AMENDMENT NO. 2 TO FORM 10
 

As filed with the Securities and Exchange Commission on May 17, 2004
File No. 001-31950


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10

Amendment No. 2

GENERAL FORM FOR REGISTRATION OF SECURITIES

PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934


MoneyGram International, Inc.

(Exact Name of Registrant as Specified in Its Charter)


     
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
  16-1690064
(I.R.S. Employer
Identification No.)
 
1550 Utica Avenue South
Minneapolis, Minnesota
(Address of Principal Executive Offices)
 
55416
(Zip Code)

(952) 591-3000

(Registrant’s Telephone Number, Including Area Code)

Securities to be registered

pursuant to Section 12(b) of the Act:
     
Title of each class Name of each exchange on which
to be so registered each class is to be registered


Common Stock, par value $0.01 per share
  The New York Stock Exchange
Preferred Share Purchase Rights
  The New York Stock Exchange

Securities to be registered

pursuant to Section 12(g) of the Act:

None




 

INFORMATION REQUIRED IN REGISTRATION STATEMENT

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND
ITEMS OF FORM 10
 
Item 1. Business

      The information required by this item is contained under the sections “Summary,” “Risk Factors,” “Unaudited Pro Forma Consolidated Financial Information of MoneyGram International, Inc.,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Viad Corp,” “Business of MoneyGram” and “Relationship between New Viad and MoneyGram” of this information statement. Those sections are incorporated herein by reference.

 
Item 2. Financial Information

      The information required by this item is contained under the sections “Summary,” “Risk Factors,” “Capitalization of Viad Corp,” “Unaudited Pro Forma Consolidated Financial Information of MoneyGram International, Inc.,” “Selected Historical Consolidated Financial and Other Data of Viad Corp,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Viad Corp” and “Viad Corp Consolidated Financial Statements” of this information statement. Those sections are incorporated herein by reference.

 
Item 3. Properties

      The information required by this item is contained under the section “Business of MoneyGram — Facilities” of this information statement. That section is incorporated herein by reference.

 
Item 4. Security Ownership of Certain Beneficial Owners and Management

      The information required by this item is contained under the sections “Management of MoneyGram — Stock Ownership of Directors and Executive Officers” and “Security Ownership of Certain Beneficial Owners and Management of MoneyGram” of this information statement. Those sections are incorporated herein by reference.

 
Item 5. Directors and Executive Officers

      The information required by this item is contained under the section “Management of MoneyGram” of this information statement. That section is incorporated herein by reference.

 
Item 6. Executive Compensation

      The information required by this item is contained under the section “Management of MoneyGram” of this information statement. That section is incorporated herein by reference.

 
Item 7. Certain Relationships and Related Transactions

      The information required by this item is contained under the sections “Management of MoneyGram” and “Relationship between New Viad and MoneyGram” of this information statement. Those sections are incorporated herein by reference.

 
Item 8. Legal Proceedings

      The information required by this item is contained under the section “Business of MoneyGram — Legal Proceedings” of this information statement. That section is incorporated herein by reference.


 

 
Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

      The information required by this item is contained under the sections “Summary,” “Risk Factors,” “The Spin-Off,” “Capitalization of Viad Corp,” “Dividend Policy of MoneyGram,” “Business of MoneyGram,” “Management of MoneyGram” and “Description of Capital Stock of MoneyGram” of this information statement. Those sections are incorporated herein by reference.

 
Item 10. Recent Sales of Unregistered Securities

      None.

 
Item 11. Description of Registrant’s Securities to Be Registered

      The information required by this item is contained under the sections “Management of MoneyGram” and “Description of Capital Stock of MoneyGram” of this information statement. Those sections are incorporated herein by reference.

 
Item 12. Indemnification of Directors and Officers

      The information required by this item is contained under the section “Indemnification of Directors and Officers of MoneyGram and New Viad” of this information statement. That section is incorporated herein by reference.

 
Item 13. Financial Statements and Supplementary Data

      The information required by this item is contained under the sections “Capitalization of Viad Corp,” “Unaudited Pro Forma Consolidated Financial Information of MoneyGram International, Inc.,” “Selected Historical and Consolidated Financial and Other Data of Viad Corp,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Viad Corp” and “Viad Corp Consolidated Financial Statements” of this information statement. Those sections are incorporated herein by reference.

 
Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

      The information required by this item is contained under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Viad Corp” of this information statement. This section is incorporated herein by reference.

 
Item 15. Financial Statements and Exhibits

      (a) Financial Statements

      The information required by this item is contained under the section “Viad Corp Consolidated Financial Statements,” beginning on page

F-1 of this information statement. That section is incorporated herein by reference.


 

      (b) Exhibits

      The following documents are filed as exhibits hereto:

         
Exhibit
Number Description


  2.1     Form of Separation and Distribution Agreement.
  3.1     Form of Amended and Restated Certificate of Incorporation.
  3.2     Form of Amended and Restated By-laws.
  4.1     Form of Specimen Certificate for MoneyGram Common Stock.*
  4.2     Form of Preferred Share Purchase Rights Agreement between MoneyGram International, Inc. and Wells Fargo Bank, N.A. as Rights Agent.
  4.3     Form of Certificate of Designations of Series A Junior Participating Preferred Stock.
  10.1     Form of Employee Benefits Agreement.
  10.2     Form of Tax Sharing Agreement.
  10.3     Form of Interim Services Agreement.
  10.4     Form of MoneyGram International, Inc. 2004 Omnibus Incentive Plan.*
  10.5     Form of Indemnification Agreement between MoneyGram International, Inc. and Directors of MoneyGram International, Inc.*
  21.1     Subsidiaries of MoneyGram International, Inc.
  99.1     Information Statement.


To be filed by amendment.


 

SIGNATURE

      Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

  MONEYGRAM INTERNATIONAL, INC.

  By:  /s/ PHILIP W. MILNE
______________________________________
Name: Philip W. Milne
Title: President and Chief Executive Officer

May 17, 2004 FORM OF SEPARATION AND DISTRIBUTION AGREEMENT

 

Exhibit 2.1

SEPARATION AND DISTRIBUTION AGREEMENT

BY AND AMONG

VIAD CORP

MONEYGRAM INTERNATIONAL, INC.

MGI MERGER SUB, INC.

AND

TRAVELERS EXPRESS COMPANY, INC.

DATED AS OF

[___], 2004

 


 

TABLE OF CONTENTS

             
ARTICLE I DEFINITIONS     1  
1.01  
General
    1  
1.02  
References to Time
    9  
ARTICLE II THE MERGER     9  
2.01  
The Merger
    9  
2.02  
Effective Time
    9  
2.03  
Effect on Stock
    9  
2.04  
Surviving Corporation Articles of Incorporation; By-laws
    10  
2.05  
Surviving Corporation Directors; Officers
    10  
2.06  
Cash Accounts
    10  
2.07  
MoneyGram Certificate of Incorporation; Bylaws; Rights Plan
    10  
2.08  
Board of Directors
    10  
ARTICLE III ACTIONS PRIOR TO THE EFFECTIVE TIME AND THE DISTRIBUTION     11  
3.01  
Redemption of Viad Preferred Stock
    11  
3.02  
Debt Tender Offers
    11  
3.03  
The Dividend
    12  
3.04  
Recapitalization of MoneyGram
    13  
3.05  
Other Agreements
    13  
3.06  
Credit Agreements
    13  
ARTICLE IV THE DISTRIBUTION     14  
4.01  
Actions Prior to the Distribution
    14  
4.02  
The Distribution
    15  
4.03  
Conditions to Distribution
    15  
4.04  
Conditions for the Benefit of Viad
    16  
ARTICLE V SURVIVAL, RELEASE, ASSUMPTION AND INDEMNIFICATION     17  
5.01  
Survival of Agreements
    17  
5.02  
Release of Pre-Merger Claims
    17  
5.03  
Taxes; Plan Audits
    19  
5.04  
Assumption and Indemnification
    19  
5.05  
Procedure for Indemnification
    21  
5.06  
Remedies Cumulative
    22  

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ARTICLE VI ACCESS TO INFORMATION     23  
6.01  
Provision of Corporate Records
    23  
6.02  
Access to Information
    23  
6.03  
Production of Witnesses
    23  
6.04  
Retention of Records
    23  
6.05  
Confidentiality
    24  
6.06  
Tax Matters
    24  
ARTICLE VII NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS     24  
7.01  
No Representations or Warranties; Exceptions
    24  
ARTICLE VIII INSURANCE     24  
8.01  
Insurance Coverage
    24  
8.02  
Post-Merger Claims
    25  
8.03  
Administration and Reserves
    25  
8.04  
Payment or Refund of Premiums, Retentions and Losses with Respect to MoneyGram Liabilities
    25  
8.05  
Allocation of Insurance Proceeds; Cooperation
    26  
8.06  
Reimbursement of Expenses
    26  
8.07  
Insurer Insolvency
    26  
8.08  
Assumption of Management of Liabilities
    27  
8.09  
No Reduction of Coverage
    27  
8.10  
Future Insurance Coverage
    27  
8.11  
Assistance, Waiver of Conflict and Shared Defense
    27  
ARTICLE IX FURTHER ASSURANCES AND ADDITIONAL COVENANTS     27  
9.01  
Further Assurances
    27  
9.02  
Publicity
    28  
9.03  
Certain Business Matters
    29  
ARTICLE X TERMINATION     29  
10.01  
Termination
    29  
10.02  
Effect of Termination
    29  
ARTICLE XI MISCELLANEOUS     29  
11.01  
Complete Agreement
    29  
11.02  
Expenses
    29  
11.03  
Governing Law
    30  
11.04  
Notices
    30  
11.05  
Amendment and Modification
    30  

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11.06  
Successors and Assigns; No Third-Party Beneficiaries
    30  
11.07  
Counterparts
    31  
11.08  
Interpretation
    31  
11.09  
Legal Enforceability
    31  
11.10  
References; Construction
    31  
11.11  
Corporate Power
    31  
11.12  
Waivers of Default
    32  

SCHEDULES

     
Schedule 1.01(a)
  MoneyGram Insurance Policies
Schedule 1.01(b)
  MoneyGram Subsidiaries
Schedule 1.01(c)
  Certain Insurance Policies Relating to Viad and MoneyGram
Schedule 2.08
  Directors of Viad and MoneyGram
Schedule 5.04(b)(iii)
  Certain Litigations
Schedule 8.04
  Certain MoneyGram Insurance Policies

EXHIBITS

     
Exhibit A
  Form of Restated Certificate of Incorporation of MoneyGram
Exhibit B
  Form of Amended and Restated Bylaws of MoneyGram
Exhibit C
  Rights Agreement of MoneyGram

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SEPARATION AND DISTRIBUTION AGREEMENT

     THIS SEPARATION AND DISTRIBUTION AGREEMENT, dated as of [   ], 2004, is by and among Viad Corp, a Delaware corporation (“Viad”), Travelers Express Company, Inc., a Minnesota corporation and direct wholly-owned subsidiary of Viad (“TECI”), MoneyGram International, Inc., a Delaware corporation and direct wholly-owned subsidiary of Viad (“MoneyGram”), and MGI Merger Sub, Inc., a Minnesota corporation and a direct wholly-owned subsidiary of MoneyGram (“Merger Sub”).

W I T N E S S E T H:

     WHEREAS, the Boards of Directors of Viad, TECI, MoneyGram and Merger Sub have determined that it is appropriate and desirable: (1) for TECI to pay to Viad the Dividend; (2) for Merger Sub to merge with and into TECI, with TECI as the surviving corporation, and as a result of that Merger, all shares of capital stock of TECI outstanding prior to the Merger being cancelled and TECI becoming a direct wholly-owned subsidiary of MoneyGram; (3) in connection with the Merger for MoneyGram to make a cash payment to Viad of $150 million; and (4) following the Merger, for Viad to distribute to the holders of the issued and outstanding shares of Viad Common Stock at the close of business on the Record Date all of the issued and outstanding shares of MoneyGram Common Stock;

     WHEREAS, the Merger is intended to be treated as a contribution of the stock of TECI to MoneyGram for federal income tax purposes;

     WHEREAS, the Merger and the Distribution are intended to qualify as a tax-free reorganization and distribution under Sections 368(a)(1)(D) and 355 of the Code; and

     WHEREAS, the parties have determined that it is necessary and desirable to set forth the principal corporate transactions required to effect the Merger and the Distribution and to set forth other agreements that will govern certain other matters prior to or following such transactions;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound thereby, the parties agree as follows:

ARTICLE I
DEFINITIONS

     Section 1.01 General. As used herein, 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):

     Acceptable Credit Rating: A long-term credit rating by Standard & Poor’s Ratings Group that is at least BBB- or by Moody’s Investors Service that is at least Baa3; provided, however, that if MoneyGram applies for and receives long-term credit ratings from both Standard & Poor’s Ratings Group and Moody’s Investors Service, such ratings shall be at least BBB- from Standard & Poor’s Ratings Group and Baa3 from Moody’s Investors Service.

 


 

     Action: any claim, demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

     Affiliate: with respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person; provided, however, that for purposes hereof, no member of either Group shall be deemed to be an Affiliate of any member of the other Group.

     Agent: Viad, in the capacity as distribution agent, or at Viad’s election, another distribution agent to be appointed by Viad, in each case, to distribute the shares of MoneyGram Common Stock to the holders of shares of Viad Common Stock pursuant to the Distribution.

     Agreement: this Separation and Distribution Agreement, including all of the Schedules and Exhibits hereto.

     Articles of Merger: the articles of merger to be filed with the Minnesota Secretary of State as contemplated by the MBCA in connection with the Merger.

     Assets: any and all assets and properties of any kind whatsoever, whether tangible or intangible, real, personal or mixed and any and all rights, contracts and claims, including the following: (1) cash, notes and accounts receivable (whether current or non-current); (2) certificates of deposit, banker’s acceptances, stock, debentures, evidences of indebtedness, certificates of interest or participation in profit-sharing agreements, collateral-trust certificates, reorganization certificates or subscriptions, transferable shares, investment contracts, voting-trust certificates, fractional undivided interests in oil, gas or other mineral rights, puts, calls, straddles, options and other securities of any kind; (3) trade secrets, confidential information, U.S. and foreign registered and unregistered trademarks, service marks, service names, trade styles and trade names, product bar codes and associated goodwill; U.S. and foreign patents; U.S. and foreign statutory, common law and registered copyrights; applications for any of the foregoing, rights to use the foregoing and other rights in, to and under the foregoing; (4) rights under leases, contracts, licenses, software license and development agreements, permits, distribution arrangements, sales and purchase agreements, other agreements and business arrangements; (5) real estate and buildings and other improvements thereon; (6) leasehold improvements, fixtures, trade fixtures, machinery, equipment (including transportation and office equipment), tools, dies and furniture; (7) office supplies, production supplies, spare parts, other miscellaneous supplies and other tangible property of any kind; (8) raw materials, work-in-process, finished goods, consigned goods and other inventories; (9) prepayments or prepaid expenses; (10) claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind; (11) the right to receive mail, payments on accounts receivable and other communications; (12) lists of advertisers, records pertaining to advertisers and accounts, personnel records, lists and records pertaining to suppliers and agents, and books, ledgers, files and business records of every kind; (13) advertising materials and other printed or written materials; (14) goodwill as a going concern and other intangible properties; (15) employee contracts, including any rights thereunder to restrict an employee from competing in certain respects and all rights under employee patent and trade secret agreements; and (16) licenses and authorizations issued by any Governmental Authority.

-2-


 

     Business Day: any day other than a Saturday, a Sunday or a day on which banking institutions located in the States of Arizona, Minnesota, New York or Delaware are authorized or obligated by law or executive order to close.

     Claims Administration: the processing of claims made under the Insurance Policies, including the reporting of claims to the insurance carrier, management and defense of claims and provision for appropriate releases upon settlement of claims.

     Code: the Internal Revenue Code of 1986, as amended.

     Commission: the Securities and Exchange Commission.

     Distribution: the distribution by Viad pursuant to Article IV hereof of all of the issued and outstanding shares of MoneyGram Common Stock owned by Viad to holders of shares of Viad Common Stock.

     Distribution Date: as defined in Section 4.03 hereof.

     Distribution Registration Statement: the registration statement on Form 10 to effect the registration under the Exchange Act of the MoneyGram Common Stock.

     Dividend: as defined in Section 3.03(a) hereof.

     Effective Time: as defined in Section 2.02 hereof.

     Employee Benefits Agreement: the Employee Benefits Agreement, dated as of the date hereof, by and among Viad, MoneyGram and TECI.

     Estimated Net Income: an amount equal to (1) the consolidated Net Income of TECI for the Interim Period, minus (2) the sum of all dividends paid by TECI to Viad during the Interim Period in respect of income of TECI earned in the Interim Period other than a special dividend of $7.25 million paid by TECI in respect of certain deferred employee compensation (it being understood and agreed that the payment made by MoneyGram under Section 2.03(a) hereof shall not be included in this clause (2)), which amount shall be estimated in good faith by Viad, based on discussions with the financial staff of Viad and TECI prior to the Effective Time.

     Exchange Act: the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

     Final Net Income: an amount equal to (1) the consolidated Net Income of TECI for the Interim Period, minus (2) the sum of all dividends paid by TECI to Viad during the Interim Period in respect of income of TECI earned in the Interim Period other than a special dividend of $7.25 million paid by TECI in respect of certain deferred employee compensation (it being understood and agreed that the payment made by MoneyGram under Section 2.03(a) hereof shall not be included in this clause (2)), as agreed to (or deemed to be agreed to) by Viad and MoneyGram in accordance with the terms of Section 3.03 hereof or resulting from the determinations made by the Neutral Auditors in accordance with Section 3.03 hereof.

-3-


 

     Foreign Exchange Rate: with respect to any currency other than United States dollars, as of any date, the average of the opening bid and asked rates on such date at which such currency may be exchanged for United States dollars as quoted by Citibank, N.A., except that, with respect to any Indemnifiable Loss covered by insurance, the Foreign Exchange Rate for such currency shall be determined as set forth in Section 5.04(e)(ii) hereof.

     Former MoneyGram Businesses: all of the businesses and operations (1) heretofore but not currently conducted by any member of the MoneyGram Group or (2) currently or heretofore conducted by any former Subsidiary of any such member.

     Former Viad Businesses: all of the businesses and operations (1) heretofore but not currently conducted by any member of the Viad Group or (2) currently or heretofore conducted by any former Subsidiary of any such member, other than any Former MoneyGram Business.

     Governmental Authority: any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority.

     Group: either the MoneyGram Group or the Viad Group, as the context requires.

     Indemnifiable Losses: all losses, Liabilities, damages, claims, demands, judgments or settlements of any nature or kind whatsoever, known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, including all reasonable costs and expenses (legal, accounting or otherwise as such costs are incurred) relating thereto, suffered by an Indemnitee.

     Indemnifying Party: a Person that is obligated hereunder to provide indemnification.

     Indemnitee: a Person that may seek indemnification hereunder.

     Indemnity Payment: an amount that an Indemnifying Party is required to pay to an Indemnitee pursuant to Article V hereof.

     Information: all records, books, contracts, instruments, computer data and other data and information, whether written or unwritten.

     Information Statement: the Information Statement to be sent to holders of shares of Viad Common Stock in connection with the Distribution.

     Insurance Administration: with respect to each Insurance Policy, (1) the accounting for premiums (including retrospectively rated premiums), defense costs, indemnity payments, deductibles and retentions as appropriate under the terms and conditions of each of the Insurance Policies, (2) the reporting to excess insurance carriers of any losses or claims that may cause the per-occurrence or aggregate limits of any Insurance Policy to be exceeded and (3) the distribution of Insurance Proceeds as contemplated hereby.

     Insurance Policy: insurance policies and insurance contracts of any kind that are owned or maintained by any member of either Group as the insured interest, including primary and excess policies, comprehensive general liability policies, crime, employee dishonesty,

-4-


 

employment practices liability, property and casualty, automobile, aircraft and workers’ compensation insurance policies and self-insurance and captive insurance company arrangements, together with the rights, benefits and privileges thereunder, but not including any policies that fund Plans.

     Insurance Proceeds: those monies received by an insured from an insurance carrier or paid by an insurance carrier on behalf of the insured (including defense costs of any third party claim), in either case net of any applicable premium adjustment, retrospectively rated premium, deductible, retention, cost or reserve paid or held by or for the benefit of such insured.

     Insured Claims: those Liabilities that, individually or in the aggregate, are covered within the terms and conditions of any of the Insurance Policies, whether or not subject to deductibles, coinsurance, uncollectability or retrospectively rated premium adjustments, but only to the extent that such Liabilities are within applicable Insurance Policy limits, including aggregates.

     Interim Period: the period beginning on January 1, 2004 and ending on the date on which the Effective Time is to occur.

     Interim Period Financial Statements: as defined in Section 3.03(b) hereof.

     Interim Services Agreement: the Interim Services Agreement, dated as of the date hereof, by and between Viad and MoneyGram.

     IRS: the Internal Revenue Service.

     Liabilities: all debts, liabilities and obligations, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, and whether or not the same would properly be reflected on a balance sheet prepared in accordance with U.S. generally accepted accounting principles, including all costs and expenses relating thereto.

     Material Adverse Effect: a material adverse effect on (1) the business, assets, liabilities, financial condition, results of operations or prospects of Viad or TECI, or (2) the ability of Viad, TECI or MoneyGram to perform its obligations hereunder.

     MBCA: the Minnesota Business Corporation Act.

     Medium-Term Note Offer: as defined in Section 3.02 hereof.

     Medium-Term Notes: the outstanding Medium-Term Notes, Series A, due 2004, 2005 and 2009, issued by Viad (as successor to The Dial Corp) on October 12, 1993, each governed by the MTN Indenture.

     Merger: the merger of Merger Sub with and into TECI.

     Merger Sub: as defined in the Preamble hereto.

-5-


 

     MoneyGram: as defined in the Preamble hereto.

     MoneyGram Assets: (1) all of the outstanding shares of all classes of capital stock of the MoneyGram Subsidiaries; (2) all of the Assets of such Subsidiaries; (3) all of the Assets held by any member of either Group immediately prior to the Effective Time, that are used or held primarily for use in or necessary to the operation of the MoneyGram Business, including those Assets reflected on MoneyGram’s audited balance sheet as of December 31, 2003; and (4) the claims under and any proceeds from the lawsuit captioned Game Financial Corp. v. Global Cash Access, LLC (Minn. Dist. Ct., File No. CT-03-007098).

     MoneyGram Business: all of the businesses conducted immediately prior to the Distribution Date by any member of either Group and reported by Viad in the “Payment Services” segment in the footnotes to the Viad consolidated financial statements (or that would have been so reported had it been conducted on December 31, 2003) in Viad’s Annual Report on Form 10-K for the year ended December 31, 2003.

     MoneyGram Claim: any claim against any MoneyGram Individual or member of the MoneyGram Group with respect to any injury, loss, Liability, damage or expense that (1) is or was incurred or asserted to have been incurred prior to the Distribution Date in, or in connection with, the conduct of the Viad Assets, the MoneyGram Assets, the Viad Business, the Former Viad Businesses, the MoneyGram Business or the Former MoneyGram Businesses and (2) arose or may have arisen out of one or more occurrences or events that are or may be insured or insurable under one or more of the Viad Policies.

     MoneyGram Common Stock: the common stock, $0.01 par value per share, of MoneyGram.

     MoneyGram Group: MoneyGram and the MoneyGram Subsidiaries.

     MoneyGram Individual: as defined in the Employee Benefits Agreement.

     MoneyGram Liabilities: subject to the provisions of the Other Agreements, (1) all of the Liabilities of any member of either Group that relate directly to the MoneyGram Assets or the MoneyGram Business as conducted immediately prior to the Effective Time, or that relate directly to any Former MoneyGram Business, in each case whether incurred or arising prior to, on or after the Effective Time and (2) all Liabilities of any member of the MoneyGram Group under or pursuant to any Other Agreement.

     MoneyGram New Credit Agreement: The credit agreement to be entered into by and among MoneyGram, as borrower, and an agent or co-agents selected by MoneyGram pursuant to which MoneyGram may borrow funds, in form and substance reasonably acceptable to the Board of Directors of MoneyGram, but that, in any event, shall permit sufficient borrowings such that MoneyGram may comply with its obligations to be performed on or prior to the Distribution Date hereunder.

     MoneyGram Policies: all Insurance Policies, current and past, that relate to the MoneyGram Business and do not relate to the Viad Business, including the Insurance Policies listed on Schedule 1.01(a) hereto.

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     MoneyGram Subsidiaries: all of the corporations, limited liability companies, business trusts and other Persons listed on Schedule 1.01(b) hereto.

     MoneyGram Support Agreements: any obligation or agreement of the Viad Group under any guarantee, letter of credit, letter of comfort or working capital maintenance agreement obtained prior to the Distribution Date for the benefit of the MoneyGram Business or any member of the MoneyGram Group.

     MTN Indenture: the indenture, dated as of April 1, 1993, between Viad (as successor to The Dial Corp) and The Chase Manhattan Bank, N.A., as trustee.

     Net Income: net income determined in accordance with U.S. generally accepted accounting principles, as applied in accordance with the past practice of TECI and Viad, without taking into account any amounts expensed by MoneyGram under Section 11.02 hereof or any proceeds received by MoneyGram from the lawsuit captioned Game Financial Corp. v. Global Cash Access, LLC (Minn. Dist. Ct., File No. CT-03-007098).

     Neutral Auditors: as defined in Section 3.03(e) hereof.

     NYSE: The New York Stock Exchange, Inc.

     Offers: as defined in Section 3.02 hereof.

     Other Agreements: the Interim Services Agreement, the Employee Benefits Agreement and the Tax Sharing Agreement.

     Person: an individual, a general or limited partnership, a joint venture, a corporation, a trust, an unincorporated organization, a limited liability company, any other entity and any Governmental Authority.

     Plan: as defined in the Employee Benefits Agreement.

     Record Date: the close of business on the date to be determined by the Board of Directors of Viad, or the Executive Committee thereof, as the record date for determining holders of shares of Viad Common Stock entitled to receive shares of MoneyGram Common Stock in the Distribution.

     Representative: with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

     Resolution Period: as defined in Section 3.03(d) hereof.

     Service Agreement: any third-party administrator or claims handling agreement of any kind or nature to which any member of either Group is directly or indirectly a party, in effect as of the date hereof, related to the handling of MoneyGram Claims.

     Subordinated Debt Offer: as defined in Section 3.02(a) hereof.

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     Subordinated Debentures: the outstanding 10 1/2% Subordinated Debentures due May 15, 2006, issued by Viad (as successor to The Greyhound Corporation) on February 21, 1986.

     Subordinated Debt Indenture: the indenture, dated as of November 15, 1985, between Viad (as successor to The Greyhound Corporation) and Continental Illinois National Bank & Trust Company of Chicago as trustee.

     Subsidiary: with respect to any specified Person, any corporation or other legal entity of which such Person or any of its Subsidiaries controls or owns, directly or indirectly, stock or other equity interests representing in excess of 50% of the votes entitled to be cast in the election of members to the board of directors or similar governing body; provided, however, that for purposes hereof, (1) the MoneyGram Subsidiaries shall be deemed to be Subsidiaries of MoneyGram and (2) neither MoneyGram nor any of the MoneyGram Subsidiaries shall be deemed to be Subsidiaries of Viad or any of Viad’s Subsidiaries.

     Surviving Corporation: as defined in Section 2.01 hereof.

     Tax: as defined in the Tax Sharing Agreement.

     Tax Sharing Agreement: the Tax Sharing Agreement, dated as of the date hereof, by and between Viad and MoneyGram.

     TECI: as defined in the Preamble hereto.

     Third-Party Claim: any claim, demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal asserted by a Person that is not a party hereto.

     Transfer Tax: all transfer, documentary, sales, use, registration, value-added and other similar Taxes (including interest, penalties and additions to such Taxes).

     Viad: as defined in the Preamble hereto.

     Viad Assets: any and all Assets (other than the MoneyGram Assets) held immediately prior to the Effective Time by any member of either Group.

     Viad Business: all of the businesses, other than the MoneyGram Business, conducted immediately prior to the Effective Time by any member of either Group.

     Viad Common Stock: the common stock, $1.50 par value per share, of Viad.

     Viad Group: Viad and its Affiliates, other than members of the MoneyGram Group.

     Viad Individual: as defined in the Employee Benefits Agreement.

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     Viad Liabilities: subject to the provisions of the Other Agreements, (1) all of the Liabilities, other than the MoneyGram Liabilities, of any member of either Group; and (2) all Liabilities of any member of the Viad Group under or pursuant to any Other Agreement.

     Viad New Credit Agreement: The credit agreement to be entered into by and among Viad, as borrower, and an agent or co-agents selected by Viad pursuant to which Viad may borrow funds, in form and substance reasonably acceptable to the Board of Directors of Viad.

     Viad Plan: as defined in the Employee Benefits Agreement.

     Viad Policies: all Insurance Policies, current and past, which relate to both the Viad Business and the MoneyGram Business, including the Insurance Policies listed on Schedule 1.01(d) hereto.

     Viad Preferred Stock: The $4.75 Preferred Stock, without par value but with a liquidation preference of $100 per share, of Viad.

     Section 1.02 References to Time. All references herein to times of the day shall be to New York City time.

ARTICLE II
THE MERGER

     Section 2.01 The Merger. At the Effective Time and on the terms and subject to the conditions set forth herein and in the MBCA, Merger Sub shall be merged with and into TECI, the separate corporate existence of Merger Sub shall cease and TECI shall continue as the surviving corporation (the “Surviving Corporation”). At the Effective Time, the effect of the Merger shall be as provided herein and in the Articles of Merger and the applicable provisions of the MBCA.

     Section 2.02 Effective Time. No later than the Distribution Date, the parties shall cause the Merger to be consummated by filing the Articles of Merger as contemplated by the MBCA, together with any required certificates, with the Secretary of State of the State of Minnesota, in such forms as required by, and executed in accordance with, the relevant provisions of the MBCA. The Merger shall be effective at the time of the later to occur of the filing of the Articles of Merger and such related certificates and such later time specified in the Articles of Merger (the “Effective Time”).

     Section 2.03 Effect on Stock. At the Effective Time, as a result of the Merger and without any action on the part of TECI and Merger Sub, or any holder of the capital stock thereof:

          (a) Each share of capital stock of TECI issued and outstanding immediately prior to the Effective Time shall cease to be outstanding, shall be canceled and retired, and in consideration therefor, MoneyGram shall make an aggregate cash payment to Viad in the amount of $150 million.

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          (b) Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall constitute one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

     Section 2.04 Surviving Corporation Articles of Incorporation; By-laws.

          (a) The articles of incorporation of TECI as in effect immediately prior to the Effective Time shall be the articles of incorporation of the Surviving Corporation until thereafter amended as provided by applicable law and such articles of incorporation.

          (b) The bylaws of TECI as in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation until thereafter amended as provided by applicable law.

     Section 2.05 Surviving Corporation Directors; Officers.

          (a) The directors of TECI immediately prior to the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or retirement in accordance with the articles of incorporation and bylaws of the Surviving Corporation.

          (b) The officers of TECI immediately prior to the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or retirement in accordance with the articles of incorporation and bylaws of the Surviving Corporation.

     Section 2.06 Cash Accounts. The cash accounts at the Effective Time of Viad and each Viad Subsidiary and TECI and each MoneyGram Subsidiary shall remain the property of each respective company or Subsidiary.

     Section 2.07 MoneyGram Certificate of Incorporation; Bylaws; Rights Plan. At or prior to the Effective Time, Viad and MoneyGram shall each take all actions that may be required to provide for the adoption by MoneyGram of the Restated Certificate of Incorporation of MoneyGram substantially in the form attached as Exhibit A hereto, the Amended and Restated Bylaws of MoneyGram substantially in the form attached as Exhibit B hereto, and the Rights Agreement of MoneyGram substantially in the form attached as Exhibit C hereto.

     Section 2.08 Boards of Directors. Prior to the Effective Time, Viad shall take all actions that may be required to cause the Board of Directors of Viad to consist of the individuals specified on part A of Schedule 2.08 hereto, and to cause the Board of Directors MoneyGram to consist of the individuals identified on part B of Schedule 2.08 hereto.

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ARTICLE III
ACTIONS PRIOR TO THE EFFECTIVE TIME AND THE DISTRIBUTION

     Section 3.01 Redemption of Viad Preferred Stock. Prior to the Effective Time, Viad shall deposit for the pro rata benefit of the holders of the shares of Viad Preferred Stock in trust with a bank or trust company in good standing, having capital, surplus and undivided profits aggregating at least $25 million according to its latest published statement of condition, the funds necessary to redeem all of the outstanding shares of Viad Preferred Stock. Prior to the Effective Time, Viad shall give such bank or trust company irrevocable authorization promptly to give notice of such redemption to the holders of the Viad Preferred Stock, and Viad shall take all other steps necessary for the Viad Preferred Stock to be deemed redeemed at or prior to the Effective Time.

     Section 3.02 Debt Tender Offers.

          (a) At such time prior to the Effective Time as determined by Viad in its sole and absolute discretion, Viad shall commence an offer to purchase all of the outstanding Medium-Term Notes under the MTN Indenture and all of the Subordinated Debentures (“Medium-Term Note Offer” and “Subordinated Debt Offer,” respectively, and collectively, the “Offers”) at an amount per note or debenture, as applicable, at least equal to the outstanding principal amount plus accrued and unpaid interest of each such note or debenture, as applicable. In connection with the Offers, Viad shall solicit consents from the holders of the Subordinated Debentures and the Medium-Term Notes to amend the Subordinated Debt Indenture and the MTN Indenture, respectively, to eliminate substantially all of the restrictive covenants from those indentures in the event all of the Subordinated Debentures or Medium-Term Notes, as the case may be, are not tendered for repurchase in the Offers. It shall be a condition to the Subordinated Debt Offer that the holders of at least a majority in outstanding principal amount of the Subordinated Debentures sufficient to satisfy the requirements specified in the Subordinated Debt Indenture for amendments to the Subordinated Debt Indenture by holders of the Subordinated Debentures consent to an amendment of the Subordinated Debt Indenture eliminating substantially all of the restrictive covenants contained in such Indenture, and tender their Subordinated Debentures to Viad, and it shall be a condition to the Medium-Term Note Offer that the holders of at least two-thirds in outstanding principal amount of the Medium-Term Notes sufficient to satisfy the requirements specified in the MTN Indenture for amendments to the MTN Indenture by holders of the Medium-Term Notes consent to an amendment of the MTN eliminating substantially all of the restrictive covenants contained in such Indenture, and tender their Medium-Term Notes to Viad. Such conditions may be waived by Viad in its sole and absolute discretion.

          (b) To the extent that any notes or debentures outstanding under the MTN Indenture or the Subordinated Debt Indenture are not repurchased by Viad in the Offers, except as otherwise provided in Section 3.02(c), Viad shall be solely responsible for all obligations with respect to such notes and debentures (including all payments of principal, interest and premium thereon). All liabilities relating to the Offers shall be Viad Liabilities.

          (c) In the event that the holders of at least a majority in principal amount of Subordinated Debentures do not consent to the amendment of the Subordinated Debt Indenture

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and tender their Subordinated Debentures to Viad in the Offers, MoneyGram shall take all action necessary to, effective as of the Effective Time, assume and become a co-obligor with Viad with respect to all of Viad’s obligations under the Subordinated Debt Indenture in accordance with the terms thereof (it being understood and agreed that MoneyGram shall have no similar obligation with respect to the MTN Indenture). Notwithstanding the foregoing, as between the Viad Group, on one hand, and the MoneyGram Group, on the other hand, all obligations under the Subordinated Debt Indenture are (i) Viad Liabilities, and none of such obligations shall be considered to be MoneyGram Liabilities, and (ii) the primary obligation of Viad, and, if any member of the MoneyGram Group is required to make any payment therefor, Viad shall reimburse such payment in the full amount of such payment within one Business Day of receipt of notice that such payment has been made.

     Section 3.03 The Dividend.

          (a) Prior to the Effective Time, TECI shall declare a dividend (the “Dividend”) in an aggregate amount equal to the Final Net Income and shall immediately pay to Viad an amount equal to Estimated Net Income, with the final payment of the Dividend being made in accordance with Section 3.03(f) hereof.

          (b) Within 90 calendar days following the Effective Time, MoneyGram shall prepare and deliver to Viad statements of income and cash flows for the Interim Period, and a balance sheet as of the date on which the Effective Time is to occur, for TECI and its subsidiaries (as such may be adjusted following resolution of disputes in accordance with this Section 3.03, the “Interim Period Financial Statements”). The Interim Period Financial Statements shall be prepared on a consolidated basis in accordance with U.S. generally accepted accounting principles, as applied in accordance with the past practice of TECI and Viad. Based on the Interim Period Financial Statements and this Section 3.03, MoneyGram shall prepare a certificate setting forth a calculation of (1) the consolidated Net Income of TECI for the Interim Period, minus (2) the sum of all dividends paid by TECI to Viad during the Interim Period in respect of income of TECI earned in the Interim Period other than a special dividend of $7.25 million paid by TECI in respect of certain deferred employee compensation (it being understood and agreed that the payment made by MoneyGram under Section 2.03(a) hereof shall not be included in this clause (2).

          (c) During the preparation of the Interim Period Financial Statements and the calculation of Final Net Income, and the period of any dispute within the contemplation of this Section 3.03, MoneyGram shall: (1) provide Viad with reasonable access to the books, records, facilities and employees of TECI; and (2) cooperate fully with Viad, including by providing on a timely basis all information necessary or useful in the calculation of Final Net Income.

          (d) After receipt of the calculation of Final Net Income, Viad shall use commercially reasonable efforts to review promptly the calculation of Final Net Income. Unless Viad delivers written notice to MoneyGram on or prior to the 90th calendar day following the delivery of certificate contemplated by Section 3.03(b) hereof (or such longer time as MoneyGram and Viad may agree) specifying in reasonable detail the amount, nature and basis of all disputed items, Viad shall be deemed to have accepted and agreed to the calculation of Final Net Income. If Viad so notifies MoneyGram of its objection to the calculation of Final Net

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Income, MoneyGram and Viad shall, within 30 calendar days following such notice (or such longer period as Viad and MoneyGram may agree) (the “Resolution Period”), attempt to resolve their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive.

          (e) If, at the conclusion of the Resolution Period, there remain amounts in dispute, then all amounts remaining in dispute shall be submitted to an internationally recognized accounting firm that has no material relationship with Viad to be selected by Viad (the “Neutral Auditor”) within ten calendar days after the expiration of the Resolution Period. Each party agrees to execute, if requested by the Neutral Auditor, a reasonable engagement letter, including customary indemnities. All fees and expenses relating to the work, if any, to be performed by the Neutral Auditors shall be borne pro rata as between Viad on the one hand and MoneyGram on the other, in proportion to the final allocation of the dollar amounts remaining in dispute between Viad and MoneyGram as determined by the Neutral Auditors such that the prevailing party pays the lesser proportion of the fees and expenses. The Neutral Auditors shall act as an arbitrator to determine, based solely on the provisions of this Section 3.03 and the presentations by Viad and MoneyGram, and not by independent review, only those issues still in dispute. The Neutral Auditors’ determination shall be made as promptly as reasonably practical following their selection, shall be set forth in a written statement delivered to Viad and MoneyGram and shall be final, binding and conclusive.

          (f) In the event that (1) Final Net Income is greater than Estimated Net Income, MoneyGram shall make an additional cash payment to Viad in an amount equal to the excess of Final Net Income over Estimated Net Income (which amount represents the declared but unpaid portion of the Dividend), or (2) Estimated Net Income is greater than Final Net Income, Viad shall make a cash payment to MoneyGram in an amount equal to the excess of Estimated Net Income over Final Net Income (which amount represents the amount paid by MoneyGram to Viad in excess of the Dividend).

     Section 3.04 Recapitalization of MoneyGram. On or prior to the Distribution Date, Viad shall consummate a recapitalization of the MoneyGram Common Stock, such that the number of shares of MoneyGram Common Stock outstanding immediately prior to the effective time of the Distribution (in accordance with Section 4.02(b) hereof) shall equal the number of shares of Viad Common Stock outstanding at the close of business on the Record Date.

     Section 3.05 Other Agreements. Each of Viad and MoneyGram shall enter into or to cause the appropriate members of its Group to enter into each Other Agreement on or prior to the Distribution Date. If there shall be a conflict between the provisions hereof and the provisions of any Other Agreement, the provisions of the Other Agreement shall control.

     Section 3.06 Credit Agreements. Each of the parties shall use reasonable best efforts to obtain, prior to the Effective Time, all necessary consents, waivers or amendments to each bank credit agreement, debt security or other financing facility to which it or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound, or to refinance such agreement, security or facility, in each case on terms satisfactory to Viad and MoneyGram as may be necessary to permit the Merger and the Distribution to be consummated without any material breach of the terms of such agreement, security or facility. Each of Viad and

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MoneyGram shall use reasonable best efforts to enter into, prior to the Effective Time, the MoneyGram New Credit Agreement and the Viad New Credit Agreement.

ARTICLE IV
THE DISTRIBUTION

     Section 4.01 Actions Prior to the Distribution. Prior to the Distribution Date, and in each case at the request of and to the extent requested by Viad:

          (a) Viad and MoneyGram shall prepare the Distribution Registration Statement. MoneyGram shall file with the Commission the Distribution Registration Statement. Viad and MoneyGram shall use their reasonable best efforts to cause the Distribution Registration Statement to become effective under the Exchange Act as promptly as reasonably practicable. Viad and MoneyGram shall prepare and, to the extent required under applicable law, file with the Commission the Information Statement and any requisite no-action letters which Viad deems are necessary, proper or desirable to effect the Distribution. Viad and MoneyGram shall each use their respective reasonable best efforts to obtain all necessary approvals from the Commission with respect thereto, if any, as soon as practicable. After the Distribution Registration Statement becomes effective, Viad shall mail the Information Statement to the holders of Viad Common Stock as of the Record Date.

          (b) The parties shall use their reasonable best efforts to take all such actions as may be necessary, proper or appropriate under state securities and blue sky laws in connection with the transactions contemplated hereby.

          (c) Viad and MoneyGram shall prepare, and MoneyGram shall file and seek to make effective, an application for the listing on the NYSE of the MoneyGram Common Stock to be distributed in the Distribution, subject to official notice of issuance.

          (d) The parties shall cooperate in preparing, filing with the Commission and causing to become effective any registration statements or amendments thereto that are necessary or appropriate in order to effect the transactions contemplated hereby or to reflect the establishment of, or amendments to, any Plans contemplated hereby.

