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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

 

 

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 Pursuant to § 240.14a-12

MONEYGRAM INTERNATIONAL, INC.

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

 

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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April 21, 2022

 

 

LOGO

2828 North Harwood Street, 15th Floor

Dallas, Texas 75201

SPECIAL MEETING OF STOCKHOLDERS

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

Dear Stockholder:

The board of directors of MoneyGram International, Inc., a Delaware corporation (“MoneyGram”), has unanimously approved and adopted a merger agreement (the “Merger Agreement”) pursuant to which MoneyGram will be acquired by an affiliate of Madison Dearborn Partners, LLC, a Delaware limited liability company (“MDP”), through a merger of a wholly owned subsidiary of MDP into MoneyGram (the “Merger”).

If the Merger contemplated by the Merger Agreement is completed, holders of our common stock will be entitled to receive $11.00 in cash, less any required withholding taxes, for each share of our common stock owned at the effective time of the Merger. The Merger Consideration will be paid without interest. Receipt of the Merger Consideration will be taxable to our stockholders for U.S. federal income tax purposes.

At a virtual-only special meeting of stockholders, our stockholders will be asked to consider and vote upon (i) a proposal to approve and adopt the Merger Agreement (which is a condition to the Merger), (ii) an advisory, non-binding proposal to approve compensation that will or may become payable to our named executive officers in connection with the Merger, and (iii) a proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting. Our board of directors has unanimously approved resolutions (i) determining that the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of MoneyGram and the stockholders of MoneyGram, (ii) approving, adopting and declaring advisable and authorized in all respects the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, (iii) directing that the Merger be submitted to the stockholders of MoneyGram for approval at a meeting of such stockholders and (iv) recommending that stockholders of MoneyGram approve the Merger and approve all other actions or matters necessary or desirable to give effect to the Merger pursuant to the Delaware General Corporation Law, as amended (the “DGCL”). Our board of directors recommends that all of our stockholders vote FOR the approval and adoption of the Merger Agreement, FOR the proposal to approve compensation that will or may become payable to our named executive officers in connection with the Merger and FOR the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting.

The affirmative vote of holders of at least a majority of the outstanding shares of our common stock as of the record date is required to approve and adopt the Merger Agreement. The approval of (i) on an advisory basis, the compensation that will or may become payable to our named executive officers in connection with the Merger, and (ii) the adjournment of the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting, requires, in each case, the affirmative vote of a majority of the votes cast toward such proposal at the special meeting. Each holder of our common stock is entitled to one vote per share. Proxies returned to us that are properly signed and dated but not marked to indicate your voting preference will be counted as votes FOR


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approval and adoption of the Merger Agreement, FOR the proposal regarding certain Merger-related executive compensation arrangements and FOR the proposal regarding the adjournment of the special meeting.

The date and time of the virtual special meeting are as follows:

May 23, 2022

9:00 a.m. Central Time

at www.virtualshareholdermeeting.com/MGI2022SM

You will not be able to attend the special meeting physically in person. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting. The proxy statement attached to this letter provides you with information about the special meeting of our stockholders and the proposed Merger. We encourage you to read the entire proxy statement carefully. Please do not send in your stock certificates at this time. If the Merger is completed, you will receive instructions regarding the surrender of your stock certificates and payment for your shares of common stock.

Your vote is very important. Whether or not you plan to attend the special meeting virtually, if you are a holder of our common stock, please complete, sign, date and mail the enclosed proxy card to us or submit your proxy by telephone or Internet. If you attend the virtual special meeting, you may vote at the special meeting even if you previously returned your proxy.

 

Sincerely,

LOGO

 

W. Alexander Holmes

Chairman and Chief Executive Officer

Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the transactions described in this document, including the Merger, or determined whether the information contained in this document is accurate or adequate. Any representation to the contrary is a criminal offense.

The proxy statement is dated April 21, 2022, and is first being mailed to our stockholders on or about April 21, 2022.


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LOGO

2828 North Harwood Street, 15th Floor

Dallas, Texas 75201

NOTICE OF VIRTUAL SPECIAL MEETING OF STOCKHOLDERS

To the stockholders of MoneyGram International, Inc.:

Notice is hereby given that on May 23, 2022, at 9:00 a.m., Central Time, MoneyGram International, Inc., a Delaware corporation (“MoneyGram”), will hold a virtual-only special meeting of its stockholders (the “special meeting”) at www.virtualshareholdermeeting.com/MGI2022SM, for the following purposes:

 

  1.

To consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of February 14, 2022, as such agreement may be amended from time to time (the “Merger Agreement”), by and among Mobius Parent Corp., a Delaware corporation (“Parent”) and an affiliate of Madison Dearborn Partners, LLC (“MDP”), Mobius Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), and MoneyGram;

 

  2.

To consider and vote upon an advisory, non-binding proposal to approve compensation that will be or may become payable to MoneyGram’s named executive officers in connection with the Merger contemplated by the Merger Agreement;

 

  3.

To consider and vote upon a proposal to adjourn the special meeting to a later date if necessary and appropriate to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting; and

 

  4.

To transact such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting.

Each of the proposals is described more fully in the proxy statement of which this notice forms a part. Please give your careful attention to all of the information in the proxy statement.

Only holders of record of our common stock at the close of business on April 20, 2022 (the “record date”) or their proxies can vote at the special meeting or any adjournment of the special meeting. Approval and adoption of the Merger Agreement requires the affirmative vote of holders of at least a majority of the outstanding shares of our common stock as of the record date. Additionally, to approve either (i) on an advisory, non-binding basis, the proposal regarding compensation that will or may become payable to MoneyGram’s named executive officers in connection with the Merger, or (ii) the proposal regarding the adjournment of the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting, requires the affirmative vote of a majority of the votes cast toward such proposal at the special meeting.

The list of stockholders of record entitled to vote at the special meeting will be available, upon request, at MoneyGram’s offices, at 2828 North Harwood Street, 15th Floor, Dallas, Texas 75201, for examination by any MoneyGram stockholder during ordinary business hours beginning 10 days prior to the special meeting. You will not be able to attend the special meeting physically in person. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.

Dissenting stockholders who comply with the procedural requirements of Section 262 of the Delaware General Corporation Law will be entitled to receive payment of the “fair value” of their shares, as determined by a Delaware court.


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Your vote is important. Whether or not you expect to attend the special meeting, you are urged to complete, sign, date and return the enclosed proxy card, or to submit your vote by Internet or telephone, at your earliest convenience. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to approve and adopt the Merger Agreement, without your instructions. Instructions for voting your shares are included on the enclosed proxy card or the voting instruction form you will receive. If you are a record holder and you send in your proxy and then decide to attend the special meeting to vote your shares, you may still do so. You may revoke your proxy in the manner described in the proxy statement at any time before it has been voted at the special meeting.

ADDITIONAL INFORMATION

For additional questions about the Merger, assistance in submitting proxies or voting shares of our common stock, or to request additional copies of the proxy statement or the enclosed proxy card, please contact our proxy solicitor at:

Alliance Advisors LLC

200 Broadacres Drive, 3rd Floor

Bloomfield, NJ 07003

Shareholders and Banks and Brokers Call Toll-Free: (855) 973-0090

Email: mgi@allianceadvisors.com

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD VIRTUALLY ON MAY 23, 2022.

The Notice of Special Meeting, proxy statement and MoneyGram’s 2021 Annual Report on Form 10-K and other filings with the United States Securities and Exchange Commission are available at http://ir.moneygram.com/sec.cfm.

 

By Order of the Board of Directors of MoneyGram,

LOGO

 

Robert L. Villaseñor

General Counsel, Corporate Secretary and Chief Administrative Officer

Dallas, Texas
April 21, 2022


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SUMMARY

     1  

Defined Terms

     1  

The Parties to the Merger

     3  

MoneyGram International, Inc.

     3  

Madison Dearborn Partners, LLC

     4  

Mobius Parent Corp.

     4  

Mobius Merger Sub, Inc.

     4  

The Special Meeting

     4  

Date, Time and Place

     4  

Record Date, Stock Entitled to Vote and Quorum

     4  

Votes Required

     5  

The Merger

     5  

Description of the Merger

     5  

Reasons for the Merger and Recommendation of Our Board of Directors

     5  

Opinion of MoneyGram’s Financial Advisor Regarding the Merger Consideration

     7  

Interests of MoneyGram’s Executive Officers and Directors in the Merger

     8  

Regulatory Matters

     8  

U.S. Antitrust Approval

     8  

Foreign Regulatory Law Approvals

     8  

Money Transmitter Requirements

     9  

Appraisal Rights

     9  

Financing of the Merger

     10  

Delisting and Deregistration of the Common Stock

     10  

Material United States Federal Income Tax Consequences of the Merger

     10  

Litigation Relating to the Merger

     10  

The Merger Agreement

     11  

When the Merger Becomes Effective

     11  

Treatment of Equity Awards and Performance Cash Awards

     11  

Stock Option Awards

     11  

Long Term Incentive Awards

     11  

Go-Shop

     12  

No Solicitation

     13  

Parent Equity Syndication

     14  

Conditions to Completion of the Merger

     14  

Termination

     14  

Termination Fees and Expenses

     16  

MoneyGram Termination Fee

     16  

Parent Termination Fee and Parent Regulatory Termination Fee

     17  

Limited Guarantee

     17  

Market Price of Our Common Stock

     18  

The Timing of the Merger

     18  

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

     19  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     28  

THE PARTIES TO THE MERGER

     30  

MoneyGram

     30  

MDP

     30  

Parent

     30  

Merger Sub

     31  

THE SPECIAL MEETING

     32  

Date, Time and Place

     32  

Purpose of Special Meeting

     32  

Record Date, Stock Entitled to Vote, Quorum, Abstentions and Broker Non-Votes

     32  

Votes Required

     32  

 

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Voting of Proxies

     34  

Revocability of Proxies

     34  

Postponement, Adjournment and Recess

     34  

Delivery of Proxy Materials to Households Where Two or More MoneyGram Stockholders Reside

     35  

Solicitation of Proxies

     35  

Stock Certificates

     35  

Questions and Additional Information

     35  

THE MERGER

     36  

Description of the Merger

     36  

Background of the Merger

     36  

Reasons for the Merger and the Recommendation of Our Board of Directors

     47  

Opinion of MoneyGram’s Financial Advisor Regarding the Merger Consideration

     53  

MoneyGram Financial Analyses

     55  

Other Factors

     58  

Miscellaneous

     59  

Unaudited Financial Projections of MoneyGram

     60  

Interests of MoneyGram’s Executive Officers and Directors in the Merger

     63  

Consideration Payable for Shares Held Pursuant to the Merger Agreement

     63  

Treatment of MoneyGram Equity-Based Awards and MoneyGram Cash Awards in the Merger

     64  

MoneyGram Stock Options

     64  

MoneyGram Pre-2023 Time-Based RSUs and Pre-2023 Performance-Based RSUs (subject solely to time-based vesting)

     64  

MoneyGram Pre-2023 Performance-Based RSUs

     65  

MoneyGram Pre-2023 Performance Cash Awards

     66  

Potential Awards Granted in 2023

     67  

Other Benefits

     67  

Retention Bonuses

     67  

Potential Severance Payments and Benefits in Connection with the Merger

     68  

Executive Severance Agreements

     68  

Indemnification and Insurance

     70  

Post-Closing Compensation Arrangements with MDP

     70  

Quantification of Payments and Benefits to MoneyGram’s Named Executive Officers

     70  

Information for Advisory Vote on Merger-Related Compensation for Our Named Executive Officers

     72  

MoneyGram Board of Directors and Management Following the Merger

     72  

Indemnification and Insurance

     72  

Regulatory Matters

     73  

U.S. Antitrust Approval

     73  

Foreign Regulatory Law Approvals

     73  

Money Transmitter Requirements

     73  

Other Regulatory Approvals

     74  

General

     74  

Appraisal Rights

     74  

Written Demand by the Record Holder

     75  

Notice by the Surviving Corporation

     76  

Filing a Petition for Appraisal

     77  

Determination of Fair Value

     78  

Financing of the Merger

     80  

Debt Commitment Letter

     80  

Equity Commitment Letter

     81  

Delisting and Deregistration of the Common Stock

     82  

Accounting Treatment

     82  

 

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Material United States Federal Income Tax Consequences of the Merger

     82  

U.S. Holders

     83  

Non-U.S. Holders

     84  

Litigation Relating to the Merger

     85  

THE MERGER AGREEMENT

     86  

General

     86  

Explanatory Note

     86  

Structure of the Merger

     86  

Certificate of Incorporation and Bylaws

     86  

Directors and Officers

     87  

When the Merger Becomes Effective

     87  

Effect of the Merger on the Common Stock

     88  

Effect of the Merger on MoneyGram Warrants

     88  

Treatment of Equity Awards and Performance Cash Awards

     89  

Payment of the Merger Consideration

     90  

Representations and Warranties; Material Adverse Effect

     91  

Conduct of Business Pending the Merger

     93  

Go-Shop

     95  

No Solicitation

     97  

Change of Recommendation

     99  

Reasonable Best Efforts

     100  

MoneyGram Stockholders Meeting

     102  

Employee Matters

     103  

Indemnification and Insurance

     103  

Stockholder Litigation

     104  

Financing

     104  

Financing Assistance from MoneyGram

     106  

Treatment of Certain Existing Indebtedness

     108  

Parent Equity Syndication

     109  

Other Covenants and Agreements

     109  

Conditions to Completion of the Merger

     109  

Mutual Conditions

     109  

Additional Conditions for Parent and Merger Sub

     110  

Additional Conditions for MoneyGram

     111  

Termination

     111  

Termination Fees and Expenses

     114  

MoneyGram Termination Fee

     114  

Parent Termination Fee and Parent Regulatory Termination Fee

     114  

Limited Guarantee

     115  

Other Remedies

     115  

Amendment, Extension and Waiver

     116  

Governing Law

     116  

NON-BINDING PROPOSAL ON EXECUTIVE COMPENSATION RELATED TO THE MERGER

     117  

ADJOURNMENT OF THE SPECIAL MEETING

     118  

MARKET PRICE OF OUR COMMON STOCK

     119  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     120  

Security Ownership of Directors and Executive Officers

     120  

Security Ownership of Certain Beneficial Owners

     120  

STOCKHOLDER PROPOSALS

     122  

OTHER MATTERS

     123  

WHERE YOU CAN FIND MORE INFORMATION

     124  

MULTIPLE STOCKHOLDERS SHARING ONE ADDRESS

     125  

ANNEX A—MERGER AGREEMENT

     A-1  

ANNEX B—OPINION OF BOFA SECURITIES, INC., DATED FEBRUARY  14, 2022

     B-1  

ANNEX C—SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW

     C-1  

 

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SUMMARY

The following summary highlights selected information in this proxy statement and may not contain all the information that may be important to you. Accordingly, we encourage you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement. You may obtain the information incorporated by reference in this proxy statement at no charge by following the instructions under the section entitled “Where You Can Find More Information.” Where appropriate, we have set forth a section and page reference directing you to a more complete description of the topics described in this summary.

Defined Terms

For purposes of this proxy statement, the following terms have the meanings set forth below, unless the context otherwise indicates:

affiliate” means (unless otherwise specified), with respect to any person, any other person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified person. Except as explicitly provided in the Merger Agreement, neither any Guarantor nor any private equity fund or investment vehicle sponsored or managed by the management company of the Guarantors or the portfolio companies of the Guarantors or any such other private equity funds or investment vehicles will be deemed to be affiliates of Parent or Merger Sub.

BofA Securities” means BofA Securities, Inc., financial advisor to MoneyGram.

business day” means any day that is not a Saturday, a Sunday or other day on which banking organizations in New York, New York or Dallas, Texas are required or authorized by law to be closed.

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

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

Company Stock Plan” means MoneyGram’s 2005 Omnibus Incentive Plan, as amended, restated, modified or supplemented from time to time, together with all other equity plans and arrangements that provide for the issuance of equity or equity-based awards.

DGCL” means the Delaware General Corporation Law, as amended.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Foreign Regulatory Laws” means laws and other requirements of certain jurisdictions outside of the United States listed in the confidential disclosure schedule delivered in connection with the Merger Agreement that impose antitrust or competition-related merger control or foreign direct investment filing obligations or waiting periods.

GAAP” means generally accepted accounting principles in the United States.

Guarantors” means (i) Madison Dearborn Capital Partners VIII-A, L.P., (ii) Madison Dearborn Capital Partners VIII-C, L.P., (iii) Madison Dearborn Capital Partners VIII Executive-A, L.P., and (iv) Madison Dearborn Capital Partners VIII Executive-A2, L.P.

HSR Act” the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

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Latham & Watkins” means the law firm of Latham & Watkins LLP, legal counsel to Parent.

Lenders” means Goldman Sachs Bank USA, Deutsche Bank AG New York Branch, Deutsche Bank Securities, Inc., Deutsche Bank AG Cayman Islands Branch, Barclays Bank PLC, Wells Fargo Bank, National Association and Wells Fargo Securities, LLC.

Limited Guarantee” means the Limited Guarantee entered into by and among the Guarantors and MoneyGram.

MDP” means Madison Dearborn Partners, LLC, an affiliate of Parent and Merger Sub.

Merger” means, as contemplated by the Merger Agreement, the proposed Merger of Merger Sub with and into MoneyGram, with MoneyGram surviving the Merger as a subsidiary of Parent, and each share of Common Stock outstanding immediately prior to the effective time of the Merger being cancelled and converted into the right to receive $11.00 in cash without interest.

Merger Agreement” means the Agreement and Plan of Merger, dated as of February 14, 2022, by and among Merger Sub, Parent, and MoneyGram, as such agreement may be amended from time to time, according to which the parties have agreed to consummate the Merger and other transactions contemplated by the Merger Agreement.

Merger Consideration” means the consideration of $11.00 in cash, without interest, offered for each share of Common Stock under the Merger Agreement.

Merger Sub” means Mobius Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent.

MoneyGram” or “we,” “us,” “our” or the “Company” means MoneyGram International, Inc., a Delaware corporation.

MoneyGram 2023 RSU” means each award of restricted stock units subject to either time-based vesting or performance-based vesting granted in or following calendar year 2023 pursuant to the Company Stock Plan representing the right to receive shares of Common Stock (including any award originally subject to performance-based vesting for which the performance period has been completed and performance threshold satisfied and which is now subject solely to time-based vesting).

MoneyGram LTI Awards” means, collectively, the MoneyGram Pre-2023 Time-Based RSU Awards, the MoneyGram Pre-2023 Performance-Based RSU Awards and the MoneyGram Pre-2023 Performance Cash Awards.

MoneyGram Option Award” means each award of options to purchase shares of Common Stock granted pursuant to the Company Stock Plan.

“MoneyGram Pre-2023 Time-Based RSU Award” means each award of restricted stock units subject to time-based vesting granted prior to January 1, 2023 pursuant to the Company Stock Plan representing the right to receive shares of Common Stock (including any award originally subject to performance-based vesting for which the performance period has been completed and performance threshold satisfied and which remains subject solely to time-based vesting) that has not been settled.

MoneyGram Pre-2023 Performance-Based RSU Award” means each award of restricted stock units subject to performance-based vesting granted prior to January 1, 2023 pursuant to the Company Stock Plan representing the right to receive shares of Common Stock for which the performance period has not been completed.

 

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MoneyGram Pre-2023 Performance Cash Award” means each performance-based cash award granted prior to January 1, 2023 pursuant to the Company Stock Plan, whether vested or unvested, representing the right to receive cash payments, whether subject to performance-based vesting requirements or time-based vesting requirements.

MoneyGram Stockholder Approval” means the affirmative vote of the holders of a majority of the outstanding shares of Common Stock as of the record date in favor of the proposal to approve and adopt the Merger Agreement at the special meeting of stockholders.

Nasdaq” means the National Association of Securities Dealers Automated Quotations.

Parent” means Mobius Parent Corp., a Delaware corporation and an affiliate of MDP.

Paul Hastings” means the law firm of Paul Hastings LLP, outside financial regulatory counsel to MoneyGram.

Retention Bonus” means the time-based cash grants which will vest at the earlier of (i) the closing date of the Merger or (ii) the first anniversary of the date of grant, granted to certain individuals who have served as an executive officer of MoneyGram at any time since January 1, 2021 that were approved by MoneyGram’s board of directors in connection with the Merger.

SEC” means the U.S. Securities and Exchange Commission.

special meeting” means the special meeting of MoneyGram stockholders to be held virtually on May 23, 2022, at 9:00 a.m., Central Time at www.virtualshareholdermeeting.com/MGI2022SM, as may be postponed or adjourned from time to time.

U.S.” or “United States” means the United States of America.

V&E” means the law firm of Vinson & Elkins L.L.P., legal counsel to MoneyGram.

The Parties to the Merger

(Page 30)

MoneyGram International, Inc.

MoneyGram is a global leader in cross-border P2P 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. 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.

 

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MoneyGram’s Common Stock is listed on the Nasdaq under the symbol “MGI.”

Madison Dearborn Partners, LLC

Madison Dearborn Partners, LLC, or MDP, a Delaware limited liability company, is a leading private equity investment firm based in Chicago, Illinois. Since MDP’s formation in 1992, MDP has raised aggregate capital of over $28 billion and has completed over 150 investments. MDP invests across five dedicated industry verticals, including financial and transaction services; basic industries; business and government software and services; health care; and telecom, media and technology services. MDP is an affiliate of Parent.

Mobius Parent Corp.

Mobius Parent Corp., or Parent, is a Delaware corporation and an affiliate of MDP. Parent is the sole stockholder of Merger Sub.

Mobius Merger Sub, Inc.

Mobius Merger Sub, Inc., or Merger Sub, is a Delaware corporation. The sole stockholder of Merger Sub is Parent. Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, has not owned any properties, rights or assets other than in connection with the transactions contemplated by the Merger Agreement, and has engaged in no other business other than in connection with the transactions contemplated by the Merger Agreement.

The Special Meeting

(Page 32)

Date, Time and Place

(Page 32)

A special meeting of our stockholders will be held virtually on May 23, 2022, at 9:00 a.m., Central Time, at www.virtualshareholdermeeting.com/MGI2022SM, to consider and vote upon a proposal to approve and adopt the Merger Agreement. You will also be asked to consider and vote upon an advisory, non-binding proposal regarding compensation that will or may become payable to MoneyGram’s named executive officers, and a proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting.

Record Date, Stock Entitled to Vote and Quorum

(Page 32)

You are entitled to vote at the special meeting if you owned shares of our Common Stock at the close of business on April 20, 2022, the record date for the special meeting. You will have one vote at the special meeting for each share of our Common Stock you owned at the close of business on the record date. As of the record date, there were 96,278,259 shares of our Common Stock outstanding held by approximately 6,873 holders of record. The holders of a majority of the issued and outstanding shares of our Common Stock that are entitled to vote at the special meeting must be present in person or represented by proxy at the special meeting for a quorum to be present.

 

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Votes Required

(Page 32)

Approval of the proposal to approve and adopt the Merger Agreement requires the affirmative vote of holders of at least a majority of the outstanding shares of our Common Stock as of the record date, and, as such, abstentions will have the same effect as a vote against this proposal. The advisory, non-binding proposal relating to compensation that will be or may become payable to MoneyGram’s named executive officers in connection with the Merger and the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting, require the affirmative vote of a majority of the votes cast on such proposal at the special meeting. Accordingly, abstentions will have no effect on the result of either proposal.

The Merger

(Page 36)

Description of the Merger

(Page 36)

If the Merger Agreement is approved and adopted by MoneyGram’s stockholders, then, subject to other closing conditions as described below in the section captioned “The Merger Agreement—Conditions to Completion of the Merger,” Merger Sub will be merged with and into MoneyGram, and MoneyGram will be the surviving corporation in the Merger. Upon completion of the Merger, MoneyGram will become a wholly owned subsidiary of Parent, and MoneyGram will cease to be a publicly traded company and its shares of Common Stock will cease to be listed on the Nasdaq. We strongly encourage you to carefully read the Merger Agreement in its entirety, a copy of which is attached as Annex A to this proxy statement, because it is the contract that governs the Merger.

If the Merger is completed, each share of Common Stock outstanding immediately prior to the effective time of the Merger (other than certain shares as set forth in the Merger Agreement, including shares for which the holders thereof have properly exercised appraisal rights in accordance with the Section 262 of the DGCL with respect to such Common Stock) will be converted into the right to receive the Merger Consideration, without interest. After the Merger is completed, you will have the right to receive the Merger Consideration (other than for shares for which you have properly exercised appraisal rights in accordance with the Section 262 of the DGCL) but you will no longer have any rights as a stockholder of MoneyGram.

Reasons for the Merger and Recommendation of Our Board of Directors

(Page 47)

At a meeting of our board of directors held on February 14, 2022, our board of directors approved and adopted the Merger Agreement and the Merger. Our board of directors unanimously recommends that the stockholders of MoneyGram vote “for” the approval and adoption of the Merger Agreement and the Merger. In the course of reaching its decision, our board of directors consulted with our senior management and our financial and legal advisors, reviewed a significant amount of information and considered a number of factors, including, among others, the following factors:

 

   

(a) the fact that the $11.00 per share in cash to be paid as merger consideration represented a premium of approximately (i) 50% to $7.34, the closing price of our Common Stock on December 14, 2021, the last trading day prior to media speculation regarding a possible transaction, (ii) 28% to $8.62, the closing price on February 11, 2022, the last trading day prior to the approval of our board of directors of the Merger, and (iii) 56% to the volume-weighted average trading price of $7.04 for the 90-day

 

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period ended December 14, 2021, the last trading day prior to media speculation regarding a possible transaction; (b) the belief of our board of directors that the $11.00 per share in cash to be paid as the Merger Consideration was the highest price per share that MDP was willing to agree to pay; and (c) that the Merger Consideration would be paid solely in cash without a financing contingency;

 

   

the possibility that a third party with sufficient financial means would agree to a transaction at a higher price than MDP on similar or more favorable terms, given the fact that the Merger is the result of an extensive sale process conducted by BofA Securities;

 

   

the risks associated with continued independence, including the risks associated with operating in a highly competitive and regulated industry, risks associated with our indebtedness, including our debt service obligations, and uncertainties relating to inflation, potential war in Ukraine and COVID-19;

 

   

information with respect to our financial condition, results of operations, business, competitive position and business strategy on a historical and prospective basis, current industry, economic and market conditions and trends, as well as the potential future value of MoneyGram, together with the risks associated with continued independence, as compared to the value of the Merger Consideration;

 

   

the opinion provided by BofA Securities as to the fairness, from a financial point of view, of the Merger Consideration to be received by holders of our Common Stock;

 

   

the business reputation and capabilities of MDP and its management, MDP’s experience executing acquisitions, the resources available to MDP to complete the Merger and the strong commercial incentives of MDP to timely obtain all necessary regulatory approvals and complete the Merger;

 

   

the terms of the committed debt financing obtained by Merger Sub and the committed equity financing provided by affiliated funds of MDP, including the nature and limited number of the conditions to the debt financing and equity financing;

 

   

the likelihood that the Merger would be completed in light of, among other things, the conditions to the Merger and the absence of a financing condition, the absence of any condition related to the receipt of third party commercial consents or approvals, the relative likelihood of obtaining required regulatory approvals prior to the end date, Parent’s representations and warranties relating to the equity commitment letter, the debt commitment letter and Parent’s solvency, and the remedies available to us under the Merger Agreement in the event of various breaches by Parent, including the limited guarantee and the $30 million reverse termination fee payable by Parent in specified circumstances when required money transfer approvals have not been obtained;

 

   

the fact that the terms of the Merger Agreement were the result of robust arm’s length negotiations conducted by MoneyGram;

 

   

the fact that the Merger would be subject to the approval of MoneyGram’s stockholders, and that MoneyGram’s stockholders would be free to evaluate the Merger and vote for or against the adoption of the Merger Agreement at MoneyGram’s stockholder meeting;

 

   

the current state of the economy, debt financing markets, political climate and general uncertainty surrounding forecasted economic and political conditions, both in the near term and the longer term, and both generally and within our industry;

 

   

the fact that the $11.00 per share in cash to be paid as Merger Consideration represents a discount of approximately 9% to the 52-week high of MoneyGram’s stock of $12.04 reached on July 22, 2021;

 

   

the risk that the announcement and pendency of the Merger, including the restrictions on the conduct of our business, may adversely affect MoneyGram’s business and/or cause substantial harm to relationships with our employees, agents, customers and partners and may divert management and employee attention away from the day-to-day operation of our business, and the fact that the time

 

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period between the signing of the Merger Agreement and the closing of the Merger will be significant due to the expected time necessary to obtain required regulatory approvals enhances such risk;

 

   

the fact that there can be no assurance that all conditions to the parties’ obligations to consummate the Merger will be satisfied or will be satisfied prior to the end date (after giving effect to any extension thereof already provided for in the Merger Agreement), and, as a result, the possibility that the Merger might not be completed;

 

   

the fact that, if the Merger is not completed, (i) we will have incurred significant risk and transaction and opportunity costs and may not be compensated completely or at all for such costs through the payment of a termination fee, (ii) it is likely that the price of our Common Stock will decline significantly and (iii) the market’s perception of our prospects could be adversely affected;

 

   

the risk that necessary regulatory approvals may be delayed, conditioned or denied, the fact that the standards for obtaining the required money transmitter approvals are not strictly quantitative and are instead subject to interpretation by the applicable regulatory bodies, the fact that the debt and equity financing necessary to fund the purchase price and the ultimate composition of Parent’s capital structure could affect Parent’s ability to obtain and the fact that Parent’s obligations under the Merger Agreement to obtain regulatory approvals are limited in certain ways;

 

   

the risk that, while the Merger Agreement is not by its terms subject to a financing condition, if Parent fails to obtain sufficient financing (notwithstanding the terms of the debt commitments and equity commitments), the Merger may not be consummated and the termination fee of $65.5 million payable to us by Parent in such event may not be sufficient to compensate us for potential losses we may incur under such circumstances;

 

   

the fact that an all cash transaction would be taxable to MoneyGram’s stockholders that are U.S. holders for U.S. federal income tax purposes;

 

   

the fact that MoneyGram will no longer exist as an independent public company and MoneyGram’s stockholders will forgo any future increase in MoneyGram’s value that might result from our earnings or possible growth as an independent company; and

 

   

the risk of litigation in connection with the execution of the Merger Agreement and the consummation of the Merger.

In the course of its deliberations, our board of directors also considered a number of additional potentially positive factors and a number of potentially negative factors regarding the Merger, as more fully described in the section entitled “The Merger—Reasons for the Merger and Recommendation of Our Board of Directors.” Our board of directors concluded that, overall, the potentially positive factors outweighed the potentially negative factors. Accordingly, our board of directors unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of MoneyGram and its stockholders.

Opinion of MoneyGram’s Financial Advisor Regarding the Merger Consideration

(Page 53)

In connection with the Merger, BofA Securities, MoneyGram’s financial advisor, delivered to our board of directors a written opinion, dated February 14, 2022, as to the fairness, from a financial point of view and as of the date of the opinion, of the Merger Consideration to be received by holders of our Common Stock. The full text of the written opinion, dated February 14, 2022, of BofA Securities, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. BofA

 

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Securities provided its opinion to our board of directors (in its capacity as our board of directors) for the benefit and use of our board of directors in connection with and for purposes of our board of directors’ evaluation of the Merger Consideration from a financial point of view. BofA Securities’ opinion does not address any other aspect of the Merger and no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to MoneyGram or in which MoneyGram might engage or as to the underlying business decision of MoneyGram to proceed with or effect the Merger. BofA Securities’ opinion does not constitute a recommendation to any stockholder as to how to vote or act in connection with the proposed Merger or any other matter.

Interests of MoneyGram’s Executive Officers and Directors in the Merger

(Page 63)

In considering the recommendation of MoneyGram’s board of directors that you vote “FOR” the proposal to approve and adopt the Merger Agreement, “FOR” the advisory, non-binding proposal relating to compensation that will be or may become payable to MoneyGram’s named executive officers in connection with the Merger and “FOR” the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting, you should be aware that MoneyGram’s directors and executive officers have interests in the Merger that may be different from, or in addition to, those of MoneyGram’s stockholders generally.

Interests of MoneyGram’s directors and executive officers that may be different from, or in addition to, the interests of MoneyGram’s stockholders generally include:

 

   

The acceleration of outstanding equity awards;

 

   

certain cash severance and benefits payable upon a qualifying termination of employment following the closing date; and

 

   

cash retention bonuses.

MoneyGram’s board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, in approving the Merger Agreement and in recommending the applicable Merger-related proposals.

Regulatory Matters

(Page 73)

U.S. Antitrust Approval

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), we cannot complete the Merger until we give notification and furnish information to the Federal Trade Commission and the Antitrust Division of the Department of Justice and until the applicable waiting period expires or is terminated. On March 16, 2022, we and MDP each filed a pre-Merger notification and report form under the HSR Act. The 30-day waiting period under the HSR Act expired at 11:59 p.m. Eastern Time on April 15, 2022.

Foreign Regulatory Law Approvals

Under the Foreign Regulatory Laws, we cannot complete the Merger until we give notification and furnish information to each of the following entities, and the applicable waiting period expires or is terminated.

 

   

The parties filed a merger control notification with the Bundeskartellamt (Federal Cartel Office) of the Federal Republic of Germany on March 23, 2022. The transaction was cleared on April 1, 2022.

 

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The parties are preparing and expect to file an Initial Application with the General Authority for Competition of the Kingdom of Saudi Arabia by the end of May, 2022. The parties have not yet received a projected expiration date for the applicable waiting period.

 

   

The parties made a filing pursuant to Italian foreign direct investment laws with the Italian Presidency of the Council of Ministers on April 15, 2022. The waiting period will expire 45 calendar days from when the filing is deemed completed, but it could be extended up to 75 calendar days from the filing date in the event that requests for information are addressed to the notifying party or third parties. If the EU cooperation mechanism is triggered (i.e., to allow the European Commission and other EU Member States to request information, issue an opinion, or comment), the waiting period could be extended up to 130 calendar days in the aggregate from the filing date.

Money Transmitter Requirements

MoneyGram holds money transmitter licenses in numerous U.S. and foreign jurisdictions. The relevant laws and regulations of certain of these jurisdictions require that, prior to the acquisition of control of a licensee, the licensee and/or acquirer must notify the applicable regulatory authority, make certain filings with such regulatory authority, and/or obtain the approval of such regulatory authority. It is a condition to Parent’s and Merger Sub’s obligation to complete the Merger that all required money transfer approvals have been made or obtained, as applicable, and remain in full force and effect and all statutory waiting periods relating to the required money transfer approvals have expired, been terminated or satisfied, as applicable, in each case, without the imposition, individually or in the aggregate, of any burdensome condition as defined in the Merger Agreement and as further described in the section entitled “The Merger Agreement—Reasonable Best Efforts.” “Required money transfer approval” means any approval related to money transmitter licenses of MoneyGram or its subsidiaries or the money transfer change of control filings contemplated by the Merger Agreement, from (i) at least 46 U.S. states (including the District of Columbia) and the United Kingdom, Belgium, India, Canada, Australia, Turkey, Mexico and Puerto Rico and (ii) all other jurisdictions where such approvals are required to be obtained prior to the effective time of the Merger, except, in the case of each of clause (i) and (ii), for such approvals the failure of which to be obtained or made prior to the effective time of the Merger would not exceed in the aggregate for clauses (i) and (ii) 2.5% of MoneyGram’s consolidated money transfer revenues for the 12-month period ended December 31, 2021.

Appraisal Rights

(Page 74)

If the Merger is completed, MoneyGram’s stockholders who do not vote in favor of the adoption of the Merger Agreement, properly demand an appraisal of their shares and who otherwise comply with the requirements set forth in Section 262 of the DGCL, will be entitled to appraisal rights under Section 262 of the DGCL. This means that you are entitled to have the fair value of your shares of our Common Stock determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the Merger Consideration if you follow exactly the procedures set forth in Section 262 of the DGCL. The ultimate amount you receive in an appraisal proceeding may be less than, equal to or more than the amount you would have received under the Merger Agreement.

To exercise your appraisal rights, you must submit a written demand for appraisal to MoneyGram before the vote is taken on the proposal to approve and adopt the Merger Agreement and you must not vote (either in person or by proxy) in favor of the proposal to approve and adopt the Merger Agreement. If you fail to follow exactly the procedures set forth in Section 262 of the DGCL, you may lose or waive your appraisal rights. See the section entitled “The Merger—Appraisal Rights” and the text of the DGCL appraisal rights statute reproduced in its entirety as Annex C to this proxy statement. If you hold your shares of our Common Stock through a bank, brokerage firm or other nominee and you wish to exercise your appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by your bank, brokerage firm or other nominee.

 

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In view of the complexity of Section 262 of the DGCL, stockholders who wish to pursue appraisal rights should consult their legal and financial advisors.

Financing of the Merger

(Page 80)

The total amount of funds necessary to consummate the Merger and the related transactions will be funded by a combination of equity and debt financing. The Guarantors have committed to provide equity financing to Parent pursuant to an equity commitment letter (of which MoneyGram is a third-party beneficiary), in the aggregate amount set forth therein, subject to the terms of such equity commitment letter. The Lenders have committed to provide debt financing to Merger Sub pursuant to a debt financing commitment letter in the aggregate amount set forth therein, subject to the terms of such debt commitment letter. The aggregate funds committed to be made available to Parent and Merger Sub under the equity commitment letter and the debt commitment letter, respectively, will provide in the aggregate sufficient funds to consummate the Merger and the related transactions, including the aggregate funds needed to (i) pay our stockholders the aggregate Merger Consideration due to them under the Merger Agreement; (ii) make payments pursuant to the Merger Agreement in respect of outstanding MoneyGram LTI Awards granted under the Company Stock Plan (as defined in the section entitled “The Merger Agreement—Treatment of Equity Awards and Performance Cash Awards”); (iii) repay the outstanding indebtedness and other obligations of MoneyGram under its existing credit agreement and redeem its existing notes at the required redemption price; and (iv) pay fees, premiums and expenses payable by Parent and Merger Sub under the Merger Agreement and in connection with the debt financing and the repayment of MoneyGram’s existing indebtedness. The obligations of Parent and Merger Sub under the Merger Agreement are not conditioned upon obtaining the financing described above.

Delisting and Deregistration of the Common Stock

(Page 82)

If the Merger is completed, our Common Stock will no longer be traded on Nasdaq and will be deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Material United States Federal Income Tax Consequences of the Merger

(Page 82)

The receipt of cash in exchange for shares of our Common Stock pursuant to the Merger generally will be a taxable transaction for U.S. federal income tax purposes. Generally, stockholders will recognize gain or loss equal to the difference between the amount of cash received and the adjusted tax basis of the shares of our Common Stock surrendered. MoneyGram stockholders who are U.S. holders (as defined in the section entitled “The Merger—Material United States Federal Income Tax Consequences of the Merger”) generally will be subject to U.S. federal income tax on any gain recognized in connection with the Merger. MoneyGram stockholders who are non-U.S. holders generally will not be subject to U.S. federal income tax on any gain recognized in connection with the Merger unless the stockholder has certain connections to the United States. MoneyGram stockholders should consult their own tax advisors to determine the tax consequences to them of the Merger based on their particular circumstances.

Litigation Relating to the Merger

(Page 85)

Since the initial filing of this proxy statement on March 29, 2022, MoneyGram and the members of the MoneyGram board have been named as defendants in multiple lawsuits brought by purported MoneyGram

 

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stockholders challenging disclosures made in connection with the Merger. These lawsuits seek, among other things, additional disclosures and to enjoin the consummation of the Merger. MoneyGram believes that the claims asserted in these lawsuits are without merit and intends to defend against them. See the section entitled “The Merger—Litigation Relating to the Merger.”

The Merger Agreement

(Page 86)

When the Merger Becomes Effective

(Page 87)

The Merger Agreement provides that the completion of the Merger will take place, unless another date is agreed upon in writing by the parties, no later than the third business day (or, if earlier, the business day immediately prior to the end date, after giving effect to any extension thereof) after the satisfaction or waiver of the conditions to the completion of the Merger (as described below), provided, that if the marketing period (as described below in the section entitled “The Merger Agreement—When the Merger Becomes Effective”) has not ended prior to such day, the closing will take place on the second business day after the final day of the marketing period or an earlier date agreed by the Parent in writing.

Treatment of Equity Awards and Performance Cash Awards

(Page 89)

Stock Option Awards

The Merger Agreement provides that each MoneyGram Option Award (whether or not vested) that is outstanding immediately prior to the effective time of the Merger, each of which has an exercise price equal to or greater than the Merger Consideration and therefore is expected to have no intrinsic value at the effective time, will be automatically cancelled and retired, and no cash or other consideration will be delivered in exchange therefor, and MoneyGram will have no further obligations with respect to such MoneyGram Option Award.

