becomes unable to continue, or gives TECI 60 days’ advance notice that it no longer wishes to continue, carrying out its administrative obligations under this Section 5.03, then TECI or a Representative of TECI shall take over such obligations. Following the Distribution, the Viad Corp Limited Executive Medical Plan shall not be amended (i) in any manner adverse to, or terminated with respect to, any individual covered thereby immediately before the Distribution, or (ii) without the consent of MoneyGram, in any manner that would increase the liabilities of the MoneyGram Group thereunder. It is acknowledged and agreed that the current and former Chairmen of the Board of Viad and their respective eligible family members are fully vested in the contractual right to receive benefits under the Viad Corp Limited Executive Medical Plan as in effect as of the date hereof.
ARTICLE VI
OPTIONS AND OTHER INCENTIVE COMPENSATION
6.01. Stock Options. Viad and MoneyGram shall cooperate and take all action necessary to amend (if necessary), or otherwise provide for adjustments of outstanding awards under, the Viad Equity Plans, so that:
(c) Delivery of Shares and Payment of Exercise Price. Viad shall be obligated to deliver any shares of Viad Common Stock that are purchased by exercise of any
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Adjusted Viad Option, and MoneyGram shall be obligated to deliver any shares of MoneyGram Common Stock that are purchased by exercise of any New MoneyGram Option, in each case whether exercised by a Viad Individual or a MoneyGram Individual. In connection with any such exercise, the exercising individual shall be required to deliver the exercise price to, and make all arrangements relating to tax withholding with, the party that is obligated to deliver the shares upon such exercise.
6.02. Restricted Stock.
6.03. Other Terms and Conditions. The terms and conditions of the Adjusted Viad Options, New MoneyGram Options, Viad Restricted Stock (after the Distribution) and MoneyGram Restricted Stock shall be the same as those of the corresponding Pre-Spin Option or Viad Restricted Stock (before the Distribution), as applicable, except as provided above and except that (1) for such awards held by MoneyGram Individuals, employment with any member of the MoneyGram Group shall be treated as if it were employment with Viad, (2) the definition of “change of control” shall be amended to include (i) a change of control of Viad, in the case of New MoneyGram Options and MoneyGram Restricted Stock held by Viad Individuals, as well as all Adjusted Viad Options and all Viad Restricted Stock, and (ii) a change of control of MoneyGram, in the case of Adjusted Viad Options and Viad Restricted Stock held by MoneyGram Individuals, as well as all New MoneyGram Options and MoneyGram Restricted Stock, and (3) for all such awards that include any noncompetition or similar covenants, such covenants shall apply with respect to competition with both the Viad Group and the MoneyGram Group. No such awards shall vest as a result of the consummation of any of the transactions contemplated by the Separation and Distribution Agreement and/or this Agreement.
6.04. Tax Deductions. Viad shall claim all tax deductions for compensation arising from the exercise of Adjusted Viad Options and New MoneyGram Options by Viad Individuals or the vesting of Viad Restricted Stock and MoneyGram Restricted Stock held by Viad
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Individuals, and MoneyGram shall not claim any such deduction. MoneyGram shall claim all tax deductions for compensation arising from the exercise of Adjusted Viad Options and New MoneyGram Options by MoneyGram Individuals or the vesting of Viad Restricted Stock and MoneyGram Restricted Stock held by MoneyGram Individuals, and Viad shall not claim any such deduction. Viad and MoneyGram shall share information and otherwise cooperate with one another to implement the foregoing and to help ensure that each is able to comply with all applicable tax withholding and reporting requirements associated with Adjusted Viad Options, New MoneyGram Options, Viad Restricted Stock and MoneyGram Restricted Stock.