          (e) Subject to the satisfaction or waiver of the conditions set forth in Section 4.03 hereof, the Board of Directors of Viad, or the Executive Committee thereof, if so authorized by the Board of Directors, shall establish the Record Date and any appropriate procedures in connection with the Distribution.

          (f) Except as otherwise contemplated by the Other Agreements, each of Viad and MoneyGram shall use its reasonable best efforts to settle all intercompany receivables, payables, loans or advances between any member of the Viad Group and any member of the MoneyGram Group within 60 days after the Distribution Date. Any amounts that remain outstanding thereafter shall be resolved pursuant to the terms hereof and of the Other Agreements.

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     Section 4.02 The Distribution.

          (a) MoneyGram shall cooperate with Viad to accomplish the Distribution and shall, at Viad’s direction, promptly take any and all actions necessary, proper or desirable to effect the Distribution.

          (b) Subject to the satisfaction of the conditions set forth in Section 4.03 hereof, on or prior to the Distribution Date, Viad shall deliver to the Agent for the benefit of holders of Viad Common Stock on the Record Date a single stock certificate, duly endorsed by Viad in blank, representing all of the outstanding shares of MoneyGram Common Stock then owned by Viad or any member of the Viad Group, and shall cause the transfer agent for the shares of Viad Common Stock to instruct the Agent to distribute on the Distribution Date the appropriate number of such shares of MoneyGram Common Stock to each such holder or designated transferee or transferees of such holder. The Distribution shall be effective at 11:59 p.m. on the Distribution Date.

          (c) Each holder of Viad Common Stock on the Record Date (or such holder’s designated transferee or transferees) shall be entitled to receive in the Distribution a number of shares of MoneyGram Common Stock equal to the number of shares of Viad Common Stock held by such holder on the Record Date.

     Section 4.03 Conditions to Distribution. Viad shall have the sole and absolute discretion to determine the date of consummation of the Distribution; and such date as so determined by Viad in accordance with this Article IV is referred to herein as the “Distribution Date.” Viad’s intention to consummate the Distribution is subject to the satisfaction or waiver of the conditions set forth below, and Viad shall not complete the Distribution unless all such conditions are satisfied (or waived by Viad in its sole and absolute discretion).

          (a) The MoneyGram Common Stock to be distributed in the Distribution shall have been approved for listing on the NYSE, subject to official notice of issuance;

          (b) The Distribution Registration Statement shall have become effective, and no stop order with respect thereto shall be in effect;

          (c) All material authorizations, consents, approvals and clearances of all Governmental Authorities required to permit the valid consummation of the Distribution shall have been obtained; and no such authorization, consent, approval or clearance shall contain any conditions that would have a Material Adverse Effect; and all statutory requirements for such valid consummation shall have been fulfilled;

          (d) The consummation of the Distribution will not violate, conflict with, result in a breach of any provision under, constitute a default (or an event that, with or without notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate or result in a right of acceleration of the performance required by, or require any approval, waiver or consent under, any material contract, indenture, preferred stock certificate of designation or Plan of any member of the Viad Group or any member of the MoneyGram Group;

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          (e) There shall not have occurred any event or occurrence, or exist any state of facts, that would have a Material Adverse Effect, including, among other things, any such effect resulting from or arising in connection with any terrorist attacks or the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or the occurrence of any other similar calamity or crisis;

          (f) The Board of Directors of Viad shall have declared a dividend payable to the holders of Viad Common Stock of shares of MoneyGram Common Stock and in connection with the declaration of such dividend shall have determined that the declaration and payment of such dividend is in the best interests of Viad and the holders of Viad Common Stock;

          (g) Viad shall have provided the NYSE with the prior written notice of the Record Date required by Rule 10b-17 of the Exchange Act and the rules and regulations of the NYSE;

          (h) No preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a Governmental Authority and no statute, rule, regulation or executive order promulgated or enacted by any Governmental Authority, shall be in effect preventing the consummation of the Distribution;

          (i) The Distribution shall be payable in accordance with applicable law;

          (j) (1) Viad shall have received the rulings from the IRS requested in the documents submitted to the IRS by Viad relating to the treatment of the Merger, the Distribution and related transactions, such rulings shall be satisfactory to Viad in its sole and absolute discretion, and (2) no event or circumstance shall have occurred that could reasonably be expected to have any adverse effect on such rulings;

          (k) One or more of members of the MoneyGram Group shall have been substituted, as of the Distribution Date, in all respects for the Viad Group or any member thereof in respect of all MoneyGram Support Agreements;

          (l) A letter or letters from the relevant ratings agency or agencies shall have been received stating that after the Distribution and subject to the conditions set forth therein, the long term debt of MoneyGram shall have an Acceptable Credit Rating; and

          (m) The MoneyGram New Credit Agreement, the Viad New Credit Agreement and the Other Agreements shall be in effect.

     Section 4.04 Conditions for the Benefit of Viad. The foregoing conditions are for the sole benefit of Viad and shall not give rise to or create any duty on the part of Viad or the Viad Board of Directors to waive or not waive such conditions or in any way limit Viad’s right to terminate this Agreement as set forth in Article X hereof or alter the consequences of any such termination from those specified in such Article. Any determination made by the Board of Directors of Viad in good faith prior to the Distribution Date concerning the satisfaction or waiver of any or all of the conditions set forth in Section 4.03 hereof shall be conclusive.

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ARTICLE V
SURVIVAL, RELEASE, ASSUMPTION AND INDEMNIFICATION

     Section 5.01 Survival of Agreements. All covenants and agreements of the parties contained herein shall survive the Distribution Date.

     Section 5.02 Release of Pre-Merger Claims.

     (a) Except as provided in Section 5.02(c) hereof, effective as of the Effective Time, MoneyGram does hereby, for itself and each other member of the MoneyGram Group, their respective Affiliates (other than any member of the Viad Group), successors and assigns, and all Persons that at any time prior to the Effective Time have been stockholders, directors, officers, agents or employees of any member of the MoneyGram Group (in each case, in their respective capacities as such), remise, release and forever discharge Viad and the members of the Viad Group, their respective Affiliates (other than any member of the MoneyGram Group), successors and assigns, and all Persons who at any time prior to the Effective Time have been stockholders, directors, officers, agents or employees of any member of the Viad Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Effective Time, including in connection with the transactions and all other activities to implement the Merger and the Distribution.

     (b) Except as provided in Section 5.02(c) hereof, effective as of the Effective Time, Viad does hereby, for itself and each other member of the Viad Group, their respective Affiliates (other than any member of the MoneyGram Group), successors and assigns, and all Persons that at any time prior to the Effective Time have been stockholders, directors, officers, agents or employees of any member of the Viad Group (in each case, in their respective capacities as such), remise, release and forever discharge MoneyGram and the members of the MoneyGram Group, their respective Affiliates (other than any member of the Viad Group), successors and assigns, and all Persons who at any time prior to the Effective Time have been stockholders, directors, officers, agents or employees of any member of the MoneyGram Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Effective Time, including in connection with the transactions and all other activities to implement the Merger and the Distribution.

     (c) Nothing contained in Section 5.02(a) or (b) hereof shall impair any right of any Person to enforce this Agreement or any Other Agreement, in accordance with the terms hereof and thereof. Nothing contained in Section 5.02(a) or (b) hereof shall release any Person from:

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          (i) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with this Agreement or any Other Agreement or any other Liability of any member of any Group hereunder or under any Other Agreement, it being understood and agreed that all Viad Liabilities have been allocated to Viad and all MoneyGram Liabilities have been allocated to MoneyGram;

          (ii) except with respect to categories of Liabilities, products, services and refunds that are covered by any Other Agreement (with respect to which Section 5.02(c)(i) shall govern), any Liability to pay or reimburse for services provided in the ordinary course of business to a member of one Group by a member of the other Group prior to the Effective Time or for unpaid amounts for products or services or refunds owing on products or services due on a value-received basis for work done by a member of one Group at the request or on behalf of a member of the other Group;

          (iii) except as otherwise provided herein or in any Other Agreement, any Liability relating to any intercompany receivables, payables, loans or advances between any member of the Viad Group and any member of the MoneyGram Group existing at the Effective Time;

          (iv) any Liability that any party may have with respect to indemnification or contribution pursuant hereto for claims brought against any party by third parties, which Liability shall be governed by the provisions of this Article V or, if applicable, the appropriate provisions of the Other Agreements; or

          (v) any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 5.02.

In addition, nothing contained in Section 5.02(a) or (b) hereof shall release any party from honoring its existing obligations to indemnify any director, officer or employee of either Group who was a director, officer or employee of such party, at or prior to the Effective Time, to the extent such director, officer or employee becomes a named defendant in any Action involving such party, and was entitled to such indemnification pursuant to then existing obligations; provided, however, that to the extent applicable, Section 5.04 hereof shall determine whether any party shall be required to indemnify the other in respect of such Liability.

     (d) MoneyGram shall not make, and shall not permit any member of the MoneyGram Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Viad or any member of the Viad Group, or any other Person released pursuant to Section 5.02(a) hereof, with respect to any Liabilities released pursuant to Section 5.02(a) hereof. Viad shall not, and shall not permit any member of the Viad Group, to make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification against MoneyGram or any member of the MoneyGram Group, or any other Person released pursuant to Section 5.02(b) hereof, with respect to any Liabilities released pursuant to Section 5.02(b) hereof.

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     (e) It is the intent of each party, by virtue of the provisions of this Section 5.02, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed at or before the Effective Time, between or among MoneyGram or any member of the MoneyGram Group, on the one hand, and Viad or any member of the Viad Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members at or before the Effective Time), except as expressly set forth in Section 5.02(c) hereof. At any time, at the request of any party, each other party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 5.02.

     Section 5.03 Taxes; Plan Audits. This Article V shall not be applicable to any Indemnifiable Losses or Liabilities related to Taxes, which shall be governed by the Tax Sharing Agreement. In addition, this Article V shall not be applicable to any Indemnifiable Losses or Liabilities related to any Action by any Governmental Authority related to the Viad Plans, which shall be governed by Section 8.04 of the Employee Benefits Agreement.

     Section 5.04 Assumption and Indemnification.

     (a) Subject to Section 5.03 hereof and the Other Agreements, from and after the Effective Time, Viad shall retain or assume (as between the Viad Group and the MoneyGram Group), as the case may be, and shall indemnify, defend and hold harmless each MoneyGram Individual and each member of the MoneyGram Group, and each of their Representatives and Affiliates, from and against:

          (i) all Liabilities for Third-Party Claims relating to, arising out of or due to, directly or indirectly, the Distribution or to the service prior to the Effective Time by any MoneyGram Individual as an officer, director or employee of any member of the Viad Group, except as provided in the Employee Benefits Agreement and except to the extent covered by insurance; provided such indemnification would be permitted by law if such officer, director or employee made a claim for indemnification;

          (ii) all Viad Liabilities;

          (iii) any material breach by Viad or any member of the Viad Group hereof or of any Other Agreement;

          (iv) all Indemnifiable Losses of any such MoneyGram Individual, member of the MoneyGram Group, Representative or Affiliate relating to, arising out of or due to, directly or indirectly, the Viad Assets, the Viad Liabilities, the Viad Business, the Former Viad Businesses, the Viad Individuals or the Viad Group’s Representatives, whether relating to or arising out of occurrences prior to, at or after the Effective Time, including any Indemnifiable Losses that Viad may incur as a result of any litigation set forth on Schedule 5.04(b)(iii); and

          (v) all Liabilities related to or arising out of any untrue statement or alleged untrue statement of a material fact or omission to state a material fact required to be stated in any portion of the Distribution Registration Statement or the Information Statement (or any preliminary or final form thereof or any amendment thereto), or necessary to make the

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statements therein not misleading, but only to the extent that such material relates solely to Viad or any member of the Viad Group; and

          (vi) all Viad obligations under Section 3.02(c) hereof.

     (b) Subject to Section 5.03 hereof and the Other Agreements, and except as specifically provided in Section 5.04(a) hereof, from and after the Effective Time, MoneyGram shall retain or assume (as between the Viad Group and the MoneyGram Group), and shall indemnify, defend and hold harmless each Viad Individual and each member of the Viad Group, and each of their Representatives and Affiliates, from and against:

          (i) all MoneyGram Liabilities;

          (ii) any material breach by MoneyGram or any member of the MoneyGram Group hereof or of any Other Agreement;

          (iii) all Indemnifiable Losses of any such Viad Individual, member of the Viad Group, Representative or Affiliate relating to, arising out of or due to, directly or indirectly, the MoneyGram Assets, the MoneyGram Liabilities, the MoneyGram Business, the Former MoneyGram Businesses, the MoneyGram Individuals or the MoneyGram Group’s Representatives, whether relating to or arising out of occurrences prior to, at or after the Effective Time;

          (iv) all Liabilities for Third-Party Claims relating to, arising out of or due to, directly or indirectly, the Distribution or to the service prior to the Effective Time by any Viad Individual as an officer, director or employee of any member of the MoneyGram Group, except as provided in the Employee Benefits Agreement and except to the extent covered by insurance; provided such indemnification would be permitted by law if such officer, director or employee made a claim for indemnification; and

          (v) all Liabilities relating to or arising out of any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated in any portion of the Distribution Registration Statement or the Information Statement (or any preliminary or final form thereof or any amendment thereto), or necessary to make the statements therein not misleading, except to the extent that Viad is liable therefor pursuant to Section 5.04(a)(v) hereof.

     (c) If an Indemnitee realizes a Tax benefit or detriment by reason of having incurred an Indemnifiable Loss for which such Indemnitee receives an Indemnity Payment from an Indemnifying Party or by reason of receiving an Indemnity Payment, then such Indemnitee shall pay to such Indemnifying Party an amount equal to the Tax benefit (as and when actually realized in cash), or such Indemnifying Party shall pay to such Indemnitee an additional amount equal to the Tax detriment (taking into account any Tax detriment resulting from the receipt of such additional amounts), as the case may be. An Indemnitee shall claim any Tax benefit to which it is entitled by reason of an Indemnifiable Loss. If, following a payment by an Indemnitee or an Indemnifying Party pursuant to this Section 5.04(c) in respect of a Tax benefit or detriment, there is an adjustment to the amount of such Tax benefit or detriment, then each of

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Viad and MoneyGram shall make appropriate payments to the other, including the payment of interest thereon at the federal statutory rate then in effect, to reflect such adjustments.

     (d) The amount that an Indemnifying Party is required to pay to any Indemnitee pursuant to this Section 5.04 shall be reduced (including retroactively) by any Insurance Proceeds and other amounts actually recovered by such Indemnitee in reduction of the related Indemnifiable Loss, it being understood and agreed that each party shall use its reasonable best efforts to collect any such proceeds or other amounts to which it or any of its Subsidiaries is entitled, without regard to whether it is the Indemnifying Party hereunder. If an Indemnitee receives an Indemnity Payment in respect of an Indemnifiable Loss and subsequently receives Insurance Proceeds or other amounts in respect of such Indemnifiable Loss, then such Indemnitee shall pay to such Indemnifying Party an amount equal to the difference between (1) the sum of the amount of such Indemnity Payment and the amount of such Insurance Proceeds or other amounts actually received and (2) the amount of such Indemnifiable Loss, adjusted (at such time as appropriate adjustment can be determined) in each case to reflect any premium adjustment attributable to such claim. Notwithstanding anything to the contrary in this Section 5.04, each party’s indemnity under this Section 5.04 shall include the increased cost and expense of purchasing insurance against future losses, provided and to the extent that such cost and expense is directly attributable to Indemnifiable Losses.

     (e) If any Indemnity Payment required to be made hereunder or under any Other Agreement is denominated in a currency other than United States dollars, the amount of such payment shall be translated into United States dollars using the Foreign Exchange Rate for such currency determined in accordance with the following rules:

          (i) with respect to an Indemnifiable Loss arising from payment by a financial institution under a guarantee, comfort letter, letter of credit, foreign exchange contract or similar instrument, the Foreign Exchange Rate for such currency shall be determined as of the date on which such financial institution is reimbursed;

          (ii) with respect to an Indemnifiable Loss covered by insurance, the Foreign Exchange Rate for such currency shall be the Foreign Exchange Rate employed by the insurance company providing such insurance in settling such Indemnifiable Loss with the Indemnifying Party; and

          (iii) with respect to an Indemnified Loss not described in clause (i) or (ii) of this Section 5.04(e), the Foreign Exchange Rate for such currency shall be determined as of the date that notice of the claim with respect to such Indemnifiable Loss is given to the Indemnitee.

     Section 5.05 Procedure for Indemnification.

     (a) If any Indemnitee receives notice of the assertion of any Third-Party Claim with respect to which an Indemnifying Party is obligated hereunder to provide indemnification, such Indemnitee shall give such Indemnifying Party notice thereof promptly after becoming aware of such Third-Party Claim; provided, however, that the failure of any Indemnitee to give notice as provided in this Section 5.05 shall not relieve any Indemnifying

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Party of its obligations under this Article V, except to the extent that such Indemnifying Party is actually prejudiced by such failure to give notice. Such notice shall describe such Third-Party Claim in reasonable detail and, if practicable, shall indicate the estimated amount of the Indemnifiable Loss that has been or may be sustained by such Indemnitee.

     (b) An Indemnifying Party, at such Indemnifying Party’s own expense and through counsel chosen by such Indemnifying Party (which counsel shall be reasonably satisfactory to the Indemnitee), may elect to defend any Third-Party Claim, with such an election by the Indemnifying Party being deemed an admission of its obligation to indemnify the Indemnitee with respect to such Third-Party Claim. If an Indemnifying Party elects to defend a Third-Party Claim, then, within ten Business Days after receiving notice of such Third-Party Claim (or sooner, if the nature of such Third-Party Claim so requires), such Indemnifying Party shall notify the Indemnitee of its intent to do so, and such Indemnitee shall cooperate in the defense of such Third-Party Claim. Such Indemnifying Party shall pay such Indemnitee’s reasonable out-of-pocket expenses incurred in connection with such cooperation. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnifying Party shall not be liable to such Indemnitee under this Article V for any legal or other expenses subsequently incurred by such Indemnitee in connection with the defense thereof; provided, however, that such Indemnitee shall have the right to employ one law firm as counsel to represent such Indemnitee (which firm shall be reasonably satisfactory to the Indemnifying Party) if, in such Indemnitee’s reasonable judgment, either a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim or there may be defenses available to such Indemnitee that are different from or in addition to those available to such Indemnifying Party, and in that event (1) the reasonable fees and expenses of one such separate counsel for all such Indemnitees shall be paid by such Indemnifying Party and (2) each of such Indemnifying Party and such Indemnitee shall have the right to conduct its own defense in respect of such claim. If an Indemnifying Party elects not to defend against a Third-Party Claim, or fails to notify an Indemnitee of its election as provided in this Section 5.05 within the period of ten Business Days described above, such Indemnitee may defend, compromise and settle such Third-Party Claim; provided, however, that no such Indemnitee may compromise or settle any such Third-Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be withheld unreasonably. Notwithstanding the foregoing, the Indemnifying Party shall not, without the prior written consent of the Indemnitee, (1) settle or compromise any Third-Party Claim or consent to the entry of any judgment that does not include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnitee of a written release from all Liability in respect of such Third-Party Claim or (2) settle or compromise any Third-Party Claim in any manner that may adversely affect the Indemnitee.

     Section 5.06 Remedies Cumulative. The remedies provided in this Article V shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any other remedies against any Indemnifying Party.

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ARTICLE VI
ACCESS TO INFORMATION

     Section 6.01 Provision of Corporate Records. Prior to or as promptly as practicable after the Distribution Date, Viad shall deliver to MoneyGram all corporate books and records of the MoneyGram Group and copies of all corporate books and records of the Viad Group relating to the MoneyGram Assets, the MoneyGram Liabilities or the MoneyGram Business, including in each case all active agreements, active litigation files and government filings. From and after the Effective Time, all books, records and copies so delivered shall be the property of MoneyGram.

     Section 6.02 Access to Information. From and after the Distribution Date, each of Viad and MoneyGram shall (and shall cause its controlled Affiliates to) afford to the other and to the other’s Representatives reasonable access and duplicating rights during normal business hours to all Information within such party’s possession relating to such other party’s businesses, Assets or Liabilities (including such Information as may be necessary to such other party to fulfill its obligations under the Other Agreements), insofar as such access is reasonably requested by such other party; provided, however, that the requesting party shall reimburse the providing party for all reasonable costs and expenses incurred in connection the provision of such requested Information. Without limiting the foregoing, Information may be requested under this Section 6.02 for audit, accounting, claims and litigation purposes, as well as for purposes of fulfilling disclosure and reporting obligations, it being understood and agreed that MoneyGram may request and shall be provided under this Section 6.02 such Information as may be necessary for MoneyGram to fulfill its status and obligations as “accounting successor” to Viad (including correspondence with the U.S. Securities and Exchange Commission, Hyperion databases, accounting position and policy memoranda, correspondence with independent auditors and details of restructuring costs and expenses).

     Section 6.03 Production of Witnesses. After the Distribution Date, each of Viad and MoneyGram shall use reasonable efforts to make available to the other, upon written request, its (and its controlled Affiliates’) directors, officers, employees and agents as witnesses to the extent that any such Person may reasonably be requested (giving consideration to business demands of such individuals) in connection with any legal, administrative or other proceedings in which the requesting party may from time to time be involved.

     Section 6.04 Retention of Records. Except as otherwise required by law or agreed in writing, or as otherwise provided in the Tax Sharing Agreement, each of Viad and MoneyGram shall retain, for a period of at least seven years following the Distribution Date, all significant Information in such party’s possession or under its control relating to the business, Assets or Liabilities of the other party and, after the expiration of such seven-year period, prior to destroying or disposing of any of such Information, (a) the party proposing to dispose of or destroy any such Information shall provide no less than 30 days’ prior written notice to the other party, specifying the Information proposed to be destroyed or disposed of and (b) if, prior to the scheduled date for such destruction or disposal, the other party requests in writing that any of the Information proposed to be destroyed or disposed of be delivered to such other party, the party proposing to dispose of or destroy such Information promptly shall arrange for the delivery of the requested Information to a location specified by, and at the expense of, the requesting party.

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     Section 6.05 Confidentiality. From and after the Distribution Date, each of Viad and MoneyGram shall hold, and shall use its reasonable best efforts to cause its Affiliates and Representatives to hold, in strict confidence all Information concerning the other party obtained by it prior to the Distribution Date or furnished to it by such other party pursuant hereto or to any Other Agreement and shall not release or disclose such Information to any other Person, except its Representatives, who shall be bound by the provisions of this Section 6.05; provided, however, that Viad and MoneyGram may disclose such Information to the extent that (a) disclosure is compelled by judicial or administrative process or, in the opinion of such party’s counsel, by other requirements of law (provided that the party compelled to disclose such Information shall provide at least ten days prior notice to the other party) or (b) such party can show that such Information was (1) available to such party on a nonconfidential basis prior to its disclosure by the other party, (2) in the public domain through no fault of such party or (3) lawfully acquired by such party from other sources after the time that it was furnished to such party pursuant hereto or to any Other Agreement. Notwithstanding the foregoing, each of Viad and MoneyGram shall be deemed to have satisfied its obligations under this Section 6.05 with respect to any Information if it exercises the same care with regard to such Information as it takes to preserve confidentiality for its own similar Information.

     Section 6.06 Tax Matters. The foregoing provisions of this Article VI shall not apply with respect to tax matters, which shall instead be governed by Article IV of the Tax Sharing Agreement.

ARTICLE VII
NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS

     Section 7.01 No Representations or Warranties; Exceptions. MoneyGram understands and agrees that no member of the Viad Group is, in this Agreement or in any other agreement or document, representing or warranting to MoneyGram in any way as to the MoneyGram Assets, the MoneyGram Liabilities, or the MoneyGram Business or as to any consents or approvals required in connection with the consummation of the transactions contemplated hereby, it being agreed and understood that MoneyGram shall take all of the MoneyGram Assets transferred to it or any other member of the MoneyGram Group “as is, where is” and that, except as provided in Section 9.01 hereof, MoneyGram shall bear the economic and legal risk that conveyances of the MoneyGram Assets shall prove to be insufficient or that the title of any member of the MoneyGram Group to any MoneyGram Assets shall be other than good and marketable and free from encumbrances.

ARTICLE VIII
INSURANCE

     Section 8.01 Insurance Coverage.

     (a) The parties intend by this Agreement that MoneyGram and each member of the MoneyGram Group be successors-in-interest to all rights that any member of the MoneyGram Group may have as of the Effective Time as a subsidiary, affiliate, division or department of Viad or as an insured party prior to the Effective Time under any Insurance Policy issued to Viad by any insurance carrier or under any agreements related to such policies executed

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prior to the Effective Time; provided, however, that MoneyGram shall have no remedy against Viad if such intent if not achieved.

     (b) Without limiting the generality of the definition of MoneyGram Assets, the MoneyGram Assets shall include (1) any and all rights of an insured party under each of the Viad Policies, including rights of indemnity and the right to be defended by or at the expense of the insurer, with respect to all MoneyGram Claims; provided, however, that nothing in this clause (1) shall be deemed to constitute (or to reflect) the assignment of any of the Viad Policies to MoneyGram, and (2) the MoneyGram Policies. The rights set forth in clause (1) and all MoneyGram Policies shall be deemed to have been transferred to MoneyGram at the Effective Time. MoneyGram shall be entitled to receive from Viad any Insurance Proceeds paid to any member of the Viad Group with respect to any MoneyGram Claim under any Viad Policy.

     Section 8.02 Post-Merger Claims. If, subsequent to the Effective Time, any Person shall assert a MoneyGram Claim, then Viad shall at the time such MoneyGram Claim is asserted be deemed to assign, without need of further documentation, to MoneyGram all of the Viad Group’s rights, if any, as an insured party under the applicable Viad Policy with respect to such MoneyGram Claim, including rights of indemnity and the right to be defended by or at the expense of the insurer; provided, however, that nothing in this Section 8.02 shall be deemed to (1) constitute (or to reflect) the assignment of any of the Viad Policies to MoneyGram or (2) affect the Viad indemnity set forth herein.

     Section 8.03 Administration and Reserves. Notwithstanding the provisions of Article V hereof, from and after the Effective Time:

     (a) Viad shall be responsible for (1) Insurance Administration with respect to the Viad Policies and (2) Claims Administration with respect to any Liabilities of Viad; provided, however, that the retention of the Viad Policies by Viad is in no way intended to limit, inhibit or preclude any right to insurance coverage for any Insured Claim of a named insured under the Viad Policies;

     (b) MoneyGram shall be responsible for (1) Insurance Administration with respect to the MoneyGram Policies, and (2) Claims Administration with respect to any Liabilities of MoneyGram; provided, however, that the retention of the MoneyGram Policies by MoneyGram is in no way intended to limit, inhibit or preclude any right to insurance coverage for any Insured Claim of a named insured under the MoneyGram Policies;

     (c) Viad shall be entitled to reserves established by any member of either Group, or the benefit of reserves held by any insurance carrier, with respect to any Viad Liabilities; and

     (d) MoneyGram shall be entitled to reserves established by any member of either Group, or the benefit of reserves held by any insurance carrier, with respect to any MoneyGram Liabilities.

     Section 8.04 Payment or Refund of Premiums, Retentions and Losses with Respect to MoneyGram Liabilities. MoneyGram shall reimburse Viad for premiums (retrospectively-rated or otherwise adjusted), self-insured retentions or deductible losses that shall

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be due after the Distribution Date under the Viad Policies with respect to the MoneyGram Liabilities, and, prior to the Effective Time, MoneyGram shall pay Viad an amount equal to the premiums paid by Viad on behalf of MoneyGram in respect to the Insurance Policy set forth on Schedule 8.04 (less any amounts previously paid by MoneyGram Group in respect thereof). Viad shall have the right, but not the obligation, to pay such premiums, self insured retentions, or deductible losses under the Viad Policies with respect to MoneyGram Liabilities on behalf of MoneyGram, whereupon MoneyGram shall forthwith reimburse Viad for any such premiums, self-insured retentions and deductible losses paid by Viad with respect to MoneyGram Liabilities on behalf of MoneyGram. MoneyGram shall not dispute any such premiums, self-insured retentions and deductible losses paid by Viad in good faith. MoneyGram shall promptly receive a refund for any such premiums paid with respect to MoneyGram Liabilities and for any reductions in self-insured retentions or refunded losses received with respect to MoneyGram Liabilities, to the extent that Viad has been reimbursed or credited or has received payment for the same under Viad Policies.

     Section 8.05 Allocation of Insurance Proceeds; Cooperation. Insurance Proceeds received with respect to claims, costs and expenses under the Insurance Policies shall be paid to Viad with respect to Viad Liabilities that are Insured Claims under the Viad Policies and to MoneyGram with respect to the MoneyGram Liabilities that are Insured Claims under the Viad Policies. Payment of the allocable portions of the Insurance Proceeds resulting from the Liability Policies shall be made to the appropriate party upon receipt from the insurer. In the event of the exhaustion of coverage under any Viad Policy, Viad and MoneyGram shall allocate Insurance Proceeds equitably based upon the bona fide claims of the Viad Group and the MoneyGram Group, respectively. The parties agree to use commercially reasonable efforts to fully cooperate with respect to insurance matters.

     Section 8.06 Reimbursement of Expenses. MoneyGram shall (a) upon the request of Viad, reimburse the relevant insurer or the relevant third-party administrator, to the extent required under any Insurance Policy or Service Agreement with respect to any and all MoneyGram Claims that are paid, settled, adjusted, defended or otherwise handled by such insurer or third-party administrator pursuant to the terms and conditions of such Insurance Policy or Service Agreement and (b) to the extent the cost incurred exceeds internal charges made by Viad to MoneyGram prior to the Effective Time, pay or reimburse Viad, or such third party as Viad may require, for any and all costs, premiums, expenses, losses paid, attorneys’ fees or charges incurred prior to the Distribution Date by either Group or after the Distribution Date by the Viad Group arising directly or indirectly in connection with the payment, settlement, adjustment, defense or handling of any such MoneyGram Claim or under the terms and conditions of any Insurance Policies or Service Agreements (including any reimbursement paid by Viad with respect to any such MoneyGram Claim to any insurer or third-party administrator pursuant to the terms of any Insurance Policy or Service Agreement). MoneyGram shall make any reimbursement required by clause (a) of this Section 8.06 at the time required by the relevant Insurance Policy or Service Agreement. MoneyGram shall make any reimbursement required by clause (b) of this Section 8.06, on a monthly basis.

     Section 8.07 Insurer Insolvency. Viad shall not be obligated to reimburse MoneyGram for any MoneyGram Claim under any Insurance Policies where such MoneyGram Claim would have been paid by the insurer or other third party, but for the insolvency of such

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insurer or other third party or the refusal by any insurer or other third party to pay such MoneyGram Claim.

     Section 8.08 Assumption of Management of Liabilities. MoneyGram shall make reasonable efforts to negotiate agreements with any and all insurers or third-party administrators whereby MoneyGram shall assume direct responsibility for any and all Liabilities related to it under any Insurance Policies or Service Agreements and Viad shall provide reasonable assistance in this effort.

     Section 8.09 No Reduction of Coverage. Viad shall take no action to eliminate or materially reduce coverage under any Viad Policy or Service Agreement for any MoneyGram Claim.

     Section 8.10 Future Insurance Coverage. For a period of one year following the Distribution Date, Viad shall assist MoneyGram, to the extent reasonably requested by MoneyGram with the efforts of the MoneyGram Group to secure alternative insurance coverage or claim handling services.

     Section 8.11 Assistance, Waiver of Conflict and Shared Defense. Each party agrees to provide reasonable assistance to the other parties in connection with any dispute with any third party (including insurers, third-party administrators and state guaranty funds) related to the Insurance Policies or Service Agreements, but only insofar as such dispute arises out of the acts or omissions of any third party with respect to a MoneyGram Claim. In the event that Insured Claims of more than one Group exist relating to the same occurrence, the parties agree to defend such Insured Claims jointly and to waive any conflict of interest necessary to the conduct of such joint defense. Nothing in this Section 8.11 shall be construed to limit or otherwise alter in any way the indemnity obligations of the parties, including those created hereby or by operation of law.

ARTICLE IX
FURTHER ASSURANCES AND ADDITIONAL COVENANTS

     Section 9.01 Further Assurances.

     (a) In addition to the actions specifically provided for in this Agreement and the Other Agreements, each party shall use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable law, regulations and agreements to consummate and make effective the transactions contemplated hereby and thereby. Without limiting the foregoing, each party shall cooperate with the other parties, and execute and deliver, or use its best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all consents, approvals or authorizations of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument, and take all such other actions as such party may reasonably be requested to take by any other party from time to time, consistent with the terms hereof, in order to effectuate the provisions and purposes of this Agreement and the Other Agreements and the transactions contemplated hereby and thereby. The parties agree that, as of the Effective Time, each party

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shall be deemed to have acquired complete and sole beneficial ownership of all of the Assets, together with all rights, powers and privileges incident thereto, and shall be deemed to have assumed in accordance with the terms of this Agreement all of the Liabilities, and all duties, obligations and responsibilities incident thereto, that such party is entitled to acquire or required to assume pursuant to the terms hereof.

     (b) Subject to Section 9.01(c) hereof, if at any time or from time to time after the date hereof any member of the Viad Group shall possess a MoneyGram Asset, or any member of the MoneyGram Group shall possess a Viad Asset, Viad or MoneyGram, as the case may be, shall promptly transfer, or cause to be transferred, such Asset to MoneyGram or Viad, as the case may be. Prior to any such transfer, the party possessing such Asset shall hold such Asset in trust for the use and benefit of the party entitled thereto (at the expense of the party entitled thereto), and shall take such other actions as may be reasonably requested by the party to which such Asset is to be transferred in order to place such party, insofar as reasonably possible, in the same position it would have been had such Asset been transferred on the Effective Time.

     (c) Without limiting the generality of Section 9.01(a) or Section 9.01(b) hereof, if the valid, complete and perfected assignment or transfer to MoneyGram of any Assets or Liabilities to be transferred under this Agreement or any Other Agreement requires the consent, agreement or approval of or any filing or registration with any Person or Governmental Authority, and as a result of the failure to make or obtain any such consent, agreement, approval, filing or registration such transfer is not effected as contemplated hereby or thereby despite the provisions hereof purporting to effect such assignment or transfer, then, and until such time as any impediment to the validity, completeness or perfection of such assignment or transfer shall have been removed, nullified or waived, the party possessing such Asset or Liability shall hold such Asset or Liability in trust for the use and benefit of the party entitled thereto (at the expense of the party entitled thereto), and shall take such other action as may be reasonably requested by the party to whom such Asset or Liability is to be transferred in order to place such party, insofar as reasonably possible, in the same position it would have been had such Asset or Liability had been transferred on the Effective Time.

     (d) Without limiting the generality of Section 9.01(a) hereof, prior to the Effective Time, (1) Viad, as the sole stockholder of each of TECI and MoneyGram, shall ratify any actions that are reasonably necessary, proper or desirable to be taken by TECI or MoneyGram to effectuate the transactions contemplated hereby in a manner consistent with the terms hereof and (2) MoneyGram, as the sole stockholder of Merger Sub, shall ratify any actions that are reasonably necessary, proper or desirable to be taken by Merger Sub to effectuate the transactions contemplated hereby in a manner consistent with the terms hereof.

     Section 9.02 Publicity. Prior to the Distribution Date, each of MoneyGram and Viad shall consult with each other prior to issuing any press releases or otherwise making public statements with respect to the Distribution or any of the other transactions contemplated hereby and prior to making any filings with any Governmental Authority with respect thereto.

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     Section 9.03 Certain Business Matters.

     (a) No member of either Group shall have any duty to refrain from (1) engaging in the same or similar activities or lines of business as any member of the other Group, (2) doing business with any potential or actual supplier or customer of any member of the other Group or (3) engaging in, or refraining from, any other activities whatsoever relating to any of the potential or actual suppliers or customers of any member of the other Group.

     (b) Each of Viad and MoneyGram is aware that from time to time certain business opportunities may arise that more than one Group may be financially able to undertake, and that are, from their nature, in the line of more than one Group’s business and are of practical advantage to more than one Group. In connection therewith, the parties agree that if either Viad or MoneyGram acquires knowledge of an opportunity that meets the foregoing standard with respect to more than one Group, neither Viad nor MoneyGram shall have any duty to communicate or offer such opportunity to any of the others and each may pursue or acquire such opportunity for itself, or direct such opportunity to any other Person.

ARTICLE X
TERMINATION

     Section 10.01 Termination. This Agreement may be terminated (a) at any time prior to the Distribution Date by Viad in its sole and absolute discretion, if at any time the Board of Directors of Viad determines that the Distribution is not in the best interests of Viad or its stockholders, or (b) upon the mutual consent of Viad and MoneyGram.

     Section 10.02 Effect of Termination. In the event of any termination of this Agreement, no party (or any directors or officers of such party) shall have any Liability or further obligation to any other party.

ARTICLE XI
MISCELLANEOUS

     Section 11.01 Complete Agreement. This Agreement, the Exhibits and Schedules hereto and the agreements and other documents referred to herein shall constitute the entire agreement among the parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.

     Section 11.02 Expenses. Except as otherwise provided herein or in the Other Agreements, (a) Viad shall pay all investment banking fees incurred in connection with the Merger and the Distribution and (b) each of Viad and MoneyGram shall pay all other third-party fees, costs and expenses paid or incurred or to be paid or incurred by it in connection with the Merger and the Distribution (it being understood and agreed that one-half of all such third party fees, costs and expenses will be deemed incurred by Viad and one-half by MoneyGram). All Transfer Taxes and costs of recording the deeds, bills of conveyance, assignment and assumption, certificates and other documents effecting or evidencing the Merger and the transfer of the MoneyGram Subsidiaries, the MoneyGram Assets and the MoneyGram Liabilities hereunder shall be paid and borne by the party liable for such Transfer Taxes under applicable Transfer Tax law.

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     Section 11.03 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware (other than the laws regarding choice of laws and conflicts of laws) as to all matters, including matters of validity, construction, effect, performance and remedies, except that the provisions concerning the effects of the Merger shall be governed by and construed in accordance with the MBCA.

     Section 11.04 Notices. All notices, requests, claims, demands and other communications hereunder (collectively, “Notices”) shall be made in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telegram, telex or other standard form of telecommunications, or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

     If to Viad:

Viad Corp
Viad Tower
Phoenix, Arizona 85077
Attention: General Counsel

     If to MoneyGram:

MoneyGram International, Inc.
1550 Utica Avenue South
Minneapolis, Minnesota 55416
Attention: General Counsel

or to such other address as any party may have furnished to the other parties by a notice in accordance with this Section 11.04. Copies of all notices, requests, claims, demands and other communications hereunder shall also be given to:

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: David M. Silk, Esq.

     Section 11.05 Amendment and Modification. This Agreement may be amended, modified or supplemented only by a written agreement signed by all of the parties.

     Section 11.06 Successors and Assigns; No Third-Party Beneficiaries. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns, but neither this Agreement nor any rights, interests and obligations hereunder shall be assigned by any party without the prior written consent of each of the other parties (which consent shall not be unreasonably withheld). Except for the provisions of Sections 5.04, 5.05 and 5.06 hereof relating to indemnification, which are also for the benefit of the Indemnitees, this Agreement is solely for the benefit of the parties and their Subsidiaries and Affiliates and is not intended to confer upon any other Person any rights or remedies.

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     Section 11.07 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     Section 11.08 Interpretation. The Article and Section headings contained herein are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation hereof.

     Section 11.09 Legal Enforceability. Any provision hereof that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Each party acknowledges that money damages would be an inadequate remedy for any breach of the provisions hereof and agrees that the obligations of the parties hereunder shall be specifically enforceable.

     Section 11.10 References; Construction. References to any “Article,” “Exhibit,” “Schedule” or “Section,” without more, are to Appendices, Articles, Exhibits, Schedules and Sections hereof. The term “or” shall be inclusive and not exclusive. Unless otherwise expressly stated, (a) clauses beginning with the term “including” set forth examples only and in no way limit the generality of the matters thus exemplified, (b) any noun or pronoun shall be deemed to include the singular and the plural and to cover all genders and (c) the terms “hereof,” “herein,” “hereto,” “hereunder,” and similar terms refer to this Agreement as a whole (including all Exhibits and Schedules).

     Section 11.11 Corporate Power.

     (a) Viad represents on behalf of itself and each other member of the Viad Group, and MoneyGram represents on behalf of itself and each other member of the MoneyGram Group, as follows:

          (i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute and deliver this Agreement and each other Other Agreement to which it is a party, to fully perform (or cause to be performed) its obligations hereunder and thereunder to consummate the transactions contemplated hereby and thereby; and

          (ii) this Agreement and each Other Agreement to which it is a party has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof and thereof.

     (b) Notwithstanding any provision hereof or of any Other Agreement, neither Viad nor MoneyGram shall be required to take or omit to take any act that would violate its fiduciary duties to any minority stockholders of any non wholly-owned Subsidiary of Viad or MoneyGram, as the case may be (it being understood that directors’ qualifying shares or similar interests will be disregarded for purposes of determining whether a Subsidiary is wholly owned).

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     Section 11.12 Waivers of Default. Waiver by any party of any default by any other party of any provision hereof or of any Other Agreement shall not be deemed a waiver by the waiving party of any subsequent or other default, nor shall it prejudice the rights of such other party.

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     IN WITNESS WHEREOF, the parties have caused this Separation and Distribution Agreement to be executed by their duly authorized representatives.

         
    VIAD CORP
 
       
  By:    
     
 
      Name:
      Title:
 
       
    MONEYGRAM INTERNATIONAL, INC.
 
       
  By:    
     
 
      Name:
      Title:
 
       
    MGI MERGER SUB, INC.
 
       
  By:    
     
 
      Name:
      Title:
 
       
    TRAVELERS EXPRESS COMPANY, INC.
 
       
  By:    
     
 
      Name:
      Title:

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FORM OF AMENDED AND RESTATED CERT. OF INCORP.
 

Exhibit 3.1

FORM OF

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF

MONEYGRAM INTERNATIONAL, INC.

     1. The name of the corporation (which is hereinafter referred to as the Corporation) is “MoneyGram International, Inc.”

     2. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on December 18, 2003.

     3. This Amended and Restated Certificate of Incorporation has been duly proposed by resolutions adopted and declared advisable by the Board of Directors of the Corporation, duly adopted by written consent of the sole stockholder of the Corporation in lieu of a meeting and vote and duly executed and acknowledged by the officers of the Corporation in accordance with the provisions of Sections 103, 228, 242 and 245 of the General Corporation Law of the State of Delaware and, upon filing with the Secretary of State in accordance with Section 103 of the General Corporation Law of the State of Delaware shall thenceforth supercede the original Certificate of Incorporation and shall, as it may thereafter be amended in accordance with its terms and applicable law, be the Certificate of Incorporation of the Corporation.

