þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2014 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
DELAWARE | 20-4531180 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
12500 EAST BELFORD AVENUE | 80112 | |
ENGLEWOOD, CO (Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer ¨ | Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
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Item 1A. | ||
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Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Revenues: | |||||||
Transaction fees | $ | 987.9 | $ | 978.0 | |||
Foreign exchange revenues | 329.3 | 312.4 | |||||
Other revenues | 33.6 | 35.0 | |||||
Total revenues | 1,350.8 | 1,325.4 | |||||
Expenses: | |||||||
Cost of services | 797.2 | 759.4 | |||||
Selling, general and administrative | 281.6 | 269.1 | |||||
Total expenses | 1,078.8 | 1,028.5 | |||||
Operating income | 272.0 | 296.9 | |||||
Other income/(expense): | |||||||
Interest income | 4.7 | 0.4 | |||||
Interest expense | (47.6 | ) | (48.9 | ) | |||
Derivative gains/(losses), net | (0.6 | ) | 0.5 | ||||
Other income/(expense), net | (1.1 | ) | 1.3 | ||||
Total other expense, net | (44.6 | ) | (46.7 | ) | |||
Income before income taxes | 227.4 | 250.2 | |||||
Provision for income taxes | 24.4 | 38.2 | |||||
Net income | $ | 203.0 | $ | 212.0 | |||
Earnings per share: | |||||||
Basic | $ | 0.37 | $ | 0.37 | |||
Diluted | $ | 0.37 | $ | 0.37 | |||
Weighted-average shares outstanding: | |||||||
Basic | 545.9 | 567.6 | |||||
Diluted | 549.2 | 569.7 | |||||
Cash dividends declared per common share | $ | 0.125 | $ | 0.125 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Net income | $ | 203.0 | $ | 212.0 | |||
Other comprehensive income/(loss), net of tax (Note 9): | |||||||
Unrealized gains/(losses) on investment securities | 2.8 | (0.9 | ) | ||||
Unrealized gains on hedging activities | 1.6 | 20.4 | |||||
Foreign currency translation adjustments | (7.0 | ) | (3.1 | ) | |||
Defined benefit pension plan adjustments | 1.6 | 2.5 | |||||
Total other comprehensive income/(loss) | (1.0 | ) | 18.9 | ||||
Comprehensive income | $ | 202.0 | $ | 230.9 |
March 31, 2014 | December 31, 2013 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 1,694.0 | $ | 2,073.1 | |||
Settlement assets | 3,515.9 | 3,270.4 | |||||
Property and equipment, net of accumulated depreciation of $438.6 and $428.6, respectively | 214.0 | 209.9 | |||||
Goodwill | 3,170.6 | 3,172.0 | |||||
Other intangible assets, net of accumulated amortization of $714.5 and $672.3, respectively | 833.5 | 833.8 | |||||
Other assets | 494.6 | 562.1 | |||||
Total assets | $ | 9,922.6 | $ | 10,121.3 | |||
Liabilities and Stockholders' Equity | |||||||
Liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 574.4 | $ | 638.9 | |||
Settlement obligations | 3,515.9 | 3,270.4 | |||||
Income taxes payable | 221.7 | 216.9 | |||||
Deferred tax liability, net | 307.2 | 319.2 | |||||
Borrowings | 3,844.1 | 4,213.0 | |||||
Other liabilities | 391.6 | 358.2 | |||||
Total liabilities | 8,854.9 | 9,016.6 | |||||
Commitments and contingencies (Note 6) | |||||||
Stockholders' equity: | |||||||
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued | — | — | |||||
Common stock, $0.01 par value; 2,000 shares authorized; 538.9 shares and 548.8 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively | 5.4 | 5.5 | |||||
Capital surplus | 405.2 | 390.9 | |||||
Retained earnings | 827.1 | 877.3 | |||||
Accumulated other comprehensive loss | (170.0 | ) | (169.0 | ) | |||
Total stockholders' equity | 1,067.7 | 1,104.7 | |||||
Total liabilities and stockholders' equity | $ | 9,922.6 | $ | 10,121.3 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 203.0 | $ | 212.0 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 16.3 | 15.4 | |||||
Amortization | 50.9 | 47.5 | |||||
Other non-cash items, net | (5.3 | ) | 9.3 | ||||
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in: | |||||||
Other assets | (12.0 | ) | (10.4 | ) | |||
Accounts payable and accrued liabilities | (65.1 | ) | (36.1 | ) | |||
Income taxes payable | 10.0 | 7.3 | |||||
Other liabilities | (1.0 | ) | (7.7 | ) | |||
Net cash provided by operating activities | 196.8 | 237.3 | |||||
Cash flows from investing activities | |||||||
Capitalization of contract costs | (16.6 | ) | (11.8 | ) | |||
Capitalization of purchased and developed software | (10.8 | ) | (8.8 | ) | |||
Purchases of property and equipment | (18.2 | ) | (17.3 | ) | |||
Acquisition of business (Note 3) | (10.2 | ) | — | ||||
Proceeds from sale of non-settlement related investments | 100.2 | — | |||||
Net cash provided by/(used in) investing activities | 44.4 | (37.9 | ) | ||||
Cash flows from financing activities | |||||||
Proceeds from exercise of options | 3.0 | 1.7 | |||||
Cash dividends paid | (67.6 | ) | (70.3 | ) | |||
Common stock repurchased (Note 9) | (185.7 | ) | (190.2 | ) | |||
Net proceeds from commercial paper | 130.0 | — | |||||
Principal payments on borrowings | (500.0 | ) | (300.0 | ) | |||
Net cash used in financing activities | (620.3 | ) | (558.8 | ) | |||
Net change in cash and cash equivalents | (379.1 | ) | (359.4 | ) | |||
Cash and cash equivalents at beginning of period | 2,073.1 | 1,776.5 | |||||
Cash and cash equivalents at end of period | $ | 1,694.0 | $ | 1,417.1 | |||
Supplemental cash flow information: | |||||||
Interest paid | $ | 14.2 | $ | 16.0 | |||
Income taxes paid (Note 13) | $ | 25.9 | $ | 29.6 |
• | Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers between two consumers, primarily through a network of third-party agents. The Company's multi-currency, real-time money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world. This service is available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through websites and account based money transfers. |
• | Consumer-to-Business - The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. The significant majority of the segment's revenue was generated in the United States during all periods presented, with the remainder primarily generated in Argentina. |
• | Business Solutions - The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The majority of the segment's business relates to exchanges of currency at the spot rate which enables customers to make cross-currency payments. In addition, in certain countries, the Company writes foreign currency forward and option contracts for customers to facilitate future payments. |
Three Months Ended March 31, | |||||
2014 | 2013 | ||||
Basic weighted-average shares outstanding | 545.9 | 567.6 | |||
Common stock equivalents | 3.3 | 2.1 | |||
Diluted weighted-average shares outstanding | 549.2 | 569.7 |
Severance, Outplacement and Related Benefits | Other (a) | Total | |||||||||
Balance, December 31, 2013 | $ | 45.4 | $ | 1.0 | $ | 46.4 | |||||
Cash payments | (10.0 | ) | (1.0 | ) | (11.0 | ) | |||||
Balance, March 31, 2014 | $ | 35.4 | $ | — | $ | 35.4 |
(a) | Other expenses primarily related to the relocation of various operations to new and existing Company facilities and third-party providers including expenses for hiring, training, relocation, travel and professional fees. All such expenses were recorded when incurred. |
Three Months Ended March 31, 2013 | |||
Cost of services | $ | 1.6 | |
Selling, general and administrative | 2.6 | ||
Total expenses, pre-tax | $ | 4.2 | |
Total expenses, net of tax | $ | 3.3 |
Fair Value Measurement Using | Assets/ Liabilities at Fair Value | ||||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Settlement assets: | |||||||||||||||
State and municipal debt securities | $ | — | $ | 911.5 | $ | — | $ | 911.5 | |||||||
State and municipal variable rate demand notes | — | 505.1 | — | 505.1 | |||||||||||
Other debt securities | — | 10.8 | — | 10.8 | |||||||||||
Other assets: | |||||||||||||||
Derivatives | — | 251.4 | — | 251.4 | |||||||||||
Total assets | $ | — | $ | 1,678.8 | $ | — | $ | 1,678.8 | |||||||
Liabilities: | |||||||||||||||
Notes and other borrowings | $ | — | $ | 4,029.5 | $ | — | $ | 4,029.5 | |||||||
Derivatives | — | 247.1 | — | 247.1 | |||||||||||
Total liabilities | $ | — | $ | 4,276.6 | $ | — | $ | 4,276.6 | |||||||
Fair Value Measurement Using | Assets/ Liabilities at Fair Value | ||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Settlement assets: | |||||||||||||||
State and municipal debt securities | $ | — | $ | 874.2 | $ | — | $ | 874.2 | |||||||
State and municipal variable rate demand notes | — | 865.0 | — | 865.0 | |||||||||||
Other debt securities | — | 11.3 | — | 11.3 | |||||||||||
Other assets: | |||||||||||||||
Short-term bond mutual fund | 100.2 | — | — | 100.2 | |||||||||||
Derivatives | — | 224.3 | — | 224.3 | |||||||||||
Total assets | $ | 100.2 | $ | 1,974.8 | $ | — | $ | 2,075.0 | |||||||
Liabilities: | |||||||||||||||
Notes and other borrowings | $ | — | $ | 4,343.2 | $ | — | $ | 4,343.2 | |||||||
Derivatives | — | 223.4 | — | 223.4 | |||||||||||
Total liabilities | $ | — | $ | 4,566.6 | $ | — | $ | 4,566.6 |
March 31, 2014 | December 31, 2013 | ||||||
Settlement assets: | |||||||
Cash and cash equivalents | $ | 866.2 | $ | 538.6 | |||
Receivables from selling agents and Business Solutions customers | 1,222.3 | 981.3 | |||||
Investment securities | 1,427.4 | 1,750.5 | |||||
$ | 3,515.9 | $ | 3,270.4 | ||||
Settlement obligations: | |||||||
Money transfer, money order and payment service payables | $ | 2,558.1 | $ | 2,376.6 | |||
Payables to agents | 957.8 | 893.8 | |||||
$ | 3,515.9 | $ | 3,270.4 |
March 31, 2014 | Amortized Cost | Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | Net Unrealized Gains | ||||||||||||||
Settlement assets: | |||||||||||||||||||
State and municipal debt securities (a) | $ | 900.7 | $ | 911.5 | $ | 11.8 | $ | (1.0 | ) | $ | 10.8 | ||||||||
State and municipal variable rate demand notes | 505.1 | 505.1 | — | — | — | ||||||||||||||
Other debt securities | 10.7 | 10.8 | 0.1 | — | 0.1 | ||||||||||||||
$ | 1,416.5 | $ | 1,427.4 | $ | 11.9 | $ | (1.0 | ) | $ | 10.9 |
December 31, 2013 | Amortized Cost | Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | Net Unrealized Gains | ||||||||||||||
Settlement assets: | |||||||||||||||||||
State and municipal debt securities (a) | $ | 868.1 | $ | 874.2 | $ | 7.8 | $ | (1.7 | ) | $ | 6.1 | ||||||||
State and municipal variable rate demand notes | 865.0 | 865.0 | — | — | — | ||||||||||||||
Other debt securities | 11.2 | 11.3 | 0.1 | — | 0.1 | ||||||||||||||
$ | 1,744.3 | $ | 1,750.5 | $ | 7.9 | $ | (1.7 | ) | $ | 6.2 | |||||||||
Other assets: | |||||||||||||||||||
Short-term bond mutual fund | 100.0 | 100.2 | 0.2 | — | 0.2 | ||||||||||||||
$ | 1,844.3 | $ | 1,850.7 | $ | 8.1 | $ | (1.7 | ) | $ | 6.4 |
(a) | The majority of these securities are fixed-rate instruments. |
Fair Value | |||
Due within 1 year | $ | 199.6 | |
Due after 1 year through 5 years | 364.1 | ||
Due after 5 years through 10 years | 398.6 | ||
Due after 10 years | 465.1 | ||
$ | 1,427.4 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Unrealized gains on investment securities, beginning of period | $ | 4.1 | $ | 7.7 | |||
Unrealized gains | 7.1 | 1.5 | |||||
Tax expense | (2.6 | ) | (0.6 | ) | |||
Reclassification of gains into "Other revenues" | (2.4 | ) | (2.9 | ) | |||
Reclassification of gains into "Interest income" | (0.2 | ) | — | ||||
Tax expense related to reclassifications | 0.9 | 1.1 | |||||
Net unrealized gains/(losses) on investment securities | 2.8 | (0.9 | ) | ||||
Unrealized gains on investment securities, end of period | $ | 6.9 | $ | 6.8 | |||
Unrealized losses on hedging activities, beginning of period | $ | (33.0 | ) | $ | (21.9 | ) | |
Unrealized gains | 2.3 | 23.8 | |||||
Tax expense | (1.9 | ) | (3.7 | ) | |||
Reclassification of (gains)/losses into "Transaction fees" | 0.1 | (0.4 | ) | ||||
Reclassification of gains into "Foreign exchange revenues" | — | (0.1 | ) | ||||
Reclassification of losses into "Interest expense" | 0.9 | 0.9 | |||||
Tax expense/(benefit) related to reclassifications | 0.2 | (0.1 | ) | ||||
Net unrealized gains on hedging activities | 1.6 | 20.4 | |||||
Unrealized losses on hedging activities, end of period | $ | (31.4 | ) | $ | (1.5 | ) | |
Foreign currency translation adjustments, beginning of period | $ | (21.6 | ) | $ | (8.5 | ) | |
Foreign currency translation adjustments | (10.8 | ) | (2.3 | ) | |||
Tax (expense)/benefit | 3.8 | (0.8 | ) | ||||
Net foreign currency translation adjustments | (7.0 | ) | (3.1 | ) | |||
Foreign currency translation adjustments, end of period | $ | (28.6 | ) | $ | (11.6 | ) | |
Defined benefit pension plan adjustments, beginning of period | $ | (118.5 | ) | $ | (129.9 | ) | |
Reclassification of losses into "Cost of services" | 2.6 | 3.1 | |||||
Tax benefit related to reclassifications and other | (1.0 | ) | (0.6 | ) | |||
Net defined benefit pension plan adjustments | 1.6 | 2.5 | |||||
Defined benefit pension plan adjustments, end of period | $ | (116.9 | ) | $ | (127.4 | ) | |
Accumulated other comprehensive loss, end of period | $ | (170.0 | ) | $ | (133.7 | ) |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Interest cost | $ | 3.4 | $ | 3.0 | |||
Expected return on plan assets | (5.1 | ) | (5.2 | ) | |||
Amortization of actuarial loss | 2.6 | 3.1 | |||||
Net periodic benefit cost | $ | 0.9 | $ | 0.9 |
Contracts designated as hedges: | |||
Euro | $ | 391.2 | |
Canadian dollar | 122.3 | ||
British pound | 81.5 | ||
Swiss franc | 43.9 | ||
Australian dollar | 37.0 | ||
Other | 77.9 | ||
Contracts not designated as hedges: | |||
Euro | $ | 188.2 | |
Canadian dollar | 59.4 | ||
British pound | 37.4 | ||
Australian dollar | 29.7 | ||
Other (a) | 143.3 |
(a) | Comprised of exposures to 14 different currencies. None of these individual currency exposures is greater than $20 million. |
Derivative Assets | Derivative Liabilities | ||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||
Balance Sheet Location | March 31, 2014 | December 31, 2013 | Balance Sheet Location | March 31, 2014 | December 31, 2013 | ||||||||||||||
Derivatives — hedges: | |||||||||||||||||||
Interest rate fair value hedges — Corporate | Other assets | $ | 2.8 | $ | 11.4 | Other liabilities | $ | 6.5 | $ | 7.8 | |||||||||
Foreign currency cash flow hedges — Consumer-to-Consumer | Other assets | 11.0 | 11.1 | Other liabilities | 25.4 | 27.7 | |||||||||||||
Total | $ | 13.8 | $ | 22.5 | $ | 31.9 | $ | 35.5 | |||||||||||
Derivatives — undesignated: | |||||||||||||||||||
Foreign currency — Business Solutions | Other assets | $ | 236.5 | $ | 201.2 | Other liabilities | $ | 213.6 | $ | 186.2 | |||||||||
Foreign currency — Consumer-to-Consumer | Other assets | 1.1 | 0.6 | Other liabilities | 1.6 | 1.7 | |||||||||||||
Total | $ | 237.6 | $ | 201.8 | $ | 215.2 | $ | 187.9 | |||||||||||
Total derivatives | $ | 251.4 | $ | 224.3 | $ | 247.1 | $ | 223.4 |
March 31, 2014 | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Condensed Consolidated Balance Sheets | Net Amounts Presented in the Condensed Consolidated Balance Sheets | Derivatives Not Offset in the Condensed Consolidated Balance Sheets | Net Amounts | |||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 79.1 | $ | — | $ | 79.1 | $ | (75.2 | ) | $ | 3.9 | |||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 172.3 | |||||||||||||||||||
Total | $ | 251.4 | ||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 118.4 | $ | — | $ | 118.4 | $ | (93.3 | ) | $ | 25.1 | |||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 105.9 | |||||||||||||||||||
Total | $ | 224.3 |
March 31, 2014 | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Condensed Consolidated Balance Sheets | Net Amounts Presented in the Condensed Consolidated Balance Sheets | Derivatives Not Offset in the Condensed Consolidated Balance Sheets | Net Amounts | |||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 176.8 | $ | — | $ | 176.8 | $ | (75.2 | ) | $ | 101.6 | |||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 70.3 | |||||||||||||||||||
Total | $ | 247.1 | ||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 146.1 | $ | — | $ | 146.1 | $ | (93.3 | ) | $ | 52.8 | |||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 77.3 | |||||||||||||||||||
Total | $ | 223.4 |
Gain/(Loss) Recognized in Income on Derivatives | Gain/(Loss) Recognized in Income on Related Hedged Item (a) | Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | ||||||||||||||||||||||||||||||
Income Statement Location | Amount | Income Statement Location | Amount | Income Statement Location | Amount | |||||||||||||||||||||||||||
Derivatives | March 31, 2014 | March 31, 2013 | Hedged Item | March 31, 2014 | March 31, 2013 | March 31, 2014 | March 31, 2013 | |||||||||||||||||||||||||
Interest rate contracts | Interest expense | $ | 3.8 | $ | (0.6 | ) | Fixed-rate debt | Interest expense | $ | (0.3 | ) | $ | 3.3 | Interest expense | $ | (0.2 | ) | $ | (0.1 | ) | ||||||||||||
Total gain/ (loss) | $ | 3.8 | $ | (0.6 | ) | $ | (0.3 | ) | $ | 3.3 | $ | (0.2 | ) | $ | (0.1 | ) |
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion) | Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) (b) | ||||||||||||||||||||||||||
Amount | Income Statement Location | Amount | Income Statement Location | Amount | ||||||||||||||||||||||||
Derivatives | March 31, 2014 | March 31, 2013 | March 31, 2014 | March 31, 2013 | March 31, 2014 | March 31, 2013 | ||||||||||||||||||||||
Foreign currency contracts | $ | 2.3 | $ | 23.8 | Revenue | $ | (0.1 | ) | $ | 0.5 | Derivative gains/(losses), net | $ | (0.6 | ) | $ | (0.2 | ) | |||||||||||
Interest rate contracts (c) | — | — | Interest expense | (0.9 | ) | (0.9 | ) | Interest expense | — | — | ||||||||||||||||||
Total gain/(loss) | $ | 2.3 | $ | 23.8 | $ | (1.0 | ) | $ | (0.4 | ) | $ | (0.6 | ) | $ | (0.2 | ) |
Gain/(Loss) Recognized in Income on Derivatives (d) | |||||||||
Income Statement Location | Amount | ||||||||
Three Months Ended March 31, | |||||||||
Derivatives | 2014 | 2013 | |||||||
Foreign currency contracts (e) | Selling, general and administrative | $ | (1.6 | ) | $ | 7.7 | |||
Foreign currency contracts (f) | Derivative gains/(losses), net | — | 0.7 | ||||||
Total gain/(loss) | $ | (1.6 | ) | $ | 8.4 |
(a) | The gain/(loss) of $(0.3) million and $3.3 million in the three months ended March 31, 2014 and 2013, respectively, was comprised of a gain/(loss) in value on the debt of $(3.6) million and $0.6 million, respectively, and amortization of hedge accounting adjustments of $3.3 million and $2.7 million, respectively. |
(b) | The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates. |
(c) | The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative's fair value in "Accumulated other comprehensive loss" in the Condensed Consolidated Balance Sheets. These amounts are reclassified to "Interest expense" in the Condensed Consolidated Statements of Income over the life of the related notes. |
(d) | The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above. |