6.05. Viad Corp Employee Equity Trust. Viad and MoneyGram shall take all action necessary so that, effective as of the Distribution Date, MoneyGram shall establish a trust (the “MoneyGram Employee Equity Trust”) comparable to the Viad Corp Employee Equity Trust to receive and hold for the benefit of MoneyGram Individuals, and the trustee of the Viad Corp Employee Equity Trust shall transfer to the trustee of the MoneyGram Employee Equity Trust, all shares of MoneyGram Common Stock received in the Distribution in respect of such shares of Viad Common Stock. Viad shall amend the Viad Corp Employee Equity Trust to the extent necessary to effectuate this Section 6.05, including without limitation to arrange for a percentage (determined in accordance with the next sentence) of the balance of the promissory note from the Viad Corp Employee Equity Trust to Viad to be assumed by the MoneyGram Employee Equity Trust and assigned to MoneyGram, so that such portion of the note represents a liability from the MoneyGram Employee Equity Trust to MoneyGram. The percentage referred to in the preceding sentence shall be determined by dividing the MoneyGram Post-Distribution Value by the Viad Pre-Distribution Value.
6.06. Viad Corp Management Incentive Plan.
(b) No Termination of Employment. For purposes of the Viad Corp Management Incentive Plan, individuals who, in connection with the Distribution, cease to be employees of Viad and become MoneyGram Employees shall not be deemed to have terminated
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employment for purposes of any deferral elections made by such individuals, and service with the MoneyGram Group shall be deemed continuous service with Viad.
7.01. Deferred Compensation Plan.
7.02. Charitable Award Program. As of the Distribution Date, TECI shall become the sponsor of The Viad Corp Director’s Charitable Award Program, and shall assume or retain, as the case may be, and shall be solely responsible for, all liabilities and obligations whatsoever of either Group, whether or not incurred prior to the Distribution Date, in connection with The Viad Corp Director’s Charitable Award Program, and the Viad Group shall cease to have any such liability or obligation with respect thereto. Viad shall assign to TECI all life insurance policies naming Viad as beneficiary that it holds to fund benefits under The Viad Corp Director’s Charitable Award Program.
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8.01. Miscellaneous Plans. The Viad Group shall be solely responsible for the payment of all liabilities and obligations whatsoever with respect to any Viad Individual or beneficiary or dependent thereof that is unpaid as of and through the Distribution Date under any Viad Miscellaneous Plan and the MoneyGram Group shall assume and be solely responsible for the payment of all liabilities and obligations whatsoever with respect to any MoneyGram Individual or beneficiary or dependent thereof that is unpaid as of and through the Distribution Date under any Viad Miscellaneous Plan. The MoneyGram Group shall be solely responsible for the payment of all liabilities and obligations whatsoever under any MoneyGram Plan, whether arising before, on or after the Distribution Date.
8.02. Post-Distribution Liabilities. Except as specifically provided otherwise in this Agreement, the Viad Group shall be solely responsible for the payment of all liabilities and obligations whatsoever of either Group arising with respect to any Viad Individual or beneficiary or dependent thereof and attributable to any period subsequent to the Distribution Date, and the MoneyGram Group shall be solely responsible for the payment of all liabilities and obligations whatsoever of either Group arising with respect to any MoneyGram Individual or beneficiary or dependent thereof and attributable to any period subsequent to the Distribution Date.
8.03. Preservation of Rights to Amend or Terminate Plans. Except as specifically provided in Sections 4.03, 5.03 and 7.02 above and Section 8.07 below, no provisions of this Agreement shall be construed as a limitation on the right of Viad, MoneyGram, TECI or any member of the Viad Group or the MoneyGram Group to amend or terminate any Plan or terminate its participation in any Plan, which Viad, MoneyGram, or TECI or any member of the Viad Group or the MoneyGram Group would otherwise have under the terms of such Plan or otherwise, and no provision of this Agreement shall be construed to create a right in any employee or former employee or beneficiary or dependent of such employee or former employee under a Plan which such employee, former employee, beneficiary or dependent would not otherwise have under the terms of the Plan itself. However, if at any time after the Distribution, the Viad Group or the MoneyGram Group amends any Plan in a manner that increases the liabilities of the other Group thereunder without the latter Group’s consent, then the Group making the amendment shall be solely responsible for all liabilities resulting from such amendment, notwithstanding any other provision of this Agreement.