     4. The text of the Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety to read as follows:

Article I

     The name of the corporation (which is hereinafter referred to as the “Corporation”) is:

MoneyGram International, Inc.

Article II

     The address of the Corporation’s registered office in the State of Delaware is The Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.

Article III

     The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized and incorporated under the General Corporation Law of the State of Delaware (the “GCL”).

 


 

Article IV

     (A) Authorized Stock. The total number of shares of stock that the Corporation shall have authority to issue is two hundred and seven million (257,000,000), consisting of (i) two hundred and fifty million (250,000,000) shares of Common Stock, par value $0.01 per share (hereinafter referred to as “Common Stock”) and (ii) seven million (7,000,000) shares of Preferred Stock, par value $0.01 per share (hereinafter referred to as “Preferred Stock”).

     (B) Preferred Stock. Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to provide for the issuance of shares of Preferred Stock in series and, by filing a certificate pursuant to the GCL (hereinafter, along with any similar designation relating to any other class of stock that may hereafter be authorized, referred to as a “Preferred Stock Designation”), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

     (i) The designation of the series, which may be by distinguishing number, letter or title.

     (ii) The number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding).

     (iii) The amounts payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative.

     (iv) Dates on which dividends, if any, shall be payable.

     (v) The redemption rights and price or prices, if any, for shares of the series.

     (vi) The terms and amount of any sinking fund provided for the purchase or redemption of shares of the series.

     (vii) The amounts payable on and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

     (viii) Whether the shares of the series shall be convertible into or exchangeable for shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series of such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made.

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     (ix) Restrictions on the issuance of shares of the same series or of any other class or series.

     (x) The voting rights, if any, of the holders of shares of the series.

     (C) Common Stock. The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. Each shares of Common Stock shall be equal to each other share of Common Stock. Except as may be provided in this Certificate of Incorporation or in a Preferred Stock Designation, the holders of shares of Common Stock shall be entitled to one vote for each such share upon all questions presented to the stockholders.

     (D) Vote. Except as may be provided in this Certificate of Incorporation or in a Preferred Stock Designation, or as may be required by applicable law, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and holders of Preferred Stock shall not be entitled to receive notice of any meeting of stockholders at which they are not entitled to vote.

     (E) Record Holders. The Corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law.

Article V

     The Board of Directors is hereby authorized to create and issue, whether or not in connection with the issuance and sale of any of stock or other securities or property of the Corporation, rights entitling the holders thereof to purchase from the Corporation shares of stock or other securities of the Corporation or any other corporation. The times at which and the terms upon which such rights are to be issued will be determined by the Board of Directors and set forth in the contracts or instruments that evidence such rights. The authority of the Board of Directors with respect to such rights shall include, but not be limited to, determination of the following:

     (A) The initial purchase price per share or other unit of the stock or other securities or property to be purchased upon exercise of such rights.

     (B) Provisions relating to the times at which and the circumstances under which such rights may be exercised or sold or otherwise transferred, either together with or separately from, any other stock or other securities of the Corporation.

     (C) Provisions that adjust the number or exercise price of such rights or amount or nature of the stock or other securities or property receivable upon exercise of such rights in the event of a combination, split or recapitalization of any stock of the Corporation, a change in ownership of the Corporation’s stock or other securities or a reorganization, merger, consolidation, sale of assets or other occurrence relating to the Corporation or any stock of the Corporation, and provisions restricting the ability of the Corporation to enter into any such

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transaction absent an assumption by the other party or parties thereto of the obligations of the Corporation under such rights.

     (D) Provisions that deny the holder of a specified percentage of the outstanding stock or other securities of the Corporation the right to exercise such rights and/or cause the rights held by such holder to become void.

     (E) Provisions that permit the Corporation to redeem or exchange such rights.

     (F) The appointment of a rights agent with respect to such rights.

Article VI

     (A) In furtherance of, and not in limitation of, the powers conferred by applicable law, the Board of Directors is expressly authorized and empowered:

     (i) to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that the Bylaws adopted by the Board of Directors under the powers hereby conferred may be amended or repealed by the Board of Directors or by the stockholders having voting power with respect thereto, provided further that in the case of amendments by stockholders, the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock, voting together as a single class, shall be required to alter, amend or repeal any provision of the Bylaws; and

     (ii) from time to time to determine whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of the Corporation, or any of them, shall be open to inspection of stockholders; and, except as so determined, or as expressly provided in this Certificate of Incorporation or in any Preferred Stock Designation, no stockholder shall have any right to inspect any account, book or document of the Corporation other than such rights as may be conferred by applicable law.

     (B) The Corporation may in its Bylaws confer powers upon the Board of Directors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon the Board of Directors by applicable law. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, and in addition to approval by the Board of Directors, the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock, voting together as a single class, shall be required to amend, repeal or adopt any provision inconsistent with paragraph (A)(i) of this Article VI. For the purposes of this Certificate of Incorporation, “Voting Stock” shall mean the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors.

Article VII

     Subject to the rights of the holders of any series of Preferred Stock or any other series or class of stock as set forth in this Certificate of Incorporation to elect additional directors under specific circumstances, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing in lieu of a meeting of such

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stockholders. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, and in addition to approval by the Board of Directors, the affirmative vote of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock, voting together as a single class, shall be required to amend, repeal or adopt any provision inconsistent with this Article VII.

Article VIII

     (A) Subject to the rights of the holders of any series of Preferred Stock or any other series or class of stock as set forth in the Certificate of Incorporation, to elect additional directors under specified circumstances, the number of directors of the Corporation shall be fixed by the Bylaws of the Corporation and may be increased or decreased from time to time in such a manner as may be prescribed by the Bylaws.

     (B) Unless and except to the extent that the Bylaws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot.

     (C) The directors, other than those who may be elected by the holders of any series of Preferred Stock or any other series or class of stock as set forth in the Certificate of Incorporation, shall be divided into three classes, as nearly equal in number as possible. One class of directors shall be initially elected for a term expiring at the annual meeting of stockholders to be held in 2005, another class shall be initially elected for a term expiring at the annual meeting of stockholders to be held in 2006, and another class shall be initially elected for a term expiring at the annual meeting of stockholders to be held in 2007. Members of each class shall hold office until their successors are elected and qualified. At each succeeding annual meeting of the stockholders of the Corporation commencing with the 2005 annual meeting, the successors of the class of directors whose term expires at that meeting shall be elected by a plurality vote of all votes cast at such meeting to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election.

     (D) Subject to the rights of the holders of any series of Preferred Stock or any other series or class of stock, as set forth in the Certificate of Incorporation, to elect additional directors under specified circumstances, vacancies resulting from death, resignation, retirement, disqualification, removal from office or other cause, and newly created directorships resulting from any increase in the authorized number of directors, may be filled, unless the Board of Directors otherwise determines, only by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors, or by the sole remaining director, and not by stockholders. Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires and until such director’s successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the Board of Directors shall shorten the term of any incumbent director.

     (E) Subject to the rights of the holders of any series of Preferred Stock or any other series or class of stock as set forth in this Certificate of Incorporation, to elect additional directors under specified circumstances, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the

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holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock, voting together as a single class.

     (F) Notwithstanding anything contained in this Certificate of Incorporation to the contrary, and in addition to approval by the Board of Directors, the affirmative vote of the holders of at least 80 percent of the voting power of the then outstanding Voting Stock, voting together as a single class, shall be required to amend, repeal or adopt any provision inconsistent with this Article VIII.

Article IX

     (A) Vote Required for Certain Business Combinations.

     (i) Higher Vote for Certain Business Combinations. In addition to any affirmative vote required by applicable law or this Certificate of Incorporation, and except as otherwise expressly provided in paragraph (B) of this Article IX:

     (a) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with (1) any Interested Stockholder (as hereinafter defined) or (2) any other corporation (whether or not itself an Interested Stockholder) that is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or

     (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder, including all Affiliates of the Interested Stockholder, of any assets of the Corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) of $10,000,000 or more; or

     (c) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder, including all Affiliates of the Interested Stockholder, in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $10,000,000 or more; or

     (d) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliates of an Interested Stockholder; or

     (e) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not an Interested Stockholder is a party thereto) that has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary that are directly or indirectly owned by any Interested Stockholder or one or more Affiliates of the Interested Stockholder;

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shall require the affirmative vote of the holders of at least two-thirds (66 2/3%) of the voting power of the then outstanding Voting Stock, voting together as a single class, including the affirmative vote of the holders of at least two-thirds (66 2/3%) of the voting power of the then outstanding Voting Stock not owned directly or indirectly by any Interested Stockholder or any Affiliate of any Interested Stockholder, unless the requirement of such vote is not permitted under applicable law. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be permitted, by applicable law or in any agreement with any national securities exchange or otherwise.

     (ii) Definition of Business Combination. The term “Business Combination” as used in this Article IX shall mean any transaction described in any one or more of clauses (a) through (e) of paragraph (A)(i) of this Article IX.

     (B) When Higher Vote is Not Required. The provisions of paragraph (A) of this Article IX shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by applicable law or any other provision of this Certificate of Incorporation, if the conditions specified in either of the following paragraphs (B)(i) or (ii) of this Article IX are met:

     (i) Approval by Continuing Directors. The Business Combination shall have been approved by a majority of the Continuing Directors (as hereinafter defined).

     (ii) Price and Procedure Requirements. All of the following conditions shall have been met:

     (a) The aggregate amount of the cash and the Fair Market Value (as hereinafter defined) as of the date of the consummation of the Business Combination of consideration other than cash, to be received per share by holders of Common Stock in such Business Combination, shall be at least equal to the highest of the following:

     (1) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the Interested Stockholder for any shares of Common Stock acquired by it (x) within the two-year period immediately prior to the first public announcement of the proposal of such Business Combination (the “Announcement Date”), or (y) in the transaction in which it became an Interested Stockholder, whichever is higher;

     (2) the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (the “Determination Date”), whichever is higher; and

     (3) (if applicable) the price per share equal to the Fair Market Value per share of Common Stock determined pursuant to paragraph (B)(ii)(a)(2) of this Article IX, multiplied by the ratio of (x) the highest per

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share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the Interested Stockholder for any shares of Common Stock acquired by it within the two-year period immediately prior to the Announcement Date to (y) the Fair Market Value per share of Common Stock on the first day in such two-year period upon which the Interested Stockholder acquired any shares of Common Stock.

     (b) The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any other class, other than Common Stock or Excluded Preferred Stock, of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this paragraph (B)(ii)(b) shall be required to be met with respect to every such class of outstanding Voting Stock whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock):

     (1) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it (x) within the two-year period immediately prior to the Announcement Date, or (y) in the transaction in which it became an Interested Stockholder, whichever is higher;

     (2) (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation;

     (3) the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher; and

     (4) (if applicable) the price per share equal to the Fair Market Value per share of such class of Voting Stock determined pursuant to paragraph (B)(ii)(b)(3) of this Article IX, multiplied by the ratio of (x) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it within the two-year period immediately prior to the Announcement Date to (y) the Fair Market Value per share of such class of Voting Stock on the first day in such two-year period upon which the Interested Stockholder acquired any shares of such class of Voting Stock.

     (c) The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock and other than Excluded Preferred Stock) shall be in cash or in the same form as the Interested Stockholder

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has previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration for such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by it.

     (d) After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (1) there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding Preferred Stock, except as approved by a majority of the Continuing Directors; (2) there shall have been no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Continuing Directors; (3) there shall have been an increase in the annual rate of dividends as necessary fully to reflect any recapitalization (including any reverse stock split), reorganization or any similar reorganization that has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure so to increase such annual rate is approved by a majority of the Continuing Directors; and (4) such Interested Stockholder shall not have become the Beneficial Owner of any additional Voting Stock except as part of the transaction that results in such Interested Stockholder becoming an Interested Stockholder.

     (e) After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a shareholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise.

     (f) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to stockholders of the Corporation at least thirty (30) days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).

     (C) Certain Definitions. For purposes of this Article IX:

     (i) “Person” shall mean any individual, firm, corporation or other entity.

     (ii) “Interested Stockholder” shall mean any Person (other than the Corporation or any Subsidiary) that:

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     (a) itself, or along with its Affiliates, is the Beneficial Owner, directly or indirectly, of more than ten percent (10%) of the then outstanding Voting Stock; or

     (b) is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was itself, or along with its Affiliates, the Beneficial Owner, directly or indirectly, of ten percent (10%) or more of the then outstanding Voting Stock; or

     (c) is an assignee of or has otherwise succeeded to any Voting Stock that was at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.

     (iii) “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations of the Securities Exchange Act of 1934, as in effect on the date hereof. In addition, a Person shall be the “Beneficial Owner” of any Voting Stock that such Person or any of its Affiliates or Associates has (a) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, provided that, in the case of rights issued pursuant to the Rights Agreement between the Corporation and [   ], as rights agent, dated as of [   ], 2004, or any successor rights agreement, once such rights are exercisable, a holder thereof shall not be deemed to be a “Beneficial Owner” for purposes of this provision of the shares of Voting Stock issuable pursuant to such rights unless and until such holder, on or after the date that such rights become exercisable, acquires any additional such rights or shares of Voting Stock, or (b) the right to vote pursuant to any agreement, arrangement or understanding (but neither such Person nor any such Affiliate or Associate shall be deemed to be the Beneficial Owner of any shares of Voting Stock solely by reason of a revocable proxy granted for a particular meeting of stockholders, pursuant to a public solicitation of proxies for such meeting, and with respect to which shares neither such Person nor any such Affiliate or Associate is otherwise deemed the Beneficial Owner).

     (iv) For the purpose of determining whether a Person is an Interested Stockholder pursuant to paragraph (C)(ii) of this Article IX, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of paragraph (C)(iii) of this Article IX but shall not include any other shares of Voting Stock that may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options or otherwise.

     (v) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on the date hereof.

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     (vi) “Subsidiary” shall mean any corporation of which a majority of any share of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in paragraph (C)(ii) of this Article IX, the term “Subsidiary” shall mean only a corporation of which a majority of each share of equity security is owned, directly or indirectly, by the Corporation.

     (vii) “Continuing Director” shall mean any member of the Board of Directors of the Corporation (the “Board of Directors”) who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any director who is thereafter chosen to fill any vacancy on the Board of Directors or who is elected and who, in either event, is unaffiliated with the Interested Stockholder and in connection with his or her initial assumption of office is recommended for appointment or election by a majority of Continuing Directors then on the Board of Directors.

     (viii) “Fair Market Value” shall mean (x) in the case of stock, the highest closing sale price during the thirty (30) day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange listed stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the thirty (30) day period preceding the date in question on the NASDAQ Stock Market or any system then in use in its stead, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Board of Directors in accordance with paragraph (D) of this Article IX; and (y) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the Board of Directors in accordance with paragraph (D) of this Article IX.

     (ix) In the event of any Business Combination in which the Corporation survives, the phrase “other consideration to be received” as used in paragraphs (B)(ii)(a) and (b) of this Article IX shall include the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares.

     (x) “Excluded Preferred Stock” means any series of Preferred Stock with respect to which a majority of the Continuing Directors have approved a Preferred Stock Designation creating such series that expressly provides that the provisions of this Article IX shall not apply.

     (D) The Continuing Directors of the Corporation shall have the power and duty to determine for the purposes of this Article IX, on the basis of information known to them after reasonable inquiry, all facts necessary to determine compliance with this Article IX, including, without limitation (i) whether a Person is an Interested Stockholder, (ii) the number of shares of Voting Stock beneficially owned by any Person, (iii) whether a Person is an Affiliate or Associate of another, (iv) whether the applicable conditions set forth in paragraph (B)(ii) of this Article IX have been met with respect to any Business Combination, (v) the Fair Market Value

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of stock or other property in accordance with paragraph (C)(viii) of this Article IX, and (vi) whether the assets that are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $10,000,000 or more.

     (E) No Effect on Fiduciary Obligations of Interested Stockholders. Nothing contained in this Article IX shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by applicable law.

     (F) Amendment, Repeal, etc. Notwithstanding any other provisions of this Certificate of Incorporation or the Bylaws of the Corporation (and notwithstanding the fact that a lesser percentage may be permitted by applicable law, this Certificate of Incorporation or the Bylaws of the Corporation), but in addition to any affirmative vote of the holders of any particular class of the Voting Stock required by applicable law or this Certificate of Incorporation, the affirmative vote of the holders of two-thirds (66 2/3%) of the voting power of the shares of the then outstanding Voting Stock voting together as a single class, including the affirmative vote of the holders of two-thirds (66 2/3%) of the voting power of the then outstanding Voting Stock not owned directly or indirectly by any Interested Stockholder or any Affiliate of any Interested Stockholder, shall be required to amend or repeal, or adopt any provisions inconsistent with, this Article IX of this Certificate of Incorporation.

Article X

     Each person who is or was or had agreed to become a director or officer of the Corporation, or each such person who is or was serving or who had agreed to serve at the request of the Board of Directors or an officer of the Corporation as a director, officer or trustee of another corporation, partnership, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person), shall be indemnified by the Corporation, in accordance with the Bylaws of the Corporation, to the fullest extent permitted from time to time by the GCL as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) or any other applicable laws as presently or hereafter in effect. The Corporation may, by action of the Board of Directors or through the adoption of Bylaws, provide indemnification to employees and agents of the Corporation, and to persons serving as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, at the request of the Corporation, with the same scope and effect as the foregoing indemnification of directors and officers. The Corporation shall be required to indemnify any person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors or is a proceeding to enforce such person’s claim to indemnification pursuant to the rights granted by this Certificate of Incorporation or otherwise by the Corporation. The right to indemnification conferred in this Article X shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition, such advances to be paid by the Corporation within twenty (20) days after the receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however, that if the General Corporation Law

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of the State of Delaware requires, the payment of such expenses incurred by such a person in his or her capacity as such a director or officer of the Corporation in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article X or otherwise. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person that provide for indemnification greater or different than that provided in this Article X. Any amendment or repeal of this Article X shall not adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such amendment or repeal.

Article XI

     To the fullest extent permitted by applicable law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any amendment or repeal of this Article XI shall not adversely affect any right or protection of a director of the Corporation existing hereunder in respect of any act or omission occurring prior to such amendment or repeal.

Article XII

     Except as may be expressly provided in this Certificate of Incorporation, the Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation or a Preferred Stock Designation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed herein or by applicable law, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article XII; provided, however, that any amendment or repeal of Article X or Article XI of this Certificate of Incorporation shall not adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such amendment or repeal; and provided further that no Preferred Stock Designation shall be amended after the issuance of any shares of the series of Preferred Stock created thereby, except in accordance with the terms of such Preferred Stock Designation and the requirements of applicable law; and provided further that paragraph (C) of Article IV shall not be amended except in accordance with the terms thereof and the requirements of applicable law.

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     IN WITNESS WHEREOF, said MoneyGram International, Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by its Chief Executive Officer and has caused its corporate seal to be affixed, this [   ] day of [                                     ], 2004.

         
    MONEYGRAM INTERNATIONAL, INC.
 
       
  By:    
     
 
      Name: Philip W. Mile
      Title: Chief Executive Officer

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FORM OF AMENDED AND RESTATED BY-LAWS
 

Exhibit 3.2

BYLAWS

OF

MONEYGRAM INTERNATIONAL, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

AS AMENDED [________], 2004

ARTICLE I

OFFICES AND RECORDS

     SECTION 1.1. Delaware Office. The principal office of the Corporation in the State of Delaware shall be located in the City of Wilmington, County of New Castle, and the name and address of its registered agent is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware.

     SECTION 1.2. Other Offices. The Corporation may have such other offices, either within or without the State of Delaware, as the Board of Directors may designate or as the business of the Corporation may from time to time require.

     SECTION 1.3. Books and Records. The books and records of the Corporation may be kept at the Corporation’s principal executive offices in Minneapolis, Minnesota or at such other locations outside of the State of Delaware as may from time to time be designated by the Board of Directors.

ARTICLE II

STOCKHOLDERS

     SECTION 2.1. Annual Meeting. Commencing in 2005, the annual meeting of the stockholders of the Corporation shall be held on the second Tuesday in May of each year, if not a legal holiday, and if a legal holiday then on the next succeeding business day, at 9:00 a.m., local time, at the principal executive offices of the Corporation, or at such other date, place and/or time as may be fixed by resolution of the Board of Directors.

     SECTION 2.2. Special Meeting. Subject to the rights of the holders of any series of preferred stock of the Corporation (the “Preferred Stock”), or any other series or class of stock as set forth in the Certificate of Incorporation of the Corporation, as amended or restated from time to time (the “Certificate of Incorporation”), special meetings of the stockholders may be called only by the Chairman of the Board of Directors or by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors that the Corporation would have if there were no vacancies (the “Whole Board”).

     SECTION 2.3. Place of Meeting. The Chairman of the Board of Directors or the Board of Directors may designate the place of meeting for any meeting of the stockholders. If no designation is made by the Chairman of the Board of Directors or the Board of Directors, the place of meeting shall be the principal executive offices of the Corporation.

 


 

     SECTION 2.4. Notice of Meeting. Written or printed notice, stating the place, day and hour of the meeting and the purpose or purposes for which the meeting is called, shall be prepared and delivered by the Corporation not less than ten (10) days nor more than sixty (60) days before the date of the meeting, either personally, or by mail, facsimile or electronic transmission, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at such address as it appears on the stock transfer books of the Corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the General Corporation Law of the State of Delaware. Such further notice shall be given as may be required by law. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Meetings may be held without notice if all stockholders entitled to vote are present, or if notice is waived by all such stockholders not present. Any previously scheduled meeting of the stockholders may be postponed, and any special meeting of the stockholders may be cancelled, by resolution of the Board of Directors upon public notice given prior to the time previously scheduled for such meeting of stockholders.

     SECTION 2.5. Quorum and Adjournment. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the voting power of all classes of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (the "Voting Stock”), represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series voting as a class, the holders of a majority of the voting power of the shares of such class or series shall constitute a quorum for the transaction of such business. The chairman of the meeting or a majority of the voting power of the shares of Voting Stock so represented may adjourn the meeting from time to time, whether or not there is such a quorum (or, in the case of specified business to be voted on by a class or series, the chairman or a majority of the shares of such class or series so represented may adjourn the meeting with respect to such specified business). No notice of the time and place of adjourned meetings need be given except as required by law. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

     SECTION 2.6. Proxies. At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or as otherwise permitted by law, or by the stockholder’s duly authorized attorney-in-fact. Such proxy must be filed with the Secretary of the Corporation or the Secretary’s representative at or before the time of the meeting.

     SECTION 2.7. Notice of Stockholder Business and Nominations.

     (A) Annual Meetings of Stockholders. (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation’s notice of meeting delivered pursuant to Section 2.4 of these Bylaws, (b) by or at the direction of the Chairman of the Board of Directors or the Board of Directors or (c) by any stockholder of the Corporation that is entitled to vote at the meeting and that complied with the notice procedures

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set forth in clauses (2) and (3) of this paragraph (A) of this Bylaw and that was a stockholder of record at the time such notice is delivered to the Secretary of the Corporation.

     (2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Bylaw, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that with respect to the annual meeting to be held in 2005, the anniversary date shall be deemed to be May 11, 2005; provided further, that in the event that the date of the annual meeting is advanced by more than thirty (30) days, or delayed by more than sixty (60) days, from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described in this paragraph (A) of this Bylaw. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on behalf of which the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on behalf of which the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class and number of shares of the Corporation that are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting, and (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder.

     (3) Notwithstanding anything in the second sentence of paragraph (A) (2) of this Bylaw to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least eighty (80) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of

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business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

     (B) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting pursuant to Section 2.4 of these Bylaws. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation that is entitled to vote at the meeting, that complies with the notice procedures set forth in this Bylaw and that is a stockholder of record at the time such notice is delivered to the Secretary of the Corporation. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate such number of persons for election to such position(s) as are specified in the Corporation’s Notice of Meeting, if the stockholder’s notice as required by paragraph (A) (2) of this Bylaw shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.

     (C) General. (1) Only persons who are nominated in accordance with the procedures set forth in this Bylaw shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylaw. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Bylaw and, if any proposed nomination or business is not in compliance with this Bylaw, to declare that such defective proposal or nomination shall be disregarded.

     (2) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

     (3) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of (a) stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) of the holders of any series of Preferred Stock or any other series or class of stock to elect directors under specified circumstances.

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     SECTION 2.8. Procedure for Election of Directors; Required Vote. Except as otherwise set forth in the Certificate of Incorporation with respect to the right of the holders of any series of Preferred Stock or any other series or class of stock to elect additional directors under specified circumstances, a plurality of the votes cast thereat shall elect directors. Except as otherwise provided by law, listing standards applicable to the Corporation’s capital stock, the Certificate of Incorporation or these Bylaws, all matters other than the election of directors submitted to the stockholders at any meeting shall be decided by the affirmative vote of a majority of the votes cast with respect thereto.

     SECTION 2.9. Inspectors of Elections; Opening and Closing the Polls.

     (A) The Board of Directors by resolution shall appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives of the Corporation, to act at the meeting and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act, or if all inspectors or alternates who have been appointed are unable to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by the General Corporation Law of the State of Delaware.

     (B) The chairman of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting.

     SECTION 2.10. No Stockholder Action by Written Consent. Subject to the rights of the holders of any series of Preferred Stock or any other series or class of stock as set forth in the Certificate of Incorporation to elect directors under specific circumstances, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

ARTICLE III

BOARD OF DIRECTORS

     SECTION 3.1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders.

     SECTION 3.2. Number, Tenure and Qualifications. Subject to the rights of the holders of any series of Preferred Stock, or any other series or class of stock as set forth in the

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Certificate of Incorporation, to elect directors under specified circumstances, the number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Whole Board, but shall consist of not more than seventeen nor less than three directors. The directors, other than those who may be elected by the holders of any series of Preferred Stock, or any other series or class of stock as set forth in the Certificate of Incorporation, shall be divided, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, with the term of office of the first class to expire at the 2005 annual meeting of stockholders, the term of office of the second class to expire at the 2006 annual meeting of stockholders and the term of office of the third class to expire at the 2007 annual meeting of stockholders. Each director shall hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing at the 2005 annual meeting, (A) directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified, and (B) if authorized by a resolution of the Board of Directors, directors may be elected to fill any vacancy on the Board of Directors, regardless of how such vacancy shall have been created.

     Notwithstanding the foregoing, no outside director shall be nominated by the Board of Directors for election as a director for another term of office unless such term of office shall begin before he attains age 75 (provided, however, that any outside director who is a director at the time these Bylaws are adopted may continue to serve as a director), and no inside director’s term of office shall continue after he attains age 65 or after termination of his services as an officer or employee of the Corporation, unless such continuance is approved by a majority of the outside directors on the Board of Directors at the time the disqualifying event occurs and each time thereafter that such inside director is nominated for reelection. The term “outside director” means any person who has never served as an officer or employee of the Corporation or an affiliate and the term “inside director” means any director who is not an “outside director.” Any person who is ineligible for re-election as a director under this paragraph may, by a majority vote of the Board of Directors, be designated as a “Director Emeritus” and as such shall be entitled to receive notice of, and to attend meetings of, the Board of Directors, but shall not vote at such meetings.

     SECTION 3.3. Chairman of the Board of Directors. The Board of Directors may elect from its members a Chairman of the Board of Directors. If a Chairman of the Board of Directors has been elected and is present, such Chairman shall preside at all meetings of the Board of Directors and stockholders. The Chairman of the Board of Directors shall have such other powers and perform such other duties as the Board of Directors may determine, including (if the Chairman of the Board of Directors is not the Chief Executive Officer) providing advice and counsel to the Chief Executive Officer and other members of senior management in areas such as corporate and strategic planning and policy, mergers and acquisitions, investor relations and other areas requested by the Board of Directors. Except where by law the signature of the Chief Executive Officer or President is required, the Chairman of the Board of Directors shall possess the same power as the Chief Executive Officer or President to sign all certificates, contracts and other instruments of the Corporation that may be duly authorized by the Board of Directors. The Chairman of the Board of Directors shall make reports to the Board of Directors and shall perform such other duties as are properly required of the Chairman by the Board of Directors.

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     SECTION 3.4. Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this Bylaw immediately after, and at the same place as, each annual meeting of stockholders. The Board of Directors may, by resolution, provide the time and place for the holding of additional regular meetings without other notice than such resolution.

     SECTION 3.5. Special Meetings. Special meetings of the Board of Directors shall be called at the request of the Chairman of the Board of Directors, the Chief Executive Officer, the President or a majority of the Whole Board. The person or persons authorized to call special meetings of the Board of Directors may fix the place and time of the meetings.

     SECTION 3.6. Notice. Notice of any special meeting shall be given to each director at his or her business or residence in writing by hand delivery, first-class or overnight mail or courier service, facsimile transmission, electronic transmission or orally by telephone communication. If mailed by first-class mail, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least five (5) days before such meeting. If by overnight mail or courier service, such notice shall be deemed adequately delivered when the notice is delivered to the overnight mail or courier service at least twenty four (24) hours before such meeting. If by hand delivery, facsimile transmission or electronic transmission, such notice shall be deemed adequately delivered when the notice is transmitted at least twenty four (24) hours before such meeting. If by telephone, the notice shall deemed adequately given if given at least twelve (12) hours prior to the time set for the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice of such meeting, except for amendments to these Bylaws as provided under Section 8.1 of these Bylaws. A meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in writing, either before or after such meeting.

     SECTION 3.7. Conference Telephone Meetings. Members of the Board of Directors, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

     SECTION 3.8. Quorum. A whole number of directors equal to at least a majority of the Whole Board shall constitute a quorum for the transaction of business, but if at any meeting of the Board of Directors there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time without further notice. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. The directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum.

     SECTION 3.9. Vacancies. Subject to the rights of the holders of any series of Preferred Stock or any other series or class of stock, as set forth in the Certificate of Incorporation, to elect additional directors under specified circumstances, and unless the Board of Directors otherwise determines, vacancies resulting from death, resignation, retirement,

7


 

disqualification, removal from office or other cause, and newly created directorships resulting from any increase in the authorized number of directors, may be filled only by the affirmative vote of a majority of the remaining directors, or the sole remaining director, though less than a quorum of the Board of Directors and not by stockholders. Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires and until such director’s successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the Whole Board shall shorten the term of any incumbent director.

     SECTION 3.10. Executive and Other Committees. The Board of Directors may designate an Executive Committee to exercise, subject to applicable provisions of law, all the powers of the Board of Directors in the management of the business and affairs of the Corporation when the Board of Directors is not in session, including the power to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of the State of Delaware. The Board of Directors may also, by resolution similarly adopted, designate one or more other committees. The Executive Committee and each such other committee shall consist of two (2) or more directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, other than the Executive Committee (the powers of which are expressly provided for herein), may to the extent permitted by law exercise such powers and shall have such responsibilities as shall be specified in the designating resolution or the charter of such committee duly approved by the Board of Directors. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board of Directors of the Directors to act at the meeting in the place of any such absent or disqualified member. Each committee shall keep written minutes of its proceedings and shall report such proceedings to the Board of Directors when required.

     A majority of any committee may determine its action and fix the time and place of its meetings, unless the Board of Directors shall otherwise provide; provided, however, that in the event of a deadlock, the chairman of such committee shall cast the deciding vote. Notice of such meetings shall be given to each member of the committee in the manner provided for in Section 3.5 of these Bylaws. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of such committee. The Board of Directors shall have power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.

     SECTION 3.11. Removal. Subject to the rights of the holders of any series of Preferred Stock, or any other series or class of capital stock as set forth in the Certificate of Incorporation, to elect additional directors under specified circumstances, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock, voting together as a single class.

8


 

     SECTION 3.12. Compensation. Each director, in consideration of his or her service as such, shall be entitled to receive from the Corporation such consideration per annum and for attendance at meetings of the Board of Directors or any committee thereof as the Board of Directors may from time to time determine. The Board of Directors may also provide that the Corporation shall reimburse each director for any expenses incurred by such director in connection with his or her attendance at any meeting of the Board of Directors or any committee thereof. Nothing in this bylaw shall be construed to preclude any director from serving the Corporation in any other capacity and receiving proper compensation therefor.

ARTICLE IV

OFFICERS

     SECTION 4.1. Elected Officers. The elected officers of the Corporation shall be a Chief Executive Officer, a President, any number of Vice Presidents that the Board of Directors may deem proper, a Chief Financial Officer, a Controller, a Secretary, a Treasurer, and such other officers as the Board of Directors from time to time may deem proper. All officers chosen by the Board of Directors shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article IV. Such officers shall also have such powers and duties as from time to time may be conferred by the Board of Directors or by any committee thereof.

     SECTION 4.2. Election and Term of Office. The elected officers of the Corporation shall be elected annually by the Board of Directors at the regular meeting of the Board of Directors held after each annual meeting of the stockholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient. Subject to Section 4.7 of these Bylaws, each officer shall hold office until his or her successor shall have been duly elected and shall have qualified or until his death or until he or she shall resign.

     SECTION 4.3. Chief Executive Officer. The Chief Executive Officer shall be responsible for the general management of the affairs of the Corporation and shall perform all duties incidental to his office that may be required by law and all such other duties as are properly required of him by the Board of Directors. The Chief Executive Officer shall make reports to the Board of Directors, and shall perform all such other duties as are properly required of him by the Board of Directors, and shall see that all orders and resolutions of the Board of Directors and of any committee thereof are carried into effect. The Chief Executive Officer may sign, alone or with the Secretary, or an Assistant Secretary, or any other proper officer of the Corporation authorized by the Board of Directors, certificates, contracts, and other instruments of the Corporation as authorized by the Board of Directors.

     SECTION 4.4. President. The President shall be subject to the direction of the Board of Directors and the Chief Executive Officer and shall act in a general executive capacity and shall assist the Chief Executive Officer in the administration and operation of the Corporation’s business and general supervision of its policies and affairs. The President shall, in the absence of or because of the inability to act of the Chief Executive Officer, perform all duties of the Chief Executive Officer. The President may sign, alone or with the Secretary, or an Assistant Secretary, or any other proper officer of the Corporation authorized by the Board of Directors,

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certificates, contracts, and other instruments of the Corporation as authorized by the Board of Directors.

     SECTION 4.5. Vice Presidents. The Vice Presidents, if any, shall be subject to the direction of the Chief Executive Officer and President and shall have such powers and duties as the Board of Directors, the Chief Executive Officer or the President may provide.

     SECTION 4.6. Chief Financial Officer. The Chief Financial Officer, if any, shall be subject to the direction of the Chief Executive Officer and President and shall have primary responsibility for the financial affairs of the Corporation and have such other powers and duties as the Board of Directors, the Chief Executive Officer or the President may provide.

     SECTION 4.7. Controller. The Controller, if any, shall be subject to the direction of the Chief Financial Officer, shall be the Corporation’s chief accounting officer and shall have primary responsibility for the Corporation’s books of account, accounting records and accounting procedures.

     SECTION 4.8. Secretary. The Secretary shall give, or cause to be given, notice of all meetings of stockholders and Directors and all other notices required by law or by these Bylaws, and in case of his or her absence or refusal or neglect so to do, any such notice may be given by any person thereunto directed by the Chairman of the Board of Directors, the Chief Executive Officer or the President, or by the Board of Directors, upon whose request the meeting is called as provided in these Bylaws. The Secretary shall record all the proceedings of the meetings of the Board of Directors, any committees thereof and the stockholders of the Corporation in a book to be kept for that purpose, and shall perform such other duties as may be assigned to the Secretary by the Board of Directors, the Chief Executive Officer or the President. The Secretary shall have the custody of the seal of the Corporation and may affix the same to all instruments requiring it, and attest to the same.

     SECTION 4.9. Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate account of receipts and disbursements in books belonging to the Corporation. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation in such depositaries as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, the Chief Executive Officer, or the President, taking proper vouchers for such disbursements. The Treasurer shall render to the Chairman of the Board of Directors, the Chief Executive Officer, the President and the Board of Directors, whenever requested, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond for the faithful discharge of his duties in such amount and with such surety as the Board of Directors shall prescribe.

     SECTION 4.10. Removal. Any officer elected by the Board of Directors may be removed by a majority of the members of the Whole Board whenever, in their judgment, the best interests of the Corporation would be served thereby. No elected officer shall have any contractual rights against the Corporation for compensation by virtue of such election beyond the date of the election of such officer’s successor or such officer’s death, resignation or removal,

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whichever event shall first occur, except as otherwise provided in an employment contract or an employee plan.

     SECTION 4.11. Vacancies. A newly created office and a vacancy in any office because of death, resignation, or removal may be filled by the Board of Directors for the unexpired portion of the term at any meeting of the Board of Directors.

ARTICLE V

STOCK CERTIFICATES AND TRANSFERS

     SECTION 5.1. Stock Certificates and Transfers.

     (A) The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form as the appropriate officers of the Corporation may from time to time prescribe, provided, that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, or the Chief Executive Officer, the President or any Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation representing the number of shares registered in certificate form. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated stock and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.

     (B) The certificates of stock shall be signed, countersigned and registered in such manner as the Board of Directors may by resolution prescribe, which resolution may permit all or any of the signatures on such certificates to be in facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

     (C) The shares of the stock of the Corporation represented by certificates shall be transferred on the books of the Corporation by the holder thereof in person or by his or her attorney, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require. Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be cancelled and issuance of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the Corporation. Within a reasonable time after the issuance or transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to the General Corporation Law of the State of Delaware or, unless otherwise provided

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by the General Corporation Law of the State of Delaware, a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

     SECTION 5.2. Lost, Stolen, or Destroyed Certificates. No certificate for shares or uncertificated shares of stock in the Corporation shall be issued in place of any certificate alleged to have been lost, destroyed or stolen, except on production of such evidence of such loss, destruction or theft and on delivery to the Corporation of a bond of indemnity in such amount, upon such terms and secured by such surety, as the Board of Directors or any financial officer may in its or such officer’s discretion require.

ARTICLE VI

MISCELLANEOUS PROVISIONS

     SECTION 6.1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January and end on the thirty-first day of December of each year.

     SECTION 6.2. Dividends. The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and the Certificate of Incorporation.

     SECTION 6.3. Seal. The corporate seal shall be in circular form and shall have inscribed thereon the name of the Corporation and the words “Corporate Seal—Delaware.”

     SECTION 6.4. Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

     SECTION 6.5. Reliance upon Books, Reports and Records. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, to the fullest extent provided by law, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or documents presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person.

     SECTION 6.6. Waiver of Notice. Whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of the General Corporation Law of the State of Delaware, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or any meeting of the Board of Directors or committee thereof need be specified in any waiver of notice of such meeting. Attendance at any meeting shall constitute waiver of notice except attendance for the sole purpose of objecting to the timeliness of notice.

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     SECTION 6.7. Audits. The accounts, books and records of the Corporation shall be audited upon the conclusion of each fiscal year by an independent certified public accountant selected by the Board of Directors or a committee thereof, and it shall be the duty of the Board of Directors to cause such audit to be made annually.

     SECTION 6.8. Resignations. Any director or any officer, whether elected or appointed, may resign at any time by serving written notice of such resignation on the Chief Executive Officer, the President or the Secretary, and such resignation shall be deemed to be effective as of the close of business on the date said notice is received by the Chief Executive Officer, the President, or the Secretary or at such later date as is stated therein. No formal action shall be required of the Board of Directors or the stockholders to make any such resignation effective.

     SECTION 6.9. Indemnification and Insurance. (A) Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, trustee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation, whether the basis of such proceeding is alleged action in an official capacity as such a director, officer, employee, trustee or agent or in any other capacity while serving as such a director, officer, employee, trustee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be such a director, officer, employee, trustee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in paragraph (B) of this Bylaw with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

     (B) To obtain indemnification under this Bylaw, a claimant shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. Upon written request by a claimant for indemnification pursuant to the first sentence of this paragraph (B), a determination, if required by applicable law, with respect to the claimant’s entitlement thereto shall be made as follows: (1) if requested by the claimant, by Independent Counsel (as hereinafter defined), or (2) if no request is made by the claimant for a determination by Independent Counsel, (i) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as

13


 

hereinafter defined), or (ii) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the claimant, or (iii) if a quorum of Disinterested Directors so directs, by the stockholders of the Corporation. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the claimant, the Independent Counsel shall be selected by the Board of Directors unless there shall have occurred within two years prior to the date of the commencement of the action, suit or proceeding for which indemnification is claimed a “Change in Control” as defined in the Corporation’s Executive Severance Plan (Tier I), in which case the Independent Counsel shall be selected by the claimant unless the claimant shall request that such selection be made by the Board of Directors. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within ten (10) days after such determination.

     (C) If a claim under paragraph (A) of this Bylaw is not paid in full by the Corporation within thirty days (30) after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct that make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

     (D) The Corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to paragraph (C) of this Bylaw that the procedures and presumptions of this Bylaw are not valid, binding and enforceable and shall stipulate in such proceeding that the Corporation is bound by all of the provisions of this Bylaw.

     (E) The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Bylaw shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

     (F) The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee, trustee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether

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or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. To the extent that the Corporation maintains any policy or policies providing such insurance, each such director or officer, and each such agent or employee to which rights to indemnification have been granted as provided in paragraph (G) of this Bylaw, shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage thereunder for any such director, officer, employee or agent.

     (G) The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to require the Corporation to pay the expenses incurred in defending any proceeding in advance of its final disposition, to any employee or agent of the Corporation, and to persons serving as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, at the request of the Corporation, to the fullest extent of the provisions of this Bylaw with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

     (H) The right to indemnification conferred in this Bylaw shall be a contract right and shall include the right to require the Corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition, such advances to be paid by the Corporation within twenty (20) days after the receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however, that if the General Corporation Law of the State of Delaware requires, the payment of such expenses incurred by such a person in his or her capacity as such a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such person while such a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Bylaw or otherwise.

     (I) If any provision or provisions of this Bylaw shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (1) the validity, legality and enforceability of the remaining provisions of this Bylaw (including, without limitation, each portion of any paragraph of this Bylaw containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this Bylaw (including, without limitation, each such portion of any paragraph of this Bylaw containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

     (J) For purposes of this By-Law:

     (1) "Disinterested Director” means a director of the Corporation who is not and was not a party to the matter in respect of which indemnification is sought by the claimant.

     (2) "Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of corporation law and shall include any

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person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant’s rights under this By-Law.

     (K) Any amendment or repeal of this Bylaw shall not diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such amendment or repeal.

