DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material under §240.14a-12

MoneyGram International, Inc.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

   No fee required
   Fee paid previously with preliminary materials
   Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

 


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2022

 

 

  NOTICE OF ANNUAL MEETING

  AND PROXY STATEMENT

 

 

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LETTER FROM OUR CHAIRMAN AND CEO

 

 

LOGO

2828 North Harwood Street, 15th Floor

Dallas, Texas 75201

March 25, 2022

Dear Fellow Stockholders:

MoneyGram had a record year in 2021, driven by the continued execution of our digital-first strategy, a record-breaking holiday season for our digital business, and resilience of our retail partners in many markets. We achieved a number of strategic milestones, including significantly improving our capital structure, launching new product capabilities and innovative partnerships, and growing our digital business. In 2022, we remain committed to our disciplined focus on customer acquisition, cross-border payments innovation, and customer experience enhancements.

Against this backdrop, and on behalf of the Board of Directors, I want to take this opportunity to invite you to attend our virtual-only 2022 Annual Meeting of Stockholders, which will be held on May 5, 2022 at 9:00 a.m. (Central Time) at www.virtualshareholdermeeting.com/MGI2022. Details of the business to be conducted at the Annual Meeting are described in the attached Notice of 2022 Annual Meeting of Stockholders and Proxy Statement.

Your vote is important, and I encourage you to vote whether or not you plan to attend the Annual Meeting. Please sign, date and return the enclosed proxy card, or vote by telephone or via the Internet as described in your proxy materials.

I encourage you to read the Annual Report on Form 10-K for information about the Company’s performance in 2021, which is available on the Company’s Investor Relations website at https://ir.moneygram.com/.

Thank you for your continued support of MoneyGram. I look forward to our ongoing engagements, including at our upcoming Annual Meeting. I would like to thank our agents and employees for their outstanding efforts to support our business and operations, and our stockholders for their continued support.

Sincerely,

 

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W. Alexander Holmes

Chairman and Chief Executive Officer

 

 


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NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

 

 

LOGO

2828 North Harwood Street, 15th Floor

Dallas, Texas 75201

 

      

 

Date and Time

 

Thursday, May 5, 2022

9:00 a.m. Central Time

 

   
      

 

Location

 

This year’s meeting is a virtual-only meeting at:

www.virtualshareholdermeeting.com/
MGI2022

 

   
      

 

Record Date

 

March 8, 2022

 

 

   
 

 

Items of Business:

 

1.

To elect eight directors to serve until the 2023 Annual Meeting of Stockholders, or until their successors are elected and qualified or their earlier resignation;

 

2.

To ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2022;

 

3.

Advisory vote to approve executive compensation; and

 

4.

To act upon any other business that may properly come before the meeting and any adjournment(s) or postponement(s) thereof.

Only stockholders of record of our common stock at the close of business on March 8, 2022 are entitled to receive this notice and to vote at the Annual Meeting. A list of the names of stockholders of record entitled to vote at the Annual Meeting will be available during the entire time of the Annual Meeting on the virtual meeting website.

To ensure that your shares are represented at the Annual Meeting, we urge you to submit your voting instructions by proxy as promptly as possible. You may submit your proxy via the Internet or telephone, or, if you received paper copies of the proxy materials by mail, you can also submit a proxy via mail by following the instructions on the proxy card or voting instruction card. We encourage you to submit a proxy via the Internet. It is convenient and saves us significant postage and processing costs. You can revoke a proxy at any time prior to its exercise at the Annual Meeting by following the instructions in the Proxy Statement. You may also vote online during the Annual Meeting.

By Order of the Board of Directors

 

LOGO

Robert L. Villaseñor

General Counsel,

Corporate Secretary and Chief Administrative Officer

Dallas, Texas

March 25, 2022

 

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL

MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY MAY 5, 2022

 

The Notice of Annual Meeting, Proxy Statement and 2021 Annual Report on Form 10-K are available at

www.proxyvote.com.

 

 

 


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TABLE OF CONTENTS

 

VOTING INFORMATION      1  

Who May Vote/Voting Rights

     1  

How You May Vote

     1  

How You May Revoke or Change Your Vote

     1  

Costs of Solicitation

     1  

Difference between a Stockholder of Record and a Beneficial Owner of Shares Held in Street Name

     2  

Participating in the Meeting

     2  

Votes Required/Voting Procedures

     2  

Reducing Duplicate Mailings

     4  
BOARD OF DIRECTORS AND GOVERNANCE      5  

The Merger

     5  

Board Structure and Composition

     5  

Director Independence

     5  

Board Meetings

     5  

Attendance at Annual Stockholder Meetings

     5  

Meetings of Independent Directors

     5  

Board Leadership Structure

     6  

Board’s Role in Risk Oversight

     6  

Board Committees

     6  

Communications with the Board

     8  

Director Nominee Criteria and Process

     8  

Compensation Committee Interlocks and Insider Participation

     8  

Other Corporate Governance Matters

     9  

PROPOSAL 1: ELECTION OF DIRECTORS

     11  

Director Nominees—Snapshot

     11  

Board Voting Recommendation

     11  

Director Nominees—Qualifications and Background

     11  

Director Compensation

     14  

Director Stock Ownership Guidelines

     15  

Board Diversity Matrix

     15  

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2022

     16  

Independent Registered Public Accounting Firm Fees

     16  

Audit Committee Approval of Audit and Non-Audit Services

     16  

Board Voting Recommendation

     16  

Audit Committee Report

     17  

PROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

     19  

Board Voting Recommendation

     19  
EXECUTIVE COMPENSATION      20  

Compensation Discussion and Analysis

     20  

Overview of Our Compensation Philosophy

     20  

2021 Say-on-Pay Results

     20  

Overview of Our Business

     20  

2021 Performance Highlights

     21  

Executive Compensation Philosophy and Program Design

     22  

Key Features of Our Executive Compensation Program

     23  

Snapshot: How Compensation Is Delivered to Our NEOs (Pay Mix)

     24  

Role of the Human Resources and Nominating Committee

     25  

Role of the Compensation Consultant

     25  

Role of the CEO

     25  

Mitigation of Excessive Risk-Taking

     26  

Peer Group Selection and Competitive Benchmarking

     27  

CEO Performance and Pay

     28  

2021 Compensation Review and Decisions

     28  

Other Compensation

     32  

Employment and Other Agreements

     33  

Compensation Committee Report

     37  
EXECUTIVE COMPENSATION TABLES      38  

2021 Summary Compensation Table

     38  

2021 Details Behind all other Compensation Column

     38  

2021 Grants of Plan-Based Awards

     39  

Outstanding Equity Awards at December 31, 2021

     41  

2021 Option Exercises and Stock Vested Table

     42  

Potential Payments upon Termination or Change in Control

     42  

CEO Pay Ratio

     46  
EQUITY COMPENSATION PLAN INFORMATION      48  
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS      49  

Policy and Procedures Regarding Transactions with Related Persons

     49  

Transactions with Related Persons

     49  
BENEFICIAL OWNERSHIP OF COMMON STOCK      51  

Certain Beneficial Owners

     51  

Directors, Director Nominees and Executive Officers

     51  
DELINQUENT SECTION 16(a) REPORTS      53  
STOCKHOLDER PROPOSALS FOR THE 2023 ANNUAL MEETING      54  
2021 ANNUAL REPORT ON FORM 10-K      55  
OTHER MATTERS      56  
ANNEX A—NON-GAAP MEASURES      A-1  
 

 

 

 

 

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PROXY STATEMENT

 

 

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VOTING INFORMATION

A proxy is solicited on behalf of the Board of Directors (the “Board”) of MoneyGram International, Inc. (“MoneyGram,” the “Company,” “we,” “us” or “our”) for use at the Annual Meeting of Stockholders to be held virtually on Thursday, May 5, 2022, beginning at 9:00 a.m. Central Time at www.virtualshareholdermeeting.com/MGI2022 and at any adjournment or postponement thereof (the “Meeting”). We are first mailing the proxy statement and proxy card to holders of MoneyGram common stock on or about March 25, 2022.

Who May Vote/Voting Rights

All stockholders who owned MoneyGram common stock at the close of business on the record date, March 8, 2022, referred to herein as the record date, are entitled to receive the Notice of Annual Meeting and to attend and vote their shares online at the Meeting. On the record date, 96,259,638 shares of MoneyGram common stock were outstanding.

A holder of MoneyGram common stock is entitled to one vote for each share of common stock held on the record date for each of the proposals set forth herein. There is no cumulative voting.

How You May Vote

You may vote by automated telephone voting, via the Internet or by proxy. The Board recommends you vote by proxy online prior to the Meeting even if you plan to participate in the Meeting. You may vote in one of four ways:

 

   

Online Prior to the Meeting: You may vote by proxy online. Go to www.proxyvote.com and follow the instructions found on your Notice or proxy card;

 

   

Online During the Meeting: You may vote online during the Meeting by visiting www.virtualshareholdermeeting.com/MGI2022 and following the instructions found on your Notice or proxy card;

 

   

By Telephone: You may vote by proxy by calling the toll-free number found on the proxy card; or

 

   

By Mail: You may vote by proxy by filling out the proxy card and mailing it back.

How You May Revoke or Change Your Vote

Proxies may be revoked or changed if you:

 

   

deliver a signed, written revocation letter, dated later than the proxy, to MoneyGram International, Inc., 2828 North Harwood Street, 15th Floor, Dallas, Texas 75201, Attention: Corporate Secretary;

 

   

deliver a signed proxy, dated later than the prior proxy, to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717;

 

   

vote again by telephone or via the Internet prior to the Meeting; or

 

   

attend the virtual Meeting and vote at the virtual Meeting by submitting a later-dated vote online.

If your shares are held in street name by a broker, bank, trust or other nominee, you must contact such organization and follow its procedures to revoke your proxy.

Costs of Solicitation

The costs of solicitation, if any, will be borne by MoneyGram. Proxies may be solicited on our behalf by directors, officers or employees, in person or by telephone, electronic transmission or facsimile transmission. No additional

 


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compensation will be paid to such persons for such solicitation. MoneyGram has retained Alliance Advisors, LLC to assist in the solicitation of proxies for an estimated fee of $7,500 plus reimbursement of certain disbursements and expenses.

MoneyGram will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to beneficial owners of shares.

Your cooperation in promptly voting your shares and submitting your proxy via the Internet or by telephone, or by completing and returning the enclosed proxy card (if you received your proxy materials in the mail), will help to avoid additional expense.

Difference between a Stockholder of Record and a Beneficial Owner of Shares Held in Street Name

If your shares are registered in your name with MoneyGram’s transfer agent, Equiniti Trust Company Shareowner Services, you are the “stockholder of record” of those shares. In such case, the Notice of Annual Meeting, proxy statement and any accompanying documents have been provided directly to you by MoneyGram.

If your shares are not registered in your own name and, instead, your broker, bank, trust or other nominee holds your shares, you are a “beneficial owner” of shares held in “street name.” The organization holding your account is considered the stockholder of record for purposes of voting at the Meeting. The Notice of Annual Meeting, this proxy statement and any accompanying documents have been forwarded to you by your broker, bank, trust or other nominee. As the beneficial owner, you have the right to direct your broker, bank, trust or other nominee how to vote your shares by using the voting instruction card or by following their instructions for voting by telephone or via the Internet.

Participating in the Meeting

This year’s Meeting will be virtual-only and accessible via the Internet. We adopted a virtual format in 2020 to make participation accessible for stockholders from any geographic location with Internet connectivity. We offer the same participation opportunities as were provided at the in-person portion of our past annual meetings while further enhancing the online experience available to all stockholders regardless of their location. The accompanying proxy materials include instructions on how to participate in the Meeting and how you may vote your shares of MoneyGram common stock.

You are entitled to participate in the Meeting if you were a stockholder as of the close of business on March 8, 2022, the record date for the Meeting, or hold a valid proxy for the Meeting. To be admitted to the Meeting at www.virtualshareholdermeeting.com/MGI2022, you must enter the 16-digit control number found next to the label “Control Number” for postal mail recipients or within the body of the email sending you the proxy statement.

Whether or not you participate in the Meeting, it is important for you to be part of the voting process. You may log on to proxyvote.com and enter your control number to vote your shares. This year’s stockholder question and answer session will be limited to questions submitted in advance of the Meeting that are relevant to the purpose of the Meeting. You may submit a question in advance of the Meeting at www.proxyvote.com after logging in with your Control Number. All questions must be submitted by 11:59 p.m. CT on Wednesday, May 4, 2022.

We will have technicians ready to assist you with any technical difficulties you may have accessing the Meeting. If you encounter any difficulties accessing the Meeting during check-in or during the Meeting, please call the technical support number that will be posted on the Meeting platform log-in page.

Votes Required/Voting Procedures

The presence at the Meeting, online or by proxy, of a majority of the voting power of our common stock issued and outstanding and eligible to vote will constitute a quorum for the transaction of business at the Meeting. If a quorum is not present at the Meeting, the chairman of the Meeting or the holders of a majority of the voting power of our common stock entitled to vote at the Meeting who are present in person or by proxy at the Meeting have the power to adjourn the Meeting from time to time, until a quorum is present.

In general, shares of common stock represented by a properly signed and returned proxy card, or properly voted by telephone or via the Internet, will be counted as present and entitled to vote at the Meeting for purposes of determining the existence of a quorum. Proxies received but marked as abstentions and broker non-votes will be

 

 

 

 

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included in the voting power considered to be present at the Meeting for purposes of determining a quorum. Broker non-votes are shares held of record by a broker that are not voted because the broker has not received voting instructions from the beneficial owner of the shares and the broker either lacks or declines to exercise the authority to vote the shares in its discretion.

Proxies will be voted as specified by the stockholder. Signed proxies that lack any specification will be voted (i) “FOR” each of the Board’s director nominees; (ii) “FOR” the ratification of KPMG LLP (“KPMG”) as our independent registered public accounting firm for 2022; and (iii) “FOR” the approval, on an advisory basis, of a resolution on our executive compensation. Notwithstanding the foregoing, proxies corresponding to shares held through the MoneyGram International, Inc. 401(k) Plan (the “401(k) Plan”) will be voted as described below. The proxy holders will use their best judgment with respect to any other matters properly brought before the Meeting. If a nominee cannot or will not serve as a director, the proxy may be voted for another person as the proxy holders decide.

Unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on any of the matters to be considered at the Meeting other than the ratification of our independent registered public accounting firm. Please vote your proxy so your vote can be counted.

Independent Tabulator.    We have appointed Broadridge Financial Solutions Inc. (“Broadridge”) as our independent tabulator to receive and tabulate all votes cast at the Meeting. Broadridge will determine whether a quorum is present.

Election of Directors (Proposal 1).    Each director nominee receiving a majority of the voting power of the common stock outstanding as of the record date and voted with respect to the director will be elected as a director, provided a quorum is present at the Meeting. This means that the voting power of the stock voted “FOR” a director nominee must exceed the voting power of the stock voted “AGAINST” that director nominee in order for that nominee to be elected as a director. Shares not represented at the Meeting, broker non-votes and proxies marked “ABSTAIN” have no effect on the election of directors. See “Other Corporate Governance Matters—Majority Vote Standard” in this proxy statement for further information.

Ratification of Appointment of Independent Registered Public Accounting Firm for 2022 (Proposal 2).    The affirmative vote of a majority of the voting power of the common stock outstanding as of the record date and voted with respect to this proposal is required for approval, provided a quorum is present at the Meeting. Shares not represented at the Meeting, broker non-votes and proxies marked “ABSTAIN” with regard to this proposal have no effect on this proposal.

Advisory Vote to Approve Executive Compensation (Proposal 3).    The affirmative vote of a majority of the voting power of the common stock outstanding as of the record date and voted with respect to this proposal is required to approve, on an advisory basis, the compensation of MoneyGram’s named executive officers, provided a quorum is present at the Meeting. Shares not represented at the Meeting, broker non-votes and proxies marked “ABSTAIN” have no effect on this proposal. While the outcome of the vote on this proposal will not be binding on the Board, the Board will review and consider the voting results when determining future executive compensation decisions.

If you hold your shares in street name, unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on any of the matters to be considered at the Meeting other than the ratification of our independent registered public accounting firm. Please vote your proxy so your vote can be counted.

If you are a participant in the 401(k) Plan, your proxy will serve as a voting instruction to the Independent Fiduciary (as defined in the 401(k) Plan). The Independent Fiduciary shall instruct the 401(k) Plan Trustee how to vote. The Independent Fiduciary shall follow each participant’s instructions unless it determines that doing so would be contrary to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). If no voting instructions are received from a participant in the 401(k) Plan, the trustee will vote those shares in accordance with the majority of shares voted in the 401(k) Plan for which instructions were received, unless the Independent Fiduciary determines that doing so would be contrary to ERISA and instructs the trustee to vote such shares differently.

 

 

 

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Reducing Duplicate Mailings

Because many stockholders hold shares of our common stock in multiple accounts or share an address with other stockholders, stockholders may receive duplicate mailings of notices or proxy materials. Stockholders may avoid receiving duplicate mailings as follows:

 

   

Stockholders of Record.    If your shares are registered in your own name and you are interested in consenting to the delivery of a single notice or single set of proxy materials, you may contact Broadridge Householding Department by phone at 1-866-540-7095 or by mail to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

 

   

Beneficial Stockholders.    If your shares are not registered in your own name, your broker, bank, trust or other nominee that holds your shares may have asked you to consent to the delivery of a single notice or single set of proxy materials if there are other MoneyGram stockholders who share an address with you. If you currently receive more than one copy of the notice or proxy materials at your household and would like to receive only one copy in the future, you should contact your nominee.

 

   

Right to Request Separate Copies.    If you consent to the delivery of a single notice or single set of proxy materials but later decide that you would prefer to receive a separate copy of the notice or proxy materials, as applicable, for each stockholder sharing your address, then please notify Broadridge Householding Department or your nominee, as applicable, and they will promptly deliver the additional notices or proxy materials. If you wish to receive a separate copy of the notice or proxy materials for each stockholder sharing your address in the future, you may also contact Broadridge Householding Department by phone at 1-866-540-7095 or by mail to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

 

 

 

 

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BOARD OF DIRECTORS AND GOVERNANCE

The Merger

On February 14, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Mobius Parent Corp., a Delaware corporation (“Parent”) and an affiliate of Madison Dearborn Partners, LLC, and Mobius Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”).

The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a subsidiary of Parent. At the effective time of the Merger, each outstanding share of our common stock (other than shares held by the Company or a wholly owned subsidiary of the Company or owned by Parent, Merger Sub or any entity of which Merger Sub is a direct or indirect wholly owned subsidiary) will be automatically cancelled and converted into the right to receive $11.00 in cash.

Consummation of the Merger is subject to a number of conditions set forth in the Merger Agreement. Our Board has unanimously approved the Merger Agreement and recommended that the Company’s stockholders approve the Merger at the special meeting of stockholders to be held.

Board Structure and Composition

The Company’s Amended and Restated Certificate of Incorporation, as amended, and Amended and Restated Bylaws, as amended (our “Bylaws”), provide that each director of the Company is elected annually, for a term expiring at the next annual meeting of stockholders, by the vote of a majority of the voting power of the common stock outstanding as of the record date and voted with respect to the director, provided that in contested elections, the directors will be elected by a plurality of the voting power of the common stock. The number of directors on the Board shall be fixed by a majority of the whole Board, but shall not be more than seventeen nor less than three. If a vacancy occurs, including as a result of an increase in the authorized number of directors, the vacant directorship may be filled by the affirmative vote of a majority of the votes of the remaining directors for a term expiring at the next annual meeting of stockholders. Each director holds office until a successor has been duly elected and qualified, or their earlier resignation.

The Board is currently made up of eight members: seven independent directors (as defined and set forth below) and W. Alexander Holmes, Chairman of the Board and Chief Executive Officer (“CEO”) of the Company. Each of the Company’s current directors is seeking re-election at the Meeting.

Director Independence

The Board, based on the recommendation of the Human Resources and Nominating Committee (“HRNC”), affirmatively determined that seven of our current directors, Mses. Gupta, Silcock and Vaughan and Messrs. Lorca, Rafferty and Turner and Amb. Garza, are independent under the Nasdaq listing standards. Mr. Holmes, our Chairman and CEO, is the only current director who is not independent.

Board Meetings

The Board held 13 meetings during 2021. Each director who was a member of the Board in 2021 attended at least 75% of the aggregate number of meetings of the Board and meetings of the committees on which the director served that were held during such director’s service.