(e) | The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange losses on settlement assets and obligations and cash balances, not including amounts related to derivatives activity as displayed above and included in "Selling, general and administrative" in the Condensed Consolidated Statements of Income, were $0.8 million and $6.2 million for the three months ended March 31, 2014 and 2013, respectively. |
(f) | The derivative contracts used in the Company's revenue hedging program are not designated as hedges in the final month of the contract. |
March 31, 2014 | December 31, 2013 | ||||||
Due in less than one year: | |||||||
Commercial paper (a) | $ | 130.0 | $ | — | |||
6.500% notes due 2014 | — | 500.0 | |||||
Due in greater than one year (b): | |||||||
Floating rate notes (effective rate of 1.2%) due 2015 | 250.0 | 250.0 | |||||
2.375% notes due 2015 (c) | 250.0 | 250.0 | |||||
5.930% notes due 2016 (c) | 1,000.0 | 1,000.0 | |||||
2.875% notes (effective rate of 2.0%) due 2017 | 500.0 | 500.0 | |||||
3.650% notes due 2018 (c) | 400.0 | 400.0 | |||||
3.350% notes due 2019 (c) | 250.0 | 250.0 | |||||
5.253% notes due 2020 (c) | 324.9 | 324.9 | |||||
6.200% notes due 2036 (c) | 500.0 | 500.0 | |||||
6.200% notes due 2040 (c) | 250.0 | 250.0 | |||||
Other borrowings | 5.7 | 5.7 | |||||
Total borrowings at par value | 3,860.6 | 4,230.6 | |||||
Fair value hedge accounting adjustments, net (b) | 1.2 | 0.9 | |||||
Unamortized discount, net | (17.7 | ) | (18.5 | ) | |||
Total borrowings at carrying value (d) | $ | 3,844.1 | $ | 4,213.0 |
(a) | Pursuant to the Company's commercial paper program, the Company may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Company's Revolving Credit Facility in excess of $150 million. The commercial paper notes may have maturities of up to 397 days from date of issuance. The Company's commercial paper borrowings as of March 31, 2014 had a weighted-average annual interest rate of approximately 0.2% and a weighted-average term of approximately 6 days. |
(b) | The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in "Interest expense" in the Condensed Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes' stated rate. |
(c) | The difference between the stated interest rate and the effective interest rate is not significant. |
(d) | As of March 31, 2014, the Company's weighted-average effective rate on total borrowings was approximately 4.3%. |
Stock options granted: | |||
Weighted-average risk-free interest rate | 1.9 | % | |
Weighted-average dividend yield | 3.1 | % | |
Volatility | 33.8 | % | |
Expected term (in years) | 6.09 | ||
Weighted-average grant date fair value | $ | 3.95 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Revenues: | |||||||
Consumer-to-Consumer: | |||||||
Transaction fees | $ | 825.6 | $ | 809.6 | |||
Foreign exchange revenues | 236.0 | 225.6 | |||||
Other revenues | 15.9 | 15.0 | |||||
1,077.5 | 1,050.2 | ||||||
Consumer-to-Business: | |||||||
Transaction fees | 140.7 | 145.8 | |||||
Foreign exchange and other revenues | 6.5 | 7.9 | |||||
147.2 | 153.7 | ||||||
Business Solutions: | |||||||
Foreign exchange revenues | 90.4 | 84.0 | |||||
Transaction fees and other revenues | 9.0 | 8.8 | |||||
99.4 | 92.8 | ||||||
Other: | |||||||
Total revenues | 26.7 | 28.7 | |||||
Total consolidated revenues | $ | 1,350.8 | $ | 1,325.4 | |||
Operating income/(loss): | |||||||
Consumer-to-Consumer | $ | 247.0 | $ | 267.1 | |||
Consumer-to-Business | 29.8 | 37.9 | |||||
Business Solutions (a) | (3.6 | ) | (6.2 | ) | |||
Other | (1.2 | ) | (1.9 | ) | |||
Total consolidated operating income | $ | 272.0 | $ | 296.9 |
(a) | During the three months ended March 31, 2013, the Company incurred $3.9 million of integration expenses related to the acquisition of Travelex Global Business Payments ("TGBP"), which was acquired in November 2011. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition, which are included in Other. |
• | Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers between two consumers, primarily through a network of third-party agents. Our multi-currency, real-time money transfer service is viewed by us as one interconnected global network where a money transfer can be sent from one location to another, around the world. Our money transfer services are available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through websites and account based money transfers. |
• | Consumer-to-Business - The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. The significant majority of the segment's revenue was generated in the United States during all periods presented, with the remainder primarily generated in Argentina. |
• | Business Solutions - The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The majority of the segment's business relates to exchanges of currency at the spot rate which enables customers to make cross-currency payments. In addition, in certain countries, we write foreign currency forward and option contracts for customers to facilitate future payments. |
Three Months Ended March 31, | ||||||||||
(in millions, except per share amounts) | 2014 | 2013 | % Change | |||||||
Revenues: | ||||||||||
Transaction fees | $ | 987.9 | $ | 978.0 | 1 | % | ||||
Foreign exchange revenues | 329.3 | 312.4 | 5 | % | ||||||
Other revenues | 33.6 | 35.0 | (4 | )% | ||||||
Total revenues | 1,350.8 | 1,325.4 | 2 | % | ||||||
Expenses: | ||||||||||
Cost of services | 797.2 | 759.4 | 5 | % | ||||||
Selling, general and administrative | 281.6 | 269.1 | 5 | % | ||||||
Total expenses | 1,078.8 | 1,028.5 | 5 | % | ||||||
Operating income | 272.0 | 296.9 | (8 | )% | ||||||
Other income/(expense): | ||||||||||
Interest income | 4.7 | 0.4 | * | |||||||
Interest expense | (47.6 | ) | (48.9 | ) | (3 | )% | ||||
Derivative gains/(losses), net | (0.6 | ) | 0.5 | * | ||||||
Other income/(expense), net | (1.1 | ) | 1.3 | * | ||||||
Total other expense, net | (44.6 | ) | (46.7 | ) | (4 | )% | ||||
Income before income taxes | 227.4 | 250.2 | (9 | )% | ||||||
Provision for income taxes | 24.4 | 38.2 | (36 | )% | ||||||
Net income | $ | 203.0 | $ | 212.0 | (4 | )% | ||||
Earnings per share: | ||||||||||
Basic | $ | 0.37 | $ | 0.37 | 0 | % | ||||
Diluted | $ | 0.37 | $ | 0.37 | 0 | % | ||||
Weighted-average shares outstanding: | ||||||||||
Basic | 545.9 | 567.6 | ||||||||
Diluted | 549.2 | 569.7 |
* | Calculation not meaningful |
Three Months Ended March 31, | |||||
2014 | 2013 | ||||
Consumer-to-Consumer | 80 | % | 79 | % | |
Consumer-to-Business | 11 | % | 12 | % | |
Business Solutions | 7 | % | 7 | % | |
Other | 2 | % | 2 | % | |
100 | % | 100 | % |
Three Months Ended March 31, | ||||||||||
(dollars and transactions in millions) | 2014 | 2013 | % Change | |||||||
Revenues: | ||||||||||
Transaction fees | $ | 825.6 | $ | 809.6 | 2 | % | ||||
Foreign exchange revenues | 236.0 | 225.6 | 5 | % | ||||||
Other revenues | 15.9 | 15.0 | 6 | % | ||||||
Total revenues | $ | 1,077.5 | $ | 1,050.2 | 3 | % | ||||
Operating income | $ | 247.0 | $ | 267.1 | (8 | )% | ||||
Operating income margin | 23 | % | 25 | % | ||||||
Key indicator: | ||||||||||
Consumer-to-Consumer transactions | 60.24 | 55.44 | 9 | % |
Three Months Ended March 31, | ||
Consumer-to-Consumer transaction growth (a): | ||
Europe and CIS | 10 | % |
North America | 4 | % |
Middle East and Africa | 8 | % |
Asia Pacific ("APAC") | 8 | % |
Latin America and the Caribbean ("LACA") | 6 | % |
westernunion.com | 55 | % |
Consumer-to-Consumer revenue growth/(decline) (a): | ||
Europe and CIS | 1 | % |
North America | 1 | % |
Middle East and Africa | 4 | % |
APAC | 1 | % |
LACA | (4 | )% |
westernunion.com | 45 | % |
Consumer-to-Consumer revenue as a percentage of consolidated revenue (a): | ||
Europe and CIS | 21 | % |
North America | 19 | % |
Middle East and Africa | 16 | % |
APAC | 12 | % |
LACA | 8 | % |
westernunion.com | 4 | % |
(a) | We view our Consumer-to-Consumer money transfer service as one interconnected global network where a money transfer can be sent from one location to another, around the world, including related transactions that can be initiated through websites and account based money transfers. The segment includes five geographic regions whose functions are limited to generating, managing and maintaining agent relationships and localized marketing activities and also includes our online money transfer service conducted through Western Union branded websites ("westernunion.com"). By means of common processes and systems, these regions and westernunion.com create an interconnected network for consumer transactions, thereby constituting one global Consumer-to-Consumer money transfer business and one operating segment. |
Three Months Ended March 31, | ||||||||||
(dollars in millions) | 2014 | 2013 | % Change | |||||||
Revenues: | ||||||||||
Transaction fees | $ | 140.7 | $ | 145.8 | (3 | )% | ||||
Foreign exchange and other revenues | 6.5 | 7.9 | (18 | )% | ||||||
Total revenues | $ | 147.2 | $ | 153.7 | (4 | )% | ||||
Operating income | $ | 29.8 | $ | 37.9 | (21 | )% | ||||
Operating income margin | 20 | % | 25 | % |
Three Months Ended March 31, | ||||||||||
(dollars in millions) | 2014 | 2013 | % Change | |||||||
Revenues: | ||||||||||
Foreign exchange revenues | $ | 90.4 | $ | 84.0 | 8 | % | ||||
Transaction fees and other revenues | 9.0 | 8.8 | 2 | % | ||||||
Total revenues | $ | 99.4 | $ | 92.8 | 7 | % | ||||
Operating loss | $ | (3.6 | ) | $ | (6.2 | ) | * | |||
Operating loss margin | (4 | )% | (7 | )% |
* | Calculation not meaningful |
Three Months Ended March 31, | ||||||||||
(dollars in millions) | 2014 | 2013 | % Change | |||||||
Revenues | $ | 26.7 | $ | 28.7 | (7 | )% | ||||
Operating loss | $ | (1.2 | ) | $ | (1.9 | ) | * |
* | Calculation not meaningful |
• | Income taxes |
• | Derivative financial instruments |
• | Other intangible assets |
• | Goodwill |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
/s/ Ernst & Young LLP | |
Denver, Colorado | |
May 1, 2014 |
Total Number of Shares Purchased* | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs** | Remaining Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | ||||||||||
January 1 - 31 | 3,041 | $ | 17.29 | — | $ | — | |||||||
February 1 - 28 | 5,327,832 | $ | 16.30 | 4,962,017 | $ | 419.1 | |||||||
March 1 - 31 | 5,960,566 | $ | 16.57 | 5,956,600 | $ | 320.4 | |||||||
Total | 11,291,439 | $ | 16.44 | 10,918,617 |
* | These amounts represent both shares authorized by the Board of Directors for repurchase under a publicly announced authorization, as described below, as well as shares withheld from employees to cover tax withholding obligations on restricted stock units that have vested. |
** | On February 11, 2014, the Board of Directors authorized $500 million of common stock repurchases through June 30, 2015, of which $320.4 million remained available as of March 31, 2014. Management has historically and may continue to establish prearranged written plans pursuant to Rule 10b5-1. A Rule 10b5-1 plan permits us to repurchase shares at times when we may otherwise be unable to do so, provided the plan is adopted when we are not aware of material non-public information. |
The Western Union Company (Registrant) | |||
Date: | May 1, 2014 | By: | /S/ HIKMET ERSEK |
Hikmet Ersek | |||
President and Chief Executive Officer (Principal Executive Officer) | |||
Date: | May 1, 2014 | By: | /S/ RAJESH K. AGRAWAL |
Rajesh K. Agrawal | |||
Executive Vice President and Interim Chief Financial Officer (Principal Financial Officer) | |||
Date: | May 1, 2014 | By: | /S/ AMINTORE T.X. SCHENKEL |
Amintore T.X. Schenkel | |||
Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) |
Exhibit Number | Description | |
10.1 | Form of Award Agreement Under The Western Union Company Senior Executive Annual Incentive Plan for 2014.* | |
10.2 | Settlement Agreement Amendment issued January 31, 2014 by The Honorable Warren Granville, Maricopa County Superior Court Judge (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 3, 2014 and incorporated herein by reference thereto). | |
10.3 | Order Granting Stipulated Motion to Modify Amendment to Settlement Agreement issued March 14, 2014 by The Honorable Warren Granville, Maricopa County Superior Court Judge. | |
10.4 | Order Granting Stipulated Motion to Extend Deadline for Separate Agreements issued April 14, 2014 by The Honorable Warren Granville, Maricopa County Superior Court Judge. | |
10.5 | The Western Union Company 2006 Long-Term Incentive Plan, as amended and restated on January 31, 2014 (filed as Exhibit 10.11 to the Company's Annual Report on Form 10-K filed on February 24, 2014).* | |
10.6 | The Western Union Company 2006 Non-Employee Director Equity Compensation Plan, as Amended and Restated Effective January 31, 2014 (filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K filed on February 24, 2014).* | |
10.7 | Separation Agreement and Release dated as of January 16, 2014 between Scott T. Scheirman, Western Union, LLC, and The Western Union Company (filed as Exhibit 10.48 to the Company's Annual Report on Form 10-K filed on February 24, 2014).* | |
10.8 | Form of 2014 Supplemental Restricted Stock Unit Award Agreement for Section 16 Officers (Non - U.S.) Under The Western Union Company 2006 Long-Term Incentive Plan.* | |
10.9 | Form of 2014 Supplemental Restricted Stock Unit Award Agreement for Section 16 Officers (U.S.) Under The Western Union Company 2006 Long-Term Incentive Plan.* | |
10.10 | Form of 2014 Nonqualified Stock Option Award Agreement for Section 16 Officers (Non - U.S.) Under The Western Union Company 2006 Long-Term Incentive Plan.* | |
10.11 | Form of 2014 Nonqualified Stock Option Award Agreement for Section 16 Officers (U.S.) Under The Western Union Company 2006 Long-Term Incentive Plan.* | |
10.12 | Form of 2014 Performance-Based Restricted Stock Unit Award Agreement for Section 16 Officers (Non - U.S.) Under The Western Union Company 2006 Long-Term Incentive Plan.* | |
10.13 | Form of 2014 Performance-Based Restricted Stock Unit Award Agreement for Section 16 Officers (U.S.) Under The Western Union Company 2006 Long-Term Incentive Plan.* | |
10.14 | Form of 2014 Restricted Stock Unit Award Agreement for Section 16 Officers (Non - U.S.) Under The Western Union Company 2006 Long-Term Incentive Plan.* | |
10.15 | Form of 2014 Restricted Stock Unit Award Agreement for Section 16 Officers (U.S.) Under The Western Union Company 2006 Long-Term Incentive Plan.* | |
10.16 | The Western Union Company Severance/Change in Control Policy (Executive Committee Level), as Amended and Restated Effective February 20, 2014.* | |
12 | Computation of Ratio of Earnings to Fixed Charges | |
15 | Letter from Ernst & Young LLP Regarding Unaudited Interim Financial Information | |
31.1 | Certification of Chief Executive Officer of The Western Union Company Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 | |
31.2 | Certification of Chief Financial Officer of The Western Union Company Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 | |
32 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Maximum Award: | ___% of the Incentive Pool |
Target Award: | ______ |
Performance Period: | January 1, 2014 - December 31, 2014 |
Incentive Pool: | 3.0% of Operating Income for fiscal year 2014 |
Vesting Date: | Employment with the Company on the Payment Date is a condition precedent to receipt of any portion of a bonus under the Plan (subject to the terms of The Western Union Company Severance/Change in Control Policy (Executive Committee Level). |
THE WESTERN UNION COMPANY, | ||
a Delaware corporation | ||
By: | ||
Name: | ||
Title: | ||
Agreed and Accepted: | ||
Participant |
State of Arizona, ex rel. Attorney General Thomas C. Horne, Plaintiff, vs. Western Union Financial Services, Inc. Defendant. | ) ) ) ) ) ) ) ) ) ) | No. CV2010-005807 ORDER GRANTING STIPULATED MOTION TO MODIFY AMENDMENT TO SETTLEMENT AGREEMENT |
State of Arizona, ex rel. Attorney General Thomas C. Horne, Plaintiff, vs. Western Union Financial Services, Inc. Defendant. | ) ) ) ) ) ) ) ) ) ) | No. CV2010-005807 ORDER GRANTING STIPULATED MOTION TO EXTEND DEADLINE FOR SEPARATE AGREEMENTS |
1. | Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), The Western Union Company (the “Company”) hereby grants to you (“Executive”) an award of Restricted Stock Units (the “Units”), in the amount specified in Executive’s Award Notice (which forms part of this Agreement) as of the Grant Date specified in Executive’s Award Notice, related to shares of the Company’s common stock (“Shares”), subject to the terms and conditions set forth in this Agreement and the Plan. The terms of the Plan are hereby incorporated in this Agreement by this reference and made a part hereof. Capitalized terms not defined herein shall have the same definitions as set forth in the Plan. |
2. | Each Unit shall provide for the issuance and transfer to Executive of one Share upon lapse of the restrictions set forth in paragraph 3 below. Upon issuance and transfer of Shares to Executive following the Restricted Period (as defined herein), Executive shall have all rights incident to ownership of such Shares, including but not limited to voting rights and the right to receive dividends. |
3. | Subject to other provisions of this Agreement and the terms of the Plan, the restrictions on the Units shall lapse and the Shares subject to the Units shall be issued and transferred to Executive as set forth below. Effective on and after the date on which the restrictions lapse, subject to applicable local laws and Company policies, Executive may hold, assign, pledge, sell, or transfer such Shares in Executive’s discretion. The period in which the Units may be forfeited by the Executive is defined as the “Restricted Period.” |
a. | On the first anniversary of the Grant Date, restrictions on thirty percent (30%) of the total number of Units granted to Executive on the Grant Date shall lapse and the Shares subject to such Units shall be transferred to Executive; and |
b. | On the second anniversary of the Grant Date, restrictions on the remaining seventy percent (70%) of the Units granted to Executive on the Grant Date shall lapse (for a cumulative total of 100% of the Units) and the Shares subject to such Units shall be transferred to Executive. |
4. | Executive may elect to satisfy Executive’s obligation to advance the amount of any required income tax (including foreign, federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related items related to Executive’s participation in the Plan and legally applicable to Executive (the “Required Tax Payments”) by any of the following means: (1) a cash payment to the Company, (2) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (3) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered to Executive having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to Executive, equal to the amount necessary to satisfy any such obligation, (4) a cash payment to the Company by a broker-dealer acceptable to the Company to whom Executive has submitted an irrevocable notice of sale, or (5) any combination of (1) and (2). |
5. | The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, while subject to restrictions. If Executive or anyone claiming under or through Executive attempts to make any such sale, transfer, assignment, pledge or other disposition of Units in violation of this paragraph 5, such attempted violation shall be null, void, and without effect. |