Long Term Incentive Awards

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger:

 

   

Each MoneyGram Pre-2023 Time-Based RSU Award that is outstanding immediately prior to the effective time will automatically become fully vested and be cancelled in exchange for the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration and (ii) the number of shares of Common Stock subject to such MoneyGram Pre-2023 Time-Based RSU Award (which, with respect to any award originally subject to performance-based vesting for which the performance period has been completed and performance threshold satisfied, and which is now subject solely to time-based vesting, means the number of shares of Common Stock for which the applicable performance criteria were achieved and are subject to time-based vesting);

 

   

Each MoneyGram Pre-2023 Performance-Based RSU Award that is outstanding immediately prior to the effective time will automatically become vested as to a number of shares of Common Stock subject to such MoneyGram Pre-2023 Performance-Based RSU Award based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time and will be cancelled in consideration for the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration and (ii) such vested number of shares of Common Stock;

 

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Each MoneyGram Pre-2023 Performance Cash Award that is outstanding immediately prior to the effective time will automatically become fully vested and be cancelled in exchange for the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the aggregate cash amount payable pursuant to such MoneyGram Pre-2023 Performance Cash Award based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time;

 

   

Each performance-based cash award granted on or after January 1, 2023 pursuant to the Company Stock Plan, whether vested or unvested, representing the right to receive cash payments, whether subject to performance-based vesting requirements or time-based vesting requirements, that is outstanding immediately prior to the effective time, will continue in accordance with its terms; and

 

   

Each MoneyGram 2023 RSU that is outstanding immediately prior to the effective time, will, unless otherwise agreed to in writing by Parent and the holder of such MoneyGram 2023 RSU, automatically be converted into a cash-settled long-term incentive award (a “converted award”), representing a right to receive an amount of cash, without interest, equal to the product of (i) the Merger Consideration and (ii) the number of shares of Common Stock underlying such MoneyGram 2023 RSU (and, with respect to any such MoneyGram 2023 RSU that is subject to performance based vesting, such number of shares of Common Stock will be based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time), on the same vesting terms and conditions applicable to such MoneyGram 2023 RSU immediately before the effective time. On the date, and to the extent, that the converted award becomes vested, such vested converted award will be paid, subject to any applicable withholding taxes, as soon as practicable thereafter (but in any event not later than the second regular payroll date thereafter).

We have further agreed to take all actions necessary to effectuate the foregoing actions, treatment and payment of consideration, as applicable.

Go-Shop

(Page 95)

Pursuant to the Merger Agreement and subject to the conditions therein, during the period beginning immediately following the execution of the Merger Agreement and continuing until 11:59 p.m. (Dallas, Texas time) on the 30th day thereafter (the “solicitation period end date”), we had the right to:

 

   

initiate, solicit, knowingly encourage or knowingly facilitate the submission of any inquiries, proposals or offers that constitute or would reasonably be expected to lead to any acquisition proposal (as defined in the section entitled “The Merger Agreement—Go-Shop”);

 

   

engage in any discussions or negotiations with, or provide any confidential information or data to, any person relating to an acquisition proposal, in each case pursuant to one or more acceptable confidentiality agreements (as defined in the section entitled “The Merger Agreement—Go-Shop”);

 

   

terminate, waive, amend or modify any provision of any standstill agreement or confidentiality agreement to which the MoneyGram is a party to the extent necessary to allow the other party thereto to submit any acquisition proposal or to inquire, propose or make an offer that may lead to an acquisition proposal; or

 

   

propose or agree to do any of the foregoing.

The go-shop period expired on March 16, 2022 without any party submitting an acquisition proposal.

 

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No Solicitation

(Page 97)

Pursuant to the Merger Agreement, following the solicitation period end date we agreed not to:

 

   

initiate, solicit, knowingly encourage or knowingly facilitate (including by way of providing information) the submission of any inquiries, proposals or offers that constitute or would reasonably be expected to lead to any acquisition proposal;

 

   

engage in, conduct or knowingly facilitate any discussions (other than to state that we are not permitted to have discussions) or negotiations with or provide any confidential information or data to any person relating to an acquisition proposal;

 

   

furnish to any person (other than to Parent, Merger Sub or any designees of Parent or Merger Sub) any non-public information relating to MoneyGram or any of its subsidiaries or afford to any person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of MoneyGram or any of its subsidiaries (other than Parent, Merger Sub or any designees of Parent or Merger Sub), in any such case with the intent to induce the making, submission or announcement of, or to knowingly encourage, facilitate or assist, an acquisition proposal or any inquiries or efforts, or the making, of any proposal that would reasonably be expected to lead to an acquisition proposal;

 

   

withdraw, change, amend, modify or qualify, or otherwise propose publicly to withdraw, change, amend, modify or qualify, in a manner adverse to Parent, our board of directors’ recommendation or approve or recommend, or propose publicly to approve or recommend, any acquisition proposal (any act described in this bullet is referred to as a “change of recommendation”);

 

   

waive the applicability of all or any portion of any anti-takeover laws in respect of any person (other than Parent and its affiliates);

 

   

approve or recommend, or propose to approve or recommend, or execute or enter into, any letter of intent or other document or contract related to any acquisition proposal (other than an acceptable confidentiality agreement) or enter into any letter of intent or other document or contract requiring MoneyGram to (or otherwise contemplated that MoneyGram) abandon, terminate or fail to consummate the transactions contemplated by or breach its obligations under the Merger Agreement; or

 

   

resolve, propose or agree to do any of the foregoing.

Notwithstanding the provisions of the Merger Agreement described above, from the solicitation period end date until the time the MoneyGram Stockholder Approval is obtained, if MoneyGram, any of its subsidiaries or any of their representatives receives an unsolicited bona fide written acquisition proposal that did not result from a breach of such foregoing restrictions and our board of directors concludes in good faith (after consultation with our outside legal and financial advisors) that such acquisition proposal constitutes a “superior proposal” (as defined in “The Merger Agreement—Go-Shop”) or could reasonably be expected to result in a superior proposal, MoneyGram may, and may permit its subsidiaries and its and their directors, officers, employees and representatives, to:

 

   

enter into and maintain discussions or negotiations with the person making such acquisition proposal; and

 

   

furnish non-public information and afford access to the business, employees, officers, contracts, properties, assets, books and records of MoneyGram and our subsidiaries to the person making such acquisition proposal.

 

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Parent Equity Syndication

(Page 109)

Following the date of the Merger Agreement, Parent will be permitted to (i) add certain “permitted co-investors” (as defined in the Merger Agreement) as sources of equity financing and (ii) in lieu of a portion of the debt financing, issue preferred equity in Parent or its affiliates to permitted preferred purchasers (clauses (i) and (ii) collectively, the “equity syndication”). Parent, Merger Sub and MoneyGram will reasonably cooperate, at Parent’s expense, to facilitate the equity syndication. Such cooperation shall include making customary and appropriate adjustments to the Merger Agreement, the equity commitment letter, and the Limited Guarantee to give effect thereto. To the extent that the terms of the proposed equity investment by any permitted co-investor would (i) result in any approval from any governmental entity being required in order for the closing to occur, the receipt of which is not already a condition to closing set forth in the Merger Agreement (a “new approval”) or (ii) require any permitted co-investor, its affiliates or their respective representatives to cooperate in connection with obtaining any approval or new approval then, in each case, Parent, Merger Sub and MoneyGram shall negotiate in good faith amendments to the provisions of the Merger Agreement described in “The Merger Agreement—Reasonable Best Efforts” and “The Merger Agreement—Conditions to Completion of the Merger” herein to add such new approvals and provide for such cooperation.

Conditions to Completion of the Merger

(Page 109)

The respective obligations of us, Parent and Merger Sub to complete the Merger are subject to the satisfaction or waiver of certain conditions, including, but not limited to:

 

   

the approval and adoption of the Merger Agreement by our stockholders;

 

   

receipt of all approvals and the expiration or termination of waiting periods applicable to the Merger under the HSR Act and the Foreign Regulatory Laws;

 

   

the absence of any order, law or other legal restraint that prohibits or makes illegal the consummation of the Merger; and

 

   

the accuracy of the representations and warranties of the other party (subject to specified materiality, material adverse effect and other qualifications) and the performance in all material respects by the other party or parties of its or their obligations.

The obligations of Parent and Merger Sub to complete the Merger are subject to the satisfaction or waiver of certain additional conditions, including, but not limited to:

 

   

the required money transfer approvals (as defined in the section entitled “The Merger Agreement—Regulatory Matters”) having been made or obtained, as applicable, and remaining in full force and effect and all statutory waiting periods relating to such required money transfer approvals having expired, been terminated or satisfied, as applicable (in each case, without the imposition, individually or in the aggregate, of any “burdensome condition,” as defined in the section entitled “The Merger Agreement—Reasonable Best Efforts”).

Termination

(Page 111)

The Merger Agreement may be terminated at any time prior to the effective time of the Merger (subject to certain limitations):

 

   

by mutual written consent of Parent and MoneyGram;

 

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by either Parent or MoneyGram, if:

 

   

any governmental entity which must grant a required money transfer approval has denied approval and such denial has become final and non-appealable;

 

   

any governmental entity of competent jurisdiction has issued a final non-appealable order enjoining or otherwise prohibiting the consummation of the transactions contemplated by the Merger Agreement, provided, however, the right to terminate the Merger Agreement pursuant to this clause will not be available to any party if issuance of such final non-appealable order is primarily due to the failure of such party to perform or observe the covenants and agreements of such party set forth in the Merger Agreement all material respects as required and as set forth in the Merger Agreement;

 

   

the Merger has not been consummated on or before February 14, 2023 (provided, that such date may be extended by either MoneyGram or Parent to May 14, 2023 (or in certain circumstances to permit receipt of required money transfer approvals or completion of the marketing period (as described below in the section entitled “The Merger Agreement—Termination”), until June 8, 2023) in the event that all conditions to the obligations of the parties to consummate the Merger are satisfied or waived, other than the condition regarding the required money transfer approvals) (referred to as the “end date termination right”);

 

   

if the other party (or, in the case of Parent, either Parent or Merger Sub) has breached any of the covenants, agreements, representations or warranties made by such other party (or, in the case of Parent, either Parent or Merger Sub) set forth in the Merger Agreement and such breach (i) is not cured within 45 days following written notice to the party committing the breach (or the end date (as may be extended, if earlier), or which breach, by its nature, cannot be cured and (ii) would entitle the non-breaching party not to consummate the transactions contemplated by the Merger Agreement (referred to as the “material breach termination right”);

 

   

the MoneyGram Stockholder Approval has not been obtained at a meeting of MoneyGram’s stockholders (including any adjournment or postponement thereof) (referred to as the “failure to obtain stockholder approval termination right”);

 

   

by Parent, prior to obtaining the MoneyGram Stockholder Approval, if:

 

   

our board of directors has effected a change of recommendation, whether or not permitted under the Merger Agreement;

 

   

MoneyGram fails to call and hold a meeting of its stockholders in breach of the Merger Agreement or commits a willful and material breach of the no solicitation provisions of the Merger Agreement;

 

   

MoneyGram has failed to publicly recommend against any tender offer or exchange offer that constitutes an acquisition proposal within 10 business days after the commencement of such tender offer or exchange offer; or

 

   

to the extent requested by Parent, MoneyGram fails to publicly reaffirm its recommendation within 10 business days after receipt of a written request by Parent to provide a reaffirmation if an acquisition proposal has been publicly announced (referred to as the “change of recommendation termination right”);

 

   

by MoneyGram, if:

 

   

(i) all the conditions to Parent’s obligation to complete the transaction have been satisfied or waived by Parent (other than those conditions that by their nature are to be satisfied at the closing), (ii) MoneyGram has delivered irrevocable written notice to Parent confirming that (a) all

 

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the conditions to Parent’s obligation to complete the transaction have been satisfied or waived by Parent (other than those conditions that by their nature are to be satisfied at the closing), (b) all the conditions to MoneyGram’s obligation to complete the transaction have been satisfied or waived by MoneyGram (other than those conditions that by their nature are to be satisfied at the closing), (c) MoneyGram is ready, willing and able to consummate the closing and (d) if the equity financing and debt financing are funded then the closing of the Merger Agreement will occur and (iii) Parent and Merger Sub have failed to consummate the closing on or before the third business day after delivery of the notice referred to in clause (ii) above (or, if earlier, the end date (as may be extended) (as summarized below)) and (x) MoneyGram stood ready, willing and able to consummate the closing throughout such period and (y) all the conditions to Parent’s obligation to complete the transaction have been satisfied or waived by Parent (other than those conditions that by their nature are to be satisfied at the closing; provided that such conditions are capable of being satisfied) remained satisfied throughout such period or waived in writing by the Parent (referred to as the “failure to close termination right”); or

 

   

prior to obtaining the MoneyGram Stockholder Approval, (i) our board of directors authorizes MoneyGram, subject to the terms of the Merger Agreement, to enter into a binding definitive agreement to effect a transaction constituting a superior proposal, (ii) prior to or concurrently with such termination of the Merger Agreement MoneyGram pays to Parent in immediately available funds the applicable termination fee described below in “Termination Fees and Expenses” and (iii) MoneyGram enters into such binding definitive agreement substantially concurrently with or immediately after such termination (referred to as the “superior proposal termination right”).

Termination Fees and Expenses

(Page 114)

MoneyGram Termination Fee

MoneyGram is required to pay Parent a termination fee of $32.8 million if the Merger Agreement is terminated as follows:

 

   

if the Merger Agreement is terminated by (i) Parent pursuant to Parent’s change of recommendation termination right or (ii) MoneyGram pursuant to MoneyGram’s superior proposal termination right;

 

   

if the Merger Agreement is terminated:

 

   

(i) by either Parent or MoneyGram pursuant to the end date termination right or by Parent pursuant to the material breach termination right or (ii) by either Parent or MoneyGram pursuant to the failure to obtain stockholder approval termination right; and

 

   

in the case of clause (i) in the immediately preceding bullet, an acquisition proposal, whether or not conditional, has been publicly announced or otherwise communicated to our board of directors at any time after the date of the Merger Agreement or, in the case of clause (ii) in the immediately preceding bullet, an acquisition proposal, whether or not conditional, has been publicly announced or otherwise publicly communicated and not withdrawn prior to a meeting of MoneyGram’s stockholders; and

 

   

within 12 months of such termination MoneyGram or any of its subsidiaries enters into an agreement with respect to any acquisition proposal, whether or not with a person that made an acquisition proposal prior to the date of such termination and such acquisition proposal is ultimately consummated (whether or not within 12 months of such termination of the Merger Agreement) (provided that the term “acquisition proposal” will have the meaning assigned to such term, except that all percentages in the term “acquisition proposal” will be changed to 50% for purposes of this and the immediately preceding sub-bullet).

 

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However, in the event that (a)(i) the Merger Agreement is terminated by (x) Parent pursuant to Parent’s change of recommendation termination right or (y) MoneyGram pursuant to MoneyGram’s superior proposal termination right and (ii) MoneyGram enters into an agreement with an “exempted person” (as defined in the Merger Agreement) with respect to a superior proposal in compliance the Merger Agreement, and (b) the counterparty to a transaction giving rise to the obligation to pay the MoneyGram termination fee pursuant to the second bullet in the list above is an exempted person on the date the Merger Agreement is terminated, then in either instance, the MoneyGram termination fee will be an amount in cash equal to $16.4 million (provided, however, that in the event such exempted person is a prior bidder (as defined below), the MoneyGram termination fee payable pursuant to either of the foregoing clauses (a) or (b) will be an amount in cash equal to $30.0 million).

See the section entitled “The Merger Agreement—Termination Fees and Expenses—MoneyGram Termination Fee.”

Parent Termination Fee and Parent Regulatory Termination Fee

Parent is required to pay MoneyGram a termination fee of $65.5 million if the Merger Agreement is terminated as follows:

 

   

by MoneyGram pursuant to MoneyGram’s material breach termination right or failure to close termination right; or

 

   

by Parent pursuant to the Parent’s end date termination right at a time when MoneyGram could have terminated the Merger Agreement pursuant to (i) MoneyGram’s material breach termination right or (ii) MoneyGram’s failure to close termination right.

Parent is required to pay MoneyGram a termination fee of $30.0 million if Merger Agreement is terminated as follows:

 

   

by Parent or MoneyGram pursuant to its end date termination right, if at the time of such termination all of the conditions to Parent’s obligation to complete the transaction have been satisfied or waived by Parent other than the condition that required money transfer approvals have been obtained (and MoneyGram’s failure to perform or observe its covenants and agreements in the Merger Agreement was not the primary cause of the failure of any such conditions); or

 

   

by Parent or MoneyGram if any governmental entity which must grant a required money transfer approval has denied such approval and such denial has become final and non-appealable.

See the section entitled “The Merger Agreement—Termination Fees and Expenses—Parent Termination Fee and Parent Regulatory Termination Fee.”

Limited Guarantee

(Page 115)

Concurrently with the execution of the Merger Agreement and pursuant to its terms, the Guarantors provided to MoneyGram a Limited Guarantee for the benefit of MoneyGram, pursuant to which, subject to the terms and conditions contained therein, the Guarantors guarantee certain payment obligations of Parent and Merger Sub under the Merger Agreement and other costs and expenses, as further described in “The Merger Agreement—Limited Guarantee”. Such payments guaranteed thereunder consist of (a) the Parent termination fee as described in “The Merger Agreement—Termination Fees and Expenses”, subject to the limitations on liability set forth in the Merger Agreement, (b) any amounts payable by Parent in respect of Parent’s reimbursement and indemnification obligations as described in “The Merger Agreement—Termination Fees and Expenses,” (c) the expense and interest payments, if and when any expense and interest payments become payable pursuant to the

 

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terms and conditions of the termination provisions of the Merger Agreement and (d) in any circumstance in with the Parent termination fee is not payable pursuant to the Merger Agreement, any monetary damages payable by the Parent pursuant to the terms and conditions of the Merger Agreement in the event of Parent’s or Merger Sub’s willful and material breach of any of their representations, warranties, covenants, obligations or agreements contained in the Merger Agreement or fraud. Parent and Merger Sub’s aggregate liability under the Merger Agreement with respect to such payments, and Guarantor’s payment obligations under the Limited Guarantee with respect thereto, are limited to $68.8  million in the aggregate. See the section entitled “The Merger Agreement—Limited Guarantee.”

Market Price of Our Common Stock

(Page 119)

Our Common Stock is listed on the Nasdaq under the symbol “MGI.” On February 14, 2022, the last full trading day prior to the public announcement of the proposed Merger, our Common Stock closed at $8.95. On April 20, 2022, the last practicable trading day prior to the date of this proxy statement, our Common Stock closed at $10.65. We encourage stockholders to obtain a current market quotation for our Common Stock in connection with voting their shares, but caution stockholders that, during the pendency of the Merger, the trading price of our Common Stock may be impacted by the fact that we have entered into the Merger Agreement and investors speculating as to the likelihood and timing of the closing of the Merger.

The Timing of the Merger

We currently expect the Merger to be completed in the fourth quarter of 2022. However, we cannot predict the exact timing of the consummation of the Merger or whether the Merger will be consummated. In order to consummate the Merger, MoneyGram stockholders must approve and adopt the Merger Agreement at the special meeting and the other closing conditions under the Merger Agreement, including receipt of certain regulatory approvals (including approvals with respect to money transmitter licenses) and completion of the marketing period, must be satisfied or, to the extent legally permitted, waived. Additionally, the Merger Agreement may be terminated if the effective time of the Merger has not occurred on or before February 14, 2023 (provided, that such date may be extended, in certain circumstances, to June 8, 2023 to permit receipt of required money transfer approvals or completion of the marketing period). See the section entitled “The Merger Agreement—Conditions to Completion of the Merger.”

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

The following questions and answers are intended to address briefly some commonly asked questions regarding the Merger, the Merger Agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a stockholder. Please refer to the “Summary” and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under the section entitled “Where You Can Find More Information.” Throughout this proxy statement, “we,” “us” and “our” refer to MoneyGram.

 

Q:

What is the Merger?

 

A:

The Merger is the acquisition of MoneyGram by Parent, an affiliate of MDP, pursuant to the Merger Agreement. Once the Merger Agreement has been approved and adopted by MoneyGram’s stockholders and the other closing conditions under the Merger Agreement have been satisfied or, if permitted, waived, Merger Sub will merge with and into MoneyGram. MoneyGram will be the surviving corporation in the Merger and will become a wholly owned subsidiary of Parent.

 

Q:

Why am I receiving the proxy materials?

 

A:

You are receiving this proxy statement and the enclosed proxy card or enclosed voting instruction form because our board of directors is soliciting your proxy to vote at the special meeting of MoneyGram’s stockholders in connection with a proposal to approve and adopt the Merger Agreement. In addition, our board of directors is soliciting your vote on an advisory, non-binding proposal to approve compensation that will or may become payable to MoneyGram’s named executive officers in connection with the Merger and on a proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting.

 

Q:

What will I receive in the Merger?

 

A:

If the Merger is completed, you will be entitled to receive the Merger Consideration of $11.00 in cash, without interest, for each share of our Common Stock that you own at the effective time of the Merger. For example, if you own 100 shares of our Common Stock at the effective time of the Merger, you will receive $1,100.00 in cash, less any required withholding taxes, in exchange for those shares unless you have properly exercised your appraisal rights in accordance with Section 262 of the DGCL with respect to such shares. You will not receive any shares of capital stock in the surviving corporation.

 

Q:

How does our board of directors recommend I vote?

 

A:

Our board of directors has adopted resolutions (i) determining that the Merger and other transactions contemplated by the Merger Agreement are fair to, and in the best interests of MoneyGram and the stockholders of MoneyGram, (ii) approving, adopting and declaring advisable and authorized in all respects the Merger Agreement and the Merger and other transactions contemplated by the Merger Agreement, (iii) directing that the Merger be submitted to the stockholders of MoneyGram for approval at a meeting of such stockholders and (iv) recommending that MoneyGram’s stockholders approve the Merger and approve all other actions or matters necessary or desirable to give effect to the Merger pursuant to the DGCL. Our board of directors unanimously recommends that all of our stockholders vote FOR the approval and adoption of the Merger Agreement. The reasons for our board of directors’ determination are discussed elsewhere in this proxy statement. Additionally, our board of directors unanimously recommends that you vote FOR the proposal to approve compensation that will or may become payable to MoneyGram’s named executive officers in connection with the Merger and FOR the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting.

 

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Q:

Who will own MoneyGram after the Merger?

 

A:

After the Merger, MoneyGram will be a wholly owned subsidiary of Parent. As a result of the receipt of cash in exchange for your shares of Common Stock following the Merger, you will no longer benefit from any increase in MoneyGram’s value, nor will you acquire an ownership interest in Parent.

 

Q:

What will happen if our board of directors receives a superior proposal?

 

A:

In the event our board of directors receives a proposal that our board of directors determines in good faith, after consultation with its outside legal and financial advisors, constitutes a superior proposal, then, subject to complying with certain provisions of the Merger Agreement (including the provision that requires us to provide Parent with the opportunity to negotiate with us to revise the terms of the Merger such that the proposal no longer constitutes a superior proposal), our board of directors may, prior to obtaining the MoneyGram Stockholder Approval, elect to terminate the Merger Agreement in order to enter into a definitive agreement with respect to the superior proposal, provided that Parent shall have received a termination fee of $32.8 million (or $16.4 million if the superior proposal was made by an exempted person (as defined in the section entitled “The Merger Agreement—Go-Shop”), or $30.0 million if the superior proposal was made by an exempted person who is also prior bidder). In the event our board of directors terminates the Merger Agreement prior to the date of the special meeting, we will not hold the special meeting, and any proxies received by us will have no force or effect. Instead, we will separately prepare and mail to our stockholders a proxy statement and proxy cards related to the superior proposal.

For additional information regarding the circumstances in which our board of directors is permitted to terminate the Merger Agreement to accept a superior proposal, please see “The Merger Agreement—Termination” beginning on page 111 of this proxy statement.

 

Q:

When do you expect the Merger to be completed?

 

A:

We are working to complete the Merger as soon as possible. The Merger cannot be completed until each closing condition has been satisfied or, to the extent legally permitted, waived. While we cannot predict the exact timing of the effective time of the Merger or whether the Merger will be consummated, assuming timely satisfaction of necessary closing conditions, we currently anticipate that the Merger will be completed during the fourth quarter of 2022. If our stockholders vote to approve and adopt the Merger Agreement, the Merger will become effective not later than the third business day following the satisfaction or waiver of the other conditions to the Merger, subject to the completion or waiver of the marketing period under the Merger Agreement. Additionally, the Merger Agreement may be terminated if the effective time of the Merger has not occurred on or before February 14, 2023 (provided, that such date may be extended, in certain circumstances, to June 8, 2023 to permit receipt of required money transfer approvals or completion of the marketing period). See the section entitled “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 109 of this proxy statement.

 

Q:

What happens if the Merger is not completed?

 

A:

If the Merger Agreement is not approved and adopted by our stockholders or if the Merger is not completed for any other reason, our stockholders will not receive any payment for their shares of our Common Stock in connection with the Merger. Instead, we will remain an independent public company, and our Common Stock will continue to be listed and traded on the Nasdaq. Under specified circumstances, we may be required to pay to Parent a fee, or Parent may be required to pay us a fee, with respect to the termination of the Merger Agreement as described under the section entitled “The Merger Agreement—Termination Fees and Expenses” beginning on page 114 of this proxy statement.

 

Q:

What are the material U.S. federal income tax consequences of the Merger to me?

 

A:

The receipt of cash in exchange for shares of our Common Stock pursuant to the Merger generally will be a taxable transaction for U.S. federal income tax purposes. Generally, you will recognize gain or loss equal to

 

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  the difference between the amount of cash you receive and the adjusted tax basis of your shares of our Common Stock. If you are a U.S. holder (as defined in “The Merger—Material United States Federal Income Tax Consequences of the Merger”), you generally will be subject to U.S. federal income tax on any gain recognized in connection with the Merger. If you are a non-U.S. holder, you generally will not be subject to U.S. federal income tax on any gain recognized in connection with the Merger unless you have certain connections to the United States. The tax consequences of the Merger to you will depend on your particular circumstances, and you should consult your own tax advisors to determine how the Merger will affect you. For a more detailed summary of the tax consequences of the Merger, see the section entitled “The Merger—Material United States Federal Income Tax Consequences of the Merger” beginning on page 82 of this proxy statement.

 

Q:

What will happen in the Merger to stock options, restricted stock units and other stock-based awards that have been granted to employees, officers and directors of MoneyGram?

 

A:

The Merger Agreement provides that (a) each outstanding option to purchase shares of Common Stock (each a “MoneyGram Option Award”) granted pursuant to the Company Stock Plan, whether or not vested, that has an exercise price equal to or greater than the Merger Consideration will automatically be cancelled and retired, (b) each restricted stock unit subject to time-based vesting (including any award originally subject to performance-based vesting for which the performance period has been completed and performance threshold satisfied and which is now subject solely to time-based vesting) granted prior to January 1, 2023 pursuant to the Company Stock Plan representing the right to receive shares of Common Stock that has not been settled (each, a “MoneyGram Pre-2023 Time-Based RSU Award”) will automatically become fully vested and will be cancelled and converted into the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration and (ii) the number of shares of Common Stock subject to such MoneyGram Pre-2023 Time-Based RSU Award, (c) each restricted stock unit subject to performance-based vesting granted prior to January 1, 2023 pursuant to the Company Stock Plan representing the right to receive shares of Common Stock for which the performance period has not been completed (each, a “MoneyGram Pre-2023 Performance-Based RSU Award”) will automatically become vested as to a number of shares of Common Stock subject to such MoneyGram Pre-2023 Performance-Based RSU Award based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time of the Merger and will be cancelled and converted into the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration and (ii) such vested number of shares of Common Stock, and (d) each performance-based cash award granted prior to January 1, 2023 pursuant to the Company Stock Plan, whether vested or unvested, representing the right to receive cash payments, whether subject to performance-based vesting requirements or time-based vesting requirements (each, a “MoneyGram Pre-2023 Performance Cash Award”), will automatically become fully vested and be cancelled in exchange for the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the aggregate cash amount payable pursuant to such MoneyGram Pre-2023 Performance Cash Award based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time of the Merger.

The Merger Agreement also provides that, to the extent that any restricted stock units subject to either time-based or performance-based vesting granted in or following calendar year 2023 pursuant to the Company Stock Plan, representing the right to receive shares of Common Stock (including any award originally subject to performance-based vesting for which the performance period has been completed and performance threshold satisfied and which is now subject solely to time-based vesting) (such awards, a “MoneyGram 2023 RSU”), such MoneyGram 2023 RSUs will automatically be converted into a cash-settled long-term incentive award, representing a right to receive an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration and (ii) the number of

 

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shares of Common Stock underlying such MoneyGram 2023 RSU (with any MoneyGram 2023 RSU subject to performance-based vesting converted based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time of the Merger), on the same vesting terms and conditions applicable to such MoneyGram 2023 RSU immediately prior to the effective time of the Merger.

 

Q:

Do any of our directors or officers have interests in the Merger that may differ from or be in addition to my interests as a stockholder?

 

A:

Yes. In considering the recommendation of our board of directors with respect to the approval and adoption of the Merger Agreement, you should be aware that our directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our stockholders generally. Our board of directors was aware of and considered these interests, among other matters, in making its determinations and recommendations in connection with the Merger Agreement and the transactions contemplated thereby. See the section entitled “The Merger—Interests of MoneyGram’s Executive Officers and Directors in the Merger” beginning on page 63 of this proxy statement.

 

Q:

When and where is the special meeting?

 

A:

The special meeting of our stockholders will be held virtually on May 23, 2022, at 9:00 a.m., Central Time, at www.virtualshareholdermeeting.com/MGI2022SM. You will not be able to attend the special meeting physically in person. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.

 

Q:

What constitutes a quorum for purposes of the special meeting?

 

A:

A majority of the total shares of our Common Stock issued and outstanding and entitled to vote at the special meeting present in person or represented by proxy at the special meeting is required for a quorum. If you submit a properly executed proxy card, even if you do not vote for the proposals, or abstain from voting in respect of the proposals, your shares of Common Stock will be counted for purposes of calculating whether a quorum is present for the transaction of business at the special meeting. Broker non-votes will not be counted for purposes of determining whether there is a quorum at the special meeting.

 

Q:

What vote is needed to approve and adopt the Merger Agreement?

 

A:

The affirmative vote of holders of at least a majority of the outstanding shares of our Common Stock as of the record date is required to approve and adopt the Merger Agreement. Accordingly, abstentions will have the same effect as a vote against the approval and adoption of the Merger Agreement.

 

Q:

Why are we asking that our stockholders approve, on an advisory, non-binding basis, certain compensation arrangements for our named executive officers?

 

A:

SEC rules require that we provide our stockholders with the opportunity to vote on this proposal. However, approval of this proposal is not a condition to completion of the Merger, and the vote with respect to this proposal is only an advisory vote by stockholders. Accordingly, the vote will not be binding on us or Parent, our or their board of directors or our compensation committee. If the Merger is completed, the compensation that is the subject of the proposal may be paid to our named executive officers in accordance with the terms and conditions of their compensation agreements and arrangements even if our stockholders do not approve this proposal.

 

Q:

What vote is needed to approve the advisory, non-binding proposal relating to certain Merger-related executive compensation arrangements for our named executive officers and the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting?

 

A:

The affirmative vote of a majority of the votes cast at the special meeting are needed to approve the advisory, non-binding proposal relating to certain Merger-related executive compensation arrangements for

 

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  our named executive officers and the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting. Accordingly, abstentions will have no effect on the approval of these proposals.

 

Q:

Am I entitled to rights of appraisal under the DGCL?

 

A:

If the Merger is completed, stockholders who do not vote in favor of the approval and adoption of the Merger Agreement and who properly demand appraisal of their shares in accordance with Section 262 of the DGCL will be entitled to appraisal rights in connection with the Merger under Section 262 of the DGCL. This means that holders of shares of our Common Stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares of Common Stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest on the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of their legal and financial advisors with respect to the exercise of appraisal rights due to the complexity of the appraisal process. The DGCL requirements for exercising appraisal rights are described in additional detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced in Annex C to this proxy statement. See the section entitled “The Merger—Appraisal Rights” beginning on page 74 of this proxy statement.

 

Q:

Who can vote at the special meeting?

 

A:

Stockholders of record of our Common Stock as of the close of business on April 20, 2022, the record date for the special meeting, are entitled to receive notice of the special meeting and vote their shares at the meeting. Each holder of Common Stock is entitled to one vote for each share of the Common Stock held on the record date for each of the proposals set forth in this proxy statement.

 

Q:

How do I vote if I am the record holder of my shares?

 

A:

You are entitled to vote at the meeting if you are a stockholder of record of Common Stock on the record date. You may vote:

 

   

in person by attending and casting your vote virtually at the special meeting; or

 

   

by proxy. Stockholders of record have a choice of submitting a proxy:

 

   

by using the Internet voting instructions printed on your proxy card;

 

   

by using the telephone voting instructions printed on your proxy card; or

 

   

by completing, signing, dating and returning each enclosed proxy card you receive in the enclosed postage paid envelope.

If you are granting a proxy to vote by telephone or via the Internet, your voting instructions must be received by the date and time indicated on the applicable proxy card(s).

Granting a proxy to vote via the Internet, by telephone or by mailing in your proxy card will not prevent you from voting in person at the special meeting. You are encouraged to submit a proxy by mail, via the Internet or by telephone even if you plan to attend the special meeting in person, to ensure that your shares of Common Stock are present in person or represented at the special meeting.

If you return a properly signed and dated proxy card but do not mark the box showing how you wish to vote, your shares will be voted “FOR” the proposal to approve and adopt the Merger Agreement, “FOR” the non-binding, advisory proposal to approve compensation that will or may become payable to MoneyGram’s named executive officers in connection with the Merger and “FOR” the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient

 

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votes to adopt the Merger Agreement at the time of the special meeting. With respect to any other matter that properly comes before the special meeting, shares present or represented by all proxies received by MoneyGram will be voted with respect to such matter in accordance with the judgment of the persons named as attorneys-in-fact in the proxies.

 

Q:

How do I vote if my shares are held by my brokerage firm, bank, trust or other nominee?

 

A:

If your shares are held in a brokerage account or by another nominee, such as a bank or trust, then you are considered to be the beneficial owner of those shares, with your shares being held in “street name.” “Street name” holders generally cannot vote their shares directly and must instead instruct the brokerage firm, bank, trust or other nominee how to vote their shares. Brokerage firms, banks, trusts or other nominees cannot exercise discretionary authority to vote your shares regarding proposals that are not “routine.” The proposal to approve and adopt the Merger Agreement, the advisory, non-binding proposal to approve compensation that will or may become payable to our named executive officers in connection with the Merger, and the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting are not considered “routine,” and therefore your brokerage firm, bank, trust or other nominee will only be permitted to vote your shares for you at the special meeting if you instruct it how to vote. Accordingly, it is important that you promptly follow the directions provided by your brokerage firm, bank, trust or other nominee regarding how to instruct it to vote your shares. If you wish to vote at the special meeting, you must bring a proxy from your brokerage firm, bank, trust or other nominee authorizing you to vote at the special meeting.

In addition, because any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, shares held in “street name” will not be combined for voting purposes with shares you hold of record. To be sure your shares are voted, you should instruct your brokerage firm, bank, trust or other nominee to vote your shares. Shares held by a corporation or business entity must be voted by an authorized officer of the entity. 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 in the section entitled, “The Special Meeting—Votes Required” beginning on page 32 of this proxy statement.

 

Q:

What happens if I do not vote?

 

A:

The vote to approve and adopt the Merger Agreement is based on the total number of shares of Common Stock outstanding as of the close of business on the record date, not just the shares that are voted. If you do not vote, it will have the same effect as a vote against the proposal to approve and adopt the Merger Agreement. If you do not vote and there is a quorum present at the special meeting, it will have no impact on the proposal to approve compensation that will or may become payable to MoneyGram’s named executive officers in connection with the Merger or the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting.

 

Q:

How do the Company’s directors and executive officers intend to vote?

 

A:

As of April 20, 2022, our directors and executive officers beneficially owned in the aggregate 3,241,298 shares of Common Stock, or approximately 3.4% of the outstanding shares of Common Stock as of April 20, 2022. Although none of the directors or executive officers is obligated to vote to approve the Merger, we currently expect that each of these individuals will vote all of his or her shares in favor of each of the proposals to be presented at the special meeting.

 

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Q:

What is the difference between a stockholder of record and a beneficial owner of shares held in street name?

 

A:

If your shares are registered in your name with MoneyGram’s transfer agent, EQ Shareowner Services, you are the “stockholder of record” of those shares. In that case, the 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 special meeting. The 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 form or by following their instructions for voting by telephone or on the Internet.

Under the rules applicable to broker-dealers, your bank, broker, or other nominee does not have discretionary authority to vote your shares on any of the proposals scheduled to be voted on at the special meeting. A so-called “broker non-vote” results when banks, brokers and other nominees return a valid proxy but do not vote on a particular proposal because they do not have discretionary authority to vote on the matter and have not received specific voting instructions from the beneficial owner of such shares. MoneyGram does not expect any broker non-votes at the special meeting because the rules applicable to banks, brokers and other nominees only provide brokers with discretionary authority to vote on proposals that are considered routine, whereas each of the proposals to be presented at the special meeting are considered non-routine under the federal securities laws. As a result, no broker will be permitted to vote your shares of Common Stock at the special meeting without receiving instructions. Failure to instruct your broker on how to vote your shares will (i) have the same effect as a vote “against” the Merger Agreement and (ii) will cause your shares not to be counted toward a quorum, but will have no effect on the proposal to approve compensation, or the proposal to adjourn the special meeting, if a quorum is present.

 

Q:

How can I change or revoke my vote?

 

A:

Proxies may be revoked or changed if you:

 

   

deliver a signed, written revocation letter, dated later than the proxy and which must be received prior to the special meeting, 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 and which must be received prior to the special meeting;

 

   

vote again by telephone or on the Internet by 11:59 p.m. Eastern Time on the day before the special meeting; or

 

   

attend the special meeting and give notice to the inspector of election that you intend to vote virtually at the special meeting rather than by proxy. Your attendance at the special meeting will not revoke your proxy unless you choose to vote virtually at the special meeting.

If your shares are held in street name by a broker, bank, trust or other nominee, you must contact such broker, bank, trust or other nominee and follow its procedures to revoke your proxy. If you are a participant in the 401(k) Plan, your proxy must be received by 11:59 p.m. Eastern Time on May 18, 2022.

 

Q:

What is a proxy?

 

A:

A proxy is your legal designation of another person, referred to as a proxy, to vote your shares of stock. The written document describing the matters to be considered and voted on at the special meeting is called a proxy statement. The document used to designate a proxy to vote your shares of stock is called a proxy card. Our board of directors has designated W. Alexander Holmes and Robert L. Villaseñor, and each of them, with full power of substitution, as proxies for the special meeting.

 

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Q:

If a stockholder gives a proxy, how are the shares of Common Stock voted?

 

A:

Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, as your proxies, will vote your shares of Common Stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of Common Stock should be voted for or against, or to abstain from voting, on all, some or none of the specific items of business to come before the special meeting.

If you are the stockholder of record, and you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted “FOR” the proposal to approve and adopt the Merger Agreement, “FOR” the non-binding, advisory proposal to approve compensation that will or may become payable to MoneyGram’s named executive officers in connection with the Merger and “FOR” the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting. If you are the beneficial owner of shares held in street name, your broker will not be able to vote your shares without instructions from you.

 

Q:

What do I do if I receive more than one proxy or set of voting instructions?

 

A:

If you hold shares of Common Stock in “street name” and also directly as a record holder or otherwise, you may receive more than one proxy and/or set of voting instructions relating to the special meeting. Each proxy should be voted and/or returned separately in accordance with the instructions provided in this proxy statement in order to ensure that all of your shares of Common Stock are voted.

 

Q:

What happens if I sell my shares of Common Stock before the special meeting?

 

A:

The record date for stockholders entitled to vote at the special meeting is earlier than the date of the special meeting. If you transfer your shares of Common Stock after the record date but before the special meeting you will, unless special arrangements are made, retain your right to vote at the special meeting but will transfer the right to receive the Merger Consideration to the person to whom you transfer your shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies?

 

A:

The expenses of preparing, printing and mailing this proxy statement and the proxies solicited hereby will be borne by us. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

We have engaged Alliance Advisors LLC (“Alliance”) to assist in the solicitation of proxies for the special meeting. We estimate that we will pay Alliance a fee of approximately $15,000, plus customary administrative fees for expenses related to calls made to or received from our stockholders. We will reimburse Alliance for reasonable out-of-pocket expenses and will indemnify Alliance and its affiliates against certain claims, liabilities, losses, damages and expenses.

We may also reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares of Common Stock for their expenses in forwarding soliciting materials to beneficial owners of Common Stock and in obtaining voting instructions from those owners.

 

Q:

What do I need to do now?

 

A:

Even if you plan to attend the special meeting, after carefully reading and considering the information contained in this proxy statement, please submit a proxy promptly to ensure that your shares are represented and voted at the special meeting. If you hold your shares of Common Stock in your own name as the stockholder of record, please submit a proxy to have your shares of Common Stock voted at the special meeting by completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid

 

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  reply envelope; by using the telephone number printed on your proxy card; or by using the Internet instructions printed on your proxy card. If you decide to attend the special meeting and vote at the special meeting, your vote by ballot will revoke any proxy previously submitted. If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you.