Attendance at Annual Stockholder Meetings

Under our Corporate Governance Guidelines, directors are expected to attend the annual meeting of stockholders, Board meetings and meetings of committees on which they serve. Each director who was a member of the Board in 2021 attended the 2021 Annual Meeting of Stockholders, which was held virtually.

Meetings of Independent Directors

Pursuant to our Corporate Governance Guidelines and the Nasdaq listing standards, the Board schedules an executive session of the independent directors at least twice annually. In 2021, the Board held three executive sessions of the independent directors, which included all directors except Mr. Holmes. The Company appointed W. Bruce Turner as the lead independent director in October 2021.

 

 

 

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Board Leadership Structure

The Board reviews its leadership structure periodically. Mr. Holmes has been CEO of the Company since January 1, 2016, has been a member of the Board since December 10, 2015 and, effective February 2, 2018, was appointed as the Chairman of the Board. At this time, we believe that a combined Chairman and CEO is the most desirable approach for the Company because it creates efficiencies and enables the CEO to act as a bridge between management and the Board.

Additionally, in October 2021, the Company appointed W. Bruce Turner as the lead independent director. As our senior serving director and a former chief executive officer with broad publicly traded company experience, we believe Mr. Turner is qualified to serve as the lead independent director. As lead independent director, Mr. Turner provides, in conjunction with the Chairman of the Board, leadership and guidance to the Board, and also:

 

   

presides at all meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the independent directors;

 

   

has the authority to call meetings of the independent directors; and

 

   

serves as the principal liaison between the Chairman and the independent directors.

Board’s Role in Risk Oversight

The Board is responsible for providing oversight of risk management functions, including the Company’s policies and strategies relating to the management of credit, liquidity, market, financial and operational risks. The Board regularly assesses management’s response to critical risks and recommends changes to management, including changes in leadership, where appropriate.

The Board meets periodically with key members of management to review the Company’s business and agree upon its strategy and the risks involved with such strategy. Management and the Board discuss the amount of risk the Company is willing to accept related to implementing our strategy. On a periodic basis throughout the year, management members responsible for managing credit, liquidity, market, financial and key operational risks, including legal, regulatory compliance, fraud, information technology and security (including cybersecurity risks), meet directly with the Board and with the Audit Committee to provide an update on key risks and their processes and systems to manage the risks. The Board approves management’s policies related to key risk areas and provides timely input to management regarding risk issues and the appropriateness of management’s response. The Board also approves actions surrounding our capital structure, debt agreements, and legal settlements, evaluates potential key acquisitions and approves the annual budget. Key finance, accounting and treasury management members meet directly with the Board and the Audit Committee to provide updates on our financial results.

The Board delegates responsibility for overseeing certain risks to the Audit Committee. The Audit Committee monitors the quality and integrity of our financial statements and, along with the Compliance and Ethics Committee, our compliance with legal and regulatory requirements. The Audit Committee is also responsible for understanding risk assessment and risk management policies. The internal audit function reports directly to the Audit Committee and is responsible for testing, on a risk basis, management’s compliance with policies and procedures. On an annual basis, the Audit Committee reviews the internal audit function and internal audit reports and regularly meets with management regarding updates on key risks and their processes and systems to manage the risks. The Audit Committee also reviews and approves the annual audit plan and regularly reports to the Board. For additional information with respect to the Audit Committee, see “Board of Directors and Governance—Board Committees—Audit Committee” in this proxy statement.

Board Committees

The Board currently maintains three standing committees: the Audit Committee, the Human Resources and Nominating Committee and the Compliance and Ethics Committee.

Audit Committee

The Audit Committee currently consists of Mses. Silcock and Vaughan and Mr. Rafferty (Chair). Membership on the Audit Committee is limited to independent directors, and the Board, based on the recommendation of the HRNC, has affirmatively determined that each member of the Audit Committee is an independent director under

 

 

 

 

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the Nasdaq listing standards and the rules of the U.S. Securities and Exchange Commission (the “SEC”). The Board has also determined, based on the recommendation of the HRNC, in accordance with the Nasdaq listing standards, all members of the Audit Committee are sufficiently proficient in reading and understanding financial statements to serve on the Audit Committee and that each member qualifies as an “audit committee financial expert” under the rules of the SEC and meets the “financial sophistication” standard as defined under the Nasdaq listing standards. No member of the Audit Committee simultaneously served on the audit committee of more than three public companies during 2021.

The Audit Committee held 5 meetings in 2021. The Board has adopted a separate written charter for the Audit Committee, which is available at https://ir.moneygram.com/.

The Audit Committee reports regularly to the Board and annually evaluates its own performance. The Audit Committee meets periodically during the year, in conjunction with regular meetings of the Board, and reviews quarterly earnings and related press releases and management’s discussion and analysis of financial condition and results of operation for inclusion in our Quarterly Reports on Form 10-Q and our Annual Report on Form 10-K filed with the SEC. The Audit Committee appoints our independent registered public accounting firm and assists the Board in monitoring the quality and integrity of our financial statements, the independence and performance of our internal auditor and our independent registered public accounting firm, and, along with the Compliance and Ethics Committee, our compliance with legal and regulatory requirements. The Audit Committee meets regularly in executive session with our independent registered public accounting firm. The independent registered public accounting firm reports directly to the Audit Committee, and the head of the Company’s internal audit function reports directly to the Audit Committee Chair. For additional information regarding the responsibilities of the Audit Committee, see “Board of Directors and Governance—Board’s Role in Risk Oversight” in this proxy statement.

Human Resources and Nominating Committee

The HRNC currently consists of Amb. Garza and Messrs. Lorca and Turner (Chair). The Board has affirmatively determined that each member of the HRNC is an independent director under the Nasdaq listing standards and the rules of the SEC.

The HRNC held 4 meetings in 2021. The Board has adopted a separate written charter for the HRNC, which is available at https://ir.moneygram.com/.

The HRNC reports regularly to the Board and annually evaluates its own performance. It meets periodically during the year, in conjunction with regular meetings of the Board. The HRNC oversees development and implementation of a compensation strategy designed to enhance profitability and fundamental value for the Company. It also reviews and approves the salary and other compensation of the CEO and our other executive officers, as well as the compensation and benefits of our non-employee directors. The HRNC determines incentive compensation targets and awards under various compensation plans and makes grants of equity awards under our stock incentive plan. The HRNC approves the grant of equity compensation to executive officers of the Company (other than the CEO, whose grants are approved by the full Board), and may delegate to one or more executive officers its authority to make grants of equity compensation to eligible individuals other than directors and executive officers. Accordingly, the HRNC has delegated authority to the Chairman and CEO to approve grants of equity compensation to employees who are not executive officers. During 2021, the HRNC utilized the services of Lyons, Benenson & Company Inc. (“LB&Co.”) and Pearl Meyer & Partners, LLC (“Pearl Meyer”), as its compensation consultants. LB&Co. and Pearl Meyer separately assisted the HRNC with an evaluation of the Company’s peer group and executive and non-employee director compensation matters. LB&Co. acted as the HRNC’s independent compensation consultant through December of 2021, when the HRNC approved the replacement of LB&Co. with Pearl Meyer. For additional information regarding our compensation consultant, see “Executive Compensation—Compensation Discussion and Analysis—Role of the Compensation Consultant” in this proxy statement.

The HRNC is also responsible for recommending to the Board a slate of directors for election by the stockholders at each annual meeting and for proposing candidates to fill any vacancies on the Board. The HRNC is also responsible for assessing the Board’s performance and reviewing our Corporate Governance Guidelines. The HRNC also reviews and advises the Board regarding public policy and environmental, social and governance matters as they relate to the Company. The HRNC may form subcommittees and delegate authority to such subcommittees when appropriate and when unanimously approved by the HRNC.

 

 

 

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Compliance and Ethics Committee

The Compliance and Ethics Committee (the “CEC”) currently consists of Amb. Garza (Chair), Mses. Gupta and Vaughan and Mr. Rafferty.

The CEC held 6 meetings in 2021. The Board has adopted a separate written charter for the CEC which is available at https://ir.moneygram.com/.

The CEC, among other things, oversees the Company’s programs, policies and procedures regarding compliance with applicable laws and regulations, including the Company’s Code of Conduct, anti-corruption policy and anti-fraud and anti-money laundering policies and oversees the activities of the Company’s chief compliance officer with respect thereto.

Communications with the Board

Stockholders or other interested parties may communicate with our independent directors as a group, committees of the Board or individual directors by writing to MoneyGram International, Inc., 2828 North Harwood Street, 15th Floor, Dallas, Texas 75201, Attention: Corporate Secretary. Upon receipt, the Corporate Secretary will review such correspondence and, as appropriate, forward such correspondence to the Board for its consideration. Complaints and concerns regarding MoneyGram may also be reported anonymously and confidentially via MoneyGram’s Ethics Line at 1-800-494-3554 in the United States or via www.moneygram.ethicspoint.com anywhere in the world. Our Policy on Communications with the Board is contained in our Corporate Governance Guidelines, which are posted at https://ir.moneygram.com.

Director Nominee Criteria and Process

Our Corporate Governance Guidelines describe the process for selection of director nominees, including qualifications. A candidate for Board service must possess the ability to apply good business judgment, have demonstrated the highest level of integrity, be able to properly exercise the duties of loyalty and care in the representation of the interests of our stockholders and must be able to represent all of our stockholders fairly and equally. Candidates should also exhibit proven leadership capabilities, and experience in business, finance, law, education, technology or government. In addition, candidates should have an understanding of major issues facing public companies similar in scope to MoneyGram. Experience in payment or financial services will be considered as well.

Candidates must also have, and be prepared to devote, adequate time to the Board and its committees. The Board’s philosophy on diversity mirrors the Company’s philosophy. Although no formal policy exists, the Board and HRNC seek to promote, through the nomination process, an appropriate diversity of experience (including international experience), expertise, perspective, age, gender and ethnicity, and includes such diversity considerations when appropriate in connection with potential nominees. Independence of a nominee under the Nasdaq listing standards and applicable SEC rules and regulations is also considered.

In general, candidates for membership to the Board are evaluated, regardless of the source of the nomination, by the HRNC for recommendation to the Board in accordance with its charter and the procedures described in the Corporate Governance Guidelines.

The HRNC also considers nominations of director candidates validly made by stockholders. A stockholder who wishes to nominate a person for election to the Board must ensure that the nomination complies with our Bylaw provisions on making stockholder nominations at an annual meeting. For information regarding stockholder proposals for our 2023 Annual Meeting of Stockholders, see the section entitled “Stockholder Proposals for the 2023 Annual Meeting” in this proxy statement.

Compensation Committee Interlocks and Insider Participation

The directors that served as members of the HRNC during the year ended December 31, 2021, were Amb. Garza and Messrs. Lorca and Turner (Chair). J. Coley Clark served as a member of the HRNC during 2021 from January 1, 2021 through May 5, 2021, when he retired from the Board. No member of the Company’s HRNC is a current or former officer or employee of the Company. During the year ended December 31, 2021, none of our executive officers served as a director or member of the compensation committee (or other committee performing similar functions) of another entity when an executive officer of such entity served as a director of the Company or on the HRNC.

 

 

 

 

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Other Corporate Governance Matters

Corporate Governance Guidelines.    Our Board has adopted Corporate Governance Guidelines that describe corporate values and ethical business conduct, duties of directors, Board operations, Board confidentiality, committee matters, director qualifications and selection process, director compensation, director independence standards, director retirement age, CEO evaluation, management succession, process for stockholders or other interested parties to communicate with directors and annual Board evaluations, among others. The Corporate Governance Guidelines are available at https://ir.moneygram.com/.

Corporate Social Responsibility.    MoneyGram is committed to the principles of corporate social responsibility as a positive corporate citizen and recognizes these ideals add value for our employees, our stockholders and our community. The HRNC reviews and advises the Board regarding public policy and environmental, social and governance (“ESG”) matters as they relate to the Company. Accordingly, our Board, through the HRNC, has adopted a Social Impact Policy which outlines the goals and purposes of the Company’s Social Impact Program. The policy states that MoneyGram leaders will act as role models by incorporating social impact considerations in all business activities and ensuring that appropriate processes are in place to effectively identify, monitor, and manage social impact opportunities relevant to our business and industry. The Company’s Social Impact Program framework consists of the following pillars:

 

   

Corporate Citizenship—developing an ESG reporting framework and seeking opportunities to leverage our systems and networks to create positive societal change in the area of financial literacy and inclusion;

 

   

Diversity, Equity & Inclusion—developing and promoting strategies and practices which support and engage all stakeholders regardless of gender, race, ethnicity, sexual orientation, religion, national origin, background or ability;

 

   

Philanthropy—aligning the MoneyGram Foundation with our corporate citizenship strategy through grants in the areas of financial literacy, financial inclusion and workforce readiness; and

 

   

Volunteerism—encouraging and supporting our global network of employees who are making an impact in the communities where they live and work.

Code of Conduct.    All of our directors and employees, including our Chief Executive Officer (principal executive officer), Chief Financial Officer (principal financial officer) and Chief Accounting Officer (principal accounting officer), or persons performing similar functions, are subject to our Code of Conduct and the provisions regarding corporate values and ethical business conduct contained in our Corporate Governance Guidelines. These documents are available at https://ir.moneygram.com/. The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendments to, or waivers from, our Code of Conduct by posting such information on our website.

Committee Authority to Retain Independent Advisors.    Each committee of the Board has the authority to retain independent advisors and consultants, with all fees and expenses to be paid by the Company.

Whistleblower Procedures.    The Audit Committee has established procedures for complaints whereby employees of the Company may submit a good faith complaint of workplace practices or policies that they believe to be in violation of law, against public policy, fraudulent or unethical, including accounting, internal accounting controls or auditing matters, without fear of dismissal or retaliation. MoneyGram is committed to achieving compliance with all applicable securities laws and regulations, accounting standards, accounting controls and auditing practices. In order to facilitate the reporting of employee complaints, the Audit Committee has established procedures for the receipt, retention and treatment of complaints, and confidential, anonymous submission by employees of concerns regarding such questionable matters.

Disclosure Control Committee.    We have established a Disclosure Control Committee composed of members of management to assist in fulfilling our obligations to maintain disclosure controls and procedures and to coordinate and oversee the process of preparing our periodic securities filings with the SEC.

Asset/Liability Committee.    We have established an Asset/Liability Committee composed of members of management and chaired by our Chief Financial Officer, or CFO, to oversee and make recommendations to the Board and Audit Committee regarding financial policies and procedures of the Company.

 

 

 

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No Executive Loans.    We do not extend loans to our executive officers or directors and do not have any such loans outstanding.

Majority Vote Standard.    In an uncontested election, our Bylaws require directors to be elected annually, for a term expiring at the next annual meeting of stockholders, by the vote of the majority of the voting power of the voting stock outstanding as of the record date and voted with respect to the director. A majority of the votes cast means that the voting power of the stock voted “FOR” a director must exceed the voting power of the stock voted “AGAINST” that director. In a contested election, a situation in which the number of nominees exceeds the number of directors to be elected as of a date that is 14 days in advance of the date of filing of the definitive proxy statement, the standard for election of directors would be a plurality of the voting power of the stock represented in person or by proxy at any such meeting and entitled to vote on the election of directors. A plurality means that the nominees receiving the highest percentage of voting power of the stock would be elected. If a nominee who is serving as a director is not elected at the Meeting, under Delaware law the director would continue to serve on the Board as a “holdover director.” However, under our Bylaws, any director who fails to be elected must offer to tender his or her resignation to the Board. The HRNC will then make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the HRNC’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. The director who tenders his or her resignation will not participate in the Board’s decision. If a nominee who was not already serving as a director is not elected at the Meeting, under Delaware law that nominee would not become a director and would not serve on the Board as a “holdover director.”

Hedging.    The Company’s insider trading policy prohibits the Company’s employees, including its executive officers and directors, from pledging the Company’s securities or engaging in certain forms of hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. We also prohibit certain employees, officers and directors from pledging MoneyGram securities as collateral for loans (including margin loans).

 

 

 

 

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PROPOSAL 1: ELECTION OF DIRECTORS

The following individuals are nominated as directors for a term expiring at the 2023 Annual Meeting of Stockholders: Mses. Gupta, Silcock and Vaughan and Messrs. Holmes, Lorca, Rafferty, and Turner and Amb. Garza. Each of these individuals is currently serving as a director of the Company. Each of the nominees has consented to being named in this proxy statement and to serve as a director if elected. Each nominee elected as a director will continue in office until his or her successor has been elected and qualified or until his or her death, resignation or retirement. If any nominee is unable to serve, proxies will be voted in favor of the remaining nominees and may be voted for another person nominated by the Board. In making its recommendation to the Board for a slate of directors for election by the Company’s stockholders, the HRNC considered the criteria described in “Board of Directors and Governance—Director Nominee Criteria and Process” in this proxy statement. The biographies of each of the director nominees below contain information regarding age, the year they first became a director, business experience, other public company directorships held currently or at any time during the last five years, involvement in certain legal or administrative proceedings, if applicable, and the experience, qualifications, attributes or skills that caused the HRNC to determine that they should serve as a director of the Company.

Director Nominees—Snapshot

 

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Board Voting Recommendation

The Board unanimously recommends to the stockholders that they vote “FOR” the election of each director nominee.

Director Nominees—Qualifications and Background

 

      

Antonio O. Garza

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Age: 62

 

Director since: 2012

 

 

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Amb. Garza has served as Counsel in the Mexico City office of White & Case LLP, an international law firm, since 2009. From 2002 to 2009, Amb. Garza was the U.S. Ambassador to Mexico. Prior to that time Amb. Garza served as chairman of the Texas Railroad Commission, having been elected to that statewide office in 1998. Amb. Garza is a past partner at Bracewell & Patterson LLP (now Bracewell) and served as Secretary of State of the State of Texas and Senior Policy Advisor to the Governor of the State of Texas from 1994 to 1997.

 

Amb. Garza currently serves as a director of Kansas City Southern, formerly a publicly-traded railroad company, and Chairman of the Board of Kansas City Southern de México, a subsidiary of Kansas City Southern and as a director of Americas Technology Acquisition Corp. (NYSE: ATA), a publicly traded Cayman Islands exempted company structured as a blank check company for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities and as a director of Greenbrier Companies, Inc. (NYSE: GBX), a publicly traded railroad equipment company. He also currently serves as Chairman of Vianovo Ventures, a private management consultant firm with a focus on cross-border business development. Amb. Garza served as a director of Basic Energy Services, Inc. (formerly NYSE: BAS) from 2009 to 2016. Amb. Garza also serves as an independent director to Grupo ODH, a privately-held Luxembourg-domiciled holding company, focused on the ultra-deep water drilling industry in Mexico, and Tricolor, a Dallas headquartered, investor owned, tech enabled Community Development Financial Institution (CDFI), and the nation’s largest used vehicle retailer to the Hispanic consumer.

 

 

 

Director Qualifications:

Amb. Garza brings to the Board an extensive government and regulatory background and deep experience with international business, especially in Mexico and Latin America. Amb. Garza also has valuable perspective balancing management of initiatives to achieve corporate objectives in highly regulated environments both in the U.S. and Mexico.

 

 

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       Alka Gupta  

 

Ms. Gupta was a Co-Founder of and former President at globaliD, Inc., a private venture-backed company building a portable and interoperable identity platform leveraging the blockchain, from 2015-2019, where she currently still serves as a director. Prior to that, from 2010 to 2015, she was an executive at eBay, Inc. where she served as Head of Strategy for eBay Marketplaces building new growth strategies in areas such as mobile commerce and cross-border payments. Ms. Gupta earned her M.B.A. from The Wharton School and holds a B.S. degree from Case Western Reserve University. She currently also serves on the boards of ExcelFin Acquisition Corp. (NYSE: XFIN), a publicly traded real estate and construction company, and as an advisory board member of National Bank Holdings Corp. (NYSE: NBHC), a publicly traded bank holding company.

 

Director Qualifications:

During her tenure as Co-Founder and President of globaliD, Inc., Ms. Gupta led its growth initiatives including building a high-quality team, launching a cutting-edge product and signing on its first digital wallet customers. She brings to the Board extensive knowledge and experiences across the fintech and global payments industries.