ARTICLE VII

AMENDMENTS

     SECTION 7.1. Amendments. These Bylaws may be amended, added to, rescinded or repealed at any meeting of the Board of Directors or of the stockholders, provided notice of the proposed change was given in the notice of the meeting and, in the case of a meeting of the Board of Directors, in a notice given no less than twenty four (24) hours prior to the meeting; provided, however, that, in the case of amendments by stockholders, notwithstanding any other provisions of these Bylaws or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of stock required by law, the Certificate of Incorporation or these Bylaws, the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock, voting together as a single class, shall be required to alter, amend or repeal any provision of these Bylaws.

16

FORM OF PREFERRED SHARE PURCHASE RIGHTS AGREEMENT
 

Exhibit 4.2

MONEYGRAM
INTERNATIONAL, INC.
and
WELLS FARGO BANK, N.A.
Rights Agreement
Dated as of __________, 2004

 


 

TABLE OF CONTENTS

                 
            Page
            Number
Section 1.  
Definitions
    1  
Section 2.  
Appointment of Rights Agent
    6  
Section 3.  
Issue of Right Certificates
    6  
Section 4.  
Form of Right Certificates
    9  
Section 5.  
Countersignature and Registration
    9  
Section 6.  
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates
    10  
Section 7.  
Exercise of Rights; Purchase Price; Expiration Date of Rights
    11  
Section 8.  
Cancellation and Destruction of Right Certificates
    13  
Section 9.  
Availability of Preferred Shares
    14  
Section 10.  
Preferred Shares Record Date
    14  
Section 11.  
Adjustment of Purchase Price, Number of Shares or Number of Rights
    15  
Section 12.  
Certificate of Adjusted Purchase Price or Number of Shares
    26  
Section 13.  
Consolidation, Merger or Sale or Transfer of Assets or Earning Power
    26  
Section 14.  
Fractional Rights and Fractional Shares
    28  
Section 15.  
Rights of Action
    30  
Section 16.  
Agreement of Right Holders
    30  
Section 17.  
Right Certificate Holder Not Deemed a Stockholder
    31  
Section 18.  
Concerning the Rights Agent
    32  
Section 19.  
Merger or Consolidation or Change of Name of Rights Agent
    32  

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            Page
            Number
Section 20.  
Duties of Rights Agent
    33  
Section 21.  
Change of Rights Agent
    36  
Section 22.  
Issuance of New Right Certificates
    38  
Section 23.  
Redemption
    38  
Section 24.  
Exchange
    39  
Section 25.  
Notice of Certain Events
    41  
Section 26.  
Notices
    42  
Section 27.  
Supplements and Amendments
    43  
Section 28.  
Successors
    44  
Section 29.  
Benefits of this Agreement
    44  
Section 30.  
Severability
    44  
Section 31.  
Governing Law
    45  
Section 32.  
Counterparts
    45  
Section 33.  
Descriptive Headings
    45  
Signatures     47  
Exhibit A  
- Form of Certificate of Designations
       
Exhibit B  
- Form of Right Certificate
       
Exhibit C  
- Summary of Rights to Purchase Preferred Shares
       

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     Agreement, dated as of         , 2004, between MoneyGram International, Inc., a Delaware corporation (the “Company”), and Wells Fargo Bank, N.A., as rights agent (the “Rights Agent”).

     The Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a “Right”) for each Common Share (as hereinafter defined) of the Company outstanding on      , 2004 (the “Record Date”), each Right representing the right to purchase one one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each Common Share that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined).

     Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

     Section 1. Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

     (a) “Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding, but shall not include the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Common Shares by the Company which, by reducing the number of Common

 


 

Shares of the Company outstanding, increases the proportionate number of Common Shares of the Company beneficially owned by such Person to 15% or more of the Common Shares of the Company then outstanding; provided, however, that, if a Person shall become the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Shares of the Company, then such Person shall be deemed to be an “Acquiring Person.” Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.

     (b) “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement.

     (c) “Associate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement.

     (d) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities:

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     (i) which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly;

     (ii) which such Person or any of such Person’s Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or

     (iii) which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities)

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for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B) hereof) or disposing of any securities of the Company.

     Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder.

     (e) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in Minnesota are authorized or obligated by law or executive order to close.

     (f) “Close of Business” on any given date shall mean 5:00 P.M., Minneapolis, Minnesota time, on such date; provided, however, that, if such date is not a Business Day, it shall mean 5:00 P.M., Minneapolis, Minnesota time, on the next succeeding Business Day.

     (g) “Common Shares” when used with reference to the Company shall mean the shares of common stock, par value $0.01 per share, of the Company. “Common Shares” when used with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.

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     (h) “Distribution Date” shall have the meaning set forth in Section 3(a) hereof.

     (i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     (j) “Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof.

     (k) “Final Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

     (l) “NASDAQ” shall mean the National Association of Securities Dealers, Inc. Automated Quotation System.

     (m) “Person” shall mean any individual, firm, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity.

     (n) “Preferred Shares” shall mean shares of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company having the rights and preferences set forth in the Form of Certificate of Designations attached to this Agreement as Exhibit A.

     (o) “Purchase Price” shall have the meaning set forth in Section 4 hereof.

     (p) “Record Date” shall have the meaning set forth in the second paragraph hereof.

     (q) “Redemption Date” shall have the meaning set forth in Section 7(a) hereof.

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     (r) “Redemption Price” shall have the meaning set forth in Section 23(a) hereof.

     (s) “Right” shall have the meaning set forth in the second paragraph hereof.

     (t) “Right Certificate” shall have the meaning set forth in Section 3(a) hereof.

     (u) “Shares Acquisition Date” shall mean the first date of public announcement by the Company or an Acquiring Person that an Acquiring Person has become such.

     (v) “Subsidiary” of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person.

     (w) “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.

     (x) “Trading Day” shall have the meaning set forth in Section 11(d) hereof.

     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall, prior to the Distribution Date, also be the holders of the Common Shares of the Company) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable.

     Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined

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by action of the Board of Directors of the Company prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares of the Company for or pursuant to the terms of any such plan) of a tender or exchange offer the consummation of which would result in any Person becoming the Beneficial Owner of Common Shares of the Company aggregating 15% or more of the then outstanding Common Shares of the Company (including any such date which is after the date of this Agreement and prior to the issuance of the Rights; the earlier of such dates being herein referred to as the “Distribution Date”), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Shares of the Company registered in the names of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right Certificates, and (y) the right to receive Right Certificates will be transferable only in connection with the transfer of Common Shares of the Company. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares of the Company as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a “Right Certificate”), evidencing one Right for each Common Share so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates.

     (b) On the Record Date, or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form of

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Exhibit C hereto (the “Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on the records of the Company. With respect to certificates for Common Shares of the Company outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with a copy of the Summary of Rights attached thereto. Until the Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the surrender for transfer of any certificate for Common Shares of the Company outstanding on the Record Date, with or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby.

     (c) Certificates for Common Shares which become outstanding (including, without limitation, reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

This certificate also evidences and entitles the holder hereof to certain rights as set forth in an Agreement between MoneyGram International, Inc. and Wells Fargo Bank, N.A., dated as of      , 2004, as it may be amended from time to time (the “Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of MoneyGram International, Inc. Under certain circumstances, as set forth in the Agreement, such Rights (as defined in the Agreement) will be evidenced by separate certificates and will no longer be evidenced by this certificate. MoneyGram International, Inc. will mail to the holder of this certificate a copy of the Agreement without charge after receipt of a written request therefor. As set forth in the Agreement, Rights beneficially owned by any Person (as defined in the Agreement) who becomes an Acquiring Person (as defined in the Agreement) become null and void.

With respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Shares of the Company represented by such certificates

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shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby. In the event that the Company purchases or acquires any Common Shares of the Company after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares of the Company shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares of the Company which are no longer outstanding.

     Section 4. Form of Right Certificates. The Right Certificates (and the forms of election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto, and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any applicable rule or regulation made pursuant thereto or with any applicable rule or regulation of any stock exchange or the National Association of Securities Dealers, Inc., or to conform to usage. Subject to the provisions of Section 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-hundredths of a Preferred Share as shall be set forth therein at the price per one one-hundredth of a Preferred Share set forth therein (the “Purchase Price”), but the number of such one one-hundredths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein.

     Section 5. Countersignature and Registration. The Right Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President, any of its Vice Presidents or its Treasurer, either manually or by facsimile signature,

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shall have affixed thereto the Company’s seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the individual who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any individual who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such individual was not such an officer.

     Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates.

     Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have

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become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates.

     Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein), in whole or in part, at any time after the Distribution Date, upon

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surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the principal office of the Rights Agent, together with payment of the Purchase Price for each one one-hundredth of a Preferred Share as to which the Rights are exercised, at or prior to the earliest of (i) the Close of Business on                    , 2014 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”), or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof.

     (b) The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to the exercise of a Right shall initially be $           , and shall be subject to adjustment from time to time as provided in Section 11 or 13 hereof, and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below.

     (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the Purchase Price for the shares to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by certified check, cashier’s check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares certificates for the number of Preferred Shares to be purchased and the Company hereby irrevocably authorizes any such transfer agent to comply with all such requests, or (B) requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares represented by such receipts shall be deposited by the transfer agent of the Preferred Shares with such depositary agent) and the Company hereby directs such depositary agent to comply with such

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request; (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof; (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder; and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate.

     (d) In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to such holder’s duly authorized assigns, subject to the provisions of Section 14 hereof.

     Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the written request of the Company, and in accordance with any required holding period, destroy such cancelled Right Certificates, and, in such case, shall deliver a certificate of destruction thereof to the Company.

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     Section 9. Availability of Preferred Shares. The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury the number of Preferred Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof. The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares.

     The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax is due.

     Section 10. Preferred Shares Record Date. Each Person in whose name any certificate for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights

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was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however, that, if the date of such surrender and payment is a date upon which the Preferred Shares transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Shares transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

     Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase Price, the number of Preferred Shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

     (a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately

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adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right.

     (ii) Subject to Section 24 hereof, in the event any Person becomes an Acquiring Person, each holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of the Company as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares of the Company (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event. In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights.

     From and after the occurrence of such event, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall be void, and any holder of such Rights shall thereafter have no right to exercise

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such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be cancelled.

     (iii) In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance with subparagraph (ii) above, the Company shall take all such action as may be necessary to authorize additional Common Shares for issuance upon exercise of the Rights. In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof.

     (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares (“equivalent preferred shares”)) or securities convertible into Preferred Shares or equivalent preferred shares at a price

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per Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into Preferred Shares or equivalent preferred shares) less than the then current per share market price of the Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Preferred Shares outstanding on such record date plus the number of additional Preferred Shares and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights. Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and, in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

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     (c) In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then-current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Preferred Share and the denominator of which shall be such then-current per share market price of the Preferred Shares on such record date; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and, in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

     (d) (i) For the purpose of any computation hereunder, the “current per share market price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days immediately prior to such date; provided, however, that, in the event

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that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or Securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, reported at or prior to 4:00 P.M. New York City time or, in case no such sale takes place on such day, the average of the bid and asked prices, regular way, reported as of 4:00 P.M. New York City time, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price reported at or prior to 4:00 P.M. New York City time or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported as of 4:00 P.M. New York City time by NASDAQ or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the

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transaction of business, or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day.

     (ii) For the purpose of any computation hereunder, the “current per share market price” of the Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Shares are not publicly traded, the “current per share market price” of the Preferred Shares shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one hundred. If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, “current per share market price” shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent.

     (e) No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a Preferred Share or one ten-thousandth of any other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the date of the expiration of the right to exercise any Rights.

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     (f) If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Section 11(a) through (c) hereof, inclusive, and the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred Shares shall apply on like terms to any such other shares.

     (g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

     (h) Unless the Company shall have exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a Preferred Share (calculated to the nearest one one-millionth of a Preferred Share) obtained by (A) multiplying (x) the number of one one-hundredths of a share covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (B) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

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     (i) The Company may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights in substitution for any adjustment in the number of one one-hundredths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed

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and countersigned in the manner provided for herein, and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

     (j) Irrespective of any adjustment or change in the Purchase Price or in the number of one one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-hundredths of a Preferred Share which were expressed in the initial Right Certificates issued hereunder.

     (k) Before taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable Preferred Shares at such adjusted Purchase Price.

     (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment.

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     (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall determine to be advisable in order that any consolidation or subdivision of the Preferred Shares, issuance wholly for cash of any Preferred Shares at less than the current market price, issuance wholly for cash of Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter made by the Company to holders of the Preferred Shares shall not be taxable to such stockholders.

     (n) In the event that, at any time after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on the Common Shares payable in Common Shares, or (ii) effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares, then, in any such case, (A) the number of one one-hundredths of a Preferred Share purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-hundredths of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding immediately before such event and the denominator of which is the number of Common Shares outstanding immediately after such event, and (B) each Common Share outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Share outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11(n) shall

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be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares and the Securities and Exchange Commission a copy of such certificate and (c) if such adjustment occurs at any time after the Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof.

     Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In the event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a) the Company shall consolidate with, or merge with and into, any other Person, (b) any Person shall consolidate with the Company, or merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property, or (c) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision shall be made so that (i) each holder of a Right (except as otherwise provided herein) shall thereafter have the right to receive, upon the exercise thereof at a

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price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of such other Person (including the Company as successor thereto or as the surviving corporation) as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares of such other Person (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Shares of the Company thereafter deliverable upon the exercise of the Rights. The Company shall not consummate any such consolidation, merger, sale or transfer unless, prior thereto, the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement so providing. The Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits

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intended to be afforded by the Rights. The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers.

     Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such date no such market maker is making

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a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used.

     (b) The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples of one one-hundredth of a Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one Preferred Share. For the purposes of this Section 14(b), the current market value of a Preferred Share shall be the closing price of a Preferred Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.

     (c) The holder of a Right, by the acceptance of the Right, expressly waives such holder’s right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as provided above).

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     Section 15. Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, in such holder’s own behalf and for such holder’s own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder’s right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement, and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

     Section 16. Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

     (a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares;

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     (b) after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer; and

     (c) the Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated Common Shares certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary.

     Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.

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     Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder, and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises.

     The Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Agreement in reliance upon any Right Certificate or certificate for the Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof.

     Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the

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execution or filing of any paper or any further act on the part of any of the parties hereto; provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and, in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

     In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and, in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

     Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:

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     (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.

     (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

     (c) The Rights Agent shall be liable hereunder to the Company and any other Person only for its own negligence, bad faith or willful misconduct.

     (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

     (e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its

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countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Shares to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares will, when issued, be validly authorized and issued, fully paid and nonassessable.

     (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions.

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     (h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity.

     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided that reasonable care was exercised in the selection and continued employment thereof.

     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified

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in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (which holder shall, with such notice, submit such holder’s Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of the State of Minnesota (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the State of Minnesota), in good standing, having an office in the State of Minnesota, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares or Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

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     Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by the Board of Directors of the Company to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement.

     Section 23. Redemption. (a) The Board of Directors of the Company may, at its option, at any time prior to such time as any Person becomes an Acquiring Person, redeem all but not less than all the then outstanding Rights at a redemption price of $.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”). The redemption of the Rights by the Board of Directors of the Company may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company, in its sole discretion, may establish.

     (b) Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23, and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors of the Company ordering the redemption of the Rights, the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights

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Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common Shares prior to the Distribution Date.

     Section 24. Exchange. (a) The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any adjustment in the number of Rights pursuant to Section 11(i) (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding.

     (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the

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only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected, and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

     (c) In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional Common Shares for issuance upon exchange of the Rights. In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exchange of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof.

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     (d) The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares. In lieu of such fractional Common Shares, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Common Share. For the purposes of this paragraph (d), the current market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

     Section 25. Notice of Certain Events. (a) In case the Company shall, at any time after the Distribution Date, propose (i) to pay any dividend payable in stock of any class to the holders of the Preferred Shares or to make any other distribution to the holders of the Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of the Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of the Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in

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Common Shares), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and, in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier.

     (b) In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company shall, as soon as practicable thereafter, give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

     Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

MoneyGram International, Inc.
1550 Utica Avenue South
Minneapolis, Minnesota 55416
Attention: Corporate Secretary

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     Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:

Wells Fargo Bank, N.A.
P.O. Box 64854
St. Paul, Minnesota 55164
Attention: Account Manager

     Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

     Section 27. Supplements and Amendments. The Company may from time to time supplement or amend this Agreement without the approval of any holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions with respect to the Rights which the Company may deem necessary or desirable, any such supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent; provided, however, that, from and after such time as any Person becomes an Acquiring Person, this Agreement shall not be amended in any manner which would adversely affect the interests of the holders of Rights. Without limiting the foregoing, the Company may at any time prior to such time as any Person becomes an Acquiring Person amend this Agreement to lower the thresholds set forth in
Section 1(a) and 3(a) hereof to not less than 10% (the “Reduced Threshold”); provided, however, that no Person who beneficially owns a number of

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Common Shares equal to or greater than the Reduced Threshold shall become an Acquiring Person unless such Person shall, after the public announcement of the Reduced Threshold, increase its beneficial ownership of the then outstanding Common Shares (other than as a result of an acquisition of Common Shares by the Company) to an amount equal to or greater than the greater of (x) the Reduced Threshold or (y) the sum of (i) the lowest beneficial ownership of such Person as a percentage of the outstanding Common Shares as of any date on or after the date of the public announcement of such Reduced Threshold plus (ii) .001%.

     Section 28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

     Section 29. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares).

     Section 30. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

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     Section 31. Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state.

     Section 32. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

     Section 33. Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested, all as of the day and year first above written.

             
Attest:   MONEYGRAM INTERNATIONAL, INC.
 
           
By
      By    
 
 
     
 
  Name:       Name:
  Title:       Title
 
           
Attest:   WELLS FARGO BANK, N.A.
 
           
By
      By    
 
 
     
 
  Name:       Name:
  Title:       Title

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Exhibit A

FORM OF

CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF

MONEYGRAM INTERNATIONAL, INC.

Pursuant to Section 151 of the
General Corporation Law of the State of Delaware

          The undersigned, pursuant to the provisions of Sections 103 and 151 of the General Corporation Law of the State of Delaware, do hereby certify that, pursuant to the authority expressly vested in the Board of Directors of MoneyGram International, Inc., a Delaware corporation (the “Corporation”), by the Corporation’s Certificate of Incorporation, the Board of Directors has duly provided for the issuance of and created a series of Preferred Stock of the Corporation, par value $0.01 per share (the “Preferred Stock”), and in order to fix the designation and amount and the voting powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a series of Preferred Stock, has duly adopted this Certificate of Designations, Preferences and Rights of Preferred Stock (this “Certificate”).

          Each share of such series of Preferred Stock shall rank equally in all respects and shall be subject to the following provisions:

     (A) Series A Junior Participating Preferred Stock. The qualifications, limitation and restrictions of the Preferred Stock shall be as follows:

     (i) Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” and the number of shares constituting the Series A Preferred Stock shall be two million (2,000,000) (such shares the “Series A Preferred Stock”). Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock.

     (ii) Dividends and Distributions.

     (a) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each

A-1


 

year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (1) $1.00 or (2) subject to the provision for adjustment hereinafter set forth, one hundred (100) times the aggregate per share amount of all cash dividends, and one hundred (100) times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (2) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

     (b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (C)(ii)(A) of this Certificate immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

     (c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such

A-2


 

dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than sixty (60) days prior to the date fixed for the payment thereof.

     (iii) Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:

     (a) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to one hundred (100) votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

     (b) Except as otherwise provided herein, in any Preferred Stock Designation, or by applicable law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

     (c) Except as set forth herein, or as otherwise provided by applicable law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

     (iv) Certain Restrictions.

     (a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in paragraph (B) of this Certificate are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

A-3


 

     (1) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;

     (2) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

     (3) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or

     (4) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

     (b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (C)(iv) of this Certificate purchase or otherwise acquire such shares at such time and in such manner.

     (v) Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any Preferred Stock Designation or as otherwise required by applicable law.

     (vi) Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (a) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of

A-4


 

Series A Preferred Stock shall have received $100.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to one hundred (100) times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (b) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (a) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

     (vii) Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to one hundred (100) times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

     (viii) No Redemption. The shares of Series A Preferred Stock shall not be redeemable.

     (ix) Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporation’s Preferred Stock.

A-5


 

      (x) Amendment. The Certificate of Incorporation of the Corporation shall not be amended in any manner that would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class.

A-6


 

     IN WITNESS WHEREOF, said MoneyGram International, Inc. has caused this Certificate of Designations to be signed by its Chief Executive Officer and has caused its corporate seal to be affixed, this [   ] day of [                    ], 2004.

         
    MONEYGRAM INTERNATIONAL, INC.
 
       
  By:    
     
 
      Name: Philip W. Mile
      Title: Chief Executive Officer

A-7


 

Exhibit B

Form of Right Certificate

      

Certificate No. R-   Rights

NOT EXERCISABLE AFTER                    , 2014 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT.

Right Certificate

MONEYGRAM INTERNATIONAL, INC.

     This certifies that                    , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Agreement, dated as of                    , 2004 (the “Agreement”), between MoneyGram International, Inc., a Delaware corporation (the “Company”), and Wells Fargo Bank, N.A. (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Agreement) and prior to 5:00 P.M., Minneapolis, Minnesota time, on                    , 2014 at the principal office of the Rights Agent, or at the office of its successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value $          per share, of the Company (the “Preferred Shares”), at a purchase price of $          per one one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred Share which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of                    , 2004, based on the Preferred Shares as constituted at such date. As provided in the Agreement, the Purchase Price and the number of one one-hundredths of a Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.

     This Right Certificate is subject to all of the terms, provisions and conditions of the Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Agreement are on file at the principal executive offices of the Company and the offices of the Rights Agent.

     This Right Certificate, with or without other Right Certificates, upon surrender at the principal office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right Cer-

B-1


 

tificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.

     Subject to the provisions of the Agreement, the Rights evidenced by this Right Certificate (i) may be redeemed by the Company at a redemption price of $0.01 per Right or (ii) may be exchanged in whole or in part for Preferred Shares or shares of the Company’s Common Stock, par value $0.01 per share.

     No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but, in lieu thereof, a cash payment will be made, as provided in the Agreement.

     No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Agreement.

     This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

     WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of          ,                  .

         
ATTEST:   MONEYGRAM INTERNATIONAL, INC.
 
       
  By    

 
     
 
Name:
      Name:
Title:
      Title:
 
Countersigned:
       
         
WELLS FARGO BANK, N.A.    
 
       
By
       
 
 
   
  Name:    
  Title:    

Form of Reverse Side of Right Certificate

B-2


 

FORM OF ASSIGNMENT

(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)

     FOR VALUE RECEIVED                   hereby sells, assigns and transfers unto                                                                                             


(Please print name and address of transferee)


this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                      Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.

                 
Dated:

       
             
             
 
              Signature

Signature Medallion Guaranteed:

     All Guarantees must be made by a financial institution (such as a bank or broker) which is a participant in the Securities Transfer Agents Medallion Program (“STAMP”), the New York Stock Exchange, Inc. Medallion Signature Program (“MSP”), or the Stock Exchanges Medallion Program (“SEMP”) and must not be dated. Guarantees by a notary public are not acceptable.

     The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement).

     
 
 
  Signature

Form of Reverse Side of Right Certificate – Continued

B-3


 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)

To: MONEYGRAM INTERNATIONAL, INC.

     The undersigned hereby irrevocably elects to exercise                      Rights represented by this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares be issued in the name of:

Please insert social security
or other identifying number


(Please print name and address)


If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:

Please insert social security
or other identifying number


(Please print name and address)


Dated: __________________

     
 
 
  Signature

Signature Medallion Guaranteed:

     All Guarantees must be made by a financial institution (such as a bank or broker) which is a participant in the Securities Transfer Agents Medallion Program (“STAMP”), the New York Stock Exchange, Inc. Medallion Signature Program (“MSP”), or the Stock Exchanges Medallion Program (“SEMP”) and must not be dated. Guarantees by a notary public are not acceptable.

B-4


 

     The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement).

     
 
 
  Signature

NOTICE

     The signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.

     In the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement) and such Assignment or Election to Purchase will not be honored.

B-5


 

Exhibit C

SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES

Introduction

          On                    , 2004, the Board of Directors of our Company, MoneyGram International, Inc., a Delaware corporation, declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01 per share. The dividend is payable on                 , 2004 to the stockholders of record on                 , 2004.

          Our Board has adopted this Rights Agreement to protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any person or group which acquires 15% or more of our outstanding common stock without the approval of our Board. The Rights Agreement should not interfere with any merger or other business combination approved by our Board.

          For those interested in the specific terms of the Rights Agreement as made between our Company and Wells Fargo Bank, N.A., as the Rights Agent, on        , 2004, we provide the following summary description. Please note, however, that this description is only a summary, and is not complete, and should be read together with the entire Rights Agreement, which has been filed with the Securities and Exchange Commission as an exhibit to a Registration Statement on Form 8-A dated                 , 2004. A copy of the agreement is available free of charge from our Company.

The Rights. Our Board authorized the issuance of a Right with respect to each outstanding share of common stock on                 , 2004. The Rights will initially trade with, and will be inseparable from, the common stock. The Rights are evidenced only by certificates that represent shares of common stock. New Rights will accompany any new shares of common stock we issue after                 , 2004 until the Distribution Date described below.

Exercise Price. Each Right will allow its holder to purchase from our Company one one-hundredth of a share of Series A Junior Participating Preferred Stock (“Preferred Share”) for $                , once the Rights become exercisable. This portion of a Preferred Share will give the stockholder approximately the same dividend, voting, and liquidation rights as would one share of common stock. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.

Exercisability. The Rights will not be exercisable until

  10 days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficial ownership of 15% or more of our outstanding common stock, or, if earlier,
 
  10 business days (or a later date determined by our Board before any person or group becomes an Acquiring Person) after a person or group begins a tender or exchange offer which, if completed, would result in that person or group becoming an Acquiring Person.

C-1


 

          We refer to the date when the Rights become exercisable as the “Distribution Date.” Until that date, the common stock certificates will also evidence the Rights, and any transfer of shares of common stock will constitute a transfer of Rights. After that date, the Rights will separate from the common stock and be evidenced by book-entry credits or by Rights certificates that we will mail to all eligible holders of common stock. Any Rights held by an Acquiring Person are void and may not be exercised.

          Our Board may reduce the threshold at which a person or group becomes an Acquiring Person from 15% to not less than 10% of the outstanding common stock.

Consequences of a Person or Group Becoming an Acquiring Person.

  Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for $               , purchase shares of our common stock with a market value of $               , based on the market price of the common stock prior to such acquisition.
 
  Flip Over. If our Company is later acquired in a merger or similar transaction after the Rights Distribution Date, all holders of Rights except the Acquiring Person may, for $               , purchase shares of the acquiring corporation with a market value of $               based on the market price of the acquiring corporation’s stock, prior to such merger.

Preferred Share Provisions.

Each one one-hundredth of a Preferred Share, if issued:

  will not be redeemable.
 
  will entitle holders to quarterly dividend payments of $.01 per share, or an amount equal to the dividend paid on one share of common stock, whichever is greater.
 
  will entitle holders upon liquidation either to receive $1 per share or an amount equal to the payment made on one share of common stock, whichever is greater.
 
  will have the same voting power as one share of common stock.
 
  if shares of our common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock.

The value of one one-hundredth interest in a Preferred Share should approximate the value of one share of common stock.

Expiration. The Rights will expire on                 , 2014.

Redemption. Our Board may redeem the Rights for $.01 per Right at any time before any person or group becomes an Acquiring Person. If our Board redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to

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receive the redemption price of $.01 per Right. The redemption price will be adjusted if we have a stock split or stock dividends of our common stock.

Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding common stock, our Board may extinguish the Rights by exchanging one share of common stock or an equivalent security for each Right, other than Rights held by the Acquiring Person.

Anti-Dilution Provisions. Our Board may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, a reclassification of the Preferred Shares or common stock. No adjustments to the Exercise Price of less than 1% will be made.

Amendments. The terms of the Rights Agreement may be amended by our Board without the consent of the holders of the Rights. However, our Board may not amend the Rights Agreement to lower the threshold at which a person or group becomes an Acquiring Person to below 10% of our outstanding common stock. In addition, the Board may not cause a person or group to become an Acquiring Person by lowering this threshold below the percentage interest that such person or group already owns. After a person or group becomes an Acquiring Person, our Board may not amend the agreement in a way that adversely affects holders of the Rights.

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FORM OF CERTIFICATE OF DESIGNATIONS
 

Exhibit 4.3

CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF

MONEYGRAM INTERNATIONAL, INC.

Pursuant to Section 151 of the
General Corporation Law of the State of Delaware

          The undersigned, pursuant to the provisions of Sections 103 and 151 of the General Corporation Law of the State of Delaware, do hereby certify that, pursuant to the authority expressly vested in the Board of Directors of MoneyGram International, Inc., a Delaware corporation (the “Corporation”), by the Corporation’s Certificate of Incorporation, the Board of Directors has duly provided for the issuance of and created a series of Preferred Stock of the Corporation, par value $0.01 per share (the “Preferred Stock”), and in order to fix the designation and amount and the voting powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a series of Preferred Stock, has duly adopted this Certificate of Designations, Preferences and Rights of Preferred Stock (this “Certificate”).

          Each share of such series of Preferred Stock shall rank equally in all respects and shall be subject to the following provisions:

     (A) Series A Junior Participating Preferred Stock. The qualifications, limitation and restrictions of the Preferred Stock shall be as follows:

          (i) Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” and the number of shares constituting the Series A Preferred Stock shall be two million (2,000,000) (such shares the “Series A Preferred Stock”). Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock.

          (ii) Dividends and Distributions.

     (a) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an

 


 

amount per share (rounded to the nearest cent) equal to the greater of (1) $1.00 or (2) subject to the provision for adjustment hereinafter set forth, one hundred (100) times the aggregate per share amount of all cash dividends, and one hundred (100) times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (2) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

     (b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (C)(ii)(A) of this Certificate immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

     (c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of

 


 

shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than sixty (60) days prior to the date fixed for the payment thereof.

          (iii) Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:

     (a) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to one hundred (100) votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

     (b) Except as otherwise provided herein, in any Preferred Stock Designation, or by applicable law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

     (c) Except as set forth herein, or as otherwise provided by applicable law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

          (iv) Certain Restrictions.

     (a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in paragraph (B) of this Certificate are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

     (1) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;

     (2) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon

 


 

liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

     (3) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or

     (4) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

     (b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (C)(iv) of this Certificate purchase or otherwise acquire such shares at such time and in such manner.

          (v) Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any Preferred Stock Designation or as otherwise required by applicable law.

          (vi) Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (a) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received $100.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to one hundred (100) times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (b) to the holders of shares of stock ranking on a parity

 


 

(either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (a) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

          (vii) Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to one hundred (100) times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

          (viii) No Redemption. The shares of Series A Preferred Stock shall not be redeemable.

          (ix) Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporation’s Preferred Stock.

          (x) Amendment. The Certificate of Incorporation of the Corporation shall not be amended in any manner that would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class.

 


 

          IN WITNESS WHEREOF, said MoneyGram International, Inc. has caused this Certificate of Designations to be signed by its Chief Executive Officer and has caused its corporate seal to be affixed, this [       ] day of [                   ], 2004.

         
    MONEYGRAM INTERNATIONAL, INC.
 
       
 
       
  By:    
     
      Name: Philip W. Mile
      Title: Chief Executive Officer

 

FORM OF EMPLOYEE BENEFITS AGREEMENT
 

Exhibit 10.1

EMPLOYEE BENEFITS AGREEMENT

BY AND AMONG

VIAD CORP,

MONEYGRAM INTERNATIONAL, INC.

AND

TRAVELERS EXPRESS COMPANY, INC.

DATED AS OF [ ], 2004

 


 

TABLE OF CONTENTS

                 
            Page
ARTICLE I  
DEFINITIONS
    1  
  1.01.    
Terms Defined in the Separation and Distribution Agreement
    1  
  1.02.    
General
    2  
  1.03.    
Plan Names
    5  
ARTICLE II  
ASSIGNMENT OF EMPLOYEES
    5  
  2.01.    
Employees
    5  
  2.02.    
Resignation of Officers and Directors
    5  
  2.03.    
Change of Control Severance Arrangements
    6  
  2.04.    
Severance Pay and Termination Liabilities
    6  
ARTICLE III  
QUALIFIED PLANS
    6  
  3.01.    
Savings Plan and ESOP
    6  
  3.02.    
Defined Benefit Plans
    8  
ARTICLE IV  
NONQUALIFIED PENSION PLANS
    9  
  4.01.    
SERPs
    9  
  4.02.    
Deferred Compensation Plan and Viad Corp Supplemental TRIM Plan
    9  
  4.03.    
Administration
    10  
ARTICLE V  
WELFARE BENEFITS
    11  
  5.01.    
End of Participation in Viad Welfare Plans
    11  
  5.02.    
MoneyGram Plans
    11  
  5.03.    
Certain Executive Medical Benefits
    11  
ARTICLE VI  
OPTIONS AND OTHER INCENTIVE COMPENSATION
    12  
  6.01.    
Stock Options
    12  
  6.02.    
Restricted Stock
    13  
  6.03.    
Other Terms and Conditions
    13  
  6.04.    
Tax Deductions
    13  
  6.05.    
Viad Corp Employee Equity Trust
    14  
  6.06.    
Viad Corp Management Incentive Plan
    14  
ARTICLE VII  
DIRECTORS’ PLANS
    15  
  7.01.    
Deferred Compensation Plan
    15  
  7.02.    
Charitable Award Program
    15  

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            Page
ARTICLE VIII  
MISCELLANEOUS
    16  
  8.01.    
Miscellaneous Plans
    16  
  8.02.    
Post-Distribution Liabilities
    16  
  8.03.    
Preservation of Rights to Amend or Terminate Plans
    16  
  8.04.    
Other Liabilities
    16  
  8.05.    
Audit and Dispute Resolution
    17  
  8.06.    
Effect if Distribution Does Not Occur
    18  
  8.07.    
Incorporation of Separation and Distribution Agreement
       
   
Provisions
    18  
  8.08.    
Indemnification; Joint and Several Liability
    18  
  8.09.    
Cost-Sharing
    18  
  8.10.    
Certain MoneyGram Common Stock
    18  
Schedule I:  
Certain MoneyGram Employees
       

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EMPLOYEE BENEFITS AGREEMENT

     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”).

W I T N E S S E T H:

     WHEREAS, Viad, MoneyGram and TECI and MGI Merger Sub, Inc., have entered into a Separation and Distribution Agreement, dated as of the date hereof (the “Separation and Distribution Agreement”) and certain other agreements that will govern certain matters relating to the Merger and the Distribution (as those terms are defined in the Separation and Distribution Agreement) and the relationship of Viad and MoneyGram and their respective Subsidiaries following the Distribution; and

     WHEREAS, pursuant to the Separation and Distribution Agreement, Viad, MoneyGram and TECI have agreed to enter into this Agreement allocating assets, liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs among them.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound thereby, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

     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.

     ERISA: the Employee Retirement Income Security Act of 1974, as amended, or any successor legislation, and any regulations promulgated thereunder.

     Inactive Supplemental TRIM Participant: Any Viad Former Employee, other than a Viad Former Employee whose most recent employment with any member of either Group and any Former Viad Business was on the payroll of GES Exposition Services, Inc. or Exhibitgroup/Giltspur, a division of Viad Corp.

     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 Pre-Distribution Value: the sum of the MoneyGram Post-Distribution Value and the Viad Post-Distribution Value.

     Viad Restricted Stock: shares of Viad Common Stock issued under a Viad Equity Plan subject to forfeiture in the event that certain terms and conditions are not satisfied.

     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.

          (b) Assumption of Liabilities. Except as otherwise specifically provided herein, the Viad Group shall retain and be solely responsible for all liabilities and obligations whatsoever in connection with claims made by or on behalf of Viad Individuals, and the MoneyGram Group shall assume and be solely responsible for all liabilities and obligations whatsoever in connection with claims made by or on behalf of MoneyGram Individuals in respect of severance pay, salary continuation and similar obligations and all other liabilities of any type arising out of or relating to the termination or alleged termination of any such person’s employment either before, to the extent unpaid, or on or after the Distribution Date.

ARTICLE III
QUALIFIED PLANS

     3.01. Savings Plan and ESOP.

          (a) End of Participation by MoneyGram Employees. As of the Distribution Date, the MoneyGram Employees shall cease to accrue benefits under the Viad Savings Plan and the Viad ESOP, and, except to the extent expressly provided below in this Section 3.01, the MoneyGram Employees shall cease to be participants, and the MoneyGram Group shall cease to be participating employers, in the Viad Savings Plan and the Viad 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.

          (c) Spinoff. Viad agrees, as soon as practicable following the Distribution Date, to direct the trustee of the trust funding the Viad Savings Plan and the trustee of the trust funding the Viad ESOP to transfer to the trustee or other funding agent of the MoneyGram Savings Plan, in cash, securities or other property or a combination thereof, as reasonably determined by Viad, an amount equal to the account balances as of the date of transfer attributable to the MoneyGram Individuals who are participants in the Viad Savings Plan and/or the Viad ESOP and beneficiaries thereof, plus the portion of any unallocated contributions and trust earnings or losses (if any) attributable to such participants and beneficiaries; provided, that the assets of the Exempt Loan Suspense Account of the Viad ESOP (as defined in the Viad ESOP) and the liability under the Viad ESOP Loan shall be retained by the Viad ESOP. Promissory notes representing participant loans, and any Viad Common Stock and MoneyGram Common Stock, held in such accounts shall be transferred in kind, and all other assets held in such accounts shall be transferred in such manner as the responsible fiduciaries of the Viad Savings Plan and the MoneyGram Savings Plan shall determine.

          (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.

          (e) Expenses. The expenses of implementing the foregoing provisions of this Section 3.01 shall be shared by MoneyGram and Viad in accordance with the next sentence; provided, that MoneyGram and Viad may, to the extent permissible, charge such expenses to the applicable trust for their respective plans; and provided, further, that to the extent such expenses that may be charged to the applicable trust are incurred before the applicable asset transfer has taken place, MoneyGram and Viad shall cooperate to enable such expenses to be charged to the trust for Viad Savings Plan, with the MoneyGram share thereof being subtracted from the amount of assets to be transferred to the trust for the MoneyGram Savings Plan. MoneyGram’s share of such expenses shall be a percentage thereof, determined by dividing (1) the value of the assets transferred to the MoneyGram Savings Plan by (2) the sum of such value and the value of the assets retained by the Viad Savings Plan (such values being determined as of the date of such transfer), and Viad’s share of such expenses shall be the remainder thereof.

          (f) Liabilities. Except as specifically set forth in this Section 3.01, from and after the Distribution Date, the Viad Group shall cease to have any liability or obligation whatsoever with respect to MoneyGram Individuals and beneficiaries thereof under the Viad Savings Plan and the Viad ESOP, and the MoneyGram Group and the MoneyGram Savings Plan shall assume and be solely responsible for all liabilities and obligations whatsoever of either Group with respect to MoneyGram Individuals and beneficiaries thereof under the Viad Savings Plan and the Viad ESOP and for all liabilities and obligations whatsoever under the MoneyGram Savings Plan.

     3.02. Defined Benefit Plans.

          (a) Change in Sponsorship. As of the Distribution Date, MoneyGram shall assume sponsorship and administration of, and the Viad Group shall cease to be participating employers in, the Viad Corp Retirement Income Plan. As soon as practicable after the Distribution, MoneyGram, or one or more other persons to which MoneyGram may have delegated the appropriate power, shall appoint all trustees and other fiduciaries of the Viad Corp Retirement Income Plan (which may include re-appointing any current fiduciary, other than a member of the Viad Group, who is willing to continue to serve as such). From and after the Distribution Date, the MoneyGram Group shall assume all liabilities and obligations whatsoever with respect to the Viad Corp Retirement Income Plan, and the Viad Group shall cease to have any such liabilities and obligations.

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          (b) Split of Master Trust. In order to effectuate the foregoing, it will be necessary for the assets of the Viad Corp Retirement Income Plan held in the master trust (the “Master Trust”) established pursuant to the Retirement Plan Master Trust Agreement dated June 27, 1985 with Mellon Bank, N.A., as trustee, to be transferred to a separate trust. Viad and MoneyGram shall cooperate and take all actions necessary or appropriate to do so, it being understood and agreed that except to the extent a fiduciary responsible for the other plans that participate in the Master Trust agree otherwise, all assets of the Master Trust that are not readily saleable or are otherwise illiquid shall be allocated to the Viad Corp Retirement Income Plan. The expenses of implementing the provisions of this Section 3.02 shall be shared by MoneyGram and Viad in accordance with the next sentence; provided, that MoneyGram and Viad may, to the extent permissible, charge such expenses to the applicable trust for their respective plans; and provided, further, that to the extent such expenses that may be charged to the applicable trust are incurred before the assets allocated to the Viad Corp Retirement Income Plan have been transferred to a separate trust, MoneyGram and Viad shall cooperate to enable such expenses to be charged to the Master Trust, with the MoneyGram share thereof being subtracted from the amount of assets to be transferred to the separate trust for the Viad Corp Retirement Income Plan. MoneyGram’s share of such expenses shall be a percentage thereof, determined by dividing (1) the value of the assets transferred to a separate trust for the Viad Corp Retirement Income Plan by (2) the sum of such value and the value of the remaining assets of the Master Trust (such values being determined as of the date of such transfer), and Viad’s share of such expenses shall be the remainder thereof.

          (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:

          (a) Administration by Viad. Except as provided in Section 4.03(b), Viad or a Representative of Viad shall (i) determine the benefits of each Viad Individual or beneficiary thereof that become due under the Viad SERPs or the Viad Corp Supplemental TRIM Plan following the Distribution Date as and when they become payable, (ii) in the case of benefits of Viad Employees and beneficiaries thereof, calculate the portion thereof that is included in the Assumed SERP Obligations or the Assumed Supplemental TRIM Liabilities, as applicable, and (iii) notify TECI of the amounts that it is required to pay pursuant to this Article IV. TECI shall pay, or cause to be paid, such amounts directly to the Viad Individual or beneficiary thereof or shall reimburse Viad for 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.

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          (b) Administration by MoneyGram or TECI. From and after the Distribution Date, MoneyGram, TECI or a Representative of MoneyGram shall be responsible for administering the payment of benefits under the Deferred Compensation Plan. In addition, if at any time after the Distribution Date Viad becomes unable to continue, or gives MoneyGram 60 days’ advance notice that it no longer wishes to continue, carrying out its administrative obligations under Section 4.03(a) above, then MoneyGram, TECI or a Representative of MoneyGram shall take over such obligations. Thereafter, MoneyGram, TECI or a Representative of MoneyGram shall (i) determine the benefits of each Viad Individual or beneficiary thereof that become due under the Viad SERPs or the Viad Corp Supplemental TRIM Plan following the Distribution Date as and when they become payable, (ii) in the case of benefits of Viad Employees and beneficiaries thereof, calculate the portion thereof that is not included in the Assumed SERP Liabilities or the Assumed Supplemental TRIM Liabilities, as applicable, and (iii ) notify Viad of such amounts. Viad shall pay, or cause to be paid, amounts directly to the Viad Individual or beneficiary thereof or shall reimburse TECI for 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 MoneyGram, TECI or a Representative of MoneyGram, as applicable.