6. | Executive shall forfeit Executive’s right to any unvested Units if Executive’s continuous employment with the Company or a Subsidiary or Affiliate terminates for any reason during the Restricted Period (except solely by reason of a period of Related Employment or as set forth in paragraphs 7 and 9). |
7. | Except to the extent paragraph 9 applies, if Executive’s employment with the Company or a Subsidiary or Affiliate is terminated involuntarily and without Cause and on the date of such termination Executive is an eligible participant in the Severance/Change in Control Policy (“Executive Committee Level”) (the “Executive Severance Policy”), subject to the terms of the Executive Severance Policy, any then-restricted Units shall vest and be settled on a prorated basis effective on Executive’s termination date. Such prorated vesting shall be calculated by multiplying the number of then-restricted Units by a fraction, the numerator of which is the number of days that have elapsed between the Grant Date and Executive’s termination date and the denominator of which is the number of days between the Grant Date and the second anniversary of the Grant Date. The restricted portion of this award that does not become vested under such calculation shall be forfeited on Executive’s termination date and shall be cancelled by the Company. |
8. | During the Restricted Period, Executive (and any person succeeding to Executive’s rights pursuant to the Plan) will have no ownership interest or rights in Shares underlying the Units, including no rights to receive dividends or other distributions made or paid with respect to such Shares or to exercise voting or other shareholder rights with respect to such Shares. Executive shall not be entitled to receive dividend equivalents in connection with this award. |
9. | If Executive is eligible to participate in the Executive Severance Policy at the time of a Change in Control and Executive’s employment with the Company, a Subsidiary or an Affiliate terminates for an eligible reason under the Executive Severance Policy during the 24-month period commencing on the effective date of the Change in Control, then, subject to the terms of the Executive Severance Policy, any remaining restrictions applicable to the Units shall immediately lapse effective on the date of Executive’s termination. |
10. | The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of Executive under this Agreement without Executive’s written consent. |
11. | Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on Executive and all persons claiming under or through Executive. By accepting this grant of Units or other benefit under the Plan, Executive and each person claiming under or through Executive shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. |
12. | In accepting the award of Units, Executive acknowledges that (i) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan; (ii) the award of Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Units, or benefits in lieu of Units even if Units have been awarded repeatedly in the past; (iii) all decisions with respect to future awards, if any, will be at the sole discretion of the Committee; (iv) Executive’s participation in the Plan is voluntary; (v) the award of Units is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or to Executive’s employer, and the Units are outside the scope of Executive’s employment contract, if any; (vi) the Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (vii) neither the award of the Units nor any provision of this Agreement, the Plan or the policies adopted pursuant to the Plan confer upon Executive any right with respect to employment or continuation of current employment, and in the event that Executive is not an employee of the Company or any Subsidiary or Affiliate, the Units shall not be interpreted to form an employment contract or relationship with the Company or any Subsidiary or Affiliate; (viii) this grant of the Units does not establish or imply an employment relationship between Executive and the Company; (ix) the future value of the underlying Shares is unknown and cannot be predicted with certainty, (x) if Executive receives Shares, the value of such Shares acquired upon vesting of the Units may increase or decrease in value; (xi) no claim or entitlement to compensation or damages arises from termination of the Units, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the Units or Shares received upon the vesting of the Units resulting from termination of the Executive’s employment by the Company or the Executive’s employer (for any reason whatsoever and whether or not in breach of local labor laws) and Executive irrevocably releases the Company and Executive’s employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, Executive shall be deemed irrevocably to have waived his entitlement to pursue such claim; (xii) in the event of involuntary termination of employment (whether or not in breach of local labor laws), Executive’s right to receive Shares pursuant to the Units after termination of employment, if any, will be measured by the last date that Executive’s employer pays Executive his last paycheck for regular salary as an employee of Executive’s employer and will not be extended by any notice period mandated under local law; the Committee shall have the exclusive discretion to determine when the Executive is no longer being paid regular salary for this purpose; and (xiii) the Units and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability. |
13. | The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Executive’s participation in the Plan, or Executive’s acquisition or sale of the Shares underlying the Units. Executive is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
14. | The validity, construction, interpretation, administration and effect of these Terms and Conditions and the Plan and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware, as provided in the Plan. For purposes of litigating any dispute that arises directly or indirectly under the grant of the Units or the Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Colorado, and agree that such litigation shall be conducted in the courts of Arapahoe County, or the federal courts for the United States for the District of Colorado, where this grant is made and/or to be performed. |
15. | Executive hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Executive’s personal data as described in this Agreement by and among, as applicable, Executive’s employer, the Company and the Company’s Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing Executive’s participation in the Plan. |
16. | The Company may, in its sole discretion, decide to deliver any documents related to the Units and to participation in the Plan or related to future Units that may be granted under the Plan by electronic means or to request Executive’s consent to participate in the Plan by electronic means. Executive hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company. |
17. | If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed as to foster the intent of this Agreement and the Plan. |
18. | [Consumer Protection Notification. If the provisions of the Austrian Consumer Protection Act (the “Act”) are applicable to the Agreement and the Plan, Executive may be entitled to revoke his acceptance of the Agreement if Executive signs this Agreement outside of the business premises of Executive’s employer, provided the revocation is made within one week of Executive’s acceptance. The revocation must be in written form to be valid. It is sufficient if Executive returns this Agreement to the Company or the Company’s representative with language which can be understood as Executive’s refusal to conclude or honor this Agreement.] [Applicable only to Austrian employees] |
19. | [Exchange Control Information. If Executive holds Shares obtained through the Plan outside of Austria, he must submit an annual report to the Austrian National Bank. An exemption applies if the value of the Shares as of December 31 does not exceed €5,000,000. The deadline for filing the annual report is January 31 of the following year. When Shares are sold, there may be exchange control obligations if the cash received is held outside Austria. If the transaction volume of all of Executive’s accounts abroad exceeds €3,000,000, the movements and balances of all accounts must be reported monthly, as of the last day of the month, on or before the fifteenth day of the following month. [Applicable only to Austrian employees] |
20. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executive’s termination of employment due to death, Disability or for an eligible reason under the Executive Severance Policy during the 24-month period commencing on the effective date of a Change in Control, in order for the restrictions on the Units to lapse the Company must achieve as a Performance Measure not less than $500,000,000 of combined operating income during the period beginning January 1, 2014 and ending December 31, 2014, as determined by the Committee based on the Corporation’s 2014 annual financial statements. |
21. | Executive acknowledges that Executive has read the Company’s Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Company’s Clawback Policy and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Company’s Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executive’s misconduct or fraud and that compensation should be recovered from Executive (such amount being recovered, the “Clawbacked Compensation”), then upon such determination, the Board may recover such Clawbacked Compensation by (a) cancelling all or any portion of the unvested Units (the “Clawbacked Portion”) and, in such case, the Clawbacked Portion of the unvested Units shall automatically and without further action of the Company be cancelled, (b) requiring Executive to deliver to the Company shares of Common Stock acquired upon the vesting of the Units (to the extent held by Executive), (c) requiring Executive to repay to the Company any net proceeds resulting from the sale of shares of Common Stock acquired upon the vesting of the Units or (d) any combination of the remedies set forth in clauses (a), (b) or (c). The foregoing remedies are in addition to and separate from any other relief available to the Company due to Executive’s misconduct or fraud. Any determination by the Board with respect to the foregoing shall be final, conclusive and binding upon Executive and all persons claiming through Executive. |
22. | To the extent any amounts under this Agreement are payable by reference to Executive’s “termination of employment,” such term shall be deemed to refer to Executive’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if Executive is a “specified employee,” as defined in Section 409A of the Code, as of the date of Executive’s separation from service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon Executive’s separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of Executive’s separation from service, such payment shall be delayed until the earlier to occur of (a) the six-month anniversary of the separation from service or (b) the date of Executive’s death. |
I hereby confirm that the foregoing and the documents attached hereto are hereby in all respects accepted and agreed to by the undersigned as of the date of this Agreement: | |
Signature:_________________________ | Printed Name: ______________________ |
Date: ____________________ |
1. | Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), The Western Union Company (the “Company”) hereby grants to you (“Executive”) an award of Restricted Stock Units (the “Units”), in the amount specified in Executive’s Award Notice (which forms part of this Agreement) as of the Grant Date specified in Executive’s Award Notice, related to shares of the Company’s common stock (“Shares”), subject to the terms and conditions set forth in this Agreement and the Plan. The terms of the Plan are hereby incorporated in this Agreement by this reference and made a part hereof. Capitalized terms not defined herein shall have the same definitions as set forth in the Plan. |
2. | Each Unit shall provide for the issuance and transfer to Executive of one Share upon lapse of the restrictions set forth in paragraph 3 below. Upon issuance and transfer of Shares to Executive following the Restricted Period (as defined herein), Executive shall have all rights incident to ownership of such Shares, including but not limited to voting rights and the right to receive dividends. |
3. | Subject to other provisions of this Agreement and the terms of the Plan, the restrictions on the Units shall lapse and the Shares subject to the Units shall be issued and transferred to Executive as set forth below. Effective on and after the date on which the restrictions lapse, subject to applicable local laws and Company policies, Executive may hold, assign, pledge, sell, or transfer such Shares in Executive’s discretion. The period in which the Units may be forfeited by the Executive is defined as the “Restricted Period.” |
a. | On the first anniversary of the Grant Date, restrictions on thirty percent (30%) of the total number of Units granted to Executive on the Grant Date shall lapse and the Shares subject to such Units shall be transferred to Executive; and |
b. | On the second anniversary of the Grant Date, restrictions on the remaining seventy percent (70%) of the Units granted to Executive on the Grant Date shall lapse (for a cumulative total of 100% of the Units) and the Shares subject to such Units shall be transferred to Executive. |
4. | Executive may elect to satisfy his or her obligation to advance the amount of any required income or other withholding taxes (the “Required Tax Payments”) incurred in connection with the issuance and transfer of the Shares by any of the following means: (1) a cash payment to the Company, (2) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (3) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered to Executive having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to Executive, equal to the amount necessary to satisfy any such obligation, (4) a cash payment to the Company by a broker-dealer acceptable to the Company to whom Executive has submitted an irrevocable notice of sale, or (5) any combination of (1) and (2). Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. |
5. | The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, while subject to restrictions. If Executive or anyone claiming under or through Executive attempts to make any such sale, transfer, assignment, pledge or other disposition of Units in violation of this paragraph 5, such attempted violation shall be null, void, and without effect. |
6. | Executive shall forfeit Executive’s right to any unvested Units if Executive’s continuous employment with the Company or a Subsidiary or Affiliate terminates for any reason during the Restricted Period (except solely by reason of a period of Related Employment or as set forth in paragraphs 7 and 9). |
7. | Except to the extent paragraph 9 applies, if Executive’s employment with the Company or a Subsidiary or Affiliate is terminated involuntarily and without Cause and on the date of such termination Executive is an eligible participant in the Severance/Change in Control Policy (“Executive Committee Level”) (the “Executive Severance Policy”), subject to the terms of the Executive Severance Policy, any then-restricted Units shall vest and be settled on a prorated basis effective on Executive’s termination date. Such prorated vesting shall be calculated by multiplying the number of then-restricted Units by a fraction, the numerator of which is the number of days that have elapsed between the Grant Date and Executive’s termination date and the denominator of which is the number of days between the Grant Date and the second anniversary of the Grant Date. The restricted portion of this award that does not become vested under such calculation shall be forfeited on Executive’s termination date and shall be cancelled by the Company. |
8. | During the Restricted Period, Executive (and any person succeeding to Executive’s rights pursuant to the Plan) will have no ownership interest or rights in Shares underlying the Units, including no rights to receive dividends or other distributions made or paid with respect to such Shares or to exercise voting or other shareholder rights with respect to such Shares. Executive shall not be entitled to receive dividend equivalents in connection with this award. |
9. | If Executive is eligible to participate in the Executive Severance Policy at the time of a Change in Control and Executive’s employment with the Company, a Subsidiary or an Affiliate terminates for an eligible reason under the Executive Severance Policy during the 24-month period commencing on the effective date of the Change in Control, then, subject to the terms of the Executive Severance Policy, any remaining restrictions applicable to the Units shall immediately lapse effective on the date of Executive’s termination. |
10. | The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of Executive under this Agreement without Executive’s written consent. |
11. | Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on Executive and all persons claiming under or through Executive. By accepting this grant of Units or other benefit under the Plan, Executive and each person claiming under or through Executive shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. |
12. | This grant of Units is discretionary, non-binding for future years and there is no promise or guarantee that such grants will be offered to Executive in future years. |
13. | The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Executive’s participation in the Plan, or Executive’s acquisition or sale of the Shares underlying the Units. Executive is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
14. | The validity, construction, interpretation, administration and effect of these Terms and Conditions and the Plan and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware, as provided in the Plan. For purposes of litigating any dispute that arises directly or indirectly under the grant of the Units or the Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Colorado, and agree that such litigation shall be conducted in the courts of Douglas County, or the federal courts for the United States for the District of Colorado, where this grant is made and/or to be performed. |
15. | If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed as to foster the intent of this Agreement and the Plan. |
16. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executive’s termination of employment due to death, Disability or for an eligible reason under the Executive Severance Policy during the 24-month period commencing on the effective date of a Change in Control, in order for the restrictions on the Units to lapse the Company must achieve as a Performance Measure not less than $500,000,000 of combined operating income during the period beginning January 1, 2014 and ending December 31, 2014, as determined by the Committee based on the Corporation’s 2014 annual financial statements. |