 

 

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Age: 52

 

 

Director since: 2021

 

 
 

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       W. Alexander Holmes  

 

Mr. Holmes has served as a director of the Company since December 2015, as CEO of the Company since January 1, 2016 and as Chairman of the Board since February 2, 2018. Prior to that, Mr. Holmes was Executive Vice President, CFO and Chief Operating Officer of the Company from February 2014 to December 2015 and Executive Vice President and CFO from March 2012 to January 2014. He joined the Company in 2009 as Senior Vice President of Corporate Strategy and Investor Relations. From 2003 to 2009, Mr. Holmes served in a variety of positions at First Data Corporation, including Chief of Staff to the Chief Executive Officer, Director of Investor Relations and Senior Vice President of Global Sourcing & Strategic Initiatives. From 2002 to 2003, he managed Western Union’s Benelux region from its offices in Amsterdam.

 

Director Qualifications:

Mr. Holmes leads the Company as the CEO and brings to the Board extensive knowledge of the Company and its strategy gained through his demonstrated leadership and performance in all aspects of our business. Through his numerous executive positions at the Company and in other roles in the payment services industry, Mr. Holmes has experience in business operations, finance, international business and strategy development.

 

 

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Age: 47

 

 

Director since: 2015

 

 
 

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       Francisco Lorca  

 

Mr. Lorca founded and has served as CEO of EthosData, a privately-held global provider of cloud-based virtual data room services, since 2007. Mr. Lorca was Managing Director of Startupbootcamp FinTech, a global fintech accelerator, from 2015 to 2017. From 2002-2007, Mr. Lorca held a variety of executive positions at First Data International, a global online payments processor and a subsidiary of First Data Corporation (now owned by Fiserv), including President—Prepaid and Mobile Payments, Chief Strategy Officer, Chief of Staff to the Chief Executive Officer and Senior Vice President—Corporate Development. Mr. Lorca has a M.B.A. degree and holds a B.S. degree in Business Administration from California State University.

 

Director Qualifications:

As the founder and CEO of a global provider of cloud-based virtual data room services, Mr. Lorca brings extensive leadership and business knowledge and experience, including experience in international business operations and strategy development and execution.

 

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Age: 53

 

 

Director since: 2021

 

 
 

 

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       Michael P. Rafferty  

 

Mr. Rafferty was a member of Ernst & Young LLP, a global public accounting firm, from 1975 until his retirement in 2013. He was admitted as a Partner of Ernst & Young LLP in 1988 and served as the Audit Practice Leader for the Southwest Region from 2004 until 2013. During his career with Ernst & Young LLP, he primarily served clients in the financial services and healthcare industries. Mr. Rafferty is a Certified Public Accountant licensed in Texas.

 

Mr. Rafferty currently serves as a director and chairman of the audit committee of Triumph Bancorp, Inc. (NASDAQ: TBK), a publicly traded financial holding company with a diversified line of community banking and commercial finance activities.

 

Director Qualifications:

Mr. Rafferty brings extensive financial and accounting knowledge and experience in the financial services industry to the Board as a result of his nearly 40-year tenure with Ernst & Young LLP, current service as a director and chairman of the audit committee of another public company and background as a Certified Public Accountant.

 

 

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Age: 67

 

 

Director since: 2016

 

 
 

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       Julie E. Silcock  

 

Ms. Silcock has served as a Senior Advisor at CDX Advisors, a tech-enabled investment bank, since June 2020. From 2009 to June 2020, she served as Managing Director and Co-Head of Southwest Investment Banking at Houlihan Lokey. Prior to that, she served as Managing Director and as Founder and Head of Southwest Investment Banking at Citigroup Global Markets, Inc. during her tenure from 2000 to 2009. Ms. Silcock earned her M.B.A. from Stanford Graduate School of Business and holds a B.A. degree from Princeton University. She currently also serves on the boards of Overseas Shipholding Group, Inc. (NYSE: OSG), a publicly traded crude oil and petroleum shipping company, Q4 Inc. (TSX: QFOR) a publicly traded leading capital markets platform that connects public companies, investors and investment banks, and JC Skincare, a privately held beauty company.

 

Director Qualifications:

Ms. Silcock has over 35 years of Capital Markets and M&A experience in the investment banking industry, bringing extensive financial knowledge and experience to the Board. Ms. Silcock also brings to the Board valuable knowledge of corporate governance and similar issues from her current and prior service on other publicly traded companies’ boards of directors.

 

 

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Age: 66

 

 

Director since: 2021

 

 
 

 

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       W. Bruce Turner  

 

Mr. Turner served as the Chief Executive Officer of Lottomatica S.p.A., a global lottery operations and technology services company, from 2006 to 2008. From 2002 to 2006, he served as Chief Executive Officer, as well as other executive roles, of GTECH Holdings Corporation, a global technology services company in the government regulated lottery industry, and now a subsidiary of Lottomatica. From 2001 to 2002, Mr. Turner served as Chairman of GTECH and from 2000 to 2001, he served as Chairman and Acting Chief Executive Officer. Prior to joining GTECH, Mr. Turner was the Managing Director, Gaming Equity Research, of Salomon Smith Barney Inc. from 1993 to 1999.

 

Director Qualifications:

Mr. Turner brings significant leadership experience, financial acumen and regulatory experience to the Board that he gained through the numerous executive positions that he has held throughout the years, including serving as chairman of the board and chief executive officer of a public company. Mr. Turner also has substantial public company board and committee experience, through which he has handled a variety of governance, audit, regulatory and international issues. From this experience, Mr. Turner has been able to provide the Board with a diverse perspective and valuable insights.

 

 

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Age: 62

 

 

Director since: 2010

 

 
 

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       Peggy Vaughan  

 

Ms. Vaughan currently advises portfolio companies in technology, life sciences, consumer goods, financial services and media industries, and also serves on the advisory committee for TWV Capital Management, LLC. From 1979 to 2001, Ms. Vaughan held various consulting positions of increasing responsibility with PricewaterhouseCoopers (PwC), becoming a partner in 1988 and serving on the PwC U.S. Board of Partners and Global Oversight Board. Following the acquisition of PwC Consulting by IBM in 2002, Ms. Vaughan served as a member of the Global Management Board with responsibility for the integration of consulting practices and also served as the global leader of consulting services lines.

 

Director Qualifications:

Ms. Vaughan’s experience includes more than 25 years leading large-scale strategic, operational improvement, restructuring, technology and change management engagements. Her expertise includes information technology governance, digital technology, mergers and acquisitions and transaction integration, business strategy and operational management processes for industries such as energy, high technology, consumer products, financial services and telecommunications.

 

 

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Age: 68

 

 

Director since: 2014

 

 
 

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Director Compensation

The HRNC is responsible for reviewing the total compensation of non-employee directors, including cash and equity compensation, and, from time to time, recommending adjustments to such compensation, as appropriate, to the Board. For 2021, non-employee directors of MoneyGram received compensation in the form of annual cash and equity retainers. While MoneyGram does not pay meeting fees, the Company does reimburse all of its directors for reasonable out-of-pocket expenses incurred in connection with a director’s Board service.

MoneyGram’s philosophy for non-employee director compensation is to provide competitive compensation, both cash and equity, to ensure the Company’s ability to attract and retain highly qualified individuals to serve on our Board. For 2021, on the basis of a competitive analysis undertaken by LB&Co., the HRNC’s prior independent compensation consultant, non-employee directors received the following compensation, which was unchanged from 2017 through the end of 2021:

 

   

Each Committee Chair received an annual cash retainer of $20,000.

 

   

Each non-employee director who was not a Committee Chair, but who served on two committees of the Board, received an annual multiple committee service cash retainer of $10,000.

 

   

Each non-employee director also received a cash retainer of $100,000, paid in arrears in four equal installments on the first business day following each calendar quarter.

 

   

The annual equity retainer for non-employee directors was granted as restricted stock units, or RSUs, having a fair market valuation of approximately $125,000 at the time of grant, rounded up to the next whole share in order to avoid the issuance of fractional shares. Annual equity retainers for non-employee directors are granted each year on the date of the annual meeting of stockholders. These RSUs vest one year from the date of grant. Directors may elect to defer the settlement date of the RSUs subject to such award until the earliest to occur of (i) the consummation of a Change in Control and (ii) an anniversary following such director’s separation from service on our Board or the vesting date of the RSUs, as selected by the director in accordance with the terms of the deferral program.

In December 2021, the HRNC approved the engagement of Pearl Meyer as its independent compensation consultant, replacing LB&Co., for the year ending December 31, 2022.

The following table sets forth information on the compensation of MoneyGram’s non-employee directors for the fiscal year ended December 31, 2021. In the first quarter of 2022, the Board increased the annual equity retainer and certain cash retainers for non-employee directors, based on a competitive analysis undertaken by Pearl Meyer. The current compensatory arrangements are disclosed in Exhibit 10.28 to MoneyGram’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Mr. Holmes was compensated only in his capacity as an executive officer of the Company and did not receive any additional compensation

 

 

 

 

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for his service as a director. The total compensation provided to Mr. Holmes for his service as an executive officer during 2021 is set forth in the Summary Compensation Table in this proxy statement.

 

NON-EMPLOYEE

DIRECTOR

  

FEES EARNED

OR PAID

IN CASH

    

STOCK

AWARDS

(1)

     TOTAL  

Antonio O. Garza

     $120,000        $125,002      $ 245,002  

Alka Gupta

     $60,278        $125,002      $ 185,280  

Francisco Lorca

     $60,278        $125,002      $ 185,280  

Michael P. Rafferty

     $114,038        $125,002      $ 239,040  

Julie E. Silcock

     $60,278        $125,002      $ 185,280  

W. Bruce Turner

     $114,038        $125,002      $ 239,040  

Peggy Vaughan

     $110,000        $125,002      $ 235,002  

 

(1)

In 2021, each of our non-employee directors received an equity grant of 18,769 RSUs, which had a grant date fair value, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC 718”), of approximately $125,000 (rounded up to the next whole share in order to avoid the issuance of fractional shares) for Board service. These grants, which were made on May 5, 2021, will vest in full on the first anniversary of the date of grant. The grant date fair values of the RSUs reported above have been determined based on the assumptions and methodologies set forth in Note 13 — Stock-Based Compensation of the Notes to the Consolidated Financial Statements in our 2021 Annual Report on Form 10-K. As of December 31, 2021, each of our non-employee directors held 18,769 outstanding, unvested RSUs.

Director Stock Ownership Guidelines

The Board has adopted Stock Ownership Guidelines that require each non-employee director to own equity at least equal in value to three times the amount of the annual cash retainer payable to non-employee directors.

Directors are expected to achieve these ownership levels within five years of their election to the Board. To determine the value of each director’s equity ownership, and for the purposes of satisfying the ownership guidelines, the following forms of equity will be included in the value calculation: shares beneficially owned by the incumbent, his or her spouse and/or minor children, whether owned outright or in trust; and any time-based restricted stock or RSUs. As of the date of this proxy statement, all directors have met their ownership guidelines, except with respect to our three directors who were elected in 2021 who are on track to meet such guidelines.

Board Diversity Matrix

The table below provides certain highlights of the composition of our Board members and nominees as of March 25, 2022. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).

 

 

BOARD DIVERSITY MATRIX (AS OF MARCH 25, 2022)

 

 

Total Number of Directors

     8  
       Female        Male        Non-Binary       
Did Not Disclose
Gender
 
 

 

Part I: Gender Identity

 

                                   

Directors

     3        5                

 

Part II: Demographic Background

 

                                   

African American or Black

                           

Alaskan Native or Native American

                           

Asian

     1                       

Hispanic or Latin Origin

            2                

Native Hawaiian or Other Pacific Islander

                           

White

     2        4                

Two or More Races or Ethnicities

            1                

LGBTQ+

                                 

Did Not Disclose Demographic Background

                                 

 

 

 

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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2022

The Audit Committee has selected KPMG as the independent registered public accounting firm to audit MoneyGram’s books and accounts for the fiscal year ending December 31, 2022. KPMG has audited the Company’s books and accounts since 2016. Representatives of KPMG are expected to be present at the Meeting and will have the opportunity to make a statement and to respond to appropriate questions. Stockholder ratification of the appointment of KPMG as our independent registered public accounting firm is not required by our Bylaws or otherwise or other applicable governing documents or regulations. However, the Board is submitting the appointment of KPMG to the stockholders for ratification as a matter of good corporate practice. If this appointment is not ratified by our stockholders, the Audit Committee will reconsider its selection. Even if the appointment is ratified, the Audit Committee, which is solely responsible for appointing and terminating our independent registered public accounting firm, may in its discretion direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of MoneyGram and its stockholders.

Independent Registered Public Accounting Firm Fees

Fees for professional services provided by KPMG for fiscal years 2021 and 2020, including related expenses, are as follows (in millions):

 

     KPMG
2021
     KPMG
2020
 

Audit fees(1)

     $3.6        $3.7  

Audit-related fees(2)

     $0.2        $0.2  

Total fees

     $3.8        $3.9  

 

(1)

Audit fees for 2021 and 2020 include the audit of MoneyGram’s consolidated financial statements, including quarterly reviews, the audit of management’s assessment of the design and effectiveness of MoneyGram’s internal control over financial reporting, international statutory audits and the separate audit of the financial statements of our subsidiary MoneyGram Payment Systems, Inc., as required for compliance and regulatory purposes.

 

(2)

Audit-related fees for 2021 and 2020 include professional fees for regulatory compliance filings in certain countries, reviews and evaluations of new regulatory pronouncements and two audits performed in accordance with Statement on Standards for Attestation Engagements (SSAE) No. 16, Reporting on Controls at a Service Organization. The SSAE 16 audits encompass internal controls for the Company’s general controls over information technology and for official check processing and electronic payments services.

Audit Committee Approval of Audit and Non-Audit Services

The Audit Committee pre-approves all audit, audit-related and permitted non-audit services provided by the independent registered public accounting firm, including the fees and terms for those services. The Audit Committee has adopted a policy and procedures governing the pre-approval process for audit, audit-related and permitted non-audit services. The Audit Committee pre-approves audit and audit-related services in accordance with its review and approval of the engagement letter and annual service plan with the independent registered public accounting firm. Tax consultation and compliance services are considered by the Audit Committee on a project-by-project basis. Non-audit and other services will be considered by the Audit Committee for pre-approval based on business purpose, reasonableness of estimated fees and the potential impact on the firm’s independence. The Chair of the Audit Committee is authorized to grant pre-approval of audit, audit-related or permissible non-audit services on behalf of the Audit Committee and is required to review such pre-approvals with the full Audit Committee at its next meeting.

Board Voting Recommendation

The Board unanimously recommends to the stockholders that they vote “FOR” the ratification of the appointment of KPMG as our independent registered public accounting firm.

 

 

 

 

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AUDIT COMMITTEE REPORT

The Audit Committee is composed entirely of independent directors, each of whom satisfies the independence requirement of Rule 10A-3 under the Securities Exchange Act of 1934, as amended. The Board has also determined that each member of the Audit Committee qualifies as an “audit committee financial expert” under the rules of the SEC and meets the “financial sophistication” standard as defined under the Nasdaq listing standards.

The Audit Committee serves as the primary communication link between the Board, the independent registered public accounting firm, and the Company’s internal auditors. The Audit Committee operates under a written charter adopted by the Board, which is evaluated annually. The charter of the Audit Committee is available in the Investor Relations section of the Company’s website at https://ir.moneygram.com/.

The Audit Committee selects, evaluates and, where deemed appropriate, replaces the Company’s independent registered public accounting firm. The Audit Committee is involved in the selection of the lead audit partner. The Audit Committee has oversight of, and pre-approves, all audit services, engagement fees and terms and all permitted non-audit services of the independent registered public accounting firm. Based on its evaluation of the quality and efficiency of the services provided, and the capabilities, technical expertise, and knowledge of the Company’s operations and industry, by the Company’s independent registered public accounting firm, KPMG LLP (“KPMG”), the Audit Committee decided to engage KPMG LLP as the Company’s independent registered public accounting firm for fiscal 2022. The Audit Committee believes the retention of KPMG as the Company’s independent registered public accounting firm is in the best interest of the Company and its stockholders. KPMG has served as the Company’s independent auditor since 2016. Although the Audit Committee has the sole authority to appoint the independent registered public accounting firm, the Audit Committee has continued its long-standing practice of recommending that the Board ask the Company’s stockholders to ratify the appointment of the independent registered public accounting firm at the Annual Meeting of Stockholders.

Management is responsible for the Company’s internal controls, internal audit and the financial reporting process. KPMG, as the Company’s independent registered public accounting firm, is responsible for expressing opinions on the conformity of the Company’s consolidated financial statements with U.S. generally accepted accounting principles and on the Company’s internal control over financial reporting. The Audit Committee’s responsibility is to monitor, oversee and review these processes.

During 2021, the Audit Committee reviewed the Company’s quarterly earnings and related press releases and management’s discussion and analysis of financial condition and results of operation for inclusion in the Company’s Quarterly Reports on Form 10-Q and Annual Report on Form 10-K, in each case prior to issuance. The Audit Committee also reviewed and discussed with management and KPMG the audited financial statements for fiscal 2021 and KPMG’s evaluation of the Company’s internal control over financial reporting. Management represented to the Audit Committee, and KPMG concurred, that the Company’s consolidated financial statements for fiscal 2021 were prepared in accordance with U.S. generally accepted accounting principles, and the Audit Committee discussed the consolidated financial statements with KPMG. The Audit Committee discussed with KPMG matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) standards, including those required by Auditing Standard No. 1301, Communications with Audit Committees.

In conformance with PCAOB rules, the Audit Committee also reviewed and discussed with KPMG one critical audit matter (“CAM”) arising from the current period audit of the Company’s consolidated financial statements. A CAM is defined to be any matter arising from the audit of the consolidated financial statements that was communicated or required to be communicated to the Audit Committee and that: 1) relates to accounts or disclosures that are material to the financial statements, and 2) involves especially challenging, subjective, or complex audit judgment. The Audit Committee concurred with KPMG’s assessment and identification of the CAM contained in its Audit Report included within the Company’s 2021 Annual Report on Form 10-K.

In addition, the Audit Committee has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence, and has discussed with KPMG its independence and considered non-audit fees and services in assessing KPMG’s independence.

 

 

 

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Based upon the Audit Committee’s review and discussions set forth above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the 2021 Annual Report on Form 10-K for the fiscal year ended December 31, 2021, for filing with the SEC.

Respectfully submitted,

Michael P. Rafferty (Chair)

Julia E. Silcock

Peggy Vaughan

 

 

 

 

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PROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

We are asking stockholders, pursuant to the requirements of Section 14A of the Securities Exchange Act of 1934, as amended, to approve an advisory resolution (commonly referred to as a “Say-on-Pay” proposal) on the compensation of the Company’s named executive officers as reported in this proxy statement.

Under applicable rules, we last conducted a non-binding advisory vote on the frequency of future Say-on-Pay proposals at our 2021 Annual Meeting of Stockholders (a “Say-on-Frequency” proposal), and over 96% of votes were cast in favor of the Company holding a Say-on-Pay proposal on an annual basis. After careful consideration, the Board previously determined that as a matter of good corporate governance, holding an annual Say-on-Pay proposal is in the best interests of the Company and its stockholders. The Board believes that an annual review of the Company’s executive compensation practices is better aligned with stockholder interests as it allows the Company to obtain information on stockholders’ views of the compensation of our named executive officers on a more consistent basis.

At our 2021 Annual Meeting of Stockholders, over 96% of the votes cast for the Say-on-Pay proposal voted to approve the compensation of the Company’s named executive officers. We believe that this voting result reflects a strong endorsement of our executive compensation program.

For these reasons, the Board is asking stockholders to vote to approve the following advisory resolution at the 2022 Annual Meeting of Stockholders:

RESOLVED, that the stockholders of MoneyGram International, Inc. approve, on an advisory basis, the compensation of the Company’s named executive officers disclosed in the Compensation Discussion and Analysis, the compensation tables and accompanying notes and narrative disclosures in the proxy statement for the Company’s 2022 Annual Meeting of Stockholders.

We encourage stockholders to read the Compensation Discussion and Analysis section of this proxy statement, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the related compensation tables and narrative disclosure, which provide detailed information on the compensation of our named executive officers. This advisory Say-on-Pay vote is non-binding on the Board. Although non-binding, the Board and the HRNC will review and consider the voting results when making future decisions regarding our executive compensation program.

Board Voting Recommendation

The Board unanimously recommends to the stockholders that they vote “FOR” the Say-on-Pay proposal.