          (c) Administrative Costs. Viad shall pay all costs of administration carried out by Viad under Section 4.03(a) and MoneyGram and TECI shall pay all costs of administration carried out by MoneyGram and TECI under Section 4.03(b).

ARTICLE V
WELFARE BENEFITS

     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:

          (a) New MoneyGram Options. As of the Distribution Date, each Viad Option which immediately prior to the Distribution Date is outstanding and not exercised (a “Pre-Spin Option”) shall, without any action on the part of the holder thereof, be converted into (1) an adjusted option under the applicable Viad Equity Plan (the “Adjusted Viad Option”) to purchase shares of Viad Common Stock and (2) a new option (the “New MoneyGram Option”) to purchase shares of MoneyGram Common Stock, on the terms and conditions set forth below. The number of shares of Viad Common Stock subject to the Adjusted Viad Option and the number of shares of MoneyGram Common Stock subject to the MoneyGram Option shall each equal the number of shares of Viad Common Stock subject to the Pre-Spin Option.

          (b) Determination of Exercise Prices. The per-share exercise price of the Adjusted Viad Option shall equal the product of (1) the per-share exercise price of the Pre-Spin Option times (2) a fraction, the numerator of which is the Viad Post-Distribution Value and the denominator of which is the Viad Pre-Distribution Value, rounded to four decimal points. The per-share exercise price of the New MoneyGram Option shall equal the product of (A) the per-share exercise price of the Pre-Spin Option times (2) a fraction, the numerator of which is the MoneyGram Post-Distribution Value and the denominator of which is the Viad Pre-Distribution Value, rounded to four decimal points. In the event that the reverse stock split referred to in Viad’s proxy statement dated March 31, 2004 occurs, each Adjusted Viad Option shall be further adjusted by (x) dividing the number of shares subject to such option by four and (y) multiplying the per-share exercise price by four.

          (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.

          (a) The Distribution. The shares of MoneyGram Common Stock distributed with respect to any shares of Viad Restricted Stock shall be “MoneyGram Restricted Stock,” subject to the same rights, obligations and restrictions as are applicable to such Viad Restricted Stock under the applicable restricted stock agreement, it being understood that in the case of a MoneyGram Employee, the fact that such individual is no longer an employee of Viad shall cause no forfeiture thereunder. “Performance” with respect to Viad Restricted Stock and MoneyGram Restricted Stock (to the extent applicable) shall continue to be measured by the performance criteria specified in the applicable grant, except as may be otherwise determined by Viad (with respect to awards held by Viad Individuals) and MoneyGram (with respect to awards held by MoneyGram Individuals). Notwithstanding the foregoing, any applicable performance criteria and other requirements for vesting of any given award of Viad Restricted Stock held by one individual, and any waiver of such criteria and/or requirements, shall also apply at all times to the MoneyGram Restricted Stock distributed with respect thereto.

          (b) Forfeitures. Any shares of Viad Restricted Stock that are forfeited after the Distribution Date by a Viad Individual or a MoneyGram Individual shall revert to Viad, and any shares of MoneyGram Restricted Stock that are forfeited after the Distribution Date by a Viad Individual or a MoneyGram Individual shall revert to MoneyGram.

     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.

          (a) Payment of Bonuses. The Viad Group shall be responsible for the payment of all liabilities and obligations for benefits with respect to Viad Individuals, and the MoneyGram Group shall be responsible for the payment of all liabilities and obligations with respect to MoneyGram Individuals, under the Viad Corp Management Incentive Plan, regardless of when payable. In addition, the MoneyGram Group shall pay the Viad Group, as promptly as practicable following the Distribution, an administration fee equal to 25% of (1) the aggregate amount of all bonuses that would be payable to MoneyGram Individuals under the Viad Corp Management Incentive Plan for 2004, if such bonuses were computed based solely upon performance through the Distribution Date, times (2) a fraction, the numerator of which is the number of days from January 1, 2004 through the Distribution Date, and the denominator of which is 366. From and after the Distribution Date, Viad and MoneyGram or TECI will, to the extent practicable, either continue the Viad Corp Management Incentive Plan or adopt a new Plan in substitution therefor and, in this connection, if necessary, adjust, in a manner equitable to participants, any incentive goals or other terms contained in the Viad Corp Management Incentive Plan or such new Plan, as they relate to periods after the Distribution Date, to reflect the Distribution.

          (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.

ARTICLE VII
DIRECTORS’ PLANS

     7.01. Deferred Compensation Plan.

          (a) Allocation of Liabilities. Effective as of the Distribution Date: (1) MoneyGram shall establish a nonqualified deferred compensation plan to provide benefits to MoneyGram Directors and beneficiaries thereof; and (2) TECI shall assume and be solely responsible for all liabilities under the Deferred Compensation Plan for Directors of Viad. Effective as of the Distribution, the portion of each account under the Deferred Compensation Plan for Directors of Viad 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.

          (b) No Termination of Service. For purposes of the Deferred Compensation Plan for Directors of Viad, a MoneyGram Director shall not be deemed to have terminated his or her service as a director for purposes of any deferral elections made by such MoneyGram Director until the later of the date he or she ceases to be a director of MoneyGram and the date he or she ceases to be a director of Viad.

          (c) Funding. Viad, MoneyGram and TECI shall use all reasonable efforts so that, as of the Distribution Date, either (1) TECI is substituted for Viad as the “Corporation” under the Trust Agreement establishing The Dial Corp Outside Directors’ Deferred Compensation Trust or (2) the assets held in such trust immediately before the Distribution Date are transferred to a grantor trust of which TECI is the grantor, the assets of which are to be used for payment of the liabilities assumed by TECI under Section 7.01(a). However, a failure to accomplish the foregoing shall not relieve TECI of its liabilities and obligations under Section 7.01(a).

     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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ARTICLE VIII
MISCELLANEOUS

     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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FORM OF TAX SHARING AGREEMENT
 

Exhibit 10.2

TAX SHARING AGREEMENT

     This Tax Sharing Agreement (the “Agreement”) dated as of [date] 2004, is entered into by and between Viad Corp, a Delaware corporation (“Viad”), and MoneyGram International, Inc., a Delaware corporation (“Newco”).

     WHEREAS, Viad and Newco have entered into a Separation and Distribution Agreement dated the date hereof (the “Distribution Agreement”); and

     WHEREAS, pursuant to the Distribution Agreement the remaining issued and outstanding common stock of Newco will be distributed by Viad (pro rata) to the holders of its common stock (the “Spin-Off”); and

     WHEREAS, the parties hereto desire to provide for the payment of tax liabilities and entitlement to tax refunds for the taxable periods ending before, on or after the date of the Spin-Off, to allocate responsibility and provide for cooperation in the preparation and filing of tax returns with respect to such taxable periods, and to provide for certain other related matters;

     NOW, THEREFORE, Viad, on behalf of itself and the Viad Group (as hereinafter defined) and Newco, on behalf of itself and the Newco Group (as hereinafter defined) in consideration of the mutual covenants contained herein, agree as follows:

ARTICLE I
DEFINITIONS

     Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to them in the Distribution Agreement. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the terms defined):

     “Actually Realized” or “Actually Realizes” means, for purposes of determining the timing of the incurrence of any Spin-Off Tax Liability, Income Tax Liability or Other Tax Liability or the realization of a Refund (or any related Income Tax or Other Tax cost or benefit) by a Person in respect of any payment, transaction, occurrence or event, the time at which the amount of Income Taxes or Other Taxes paid (or Refund realized) by such Person is increased above (or reduced below) the amount of Income Taxes or Other Taxes that such Person would have been required to pay (or Refund that such Person would have realized) but for such payment, transaction, occurrence or event.

     “Affiliate” means, with respect to any Person, any other Person that, directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such party, where “control”, “controlled by” and “under common control with” mean the possession, directly or indirectly, of the power to direct or cause the direction of the

 


 

management and policies of such party, whether through the ownership of voting securities, by voting trust, contract or similar arrangement, as trustee or executor, or otherwise.

     “Aggregate Spin-Off Tax Liabilities” means the sum of the Spin-Off Tax Liabilities with respect to each taxing jurisdiction.

     “Ancillary Agreements” means this Agreement, the Distribution Agreement, the Interim Services Agreement and the Employee Benefits Agreement.

     “Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions located in the State of New York are authorized or obligated by law or executive order to close.

     “Cash Acquisition Merger” means a merger of a newly-formed Subsidiary of Viad or Newco, as the case may be, with a corporation, limited liability company, limited partnership, general partnership or joint venture (in each case, not previously owned directly or indirectly by Viad or Newco, as the case may be) solely for cash or a note that is not an Equity Security pursuant to which Viad or Newco, as the case may be, acquires such corporation, limited liability company, limited partnership, general partnership or joint venture and no Equity Securities of Viad or any Viad Subsidiary, or Newco or any Newco Subsidiary, are issued, sold, redeemed or acquired, directly or indirectly.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Distribution Date” means the date on which the Spin-Off occurs.

     “Equity Securities” means any stock or other equity securities treated as stock for tax purposes, or options, warrants, rights, convertible debt, or any other instrument or security that affords any Person the right, whether conditional or otherwise, to acquire stock or to be paid an amount determined by reference to the value of stock.

     “Estimated Tax” or “Estimated Taxes” means the periodic (quarterly or monthly) payment of income or franchise taxes (federal, state, local or foreign) required to be made to any Tax Authority for any taxable year or period, including any payment required to be made with an extension to file any Tax Return.

     “Fifty-Percent or Greater Interest” shall have the meaning ascribed to such term for purposes of Sections 355(d) and (e) of the Code.

     “Final Determination” means the final resolution of liability for any Tax for a taxable period, (i) by IRS Form 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the IRS, or by a comparable form under the laws of any other jurisdiction; except that a Form 870-AD or comparable form that reserves (whether by its terms

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or by operation of law) the right of the taxpayer to file a claim for refund and/or the right of the Tax Authority to assert a further deficiency shall not constitute a Final Determination with respect to the subject matter reserved; (ii) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (iii) by closing agreement or accepted offer in compromise under section 7121 or 7122 of the Code, or by a comparable agreement under the laws of any other jurisdiction; (iv) by any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the relevant taxing jurisdiction; or (v) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the parties.

     “Group” means either the Newco Group or the Viad Group.

     “Income Tax” (a) means (i) any foreign or any United States federal, State or local tax, charge, fee, impost, levy or other assessment that is based upon, measured by, or calculated with respect to (A) net income or profits (including, but not limited to, any capital gains, gross receipts, or minimum tax, and any tax on items of tax preference, but not including sales, use, value added, real property gains, real or personal property, transfer or similar taxes), (B) multiple bases (including, but not limited to, corporate franchise, doing business or occupation taxes), if one or more of the bases upon which such tax may be based, by which it may be measured, or with respect to which it may be calculated is described in clause (a)(i)(A) of this definition, or (C) any net worth, franchise or similar tax, in each case together with (ii) any interest and any penalties, fines, additions to tax or additional amounts imposed by any Tax Authority with respect thereto and (b) includes any transferee or successor liability in respect of an amount described in clause (a) of this definition.

     “Income Tax Liabilities” means all liabilities for Income Taxes.

     “IRS” means the United States Internal Revenue Service.

     “Material Subsidiary” means any Subsidiary that, immediately before the relevant transaction, owns, directly or indirectly, 25 percent or more of the consolidated gross assets of the Viad Group or the Newco Group.

     “Newco Board” means the Board of Directors of Newco.

     “Newco Board Certification” means a certified copy of a resolution of the Newco Board in which the Newco Board, after an investigation of the facts and advice concerning the applicable law, finds and warrants to Newco that (i) following the transaction at issue, one or more Persons will not have acquired, and will not have the right to acquire, directly or indirectly, more than 25% (by vote or value) of the outstanding Equity Securities of Newco (determined immediately after such transaction) taking into account all relevant issuances, redemptions or other acquisitions of (and agreements to issue, redeem or otherwise acquire) Equity Securities (and assuming the exercise or conversion of all such Equity Securities (if such Equity Securities

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are options or warrants or similar exercisable or convertible securities) and the closing of all such agreements) from the point in time two years prior to the Spin-Off to the date immediately following such transaction and pursuant to any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Spin-Off, (ii) Newco will be the surviving entity if such transaction is a merger (and the transaction is not a reverse subsidiary merger in which Newco is the surviving entity) and (iii) the facts and conclusions contained in the resolution will be true and correct at the time the transaction at issue closes.

     “Newco Businesses” means the present, former and future subsidiaries, divisions and businesses of any member of the Newco Group which are not, or are not contemplated by the Distribution Agreement to be, part of the Viad Group immediately after the Spin-Off.

     “Newco Group” means the affiliated group of corporations as defined in section 1504(a) of the Code, or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which Newco (or, with respect to any taxable period ending on or before the Effective Time (as defined in the Distribution Agreement), Travelers Express Company, Inc. (“TECI”)) would be the common parent if it were not a subsidiary of Viad, any corporation or other entity which is a subsidiary of Newco or TECI for the relevant taxable period or portion thereof, and, after the Spin-Off, any Affiliate of Newco or TECI.

     “Other Tax Liabilities” means all liabilities for Other Taxes.

     “Other Taxes” means all forms of taxation, whenever created or imposed, and whether of the United States of America or elsewhere, and whether imposed by a local, municipal, governmental, State, federation or other body, and without limiting the generality of the foregoing, shall include superfund, sales, use, ad valorem, value added, transfer, recording, withholding, payroll, employment, excise, occupation, premium or property taxes (in each case, together with any related interest, penalties and additions to tax, or additional amounts imposed by any Tax Authority thereon); provided, however, that Other Taxes shall not include any Income Taxes.

     “Person” means any individual, partnership, joint venture, limited liability company, corporation, association, joint stock company, trust, unincorporated organization or similar entity or a governmental authority or any department or agency or other unit thereof.

     “Qualified Tax Counsel” means independent United States tax counsel of recognized national standing that is acceptable to the party to whom the Unqualified Tax Opinion is to be provided.

     “Refund” means any refund of Income Taxes or Other Taxes, including any reduction in Income Tax Liabilities or Other Tax Liabilities by means of a credit, offset or otherwise.

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     “Reorganization” means the Spin-Off and the other transactions contemplated by the Distribution Agreement, including the transfer of the stock of TECI by Viad to Newco by way of the Merger (as defined in the Distribution Agreement), the transfer of certain cash to Viad by Newco and the transfer of certain assets and liabilities from Viad to TECI pursuant to the Employee Benefits Agreement (as defined in the Distribution Agreement).

     “Restriction Period” means the period beginning on the date hereof and ending on the second anniversary of the Distribution Date.

     “Ruling” means (a) the private letter ruling issued by the IRS to Viad in connection with the Reorganization and (b) any similar first ruling issued by any Tax Authority other than the IRS in connection with the Reorganization.

     “Ruling Documents” means the Ruling, the Request for Rulings dated August 4, 2003, submitted on behalf of Viad to the IRS, the appendices, attachments and exhibits thereto, and any additional materials submitted at any time on behalf of Viad to the IRS in connection with such Request for Rulings.

     “Spin-Off Tax Liabilities” means, with respect to any taxing jurisdiction, the sum of (a) any increase in Income Tax Liability or Other Tax Liability (or reduction in a Refund) Actually Realized as a result of any corporate-level gain or income recognized with respect to the failure of the Reorganization to qualify for Tax-Free Status under the income tax law of such taxing jurisdiction pursuant to any settlement, Final Determination, judgment, assessment, proposed adjustment or otherwise, (b) interest on such amounts calculated pursuant to such taxing jurisdiction’s laws regarding interest on tax liabilities at the highest Underpayment Rate for corporations in such taxing jurisdiction from the date such additional gain or income was recognized until full payment with respect thereto is made (or in the case of a reduction in a Refund, the amount of interest that would have been received on the foregone portion of the Refund but for the failure of the Reorganization to qualify for Tax-Free Status), and (c) any penalties actually paid to such taxing jurisdiction that would not have been paid but for the failure of the Reorganization to qualify for Tax-Free Status in such taxing jurisdiction.

     “Supplemental Ruling” means (i) any private letter ruling issued by the IRS in connection with the Reorganization or (ii) any similar ruling issued by any Tax Authority other than the IRS in connection with the Reorganization, in each case, other than the Ruling.

     “Supplemental Ruling Documents” means (i) any Supplemental Ruling, any request for a Supplemental Ruling submitted to the IRS, together with the appendices, attachments and exhibits thereto and any supplemental filings or other materials subsequently submitted to the IRS, in connection with the Reorganization or (ii) any similar filings submitted to any other Tax Authority in connection with any such request for a Supplemental Ruling.

     “Tax Attribute” means any net operating loss, capital loss, or tax credit allowed by the Code or state, local or foreign Tax law, including, without limitation, alternative minimum tax credits, foreign tax credits and general business tax credits.

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     “Tax Authority” means a governmental authority (foreign or domestic) or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including, without limitation, the IRS).

     “Tax Benefit” means the amount of the decrease in the liability for Taxes (and, without duplication, the increase in any Tax refund) resulting from any increase or decrease in any item, including, but not limited to, any item of income or deduction, gain or loss or tax credit.

     “Tax Detriment” means the amount of the increase in the liability for Taxes (and, without duplication, the reduction in any Tax refund) resulting from any increase or decrease in any item, including, but not limited to, any item of income or deduction, gain or loss, or tax credit.

     “Tax Item” means any item of income, gain, loss, deduction or credit, or other attribute that may have the effect of increasing or decreasing any Tax.

     “Tax-Free Status” means the qualification of each of the Reorganization (a) as a transaction described in Sections 355(a) and 368(a)(1)(D) of the Code, (b) as a transaction in which the stock distributed thereby is “qualified property” for purposes of Section 361(c) of the Code, and (c) as a transaction in which Viad, the members of the Viad Group, Newco and the members of the Newco Group recognize no income or gain other than intercompany items or excess loss accounts taken into account pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code.

     “Tax-Related Losses” means (without duplication): (i) the Aggregate Spin-Off Tax Liabilities; (ii) all accounting, legal and other professional fees, and court costs incurred in connection with any settlement, Final Determination, judgment or other determination with respect to such Aggregate Spin-Off Tax Liabilities; and (iii) all costs, expenses and damages associated with stockholder litigation or controversies and any amount paid by Viad or Newco in respect of the liability of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority payable by Viad or Newco or their respective Affiliates, in each case, resulting from the failure of the Reorganization to qualify for Tax-Free Status.

     “Tax Return” or “Return” means any return, filing, questionnaire or other document filed or required to be filed, including amended returns that may be filed, for any period with any Tax Authority in connection with any Taxes (whether or not a payment is required to be made with respect to such filing).

     “Taxes” means all forms of taxation, whenever created or imposed, and whether of the United States or elsewhere, and whether imposed by a local, municipal, governmental, state, federation or other body, and without limiting the generality of the foregoing, shall include income, alternative minimum, superfund, sales, use, ad valorem, gross receipts, value added,

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franchise, transfer, recording, withholding, payroll, employment, excise, occupation, premium or property taxes, together with any related interest, penalties and additions to tax, or additional amounts imposed by any Tax Authority upon the Newco Group, the Viad Group or any of their respective members or subsidiaries or divisions or branches or any combination thereof.

     “Underpayment Rate” means the annual rate of interest described in Section 6621(c) of the Code for large corporate underpayments of Income Tax (or similar provision of State, local, or foreign Income Tax law, as applicable), as determined from time to time.

     “Unqualified Tax Opinion” means an unqualified “will” opinion of Qualified Tax Counsel on which the party to whom such opinion is provided may rely to the effect that a transaction will not disqualify the Reorganization from Tax-Free Status, assuming that the Reorganization would have qualified for Tax-Free Status if such transaction did not occur.

     “Viad Board” means the Board of Directors of Viad.

     “Viad Board Certification” means a certified copy of a resolution of the Viad Board in which the Viad Board, after an investigation of the facts and advice concerning the applicable law, finds and warrants to Newco that (i) following the transaction at issue, one or more Persons will not have acquired, and will not have the right to acquire, directly or indirectly, more than 25% (by vote or value) of the outstanding Equity Securities of Viad (determined immediately after such transaction) taking into account all relevant issuances, redemptions or other acquisitions of (and agreements to issue, redeem or otherwise acquire) Equity Securities (and assuming the exercise or conversion of all such Equity Securities (if such Equity Securities are options or warrants or similar exercisable or convertible securities) and the closing of all such agreements) from the point in time two years prior to the Spin-Off to the date immediately following such transaction and pursuant to any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Spin-Off, (ii) Viad will be the surviving entity if such transaction is a merger (and the transaction is not a reverse subsidiary merger in which Viad is the surviving entity) and (iii) the facts and conclusions contained in the resolution will be true and correct at the time the transaction at issue closes.

     “Viad Businesses” means the present, former and future subsidiaries, divisions and businesses of any member of the Viad Group, other than the Newco Businesses.

     “Viad Group” means the affiliated group of corporations as defined in section 1504(a) of the Code, or similar group of entities as defined under corresponding provisions of the laws of other jurisdictions, of which Viad is the common parent, and any corporation or other entity which is a member of such group for the relevant taxable period or portion thereof, but excluding any member of the Newco Group.

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ARTICLE II
PREPARATION AND FILING OF TAX RETURNS

     Section 2.01 Manner of Preparation; Elections. All Tax Returns filed after the Distribution Date, to the extent Tax Items, elections, accounting methods, conventions or Tax principles reflected on such Tax Returns could reasonably be expected to affect Tax Items, elections, accounting methods, conventions or Tax principles reflected on any Tax Return filed before the Distribution Date, shall be prepared in accordance with past practice (unless such past practice is no longer permissible under the Code or other applicable Tax law), or to the extent any such Tax Items, elections, accounting methods, conventions or Tax principles are not covered by past practice (or in the event such past practice is no longer permissible under the Code or other applicable Tax law), in accordance with reasonable Tax practices selected by Viad. All Tax Returns filed after the Distribution Date shall be filed on a timely basis by the party responsible for such filing under this Agreement. Subject to the provisions of this Agreement, all decisions relating to the preparation and filing of Tax Returns and any audit or other review of such Tax Returns shall be made in the sole discretion of the party responsible under this Agreement for such filing. Anything herein to the contrary notwithstanding, without the prior written consent of Viad, which consent shall not be unreasonably withheld, no member of the Newco Group shall carry back to any taxable period beginning before the Distribution Date any Tax Attribute arising in any taxable period beginning on or after the Distribution Date. To the extent any such carryback is not so consented to by Viad, then Viad shall be entitled to retain for itself any refund or other benefit obtained from such carryback filed by Newco or a member of the Newco Group. Newco shall promptly reimburse Viad for the amount, if any, by which any Tax Detriment incurred by the Viad Group or any member thereof as a result of such carryback exceeds the Tax Benefit(s) to the Viad Group or any member thereof as a result of such carryback, upon receipt of documentation detailing such Tax Detriment(s) within fifteen (15) days of receipt of documentation, after which any unpaid amount will accrue interest at the rate for income tax deficiencies specified in Section 3.01. Section 6.04 of the Employee Benefits Agreement (entitled “Tax Deductions”) is hereby incorporated by reference, and all Tax Returns shall be filed in a manner consistent therewith.

     Section 2.02 Preparation and Filing of, and Elections with respect to, Pre-Spin-Off Tax Returns. (a) Consolidated Federal Income Tax Returns. All consolidated federal income Tax Returns which include a member of the Viad Group and a member of the Newco Group that are required to be filed for periods beginning before the Distribution Date shall be prepared and filed by Viad. Newco shall, for each of such aforesaid taxable periods for which it or any member of the Newco Group is includible in the consolidated federal income Tax Return of Viad, provide Viad with a true, complete, and correct (i) pro forma consolidated federal income Tax Return (without regard to the alternative minimum tax) for those members of the Newco Group includible in Viad’s consolidated federal income Tax Return for such taxable period, treating Newco as the common parent of such deemed consolidated group, together with an accompanying computation of the pro forma consolidated federal income Tax liability (without regard to the alternative minimum tax) of such deemed consolidated group, (ii) separate federal income Tax Returns (without regard to the alternative minimum tax) for Newco and each member of the Newco Group together with accompanying computations of the separate federal income Tax liabilities (without regard to the alternative minimum tax) of Newco and each

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member of the Newco Group and (iii) a reconciliation of book income to federal taxable income for Newco and each member of the Newco Group. Such Tax Returns and reconciliation shall be subject to review and reasonable approval by Viad and Newco shall reflect in them any reasonable comments of Viad. Newco shall provide Viad with such Returns and computations on or before the first (1st) day of the eighth (8th) month following the end of the period to which such Returns and computations relate, but in any event Newco shall provide such Returns and computations no later than the fifteenth (15th) day of the eighth (8th) month following the end of the period to which such Returns and computations relate unless another date is agreed to in writing by both parties. Viad shall notify Newco of the intended filing date of its then due consolidated federal income Tax Return and Newco shall pay Viad at least one (1) day prior to such filing date the amount of total federal income Tax liability shown on the above-referenced pro forma consolidated federal income Tax Returns (reflecting Viad’s comments) for the members of the Newco Group includible in Viad’s consolidated federal income Tax Return, reduced by all Estimated Tax payments theretofore made by Newco or any Newco Group member to Viad on account of such Tax liability, or if such Estimated Tax payments in the aggregate exceed the federal income Tax liability of Newco and each member of the Newco Group, Viad shall pay such excess to Newco within thirty (30) days of the filing by Viad of the consolidated federal income Tax Return with respect to which such overpayment relates. Additionally, Newco shall pay Viad at least one (1) day prior to such filing date an amount (calculated in the manner described in Section 2.01(d)) equal to the value of the Tax Attributes, if any, apportioned or allocated to Newco as a result of the Tax filing. Anything herein to the contrary notwithstanding, Newco for itself and each member of the Newco Group shall calculate and shall remit to Viad at least two (2) days prior to the due date of each Viad Estimated Tax payment the Estimated Tax liability attributable to Newco and each member of the Newco Group on a consolidated basis for the period to which such Estimated Tax payment relates; provided, however, that such calculation shall be subject to review and approval by Viad.

     (b) Combined or consolidated state or local income or franchise Tax Returns. All combined or consolidated state or local income or franchise Tax Returns which include a member of the Viad Group and a member of the Newco Group that are required to be filed for periods beginning before the Distribution Date shall be prepared and filed by Viad. Newco shall, for each of such aforesaid taxable periods for which it or any member of the Newco Group is includible in any combined or consolidated state or local income or franchise Tax Return of Viad, provide Viad with true, complete, and correct state and local Tax Return data required or requested by Viad, including any information necessary to (i) prepare pro forma combined or consolidated state or local income or franchise Tax Returns (without regard to any alternative minimum tax), as applicable, for those members of the Newco Group includible in Viad’s combined or consolidated state or local income or franchise Tax Return for such taxable period, treating Newco as the common parent of such deemed combined or consolidated group, (ii) compute the pro forma combined or consolidated state or local income or franchise Tax liability (without regard to the alternative minimum tax) of such deemed combined or consolidated group, (iii) prepare separate state or local income or franchise Tax Returns for Newco and each member of the Newco Group, (iv) compute the separate state or local income or franchise Tax liabilities of Newco and each member of the Newco Group and (v) reconcile book income to state or local taxable income for Newco and each member of the Newco Group. Such Tax Return data shall be subject to review and reasonable approval by Viad and Newco shall reflect

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in it any reasonable comments of Viad. Newco shall provide Viad with such Tax Return data on or before the first (1st) day of the eighth (8th) month following the end of the period to which such Tax Return data relates, but in any event Newco shall provide such Tax Return data no later than the fifteenth (15th) day of the eighth (8th) month following the end of the period to which such Tax Return data relates unless another date is agreed to in writing by both parties. Viad shall notify Newco of the intended filing date of Viad’s then due combined or consolidated state or local income or franchise Tax Return and Newco shall pay Viad at least one (1) day prior to such filing date the amount of total state or local income or franchise Tax liability attributable to the members of the Newco Group for the period to which such Tax Return relates, reduced by all Estimated Tax payments theretofore made by Newco or any Newco Group member to Viad on account of such Tax liability, or if such Estimated Tax payments in the aggregate exceed the state or local income or franchise Tax liability of Newco and each member of the Newco Group, Viad shall pay such excess to Newco within thirty (30) days of the filing by Viad of the combined or consolidated state or local income or franchise Tax Return with respect to which such overpayment relates. Anything herein to the contrary notwithstanding, Newco for itself and each member of the Newco Group shall calculate and shall remit to Viad at least two (2) days prior to the due date of each Viad Estimated Tax payment the Estimated Tax liability attributable to Newco and each member of the Newco Group on a combined or consolidated basis for the period to which such Estimated Tax payment relates; provided, however, that such calculation shall be subject to review and approval by Viad. The tax savings, if any, resulting from filing combined or consolidated state or local income or franchise Tax Returns for the short period ending on the Distribution Date will be allocated to Newco in a manner consistent with the most recent period (except that Viad will not hold back 20% of Newco’s allocated savings for future audits, as it has done in the past). If there should be adjustments to any combined or consolidated state or local income or franchise Tax Returns, or to a consolidated federal income Tax Return as a result of an audit, or any other settlement with a Tax Authority, the additional Tax or Refund will be settled between Viad and Newco in accordance with Article III.

     (c) Other Tax Returns. All Tax Returns (other than Tax Returns described in Sections 2.02(a) and (b)) which include or are filed with respect to a member of the Viad Group or the Newco Group that are required to be filed for periods beginning before the Distribution Date shall be filed by the member of the Viad Group or the Newco Group, as the case may be, which filed the corresponding Tax Return for the most recent period for which such Tax Return has been filed, or, if no such corresponding Tax Return has been filed, by the appropriate member in accordance with applicable law or custom. In the case of such Tax Returns filed by a member of the Viad Group, Newco shall be liable for and pay to Viad the portion of the Tax liability on such Tax Returns attributable to Newco Group members, at the time and in the amount determined in accordance with past practice. In the case of such Returns filed by a member of the Newco Group, Viad shall be liable for and pay to Newco the portion of the Tax liability on such Returns attributable to Viad Group members, at the time and in the amount determined in accordance with past practice. For the avoidance of doubt, any Tax Return that includes only members of the Newco Group (a “Separate Return”) and any Taxes with respect to such Separate Return shall be the responsibility of the Newco Group, and Newco shall indemnify Viad with respect to such Tax Returns and Taxes.

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     (d) Apportionment of Tax Attributes. Credits arising in connection with any alternative minimum tax liability (“Alternative Minimum Tax Credits”) shall be apportioned based on alternative minimum taxable income (as defined in Section 55(b)(2) of the Code) and consistent with the attached allocation schedule of credits arising prior to 2004. Any unused credits described in Section 38 of the Code (“General Business Credits”) shall be allocated to the entity that generated such credits, taking into account current year utilization following the ordering rules of Section 38(d) of the Code. In order to reflect the fact that under the historic intercompany tax sharing arrangement between Viad and TECI (i) tax sharing payments from TECI to Viad have been made without regard to Section 55 of the Code, as a result of which such tax sharing payments from TECI to Viad have been less than such payments would have otherwise been and (ii) Viad has previously paid TECI in respect of General Business Credits which Viad has been unable to use as a result of being subject to tax under Section 55 of the Code, TECI shall, in respect of any Alternative Minimum Tax Credits and General Business Credits apportioned to a separate return year of Newco, make a tax sharing payment prior to the Distribution Date to Viad in an amount equal to the amount so apportioned; provided, however, that (i) the amount required to be paid pursuant to this Section 2.02(d) shall be recalculated at any time that facts or circumstances arise or come to light which affect the amount required to be paid pursuant to this Section 2.02(d) (including, without limitation, the filing of a Tax Return or any adjustment made by any Taxing Authority as described in Article III) and (ii) if such facts or circumstances arise or come to light after any payment by TECI to Viad pursuant to this Section 2.02(d) which, if known when such payment was made would have increased or reduced the amount of such payment, then (A) if the amount of the payment made by TECI to Viad pursuant to this Section 2.02(d) exceeds the amount that would have been paid by TECI pursuant to this Section 2.02(d) had all of the facts and circumstances been known at the time such payment was made, Viad shall be required to remit to TECI in cash an amount equal to such excess and (B) if the amount that would have been paid by TECI pursuant to this Section 2.02(d) had all of the facts and circumstances been known at the time such payment was made exceeds the amount of the payment made by TECI to Viad pursuant to this Section 2.02(d), TECI shall be required to remit to Viad in cash an amount equal to such excess; provided further, however, that if, as a result of a Tax proceeding, an expense borne by Newco and deducted by Newco on a Tax Return is required to be deducted instead by Viad, Newco shall not be required to pay Viad, or cause Viad to be paid, for additional Tax Attributes apportioned to Newco as a result of such adjustment.

     Section 2.03 Filing of Post-Spin-Off Tax Returns. All Tax Returns and Taxes for periods beginning on or after the Distribution Date shall be the responsibility of the Viad Group if such Tax Returns or Taxes relate to Viad Businesses, and shall be the responsibility of the Newco Group if such Tax Returns or Taxes relate to Newco Businesses.

     Section 2.04 Certification. Each Tax Return and computation of tax liability, and all Tax Return data, required to be provided to Viad by Newco and each member of the Newco Group pursuant to Section 2.02 hereof shall be accompanied by a statement signed by the Vice President – Taxes of Newco, or other authorized officer, to the effect that such officer has reviewed for completeness and accuracy the Tax Return, computation of the Tax liability, Tax Return data and documentation in support thereof and has determined that such Tax Return, computation and Tax Return data properly reflect the taxable income (or loss), Tax liability and credits of the entity or

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entities, as the case may be, to which such Tax Return, computation and Tax Return data relate for the period covered thereby.

ARTICLE III
DEFICIENCIES AND REFUNDS OF TAXES

     Section 3.01 Payment of Deficiencies by Newco. (a) Consolidated Federal Income Tax Returns. If any adjustment is made by the IRS with respect to any consolidated federal income Tax Return which includes a member of the Viad Group and a member of the Newco Group that is required to be filed for a taxable period beginning before the Distribution Date, then to the extent that such adjustment either increases the taxable income, reduces the taxable loss, decreases the tax credits or otherwise adjusts any Tax Item reflected on such Tax Return, the Tax liability of the Newco Group shall be redetermined in accordance with the principles of this Agreement (including, without limitation, Article II for Tax Returns filed prior to, on or after the date hereof) taking into account such adjustment. If such redetermination results in a greater Tax liability for any period for the Newco Group, Newco and each other member of the Newco Group shall be liable for such increases in Taxes (except to the extent there is an offsetting Tax Benefit to Viad, in which case the Tax Benefit will be netted against the increase in Tax if such Tax Benefit is realized in the same year and otherwise will be paid by Viad to Newco if, as and when realized by Viad). If any member of the Newco Group shall have any liability as a result of this Section 3.01(a), Newco shall pay to Viad, hold Viad harmless and indemnify Viad for any such Tax liability, for any costs and attorneys fees spent to contest such Tax liability, and the amount thereof shall be paid by Newco to Viad within thirty (30) days of the receipt by Newco of written notice of such liability, together with a computation of the amount due and supporting documentation in such detail as Newco may reasonably request to verify the computation of the amount due. Any such required payment not made within such thirty (30) day period shall thereafter bear interest until paid at the then most recently published Underpayment Rate. For taxable periods beginning on or after the Distribution Date, in the event that Newco or any member of the Newco Group pays a liability which creates a Tax Benefit for Viad, which Tax Benefit would not have arisen but for the payment of such liability, such Tax Benefit will be paid by Viad to Newco if, as and when realized by Viad; provided, however, that if Viad shall pay Newco for such Tax Benefit and subsequently determine that it has lost the benefit of all or a portion of such Tax Benefit, Newco shall promptly remit to Viad the amount certified by Viad to be the amount necessary to restore Viad to the position Viad would have been in if no payment had been made by Viad to Newco pursuant to this sentence.

     (b) Combined or Consolidated State or Local Income or Franchise Tax Returns. If any adjustment is made by any Tax Authority with respect to any state or local income or franchise Tax Return which includes a member of the Viad Group and a member of the Newco Group that is required to be filed for a taxable period beginning before the Distribution Date, then Newco and each member of the Newco Group, on the one hand, and Viad, on the other hand, shall share any resulting increase in Tax liability for such taxable period in the percentages set forth on Schedule A. If any member of the Newco Group shall have any liability as a result of this Section 3.01(b), Newco shall pay to Viad, hold Viad harmless and indemnify Viad for any such Tax liability, costs and attorneys fees spent to contest such Tax liability, and the amount thereof shall be paid by Newco to Viad within thirty (30) days of the

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receipt by Newco of written notice of such liability, together with a computation of the amount due and supporting documentation in such detail as Newco may reasonably request to verify the computation of the amount due. Any such required payment not made within such thirty (30) day period shall thereafter bear interest until paid at the then most recently published Underpayment Rate.

     (c) Other Tax Returns. If any adjustment is made by any Tax Authority with respect to any Tax Return (other than those included in Section 3.01(a) and (b)) of Viad (or any member of the Viad Group) in which any member of the Newco Group is included for taxable periods beginning before the Distribution Date, then to the extent that such adjustment either increases the taxable income, reduces the taxable loss, decreases the tax credits or otherwise adjusts any Tax Item reflected on such Tax Return, the Tax liability of the Newco Group shall be redetermined in accordance with the principles of this Agreement (including, without limitation, Article II) taking into account such adjustment. If such redetermination results in a greater Tax liability for any period for Newco or any member of the Newco Group, Newco and each other member of the Newco Group shall be liable for such increases in Taxes (unless there is an offsetting Tax Benefit to Viad, in which case the Tax Benefit will be netted against the increase in Tax if such Tax Benefit is realized in the same year and otherwise will be paid if, as and when realized). If any member of the Newco Group shall have any liability as a result of this Section 3.01(c), Newco shall pay to Viad, hold Viad harmless and indemnify Viad for any such Tax liability, costs and attorneys fees, and the amount thereof shall be paid by Newco to Viad within thirty (30) days of the receipt by Newco of written notice of such liability, together with a computation of the amount due and supporting documentation in such detail as Newco may reasonably request to verify the computation of the amount due. Any such required payment not made within such thirty (30) day period shall thereafter bear interest until paid at the then most recently published Underpayment Rate.

     Section 3.02 Payment of Refunds to Newco. If any adjustment is made by any Tax Authority with respect to any Tax Return of Viad (or any member of the Viad Group) in which any member of the Newco Group is included for any taxable period beginning before the Distribution Date, then to the extent that such adjustment either (a) decreases the Tax liability attributable to any member of the Newco Group and results in a Tax Benefit, that would not have arisen but for such adjustment, to Viad or any member of the Viad Group or (b) is attributable to a member of the Newco Group and results in a reduced Tax liability, that would not have arisen but for such adjustment, for Viad or any member of the Viad Group (calculated consistently with the methodology and principles set forth in Section 3.01), then Viad shall remit to Newco any refunds of Taxes received by or credited to it as a result of such adjustments attributable to a member of the Newco Group. Viad shall pay any amounts due from it to Newco as a result of this Section 3.02 within ten (10) days of its receipt of the relevant refund or credit with respect thereto from the IRS or any state or other governmental unit, as the case may be. Any such required payment not made within such ten (10) day period shall thereafter bear interest until paid at the then most recently published Underpayment Rate. Such payments shall be accompanied by a computation of the amount due and supporting documentation in such detail as Newco may reasonably request to verify the computation of the amount due. Anything herein to the contrary notwithstanding, except as provided in this Section 3.02, no member of the Newco Group shall be entitled to any payment or benefit as a result of the receipt of any Tax

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refund received by any member of the Viad Group except as set forth in Section 2.02 to the extent such refund is attributable to the overpayment of Estimated Taxes by the Newco Group or any member thereof.

ARTICLE IV
TAX AUDITS AND OTHER MATTERS

     Section 4.01 Tax Audits and Controversies. (a) Federal, State, or Local Income or Franchise Taxes. Except as otherwise provided in this Section 4.01, Viad shall have the exclusive authority and obligation to represent each member of the Newco Group before the IRS or any other Tax Authority or before any court with respect to any matter affecting the federal, state or local income or franchise Tax liability reflected on a Tax Return which includes a member of the Viad Group and a member of the Newco Group for any Tax period beginning before the Distribution Date, in each such case allowing representatives of the Newco Group, including, without limitation, outside counsel and consultants, to participate in good faith in all respects in all such Tax proceedings affecting any member of the Newco Group. Such representation by Viad shall include, but shall not be limited to exclusive control over (i) any response to any examination of federal, state or local income or franchise Tax Returns and (ii) any contest or litigation through a Final Determination of any issue included in any Tax Return that includes a member of the Viad Group, including but not limited to (a) whether and in what forum to conduct such contest, and (b) whether and on what basis to settle such contest; except that Viad shall not settle any claim, suit, action or proceeding in respect of which indemnity for federal, state or local income or franchise Taxes may be sought hereunder against Newco or any member of the Newco Group without Newco’s consent, which consent shall not be unreasonably withheld. Viad shall give timely notice to Newco of any inquiry, the assertion of any claim or the commencement of any suit, action or proceeding in respect of which indemnity for federal, state or local income or franchise Taxes may be sought under this Agreement against Newco or any member of the Newco Group and will give Newco such information with respect thereto as Newco may reasonably request. Anything in this Section 4.01 or elsewhere in this Agreement to the contrary notwithstanding, if Newco contests or litigates any federal, state or local income or franchise tax issue in any forum, Newco shall pay and shall indemnify and hold harmless each member of the Viad Group from any and all costs, expenses and/or liabilities of any type or nature, including, without limitation, any federal income tax liability (including interest and penalties thereon), that are incurred by or imposed upon Viad or any member of the Viad Group which Viad or such Viad Group member would not otherwise have incurred.