17. | Executive acknowledges that Executive has read the Company’s Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Company’s Clawback Policy and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Company’s Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executive’s misconduct or fraud and that compensation should be recovered from Executive (such amount being recovered, the “Clawbacked Compensation”), then upon such determination, the Board may recover such Clawbacked Compensation by (a) cancelling all or any portion of the unvested Units (the “Clawbacked Portion”) and, in such case, the Clawbacked Portion of the unvested Units shall automatically and without further action of the Company be cancelled, (b) requiring Executive to deliver to the Company shares of Common Stock acquired upon the vesting of the Units (to the extent held by Executive), (c) requiring Executive to repay to the Company any net proceeds resulting from the sale of shares of Common Stock acquired upon the vesting of the Units or (d) any combination of the remedies set forth in clauses (a), (b) or (c). The foregoing remedies are in addition to and separate from any other relief available to the Company due to Executive’s misconduct or fraud. Any determination by the Board with respect to the foregoing shall be final, conclusive and binding upon Executive and all persons claiming through Executive. |
18. | To the extent any amounts under this Agreement are payable by reference to Executive’s “termination of employment,” such term shall be deemed to refer to Executive’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if Executive is a “specified employee,” as defined in Section 409A of the Code, as of the date of Executive’s separation from service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon Executive’s separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of Executive’s separation from service, such payment shall be delayed until the earlier to occur of (a) the six-month anniversary of the separation from service or (b) the date of Executive’s death. |
I hereby confirm that the foregoing and the documents attached hereto are hereby in all respects accepted and agreed to by the undersigned as of the date of this Agreement: | |
Signature:_________________________ | Printed Name: ______________________ |
Date: ____________________ |
1. | These Terms and Conditions, including the attached Appendix, form part of your Stock Option Agreement (the “Agreement”) pursuant to which you have been granted a Nonqualified Stock Option (“Stock Option”) under The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”). A copy of the Plan is enclosed for your convenience. The terms of the Plan are hereby incorporated in this Agreement by reference and made a part hereof. Any capitalized terms used in this Agreement that are not defined herein shall have the meaning set forth in the Plan. |
2. | The number of common shares of The Western Union Company (the “Company”) subject to the Stock Option, the grant date of the Stock Option and the option exercise price are all specified in the attached Award Notice (which forms part of the Agreement). |
3. | Subject to the other provisions of this Agreement and the terms of the Plan, you will “vest” in, or have the right to exercise, this Stock Option as follows: |
(a) | On or after the first anniversary and until the tenth anniversary of the grant date, you may exercise this Stock Option for up to one-fourth (25%) of the total number of shares covered hereby; |
(b) | On or after the second anniversary and until the tenth anniversary of the grant date, you may exercise this Stock Option for up to one-half (50%) of the total number of shares covered hereby; |
(c) | On or after the third anniversary and until the tenth anniversary of the grant date, you may exercise this Stock Option for up to three-fourths (75%) of the total number of shares covered hereby; |
(d) | On or after the fourth anniversary and until the tenth anniversary of the grant date, you may exercise this Stock Option with respect to the total number of shares covered hereby; |
(e) | No part of this Stock Option may be exercised after the tenth anniversary of the grant date listed in the Award Notice; |
(f) | If you are an eligible participant in the Severance/Change in Control Policy applicable to members of the Company’s Executive Committee at the time of a Change in Control and your employment with the Company, a Subsidiary or an Affiliate terminates for an eligible reason under such policy during the 24-month period commencing on the effective date of the Change in Control, then this Stock Option shall immediately become fully vested and exercisable effective on the date of your termination and may thereafter be exercised by you (or your legal representative or similar person) until the end of your severance period under such Policy or, if earlier, the expiration date of the term of this Stock Option. |
4. | This Stock Option may not be exercised, in whole or in part, unless the following conditions are met: |
(a) | You have accepted these Terms and Conditions either through on-line electronic acceptance (if permitted by the Company) or by signing and returning to the Company a copy of these Terms and Conditions. Signed copies of these Terms and Conditions should be sent to the attention of: Western Union Stock Plan Administration, 12500 E. Belford Avenue, M21B2, Englewood, Colorado 80112. |
(b) | Legal counsel for the Company must be satisfied at the time of exercise that the issuance of shares upon exercise will comply with applicable U.S. federal, state, local and foreign laws. |
(c) | You pay the exercise price as follows: (i) by giving notice to the Company or its designee of the number of whole shares of Common Stock to be purchased and by making payment therefor in full (or arranging for such payment to the Company's satisfaction) either (A) in cash, (B) except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to the Company and to whom you have submitted an irrevocable notice of exercise (i.e., also known as “cashless exercise”) or (C) by a combination of (A) and (B), and (ii) by executing such documents as the Company may reasonably request. |
(d) | You must, at all times during the period beginning with the grant date of this Stock Option and ending on the date of such exercise, have been employed by the Company, a Subsidiary or an Affiliate or have been engaged in a period of Related Employment, with certain exceptions noted below. Service on the Board after receipt of a Stock Option shall not be considered a termination of employment. |
(e) | You have executed and returned to the Company or accepted electronically an updated restrictive covenant agreement (and exhibits) if requested by the Company which may contain certain noncompete, nonsolicitation and/or nondisclosure provisions. While a court may sever any provision in the restrictive covenant agreement, you agree by executing or electronically accepting the restrictive covenant agreement that you will forfeit this Stock Option, whether vested or not, if you do not abide by the restrictive covenant agreement as written. |
5. | Absent a period of Related Employment or service on the Board subsequent to the grant date, if you terminate employment or cease providing services to the Company, a Subsidiary or an Affiliate while holding this Stock Option, your right to exercise the Stock Option and the time during which you may exercise the Stock Option depends on the reason for your termination. |
(a) | Disability. If your employment with or service to the Company, a Subsidiary or an Affiliate terminates by reason of Disability, this Stock Option shall become fully vested and exercisable and may thereafter be exercised by you (or your legal representative or similar person) until the date which is one year after the effective date of your termination of employment or service, or if earlier, the expiration date of the term of this Stock Option. |
(b) | Retirement. If your employment with or service to the Company, a Subsidiary or an Affiliate terminates by reason of Retirement, this Stock Option, to the extent not already vested, shall vest on a prorated basis on the effective date of your termination of employment or service. Such prorated vesting shall be calculated by multiplying the number of shares covered by the unvested portion of this Stock Option by a fraction, the numerator of which is the number of days that have elapsed between the grant date and the effective date of your termination of employment or service and the denominator of which is the number of days between the grant date and the fourth anniversary of the grant date. The unvested portion of this Stock Option that does not become vested under such calculation shall be forfeited effective on your termination date and shall be canceled by the Company. The vested portion of this Stock Option, including any portion that had previously become vested and the prorated portion that vests effective on your termination date in accordance with the above calculation may be exercised by you (or your legal representative or similar person) until the date which is two years after the effective date of your termination of employment or service, or if earlier, the expiration date of the term of this Stock Option. In administering the Plan, the Committee reserves the right to treat your termination of employment due to Retirement the same as "Other Termination" (as defined in this Agreement) in the event that application of the immediately preceding sentence would be deemed to be impermissible age discrimination under local law, as determined in the sole discretion of the Committee. |
(c) | Death. If your employment with or service to the Company, a Subsidiary or an Affiliate terminates by reason of death, this Stock Option shall become fully vested and exercisable and may thereafter be exercised by your executor, administrator, legal representative, beneficiary or similar person until the date which is one year after the date of death, or if earlier, the expiration date of the term of this Stock Option. |
(d) | Involuntary Termination Without Cause. Except to the extent paragraph 3(f) applies, if your employment with or service to the Company, a Subsidiary or an Affiliate is terminated involuntarily and without Cause and you are an eligible participant in the Severance/Change in Control Policy applicable to members of the Company’s Executive Committee, subject to the terms of such policy, the unvested portion of this Stock Option shall vest on a prorated basis effective on your termination date. Such prorated vesting shall be calculated by multiplying the number of shares covered by the unvested portion of this Stock Option by a fraction, the numerator of which is the number of days that have elapsed between the grant date and the effective date of your termination of employment or service and the denominator of which is the number of days between the grant date and the fourth anniversary of the grant date. The unvested portion of this Stock Option that does not become vested under such calculation shall be forfeited effective on your termination date and shall be canceled by the Company. The vested portion of this Stock Option, including any portion that had previously become vested and the prorated portion that vests effective on your termination date in accordance with the above calculation may be exercised by you (or your legal representative or similar person) until the end of your severance period under such Policy or, if earlier, the expiration date of the term of this Stock Option. If your employment with or service to the Company, a Subsidiary or an Affiliate is terminated involuntarily and without Cause and you are not an eligible participant in the Severance/Change in Control Policy applicable to members of the Company’s Executive Committee on the date of such termination, this Stock Option shall cease to vest, and to the extent already vested, may thereafter be exercised by you (or your legal representative or similar person) until the date which is three months after such involuntary termination, or if earlier, the expiration date of the term of this Stock Option. Notwithstanding the foregoing, if, at the time of your termination of employment, you have satisfied the applicable age or age and service requirement for “Retirement” under the Plan, the provisions of paragraph 5(b) above, rather than this paragraph 5(d), shall be applicable to this Stock Option if at such time the provisions of paragraph 5(b) are more advantageous to you. |
(e) | Termination for Cause. If your employment with or service to the Company, a Subsidiary or an Affiliate is terminated for Cause, this Stock Option shall cease to vest, and to the extent already vested, may thereafter be exercised by you (or your legal representative or similar person) until the close of the New York Stock Exchange (if open) on the date of your termination of employment or service. If the New York Stock Exchange is closed at the time of your termination of employment, this Stock Option shall be forfeited at the time your employment is terminated and shall be canceled by the Company. |
(f) | Other Termination. If your employment with or service to the Company, a Subsidiary or an Affiliate terminates for any reason other than Disability, Retirement, death, involuntary termination without Cause, or termination for Cause, this Stock Option shall cease to vest, and to the extent already vested, may thereafter be exercised by you (or your legal representative or similar person) until the close of the New York Stock Exchange (if open) on the date which is the thirtieth (30th) day following your termination of employment or service, or if earlier, the expiration date of the term of this Stock Option. If the New York Stock Exchange is closed on the thirtieth (30th) day following your termination of employment or service, then your unexpired Stock Option may be exercised until the close of the New York Stock Exchange on the next following day on which the New York Stock Exchange is open, after which time this Stock Option shall be forfeited and canceled by the Company. |
(g) | Death Following Termination of Employment or Service. If you die during the applicable Post-Termination Exercise Period, this Stock Option will be exercisable only to the extent that the Stock Option is exercisable on the date of your death and may thereafter be exercised by your executor, administrator, legal representative, beneficiary or similar person until the date which is one year after the date of your death, or if earlier, the expiration date of the term of this Stock Option. |
6. | Subject to any restrictions imposed by local law, so long as you continue to be a member of the Executive Committee of the Company, you may transfer this Stock Option to a Family Member or Family Entity without consideration; provided, however, in the case of a transfer of this Stock Option to a limited liability company or a partnership which is a Family Entity, such transfer may be for consideration consisting solely of an entity interest in the limited liability company or partnership to which the transfer is made. Any transfer of this Stock Option shall be in a form acceptable to the Committee, shall be signed by you and shall be effective only upon written acknowledgement by the Committee of its receipt and acceptance of such notice. If this Stock Option is transferred to a Family Member or Family Entity, the Stock Option may not thereafter be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by such Family Member or Family Entity except by will or the laws of descent and distribution. The Committee has delegated its responsibilities under this paragraph 6 to the Company’s General Counsel. |
7. | The Company shall have the right to require, as of the grant, vesting or exercise of an option and the sale of any shares of stock received upon exercise of an option, that you (or any person acting under Paragraph 5 above): |
(a) | Pay to the Company or its designee, upon its demand, such amount as may be requested for the purpose of satisfying its obligation or the obligation of any of its Subsidiaries or Affiliates or other person to withhold U.S. federal, state, local or foreign income, employment or other taxes incurred by reason of the shares. You may satisfy your obligation to pay such amounts by authorizing the Company to withhold from your wages or other cash compensation, from proceeds from the sale of shares or from the shares purchased by you pursuant to the exercise shares having a fair market value on the date of exercise equal to the withholding amount. If the amount requested for the purpose of satisfying the withholding obligation is not paid, the Company may refuse to allow you to exercise the option; and |
(b) | Provide the Company with any forms, documents or other information reasonably required by the Company in connection with the grant. |
(c) | Regardless of any action the Company takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax Related Items”), you acknowledge that the ultimate liability for all Tax Related Items legally due remains your responsibility and that the Company (i) makes no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the Stock Options, including the grant of the Stock Options, the exercise of the Stock Options, the receipt of an equivalent cash payment, the subsequent sale of any Shares acquired at exercise and the receipt of any dividends; and (ii) does not commit to structure the terms of the grant or any aspect of the Stock Options to reduce or eliminate your liability for Tax Related Items. |
(d) | Prior to the issuance of Shares upon exercise of the Stock Options, you shall pay, or make adequate arrangements satisfactory to the Company (in its sole discretion) to satisfy all withholding and payment on account obligations of the Company. In this regard, you authorize the Company to withhold all applicable Tax Related Items legally payable by you from your wages or other cash compensation payable to you by the Company upon exercise of any Stock Options. Alternatively, or in addition, if permissible under local law, the Company may, in its sole discretion, (i) sell or arrange for the sale of Shares to be issued on the exercise of the Stock Options to satisfy the withholding or payment on account obligation, and/or (ii) withhold in Shares, provided that the Company shall withhold only the amount of Shares necessary to satisfy the minimum withholding amount. You shall pay to the Company any amount of Tax Related Items that the Company may be required to withhold as a result of your receipt of the Stock Options, or the exercise of the Stock Options, that cannot be satisfied by the means previously described. The Company may refuse to deliver Shares if you fail to comply with your obligations in connection with the Tax Related Items as described herein. |