 

 

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) provides information on our executive compensation program and the amounts shown in the executive compensation tables that follow. In this proxy statement, the term “NEOs” means “Named Executive Officers.” Our NEOs, who are named in the executive compensation tables of this proxy statement, are listed below:

 

Name

   Title and Position

W. Alexander Holmes

   Chairman and CEO

Lawrence Angelilli

   Chief Financial Officer

Grant Lines

   Chief Revenue Officer

Andres Villareal

   Chief Compliance Officer

Robert L. Villaseñor

   General Counsel, Corporate Secretary and Chief Administrative Officer

Overview of Our Compensation Philosophy

Our executive compensation program is designed to attract, motivate and retain top executive and managerial talent, and to reward our executives and managers for delivering results that are expected to build sustainable long-term value for our stockholders. The overall program is designed to be competitive with similar companies on the basis of industry focus, scope of operations and size, as well as the competitive marketplace for talent. We have created a compensation program that includes short-term and long-term components, cash and equity elements and fixed and performance-based payments which we believe:

 

   

Supports our performance-based approach to compensation to foster a goal-oriented and highly-motivated management team;

 

   

Provides an incentive for retention of key management who are critical to the success of the long-term investments we are making in our business and our future growth initiatives; and

 

   

Improves organizational excellence and aligns our executives’ objectives with those of our stockholders.

Based on this philosophy, we give substantial weight to performance-based compensation by making a significant portion of our executive officers’ total compensation “at-risk” and based on the achievement of our corporate goals and the value of our stock price, which we believe aligns our executive officers’ interests with those of our stockholders. The details of our executive compensation programs are set forth later in this CD&A.

2021 Say-on-Pay Results

We carefully consider the results of our advisory stockholder Say-on-Pay votes and take into account feedback we receive from our stockholders. Overall, our stockholders have been very supportive of our executive compensation program and its direction, as evidenced by our most recent 2021 Say-on-Pay advisory vote, which over 96% of our stockholders supported. We will continue to keep an open dialogue with our stockholders to help ensure that we have a regular pulse on investor perspectives.

Overview of Our Business

MoneyGram is a global leader in cross-border peer-to-peer payments and money transfers. Our consumer-centric capabilities enable family and friends to quickly and affordably send money in more than 200 countries and territories with over 100 countries digitally-enabled as of December 31, 2021. The innovative MoneyGram platform leverages its leading distribution network, global financial settlement engine, cloud-based infrastructure with integrated APIs, and its unparalleled compliance program to enable seamless and secure transfers around the world. Whether through our mobile application, moneygram.com, integration with account deposit and mobile wallets, kiosks, or any one of the more than 430,000 agent locations around the globe, we connect consumers, primarily those who may not be fully served by other financial institutions, in any way that is convenient for them.

 

 

 

 

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As an alternative financial services company, we provide individuals with essential services to help them meet the financial demands of their daily lives. Our growing direct-to-consumer digital business, our Retail Channel centered around our global distribution network, our emerging embedded finance business for enterprise customers and MoneyGram-as-a-Service, enable the Company to serve the entire remittance market. Given strong mobile P2P market growth rates, our direct-to-consumer digital business is a growth engine for the Company as our digital capabilities enable us to serve new customer segments who utilize our platform to transfer money around the world.

2021 Performance Highlights1

Fiscal year 2021 was a record year for the company as we achieved a number of strategic milestones, including significantly improving our capital structure, launching new product capabilities and innovative partnerships, and growing the digital business to an impressive $300 million run-rate exiting 2021. Above all, we continued to play an important role in connecting the world’s communities by serving over 47 million people this past year. Our disciplined focus on customer acquisition, cross-border payments innovation, and customer experience enhancements are reflected in the results and remain fundamental to our growth strategy in the exciting year ahead. Key performance highlights in 2021 with comparisons to the prior year, include:

 

   

Total revenue of $1,283.6 million increased 5% on a reported basis and 4% on a constant currency basis.

 

   

Money Transfer revenue was $1,188.3 million, an increase of 8%, or 6% on a constant currency basis, driven by 10% transaction growth.

 

   

Investment revenue totaled $7.8 million, or a $12.2 million decline, primarily due to lower prevailing interest rates.

 

   

Gross Profit was $599.5 million an increase of $35.3 million driven by the continued shift in mix to higher margin MGO business.

 

   

Total operating expenses were $525.8 million, an increase of $64.6 million, or 14%, primarily due to an increase in transaction and operations support and an increase in compensation and benefits expenses which are partially offset by a decrease in depreciation and amortization.

 

   

Net loss of $37.9 million was partly due to a non-recurring $44.1 million debt extinguishment expense related to the Company’s debt refinancing completed in the third quarter of 2021 and $13.8 million increase in legal reserves.

 

   

Adjusted EBITDA decreased 8% to $222.2 million, or 12% on a constant currency basis Adjusted EBITDA was 10% higher year-over-year when excluding the Ripple incentives.

The HRNC carefully considered these key performance highlights in order to ensure that our compensation program continues to adequately reflect our compensation principles.

Summary of 2021 Executive Compensation

The following list includes key compensation highlights and decisions for our NEOs in 2021:

 

   

Approximately 86% of total target compensation for 2021 with respect to our CEO, and between approximately 78% and 81% of total target compensation, with respect to our other NEOs, is variable, “at-risk” performance-based compensation tied to objective performance goals.

 

   

The base salary for Mr. Holmes, our CEO, was increased in 2021 to recognize individual performance and market conditions. The base salary for Mr. Villaseñor, our General Counsel, Corporate Secretary & Chief Administrative Officer was increased to recognize individual performance and expanded responsibilities. Base salaries for the other named executive officers remained unchanged from 2020. See “—2021 Compensation Review and Decisions.”

 

 

1 Annex A includes a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable measures reported under accounting principles generally accepted in the United States (“GAAP”).

 

 

 

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Annual incentive targets as a percentage of base salary under our Performance Bonus Plan (“PBP”) were increased for Mr. Villareal, our Chief Compliance Officer, to align his annual incentive target to the annual incentive target for each of our named executive officers other than our CEO, and for Mr. Villaseñor, to recognize individual performance and expanded responsibilities; annual incentive targets for all other named executive officers remained unchanged for 2021. See “—2021 Compensation Review and Decisions.”

 

   

Under our annual long-term incentive program, we granted long-term cash and equity awards that link the interests of our executives with those of our stockholders. The long-term award grant values for our named executive officers remained unchanged from 2020. For 2021, the long-term incentive awards were composed of 50% restricted stock units (“RSUs”) subject to time-based vesting, 25% performance stock units subject to performance-based vesting (“PSUs”) and 25% performance-based cash. See “—2021 Compensation Review and Decisions.”

 

   

Based on the Company’s financial results for 2021, our NEOs earned:

 

   

PBP awards at 107% of target, based on Adjusted Total Revenue, Adjusted EBITDA and MGO Transaction Growth reflecting our performance against challenging market and economic conditions and overall Company goals. MGO Transaction Growth is the year-over-year percentage increase of the number of global transactions completed online. It reflects transactions through MGO—only branded sites. See “—2021 Compensation Review and Decisions.”

 

   

Long-term incentive awards at 100% of target, reflecting our performance against challenging market and economic conditions and overall Company goals based on Adjusted Total Revenue and Adjusted EBITDA. See “—2021 Compensation Review and Decisions.”

Executive Compensation Philosophy and Program Design

MoneyGram and the Board are committed to ensuring that our executive compensation program is effectively designed to attract, motivate and retain top executive and managerial talent. We give substantial weight to performance-based compensation by making a significant portion of our executive officers’ total compensation “at-risk” and based on the achievement of our corporate goals and the value of our stock price.

Our compensation program has been designed with the following objectives in mind:

Overall Objectives

 

   

Motivate our executives to:

 

   

Perform at a high level with the utmost integrity and accountability.

 

   

Support growth and long-term value creation for our stockholders.

 

   

Align the interests of our executives with those of our stockholders.

 

   

Position the Company to compete effectively in recruiting high-caliber, experienced leaders instrumental to the Company’s long-term success.

 

   

Support the retention of the Company’s executives who are critical to executing the Company’s strategy for value creation.

 

   

Discourage excessive and imprudent risk-taking and encourage legal and regulatory compliance consistent with our business model and strategies.

Pay Mix Objectives

 

   

Pay our employees: (1) competitively relative to the marketplace for talent in which we operate; and (2) equitably relative to one another based on job scope and impact, the capabilities and experience they possess and the performance they demonstrate by:

 

   

Providing a mix of both fixed and variable (“at-risk”) compensation, each of which has a different time horizon and payout form (cash and equity), to retain our key executives and reward the achievement of annual and long-term performance in light of the current stage of the Company’s transformation, industry and regulatory environment.

 

 

 

 

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Pay-For-Performance Objective

 

   

Provide a strong link between pay and performance by:

 

   

Ensuring our compensation programs are consistent with, and supportive of, our short-term and long-term strategic, operating and financial objectives;

 

   

Placing a significant portion of our executives’ compensation at-risk, with payouts dependent on the achievement of both corporate and individual performance goals, which are set annually by the HRNC;

 

   

Encouraging balanced performance by employing multiple performance measures; and

 

   

Applying judgment and reasonable discretion in making compensation decisions to avoid relying solely on formulaic program design, taking into account the current industry and regulatory environment.

Key Features of Our Executive Compensation Program

Consistent with our philosophy, it is MoneyGram’s goal to maintain an executive compensation program that is competitive, rooted in the principles of pay-for-performance and motivates our executives to build long-term stockholder value. To this end, the HRNC routinely evaluates our practices and programs with respect to executive compensation in an effort to identify any opportunities for improvement that might exist. The Company’s practices and programs include the following key features, each of which reinforces our executive compensation philosophy and objectives:

 

No Excise Tax

Gross-Ups

   We do not provide excise tax gross-ups.

No Tax Gross-Ups on Perquisites or Benefits

   We do not provide tax gross-ups on perquisites or benefits except in the case of standard relocation benefits and expatriate income tax equalization benefits available to all similarly situated employees.

No Liberal Share

Recycling

   The Amended and Restated 2005 Omnibus Incentive Plan, as of May 6, 2020, which we refer to as the Omnibus Plan, does not allow “liberal share recycling,” or the reuse of those shares withheld or tendered in full or partial payment of the exercise price relating to an award or in connection with the satisfaction of tax obligations relating to an award.

Long-Term Incentive Grant Guidelines

   The Company adheres to regular, annual grant guidelines, which guidelines have been reviewed and approved by the HRNC from time to time, as appropriate.

Clawback Policy

   The Company may recover incentive compensation paid to an executive officer if it is later determined that the executive engaged in misconduct, acted in a manner contrary to the Company’s interest or breached a non-competition agreement. The Company also has an Incentive Compensation Recoupment or “Clawback” Policy that allows the Company, under certain circumstances, to “recoup” or “clawback” cash compensation issued under an annual performance bonus plan from executives later determined to have engaged in conduct that is not compliant with company policy. A clawback review may be initiated under the policy as a result of, among other things, fraud, money laundering, bribery, corruption, willful misconduct, contribution to compliance failures or violation of other policies, including contributing to a restatement of financial results as a result of willful misconduct or gross negligence. This policy also provides that certain executives, including the NEOs, who are found to have engaged in any non-compliant acts in any year will forfeit any entitlement to and be ineligible for any annual cash incentive compensation for that year.

Stock Ownership Guidelines

   The Company maintains Stock Ownership Guidelines applicable to executive officers as well as to our non-employee directors. We fundamentally believe that stock ownership guidelines serve to align the interests of management and non-employee directors with those of our stockholders by requiring executives and directors to acquire and maintain a

 

 

 

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   meaningful equity position in the Company, which, in turn, supports the Company’s objective of building long-term stockholder value.

Prohibition on Pledging and Hedging

   The Company’s insider trading policy prohibits the Company’s employees, including its executive officers and directors from pledging the Company’s securities or engaging in certain forms of hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities. We also prohibit certain employees, officers and directors from pledging MoneyGram securities as collateral for loans (including margin loans).

Significant Portion of Total Compensation is Variable and Performance-Based

   For 2021, approximately 86% of our CEO’s total target compensation, and between approximately 78% and 81% of the total target compensation of our other NEOs was variable and dependent upon performance of both the individual and the Company. The HRNC employs a framework to assess our performance on an absolute basis relative to our goals and objectives, which goals are designed to support our Board-approved business and financial plans; and on our progress against strategic initiatives.

Maximum Compensation Limits

   All of our incentive plans provide for maximum payout limits or “caps.”

Annual Risk Assessment

   At least annually, the HRNC performs a risk assessment of our executive compensation arrangements to assess the relationship between the Company’s risk management policies and practices and our compensation program and to ensure that our program does not motivate our executives to take excessive or unnecessary risks.

Long-Term Incentive Awards with Performance and Service Based Vesting

   The outstanding long-term incentive awards held by our NEOs include a combination of (i) time-vested RSUs, which promote long-term retention; (ii) PSUs, which are earned only on the basis of achieving certain performance targets over the specified performance periods; (iii) performance-based long-term cash awards; and (iv) stock options, which deliver value only to the extent that our stock appreciates in value between the grant and exercise dates, ensuring that our executives benefit only if our stockholders benefit.

Snapshot: How Compensation Is Delivered to Our NEOs (Pay Mix)

Total direct compensation of our NEOs for 2021 is composed of the following:

 

CORE

COMPENSATION

ELEMENT

   UNDERLYING PRINCIPLE    DESCRIPTION
Base Salary    To provide a competitive level of fixed compensation that serves to attract and retain high-caliber talent and is predicated on responsibility, skills and experience.    Base salaries are generally reviewed annually and may be modified on the basis of merit, promotion, internal equity considerations and/or market adjustments.

Annual Cash

Incentive Award

 

   To reward achievement of corporate, business unit (where applicable) and individual NEO goals and contributions to the Company.    Drive Company and business unit results. Based on objective performance metrics, but also allows the HRNC to apply discretion in considering quantitative and qualitative performance.

Long-Term

Incentive Awards

   To promote the recruitment and retention of our NEOs, to reward performance that drives stockholder value creation and to align the interests of our management team with those of our stockholders.    Drive Company performance and align interests of NEOs with those of stockholders. In 2021, long-term incentive awards were delivered to our NEOs in a combination of time-vested RSUs, PSUs and performance-based cash awards.

 

 

 

 

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Role of the Human Resources and Nominating Committee

Currently, the HRNC consists of three members of the Board, all of whom qualify as independent under SEC standards and Nasdaq listing standards, including the Chairman of the HRNC. The primary goal of the HRNC is to assist the Board in fulfilling its oversight responsibilities related to setting, monitoring and implementing the Company’s compensation philosophy, strategy and programs. In discharging its duties, the HRNC works very closely with its independent compensation consultant, and management to examine pay and performance matters throughout the year. For 2021, in determining the compensation of the NEOs other than the CEO, the HRNC considered the recommendations of the CEO, which are based primarily on Company and individual performance as well as competitive market data.

The Charter of the HRNC is available online at: https://ir.moneygram.com/.

In 2021, the HRNC’s review process considered a variety of factors in determining base salary levels, annual incentive opportunities and long-term incentive opportunities for incumbent executives, including, among others, performance, potential, position, scope and market rates.

Role of the Compensation Consultant

The HRNC engaged LB&Co. during the first part of 2021 as MoneyGram’s independent compensation consultant to assist and advise the HRNC on all aspects of the Company’s executive and non-employee director compensation programs and corporate governance. LB&Co. attended or participated by teleconference in all meetings of the HRNC in 2021. LB&Co. provided no other services to MoneyGram in 2021. During the fourth quarter of 2021, the HRNC replaced LB&Co. with Pearl Meyer as its independent compensation consultant. The services that LB&Co. provided during 2021, and that Pearl Meyer currently provides to the HRNC include:

 

   

Reviewing and advising regarding the Company’s compensation philosophy, strategy and program.

 

   

Providing advice and counsel on best practices in compensation and corporate governance, and keeping the Company and the HRNC apprised of trends, developments, legislation and regulations affecting executive and director compensation.

 

   

Providing and analyzing competitive market compensation data.

 

   

Analyzing the effectiveness of executive compensation programs and making recommendations, as appropriate.

 

   

Assisting in the design and negotiation of executive employment agreements, as applicable.

 

   

Analyzing the appropriateness of the Compensation Peer Group.

 

   

Conducting a risk assessment of the Company’s incentive compensation plans and programs at least annually and making recommendations, as appropriate.

 

   

Evaluating how well our compensation programs adhere to the philosophies and principles stated in this CD&A.

 

   

Providing advice and counsel on non-employee directors’ compensation.

Compensation Consultant Conflict Of Interest Assessment:     As required by rules adopted by the SEC under Dodd-Frank, the HRNC assessed all relevant factors and determined that the work of LB&Co. and Pearl Meyer did not raise any conflict of interest in 2021. In making this determination, the HRNC considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act.

Role of the CEO

In making determinations regarding compensation for our NEOs other than the CEO, the HRNC considers the recommendations of the CEO and the input received from its independent compensation consultant. The CEO recommends compensation for NEOs other than the CEO. In making these recommendations, the CEO evaluates the performance of each executive, considers each executive’s responsibilities and compensation in relation to other officers of the Company, and considers publicly available information regarding the competitive marketplace for talent, survey data and other information provided to him by the Company and information provided to the HRNC by its independent compensation consultant.

 

 

 

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The HRNC reviews and recommends to the independent members of the Board the compensation of the CEO without management input, and is assisted in this determination by its independent compensation consultant. Compensation decisions relating to the CEO are approved by the independent members of the Board, after considering the recommendation of the HRNC. The CEO is not present during deliberations or voting on his compensation.

Mitigation of Excessive Risk-Taking

The HRNC oversees the Company’s executive compensation program, including the design of the program and whether it appropriately balances risk taking and short-term and long-term incentives. The HRNC meets periodically to review the risk assessment of the Company’s compensation arrangements and reviews and discusses (at least annually) the relationship between risk management policies and practices and compensation. The HRNC believes that our executive compensation program does not encourage excessive and unnecessary risk-taking that would be reasonably likely to have a material adverse effect on the Company. Key factors in mitigating any risks associated with the Company’s compensation programs and practices are outlined below. The HRNC may also consider recommendations from the Audit Committee regarding risks and risk mitigation.

Balanced Weighting of Performance Metrics in Incentive Compensation Programs

The PBP, also referred to herein as the annual cash incentive plan or the annual bonus plan, and the Omnibus Plan use a balanced weighting of multiple performance measures and metrics to determine incentive payouts to our executives and other bonus-eligible employees. This discourages excessive risk-taking by eliminating any inducement to over-emphasize one goal to the detriment of others. The awards to our NEOs under the annual cash incentive plan and the Omnibus Plan are discussed in detail below under “Performance Bonus Plan” and “Long-Term Incentives.”

Stock Ownership Guidelines for Executives

The Company believes that ownership guidelines serve to align the interests of management with those of stockholders by requiring executives to acquire and maintain a meaningful equity position in the Company, which, in turn, supports the Company’s objective of building long-term stockholder value. Furthermore, the Company believes that ownership of equity mitigates the risk of executive actions that could potentially damage or destroy equity value.

Our long-standing stock ownership guidelines were established for executive officers to encourage them to have a long-term equity stake in MoneyGram, align their interests with stockholders and mitigate potential compensation-related risk. The guidelines provide that each executive officer must hold a multiple of his or her annual base salary in MoneyGram stock as reflected below:

 

POSITION

   OWNERSHIP GUIDELINE

CEO

   5x Base Salary

Executive Leadership Team Members (which includes all other NEOs)

   3x Base Salary

Each covered officer is expected to achieve these levels of ownership within five years of their first becoming eligible to participate in the Omnibus Plan. Additionally, if an executive receives a promotional salary increase during this time, the HRNC, in its discretion, may extend that executive’s time to meet the ownership requirements by one year. Failure to meet or, in certain circumstances, to show sustained progress toward meeting, the above ownership guidelines may result in a reduction in future long-term incentive equity grants, and/or payment of future annual and/or long-term cash incentive payouts in the form of equity, at the discretion of the HRNC.

To determine the value of each officers’ equity ownership, and for the purposes of satisfying the ownership guidelines, the following forms of equity will be included in the value calculation: shares owned by the executive, his or her spouse and/or minor children, whether owned outright or in trust; any time-based restricted stock or RSUs awarded; any PSUs awarded for which the performance criteria have been achieved; any vested, in-the-money stock options; and any stock held for the incumbent’s benefit in any pension or 401(k) plans. As of the date of this proxy statement, all NEOs have met their guideline.