 

Q:

Should I send in my MoneyGram stock certificates now?

 

A:

No. After the Merger is completed, you will receive written instructions for exchanging your shares of our Common Stock for the Merger Consideration for each share of our Common Stock that you own at the effective time of the Merger, subject to the terms of the Merger Agreement.

 

Q:

I do not know where my stock certificate is. How will I get the Merger Consideration for my shares?

 

A:

If the Merger is completed, the transmittal materials you will receive after the completion of the Merger will include the procedures that you must follow if you cannot locate your stock certificate. This will include an affidavit that you will need to sign attesting to the loss of your stock certificate. MoneyGram may also require that you provide a customary indemnity agreement to MoneyGram in order to cover any potential loss.

 

Q:

What is householding and how does it affect me?

 

A:

The SEC has approved rules that permit companies and intermediaries, such as banks, brokers and other nominees, to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process is commonly referred to as “householding.”

This means that only one copy of this proxy statement may have been sent to multiple stockholders in your household unless we have received contrary instructions from one or more stockholders. We will promptly deliver a separate copy of this proxy statement to you if you contact us at the following address: MoneyGram International, Inc., 2828 North Harwood Street, 15th Floor, Dallas, Texas 75201, Attention: Corporate Secretary, telephone: (214) 999-7552. If you want to receive separate copies of the proxy statement or annual report to stockholders in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address or telephone number.

See the section entitled “Multiple Stockholders Sharing One Address” beginning on page 125 of this proxy statement for more information.

 

Q:

Where can I find the voting results of the special meeting?

 

A:

MoneyGram intends to announce the preliminary voting results of the special meeting and disclose the final voting results in a Current Report on Form 8-K that will be filed with the SEC following the special meeting. All reports that MoneyGram files with the SEC are publicly available when filed.

 

Q:

Who can help answer my other questions?

 

A:

If you have additional questions about the Merger, need assistance in submitting your proxy or voting your shares of Common Stock, or need additional copies of the proxy statement or the enclosed proxy card, please call Alliance, our proxy solicitor, who may be contacted toll-free at (855) 973-0090.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement and the documents incorporated by reference herein may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to, among other things, the financial condition, results of operations, plans, objectives, future performance and business of MoneyGram and its subsidiaries. Statements preceded by, followed by or that include words such as “believes,” “estimates,” “expects,” “projects,” “plans,” “anticipates,” “intends,” “continues,” “will,” “should,” “could,” “may,” “would,” “goals” and other similar expressions are intended to identify some of the forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are included, along with this statement, for purposes of complying with the safe harbor provisions therein. These statements include, but are not limited to, the expected timing of the Merger; the ability of MDP and MoneyGram to close the Merger; the performance of the parties under the terms of the Merger Agreement; and statements regarding future performance. All of such information and statements are subject to certain risks and uncertainties, the effects of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Investors are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this proxy statement. Investors are also urged to carefully review and consider the various disclosures in our periodic and interim reports filed with the SEC, including but not limited to our Annual Report on Form 10-K for the year ended December 31, 2021 and the Current Reports on Form 8-K filed from time to time by us, as well as the following factors:

 

   

uncertainties associated with the acquisition of MoneyGram by MDP;

 

   

uncertainties as to the timing of the Merger and the possibility that the Merger may not be completed;

 

   

the failure to receive approval of the Merger Agreement by our stockholders;

 

   

the ability of the parties to satisfy closing conditions to the Merger, including the receipt of money transmitter licenses or other regulatory approvals, including non-actions or approvals under the HSR Act or Foreign Regulatory Laws;

 

   

the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, including in circumstances requiring MoneyGram to pay a termination fee to Parent;

 

   

the impact of the pendency of the Merger on our business, including our relationships with agents, customers and employees;

 

   

changes in economic, business, competitive, technological and/or regulatory factors, or catastrophic events, including acts of terrorism, outbreak of war or hostilities (including the ongoing conflict in Ukraine), civil unrest, adverse climate or weather events and the COVID-19 pandemic or other public health emergencies;

 

   

the outcome of any legal proceedings that have been or may be instituted against MoneyGram and/or others relating to the Merger Agreement;

 

   

failure of a party to comply with its obligations under the Merger Agreement;

 

   

the amount of costs, fees and expenses we have, and may incur, related to the Merger, whether or not the Merger is ultimately completed;

 

   

the fact that, if the Merger is completed, stockholders will forgo the opportunity to realize the potential long-term value of the successful execution of our current strategy as a publicly traded company;

 

   

the inability to pursue alternative business opportunities or make appropriate changes to our business because of requirements of the Merger Agreement and the related equity and debt financing commitments that we conduct our business in the ordinary course of business consistent with past practice and not engage in certain kinds of transactions prior to the completion of the Merger; and

 

   

risks that the price of our Common Stock may decline significantly if the Merger is not completed.

 

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Consequently, all of the forward-looking statements we make in this document are qualified by the information contained or incorporated by reference herein, including, but not limited to, (a) the information contained under this heading and (b) the information contained in Part I, Item 1A under the caption “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021, as well as the various factors described herein. We are under no obligation to publicly release any revision to any forward-looking statement contained or incorporated herein to reflect any future events or occurrences.

You should carefully consider the cautionary statements contained or referred to in this section in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf.

 

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THE PARTIES TO THE MERGER

MoneyGram

MoneyGram International, Inc.

2828 N. Harwood Street, 15th Floor

Dallas, Texas 75201

(214) 999-7552

MoneyGram is a global leader in cross-border P2P 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. 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.

MoneyGram’s Common Stock is listed on the Nasdaq under the symbol “MGI.”

Additional information regarding MoneyGram is contained in our filings with the SEC. Also, see the section of this proxy statement entitled “Where You Can Find More Information.”

MDP

Madison Dearborn Partners, LLC

70 West Madison, Suite 4600

Chicago, IL 60602

(312) 895-1000

MDP, a Delaware limited liability company, is a leading private equity investment firm based in Chicago, Illinois. Since MDP’s formation in 1992, MDP has raised aggregate capital of over $28 billion and has completed over 150 investments. MDP invests across five dedicated industry verticals, including financial and transaction services; basic industries; business and government software and services; health care; and telecom, media and technology services. MDP is an affiliate of Parent.

Parent

Mobius Parent Corp.

70 West Madison, Suite 4600

Chicago, IL 60602

(312) 895-1000

Parent is a Delaware corporation and an affiliate MDP. Parent is the sole stockholder of Merger Sub.

 

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Merger Sub

Mobius Merger Sub, Inc.

70 West Madison, Suite 4600

Chicago, IL 60602

(312) 895-1000

Merger Sub is a Delaware corporation and the sole stockholder of Merger Sub is Parent. Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, has not owned any properties, rights or assets other than in connection with the transactions contemplated by the Merger Agreement, and has engaged in no other business other than in connection with the transactions contemplated by the Merger Agreement.

 

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THE SPECIAL MEETING

We are furnishing this proxy statement to our stockholders as part of the solicitation of proxies by our board of directors for use at the special meeting, and at any adjournments or postponements of the special meeting.

Date, Time and Place

We will hold the special meeting at www.virtualshareholdermeeting.com/MGI2022SM, at 9:00 a.m., Central Time, on May 23, 2022.

Purpose of Special Meeting

At the special meeting, we will ask holders of our Common Stock to approve and adopt the Merger Agreement. Our stockholders will also be asked to approve an advisory, non-binding proposal to approve compensation that will or may become payable to our named executive officers in connection with the Merger and a proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting.

Record Date, Stock Entitled to Vote, Quorum, Abstentions and Broker Non-Votes

Only holders of record of our Common Stock at the close of business on April 20, 2022, which is the record date for the special meeting, are entitled to notice of and to vote at the special meeting. As of the record date, 96,278,259 shares of our Common Stock were outstanding and held by approximately 6,873 holders of record. A majority of the shares of our Common Stock issued and outstanding and entitled to vote at the special meeting present or represented by proxy at the special meeting is required for a quorum. Shares of our Common Stock represented at the special meeting but not voting, including shares of our Common Stock for which proxies have been received but for which stockholders have abstained, will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business at the special meeting. Shares represented by broker non-votes will not be considered present and entitled to vote at the special meeting for the purpose of determining the presence of a quorum.

Votes Required

The proposal to approve and adopt the Merger Agreement requires the affirmative vote of holders of at least a majority of the outstanding shares of our Common Stock as of the record date. Accordingly, if you abstain or fail to vote on the proposal to approve and adopt the Merger Agreement, or if you fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the approval and adoption of the Merger Agreement. If you hold your shares in “street name” through a broker, bank or other nominee, you must direct your broker, bank or other nominee how to vote your shares of Common Stock by following their instructions for voting. Brokers, banks or other nominees who hold shares of our Common Stock in street name for customers who are the beneficial owners of those shares are not permitted to vote those customers’ shares in the absence of specific instructions from those customers.

The advisory, non-binding proposal to approve compensation that will or may become payable to MoneyGram’s named executive officers in connection with the Merger requires the affirmative vote of a majority of the votes cast on such proposal at the special meeting, excluding abstentions and broker non-votes, which shall not be counted as votes cast. Accordingly, assuming that a quorum is present, not voting at the special meeting, or abstaining from voting, will have no effect on the outcome of this proposal. Approval of this proposal is not a condition to completion of the Merger, and the vote with respect to this proposal is only an advisory vote by stockholders. Accordingly, the vote will not be binding on us, Parent or MDP, any of our boards of directors or our compensation committee. If the Merger is completed, the compensation that is the subject of the proposal may be paid to our named executive officers in accordance with the terms and conditions of their compensation agreements and arrangements even if our stockholders do not approve this proposal.

 

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The proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting requires an affirmative vote of a majority of the votes cast on such proposal at the special meeting, excluding abstentions and broker non-votes, which shall not be counted as votes cast. Accordingly, assuming that a quorum is present, not voting at the special meeting, or abstaining from voting, will have no effect on the outcome of this proposal. MoneyGram does not intend to call a vote on this proposal if the Merger Agreement is approved and adopted at the special meeting. The vote required on this proposal is a vote separate and apart from the vote to approve and adopt the Merger Agreement, and is not a condition to the consummation of the Merger. Accordingly, you may vote to approve and adopt the Merger Agreement and vote not to approve the proposal regarding the adjournment of the special meeting and vice versa.

MoneyGram does not expect any broker non-votes at the special meeting because the rules applicable to banks, brokers and other nominees only provide brokers with discretionary authority to vote on proposals that are considered “routine.” Since each of the proposals to be presented at the special meeting are not considered “routine” under the applicable rules, no broker will be permitted to vote your shares of Common Stock at the special meeting without receiving instructions.

If you are a stockholder of record, you may vote your shares of Common Stock in any of the following ways:

 

   

by casting your vote at the special meeting; or

 

   

by proxy. Stockholders of record have a choice of submitting a proxy:

 

   

by using the Internet voting instructions printed on your proxy card;

 

   

by using the telephone voting instructions printed on your proxy card; or

 

   

by completing, signing, dating and returning each enclosed proxy card you receive in the enclosed postage paid envelope.

If you are not a stockholder of record, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner and wish to vote at the special meeting, you must obtain a legal proxy from your bank, brokerage firm or other nominee.

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.

A control number, located on your proxy card, is designed to verify your identity and allow you to vote your shares of Common Stock, and to confirm that your voting instructions have been properly recorded when submitting a proxy over the Internet or by telephone. Please be aware that if you submit a proxy over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible.

Holders of record of our shares of outstanding Common Stock on the record date are entitled to one vote per share on each matter to be considered at the special meeting. Holders of securities convertible or exercisable for our Common Stock, such as stock options, will not be able to vote such shares underlying such securities.

 

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As of the record date, directors and executive officers of MoneyGram and their affiliates had the right to vote 3,241,298 shares of Common Stock, or approximately 3.4% of the outstanding Common Stock at that date.

Voting of Proxies

All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in the manner specified by the holders thereof. Properly executed proxies that do not contain voting instructions will be voted FOR the approval and adoption of the Merger Agreement, FOR the proposal to approve compensation that will or may become payable to our named executive officers in connection with the Merger and FOR the proposal to adjourn the special meeting to a later date, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the special meeting.

Revocability of Proxies

The grant of a proxy on the enclosed form of proxy does not preclude a stockholder from voting at the special meeting. A stockholder may revoke a proxy if you:

 

   

deliver a signed, written revocation letter, dated later than the proxy and which must be received prior to the special meeting, 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 and which must be received prior to the special meeting;

 

   

vote again by telephone or on the Internet by 11:59 p.m. Eastern Time on the day before the special meeting; or

 

   

attend the special meeting and give notice to the inspector of election that you intend to vote at the special meeting rather than by proxy. Your attendance at the special meeting will not revoke your proxy unless you choose to vote at the special meeting.

If your shares are held in street name by a broker, bank, trust or other nominee, you must contact such broker, bank, trust or other nominee and follow its procedures to revoke your proxy. If you are a participant in the 401(k) Plan, your proxy must be received by 11:59 p.m. Eastern Time on May 18, 2022.

MoneyGram stockholders who require assistance should contact the persons at the phone number provided on page 27 of this proxy statement.

Postponement, Adjournment and Recess

Although it is not currently expected, the special meeting may be adjourned, recessed or postponed for the purpose of soliciting additional proxies. In the event that there is present, in person or by proxy, sufficient favorable voting power to secure the MoneyGram Stockholder Approval to approve and adopt the Merger Agreement, MoneyGram does not anticipate that it will adjourn or postpone the special meeting unless it is advised by counsel that failure to do so could reasonably be expected to result in a violation of applicable law.

If a quorum is present, the special meeting may be adjourned or recessed by the chairman of the special meeting or by the affirmative vote of the holders of a majority of the shares of Common Stock present or represented by proxy at the special meeting and entitled to vote at the special meeting. Any adjournment, recess or postponement of the special meeting for the purpose of soliciting additional proxies will allow MoneyGram’s stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned, recessed or postponed.

For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.

 

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Delivery of Proxy Materials to Households Where Two or More MoneyGram Stockholders Reside

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.

Solicitation of Proxies

All costs related to the solicitation of proxies, including the printing and mailing of this proxy statement, will be borne by us. We have retained Alliance to aid in the solicitation of proxies and to verify records relating to the solicitation. Alliance will receive a base fee for its services of $15,000, plus fees per call to stockholders and expense reimbursement. In addition, our directors, officers and employees may, without additional compensation, solicit proxies from stockholders by mail, telephone, facsimile, or in person. However, you should be aware that certain members of our board of directors and our officers have interests in the Merger that are different from, or in addition to, yours. See the section entitled “The Merger—Interests of MoneyGram’s Executive Officers and Directors in the Merger.”

We will also reimburse brokers and other custodians, nominees and fiduciaries for their expenses in sending these materials to you and getting your voting instructions.

Stock Certificates

Stockholders should not send stock certificates with their proxies. A letter of transmittal with instructions for the surrender of our Common Stock certificates will be mailed to our stockholders as soon as practicable after completion of the Merger.

Questions and Additional Information

If you have questions about the Merger, how to submit your proxy or vote your shares, or if you need additional copies of this proxy statement or the enclosed proxy, please contact our proxy solicitor at:

Alliance Advisors LLC

200 Broadacres Drive, 3rd Floor

Bloomfield, NJ 07003

Shareholders and Banks and Brokers Call Toll-Free: (855) 973-0090

Email: mgi@allianceadvisors.com

 

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THE MERGER

Description of the Merger

Our board of directors has approved and adopted the Merger Agreement and the Merger. If the Merger agreement is approved and adopted by MoneyGram’s stockholders, then, subject to other closing conditions as described in “The Merger Agreement—Conditions to Completion of the Merger,” Merger Sub will be merged with and into MoneyGram, and MoneyGram will be the surviving corporation in the Merger and become a wholly owned subsidiary of Parent. We strongly encourage you to read carefully the Merger Agreement in its entirety, a copy of which is attached as Annex A to this proxy statement, because it is the contract that governs the Merger.

If the Merger is completed, each share of Common Stock outstanding immediately prior to the effective time of the Merger (other than certain shares as set forth in the Merger Agreement, including shares for which the holders thereof have properly exercised appraisal rights in accordance with Section 262 of the DGCL with respect to such Common Stock) will be converted into the right to receive the Merger Consideration, without interest.

After the Merger is completed, you will have the right to receive the Merger Consideration but you will no longer have any rights as a stockholder of MoneyGram. In the case of shares of our Common Stock represented by certificates, you will receive the Merger Consideration for your shares of Common Stock after exchanging your stock certificates in accordance with the instructions contained in a letter of transmittal to be sent to you shortly after completion of the Merger. In the case of shares of our Common Stock held in book-entry form, you will receive the Merger Consideration for your shares of Common Stock as promptly as practicable following the Merger without the requirement to deliver a stock certificate or, unless reasonably requested by the paying agent, a letter of transmittal.

The Common Stock is currently registered under the Exchange Act and is designated for trading on the Nasdaq under the symbol “MGI.” Following the Merger, the Common Stock will be delisted from the Nasdaq and will no longer be publicly traded, and the registration of our Common Stock under the Exchange Act will be terminated.

Please see the section entitled “The Merger Agreement” for additional and more detailed information regarding the Merger Agreement.

Background of the Merger

On a regular basis, we and our board of directors, together with our financial and legal advisors, review and evaluate strategic opportunities and alternatives with a view to enhancing stockholder value. Such opportunities and alternatives our board of directors has reviewed include refinancing our outstanding debt, strategic investments in other companies, new strategic initiatives and product offerings, remaining as a stand-alone entity, and a potential sale of MoneyGram.

In January 2017, MoneyGram entered into a definitive merger agreement (the “Ant Merger Agreement”) to be acquired by Alipay (UK) Limited (“Ant Financial”) at a price of $13.25 per share in cash, which agreement was subsequently amended in April 2017 to, among other things, increase the purchase price to $18.00 per share following an intervening offer by Euronet Worldwide, Inc. to acquire MoneyGram for $15.20 per share in cash.

In January 2018, MoneyGram and Ant Financial agreed to terminate the Ant Merger Agreement due to the expectation that the transaction would not receive approval from the Committee on Foreign Investment in the United States. In connection with such termination, Ant Financial paid MoneyGram a $30 million reverse termination fee as required under the Ant Merger Agreement.

 

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On November 8, 2018, MoneyGram announced that it had agreed to extend its 2012 deferred prosecution agreement (the “DPA”) with the United States Department of Justice, Criminal Division, Money Laundering and Asset Recovery Section and the United States Attorney’s Office for the Middle District of Pennsylvania (collectively the “Department”) by 30 months and agreed to pay a $125 million fine due to alleged weaknesses in MoneyGram’s anti-money laundering program resulting in a breach of the DPA. MoneyGram paid $70 million of the fine in November 2018, with the remaining $55 million to be paid in May 2020. In the trading day following MoneyGram’s announcement of the DPA extension, MoneyGram’s stock price declined 49%, from $4.47 to $2.27.

In January 2019, at the direction of our board of directors, MoneyGram launched a strategic review process, with the assistance of its financial advisor, BofA Securities, Inc., during which BofA Securities broadly solicited potential purchasers of MoneyGram in an effort to enable our board of directors to determine whether a transaction may be available that would be in the best interests of MoneyGram stockholders. During the process, BofA Securities, on behalf of MoneyGram, contacted 22 potential buyers, consisting of 6 potential strategic buyers and 16 potential financial buyers, including MDP and several other parties contacted during the 2021 sale process, as described below. Of the 22 contacted parties, only one party, a private equity firm, referred to as Party A, submitted a non-binding acquisition proposal, which provided for a purchase price of $2.75 to $3.25 per share, while MoneyGram’s stock price was $2.53 per share on February 27, 2019, the date the proposal was received. After discussion among our board of directors and its financial and legal advisors, our board of directors instructed BofA Securities to tell the potential buyer that a proposal of $2.75 to $3.25 was not compelling at such time. Discussions with the potential buyer then ceased.

During the spring of 2019, MoneyGram contacted various potential lenders regarding a refinancing of MoneyGram’s debt.

Also in the spring of 2019, MoneyGram engaged in preliminary merger and financing discussions with a consortium of domestic and foreign investors, referred to as the Consortium, introduced to MoneyGram by a representative of Thomas H. Lee Partners, L.P. (“THL”), MoneyGram’s largest stockholder at the time.

On April 19, 2019, MoneyGram received a preliminary non-binding proposal from a strategic competitor, referred to as Party B, to acquire MoneyGram for $5.00 per share, a 106% premium to MoneyGram’s closing stock price of $2.43 on April 18, 2019. Party B’s proposal also included a conditional offer to provide a partial refinancing of MoneyGram’s debt in the form of second lien notes. However, discussions between MoneyGram and Party B ceased in April 2019 as MoneyGram began to move forward with its refinancing process.

On May 3, 2019, the Consortium sent MoneyGram a draft non-binding term sheet providing for an acquisition of MoneyGram for $4.25 per share, a 35% premium to MoneyGram’s closing stock price of $3.14 on May 2, 2019. However, discussions between MoneyGram and the Consortium ceased as MoneyGram began to finalize its refinancing process.

In June 2019, MoneyGram successfully refinanced its debt and entered into a new three-year revolving credit facility, a four-year first lien term loan facility and a five-year second lien term loan facility. In connection with the refinancing, MoneyGram issued warrants to the second lien lenders exercisable at $0.01 per share for an aggregate of 5,423,470 shares of MoneyGram Common Stock (or approximately 7% of MoneyGram’s then fully diluted outstanding Common Stock). Also in June 2019, MoneyGram entered into an agreement with Ripple Labs Inc. (“Ripple”) pursuant to which Ripple committed to purchase up to $50 million of shares of MoneyGram Common Stock and warrants at a price of $4.10 per share (or per share underlying each warrant). Ripple purchased $30 million of such shares of Common Stock and warrants in June 2019 and the remaining $20 million in November 2019.

In the summer of 2019, following the completion of MoneyGram’s refinancing, MoneyGram reengaged in preliminary merger discussions with Party B and the Consortium.

 

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On August 9, 2019, MoneyGram received a non-binding proposal letter from the Consortium to acquire MoneyGram for $4.25 per share, a 38% premium to MoneyGram’s closing stock price of $3.08 on August 8, 2019. However, discussions with the Consortium ended in September 2019 primarily due to regulatory concerns and valuation issues.

In the fall of 2019, discussions with Party B ceased primarily due to regulatory concerns and valuation issues.

In November 2019, funds affiliated with THL, which collectively held over 30% of MoneyGram’s Common Stock on an as-converted basis at the time, distributed substantially all of their shares of MoneyGram Common Stock to certain THL limited partners and to the general partner and affiliated entities of THL, resulting in MoneyGram no longer being treated as a “controlled company” under Nasdaq rules.

On February 25, 2020, MoneyGram and the Department agreed to extend the due date for the remaining $55 million payment under the DPA to November 8, 2020.

In February and March 2020, in connection with the onset of the COVID-19 pandemic, MoneyGram’s stock price declined along with most of the rest of the U.S. equity markets, reaching a multi-year low closing price of $1.18 per share on April 1, 2020.

On April 9, 2020, MoneyGram received an unsolicited non-binding proposal from Party B to acquire MoneyGram for $3.00 per share, a 108% premium to MoneyGram’s closing stock price of $1.44 on April 9, 2020.

During the spring and summer of 2020, MoneyGram and Party B reengaged in discussions to further analyze the regulatory risks of a combination of the two companies. However, discussions ultimately ceased in the summer of 2020 due to the view of both MoneyGram and Party B that a merger between the two parties was unlikely to be approved by regulatory authorities.

On July 24, 2020, MoneyGram and the Department agreed to further extend the due date for the remaining $55 million payment under the DPA to May 9, 2021.

On July 28, 2020, our board of directors adopted a Tax Benefits Preservation Plan (the “Tax Benefits Preservation Plan”), which placed certain restrictions on stockholders acquiring more than 5% of MoneyGram’s Common Stock in order to prevent an inadvertent “ownership change” as defined in Section 382 of the U.S. Internal Revenue Code of 1986, as amended, in order to preserve certain net operating loss and tax credit carryforwards.

In August and September 2020, affiliates of The Goldman Sachs Group, Inc. (“GS”), which collectively held one of the largest positions of MoneyGram Common Stock at the time with an over 10% as-converted ownership percentage, sold their position in MoneyGram, further decreasing the concentration of MoneyGram’s stockholder base.

On March 17, 2021, MoneyGram received a non-binding proposal to acquire MoneyGram for $9.50 per share from a private equity firm, referred to as Party C, a 33% premium to MoneyGram’s closing stock price of $7.16 on March 16, 2021.

On March 24, 2021, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E, outside counsel to MoneyGram, to discuss Party C’s non-binding proposal. Following discussion, our board of directors determined that prior to engaging further with Party C, MoneyGram would attend to certain near-term commercial matters, including the expected termination of the DPA and MoneyGram’s planned debt refinancing to take advantage of historically low interest rates and to

 

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lessen MoneyGram’s interest expense burden. MoneyGram so advised Party C that it intended to attend to such other matters. Also during this meeting, representatives of V&E provided our board of directors with an overview of the directors’ fiduciary duties and general process and procedural considerations in the context of receiving an acquisition proposal.

In May 2021, MoneyGram made the final $55 million payment under the DPA.

On May 21, 2021, a representative of a private equity firm, referred to as Party D, contacted Mr. Holmes to request a meeting.

On May 24, 2021, Mr. Holmes and other members of management met with the representative of Party D via videoconference. During this meeting, the representative of Party D stated that Party D was interested in a potential transaction with MoneyGram and requested that the parties sign a confidentiality agreement to facilitate further discussions.

On May 26, 2021, MoneyGram and Party D entered into a confidentiality agreement, which contained a customary standstill restriction but did not preclude Party D from submitting a private proposal to our board of directors at any time. Following the execution of the confidentiality agreement, Party D was given access to an online data room hosted by MoneyGram. Party D also engaged in a series of preliminary discussions with representatives of MoneyGram between May 26 and June 24, 2021, after which discussions between the parties ceased prior to Party D giving any indication of a valuation of MoneyGram.

Also in May 2021, MoneyGram’s stock price exceeded the price proposed in Party C’s non-binding proposal submitted on March 17, 2021 and no further discussions were held between the parties.

On June 3, 2021, our board of directors terminated the Tax Benefits Preservation Plan.

On June 10, 2021, the charges filed by the Department under the DPA were dismissed and the DPA was officially terminated.

In connection with considering the range of outcomes relative to refinancing its long-term debt and reducing its cost of capital, based on the recommendation of BofA Securities and our management, our board of directors determined that MoneyGram should first raise new equity to partially reduce its outstanding debt and leverage ratios. On June 18, 2021, MoneyGram completed an at-the-market equity offering, raising $99.8 million in gross proceeds through the sale of approximately 10.4 million shares of MoneyGram Common Stock at an average price of $9.56 per share, the proceeds of which were primarily used to prepay a portion of MoneyGram’s second lien debt.

On July 15, 2021, the Financial Times (the “Financial Times”) published an article reporting a rumor that a private equity firm was considering an offer to acquire MoneyGram. However, MoneyGram did not receive an acquisition proposal during this period.

On July 21, 2021, MoneyGram announced a successful refinancing of its debt through the closing of a private offering of $415 million of senior secured notes and a $400 million senior secured term loan, the proceeds of which were used to prepay the full remaining amount of MoneyGram’s first and second lien debt. Following the publication of the Financial Times article and the announcement of MoneyGram’s successful refinancing, MoneyGram’s stock price closed at a new multi-year high of $12.04 on July 22, 2021.

In the Fall of 2021, a representative of a private equity firm, referred to as Party E, contacted a representative of BofA Securities regarding Party E’s potential interest in engaging in transaction discussions with MoneyGram.

 

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On October 19, 2021, Vahe A. Dombalagian, a managing director at MDP, contacted a representative of BofA Securities to request a reintroduction to Mr. Holmes to discuss MDP’s potential interest in a transaction with MoneyGram.

On October 20, 2021, MoneyGram and MDP entered into a confidentiality agreement, which contained a customary standstill restriction but did not preclude MDP from submitting a private proposal to our board of directors at any time. Following the execution of the confidentiality agreement, MDP was given access to the online data room hosted by MoneyGram and engaged in due diligence discussions with representatives of MoneyGram.

On November 5, 2021, members of MoneyGram management met with Mr. Dombalagian and other representatives of MDP at MoneyGram’s headquarters in Dallas, Texas, during which MDP discussed its potential interest in pursuing an acquisition of MoneyGram. MDP representatives gave no indication of valuation during these discussions.

Later on November 5, 2021, our board of directors held a special meeting, attended by members of management and a representative of BofA Securities, to discuss, among other things, the recent discussions with MDP. During this meeting, Mr. Holmes explained to our board of directors that discussions with MDP were preliminary and that MDP had not provided an indication of value or indicated whether it would submit an acquisition proposal. Mr. Holmes also explained that a representative of Party E had contacted BofA Securities regarding a potential transaction with MoneyGram but such discussions had not advanced past a preliminary stage. Mr. Holmes further noted that MoneyGram had previously engaged in separate conversations regarding an acquisition of MoneyGram with each of MDP and Party E during the 2019 sale process, but the discussions did not advance past a preliminary stage at such time.

Between November 5 and 16, 2021, MoneyGram engaged in continued preliminary discussions with MDP.

On November 11, 2021, a representative of a MoneyGram institutional stockholder introduced Mr. Holmes to a representative of a private equity firm, referred to as Party F.

On November 16, 2021, Mr. Dombalagian called Mr. Holmes to notify him that MDP intended to submit a non-binding proposal to acquire MoneyGram.

On November 17, 2021, Mr. Dombalagian emailed Mr. Holmes a non-binding proposal to acquire MoneyGram for $10.00 per share, a 60% premium to MoneyGram’s closing stock price of $6.25 on November 16, 2021, which included a request for a 30-day exclusive negotiating period between MoneyGram and MDP.

On November 19, 2021, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E, to discuss MDP’s proposal. During the meeting, our board of directors instructed management to remain engaged with MDP but not to grant MDP exclusivity. Our board of directors also instructed BofA Securities to contact additional potential buyers to determine whether a transaction may be available that would be in the best interests of MoneyGram stockholders. Also during this meeting, representatives of V&E provided our board of directors with an overview of the directors’ fiduciary duties and general process and procedural considerations in the context of receiving an acquisition proposal.

Also on November 19, 2021, members of MoneyGram management met with representatives of Party F to engage in a high-level discussion of MoneyGram’s business.

In late November 2021, following the direction given by our board of directors at the board meeting on November 19, 2021, BofA Securities began contacting potentially interested buyers. During the course of November and December 2021, BofA Securities contacted 33 parties (including MDP, Party C, Party D, Party E,

 

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Party F and a private equity firm, referred to as Party G), consisting of 20 financial parties and 13 strategic parties. Of the 33 contacted parties, 17 parties (including 13 financial parties and 4 strategic parties) entered into confidentiality agreements with MoneyGram and 15 parties (including 11 financial parties and 4 strategic parties) engaged in management presentations or discussions with MoneyGram regarding a potential transaction. The confidentiality agreements between MoneyGram and each interested party described below included a customary standstill provision, but none of them precluded an interested party from making a private proposal to our board of directors at any time. BofA Securities, at the direction of our board of directors, did not contact certain strategic parties, including Party B, due to competitive and regulatory concerns.

On December 2, 2021, a representative of Party D, who had previously been contacted by representatives of BofA Securities, contacted Mr. Holmes to express an interest in commencing potential acquisition discussions. Later that day, MoneyGram and Party D entered into a new confidentiality agreement, which was substantially similar to the confidentiality agreement entered into between the parties on May 26, 2021, including with respect to its standstill provision.

On December 7, 2021, members of MoneyGram management and representatives of BofA Securities met with Mr. Dombalagian and other representatives of MDP at MoneyGram’s headquarters in Dallas, Texas. During this meeting, the parties discussed MoneyGram’s business performance, background, and other related matters.

On December 8, 2021, our board of directors held a regular meeting, a portion of which was attended by members of management and representatives of BofA Securities and V&E to discuss the outreach to potential buyers by BofA Securities. During this portion of the meeting, representatives of V&E reviewed with the members of our board of directors their fiduciary duties in connection with evaluating a potential strategic transaction and responding to any formal proposals that our board of directors may receive with respect to a sale of MoneyGram or other strategic transaction.

On December 9, 2021, Party F notified representatives of BofA Securities that it would not further pursue an acquisition of MoneyGram.

Between December 10 and 14, 2021, at the direction of our board of directors, BofA Securities sent letters to the 10 parties that appeared most interested in pursuing an acquisition of MoneyGram, including MDP, Party C, Party D and Party E, requesting the submission of non-binding proposals to acquire MoneyGram by December 21, 2021.

On December 13, 2021, MoneyGram entered into a confidentiality agreement with a domestic strategic party, referred to as Party H, who was a member of the Consortium that engaged in preliminary merger discussions with MoneyGram in 2019. The confidentiality agreement contained a customary standstill restriction but did not preclude Party H from submitting a private proposal to our board of directors at any time. Party H indicated that it would likely not be in a position to acquire all of MoneyGram but that it may desire to act as a co-bidder with another potential buyer. Accordingly, the confidentiality agreement allowed Party H to act as a co-bidder with certain parties or with MoneyGram’s consent.

On December 15, 2021, Reuters reported that MDP had submitted a proposal to acquire MoneyGram. That same day, following the release of this story, MoneyGram’s stock price closed up 8.2% from the prior day’s close. From December 14, 2021, the trading day prior to publication of the Reuters story, through February 11, 2022, the trading day prior to the signing of the merger agreement with MDP, MoneyGram’s stock price significantly outperformed the stock prices of certain key competitors and the broader market generally, rising 17.4% during such period whereas the S&P 500 index declined by 4.6%.

Also on December 15, 2021, representatives of MDP orally communicated to MoneyGram a willingness to increase MDP’s proposed price to $10.50 per share, an increase from the $10.00 per share set forth in MDP’s proposal letter submitted on November 17, 2021.

 

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Further on December 15, 2021, Party A contacted representatives of BofA Securities to express an interest in engaging in transaction discussions with MoneyGram, citing the Reuters article published earlier that day.

On December 16, 2021, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E, to discuss MDP’s willingness to increase its proposed price and the status of discussions with other potential buyers. During this meeting, our board of directors expressed support for continuing discussions with interested parties to determine whether a transaction may be available that would be in the best interests of MoneyGram stockholders.

On December 20, 2021, at the direction of our board of directors, BofA Securities sent a letter to Party A, requesting the submission of a non-binding proposal to acquire MoneyGram by December 21, 2021.

On December 21, 2021, MoneyGram received two additional non-binding proposals: one from Party D at a price of $10.00 to $11.00 per share and another from Party G at a price of $9.75 to $10.25 per share. On that same day, a representative of a private equity firm, referred to as Party I, contacted a representative of BofA Securities regarding Party I’s potential interest in engaging in transaction discussions with MoneyGram, citing the Reuters article published on December 15, 2021.

Also on December 21, 2021, Party E notified representatives of BofA Securities that it would not further pursue an acquisition of MoneyGram.

On December 22, 2021, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E, to discuss the proposals received from MDP, Party D and Party G and the status of other potentially interested buyers. During this meeting, our board of directors instructed management and BofA Securities to continue to engage with all remaining interested buyers in an effort to identify the best potential transaction that could be obtained for MoneyGram’s stockholders.

Also on December 22, 2021, Party C notified representatives of BofA Securities that it would not further pursue an acquisition of MoneyGram.

On December 23, 2021, MoneyGram received a non-binding proposal from Party A at a price of $8.75 to $10.75 per share.

On December 30, 2021, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E, to discuss the status of discussions with the remaining interested parties. During this meeting, representatives of BofA Securities presented to our board of directors preliminary financial analyses related to the valuation of MoneyGram, which materials utilized financial projections prepared by MoneyGram management.

On January 3, 2022, MoneyGram posted a draft form merger agreement for MDP, Party A and Party D and Party G to the online data room hosted by MoneyGram. The draft merger agreement included, among other things, (i) a 30-day post-signing period during which MoneyGram could continue to actively solicit acquisition proposals from other parties and terminate the merger agreement for a lower termination fee (the “Go-Shop Provision”) and (ii) a reverse termination fee payable by buyer in the event the transaction did not close due to the failure to receive certain money transmitter license change of control approvals, regardless of whether such failure was the fault of buyer (the “MTL Approval Reverse Termination Fee”).

In late December 2021 and early January 2022, representatives of MoneyGram and BofA Securities continued to engage in discussions with interested buyers, including two strategic parties who had previously executed confidentiality agreements during the process, referred to as Party J and Party K.

On January 7, 2022, Party G notified representatives of BofA Securities that it would not further pursue an acquisition of MoneyGram.

 

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By January 9, 2022, all parties contacted by BofA Securities since the beginning of the process, other than MDP and Parties A, D, H, I, J and K, had declined to pursue an acquisition of MoneyGram. Parties H, I, J and K, however, had not submitted an acquisition proposal.

Also on January 10, 2022, at the direction of our board of directors, BofA Securities sent letters to MDP, Party A and Party D requesting definitive acquisition proposals from such parties by January 24, 2022.

On January 12, 2022, Party I notified representatives of BofA Securities that it would not further pursue an acquisition of MoneyGram.

On January 13, 2022, at the direction of our board of directors, BofA Securities sent a letter to Party K requesting an initial indication of interest by January 19, 2022. Party J was not sent a letter because it did not appear interested in further pursuing an acquisition of MoneyGram at the time.

On January 14, 2022, MDP sent an updated proposal letter, increasing its proposed price to $10.50 per share, confirming its oral indication from December 15, 2021. The proposal letter stated that MDP’s proposal would expire on January 25, 2022 unless MoneyGram granted MDP exclusivity on or prior to such date. MDP’s proposal letter also indicated that MDP expected to finish its diligence during the week of January 17, 2022. MDP also submitted a markup of the merger agreement, as well as initial drafts of equity and debt commitment letters and a draft limited guarantee. MDP’s merger agreement markup, among other things, (i) removed the Go-Shop Provision, (ii) removed the MTL Approval Reverse Termination Fee, (iii) included a reimbursement by MoneyGram of up to $10 million of MDP’s expenses if the merger agreement was terminated due to the failure to obtain MoneyGram stockholder approval (the “Expense Fee”), (iv) included a broad definition of “burdensome condition,” which set limitations on the actions buyer would be required to take under the merger agreement to obtain regulatory approvals, including money transmitter license approvals and (v) proposed a MoneyGram termination fee in the amount of 3.50% of MoneyGram’s equity value as of the signing of a merger agreement, which would be payable in the event MoneyGram entered into an agreement with another buyer, our board of directors changed its recommendation or in certain other circumstances.

Also on January 14, 2022, Party D contacted BofA Securities to seek permission from MoneyGram to make a co-bid with Party H. Later that day, MoneyGram granted its consent for Party D making a co-bid with Party H.

On January 18, 2022, Party J notified representatives of BofA Securities that it would not further pursue an acquisition of MoneyGram.

On January 20, 2022, Party K notified representatives of BofA Securities that it would not further pursue an acquisition of MoneyGram.

On January 24, 2022, Party A notified representatives of BofA Securities that it would not further pursue an acquisition of MoneyGram.

Also on January 24, 2022, Latham & Watkins, outside counsel for MDP, on behalf of MDP, sent V&E an updated markup of the merger agreement reflecting certain changes from MDP’s markup submitted on January 14, 2022, including a proposed buyer termination fee amount of 5.0% of MoneyGram’s equity value as of the signing of a merger agreement. During this time, MDP continued to indicate its desire to sign a definitive merger agreement as soon as possible, noting that its diligence was complete. MDP also communicated orally that it might be willing to increase its proposed price from $10.50 per share but did not specify an exact price.

On the morning of January 25, 2022, Reuters reported that MDP and two other private equity firms had submitted competing offers to acquire MoneyGram.

 

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In the afternoon of January 25, 2022, Parties D and H submitted a joint non-binding proposal letter to acquire MoneyGram for $11.00 per share. Under the proposal, Party D was to be the primary bidder with Party H providing a certain amount of equity financing for the acquisition. Along with the proposal, Party D indicated that it would need at least four more weeks of diligence before it could be in a position to sign a merger agreement and that the proposal could be revised or withdrawn based on the outcome of such diligence. Parties D and H also submitted a markup of the merger agreement, as well as initial drafts of equity and debt commitment letters and draft limited guarantees. The merger agreement markup, among other things, (i) removed the Go-Shop Provision, (ii) removed the MTL Approval Reverse Termination Fee, (iii) included a buyer reverse termination fee in the amount of 5.0% of MoneyGram’s equity value as of the signing of a merger agreement and (iv) broadened the “burdensome condition” definition from MoneyGram’s draft merger agreement.