8. | The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of yours under this Agreement without your written consent. |
9. | Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on you and all persons claiming under or through you. By accepting this grant or other benefit under the Plan, you and each person claiming under or through you shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. |
10. | The validity, construction, interpretation, administration and effect of the Plan, and of its rules and regulations, and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware. If you have received this or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control. |
11. | In accepting the grant, you acknowledge that: (i) the Plan is discretionary in nature and it may be modified, suspended or terminated by the Company or the Committee at any time; (ii) the grant of the Stock Option is voluntary and occasional and does not create any contractual or other right to receive future grants of Stock Options, or benefits in lieu of options, even if options have been granted repeatedly in the past; (iii) all decisions with respect to any such future grants will be at the sole discretion of the Committee; (iv) your participation in the Plan shall not create a right to further employment with your Employer (“Employer”) and shall not interfere with the ability of your Employer to terminate your employment relationship at any time with or without cause; (v) your participation in the Plan is voluntary; (vi) the value of the option is an extraordinary item of compensation which is outside the scope of your employment contract, if any; (vii) the options are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (viii) in the event of involuntary termination of your employment, your right to receive options under the Plan, if any, will terminate effective as of the date that you are no longer actively employed regardless of any reasonable notice period mandated under local law (including but not limited to statutory law, regulatory law and/or common law) and the right to receive grants of options will not continue during any required notice period; (ix) the options have not been granted to you in consideration of your employment with your Employer, but is purely a gratuity extended by the Company at its sole discretion, and the option grant can in no event be understood or interpreted to mean that the Company is your employer or that you have an employment relationship with the Company; (x) the future value of the underlying shares is unknown and cannot be predicted with certainty; (xi) if the underlying shares do not increase in value, the options will have no value; and (xii) no claim or entitlement to compensation or damages arises from termination of the options or diminution in value of the options or shares purchased through exercise of the options and you irrevocably release the Company and your Employer from any such claim that may arise. |
12. | You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, your Employer, the Company and the Company’s Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that your Employer and/or the Company hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom you may elect to deposit any shares of stock acquired upon exercise of the option. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or withdraw the consents herein by contacting in writing your local human resources representative. You understand that withdrawal of consent may affect your ability to exercise or realize benefits from the option. |
13. | If any provision of this Agreement (including the Appendix) shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining provisions of this Agreement. |
14. | You acknowledge that you have read the Company’s Clawback Policy. In consideration of the grant of this Stock Option, you agree to abide by the Company’s Clawback Policy as it may be amended from time to time, and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Company’s Clawback Policy) received by or paid to you resulted from any financial result or performance metric that was impacted by your misconduct or fraud and that compensation should be recovered from you (such amount being recovered, the “Clawbacked Compensation”), then upon such determination, the Board may recover such Clawbacked Compensation by (a) cancelling all or any portion of this Stock Option (the “Clawbacked Portion”) and, in such case, you shall cease to be entitled to exercise the Clawbacked Portion of this Stock Option and the Clawbacked Portion of this Stock Option shall automatically and without further action of the Company be cancelled, (b) requiring you to deliver to the Company shares of Common Stock acquired upon the exercise of this Stock Option (to the extent held by you), (c) requiring you to repay to the Company any profit resulting from the sale of shares of Common Stock acquired upon the exercise of this Stock Option or (d) any combination of the remedies set forth in clauses (a), (b) or (c). The foregoing remedies are in addition to and separate from any other relief available to the Company due to your misconduct or fraud. Any determination by the Board with respect to the foregoing shall be final, conclusive and binding upon you and all persons claiming through you. |
15. | The validity, construction, interpretation, administration and effect of the Plan and this Agreement (including the Appendix) shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware, as provided in the Plan. For purposes of litigating any dispute that arises directly or indirectly under the Stock Option or the Agreement (including the Appendix), the parties hereby submit to and consent to the jurisdiction of the State of Colorado, and agree that such litigation shall be conducted in the courts of Douglas County, or the federal courts for the United States for the District of Colorado, where this grant is made and/or to be performed. |
16. | If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control. |
17. | The Company may, in its sole discretion, decide to deliver any documents related to the Stock Option granted under and participation in the Plan or future options that may be granted under the Plan by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company. |
18. | Notwithstanding any provisions in the Agreement or the Plan, the Stock Option grant shall be subject to any special terms and conditions set forth in the Appendix to this Agreement for your country of residence. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of the Agreement. |
19. | The Company reserves the right to impose other requirements on your participation in the Plan, on the Stock Option and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
I hereby confirm that the foregoing and the documents attached hereto are hereby in all respects accepted and agreed to by the undersigned as of the date of this Agreement: | |
Signature:_______________________________ | Printed Name: ______________________ |
Date: ________________________________ |
(i) | If you accept the Agreement outside the business premises of the Company, you may be entitled to revoke your acceptance of the Agreement, provided the revocation is made within one week after you accept the Agreement. |
(ii) | The revocation must be in written form to be valid. It is sufficient if you return the Agreement to the Company or the Company’s representative with language which can be understood as your refusal to conclude or honor the Agreement, provided the revocation is sent within the period set forth above. |
1. | These Terms and Conditions form part of your Stock Option Agreement (the “Agreement”) pursuant to which you have been granted a Nonqualified Stock Option (“Stock Option”) under The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”). The terms of the Plan are hereby incorporated in this Agreement by reference and made a part hereof. Any capitalized terms used in this Agreement that are not defined herein shall have the meaning set forth in the Plan. |
2. | The number of common shares of The Western Union Company (the “Company”) subject to the Stock Option, the grant date of the Stock Option and the option exercise price are all specified in the attached Award Notice (which forms part of the Agreement). |
3. | Subject to the other provisions of this Agreement and the terms of the Plan, you will “vest” in, or have the right to exercise, this Stock Option as follows: |
(a) | On or after the first anniversary and until the tenth anniversary of the grant date, you may exercise this Stock Option for up to one-fourth (25%) of the total number of shares covered hereby; |
(b) | On or after the second anniversary and until the tenth anniversary of the grant date, you may exercise this Stock Option for up to one-half (50%) of the total number of shares covered hereby; |
(c) | On or after the third anniversary and until the tenth anniversary of the grant date, you may exercise this Stock Option for up to three-fourths (75%) of the total number of shares covered hereby; |
(d) | On or after the fourth anniversary and until the tenth anniversary of the grant date, you may exercise this Stock Option with respect to the total number of shares covered hereby; |
(e) | No part of this Stock Option may be exercised after the tenth anniversary of the grant date listed in the attached Award Notice. |
4. | This Stock Option may not be exercised, in whole or in part, unless the following conditions are met: |
(a) | You have accepted these Terms and Conditions either through on-line electronic acceptance (if permitted by the Company) or by signing and returning to the Company a copy of these Terms and Conditions. Signed copies of these Terms and Conditions should be sent to the attention of: Western Union Stock Plan Administration, 12500 E. Belford Avenue, M21B2, Englewood, Colorado 80112. |
(b) | Legal counsel for the Company must be satisfied at the time of exercise that the issuance of shares upon exercise will comply with applicable U.S. federal, state, local and foreign laws. |
(c) | You pay the exercise price as follows: (i) by giving notice to the Company or its designee of the number of whole shares of Common Stock to be purchased and by making payment therefor in full (or arranging for such payment to the Company's satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of Mature Shares having an aggregate Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to the Company and to whom you have submitted an irrevocable notice of exercise (i.e., also known as “cashless exercise”) or (D) by a combination of (A) and (B) and (ii) by executing such documents as the Company may reasonably request. |
(d) | You must, at all times during the period beginning with the grant date of this Stock Option and ending on the date of such exercise, have been employed by the Company, a Subsidiary or an Affiliate or have been engaged in a period of Related Employment, with certain exceptions noted below. Service on the Board after receipt of a Stock Option shall not be considered a termination of employment. |
(e) | You have executed and returned to the Company or accepted electronically an updated restrictive covenant agreement (and exhibits) if requested by the Company which may contain certain noncompete, nonsolicitation and/or nondisclosure provisions. While a court may sever any provision in the restrictive covenant agreement, you agree by executing or electronically accepting the restrictive covenant agreement that you will forfeit this Stock Option, whether vested or not, if you do not abide by the restrictive covenant agreement as written. |
(f) | You pay all applicable taxes, withholding obligations, securities fees, or other costs, charges, or fees associated with the exercise. You may elect to satisfy your obligation to pay all applicable taxes, withholding obligations, securities fees, or other costs, charges, or fees by any of the following means: (A) a cash payment to the Company, (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to you, equal to the amount necessary to satisfy any such obligations, (D) except as may be prohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom you have submitted an irrevocable notice of exercise, or (E) any combination of (A) and (B). Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. You (or any beneficiary or person entitled to act on your behalf) shall provide the Company with any forms, documents or other information reasonably required by the Company. |
5. | Absent a period of Related Employment or service on the Board subsequent to the grant date, if you terminate employment or cease providing services to the Company, a Subsidiary or an Affiliate while holding this Stock Option, your right to exercise the Stock Option and the time during which you may exercise the Stock Option depends on the reason for your termination. |
(a) | Disability. If your employment with or service to the Company, a Subsidiary or an Affiliate terminates by reason of Disability, this Stock Option shall become fully vested and exercisable and may thereafter be exercised by you (or your legal representative or similar person) until the date which is one year after the effective date of your termination of employment or service, or if earlier, the expiration date of the term of this Stock Option. |
(b) | Retirement. If your employment with or service to the Company, a Subsidiary or an Affiliate terminates by reason of Retirement, this Stock Option, to the extent not already vested, shall vest on a prorated basis on the effective date of your termination of employment or service. Such prorated vesting shall be calculated by multiplying the number of shares covered by the unvested portion of this Stock Option by a fraction, the numerator of which is the number of days that have elapsed between the grant date and the effective date of your termination of employment or service and the denominator of which is the number of days between the grant date and the fourth anniversary of the grant date. The unvested portion of this Stock Option that does not become vested under such calculation shall be forfeited effective on your termination date and shall be canceled by the Company. The vested portion of this Stock Option, including any portion that had previously become vested and the prorated portion that vests effective on your termination date in accordance with the above calculation may be exercised by you (or your legal representative or similar person) until the date which is two years after the effective date of your termination of employment or service, or if earlier, the expiration date of the term of this Stock Option. |
(c) | Death. If your employment with or service to the Company, a Subsidiary or an Affiliate terminates by reason of death, this Stock Option shall become fully vested and exercisable and may thereafter be exercised by your executor, administrator, legal representative, beneficiary or similar person until the date which is one year after the date of death, or if earlier, the expiration date of the term of this Stock Option. |
(d) | Involuntary Termination Without Cause. Except to the extent paragraph 7 applies, if your employment with or service to the Company, a Subsidiary or an Affiliate is terminated involuntarily and without Cause and you are an eligible participant in the Severance/Change in Control Policy applicable to members of the Company’s Executive Committee, subject to the terms of such policy, the unvested portion of this Stock Option shall vest on a prorated basis effective on your termination date. Such prorated vesting shall be calculated by multiplying the number of shares covered by the unvested portion of this Stock Option by a fraction, the numerator of which is the number of days that have elapsed between the grant date and the effective date of your termination of employment or service and the denominator of which is the number of days between the grant date and the fourth anniversary of the grant date. The unvested portion of this Stock Option that does not become vested under such calculation shall be forfeited effective on your termination date and shall be canceled by the Company. The vested portion of this Stock Option, including any portion that had previously become vested and the prorated portion that vests effective on your termination date in accordance with the above calculation, may be exercised by you (or your legal representative or similar person) until the end of your severance period under such Policy or, if earlier, the expiration date of the term of this Stock Option. If your employment with or service to the Company, a Subsidiary or an Affiliate is terminated involuntarily and without Cause and you are not an eligible participant in the Severance/Change in Control Policy applicable to members of the Company’s Executive Committee on the date of such termination, this Stock Option shall cease to vest, and to the extent already vested, may thereafter be exercised by you (or your legal representative or similar person) until the date which is three months after such involuntary termination, or if earlier, the expiration date of the term of this Stock Option. Notwithstanding the foregoing, if, at the time of your termination of employment, you have satisfied the applicable age or age and service requirement for “Retirement” under the Plan, the provisions of paragraph 5(b) above, rather than this paragraph 5(d), shall be applicable to this Stock Option if at such time the provisions of paragraph 5(b) are more advantageous to you. |
(e) | Termination for Cause. If your employment with or service to the Company, a Subsidiary or an Affiliate is terminated for Cause, this Stock Option shall cease to vest, and to the extent already vested, may thereafter be exercised by you (or your legal representative or similar person) until the close of the New York Stock Exchange (if open) on the date of your termination of employment or service. If the New York Stock Exchange is closed at the time of your termination of employment, this Stock Option shall be forfeited at the time your employment is terminated and shall be canceled by the Company. |
(f) | Other Termination. If your employment with or service to the Company, a Subsidiary or an Affiliate terminates for any reason other than Disability, Retirement, death, involuntary termination without Cause, or termination for Cause, this Stock Option shall cease to vest, and to the extent already vested, may thereafter be exercised by you (or your legal representative or similar person) until the close of the New York Stock Exchange (if open) on the date which is the thirtieth (30th) day following your termination of employment or service, or if earlier, the expiration date of the term of this Stock Option. If the New York Stock Exchange is closed on the thirtieth (30th) day following your termination of employment or service, then your unexpired Stock Option may be exercised until the close of the New York Stock Exchange on the next following day on which the New York Stock Exchange is open, after which time this Stock Option shall be forfeited and canceled by the Company. |