 

 

 

 

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Policy Regarding Trading in Company Stock; Hedging

We maintain policies and procedures for transactions in the Company’s securities that are designed to ensure compliance with applicable insider trading rules. The Company’s policies and procedures also prohibit all of our employees, officers and directors from purchasing financial instruments, including prepaid variable forward contracts, equity swaps, collars and exchange funds, designed to hedge or offset any decrease in market value of Company securities held by them. We also prohibit certain employees, officers and directors from pledging MoneyGram securities as collateral for loans (including margin loans) and engaging in short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities.

Clawback Policy

The Company’s incentive compensation award agreements and annual cash incentive plan provide that the HRNC may seek reimbursement of incentive compensation paid to a NEO or other executive if it is later determined that he or she engaged in misconduct, acted in a manner contrary to the Company’s interest or breached a non-competition agreement. To date, the HRNC has not exercised this right with respect to any plan award previously paid.

The Company has also adopted an Incentive Compensation Recoupment or “Clawback” Policy, which provides that:

 

   

Under the annual cash incentive plan, the Company may “recoup” or “clawback” prior bonuses from executives later determined to have contributed to compliance failures or violated other policies including contributing to a restatement of financial results as a result of willful misconduct or gross negligence.

 

   

Certain executives, including the NEOs, who are found to have engaged in any non-compliant acts in any year will forfeit any entitlement to and be ineligible for any annual cash incentive compensation for that year.

Peer Group Selection and Competitive Benchmarking

Our executive compensation program is designed to reward achievement of goals and to attract, retain and motivate our leaders in a competitive talent market. The HRNC examines the executive compensation of a group of peer companies (our “Compensation Peer Group”) to stay current with market pay practices and trends, and to understand the competitiveness of our total compensation and its various elements. The HRNC reviews at least annually the Compensation Peer Group to confirm that it includes companies that are comparable to MoneyGram on the basis of industry focus, scope of operations, size (based on revenues) and the competitive marketplace for talent. We use this data solely for informational purposes and do not target a specific percentile or make significant pay decisions based on market data alone. Although we believe this information can be helpful, we recognize that benchmarking is not always reliable and is subject to significant change from one year to the next—particularly for companies in the financial services industry. As a result, we use both Company and individual performance as primary drivers of pay levels, as opposed to market data.

The HRNC updated the Compensation Peer Group in 2021 after consultation with its former compensation consultant, LB&Co. Two companies, Cardtronics plc and CoreLogic, Inc., were removed and two companies, CSG Systems International and Shift4 Payments, Inc., were added. The following 14 companies in the table below made up the Compensation Peer Group that was considered by the HRNC in its 2021 compensation decisions:

 

Compensation Peer Group          

ACI Worldwide, Inc.

   Euronet Worldwide, Inc.    Jack Henry & Associates, Inc.

CSG Systems International, Inc.

   Exela Technologies, Inc.    Shift4 Payments, Inc.

CURO Group Holdings Corp.

   FLEETCOR Technologies, Inc.    The Western Union Company

Elevate Credit, Inc.

   Green Dot Corporation    WEX Inc.

Enova International, Inc.

   IDT Corporation   

The HRNC decided upon this peer group after consultation with its former compensation consultant, LB&Co., and primarily based its decision upon criteria including business alignment, industry relevance and competition for executive talent. While the companies in the Compensation Peer Group are generally larger than we are in terms of market capitalization and revenue, we believe this peer group composition is appropriate in light of the importance we ascribe to providing competitive pay opportunities sufficient to attract and retain the talented executives needed to lead the Company.

 

 

 

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CEO Performance and Pay

Under Mr. Holmes’s leadership in 2021, the Company made significant progress toward its long-term goals. The following were some of the significant accomplishments achieved during 2021:

 

   

Achieved total revenue of $1,283.6 million on a reported basis during the year; and

 

   

Adjusted EBITDA was $222.2 million (see Annex A for information regarding EBITDA and Adjusted EBITDA, including a reconciliation thereof to pre-tax income).

The HRNC assessed Mr. Holmes’s 2021 compensation consistent with our overall compensation strategy. In light of the achievements described above, the HRNC believes that the resulting total target compensation of $6.66 million was the appropriate level of compensation for Mr. Holmes during the year. Mr. Holmes’s total target compensation for 2021 was increased by 5.5% from 2020 (as a result of the increase in Mr. Holmes’s base salary) and was made up of $925,000 in base salary, $1,110,000 in annual cash incentive, and a long-term incentive award with a grant date value of $4,625,000. Approximately 86% of Mr. Holmes’s total target compensation was variable. The following chart shows the target total direct compensation mix for Mr. Holmes’s 2021 compensation.

 

LOGO

2021 Compensation Review and Decisions

As discussed above under “—Peer Group Selection and Competitive Benchmarking,” we base our annual compensation decisions upon Company and individual performance as it relates to our goals and objectives. We believe this approach further strengthens the relationship between pay and performance for our senior executives.

 

 

 

 

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Overview of 2021 Total Direct Compensation for our CEO and our other NEOs

 

COMPENSATION

ELEMENT

   WHAT IT DOES  

HOW IT’S SET/LINKS TO

PERFORMANCE

 

Base Salary

  

 

  Provides competitive fixed compensation

  Balances risk-taking concerns with pay for performance

 

 

  Job scope and impact, experience and capability, market compensation levels

 

Annual Cash Incentive

  

 

  Provides a competitive annual incentive opportunity

  Aligns with individual business unit (where appropriate) and Company performance

 

 

  Payout range: 0%—200% of target

  Based on achievement of financial goals (Adjusted Total Revenue, Adjusted EBITDA and MGO Transaction Growth)

  Risk/control and compliance goals

  Based on objective performance metrics

 

Time-based RSUs

  

 

  Promotes executive retention

  Aligns executives’ interests with those of stockholders, as value of an executive’s grant increases only if the Company’s stock price increases

 

 

  Vest in three equal installments on each anniversary of the grant date

 

Performance-Based Cash

  

 

  Performance-based vesting aligns executives’ interests with the interests of our stockholders

  Rewards performance that drives stockholder value creation

 

 

  Payout range: 0%—150% of target

  Performance period: 2020

  Targets based 25% on Adjusted Total Revenue and 75% on Adjusted EBITDA

  Vests in three equal installments on each anniversary of the grant date, subject to satisfaction of performance conditions

 

PSUs

  

 

  Performance-based vesting aligns executives’ interests with the interests of our stockholders

  Rewards performance that drives stockholder value creation

  Aligns executives’ interests with those of stockholders, as value of an executive’s grant increases only if the Company’s stock price increases

 

 

  Payout range: 0%—150% of target

  Performance period: 2021

  Targets based 25% on Adjusted Total Revenue and 75% on Adjusted EBITDA

  Vests in three equal installments on each anniversary of the grant date, subject to satisfaction of performance conditions

Base Salary

Base salary decisions for 2021 were determined by the HRNC based on the following factors:

 

   

Recommendations from the CEO (for NEOs other than the CEO);

 

   

Performance achievement (both Company and individual) relative to goals and objectives;

 

   

Scope and impact of each role and changes in job responsibility (in particular with respect to promotional increases);

 

   

Internal pay equity considerations; and

 

   

Peer group data.

Having considered these factors, the HRNC approved a base salary increase for Mr. Holmes and Mr. Villaseñor in 2021 while base salaries for all other named executive officers remained the same:

 

               

Base Salary at Year End
(Annualized Rate)

         

NAMED EXECUTIVE

  BASE SALARY
INCREASE (OR
DECREASE)
            2020                     2021             EFFECTIVE DATE   RATIONALE FOR CHANGE

W. Alexander Holmes

    5.7   $ 50,000     $ 875,000     $ 925,000     N/A   Performance

Lawrence Angelilli

      $ 0     $ 475,000     $ 475,000     N/A   N/A

Grant Lines

      $ 0     $ 465,000     $ 465,000     N/A   N/A

Andres Villareal

      $ 0     $ 435,000     $ 435,000     N/A   N/A

Robert L. Villaseñor

    5.8   $ 25,000     $ 425,000     $ 450,000     N/A   Performance; Expanded Responsibilities

 

 

 

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Performance Bonus Plan

The PBP provides for annual cash incentive awards based on overall Company performance and individual performance and contribution. The HRNC sets specific performance objectives for the Company under the annual cash incentive plan.

Award Levels

In February 2021, the HRNC reviewed the annual incentive targets for each NEO to ensure that the Company is competitive under this element of compensation, and no changes were made based on such review. Consistent with our compensation objectives, as an executive assumes greater responsibility within the Company, a larger portion of his or her compensation is “at-risk” and tied to the achievement of Company and individual performance goals.

Having considered these factors, the HRNC approved an annual incentive target increase for Mr. Villareal and Mr. Villaseñor in 2021 while annual incentive targets for all other named executive officers remained the same:

 

NAMED EXECUTIVE

   ANNUAL INCENTIVE TARGET AS A PERCENT OF
BASE SALARY AS OF:

 

   12/31/2020   12/31/2021

W. Alexander Holmes

       120 %       120 %

Lawrence Angelilli

       80 %       80 %

Grant Lines

       80 %       80 %

Andres Villareal

       70 %       80 %

Robert L. Villaseñor

       70 %       80 %

Each NEO’s actual annual cash incentive award for 2021 was based on the Company’s achievement of annual financial results relative to performance objectives established by the HRNC. In setting these goals, the HRNC considers input from management on all NEOs except for the CEO.

2021 Performance Objectives

Under the annual cash incentive plan, the HRNC sets specific performance objectives for the Company, as well as threshold, target and maximum payout levels predicated on actual achievement, in accordance with the funding formula set forth below (with straight-line interpolation between levels).

 

     THRESHOLD   TARGET   MAXIMUM

Performance Achievement

       85 %       100 %       115 %

Payout

       50 %       100 %       200 %

For 2021, the HRNC approved Adjusted Total Revenue, Adjusted EBITDA and MGO Transaction Growth (each as defined below), on a plan foreign exchange rate basis, as the performance measures governing annual incentive payouts. In setting these goals, the HRNC considered target Company performance under the challenging board-approved annual operating plan. The targets were designed to be challenging while recognizing business and broader economic uncertainties existing at the time the goals were established, including continued global macroeconomic and consumer headwinds.

 

PERFORMANCE MEASURES
  ($ IN MILLIONS)

   WEIGHT   THRESHOLD   TARGET   MAXIMUM   2021
RESULTS
      2021
PAYOUT
RESULTS BY
MEASURE(1)

Adjusted Total Revenue

       30 %       $1,086.7       $1,278.5       $1,470.3       $1,271.5       (3 )       98.2 %

Adjusted EBITDA(2)

       50 %       $      187       $   220.0       $   253.0       $   216.5       (4 )       100.0 %

MGO Transaction Growth

       20 %       34 %       40 %       46 %       47 %       (5 )       135.3 %

 

(1)

Represents payout (as a percentage of target) on each respective performance measure under application of the funding formula presented above.

 

 

 

 

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(2)

Adjusted EBITDA is EBITDA excluding restructuring and reorganization costs, legal and contingent matter costs, compliance enhancement program costs, stock-based, contingent and incentive compensation costs, debt extinguishment costs, direct monitor costs, severance and related costs.

 

(3)

Reflects plan foreign exchange rate Adjusted Total Revenue. Reported total revenue was $1,283.6 million which was adjusted by $12.1 million to reflect the impact from changes in exchange rates in accordance with the terms of the PBP.

 

(4)

Reflects plan foreign exchange rate Adjusted EBITDA. Reported Adjusted EBITDA was $222.2 million, which was adjusted by $5.7 million to reflect the impact from changes in exchange rates in accordance with the terms of the PBP.

 

(5)

Reflects MGO Transaction Growth as previously defined.

2021 Actual PBP Payouts

Like many companies, we continued to face the unprecedented impact of the global COVID-19 pandemic during 2021. Due to the economic disruption caused by the pandemic and by various responses, including government-imposed quarantines, stay-at-home restrictions, travel restrictions and other public health and safety measures, our results of operations continued to be adversely impacted during 2021. Despite these challenging times, based on the results achieved and the relative weighting of each performance objective (as shown in the table above), the 2021 level of performance achievement for the annual cash incentive plan pool was 107% of target. The Company’s actual performance on MGO Transaction Growth over-achieved against pre-established targets under the plan which drove this above-target payout result.

All annual cash incentive payouts were approved by the HRNC.

 

NAMED EXECUTIVE

  

ANNUAL CASH INCENTIVE AS

A PERCENT OF TARGET(1)

W. Alexander Holmes

       107 %

Lawrence Angelilli

       107 %

Grant Lines

       107 %

Andres Villareal

       107 %

Robert L. Villaseñor

       107 %

 

(1)

Represents a percentage comparison between the actual cash incentive amount paid to the NEO and such NEO’s target payout amount.

Long-Term Incentives

Annual Long-Term Incentive Award Guidelines and 2021 Long-Term Incentive Grants

We typically make annual long-term incentive awards to the NEOs each year in order to reward performance that drives stockholder value creation and aligns the interests of our management team with those of our stockholders. Long-term incentive awards are granted under our Omnibus Plan, which provides for a variety of different awards, including RSUs and performance awards.

The HRNC regularly reviews the Company’s annual long-term incentive grant guidelines, pursuant to which annual grant multiples are set for the NEOs. The equity grant guidelines for 2021, expressed as a multiple of base salary or as a specific dollar amount, are set forth below. The guidelines for our Chairman and CEO conform to the terms of his amended employment agreement. The guideline range for our other NEOs was expanded in 2018 to recognize the competitive market within which we compete for executive talent and additional responsibilities assumed by our NEOs.

 

LEVEL

  

PERCENT

(or dollar amount)

 

Chairman and CEO

     500%  

Other NEOs

     $1,200,000  

The HRNC determines the allocation between award types and sets the vesting criteria at the time of each grant. For 2021, the HRNC approved the allocation of the value of annual long-term incentive awards to be 50% time-based RSUs, 25% PSUs and 25% performance-based cash awards. Our decisions relating to equity awards are primarily influenced by the need to recruit and retain certain NEOs as well as to align the interests of the NEOs with those of our stockholders. Time-based RSUs vest in three equal installments on each anniversary of the grant date. PSUs are subject to a one-year performance period. When and if the conditions are satisfied at the

 

 

 

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end of the one-year performance period, vesting of the PSUs are subject only to the passage of time and vest in three equal installments on each anniversary of the grant date. The vesting criteria for the time-based RSU awards were developed to retain key executives. The vesting criteria for the PSUs serve to motivate the creation of stockholder value and retain key executives. The performance-vesting criteria for the performance-based cash awards serve to motivate the creation of stockholder value.

The table below sets forth the total value of performance-based cash awards and total number of time-based RSUs and target number of PSUs granted to each NEO during 2021 in connection with annual long-term incentive awards:

 

    

DATE OF

GRANT

  

TOTAL GRANT

DATE VALUE

($)

   AWARD SPLIT AMONG
  NAMED EXECUTIVE   

Performance-

Based
Cash

($)

  

Time-Based

RSUs (#)

   PSUs
(#)

W. Alexander Holmes

       2/24/2021        $4,625,000        $1,156,250        327,086        163,543

Lawrence Angelilli

       2/24/2021        $1,200,000        $   300,000        84,866        42,433

Grant Lines

       2/24/2021        $1,200,000        $   300,000        84,866        42,433

Andres Villareal

       2/24/2021        $1,200,000        $   300,000        84,866        42,433

Robert L. Villaseñor

       2/24/2021        $1,200,000        $   300,000        84,866        42,433

For the performance-based cash awards and PSUs, the HRNC approved 2021 Adjusted Total Revenue and Adjusted EBITDA (as defined above for the PBP) as the performance measures, each on a plan foreign exchange rate basis and as provided in the table below.

 

PERFORMANCE MEASURES
  ($ IN MILLIONS)

   WEIGHT   THRESHOLD    TARGET    MAXIMUM    2021
RESULTS
   2021
PAYOUT
RESULTS BY
MEASURE(1)

Adjusted Total Revenue

       25 %       $1,086.7        $1,278.5        $1,470.3        $1,271.5        98.2 %

Adjusted EBITDA

       75 %       $   187.0        $   220.0        $   253.0        $   216.5        100 %

 

(1)

Represents payout (as a percentage of target) on each respective performance measure under application of the funding formula presented below.

Threshold, target and maximum payout levels for the performance-based cash awards and the number of PSUs that are earned are predicated on actual achievement, in accordance with the funding formula set forth below (with straight-line interpolation between levels). Once earned, the performance-based cash awards and PSUs vest in three equal installments on each anniversary of the grant date.

 

     THRESHOLD   TARGET   MAXIMUM

Performance Achievement

       85 %       100 %       115 %

Payout

       50 %       100 %       150 %

Actual Performance-Based Cash Award Payouts

As noted above, we continued to face the unprecedented impact of the global COVID-19 pandemic during 2021. Despite the challenges faced by the Company in 2021, following the conclusion of the performance period, actual performance levels resulted in the target 100% payout achievement level.

Other Compensation

In addition to the components of total direct compensation for 2021 described above, a portion of our NEOs’ compensation includes other market competitive, non-variable compensation and benefits. These other compensation and benefit elements aid us in being able to recruit more effectively and to retain highly qualified executive talent while competing with other companies that offer similar programs.

 

 

 

 

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Retirement Benefits and Deferred Compensation

MoneyGram does not provide any form of pension or deferred compensation for executive officers, other than a 401(k) plan. The 401(k) plan is the Company’s primary retirement plan for U.S. employees, including NEOs. The 401(k) plan is a defined contribution plan that allows employees whose customary employment is for 1,000 hours or more per year to defer up to 50% of their eligible compensation on a pre-tax or post-tax basis subject to limitations under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). MoneyGram matches 100% of the first three percent and 50% of the next two percent of compensation deferred by an eligible employee. In addition, a discretionary contribution may be granted annually by our Board; however, no discretionary contribution was granted for 2021. Employer contributions are invested according to a participant’s investment election for employee contributions. Employee contributions and the employer match are immediately 100% vested.

Severance Benefits

A discussion of the Company’s severance benefits for the NEOs is set forth below under “Executive Employment Agreements” and “Other Agreements.”

Perquisites and Personal Benefits

MoneyGram provides limited perquisites to executive officers on a case-by-case basis. As such, in 2021, Mr. Lines received immigration and continued tax services support due to his permanent transfer to the U.S. from Dubai in 2018 as described in the “2021 Details Behind All Other Compensation Column Table.”

Employment and Other Agreements

Executive Employment Agreements

MoneyGram currently maintains an employment agreement with Mr. Holmes, our CEO. None of our other NEOs has an executive employment agreement.

W. Alexander Holmes

On March 2, 2018, the Company entered into an amended and restated employment agreement with Mr. Holmes (the “A&R Holmes Employment Agreement”), effective as of January 1, 2018, which amended and restated the original employment agreement with Mr. Holmes, dated July 30, 2015.

The A&R Holmes Employment Agreement provides that Mr. Holmes shall receive an annual base salary of $825,000 during the term of his employment pursuant to such agreement, which amount is subject to annual review and may be increased, but not decreased, without Mr. Holmes’s consent. During 2021, Mr. Holmes’s base salary was $925,000. During the term of his employment pursuant to the A&R Holmes Employment Agreement, Mr. Holmes shall be eligible to participate in the Company’s annual cash incentive plan, and shall be eligible to receive a target annual bonus equal to 120% of his base salary and a maximum annual bonus equal to two times his target bonus if the Company’s performance exceeds targeted levels. Also, during the term of his employment pursuant to the A&R Holmes Employment Agreement, Mr. Holmes shall participate in the Omnibus Plan and shall receive an annual grant of equity or equity-based awards with an aggregate grant date fair market value equal to at least five times his annual base salary in effect at the time of grant, if the Company makes grants of such awards to other senior executive officers of the Company.

The A&R Holmes Employment Agreement provides that, during the term of his employment pursuant to such agreement, if Mr. Holmes is terminated without “cause” or resigns for “good reason” (each as defined in the A&R Holmes Employment Agreement), he shall receive, among other accrued benefits, the following: (i) a pro-rata portion of his bonus under the annual cash incentive plan for the fiscal year in which termination occurs, subject to the Company’s actual performance achievement; (ii) an aggregate payment of two times the sum of (a) his annual base salary and (b) his target bonus under the annual cash incentive plan; (iii) continuation of health and life insurance coverage for up to two years; and (iv) with respect to equity or equity-based awards held by Mr. Holmes on the date of termination, continued eligibility to vest on a pro-rata basis based on the Company’s actual performance achievement (for awards subject to performance-based vesting criteria), acceleration of the portion that would have vested on the next regularly-schedule vesting date or, if termination is within forty-five days from the next regularly-scheduled vest date, then acceleration of the portion that would have vested on the next two regularly-scheduled vesting dates (for awards subject to solely time-based vesting criteria) and an extended exercise period for an award of options that is or becomes vested on the date of termination. If

 

 

 

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Mr. Holmes is terminated during the term of his employment pursuant to the A&R Holmes Employment Agreement due to death or “disability” (as defined in the A&R Holmes Employment Agreement), he shall receive, among other accrued benefits, the payments and benefits described in clause (i) of the preceding sentence.