Later in the afternoon of January 25, 2022, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E, to discuss the proposals received from MDP and Parties D and H. During this meeting, our board of directors expressed disappointment that Party D would need at least four more weeks of diligence before signing a merger agreement and the fact that the proposal by Parties D and H could be revised or withdrawn based on the outcome of such diligence, noting that this gave MoneyGram little certainty that such parties would ultimately transact at a price of $11.00 per share or otherwise. Observing that MDP’s latest proposal expired on the day of the meeting, our board of directors instructed BofA Securities to ask MDP for more time to evaluate MDP’s proposal and to ask Party D to expedite its timeline to signing a merger agreement. Also at this meeting, representatives of BofA Securities presented to our board of directors an updated version of its preliminary financial analyses related to the valuation of MoneyGram, which analyses utilized the financial projections prepared by MoneyGram management and more fully described under “The Merger—Unaudited Financial Projections of MoneyGram.”

During the next several days, representatives of MoneyGram and BofA Securities continued to engage in discussions with MDP and Parties D and H.

On January 26, 2022, MoneyGram and MDP and their respective advisors held several video conferences during which the parties discussed the material terms in MDP’s proposed draft of the merger agreement. During these discussions, MDP indicated a willingness to accept a Go-Shop Provision with a “two-tiered” MoneyGram termination fee with a 50% lower termination fee payable if the merger agreement were terminated by MoneyGram to accept an offer received during the “go-shop” period, so long as the termination fee for a termination to accept an offer received during the “go-shop” period from certain types of parties that had expressed interest prior to signing was only slightly lower than MoneyGram’s regular post-“go-shop” period termination fee.

On January 28, 2022, V&E, on behalf of MoneyGram, sent a revised draft of the merger agreement to Latham & Watkins, along with revised drafts of the equity commitment letter and limited guarantee. The draft merger agreement, among other things, (i) reinserted the Go-Shop Provision, (ii) reinserted the MTL Approval Reverse Termination Fee, (iii) removed the Expense Fee, (iv) included a buyer termination fee amount of 7.50% of MoneyGram’s equity value as of the signing of the merger agreement, (v) included a MoneyGram termination fee amount of 3.00% of MoneyGram’s equity value as of the signing of a merger agreement, except for a termination in accordance with the Go-Shop Provision, in which case the termination fee amount would equal 1.50% of MoneyGram’s equity value as of signing or, in the case of a termination for a transaction with certain types of parties that had expressed interest prior to signing, 2.75% of MoneyGram’s equity value as of signing, and (vi) generally reinserted the “burdensome condition” definition from MoneyGram’s initial draft.

On the morning of January 29, 2022, Mr. Dombalagian contacted Mr. Holmes and representatives of BofA Securities to communicate MDP’s disappointment in the merger agreement markup, particularly with respect to the reinsertion of the MTL Approval Reverse Termination Fee and the narrowing of the “burdensome condition” definition.

 

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On the evening of January 29, 2022, V&E, on behalf of MoneyGram, following a discussion with representatives of MoneyGram, BofA Securities and Paul Hastings, financial services regulatory counsel to MoneyGram, earlier that afternoon, sent an updated markup of the merger agreement to Latham & Watkins, reflecting minor broadening of the “burdensome condition” definition.

On the morning of January 30, 2022, representatives of MoneyGram, MDP, V&E, Latham & Watkins and Paul Hastings had a phone call to discuss certain outstanding items in the merger agreement. During this call, MDP indicated a willingness to (i) accept the reinsertion of the Go-Shop Provision, (ii) accept the reinsertion of the MTL Approval Reverse Termination Fee, but with a termination fee amount of $30 million, (iii) accept the removal of the Expense Fee, (iv) accept MoneyGram’s proposed amounts for the MoneyGram termination fee, including upon a termination in accordance with the Go-Shop Provision, and (v) propose certain compromises on the “burdensome condition” definition.

On the evening of January 30, 2022, V&E, on behalf of MoneyGram, sent a revised draft of the merger agreement, along with revised drafts of the equity commitment letters and limited guarantees, to counsel for Party D. The draft merger agreement, among other things, (i) reinserted the Go-Shop Provision, (ii) reinserted the MTL Approval Reverse Termination Fee, (iii) included a buyer termination fee amount of 7.50% of MoneyGram’s equity value as of the signing of the merger agreement and (iv) generally reinserted the “burdensome condition” definition from MoneyGram’s initial draft. Party D did not respond to the revised drafts.

On January 31, 2022, Mr. Dombalagian called Mr. Holmes to notify him that MDP would increase its proposal to $11.00 per share, subject to MoneyGram granting MDP seven days of exclusivity.

On February 1, 2022, Latham & Watkins, at the direction of MDP, sent a revised draft of the merger agreement to V&E, which, among other things, (i) generally accepted MoneyGram’s reinsertion of the Go-Shop Provision but excluded certain types of parties that had expressed interest prior to signing from the go-shop process entirely, (ii) accepted the MTL Approval Reverse Termination Fee, (iii) accepted the removal of the Expense Fee, (iv) proposed a buyer termination fee of 6.0% of MoneyGram’s equity value as of signing, other than in the case of an MTL Approval Reverse Termination Fee, in which case such fee would be $30 million, (v) accepted MoneyGram’s proposed amounts for the MoneyGram termination fee, including upon a termination in accordance with the Go-Shop Provision, and (vi) slightly broadened the scope of the “burdensome condition” definition.

On February 2, 2022, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E, to discuss the status of discussions with MDP and Parties D and H. During this meeting, members of management and BofA Securities communicated to our board of directors that based on discussions with Party D the previous day, Party D was still not willing to expedite its timeline to signing a definitive agreement and there was substantial doubt that Party D would in fact make a definitive proposal at the end of that period. In light of such discussions and the fact that MDP indicated a willingness to increase its proposal to $11.00 per share if granted exclusivity, our board of directors approved granting MDP seven days of exclusivity so long as MDP accepted a Go-Shop Provision that did not exclude certain types of parties that had expressed interest prior to signing from such process. In addition, BofA Securities reviewed with our board of directors its preliminary financial analyses related to the valuation of MoneyGram, which were substantially the same as the preliminary financial analyses reviewed at the meeting of our board of directors on January 25, 2022. Also during this meeting, our board of directors, with V&E, compared the legal terms currently proposed by both MDP and Parties D and H. Our board of directors expressed general support for the terms negotiated with MDP.

Following the meeting of our board of directors on February 2, 2022, Mr. Holmes called Mr. Dombalagian to notify him that MoneyGram was willing to grant MDP seven days of exclusivity so long as MDP accepted a Go-Shop Provision that did not exclude certain types of parties that had expressed interest prior to signing from such process. Mr. Dombalagian accepted this position.

 

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On February 3, 2022, MoneyGram and MDP executed an exclusivity agreement, which provided that MoneyGram would negotiate exclusively with MDP until February 10, 2022.

From February 3 through February 10, 2022, MoneyGram and MDP engaged in continued discussions regarding a transaction, and V&E and Latham & Watkins exchanged several drafts of the merger agreement and related documents in an attempt to finalize acquisition terms.

On February 10, 2022, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E, to discuss the latest negotiations with MDP. During this meeting, members of management and BofA Securities communicated to our board of directors that discussions with MDP remained ongoing and that both MDP and MoneyGram continued to work towards finalizing transaction terms. Our board of directors approved extending exclusivity with MDP for an additional seven days. In addition, BofA Securities again reviewed with our board of directors its preliminary financial analyses related to the valuation of MoneyGram. Following the meeting, MoneyGram and MDP executed an exclusivity agreement extension, extending the exclusivity term to February 17, 2022.

From February 10 through February 14, 2022, MoneyGram and MDP and their respective advisors continued to work to finalize the terms of the transaction documents.

On February 14, 2022, our board of directors held a special meeting, attended by members of management and representatives of BofA Securities and V&E. During the meeting, our board of directors, with V&E, reviewed the final material terms of the proposed merger agreement and related documents, which are more fully described under “The Merger Agreement.” Also at this meeting, BofA Securities reviewed with our board of directors its financial analyses of the merger consideration, which were substantially the same as the financial analyses reviewed at the meeting of our board of directors on February 10, 2022, and delivered to our board of directors an oral opinion, which was subsequently confirmed by delivery of a written opinion dated February 14, 2022, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by holders of our Common Stock was fair, from a financial point of view, to such holders. The full text of the written opinion of BofA Securities is attached to this proxy statement as Annex B and is incorporated by reference in this proxy statement in its entirety. See also “The Merger—Opinion of MoneyGram’s Financial Advisor Regarding the Merger Consideration.” Following the presentations and discussion, the members of our board of directors present at the meeting unanimously approved and adopted the merger agreement and the merger, and unanimously resolved to recommend that MoneyGram stockholders vote to approve the merger. In connection with this board meeting, BofA Securities furnished a customary relationship disclosure memorandum to our board of directors.

On February 15, 2022, prior to the opening of trading of our Common Stock on the Nasdaq, the parties executed the merger agreement and issued a joint press release announcing the transaction.

On February 17, 2022, in accordance with the Go-Shop Provision in the merger agreement, BofA Securities, on behalf of MoneyGram, began contacting parties to gauge interest in whether any other buyer would be willing to acquire MoneyGram at a higher price than MDP. BofA Securities ultimately contacted 39 new parties, including 21 financial parties and 18 strategic parties, and 4 parties that had previously been contacted by BofA Securities in December 2021, including 3 financial parties and 1 strategic party. Of such contacted parties, two strategic parties and one private equity firm executed a confidentiality agreement, which included a customary standstill provision but did not preclude such party from making a private proposal to our board of directors at any time, and all other parties declined to pursue discussions with MoneyGram. MoneyGram granted access to an online data room to the three parties that executed confidentiality agreements. However, none of the three parties submitted an acquisition proposal.

On March 16, 2022, at 11:59 p.m. Central Time, the 30-day go-shop period ended without any party submitting a proposal to acquire MoneyGram.

 

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Reasons for the Merger and the Recommendation of Our Board of Directors

At a meeting of our board of directors held on February 14, 2022, our board of directors approved and adopted the Merger Agreement and the Merger. Our board of directors unanimously recommends that the stockholders of MoneyGram vote “for” the approval and adoption of the Merger Agreement and the Merger.

In the course of reaching its decision, our board of directors consulted with our senior management and our financial and legal advisors, reviewed a significant amount of information and considered a number of factors, including, among others, the following (which factors are not necessarily presented in order of relative importance), each of which our board of directors believed supported its determination and recommendation:

 

   

Merger Consideration. Our board of directors considered that the $11.00 per share in cash to be paid as Merger Consideration provides stockholders with the best value reasonably obtainable for their shares of MoneyGram Common Stock. Specifically, our board of directors considered:

 

  o

the fact that the $11.00 per share in cash to be paid as Merger Consideration represented a premium of approximately (i) 50% to $7.34, the closing price of our Common Stock on December 14, 2021, the last trading day prior to media speculation regarding a possible transaction, (ii) 28% to $8.62, the closing price on February 11, 2022, the last trading day prior to the approval by our board of directors of the Merger, and (iii) 56% to the volume-weighted average trading price of $7.04 for the 90-day period ended December 14, 2021, the last trading day prior to media speculation regarding a possible transaction;

 

  o

the belief of our board of directors that the $11.00 per share in cash to be paid as Merger Consideration was the highest price per share that MDP was willing to agree to pay, particularly in light of the fact that MDP had twice increased its proposed price in the course of its negotiations with MoneyGram (as more fully described in “The Merger—Background of the Merger”), and the view of our board of directors as to the likelihood that any third party would be willing to pay more to acquire MoneyGram on the same or substantially similar terms; and

 

  o

the fact that the Merger Consideration would be paid solely in cash, without a financing contingency, which, compared to non-cash consideration, provides certainty and immediate liquidity and value to our stockholders and does not expose them to any future risks related to the business or the financial markets generally, in each case upon and assuming closing of the Merger.

 

   

Best Alternative for Maximizing Stockholder Value After a Thorough Sale Process. Our board of directors considered its assessment as to the possibility that a third party with sufficient financial means would agree to a transaction at a higher price than MDP on similar or more favorable terms, given the fact that the Merger is the result of an extensive sale process conducted by BofA Securities, during which BofA Securities contacted 13 potential strategic acquirers and 20 financial acquirers (including MDP) concerning their interest in an acquisition of MoneyGram and of these only MDP and three other parties made a proposal and only MDP submitted a final bid. In addition, while the sale and extensive due diligence process was conducted privately, several media stories were published regarding MDP’s proposals to acquire MoneyGram, making it more likely, in the view of our board of directors, that potential acquirers with serious interest in acquiring MoneyGram who had not been contacted by BofA Securities would still be aware of the potential for a sale and would have approached MoneyGram. In addition to the thorough sales process we conducted prior to signing the Merger Agreement, our board of directors also considered the additional opportunities potential acquirers would have to participate in a go-shop process following signing, more fully described under “—Merger Agreement” below. MoneyGram’s sale process is more fully described in “The Merger—Background of the Merger.”

 

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Risks associated with continued independence. Our board of directors considered the risks associated with continued independence, including:

 

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risks associated with operating in a highly competitive industry, including that some of our competitors have larger market share, more established customer bases and substantially greater financial, marketing and other resources than we have, and the risks that other third parties with more resources, including certain of MoneyGram’s agents, may enter the marketplace in the future;

 

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risks associated with operating in a rapidly changing competitive landscape in the payments industry, which includes competing disruptive digital technologies;

 

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risks associated with operating in a highly regulated industry, including with respect to laws and regulations intended to prevent consumer fraud, money laundering and terrorism financing, the high ongoing compliance costs associated with operating in such industry, and the possibility of litigation or investigations involving us or our agents;

 

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risks associated with our reliance on key agents and markets;

 

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risks associated with our indebtedness, including our debt service obligations, debt covenant requirements and our below “investment grade” credit ratings;

 

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risks associated with the uncertainties relating to inflation on MoneyGram’s business, cost structure and operations and other factors affecting global economic activity;

 

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risks associated with any potential outbreak, continuation or escalation of war or hostilities (including the potential conflict in Ukraine);

 

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risks associated with ongoing efforts and uncertainty relating to COVID-19; and

 

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other risks and uncertainties discussed in MoneyGram’s public filings with the SEC.

 

   

MoneyGram’s current condition and future prospects. Our board of directors considered information with respect to our financial condition, results of operations, business, competitive position and business strategy on a historical and prospective basis, as well as current industry, economic and market conditions and trends. Our board of directors also considered the potential future value of MoneyGram, together with the risks associated with continued independence discussed above, as compared to the value of the Merger Consideration.

 

   

Opinion of MoneyGrams Financial Advisor. Our board of directors considered the opinion provided by BofA Securities, dated February 14, 2022, to our board of directors as to the fairness, from a financial point of view and as of the date of the opinion, of the Merger Consideration to be received by holders of our Common Stock, as more fully described in the subsection entitled “The Merger—Opinion of MoneyGram’s Financial Advisor Regarding the Merger Consideration.” The full text of the opinion is attached as Annex B to this proxy statement.

 

   

Characteristics of MDP. Our board of directors considered the business reputation and capabilities of MDP and its management, MDP’s experience executing acquisitions, the resources available to MDP to complete the Merger and the strong commercial incentives and motivations of MDP to timely obtain all necessary regulatory approvals and complete the Merger.

 

   

Financing. Our board of directors considered the terms of the committed debt financing obtained by Merger Sub from major commercial banks with significant experience in similar lending transactions and strong reputations for honoring their commitments and the terms of the committed equity financing provided by affiliated funds of MDP, including the nature and limited number of the conditions to the debt financing and equity financing, the obligation of Parent and Merger Sub to use their reasonable best efforts to satisfy the conditions to the equity financing and debt financing and the fact that the committed equity financing is in an amount that, together with the committed debt financing, would be sufficient to consummate the Merger and the transactions contemplated by the Merger Agreement.

 

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Likelihood of consummation. Our board of directors considered the likelihood that the Merger would be completed in light of, among other things, the conditions to the Merger and the absence of a financing condition, the absence of any condition related to the receipt of third party commercial consents or approvals, the relative likelihood of obtaining required regulatory approvals prior to the end date (after giving effect to any extension thereof already provided for in the Merger Agreement), Parent’s representations and warranties relating to the equity commitment letter, the debt commitment letter and Parent’s solvency, and the remedies available to us under the Merger Agreement in the event of various breaches by Parent, including the Limited Guarantee discussed below. Our board of directors also considered its belief that Parent should, in particular, be incentivized to take considerable efforts to obtain necessary approvals from money transmitter license regulators in light of the $30 million reverse termination fee payable by Parent following the termination of the Merger Agreement in specified circumstances when the required money transfer approvals have not been obtained.

 

   

Negotiation Process. Our board of directors considered that the terms of the Merger Agreement were the result of robust arm’s-length negotiations conducted by MoneyGram, with the knowledge and at the direction of our board of directors and with the assistance of our legal and financial advisors.

 

   

Merger Agreement. Our board of directors considered the terms of the Merger Agreement, including:

 

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the representations, warranties and covenants of the parties, the conditions to the parties’ obligations to complete the Merger and their ability to terminate the Merger Agreement;

 

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Parent’s undertakings in furtherance of obtaining required regulatory approvals and the fact that the consummation of the Merger Agreement is (i) conditioned on obtaining only the required money transfer approvals (in addition to certain other approvals as more fully described in “The Merger Agreement—Conditions to Completion of the Merger), as more further described in “The Merger—Regulatory Matters,” and not all approvals related to money transmitter licenses and (ii) not conditioned on obtaining the consent of any third party under commercial agreements;

 

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the end date (after giving effect to any extension thereof already provided for in the Merger Agreement) under the Merger Agreement on which either party, subject to certain exceptions, can terminate the Merger Agreement and the belief of our board of directors that such end date allows for sufficient time to consummate the Merger;

 

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the obligation of Parent under certain circumstances to pay us a termination fee of:

 

   

$65.5 million, in connection with any failure to consummate the Merger if the relevant conditions are satisfied and in certain circumstances following a breach by Parent or Merger Sub, as more fully described in “The Merger Agreement—Termination Fees and Expenses”; and

 

   

$30 million, in connection with the termination of the Merger Agreement in specified circumstances when the required money transmitter approvals have not been obtained;

 

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the Guarantors’ obligation to guarantee Parent’s payment of any termination fee payable under the Merger Agreement, along with certain other obligations of Parent and Merger Sub under the Merger Agreement, and the fact that MoneyGram has no obligation to seek payment from Parent prior to seeking to recover from the Guarantors;

 

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the right of MoneyGram and our board of directors to actively solicit offers with respect to acquisition proposals during a 30-day go-shop period and terminate the Merger Agreement to enter into an agreement with respect to a superior proposal during the go-shop period and for a period of 20 days thereafter, subject to Parent’s right to receive payment of a termination fee of (A) $16.4 million if the counterparty did not submit a bid or proposal or take certain other actions during the 180 days prior to execution of the Merger Agreement or (B) $30.0 million if the counterparty did submit a bid or proposal or take certain other actions during the 180 days prior to execution of the Merger Agreement;

 

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the right of MoneyGram and our board of directors to entertain certain unsolicited acquisition proposals after the go-shop period and terminate the Merger Agreement prior to receipt of stockholder approval to enter into an agreement with respect to a superior proposal, subject to Parent’s right to receive payment of a termination fee of $32.8 million;

 

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the belief of our board of directors that, although the no solicitation covenant, termination fee provisions and Parent’s right to match any superior proposal might have the effect of discouraging competing third-party proposals or reducing the price of such proposals, such provisions are customary for transactions of this size and type, and its belief that the termination fee was reasonable in the context of comparable transactions, particularly given the discussions with certain other potential bidders that we held in advance of the execution of the Merger Agreement, as more fully described in “The Merger—Background of the Merger”;

 

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the right of our board of directors to change its recommendation prior to receipt of stockholder approval, subject to certain restrictions, in connection with a superior proposal or other circumstances in which our board of directors determines the failure to do so would be inconsistent with its fiduciary duties under applicable law; and

 

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the right of MoneyGram, under certain circumstances specified in the Merger Agreement, to seek specific performance of Parent’s obligation to cause, and, pursuant to the equity commitment letters, to seek specific performance to directly cause, the equity financing sources to fund their contributions as contemplated by the Merger Agreement and the equity commitment letter.

 

   

Opportunity for MoneyGram Stockholders to Vote. Our board of directors considered the fact that the Merger would be subject to the approval of MoneyGram’s stockholders, and that MoneyGram’s stockholders would be free to evaluate the Merger and vote for or against the adoption of the Merger Agreement at MoneyGram’s stockholder meeting.

 

   

Current economic and political conditions. Our board of directors considered the current state of the economy, debt financing markets, political climate and general uncertainty surrounding forecasted economic and political conditions, both in the near term and the long term, and both generally and within our industry, including the fact that valuation multiples in U.S. public equity markets are currently higher than historical trends.

In the course of reaching its decision, our board of directors also considered a number of potentially negative factors including, among others, the following:

 

   

Merger Consideration. Our board of directors considered the fact that the $11.00 per share in cash to be paid as Merger Consideration represents a discount of approximately 9% to the 52-week high of MoneyGram’s stock of $12.04 reached on July 22, 2021.

 

   

Risks associated with announcement and pendency of the Merger. Our board of directors considered the risks associated with the announcement and pendency of the Merger, including:

 

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the risk that the restrictions on the conduct of MoneyGram’s business prior to the completion of the Merger imposed by the Merger Agreement may adversely affect MoneyGram’s business in the event the Merger is not completed (including by delaying or preventing MoneyGram from pursuing business opportunities that may arise or by precluding actions that would be advisable if MoneyGram were to remain an independent company);

 

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the risk that the public announcement of the Merger may cause substantial harm to our revenues, operating results and share price, our relationships with our employees, agents, customers and partners and our ability to attract and retain key management and personnel;

 

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the risk that the Merger may divert management and employee attention away from the day-to-day operation of our business; and

 

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the risk that the time period between the signing of the Merger Agreement and the closing of the Merger will be significant due to the expected time necessary to obtain required regulatory approvals, which enhances the above risks.

 

   

Risks associated with a failure to consummate the Merger. Our board of directors considered the fact that there can be no assurance that all conditions to the parties’ obligations to consummate the Merger will be satisfied or will be satisfied prior to the end date (after giving effect to any extension thereof already provided for in the merger agreement), and, as a result, the possibility that the merger might not be completed.

 

   

Risks if the Merger is not consummated. Our board of directors considered the fact that, if the Merger is not completed:

 

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we will have incurred significant risk and transaction and opportunity costs, including the possibility of disruption to our operations, diversion of management and employee attention, employee attrition and a potentially negative effect on our business and agent and customer relationships; and, we may not be compensated completely or at all for such costs through the payment of a termination fee;

 

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depending on the circumstances that caused the Merger not to be completed, it is likely that the price of our Common Stock will decline significantly; and

 

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the market’s perception of our prospects could be adversely affected.

 

   

Regulatory risk. Our board of directors considered certain regulatory risks, including:

 

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the risk that necessary regulatory approvals may be delayed, conditioned or denied, including the fact that no termination fee would be payable by Parent if certain regulatory approvals other than the required money transmitter approvals were not satisfied and Parent was not then in breach of its obligations under the Merger Agreement;

 

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the fact that the standards for obtaining the required money transmitter approvals are not strictly quantitative standards and are instead subject to interpretation by the applicable regulatory bodies, which may not uniformly apply such standards, and that the debt and equity financing necessary to fund the purchase price and the ultimate composition of Parent’s capital structure could affect Parent’s ability to obtain the required money transmitter approvals; and

 

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the fact that Parent’s obligations under the Merger Agreement to obtain regulatory approvals are limited in certain ways, as more further described under “The Merger—Regulatory Matters.”

 

   

Financing risk. Our board of directors considered the risk that, while the Merger Agreement is not by its terms subject to a financing condition, if Parent fails to obtain sufficient financing (notwithstanding the terms of the debt commitments and equity commitments), the Merger may not be consummated and the termination fee of $65.5 million payable to us by Parent in such event may not be sufficient to compensate us for potential losses we may incur under such circumstances.

 

   

Merger Agreement. Our board of directors considered certain terms of the Merger Agreement, including:

 

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the restrictions on the conduct of our business prior to the completion of the Merger, which could delay or prevent us from realizing certain business opportunities or taking certain actions with respect to our operations we would otherwise take absent the pending Merger;

 

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provisions that preclude us from actively soliciting alternative proposals to the Merger outside of the go-shop period;

 

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certain limitations on Parent’s undertakings in furtherance of obtaining required regulatory approvals, as more further described under “The Merger—Regulatory Matters”;

 

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the requirement that, if the Merger Agreement is terminated under certain circumstances, including by MoneyGram to accept a superior proposal, MoneyGram would be obligated to pay a termination fee to Parent and the right of Parent to match any superior proposal, each of which might have the effect of discouraging alternative acquisition proposals or reducing the price of such proposals; and

 

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provisions limiting Parent’s liability under certain conditions where the Merger does not close to the reverse termination fee of $30 million in connection with certain terminations arising from Parent’s failure to obtain the required money transmitter approvals or $65.5 million for other instances in which the reverse termination fee is payable.

 

   

Tax treatment. Our board of directors considered the fact that an all cash transaction would be taxable to MoneyGram’s stockholders that are U.S. holders for U.S. federal income tax purposes.

 

   

Participation in future gains. Our board of directors considered the fact that MoneyGram will no longer exist as an independent public company and MoneyGram’s stockholders will forgo any future increase in MoneyGram’s value that might result from our earnings or possible growth as an independent company.

 

   

Litigation risk. Our board of directors considered the risk of litigation in connection with the execution of the Merger Agreement and the consummation of the Merger.

 

   

Risk factors. Our board of directors considered other risks and uncertainties including those listed above in the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

While our board of directors considered potentially positive and potentially negative factors, our board of directors concluded that, overall, the potentially positive factors outweighed the potentially negative factors. Accordingly, our board of directors unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of MoneyGram and its stockholders.

The foregoing discussion is not intended to be an exhaustive list of the information and factors considered by our board of directors in its consideration of the Merger, but is merely a summary of the material positive factors and material negative factors considered by our board of directors in that regard. In view of the complexity, number and variety of factors and the amount of information considered, our board of directors did not find it practicable to make specific assessments of, quantify, or otherwise assign relative weights to the specific factors considered in reaching its determination. In addition, in considering the factors discussed above, individual members of our board of directors may have given different weights to different factors. Based on the totality of the information presented, including discussions with, and questioning of, MoneyGram’s management and its financial and legal advisors, our board of directors collectively reached the unanimous decision to approve and adopt the Merger Agreement and the Merger in light of the factors described above and other factors that the members of our board of directors felt were appropriate.

When you consider our board of directors’ recommendation, you should be aware that certain of MoneyGram’s directors may have interests in the Merger that may be different from, or in addition to, the interests of MoneyGram’s stockholders generally. These interests are described in the section entitled “The Merger—Interests of MoneyGram’s Executive Officers and Directors in the Merger.”

This explanation of MoneyGram’s reasons for the Merger and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

 

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Opinion of MoneyGram’s Financial Advisor Regarding the Merger Consideration

MoneyGram has retained BofA Securities to act as MoneyGram’s financial advisor in connection with the Merger. BofA Securities is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. MoneyGram selected BofA Securities to act as MoneyGram’s financial advisor in connection with the Merger on the basis of MoneyGram’s prior retention of BofA Securities in various investment banking matters, BofA Securities’ experience in transactions similar to the Merger, its reputation in the investment community and its familiarity with MoneyGram and its business.

On February 14, 2022, BofA Securities delivered to our board of directors a written opinion dated February 14, 2022, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the Merger Consideration to be received by holders of our Common Stock was fair, from a financial point of view, to such holders.

The full text of BofA Securities’ written opinion, dated February 14, 2022, to our board of directors, which sets forth, among other things, the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by BofA Securities in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. The following summary of BofA Securities’ opinion is qualified in its entirety by reference to the full text of the opinion. BofA Securities delivered its opinion to our board of directors for the benefit and use of our board of directors (in its capacity as our board of directors) in connection with and for purposes of its evaluation of the Merger Consideration from a financial point of view. BofA Securities’ opinion does not address any terms or other aspects or implications of the Merger and no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to MoneyGram or in which MoneyGram might engage or as to the underlying business decision of MoneyGram to proceed with or effect the Merger. BofA Securities’ opinion does not constitute a recommendation as to how any stockholder should vote or act in connection with the proposed Merger or any other matter.

In connection with its opinion, BofA Securities, among other things:

 

   

reviewed certain publicly available business and financial information relating to MoneyGram;

 

   

reviewed certain internal financial and operating information with respect to the business, operations and prospects of MoneyGram furnished to or discussed with BofA Securities by the management of MoneyGram, including certain financial forecasts relating to MoneyGram prepared by the management of MoneyGram, which are described in the section entitled “Unaudited Financial Projections of MoneyGram” and referred to in the proxy statement as the “MoneyGram Unaudited Financial Projections”;

 

   

discussed the past and current business, operations, financial condition and prospects of MoneyGram with members of senior management of MoneyGram;

 

   

reviewed the trading history for our Common Stock and a comparison of that trading history with the trading histories of other companies BofA Securities deemed relevant;

 

   

compared certain financial and stock market information of MoneyGram with similar information of other companies BofA Securities deemed relevant;

 

   

compared certain financial terms of the Merger to financial terms, to the extent publicly available, of other transactions BofA Securities deemed relevant;

 

   

reviewed a draft, dated February 14, 2022, of the Merger Agreement (which we refer to in this section of this proxy statement as the “Draft Agreement”); and

 

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performed such other analyses and studies and considered such other information and factors as BofA Securities deemed appropriate.

In arriving at its opinion, BofA Securities assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with BofA Securities, and BofA Securities relied upon the assurances of the management of MoneyGram that it is not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the MoneyGram Unaudited Financial Projections, BofA Securities was advised by MoneyGram, and BofA Securities assumed, that they were reasonably prepared on bases reflecting the best then-available estimates and good faith judgments of the management of MoneyGram as to the future financial performance of MoneyGram. BofA Securities did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of MoneyGram, nor did it make any physical inspection of the properties or assets of MoneyGram. BofA Securities did not evaluate the solvency or fair value of MoneyGram or Parent under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Securities assumed, at the direction of MoneyGram, that the Merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on MoneyGram or the contemplated benefits of the Merger. BofA Securities also assumed, at the direction of MoneyGram, that the final executed Merger Agreement did not differ in any material respect from the Draft Agreement reviewed by BofA Securities.

BofA Securities expressed no view or opinion as to any terms or other aspects or implications of the Merger (other than the Merger Consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the Merger, any related transaction or any other agreement, arrangement or understanding entered into in connection with or related to the Merger or otherwise. BofA Securities’ opinion was limited to the fairness, from a financial point of view, of the Merger Consideration to be received by the holders of our Common Stock and no opinion or view was expressed with respect to any consideration received in connection with the Merger by the holders of any class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the Merger, or class of such persons, relative to the Merger Consideration or otherwise. Furthermore, no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to MoneyGram or in which MoneyGram might engage or as to the underlying business decision of MoneyGram to proceed with or effect the Merger. BofA Securities did not express any opinion with respect to, and relied, at the direction of MoneyGram, upon the assessments of representatives of MoneyGram regarding, legal, regulatory, accounting, tax and similar matters relating to MoneyGram or the Merger (including the contemplated benefits thereof), as to which BofA Securities understood that MoneyGram had obtained such advice as MoneyGram deemed necessary from qualified professionals. In addition, BofA Securities expressed no opinion or recommendation as to how any stockholder should vote or act in connection with the Merger or any other matter.

BofA Securities’ opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Securities as of, the date of its opinion. It should be understood that subsequent developments may affect its opinion, and BofA Securities does not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Securities’ opinion was approved by a fairness opinion review committee of BofA Securities. Except as described above, MoneyGram imposed no other limitations on the investigations made or procedures followed by BofA Securities in rendering its opinion.

 

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The discussion set forth below in the section entitled “The Merger—MoneyGram Financial Analyses” represents a brief summary of the material financial analyses presented by BofA Securities to our board of directors in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Securities, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Securities. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Securities.

MoneyGram Financial Analyses

Selected Publicly Traded Companies Analysis. BofA Securities reviewed publicly available financial and stock market information for MoneyGram and the following 12 selected publicly traded companies, which consisted of personal financial services companies, payment processors and financial technology (“processor and fintech”) companies and consumer finance companies.

Selected Personal Financial Services Publicly Traded Companies

 

   

The Western Union Company

 

   

H&R Block, Inc.

 

   

International Money Express, Inc.

Selected Processors and FinTech Publicly Traded Companies

 

   

Euronet Worldwide, Inc.

 

   

EVERTEC, Inc.

 

   

Everi Holdings Inc.

 

   

Green Dot Corporation

Other Selected Consumer Finance Publicly Traded Companies

 

   

Discover Financial Services

 

   

Synchrony Financial

 

   

Ally Financial Inc.

 

   

Santander Consumer USA Holdings Inc.

 

   

OneMain Holdings, Inc.

BofA Securities reviewed, among other things, enterprise values (“EVs”) of the selected publicly traded companies, calculated as their equity values based on their closing stock prices on February 11, 2022 and the number of their fully diluted shares outstanding using the treasury stock method, plus debt, preferred stock, minority interests, the after-tax value of pension and post-retirement liabilities and SERP liabilities, and less cash, short-term investments and long-term investments, as a multiple of calendar year 2022 and 2023 estimated adjusted earnings before interest, taxes, depreciations and amortization, not burdened by stock-based

 

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compensation expenses, special charges, one-time items and amortization of intangibles, but burdened by amortization of signing bonus payments, as applicable (“Adjusted EBITDA (Burdened)”).

 

    

Selected Publicly Traded Companies

   Enterprise Value /
Adjusted EBITDA
(Burdened)
 
          2022E      2023E  

Selected Personal Financial

   The Western Union Company      8.3x        8.0x  

Services Companies

   H&R Block, Inc.      6.6x        6.5x  
   International Money Express, Inc.      6.1x        5.3x  

Selected Processors and

   Euronet Worldwide, Inc.      13.2x        10.2x  

FinTech Companies

   EVERTEC, Inc.      11.3x        10.5x  
   Everi Holdings Inc.      8.3x        7.7x  
   Green Dot Corporation      7.1x        6.0x  

Other Selected Consumer

   Discover Financial Services      N/A        N/A  

Finance Companies

   Synchrony Financial      N/A        N/A  
   Ally Financial Inc.      N/A        N/A  
   Santander Consumer USA Holdings Inc.      N/A        N/A  
   OneMain Holdings, Inc.      N/A        N/A  
   Overall Mean      8.7        7.8  
   Overall Median      8.3        7.7  

The mean and median EV / calendar year 2022 estimated Adjusted EBITDA (Burdened) multiples observed for the selected personal financial services publicly traded companies were 7.0x and 6.6x, respectively. The mean and median EV / calendar year 2023 estimated Adjusted EBITDA (Burdened) multiples observed for the selected personal financial services publicly traded companies were 6.6x and 6.5x, respectively.

The mean and median EV / calendar year 2022 estimated Adjusted EBITDA (Burdened) multiples observed for the selected processor and fintech companies were 10.0x and 9.8x, respectively. The mean and median EV / calendar year 2023 estimated Adjusted EBITDA (Burdened) multiples observed for the selected processor and fintech companies were 8.6x and 8.9x, respectively.

The overall low to high calendar year 2022 and 2023 estimated Adjusted EBITDA (Burdened) multiples observed for all of the selected publicly traded companies were 6.1x to 13.2x (with a mean of 8.7x and a median of 8.3x) and 5.3x to 10.5x (with a mean of 7.8x and a median of 7.7x), respectively. Estimated financial data of the selected publicly traded companies were based on public filings and publicly available research analysts’ estimates.

Of the selected publicly traded companies, BofA Securities determined, based on its professional judgment and experience, that the market trading and valuation characteristics of the personal financial services publicly traded companies and the processor and fintech publicly traded companies were more similar to MoneyGram than the other selected publicly traded consumer finance companies and that the personal financial services publicly traded companies were more similar to MoneyGram in terms of other characteristics than the processor and fintech publicly traded companies. Accordingly, for purposes of its analysis, BofA Securities examined only the selected personal financial services companies and selected processors and fintech companies (and not the other selected consumer finance companies), affording greater weight to the personal financial services publicly traded companies, and also took into account the relative historical trading prices of the selected publicly traded companies relative to that of MoneyGram, among others. BofA Securities thus applied calendar year 2022 and 2023 EBITDA multiples of 6.0x to 8.0x and 5.5x to 7.5x, respectively, derived from the selected publicly traded companies, to MoneyGram’s calendar year 2022 and 2023 estimated Adjusted EBITDA (Burdened) of $189 million and $231 million, respectively, as set forth in the MoneyGram Unaudited Financial Projections, to calculate ranges of implied enterprise values for MoneyGram. Estimated financial data of MoneyGram were based on the MoneyGram Unaudited Financial Projections.

 

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BofA Securities then calculated implied equity value reference ranges per share of MoneyGram Common Stock by deducting estimated net debt of MoneyGram of $710 million as of December 31, 2021, as provided by MoneyGram’s management, from such enterprise values and dividing the result by the number of fully-diluted shares outstanding, calculated using the treasury stock method, based on information provided by MoneyGram’s management. In applying the calendar year 2022 and 2023 multiples, BofA Securities took into consideration, among other things, the observed data for the selected publicly traded companies and for MoneyGram, the historical trading prices of MoneyGram’s Common Stock and the common stocks of the selected publicly traded companies and the differences in the financial profiles of MoneyGram and the selected publicly traded companies.

This analysis indicated the following approximate implied per share of MoneyGram Common Stock equity value reference ranges for MoneyGram, as compared to the per share Merger Consideration:

 

2022E Adj.
EBITDA

 

2023E Adj.
EBITDA

 

Per Share Merger
Consideration

$4.24 - $8.04

  $5.67 - $10.33   $11.00

No company used in this analysis is identical to MoneyGram. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which MoneyGram was compared.

Selected Precedent Transactions Analysis. BofA Securities reviewed, to the extent publicly available, financial information relating to the following ten selected transactions involving companies in the payments processing and money remittance businesses:

 

Date Announced

   Acquirer(s)    Target   TV / LTM
Adj. EBITDA
(Burdened)
 

January 25, 2021

   NCR Corporation    Cardtronics plc     10.6  

February 3, 2020

   Worldline SA    Ingenico Group     13.8  

February 28, 2019

   ACI Worldwide, Inc.    SpeedPay, Inc.     8.0  

April 9, 2018

   Francisco Partners Management,
L.P.
   Verifone Systems, Inc.     12.3  

October 3, 2016

   Cardtronics plc    DirectCash Management Inc     8.8  

July 25, 2016

   Apollo Global Management, LLC    Outerwall Inc.     3.6  

September 18, 2014

   Green Dot Corporation    Santa Barbara Tax Products
Group, LLC
    5.2  

January 30, 2013

   ACI Worldwide, Inc.    Online Resources Corp.     7.3  

January 14, 2013

   Fiserv, Inc.    Open Solutions Inc.     8.5  

February 12, 2008

   Thomas H. Lee Partners, L.P. and
The Goldman Sachs Group, Inc.
   MoneyGram International, Inc.(1)     5.5  

 

(1)

Represents recapitalization transaction of MoneyGram by funds affiliated with Thomas H. Lee Partners, L.P. and affiliates of The Goldman Sachs Group, Inc. for an approximately 79% equity stake through the issuance of preferred securities.

BofA Securities reviewed transaction values (“TVs”), calculated as the enterprise value implied for the target company based on the consideration payable in the selected transaction, as a multiple of the target company’s latest 12 months (“LTM”) Adjusted EBITDA (Burdened). The overall low to high TV / LTM Adjusted EBITDA (Burdened) multiples observed for the selected transactions were 3.6x to 13.8x (with a mean of 8.4x and a median of 8.3x). Based on its professional judgment and experience and after taking into consideration, among other things, the observed data for the selected precedent transactions, BofA Securities then applied a selected range of TV / LTM Adjusted EBITDA (Burdened) multiples of 7.5x to 10.5x to

 

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MoneyGram’s calendar year 2021 estimated Adjusted EBITDA (Burdened) of $164 million as set forth in the MoneyGram Unaudited Financial Projections, to calculate ranges of implied enterprise values for MoneyGram. Estimated financial data of the selected transactions were based on publicly available information at the time of announcement of the relevant transaction, and estimated financial data of MoneyGram were based on the MoneyGram Unaudited Financial Projections.

BofA Securities then calculated implied equity value reference ranges per share of MoneyGram Common Stock by deducting estimated net debt of MoneyGram of $710 million as of December 31, 2021, as provided by MoneyGram’s management, from such enterprise values and dividing the result by the number of fully-diluted shares outstanding, calculated using the treasury stock method, based on information provided by MoneyGram’s management.

This analysis indicated the following approximate implied per share equity value reference ranges for MoneyGram, as compared to the Merger Consideration:

 

Implied Per Share Equity Value

Reference Range for MoneyGram Based on:

  

Merger
Consideration

 

LTM 2021E Adj. EBITDA (Burdened)

      

$5.23 - $10.18

   $ 11.00  

No company, business or transaction used in this analysis is identical to MoneyGram or the Merger. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which MoneyGram and the Merger were compared.