8.04. Other Liabilities. As of the Distribution Date: (1) MoneyGram shall assume and be solely responsible for all Liabilities whatsoever of the Viad Group with respect to claims made by the MoneyGram Individuals and MoneyGram Directors relating to any employment-related or service-related Liability not otherwise expressly provided for in this Agreement, including earned salary, wages, fees, retainers, severance payments or other compensation and accrued holiday, vacation, health, dental or retirement benefits, regardless of whether such employment-related Liability was incurred before or after the Distribution Date and (2) Viad shall retain all such Liabilities with respect to (A) Viad Individuals and (B) directors of Viad who served as such prior to the Distribution Date and who are not MoneyGram Directors. In the event of any Liabilities with respect to periods prior to the Distribution Date arising from any inquiry, audit, examination, investigation, dispute, or litigation by any Governmental Authorities
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(as defined in the Separation and Distribution Agreement) related to any Viad Plan, such Liabilities shall be allocated between the Viad Group and the MoneyGram Group in a manner consistent with Viad’s past practice prior to the Distribution Date. Notwithstanding any other provision of this Agreement, the provisions of Section 5.02 of the Separation and Distribution Agreement (relating to Pre-Merger Claims) shall apply to Liabilities relating to the administration by members of the Viad Group before the Effective Time of Plans in which any MoneyGram Individuals participated.
8.05. Audit and Dispute Resolution. The following provisions shall apply with respect to the administrative duties to be carried out from time to time by Viad, MoneyGram and/or TECI under Section 4.03 or Section 5.03 above.
(a) The party carrying out any such administrative duties (the “Administrating Party”) shall provide the other party (the “Auditing Party”) with the opportunity, upon request, to conduct reasonable audits of the manner in which the Administrating Party is carrying out its duties and the accuracy of the amounts the Auditing Party is being or has been required to pay under Sections 4.01, 4.02 or 5.03, as applicable (the “Payments”). The Auditing Party may adopt reasonable procedures and guidelines for conducting audits and the selection of audit representatives under this Section 8.05. The Auditing Party shall have the right to make copies of any records at its expense, subject to the confidentiality provisions set forth in the Separation and Distribution Agreement, which are incorporated by reference herein. The Administrating Party shall provide the Auditing Party’s representatives with reasonable access during normal business hours to its operations, computer systems and paper and electronic files, and provide work space to its representatives. After any audit is completed, the Administrating Party shall have the right to review a draft of the audit findings and to comment on those findings in writing within ten business days after receiving such draft.
(b) The Auditing Party’s audit rights under this Section 8.05 shall include the right to audit, or participate in an audit facilitated by the Administrating Party, of any Subsidiaries and Affiliates of the party being audited and to require the Administrating Party to request any Representative or other benefit providers and third parties with whom the Administrating Party has a relationship, or agents of such party (collectively, the “Non-parties”), to agree to such an audit to the extent relevant to the administrative duties at issue. The Administrating Party shall, upon written request from the Auditing Party, provide an individual (at the Auditing Party’s expense) to supervise any audit of a Non-party. The Auditing Party shall be responsible for supplying, at the Auditing Party’s expense, additional personnel sufficient to complete the audit in a reasonably timely manner. The responsibility of the Administrating Party shall be limited to providing, at the Auditing Party’s expense, a single individual at each audited site for purposes of facilitating the audit.
(c) If, at the conclusion of any audit conducted pursuant to this Section 8.05, the Auditing Party determines that it believes that the Administrating Party has required it, or is requiring it, to make Payments in excess of the proper amounts, the Auditing Party and the Administrating Party shall negotiate in good faith for 30 days to reach agreement about such Payments. If they are unable to reach such agreement during such period, they shall select a mutually agreeable third-party expert to determine the proper amounts of the disputed Payments,
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whose determination shall be final and binding upon all parties and whose fees and expenses shall be borne equally by Viad, on the one hand, and MoneyGram and TECI, on the other hand.