The A&R Holmes Employment Agreement also provides that if Mr. Holmes’s employment is terminated by the Company without cause or by Mr. Holmes for good reason, in each case, within the 24-month period immediately following a change in control, then, in addition to the payments and benefits described in clauses (i), (ii) and (iii) in the paragraph above, each equity or equity-based award and long-term performance-based cash award held by Mr. Holmes on the date of such termination shall become immediately vested in full on the date of termination (at 100% of the applicable target level in the case of any award then subject to performance-based vesting).

Other Agreements

Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement

Each of the NEOs, other than Mr. Holmes, whose trade secret, confidentiality and post-employment restriction provisions were included in his employment agreement, has entered into an Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement. Under these agreements, each NEO agrees to confidentiality and non-disparagement obligations that extend indefinitely. In addition, under these agreements, each NEO agrees to non-competition provisions with respect to certain competing businesses and non-solicitation restrictions with respect to employees and customer relationships for defined periods of time.

Severance Benefits

The Company maintains severance arrangements for all of its NEOs, the intended benefits of which are to provide financial protection in the event of a termination that could disrupt the careers of the NEOs. The severance benefits allow the NEOs to focus on corporate performance and maximizing value for the benefit of stockholders in the event of a change of control or other potential termination of employment by providing an economic means for the NEO to transition away from the employment with the Company. Participation by an NEO in any plan or agreement requires the approval of the HRNC. For a description of the Company’s severance agreements, see below and also “Potential Payments Upon Termination or Change Of Control” in this proxy statement.

Severance Agreements

Each of the NEOs, other than Mr. Holmes, whose severance provisions were included in his employment agreement, has entered into an individual severance agreement with the Company. These individual severance agreements, as most recently amended and restated effective May 8, 2019, provide for severance benefits in the event that an NEO’s employment is terminated at any time by the Company without “cause” or without cause or for “good reason” within the 24-month period following a “change in control” (each quoted term as defined in the severance agreements). The severance agreements do not provide for severance benefits solely in the event of a change in control.

If an NEO is terminated without cause, the severance agreements provide for severance in an amount equal to one year of the NEO’s annual base salary payable in equal installments over the twelve-month period following the date of termination, and, provided the Company achieves its applicable performance goals, a pro rata portion of the NEO’s annual incentive bonus for the year in which the termination occurs (not to exceed the NEO’s annual target incentive opportunity), payable in a lump sum when such cash bonuses are regularly paid. The severance provisions under these agreements become available to the respective NEO on or after the first anniversary of such person’s employment with the Company.

If an NEO is terminated without cause or resigns for good reason within the two-year period following the consummation of a change in control, in addition to the benefits described above, the severance agreements provide for full vesting (at 100% of the applicable target level for performance-based awards if termination occurs on or prior to the last day of the performance period) of any outstanding restricted stock unit awards or long-term performance-based cash awards (including any replacement awards or awards into which any such awards are converted into in connection with a change in control) held by the NEO on the date of termination.

PSU and Time-Based RSU Agreements

Pursuant to the terms of the PSU agreements for outstanding PSUs held by NEOs other than Mr. Holmes, if a participant is terminated for cause or resigns from the Company or any of its subsidiaries, all units subject to the award shall be forfeited. If a participant is terminated without cause or due to death or disability prior to completion of half of

 

 

 

 

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the performance period, all units subject to the award shall be forfeited. If a participant is terminated (1) without cause or due to death or disability after completion of half of the performance period but on or prior to the last day of the performance period, one-third of the units will vest based on actual performance determined after the completion of the performance period, and all unvested units will be forfeited, or (2) following the last day of the of the performance period, the units subject to the next vesting installment will vest and all other unvested units will be forfeited. In the event that the units are assumed or otherwise replaced in connection with a change in control, and a participant’s employment is terminated without cause or a participant terminates his or her employment for good reason, in each case within the 12-month period immediately following such change in control, then, if the termination occurs on or prior to the last day of the performance period, the units will vest at the target level and, if the termination occurs after the end of the performance period, all remaining installments will vest.

Pursuant to the terms of the agreements for outstanding time-based RSUs held by NEOs other than Mr. Holmes, if a participant is terminated for cause or resigns from the Company or any of its subsidiaries, any units that are not vested as of such date will be forfeited. If a participant is terminated without cause or due to death or disability, then the number of units that would have vested during the 12-month period following the termination date will vest as of the termination date. In the event the units are assumed or otherwise replaced in connection with a change in control and a participant’s employment is terminated without cause or a participant terminates his or her employment for good reason, in each case within 12 months following such change in control, then all unvested units will vest as of the termination date.

Pursuant to the terms of the PSU agreements for outstanding PSUs held by Mr. Holmes, if he is terminated for cause or he resigns other than for good reason, any units that are not vested as of such date shall be forfeited. If Mr. Holmes is terminated without cause or he resigns for good reason prior to completion of half of the performance period, then a prorated number of units will vest based on actual performance determined after completion of the performance period, and all unvested units will be forfeited. If Mr. Holmes is terminated due to death or disability prior to completion of half of the performance period, all units subject to the award shall be forfeited. If Mr. Holmes is terminated without cause or due to death or disability, or he resigns for good reason (1) after completion of half of the performance period but on or prior to the last day of the performance period, then one-third of the units will vest based on actual performance determined after the completion of the performance period, and all unvested units will be forfeited, or (2) following the last day of the of the performance period, then the units subject to the next vesting installment will vest and all other unvested units will be forfeited. In the event that the units are assumed or otherwise replaced in connection with a change in control, and Mr. Holmes’s employment is terminated without cause or he resigns for good reason, in each case within the 12-month period immediately following such change in control, then, if the termination occurs on or prior to the last day of the performance period, the units will vest at the target level and, if the termination occurs after the end of the performance period, all remaining installments will vest.

Pursuant to the terms of the agreements for outstanding time-based RSUs held by Mr. Holmes, if he is terminated for cause or he resigns other than for good reason, any units that are not vested as of such date will be forfeited. If Mr. Holmes is terminated without cause or due to death or disability, or he resigns for good reason, then the number of units that would have vested during the 12-month period following the termination date will vest as of the termination date. In the event the units are assumed or otherwise replaced in connection with a change in control and Mr. Holmes’s employment is terminated without cause or he resigns for good reason, in each case within 12 months following such change in control, then all unvested units will vest as of the termination date.

The treatment of certain RSUs granted to the NEOs other than Mr. Homes is also governed by the terms of the amended and restated severance agreements as described above under “—Other Agreements—Severance Agreements” and the treatment of certain RSUs granted to Mr. Holmes are also governed by the terms of his existing employment agreement as described above under “—Executive Employment Agreements—Alexander Holmes.”

Performance-Based Cash Award Agreements

Pursuant to the terms of the performance-based cash award agreements for outstanding awards held by our NEOs other than Mr. Holmes, if a participant is terminated for cause or resigns from the Company or any of its subsidiaries, any amount of the award that is not vested as of such date shall be forfeited. If a participant is terminated without cause or due to death or disability prior to completion of half of the performance period, the total amount of the award shall be forfeited. If a participant is terminated without cause or due to death or disability (1) after completion of half of the performance period but on or prior to the last day of the performance period, then one-third of the award will vest based on actual performance determined after the completion of the performance period, and any unvested amount of the award will be forfeited, or (2) after completion of the

 

 

 

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performance period, then the portion of the award subject to the next vesting installment will vest, and any unvested amount of the award will be forfeited. If a participant is terminated without cause or for good reason, in each case with the 12-month period following a change in control, then, if the termination occurs on or prior to the last day of the performance period, the award will vest at the target level and, if the termination occurs after the end of the performance period, all remaining installments will vest.

Pursuant to the terms of the performance-based cash award agreements for outstanding awards held by Mr. Holmes, if he is terminated for cause or resigns other than for good reason, any amount of the award that is not vested as of such date shall be forfeited. If Mr. Holmes is terminated without cause or he resigns for good reason, prior to completion of half of the performance period, then a prorated portion of the award will vest based on actual performance determined after completion of the performance period, and any unvested portion of the award will be forfeited. If Mr. Holmes is terminated due to death or disability prior to completion of half of the performance period, the total amount of the award shall be forfeited. If Mr. Holmes is terminated without cause or due to death or disability, or he resigns for good reason (1) after completion of half of the performance period but on or prior to the last day of the performance period, then one-third of the award will vest based on actual performance determined after the completion of the performance period, and any unvested amount of the award will be forfeited, or (2) after completion of the performance period, then the portion of the award subject to the next vesting installment will vest, and any unvested amount of the award will be forfeited. If Mr. Holmes is terminated without cause or for good reason, in each case with the 12-month period following a change in control, then, if the termination occurs on or prior to the last day of the performance period, the award will vest at the target level and, if the termination occurs after the end of the performance period, all remaining installments will vest.

The treatment of the performance-based cash awards granted to the NEOs other than Mr. Homes is also governed by the terms of the amended and restated severance agreements as described above under “—Other Agreements—Severance Agreements” and the treatment of the performance-based cash awards granted to Mr. Holmes are also governed by the terms of his existing employment agreement as described above under “—Executive Employment Agreements—Alexander Holmes.”

Stock Option Agreements

We have not granted stock options to any NEO since 2014 and all outstanding stock options held by our NEOs are now fully vested by their terms. Pursuant to the terms of the form stock option agreements for stock options awarded after November 2011, if an optionee’s employment is terminated for cause, any portion of the option that has not been exercised shall be immediately forfeited. If there is a change in control of the Company and the per share fair market value of the Company’s common stock on the occurrence of the change in control does not exceed the per share option price, then the option shall immediately terminate. However, if the fair market value exceeds the option price on the occurrence of the change in control, the Committee, in its sole discretion, may (1) provide the optionee reasonable time to exercise the option, (2) provide for the termination of the option in exchange for payment to the optionee of the excess of the (x) aggregate fair market value of the common stock issuable pursuant to the option over (y) the aggregate option price or (3) if the change in control involves a merger or consolidation with another company, provide for the assumption or substitution by the surviving entity or its parent of awards with substantially the same terms as the option.

The treatment of stock options granted to Mr. Holmes are governed by the terms of his existing long-term equity award agreements and the provisions of his existing employment agreement as described above under “—Executive Employment Agreements.”

Annual Cash Incentive Plan

Pursuant to the terms of the annual cash incentive plan, in the event of a change of control, each participant in the plan shall be entitled to a pro rata bonus award calculated on the basis of achievement of the performance goals through the date of the change of control. In the event of a participant’s termination of employment to retirement, death or disability, the participant shall be eligible to receive a pro rata bonus award if bonus awards are paid by the Company.

Applicable Definitions

For purposes of the agreements described in this section entitled “—Other Agreements” and in the section entitled “—Executive Employment Agreements,” the terms listed below are defined as follows:

(i) “cause” generally means (a) the executive has willfully refused to carry out the reasonable and lawful directions, within the executive’s control and responsibilities, of the Board or the person to whom the

 

 

 

 

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executive reports for 10 days following notice of such failure, (b) the executive has committed fraud or dishonesty in the performance of his or her duties, (c) the executive has committed an act constituting a felony, misdemeanor involving moral turpitude, or violation of federal securities laws, or the executive is indicted for a felony, (d) the executive has engaged in willful misconduct or gross negligence that could reasonably be expected to be injurious to our financial condition or business reputation, (e) the executive has materially breached our code of conduct or ethics or any other code of conduct in effect from time to time (to the extent applicable to the executive) resulting in a material adverse effect on us, or (f) the executive has breached an Employee Trade Secret Agreement, Confidential Information Agreement, Post-Employment Restriction Agreement, or other similar agreement resulting in an adverse effect on us.

(ii) “good reason” generally means (a) a material reduction in the executive’s position or responsibilities, (b) a material reduction in the executive’s base salary or target bonus opportunity, except in connection with across-the-board compensation reductions of less than 10% applicable to similarly situated employees, or (c) a change in the geographic location of the executive’s place of work by more than 50 miles. The executive must notify us in writing of his or her intent to terminate employment with good reason within 60 days after the occurrence of an event, and we have a 30-day cure period to remedy such event after receipt of notice.

(iii) “disability” generally means the executive’s physical or mental incapacity rendering the executive incapable of performing his or her duties or responsibilities with respect to us for an extended period of time.

(iv) “change of control” generally means (a) a sale or other transfer of all or substantially all of our assets, (b) the transfer of more than 50% of our outstanding stock, or (c) the consummation of a merger, recapitalization or share exchange with another entity that results in a person obtaining 50% or more of our voting power; however, for purposes of the annual cash incentive plan, a “change of control” generally means (a) the acquisition by a person of 20% or more of our outstanding shares of common stock or of the voting power of the outstanding voting securities, (b) a change in the majority composition of our Board, (c) the consummation of a reorganization, merger, consolidation, sale or other disposition of all or substantially all of our assets, or (d) our stockholders’ approval of a complete liquidation or dissolution.

Tax Deductibility

The Company’s ability to deduct compensation expense for federal income tax purposes is subject to the limitations of Section 162(m) of the Internal Revenue Code (the “Code”). Section 162(m) limits deductibility to $1 million for certain executive officers. Under the tax laws in effect before 2018, compensation that qualified as “performance-based compensation” under Section 162(m) was deductible without regard to this limitation. Effective for tax years beginning after December 31, 2017, the “Tax Cuts and Jobs Act of 2017” generally eliminated the performance-based exemption, subject to a special rule that grandfathers certain awards and agreements that were in effect on November 2, 2017. There are no such outstanding grandfathered awards payable to any of our NEOs.

While the HRNC is mindful of the limitation imposed by Section 162(m) of the Internal Revenue Code, it also recognizes that facts and circumstances may render compliance with those limitations inappropriate, at odds with the best interest of the Company or inconsistent with the then-prevailing competitive market conditions. In such event, the HRNC’s priority will be determining what is in the best interest of the Company and its stockholders rather than obtaining the potential benefit of a tax deduction and, therefore, may approve compensation that is not deductible for tax purposes.

COMPENSATION COMMITTEE REPORT

The Human Resources and Nominating Committee of the Board, which performs equivalent functions to a compensation committee, has reviewed and discussed with management the Compensation Discussion and Analysis and, based on such review and discussion, has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

Respectfully Submitted,

W. Bruce Turner (Chair)

Francisco Lorca

Antonio O. Garza

 

 

 

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EXECUTIVE COMPENSATION TABLES

The following tables and accompanying narrative disclosure should be read in conjunction with the Compensation Discussion and Analysis above, which sets forth the objectives of MoneyGram’s executive compensation and benefit programs.

2021 SUMMARY COMPENSATION TABLE

 

Name and

Principal Position

   Year   

Salary

($)

  

Bonus

($)

  

Stock

Awards

($)(1)

  

Non-Equity

Incentive Plan

Compensation

($)(2)

  

All Other

Compensation

($)(3)

  

Total

($)

W. Alexander Holmes

       2021        925,000               3,468,747        2,315,356        12,328        6,721,431

Chairman and Chief Executive Officer

       2020        908,654               2,187,500        2,869,688        12,328        5,978,170
       2019        872,885        68,200        1,093,750        1,693,938        12,910        3,741,683

Lawrence Angelilli

       2021        475,000               900,004        1,010,350        12,272        2,397,626

Chief Financial Officer

       2020        479,808               600,000        903,000        12,272        1,995,080
       2019        425,000        22,100        300,000        498,700        17,536        1,263,336

Grant Lines

       2021        465,000               900,004        1,021,000        16,249        2,402,253

Chief Revenue Officer

       2020        473,654               600,000        911,450        27,445        2,012,549
       2019        450,000        23,400        300,000        534,650        40,146        1,348,196

Andres Villareal

       2021        435,000               900,004        907,150        12,181        2,254,335

Chief Compliance Officer

       2020        446,346               600,000        732,100        12,181        1,790,627
       2019        410,962        18,800        225,000        396,200        15,225        1,066,187

Robert L. Villaseñor

       2021        450,000               900,004        681,675        12,215        2,043,894

General Counsel, Corporate Secretary, and Chief Administrative Officer

                                                                            

 

(1)

Amounts included in this column represent the aggregate grant date fair value of the time-based RSUs and PSUs awarded to NEOs calculated in accordance with the applicable accounting guidance under FASB ASC 718. With respect to the PSUs, the grant date fair value is based upon the probable outcome of the applicable performance conditions. The grant date fair values have been determined based on the assumptions and methodologies set forth in Note 13—Stock-Based Compensation of the Notes to the Consolidated Financial Statements in our 2021 Annual Report on Form 10-K.

 

(2)

Non-equity incentive plan compensation includes annual cash incentive plan awards earned under the PBP in 2021 which were paid in 2022, and LTI cash awards granted prior to 2021 and which were paid during 2021.

 

(3)

For a breakdown of the components that make up “All Other Compensation” for the NEOs in 2021, refer to the table entitled “2021 Details Behind All Other Compensation Column” that follows.

2021 DETAILS BEHIND ALL OTHER COMPENSATION COLUMN

 

Name

   Year    Group Term
Life ($)(1)
  

Registrant

Contributions

to

Defined

Contribution

Plans ($)(2)

  

Tax

Preparation

($)(3)

W. Alexander Holmes

       2021        1,128        11,200       

Lawrence Angelilli

       2021        1,072        11,200       

Grant Lines

       2021        1,049        11,200        4,000

Andres Villareal

       2021        981        11,200       

Robert L. Villaseñor

       2021        1,015        11,200       

 

(1)

Amounts included in this column reflect costs for Company-provided life insurance premiums.

 

 

 

 

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(2)

The 401(k) plan allows employees to defer up to 50% of eligible compensation subject to federal tax law limits. MoneyGram matches 100% of the first three percent and 50% of the next two percent of compensation deferred. Amounts in the table represent the Company matching contributions for 2021 for each respective NEO.

 

(3)

Amount included in this column reflects tax preparation fees paid by MoneyGram on behalf of Mr. Lines in connection with his 2018 relocation from Dubai to the U.S. as provided in his relocation agreement.

2021 GRANTS OF PLAN-BASED AWARDS

The following table summarizes the 2021 grants of equity and non-equity plan-based awards for each NEO.

 

  Name              

Estimated Future Payouts

Under Non-Equity Incentive

Plan Awards(1)

   

Estimated Future
Payouts

Under Equity
Incentive

Plan Awards(2)

   

All Other

Stock

Awards:

Number of

Shares of

Stock or

Units(3)

(#)

   

Grant Date

Fair Value

of Stock and

Option

Awards

($)

 
 

Grant

Date

   

Approval

Date

   

Threshold

($)

   

Target

($)

   

Maximum

($)

   

Threshold

(#)

   

Target

(#)

   

Maximum

(#)

 

W. Alexander Holmes

      02/24/2021 **      555,000       1,110,000       2,220,000                                
    02/24/2021       02/24/2021     578,125       1,156,250       1,734,375                                
    02/24/2021       02/24/2021                                         327,086       2,315,769 (4) 
    02/24/2021       02/24/2021                       81,772       163,543       245,314             1,170,978 (5) 

Lawrence Angelilli

      02/23/2021 **      190,000       380,000       760,000                                
    02/24/2021       02/23/2021     150,000       300,000       450,000                                
    02/24/2021       02/23/2021                                         84,866       600,851 (4) 
    02/24/2021       02/23/2021                       21,217       42,433       63,650             299,153 (5) 

Grant Lines

      02/23/2021 **      186,000       372,000       744,000                                
    02/24/2021       02/23/2021     150,000       300,000       450,000                                
    02/24/2021       02/23/2021                                         84,866       600,851 (4) 
    02/24/2021       02/23/2021                       21,217       42,433       63,650             299,153 (5) 

Andres Villareal

      02/23/2021 **      174,000       348,000       696,000                                
    02/24/2021       02/23/2021     150,000       300,000       450,000                                
    02/24/2021       02/23/2021                                         84,866       600,851 (4) 
    02/24/2021       02/23/2021                       21,217       42,433       63,650             299,153 (5) 

Robert Villaseñor

      02/23/2021 **      180,000       360,000       720,000                                
    02/24/2021       02/23/2021     150,000       300,000       450,000                                
    02/24/2021       02/23/2021                                         84,866       600,851 (4) 
      02/24/2021       02/23/2021                       21,217       42,433       63,650             299,153 (5) 

 

*

Denotes time-based RSUs, PSUs and performance-based cash awards granted pursuant to the Omnibus Plan.