Discounted Cash Flow Analysis. BofA Securities performed a discounted cash flow analysis of MoneyGram to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that MoneyGram was forecasted to generate during MoneyGram’s fiscal year 2022 through fiscal year 2026 based on the MoneyGram Unaudited Financial Projections. BofA Securities calculated terminal values for MoneyGram by applying terminal multiples ranging from 6.0x to 8.0x, based on the historical trading range for the MoneyGram stock as a multiple of the terminal year Adjusted EBITDA (Burdened). The cash flows and terminal values were then discounted to present value as of December 31, 2021 using discount rates ranging from 8.3% to 10.4%, which were based on an estimate of MoneyGram’s weighted average cost of capital. This analysis indicated the following approximate implied per share equity value reference range for MoneyGram, as compared to the Merger Consideration:

 

Implied Per Share Equity Value

Reference Range for MoneyGram

  

Merger
Consideration

 

$9.72 - $15.43

   $ 11.00  

Other Factors

BofA Securities also noted certain additional factors that were not considered part of BofA Securities’ material financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:

 

   

historical trading prices and trading volumes of our Common Stock, which indicated low and high closing prices for our Common Stock during the 52-week period ended February 11, 2022 of approximately $5.20 to $12.04 per share; and

 

   

one-year future stock price targets for our Common Stock in publicly available research analyst reports, which indicated stock price targets for MoneyGram, discounted to present value utilizing MoneyGram’s cost of equity of 10.5% (as determined by BofA Securities based on an estimate of MoneyGram’s weighted average cost of capital), of a range of approximately $7.24 to $11.09 per share.

 

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Miscellaneous

As noted above, the discussion set forth above in the section entitled “The Merger—MoneyGram Financial Analyses” represents a brief summary of the material financial analyses presented by BofA Securities to our board of directors in connection with its opinion and is not a comprehensive description of all analyses undertaken or factors considered by BofA Securities in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Securities believes that its analyses summarized above must be considered as a whole. BofA Securities further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Securities’ analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Securities considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of MoneyGram. The estimates of the future performance of MoneyGram in or underlying BofA Securities’ analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Securities’ analyses. These analyses were prepared solely as part of BofA Securities’ analysis of the fairness, from a financial point of view, of the Merger Consideration and were provided to our board of directors in connection with the delivery of BofA Securities’ opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or acquired or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Securities’ view of the actual value of MoneyGram.

The type and amount of consideration payable in the Merger was determined through negotiations between MoneyGram and Parent, rather than by any financial advisor, and was approved by our board of directors. The decision to enter into the Merger Agreement was solely that of our board of directors. As described above, BofA Securities’ opinion and analyses were only one of many factors considered by our board of directors in its evaluation of the Merger and should not be viewed as determinative of the views of our board of directors, management or any other party with respect to the Merger or the Merger Consideration.

MoneyGram has agreed to pay BofA Securities for its services in connection with the Merger an aggregate fee that is currently estimated to be $20.2 million, approximately $1 million of which was payable upon the delivery of BofA Securities’ opinion and the remaining portion of which is contingent upon the consummation of the Merger. MoneyGram also has agreed to reimburse BofA Securities for its expenses incurred in connection with BofA Securities’ engagement and to indemnify BofA Securities, any controlling person of BofA Securities and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws. Pursuant to its engagement letter with MoneyGram, BofA Securities would be entitled to a transaction fee from MoneyGram in connection with any merger or similar acquisition transaction, irrespective of the identity of the acquirer. Such fee would generally be higher for a transaction that provides for greater merger consideration.

BofA Securities and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Securities and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold

 

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long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of MoneyGram, Parent and certain of their respective affiliates.

BofA Securities and its affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to MoneyGram and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as administrative agent, bookrunner, co-lead arranger for, and as a lender (including a swing line lender and a letter of credit lender) under, certain credit facilities and/or agreements of MoneyGram, (ii) having acted or acting as sole sales agent on a registered at-the-market offering for MoneyGram and as a bookrunner on a bond offering for MoneyGram and (iii) having provided or providing certain foreign exchange, treasury and trade management services and products to MoneyGram. From January 1, 2020 through December 31, 2021, BofA Securities and its affiliates derived aggregate revenues from MoneyGram of approximately $34 million.

In addition, BofA Securities and its affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to MDP and certain of its affiliates and portfolio companies and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as financial advisor to MDP and certain of its affiliates and portfolio companies in connection with certain mergers and acquisition transactions, (ii) having acted or acting as administrative agent, collateral agent, arranger, bookrunner and/or lender for MDP and certain of its affiliates and portfolio companies in connection with, among other purposes, the financing for various acquisition transactions, (iii) having acted or acting as underwriter, initial purchaser and placement agent for various equity and debt offerings undertaken by MDP and certain of its affiliates and portfolio companies and (iv) having provided or providing certain treasury and trade services and products to MDP and certain of its affiliates and portfolio companies. BofA Securities has advised us that from January 1, 2020 through December 31, 2021, BofA Securities and its affiliates derived aggregate revenues from MDP and certain of their respective affiliates of over $80 million for investment and corporate banking services.

Unaudited Financial Projections of MoneyGram

Except for a financial outlook with respect to the current fiscal quarter and year issued in connection with its ordinary course earnings announcements, MoneyGram does not usually make public detailed projections as to earnings or other results, due to, among other reasons, the unpredictability of the underlying assumptions and estimates inherent in preparing financial projections. However, the senior management of MoneyGram regularly prepares, for internal purposes, prospective financial information in connection with its ordinary course strategic planning and, in connection with the evaluation of a possible transaction, prospective financial information regarding MoneyGram’s future performance on a standalone basis for the years 2021 through 2026 (the “MoneyGram Unaudited Financial Projections”) was provided to our board of directors and BofA Securities, as the financial advisor to MoneyGram, to assist in evaluating MoneyGram’s operations and prospects and the Merger. In addition, the MoneyGram Unaudited Financial Projections were provided to MDP in connection with its evaluation of MoneyGram and its analysis of the Merger, as well as to certain other parties potentially interested in a transaction with MoneyGram. The MoneyGram Unaudited Financial Projections were prepared as of January 24, 2022 and have not been subsequently updated.

The MoneyGram Unaudited Financial Projections were not prepared with a view toward public disclosure or with a view toward complying with generally accepted accounting principles in the United States (“GAAP”), the guidelines of the SEC with respect to prospective financial information or the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information. In the view of MoneyGram’s management, this information was, based on certain growth assumptions, prepared on a reasonable basis, reflected the best available estimates and judgments at the time of its preparation, and presented, to the best of MoneyGram’s management’s knowledge and belief, the expected course of action and the expected future financial performance of MoneyGram on a standalone basis at the time of its preparation.

 

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However, this information is not fact and should not be relied upon as being indicative of future results, and you are cautioned not to rely on the MoneyGram Unaudited Financial Projections. The MoneyGram Unaudited Financial Projections do not reflect any impact of the Merger and do not take into account the potential consequences should the Merger fail to be consummated, and should not be viewed as accurate or continuing in those contexts.

Neither MoneyGram’s independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for the prospective financial information. The report of the independent registered public accounting firm incorporated by reference into this proxy statement relates to the historical financial information of MoneyGram. The report does not extend to the unaudited financial projections and should not be read to do so.

In developing the MoneyGram Unaudited Financial Projections, MoneyGram’s management made numerous material assumptions with respect to MoneyGram for the periods covered by the projections, including, but not limited to, the following:

 

   

the revenues, operating expenses and margins from existing business activities;

 

   

assumptions with respect to organic growth projects and other capital investments, such as the amounts and timing of capital expenditures and earnings before interest, tax, depreciation and amortization (“EBITDA”), if any, associated with such projects;

 

   

the availability and cost of debt and equity;

 

   

assumptions relating to the demand for our services;

 

   

assumptions relating to the taxes we will incur in the various jurisdictions in which we operate; and

 

   

other general business, market, regulatory and financial assumptions.

All of these assumptions involve variables making them difficult to predict, and most are beyond the control of MoneyGram. Although MoneyGram’s management believes that there was a reasonable basis for the underlying assumptions related to the MoneyGram Unaudited Financial Projections, there can be no assurance that such underlying assumptions will prove to be accurate or that the projected results will be realized, and the risk of inaccuracy increases with the length of the forecasted period.

The MoneyGram Unaudited Financial Projections are summarized in the table below.

 

     Year Ending December 31,  
     2021E     2022E      2023E      2024E      2025E      2026E  
     ($ in millions)  

Revenue

   $ 1,284.7     $ 1,401.1      $ 1,516.1      $ 1,637.4      $ 1,730.1      $ 1,819.2  

Net income

   $ (28.6   $ 57.0      $ 91.0      $ 120.1      $ 134.1      $ 156.9  

Adjusted EBITDA(1)

   $ 221.2     $ 243.1      $ 267.8      $ 305.9      $ 324.4      $ 348.4  

 

(1)

“Adjusted EBITDA” for purposes of this table means earnings before interest expense, tax, depreciation and amortization, plus special charges and other one-time items, stock-based compensation and amortization of intangibles. Amortization costs of signing bonus payments for MoneyGram, which were used by BofA Securities in calculating Adjusted EBITDA (Burdened) as described above in “The Merger—Opinion of MoneyGram’s Financial Advisor Regarding the Merger Consideration,” were projected by management of MoneyGram to be $57.3 million, $54.5 million, $36.3 million, $33.7 million, $31.4 million and $25.7 million for the years 2021, 2022, 2023, 2024, 2025 and 2026, respectively. Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flows or as a measure of liquidity. Adjusted EBITDA does not include the impact of any potential synergies or costs related to the Merger.

 

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The estimates and assumptions underlying the MoneyGram Unaudited Financial Projections are inherently uncertain and, though considered reasonable by the management of MoneyGram as of the date of the preparation of such projections, are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that are outside of the control of MoneyGram and could cause actual results to differ materially from those contained in the MoneyGram Unaudited Financial Projections, including, among other things, the matters described in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Accordingly, there can be no assurance that the projections are indicative of the future performance of MoneyGram, or that actual results will not differ materially from the results presented in the MoneyGram Unaudited Financial Projections. Inclusion of the MoneyGram Unaudited Financial Projections in this proxy statement should not be regarded as a representation by any person that the results contained in the MoneyGram Unaudited Financial Projections will be achieved. In light of the foregoing factors and the uncertainties inherent in the MoneyGram Unaudited Financial Projections, MoneyGram stockholders are cautioned not to place undue, if any, reliance on the MoneyGram Unaudited Financial Projections.

Adjusted EBITDA contained in the MoneyGram Unaudited Financial Projections summarized above is a “non-GAAP financial measure,” which is a financial performance measure that is not calculated in accordance with GAAP. The non-GAAP financial measures used in the MoneyGram Unaudited Financial Projections were relied upon by BofA Securities with the approval of MoneyGram’s management for purposes of its opinion and by our board of directors in connection with its evaluation of the Merger. The SEC rules which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure do not apply to non-GAAP financial measures included in disclosures relating to a proposed business combination, such as the Merger, if the disclosure is included in a document such as this proxy statement. In addition, reconciliations of non-GAAP financial measures were not relied upon by BofA Securities for purposes of its opinion or by our board of directors in connection with its evaluation of the Merger. Accordingly, MoneyGram has not provided a reconciliation of the financial measures included in the MoneyGram Unaudited Financial Projections to the relevant GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by MoneyGram may not be comparable to similarly titled amounts used by other companies. Furthermore, there are limitations inherent in non-GAAP financial measures because they exclude charges and credits that are required to be included in a GAAP presentation. Accordingly, these non-GAAP financial measures should be considered together with, and not as an alternative to, financial measures prepared in accordance with GAAP.

The inclusion of the MoneyGram Unaudited Financial Projections in this proxy statement should not be regarded as an indication that such projections are material information of MoneyGram or predictive of actual future results nor should it be construed as financial guidance, and it should not be relied upon as such. The MoneyGram Unaudited Financial Projections are not included in this proxy statement in order to induce any MoneyGram stockholder to vote in favor of any of the proposals at the special meeting, but have been included solely because the MoneyGram Unaudited Financial Projections were made available by management of MoneyGram to our board of directors, BofA Securities and MDP, and the MoneyGram Unaudited Financial Projections were used by BofA Securities in connection with the rendering of its fairness opinion to our board of directors and performing its related financial analyses, as described in the section entitled “The Merger—Opinion of MoneyGram’s Financial Advisor Regarding the Merger Consideration.” MoneyGram has made no representation to MDP, Parent, Merger Sub or the Guarantors, in the Merger Agreement or otherwise, concerning the MoneyGram Unaudited Financial Projections.

WE DO NOT INTEND TO REVISE THE MONEYGRAM UNAUDITED FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE MONEYGRAM UNAUDITED FINANCIAL PROJECTIONS ARE NO LONGER APPROPRIATE.

 

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Interests of MoneyGram’s Executive Officers and Directors in the Merger

In considering the recommendation of MoneyGram’s board of directors that you vote “FOR” the proposal to approve and adopt the Merger Agreement, “FOR” the advisory, non-binding proposal relating to compensation that will be or may become payable to MoneyGram’s named executive officers in connection with the Merger and “FOR” the proposal to adjourn the special meeting to a later date, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting, you should be aware that MoneyGram’s directors and executive officers have interests in the Merger that may be different from, or in addition to, those of MoneyGram’s stockholders generally. MoneyGram’s board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, in approving the Merger Agreement and in recommending the applicable Merger-related proposals.

The following discussion sets forth certain of these interests in the Merger of each person who has served as an executive officer or non-employee director of MoneyGram since January 1, 2021 (excluding, for the avoidance of doubt, Mr. Victor Dahir, who ceased to serve as a non-employee director upon his death on March 20, 2021).

Consideration Payable for Shares Held Pursuant to the Merger Agreement

The executive officers and directors of MoneyGram who hold Common Stock at the closing of the Merger will be eligible to receive the same Merger Consideration as the other MoneyGram stockholders with respect to each outstanding share of Common Stock held. The executive officers and directors of MoneyGram held, in the aggregate, 3,241,298 shares of Common Stock (or approximately 3.4% of all outstanding Common Stock) as of April 15, 2022, excluding shares issuable upon exercise of MoneyGram Option Awards or subject to outstanding equity awards, which are discussed below.

The table below sets forth the number of shares of our Common Stock held by the executive officers and directors of MoneyGram as of April 15, 2022 (excluding stock options and restricted stock units), and the value (based on $11.00 per share, which is equal to the Merger Consideration) they would receive for those shares upon consummation of the Merger.

MoneyGram’s executive officers and directors may continue to engage in transactions involving shares of Common Stock prior to the effective time of the Merger.

 

Name

   Number of
Shares Owned
     Consideration for
Shares Owned ($)
 

Non-Employee Directors

     

Antonio O. Garza

     220,555      $ 2,426,105  

Alka Gupta

     10,715      $ 117,865  

Francisco Lorca

     19,634      $ 215,974  

Michael P. Rafferty

     196,787      $ 2,164,657  

Julie E. Silcock

     33,800      $ 371,800  

W. Bruce Turner

     466,843      $ 5,135,273  

Peggy Vaughan

     155,608      $ 1,711,688  

Executive Officers

     

Lawrence Angelilli

     408,307      $ 4,491,377  

Kamila K. Chytil

     110,943      $ 1,220,373  

Adrianna Greenwald

     65,387      $ 719,257  

W. Alexander Holmes

     739,620      $ 8,135,820  

Hilary Jackson

     —        $ —    

Grant A. Lines

     532,381      $ 5,856,191  

Andres Villareal

     273,693      $ 3,010,623  

Robert L. Villaseñor

     136,737      $ 1,504,107  

 

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Treatment of MoneyGram Equity-Based Awards and MoneyGram Cash Awards in the Merger

The Merger Agreement provides for the treatment set forth below with respect to the MoneyGram equity-based awards that are outstanding at the effective time of the merger.

MoneyGram Stock Options

Each MoneyGram Option Award, whether vested or unvested, will be cancelled and retired, and no cash or other consideration will be delivered in exchange thereof. All outstanding MoneyGram Option Awards are currently “out-of-the-money,” which means that, as of the date hereof, the per share exercise price applicable to each MoneyGram Option Award exceeds the market value of a share of Common Stock.

Currently, no non-employee director holds any MoneyGram Option Awards, vested or unvested, and no executive officer holds any unvested MoneyGram Option Award. The following sets forth the aggregate number of shares of Common Stock subject to vested MoneyGram Option Awards held by MoneyGram’s executive officers as of April 15, 2022.

 

Name

   Number of
Shares
Subject to
Outstanding
Vested
MoneyGram
Options Awards
 

W. Alexander Holmes(1)

     26,835  

Lawrence Angelilli(2)

     14,135  

Adrianna Greenwald(3)

     1,178  

 

(1)

The exercise price applicable to such MoneyGram Option Awards ranges from a minimum of $16.48 per share to a maximum of $18.39 per share.

(2)

The exercise price applicable to such MoneyGram Option Awards ranges from a minimum of $16.48 per share to a maximum of $20.08 per share.

(3)

The exercise price applicable to such MoneyGram Option Awards is $20.08 per share.

MoneyGram Pre-2023 Time-Based RSUs and Pre-2023 Performance-Based RSUs (subject solely to time-based vesting)

Each MoneyGram Pre-2023 Time-Based RSU and each Pre-2023 Performance-Based RSU will fully vest and be cancelled in exchange for the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration ($11.00 per share), and (ii) (a) for the Pre-2023 Time-Based RSUs, the number of shares of Common Stock subject to such Pre-2023 Time-Based RSU and (b) for the Pre-2023 Performance-Based RSUs for which the performance period has been completed and performance threshold satisfied, the number of shares of Common Stock for which the applicable performance criteria was achieved.

 

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The following sets forth, for each of MoneyGram’s executive officers, the aggregate number of shares of Common Stock subject to outstanding Pre-2023 Time-Based RSUs and Pre-2023 Performance-Based RSUs that are now subject solely to time-based vesting, held by such executive officers as of April 15, 2022.

 

Name

   Number of Shares Subject to
MoneyGram Pre-2023 Time-Based
RSUs and Pre-2023 Performance-Based
RSUs Subject only to Time-Based  Vesting

W. Alexander Holmes

   778,638

Lawrence Angelilli

   239,904

Grant Lines

   239,904

Robert Villaseñor

   244,555

Andres Villareal

   235,252

Adrianna Greenwald

   159,395

Hilary Jackson

   189,345

Kamila K. Chytil*

   —  

 

*

Ms. Chytil resigned from the Company on March 19, 2021, in order to accept a senior executive position with another company in an unrelated industry. In accordance with the terms of MoneyGram’s standard form of long-term incentive award agreements, Ms. Chytil’s unvested awards were cancelled upon her resignation.

The following sets forth, for each of MoneyGram’s non-employee directors, the aggregate number of shares of Common Stock subject to outstanding MoneyGram Pre-2023 Time-Based RSUs, held by such non-employee directors as of April 15, 2022.

 

Name

   Number of
Shares
Subject to
MoneyGram
Pre-2023 Time-
Based RSUs
 

Antonio O. Garza

     18,769  

Alka Gupta

     18,769  

Francisco Lorca

     18,769  

Michael P. Rafferty

     18,769  

Julie E. Silcock

     18,769  

W. Bruce Turner

     18,769  

Peggy Vaughan

     18,769  

MoneyGram Pre-2023 Performance-Based RSUs

Each MoneyGram Pre-2023 Performance-Based RSU for which the performance period has not been completed will become vested as to a number of shares of Common Stock subject to such MoneyGram Pre-2023 Performance-Based RSU based on achievement of the performance criteria set forth in the applicable award agreement at the greater of target and actual level of performance achieved as of immediately prior to the effective time and will be cancelled in consideration for the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration ($11.00 per share) and (ii) the number of shares of Common Stock subject to such Pre-2023 Performance-Based RSU.

 

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The following sets forth, for each of MoneyGram’s executive officers, the aggregate target number of shares of Common Stock subject to outstanding MoneyGram Pre-2023 Performance-Based RSUs for which the performance criteria has not been certified, held by such executive officers as of April 15, 2022. Accordingly, the table below represents only the PSU awards granted as part of the annual 2022 long-term incentive award program.

 

Name

   Number of
Shares
Subject to
MoneyGram
Pre-2023
Performance-
Based RSUs at
Target
 

W. Alexander Holmes

     139,535  

Lawrence Angelilli

     30,233  

Grant Lines

     30,233  

Robert Villaseñor

     32,559  

Andres Villareal

     27,907  

Adrianna Greenwald

     32,559  

Hilary Jackson

     27,907  

Kamila K. Chytil*

        

 

*

Ms. Chytil resigned from the Company on March 19, 2021, in order to accept a senior executive position with another company in an unrelated industry and was no longer employed by the Company when these grants were awarded.

MoneyGram Pre-2023 Performance Cash Awards

Each MoneyGram Pre-2023 Performance Cash Award will fully vest and be cancelled in exchange for the right to receive an amount in cash (subject to any applicable withholding taxes) equal to the aggregate cash amount payable pursuant to such MoneyGram Pre-2023 Performance Cash Award based on, to the extent applicable, achievement of the performance criteria set forth in the applicable award agreement at the greater of target and actual level of performance achieved as of immediately prior to the effective time.

The following sets forth, for each of MoneyGram’s executive officers, the total cash value subject to outstanding MoneyGram Pre-2023 Performance Cash Awards based on target performance, held by such executive officers as of April 15, 2022.

 

Name

   Total Cash Value
of MoneyGram
Pre-2023
Performance Cash
Awards at Target
 

W. Alexander Holmes

   $ 2,763,020.84  

Lawrence Angelilli

   $ 795,000.00  

Grant Lines

   $ 795,000.00  

Robert Villaseñor

   $ 820,000.00  

Andres Villareal

   $ 770,000.00  

Adrianna Greenwald

   $ 508,333.34  

Hilary Jackson

   $ 500,000.00  

Kamila K. Chytil*

   $    

 

*

Ms. Chytil resigned from the Company on March 19, 2021, in order to accept a senior executive position with another company in an unrelated industry. In accordance with the terms of MoneyGram’s standard form of long-term incentive award agreements, Ms. Chytil’s unvested awards were cancelled upon her resignation.

 

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Potential Awards Granted in 2023

If the closing date happens in 2023 or a subsequent year, MoneyGram may grant MoneyGram 2023 RSUs under the Company Stock Plan prior to the actual closing date, the terms of which are unknown at this time. Any MoneyGram 2023 RSU, will, unless otherwise agreed to in writing, be converted into a cash-settled long-term incentive award (a “converted award”) representing a right to receive an amount of cash, without interest, equal to the product of (i) the Merger Consideration ($11.00 per share) and (ii) the number of shares of Common Stock underlying such MoneyGram 2023 RSU (and, with respect to any such award that is subject to performance-based vesting, such number of shares of Common Stock will be based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time), on the same vesting terms and conditions applicable to such MoneyGram 2023 RSU immediately before the effective time. On the date, and to the extent, that the converted awards become vested, such vested converted awards shall be paid, subject to any applicable withholding taxes, as soon as practicable thereafter (but in any event, not later than the second regular payroll date thereafter). Each performance-based cash award granted on or after January 1, 2023 pursuant to the Company Stock Plan, whether vested or unvested, representing the right to receive cash payments, whether subject to performance-based vesting requirements or time-based vesting requirements, that is outstanding immediately prior to the effective time, shall continue in accordance with its terms.

Other Benefits

Retention Bonuses

In connection with the 2022 annual long-term incentive award grants, MoneyGram’s board of directors approved retention bonuses for certain of those individuals who have served as an executive officer of MoneyGram at any time since January 1, 2021. These bonuses (each, a “Retention Bonus”) are time-based cash grants which will vest at the earlier of (i) the closing date or (ii) the first anniversary of the date of grant. Such Retention Bonuses will be forfeited, in full, if the recipient’s employment terminates for any reason prior to vesting.

The value of each Retention Bonus is equal to 12.5% of the 2022 target annual long-term incentive award value for each such executive officer. Concurrent with these awards, the board of directors also approved a 12.5% increase to the total annual long-term incentive award value received by each other participant in MoneyGram’s 2022 long-term incentive award program.

The following sets forth the value of each Retention Bonus granted to certain of MoneyGram’s executive officers.

 

Name

   Retention
Bonus
 

W. Alexander Holmes

   $ 750,000  

Lawrence Angelilli

   $ 162,500  

Grant Lines

   $ 162,500  

Robert Villaseñor

   $ 175,000  

Andres Villareal

   $ 150,000  

Adrianna Greenwald

   $ 175,000  

Hilary Jackson

   $ 150,000  

Kamila K. Chytil*

   $ 0  

 

*

Ms. Chytil resigned from the Company on March 19, 2021, in order to accept a senior executive position with another company in an unrelated industry and was no longer employed by the Company when these grants were awarded.

 

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Potential Severance Payments and Benefits in Connection with the Merger

Executive Severance Agreements

Each of MoneyGram’s executive officers, other than Mr. Holmes, whose severance provisions are included in his employment agreement, has entered into a standard severance agreement with MoneyGram.

Pursuant to Mr. Holmes’s employment agreement, if within 24-months following a change in control, Mr. Holmes’s employment is terminated by MoneyGram without “Cause” (as defined in the employment agreement and described below) or by Mr. Holmes for “Good Reason” (as defined in the 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 MoneyGram Option Award 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 MoneyGram without Cause or by Mr. Holmes for Good Reason: (i) payment of his accrued and unpaid base salary (as defined in the employment agreement) and unpaid reimbursement of expenses; (ii) a pro-rata portion of his bonus under the MoneyGram Performance Bonus Plan (the “Performance Bonus Plan”) for the fiscal year in which the termination occurs, if cash bonuses pursuant to the Performance Bonus Plan are paid to other participants in the plan; (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; (iv) continuation of health and life insurance coverage until the earlier of (a) the two year period following the 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 MoneyGram’s benefit plans, programs or policies and any bonus earned under the Performance Bonus Plan with respect to the fiscal year ending prior to the date of the termination but unpaid as of such date.

For purposes of Mr. Holmes’s employment agreement, the following terms generally have the definitions set forth below:

 

   

“Cause” generally means a good faith finding by MoneyGram’s board of directors of: (i) the executive’s willful refusal to carry out, in all material respects, the reasonable and lawful directions of MoneyGram’s board of directors that are within the executive’s control and consistent with the executive’s status as chief executive officer of MoneyGram and his duties and responsibilities under the employment agreement (except for a failure that is attributable to the executive’s illness, injury or disability) for a period of ten days following written notice MoneyGram to the executive of such failure; (ii) fraud or material dishonesty in the performance of the executive’s duties under the employment agreement; (iii) an act or acts on the executive’s part constituting (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) an indictment of the executive for a felony under the laws of the United States or any state thereof; (v) the executive’s willful misconduct or gross negligence in connection with the executive’s duties under the employment agreement which is materially injurious to the financial condition or business reputation of MoneyGram; (vi) the executive’s 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 MoneyGram; or (vii) the executive’s 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 the executive’s part shall be considered “willful” unless done, or omitted to be done, by the executive in bad faith and without reasonable belief that the executive’s action or omission was in the best interest of MoneyGram.

 

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“Good Reason” generally means without the executive’s consent, (i) any material reduction in the executive’s position or responsibilities, excluding an isolated, insubstantial or inadvertent action not taken in bad faith; (ii) a material reduction of the executive’s 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 MoneyGram; or (iii) the reassignment of the executive’s place of work to a location more than 50 miles from the executive’s place of work; provided that none of the events described in clauses (i), (ii) or (iii) shall constitute Good Reason unless (a) the executive shall have given written notice to MoneyGram of the executive’s intent to terminate his employment with Good Reason within 60 days following the occurrence of any such event and (b) MoneyGram shall have failed to remedy such event within 30 days of MoneyGram’s receipt of such notice.

The individual severance agreements entered into by the other executive officers provide for the following severance treatment with regard to a change in control. If within 24 months following a change in control and a termination of employment by MoneyGram without Cause (as defined in the severance agreement and described below) or by the executive for Good Reason (as defined in the severance agreement and described below), the executive will be entitled to: (i) a cash payment equal to the executive’s then current monthly base salary multiplied by twelve and payable in equal monthly installments over the twelve months following termination; (ii) a pro-rata portion of the executive’s bonus (up to target level) payable in a lump sum at the time other bonuses are paid, if cash bonuses pursuant to the Performance Bonus Plan are paid to participants; and (iii) immediate full vesting of each restricted stock unit 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 100% of the target level, in the case of any award then subject to performance-based vesting criteria if the termination occurs on or prior to the last day of the performance period).

For purposes of each severance agreement between MoneyGram and its executive officers, the following terms generally have the definitions set forth below:

 

   

“Cause” generally means (i) the executive’s willful refusal to carry out, in all respects, the reasonable and lawful directions of the person or persons to whom the executive reports or MoneyGram’s board of directors that are within the executive’s control and consistent with the executive’s status with MoneyGram and their duties and responsibilities under the severance agreement (except for a failure that is attributable to the executive’s illness, injury, or disability) for a period of ten days following written notice by MoneyGram to the executive of such a failure; (ii) fraud or material dishonesty in performance with the executive’s duties under the severance agreement; (iii) an act or acts on the executive’s part constituting (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) an indictment of the executive for a felony under the laws of the United States or any state thereof; (v) the executive’s willful misconduct or gross negligence in connection with the executive’s duties which could reasonably be expected to be injurious in any material respect to the financial condition or business reputation of MoneyGram as determined in good faith by MoneyGram’s board of directors; (vi) the executive’s material breach of MoneyGram’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 executive, and which breach could reasonably be expected to have a material adverse effect on MoneyGram as determined in good faith by MoneyGram’s board of directors; or (vii) the executive’s breach of the Employee Trade Secret, Confidential Information and Post-Employment Restriction Agreement which breach has an adverse effect of MoneyGram.

 

   

“Good Reason” generally means (i) a material reduction in the executive’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 executive’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 MoneyGram; or (iii) the reassignment, without the executive’s consent, of the executive’s place of work to a location more than 50 miles from the executive’s place of work;

 

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provided that none of the events described in clauses (i), (ii) or (iii) shall constitute Good Reason unless (a) the executive shall have given written notice to the Company of the executive’s intent to terminate their 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 MoneyGram’s receipt of such notice.

The Merger will constitute a “change in control” under Mr. Holmes’s employment agreement and each of the individual severance agreements entered into on behalf of the other executive officers, as well as for the Retention Bonuses. For the quantification of the value of the severance payments and benefits described above that would be payable to MoneyGram’s named executive officers in the event of a qualifying termination following the Merger, see the “Cash” and “Benefits” columns of the table below under “—Quantification of Payments and Benefits to MoneyGram’s Named Executive Officers.”

Indemnification and Insurance

The Merger Agreement provides that the executive officers and non-employee directors of MoneyGram and its subsidiaries will have the right to indemnification and continued coverage under directors’ and officers’ liability insurance policies for at least six years following the effective time of the Merger.

Post-Closing Compensation Arrangements with MDP

Any of MoneyGram’s executive officers or non-employee directors who become officers, directors or employees or who otherwise are retained to provide services to MDP or the surviving company following the effective time of the Merger may enter into new individualized compensation arrangements and may participate in cash or equity incentive or other benefit plans maintained by MDP. As of the date hereof, no compensation arrangements between such persons and MDP or its affiliates have been established. However, under the Merger Agreement, MDP has agreed to provide, or cause to be provided to all MoneyGram employees (who are employed at the effective time), including executive officers, during the Benefit Continuation Period (as defined below), the following: (i) base salary or wages and cash incentive compensation opportunities that are no less favorable, in each instance, to those provided to the continuing employees immediately prior to the closing, and (ii) employee benefits (other than any defined benefit pension benefits or supplemental executive retirement plan benefits) that are substantially comparable, in the aggregate, to those provided to the continuing employees immediately prior to the closing. For purposes of the above employee benefit arrangements, “Benefit Continuation Period” means the period of time from the effective time of the Merger until the first anniversary of the effective time of the Merger. During the Benefit Continuation Period, MDP has agreed to assume and honor, or cause to be assumed and honored, MoneyGram’s and its subsidiaries’ obligations under all employment, severance, and bonus agreements, for all continuing employees. For additional information, see “The Merger Agreement—Covenants and Agreements—Certain Employee Benefits Matters.”

Quantification of Payments and Benefits to MoneyGram’s Named Executive Officers

The information set forth below is required by Item 402(t) of Regulation S-K regarding compensation that is based on or otherwise relates to the Merger that MoneyGram’s named executive officers could receive in connection with the Merger. Such amounts have been calculated assuming that (i) the closing of the Merger occurs on April 15, 2022, (ii) the closing price of a share of Common Stock at the effective time of the Merger is $11.00 (which represents the fixed dollar amount received by shareholders in connection with the Merger), (iii) each of MoneyGram’s named executive officers experiences a qualifying termination immediately following the effective time of the Merger, (iv) the MoneyGram incentive awards subject to performance-based vesting, will accelerate and vest based on target performance (100%), (v) the amount of annual cash compensation for each of MoneyGram’s named executive officers will remain unchanged from the amount determined as of the date hereof, (vi) none of MoneyGram’s named executive officers receives any additional equity-based awards following the date hereof, and (vii) each of MoneyGram’s named executive officers has properly executed any

 

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required releases and complied with all requirements (including any applicable restrictive covenants) necessary in order to receive such payments and benefits. Some of the assumptions used in the table below are based upon information not currently available and, as a result, the actual amounts to be received by any of MoneyGram’s named executive officers may materially differ from the amounts set forth below.

Golden Parachute Compensation

 

Name

   Cash(1)      Equity(2)      Perquisites/
Benefits(3)
     Other(4)      Total  

W. Alexander Holmes

   $ 7,152,368      $ 10,099,903      $ 28,696      $ 750,000      $ 18,030,967  

Lawrence Angelilli

   $ 1,379,326      $ 2,971,507      $ —        $ 162,500      $ 4,513,333  

Grant Lines

   $ 1,367,024      $ 2,971,507      $ —        $ 162,500      $ 4,501,031  

Andres Villareal

   $ 1,305,120      $ 2,894,749      $ —        $ 150,000      $ 4,349,869  

Robert Villaseñor

   $ 1,392,024      $ 3,048,254      $ —        $ 175,000      $ 4,615,278  

 

(1)

Amounts shown reflect cash severance payments under Mr. Holmes’s employment agreement and the individual severance agreements entered into with each of the other named executive officers, in the amount of $4,389,347 for Mr. Holmes, $584,326 for Mr. Angelilli, $572,024 for Mr. Lines, $535,120 for Mr. Villareal and $572,024 for Mr. Villaseñor. These cash severance payments under Mr. Holmes’ employment agreement consist of (i) a cash payment two times the sum of (x) his base salary and (y) his target annual bonus, and (ii) a pro-rata portion of his bonus under the Performance Bonus Plan (if such bonuses are paid to other participants), and these cash severance payments under the severance agreements entered into with each of the other named executive officers consists of (a) a cash payment equal to the executive’s monthly base salary multiplied by twelve, and (b) a pro-rata portion of the executive’s bonus (up to target level). The cash severance payments pursuant to Mr. Holmes’s employment agreement are payable upon his termination of employment without Cause or resignation for Good Reason, in each case, whether or not a change in control occurs, and the cash severance payments pursuant to the named executive officers’ severance agreements are considered to be “double-trigger” payments, which means that both a change in control, such as the Merger, and another event (i.e., a named executive officer’s termination without Cause or resignation for Good Reason) must occur prior to such payments being provided to the named executive officer. In addition, amounts shown also reflect the single-trigger accelerated vesting and payout of the MoneyGram Pre-2023 Performance Cash Awards held by the named executive officers in the following amounts: $2,763,021 for Mr. Holmes, $795,000 for Mr. Angelilli, $795,000 for Mr. Lines, $770,000 for Mr. Villareal and $820,000 for Mr. Villaseñor.

(2)

Amounts shown reflect the sum of the potential value that each named executive officer could receive in connection with the single-trigger accelerated vesting and cash settlement of all outstanding restricted stock units, whether subject to time-based or performance-based vesting (calculated at target if performance has yet to be certified). No value has been included for the MoneyGram Option Awards held by Messrs. Holmes and Angelilli because the exercise price applicable to the MoneyGram Option Awards is greater than the Merger Consideration payable with respect to such awards. These payments are considered to be “single-trigger” payments, which means that only a change in control, such as the Merger, must occur prior to such payments being provided to the named executive officers.

(3)

Amounts shown reflect the value of the continuation of health and life insurance coverage for Mr. Holmes, for the maximum period of two years under his employment agreement. This benefit is considered to be a “double-trigger” benefit, which means that both a change in control, such as the Merger, and another event (i.e., Mr. Holmes’s termination without Cause or resignation for Good Reason) must occur prior to such payments being provided to Mr. Holmes.

(4)

Amounts shown reflect value of Retention Bonuses granted to each named executive officer. These payments are considered to be “single-trigger” payments, which means that only a change in control, such as the Merger, must occur prior to such payments being provided to the named executive officers.

 

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Information for Advisory Vote on Merger-Related Compensation for Our Named Executive Officers

MoneyGram is asking its stockholders to indicate their approval of the various “change of control” payments and other compensation which MoneyGram’s named executive officers will or may be eligible to receive in connection with the Merger. These payments are set forth in the table entitled “Golden Parachute Compensation” under the section of this proxy statement entitled “The Merger—Interests of MoneyGram’s Executive Officers and Directors in the Merger” and the accompanying footnotes.

Approval of this proposal is not a condition to completion of the Merger. Approval of this proposal requires an affirmative vote of a majority of the votes cast on this proposal at the special meeting, assuming a quorum is present. For additional information, see the section entitled “Non-Binding Proposal on Compensation Related to the Merger.”

MoneyGram Board of Directors and Management Following the Merger

Pursuant to the terms of the Merger Agreement, our board of directors will be replaced by the board of directors of Merger Sub, or such other individuals that Parent may designate prior to the effective time of the Merger to serve as directors of the surviving corporation, and will not hold any directorships with Merger Sub or Parent unless designated by Parent.

Following the Merger, the board of directors designated by Merger Sub will have the authority to retain or replace the existing executive officers of MoneyGram. It is expected that MoneyGram will continue to be led by Mr. Holmes, as Chief Executive Officer, and MoneyGram’s existing management team.

Indemnification and Insurance

The Merger Agreement provides that after the effective time of the Merger, Parent will cause the surviving corporation to indemnify and hold harmless, to the fullest extent provided in the certificate of incorporation and bylaws of MoneyGram in effect on the date of the Merger Agreement and permitted by applicable law, all past and present directors and officers of MoneyGram or any of its subsidiaries, referred to collectively as, the “Indemnified Parties,” with respect to acts or omissions occurring at or prior to the effective time of the Merger. In addition, for six years after the effective time of the Merger, Parent will not permit any amendments to the certificate of incorporation, bylaws or other organizational documents of MoneyGram or its subsidiaries that would adversely affect any right of a person who was or is a director or officer of MoneyGram or its subsidiaries prior to the effective time of the Merger with respect elimination of liability of directors, indemnification of officers, directors and employees and advancement of expenses under MoneyGram’s and its subsidiaries’ certificate of incorporation, bylaws or other organizational documents in effect as of the date of the Merger Agreement.

For a period of six years after the effective time of the Merger, Parent is also required to maintain or cause the surviving company to maintain directors’ and officers’ liability insurance policy (from MoneyGram’s current insurance carrier or an insurance carrier with the same or better credit rating, as of the closing date of the Merger, as MoneyGram’s current insurance carrier) that provides coverage for acts or omissions occurring prior to the effective time of the Merger with terms and conditions which are, in the aggregate, not less advantageous to the Indemnified Parties than the terms and conditions of the existing directors’ and officers’ liability insurance policy of the MoneyGram. However, at Parent’s option, in lieu of the foregoing insurance coverage, Parent or, with Parent’s consent, MoneyGram may at or prior to the effective time of the Merger substitute the insurance coverage for a single premium tail coverage with respect to such insurance that provides coverage for a period of six years after the effective time of the Merger, with terms and conditions which are, in the aggregate, not less advantageous to such Indemnified Parties than the terms and conditions of the existing directors’ and officers’ liability insurance policy of MoneyGram. However, Parent will not be required to expend, in the aggregate, an amount in excess of 300% of the annual premiums currently paid by MoneyGram for the existing directors’ and

 

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officers’ liability insurance policy of MoneyGram. If Parent is unable to maintain or obtain the required insurance for an amount equal to or less than such amount, Parent is required to obtain as much comparable insurance as may be available for such amount.

Regulatory Matters

U.S. Antitrust Approval

Under the HSR Act, we cannot complete the Merger until we give notification and furnish information to the Federal Trade Commission and the Antitrust Division of the Department of Justice and until the applicable waiting period expires or is terminated. On March 16, 2022, we and MDP each filed a pre-Merger notification and report form under the HSR Act. The 30-day waiting period under the HSR Act expired at 11:59 p.m. Eastern Time on April 15, 2022.

Foreign Regulatory Law Approvals

Under the Foreign Regulatory Laws, we cannot complete the Merger until we give notification and furnish information to each of the following entities, and the applicable waiting period expires or is terminated.