(g) | Death Following Termination of Employment or Service. If you die during the applicable Post-Termination Exercise Period, this Stock Option will be exercisable only to the extent that the Stock Option is exercisable on the date of your death and may thereafter be exercised by your executor, administrator, legal representative, beneficiary or similar person until the date which is one year after the date of your death, or if earlier, the expiration date of the term of this Stock Option. |
6. | So long as you continue to be a member of the Executive Committee of the Company, you may transfer this Stock Option to a Family Member or Family Entity without consideration; provided, however, in the case of a transfer of this Stock Option to a limited liability company or a partnership which is a Family Entity, such transfer may be for consideration consisting solely of an entity interest in the limited liability company or partnership to which the transfer is made. Any transfer of this Stock Option shall be in a form acceptable to the Committee, shall be signed by you and shall be effective only upon written acknowledgement by the Committee of its receipt and acceptance of such notice. If this Stock Option is transferred to a Family Member or Family Entity, the Stock Option may not thereafter be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by such Family Member or Family Entity except by will or the laws of descent and distribution. The Committee has delegated its responsibilities under this paragraph 6 to the Company’s General Counsel. |
7. | If you are an eligible participant in the Severance/Change in Control Policy applicable to members of the Company’s Executive Committee at the time of a Change in Control and your employment with the Company, a Subsidiary or an Affiliate terminates for an eligible reason under such policy during the 24-month period commencing on the effective date of the Change in Control, then this Stock Option shall immediately become fully vested and exercisable effective on the date of your termination and may thereafter be exercised by you (or your legal representative or similar person) until the end of your severance period under such policy or, if earlier, the expiration date of the term of this Stock Option. |
8. | The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Common Stock. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. |
9. | The Board or Committee may amend or terminate the Plan and the Committee may amend (or its delegate may amend) this Agreement. No amendment may impair your rights as an option holder without your consent. The determination of such impairment shall be made by the Committee in its sole discretion. |
10. | The Committee (or its delegate) administers the Plan and has discretion to interpret the Plan and this Agreement. Any decision or interpretation rendered by the Committee or its delegate shall be final, conclusive and binding on you and all persons claiming under or through you. By accepting this grant or other benefit under the Plan, you and each person claiming under or through you shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Committee or its delegate. |
11. | The validity, construction, interpretation, administration and effect of the Plan and this Agreement shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware. For purposes of litigating any dispute that arises directly or indirectly under the Stock Option or the Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Colorado, and agree that such litigation shall be conducted in the courts of Douglas County, or the federal courts for the United States for the District of Colorado, where this grant is made and/or to be performed. |
12. | You acknowledge that you have read the Company’s Clawback Policy. In consideration of the grant of this Stock Option, you agree to abide by the Company’s Clawback Policy as it may be amended from time to time, and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Company’s Clawback Policy) received by or paid to you resulted from any financial result or performance metric that was impacted by your misconduct or fraud and that compensation should be recovered from you (such amount being recovered, the “Clawbacked Compensation”), then upon such determination, the Board may recover such Clawbacked Compensation by (a) cancelling all or any portion of this Stock Option (the “Clawbacked Portion”) and, in such case, you shall cease to be entitled to exercise the Clawbacked Portion of this Stock Option and the Clawbacked Portion of this Stock Option shall automatically and without further action of the Company be cancelled, (b) requiring you to deliver to the Company shares of Common Stock acquired upon the exercise of this Stock Option (to the extent held by you), (c) requiring you to repay to the Company any profit resulting from the sale of shares of Common Stock acquired upon the exercise of this Stock Option or (d) any combination of the remedies set forth in clauses (a), (b) or (c). The foregoing remedies are in addition to and separate from any other relief available to the Company due to your misconduct or fraud. Any determination by the Board with respect to the foregoing shall be final, conclusive and binding upon you and all persons claiming through you. |
I hereby confirm that the foregoing and the documents attached hereto are hereby in all respects accepted and agreed to by the undersigned as of the date of this Agreement: | |
Signature:_________________________ | Printed Name: ______________________ |
Date: ________________________________ |
Grant Date: | February 20, 2014 |
Target Award: | ___ shares of Common Stock |
Maximum Award: | ___ shares of Common Stock |
Performance Period: | January 1, 2014 - December 31, 2015 |
Performance Measure: | $1,000,000,000 Combined Consolidated Operating Income |
Vesting Date: | Third anniversary of Grant Date |
THE WESTERN UNION COMPANY, | ||
a Delaware corporation | ||
By: | ||
Name: | ||
Title: |
1. | Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), The Western Union Company (the “Company”) hereby grants to you (“Executive”) an award of Restricted Stock Units (the “Units”), in the amount specified in your Award Notice (which forms part of this Agreement) as of the Grant Date specified in your Award Notice, related to shares of the Company’s common stock (“Shares”), subject to the terms and conditions set forth in this Agreement and the Plan. The terms of the Plan are hereby incorporated in this Agreement by this reference and made a part hereof. Capitalized terms not defined herein shall have the same definitions as set forth in the Plan. |
2. | Each Unit shall provide for the issuance and transfer to Executive of one Share upon lapse of the restrictions set forth in paragraph 3 below and subject to the satisfaction of the Performance Measure during the Performance Period set forth in the Award Notice and the Committee’s determination of the amount of the Award payable to Executive in accordance with Exhibit A. Upon issuance and transfer of Shares to Executive following the Restricted Period (as defined herein), Executive shall have all rights incident to ownership of such Shares, including but not limited to voting rights and the right to receive dividends. |
3. | Subject to other provisions of this Agreement and the terms of the Plan, on the third anniversary of the Grant Date, subject to the satisfaction of the Performance Measure during the Performance Period set forth in the Award Notice and the Committee’s determination of the amount of the Award payable to Executive in accordance with Exhibit A, all restrictions on the Units shall lapse and the number of Shares subject to the Units determined by the Committee to be transferred to Executive in accordance with Exhibit A shall be issued and transferred to Executive. Effective on and after such date, subject to applicable laws and Company policies, Executive may hold, assign, pledge, sell, or transfer the Shares transferred to Executive in Executive’s discretion. The three year period in which the Units may be forfeited by Executive is defined as the “Restricted Period.” |
4. | Executive may elect to satisfy Executive’s obligation to advance the amount of any required income tax (including foreign, federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related items related to Executive’s participation in the Plan and legally applicable to Executive (the “Required Tax Payments”) by any of the following means: (1) a cash payment to the Company, (2) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (3) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered to Executive having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to Executive, equal to the amount necessary to satisfy any such obligation, (4) a cash payment to the Company by a broker-dealer acceptable to the Company to whom Executive has submitted an irrevocable notice of sale, or (5) any combination of (1) and (2). |
5. | The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, while subject to restrictions. If Executive or anyone claiming under or through Executive attempts to make any such sale, transfer, assignment, pledge or other disposition of Units in violation of this paragraph 5, such attempted violation shall be null, void, and without effect. |
6. | Executive shall forfeit Executive’s right to any unvested Units if Executive’s continuous employment with the Company or a Subsidiary or Affiliate terminates for any reason during the Restricted Period (except solely by reason of a period of Related Employment or as set forth in paragraphs 7 and 9). |
7. | If Executive’s employment with the Company or a Subsidiary or Affiliate terminates involuntarily and without Cause on or after the first anniversary of the Grant Date, Executive is an eligible participant in the Severance/Change in Control Policy (Executive Committee Level) (the “Executive Severance Policy”), and paragraph 9 does not apply, Executive shall be entitled to a prorated Award, subject to the terms of the Executive Severance Policy. Such prorated Award shall be equal to the amount of the Award which is actually earned, based upon satisfaction of the Performance Measure during the Performance Period (as certified by the Committee in writing) and the Committee’s determination of the amount of the Award payable to Executive in accordance with Exhibit A, multiplied by a fraction, the numerator of which shall equal the number of days Executive was employed with the Company during the Restricted Period and the denominator of which shall equal the number of days in the Restricted Period. Such prorated Award shall be paid at the same time as if Executive had remained employed with the Company through the end of the Restricted Period. If Executive’s employment with the Company or a Subsidiary or Affiliate terminates involuntarily and without Cause before the first anniversary of the Grant Date (other than on account of death or Disability), and paragraph 9 does not apply, Executive shall not be entitled to a prorated Award. |
8. | During the Restricted Period, Executive (and any person succeeding to Executive’s rights pursuant to the Plan) will have no ownership interest or rights in Shares underlying the Units, including no rights to receive dividends or other distributions made or paid with respect to such Shares or to exercise voting or other shareholder rights with respect to such Shares. Executive shall not be entitled to receive dividend equivalents in connection with this Award. |
9. | If Executive is eligible to participate in the Executive Severance Policy at the time of a Change in Control and Executive’s employment with the Company, a Subsidiary or an Affiliate terminates for an eligible reason under such policy during the 24-month period commencing on the effective date of the Change in Control, then, subject to the terms of such policy, the Award shall be paid to Executive, to the extent earned, based upon satisfaction of the Performance Measure during the Performance Period (as certified by the Committee in writing) and in accordance with Exhibit A, as if Executive had remained employed with the Company through the end of the Restricted Period. |
10. | The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of Executive under this Agreement without Executive’s written consent. |
11. | Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on Executive and all persons claiming under or through Executive. By accepting this grant of Units or other benefit under the Plan, Executive and each person claiming under or through Executive shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. |
12. | In accepting the award of Units, Executive acknowledges that (i) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan; (ii) the award of Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Units, or benefits in lieu of Units even if Units have been awarded repeatedly in the past; (iii) all decisions with respect to future awards, if any, will be at the sole discretion of the Committee; (iv) Executive’s participation in the Plan is voluntary; (v) the award of Units is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or to Executive’s employer, and the Units are outside the scope of Executive’s employment contract, if any; (vi) the Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (vii) neither the award of the Units nor any provision of this Agreement, the Plan or the policies adopted pursuant to the Plan confer upon Executive any right with respect to employment or continuation of current employment, and in the event that Executive is not an employee of the Company or any Subsidiary or Affiliate, the Units shall not be interpreted to form an employment contract or relationship with the Company or any Subsidiary or Affiliate; (viii) this grant of the Units does not establish or imply an employment relationship between Executive and the Company; (ix) the future value of the underlying Shares is unknown and cannot be predicted with certainty, (x) if Executive receives Shares, the value of such Shares acquired upon vesting of the Units may increase or decrease in value; (xi) no claim or entitlement to compensation or damages arises from termination of the Units, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the Units or Shares received upon the vesting of the Units resulting from termination of the Executive’s employment by the Company or the Executive’s employer (for any reason whatsoever and whether or not in breach of local labor laws) and Executive irrevocably releases the Company and Executive’s employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, Executive shall be deemed irrevocably to have waived his entitlement to pursue such claim; (xii) in the event of involuntary termination of employment (whether or not in breach of local labor laws), Executive’s right to receive Shares pursuant to the Units after termination of employment, if any, will be measured by the last date that Executive’s employer pays Executive his last paycheck for regular salary as an employee of Executive’s employer and will not be extended by any notice period mandated under local law; the Committee shall have the exclusive discretion to determine when the Executive is no longer being paid regular salary for this purpose; and (xiii) the Units and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability. |
13. | The validity, construction, interpretation, administration and effect of these Terms and Conditions and the Plan and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware. |
14. | Executive hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Executive’s personal data as described in this Agreement by and among, as applicable, Executive’s employer, the Company and the Company’s Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing Executive’s participation in the Plan. |
15. | The Company may, in its sole discretion, decide to deliver any documents related to the Units and to participation in the Plan or related to future Units that may be granted under the Plan by electronic means or to request Executive’s consent to participate in the Plan by electronic means. Executive hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company. |
16. | If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed as to foster the intent of this Agreement and the Plan. |
17. | [Consumer Protection Notification. If the provisions of the Austrian Consumer Protection Act (the “Act”) are applicable to the Agreement and the Plan, Executive may be entitled to revoke his acceptance of the Agreement if Executive signs this Agreement outside of the business premises of Executive’s employer, provided the revocation is made within one week of Executive’s acceptance. The revocation must be in written form to be valid. It is sufficient if Executive returns this Agreement to the Company or the Company’s representative with language which can be understood as Executive’s refusal to conclude or honor this Agreement.] [Applicable only to Austrian employees] |
18. | [Exchange Control Information. If Executive holds Shares obtained through the Plan outside of Austria, he must submit an annual report to the Austrian National Bank. An exemption applies if the value of the Shares as of December 31 does not exceed €5,000,000. The deadline for filing the annual report is January 31 of the following year. When Shares are sold, there may be exchange control obligations if the cash received is held outside Austria. If the transaction volume of all of Executive’s accounts abroad exceeds €3,000,000, the movements and balances of all accounts must be reported monthly, as of the last day of the month, on or before the fifteenth day of the following month. [Applicable only to Austrian employees] |
19. | Executive acknowledges that Executive has read the Company’s Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Company’s Clawback Policy and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Company’s Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executive’s misconduct or fraud and that compensation should be recovered from Executive (such amount being recovered, the “Clawbacked Compensation”), then upon such determination, the Board may recover such Clawbacked Compensation by (a) cancelling all or any portion of the unvested Units (the “Clawbacked Portion”) and, in such case, the Clawbacked Portion of the unvested Units shall automatically and without further action of the Company be cancelled, (b) requiring Executive to deliver to the Company shares of Common Stock acquired upon the vesting of the Units (to the extent held by Executive), (c) requiring Executive to repay to the Company any net proceeds resulting from the sale of shares of Common Stock acquired upon the vesting of the Units or (d) any combination of the remedies set forth in clauses (a), (b) or (c). The foregoing remedies are in addition to and separate from any other relief available to the Company due to Executive’s misconduct or fraud. Any determination by the Board with respect to the foregoing shall be final, conclusive and binding upon Executive and all persons claiming through Executive. |