 

**

Denotes annual cash incentive awards under the PBP, which by its terms is governed by the Omnibus Plan.

 

(1)

The awards described under these columns reflect (a) potential awards under the 2021 annual cash incentive plan under the PBP and (b) the performance-based cash awards granted in 2021. Actual payout amounts of the annual cash incentive awards under the PBP have already been determined and were paid in February 2022 and are included in the “Non-Equity Incentive Plan Compensation” Column of the Summary Compensation Table above. Performance-based cash awards will be reported in the Summary Compensation table in the year paid.

 

(2)

These amounts represent the threshold, target and maximum number of PSUs granted to our NEOs during 2021. The PSUs are eligible to be earned based on achievement with respect to Adjusted Total Revenue and Adjusted EBITDA performance goals during the one-year performance period ending on December 31, 2021. Any earned PSUs are subject to vesting in one-third installments on each of the first three anniversaries of the applicable date of grant, subject to an NEO’s continued employment through such date.

 

(3)

Amounts in this column reflect time-based RSUs granted to our NEOs during 2021. One-third of each such grant vests on each of the first three anniversaries of the applicable date of grant, subject to an NEO’s continued employment through such date.

 

(4)

The amounts included in this column represent the aggregate grant date fair value of the time-based RSUs granted to our NEOs calculated in accordance with applicable accounting guidance under FASB ASC 718, disregarding estimated forfeitures (see Note 13—

 

 

 

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  Stock-Based Compensation of the Notes to Consolidated Financial Statements in our 2021 Annual Report on Form 10-K). The grant date fair value is determined as the closing sales price of the common stock on the grant date multiplied by the number of units that are expected to vest.

 

(5)

The amounts included in this column represent the aggregate grant date fair value of the PSUs granted to our NEOs calculated in accordance with applicable accounting guidance under FASB ASC 718, disregarding estimated forfeitures (see Note 13—Stock-Based Compensation of the Notes to the Consolidated Financial Statements in our 2021 Annual Report on Form 10-K). The grant date fair value is based on probable outcome with regard to the applicable performance metrics and is determined as the closing sales price of the common stock on the grant date multiplied by an estimate of the aggregate compensation cost to be recognized over the service period determined as of the grant date.

PSUs and Time-Based RSUs.    Awards of time-based RSUs and PSUs were granted under the Omnibus Plan for 2021. The time-based RSUs will vest, and become payable in shares of the Company’s common stock, in three substantially equal, annual installments measured from the grant date as long as the NEO remains continuously employed by the Company or one of its subsidiaries through the applicable vesting date. The PSUs will vest, and become payable in shares of the Company’s common stock in accordance with their vesting schedule. The PSUs are based on Adjusted Total Revenue and Adjusted EBITDA performance goals over a performance period of one-year, which began on January 1, 2021 and ended on December 31, 2021. If and when the performance conditions are satisfied at the end of the one-year performance period, the performance-based RSUs will be only subject to time-based vesting and will vest in three equal installments on each anniversary of the grant date, subject to continued employment through each applicable vesting date. With respect to the PSUs granted in 2021, the HRNC determined that the performance levels were met at a 100% attainment level.

Performance-Based Cash Awards.    Performance-based cash awards were granted under the Omnibus Plan for 2021. The performance-based cash awards vest in three equal installments on each anniversary of the grant date if certain performance goals are achieved, with up to 75% of the performance-based cash awards eligible to vest over such three-year period if a target level of Adjusted EBITDA is achieved for the year ended December 31, 2021 and up to 25% of the performance-based cash awards eligible to vest over such three year period if a target level of Adjusted Total Revenue is achieved for the year ended December 31, 2021. Under the terms of the award agreements, these performance-based cash awards have the potential to pay out at 50% of target cash amount awarded if the Company achieves threshold-level performance and up to 150% of target cash amount awarded if the Company achieves maximum-level performance. Attainment between the threshold and target and the target and maximum performance goals is subject to straight-line interpolation. With respect to the performance-based cash awards granted in 2021, the HRNC determined that the performance levels were met at a 100% attainment level.

For a more detailed discussion of the information set forth in the Summary Compensation Table and Grants of Plan-Based Awards Table above, please see the section above titled “Compensation Discussion and Analysis—2021 Compensation Review and Decisions.”

 

 

 

 

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OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2021

The following table summarizes the total outstanding equity awards as of December 31, 2021 for each NEO.

 

     Option Awards      Stock Awards  
     Number of
Securities
Underlying
Unexercised
Options
    

Equity

Incentive
Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)

 

   

Option

Exercise

Price

($/Sh)

 

   

Option

Expiration

Date

 

    

Number of
Shares or
Units of
Stock
That Have
Not

Vested
(#)

 

   

Market Value
(as of
December 31,
2021) of
Shares or

Units of
Stock That
Have Not
Vested

($)(3)

 

   

Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not

Vested
(#)

 

   

Equity
Incentive
Plan
Awards: Market
or Payout
Value of
Unearned
Shares,
Units or Other
Rights That
Have Not

Vested

($)

 

 

Name and Grant Date

 

  

Exercisable

(#)

 

    

Unexercisable

(#)

 

 

W. Alexander Holmes

                     

03/21/2012

     13,526                     18.39       3/21/2022                           

02/26/2013

     26,835                     16.48       2/26/2023                           

02/21/2019

                                      73,652 (1)      581,114              

03/04/2020

                                      344,119 (1)      2,715,099              

02/24/2021

                                      327,086 (1)      2,580,709              

02/24/2021

                                      163,543 (2)      1,290,354              

Lawrence Angelilli

                     

02/26/2013

     7,989                     16.48       2/26/2023                           

02/24/2014

     6,146                     20.08       2/24/2024                           

02/21/2019

                                      40,404 (1)      318,788              

03/4/2020

                                      188,774 (1)      1,489,190              

02/24/2021

                                      84,866 (1)      669,593              

02/24/2021

                                      42,433 (2)      334,796              

Grant Lines

                     

02/21/2019

                                      40,404 (1)      318,788              

03/04/2020

                                      188,774 (1)      1,489,427              

02/24/2021

                                      84,866 (1)      669,593              

02/24/2021

                                      42,433 (2)      334,796      

Andres Villareal

                     

02/21/2019

                                      30,303 (1)      239,091              

03/04/2020

                                      188,774 (1)      1,489,427              

02/24/2021

                                      84,866 (1)      669,593              

02/24/2021

                                      42,433 (2)      334,796              

Robert Villaseñor

                     

02/21/2019

                                      3,031 (1)      23,915              

03/04/2020

                                      188,774 (1)      1,489,427              

02/24/2021

                                      84,866 (1)      669,593              

02/24/2021

                                      42,433 (2)      334,796              

 

(1)

Reflects awards of time-based RSUs granted during 2019, 2020 and 2021, the awards will vest, and become payable in shares of the Company’s common stock, in three substantially equal annual installments on the first three anniversaries of the applicable grant date as long as the NEO remains continuously employed by the Company through the applicable vesting dates.

 

(2)

Reflects the number of PSUs granted during 2021 that were earned following the completion of the one-year performance period, which ended on December 31, 2021. Such number of PSUs will vest, and become payable in shares of the Company’s common stock, in three substantially equal annual installments on the first three anniversaries of the grant date as long as the NEO remains continuously employed by the Company through the applicable vesting dates.

 

(3)

The market value of shares or units of stock is calculated by multiplying the number of shares or units reported with respect to the award by the closing price of our stock on the Nasdaq on December 31, 2021, which was $7.89 per share.

 

 

 

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2021 OPTION EXERCISES AND STOCK VESTED TABLE

The following table summarizes the vesting of RSUs during 2021 for each NEO. No stock options were exercised by any NEOs during 2021.

 

     Option Awards    Stock Awards(1)

Named Executive

  

Number of Shares

Acquired on Exercise (#)

  

Value Realized

on Exercise ($)

  

Number of Shares

Acquired on Vesting (#)

  

Value Realized  

on Vesting ($)(2)  

W. Alexander Holmes

         290,254    2,200,363

Lawrence Angelilli

         154,174    1,170,789

Grant Lines

         160,722    1,217,804

Andres Villareal

         144,104    1,061,329

Robert Villaseñor

         101,156    656,361

 

(1)

Represents vesting of time-based RSUs and PSUs.

 

(2)

Aggregate dollar amount realized upon vesting is computed by multiplying the number of shares that vested by the closing price of our stock on the vesting date, or the previous business day if the vesting date occurred on a weekend or holiday.

Potential Payments upon Termination or Change in Control

The following tables reflect the amount of compensation that each of the NEOs would have received in the event of termination of such NEO’s employment with MoneyGram under a variety of circumstances, assuming that termination was effective as of December 31, 2021. The amounts represent the compensation and benefits due and payable upon the different termination events as provided for in the applicable agreements and plans in existence as of December 31, 2021.

While the summaries below provide an estimate of the payments that may be made to the NEOs, actual payments to an NEO upon the various termination events can only be determined at the time of such NEO’s actual termination. The tables include only those benefits, if any, that are enhanced or increased as a result of the termination event specified and do not include benefits that the NEO is entitled to receive regardless of the termination event, including but not limited to: (i) any base salary earned but not yet paid; (ii) amounts contributed to or accrued and earned under broad-based employee benefit plans, such as the 401(k) plan; and (iii) basic continuation of medical, dental, life and disability benefits that are not subsidized by the Company.

Potential Payments and Benefits upon Termination following a Change in Control

Certain of MoneyGram’s compensation and benefit plans contain provisions for enhanced benefits upon a qualifying termination within a specified period following a change in control of MoneyGram. Each of MoneyGram’s executive officers, other than Mr. Holmes, whose severance provisions are included in the A&R Holmes Employment Agreement, has entered into a standard severance agreement with the Company.

Pursuant to the A&R Holmes Employment Agreement, if within 24-months following a “Change in Control,” Mr. Holmes’s employment is terminated by the Company without “Cause” or by Mr. Holmes for “Good Reason” (each such quoted term as defined in the A&R Holmes Employment Agreement and described below), Mr. Holmes will be entitled to: immediate full vesting (at 100% of the target level, in the case of any award then subject to performance-based vesting if the termination occurs on or prior to the last day of the performance period) of each then-outstanding equity or equity-based award and long-term performance-based cash award (and any replacement, continuation or converted award) and each then-outstanding vested stock option immediately following termination will remain exercisable until the earliest of (i) the expiration of the ten-year term of such option, or (ii) the six month anniversary of the date of termination. Regardless of a Change in Control, Mr. Holmes will be entitled to the following upon a termination by the Company without Cause or by Mr. Holmes for Good Reason: (i) payment of his accrued and unpaid base salary and unpaid reimbursement of expenses; (ii) a pro-rata portion of his annual cash incentive award under the PBP for the fiscal year in which the termination occurs, if cash bonuses pursuant to the PBP are paid to other participants in the PBP; (iii) payment in equal installments, in accordance with normal payroll practices, over the two year period following his termination of employment, of an aggregate amount equal to two times the sum of (a) his base salary, and (b) his target annual bonus under the PBP; (iv) continuation of health and life insurance coverage until the earlier of (a) the two year period following the

 

 

 

 

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termination of employment, or (b) the date he becomes eligible to receive comparable health and life insurance coverage from a subsequent employer; and (v) all other accrued or vested amounts or benefits due to him in accordance with the Company’s benefit plans, programs or policies.

For purposes of the A&R Holmes Employment Agreement, the following terms generally have the definitions set forth below:

 

   

“Cause” generally means a good faith finding by the Board of Mr. Holmes’s (i) willful refusal to carry out, in all material respects, the reasonable and lawful directions of the Board that are within his control and consistent with his status as Chief Executive Officer of the Company and his duties and responsibilities under the A&R Holmes Employment Agreement (except for a failure that is attributable to his illness, injury or disability for a period of ten days following written notice by the Company to the executive of such failure); (ii) fraud or material dishonesty in the performance of his duties under the A&R Holmes Employment Agreement; (iii) commission of (a) a felony under the laws of the United States or any state thereof, (b) a misdemeanor involving moral turpitude or (c) a material violation of federal or state securities laws; (iv) indictment for a felony under the laws of the United States or any state thereof; (v) willful misconduct or gross negligence in connection with his duties under the A&R Holmes Employment Agreement which is materially injurious to the financial condition or business reputation of the Company; (vi) material breach of the Company’s Code of Conduct and Ethics or any other code of conduct in effect from time to time to the extent applicable to the executive, and which breach has a material adverse effect on the Company; or (vii) breach of the Non-Competition, Non-Solicitation, Confidentiality, or Assignment of Inventions provisions in the employment agreement; provided that, no act or failure to act on his part shall be considered “willful” unless done, or omitted to be done, by him in bad faith and without reasonable belief that his action or omission was in the best interest of the Company.

 

   

“Change in Control” generally means (i) a sale, transfer or other conveyance or disposition, in any single transaction or series of transactions, of all or substantially all of the Company’s assets, (ii) the transfer of more than 50% of the outstanding securities of the Company, calculated on a fully diluted basis, to an entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) or (iii) the merger, consolidation reorganization, recapitalization or share exchange of the Company with another entity, in each case in clauses (ii) and (iii) above, under circumstances in which the holders of the voting power of the outstanding securities of the Company, as the case may be, immediately prior to such transaction, together with such holders’ affiliates and related parties, hold less than 50% in voting power of the outstanding securities of the Company or the surviving entity or resulting entity, as the case may be, immediately following such transaction; provided, however, that the issuance of securities by the Company shall not, in any event, constitute a Change in Control, and, for the avoidance of doubt, a sale or other transfer or series of transfers of all or any portion of the securities of the Company held by the investors and their affiliates and related parties shall not constitute a Change in Control unless such sale or transfer or series of transfers results in an entity or group (as defined in the Exchange Act) other than the investors and their affiliates and related parties holding more than 50% in voting power of the outstanding securities of the Company.

 

   

“Good Reason” generally means without Mr. Holmes’s consent, (i) any material reduction in his position or responsibilities, excluding an isolated, insubstantial or inadvertent action not taken in bad faith; (ii) a material reduction of his base salary, or target bonus opportunity then in effect, except in connection with an across-the-board reduction of not more than 10% applicable to senior executives of the Company; or (iii) the reassignment of his place of work to a location more than 50 miles from his current place of work; provided that none of the events described in clauses (i), (ii) or (iii) shall constitute Good Reason unless (a) Mr. Holmes gives written notice to the Company of his intent to terminate his employment with Good Reason within 60 days following the occurrence of any such event and (b) the Company shall have failed to remedy such event within 30 days of the Company’s receipt of such notice.

The individual severance agreements entered into by our other NEOs provide for the following severance treatment with regards to a “Change in Control.” If an NEO incurs a termination of employment by the Company without “Cause” or resigns for “Good Reason” within 24 months following a Change in Control (each such quoted term as defined in the severance agreements and described below), the NEO will be entitled to: (i) a cash payment equal to his monthly base salary multiplied by 12 and payable in equal monthly installments over the 12 months

 

 

 

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following termination; (ii) a pro-rata portion of his annual cash incentive award under the PBP for the fiscal year in which the termination occurs, if cash bonuses pursuant to the PBP are paid to other participants in the PBP; and (iii) immediate full vesting of each RSU award and long-term performance-based cash award (and any replacement, continuation or converted award) held by the executive on the date of termination (at target level for any performance-based awards where termination occurs on or prior to the last day of the performance period).

For purposes of the severance agreements between the Company and our NEOs (other than Mr. Holmes), the following terms generally have the definitions set forth below:

 

   

“Cause” generally means the NEO’s (i) willful refusal to carry out, in all respects, the reasonable and lawful directions of the person or persons to whom the NEO reports or the Board that are within the NEO’s control and consistent with the NEO’s status with the Company and their duties and responsibilities under the severance agreement (except for a failure that is attributable to the NEO’s illness, injury, or disability) for a period of ten days following written notice by the Company to the NEO of such a failure; (ii) fraud or material dishonesty in performance with the NEO’s duties under the severance agreement; (iii) commission of (a) a felony under the laws of the United States or any state thereof, (b) a misdemeanor involving moral turpitude or (c) a material violation of federal or state securities laws; (iv) indictment for a felony under the laws of the United States or any state thereof; (v) willful misconduct or gross negligence in connection with the NEO’s duties which could reasonably be expected to be injurious in any material respect to the financial condition or business reputation of the Company as determined in good faith by the Board; (vi) material breach of the Company’s Code of Ethics, Always Honest policy or any other code of conduct in effect from time to time to the extent applicable to the NEO, and which breach could reasonably be expected to have a material adverse effect on the Company as determined in good faith by the Board; or (vii) breach of the Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement which breach has an adverse effect of the Company.

 

   

“Change in Control” generally has the same meaning provided in the A&R Holmes Employment Agreement, as described above.

 

   

“Good Reason” generally means (i) a material reduction in the NEO’s position or responsibilities, excluding for this purpose an isolated, insubstantial or inadvertent action not taken in bad faith; (ii) a material reduction in the NEO’s base salary or target bonus opportunity, if any, except in connection with an across-the-board reduction of not more than 10% applicable to similarly situated employees of the Company; or (iii) the reassignment, without the NEO’s consent, of the NEO’s place of work to a location more than 50 miles from NEO’s place of work; provided that none of the events described in clauses (i), (ii) or (iii) shall constitute Good Reason unless (a) the NEO shall have given written notice to the Company of his intent to terminate his employment with Good Reason within 60 days following the occurrence of any such event and (b) the Company shall have failed to remedy such event within 30 days of the Company’s receipt of such notice.

The following table sets forth the benefits each of our NEOs would have been eligible to receive pursuant to each NEO’s employment agreement or severance agreement, as applicable, and under our awards granted pursuant to the Omnibus Plan upon a termination of employment by the Company without “Cause” or resignation for “Good Reason” immediately following a “Change in Control” of the Company as of December 31, 2021.

 

Benefit

  

W. Alexander

Holmes

    

Lawrence

Angelilli

     Grant
Lines
    

Andres

Villareal

     Robert
Villaseñor
 

Severance Payment(1)

   $  4,070,000      $ 475,000      $ 465,000      $ 435,000      $ 450,000  

Pro-Rata Bonus Under the PBP(2)

   $ 1,187,700      $ 406,600      $ 398,000      $ 372,400      $ 385,200  

Accelerated vesting of Time-Based RSUs(3)

   $ 6,579,211      $ 2,477,807      $ 2,477,807      $ 2,398,110      $ 2,182,934  

Accelerated vesting of PSUs(4)

   $ 1,290,354      $ 334,796      $ 334,796      $ 334,796      $ 334,796  

Accelerated vesting of Performance-Based Cash Awards(5)

   $ 3,639,063      $ 1,116,000      $ 1,116,000      $ 1,047,000      $ 860,000  

Welfare Benefits(6)

   $ 28,696                              
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     16,795,024      $ 4,810,203      $ 4,791,603      $ 4,587,306      $ 4,212,930  

 

(1)

Amount represents cash severance equal to (i) for Mr. Holmes, two times the sum of his base salary and target annual bonus under the PBP for 2021 and (ii) for each other NEO, 12 months of base salary.

 

 

 

 

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(2)

Amount represents a pro rata 2021 annual bonus under the PBP based on the number of days each NEO was employed by the Company during 2021 and actual achievement of Company performance goals through December 31, 2021. The bonuses paid to the NEOs with respect to the 2021 fiscal year are included in the table because the NEOs would have been employed for the full year if their termination occurred on December 31, 2021.

 

(3)

Valuation is based on the number of shares subject to the time-based RSU awards that would vest upon a “Change in Control” in connection with an involuntary termination without “Cause” or “Good Reason” multiplied by the closing market price of our common stock on December 31, 2021, which was $7.89 per share.

 

(4)

Represents the PSUs granted in February 2021 that would vest upon a “Change in Control” in connection with an involuntary termination without “Cause” or for “Good Reason” based on actual performance. Performance for such awards was earned at target as of December 31, 2021, so the valuation is based on the target number of shares subject to the PSUs multiplied by the closing market price of our common stock on December 31, 2021, which was $7.89 per share.