 

   

The parties filed a merger control notification with the Bundeskartellamt (Federal Cartel Office) of the Federal Republic of Germany on March 23, 2022. The transaction was cleared on April 1, 2022.

 

   

The parties are preparing and expect to file an Initial Application with the General Authority for Competition of the Kingdom of Saudi Arabia by the end of May. The parties have not yet received a projected expiration date for the applicable waiting period.

 

   

The parties made a filing pursuant to Italian foreign direct investment laws with the Italian Presidency of the Council of Ministers on April 15, 2022. The waiting period will be 45 calendar days from when the filing is deemed completed, but it could be extended up to 75 calendar days from the filing date in the event that requests for information are addressed to the notifying party or third parties. In case the EU cooperation mechanism is triggered (i.e. to allow the European Commission and other EU Member States to request information, issue an opinion, or comment), the waiting period could be extended up to 130 calendar days in the aggregate from the filing date.

Money Transmitter Requirements

MoneyGram holds money transmitter licenses in numerous U.S. and foreign jurisdictions. The relevant laws and regulations of certain of these jurisdictions require that, prior to the acquisition of control of a licensee, the licensee and/or acquirer must notify the applicable regulatory authority, make certain filings with such regulatory authority, and/or obtain the approval of such regulatory authority. It is a condition to Parent’s and Merger Sub’s obligation to complete the Merger that all required money transfer approvals have been made or obtained, as applicable, and remain in full force and effect and all statutory waiting periods relating to the required money transfer approvals have expired, been terminated or satisfied, as applicable, in each case, without the imposition, individually or in the aggregate, of any burdensome condition as defined in the Merger Agreement and as further described in the section entitled “The Merger Agreement—Reasonable Best Efforts.” “Required money transfer approval” means any approval related to money transmitter licenses of MoneyGram or its subsidiaries or the money transfer change of control filings contemplated by the Merger Agreement, from (i) at least 46 U.S. states (including the District of Columbia) and the United Kingdom, Belgium, India, Canada, Australia, Turkey, Mexico and Puerto Rico and (ii) all other jurisdictions where such approvals are required to be obtained prior to the effective time of the Merger, except, in the case of each of clause (i) and (ii), for such approvals the failure of which to be obtained or made prior to the effective time of the Merger would not exceed in the aggregate for clauses (i) and (ii) 2.5% of MoneyGram’s consolidated money transfer revenues for the 12-month period ended December 31, 2021. MoneyGram and Parent are in the process of obtaining the required money transfer approvals.

 

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Other Regulatory Approvals

Other than as described above, neither MoneyGram nor MDP is currently aware of any material governmental approvals or actions that are required for completion of the Merger. We expect that if any such additional material governmental approvals or actions are required, those approvals or actions will be sought.

General

Under the Merger Agreement, each of the parties agreed to use reasonable best efforts to complete the Merger and to prepare all necessary applications, notices, petitions, filings, ruling requests and other documents to obtain approval from any governmental entity that is required to be obtained in connection with the Merger, including approval from U.S. antitrust authorities and financing approvals with respect to money transmitter licenses. The parties have also agreed to use reasonable best efforts to comply with all legal requirements with respect to obtaining approvals for the transactions contemplated by the Merger Agreement, defend all lawsuits or other proceedings challenging the Merger Agreement or the consummation of the Merger, seek to avoid the entry of, and the commencement of, litigation seeking the entry of, or seek to have lifted or rescinded, any injunction or restraining order which may adversely affect the ability of the parties to complete the Merger, and to resolve any objection by a governmental entity challenging the Merger Agreement or the transactions contemplated by the Merger Agreement. Neither Parent nor any of its affiliates are required to agree to or take any action that would result in a “burdensome condition” as defined in the Merger Agreement and as further described in the section entitled “The Merger Agreement—Reasonable Best Efforts.”

While we expect that all regulatory approvals will be obtained without the imposition of a burdensome condition, there is no certainty that these approvals will be obtained or obtained within the period of time contemplated by the Merger Agreement, that any such approvals would not involve the imposition of burdensome conditions or that other regulatory challenges to the Merger will not be made. If a challenge is made, we cannot predict the result. Any conditions with respect to such regulatory approvals could result in the conditions to the completion of the Merger not being satisfied.

The approval of any regulatory application or completion of regulatory review merely implies the satisfaction of certain regulatory criteria, which do not include review of the Merger from the standpoint of the adequacy of the consideration to be received by our stockholders. Further, regulatory approvals or reviews do not constitute an endorsement or recommendation of the Merger.

Appraisal Rights

Under Delaware law, holders of record of shares of our Common Stock are entitled to appraisal rights in connection with the Merger, provided that such holders meet all of the conditions set forth in Section 262 of the DGCL. If the Merger is completed, holders of record of shares of our Common Stock who continuously hold shares through the effective time of the Merger, who did not vote in favor of the proposal to approve and adopt the Merger Agreement and who otherwise comply with the applicable statutory procedures under Section 262 of the DGCL will be entitled to appraisal rights in connection with the Merger.

Pursuant to Section 262 of the DGCL, if you do not wish to accept the Merger Consideration provided for in the Merger Agreement, you have the right to seek appraisal of your shares of our Common Stock and to receive payment in cash for the fair value of your shares of our Common Stock, exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Court of Chancery of the State of Delaware, together with interest, if any, to be paid upon the amount determined to be fair value. The “fair value” of your shares of our Common Stock as determined by the Court of Chancery of the State of Delaware may be less than, equal to or more than the $11.00 per share that you would otherwise be entitled to receive under the terms of the Merger Agreement. These rights are known as appraisal rights. Stockholders who do not vote in favor of the proposal to approve and adopt the Merger Agreement and who properly demand appraisal for their

 

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shares in compliance with the provisions of Section 262 of the DGCL will be entitled to such appraisal rights. Strict compliance with the statutory procedures set forth in Section 262 of the DGCL is required. Failure to follow precisely any of the statutory requirements may result in the loss or waiver of your appraisal rights.

This section is intended only as a brief summary of certain provisions of the statutory procedures that a stockholder must follow under the DGCL in order to seek and perfect appraisal rights. This summary, however, is not a complete statement of all applicable requirements and the law pertaining to appraisal rights under the DGCL, and is qualified in its entirety by reference to Section 262 of the DGCL, the full text of which appears in Annex C to this proxy statement. The following summary does not constitute any legal or other advice, nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262 of the DGCL.

Under Section 262 of the DGCL, not less than 20 days before the special meeting at which the approval and adoption of the Merger Agreement is considered, MoneyGram is required to notify each of the holders of our Common Stock as of the record date who are entitled to appraisal rights that such rights are available for any or all of such holder’s shares of our Common Stock, and is required to include in such notice a copy of Section 262 of the DGCL. This proxy statement constitutes a formal notice of appraisal rights under Section 262 of the DGCL in connection with the Merger.

ANY HOLDER OF SHARES OF OUR COMMON STOCK WHO WISHES TO EXERCISE THEIR APPRAISAL RIGHTS, OR WHO WISHES TO PRESERVE THEIR RIGHT TO DO SO, SHOULD REVIEW THE FOLLOWING DISCUSSION AND ANNEX C CAREFULLY BECAUSE FAILURE TO TIMELY AND PROPERLY COMPLY WITH THE PROCEDURES SPECIFIED MAY RESULT IN THE LOSS OR WAIVER OF APPRAISAL RIGHTS UNDER THE DGCL. MOREOVER, BECAUSE OF THE COMPLEXITY OF THE PROCEDURES FOR EXERCISING THE RIGHT TO SEEK APPRAISAL OF SHARES OF OUR COMMON STOCK, MONEYGRAM BELIEVES THAT A STOCKHOLDER CONSIDERING THE EXERCISE OF SUCH RIGHTS SHOULD SEEK THE ADVICE OF LEGAL COUNSEL.

Stockholders wishing to exercise the right to seek appraisal of their shares of our Common Stock must fully comply with Section 262 of the DCGL, which means, among other things, all of the following:

 

   

the stockholder must deliver to MoneyGram a written demand for appraisal before the vote on the proposal to approve and adopt the Merger Agreement is taken at the special meeting;

 

   

the stockholder must not vote in favor of the proposal to approve and adopt the Merger Agreement;

 

   

the stockholder must continuously hold the shares from the date of making the demand through the effective time of the Merger (a stockholder may lose or waive appraisal rights if the stockholder transfers the shares prior to the effective time of the Merger); and

 

   

the stockholder or the surviving corporation must file a petition in the Court of Chancery of the State of Delaware demanding a determination of value of the shares within 120 days after the effective time of the Merger. The surviving corporation is under no obligation to file any petition and has no present intention of doing so.

Because a properly executed proxy that does not contain voting instructions will, unless revoked, be voted in favor of the proposal to approve and adopt the Merger Agreement, a stockholder who votes by proxy and who wishes to exercise appraisal rights should not return a blank proxy, but rather must vote against the proposal to approve and adopt the Merger Agreement, abstain or not vote his, hers or its shares.

Written Demand by the Record Holder

MoneyGram’s stockholders wishing to exercise their appraisal rights must deliver to MoneyGram a written demand for appraisal of their shares before the vote with respect to the approval and adoption of the Merger Agreement is taken at the special meeting, and such stockholders must not vote or submit a proxy in favor of the

 

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proposal to approve and adopt the Merger Agreement either at the special meeting or by proxy. A stockholder wishing to exercise appraisal rights must continue to hold the shares of record on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective time of the Merger. The stockholder must not vote in favor of the proposal to approve and adopt the Merger Agreement. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the proposal to approve and adopt the Merger Agreement, and it may cause a stockholder to lose or waive the stockholder’s right to appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the proposal to approve and adopt the Merger Agreement or abstain from voting on the proposal to approve and adopt the Merger Agreement. The written demand for appraisal must be in addition to and separate from any proxy or vote on the proposal to approve and adopt the Merger Agreement. Under Section 262 of the DGCL, neither a proxy or vote against the Merger, nor abstaining from voting or failing to vote on the proposal to approve and adopt the Merger Agreement, will in and of itself, constitute a written demand for appraisal. A stockholder’s failure to make the written demand prior to the taking of the vote on the proposal to approve and adopt the Merger Agreement at the special meeting may cause the stockholder to lose or waive his, her or its appraisal rights in connection with the Merger.

The written demand for appraisal must be executed by or for the record holder of shares, fully and correctly, as such holder’s name appears on the stock records of MoneyGram. Written demands must reasonably inform MoneyGram of the identity of the stockholder and the intention of the stockholder to demand appraisal of such stockholder’s shares of our Common Stock. The demand should set forth, fully and correctly, the stockholder’s name as it appears on the share certificate or certificates that represent such stockholder’s shares or in the book entry that represents such stockholder’s shares, as the case may be. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand must be made in that capacity, and if the shares are owned of record by more than one person, such as in a joint tenancy or a tenancy in common, the demand must be executed by or for all joint owners. An authorized agent, including one of two or more joint owners, may execute the demand for appraisal for a stockholder of record. However, the agent must identify the record owner(s) and expressly disclose the fact that, in executing the demand, the agent is acting as agent for the record owner(s).

A beneficial owner of shares of our Common Stock held in “street name” who wishes to exercise appraisal rights should take such actions as may be necessary to ensure that a timely and proper demand for appraisal is made by the record holder of the shares. If the shares are held through a brokerage firm, bank or other nominee who in turn holds the shares through a central securities depository nominee, a demand for appraisal of such shares must be made by or on behalf of the depository nominee and must identify the depository nominee as the record stockholder. Any beneficial owner who wishes to exercise appraisal rights and holds shares through a nominee holder is responsible for ensuring that the demand for appraisal is timely made by the record stockholder. The beneficial holder of the shares should instruct the nominee holder that the demand for appraisal should be made by the record holder of the shares, which may be a central securities depository nominee if the shares have been so deposited.

All written demands for appraisal should be addressed to MoneyGram’s corporate secretary at:

MoneyGram International, Inc.

2828 North Harwood Street, 15th Floor

Dallas, Texas 75201

Attention: Corporate Secretary

Notice by the Surviving Corporation

If the Merger is consummated, within 10 days after the effective time of the Merger, the surviving corporation (i.e., MoneyGram) must notify each holder of shares of Common Stock who has properly made a

 

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written demand for appraisal pursuant to Section 262 of the DCGL, and who has not voted in favor of the proposal to approve and adopt the Merger Agreement, that the Merger has become effective and the effective date thereof.

Filing a Petition for Appraisal

Within 120 days after the effective time of the Merger, the surviving corporation or any MoneyGram stockholder who has complied with Section 262 of the DGCL and is entitled to appraisal rights thereunder, may commence an appraisal proceeding by filing a petition in the Court of Chancery of the State of Delaware, with a copy served on MoneyGram in the case of a petition filed by a stockholder, demanding a determination of the fair value of our Common Stock held by all such stockholders entitled to appraisal. If no such petition is filed by any stockholders entitled to appraisal within that 120-day period, appraisal rights may be lost or waived for all dissenting stockholders. MoneyGram is under no obligation to, and has no present intention to, file a petition in the event there are dissenting stockholders, and stockholders should not assume that MoneyGram will file a petition or that it will initiate any negotiations with respect to the fair value of shares of our Common Stock. Accordingly, it is the obligation of MoneyGram’s stockholders to initiate all necessary action to perfect their appraisal rights in respect of the shares of our Common Stock within the period prescribed in Section 262 of the DGCL.

Within 120 days after the effective time of the Merger, any MoneyGram stockholder who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the surviving corporation a statement setting forth the aggregate number of shares not voted in favor of the proposal to approve and adopt the Merger Agreement and with respect to which demands for appraisal have been received and the aggregate number of such dissenting stockholders. Such statement must be mailed by the surviving corporation within 10 days after the receipt of a written request from the dissenting stockholders or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. Notwithstanding the requirement that a demand for appraisal must be made by or on behalf of the record owner of shares, a person who is the beneficial owner of shares held either in a voting trust or by a nominee on behalf of such person, and as to which demand has been properly made and not effectively withdrawn, may, in such person’s own name, file a petition for appraisal or request from the surviving corporation the statement described in this paragraph.

Upon the filing of such petition by any such holder of shares, service of a copy thereof must be made upon the surviving corporation, which will then be obligated within 20 days after such service to file in the office of the Register in Chancery of the Court of Chancery of the State of Delaware (referred to as the “Delaware Register in Chancery”) a duly verified list (referred to as the “verified list”) containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving corporation. Upon the filing of any such petition, the Court of Chancery of the State of Delaware may order the Delaware Register in Chancery to provide notice of the time and place fixed for the hearing on the petition by registered or certified mail to the surviving corporation and all of the stockholders shown on the verified list. Such notice will also be published in one or more publications at least one week before the day of the hearing in a newspaper of general circulation published in the City of Wilmington, Delaware, or in another publication determined by the Court of Chancery of the State of Delaware. The forms of notice by mail or publication will be approved by the Court of Chancery of the State of Delaware and the costs of these notices are borne by the surviving corporation.

After notice to the stockholders as required by the Court of Chancery of the State of Delaware, the Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 of the DGCL and who have become entitled to appraisal rights thereunder. The Court of Chancery may require the stockholders who demanded appraisal for their shares of our Common Stock and who hold shares represented by certificates to submit their stock certificates to the Delaware Register in Chancery for notation thereon of the pendency of the appraisal proceeding, and, if any such stockholder fails to comply with the direction, the Court of Chancery may dismiss the proceedings as to that stockholder. Even if a stockholder

 

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complies with the requirements of Section 262 of the DGCL, because immediately before the Merger the shares of Common Stock will be listed on a national securities exchange, the Court of Chancery shall dismiss the proceedings as to all stockholders who are otherwise entitled to appraisal rights unless (i) the total number of shares of our Common Stock entitled to appraisal exceeds 1% of the outstanding shares of our Common Stock eligible for appraisal or (ii) the value of the Merger Consideration for such total number of shares of our Common Stock entitled to appraisal exceeds $1 million.

Determination of Fair Value

After the Court of Chancery of the State of Delaware determines which stockholders are entitled to appraisal, the appraisal proceeding will be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through the appraisal proceeding, the Court of Chancery will determine the fair value of the shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be the fair value (or in certain circumstances described below, on the difference between the amount determined to be the fair value and the amount paid by the surviving corporation in the Merger to each stockholder entitled to appraisal prior to the entry of judgment in the appraisal proceeding). Unless the Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective time of the Merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5.0% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between effective time of the Merger and the date of payment of the judgment. Despite the foregoing, at any time before the entry of a judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest will accrue thereafter as provided in the immediately preceding sentence only upon the sum of (i) the difference, if any, between the amount so paid and the fair value of the shares of our Common Stock as determined by the Court of Chancery and (ii) interest theretofore accrued, unless paid at that time. The surviving corporation is under no obligation to make such a voluntary cash payment prior to such entry of judgment.

In determining fair value, the Court of Chancery of the State of Delaware may take into account all relevant factors. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.”

The Delaware Supreme Court stated that, in making this determination of fair value, the Court of Chancery must consider market value, asset value, the price negotiated by the parties, the unaffected stock price, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the Merger that throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the Merger [.]” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the Merger and not the product of speculation, may be considered.” In addition, Delaware courts have decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a dissenting stockholder’s exclusive remedy.

Stockholders considering appraisal should be aware that the fair value of their shares of our Common Stock as so determined could be more than, the same as or less than the per share Merger Consideration such stockholders would otherwise be entitled to receive under the terms of the Merger if such stockholders did not seek appraisal and that an investment banking opinion as to the fairness, from a financial point of view, of the

 

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consideration payable in a sale transaction, such as the Merger, is not an opinion as to, and does not otherwise address, “fair value” under Section 262 of the DGCL. Although MoneyGram believes that the per share Merger Consideration is fair, we cannot make any assurances as to the outcome of the appraisal of fair value as determined by the Court of Chancery of the State of Delaware. MoneyGram does not anticipate offering more than the per share Merger Consideration to any stockholder exercising appraisal rights, and MoneyGram reserves the right to assert, in any appraisal proceeding, that for purposes of Section 262 of the DGCL, the fair value of a share of our Common Stock is less than the per share Merger Consideration.

Upon application by the surviving corporation or by any holder of shares of our Common Stock entitled to participate in the appraisal proceeding, the Court of Chancery of the State of Delaware may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any holder of shares of our Common Stock whose name appears on the verified list and, if such shares are represented by certificates and if so required, who has submitted such stockholder’s certificates of stock to the Delaware Register in Chancery, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights. The Court of Chancery will direct the payment of the fair value of the shares of our Common Stock, together with interest, if any, upon the amount determined to be the fair value (or, in certain circumstances described in this proxy statement, on the difference between the amount determined to be the fair value and the amount paid by the surviving corporation in the Merger to each stockholder entitled to appraisal prior to the entry of judgment in the appraisal proceeding) by the surviving corporation to the stockholders entitled thereto. Payment will be so made to each such stockholder, in the case of holders of uncertificated stock, forthwith, and, in the case of holders of shares represented by certificates, upon the surrender to the surviving corporation of such stockholder’s certificates. The Court of Chancery’s decree may be enforced as other decrees in such Court may be enforced.

The costs of the action (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Court of Chancery of the State of Delaware and taxed upon the parties as the Court of Chancery deems equitable. Upon application of a stockholder, the Court of Chancery may order all or a portion of the expenses incurred by a stockholder in connection with an appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts utilized in the appraisal proceeding, to be charged, pro rata, against the value of all the shares of our Common Stock entitled to appraisal. In the absence of such an order, each party to the appraisal proceeding bears its own expenses.

Any stockholder who has duly demanded appraisal rights for shares of our Common Stock in compliance with Section 262 of the DGCL will not, after the effective time of the Merger, be entitled to vote such shares for any purpose or be entitled to the payment of dividends or other distributions thereon, except dividends or other distributions payable to holders of record of shares of our Common Stock as of a date or time prior to the effective time of the Merger.

At any time within 60 days after the effective time of the Merger, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party will have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered in the Merger; after this period, the stockholder may withdraw such stockholder’s demand for appraisal only with the consent of MoneyGram. No appraisal proceeding in the Court of Chancery of the State of Delaware shall be dismissed as to any stockholder without the approval of the Court of Chancery of the State of Delaware, and such approval may be conditioned upon such terms as the Court of Chancery of the State of Delaware deems just. If no petition for appraisal is filed with the Court of Chancery of the State of Delaware within 120 days after the effective time of the Merger, stockholders’ rights to appraisal shall cease and all holders of shares of our Common Stock will be entitled to receive the Merger Consideration. Inasmuch as MoneyGram has no obligation to file such a petition and has no present intention to do so, any holder of shares of our Common Stock who desires such a petition to be filed is advised to file it on a timely basis. Any stockholder may withdraw such stockholder’s demand for appraisal by delivering to MoneyGram a written withdrawal of its demand for appraisal and acceptance of the Merger Consideration, except that (a) any such attempt to withdraw made more than 60 days after the effective time of

 

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the Merger will require written approval of MoneyGram and (b) no appraisal proceeding in the Court of Chancery of the State of Delaware shall be dismissed as to any stockholder without the approval of the Court of Chancery of the State of Delaware and such approval may be conditioned upon such terms as the Court of Chancery of the State of Delaware deems just. Notwithstanding the foregoing, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw such stockholder’s demand for appraisal and accept the terms offered upon the Merger within 60 days after the effective time of the Merger.

If you wish to exercise your appraisal rights, you must not vote your shares of our Common Stock in favor of the Merger and you must comply with the procedures set forth in Section 262 of the DGCL. If you fail to take any required step in connection with the exercise of appraisal rights, it may result in the termination or waiver of your appraisal rights.

The foregoing is a brief summary of the rights of MoneyGram stockholders to seek appraisal rights under Section 262 of the DGCL and does not purport to be a complete statement of the procedures to be followed by MoneyGram stockholders desiring to exercise any appraisal rights available to them and is qualified in its entirety by reference to Section 262 of the DGCL. To the extent there are any inconsistencies between the foregoing summary and Section 262, Section 262 will govern. The proper exercise of appraisal rights requires strict adherence to the applicable provisions of Section 262 of the DGCL. A copy of Section 262 of the DGCL is included as Annex C to this proxy statement.

Failure to comply strictly with all of the procedures set forth in Section 262 of the DGCL may result in the loss or waiver of a stockholder’s statutory appraisal rights. In view of the complexity of Section 262 of the DGCL, MoneyGram’s stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.

Financing of the Merger

The total amount of funds necessary to consummate the Merger and the related transactions will be funded by a combination of equity and debt financing. The Parent and Merger Sub will obtain such funding through the proceeds from one or more debt financing transactions and an equity financing. The Guarantors have committed to provide equity financing to Parent pursuant to an equity commitment letter (of which MoneyGram is a third-party beneficiary), in the aggregate amount set forth therein, subject to the terms of such equity commitment letter. The Lenders have committed to provide debt financing to Merger Sub pursuant to a debt financing commitment letter in the aggregate amount set forth therein, subject to the terms of such debt commitment letter. The aggregate funds committed to be made available to Parent and Merger Sub under the equity commitment letter and the debt commitment letter, respectively, will provide in the aggregate sufficient funds to consummate the Merger and the related transactions, including the aggregate funds needed to (i) pay our stockholders the aggregate Merger Consideration due to them under the Merger Agreement; (ii) make payments pursuant to the Merger Agreement in respect of outstanding MoneyGram LTI Awards granted under the Company Stock Plan; (iii) repay the outstanding indebtedness and other obligations of MoneyGram under its existing credit agreement and redeem its existing notes at the required redemption price; and (iv) pay fees, premiums and expenses payable by Parent and Merger Sub under the Merger Agreement and in connection with the debt financing and the repayment of MoneyGram’s existing indebtedness. The obligations of Parent and Merger Sub under the Merger Agreement are not conditioned upon obtaining the financing described above.

Debt Commitment Letter

In connection with the signing of the Merger Agreement, Merger Sub entered into a commitment letter with Goldman Sachs Bank USA, Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Deutsche Bank AG Cayman Islands Branch, Barclays Bank PLC, Wells Fargo Bank, National Association and Wells Fargo Securities, LLC (collectively, the “debt commitment parties”) providing for a senior secured term loan

 

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facility in an aggregate amount up to $700,000,000 and a senior secured revolving credit facility in an aggregate amount up to $150,000,000 (the “debt commitment letter”).

In the event Merger Sub is unable to complete a private placement of a junior financing in an aggregate principal amount of $500,000,000 prior to closing of the Merger, the debt commitment parties have agreed to provide additional debt financing in the form of an unsecured senior bridge facility in an aggregate principal amount up to $500,000,000 under certain circumstances.

The commitments of the debt commitment parties under the debt commitment letter are subject to the satisfaction (or waiver by the applicable debt commitment party) of certain conditions precedent, including, without limitation:

 

   

the absence of a Material Adverse Effect (as defined in the debt commitment letter) since January 24, 2022;

 

   

the consummation of the Merger in accordance with the Merger Agreement (without giving effect to any amendment or waiver that would be materially adverse to the interests of the lenders in their capacity as such without the consent of the debt commitment parties);

 

   

subject to certain limitations and exceptions, the accuracy in all material respects as of the date of closing of the Merger of certain specified representations and warranties in the Merger Agreement and certain specified representations and warranties in the debt commitment letter;

 

   

the equity financing contemplated by the equity commitment letter (as defined below) shall have occurred or, substantially concurrently with the initial funding contemplated by the debt commitment letter, shall occur;

 

   

the refinancing of certain of MoneyGram’s existing indebtedness shall have occurred or, substantially concurrently with the initial funding contemplated by the debt commitment letter, shall occur; and

 

   

other customary conditions precedent set forth in the debt commitment letter.

The obligations of the debt commitment parties to provide the debt financing under the debt commitment letter will terminate at the earliest to occur of (i) the consummation of the Merger without the funding of the debt financing, (ii) 11:59 p.m., New York City time, February 22, 2023 subject to automatic extension in the event that the end date under the Merger Agreement is extended by the parties to the Merger Agreement in connection with obtaining certain required money transfer approvals, as more particularly described in the Merger Agreement, (iii) the funding of the credit facilities and (iv) the consummation of the Merger without the funding of the credit facilities.

The definitive documentation governing the debt financing has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described in this proxy statement.

Equity Commitment Letter

In connection with the signing of the Merger Agreement, the Guarantors entered into a commitment letter (the “equity commitment letter”), whereby the Guarantors committed to provide equity financing of $810,000,000, subject to the terms and conditions set forth in the equity commitment letter. The proceeds from the equity financing will be used to finance a portion of the Merger Consideration and LTI Award consideration. Each Guarantor may assign all or a portion of its equity commitment to any other investor or co-investor, although no assignment of the equity commitment will relieve a Guarantor of its obligations under the equity commitment letter except to the extent such other investor actually funds the amount required under the equity commitment letter to Parent.

The commitments of the Guarantors under the equity commitment letter are subject to (i) the satisfaction or waiver by Parent of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the Merger,

 

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as set forth in the Merger Agreement, (ii) the substantially concurrent consummation and funding of the debt financing on the terms set forth in the debt commitment letter and (iii) MoneyGram having irrevocably confirmed in a written notice delivered to Parent that, if the equity financing and debt financing are funded, the Merger will be consummated.

The obligation of the Guarantors to fund the commitments under the equity commitment letter shall, in each case, automatically and immediately terminate upon the earliest to occur of: (a) the closing of the Merger, provided that the Guarantors shall at or prior thereto have fully funded and paid their respective commitments under the equity commitment to Parent, directly or indirectly; (b) the valid termination of the Merger Agreement in accordance with its terms; (c) the assertion by MoneyGram or any of its affiliates of any claim against any Guarantor, Parent or Merger Sub relating to the equity commitment letter, the debt commitment letter, the Limited Guarantee, the Merger Agreement or any of the transactions contemplated thereby, other than any Retained Claims (as defined in, and solely to the extent permitted under and against the persons specified therein, the Limited Guarantee); or (d) the valid termination of the Guarantor’s obligations pursuant to the Limited Guarantee in accordance with its terms.

MoneyGram is entitled to enforce the terms of the equity commitment letter and to cause Parent to enforce the equity commitment letter solely prior to the termination of the Merger Agreement and in accordance with Section 8.12(b) of the Merger Agreement.

Delisting and Deregistration of the Common Stock

If the Merger is completed, our Common Stock will no longer be traded on the Nasdaq and will be deregistered under the Exchange Act and, as a result, we will no longer file periodic reports with the SEC.

Accounting Treatment

The Merger will be accounted for as a purchase business combination for financial accounting purposes.

Material United States Federal Income Tax Consequences of the Merger

The following is a summary of certain material United States federal income tax considerations applicable to our stockholders of the receipt of cash in exchange for shares of our Common Stock pursuant to the Merger. This summary is based upon the provisions of the Code, applicable United States Treasury Regulations, judicial authority and administrative rulings and practice, all as in effect on the date of this proxy statement. All of these authorities are subject to change, possibly on a retroactive basis and to differing interpretations, all of which could result in tax considerations different from those described below. This discussion assumes that the shares of our Common Stock are held as capital assets within the meaning of Section 1221 of the Code by their beneficial owners. This discussion does not address all aspects of United States federal income taxation that may be relevant to a particular stockholder in light of such stockholder’s unique investment circumstances, or to stockholders subject to special treatment under the United States federal income tax laws (for example (but not limited to), banks, insurance companies, or other financial institutions; dealers or brokers in securities or currencies; traders in securities that elect mark-to-market treatment; tax-exempt organizations, governmental agencies, instrumentalities or other governmental organizations and pension funds; retirement plans or other tax-deferred accounts; S-corporations, partnerships, or other pass-through entities; mutual funds; real estate investment trusts or regulated investment companies; personal holding companies; United States expatriates, including expatriated entities subject to Section 7874 of the Code; controlled foreign corporations, passive foreign investment companies; corporations that accumulate earnings to avoid U.S. federal income tax; “U.S. holders” (as defined below) whose functional currency is not the U.S. dollar; stockholders who hold shares of our Common Stock as part of a hedging, “straddle,” constructive sale, conversion or other risk-reduction strategy or integrated transaction; holders that own, or have owned, actually, indirectly or constructively, more than 5% of our Common Stock; grantor trusts; or stockholders who acquired their shares of our Common Stock through the

 

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exercise of employee stock options or other compensation arrangements or stockholders who receive cash pursuant to the exercise of appraisal rights). In addition, this discussion is general in nature and does not address any aspect of state, local, alternative minimum, estate, gift or non-United States taxation that may be applicable to a particular stockholder.

MoneyGram stockholders should consult their own tax advisors to determine the particular tax consequences to them of the receipt of cash in exchange for shares of our Common Stock pursuant to the Merger (including the application and effect of any state, local or non-United States income and other tax laws).

If a partnership (or an entity or arrangement taxable as a partnership for United States federal income tax purposes) holds shares of our Common Stock, the tax treatment of a partner generally will depend on the status of the partner and activities of the partnership. If you are a partner of a partnership holding our Common Stock, you should consult your own tax advisor as to the particular tax consequences to you of the transactions contemplated by the Merger Agreement.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of our Common Stock that is, for U.S. federal income tax purposes, any of the following:

 

   

a citizen or individual resident of the United States;

 

   

a corporation, or other entity taxable as a corporation for United States federal income tax purposes, created or organized in or under the laws of the United States, any state in the United States, or the District of Columbia;

 

   

a trust if (1) a court within the United States is able to exercise primary supervision over the trust’s administration and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or

 

   

an estate that is subject to United States federal income tax on all of its income regardless of source.

A “non-U.S. holder” is a beneficial owner (other than a partnership or other entity or arrangement taxable as a partnership for United States federal income tax purposes) of our Common Stock that is not a U.S. holder.

U.S. Holders

The receipt of cash in the Merger generally will be a taxable transaction to U.S. holders for United States federal income tax purposes. Generally, a U.S. holder of shares of our Common Stock will recognize gain or loss equal to the difference between the amount of cash received in the Merger and such U.S. holder’s adjusted tax basis in the shares of our Common Stock converted into cash pursuant to the Merger. Gain or loss will be determined separately for each block of shares (that is, shares acquired at the same cost in a single transaction) owned by a U.S. holder. If the shares of our Common Stock have been held for more than one year at the effective time of the Merger, the gain or loss generally will be long-term capital gain or loss, and will be short-term capital gain or loss if the shares have been held for one year or less. Long-term capital gains recognized by non-corporate U.S. holders may be subject to reduced tax rates. The deductibility of capital losses is subject to limitation.

A 3.8% tax is imposed on the “net investment income” of certain U.S. holders that are individuals, trusts or estates if their income exceeds certain thresholds. In the case of an individual, the net investment income tax will be imposed on the lesser of (i) an individual’s “net investment income” or (ii) the amount by which an individual’s modified adjusted gross income exceeds $250,000 (if the individual is married and filing jointly or a surviving spouse), $125,000 (if the individual is married and filing separately) or $200,000 (in any other case). In the case of an estate or trust, the tax will be imposed on the lesser of (i) undistributed “net investment income” or

 

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(ii) the excess of adjusted gross income over the dollar amount at which the highest income tax bracket applicable to an estate or trust begins. For these purposes, “net investment income” generally will include any gain recognized on the receipt of the cash for shares of our Common Stock in the Merger.

Information returns will be filed with the Internal Revenue Service (“IRS”) in connection with payments to a U.S. holder pursuant to the Merger, unless the U.S. holder is an exempt recipient. Under the United States federal income tax backup withholding rules, the paying agent generally will be required to withhold 24% of all payments to which a U.S. holder is entitled in the Merger, unless the U.S. holder (1) is a corporation or comes within other exempt categories and demonstrates this fact or (2) provides its correct tax identification number (social security number, in the case of an individual, or employer identification number in the case of other stockholders), certifies under penalties of perjury that the number is correct, certifies as to no loss of exemption from backup withholding and otherwise complies with the applicable requirements of the backup withholding rules. Each U.S. holder should complete, sign and return to the paying agent for the Merger the IRS Form W-9 that each stockholder will receive with the letter of transmittal following completion of the Merger in order to provide the information and certification necessary to avoid backup withholding, unless an applicable exception exists and is proved in a manner satisfactory to the paying agent. If a U.S. holder does not provide a correct tax identification number, the U.S. holder may be subject to penalties imposed by the IRS.

Backup withholding is not an additional tax. Generally, any amounts withheld under the backup withholding rules described above may be credited against a U.S. holder’s United States federal income tax liability, if any, or refunded by the IRS provided that the required information is furnished to the IRS in a timely manner. Each U.S. holder should consult its own tax advisors as to the qualifications for an exemption from backup withholding and the procedures for obtaining such exemption.

Non-U.S. Holders

Any gain realized on the receipt of cash pursuant to the Merger by a non-U.S. holder generally will not be subject to United States federal income tax unless:

 

   

the gain is effectively connected with a United States trade or business of such non-U.S. holder (and, if an applicable income tax treaty so provides, is also attributable to a permanent establishment in the United States maintained by such non-U.S. holder), in which case the non-U.S. holder generally will be taxed at graduated United States federal income tax rates applicable to United States persons (as defined under the Code), and, if the non-U.S. holder is a corporation for U.S. federal income tax purposes, an additional branch profits tax may apply to its effectively connected earnings and profits for the taxable year at the rate of 30% (or such lower rate as may be specified by an applicable income tax treaty);

 

   

the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the Merger and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax on the non-U.S. holder’s gain realized in the Merger (unless an exception is provided under an applicable income tax treaty), which may be offset by U.S. source capital losses of the non-U.S. holder, if any (provided the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses); or

 

   

our Common Stock constitutes a United States real property interest (“USRPI”) by reason of MoneyGram’s status as a United States real property holding corporation (“USRPHC”) for U.S. federal income tax purposes and one or more other conditions are satisfied. We believe MoneyGram currently is not a USRPHC. Because the determination of whether MoneyGram is a USRPHC depends, however, on the fair market value of its USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance MoneyGram currently is not a USRPHC or will not become one. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition of our Common Stock by a non-U.S. holder will not be subject to U.S.

 

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federal income tax if our Common Stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market and such non-U.S. holder owned, actually, indirectly or constructively, 5% or less of our Common Stock throughout the shorter of the five-year period ending on the date of the Merger or the non-U.S. holder’s holding period.

A non-U.S. holder will be subject to information reporting, and, in certain circumstances, backup withholding may apply to the cash received pursuant to the Merger, unless the non-U.S. holder certifies under penalties of perjury that it is a non-U.S. person (and the payor does not have actual knowledge or reason to know that the non-U.S. holder is a United States person as defined under the Code) or such non-U.S. holder otherwise establishes an exemption. To avoid backup withholding, non-U.S. holders generally must submit a properly executed IRS Form W-8BEN, “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding” or other applicable IRS Form W-8. Backup withholding is not an additional tax. Generally, any amounts withheld under the backup withholding rules described above may be credited against a non-U.S. holder’s United States federal income tax liability, if any, or refunded by the IRS provided that the required information is furnished to the IRS in a timely manner. Each non-U.S. holder should consult its own tax advisors as to the qualifications for an exemption from backup withholding and the procedures for obtaining such exemption.

The foregoing discussion of certain material United States federal income tax consequences is not intended to be, and should not be construed as, legal or tax advice to any stockholder of our Common Stock. You should consult your own tax advisors to determine the particular tax consequences to you (including the application and effect of any state, local or non-United States income and other tax laws) of the receipt of cash in exchange for shares of our Common Stock pursuant to the Merger.

Litigation Relating to the Merger

On March 31, 2022, a purported MoneyGram stockholder filed a lawsuit, entitled Shiva Stein v. MoneyGram International, Inc., et al., in the United States District Court for the Southern District of New York. On March 31, 2022, a purported MoneyGram stockholder filed a lawsuit, entitled Chandler Tulin v. MoneyGram International, Inc., et al., in the United States District Court for the Southern District of New York. On April 1, 2022, a purported MoneyGram stockholder filed a lawsuit, entitled Ryan O’Dell v. MoneyGram International, Inc., et al., in the United States District Court for the Southern District of New York. On April 6, 2022, a purported MoneyGram stockholder filed a lawsuit, entitled Lewis D. Baker v. MoneyGram International, Inc., et al., in the United States District Court for the Eastern District of New York. On April 8, 2022, a purported MoneyGram stockholder filed a lawsuit, entitled Marc Waterman v. MoneyGram International, Inc., et al., in the United States District Court for the Eastern District of Pennsylvania. On April 10, 2022, a purported MoneyGram stockholder filed a lawsuit, entitled Khristina Keller v. MoneyGram International, Inc., et al., in the United States District Court for the Eastern District of New York. The plaintiffs in each lawsuit allege that the preliminary proxy statement filed by MoneyGram with the SEC on March 29, 2022 in connection with the proposed Merger contains materially incomplete and misleading information and omits material information with respect to the Merger, rendering the preliminary proxy statement materially incomplete and misleading in violation of Sections 14(a) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78n(a), 78t(a), Rule 14a-9 of the SEC rules, and/or 17 C.F.R. § 244.100. The plaintiff in the Tulin action also asserts that the members of the MoneyGram board breached their fiduciary duties by, among other things, entering into the Merger Agreement through an unfair process and for inadequate compensation, and that MoneyGram aided and abetted the purported breaches of fiduciary duties. Each plaintiff seeks, among other things, injunctive relief until the defendants to the applicable lawsuit disclose the alleged omitted material information.

MoneyGram believes that the claims asserted in these lawsuits are without merit and intends to defend against all claims asserted. Additional lawsuits arising out of or relating to the Merger Agreement and the transactions contemplated thereby may be filed in the future.

 

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THE MERGER AGREEMENT

The following summary of the material terms of the Merger Agreement is qualified in its entirety by reference to the complete text of the Merger Agreement, which is incorporated by reference in this proxy statement and attached to this proxy statement as Annex A. The Merger Agreement has been included as Annex A to this proxy statement to provide you with information regarding its terms. It is not intended to provide you with any other factual information about MoneyGram, Parent or Merger Sub. Such information can be found elsewhere in this proxy statement and in other public filings made by MoneyGram with the SEC, which are available without charge at www.sec.gov or as more fully described in the section entitled “Where You Can Find More Information.” Our stockholders are urged to read the full text of the Merger Agreement in its entirety.

General

Explanatory Note

The following summary of the Merger Agreement, and the copy of the Merger Agreement attached as Annex A to this document, are intended to provide information regarding the terms of the Merger Agreement and are not intended to provide any factual information about MoneyGram or modify or supplement any factual disclosures about MoneyGram in its public reports filed with the SEC. In particular, the Merger Agreement and the related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to MoneyGram. The Merger Agreement contains representations and warranties by and covenants of MoneyGram, Parent and Merger Sub that were made only for purposes of that agreement and as of specified dates. The representations, warranties and covenants in the Merger Agreement were made solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures and being made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to contractual standards of materiality or material adverse effect or other limitations applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in MoneyGram’s public disclosures. The representations, warranties and covenants in the Merger Agreement and any descriptions thereof should be read in conjunction with the disclosures in MoneyGram’s periodic and current reports, proxy statements and other documents filed with the SEC. See the section entitled “Where You Can Find More Information.” Moreover, the description of the Merger Agreement below does not purport to describe all of the terms of such agreement and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Annex A and is incorporated in this proxy statement by reference.