20. | To the extent any amounts under this Agreement are payable by reference to Executive’s “termination of employment,” such term shall be deemed to refer to Executive’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if Executive is a “specified employee,” as defined in Section 409A of the Code, as of the date of Executive’s separation from service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon Executive’s separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of Executive’s separation from service, such payment shall be delayed until the earlier to occur of (a) the six-month anniversary of the separation from service or (b) the date of Executive’s death. |
I hereby confirm that the foregoing and the documents attached hereto are hereby in all respects accepted and agreed to by the undersigned as of the date of this Agreement: | |
Signature:________________________________ | Printed Name: ______________________ |
Date: ________________________________ |
Grant Date: | February 20, 2014 |
Target Award: | ___ shares of Common Stock |
Maximum Award: | ___ shares of Common Stock |
Performance Period: | January 1, 2014 - December 31, 2015 |
Performance Measure: | $1,000,000,000 Combined Consolidated Operating Income |
Vesting Date: | Third anniversary of Grant Date |
THE WESTERN UNION COMPANY, | ||
a Delaware corporation | ||
By: | ||
Name: | ||
Title: |
1. | Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), The Western Union Company (the “Company”) hereby grants to you (“Executive”) an award of Restricted Stock Units (the “Units”), in the amount specified in your Award Notice (which forms part of this Agreement) as of the Grant Date specified in your Award Notice, related to shares of the Company’s common stock (“Shares”), subject to the terms and conditions set forth in this Agreement and the Plan. The terms of the Plan are hereby incorporated in this Agreement by this reference and made a part hereof. Capitalized terms not defined herein shall have the same definitions as set forth in the Plan. |
2. | Each Unit shall provide for the issuance and transfer to Executive of one Share upon lapse of the restrictions set forth in paragraph 3 below and subject to the satisfaction of the Performance Measure during the Performance Period set forth in the Award Notice and the Committee’s determination of the amount of the Award payable to Executive in accordance with Exhibit A. Upon issuance and transfer of Shares to Executive following the Restricted Period (as defined herein), Executive shall have all rights incident to ownership of such Shares, including but not limited to voting rights and the right to receive dividends. |
3. | Subject to other provisions of this Agreement and the terms of the Plan, on the third anniversary of the Grant Date, subject to the satisfaction of the Performance Measure during the Performance Period set forth in the Award Notice and the Committee’s determination of the amount of the Award payable to Executive in accordance with Exhibit A, all restrictions on the Units shall lapse and the number of Shares subject to the Units determined by the Committee to be transferred to Executive in accordance with Exhibit A shall be issued and transferred to Executive. Effective on and after such date, subject to applicable laws and Company policies, Executive may hold, assign, pledge, sell, or transfer the Shares transferred to Executive in Executive’s discretion. The three year period in which the Units may be forfeited by Executive is defined as the “Restricted Period.” |
4. | Executive may elect to satisfy his or her obligation to advance the amount of any required income or other withholding taxes (the “Required Tax Payments”) incurred in connection with the issuance and transfer of the Shares by any of the following means: (1) a cash payment to the Company, (2) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (3) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered to Executive having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to Executive, equal to the amount necessary to satisfy any such obligation, (4) a cash payment to the Company by a broker-dealer acceptable to the Company to whom Executive has submitted an irrevocable notice of sale, or (5) any combination of (1) and (2). Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. |
5. | The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, while subject to restrictions. If Executive or anyone claiming under or through Executive attempts to make any such sale, transfer, assignment, pledge or other disposition of Units in violation of this paragraph 5, such attempted violation shall be null, void, and without effect. |
6. | Executive shall forfeit Executive’s right to any unvested Units if Executive’s continuous employment with the Company or a Subsidiary or Affiliate terminates for any reason during the Restricted Period (except solely by reason of a period of Related Employment or as set forth in paragraphs 7 and 9). |
7. | If Executive’s employment with the Company or a Subsidiary or Affiliate terminates involuntarily and without Cause on or after the first anniversary of the Grant Date, Executive is an eligible participant in the Severance/Change in Control Policy (Executive Committee Level) (the “Executive Severance Policy”), and paragraph 9 does not apply, Executive shall be entitled to a prorated Award, subject to the terms of the Executive Severance Policy. Such prorated Award shall be equal to the amount of the Award which is actually earned, based upon satisfaction of the Performance Measure during the Performance Period (as certified by the Committee in writing) and the Committee’s determination of the amount of the Award payable to Executive in accordance with Exhibit A, multiplied by a fraction, the numerator of which shall equal the number of days Executive was employed with the Company during the Restricted Period and the denominator of which shall equal the number of days in the Restricted Period. Such prorated Award shall be paid at the same time as if Executive had remained employed with the Company through the end of the Restricted Period. If Executive’s employment with the Company or a Subsidiary or Affiliate terminates involuntarily and without Cause before the first anniversary of the Grant Date (other than on account of death or Disability), and paragraph 9 does not apply, Executive shall not be entitled to a prorated Award. |
8. | During the Restricted Period, Executive (and any person succeeding to Executive’s rights pursuant to the Plan) will have no ownership interest or rights in Shares underlying the Units, including no rights to receive dividends or other distributions made or paid with respect to such Shares or to exercise voting or other shareholder rights with respect to such Shares. Executive shall not be entitled to receive dividend equivalents in connection with this Award. |
9. | If Executive is eligible to participate in the Executive Severance Policy at the time of a Change in Control and Executive’s employment with the Company, a Subsidiary or an Affiliate terminates for an eligible reason under such policy during the 24-month period commencing on the effective date of the Change in Control, then, subject to the terms of such policy, the Award shall be paid to Executive, to the extent earned, based upon satisfaction of the Performance Measure during the Performance Period (as certified by the Committee in writing) and in accordance with Exhibit A, as if Executive had remained employed with the Company through the end of the Restricted Period. |
10. | The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of Executive under this Agreement without Executive’s written consent. |
11. | Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on Executive and all persons claiming under or through Executive. By accepting this grant of Units or other benefit under the Plan, Executive and each person claiming under or through Executive shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. |
12. | This grant of Units is discretionary, non-binding for future years and there is no promise or guarantee that such grants will be offered to Executive in future years. |
13. | The validity, construction, interpretation, administration and effect of these Terms and Conditions and the Plan and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware. |
14. | If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed as to foster the intent of this Agreement and the Plan. |
15. | Executive acknowledges that Executive has read the Company’s Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Company’s Clawback Policy and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Company’s Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executive’s misconduct or fraud and that compensation should be recovered from Executive (such amount being recovered, the “Clawbacked Compensation”), then upon such determination, the Board may recover such Clawbacked Compensation by (a) cancelling all or any portion of the unvested Units (the “Clawbacked Portion”) and, in such case, the Clawbacked Portion of the unvested Units shall automatically and without further action of the Company be cancelled, (b) requiring Executive to deliver to the Company shares of Common Stock acquired upon the vesting of the Units (to the extent held by Executive), (c) requiring Executive to repay to the Company any net proceeds resulting from the sale of shares of Common Stock acquired upon the vesting of the Units or (d) any combination of the remedies set forth in clauses (a), (b) or (c). The foregoing remedies are in addition to and separate from any other relief available to the Company due to Executive’s misconduct or fraud. Any determination by the Board with respect to the foregoing shall be final, conclusive and binding upon Executive and all persons claiming through Executive. |
16. | To the extent any amounts under this Agreement are payable by reference to Executive’s “termination of employment,” such term shall be deemed to refer to Executive’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if Executive is a “specified employee,” as defined in Section 409A of the Code, as of the date of Executive’s separation from service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon Executive’s separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of Executive’s separation from service, such payment shall be delayed until the earlier to occur of (a) the six-month anniversary of the separation from service or (b) the date of Executive’s death. |
I hereby confirm that the foregoing and the documents attached hereto are hereby in all respects accepted and agreed to by the undersigned as of the date of this Agreement: | |
Signature:_________________________ | Printed Name: ______________________ |
Date: ________________________________ |
1. | Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), The Western Union Company (the “Company”) hereby grants to you (“Executive”) an award of Restricted Stock Units (the “Units”), in the amount specified in Executive’s Award Notice (which forms part of this Agreement) as of the Grant Date specified in Executive’s Award Notice, related to shares of the Company’s common stock (“Shares”), subject to the terms and conditions set forth in this Agreement and the Plan. The terms of the Plan are hereby incorporated in this Agreement by this reference and made a part hereof. Capitalized terms not defined herein shall have the same definitions as set forth in the Plan. |
2. | Each Unit shall provide for the issuance and transfer to Executive of one Share upon lapse of the restrictions set forth in paragraph 3 below. Upon issuance and transfer of Shares to Executive following the Restricted Period (as defined herein), Executive shall have all rights incident to ownership of such Shares, including but not limited to voting rights and the right to receive dividends. |
3. | Subject to other provisions of this Agreement and the terms of the Plan, the restrictions on the Units shall lapse and the Shares subject to the Units shall be issued and transferred to Executive as set forth below. Effective on and after the date on which the restrictions lapse, subject to applicable local laws and Company policies, Executive may hold, assign, pledge, sell, or transfer such Shares in Executive’s discretion. The period in which the Units may be forfeited by the Executive is defined as the “Restricted Period.” |
a. | On the first anniversary of the Grant Date, restrictions on twenty-five percent (25%) of the total number of Units granted to Executive on the Grant Date shall lapse and the Shares subject to such Units shall be transferred to Executive; |
b. | On the second anniversary of the Grant Date, restrictions on a further twenty-five percent (25%) of the Units granted to Executive on the Grant Date shall lapse (for a cumulative total of 50% of the Units) and the Shares subject to such Units shall be transferred to Executive; |
c. | On the third anniversary of the Grant Date, restrictions on a further twenty-five percent (25%) of the Units granted to Executive on the Grant Date shall lapse (for a cumulative total of 75% of the Units) and the Shares subject to such Units shall be transferred to Executive; and |
d. | On the fourth anniversary of the Grant Date, restrictions on the remaining twenty-five percent (25%) of the Units granted to Executive on the Grant Date shall lapse (for a cumulative total of 100% of the Units) and the Shares subject to such Units shall be transferred to Executive. |
4. | Executive may elect to satisfy Executive’s obligation to advance the amount of any required income tax (including foreign, federal, state and local taxes), social insurance, payroll tax, payment on account or other tax-related items related to Executive’s participation in the Plan and legally applicable to Executive (the “Required Tax Payments”) by any of the following means: (1) a cash payment to the Company, (2) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (3) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered to Executive having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to Executive, equal to the amount necessary to satisfy any such obligation, (4) a cash payment to the Company by a broker-dealer acceptable to the Company to whom Executive has submitted an irrevocable notice of sale, or (5) any combination of (1) and (2). |
5. | The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, while subject to restrictions. If Executive or anyone claiming under or through Executive attempts to make any such sale, transfer, assignment, pledge or other disposition of Units in violation of this paragraph 5, such attempted violation shall be null, void, and without effect. |
6. | Executive shall forfeit Executive’s right to any unvested Units if Executive’s continuous employment with the Company or a Subsidiary or Affiliate terminates for any reason during the Restricted Period (except solely by reason of a period of Related Employment or as set forth in paragraphs 7 and 9). |
7. | Except to the extent paragraph 9 applies, if Executive’s employment with the Company or a Subsidiary or Affiliate is terminated involuntarily and without Cause and on the date of such termination Executive is an eligible participant in the Severance/Change in Control Policy (“Executive Committee Level”) (the “Executive Severance Policy”), subject to the terms of the Executive Severance Policy, any then-restricted Units shall vest and be settled on a prorated basis effective on Executive’s termination date. Such prorated vesting shall be calculated by multiplying the number of then-restricted Units by a fraction, the numerator of which is the number of days that have elapsed between the Grant Date and Executive’s termination date and the denominator of which is the number of days between the Grant Date and the fourth anniversary of the Grant Date. The restricted portion of this award that does not become vested under such calculation shall be forfeited on Executive’s termination date and shall be cancelled by the Company. |
8. | During the Restricted Period, Executive (and any person succeeding to Executive’s rights pursuant to the Plan) will have no ownership interest or rights in Shares underlying the Units, including no rights to receive dividends or other distributions made or paid with respect to such Shares or to exercise voting or other shareholder rights with respect to such Shares. Executive shall not be entitled to receive dividend equivalents in connection with this award. |
9. | If Executive is eligible to participate in the Executive Severance Policy at the time of a Change in Control and Executive’s employment with the Company, a Subsidiary or an Affiliate terminates for an eligible reason under the Executive Severance Policy during the 24-month period commencing on the effective date of the Change in Control, then, subject to the terms of the Executive Severance Policy, any remaining restrictions applicable to the Units shall immediately lapse effective on the date of Executive’s termination. |
10. | The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of Executive under this Agreement without Executive’s written consent. |
11. | Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on Executive and all persons claiming under or through Executive. By accepting this grant of Units or other benefit under the Plan, Executive and each person claiming under or through Executive shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. |