 

(5)

Amounts represent the value of the performance-based cash award granted in February 2021 and the remaining unvested portion of performance-based cash awards granted in March 2020 and February 2019 that would accelerate upon a termination without “Cause” for “Good Reason” following a “Change in Control,” each based on the actual performance attainment levels of 100% for the performance-based cash awards for 2021, 135% for the performance-based cash awards for 2020, and 92% for the performance-based cash awards granted in 2019, each as determined by the HRNC.

 

(6)

Amount represents the estimated value of the continued welfare benefits to be provided during the applicable severance period following a termination without “Cause” or for “Good reason,” which is up to 24 months for Mr. Holmes under the A&R Holmes Employment Agreement.

Potential Payments and Benefits upon Termination without Cause or Termination by Executive with Good Reason

The following table sets forth the benefits our NEOs would have been eligible to receive pursuant to each such NEO’s severance agreement or employment agreement, as applicable, and under our awards granted pursuant to the Omnibus Plan upon a termination of employment without “Cause” or, in the case of Mr. Holmes, for “Good Reason,” as of December 31, 2021.

 

Benefit

   W. Alexander
Holmes(1)
     Lawrence
Angelilli(2)
     Grant
Lines(2)
     Andres
Villareal(2)
     Robert
Villaseñor(2)
 

Severance Payment(3)

   $ 4,070,000      $ 475,000      $ 465,000      $ 435,000      $ 450,000  

Bonus (annual cash incentive plan)(4)

   $ 1,187,700      $ 406,600      $ 398,000      $ 372,400      $ 385,200  

Accelerated vesting of RSUs(5)

   $ 4,737,558      $ 2,477,807      $ 2,477,807      $ 2,398,110      $ 2,182,934  

Accelerated vesting of PSUs(6)

   $ 1,290,354      $ 334,796      $ 334,796      $ 334,796      $ 334,796  

Accelerated vesting of Performance-Based cash Awards(7)

   $ 3,639,063      $ 1,116,000      $ 1,116,000      $ 1,047,000      $ 860,000  

Welfare Benefits(8)

   $ 28,696                              
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 14,953,371      $ 4,810,203      $ 4,791,603      $ 4,587,306      $ 4,212,930  

 

(1)

For a description of Mr. Holmes’ severance benefits under the A&R Holmes Employment Agreement, see “Executive Compensation—Compensation Discussion and Analysis—Executive Employment Agreements—Alexander Holmes.” In the event of a termination by the Company without cause or by Mr. Holmes for good reason on or after January 1, 2016, Mr. Holmes’ outstanding cash and equity-based incentive awards granted prior to January 1, 2016, will continue to be governed by the terms of the applicable award.

 

(2)

These NEOs have entered into severance agreements with the Company, which provide for severance if the NEO’s employment is terminated by the Company without “Cause.” The severance agreements provide for severance payments equal to: (i) the NEO’s then-current monthly base salary multiplied by 12, payable in equal monthly installments; and (ii) a pro rata portion of the NEO’s annual target incentive bonus for the year in which the termination occurs (not to exceed the NEO’s annual target incentive opportunity), payable in a lump sum. For a description of the severance agreements, see “Executive Compensation—Compensation Discussion and Analysis—Other Agreements—Severance Agreements.”

 

(3)

Amount represents cash severance equal to (i) for Mr. Holmes, two times the sum of his base salary and target annual bonus under the PBP for 2021 and (ii) for each other NEO, 12 months of base salary.

 

(4)

Amount represents a pro rata 2021 annual bonus under the PBP based on the number of days each NEO was employed by the Company during 2021 and actual achievement of Company performance goals through December 31, 2021. The bonuses paid to the NEOs with respect to the 2021 fiscal year are included in the table because the NEOs would have been employed for the full year if their termination occurred on December 31, 2021.

 

(5)

Valuation is based on the number of shares subject to the time-based RSU awards that would vest upon a termination without “Cause” or with “Good Reason” multiplied by the closing market price of our common stock on December 31, 2021, which was $7.89 per share.

 

(6)

Valuation is based on the number of shares subject to the PSUs (based on actual performance attainment) that would vest upon a termination without “Cause” or with “Good Reason.” Performance for such awards was earned at target as of December 31, 2021, so the valuation is based on the target number of shares subject to the PSUs multiplied by the closing market price of our common stock on December 31, 2021, which was $7.89 per share.

 

 

 

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(7)

Amounts represent the value of the performance-based cash award granted in February 2021 and the remaining unvested portion of performance-based cash awards granted in March 2020 and February 2019 that would accelerate (a) with respect to Mr. Holmes, upon a termination without “Cause” for “Good Reason” and (b) with respect to the other NEOs, upon a termination without “Cause,” each based on the actual performance attainment levels of 100% for the performance-based cash awards for 2021, 135% for the performance-based cash awards for 2020, and 92% for the performance-based cash awards granted in 2019, each as determined by the HRNC.

 

(8)

Amount represents the value of continued welfare benefits upon a termination without “Cause” or for “Good Reason” during the applicable severance period, which is up to 24 months for Mr. Holmes under the A&R Holmes Employment Agreement.

Potential Payments and Benefits upon Retirement, Death or Disability

The columns in the table below represent payments that each of our NEOs would be eligible to receive in the event of a qualified retirement (age 55 with ten years of service) or the NEO’s death or disability. The NEOs would be entitled to receive pro rata payments under certain incentive plans and certain pro rata vesting of RSUs. The payments below assume that the termination event occurred as of December 31, 2021.

 

Benefit

  

W. Alexander

Holmes

    

Lawrence

Angelilli

    

Grant

Lines

    

Andres

Villareal

     Robert
Villaseñor
 

Bonus (annual cash incentive plan)(1)

   $ 1,187,700      $ 406,600      $ 398,000      $ 372,400      $ 385,200  

Accelerated vesting of RSUs(2)

   $ 6,579,211      $ 2,477,807      $ 2,477,807      $ 2,398,110      $ 2,182,934  

Accelerated vesting of PSUs(3)

   $ 1,290,354      $ 334,796      $ 334,796      $ 334,796      $ 334,796  

Accelerated vesting of Performance-Based cash Awards(4)

   $ 3,639,063      $ 1,116,000      $ 1,116,000      $ 1,047,000      $ 860,000  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 12,696,328      $ 4,335,203      $ 4,326,603      $ 4,152,306      $ 3,762,930  

 

(1)

Pursuant to the annual cash incentive plan, if a participant terminates employment due to (i) retirement upon attaining age 55 or older and completing 10 years of service with the Company, (ii) death, or (iii) disability, the participant is eligible to receive a pro rata bonus award under the PBP based on actual performance, if bonus awards are paid by the Company.

 

(2)

Valuation is based on the number of shares subject to the time-based RSU awards that would vest upon a termination due to death or disability multiplied by the closing market price of our common stock on December 31, 2021, which was $7.89 per share.

 

(3)

Valuation is based on the number of shares subject to the PSUs (based on actual performance attainment) that would vest upon a termination due to death or disability. Performance for such awards was earned at target as of December 31, 2021, so the valuation is based on the target number of shares subject to the PSUs multiplied by the closing market price of our common stock on December 31, 2021, which was $7.89 per share.

 

(4)

Amounts represent the value of the performance-based cash award granted in February 2021 and the remaining unvested portion of performance-based cash awards granted in March 2020 and February 2019 that would accelerate (a) with respect to Mr. Holmes, upon a termination without “Cause” for “Good Reason” and (b) with respect to the other NEOs, upon a termination without “Cause,” each based on the actual performance attainment levels of 100% for the performance-based cash awards for 2021, 135% for the performance-based cash awards for 2020, and 92% for the performance-based cash awards granted in 2019, each as determined by the HRNC.

CEO Pay Ratio

Pursuant to Section 953(b) of Dodd-Frank and Item 402(u) of Regulation S-K, this section provides information regarding the relationship of the annual total compensation of all of our employees (other than our CEO) to the annual total compensation of our CEO, Mr. Holmes. The annual total compensation of our CEO for 2021, as reported in the Summary Compensation Table above, was $6,721,431. Our median employee’s annual total compensation was $75,706 in 2021. Based on this information, for 2021, the ratio of the annual total compensation of Mr. Holmes to the median of the annual total compensation of all of our employees (other than Mr. Holmes) was 89 to 1.

Methodology and Assumptions

The median annual total compensation for all our employees reported above reflects the compensation actually paid to an employee who represents the median of our entire employee population when ranked on the basis of compensation. To identify this median employee, as well as to determine the ratio of the total annual compensation of the median employee to the total annual compensation of our Chief Executive Officer, we utilized the methodology and assumptions set forth below.

As permitted by the SEC rules, the median employee utilized for 2021 is the same employee identified in 2020 because there have been no changes in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to this pay ratio disclosure.

 

 

 

 

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  Executive Compensation Tables     47

 

We selected December 31, 2020 as the date on which to determine our employee population for purposes of identifying our median employee, because such date provided payroll data and other information necessary to efficiently determine our employee population. As of December 31, 2020, our employee population consisted of 2,279 individuals, including 974 employees in the U.S. and 1305 employees outside of the U.S. This population included all individuals employed by the Company or any of its consolidated subsidiaries, whether as full-time, part-time, seasonal or temporary workers. This population did not include independent contractors engaged by the Company.

In identifying our median employee, we utilized the consistently applied compensation measures described below, which we believe provide a reasonable basis for determining each employee’s total annual compensation as well as a useful measure in evaluating each employee’s total annual compensation and identifying our median employee. For employees located in the United States, we calculated total annual compensation by aggregating, as applicable, each such employee’s (i) base wages or salary (including any overtime pay) realized for the 2020 fiscal year, (ii) annual incentive bonus or any other type of incentive pay received in the 2020 fiscal year, and (iii) target annual long-term incentive plan amounts in effect as of the end of the 2020 fiscal year. For employees located outside the United States, we utilized the same compensation measure used for employees located in the United States, except that we used base wages or salary amounts, as applicable, that were in effect as of December 31, 2020 (as opposed to actually realized for fiscal year 2020), as precise base wage and salary information was not available for all of our foreign employees. For the 323 employees hired during 2020, we annualized each such employees’ compensation in order to establish a more direct comparison to the annual total compensation of our employees that were employed for all of 2020. Such annualization adjustments included target annual bonus amounts for the employees hired in 2020 in order to more closely approximate the compensation such employees would have received had they been employed by the Company for all of 2020 and to align such annualized amounts with the annual total compensation of our employees that were employed for all of 2020 and received annual bonuses in the first quarter of 2020. No cost-of-living adjustments were made in identifying our median employee. This calculation methodology was consistently applied to our entire employee population, determined as of December 31, 2020, in order to identify our median employee.

We calculated each element of our median employee’s annual compensation for 2021 in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K. The difference between our median employee’s total annual compensation calculated using our consistently applied compensation measure for determining our median employee and the employee’s annual total compensation calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K represents the Company’s 401(k) matching contributions made with respect such employee pursuant to our 401(k) plan. Similarly, the 2021 annual total compensation of our CEO was calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K, as reported in the “Total” column of the Summary Compensation Table above.

 

 

 

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48     Equity Compensation Plan Information   

 

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about our common stock that may be issued as of December 31, 2021 under the Omnibus Plan, which was our only existing equity compensation plan as of December 31, 2021.

 

Plan Category

  

Number of securities to

be issued upon

exercise of outstanding

options, warrants

and rights

(a)(1)

  

Weighted average

exercise price ($) of

outstanding options,

warrants and rights

(b)(2)

  

Number of securities

 remaining available for 

future issuance under

equity compensation

plans (excluding

securities reflected in

column (a))

(c)

Equity compensation plans approved by stockholders

       4,235,700      $ 17.54        4,106,694

Equity compensation plans not approved by stockholders

                    
    

 

 

      

 

 

      

 

 

 

 

Total

       4,235,700      $ 17.54        4,106,694

 

(1)

Represents shares subject to outstanding stock options and outstanding time-based and PSU awards granted under the Omnibus Plan. In the case of PSUs, the maximum payout level of 150% of the PSUs awarded has been used, which represents the maximum payout level for all PSUs.

 

(2)

The weighted average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding awards of time-based RSUs or PSUs, which have no exercise price.

 

 

 

 

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  Certain Relationships and Related Transactions     49

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

POLICY AND PROCEDURES REGARDING TRANSACTIONS WITH RELATED PERSONS

The Audit Committee adopted our Policy and Procedures regarding Transactions with Related Persons. In accordance with our written policy, the Audit Committee is responsible for the review, approval or ratification of all transactions with related persons that are required to be disclosed under the rules of the SEC. Under the policy, a “related person” includes any of our directors or executive officers, certain of our stockholders and any of their respective immediate family members. The policy applies to transactions in which MoneyGram is a participant, a “related person” will have a direct or indirect material interest, and the amount involved exceeds $120,000. Under the policy, management of MoneyGram is responsible for disclosing to the Audit Committee all material information related to any covered transaction prior to entering into the transaction. The Audit Committee may use any process and review any information that it determines is reasonable under the circumstances in order to determine whether the covered transaction is fair and reasonable and on terms no less favorable to MoneyGram than could be obtained in a comparable arms-length transaction with an unrelated third party.

TRANSACTIONS WITH RELATED PERSONS

The transactions set forth below include transactions involving the Company and Ripple Labs Inc. (“Ripple”). During a portion of 2021, Ripple was the beneficial owner of more than five percent of our voting securities. As of April 15, 2021, Ripple ceased to be a beneficial owner of more than five percent of our common stock, as reported by Ripple in its Schedule 13D/A (Amendment No. 9) filed on April 20, 2021.

Ripple—Securities Purchase Agreement and Commercial Agreement

On June 17, 2019, the Company entered into a securities purchase agreement (the “SPA”) with Ripple, pursuant to which Ripple agreed to purchase and the Company agreed to issue up to $50.0 million of common stock and ten-year warrants to purchase common stock at $0.01 per underlying share of common stock (“Warrants”). In connection with the execution of the SPA, Ripple purchased, and the Company issued, (i) 5,610,923 shares of common stock at a purchase price of $4.10 per share and (ii) a Warrant to purchase 1,706,151 shares of common stock at a per share reference purchase price of $4.10 per share of common stock underlying the Warrants, for an aggregate purchase price of $30.0 million. The Company incurred direct and incremental costs of $0.5 million related to this transaction.

Simultaneously with the execution of the SPA, a bank issued a stand-by letter of credit (the “Letter of Credit”) on behalf of Ripple for the benefit of the Company in a face amount equal to $20.0 million to be used to fund additional purchases of shares of common stock and Warrants by Ripple. Pursuant to the SPA, the Company had the right to issue and sell additional shares of common stock and Warrants to Ripple by drawing on the Letter of Credit in amounts up to $20.0 million in the aggregate.

In addition, on June 17, 2019, the Company also entered into a commercial agreement with an affiliate of Ripple to utilize Ripple’s On Demand Liquidity (“ODL”) blockchain product (formerly known as xRapid), as well as XRP, for cross-border non-U.S. dollar exchange settlements. The Company was compensated by Ripple in XRP for developing and bringing liquidity to foreign exchange markets, facilitated by Ripple’s blockchain, and providing a reliable level of foreign exchange trading activity. The Company referred to this compensation as market development fees.

MoneyGram recognized the XRP fees received from Ripple as vendor consideration, which was presented as an offset to costs incurred to the vendor in “Transaction and operations support, net” in the Consolidated Statements of Operations. All activity related to the Ripple commercial agreement including purchases and sales of XRP, and consideration received in XRP, was presented as part of operating activities in the Consolidated Statement of Cash Flows. Per the terms of the commercial agreement, the Company did not pay fees to Ripple for its usage of the ODL platform and there are no claw back or refund provisions. On March 7, 2021, the Company and Ripple entered into an agreement to terminate, effective immediately, the commercial agreement between the parties. As previously disclosed in the Company’s Annual Report on Form 10-K, the Company had ceased transacting under the commercial agreement in early December 2020. The Company did not resume transacting under the commercial agreement from that period through the termination date and as such, did not receive any market development fees in 2021.

 

 

 

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50     Certain Relationships and Related Transactions   

 

On November 22, 2019, the Company closed on the exercise of its right to draw $20.0 million on the Letter of Credit, and in exchange therefor, issued and sold to Ripple (i) 626,600 shares of common stock at a purchase price of $4.10 per share and (ii) a Warrant to purchase 4,251,449 shares of common stock at a per share reference price of $4.10 per share of common stock underlying the Warrant, exercisable at $0.01 per underlying share of common stock. The proceeds from the issuance to Ripple, net of the direct incremental costs, were recorded in “Additional paid-in capital” with the corresponding par value of the common stock issued in “Common stock” on the Company’s Consolidated Balance Sheets.

On March 1, 2021, Ripple exercised 4,762,477 of the Warrants to purchase common stock at a price of $0.01 per underlying share of common stock and received 4,755,514 shares of common stock pursuant to the cashless exercise provisions of the Warrants. Ripple held 1,195,123 Warrants following such exercise.

On March 11, 2021, Ripple filed a 13D/A with the SEC in which it disclosed that on March 10, 2021, it had entered into an agreement with Jefferies LLC (“Jefferies”), pursuant to which Jefferies is authorized to sell up to 8,195,123 shares of MoneyGram common stock on behalf of Ripple in a manner intended to qualify for the affirmative defense provided by Rule 10b5-1(c).

On March 22, 2021, Ripple filed a 13D/A (Amendment No. 6) with the SEC in which it disclosed that it entered into an amended agreement with Jefferies, pursuant to which Jefferies is authorized to sell up to 8,188,160 shares of MoneyGram common stock on behalf of Ripple, less the number of shares of common stock withheld in order to effect the net exercise of Ripple’s 1,195,123 Warrants. The amended agreement is intended to qualify for the affirmative defense provided by Rule 10b5-1(c). During the period commencing on March 11, 2021, and ending on March 22, 2021, Ripple sold an aggregate of 1,307,910 shares of MoneyGram common stock on the open market.

On March 29, 2021, Ripple exercised all of its remaining 1,195,123 Warrants to purchase common stock at a price of $0.01 per underlying share of common stock and received 1,193,381 shares of MoneyGram common stock pursuant to the cashless exercise provisions of the Warrants. Those shares of common stock became subject to sale pursuant to the amended agreement with Jefferies.

On March 30, 2021, Ripple filed a 13D/A (Amendment No. 7) with the SEC in which it disclosed that during the period commencing on March 23, 2021 and ending on March 30, 2021, Ripple sold an aggregate of 774,546 shares of MoneyGram common stock on the open market.

On April 9, 2021, Ripple filed a 13D/A (Amendment No. 8) with the SEC in which it disclosed that during the period commencing on March 31, 2021 and ending on April 9, 2021, Ripple sold an aggregate of 1,604,429 shares of MoneyGram common stock on the open market.

On April 20, 2021, Ripple filed a 13D/A (Amendment No. 9) with the SEC in which it disclosed that during the period commencing on April 12, 2021, and ending on April 20, 2021, Ripple sold an aggregate of 1,281,623 shares of MoneyGram common stock on the open market. As of the date of that filing, Ripple held total voting and investment power with respect to 3,217,910 shares of MoneyGram common stock, representing 4.15% of the shares of common stock then outstanding (on the basis of the 77,578,455 shares of common stock outstanding as of March 8, 2021, as reported by the MoneyGram 2021 definitive proxy statement on Schedule 14A).

 

 

 

 

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  Beneficial Ownership of Common Stock     51

 

BENEFICIAL OWNERSHIP OF COMMON STOCK

CERTAIN BENEFICIAL OWNERS

The following table shows, as of March 21, 2022, the beneficial ownership of shares of our common stock by each stockholder known to the Company to beneficially own more than 5% of our common stock. We have determined beneficial ownership in accordance with the rules of the SEC. Under these rules, beneficial ownership generally includes voting or investment power over securities. The number of shares shown as beneficially owned in the table below are calculated pursuant to Rule 13d-3(d)(1) of the Exchange Act. Under Rule 13d-3(d)(1) of the Exchange Act, shares not outstanding that are subject to options, warrants, rights or conversion privileges exercisable within 60 days are deemed outstanding for the purpose of calculating the number and percentage owned by such person, but not deemed outstanding for the purpose of calculating the percentage owned by any other person listed.

 

Name and Address

  

Shares of Common

Stock Beneficially

Owned

    

Percent of

Common
Stock(1)

 

Beach Point Capital Management LP (2)

     6,949,230        7.2

BlackRock, Inc. (3)

     6,138,580