Additional information about MoneyGram may be found elsewhere in this document and MoneyGram’s other public filings. See the section entitled “Where You Can Find More Information.”

Structure of the Merger

At the effective time of the Merger, Merger Sub will merge with and into MoneyGram and MoneyGram will continue its corporate existence under the Laws of the State of Delaware as the surviving corporation in the Merger.

Certificate of Incorporation and Bylaws

The certificate of incorporation of MoneyGram, as in effect as of immediately prior to the effective time of the Merger, will be amended and restated as of the effective time of the Merger so as to read in its entirety as set forth in the respective form attached as an exhibit to the Merger Agreement, and as so amended and restated will be the certificate of incorporation of the surviving corporation following the Merger until thereafter amended in

 

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accordance with the provisions thereof and of applicable law. The bylaws of MoneyGram, as in effect as of immediately prior to the effective time of the Merger, will be amended and restated as of the effective time of the Merger so as to read in their entirety as set forth in the respective form attached as an exhibit to the Merger Agreement, and as so amended and restated will be the bylaws of the surviving corporation until thereafter amended in accordance with the provisions thereof, the certificate of incorporation of the surviving corporation and of applicable law.

Directors and Officers

The directors of Merger Sub immediately prior to the effective time of the Merger, with such additional individuals that Parent may designate prior to the effective time of the Merger to serve as directors of the surviving corporation, will be the directors of MoneyGram, as the surviving corporation, as of the effective time of the Merger. The officers of MoneyGram immediately prior to the effective time of the Merger will be the officers of MoneyGram, as the surviving corporation, as of the effective time of the Merger.

When the Merger Becomes Effective

The closing of the Merger will take place, unless another date is agreed in writing by the parties, no later than the third business day (or, if earlier, the business day immediately prior to the end date (after giving effect to any extension thereof)) after the satisfaction or waiver (to the extent permitted by applicable law) of the closing conditions (other than those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver of those conditions) set forth in the Merger Agreement; provided, if the marketing period (as summarized below) has not ended prior to such business day (including as a result of any extension of the end date to accommodate the marketing period), the closing of the Merger will occur on the second business day after the final day of the marketing period unless an earlier date has been agreed by Parent in writing.

On the closing date of the Merger, MoneyGram and Merger Sub will cause the Merger to be consummated by executing, delivering and filing a certificate of Merger with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL and other applicable Delaware law and will make such other filings or recordings required under the DGCL in connection with the Merger. The Merger will become effective at such time as the certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such later time on the closing date of the Merger as may be agreed by Parent and MoneyGram and specified in the certificate of Merger.

The “marketing period” means the first period of 15 consecutive business days following the date on which all conditions precedent to the closing for the benefit of Parent, other than such conditions precedent related to certain representations and warranties of MoneyGram or the performance of all obligations of MoneyGram under the Merger Agreement that, by their terms or nature, cannot be satisfied until the effective time, but subject to the satisfaction or, where not prohibited, waiver by Parent, of those conditions as of the effective time will have been (and remain) satisfied or are waived, and such 15 consecutive business day period will not commence unless Parent will have received certain financial information of MoneyGram required under the terms of the Merger Agreement (“required financial information”) at the commencement of, or prior to, such 15 consecutive business day period (and throughout the marketing period, certain compliance requirements (“compliance requirements”) with respect to the financial information as specified in the Merger Agreement have been satisfied; provided that if the compliance requirements at any time fail to be satisfied during the marketing period, then the marketing period will not be deemed to have commenced and the marketing period will only commence when the compliance requirements are satisfied), provided that (a) certain dates and periods specified in the Merger Agreement will not be included in the calculation of the marketing period, (b) if the marketing period has not ended on or prior to August 22, 2022, then the marketing period will be deemed not to have commenced until September 6, 2022, (c) if the marketing period has not ended on or prior to December 19, 2022, then the marketing period will be deemed not to have commenced until January 3, 2023 and (d) the marketing period will end on any earlier date on which the debt financing is consummated. If MoneyGram in good faith reasonably

 

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believes it has provided the required financial information and such other conditions required for the commencement of the marketing period have been satisfied or waived, it may deliver to Parent a written notice to that effect (stating the date it believes it completed such delivery), in which case the marketing period will be deemed to have commenced on the date specified in the letter, unless Parent in good faith reasonably believes either (i) MoneyGram has not completed delivery of the required financial information or (ii) such other conditions required for the commencement of the marketing period have not been satisfied or waived, and, within three business days after receipt of such notice by MoneyGram, delivers a written notice to MoneyGram to that effect (stating with reasonable specificity which required financial information Parent reasonably believes MoneyGram has not delivered or are otherwise unsuitable or which conditions have not been satisfied or waived).

Effect of the Merger on the Common Stock

At the effective time of the Merger each share of Common Stock outstanding immediately prior to the effective time of the Merger (other than “dissenting shares” or “cancelled shares” (each as described below) will be cancelled and converted into the right to receive $11.00 in cash, without interest (the “Merger Consideration”).

Notwithstanding the foregoing, any shares of Common Stock then held by MoneyGram, any wholly owned subsidiary of MoneyGram, Parent, Merger Sub or any entity of which Merger Sub is a direct or indirect wholly owned subsidiary (such shares, the “cancelled shares”) will be cancelled and retired and no cash or other consideration will be delivered in exchange of such cancelled shares.

In addition, to the extent required by the DGCL, any shares of Common Stock that are issued and outstanding immediately prior to the effective time of the Merger and as to which the holders thereof have not voted in favor of the approval and adoption of the Merger Agreement and have properly demanded appraisal in accordance with Section 262 of the DGCL and have not effectively withdrawn such demand (the “dissenting shares”) will not be converted into the right to receive the Merger Consideration, and such holders will be entitled only to such rights and payments as are granted by Section 262 of the DGCL; provided, however, that if any such holder effectively waives, withdraws, fails to properly demand or perfect, or otherwise loses such holder’s rights under Section 262 of the DGCL, each of such holder’s dissenting shares will thereupon be deemed to have been converted at the effective time of the Merger into the right to receive the Merger Consideration, without interest and after giving effect to any required tax withholdings as provided in this proxy statement, and such holder thereof will cease to have any other rights with respect thereto. For more information regarding appraisal rights, see the section entitled “The Merger—Appraisal Rights.”

At the effective time of the Merger, each share of common stock, par value $0.01 per share, of Merger Sub outstanding immediately prior to the effective time of the Merger will be converted into and become one share of common stock of MoneyGram, as the surviving corporation.

Effect of the Merger on MoneyGram Warrants

At the effective time of the Merger, any warrant to purchase shares of our Common Stock (a “MoneyGram Warrant”), or portion thereof, that is outstanding and unexercised immediately prior to the effective time will be cancelled and each holder thereof will be entitled to receive an amount in cash (the “warrant consideration”) equal to the product of (a) the excess of the Merger Consideration over the applicable per share exercise price of such MoneyGram Warrant and (b) the number of shares of Common Stock issuable upon exercise of such MoneyGram Warrant (or portion thereof).

On February 25, 2022, all of the issued and outstanding MoneyGram Warrants were exercised and, as a result, there are no MoneyGram Warrants outstanding as of the date hereof.

 

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Treatment of Equity Awards and Performance Cash Awards

At the effective time of the Merger, each MoneyGram Option Award, granted pursuant to the Company Stock Plan, whether vested or unvested, that is outstanding immediately prior to the effective time of the Merger, each of which has an exercise price equal to or greater than the Merger Consideration and therefore is expected to have no intrinsic value at the effective time, will automatically be cancelled and retired, and no cash or other consideration will be delivered in exchange therefor, and MoneyGram will have no further obligations with respect to such MoneyGram Option Award.

At the effective time of the Merger, each MoneyGram Pre-2023 Time-Based RSU Award that is outstanding immediately prior to the effective time will automatically become fully vested and be cancelled in exchange for the right to receive, at the effective time and in full satisfaction of MoneyGram’s obligations with respect to such MoneyGram Pre-2023 Time-Based RSU Award, an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration and (ii) the number of shares of Common Stock subject to such MoneyGram Pre-2023 Time-Based RSU Award (which, with respect to any award originally subject to time and performance-based vesting for which the performance period has been completed and performance threshold satisfied, and which remains subject solely to time-based vesting, means the number of shares of Common Stock for which the applicable performance criteria were achieved and are subject to time-based vesting).

At the effective time of the Merger, each MoneyGram Pre-2023 Performance-Based RSU Award that is outstanding immediately prior to the effective time will automatically become vested as to a number of shares of Common Stock subject to such MoneyGram Pre-2023 Performance-Based RSU Award based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time and will be cancelled in consideration for the right to receive, at the effective time and in full satisfaction of MoneyGram’s obligations with respect to such MoneyGram Pre-2023 Performance-Based RSU Award, an amount in cash (subject to any applicable withholding taxes) equal to the product of (i) the Merger Consideration and (ii) such vested number of shares of Common Stock.

At the effective time of the Merger, each MoneyGram Pre-2023 Performance Cash Award that is outstanding immediately prior to the effective time will automatically become fully vested and be cancelled in exchange for the right to receive, at the effective time and in full satisfaction of MoneyGram’s obligations with respect to such MoneyGram Pre-2023 Performance Cash Award, an amount in cash (subject to any applicable withholding taxes) equal to the aggregate cash amount payable pursuant to such MoneyGram Pre-2023 Performance Cash Award based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time. Each performance-based cash award granted on or after January 1, 2023 pursuant to the Company Stock Plan, whether vested or unvested, representing the right to receive cash payments, whether subject to performance-based vesting requirements or time-based vesting requirements, that is outstanding immediately prior to the effective time, will continue in accordance with its terms.

At the effective time of the Merger, each MoneyGram 2023 RSU that is outstanding immediately prior to the effective time, will, unless otherwise agreed to in writing by Parent and the holder of such MoneyGram 2023 RSU, automatically be converted into a converted award, representing a right to receive an amount of cash, without interest, equal to the product of (i) the Merger Consideration and (ii) the number of shares of Common Stock underlying such MoneyGram 2023 RSU (and, with respect to any such MoneyGram 2023 RSU, that is subject to performance based vesting, such number of shares of Common Stock will be based on achievement of the performance criteria set forth in the applicable award agreement at the greater of the target level and the actual level of performance achieved immediately prior to the effective time), on the same vesting terms and conditions applicable to such MoneyGram 2023 RSU immediately before the effective time. On the date, and to the extent, that the converted award becomes vested, such vested converted award will be paid, subject to any applicable withholding taxes, as soon as practicable thereafter (but in any event not later than the second regular payroll date thereafter).

 

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Prior to the effective time of the Merger, MoneyGram will take all actions necessary to effectuate the treatment of the MoneyGram LTI Awards, including the payment of the consideration for each of the MoneyGram LTI Awards described above, as applicable (the “LTI Award consideration”) and cancellation of such MoneyGram LTI Awards as of the effective time. MoneyGram will ensure that, following the effective time, no participant in the Company Stock Plan or otherwise will have any right thereunder to acquire any equity securities of MoneyGram, the surviving corporation or any of their respective subsidiaries. The respective provisions described above apply to all MoneyGram Pre-2023 Time-Based RSU Awards, all MoneyGram Pre-2023 Performance-Based RSU Awards and all MoneyGram 2023 RSUs except as otherwise agreed to in writing signed prior to the effective time by Parent and the applicable holder of a MoneyGram Pre-2023 Time-Based RSU Award, a MoneyGram Pre-2023 Performance-Based RSU Award or a MoneyGram 2023 RSU.

Payment of the Merger Consideration

Prior to the effective time of the Merger, Parent will enter into an agreement in form and substance reasonably acceptable to MoneyGram with MoneyGram’s transfer agent or a bank or trust company that is reasonably satisfactory to MoneyGram to act as paying agent (the “Paying Agent”). At or immediately prior to the effective time of the Merger, Parent or one of its subsidiaries will deposit, or cause to be deposited, with the Paying Agent, for the benefit of the holders of shares of Common Stock (other than dissenting shares or cancelled shares) and the MoneyGram LTI Awards, cash in U.S. dollars sufficient to make the aggregate payments of the Merger Consideration and LTI Award consideration required, as of the effective time of the Merger, to be made at the effective time of the Merger. With respect to any dissenting shares, Parent will only be required to deposit or cause to be deposited with the Paying Agent funds sufficient to pay the aggregate Merger Consideration payable in respect of such dissenting shares if the holder thereof fails to perfect or effectively withdraws or loses its right to dissent under the DGCL. The funds held by the Paying Agent will be invested by the Paying Agent as directed by Parent; provided, however, to the extent such funds are not sufficient to make the payments required to be made at the effective time of the Merger, Parent will, or will cause the surviving corporation to, promptly replace or restore the lost portion of such fund so as to ensure that it is maintained at a level sufficient to make such payments.

As soon as reasonably practicable after the effective time of the Merger (but in any event no later than three business days thereafter), Parent will cause the Paying Agent to mail to each holder of record of shares of Common Stock (other than dissenting shares or cancelled shares) that immediately prior to the effective time of the Merger were evidenced by certificates: (i) a form of letter of transmittal and (ii) instructions for use in effecting the surrender of the certificates in exchange for the Merger Consideration. Upon proper surrender of such certificate (or affidavits of loss in lieu thereof) for exchange and cancellation to the Paying Agent, together with a letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be reasonably required pursuant to such instructions, the holder of such certificate will be entitled to receive in exchange therefor the Merger Consideration in respect of the shares of Common Stock formerly represented by such certificate and such certificate so surrendered will be cancelled. No interest will be paid or accrued for the benefit of holders of the certificates on the Merger Consideration payable upon the surrender of such certificates.

Any holder of record of shares of Common Stock (other than dissenting shares or cancelled shares) that immediately prior to the effective time of the Merger were not evidenced by certificates (“book entry shares”) will not be required to deliver a certificate or, unless reasonably requested by the Paying Agent, an executed letter of transmittal to the Paying Agent in order to receive the aggregate Merger Consideration with respect to such book entry shares, and as soon as reasonably practicable after the effective time of the Merger, the Paying Agent will pay and deliver to each holder of book entry shares the aggregate Merger Consideration in respect of such book entry shares, and such book entry shares will then be cancelled. No interest will be paid or accrued for the benefit of holders of book entry shares on the Merger Consideration payable in respect of such book entry shares.

 

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Representations and Warranties; Material Adverse Effect

The Merger Agreement contains representations and warranties of MoneyGram, subject to certain exceptions in the Merger Agreement, in the confidential disclosure schedule delivered in connection with the Merger Agreement and in certain of MoneyGram’s public filings, as to, among other things:

 

   

corporate organization;

 

   

capitalization;

 

   

corporate authority and the recommendation of our board of directors;

 

   

consents and approvals of governmental entities and other third parties relating to the execution, delivery or performance of the Merger Agreement;

 

   

MoneyGram’s SEC filings;

 

   

financial statements and the absence of undisclosed liabilities;

 

   

the absence of a material adverse effect and certain other changes or events;

 

   

legal proceedings;

 

   

compliance with applicable law;

 

   

material contracts;

 

   

tax matters;

 

   

employee and employee benefit plan matters;

 

   

labor matters;

 

   

intellectual property and data privacy;

 

   

environmental liability;

 

   

real and personal property matters;

 

   

insurance matters;

 

   

anti-takeover statutes;

 

   

required stockholder vote;

 

   

receipt of a fairness opinion from BofA Securities;

 

   

broker’s fees;

 

   

transactions with affiliates; and

 

   

the accuracy and completeness of the information supplied for the purposes of this proxy statement.

The Merger Agreement also contains representations and warranties of Parent and Merger Sub, subject to certain exceptions in the Merger Agreement, as to, among other things:

 

   

corporate organization;

 

   

corporate authority;

 

   

governmental and third-party consents and approvals relating to the execution, delivery and performance of the Merger Agreement;

 

   

broker’s fees;

 

   

the accuracy and completeness of the information supplied for the purposes of this proxy statement;

 

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approvals by the respective stockholders of Parent and Merger Sub;

 

   

ownership of Common Stock;

 

   

litigation;

 

   

the equity and debt financing;

 

   

solvency;

 

   

“foreign person” status, as defined under the Defense Production Act of 1950; and

 

   

equity interests held in competitors of MoneyGram.

Some of the representations and warranties in the Merger Agreement are qualified by materiality or knowledge qualifications or a “material adverse effect” qualification with respect to MoneyGram or a “parent material adverse effect” with respect to Parent and Merger Sub, as discussed below.

For purposes of the Merger Agreement, a “material adverse effect” means any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate with all other facts, circumstances, events, changes, effects, or occurrences, has or would be reasonably expected to have a material adverse effect on the business, results of operations or financial condition of MoneyGram and its subsidiaries taken as a whole; provided, however, that in determining whether a material adverse effect has occurred, there will be excluded any effect on MoneyGram and its subsidiaries to the extent caused by, resulting from or relating to the following (except the effect of the changes described in the first, third, fifth, sixth and seventh bullets below will not be excluded to the extent of the disproportionate impact, if any, they have on MoneyGram and its subsidiaries relative to other participants in the money transmission industry):

 

   

any change after the date of the Merger Agreement in laws of general applicability (including any change in immigration, tariff or trade policies) or published interpretations thereof by governmental entities (as defined in the Merger Agreement) or in GAAP;

 

   

the announcement or execution of the Merger Agreement or the transactions contemplated thereby, including the identity of Parent and any announced plans or intentions of Parent with respect to MoneyGram or the business of MoneyGram and its subsidiaries following the closing (provided that the exception in this bullet will not apply to the use of the term “material adverse effect” in the representations and warranties regarding consents and approvals of governmental entities and other third parties relating to the execution, delivery or performance of the Merger Agreement and compliance with certain laws);

 

   

any changes after the date of the Merger Agreement in general political, tax, economic or business conditions in the U.S. or any country or region in the world in which MoneyGram or any of its subsidiaries does business, or any changes in securities, credit or capital market conditions, including interest rates or exchange rates;

 

   

the failure in and of itself by MoneyGram and its subsidiaries to meet internal projections or forecasts or published revenue or earnings predictions (but not the underlying reasons therefor) for any period ending on or after the date of the Merger Agreement or a decrease in the market price or the trading volume of shares of Common Stock (provided that the exception in this bullet will not prevent the underlying facts giving rise or contributing to such failure or decrease from being taking into account in determining whether a material adverse effect has occurred);

 

   

hurricanes, earthquakes, floods, epidemics, pandemics or disease outbreaks (including COVID-19), or other natural disasters, similar force majeure events, or related government actions (including COVID-19 measures), including any material worsening of such conditions existing as of the date of the Merger Agreement;

 

   

the commencement, continuation or escalation of a war (whether or not declared), armed hostilities or acts of crime or terrorism;

 

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any change or effect generally affecting the money transmission industry;

 

   

the performance by MoneyGram or any of its affiliates of its or their express obligations under the Merger Agreement;

 

   

any legal proceedings made or brought by any of the current or former stockholders of MoneyGram (on their own behalf or on behalf of MoneyGram) against MoneyGram or any of its executive officers or directors, but in any event only in their capacities as current or former stockholders, or otherwise under the DGCL or other applicable law, arising out of or related to the Merger Agreement or any of the transactions contemplated thereby; or

 

   

any action or omission by MoneyGram taken at the express written request of Parent.

A “material adverse effect” also includes any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate with all other facts, circumstances, events, changes, effects, or occurrences, prevents or materially delays or materially impairs, or that would reasonably be expected to prevent, materially delay or materially impair, MoneyGram’s ability to perform its obligations under the Merger Agreement or consummate the transactions contemplated thereby on a timely basis.

For purposes of the Merger Agreement, a “parent material adverse effect” means any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate with all other facts, circumstances, events, changes, effects, or occurrences prevents or materially delays or materially impairs, or that would reasonably be expected to prevent, materially delay or materially impair, Parent’s and Merger Sub’s ability to perform their respective obligations under the Merger Agreement or consummate the transactions contemplated thereby as and when required to do so under the Merger Agreement; provided that, notwithstanding the foregoing, in no event will a permitted co-investor (as defined in the Merger Agreement) becoming, or seeking to become (including in connection with seeking any approval required to become in connection with the Merger), a direct or indirect equity investor in Parent or its affiliates after the date of the Merger Agreement and effective prior to or as of the closing be deemed a parent material adverse effect or grounds for a parent material adverse effect.

Conduct of Business Pending the Merger

The Merger Agreement provides that except (i) as expressly contemplated or permitted by the Merger Agreement, (ii) as required by any law applicable to MoneyGram or any of its subsidiaries (including any COVID-19 measures), or any COVID-19 action, (iii) as set forth on the confidential disclosure schedules or (iv) with the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed), during the period from the date of the Merger Agreement to the effective time of the Merger or the earlier termination of the Merger Agreement, (A) MoneyGram will, and will cause each of its subsidiaries to, (1) conduct its business in all material respects in the ordinary course consistent with past practice and (2) use reasonable best efforts to (I) maintain and preserve intact its assets, properties, contracts or other legally binding understandings, business organization, rights, licenses, authorizations, franchises and other authorizations issued by governmental entities, (II) preserve its business relationships with money transfer agents and other persons doing business with it and (III) retain the services of its officers and key employees and (B) MoneyGram will not, and will not permit any of its subsidiaries to, subject to certain exceptions as set forth in the Merger Agreement:

 

   

(i) amend or otherwise change MoneyGram’s certificate of incorporation or bylaws, (ii) with respect to subsidiaries of MoneyGram, amend or otherwise change their applicable organizational documents in any material respect and (iii) adopt any rights plan, “poison-pill” or similar plan or agreement;

 

   

adjust, split (including a reverse stock split), combine or reclassify any capital stock or other equity interest of MoneyGram, or engage in any dividend or distributions that would change the number of shares of Common Stock issuable upon conversion, exchange or exercise of any issued and outstanding securities of MoneyGram (including the MoneyGram Option Awards and MoneyGram LTI Awards) into a different number of shares of Common Stock or a different class of securities;

 

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issue, grant, sell, dispose of, redeem or repurchase any equity securities or equity-based award in MoneyGram or any of its subsidiaries, or securities convertible into, or exchangeable or exercisable for, any such equity securities or awards, or any rights of any kind to acquire any such equity securities or such convertible or exchangeable securities;

 

   

declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of Common Stock or other shares of capital stock or equity interests;

 

   

sell, exclusively license, transfer, mortgage, encumber or otherwise dispose of, any assets, rights or businesses of MoneyGram or its subsidiaries (including any capital stock of any subsidiaries);

 

   

acquire any corporation, partnership or other business organization or division thereof or any assets;

 

   

(i) incur, issue, assume or guarantee any indebtedness for borrowed money or any debt securities in an aggregate amount exceeding $5,000,000 outstanding at one time and guarantees thereof, or (ii) enter into any swap or hedging transaction or other derivative agreement (other than forward contracts entered into in the ordinary course of business); provided, that, for the avoidance of doubt, this clause would not prohibit the continuing guarantee of existing indebtedness for borrowed money of MoneyGram or any of its subsidiaries;

 

   

make any loans, advances or capital contributions to, or investments in, any other person in excess of $1,000,000 individually or $2,000,000 in the aggregate;

 

   

enter into any contract involving or providing for the settlement of, or other arrangements with respect to, any claims or threatened claim (or series of related claims);

 

   

except in the ordinary course of business consistent with past practice or as otherwise explicitly permitted pursuant to the Merger Agreement, enter into, amend in any material respect, waive compliance with any material rights with respect to, or cancel or terminate any material contract;

 

   

except for the expenditures contemplated by and consistent with the 2022 and 2023 capital expenditure budgets, make, or commit to make, or otherwise authorize any capital expenditures in excess of $3,000,000 in 2022 or $3,000,000 in 2023;

 

   

(i) adopt, establish, enter into, amend or modify or agree to establish, amend or modify (or announce an intention to establish, amend or modify) or terminate any employee benefit plan or arrangement that would constitute an employee benefit plan if in effect as of the date of the Merger Agreement, (ii) materially increase the compensation or benefits, including severance benefits, or create any new rights to material payments or benefits, including any severance, change in control, retention, or similar compensation or benefits, of any employee of MoneyGram; (iii) take any action to accelerate the vesting or time of payment of any material compensation or benefit under the Company Stock Plan or awards granted thereunder; (iv) loan or advance any money or other property to any present or former director, officer or employee of MoneyGram or its subsidiaries or (v) enter into any trust, annuity or insurance contract or similar agreement or take any other action to fund or otherwise secure the payment of any compensation or benefit, or increase the funding obligation or contribution rate of any employee benefit plan subject to Title IV of the Employee Retirement Income Security Act of 1974, as amended; provided, however, that it will not be a violation of this clause if MoneyGram or any of its subsidiaries enters into a retention bonus agreement with an employee of MoneyGram after the date of the Merger Agreement so long as the total cost to MoneyGram and its subsidiaries under all such retention bonus agreements with all such employees of MoneyGram does not exceed $5,000,000 in the aggregate and no retention bonus is made to an individual that could result in such payment being subject to a loss of deduction under Section 280G of the Internal Revenue Code;

 

   

make any material changes in its methods, practices or policies of financial accounting;

 

   

(i) make or change any material tax election, (ii) agree with tax authorities on the settlement of any material tax examination, audit assessment or other proceedings of MoneyGram or any of its subsidiaries, (iii) enter into any closing agreement with respect to any material tax or surrender any right to claim a material tax

 

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refund, offset, or other reduction in liability, (iv) consent to any extension or waiver of any limitation period with respect to any material tax claim or assessment, (v) file an amended income or other material tax return, (vi) change any annual tax accounting period or adopt or change any method of tax accounting principles or practices, (vii) fail to pay any material taxes as they become due and payable, or (viii) enter into any tax sharing, tax indemnity or tax allocation agreement or similar contract or arrangement, in each case, that includes a party other than MoneyGram or any of its subsidiaries;

 

   

fail to use its reasonable best efforts to maintain in full force and effect any material existing insurance policies of MoneyGram and its subsidiaries or to replace such material insurance policies with comparable insurance policies;

 

   

sell, transfer, lease, pledge or otherwise encumber or subject to any lien, abandon, cancel, let lapse or convey or dispose of any intellectual property, except for (i) where MoneyGram has, in its reasonable business judgment, decided to cancel, abandon, allow to lapse or not renew any registered intellectual property, (ii) permitted liens or (iii) pledges, non-exclusive licenses in the ordinary course of business consistent with past practice that would not, individually or in the aggregate, reasonably be expected to be material to MoneyGram;

 

   

effectuate a “plant closing,” “mass layoff” (each as defined in the WARN Act) or other employee layoff event (as defined in the WARN Act) affecting in whole or in part any site of employment, facility, operating unit or employee;

 

   

fail to use reasonable best efforts to maintain in full force and effect any money transmitter license to continue to operate its business in the ordinary course in all material respects; or

 

   

agree to, or make any commitment to, take any of the foregoing actions.

Go-Shop

During the period beginning immediately following the execution of the Merger Agreement and continuing until 11:59 p.m. (Dallas, Texas time) on the 30th day thereafter (the “solicitation period end date”), MoneyGram had the right to, and may cause its subsidiaries and MoneyGram’s and its subsidiaries’ respective directors, officers, employees and representatives to, directly or indirectly (such following actions, the “go-shop right”):

 

   

initiate, solicit, knowingly encourage or knowingly facilitate the submission of any inquiries, proposals or offers that constitute or would reasonably be expected to lead to any acquisition proposal;

 

   

engage in any discussions or negotiations with, or provide any confidential information or data to, any person relating to an acquisition proposal, in each case pursuant to one or more acceptable confidentiality agreements;

 

   

terminate, waive, amend or modify any provision of any standstill agreement or confidentiality agreement to which MoneyGram is a party to the extent necessary to allow the other party thereto to submit any acquisition proposal or to inquire, propose or make an offer that may lead to an acquisition proposal; or

 

   

propose or agree to do any of the foregoing.

Neither Parent nor any of its affiliates will, and Parent will use its reasonable best efforts to cause its and its affiliates’ respective representatives not to, participate in discussions with, any person (or group that includes any person) that prior to the execution of the Merger Agreement, directly or indirectly, whether through its affiliates or representatives, (1) accessed the online data room hosted on behalf of MoneyGram in connection with evaluating a potential acquisition of MoneyGram, (2) participated in substantive negotiations with MoneyGram or its representatives regarding an acquisition proposal, or (3) submitted an acquisition proposal to MoneyGram or its representatives, in each case, within 180 days prior to the date of the Merger Agreement (any such person, a “prior bidder”); provided, however, that the foregoing does not prohibit or restrict Parent from making or conducting public communications or solicitations regarding (i) an acquisition proposal or (ii) the transactions contemplated by the Merger Agreement in accordance with the publicity provisions of the Merger Agreement.

 

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MoneyGram will substantially concurrently make available to Parent or its representatives any non-public information concerning MoneyGram and its subsidiaries that is provided by MoneyGram to any person or its representatives that was not previously provided or made available to Parent as promptly as reasonably practicable (but in any event within one day) after providing (or causing to be provided) any such information and MoneyGram will not provide to any such person any non-public information of or relating to Parent, Merger Sub or any of their respective affiliates or representatives.

Any person or group of persons (i) who submits an acquisition proposal to MoneyGram prior to the solicitation period end date, and (ii) whose acquisition proposal our board of directors determines in good faith (after consultation with MoneyGram’s outside legal and financial advisors) constitutes a superior proposal or could reasonably be expected to result in a superior proposal, will be considered an “exempted person” for purposes of the no solicitation provisions of the Merger Agreement (as described in “The Merger Agreement—No Solicitation”); provided, that a person shall immediately cease to be considered an exempted person for purposes of the Merger Agreement upon the earlier of (a) the time (if any) at which such acquisition proposal is withdrawn by such person or group, it being understood that a modification of an acquisition proposal submitted by a person or group will not be deemed to be a withdrawal or termination of an acquisition proposal by such person or group so long as our board of directors determines in good faith (after consultation with MoneyGram’s outside legal and financial advisors) that, following such modification, the acquisition proposal continues to constitute a superior proposal or could reasonably be expected to result in a superior proposal and (b) 20 days following the solicitation period end date.

For purposes of this proxy statement:

 

   

“acceptable confidentiality agreement” means a confidentiality agreement that (a) contains terms as to confidentiality and use that are no less favorable in the aggregate to MoneyGram (as determined by MoneyGram in good faith) than those contained in the confidentiality agreement between MoneyGram and MDP and (b) does not include any provision calling for an exclusive right to negotiate with MoneyGram prior to the termination of the Merger Agreement or restrict MoneyGram from providing any information to Parent to which Parent would be entitled under any provision of the Merger Agreement.

 

   

“acquisition proposal” means any inquiry, indication of interest or offer from any person or “group” (as defined in or under Section 13(d) of the Exchange Act) (other than Parent or any of its subsidiaries) relating to, or that could reasonably be expected to lead to, any direct or indirect (a) acquisition, purchase, license or sale of a business or assets that constitute 20% or more of the consolidated business, revenues, net income or assets (including stock of MoneyGram’s subsidiaries) of MoneyGram and its subsidiaries, (b) Merger, reorganization, share exchange, amalgamation, consolidation, business combination, recapitalization, extraordinary dividend, liquidation, dissolution or similar transaction involving (i) MoneyGram or (ii) one or more subsidiaries of MoneyGram representing 20% or more of the consolidated business, net revenues, net income or assets of MoneyGram and its subsidiaries, (c) purchase or sale of, or tender or exchange offer (including a self-tender offer) for, securities of MoneyGram or any of its subsidiaries that, if consummated, would result in any person (or the stockholders of such person) or “group” (as defined in or under Section 13(d) of the Exchange Act) beneficially owning securities representing 20% or more of the equity or total voting power of MoneyGram, any of its subsidiaries or the surviving parent entity in such transaction or (d) any public announcement of a proposal, plan or intention to do any of the foregoing or any contract to engage in any of the foregoing.

 

   

“superior proposal” means a bona fide written acquisition proposal (with all references in the definition of acquisition proposal to “20%” changed to “50%” for purposes of this definition) made by any person or “group” (as defined in or under Section 13(d) of the Exchange Act) that if consummated would result in such person or group (or their equityholders) owning, directly or indirectly, a majority of the outstanding shares of MoneyGram (or of the stock of the surviving entity in a Merger or the direct or indirect parent of the surviving entity in a Merger), securities representing a majority of the total voting power of MoneyGram, or a majority of the assets of MoneyGram or its subsidiaries taken as a whole, and which our

 

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board of directors determines in good faith, after consultation with MoneyGram’s outside financial and legal advisors, is reasonably likely to be consummated and would result, if consummated, in a transaction that is more favorable to MoneyGram’s stockholders than the Merger, after taking into account (a) the legal, financial, regulatory or other aspects of such proposal (including any financing risk, antitrust and other regulatory risks, termination or break-up fees, expense reimbursement provisions, timing, conditions to consummation and certainty of closing), (b) the likelihood and timing of consummation (as compared to the transactions contemplated by the Merger Agreement) and (c) any changes to the terms of the Merger Agreement proposed by Parent and any other information provided by Parent.

The go-shop period expired on March 16, 2022 without any party submitting an acquisition proposal.

No Solicitation

Except as (i) expressly permitted by the Merger Agreement or (ii) with respect to any exempted person, until the date that is 20 days following the solicitation period end date, from the solicitation period end date until the effective time of the Merger or, if earlier, the date on which the Merger Agreement is terminated in accordance with its terms, MoneyGram will not, and MoneyGram will cause its subsidiaries not to, and will instruct and use reasonable best efforts to cause its and its subsidiaries’ respective directors, officers, employees and representatives not to, directly or indirectly:

 

   

initiate, solicit, knowingly encourage or knowingly facilitate (including by way of providing information) the submission of any inquiries, proposals or offers that constitute or would reasonably be expected to lead to any acquisition proposal;

 

   

engage in, conduct or knowingly facilitate any discussions (other than to state that they are not permitted to have discussions) or negotiations with, or provide any confidential information or data to, any person relating to an acquisition proposal;

 

   

furnish to any person (other than to Parent, Merger Sub or any designees of Parent or Merger Sub) any non-public information relating to MoneyGram or any of its subsidiaries or afford to any person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of MoneyGram or any of its subsidiaries (other than to Parent, Merger Sub or any designees of Parent or Merger Sub), in any such case with the intent to induce the making, submission or announcement of, or to knowingly encourage, facilitate or assist, an acquisition proposal or any inquiries or efforts, or the making, of any proposal that would reasonably be expected to lead to an acquisition proposal;

 

   

withdraw, change, amend, modify or qualify, or otherwise propose publicly to withdraw, change, amend, modify or qualify, in a manner adverse to Parent, our board of directors’ recommendation or approve or recommend, or propose publicly to approve or recommend, any acquisition proposal (any act described in this bullet is referred to as a “change of recommendation”);

 

   

waive the applicability of all or any portion of any anti-takeover laws in respect of any person (other than Parent and its affiliates);

 

   

approve or recommend, or propose to approve or recommend, or execute or enter into, any letter of intent or other document or contract related to any acquisition proposal (other than an acceptable confidentiality agreement) or enter into any letter of intent or other document or contract requiring MoneyGram to (or otherwise contemplating that MoneyGram) abandon, terminate or fail to consummate the transactions contemplated by or breach its obligations under the Merger Agreement; or

 

   

resolve, propose or agree to do any of the foregoing.

Except (1) as expressly permitted by the Merger Agreement or (2) with respect to any exempted person until the date that is 20 days following the solicitation period end date, from the solicitation period end date until the effective time of the Merger or, if earlier, the date on which the Merger Agreement is terminated, MoneyGram will, and will cause its subsidiaries to, and will instruct and use reasonable best efforts to cause its and its subsidiaries’ directors, officers, employees and representatives to, immediately cease and cause to be terminated,

 

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and will not authorize or knowingly permit any of its or their representatives to continue, any and all activities, discussions or negotiations conducted with any persons other than Parent with respect to any acquisition proposal, including immediately revoking or withdrawing access of any person other than Parent and its directors, officers, employees and representatives to any data room (virtual or actual) containing any non-public information with respect to MoneyGram or its subsidiaries previously furnished with respect to an acquisition proposal and using reasonable best efforts to cause any such third-party (or its agents or advisors) in possession of non-public information in respect of MoneyGram or any of its subsidiaries that was furnished by or on behalf of MoneyGram and its subsidiaries in connection with such activities, discussions or negotiations conducted with respect to any acquisition proposal to return or destroy (and confirm destruction of) all such information pursuant to the terms of any binding agreement to do so. The foregoing does not prevent MoneyGram from communicating with a prospective acquirer to request clarification of the terms and conditions of a possible acquisition proposal so as to determine whether such acquisition proposal could reasonably be expected to lead to a superior proposal. Any violation of these restrictions by any directors, officers, employees of MoneyGram or any of its subsidiaries, or representatives acting on behalf of MoneyGram or any of its subsidiaries, is deemed to be a breach of these restrictions by MoneyGram.

Notwithstanding the foregoing restrictions, from the solicitation period end date until the time the MoneyGram Stockholder Approval is obtained, if MoneyGram, any of its subsidiaries or any of their representatives receives an unsolicited bona fide written acquisition proposal that did not result from a breach of such foregoing restrictions and our board of directors concludes in good faith (after consultation with our outside legal and financial advisors) that such acquisition proposal constitutes a superior proposal or could reasonably be expected to result in a superior proposal, MoneyGram may, and may permit its subsidiaries and its and their directors, officers, employees and representatives, to:

 

   

enter into and maintain discussions or negotiations with the person making such acquisition proposal; and

 

   

furnish non-public information and afford access to the business, employees, officers, contracts, properties, assets, books and records of MoneyGram and its subsidiaries to the person making such acquisition proposal.

Prior to MoneyGram providing (or causing to be provided) such information or affording such access to, or entering into or maintaining such discussions or negotiations with, such person (other than informing such person of the provisions contained in the Merger Agreement or contacting such person making any acquisition proposal to clarify the terms and conditions thereof), MoneyGram will have entered into an acceptable confidentiality agreement with such person. In addition, MoneyGram will provide to Parent any non-public information relating to MoneyGram or any of its subsidiaries that was not previously provided to Parent or made available to Parent as promptly as reasonably practicable (but in any event within one day) after providing (or causing to be provided) any such information to such person making or who has made such acquisition proposal and will not provide to such person making any acquisition proposal any non-public information of or relating to Parent, Merger Subs or any of their respective affiliates or representatives.

As promptly as reasonably practicable, and in any event within forty-eight hours after the expiration of the solicitation period end date, MoneyGram will (i) notify Parent in writing of the identity of each person, if any, that, in accordance with the Merger Agreement, our board of directors has determined to be an exempted person and (ii) provide Parent with a reasonably detailed summary of the material terms and conditions of any acquisition proposal received from any exempted person prior to the solicitation period end date (it being understood that, to the extent then known, price per share, transaction structure, closing conditions, and, to the extent part of the acquisition proposal, financing provisions will be considered material terms of any such acquisition proposal). In addition to the foregoing, MoneyGram will notify Parent orally and in writing promptly (but in any event within two business days):

 

   

after receipt of any acquisition proposal (or any inquiry, request, proposal or offer that could reasonably be expected to lead to an acquisition proposal) that MoneyGram receives after the solicitation period end date,

 

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which notice will include the identity of the person making such proposal or offer, a summary of the material terms of all such proposals or offers and copies of drafts of proposed agreements, term sheets or letters of intent related thereto received by MoneyGram;

 

   

of any change to the financial or other material terms and conditions of any acquisition proposal received after the solicitation period end date and MoneyGram will otherwise keep Parent reasonably informed of developments with respect to, and the status of, any such acquisition proposal (including by providing copies of all proposals, offers and drafts of proposed agreements related thereto that have not already been provided); and

 

   

after receipt by MoneyGram or its representatives of any request for non-public information received after the solicitation period end date relating to MoneyGram or any of its subsidiaries or for access to MoneyGram’s or any of its subsidiaries’ properties, books or records by any person in connection with an acquisition proposal (or any inquiry, request, proposal or offer that could reasonably be expected to lead to an acquisition proposal).

Neither MoneyGram nor any of its subsidiaries will, after the date of the Merger Agreement, enter into any confidentiality or other agreement or obligation that would prohibit it from providing the information described above to Parent.