     (b) Other Taxes. Except as otherwise provided in this Section 4.01, the party responsible for filing any Tax Return (other than federal, state or local income or franchise Tax Returns) pursuant to Section 2.02(c) hereof shall, at its own expense, have the exclusive authority to represent each member of the Viad Group and of the Newco Group before any Tax Authority or before any court with respect to any matter affecting the Tax liability of any member of either the Viad Group or the Newco Group for any Tax period beginning before the Distribution Date in each case (i) allowing representatives of the other group to participate in good faith in all respects in all such Tax proceedings affecting any member of the other group, and (ii) acting in the best interests of both the Viad Group and the Newco Group. Such representation shall include, but shall not be limited to exclusive control over (i) any response to

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any examination by a Tax Authority of such Tax Returns and (ii) any contest through a Final Determination of any issue included in any Tax Return that includes a member of the Newco Group or the Viad Group, including, but not limited to (a) whether and in what forum to conduct such contest, and (b) whether and on what basis to settle such contest; except that Viad or any member of the Viad Group shall not settle any claim, suit, action or proceeding in respect of which indemnity for such Taxes may be sought hereunder against Newco or any member of the Newco Group without Newco’s consent, which consent shall not be unreasonably withheld; and except that Newco or any member of the Newco Group shall not settle any claim, suit, action or proceeding in respect of which indemnity for such Taxes may be sought hereunder against Viad or any member of the Viad Group without Viad’s consent, which consent shall not be unreasonably withheld.

     Section 4.02 Retention of Books and Records. Newco and Viad each agree to retain and preserve in accessible and reproducible form all Tax Returns, related schedules and workpapers, and all accounting and computer records (in whatever media) and other documents relating thereto (collectively, the “Tax Documents”) existing on the date hereof or created through or with respect to taxable periods ending on or before the Distribution Date, until the later of (a) the expiration of the statute of limitations (including extensions) of the taxable years to which such Tax Returns and Tax Documents relate or (b) December 31, 2010. No Tax Documents shall be destroyed or otherwise disposed of by either Viad or Newco (or any member of their respective Groups) until the party intending to make such disposition has given the other party at least thirty (30) days’ advance notice thereof, whereupon the party receiving such notice shall have the right, at its own expense, to take possession of such Tax Documents.

     Section 4.03 Cooperation regarding Return Filings, Examinations and Controversies. (a) Newco’s Obligations. In addition to any obligations imposed pursuant to the Distribution Agreement, Newco and each other member of the Newco Group shall fully cooperate with Viad and its representatives, in a prompt and timely manner, in connection with (i) the preparation and filing of and (ii) any inquiry, audit, examination, investigation, dispute, or litigation involving any Tax Return filed or required to be filed by or for any member of the Viad Group for any taxable period beginning before the Distribution Date. Such cooperation shall include, but not be limited to, making available to Viad during normal business hours, and within thirty (30) days of any request therefor, all Tax Documents, books, records and information, and the assistance of all officers and employees, necessary or useful in connection with any Tax inquiry, audit, examination, investigation, dispute, litigation or any other matter. Newco agrees on behalf of itself and each member of the Newco Group to execute and deliver to Viad, when so requested by Viad, any power of attorney required to allow Viad and its counsel to represent Newco or such other Newco Group member in any controversy which Viad shall have the right to control pursuant to the terms of Section 4.01 of this Agreement.

     (b) Viad’s Obligation. Except as otherwise provided in this Article IV, Viad shall fully cooperate with Newco and its representatives, in a prompt and timely manner, in connection with (i) the preparation and filing of and (ii) any inquiry, audit, examination, investigation, dispute, or litigation involving, any Tax Return filed or required to be filed pursuant to Section 2.02(c) by or for any member of the Newco Group. Such cooperation shall include, but not be limited to, making available to Newco, during normal business hours, and

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within thirty (30) days of any request therefor, all books, records and information, and the assistance of all officers and employees, necessary or useful in connection with any tax inquiry, audit, examination, investigation, dispute, litigation or any other matter. Viad agrees on behalf of itself and each member of the Viad Group to execute and deliver to Newco, when so requested by Newco, any power of attorney required to allow Newco and its counsel to represent Viad or such other Viad Group member in any controversy which Newco shall have the right to control pursuant to the terms of Section 4.01(b) of this Agreement.

     Section 4.04 Survival of Agreement. This Agreement and all covenants contained herein shall survive for the applicable statute of limitations and any extensions thereof and any Final Determination applicable to all periods beginning before the Distribution Date.

     Section 4.05 Escheat. Notwithstanding any other provision of this Agreement, Viad shall have no liability in connection with, and Newco shall be responsible for and shall indemnify and hold Viad and any successor entities thereto or Affiliates thereof harmless against, any claims made on or after the Distribution Date for or with respect to abandoned, unclaimed or escheatable property, whether or not such claims arise from events or activities taken prior to, on or after the Distribution Date, to the extent such claims relate or are attributable to Newco or any Newco Business.

     Section 4.06 Confidentiality. Subject to any contrary requirement of law and the right of each party to enforce its rights hereunder in any legal action, each party agrees that it shall keep strictly confidential, and shall cause its employees and agents to keep strictly confidential, any information which it or any of its employees or agents may acquire pursuant to, or in the course of performing its obligations under, any provision of this Agreement.

ARTICLE V
SPIN-OFF

     Section 5.01 Viad Representations. (a) Ruling Documents. Viad hereby represents and warrants that (i) it has examined the Ruling Documents (including, without limitation, the representations to the extent that they relate to the plans, proposals, intentions, and policies of Viad, its Subsidiaries, the Viad Business, or the Viad Group) and (ii) to the extent in reference to Viad, its Subsidiaries, the Viad Business, or the Viad Group, the facts presented and the representations made therein are true, correct and complete.

     (b) Tax-Free Status. Viad hereby represents and warrants that it has no plan or intention of taking any action, or failing or omitting to take any action or knows of any circumstance, that could reasonably be expected to (i) cause the Reorganization not to have Tax-Free Status or (ii) cause any representation or factual statement made in this Agreement, the Distribution Agreement, the Ruling Documents, any Supplemental Ruling Documents or any of the Ancillary Agreements to be untrue in a manner that would have an adverse effect on the Tax-Free Status of the Reorganization.

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     (c) Plan or Series of Related Transactions. Viad hereby represents and warrants that, to the best knowledge of Viad and the management of the Viad Group, after due inquiry, the Reorganization is not part of a plan (or series of related transactions) pursuant to which a Person will acquire stock representing a Fifty-Percent or Greater Interest in Viad or any successor to Viad.

     Section 5.02 Newco Representations. (a) Ruling Documents. Newco hereby represents and warrants that (i) it has examined the Ruling Documents (including, without limitation, the representations to the extent that they relate to the plans, proposals, intentions, and policies of Newco, its Subsidiaries, the Newco Business, or the Newco Group) and (ii) to the extent in reference to Newco, its Subsidiaries, the Newco Business, or the Newco Group, the facts presented and the representations made therein are true, correct and complete.

     (b) Tax-Free Status. Newco hereby represents and warrants that it has no plan or intention of taking any action, or failing or omitting to take any action or knows of any circumstance, that could reasonably be expected to (i) cause the Reorganization not to have Tax-Free Status or (ii) cause any representation or factual statement made in this Agreement, the Distribution Agreement, the Ruling Documents, any Supplemental Ruling Documents or any of the Ancillary Agreements to be untrue in a manner that would have an adverse effect on the Tax-Free Status of the Reorganization.

     (c) Plan or Series of Related Transactions. Newco hereby represents and warrants that, to the best knowledge of Newco and the management of the Newco Group, after due inquiry, the Reorganization is not part of a plan (or series of related transactions) pursuant to which a Person will acquire stock representing a Fifty-Percent or Greater Interest in Newco or any successor to Newco.

     Section 5.03 Viad Covenants. (a) Actions Consistent with Representations and Covenants. Viad shall not take any action or permit any member of the Viad Group to take any action, and Viad shall not fail to take any action or permit any member of the Viad Group to fail to take any action, where such action or failure to act would be inconsistent with or cause to be untrue any material, information, covenant or representation in this Agreement, the Distribution Agreement, the Ruling Documents, any Supplemental Ruling Documents or any of the Ancillary Agreements in a manner that would have an adverse effect on the Tax-Free Status of the Reorganization.

     (b) Preservation of Tax-Free Status; Viad Business. Viad shall not (i) take any action (including, but not limited to, any cessation, transfer or disposition of all or any portion of any Viad Business; payment of extraordinary dividends to shareholders; and acquisitions or issuances of stock) or permit any member of the Viad Group to take any such action, and Viad shall not fail to take any such action or permit any member of the Viad Group to fail to take any such action and (ii) until the first day after the Restriction Period, engage in any transaction that would result in it or any member of the Viad Group ceasing to be a company engaged in any Viad Business (including, without limitation, any cessation, transfer or

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disposition of any Viad Business), in each case, where such action or failure to act would have an adverse effect on the Tax-Free Status of the Reorganization.

     (c) Sales, Issuances and Redemptions of Equity Securities. Until the first day after the Restriction Period, none of Viad or any of its Subsidiaries shall, or shall agree to, sell or otherwise issue to any Person, or redeem or otherwise acquire from any Person, any Equity Securities of Viad, directly or indirectly; provided, however, that (i) Viad and the members of the Viad Group may repurchase such Equity Securities to the extent that such repurchases meet the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30, and (ii) Viad may issue such Equity Securities to the extent such issuances satisfy Safe Harbor VI (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor VII (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7T(d).

     (d) Tender Offers; Other Business Transactions. Until the first day after the Restriction Period, none of Viad or any member of the Viad Group shall (i) solicit any Person to make a tender offer for, or otherwise acquire or sell, the Equity Securities of Viad, (ii) participate in or support any unsolicited tender offer for, or other acquisition, issuance or disposition of, the Equity Securities of Viad or (iii) approve or otherwise permit any proposed business combination or any transaction which, in the case of clauses (i), (ii) or (iii), individually or in the aggregate, together with any transaction occurring within the four-year period beginning on the date which is two years before the Distribution Date and any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Spin-Off, results in one or more Persons acquiring (except for acquisitions that otherwise satisfy Safe Harbor VI (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor VII (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7T(d)) directly or indirectly stock representing a 40% or greater interest, by vote or value, in Viad (or any successor thereto). In addition, none of Viad or any member of the Viad Group shall at any time, whether before or subsequent to the expiration of the Restriction Period, engage in any action described in clauses (i), (ii) or (iii) of the preceding sentence if it is pursuant to an arrangement negotiated (in whole or in part) prior to the first anniversary of the Spin-Off, even if at the time of the Spin-Off or thereafter such action is subject to various conditions.

     (e) Dispositions of Assets. Until the first day after the Restriction Period, none of Viad or any member of the Viad Group shall sell, transfer, or otherwise dispose of or agree to dispose of assets (including, for such purpose, any shares of capital stock of a Subsidiary and any transaction treated for tax purposes as a sale, transfer or disposition) that, in the aggregate, constitute more than 60 percent of the gross assets of Viad, nor shall Viad or any member of the Viad Group sell, transfer, or otherwise dispose of or agree to dispose of assets (including, for such purpose, any shares of capital stock of a Subsidiary and any transaction treated for tax purposes as a sale, transfer or disposition) that, in the aggregate, constitute more than 60 percent of the consolidated gross assets of the Viad Group. The foregoing sentence shall not apply to sales, transfers, or dispositions of assets in the ordinary course of business. The percentages of gross assets or consolidated gross assets of Viad or the Viad Group, as the case may be, sold, transferred, or otherwise disposed of, shall be based on the fair market value of the gross assets of Viad and the members of the Viad Group as of the Distribution Date. For

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purposes of this Section 5.03(e), a merger of Viad or one of its Subsidiaries with and into any Person shall constitute a disposition of all of the assets of Viad or such Subsidiary.

     (f) Liquidations, Mergers, Reorganizations. Until the first day after the Restriction Period, neither Viad nor any of its Material Subsidiaries shall, or shall agree to, voluntarily dissolve or liquidate or engage in any transaction involving a merger (except for a Cash Acquisition Merger), consolidation or other reorganization; provided, however, mergers of direct or indirect wholly-owned Subsidiaries of Viad solely with other direct or indirect wholly-owned Subsidiaries of Viad are not subject to this Section 5.03(f) to the extent not inconsistent with the Tax-Free Status of the Reorganization.

     Section 5.04 Newco Covenants. (a) Actions Consistent with Representations and Covenants. Newco shall not take any action or permit any member of the Newco Group to take any action, and Newco shall not fail to take any action or permit any member of the Newco Group to fail to take any action, where such action or failure to act would be inconsistent with or cause to be untrue any material, information, covenant or representation in this Agreement, the Distribution Agreement, the Ruling Documents, any Supplemental Ruling Documents or any of the Ancillary Agreements in a manner that would have an adverse effect on the Tax-Free Status of the Reorganization.

     (b) Preservation of Tax-Free Status; Newco Business. Newco shall not (i) take any action (including, but not limited to, any cessation, transfer or disposition of all or any portion of any Newco Business; payment of extraordinary dividends to shareholders; and acquisitions or issuances of stock) or permit any member of the Newco Group to take any such action, and Newco shall not fail to take any such action or permit any member of the Newco Group to fail to take any such action and (ii) until the first day after the Restriction Period, engage in any transaction that would result in it or any member of the Newco Group ceasing to be a company engaged in any Newco Business (including, without limitation, any cessation, transfer or disposition of any Newco Business), in each case, where such action or failure to act would have an adverse effect on the Tax-Free Status of the Reorganization.

     (c) Sales, Issuances and Redemptions of Equity Securities. Until the first day after the Restriction Period, none of Newco or any of its Subsidiaries shall, or shall agree to, sell or otherwise issue to any Person, or redeem or otherwise acquire from any Person, any Equity Securities of Newco, directly or indirectly; provided, however, that (i) the adoption by Newco of a shareholder rights plan shall not constitute a sale or issuance of such Equity Securities, (ii) Newco and the members of the Newco Group may repurchase such Equity Securities to the extent that such repurchases meet the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30, and (iii) Newco may issue such Equity Securities to the extent such issuances satisfy Safe Harbor VI (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor VII (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7T(d).

     (d) Tender Offers; Other Business Transactions. Until the first day after the Restriction Period, none of Newco or any member of the Newco Group shall (i) solicit any

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Person to make a tender offer for, or otherwise acquire or sell, the Equity Securities of Newco, (ii) participate in or support any unsolicited tender offer for, or other acquisition, issuance or disposition of, the Equity Securities of Newco or (iii) approve or otherwise permit any proposed business combination or any transaction which, in the case of clauses (i), (ii) or (iii), individually or in the aggregate, together with any transaction occurring within the four-year period beginning on the date which is two years before the Distribution Date and any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Spin-Off, results in one or more Persons acquiring (except for acquisitions that otherwise satisfy Safe Harbor VI (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor VII (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7T(d)) directly or indirectly stock representing a 40% or greater interest, by vote or value, in Newco (or any successor thereto). In addition, none of Newco or any member of the Newco Group shall at any time, whether before or subsequent to the expiration of the Restriction Period, engage in any action described in clauses (i), (ii) or (iii) of the preceding sentence if it is pursuant to an arrangement negotiated (in whole or in part) prior to the first anniversary of the Spin-Off, even if at the time of the Spin-Off or thereafter such action is subject to various conditions.

     (e) Dispositions of Assets. Until the first day after the Restriction Period, none of Newco or any member of the Newco Group shall sell, transfer, or otherwise dispose of or agree to dispose of assets (including, for such purpose, any shares of capital stock of a Subsidiary and any transaction treated for tax purposes as a sale, transfer or disposition) that, in the aggregate, constitute more than 60 percent of the gross assets of Newco, nor shall Newco or any member of the Newco Group sell, transfer, or otherwise dispose of or agree to dispose of assets (including, for such purpose, any shares of capital stock of a Subsidiary and any transaction treated for tax purposes as a sale, transfer or disposition) that, in the aggregate, constitute more than 60 percent of the consolidated gross assets of the Newco Group. The foregoing sentence shall not apply to sales, transfers, or dispositions of assets in the ordinary course of business. The percentages of gross assets or consolidated gross assets of Newco or the Newco Group, as the case may be, sold, transferred, or otherwise disposed of, shall be based on the fair market value of the gross assets of Newco and the members of the Newco Group as of the Distribution Date. For purposes of this Section 5.04(e), a merger of Newco or one of its Subsidiaries with and into any Person shall constitute a disposition of all of the assets of Newco or such Subsidiary.

     (f) Liquidations, Mergers, Reorganizations. Until the first day after the Restriction Period, neither Newco nor any of its Material Subsidiaries shall, or shall agree to, voluntarily dissolve or liquidate or engage in any transaction involving a merger (except for a Cash Acquisition Merger), consolidation or other reorganization; provided, however, mergers of direct or indirect wholly-owned Subsidiaries of Newco solely with other direct or indirect wholly-owned Subsidiaries of Newco are not subject to this Section 5.04(f) to the extent not inconsistent with the Tax-Free Status of the Reorganization.

     Section 5.05 Viad Permitted Transactions. (a) Notwithstanding the restrictions otherwise imposed by Sections 5.03(c) through 5.03(f), during the Restriction Period, Viad may (i) approve, participate in, support or otherwise permit a proposed business combination or

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transaction that would otherwise breach the covenant set forth in Section 5.03(d), (ii) sell or otherwise dispose of the assets of Viad or any member of the Viad Group in a transaction that would otherwise breach the covenant set forth in Section 5.03(e), (iii) merge Viad or any member of the Viad Group with another entity without regard to which party is the surviving entity in a transaction that would otherwise breach the covenant set forth in Section 5.03(f) or (iv) issue, sell, redeem or otherwise acquire (or cause a member of the Viad Group to issue, sell, redeem or otherwise acquire) Equity Securities of Viad in a transaction that would otherwise breach the covenant set forth in Section 5.03(c), if and only if such transaction would not violate Section 5.03(a) or Section 5.03(b) and one of the following Sections 5.05(b), 5.05(c) or 5.05(d) is satisfied.

     (b) Supplemental Ruling. Prior to entering into any agreement contemplating a transaction described in clauses (i), (ii), (iii) or (iv) of Section 5.05(a) and prior to consummating any such transaction, Viad shall request a Supplemental Ruling in accordance with Section 5.7(a) of this Agreement to the effect that such transaction will not affect the Tax-Free Status of the Reorganization and Viad shall have received such a Supplemental Ruling in form and substance satisfactory to Newco in its sole and absolute discretion.

     (c) Tax Opinion. Prior to entering into any agreement contemplating a transaction described in clause (iv) (including transactions described in clause (iii) and (iv)) of Section 5.05(a) (expressly excluding for this purpose transactions described in clause (ii) of Section 5.05(a)) and prior to consummating any such transaction, the following conditions are satisfied: (i) following the transaction at issue, one or more Persons will not have acquired, and will not have the right to acquire, directly or indirectly, 40% or greater (by vote or value) of the outstanding Equity Securities of Viad (determined immediately following such transaction) taking into account all relevant issuances, redemptions or other acquisitions of (and agreements to issue, redeem or otherwise acquire) Equity Securities (and assuming the exercise or conversion of all such Equity Securities (if such Equity Securities are options or warrants or similar exercisable or convertible securities) and the closing of all such agreements) from the point in time two years prior to the Spin-Off to the date immediately following such transaction and pursuant to any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Spin-Off, (ii) Viad will be the surviving entity if such transaction is a merger (and the transaction is not a reverse subsidiary merger in which Viad is the surviving entity) and (iii) prior to entering into any agreement contemplating a transaction described in clause (iv) (including transactions described in clause (iii) and (iv)) of Section 5.05(a) and prior to consummating any such transaction, Viad shall provide Newco with an Unqualified Tax Opinion in form and substance acceptable to Newco in its sole and absolute discretion (and in determining whether an opinion is acceptable, Newco may consider, among other factors, the appropriateness of any underlying assumptions and management’s representations if used as a basis for the opinion).

     (d) Board Certification. Prior to entering into any agreement contemplating a transaction described in clause (iv) (including transactions described in clause (iii) and (iv)) of Section 5.05(a) (expressly excluding for this purpose transactions described in clause (ii) of Section 5.05(a)) and prior to consummating any such transaction, the following conditions are satisfied: (i) following the transaction at issue, one or more Persons will not have acquired, and

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will not have the right to acquire, directly or indirectly, more than 25% (by vote or value) of the outstanding Equity Securities of Viad (determined immediately following such transaction) taking into account all relevant issuances, redemptions or other acquisitions of (and agreements to issue, redeem or otherwise acquire) Equity Securities (and assuming the exercise or conversion of all such Equity Securities (if such Equity Securities are options or warrants or similar exercisable or convertible securities) and the closing of all such agreements) from the point in time two years prior to the Spin-Off to the date immediately following such transaction and pursuant to any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Spin-Off, (ii) Viad will be the surviving entity if such transaction is a merger (and the transaction is not a reverse subsidiary merger in which Viad is the surviving entity) and (iii) prior to entering into any agreement contemplating a transaction described in clause (iv) (including transactions described in clause (iii) and (iv)) of Section 5.05(a) and prior to consummating any such transaction, Viad delivers to Newco a Viad Board Certification.

     Section 5.06 Newco Permitted Transactions. (a) Notwithstanding the restrictions otherwise imposed by Sections 5.04(c) through 5.04(f), during the Restriction Period, Newco may (i) approve, participate in, support or otherwise permit a proposed business combination or transaction that would otherwise breach the covenant set forth in Section 5.04(d), (ii) sell or otherwise dispose of the assets of Newco or any member of the Newco Group in a transaction that would otherwise breach the covenant set forth in Section 5.04(e), (iii) merge Newco or any member of the Newco Group with another entity without regard to which party is the surviving entity in a transaction that would otherwise breach the covenant set forth in Section 5.04(f) or (iv) issue, sell, redeem or otherwise acquire (or cause a member of the Newco Group to issue, sell, redeem or otherwise acquire) Equity Securities of Newco in a transaction that would otherwise breach the covenant set forth in Section 5.04(c), if and only if such transaction would not violate Section 5.04(a) or Section 5.04(b) and one of the following Sections 5.06(b), 5.06(c) or 5.06(d) is satisfied.

     (b) Supplemental Ruling. Prior to entering into any agreement contemplating a transaction described in clauses (i), (ii), (iii) or (iv) of Section 5.06(a) and prior to consummating any such transaction, Newco shall request that Viad obtain a Supplemental Ruling in accordance with Section 5.7(b) of this Agreement to the effect that such transaction will not affect the Tax-Free Status of the Reorganization and Viad shall have received such a Supplemental Ruling in form and substance satisfactory to Viad in its sole and absolute discretion.

     (c) Tax Opinion. Prior to entering into any agreement contemplating a transaction described in clause (iv) (including transactions described in clause (iii) and (iv)) of Section 5.06(a) (expressly excluding for this purpose transactions described in clause (ii) of Section 5.06(a)) and prior to consummating any such transaction, the following conditions are satisfied: (i) following the transaction at issue, one or more Persons will not have acquired, and will not have the right to acquire, directly or indirectly, 40% or greater (by vote or value) of the outstanding Equity Securities of Newco (determined immediately following such transaction) taking into account all relevant issuances, redemptions or other acquisitions of (and agreements to issue, redeem or otherwise acquire) Equity Securities (and assuming the exercise or

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conversion of all such Equity Securities (if such Equity Securities are options or warrants or similar exercisable or convertible securities) and the closing of all such agreements) from the point in time two years prior to the Spin-Off to the date immediately following such transaction and pursuant to any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Spin-Off, (ii) Newco will be the surviving entity if such transaction is a merger (and the transaction is not a reverse subsidiary merger in which Newco is the surviving entity) and (iii) prior to entering into any agreement contemplating a transaction described in clause (iv) (including transactions described in clause (iii) and (iv)) of Section 5.06(a) and prior to consummating any such transaction, Newco shall provide Viad with an Unqualified Tax Opinion in form and substance acceptable to Viad in its sole and absolute discretion (and in determining whether an opinion is acceptable, Viad may consider, among other factors, the appropriateness of any underlying assumptions and management’s representations if used as a basis for the opinion).

     (d) Board Certification. Prior to entering into any agreement contemplating a transaction described in clause (iv) (including transactions described in clause (iii) and (iv)) of Section 5.06(a) (expressly excluding for this purpose transactions described in clause (ii) of Section 5.06 (a)) and prior to consummating any such transaction, the following conditions are satisfied: (i) following the transaction at issue, one or more Persons will not have acquired, and will not have the right to acquire, directly or indirectly, more than 25% (by vote or value) of the outstanding Equity Securities of Newco (determined immediately following such transaction) taking into account all relevant issuances, redemptions or other acquisitions of (and agreements to issue, redeem or otherwise acquire) Equity Securities (and assuming the exercise or conversion of all such Equity Securities (if such Equity Securities are options or warrants or similar exercisable or convertible securities) and the closing of all such agreements) from the point in time two years prior to the Spin-Off to the date immediately following such transaction and pursuant to any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Spin-Off, (ii) Newco will be the surviving entity if such transaction is a merger (and the transaction is not a reverse subsidiary merger in which Newco is the surviving entity) and (iii) prior to entering into any agreement contemplating a transaction described in clause (iv) (including transactions described in clause (iii) and (iv)) of Section 5.06(a) and prior to consummating any such transaction, Newco delivers to Viad a Newco Board Certification.

     Section 5.07 Supplemental Rulings and Restrictions on Newco. (a) Supplemental Ruling at Viad’s Request. Viad shall have the right to obtain a Supplemental Ruling in its sole and absolute discretion. If Viad determines to obtain a Supplemental Ruling, Newco shall (and shall cause each member of the Newco Group to) cooperate with Viad and take any and all actions reasonably requested by Viad in connection with obtaining the Supplemental Ruling (including, without limitation, by making any representation or covenant or providing any materials or information requested by any Tax Authority; provided that Newco shall not be required to make (or cause any member of the Newco Group to make) any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control). Viad shall reimburse Newco for all reasonable costs and expenses incurred by the Newco Group in obtaining a Supplemental Ruling requested by Viad within 10 Business Days after receiving an invoice from Newco therefor. In connection with obtaining a

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Supplemental Ruling pursuant to this Section 5.07(a), (i) Viad shall keep Newco informed in a timely manner of all material actions taken or proposed to be taken by Viad in connection therewith; (ii) Viad shall (x) reasonably in advance of the submission of any Ruling Documents or Supplemental Ruling Documents, provide Newco with a draft copy thereof, (y) reasonably consider Newco’s comments on such draft copy, and (z) provide Newco with a final copy; and (iii) Viad shall provide Newco with notice reasonably in advance of, and Newco shall have the right to attend, any formally scheduled meetings with any Tax Authority (subject to the approval of the Tax Authority) that relate to such Supplemental Ruling.

     (b) Supplemental Rulings at Newco’s Request. Viad agrees that at the reasonable request of Newco pursuant to Section 5.06(b), Viad shall (and shall cause each member of the Viad Group to) cooperate with Newco and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a Supplemental Ruling from the IRS and/or any other applicable Tax Authority for the purpose of confirming compliance on the part of Newco or any member of the Newco Group with its obligations under Section 5.04 of this Agreement. Further, in no event shall Viad be required to file any Supplemental Ruling under this Section 5.07(b) unless Newco represents that (i) it has read the request for the Supplemental Ruling and any materials, appendices and exhibits submitted or filed therewith, and (ii) all information and representations, if any, relating to any member of the Newco Group, contained in the Supplemental Ruling Documents are true, correct and complete in all material respects. Newco shall reimburse Viad for all reasonable costs and expenses incurred by the Viad Group in obtaining a Supplemental Ruling requested by Newco within ten (10) Business Days after receiving an invoice from Viad therefor. Newco hereby agrees that Viad shall have sole and exclusive control over the process of obtaining a Supplemental Ruling, and that only Viad shall apply for a Supplemental Ruling. In connection with obtaining a Supplemental Ruling pursuant to this Section 5.07(b), (i) Viad shall keep Newco informed in a timely manner of all material actions taken or proposed to be taken by Viad in connection therewith; (ii) Viad shall (x) reasonably in advance of the submission of any Ruling Documents or Supplemental Ruling Documents, provide Newco with a draft copy thereof, (y) reasonably consider Newco’s comments on such draft copy, and (z) provide Newco with a final copy; and (iii) Viad shall provide Newco with notice reasonably in advance of, and Newco shall have the right to attend, any formally scheduled meetings with any Tax Authority (subject to the approval of the Tax Authority) that relate to such Supplemental Ruling.

     (c) Prohibition on Newco. Newco hereby agrees that neither it nor any member of the Newco Group shall seek any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) concerning the Reorganization (or the impact of any transaction on the Reorganization).

     Section 5.08 Viad Liability for Undertaking Certain Actions. Notwithstanding anything in this Agreement to the contrary, Viad and each member of the Viad Group shall be responsible for one hundred percent (100%) of any and all Tax-Related Losses that are attributable to, or result from: (a) any act or failure to act by Viad or any member of the Viad Group, which action or failure to act breaches any of the covenants described in Section 5.03 of this Agreement (without regard to the exceptions or provisos set forth in such provisions), expressly including, for this purpose, any Permitted Transaction and any act or failure to act that

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breaches Section 5.03(a) or 5.03(b), regardless of whether such act or failure to act is permitted by Section 5.03(c) through 5.03(f); (b) any acquisition of Equity Securities of Viad or any member of the Viad Group by any Person or Persons (including, without limitation, as a result of an issuance of Viad Equity Securities or a merger of another entity with and into Viad or any member of the Viad Group) or any acquisition of assets of Viad or any member of the Viad Group (including, without limitation, as a result of a merger) by any Person or Persons; and (c) any Tax Authority withdrawing all or any portion of the Ruling or any Supplemental Ruling issued to Viad in connection with the Reorganization because of a breach by Viad or any member of the Viad Group of a representation made in this Agreement (or made in connection with the Ruling or any Supplemental Ruling).

     Section 5.09 Newco Liability for Undertaking Certain Actions. Notwithstanding anything in this Agreement to the contrary, Newco and each member of the Newco Group shall be responsible for one hundred percent (100%) of any and all Tax-Related Losses that are attributable to, or result from: (a) any act or failure to act by Newco or any member of the Newco Group, which action or failure to act breaches any of the covenants described in Section 5.04 of this Agreement (without regard to the exceptions or provisos set forth in such provisions), expressly including, for this purpose, any Permitted Transaction and any act or failure to act that breaches Section 5.04(a) or 5.04(b), regardless of whether such act or failure to act is permitted by Section 5.04(c) through 5.04(f); (b) any acquisition of Equity Securities of Newco or any member of the Newco Group by any Person or Persons (including, without limitation, as a result of an issuance of Newco Equity Securities or a merger of another entity with and into Newco or any member of the Newco Group) or any acquisition of assets of Newco or any member of the Newco Group (including, without limitation, as a result of a merger) by any Person or Persons; and (c) any Tax Authority withdrawing all or any portion of the Ruling or any Supplemental Ruling issued to Viad in connection with the Reorganization because of a breach by Newco or any member of the Newco Group of a representation made in this Agreement (or made in connection with the Ruling or any Supplemental Ruling).

     Section 5.10 Cooperation. (a) Without limiting the prohibition set forth in Section 5.07(c), until the first day after the Restriction Period, Newco shall furnish Viad with a copy of any ruling request that any member of the Newco Group may file with the IRS or any other Tax Authority and any opinion received that in any respect relates to, or otherwise reasonably could be expected to have any effect on, the Tax-Free Status of the Reorganization. Until the first day after the Restriction Period, Viad shall furnish Newco with a copy of any ruling request that any member of the Viad Group may file with the IRS or any other Tax Authority and any opinion received that in any respect relates to, or otherwise reasonably could be expected to have any effect on, the Tax-Free Status of the Reorganization.

     (b) Viad shall reasonably cooperate with Newco in connection with any request by Newco for an Unqualified Tax Opinion pursuant to Section 5.06(c), and Newco shall reasonably cooperate with Viad in connection with any request by Viad for an Unqualified Tax Opinion pursuant to Section 5.05(c).

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     (c) Until the first day after the Restriction Period, (i) Newco will provide adequate advance notice to Viad in accordance with the terms of Section 5.10(d) of any action described in Sections 5.04(a) through 5.04(f) within a period of time sufficient to enable Viad to seek injunctive relief pursuant to 5.11 in a court of competent jurisdiction, and (ii) Viad will provide adequate advance notice to Newco in accordance with the terms of Section 5.10(d) of any action described in Sections 5.03(a) through 5.03(f) within a period of time sufficient to enable Newco to seek injunctive relief pursuant to 5.11 in a court of competent jurisdiction.

     (d) Each notice required by Section 5.10(c)(i) shall set forth the terms and conditions of any such proposed transaction, including, without limitation, (i) the nature of any related action proposed to be taken by the board of directors of Newco, (ii) the approximate number of Equity Securities of Newco or any member of the Newco Group (if any) proposed to be sold or otherwise issued, (iii) the approximate value of Newco’s assets (or assets of any member of the Newco Group) proposed to be transferred, and (iv) the proposed timetable for such transaction, all with sufficient particularity to enable Viad to seek such injunctive relief. Promptly, but in any event within 30 days, after Viad receives such written notice from Newco, Viad shall notify Newco in writing of Viad’s decision to seek injunctive relief pursuant to Section 5.11. Each notice required by Section 5.10(c)(ii) shall set forth the terms and conditions of any such proposed transaction, including, without limitation, (i) the nature of any related action proposed to be taken by the board of directors of Viad, (ii) the approximate number of Equity Securities of Viad or any member of the Viad Group (if any) proposed to be sold or otherwise issued, (iii) the approximate value of Viad’s assets (or assets of any member of the Viad Group) proposed to be transferred, and (iv) the proposed timetable for such transaction, all with sufficient particularity to enable Newco to seek such injunctive relief. Promptly, but in any event within 30 days, after Newco receives such written notice from Viad, Newco shall notify Viad in writing of Newco’s decision to seek injunctive relief pursuant to Section 5.11.

     (e) From and after the date Viad first requests a Supplemental Ruling pursuant to Section 5.07 until the first day after the two-year anniversary of the date that Viad receives such Supplemental Ruling (pursuant to Section 5.07(a) or 5.07(b)), (i) neither Newco nor any member of the Newco Group shall take (or refrain from taking) any action to the extent that such action or inaction would have caused a representation given by Newco in connection with any such request for a Supplemental Ruling to have been untrue as of the relevant representation date, had Newco or any member of the Newco Group intended to take (or refrain from taking) such action on the relevant representation date and (ii) neither Viad nor any member of the Viad Group shall take (or refrain from taking) any action to the extent that such action or inaction would have caused a representation given by Viad in connection with any such request for a Supplemental Ruling to have been untrue as of the relevant representation date, had Viad or any member of the Viad Group intended to take (or refrain from taking) such action on the relevant representation date.

     Section 5.11 Enforcement. The parties hereto acknowledge that irreparable harm would occur in the event that any of the provisions of this Article V were not performed in accordance with their specific terms or were otherwise breached. The parties hereto agree that, in order to preserve the Tax-Free Status of the Reorganization, injunctive relief is appropriate to

Page 26


 

prevent any violation of the foregoing covenants; provided, however, that injunctive relief shall not be the exclusive legal or equitable remedy for any such violation.

ARTICLE VI
MISCELLANEOUS

     Section 6.01 Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable, the enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

     Section 6.02 Modification of Agreement. No modification, amendment or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by each of the parties hereto and then such modification, amendment or waiver shall be effective only in the specific instance and for the purpose for which given.

     Section 6.03 Conflict with the Distribution Agreement. Anything in this Agreement or the Distribution Agreement to the contrary notwithstanding, to the extent that there shall be a conflict between the provisions of this Agreement and the Distribution Agreement, the provisions of this Agreement shall control.

     Section 6.04 Notices. All notices or other communications required or permitted under this Agreement shall be delivered by hand, mailed by certified or registered mail, postage prepaid and return receipt requested, or sent by cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice) and shall be deemed given on the date on which such notice is received:

         
(b)   In the case of Viad, to:
      Viad Corp
      Viad Tower
      Phoenix, Arizona 85077-0949
      Attention: Executive Director – Taxes
 
       
    With a copy to:
      Viad Corp
      Viad Tower
      Phoenix, Arizona 85077
      Attention: Vice President and General Counsel
 
       
(c)   In the case of Newco, to:
      MoneyGram International, Inc.
      1550 Utica Avenue South
      Minneapolis, Minnesota 55416-5301
      Attention: Vice President – Taxes

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    With a copy to:
      MoneyGram International, Inc.
      1550 Utica Avenue South
      Minneapolis, Minnesota 55416-5301
      Attention: General Counsel

     Section 6.05 Application to Present and Future Subsidiaries. This Agreement is being entered into by Viad and Newco on behalf of themselves and each member of the Viad Group and the Newco Group, respectively. This Agreement shall constitute a direct obligation of each such member and shall be deemed to have been readopted and affirmed on behalf of any corporation which becomes a member of the Viad Group or the Newco Group in the future. Viad and Newco hereby guarantee the performance of all actions, agreements and obligations provided for under this Agreement of each member of the Viad Group and the Newco Group, respectively. Viad and Newco shall, upon the written request of the other, cause any of their respective group members formally to execute this Agreement. This Agreement shall be binding upon, and shall inure to the benefit of, the successors, assigns and persons controlling any of the corporations bound hereby.

     Section 6.06 Term. This Agreement shall commence on the date of execution indicated above and shall continue in effect until otherwise agreed to in writing by Viad and Newco, or their successors.

     Section 6.07 Titles and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part or to affect the meaning or interpretation of this Agreement.

     Section 6.08 Singular and Plural. As used herein for all purposes throughout this Agreement, the singular shall include the plural and vice versa.

     Section 6.09 Governing Law. This Agreement shall be governed by the laws of the State of Delaware.

     Section 6.10 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become a binding agreement when one or more counterparts have been signed by each party and delivered to the other parties.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, all on the day and year first above written.

             
    VIAD CORP,
a Delaware corporation
 
           
  By:  
 
      Name:    
 
      Title:    
 
           
    MONEYGRAM INTERNATIONAL, INC.,
a Delaware corporation
 
           
  By:  
 
      Name:    
 
      Title:    

Page 29

FORM OF INTERIM SERVICES AGREEMENT
 

Exhibit 10.3

INTERIM SERVICES AGREEMENT

     This Interim Services Agreement is made as of the    day of    , 2004, between Viad Corp, a Delaware corporation (“Viad”) and MoneyGram International, Inc., a Delaware corporation (“MoneyGram”), wherein it is agreed:

1. Purposes.

     1.1 The Board of Directors of Viad has determined that it is in the best interest of Viad to separate Viad’s existing businesses into two independent businesses, the convention and event services business and the payment services business.

     1.2 In order to effectuate the foregoing, Viad, MoneyGram and Travelers Express Company, Inc., a Minnesota corporation (“TECI”) and MGI Merger Sub, Inc. have entered into a Separation and Distribution Agreement, dated as of the date hereof (the “Separation and Distribution Agreement”), pursuant to which, and on the terms and subject to the conditions set forth therein, among other things (1) MGI Merger Sub, Inc., a wholly owned subsidiary of MoneyGram, will merge with and into TECI with TECI as the surviving corporation, and as a result of that merger, all outstanding shares of capital stock of TECI being cancelled and TECI becoming a wholly owned subsidiary of MoneyGram and (2) following the merger, Viad will distribute to the holders of Viad Common Stock, the issued and outstanding shares of MoneyGram Common Stock then owned directly or indirectly by Viad (the “Distribution”).

     1.3 Prior to the Distribution Date, Viad or its subsidiaries provided certain services to TECI and its subsidiaries, and also received certain services from TECI and its subsidiaries.

     1.4 After the Distribution Date, MoneyGram will require for a limited period of time that Viad or its subsidiaries continue providing certain services to MoneyGram and its subsidiaries until MoneyGram and its subsidiaries are able to otherwise contract or arrange for such services.

     1.5 After the Distribution Date, Viad will require for a limited period of time that MoneyGram and its subsidiaries continue providing certain services to Viad and its subsidiaries until Viad and its subsidiaries are able to otherwise contract or arrange for such services.

     1.6 All capitalized terms not defined herein shall have the meaning ascribed thereto in the Separation and Distribution Agreement.

2. Term.

     2.1 Subject to the provisions of Section 5 hereof and the following sentence, this agreement, including the Schedules hereto (the “Agreement”), shall be effective on the Distribution Date and shall continue until the earlier of (a) two years following the Distribution Date, and (b) termination of all Services (as herein defined) pursuant to Section 5 hereof (“Term”). Viad’s provision of those Services listed on Schedule 2 (the “Schedule 2 Services”) may not be terminated by MoneyGram earlier than the expiration of the two-year Term, without the prior written consent of Viad (which may be granted or withheld at the sole discretion of Viad).

 


 

3. Agreement to Perform Selected Services.

     3.1 On the terms and subject to the conditions hereof, Viad and MoneyGram hereby agree that Viad shall offer and provide to MoneyGram and its subsidiaries during the Term those services described on Schedule 1 and 2 hereto, and MoneyGram shall offer and provide to Viad and its subsidiaries during the Term the services described on Schedule 3 hereto (collectively, the “Services”). Such Services are grouped by subject matter on Schedules 1 and 3 and each such grouping, as identified by its associated annual cost, shall be referred to herein as a “Category” or “Subcategory” as the case may be . The Schedule 2 Services are grouped by subject matter with a total cost shown for all such services. The annual cost for any Category of Service or Schedule 2 Services may be increased (at a rate not to exceed ten percent (10%) per year) based on documented changes in the cost to provide such service. Such cost adjustment will be effective upon thirty (30) days notice to the party receiving the service. Services heretofore provided to the other by Viad or, its subsidiaries or MoneyGram, or its subsidiaries, as the case may be, shall be provided on a basis consistent with prior practice. Services to be provided hereunder that were not heretofore provided by Viad or MoneyGram, as the case may be, shall be provided on a reasonably timely basis. Charges for Services shall be as set forth in Section 4 hereof.

     3.2 The Services to be provided hereunder shall include those Services provided by Viad or its subsidiaries to MoneyGram and its subsidiaries, or provided by MoneyGram to Viad and its subsidiaries, on the Distribution Date or at any time during the calendar year immediately preceding the Distribution Date, in each case as described on Schedule 1, 2 and 3 hereto, respectively. If Viad or MoneyGram, as the case may be, desires to obtain any services not listed on the Schedules, it shall notify the other in writing of those Services it desires to use. The party receiving such notice may, at its discretion, elect to provide or decline to provide such service. Said party shall promptly notify the other party of its decision and, if the decision is to provide the service, the annual cost of providing such service.