8.06. Effect if Distribution Does Not Occur. If the Distribution does not occur, then all actions and events that are, under this Agreement, to be taken or occur effective as of the Distribution Date, or otherwise in connection with the Distribution, shall not be taken or occur except to the extent specifically agreed by Viad, MoneyGram and TECI.
8.07. Incorporation of Separation and Distribution Agreement Provisions. The following provisions of the Separation and Distribution Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein: Section 5.01 (relating to survival); Article VI (relating to access to information); Article X (relating to termination); and Article XI (relating to miscellaneous) other than Sections 11.02 (relating to expenses) and 11.11 (relating to corporate power); provided, that notwithstanding Section 11.06 of the Separation and Distribution Agreement, each Viad Individual, each current or former director of Viad and each beneficiary or dependent thereof who is entitled to receive any of the benefits for which TECI or MoneyGram is made responsible pursuant to Section 4.01, 4.02, 5.03, 6.01, 6.02, 6.03, 7.01 and 7.02 above shall be third-party beneficiaries of such Sections to the extent applicable, entitled to enforce against TECI or MoneyGram, as the case may be, the obligations of TECI or MoneyGram, as the case may be, thereunder to provide benefits to him or her.
8.08. Indemnification; Joint and Several Liability. The Liabilities that are assigned to MoneyGram, TECI and/or the MoneyGram Group under this Agreement shall be considered MoneyGram Liabilities subject to Sections 5.04, 5.05 and 5.06 of the Separation and Distribution Agreement. Each member of the MoneyGram Group shall have joint and several liability for all Liabilities and obligations of each other member of the MoneyGram Group hereunder. The Liabilities that are assigned to Viad and/or the Viad Group under this Agreement shall be considered Viad Liabilities subject to Sections 5.04, 5.05 and 5.06 of the Separation and Distribution Agreement. Each member of the Viad Group shall have joint and several liability for all Liabilities and obligations of each other member of the Viad Group hereunder.
8.09. Cost-Sharing. MoneyGram or TECI shall reimburse Viad for the costs of benefits and the associated administrative costs of the participation and coverage by MoneyGram Individuals and their beneficiaries up to the Distribution Date, on a basis consistent with past practice and taking into account such factors as the percentage of the underlying obligation attributable to Viad Individuals and MoneyGram Individuals, respectively; provided, that in the case of Plans that are insured, the premium costs associated therewith for periods that begin before and end on or after the Distribution Date shall be allocated between the pre-Distribution-Date period and the post-Distribution-Date period on a pro-rata basis based on the number of days in each such period.
8.10. Certain MoneyGram Common Stock. Certain shares of Viad Common Stock have been transferred from the Viad Corp Employee Equity Trust to the Viad Corp Medical Plan Trust. MoneyGram shall, upon the request of the trustee of such trust, and at the expense of MoneyGram, use all reasonable efforts to cause the shares of MoneyGram Common Stock received by such trust in the Distribution in respect of such shares of Viad Common Stock to be
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registered in accordance with applicable federal and state securities laws and listed on any applicable stock exchange, to the extent necessary for such shares of MoneyGram Common Stock to be sold in compliance with law; provided, however, that if such shares may be sold in the NYSE without such registration, or if MoneyGram purchases such shares from such trust at their then-fair market value, MoneyGram shall not be required to seek to register such shares.
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IN WITNESS WHEREOF, the parties have caused this Employee Benefits Agreement to be executed by their duly authorized representatives.
VIAD CORP | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
MONEYGRAM INTERNATIONAL, INC. | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
TRAVELERS EXPRESS COMPANY, INC. | ||||||
By: | ||||||
Name: | ||||||
Title: |
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