Change of Recommendation

Other than in connection with an acquisition proposal, prior to the time the MoneyGram Stockholder Approval is obtained, our board of directors may, in response to an intervening event, make a change of recommendation if and only if:

 

   

prior to taking such action, our board of directors determines in good faith, after consultation with our and our board of directors’ outside legal and financial advisors, that failure to take such action in light of such intervening event would be reasonably likely to be inconsistent with its fiduciary duties under applicable law;

 

   

MoneyGram provides Parent prior written notice advising Parent that our board of directors intends to take such action, which notice will specify in reasonable detail the facts underlying the MoneyGram board of directors’ determination that an intervening event has occurred and the reasons for such change of recommendation in light of such intervening event;

 

   

for at least four business days after Parent’s receipt of such notice referred to in the bullet immediately above, MoneyGram has negotiated, and has caused its financial and legal advisors (and other representatives) to negotiate, with Parent in good faith (to the extent Parent desires to negotiate) to make such adjustments in the terms and conditions of the Merger Agreement in such a manner that the failure to make a change of recommendation would no longer be reasonably likely to be inconsistent with our board of directors’ fiduciary duties under applicable law; and

 

   

at the end of the period referred to in the bullet immediately above, our board of directors has concluded in good faith (after consultation with our outside legal and financial advisors) that failure to make a change of recommendation would be reasonably likely to be inconsistent with its fiduciary duties under applicable law after giving effect to all of the adjustments which may be offered by Parent pursuant to the bullet immediately above.

Nothing contained in the Merger Agreement prevents MoneyGram or our board of directors from (i) taking and disclosing a position contemplated by Rule 14e-2(a) under the Exchange Act or complying with the provisions of Rule 14d-9 promulgated under the Exchange Act with respect to an acquisition proposal or (ii) making any disclosure to MoneyGram’s stockholders if our board of directors determines in good faith (after consultation with its outside legal advisors) that the failure to make such disclosure would be reasonably likely to be inconsistent with its fiduciary duties under applicable law (it being agreed that this clause (ii) will in no way

 

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eliminate or modify the effect that any such disclosure would otherwise have under the Merger Agreement); provided, that in no event will MoneyGram or our board of directors make a change of recommendation except as provided above and any public disclosure by MoneyGram or our board of directors relating to any determination or other action by our board of directors with respect to any acquisition proposal will be deemed to be a change of recommendation unless our board of directors expressly and concurrently reaffirms the recommendation of our board of directors.

Except as set forth above, during the period commencing with the solicitation period end date and continuing until the earlier to occur of the termination of the Merger Agreement and the effective time of the Merger, MoneyGram may not terminate, waive, amend or modify any provision of any standstill agreement or confidentiality agreement to which MoneyGram is a party, in each case, with respect to the submission of any acquisition proposal. Notwithstanding anything to the contrary contained in the Merger Agreement, MoneyGram will be permitted, without the prior written consent of Parent, to terminate, waive, amend or modify any standstill agreement or confidentiality agreement or similar agreement to the extent the MoneyGram board of directors determines in good faith, after consultation with MoneyGram’s outside legal and financial advisors, that failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law.

Reasonable Best Efforts

Subject to the terms and conditions of the Merger Agreement, each of Parent, Merger Sub and MoneyGram will use their reasonable best efforts to:

 

   

consummate the transactions contemplated by the Merger Agreement and to cause the closing conditions set forth in the Merger Agreement (as summarized below) to be satisfied as promptly as practicable;

 

   

prepare as promptly as practicable (and file, submit or effect, or cause to be filed, submitted or effected, as applicable) all necessary applications, notices, petitions, filings, ruling requests and other documents in order to obtain (and to cooperate with the other parties to obtain) any approval from any governmental entity which is required or advisable to be obtained by Parent, Merger Sub, MoneyGram or its subsidiaries in connection with the transactions contemplated by the Merger Agreement;

 

   

comply promptly with all legal requirements which may be imposed on such party with respect to obtaining approvals for the transactions contemplated by the Merger Agreement;

 

   

defend all lawsuits or other legal, regulatory, administrative or other proceedings to which it (or with respect to MoneyGram, its subsidiaries) is a party challenging or affecting the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement;

 

   

seek to avoid the entry of, and the commencement of litigation seeking the entry of, or seek to have lifted or rescinded, any injunction or restraining order which would prevent or materially delay the ability of the parties to consummate the transactions contemplated by the Merger Agreement; and

 

   

seek to resolve any objection or assertion by any governmental entity challenging the Merger Agreement or the transactions contemplated thereby.

Subject to the other provisions of the Merger Agreement, each of MoneyGram, on the one hand, and Parent and Merger Sub, on the other hand, will also:

 

   

use reasonable best efforts to cooperate with the other parties thereto (including in connection with any permitted co-investor);

 

   

to the extent permitted by applicable legal requirements, promptly inform the other party or parties of any substantive communication (oral and written) received by such party from, or given by such party to, any governmental entity with respect to any such filing or approval or the transactions contemplated by the Merger Agreement, and of any substantive communication received or given in connection with any legal proceeding by a private party regarding the Merger;

 

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consult with and consider in good faith the view of the other party or parties (subject to applicable legal requirements relating to the exchange of information) in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party relating to proceedings with respect to any such approvals or the transactions contemplated by the Merger Agreement;

 

   

use reasonable best efforts to, and to cause their respective affiliates and representatives to, furnish to the other party or parties and to any governmental entities such information and assistance as may be requested in connection with the foregoing, including by responding promptly to and complying with any reasonable request for additional information or documents under any applicable legal requirements;

 

   

not, to the extent commercially practicable, independently participate in any meeting (including substantive telephonic or virtual meetings) with any governmental entity in respect of any approval without giving the other party or parties sufficient prior notice of the meeting and, to the extent permitted by such governmental entity, the opportunity to attend and/or participate in such meeting (including substantive telephonic meetings or virtual meetings) and, in the event such party does not attend such meeting after receiving notice (including substantive telephonic or virtual meetings), if requested, provide as promptly as practicable a reasonable summary of the substance of such meeting (including substantive telephonic or virtual meetings); and

 

   

use reasonable best efforts to comply with agreed upon (by Parent and MoneyGram) terms and conditions of all such approvals of all such governmental entities (including in connection with any permitted co-investor who becomes or seeks to become after the date of the Merger Agreement an equity investor in Parent as of the closing (giving effect to the Merger)).

Without limiting any party’s obligation to provide information to any governmental entity, notwithstanding anything in the foregoing to the contrary, materials provided by or on behalf of Parent to MoneyGram or its counsel or MoneyGram to Parent or its counsel may be redacted to the extent necessary (a) to remove references concerning Parent’s or MoneyGram’s valuation analyses with respect to MoneyGram and its subsidiaries, (b) as necessary, to comply with contracts in effect on the date of the Merger Agreement or (c) to remove personal, proprietary, privileged and other confidential business information; provided with respect to (b) and (c), the parties will use reasonable best efforts to minimize the information or materials that cannot be shared, to utilize customary mechanisms to permit sharing while protecting confidentiality, privilege or compliance (such as confidentiality agreements) and to seek a waiver or disclosure if requested by the party hereto seeking disclosure.

Parent after, to the extent permitted by law, consulting in good faith with MoneyGram and considering in good faith MoneyGram’s views and comments, will have the principal responsibility for determining the strategy to be pursued for obtaining, and directing the effort to obtain, all necessary actions or non-actions and approvals from governmental entities with respect to the HSR Act, Foreign Regulatory Laws, money transmitter licenses and other approvals in connection with the transactions contemplated by the Merger Agreement (including in connection with any permitted co-investor); provided, however, that MoneyGram’s written consent will be required prior to the taking of any action in connection with obtaining any such approvals if such action would result in the imposition of a burdensome condition on MoneyGram that is not waived by Parent and not conditioned on, and effective only as of or after, the closing. MoneyGram may not, and must cause its subsidiaries not to, enter into any agreement, commitment, obligation or settlement with any governmental entity (including any governmental entity that issues, grants, or administers money transmitter licenses) with respect to any approvals required thereunder (including the money transfer change of control filings or filing pursuant to Foreign Regulatory Laws) without Parent’s prior written consent.

Notwithstanding anything in the Merger Agreement to the contrary, nothing in the Merger Agreement requires Parent or any of its affiliates to agree to or take (nor will MoneyGram or its subsidiaries, without Parent’s prior written consent, take or agree to take or be required to take prior to or after the closing) any action, make any agreement, settlement, or commitment, provide any consent for any reason, or suffer any restriction,

 

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obligation, liability or other detriment, with respect to obtaining money transmitter licenses, approvals in connection with the HSR Act, the filings pursuant to Foreign Regulatory Laws or any other approvals required in connection with the Merger (including in connection with any permitted co-investor) that when taken, whether in and of itself or collectively with any other obligation or action taken pursuant to the Merger Agreement or any other transaction documents referenced therein, would, or would reasonably be expected to, individually or in the aggregate:

 

   

have a material adverse effect;

 

   

require the Guarantors, Parent, Merger Sub, or MoneyGram or any of its subsidiaries, to incur economic detriment (including through making payments, losing or forgoing revenue or earnings, divesting assets, incurring liabilities or limitations on operations, or otherwise) of more than $30,000,000 in the aggregate for all such persons when taken together with all such other economic detriments incurred in complying with the Merger Agreement;

 

   

prevent the utilization of the financing at and after the closing as contemplated in the commitment letters (and the definitive agreements contemplated thereby) (including with respect to collateral security and ratings);

 

   

require any information to be provided by, or any restriction to be borne by, a person that is not delivering an equity commitment letter or who is not a director or officer of Parent, MoneyGram or its subsidiaries (including from and after the closing) or a Managing Director or officer of MDP, or any permitted co-investor that will own, directly or indirectly, at least 10% of the equity interests of MoneyGram, or any person who will serve as a director or executive officer of Parent, MoneyGram or any of their respective subsidiaries; or

 

   

require Parent or its affiliates to seek prior approval of any transactions, investments, Mergers or acquisitions from any governmental entity for any period of time, other than the money transfer change of control filings and filings pursuant to Foreign Regulatory Laws contemplated by the Merger Agreement (any such arrangements, conditions or restrictions in this bullet or the immediately preceding four bullets, a “burdensome condition”).

Parent and its affiliates and MoneyGram and its subsidiaries are not required to (and without the prior consent of Parent, MoneyGram and its subsidiaries will not), take any action with respect to any order or any applicable law or in order to obtain any approval which is not conditioned upon the consummation of the Merger.

Notwithstanding anything to the contrary in the Merger Agreement, in connection with obtaining any approval or consent from any persons (other than governmental entities) with respect to any transaction contemplated by the Merger Agreement, (i) none of MoneyGram or any of its subsidiaries will be required to, or, without the prior written consent of Parent, will, pay or commit to pay to such person whose approval or consent is being solicited any cash or other consideration, make any commitment or incur any liability or other obligation due to such person and (ii) none of Parent, Merger Sub or any of their affiliates will be required to pay or commit to pay to such person whose approval or consent is being solicited any cash or other consideration, make any commitment or incur any liability or other obligation.

MoneyGram Stockholders Meeting

MoneyGram will duly take all lawful action to call, give notice of, convene and hold a meeting of its stockholders (which may be held virtually) for the purpose of obtaining the MoneyGram Stockholder Approval as promptly as practicable following the date the SEC confirms it has no further comments to the preliminary proxy statement. Except to the extent there has been a change of recommendation in accordance with and subject to the terms of the Merger Agreement, MoneyGram will use its reasonable best efforts to solicit from its stockholders proxies in favor of approval of the Merger and secure any other approval of stockholders of MoneyGram that is required by applicable law in connection with the Merger. The obligation of MoneyGram to duly call, give notice of, convene and hold the stockholders meeting will not be affected by a change in recommendation.

 

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Employee Matters

During the 12-month period following the effective time of the Merger, Parent will or will cause the surviving corporation to provide to the employees who are employees of MoneyGram or a subsidiary of MoneyGram at the effective time of the Merger (the “continuing employees”), while such continuing employees remain employed by MoneyGram or a subsidiary of MoneyGram, (i) base salary or wages and cash incentive compensation opportunities that are no less favorable, in each instance, to those provided to the continuing employees immediately prior to the closing and (ii) employee benefits (other than any defined benefit pension benefits or supplemental executive retirement plan benefits) that are substantially comparable, in the aggregate, to those provided to the continuing employees immediately prior to the closing. During the 12-month period following the effective time of the Merger, Parent will, or will cause the surviving corporation to, assume and honor MoneyGram’s and its subsidiaries’ obligations under all employment, severance and bonus agreements, if any, between MoneyGram or a subsidiary of MoneyGram on the one hand, and a continuing employee, on the other hand, immediately prior to the effective time of the Merger, including, but not limited to, the MoneyGram Payment Systems, Inc. Severance Plan, as it is in effect as of the effective time of the Merger. The foregoing provisions are solely for the benefit of the parties to the Merger Agreement and nothing therein, express or implied, (i) will confer upon any continuing employee, or legal representative or beneficiary thereof, any rights or remedies, including any right to employment or continued employment for any specified period, or compensation or benefits of any nature or kind whatsoever under the Merger Agreement or (ii)  be deemed an amendment of any employee benefit plan.

Indemnification and Insurance

From and after the effective time of the Merger, Parent will, and will cause the surviving corporation to, indemnify and hold harmless, as and to the fullest extent provided in the certificate of incorporation and bylaws of MoneyGram as in effect on the date of the Merger Agreement and permitted by applicable law, all past and present directors and officers of MoneyGram or any of its subsidiaries (collectively, the “Indemnified Parties”) against any losses, claims, damages, liabilities, costs, expenses (including reasonable attorneys’ fees and expenses in advance of the final disposition of any claim, suit, proceeding or investigation to each Indemnified Party upon receipt of an undertaking from such Indemnified Party to repay such advanced expenses if it is determined by a final and non-appealable judgment of a court of competent jurisdiction that such Indemnified Party was not entitled to indemnification thereunder), judgments, fines and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal or administrative (in each case whether asserted or claimed before or after the effective time of the Merger) arising out of acts or omissions occurring at or prior to the effective time of the Merger in connection with such Indemnified Party serving as a director or officer of MoneyGram or any of its subsidiaries (including in connection with an Indemnified Party serving at the request of MoneyGram or any of its subsidiaries as a director, officer, employee, trustee or partner of another corporation, partnership, trust, joint venture, employee benefit plan or other entity and including acts or omissions occurring in connection with the Merger Agreement and the transactions contemplated thereby).

For a period of six years after the effective time of the Merger, Parent will maintain, or cause the surviving corporation to maintain, for the benefit of the Indemnified Parties, a directors’ and officers’ liability insurance policy (from MoneyGram’s current insurance carrier or an insurance carrier with the same or better credit rating, as of the closing date of the Merger, as MoneyGram’s current insurance carrier) that provides coverage for acts or omissions occurring at or prior to the effective time of the Merger with terms and conditions which are, in the aggregate, not less advantageous to such Indemnified Party than the terms and conditions of the existing directors’ and officers’ liability insurance policy of MoneyGram; provided that, at Parent’s option, in lieu of the foregoing insurance coverage, MoneyGram, at Parent’s expense, may at or prior to the effective time of the Merger, substitute the insurance coverage for a single premium tail coverage with respect to such insurance that provides coverage for period of six years after the effective time of the Merger, with terms and conditions which are, in the aggregate, not less advantageous to such Indemnified Party than the terms and conditions of the

 

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existing directors’ and officers’ liability insurance policy of MoneyGram. Notwithstanding the foregoing, in no event will Parent be required to expend, in the aggregate, an amount in excess of 300% of the annual premiums currently paid by MoneyGram for the existing directors’ and officers’ liability insurance policy of MoneyGram, and if Parent is unable to maintain or obtain the required insurance for an amount equal to or less than such amount, Parent will obtain as much comparable insurance as may be available for such amount.

Stockholder Litigation

In the event that any litigation or other claim of any stockholder related to the Merger Agreement, the Merger or the other transactions contemplated by the Merger Agreement is initiated or, to the knowledge of MoneyGram, threatened against any of MoneyGram or its subsidiaries and/or the members of our board of directors (or of any equivalent governing body of any subsidiary of MoneyGram) prior to the effective time of the Merger, MoneyGram will promptly notify Parent on a regular basis of any such litigation or other claim and will keep Parent reasonably informed on a current basis with respect to the status thereof. MoneyGram will consult with Parent with respect to, and will give Parent the opportunity to participate, at Parent’s expense, in the defense or settlement of, any such litigation or claims, and no such settlement or compromise will be agreed to without Parent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).

Financing

Subject to the terms and conditions of the Merger Agreement, without the consent of MoneyGram, each of Parent and Merger Sub will not permit any amendment, replacement, supplement or modification to be made to, or any waiver of any provision or remedy pursuant to, the commitment letters prior to the effective time of the Merger if such amendment, replacement, supplement, modification or waiver would, or would reasonably be expected to:

 

   

reduce the aggregate net amount of the financing below the required financing amount, including by changing the amount of the fees to be paid or the original issue discount of the debt financing;

 

   

impose new or additional conditions or otherwise expand, amend or modify any of the conditions to the receipt of the financing in a manner that would reasonably be expected to (1) materially delay or prevent the closing of the Merger or (2) make the timely funding of the financing, or the satisfaction of the conditions to obtaining the financing, less likely to occur in any material respect; or

 

   

adversely impact the ability of Parent or Merger Sub, as applicable, to enforce its rights against the other parties to the commitment letters or the definitive agreements with respect thereto.

Notwithstanding the foregoing, no consent from MoneyGram will be required for: (1) any amendment, replacement, supplement or modification of the debt commitment letters that is limited to adding lenders, lead arrangers, bookrunners, syndication agents or similar entities that have not executed the debt commitment letter as of the date of the Merger Agreement (including in replacement of a Lender), (2) the implementation of a replacement commitment facility (as defined in the debt commitment letter entered into as of the date of the Merger Agreement) so long as doing so would not reasonably be expected to result in any of the outcomes described in the foregoing clauses (i)-(iii), (3) implementation or exercise of any “flex” provisions provided in the fee letter as in effect as of the date of the Merger Agreement, (4) Parent or any subsidiary thereof to issue senior notes or other securities in lieu of all or a portion of the senior bridge facility referred to in the debt commitment letter as of the date of the Merger Agreement or the issuance of preferred equity at the closing (in lieu of the senior notes or other debt securities in lieu of a portion of the senior bridge facility) to permitted preferred purchasers, or (5) permitted co-investors being added to the equity commitment letter or delivering an equity commitment letter of their own in substantially similar form (except for amount) to the equity commitment letter for a portion of the equity financing; and provided further, notwithstanding the foregoing or anything to the contrary in the Merger Agreement, in no event in and of itself will a permitted co-investor becoming, or seeking to become (including in connection with seeking any approval required to become in

 

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connection with the Merger), a direct or indirect equity investor in Parent or its affiliates after the date of the Merger Agreement and effective prior to or as of the closing be deemed to result in the outcomes described in the foregoing clauses (i)-(iii).

The “required financing amount” means the funds necessary to satisfy Parent’s and Merger Sub’s payment obligations under the Merger Agreement at the effective time of the Merger, including payment in cash of the aggregate Merger Consideration and LTI award consideration payable at the effective time of the Merger, refinancing of MoneyGram’s indebtedness outstanding under the credit agreement (as defined in “The Merger Agreement—Treatment of Certain Existing Indebtedness”) and the 2021 first lien notes (as defined in “The Merger Agreement—Treatment of Certain Existing Indebtedness”) (in each case, including all applicable interest, fees and premiums), and to pay all related fees and expenses required to be paid by Parent and Merger Sub in connection with the Merger, in each case, at the effective time of the Merger.

Subject to the terms and conditions of the Merger Agreement, each of Parent and Merger Sub will use its respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper and advisable to arrange, consummate and obtain the financing on a timely basis (taking into account the marketing period), but in any event no later than the effective time of the Merger, on the terms and conditions (including, to the extent required, the full exercise of any “flex” provisions in any fee letter) described in the commitment letters, including, but not limited to, using its reasonable best efforts to (i) maintain in effect the commitment letters in accordance with the terms and subject to the conditions thereof; (ii) negotiate, execute and deliver definitive agreements with respect to the debt financing contemplated by the debt commitment letter and related fee letter on a timely basis (taking account of the marketing period) on the terms and conditions (including any “flex” provisions in the related fee letter) contemplated by the debt commitment letter and related fee letter (or any other terms acceptable to Parent so long as Parent remains in compliance with the requirements described in this paragraph); (iii) satisfy (or obtain the waiver of) on a timely basis all conditions contained in the debt commitment letter and related fee letter and such definitive agreements related thereto within the control of Parent or Merger Sub and in the equity commitment letter on or prior to the effective time of the Merger; (iv) in the event that all conditions contained in the commitment letters (other than, with respect to the debt financing, the availability of the cash equity contribution) have been satisfied and Parent is required to consummate the closing pursuant to Merger Agreement and the marketing period has been completed, consummate the financing at or prior to the closing, including using reasonable best efforts to cause the lenders to fund the debt financing at the closing; (v) comply with its obligations pursuant to the commitment letters on or prior to effective time of the Merger; and (vi) enforce its rights pursuant to the commitment letters. Parent and Merger Sub will fully pay, or cause to be fully paid, all commitment or other fees arising pursuant to the commitment letters as and when they become due.

As set forth in the Merger Agreement, Parent will (i) keep MoneyGram informed on a current basis and in reasonable detail of the status of its efforts to arrange the financing; and (ii) provide MoneyGram with copies of all definitive agreements and other documents related to the debt financing.

If any portion of the debt financing becomes unavailable (other than as a result of a breach by MoneyGram of the Merger Agreement), on the terms and conditions (including any “flex” and “securities demand” provisions in any fee letter) contemplated in the debt commitment letter and related fee letter, Parent will promptly notify MoneyGram in writing (but in any event within two business days after obtaining knowledge of the occurrence or discovery thereof) and Parent and Merger Sub will use their respective reasonable best efforts to, as promptly as reasonably practicable following the occurrence of such event, (i) arrange and obtain the debt financing or such portion of the debt financing from the same or alternative sources (A) on terms and conditions not materially less favorable in the aggregate to Parent and Merger Sub than those contained in the debt commitment letter and related fee letter and (B) containing conditions to draw at closing that would not reasonably be expected to adversely affect the availability thereof that (1) are not more onerous than those conditions and terms contained in the debt commitment letter and related fee letter, (2) would not reasonably be expected to prevent or materially delay the closing or make the closing materially less likely to occur, and (3) in an amount at least

 

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equal to the debt financing or such unavailable portion thereof, but in no event more than the required financing amount if such amount is less, as the case may be (the “alternate debt financing”); and (ii) obtain one or more new debt financing commitment letters with respect to such alternate debt financing (the “new debt commitment letters”), which new letters will replace the existing debt commitment letter in whole or in part.

In no event will the reasonable best efforts of Parent be deemed or construed to require Parent to (A) seek cash equity from any source other than those counterparty to the equity commitment letter, or in any amount with respect to a Guarantor in excess of such Guarantor’s commitment, (B) pay any fees in excess of those contemplated by the commitment letters, or (C) agree to economic terms of the alternate debt financing (including any “flex” provisions relating thereto) that are less favorable in the aggregate than those contemplated by the debt commitment letter or any related fee letter (after giving effect to any “flex” provisions therein). Parent will promptly provide a copy of any new debt commitment letter (and any fee letter in connection therewith or other agreements related thereto (with customary redactions)) to MoneyGram.

Subject to, and without limiting or modifying, the provisions described in “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 109 of this proxy statement below, obtaining the financing is not a condition to Parent’s or Merger Sub’s obligations under the Merger Agreement.

Financing Assistance from MoneyGram

From the date of the signing of the Merger Agreement until the earlier of the effective time of the Merger and the termination of the Merger Agreement, MoneyGram must use its reasonable best efforts to provide, and must cause its subsidiaries and representatives to provide, at Parent’s sole cost and expense, such customary cooperation and customary and reasonably available financial information and data, in each case, that is in the possession of MoneyGram at such time and reasonably requested by Parent in connection with the debt financing, which reasonable best efforts will include:

 

   

cooperating in respect of road show or ratings agency presentations or meetings held by or on behalf of Parent with the lenders, prospective lenders and investors or other financing sources regarding the debt financing and otherwise provide reasonable cooperation with the marketing efforts for the debt financing, with such cooperation to include the participation of senior officers in a reasonable number of meetings, presentations, drafting sessions, conference calls, due diligence sessions (including accounting due diligence sessions) and sessions with rating agencies in connection with the debt financing;

 

   

making available to Parent and the lenders and their respective representatives, such financial information or other information that is reasonably available to MoneyGram without undue burden or expense as Parent may reasonably request in connection with the preparation of any marketing materials, offering documents, prospectuses, registration statements, bank information memoranda, ratings agency presentations, roadshow presentations and similar documents, and which information is customarily delivered in connection with such marketing materials, and assist in the preparation of such materials, including providing customary authorization letters to the lenders, authorizing the distribution of information to prospective lenders or investors and other financing sources;

 

   

using reasonable best efforts to provide Parent and the lenders with the required financial information and assisting Parent in the preparation of any pro forma financial statements, in each case, as reasonably required or customarily included in offering materials for transactions involving the private placement of non-convertible high-yield bonds in connection with the debt financing;

 

   

providing information reasonably required by the lenders in the context of due diligence and verification, in compliance with applicable requirements or customary practice to the extent such information is reasonably available to MoneyGram;

 

   

as promptly as practicable following the request therefor, which must be made at least five business days prior to the date of closing, providing Parent and any of the lenders with all documentation and other

 

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information required by regulatory authorities under applicable anti-money laundering rules and regulations, including the PATRIOT Act, know-your-client processes, and laws with respect to beneficial ownership;

 

   

delivering customary representation letters to and otherwise using reasonable best efforts to obtain from MoneyGram’s independent accountants customary “comfort” (including “negative assurance” comfort) letters in connection with the offering of debt securities contemplated by the debt commitment letter (including by delivering customary representation letters), and using reasonable best efforts to obtain any necessary cooperation from any of its auditors and any other advisors to the use of any financial or other expert information in the debt financing, including any unqualified consents with respect to the inclusion thereof in such materials;

 

   

executing and delivering, effective as of, and subject to the occurrence of, the effective time of the Merger, customary pledge and security documents and certificates, documents and instruments relating to guarantees, collateral and other matters ancillary to the debt financing (including a certificate of a senior financial officer of MoneyGram with respect to solvency matters substantially in the form attached to the debt commitment letter as in effect as of the date of the Merger Agreement), and otherwise facilitating the pledging of collateral and the providing of guarantees (including, providing reasonable and customary information required in connection with the pledging and identification of real property and intellectual property to the extent specifically requested of MoneyGram by Parent);

 

   

promptly upon becoming aware of any such new or revised information, updating any information provided by or on behalf of it, or which relates to MoneyGram and its subsidiaries, to ensure that such information does not contain any untrue statement of material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading;

 

   

providing information to Parent and its counsel required for the delivery of customary legal opinions by Parent and its counsel in connection with effectuating the debt financing (provided, that, for the avoidance of doubt, neither MoneyGram nor its counsel will be required to provide any legal opinion in connection with effectuating the debt financing); and

 

   

taking such corporate actions, including execution of the definitive documentation with respect to the debt financing, as will be reasonably requested by Parent (which actions will not be effective prior to the closing).

Notwithstanding the foregoing, that no such cooperation described above will be required to the extent it would:

 

   

unreasonably disrupt or interfere with the conduct of MoneyGram’s business;

 

   

require MoneyGram or any of its subsidiaries to incur any fees, expenses or other liability or pay any fee in connection with the debt financing prior to the effective time of the Merger for which it is not promptly reimbursed;

 

   

require MoneyGram, and any of its subsidiaries, or any of its or their respective directors, officers or employees (A) in the case of individuals, to deliver, or be required to deliver, any certificate or take any action that would reasonably be expected to result in any personal liability or (B) to make any representation, warranty or certification which MoneyGram has determined in good faith is not true;

 

   

require MoneyGram or any of its subsidiaries to provide any information that is prohibited or restricted by applicable law or is privileged and disclosure of which would result in a loss of such privilege;

 

   

require MoneyGram or any of its subsidiaries to prepare or deliver any financial statements or financial information in a form not customarily prepared by MoneyGram or any financial information with respect to a fiscal period that has not yet ended, or for which the applicable quarterly or annual report has not been filed with the SEC or the delivery of projections, pro forma financial information or any other forward-looking information, in each case, other than the required financial information;

 

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require MoneyGram or any of its subsidiaries to enter into, amend or modify any agreement or commitment related to the debt financing that would not be conditioned on the occurrence of, or would be effective prior to, the effective time of the Merger (other than customary authorization and representation letters);

 

   

require MoneyGram or any of its subsidiaries, or any of their respective directors, managers or officers, to take any action to authorize any formal corporate or similar action with respect to the debt financing that is not subject to the occurrence of the effective time of the Merger; or

 

   

require MoneyGram or any of its subsidiaries to take any action that would conflict with or violate, result in the contravention of, or that would reasonably be expected to result in a violation or breach of, or default under, any material written agreement, contract, lease, license, instrument, note, bond, indenture, credit agreement or benefit plan to which MoneyGram or any of its subsidiaries is a party, in each case that are not contingent upon the occurrence of the effective time of the Merger, or conflict with or violate any law.

Treatment of Certain Existing Indebtedness

Prior to the date of closing, MoneyGram will use its commercially reasonable efforts to, on a timely basis and as reasonably requested by Parent, (i) deliver (or cause to be delivered) notices of the payoff, discharge and termination of any outstanding indebtedness and other obligations of MoneyGram under the credit agreement and any other indebtedness and other obligations required to be paid off, discharged or terminated in accordance with and within the time periods required by the credit agreement or the other contracts governing such indebtedness (which notices may be conditioned upon the closing to the extent permitted under the credit agreement and such applicable contracts) (such indebtedness, collectively, the “credit agreement payoff amount”), (ii) take all other actions required to facilitate the repayment of the obligations with respect to and termination of the commitments under such indebtedness and the release of any liens and termination of all guarantees granted in connection therewith and (iii) obtain customary payoff letters or other similar evidence in form and substance reasonably acceptable to Parent at least five business days prior to closing; provided that, such obligations of MoneyGram will not apply to any indebtedness or liens that are permitted to remain outstanding after the effective time of the Merger pursuant to the debt commitment letters and/or the definitive financing documentation executed in connection therewith and agreed to by Parent. Parent will irrevocably pay off or cause to be paid off at or as promptly as practicable after the effective time of the Merger, but in any event on the date of closing, the credit agreement payoff amount and use its commercially reasonable efforts to provide all customary cooperation as may be reasonably requested by MoneyGram to assist MoneyGram in connection with its obligations thereunder.

Prior to the date of closing, MoneyGram will use its commercially reasonable efforts to, on a timely basis as reasonably requested by Parent, (i) deliver (or cause to be delivered) notices of the payoff, redemption, satisfaction, discharge and/or defeasance of the 2021 first lien notes under the 2021 first lien notes indenture and the termination of all outstanding indebtedness and other obligations under the 2021 first lien notes indenture in accordance with and within the time periods required by the 2021 first lien notes indenture or other contracts governing such indebtedness (including the release of all liens (as such term is defined in the 2021 first lien notes indenture) and pledges of collateral thereunder), and (ii) take all other actions required to facilitate the payoff, redemption, satisfaction, discharge and/or defeasance of the 2021 first lien notes and the release of any liens (as such term is defined in the 2021 first lien notes indenture) and pledges of collateral thereunder and termination of all guarantees granted in connection therewith, other than depositing with the 2021 first lien notes trustee or the paying agent (as such term is defined in the 2021 first lien notes indenture) the amounts sufficient to redeem, satisfy, discharge and/or defease the 2021 first lien notes indenture (the “indenture redemption amount”). Parent will irrevocably deposit or cause to be deposited with the 2021 first lien notes trustee or the paying agent (as such term is defined in the 2021 first lien notes indenture) at or as promptly as reasonably practicable after the effective time of the Merger, but in any event on the date of closing, the indenture redemption amount and use its commercially reasonable efforts to provide all customary cooperation as may be reasonably requested by MoneyGram to assist MoneyGram in connection with its obligations thereunder.

 

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The “credit agreement” means the Credit Agreement, dated as of July 21, 2021, among MoneyGram, as borrower, Bank of America, N.A., as administrative agent, the financial institutions parties thereto as lenders and the other agents party thereto. The “2021 first lien notes” means MoneyGram’s 5.375% Senior Secured Notes due 2026 issued on July 21, 2021 in an initial aggregate principal amount of $415,000,000. The “2021 first lien notes indenture” means the Indenture dated as of July 21, 2021 among MoneyGram and the 2021 first lien notes trustee under which the 2021 first lien notes were issued. The “2021 first lien notes trustee” means Wells Fargo Bank, National Association, in its capacity as trustee for the holders of the 2021 first lien notes pursuant to the 2021 first lien notes indenture.

Parent Equity Syndication

Following the date of the Merger Agreement, Parent will be permitted to (i) add certain permitted co-investors as sources of equity financing and (ii) in lieu of a portion of the debt financing, issue preferred equity in Parent or its affiliates to permitted preferred purchasers (clauses (i) and (ii) collectively, the “equity syndication”). Parent, Merger Sub and MoneyGram will, and will cause their respective representatives to, reasonably cooperate, at Parent’s expense, to facilitate the equity syndication. Such cooperation must include making customary and appropriate adjustments to the Merger Agreement, the equity commitment letter, and the Limited Guarantee to give effect thereto (it being understood that in no event will the addition of any permitted co-investor as an equity financing source and the related amendments to the Merger Agreement, the equity commitment letter or the Limited Guarantee result in (x) the aggregate amount of committed equity financing of Parent being reduced from the amounts in the equity commitment letter or (y) the aggregate amount of guaranteed obligations (as defined in the Limited Guarantee) being reduced from the amounts set forth in the Limited Guarantee). To the extent that the terms of the proposed equity investment by any permitted co-investor would (i) result in any approval from any governmental entity being required in order for the closing to occur, the receipt of which is not already a condition to closing set forth below in the section entitled “The Merger Agreement—Conditions to Completion of Merger” (a “new approval”) or (ii) require any permitted co-investor, its affiliates or their respective representatives to cooperate in connection with obtaining any approval or new approval then, in each case, Parent, Merger Sub and MoneyGram shall negotiate in good faith amendments to the provisions of the Merger Agreement described in “The Merger Agreement—Reasonable Best Efforts” and “The Merger Agreement—Conditions to Completion of the Merger” herein to add such new approvals and provide for such cooperation.

Other Covenants and Agreements

The Merger Agreement also contains additional covenants, including, among others, covenants relating to access to information, public announcements relating to the Merger, actions to minimize the effect of any anti-takeover laws, delisting from the Nasdaq; exemptions under Rule 16b-3 of the Exchange Act; obligations of Parent with respect to the Merger Sub and surviving corporation; agreements by and between Parent and foreign persons and ownership of Parent and Merger Sub by foreign persons.

Conditions to Completion of the Merger

Mutual Conditions

Each party’s obligation to complete the transactions contemplated by the Merger Agreement is subject to the satisfaction or (to the extent permitted by applicable law) waiver of the following conditions:

 

   

the affirmative vote of the holders of a majority of the outstanding shares of Common Stock at a meeting of the MoneyGram stockholders;

 

   

all approvals and the expirations or terminations of waiting periods (and any extensions thereof) applicable to the Merger under the HSR Act and Foreign Regulatory Laws have been obtained or have occurred, as applicable; and

 

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there is no injunction, writ, order, award, judgment, settlement or decree or other legal restraint or prohibition issued by any governmental entity of competent jurisdiction preventing the consummation of the Merger and no law has been enacted, entered, promulgated or enforced by any governmental entity of competent jurisdiction which prohibits, enjoins or makes illegal the consummation of the Merger.

Additional Conditions for Parent and Merger Sub

The obligations of Parent and Merger Sub to complete the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of the following additional conditions:

 

   

the accuracy of the representations and warranties of MoneyGram both at and as of the date of the Merger Agreement and at and as of the closing date of the Merger (except for any such representations and warranties expressly relate to an earlier specified date, which representations and warranties must be true and correct as of that earlier date), subject to such representations and warranties:

 

   

being true and correct in all respects, for the representations and warranties regarding: the organization of MoneyGram; corporate authority of MoneyGram; the absence of a material adverse effect since December 31, 2020; the opinion of MoneyGram’s financial advisor; and broker’s fees;

 

   

being true and correct, for the representations and warranties regarding certain capitalization matters, except for any failures of such representations and warranties to be true and correct to the extent that such failures would not cause the Merger Consideration or the LTI Award consideration to be increased in the aggregate by an amount in excess of $3,000,000;

 

   

being true and correct in all but de minimis respects, with regard to certain other capitalization matters;

 

   

being true and correct in all material respects (in each case without giving effect to any material adverse effect or other materiality qualifications or limitations contained therein), with regard to certain representations and warranties, including regarding: the existence of contracts to which MoneyGram or any of its subsidiaries is a party that restrict the transfer of, that relate to the voting of, or that provide registration rights in respect of, the capital stock or other equity interest of MoneyGram or any of its subsidiaries; the subsidiaries of MoneyGram; the joint ventures, partnerships, limited liability companies or other companies, entities or persons in which MoneyGram or any of its subsidiaries owns, directly or indirectly, any shares of capital stock or equity interests; the indebtedness of MoneyGram; and the MoneyGram LTI Awards and MoneyGram Option Awards; and

 

   

being true and correct subject to a “material adverse effect” standard, with regard to all of MoneyGram’s other representations and warranties;

 

   

MoneyGram and its subsidiaries having performed or complied in all material respects with all obligations required to be performed or complied with by it under the Merger Agreement at or prior to the closing;

 

   

since the date of the Merger Agreement, a material adverse effect has not occurred;

 

   

Parent having received a certificate, signed on behalf of MoneyGram, certifying to the satisfaction of the conditions described in the three previous bullets;

 

   

the required money transfer approvals have been made or obtained, as applicable, and remain in full force and effect and all statutory waiting periods relating to such required money transfer approvals have expired, been terminated or satisfied, as applicable, in each case, without the imposition, individually or in the aggregate, of any burdensome condition; and

 

   

Parent and Merger Sub have each received a certificate and notice pursuant to Treasury Regulation Sections 1.1445-2(c)(3) and 1.897-2(h) dated as of the date of closing, signed on behalf of MoneyGram, in form and substance reasonably satisfactory to Parent and Merger Sub, stating that interests in MoneyGram are not “United States real property interests” within the meaning of Section 897(c)(1) of the Internal Revenue Code and that MoneyGram is not a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Internal Revenue Code, together with a written authorization for Parent to provide such certificate and notice to the Internal Revenue Service on behalf of MoneyGram.

 

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Additional Conditions for MoneyGram

The obligation of MoneyGram to complete the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of the following additional conditions:

 

   

the accuracy of the representations and warranties of Parent and Merger Sub regarding the organization of Parent and Merger Sub and the corporate authority of Parent and Merger Sub are true and correct in all respects as of the closing date of the Merger as if made on and as of the closing date of the Merger;

 

   

the other representations and warranties of Parent are true and correct as of the closing date of the Merger as if made on and as of the closing date of the Merger (except to the extent any such representations and warranties expressly relates to a specified date, which representations and warranties must be true and correct only as of that specified date), subject to a “parent material adverse effect”;

 

   

Parent and Merger Sub each has performed or complied in all material respects with all obligations required to be performed by it under the Merger Agreement at or prior to the closing; and

 

   

MoneyGram has received a certificate, signed on behalf of Parent and Merger Sub, certifying to the satisfaction of the conditions described in the three previous bullets.

Termination

The Merger Agreement may be terminated at any time prior to the effective time of the Merger, in the following ways:

 

   

by mutual written consent of Parent and MoneyGram;

 

   

by either Parent or MoneyGram, if:

 

   

any governmental entity which must grant a required money transfer approval has denied such approval and such denial has become final and non-appealable;

 

   

any governmental entity of competent jurisdiction has issued a final non-appealable order enjoining or otherwise prohibiting the consummation of the transactions contemplated by the Merger Agreement, provided, however, the right to terminate the Merger Agreement pursuant to this clause will not available to any party if issuance of such final non-appealable order is primarily due to the failure of such party to perform or observe the covenants and agreements of such party set forth in the Merger Agreement all material respects as required and as set forth in the Merger Agreement;

 

   

the effective time of the Merger has not occurred on or before February 14, 2023 (the “end date”); however, if the required money transfer permits have not been obtained or receipt thereof has not been waived by Parent as of February 14, 2023 (the “initial end date”) (but all other closing conditions set forth in the Merger Agreement have been satisfied or waived) then either MoneyGram or Parent may extend the end date to May 14, 2023 (the “extended end date”) by delivering written notice to the other party on or prior to the initial end date, subject to the second proviso below regarding the marketing period; however, the right to terminate the Merger Agreement pursuant to this bullet will not be available to: (i) MoneyGram if the failure of the effective time of the Merger to occur by such date is primarily due to the failure of MoneyGram to perform or observe its covenants and agreements in all material respects as required and as set forth in the Merger Agreement or (ii) Parent, if the failure of the effective time of the Merger to occur by such date is due to the failure of Parent or Merger Sub to perform or observe their covenants and agreements in all material respects as required and set forth in the Merger Agreement;

 

     

provided, if (1) as of the initial end date all closing conditions set forth in the Merger Agreement have been satisfied or waived by the party having the benefit of the condition (other than those conditions that by their nature are to be satisfied at the closing, but subject to such conditions being capable of being satisfied as of the initial end date and at all times through the end of the

 

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marketing period) and the marketing period has not yet ended, the initial end date will automatically be exten