     3.3 The parties shall retain the discretion to reasonably allocate the time, place and manner of the performance of the Services by their respective employees consistent with their past practices and procedures for allocating employee resources prior to the Distribution Date. A party shall not be required to provide a Service that that party has ceased to provide to itself. With respect to the National Vendor Contracts set forth on Schedule 2, the parties understand and agree that each is responsible for the payment of its portion of the service fees charged by a given vendor in the course of providing the services described under the applicable National Vendor Contract. Notwithstanding anything to the contrary contained in this Agreement, MoneyGram hereby indemnifies Viad from any costs, claims, losses or damages arising out of the acts or omissions of MoneyGram, including but not limited to MoneyGram’s failure to timely pay its portion of the service fees or MoneyGram’s decreasing its volume levels from current levels under or related to any or all of the National Vendor Contracts. Viad agrees to indemnify MoneyGram where MoneyGram is the principal party of record under a National Vendor Contract from any costs, claims, losses or damages arising out of the acts or omissions of Viad in-

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cluding but not limited to Viad’s failure to timely pay its portion of the service fees or Viad’s decreasing its volume levels from current levels under or related to any or all of the National Vendor Contracts. The foregoing indemnifications exclude any liability for lost profits or other incidental, special or consequential damages. Neither party can guarantee that any given National Vendor Contract will continue in effect for the two-year period on Schedule 2 and each party hereby releases the other from any loss or liability in connection with the termination of any given National Vendor Contract prior to such two-year period. The parties agree that where one is a party of record under a National Vendor Contract, it shall enforce the contract for the benefit of the other and that the other party shall have the right to participate in any negotiations for amendments or extensions of such contracts. The terms and conditions of this Section 3.3 shall continue to apply to those National Vendor Contracts listed on Schedule 2 for the term provided in each such contract. Nothing in this Agreement shall be construed to require that any Service be performed by any specific employee of either party. In no event shall the “Services” hereunder be construed so as to obligate either party to engage in the practice of law within the meaning of any applicable law, nor to render any services to the extent doing so would violate any applicable law or contract.

4. Charges for Services; Payment.

     4.1 It is understood and agreed that the annual cost for Services as reflected on the Schedules was determined and allocated hereunder according to methods consistent with past practices and procedures observed by Viad and its subsidiaries concerning intercompany services and accounts.

     4.2 MoneyGram shall, as of the Distribution Date, pay to the other for the provision of Services, the initial monthly amount of one-twelfth of the annual cost set forth for all services listed on the Schedules. For example, under Category of Service I of Schedule 1, “Taxation”, MoneyGram would pay to Viad on the Distribution Date one-twelfth of $290,000 or $24,167 and so forth for each Category or Subcategory on Schedules 1 and the Schedule 2 Services. MoneyGram shall continue in such fashion to pay one-twelfth of the annual cost for each Category of Service on Schedules 1 and 2 on or before the first of the month (or the next business day if the first of the month is a Saturday, Sunday or national holiday) thereafter for the duration of this Agreement or until MoneyGram terminates a Category or Subcategory pursuant to Section 5, hereto, and subject to the limitation on termination of Schedule 2.

     4.3 MoneyGram or Viad, as the case may be, shall reimburse the other for reasonable travel and business expenses incurred in connection with the performance hereunder upon presentation of supporting documentation of such expenses to the party on whose behalf the expense was incurred.

     4.4 Nothing in this Agreement shall be construed to require that either party engage any legal counsel, actuarial firm, consultant or other outside advisor or service provider on behalf of the other party. If it becomes necessary that any such outside advisor or service provider be engaged by a party in connection with the provision of Services under Schedule 1, the costs of such outside advisor or service provider shall be in addition to

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the cost for Services set forth on the Schedules, except as otherwise expressly provided herein.

5. Reductions in Services; Termination.

     The parties recognize that during the Term hereof the requirements of each party for certain Services will decrease (with the exception of the Schedule 2 Services, which shall be for a term of two years) and that each party intends to phase out any Services when no longer required. Accordingly, at any time after the expiration of one year from the Distribution Date, except for the Schedule 2 Services, either party hereto may request termination of any Category or Subcategory as to which a separate charge is stated by giving the other party not less than 90 days’ advance notice in writing of any anticipated termination of any Services and, to the extent practicable, the parties will agree to an orderly reduction or phase-out of such Services. Notwithstanding anything to the contrary set forth herein, the termination or discontinuance by MoneyGram of Category VII on Schedule 1 or any Subcategory of Category VII, the Internal Audit Function, must first be approved by the MoneyGram Board of Directors. Once a Category Subcategory is discontinued, Viad or MoneyGram, as the case may be, shall not be obligated to later reinstate such Category of Service.

     Following the termination or discontinuance of any Category or Subcategory or a Schedule 2 Service as provided herein, to the extent either party is thereafter requested to provide any terminated or discontinued Service, including any transition-related assistance necessary for any other organization to perform the terminated or discontinued Service, and the applicable party hereto consents to perform such Service, the party performing such Service shall be entitled to compensation reflecting incurred costs.

6. Mutual Covenants.

     Viad and MoneyGram agree that the charges for Services hereunder are and shall be determined in a fair and equitable manner consistent with past practices and procedures of Viad in determining charges for similar services prior to the Distribution Date. Each party agrees to maintain the confidentiality of information received by it in the course of the performance of this Agreement, subject to such disclosure required by law.

6A. Cooperation.

     During the Term hereof, the parties agree to make good faith efforts to cooperate with respect to negotiating future vendor contracts similar to the National Vendor Contracts listed on Schedule 2. The parties agree to give each other notice of potential vendor contracts and engage in reasonable efforts to involve the other party in such negotiations to obtain pricing discounts for volume purchases. Neither party shall be required to take any action pursuant to this provision which would cause a detriment to the party’s business.

7. Force Majeure.

     If either party is unable to perform any of its duties or fulfill any of its covenants or obligations hereunder as a result of causes beyond its control and without its fault or negligence, in-

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cluding but not limited to acts of God or government, fire, flood, war, governmental controls, and labor strife, then such party shall not be deemed to be in default hereof during the continuance of such events which rendered it unable to perform, such party shall have such additional time thereafter as is reasonably necessary to enable it to resume performance of its duties and obligations hereunder; and the party entitled to such Service shall not be required to pay the other party for any Service to the extent that such other party is unable to perform.

8. Severability.

     The invalidity of any provision hereof as determined by a court of competent jurisdiction in no way shall affect the validity of any other provision hereof. If a provision is determined to be invalid, the parties hereto shall negotiate in good faith in an effort to agree upon a suitable and equitable alternative provision to effect the original intent of the parties hereto.

9. Time of the Essence.

     The parties hereto agree that with respect to the performance of all terms and covenants hereof and satisfaction of all conditions herein, time is of the essence.

10. Captions.

     Section captions are not a part hereof and are merely for the convenience of the parties hereto.

11. Binding Effect; Choice of Law.

     This Agreement shall be binding on and inure to the benefit of the parties hereto, their successors and assigns. This Agreement shall be governed by the laws of the State of Delaware applicable to contracts made and wholly-performed within such state, without reference to the conflict or choice of law provisions thereof.

12. Assignment.

     Neither party hereto shall assign or subcontract this Agreement or any Services to be provided hereunder without the prior written consent of the other, which consent shall not be withheld unreasonably; provided, however, that in the event that Viad or MoneyGram, as the case may be, does not consent for any reason to the assignment or subcontract of a Service to a third party, then the other party shall not assign or subcontract such Service to such third party for a period of 90 days from the date of such requested consent, but after the expiration of such 90-day period, Viad or MoneyGram, as the case may be, may assign or subcontract such Service to such party. Notwithstanding the foregoing, consent shall not be required for an assignment or subcontract of any Service provided hereunder by either party to a corporate affiliate of such party or to any third party vendor or third party recordkeeper who had been providing all or a material portion of the Services to or on behalf of Viad or MoneyGram, as the case may be, prior to the Distribution Date nor shall consent be required if one party elects to assign or subcontract a Service pursuant to an internal decision to outsource that Service for itself except for a Schedule 2 Service. If Viad elects to assign or subcontract any Schedule 2 Service and if MoneyGram does not agree to such assignment or subcontract, then the Service shall be converted to a Schedule 1

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Service at a fee equal to the amount that would be payable to the third party under such assignment or subcontract and the total cost under the Schedule 2 fee shall be reduced in such amount as the parties shall negotiate in good faith.

13. Amendment.

     This Agreement may not be amended without the express written agreement of each party hereto.

14. Notices.

     All notices hereunder must be in writing and delivered personally or sent by United States mail, postage prepaid, addressed as follows, except that any party by written notice given as aforesaid, may change its address for subsequent notices to be given hereunder.

         
    If to Viad:
 
       
      Viad Corp
      Viad Tower M.S. 1012
      Phoenix, Arizona 85077
      Attention: General Counsel
 
       
    If to MoneyGram:
 
       
      MoneyGram International, Inc.
      1550 Utica Avenue South
      St. Louis Park, Minnesota 55416
      Attention: General Counsel

15. Liability for Nonperformance.

     Neither party hereto nor any subsidiaries of such party shall have any liability to the other party hereto for failure to perform its obligations hereunder unless such failure arises out of, directly or indirectly, the intentional misconduct or gross negligence on the part of the nonperforming party. Neither party hereto shall be required to perform any Service (or any part of any Service) to the extent that performance of such Service (or such part of such Service) would violate any law (including any state law prohibition on the performance of legal services), rule, regulation or third-party contract. The liability of any party for nonperformance of any Service shall be limited to a refund of amounts received by that party from the other party with respect to that Service and in no event shall either party be liable for consequential damages. Any party receiving Services shall defend, indemnify and hold harmless the party providing such Services from any and all claims of any third parties arising out of the performance of those Services (except to the extent that liability arises as a result of intentional misconduct or gross negligence on the part of the party performing such Services). Such indemnity shall include reimbursement for reasonable out of pocket expenses, including reasonable legal fees.

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16. Independent Entities.

     In carrying out the provisions hereof, MoneyGram and Viad are and shall be deemed to be for all purposes, separate and independent entities. MoneyGram and Viad shall select their employees and agents, and such employees and agents shall be under the exclusive and complete supervision and control of MoneyGram or Viad, as the case may be. MoneyGram and Viad each hereby acknowledge responsibility for full payment of wages and other compensation to all employees and agents engaged by either in the performance of their respective Services hereunder. It is the express intent of the parties hereto that the relationship of MoneyGram to Viad and Viad to MoneyGram shall be solely that of separate and independent companies and not that of a joint venture, partnership or any other joint relationship.

17. Nonfiduciary Status.

     In carrying out the provisions hereof, neither party hereto shall be a fiduciary (as defined in Section 3(21) of ERISA) with respect to any employee benefit plan, program or arrangement maintained by or on behalf of the other party. Each party hereto shall provide Services pursuant to the terms and subject to the conditions hereof in accordance with the directions, guidelines and/or procedures established by Viad or MoneyGram, as the case may be, or the plan administrator (as defined in Section 3(16) of ERISA) of each party’s employee benefit plans or arrangements.

18. Third Party Beneficiaries.

     The provisions hereof are solely for the benefit of the parties hereto and are not intended to confer upon any Person except the parties hereto any rights or remedies hereunder. There are no third party beneficiaries hereof, and this Agreement shall not provide any Person except the parties hereto with any remedy, claim, liability, reimbursement, action or other right in excess of those existing without reference hereto.

19. Construction.

     For purposes hereof, references to MoneyGram, with respect to events or periods prior to the Distribution Date, shall mean and include, where appropriate, Viad’s payment services business unit as it existed prior to such date.

20. Dispute Resolution.

     If any dispute arises under or relates to this Agreement either party may submit the matter in dispute to binding arbitration by referring the matter to the Phoenix, Arizona office of the American Arbitration Association (“AAA”) (or if there is no Phoenix office at that time such other office applicable to a dispute in Arizona) for the purpose of providing three names of potential arbitrators from which the parties will select an arbitrator. If the parties are unable to agree on an arbitrator then the parties will alternately strike names from the list until one name is left, who shall then be the arbitrator. The party who did not request the arbitration shall be entitled to the first strike. Except as the parties may agree otherwise at the time of the Arbitration, the Arbitration shall be conducted pursuant to the AAA’s then current rules for binding arbitration. The arbitration hearing shall be conducted within 60 days from the date of the arbitrator’s

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selection. The hearing shall be conducted in Phoenix, Arizona unless the parties mutually agree to an alternate location. The parties shall share equally in the costs and expenses of the arbitration. Each party shall bear its own costs for case preparation and presentation, including any attorney fees and travel costs. Except for any matter for which equitable or injunctive relief would be appropriate under the circumstances, binding arbitration shall be the parties’ only remedy at law and the decision of the arbitrator shall be final.

21. Survival.

     The indemnification provisions of Sections 3.3 and 15 shall survive the termination of this Agreement.

     IN WITNESS WHEREOF, this Agreement has been executed in multiple counterparts on the date set forth above, each of which shall, for all purposes, be deemed an original and all of which shall evidence but one agreement between the parties hereto.

                 
VIAD CORP,       MONEYGRAM INTERNATIONAL, INC.
    a Delaware corporation           a Delaware corporation
               
By:
          By:    
 
 
         
 
Name:
          Name:    
 
 
         
 
Title:
          Title:    
 
 
         
 

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SUBSIDIARIES
 

Exhibit 21.1

SUBSIDIARIES OF
MONEYGRAM INTERNATIONAL, INC.

Travelers Express Company, Inc. (Minnesota)

     CAG Inc. (Nevada)

     Hematite Trust (Delaware)

     Monazite Trust (Delaware)

     Rhyolite Trust (Delaware)

     Ferrum Trust (Delaware)

     FSMC, Inc. (Minnesota)

     MoneyGram Payment Systems, Inc. (Delaware)

     MoneyGram International Holdings Limited (United Kingdom)

     MoneyGram International Limited (United Kingdom)

     MIL Overseas Limited (United Kingdom)

     MoneyGram of New York LLC (Delaware)

     MoneyGram Payment Systems Canada, Inc. (Ontario)

     Travelers Express Co. (P.R.) Inc. (Puerto Rico)

     Tsavorite Trust (Delaware)

 

INFORMATION STATEMENT
Table of Contents

(VIAD LOGO)

, 2004

Dear Fellow Viad Stockholder:

      On                     , 2004, our board of directors approved a pro rata distribution to Viad stockholders of all of the shares of MoneyGram International, Inc., a wholly-owned subsidiary of Viad Corp that conducts Viad’s global payment services business. If you were a Viad stockholder on                     , 2004, the record date for the distribution, you will become a stockholder of MoneyGram.

      We believe that the spin-off will create two strong and focused businesses with promising opportunities for growth and enhanced stockholder value. As a separate, independent company, MoneyGram will be better positioned to provide consumers and businesses with affordable, reliable and convenient payment services. Our remaining businesses will continue to provide high-quality services addressing the needs of trade show and exhibit customers, as well as unique travel and recreation opportunities in the northern United States and Canada.

      In the distribution, you will receive one share of MoneyGram common stock for each share of Viad common stock that you held at the close of business on the record date.

      Your current shares of Viad common stock will continue to represent your equity ownership in our remaining businesses, which we refer to as “New Viad.” At Viad’s 2004 annual meeting of stockholders, Viad received stockholder approval for a one-for-four reverse stock split. The reverse stock split will be effective immediately following the spin-off. When the reverse stock split is effected, you will receive one share of Viad common stock for every four shares of Viad common stock that you held on the record date. We expect that shares of MoneyGram common stock will trade on the New York Stock Exchange, Inc. under the ticker symbol “MGI.” Viad common stock will continue to trade under the ticker symbol “VVI.”

      The enclosed information statement is being sent to you to explain the distribution in detail and provide important information regarding MoneyGram and New Viad. We urge you to read it carefully. Please note that stockholder approval is not required for the distribution, and holders of Viad common stock are not required to take any action to participate in the distribution. Thus, we are not asking you for a proxy.

      We look forward to your continued support as a stockholder in Viad and MoneyGram.

  Very truly yours,
 
  Robert H. Bohannon
  Chairman, President and Chief Executive Officer


Table of Contents

(MONEYGRAM LOGO)

, 2004

Dear Fellow MoneyGram Stockholder:

      On behalf of the entire team at MoneyGram International, Inc., I wish to welcome you as a stockholder in our company.

      The board of directors of Viad Corp has approved the distribution to Viad stockholders of all the outstanding shares of MoneyGram common stock. Upon completion of the distribution, MoneyGram International, Inc. will be a separate, independent public company. Following the spin-off, we expect that MoneyGram common stock will be listed on the New York Stock Exchange, Inc. and will trade under the symbol “MGI.”

      We would like to take this opportunity to introduce you to our company. We conduct a leading global payment services business with over 60 years of operating performance, and our mission is to provide consumers and businesses with affordable, reliable and convenient payment services.

      We are very excited about our prospects as an independent company. We are committed to building value for you, our stockholders, by expanding our core businesses through focused growth strategies.

      I invite you to learn more about us and our business by reviewing the enclosed information statement.

      Welcome, again, to our company.

  Very truly yours,
 
  Philip W. Milne
  President and Chief Executive Officer


Table of Contents

Preliminary Information Statement
(Subject to Completion, Dated May 17, 2004)
     
(VIAD LOGO)
  (MONEYGRAM LOGO)

      Viad Corp is furnishing this information statement to its stockholders in connection with the distribution by Viad to its stockholders of all of the issued and outstanding shares of common stock of MoneyGram International, Inc. The distribution will result in the separation of Viad’s global payment services business from its other businesses. As of the date of this information statement, Viad owns all of the MoneyGram common stock.

      In the distribution, Viad will distribute all of the MoneyGram common stock on a pro rata basis to Viad stockholders. Each of you, as a Viad stockholder, will receive one share of MoneyGram common stock, together with the attached preferred share purchase right, for each share of Viad common stock that you hold at the close of business on                     , 2004, the record date. The distribution will be effective at 11:59 p.m. on                     , 2004. The distribution is intended to be tax-free to Viad and its stockholders for U.S. federal income tax purposes, and Viad has received a favorable ruling from the U.S. Internal Revenue Service to that effect.

      No vote of Viad stockholders is required in connection with the distribution.

      There is no current trading market for MoneyGram common stock. However, we expect that a limited market, commonly known as a when-issued trading market, for MoneyGram common stock will develop on or shortly before the record date for the distribution, and we expect regular way trading of MoneyGram common stock will begin on the first trading day after the distribution. We have applied to the New York Stock Exchange, Inc. to list MoneyGram common stock for trading under the symbol “MGI.”

      At its 2004 annual meeting of stockholders, Viad received stockholder approval for a one-for-four reverse stock split of Viad common stock. The reverse stock split will be effective immediately following the spin-off.

      In reviewing this information statement, you should carefully consider the matters described under “Risk Factors” beginning on page 22.


WE ARE NOT ASKING YOU FOR A PROXY AND

YOU ARE REQUESTED NOT TO SEND US A PROXY.


      Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities, or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.


The date of this information statement is                     , 2004.

Viad first mailed this information statement to its stockholders on                     , 2004.


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QUESTIONS AND ANSWERS

What is the spin-off?

      The spin-off is the method through which Viad Corp will separate its existing businesses into two independent, publicly-traded companies:

  •  MoneyGram International, Inc., consisting of Viad’s global payment services business; and
 
  •  New Viad, consisting of Viad’s convention and event services, exhibit design and construction and travel and recreation services businesses.

See “The Spin-Off.”

Why is Viad separating MoneyGram and New Viad?

      Viad believes that the separation will allow each of MoneyGram’s and New Viad’s management to focus more clearly on each business and create promising opportunities for growth and enhanced stockholder value. Further, the separation will eliminate any competition for capital between Viad’s businesses, which MoneyGram and Viad believe will enhance the businesses’ opportunities for growth. As an independent public company, MoneyGram expects to have direct access to the capital markets, enabling it to issue equity and debt more easily and on more favorable terms. As a “pure-play” payment services company, MoneyGram expects that its ability to pursue acquisitions and joint ventures will be enhanced as a result of having a more focused equity currency. Finally, the separation will enable each of MoneyGram and New Viad to offer its key employees compensation directly linked to the performance of its business, which they expect will enhance their ability to attract, retain and motivate qualified personnel.

What steps will Viad take to complete the spin-off?

      Prior to the spin-off, Travelers Express Company, Inc., a direct, wholly-owned subsidiary of Viad Corp that currently conducts the global payments services business, will be merged with a subsidiary of MoneyGram International, Inc. and MoneyGram will make a cash payment to Viad Corp of $150 million. In addition, Travelers Express Company, Inc. will pay Viad a cash dividend in the amount of the net income of Travelers Express Company, Inc. in 2004 to the date of the spin-off, less the amount of dividends already paid in respect of such net income (other than the $7.25 million dividend described below). For the quarter ended March 31, 2004, Travelers Express Company, Inc. paid Viad a dividend in respect of net income for that quarter of approximately $34 million, of which $11 million related to a gain from the sale of a subsidiary and approximately $23 million related to net income exclusive of such gain. Assuming the spin-off is completed on June 30, 2004, Travelers Express Company, Inc. expects to pay a similar amount (approximately $23 million) based on its net income for the quarter ending on that date. However, we do not currently know when the distribution will occur or how Travelers Express Company, Inc.’s business will perform during that time.

      Viad and MoneyGram will enter into a separation and distribution agreement, a tax sharing agreement, an employee benefits agreement and an interim services agreement, each of which will govern the relationship between Viad and MoneyGram following the spin-off.

      In connection with the spin-off, Viad will redeem all currently outstanding shares of its preferred stock and is making tender offers to purchase its outstanding public notes and subordinated debentures and seeking to eliminate substantially all of the restrictive covenants in the instruments governing this indebtedness. Viad also expects that all of its outstanding commercial paper and certain other previously existing indebtedness will be repaid at or prior to the time of the spin-off. In addition, Travelers Express Company, Inc. will pay Viad a dividend of $7.25 million prior to the spin-off in connection with Viad’s payment of certain deferred compensation liabilities, which amount Viad will use to pay its creditors.

      For further information concerning all of the transactions that are being effected in connection with the spin-off, see “Relationship Between New Viad and MoneyGram — The Separation.”

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Are there any conditions to the spin-off being completed?

      Viad may decide not to complete the distribution if, at any time prior to the distribution, Viad’s board of directors determines, in its sole discretion, that the distribution is not in the best interests of Viad or its stockholders. In addition, Viad’s intention to complete the distribution is contingent on the satisfaction of the conditions described below, any of which (other than those set forth in the first, second, sixth and seventh bullet points below) may be waived by Viad:

  •  the MoneyGram common stock to be distributed in the distribution must be listed on the New York Stock Exchange;
 
  •  the registration statement filed in respect of the MoneyGram common stock to be distributed must be effective;
 
  •  any material governmental consents and authorizations necessary for the distribution must have been obtained;
 
  •  all statutory requirements for the consummation of the distribution must have been satisfied;
 
  •  the consummation of the distribution must not conflict with or require any consent under any material contract of Viad or MoneyGram and no legal constraint prevents the consummation of the distribution;
 
  •  the distribution must be payable in accordance with applicable law;
 
  •  no injunction or court order and no law or regulation shall be in effect preventing the completion of the distribution;
 
  •  the ruling that Viad received from the Internal Revenue Service that the distribution will qualify as a tax-free distribution for federal income tax purposes must not have been revoked or rescinded;
 
  •  Viad and MoneyGram must have in place new credit agreements that are acceptable to their respective boards of directors, and the employee benefits agreements, the interim services agreements and the tax sharing agreement must be in effect;
 
  •  MoneyGram or one of its subsidiaries must have been substituted for Viad in respect of any agreements under which Viad has guaranteed any obligations of MoneyGram or any of its subsidiaries;
 
  •  there shall not have occurred any material adverse effect on the business, assets, liabilities, financial condition, results of operations or prospects of MoneyGram or New Viad, including among other things, any such effect resulting from or arising in connection with any terrorist attacks or the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or the occurrence of any similar calamity or crises; and
 
  •  investment grade long-term credit rating for MoneyGram must have been confirmed and not withdrawn.

      See “The Spin-Off” and “Relationship between New Viad and MoneyGram — Agreements between Viad and MoneyGram.”

What will I receive in the spin-off?

      For every one share of Viad common stock that you hold at the close of business on                     , 2004, you will receive one share of MoneyGram common stock, together with the attached preferred share purchase right. See “The Spin-Off.” Because you will receive one share of MoneyGram common stock for each share of Viad common stock that you hold, Viad will not need to issue or pay cash in lieu of any fractional shares of MoneyGram common stock.

      In addition, at its 2004 annual meeting of stockholders, Viad received stockholder approval for a one-for-four reverse stock split of Viad common stock. The reverse stock split will be effective immediately following the spin-off. When the reverse stock split is effected, the number of shares of Viad common stock that you hold would be reduced by a factor of four.

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What will happen to Viad and my existing Viad common stock as a result of the spin-off?

      After the spin-off, Viad will continue to own and operate its convention and event services, exhibit design and construction and travel and recreation services businesses, which we refer to as “New Viad.” Viad common stock will continue to trade on the New York Stock Exchange, Inc. under the symbol “VVI.”

      At Viad’s 2004 annual meeting of stockholders, Viad received stockholder approval for a one-for-four reverse stock split. The reverse stock split will be effective immediately following the spin-off. When the reverse stock split is effected, you will receive one share of Viad common stock for every four shares of Viad common stock that you held on the record date. As soon as practicable after the record date, New Viad will notify you as to how and when to surrender your certificates representing shares of New Viad common stock. This reverse stock split will have no effect on shares of MoneyGram common stock or the one-for-one distribution ratio for the distribution.

      Information concerning this reverse stock split is contained in the proxy statement that was provided to you in connection with Viad’s 2004 annual meeting of stockholders. You do not need to take any action at this time in connection with the reverse stock split.

What is the accounting treatment for the spin-off?

      Despite the fact that MoneyGram International, Inc. is being spun-off from Viad Corp, for accounting purposes, due to the relative significance of MoneyGram International, Inc. to Viad Corp, MoneyGram International, Inc. will be considered the divesting entity. As a result, MoneyGram International, Inc. will be the “accounting successor” to Viad Corp, and we have presented the historical financial information of Viad Corp as the financial information for MoneyGram International, Inc. in this information statement. See “Unaudited Pro Forma Consolidated Financial Information of MoneyGram International, Inc.”

Will I be taxed on the shares of MoneyGram that I receive in the spin-off?

      Viad has received a favorable private letter ruling from the Internal Revenue Service to the effect that, for U.S. federal income tax purposes, the spin-off generally will be tax-free to Viad stockholders. See “The Spin-Off.”

      This tax ruling, however, does not address state, local or foreign tax consequences for Viad stockholders. You should consult your tax advisor as to the particular tax consequences to you of the spin-off.

What do I have to do to participate in the spin-off?

      Nothing, except to have owned Viad common stock on the record date. We intend to use a book-entry system to distribute shares of MoneyGram common stock. This means that your ownership of MoneyGram common stock will be recorded in the records maintained by our transfer agent. MoneyGram stock certificates will not be issued unless you request one. You do not need to, and should not, mail in your certificates of Viad common stock to receive your MoneyGram common stock in the spin-off.

      In connection with the reverse stock split, Viad will send you a letter of transmittal shortly after that reverse stock split becomes effective instructing you to mail your certificates representing shares of New Viad common stock to New Viad’s transfer agent. You should send these stock certificates only after you have received that letter of transmittal.

When will the spin-off occur?

      The spin-off will be effective at 11:59 p.m. on                     , 2004.

On which exchange will MoneyGram common stock trade?

      We have applied to list the shares of MoneyGram on the New York Stock Exchange, Inc. under the symbol “MGI.”

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When will I be able to buy and sell MoneyGram common stock?

      Regular trading of MoneyGram common stock will begin on                     , 2004. A form of interim trading, called when-issued trading, may occur for MoneyGram common stock on or before                     , 2004. “When-issued” trading reflects the value at which the market expects the MoneyGram common stock to trade after the spin-off. If when-issued trading develops, you will be able to buy and sell MoneyGram common stock before the spin-off. None of these trades, however, will settle until after the spin-off, when regular trading in MoneyGram common stock will begin. If the spin-off does not occur, all when-issued trading will be null and void. If when-issued trading occurs, the listing for MoneyGram common stock will be under the trading symbol “MGI” and accompanied by the letters “wi.” See “The Spin-Off — Trading between the Record Date and the Distribution Date.”

How will New Viad common stock trade?

      Viad common stock will continue to trade on a regular basis through the date of the spin-off.

      We expect that ex-distribution trading for Viad common stock may develop before the spin-off. “Ex-distribution” trading means that you may trade Viad common stock before the spin-off, but on a basis that reflects the value at which the market expects the Viad common stock to trade after the spin-off. If ex-distribution trading develops, you may buy and sell those shares before the spin-off. None of these trades, however, will settle until after the spin-off, when regular trading in Viad common stock has begun. If the spin-off does not occur, all ex-distribution trading will be null and void.

      If ex-distribution trading occurs, the listing for Viad common stock will be accompanied by the letters “wi.”

Will the MoneyGram common stock distributed be freely tradable?

      The shares of MoneyGram common stock to be distributed will be freely tradable, except for shares received by persons that may have a special relationship or affiliation with MoneyGram. See “The Spin-Off — Listing and Trading of MoneyGram and Viad Common Stock.”

What will be the relationship between New Viad and MoneyGram after the spin-off?

      After the spin-off, Viad will not own any MoneyGram common stock, MoneyGram will not own any Viad common stock, and the two companies will be separate, independent public companies. Prior to the spin-off, MoneyGram will enter into the following agreements with Viad:

  •  a separation and distribution agreement;
 
  •  an employee benefits agreement;
 
  •  an interim services agreement; and
 
  •  a tax sharing agreement.

These agreements will outline the specifics of the spin-off itself and govern the ongoing relationship between MoneyGram and Viad after the completion of the spin-off. See “Relationship between New Viad and MoneyGram.”

Do MoneyGram or New Viad plan to pay dividends?

      Neither MoneyGram nor New Viad has made any determination as to whether it will pay any dividends after the spin-off. Any decision to pay dividends will be at the discretion of the board of directors of MoneyGram and New Viad in accordance with applicable law.

Are there risks to owning New Viad or MoneyGram common stock?

      You should read this entire information statement carefully. MoneyGram’s global payment services business and New Viad’s convention and event services, exhibit design and construction and travel and recreation services

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businesses are subject to general and specific business risks. In addition, the spin-off presents other risks resulting from the spin-off transaction itself, risks relating to MoneyGram being an independent public company, and risks relating to New Viad’s businesses after the spin-off. These risks are described under “Risk Factors.” We encourage you to read that section carefully when evaluating whether and for how long you should retain your Viad common stock and the MoneyGram common stock you will receive in the spin-off.

Where can Viad stockholders get more information?

      Before the spin-off, you should direct inquiries relating to the spin-off to:

  Viad Corp
       Investor Relations Department
       1850 N. Central Ave. MS# 820
       Phoenix, AZ 85004
       phone: 602-207-2681
       fax: 602-207-2832
       www.viad.com

      After the spin-off, you should direct inquiries relating to your investment in MoneyGram common stock to:

  MoneyGram International, Inc.
       Investor Relations Department
       MoneyGram National Headquarters
       1550 Utica Avenue South
       Minneapolis, MN 55416
       www.moneygram.com

and inquiries relating to your investment in New Viad common stock to:

  Viad Corp
       Investor Relations Department
       1850 N. Central Ave. MS# 820
       Phoenix, AZ 85004
       phone: 602-207-2681
       fax: 602-207-2832
       www.viad.com

      Information on the websites listed above does not constitute part of this information statement.

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SUMMARY
RISK FACTORS
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
THE SPIN-OFF
DIVIDEND POLICY OF MONEYGRAM
CAPITALIZATION OF VIAD CORP (Accounting Predecessor to MoneyGram International, Inc.)
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF MONEYGRAM INTERNATIONAL, INC. (Accounting Successor to Viad Corp)
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA OF VIAD CORP (Accounting Predecessor to MoneyGram International, Inc.)
BUSINESS OF MONEYGRAM
MANAGEMENT OF MONEYGRAM
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF MONEYGRAM
DESCRIPTION OF CAPITAL STOCK OF MONEYGRAM
FINANCING ARRANGEMENTS OF MONEYGRAM
DIVIDEND POLICY OF NEW VIAD
CAPITALIZATION OF NEW VIAD
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION OF NEW VIAD
SELECTED HISTORICAL COMBINED FINANCIAL AND OTHER DATA OF NEW VIAD
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF NEW VIAD
BUSINESS OF NEW VIAD
MANAGEMENT OF NEW VIAD
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF NEW VIAD
DESCRIPTION OF CAPITAL STOCK OF NEW VIAD
FINANCING ARRANGEMENTS OF NEW VIAD
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF MONEYGRAM AND NEW VIAD
RELATIONSHIP BETWEEN NEW VIAD AND MONEYGRAM
WHERE YOU CAN FIND MORE INFORMATION ABOUT MONEYGRAM
WHERE YOU CAN FIND MORE INFORMATION ABOUT NEW VIAD
INDEX TO FINANCIAL STATEMENTS
FORM OF SEPARATION AND DISTRIBUTION AGREEMENT
FORM OF AMENDED AND RESTATED CERT. OF INCORP.
FORM OF AMENDED AND RESTATED BY-LAWS
FORM OF PREFERRED SHARE PURCHASE RIGHTS AGREEMENT
FORM OF CERTIFICATE OF DESIGNATIONS
FORM OF EMPLOYEE BENEFITS AGREEMENT
FORM OF TAX SHARING AGREEMENT
FORM OF INTERIM SERVICES AGREEMENT
SUBSIDIARIES
INFORMATION STATEMENT


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TABLE OF CONTENTS

         
Page

Summary
    1  
Risk Factors
    22  
Special Note About Forward-Looking Statements
    37  
The Spin-Off
    38  
Dividend Policy of MoneyGram
    44  
Capitalization of Viad Corp
    45  
Unaudited Pro Forma Consolidated Financial Information of MoneyGram International, Inc.  
    47  
Selected Historical Consolidated Financial and Other Data of Viad Corp
    62  
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Viad Corp.
    64  
Business of MoneyGram
    94  
Management of MoneyGram
    113  
Security Ownership of Certain Beneficial Owners and Management of MoneyGram
    125  
Description of Capital Stock of MoneyGram
    127  
Financing Arrangements of MoneyGram
    132  
Dividend Policy of New Viad
    133  
Capitalization of New Viad
    134  
Unaudited Pro Forma Combined Financial Information of New Viad
    135  
Selected Historical Combined Financial and Other Data of New Viad
    140  
Management’s Discussion and Analysis of Financial Condition and Results of Operations of New Viad
    142  
Business of New Viad
    153  
Management of New Viad
    168  
Security Ownership of Certain Beneficial Owners and Management of New Viad
    177  
Description of Capital Stock of New Viad
    179  
Financing Arrangements of New Viad
    184  
Indemnification of Directors and Officers of MoneyGram and New Viad
    185  
Relationship Between New Viad and MoneyGram
    187  
Where You Can Find More Information About MoneyGram
    195  
Where you Can Find More Information About New Viad
    195  
Index to Financial Statements
    F-1  

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      In this information statement, unless the context requires otherwise, (1) all references to the “spin-off” or the “distribution” are to the pro rata distribution by Viad Corp to its stockholders of all of the issued and outstanding shares of MoneyGram common stock, (2) “Viad” refers to Viad Corp, (3) “MoneyGram” refers to the businesses that are currently conducted by Travelers Express Company, Inc., as if such business were a separate, independent company and, with respect to periods following the spin-off, refers to MoneyGram International, Inc., (4) “we,” “us” and “our” refer to MoneyGram or Viad, as the context requires, and (5) “New Viad” refers to the businesses that will continue to be conducted by Viad following the spin-off and, with respect to periods following the spin-off, refers to Viad Corp. In this information statement, information concerning MoneyGram has been provided by MoneyGram and information concerning New Viad has been provided by Viad.


      MoneyGram®, AgentConnect®, DeltaWorks®, ExpressPaymentsm, Flash Pay®, GameCash®, PrimeLink®, PrimeLinkplus® and Travelers Express® are trademarks of MoneyGram. GES®, GES Canadasm, ExhibitSelectsm, INTERKIT®, GES at Your Service!®, GES Servicentersm, GES National Servicentersm, HANG:RX®, Trade Show Electrical®, Exhibitgroup/ Giltspur®, ExpoTech®, Exhibitgroup®, Maxim®, E’LANsm, EMAX®, egXpresssm, eg@worksm, LUMA2 & Design®, Royal Glacier Tours®, Red Bus designsm, Jammer Amber® and WAM! The Wireless Ambassador® are trademarks of Viad. This information statement also includes references to trademarks, service marks and trade names of other entities.

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SUMMARY

      This summary highlights selected information from this information statement concerning MoneyGram, New Viad and the spin-off. More detailed discussions of the information summarized below are contained elsewhere in this information statement. You should read this entire information statement carefully, including the risk factors and the historical and pro forma financial statements and notes to those statements included in this information statement.

The Spin-Off

      The following is a brief summary of the terms of the spin-off:

 
Distributing Company Viad Corp. After the spin-off, New Viad will not own any shares of MoneyGram common stock.
 
Distributed Company MoneyGram International, Inc., currently a wholly-owned subsidiary of Viad Corp. After the spin-off, MoneyGram will be a separate, independent public company and will not own any shares of New Viad common stock.
 
Shares to Be Distributed Approximately                    shares of MoneyGram common stock, par value $0.01 per share, together with the attached preferred share purchase rights. The shares of MoneyGram common stock to be distributed will constitute all of the outstanding shares of MoneyGram common stock immediately after the spin-off.
 
Distribution Ratio One share of MoneyGram common stock for each share of Viad common stock that you hold at the close of business on the record date for the distribution.
 
Record Date Close of business on                     , 2004
 
Distribution Date                     , 2004
 
Distribution Shortly after the distribution date, the transfer agent will distribute the shares of MoneyGram common stock by crediting these shares to book-entry accounts established by the transfer agent for persons that were Viad stockholders on the record date. You will not be required to make any payment or to surrender or exchange your Viad common stock or take any other action to receive your shares of MoneyGram common stock.
 
Under the separation and distribution agreement between MoneyGram and Viad, Viad may terminate the distribution without liability at any time prior to the time that the distribution is effected. See “The Spin-Off.”
 
Reverse Stock Split At Viad’s 2004 annual meeting of stockholders, Viad received stockholder approval for a one-for-four reverse stock split. The reverse stock split will be effective immediately after the spin-off. When the reverse stock split is effected, you will receive one share of Viad common stock for every four shares of Viad common stock that you held on the record date. In connection with the reverse stock split, New Viad will send you a letter of transmittal shortly after that reverse stock split becomes effective instructing you to mail your certificates representing shares of New Viad common stock to New Viad’s transfer agent. You should send these stock certificates only after you have received that letter of transmittal.
 
Transfer Agent Wells Fargo Shareowner Services

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New York Stock Exchange Symbol for MoneyGram MoneyGram has applied to have MoneyGram common stock listed on the New York Stock Exchange, Inc. under the symbol “MGI.”
 
New York Stock Exchange Symbol for New Viad After the spin-off, New Viad common stock will continue to trade on the New York Stock Exchange, Inc. under the symbol “VVI.”
 
Trading Market We expect when-issued trading for MoneyGram common stock and ex-distribution trading for Viad common stock to occur before the distribution date. See “The Spin-Off — Trading between the Record Date and Distribution Date.”
 
Risk Factors The distribution and ownership of MoneyGram and Viad common stock involve various risks. See “Risk Factors.”
 
Tax Consequences Viad has received a favorable private letter ruling from the Internal Revenue Service to the effect that the spin-off qualifies as a tax-free distribution for U.S. federal income tax purposes. See “The Spin-Off — Material U.S. Federal Income Tax Consequences of the Spin-Off.”
 
Trading of MoneyGram Common Stock The shares of MoneyGram common stock to be distributed will be freely transferable, except for shares received by persons that may have a special relationship or affiliation with MoneyGram. See “The Spin-Off — Listing and Trading of MoneyGram and Viad Common Stock.”
 
Relationship Between New Viad and MoneyGram After the Spin-Off After the spin-off, New Viad and MoneyGram will be independent, publicly owned companies. Viad and MoneyGram have entered into several agreements to define their ongoing relationship after the spin-off. See “Relationship between New Viad and MoneyGram.”
 
Stock Options and Restricted Stock Grants At the time of the spin-off, all outstanding options to purchase Viad common stock will be adjusted to consist of options to purchase the same number of shares of New Viad common stock (subject to adjustment for the reverse stock split) and options to purchase the same number of shares of MoneyGram common stock, and all holders of outstanding shares of Viad restricted stock will receive shares of MoneyGram common stock, which will also be subject to restrictions. The adjustments to the outstanding options are designed to preserve the intrinsic economic value of those options. See “Relationship between New Viad and MoneyGram — Agreements between Viad and MoneyGram — Employee Benefits Agreement.”
 
Anti-Takeover Effects New Viad would be subject to tax if an acquisition or issuance of New Viad common stock or MoneyGram common stock triggers the application of Section 355(e) of the U.S. Internal Revenue Code of 1986, as amended, or the “Code.” MoneyGram has agreed to indemnify New Viad from any tax resulting from any acquisition or issuance of MoneyGram common stock that triggers the application of Section 355(e). Thus, Section 355(e) of the Code could discourage, delay or prevent a change of control of New Viad or MoneyGram.

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In addition, some provisions of MoneyGram’s amended and restated certificate of incorporation and amended and restated by-laws and Delaware law may also have the effect of making more difficult an acquisition of control of MoneyGram in a transaction not approved by its board of directors. See “Relationship between New Viad and MoneyGram” and “Description of Capital Stock of MoneyGram.”
 
Prior to the spin-off, MoneyGram’s board of directors expects to adopt a rights agreement, with Wells Fargo Bank, N.A. as rights agent, to protect its stockholders from coercive or otherwise unfair takeover tactics. The preferred share purchase rights issuable under the rights agreement will be attached to the shares of MoneyGram common stock that you receive in the spin-off. See “Description of Capital Stock of MoneyGram — The Rights Agreement.”
 
Similarly, some provisions of Viad’s amended and restated certificate of incorporation and by-laws and Delaware law, as well as the existing rights agreement between Viad and Wells Fargo Bank Minnesota, N.A., as rights agent, may have the effect of making more difficult an acquisition of control of New Viad in a transaction not approved by Viad’s board of directors. See “Description of Capital Stock of New Viad.”

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MoneyGram International, Inc.

      MoneyGram is a leading global payment services company. Our mission is to provide consumers and businesses with affordable, reliable and convenient payment services worldwide. We offer our products and services to consumers through our network of agents and our financial institution customers. The diverse array of products and services we offer enables consumers, most of whom are not fully served by traditional financial institutions, to make payments and to transfer money around the world, helping them meet the financial demands of their daily lives.

      Our business, which is conducted through Travelers Express Company, Inc. and its subsidiaries, including MoneyGram Payment Systems, Inc., has been in operation since 1940. In the last six years, we have added important new products and services and have expanded our business domestically and internationally. Following the spin-off, our business will consist of two operating segments: our global funds transfer segment and our payment services segment. Our global funds transfer segment provides consumers with domestic and international money transfers, money orders and bill payment services through our network of agents. Our payment services segment provides official check outsourcing services to financial institutions and related payment solutions to businesses. In both operating segments, our primary sources of revenue are transaction fees and revenue generated from our investment of the funds underlying the payment instruments from the time those funds are remitted to us until the transaction is completed.

      Our primary channel of distribution to consumers of our global funds transfer segment is a worldwide network of agents currently consisting of more than 100,000 locations. Currently, more than 68,000 locations around the world offer our money transfer services and more than 63,500 locations in the United States offer our money orders. Our payment services segment provides official check services through more than 16,000 branch locations of our financial institution customers. Based on the number of our transactions in 2003, we are:

  •  a leading global provider of consumer money transfers, offering our MoneyGram-branded money transfer services in approximately 160 countries around the world;
 
  •  the largest issuer of money orders in the United States, with approximately 295 million money orders issued;
 
  •  the second largest provider of urgent bill payment services in the United States; and
 
  •  the second largest provider of official check outsourcing services to financial institutions in the United States.

      From 1997 through 2003, our business has grown through:

  •  our June 1998 acquisition of MoneyGram Payment Systems, Inc., which today forms the foundation of our consumer money transfer business and has grown from serving approximately 105 countries in 1997 to approximately 160 countries in 2003;
 
  •  increasing the number of consumer money transfer agent locations from approximately 21,000 in 1997 to over 63,000 in 2003;
 
  •  increasing the number of money order agent and financial institution locations from approximately 41,000 in 1997 to over 63,500 in 2003; and
 
  •  increasing our average daily balance of investments, primarily attributable to our official check outsourcing services, from approximately $1.6 billion in 1997 to approximately $7.0 billion in 2003.
 
MoneyGram Competitive Advantages

      We believe that our success results from a combination of key assets and competencies, including:

  •  Strong Value Proposition. We believe that our products and services provide consumers, as well as our agents and financial institution customers, with a recognizable value. We offer consumer money transfer and urgent bill payment services that we believe are generally less expensive than those offered by our primary competitor, First Data Corporation and its subsidiaries, including Western Union. Our services

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  include features that we believe are not typically found with smaller, niche competitors, including delivery in as little as ten minutes, 24 hours a day, seven days a week customer service and receiver choice of delivery location. Our official check outsourcing services provide our financial institution customers with a suite of services, including imaged checks and branch level and internet reporting of activity, generally at a lower cost than the financial institutions would incur if they were to perform these services themselves.
 
 
  •  Advanced Proprietary Technology. We believe that our advanced proprietary technology in each of our operating segments gives us a significant competitive advantage. The technology that we use in our central processing functions is both flexible and scalable and can support increased transaction volume and continued innovation without requiring fundamental change. In addition, our flexible point-of-sale technology options provide our agents with a variety of means to efficiently provide money transfers, bill payment services and money orders.
 
 
  •  Broad Consumer Recognition and Consumer Loyalty. We believe that our key brands — MoneyGram and Travelers Express — are well-known and established, and that the primary consumers of our products and services associate our brands with quality payment services at an affordable price. As a result, we believe that these consumers are loyal to our products and services.
 
 
  •  Extensive Domestic and International Retail Agent Network. Currently, we offer money orders through over 63,500 retail agent and bank locations in the United States, and offer money transfer services through a network of over 68,000 agent locations in approximately 160 countries. Our money transfer agent locations in the United States are focused in ethnic neighborhoods, allowing us to compete effectively for money transfers that are originated in the United States, while our international agent locations include key agents in high-volume markets around the world, including many in remote areas not well served by traditional financial institutions. International money transfers, including money transfers that originate outside of the United States, are a rapidly growing part of the money transfer industry and we believe that our international agent locations provide us with the ability to take advantage of this growth.
 
 
  •  Strong Relationships with Agents and Financial Institution Customers. In our global funds transfer segment, we have long-term contracts with some of the largest and most recognized retail chains, financial institutions and post offices in the world, including: Wal-Mart Stores, Albertson’s, Safeway, Publix, Harris Teeter, Circle K, Ace Cash Express, Bancomer, the United Kingdom Post Office, the Canadian Post Office and the Italian Postal Service. Customers of our payment systems segment include a variety of U.S. financial institutions, such as major retail banks, regional banks, community banks, savings banks and credit unions, including Wachovia, U.S. Bancorp, Compass Bankshares, Huntington, Branch Banking and Trust Company (or BB&T) and Charter One Bank.
 
MoneyGram Growth Strategies

      Our growth strategies include:

  •  Continuing to Provide Consumers, Agents and Financial Institution Customers with a Strong Value Proposition. We believe that the products and services we offer provide consumers, agents and financial institution customers with recognizable value. We intend to continue to capitalize on this value proposition by developing and implementing marketing and other communication programs targeting consumers and businesses that reinforce this value proposition. In addition, we will continue to implement multiple pricing strategies to customize our pricing for different send and receive corridors in response to changes in competition, and we will continue to introduce our multi-currency system, which allows consumers to know the exact amount of currency that will be available for delivery. We also intend to develop loyalty programs that reward our most productive and loyal consumers and agents.
 
  •  Expanding Our Distribution Channels and Creating New Delivery Methods. We intend to take advantage of the growth potential that we believe exists in our industry by expanding our distribution channels, creating new delivery methods and targeting the rapidly growing immigrant populations in host

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  countries. We plan to maintain and expand our existing relationships with agents and enter into relationships with new agents by expanding our international agent base and our relationships with businesses that have not traditionally offered money transfer services through the use of technologies, such as our FormFree system. We intend to support our international expansion by increased staffing at our London office and our nine regional offices around the world. We also believe that there are opportunities to increase our distribution channels and enhance delivery methods by increasing the number of billers that participate in our urgent bill payment services, and in new ways, such as offering our products and services through the internet, ATM networks and self-service kiosks.
 
  •  Delivering New Payment Products and Related Financial Services. We closely monitor consumer trends, and intend to develop new payment products and related financial services to meet consumer needs. The products that we expect to offer in the future are generally consumer focused and are intended to take advantage of existing payment networks such as the automated clearing house and debit networks. We expect these products to include a suite of stored-value card and other electronic payment products.
 
  •  Continuing to Deliver an Integrated, Reliable, Low-Cost Service Platform to Our Consumers, Agents and Financial Institution Customers. We believe that we can increase our transaction volume by making it easier for our agents, financial institution customers and consumers to do business with us. We intend to continue to provide regular enhancements to our point-of-sale platforms that simplify transactions while increasing speed for both the consumer and agent. Additionally, we will seek ways to improve our settlement and reporting mechanisms to our agents and financial institution customers. We also intend to support our consumer value proposition by further reducing our delivery costs by focusing on agent automation and improving our operational efficiency.
 
  •  Pursuing Strategic Acquisitions and Alliances. We intend to actively evaluate strategic acquisitions and alliances and aggressively pursue those opportunities that we believe further our strategic goals. We plan to pursue opportunities that would allow us to acquire new or complementary products and services, expand our distribution channels, broaden our market presence or increase our market penetration.
 
  •  Continuing to Recruit, Retain and Reward Solution-Oriented Employees Who Share Our Corporate Values. We intend to continue recruiting, retaining and rewarding employees and executives at all levels who have the experience and talent necessary to implement our growth strategies. These employees must share our corporate values: respect, courage, passion, integrity and teamwork. We plan to accomplish this goal by actively developing the skills of our employees, creating career opportunities, providing competitive compensation and implementing employee communication programs that celebrate success and recognize contributors and leaders.
 
Risks Relating to MoneyGram

      There are a number of risks associated with an investment in MoneyGram common stock, including:

  •  Our financial condition and results of operation could be adversely affected by fluctuations in interest rates.
 
  •  Our business may require cash in amounts greater than the amount of available credit facilities and liquid assets that we have on hand at a particular time, and if we were forced to ultimately liquidate assets or secure other financing as a result of unexpected liquidity needs, our earnings could be reduced.
 
  •  We are subject to credit risks related to our investment portfolio and our use of derivatives.
 
  •  If our credit ratings were to be downgraded, or if the ratings agencies were to indicate that a lowering may occur, our business would be harmed.
 
  •  We face intense competition, and if we are unable to continue to compete effectively, our business, financial condition and results of operation would be adversely affected.
 
  •  If we lost key retail agents in our global funds transfer segment, our business and results of operations could be adversely affected.
 
  •  If we lost large financial institution customers in our payment systems segment, our business and results of operation could be adversely affected.

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      There are also a number of risks associated with the spin-off, including:

  •  The historical financial information of MoneyGram may not be representative of its results as a separate, independent company.
 
  •  If the spin-off is determined to be a taxable transaction, you could be subject to tax on the value of the MoneyGram common stock you receive in the distribution.
 
  •  If MoneyGram takes actions that cause the spin-off to fail to qualify as a tax-free transaction, it will be required to indemnify New Viad for any resulting taxes and related losses.
 
  •  The ability of MoneyGram to engage in financings and acquisitions and other strategic transactions using equity securities is subject to limitations because of the U.S. federal income tax requirements for a tax-free distribution.
 
  •  MoneyGram could incur significant tax liability if New Viad fails to pay the tax liabilities attributable to it under the tax sharing agreement.

      For more information on these and other risks that we face, including risks relating to our development of new products and services, agent credit and fraud risk, operation of our computer systems and data centers, the amount of money that we move, the anticipated terms of our credit agreements, our expansion plans, our intellectual property, our reliance on third party vendors, litigation that we may face, affecting the payment systems industry generally, challenges of the spin-off as a fraudulent transfer or a legal dividend, potential conflicts of interests involving our management and directors and relating to securities markets and ownership of MoneyGram common stock, see “Risk Factors” beginning on page 22 of this information statement.

     History of MoneyGram

      The businesses conducted by MoneyGram date to 1940 when Travelers Express Company, Inc. began offering what are now known as money orders. Travelers Express Company, Inc. was acquired by a predecessor of Viad Corp in 1965. In 1998, Travelers Express Company, Inc. acquired MoneyGram Payment Systems, Inc., a provider of worldwide money transfers.

      Currently, both MoneyGram International, Inc., which was incorporated in Delaware in December 2003 in connection with the spin-off, and Travelers Express Company, Inc. are direct, wholly owned subsidiaries of Viad. Prior to the completion of the spin-off, Travelers Express Company, Inc. will be merged with a direct, wholly owned subsidiary of MoneyGram International, Inc., with Travelers Express Company, Inc. as the surviving corporation. As a result of the merger, Travelers Express Company, Inc. will become a direct, wholly owned subsidiary of MoneyGram International, Inc.

      *          *          *

      MoneyGram’s principal executive offices are located at 1550 Utica Avenue South, Minneapolis, Minnesota 55416, and our telephone number is (952) 591-3000. Our internet address is www.moneygram.com. The information contained on our website, or connected to that website, is not a part of this information statement or the registration statement of which this information statement is a part. After the registration statement of which this information statement is a part becomes effective, MoneyGram will make available free of charge on www.moneygram.com its annual, quarterly and current reports and amendments to those reports, as soon as reasonably practicable after it electronically files those reports with, or furnishes them to, the Securities and Exchange Commission.

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New Viad

      Following the spin-off, Viad will continue to be a leading provider of high-quality services that address the needs of trade show organizers and exhibitors, as well as travel and recreation services in the United States and Canada. These businesses, which we refer to as “New Viad,” will be operated through three segments:

  •  GES — GES Exposition Services, Inc., GES Exposition Services (Canada) Limited and their respective subsidiaries, which we collectively refer to as “GES,” provide various convention and trade show services throughout North America, such as freight handling, transportation, installation, dismantling and management services to trade show management companies, trade associations and exhibitors. GES also provides certain exhibit design and construction services;
 
  •  Exhibitgroup — the Exhibitgroup/ Giltspur division of New Viad, David H. Gibson Company, Inc., Giltspur Exhibits of Canada, Inc., Viad Holding GmbH, Viad Services Companies Limited and their respective subsidiaries, which we collectively refer to as “Exhibitgroup,” specialize in design, construction, installation and warehousing of convention and trade show exhibits and displays, primarily for corporate customers in North America, and, to a lesser extent, in Europe. Exhibitgroup also provides various trade show services to its corporate customers; and
 
  •  Travel and Recreation Services — Brewster Transport Company Limited, Brewster Tours Inc., and Brewster Inc., which we collectively refer to as “Brewster,” and Glacier Park, Inc., and Waterton Transport Company, Limited, which we collectively refer to as “Glacier Park,” provide tour and charter operations in the Canadian Rockies and operate historic lodges and food services in certain national parks in North America.

      GES is a leading provider of a diverse array of services in connection with the planning, design and execution of conventions, trade shows and special events. The core customers of GES are trade show organizers and exhibitors at the trade shows of these organizers, which are required by the organizer to use GES for certain services. GES also provides services to exhibitors on an elective basis. GES provides services at an estimated 2,000 trade shows and events annually, including some of the most visible and influential events in the trade show industry. GES’s principal services include trade show layout and design, logistics planning and show execution. GES was the primary service provider for five of the top ten trade shows (based on square footage) in North America in 2003, and was the primary service provider for approximately a third of the top 200 trade shows (based on square footage) in North America during 2000 through 2003.

      Exhibitgroup is one of the most experienced and largest exhibit designers and fabricators in the world, with an over 60-year operating history of providing custom exhibit design and construction and related services to large companies. Exhibitgroup is also a highly-specialized exhibit program manager, working closely with its core client base of Fortune 1000 and large private company clients with one-stop management and production of an entire exhibit campaign over a series of trade shows or events. Exhibitgroup’s core competencies include three-dimensional design, custom construction, exhibitor show program management, installation and dismantle services and innovative technology. Exhibitgroup has won over 50 design awards since 1997, including 28 prestigious “Best of Show” awards for exhibits that its clients have presented at particular trade shows.

      Brewster provides a variety of tourism services in the Rocky Mountains of southern Alberta, Canada, including two world-class attractions, the Banff Gondola and the Columbia Icefield, as well as “snocoach” tours, motorcoach services, charter and sightseeing services, hotel operations and travel agencies in Alberta, Canada. Brewster’s services also include package tour agency operations for destinations throughout Canada.

      Glacier Park is the largest concessionaire in Glacier National Park in Montana. Glacier Park operates, among other things, four historic lodges and three motor inns in and around Glacier National Park and Waterton Lakes National Park in southern Alberta, Canada.

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New Viad Competitive Advantages

      We believe that a number of competitive advantages distinguish us from competitors in our various businesses, including:

  •  Leading Market Position. Each of GES and Exhibitgroup occupies a leading position in its industry. We believe that these leadership positions are due largely to strong, experienced and talented personnel, equipment resources, innovative technology and process improvements. These capabilities allow GES and Exhibitgroup to provide what we believe to be top quality products and services at competitive rates and be recognized as world-class providers in their respective marketplaces.
 
  •  Ability to Offer an Integrated Suite of Service Offerings. The distinct yet synergistic services provided by GES and Exhibitgroup allow us to service virtually all needs of exhibit and trade show customers. Exhibitgroup provides one-stop shopping for exhibit program clients, providing all exhibit-related services required in the context of a client’s overall marketing strategy. GES is similarly positioned to address all the needs of the trade show, convention and event customer, from the planning stages to all aspects of execution of a successful trade show.
 
  •  Strong Customer Relationships. GES and Exhibitgroup pride themselves on their level of customer service, which has allowed them to develop long-standing relationships with a wide range of customers in various industries and has resulted in a high percentage of contract renewals. Our highly skilled and experienced team of sales, design and service professionals work hard to understand and bring to life the goals of both long-standing and new design clients and trade show customers.
 
  •  Well-Positioned in Major Trade Show Markets. GES and Exhibitgroup have a well-established presence in North America’s most active convention and event services markets, as well as production facilities and warehouses in strategic locations throughout North America. This geographic presence allows GES and Exhibitgroup to efficiently and simultaneously service customers throughout the United States. Exhibitgroup also has a strong presence in certain markets outside North America, with European operations and strategic global alliances that distinguish Exhibitgroup from its competitors around the world. In addition, GES is the leading participant in the Las Vegas trade show market, which is the premier venue for national trade shows. GES is headquartered and has extensive facilities in Las Vegas, Nevada.
 
  •  Technology Leadership. We believe that both Exhibitgroup and GES are industry leaders and innovators in technologies used to address customers’ needs. From design software to logistics and construction technologies, Exhibitgroup and GES’s technologies are often benchmarks in their respective industries.
 
  •  Operations in Internationally Recognized Travel and Recreation Sites. We believe that Glacier National Park and the Canadian Rockies are internationally recognized as vacation destinations. Glacier National Park is regarded as one of the “jewels” of the U.S. National Park system. The Columbia Icefield and the Canadian Rockies in general are also internationally recognized for their spectacular landscapes and unique tourism opportunities.
 
New Viad Growth Strategies

      Our strategy is to enhance our leadership role in our key markets. To achieve this goal, we have several key business strategies:

  •  Maximizing Revenue Opportunities Through Enhanced Service Offerings and Geographic Expansion. GES intends to drive revenue growth by increasing sales of elective exhibitor services through its Exhibitor Value Program. GES and Exhibitgroup intend to expand their presence in high-growth geographic areas and industries for which trade shows and events are an important marketing tool. Exhibitgroup intends to increase its international revenue by expanding its network of global strategic alliances to service clients worldwide.
 
  •  Leveraging the Relationship between GES and Exhibitgroup. Although GES and Exhibitgroup are distinct businesses, we plan to leverage the core competencies of each to provide customers with additional value, including capitalizing on the growth in corporate specialty events by offering integrated

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  services from GES and Exhibitgroup to the large companies that sponsor these events. We plan to optimize the unique talents of these businesses, with Exhibitgroup designing the event theme and exhibits and GES providing general contractor services to produce the corporate event. For example, in the 2003 Ford Centennial Celebration, Exhibitgroup provided its design expertise to bring the event theme to life and to design specific exhibits and GES acted as the general services contractor to stage the event.
 
  •  Increasing Efficiencies. To increase value to customers and stockholders, we intend to continue centralizing operations. During 2003, Exhibitgroup consolidated production facilities and certain accounting and finance functions, and strategically relocated sales and design offices. GES has developed, and continues to train its staff in, best practice processes for all key elements of show execution, including labor planning, equipment distribution, product delivery and freight management. The end result of these best practices is higher service levels to the trade show organizer and exhibitors and more effective cost controls.
 
  •  Making Selective Investments and Focused Acquisitions. We intend to make selective investments in projects, including technology, and to make acquisitions that we believe will improve financial returns, enhance our range of capabilities and improve client service levels. We plan to refine our planning, inventory management and billing systems, as well as the internal systems that support our operations.
 
Risks Relating to New Viad

      There are a number of risks associated with an investment in New Viad common stock, including:

  •  Our businesses and operating results are adversely affected by deterioration in general economic conditions.
 
  •  Our businesses are adversely affected by disruptions in the travel industry, particularly those adversely affecting the hotel and airline industries.
 
  •  Our businesses are seasonal, which causes our results of operations to fluctuate and makes our results of operations particularly sensitive to adverse events during peak periods.
 
  •  Trade show rotation may impact our overall profitability and makes comparisons between periods difficult.
 
  •  Transportation disruptions could adversely affect our business and operating results.
 
  •  Union-represented labor creates an increased risk of work stoppages and higher labor costs.

      There are also a number of risks associated with the spin-off, including:

  •  The historical financial information of New Viad may not be representative of its results as a separate, independent company.
 
  •  If the spin-off is determined to be a taxable transaction, New Viad could be subject to material amounts of taxes.
 
  •  If New Viad takes actions that cause the spin-off to fail to qualify as a tax-free transaction, it will be required to indemnify MoneyGram for any resulting taxes and related losses.
 
  •  The ability of New Viad to engage in financings and acquisitions and other strategic transactions using equity securities is subject to limitations because of the U.S. federal income tax requirements for a tax-free distribution.
 
  •  New Viad could incur significant tax liability if MoneyGram fails to pay the tax liabilities attributable to it under the tax sharing agreement.

      For more information on these and other risks that we face, including risks relating to competition, the loss of large customers, the relationship driven nature or our businesses, liabilities relating to prior and discontinued operations, our credit ratings, our concession agreement for Glacier Park, challenges of the spin-off as a fraudulent transfer or a legal dividend, potential conflicts of interests involving our management and directors and

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relating to securities markets and ownership of New Viad common stock, see “Risk Factors” beginning on page 22 of this information statement.
 
History of New Viad

      Viad Corp has a corporate history dating to 1926 when its predecessor, The Greyhound Corporation, was formed. The Greyhound Corporation was the largest bus company in the world and began a series of diversifying acquisitions in the 1960’s that continued through the 1980’s. These acquisitions included predecessors to both MoneyGram and New Viad, as well as food, and consumer products and airport services businesses.

      In the late 1980’s, Viad Corp separated its bus transportation operations from its other businesses. In connection with this separation, The Dial Corp was formed in December 1991. In 1996, The Dial Corp changed its name to Viad Corp in connection with the disposition of its consumer products businesses.

*     *     *

      New Viad’s principal executive offices will continue to be located at 1850 North Central Avenue, Phoenix, Arizona 85004 with the telephone number of (602) 207-4000. New Viad’s internet address will remain as www.viad.com. New Viad will make available free of charge on www.viad.com its annual, quarterly and current reports, and amendments to those reports, as soon as reasonably practicable after it electronically files this material with, or furnishes it to, the SEC. The information contained on New Viad’s website, or connected to that site, is not a part of this information statement or the registration statement of which this information statement forms a part.

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Relationship between New Viad and MoneyGram

      Prior to the spin-off, New Viad and MoneyGram will enter into a number of agreements that will govern their relationship following the spin-off. These agreements include a separation and distribution agreement, a tax sharing agreement and an employee benefits agreement. The separation and distribution agreement will provide for the principal corporate transactions required to effect the separation of MoneyGram from Viad and the spin-off and other matters governing their relationship following the spin-off. Under the separation and distribution agreement, among other things:

  •  assets, personnel and liabilities currently associated with Viad’s payment services business and other specified liabilities will be allocated to MoneyGram, while all other assets, personnel and liabilities will be allocated to New Viad;
 
  •  Viad agrees to conduct the offers to purchase its outstanding medium-term notes and subordinated debentures, to redeem its outstanding preferred stock and to repay its outstanding commercial paper;
 
  •  Viad agrees to make the distribution on the terms described in this information statement; and
 
  •  MoneyGram indemnifies New Viad against liabilities related to MoneyGram’s business and other specified liabilities, and New Viad indemnifies MoneyGram against liabilities related to New Viad’s business.

      The employee benefits agreement will provide for the allocation of employees, employee benefit plans and associated liabilities and related assets between MoneyGram and Viad. Generally, Viad will remain responsible for compensation and benefit liabilities for employees and former employees assigned to it, and MoneyGram will be responsible for compensation and benefit liabilities for employees and former employees assigned to it. However, MoneyGram will assume specified liabilities relating to employees and former employees of Viad under its primary defined benefit pension plan, supplemental executive retirement plans and specified executive medical benefits.

      The tax sharing agreement will provide for the allocation between Viad and MoneyGram of federal, state, local and foreign tax liabilities for all periods through the spin-off. In general, the tax sharing agreement provides that MoneyGram will be liable for all federal, state, local and foreign tax liabilities, including any such liabilities resulting from the audit of or other adjustment to previously filed tax returns, that are attributable to the business of MoneyGram for all periods through the spin-off, and Viad will be responsible for all other of these taxes through the spin-off.

      Under the interim services agreement, Viad will provide a number of specified services to MoneyGram on an interim basis. Viad will generally provide these services until the earlier of two years from the spin-off or termination of all services under the interim services agreement. Viad will charge a fee for the services provided, which fee will be determined and allocated according to methods consistent with those in place prior to the spin-off. Generally, Viad will not be liable to MoneyGram for any failure to perform its obligations under the interim services agreement, except in the case of intentional misconduct or gross negligence. MoneyGram will indemnify Viad for any liability to any third party arising out of provision of services.

      For a more complete description of the terms of these agreements, see “Relationship between New Viad and MoneyGram — Agreements Between New Viad and MoneyGram.”

Actions Prior to the Spin-Off

      Immediately prior to the spin-off, Travelers Express Company, Inc., a wholly-owned subsidiary of Viad Corp, will be merged with a subsidiary of MoneyGram International, Inc., and MoneyGram International, Inc. will make a cash payment to Viad Corp of $150 million. The amount of this payment was determined based on review of historical cash flows, and the near-term and medium-term expected cash flows of MoneyGram and New Viad subsequent to the spin-off, and is intended to ensure that each of Viad and MoneyGram are adequately capitalized and has the appropriate level of cash resources at the time of the separation, while obtaining an investment grade long-term credit rating for MoneyGram. In addition, prior to the spin-off, Travelers Express

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Company, Inc. will pay Viad cash dividends in the amount of the net income of Travelers Express Company, Inc. in 2004 to the date of the spin-off, less the amount of dividends already paid in respect of such net income (other than the $7.25 million dividend described below). For the quarter ended March 31, 2004, Travelers Express Company, Inc. paid Viad a dividend in respect of net income for that quarter of approximately $34 million, of which $11 million related to a gain from the sale of a subsidiary and approximately $23 million related to net income exclusive of such gain. Assuming the spin-off is completed on June 30, 2004, Travelers Express Company, Inc. expects to pay a similar amount (approximately $23 million) based on its net income for the quarter ending on that date. However, we do not currently know when the distribution will occur or how Travelers Express Company, Inc.’s business will perform during that time, we cannot provide an estimate of the amount of the dividend.

      In connection with the spin-off, Viad expects to redeem all currently outstanding shares of its preferred stock. Viad has also repaid industrial revenue bonds for which it is responsible and is making tender offers to purchase its outstanding public notes and subordinated debentures and seeking consents to eliminate substantially all of the restrictive covenants in the instruments governing that indebtedness. In addition, in connection with the spin-off, Viad expects to repay all of its outstanding commercial paper, and each of MoneyGram and New Viad expect to enter into new credit facilities. See “Financing Arrangements of MoneyGram” and “Financing Arrangements of New Viad.” The total amount of cash required to fund the repayment of commercial paper, preferred stock redemptions and debt retirement described above, including the redemption of the industrial revenue bond, is expected to be $262.2 million.

      In addition, Travelers Express Company, Inc. will pay Viad a dividend of $7.25 million prior to the spin-off in connection with Viad’s payment of certain deferred compensation liabilities, which amount Viad will use to pay its creditors. For further information concerning all of the transactions that are being effected in connection with the spin-off, see “Relationship Between New Viad and MoneyGram — The Separation.”

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Summary Unaudited Pro Forma Consolidated Financial and Other Data

of MoneyGram International, Inc.
(Accounting Successor to Viad Corp)

      The summary unaudited pro forma consolidated financial data for MoneyGram International, Inc. (accounting successor to Viad Corp) set forth below is derived from the unaudited pro forma consolidated financial information of MoneyGram International, Inc. (accounting successor to Viad Corp) included elsewhere in this information statement. Notwithstanding the legal form of the spin-off, because of the relative significance of MoneyGram International, Inc. to Viad Corp, MoneyGram International, Inc. will be considered the divesting entity and treated as the “accounting successor” to Viad Corp for financial reporting purposes in accordance with Emerging Issues Task Force (EITF) Issue No. 02-11, “Accounting for Reverse Spin-offs” (EITF No. 02-11).

      The following summary unaudited pro forma consolidated financial data at and for the three months ended March 31, 2004 and for the year ended December 31, 2003 reflect the effects of the anticipated Viad preferred stock redemption, debt refinancings and the spin-off. The summary unaudited pro forma consolidated financial data for the years ended December 31, 2002 and 2001 reflect the historical financial data of MoneyGram International, Inc. giving effect to the spin-off transaction only. The capital structure that existed when the businesses that will be held by MoneyGram International, Inc. operated as part of Viad Corp is not relevant because it does not reflect MoneyGram International, Inc.’s expected future capital structure as a separate, independent public company. The basic weighted average shares outstanding were calculated by applying the distribution ratio (one share of MoneyGram common stock for every one share of Viad common stock) to Viad Corp’s basic weighted average shares outstanding during each period.

      The pro forma data does not represent what MoneyGram International, Inc.’s financial position or results of operations would have been had MoneyGram International, Inc. operated as a separate, independent public company, nor does the pro forma data give effect to any events other than those discussed in the related notes. The pro forma data also does not project MoneyGram International, Inc.’s financial position or results of operations at any future date or for any future period.

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Three months
ended Year ended December 31,
March 31,
2004 2003 2002 2001




(in thousands, except per share data)
Statement of Income Data
                               
Revenues:
                               
Payment services transaction fees
  $ 113,622     $ 419,003     $ 365,636     $ 322,128  
Payment services investment income
    77,700       318,221       342,055       313,432  
     
     
     
     
 
Total revenues
  $ 191,322     $ 737,224     $ 707,691     $ 635,560  
     
     
     
     
 
Income from continuing operations(1),(2)
  $ 19,578     $ 76,607     $ 74,853     $ 73,054  
     
     
     
     
 
Unaudited pro forma diluted income from continuing operations per common share(3)
  $ 0.22     $ 0.88     $ 0.86     $ 0.85  
     
     
     
     
 
Average outstanding and potentially dilutive common shares(4)
    87,217       86,619       86,716       86,322  
     
     
     
     
 
Unaudited pro forma basic income from continuing operations per common share(3)
  $ 0.23     $ 0.89     $ 0.87     $ 0.85  
     
     
     
     
 
Average outstanding common shares
    86,710       86,223       86,178       85,503  
     
     
     
     
 
Other Data
                               
Average investable balances
  $ 6,584,946                          
Approximate number of countries served
    160                          
Approximate number of global funds transfer agent locations
    100,000                          
 
Balance Sheet Data (at end of period)
                               
Total assets(1)
  $ 8,724,988                          
Total debt
    150,771                          
Stockholder’s equity(1)
    489,318                          


(1)  Management anticipates that Viad Corp will incur a one-time pre-tax loss on the retirement of debt and redemption of preferred stock, currently estimated to be $23.0 million, in connection with the spin-off. Further, management expects that one-time pre-tax expenses of approximately $18.0 million, primarily related to investment banking, legal and accounting fees, will be required to complete the spin-off. Of these expenses, $10.0 million represent fees payable by Viad Corp upon completion of the spin-off under existing agreements. The remaining $8.0 million represent other fees and expenses incurred jointly by MoneyGram International, Inc. and Viad Corp in connection with the spin-off, which fees and expenses MoneyGram International, Inc. and Viad Corp will share equally. As a result, approximately $4.0 million is expected to be incurred by MoneyGram International, Inc. and $14.0 million is expected to be incurred by New Viad. These nonrecurring items have not been reflected in the pro forma consolidated statements of income; however, the pro forma consolidated balance sheet has been adjusted to reflect these nonrecurring items.
 
(2)  For an explanation of the pro forma adjustments included in the above information, refer to the Unaudited Pro Forma Consolidated Statements of Income of MoneyGram International, Inc. (Accounting Successor to Viad Corp) included elsewhere in this information statement.
 
(3)  The computation of unaudited pro forma income from continuing operations per common share for the periods presented is based upon Viad Corp’s historical weighted average number of shares of common stock outstanding.
 
(4)  The diluted weighted average common shares is based on Viad Corp’s historical outstanding and potentially dilutive securities for purposes of computing unaudited pro forma diluted income from continuing operations per common share.

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Summary Historical Consolidated Financial and Other Data of

Viad Corp
(Accounting Predecessor to MoneyGram International, Inc.)

      The summary historical financial data of Viad Corp (accounting predecessor to MoneyGram International, Inc.) is derived from the audited and unaudited consolidated financial statements of Viad Corp. Notwithstanding the legal form of the spin-off, because of the relative significance of MoneyGram International, Inc. to Viad Corp, MoneyGram International, Inc. will be considered the divesting entity and treated as the “accounting successor” to Viad Corp for financial reporting purposes in accordance with EITF No. 02-11. As such, the information presented in the following summary for MoneyGram International, Inc. (accounting successor to Viad Corp) generally reflects financial and other information previously filed with the SEC by Viad Corp. If the spin-off were to occur, MoneyGram International, Inc. would report the historical results of operations (subject to certain adjustments) of New Viad as discontinued operations in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Pursuant to SFAS No. 144; however, this presentation is not permitted until the date of the spin-off.

      The statement of income data for the years ended December 31, 2003, 2002 and 2001 and the balance sheet data at December 31, 2003 and 2002 set forth below are derived from the audited consolidated financial statements of Viad Corp included elsewhere in this information statement. The balance sheet data at December 31, 2001 set forth below is derived from audited consolidated financial statements of Viad Corp not included in this information statement. The statement of income data for the three months ended March 31, 2004 and 2003 and the balance sheet data at March 31, 2004 are derived from the unaudited consolidated financial statements of Viad Corp included elsewhere in this information statement. The balance sheet data at March 31, 2003 is derived from unaudited consolidated financial statements of Viad Corp not included in this information statement.

      The summary historical consolidated financial data is not necessarily indicative of the results of operations or financial position that would have occurred if MoneyGram International, Inc. had been a separate, independent company during the periods presented, nor is it indicative of MoneyGram International, Inc.’s future performance. This historical data should be read together with the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Viad Corp (Accounting Predecessor to MoneyGram International, Inc.)” and Viad Corp’s consolidated financial statements and related notes included elsewhere in this information statement.

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Three months ended
March 31, Year ended December 31,


2004 2003 2003 2002 2001





(in thousands, except per share data)
Statement of Income Data
                                       
Revenues
  $ 398,877     $ 396,966     $ 1,507,692     $ 1,552,177     $ 1,581,057  
     
     
     
     
     
 
Income from continuing operations(1)(2)
  $ 29,061     $ 21,390     $ 110,528     $ 93,048     $ 42,382  
Income from discontinued operations(3)
    11,932       641       3,374       2,577       4,106  
Changes in accounting principles(4)
                      (37,739 )     (1,884 )
     
     
     
     
     
 
Net income
  $ 40,993     $ 22,031     $ 113,902     $ 57,886     $ 44,604  
     
     
     
     
     
 
Diluted income per common share
                                       
Continuing operations(1)(2)
  $ 0.33     $ 0.24     $ 1.27     $ 1.06     $ 0.48  
Discontinued operations(3)
    0.14       0.01       0.04       0.03       0.04  
Changes in accounting principles(4)
                      (0.44 )     (0.02 )
     
     
     
     
     
 
Diluted net income per common share
  $ 0.47     $ 0.25     $ 1.31     $ 0.65     $ 0.50  
     
     
     
     
     
 
Average outstanding and potentially dilutive common shares
    87,217       86,326       86,619       86,716       86,322  
     
     
     
     
     
 
Basic income per common share
                                       
Continuing operations(1)(2)
  $ 0.33     $ 0.24     $ 1.27     $ 1.07     $ 0.48  
Discontinued operations(3)
    0.14       0.01       0.04       0.03       0.05  
Changes in accounting principles(4)
                      (0.44 )     (0.02 )
     
     
     
     
     
 
Basic net income per common share
  $ 0.47     $ 0.25     $ 1.31     $ 0.66     $ 0.51  
     
     
     
     
     
 
Average outstanding common shares
    86,710       86,008       86,223       86,178       85,503  
     
     
     
     
     
 
Dividends declared per common share
  $ 0.09     $ 0.09     $ 0.36     $ 0.36     $ 0.36  
     
     
     
     
     
 
Balance Sheet Data (at end of period)
                                       
Total assets
  $ 9,566,076     $ 9,872,173     $ 9,222,155     $ 9,675,429     $ 8,375,299  
Total debt
    252,548       355,531       251,443       361,657       396,828  
$4.75 Redeemable preferred stock subject to mandatory redemption
    6,741       6,711       6,733       6,704       6,679  
Common stock and other equity
    915,369       733,093       849,837       677,894       714,481  


(1)  Includes investment impairment losses and interest income adjustments (after-tax) of $3.6 million, or $0.04 per diluted share, and $12.6 million, or $0.15 per diluted share for the three months ended March 31, 2004 and 2003, respectively, and $19.5 million, or $0.23 per diluted share, in 2003, $18.2 million, or $0.21 per diluted share, in 2002 and $4.6 million, or $0.06 per diluted share, in 2001. Also includes restructuring charges, recoveries and other items (after-tax) of $3.0 million income, or $0.03 per diluted share, in 2003, $12.3 million expense, or $0.14 per diluted share, in 2002 and $58.9 million expense, or $0.68 per diluted share, in 2001.
 
(2)  In January 2002, Viad Corp adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 specifies that goodwill and certain intangible assets with indefinite lives no longer be amortized but instead be subject to periodic impairment testing. Excluding the amortization of previously expensed goodwill and certain intangible assets, income from continuing operations and corresponding diluted income per share would have been $56.6 million ($0.64 diluted income per share) in 2001.
 
(3)  If the spin-off were to occur, MoneyGram International, Inc. (Accounting Successor to Viad Corp) would record the historical results of operations (subject to certain adjustments) of New Viad in discontinued

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operations upon the completion of the spin-off pursuant to SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”
 
(4)  In accordance with the adoption of SFAS No. 142, Viad Corp completed the transitional impairment test for goodwill during 2002 and concluded that a transitional impairment loss of $40.0 million ($37.7 million after-tax) should be recognized related to goodwill at the Exhibitgroup reporting unit of the Convention and Event Services segment. Effective in the second quarter of 2001, Viad adopted the provisions of EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets” (EITF No. 99-20). Accordingly, Viad Corp recorded a cumulative effect of a change in accounting principle of $3.0 million ($1.9 million after-tax).

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Summary Unaudited Pro Forma Combined Financial and Other Data of New Viad

      The summary unaudited pro forma combined financial data for New Viad set forth below is derived from the unaudited pro forma combined financial information of New Viad included elsewhere in this information statement.

      The following summary unaudited pro forma combined financial data at and for the three months ended March 31, 2004 and for the year ended December 31, 2003 reflects the effects of the anticipated Viad preferred stock redemption, debt refinancing and spin-off. The pro forma data does not represent what New Viad’s financial position or results of operations would have been had New Viad operated as a separate, independent public company, nor does the pro forma data give effect to any events other than those discussed in the related notes. The pro forma data also does not project New Viad’s financial position or results of operations at any future date or for any future period.

                 
Three months
ended Year ended
March 31, December 31,
2004 2003


(in thousands, except
per share data)
Statement of Income Data
               
Revenues:
               
Convention show services
  $ 158,330     $ 521,433  
Exhibit design and construction
    45,286       195,832  
Travel and recreation services
    3,939       53,203  
     
     
 
Total revenues
  $ 207,555     $ 770,468  
     
     
 
Income from continuing operations(1)(2)
  $ 7,707     $ 21,624  
     
     
 
Unaudited pro forma diluted income from continuing operations per common share(3)
  $ 0.09     $ 0.25  
     
     
 
Average outstanding and potentially dilutive common shares(4)
    87,217       86,619  
     
     
 
Unaudited pro forma basic income from continuing operations per common share(3)
  $ 0.09     $ 0.25  
     
     
 
Average outstanding common shares
    86,710       86,223  
     
     
 
Balance Sheet Data (at end of period)
               
Total assets(1)
  $ 705,066          
Total debt
    19,274          
Stockholder’s equity(1)
    379,273          


(1)  Management expects that one-time pre-tax expenses of approximately $18.0 million, primarily related to investment banking, legal and accounting fees, will be required to complete the spin-off. Of these expenses, $10.0 million represent fees payable by Viad Corp upon completion of the spin-off under existing agreements. The remaining $8.0 million represent other fees and expenses incurred jointly by MoneyGram International, Inc. and Viad Corp in connection with the spin-off, which fees and expenses MoneyGram International, Inc. and Viad Corp will share equally. As a result, approximately $4.0 million is expected to be incurred by MoneyGram International, Inc. and $14.0 million is expected to be incurred by New Viad. These nonrecurring items have not been reflected in the pro forma combined statements of income; however, the pro forma combined balance sheet has been adjusted to reflect the incurrence of $14.0 million of these expenses.
 
(2)  For an explanation of the pro forma adjustments included in the above information, refer to the Unaudited Pro Forma Combined Statements of Income of New Viad included elsewhere in this information statement.
 
(3)  The computation of unaudited pro forma income (loss) per common share for the periods presented is based upon Viad’s historical weighted average number of shares of Viad common stock outstanding.
 
(4)  The diluted weighted average common shares is based on Viad Corp’s historical outstanding and potentially dilutive securities for purposes of computing unaudited pro forma diluted income (loss) per common share.

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Summary Historical Combined Financial and Other Data of New Viad

      The following table summarizes historical combined financial data for New Viad. The statement of income data for the years ended December 31, 2003, 2002 and 2001 and the balance sheet data at December 31, 2003 and 2002 set forth below are derived from the audited combined financial statements of New Viad included elsewhere in this information statement. The balance sheet data at December 31, 2001 set forth below is derived from the audited combined financial statements of New Viad not included in this information statement. The statement of income data for the three months ended March 31, 2004 and 2003 and the balance sheet data at March 31, 2004 are derived from the unaudited combined financial statements of New Viad included elsewhere in this information statement. The balance sheet data at March 31, 2003 is derived from the unaudited financial information of New Viad not included in this information statement.

      The summary historical combined financial data is not necessarily indicative of the results of operations or financial position that would have occurred if New Viad had been a separate, independent company during the periods presented, nor is it indicative of New Viad’s future performance. This historical data should be read together with the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations of New Viad” and New Viad’s combined financial statements and related notes included elsewhere in this information statement.

                                         
Three months ended
March 31, Year ended December 31,


2004 2003 2003 2002 2001





(in thousands, except per share data)
Statement of Income Data
                                       
Revenue
  $ 207,555     $ 225,338     $ 770,468     $ 844,486     $ 945,497  
     
     
     
     
     
 
Income (loss) from continuing operations
  $ 7,559     $ 4,711     $ 21,091     $ 8,395     $ (40,603 )
Change in accounting principle
                      (37,739 )      
     
     
     
     
     
 
Net income (loss)
  $ 7,559     $ 4,711     $ 21,091     $ (29,344 )   $ (40,603 )
     
     
     
     
     
 
Unaudited pro forma diluted income (loss) per common share(1)
                                       
Continuing operations
  $ 0.09     $ 0.05     $ 0.24     $ 0.10     $ (0.47 )
Change in accounting principle
                      (0.44 )      
     
     
     
     
     
 
Diluted net income (loss) per common share
  $ 0.09     $ 0.05     $ 0.24     $ (0.34 )   $ (0.47 )