12. | In accepting the award of Units, Executive acknowledges that (i) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan; (ii) the award of Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Units, or benefits in lieu of Units even if Units have been awarded repeatedly in the past; (iii) all decisions with respect to future awards, if any, will be at the sole discretion of the Committee; (iv) Executive’s participation in the Plan is voluntary; (v) the award of Units is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or to Executive’s employer, and the Units are outside the scope of Executive’s employment contract, if any; (vi) the Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (vii) neither the award of the Units nor any provision of this Agreement, the Plan or the policies adopted pursuant to the Plan confer upon Executive any right with respect to employment or continuation of current employment, and in the event that Executive is not an employee of the Company or any Subsidiary or Affiliate, the Units shall not be interpreted to form an employment contract or relationship with the Company or any Subsidiary or Affiliate; (viii) this grant of the Units does not establish or imply an employment relationship between Executive and the Company; (ix) the future value of the underlying Shares is unknown and cannot be predicted with certainty, (x) if Executive receives Shares, the value of such Shares acquired upon vesting of the Units may increase or decrease in value; (xi) no claim or entitlement to compensation or damages arises from termination of the Units, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the Units or Shares received upon the vesting of the Units resulting from termination of the Executive’s employment by the Company or the Executive’s employer (for any reason whatsoever and whether or not in breach of local labor laws) and Executive irrevocably releases the Company and Executive’s employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, Executive shall be deemed irrevocably to have waived his entitlement to pursue such claim; (xii) in the event of involuntary termination of employment (whether or not in breach of local labor laws), Executive’s right to receive Shares pursuant to the Units after termination of employment, if any, will be measured by the last date that Executive’s employer pays Executive his last paycheck for regular salary as an employee of Executive’s employer and will not be extended by any notice period mandated under local law; the Committee shall have the exclusive discretion to determine when the Executive is no longer being paid regular salary for this purpose; and (xiii) the Units and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability. |
13. | The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Executive’s participation in the Plan, or Executive’s acquisition or sale of the Shares underlying the Units. Executive is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
14. | The validity, construction, interpretation, administration and effect of these Terms and Conditions and the Plan and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware, as provided in the Plan. For purposes of litigating any dispute that arises directly or indirectly under the grant of the Units or the Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Colorado, and agree that such litigation shall be conducted in the courts of Douglas County, or the federal courts for the United States for the District of Colorado, where this grant is made and/or to be performed. |
15. | Executive hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Executive’s personal data as described in this Agreement by and among, as applicable, Executive’s employer, the Company and the Company’s Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing Executive’s participation in the Plan. |
16. | The Company may, in its sole discretion, decide to deliver any documents related to the Units and to participation in the Plan or related to future Units that may be granted under the Plan by electronic means or to request Executive’s consent to participate in the Plan by electronic means. Executive hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company. |
17. | If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed as to foster the intent of this Agreement and the Plan. |
18. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executive’s termination of employment due to death, Disability or for an eligible reason under the Executive Severance Policy during the 24-month period commencing on the effective date of a Change in Control, in order for the restrictions on the Units to lapse the Company must achieve as a Performance Measure not less than $500,000,000 of combined operating income during the period beginning January 1, 2014 and ending December 31, 2014, as determined by the Committee based on the Corporation’s 2014 annual financial statements. |
19. | Executive acknowledges that Executive has read the Company’s Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Company’s Clawback Policy and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Company’s Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executive’s misconduct or fraud and that compensation should be recovered from Executive (such amount being recovered, the “Clawbacked Compensation”), then upon such determination, the Board may recover such Clawbacked Compensation by (a) cancelling all or any portion of the unvested Units (the “Clawbacked Portion”) and, in such case, the Clawbacked Portion of the unvested Units shall automatically and without further action of the Company be cancelled, (b) requiring Executive to deliver to the Company shares of Common Stock acquired upon the vesting of the Units (to the extent held by Executive), (c) requiring Executive to repay to the Company any net proceeds resulting from the sale of shares of Common Stock acquired upon the vesting of the Units or (d) any combination of the remedies set forth in clauses (a), (b) or (c). The foregoing remedies are in addition to and separate from any other relief available to the Company due to Executive’s misconduct or fraud. Any determination by the Board with respect to the foregoing shall be final, conclusive and binding upon Executive and all persons claiming through Executive. |
20. | To the extent any amounts under this Agreement are payable by reference to Executive’s “termination of employment,” such term shall be deemed to refer to Executive’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if Executive is a “specified employee,” as defined in Section 409A of the Code, as of the date of Executive’s separation from service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon Executive’s separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of Executive’s separation from service, such payment shall be delayed until the earlier to occur of (a) the six-month anniversary of the separation from service or (b) the date of Executive’s death. |
I hereby confirm that the foregoing and the documents attached hereto are hereby in all respects accepted and agreed to by the undersigned as of the date of this Agreement: | |
Signature:_________________________ | Printed Name: ______________________ |
Date: ___________________________ |
1. | Pursuant to The Western Union Company 2006 Long-Term Incentive Plan (the “Plan”), The Western Union Company (the “Company”) hereby grants to you (“Executive”) an award of Restricted Stock Units (the “Units”), in the amount specified in Executive’s Award Notice (which forms part of this Agreement) as of the Grant Date specified in Executive’s Award Notice, related to shares of the Company’s common stock (“Shares”), subject to the terms and conditions set forth in this Agreement and the Plan. The terms of the Plan are hereby incorporated in this Agreement by this reference and made a part hereof. Capitalized terms not defined herein shall have the same definitions as set forth in the Plan. |
2. | Each Unit shall provide for the issuance and transfer to Executive of one Share upon lapse of the restrictions set forth in paragraph 3 below. Upon issuance and transfer of Shares to Executive following the Restricted Period (as defined herein), Executive shall have all rights incident to ownership of such Shares, including but not limited to voting rights and the right to receive dividends. |
3. | Subject to other provisions of this Agreement and the terms of the Plan, the restrictions on the Units shall lapse and the Shares subject to the Units shall be issued and transferred to Executive as set forth below. Effective on and after the date on which the restrictions lapse, subject to applicable local laws and Company policies, Executive may hold, assign, pledge, sell, or transfer such Shares in Executive’s discretion. The period in which the Units may be forfeited by the Executive is defined as the “Restricted Period.” |
a. | On the first anniversary of the Grant Date, restrictions on twenty-five percent (25%) of the total number of Units granted to Executive on the Grant Date shall lapse and the Shares subject to such Units shall be transferred to Executive; |
b. | On the second anniversary of the Grant Date, restrictions on a further twenty-five percent (25%) of the Units granted to Executive on the Grant Date shall lapse (for a cumulative total of 50% of the Units) and the Shares subject to such Units shall be transferred to Executive; |
c. | On the third anniversary of the Grant Date, restrictions on a further twenty-five percent (25%) of the Units granted to Executive on the Grant Date shall lapse (for a cumulative total of 75% of the Units) and the Shares subject to such Units shall be transferred to Executive; and |
d. | On the fourth anniversary of the Grant Date, restrictions on the remaining twenty-five percent (25%) of the Units granted to Executive on the Grant Date shall lapse (for a cumulative total of 100% of the Units) and the Shares subject to such Units shall be transferred to Executive. |
4. | Executive may elect to satisfy his or her obligation to advance the amount of any required income or other withholding taxes (the “Required Tax Payments”) incurred in connection with the issuance and transfer of the Shares by any of the following means: (1) a cash payment to the Company, (2) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (3) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered to Executive having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to Executive, equal to the amount necessary to satisfy any such obligation, (4) a cash payment to the Company by a broker-dealer acceptable to the Company to whom Executive has submitted an irrevocable notice of sale, or (5) any combination of (1) and (2). Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. |
5. | The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, while subject to restrictions. If Executive or anyone claiming under or through Executive attempts to make any such sale, transfer, assignment, pledge or other disposition of Units in violation of this paragraph 5, such attempted violation shall be null, void, and without effect. |
6. | Executive shall forfeit Executive’s right to any unvested Units if Executive’s continuous employment with the Company or a Subsidiary or Affiliate terminates for any reason during the Restricted Period (except solely by reason of a period of Related Employment or as set forth in paragraphs 7 and 9). |
7. | Except to the extent paragraph 9 applies, if Executive’s employment with the Company or a Subsidiary or Affiliate is terminated involuntarily and without Cause and on the date of such termination Executive is an eligible participant in the Severance/Change in Control Policy (“Executive Committee Level”) (the “Executive Severance Policy”), subject to the terms of the Executive Severance Policy, any then-restricted Units shall vest and be settled on a prorated basis effective on Executive’s termination date. Such prorated vesting shall be calculated by multiplying the number of then-restricted Units by a fraction, the numerator of which is the number of days that have elapsed between the Grant Date and Executive’s termination date and the denominator of which is the number of days between the Grant Date and the fourth anniversary of the Grant Date. The restricted portion of this award that does not become vested under such calculation shall be forfeited on Executive’s termination date and shall be cancelled by the Company. |
8. | During the Restricted Period, Executive (and any person succeeding to Executive’s rights pursuant to the Plan) will have no ownership interest or rights in Shares underlying the Units, including no rights to receive dividends or other distributions made or paid with respect to such Shares or to exercise voting or other shareholder rights with respect to such Shares. Executive shall not be entitled to receive dividend equivalents in connection with this award. |
9. | If Executive is eligible to participate in the Executive Severance Policy at the time of a Change in Control and Executive’s employment with the Company, a Subsidiary or an Affiliate terminates for an eligible reason under the Executive Severance Policy during the 24-month period commencing on the effective date of the Change in Control, then, subject to the terms of the Executive Severance Policy, any remaining restrictions applicable to the Units shall immediately lapse effective on the date of Executive’s termination. |
10. | The terms of this Agreement may be amended from time to time by the Committee in its sole discretion in any manner that it deems appropriate; provided, however, that no such amendment shall adversely affect in a material manner any right of Executive under this Agreement without Executive’s written consent. |
11. | Any action taken or decision made by the Company, the Board, or the Committee or its delegates arising out of or in connection with the construction, administration, interpretation or effect of the Plan or this Agreement shall lie within its sole and absolute discretion, as the case may be, and shall be final, conclusive and binding on Executive and all persons claiming under or through Executive. By accepting this grant of Units or other benefit under the Plan, Executive and each person claiming under or through Executive shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. |
12. | This grant of Units is discretionary, non-binding for future years and there is no promise or guarantee that such grants will be offered to Executive in future years. |
13. | The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Executive’s participation in the Plan, or Executive’s acquisition or sale of the Shares underlying the Units. Executive is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
14. | The validity, construction, interpretation, administration and effect of these Terms and Conditions and the Plan and rights relating to the Plan and to this Agreement, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware, as provided in the Plan. For purposes of litigating any dispute that arises directly or indirectly under the grant of the Units or the Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Colorado, and agree that such litigation shall be conducted in the courts of Douglas County, or the federal courts for the United States for the District of Colorado, where this grant is made and/or to be performed. |
15. | If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed as to foster the intent of this Agreement and the Plan. |
16. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executive’s termination of employment due to death, Disability or for an eligible reason under the Executive Severance Policy during the 24-month period commencing on the effective date of a Change in Control, in order for the restrictions on the Units to lapse the Company must achieve as a Performance Measure not less than $500,000,000 of combined operating income during the period beginning January 1, 2014 and ending December 31, 2014, as determined by the Committee based on the Corporation’s 2014 annual financial statements. |
17. | Executive acknowledges that Executive has read the Company’s Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Company’s Clawback Policy and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Company’s Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executive’s misconduct or fraud and that compensation should be recovered from Executive (such amount being recovered, the “Clawbacked Compensation”), then upon such determination, the Board may recover such Clawbacked Compensation by (a) cancelling all or any portion of the unvested Units (the “Clawbacked Portion”) and, in such case, the Clawbacked Portion of the unvested Units shall automatically and without further action of the Company be cancelled, (b) requiring Executive to deliver to the Company shares of Common Stock acquired upon the vesting of the Units (to the extent held by Executive), (c) requiring Executive to repay to the Company any net proceeds resulting from the sale of shares of Common Stock acquired upon the vesting of the Units or (d) any combination of the remedies set forth in clauses (a), (b) or (c). The foregoing remedies are in addition to and separate from any other relief available to the Company due to Executive’s misconduct or fraud. Any determination by the Board with respect to the foregoing shall be final, conclusive and binding upon Executive and all persons claiming through Executive. |
18. | To the extent any amounts under this Agreement are payable by reference to Executive’s “termination of employment,” such term shall be deemed to refer to Executive’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if Executive is a “specified employee,” as defined in Section 409A of the Code, as of the date of Executive’s separation from service, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon Executive’s separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of Executive’s separation from service, such payment shall be delayed until the earlier to occur of (a) the six-month anniversary of the separation from service or (b) the date of Executive’s death. |
I hereby confirm that the foregoing and the documents attached hereto are hereby in all respects accepted and agreed to by the undersigned as of the date of this Agreement: | |
Signature:_________________________ | Printed Name: ______________________ |
Date: ___________________________ |
1. | Purpose |
2. | Effective Date |
3. | Definitions |
(a) | the acquisition by any individual, entity or group (a “Person”), including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of 35% or more of either (i) the then outstanding shares of common stock of Western Union (the “Outstanding Common Stock”) or (ii) the combined voting power of the then outstanding securities of Western Union entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (A) any acquisition directly from Western Union (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from Western Union), (B) any acquisition by Western Union, (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Western Union or any corporation controlled by Western Union or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this definition; provided further, that for purposes of clause (B), if any Person (other than Western Union or any employee benefit plan (or related trust) sponsored or maintained by Western Union or any corporation controlled by Western Union) shall become the beneficial owner of 35% or more of the Outstanding Common Stock or 35% or more of the Outstanding Voting Securities by reason of an acquisition by Western Union, and such Person shall, after such acquisition by Western Union, become the beneficial owner of any additional shares of the Outstanding Common Stock or any additional Outstanding Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control; |
(b) | the cessation of individuals who constitute the Board (the “Incumbent Board”) as of the date this Policy is adopted by the Committee, to constitute at least a majority of such Incumbent Board; provided that any individual who becomes a director of Western Union subsequent to the date this Policy is adopted by the Committee whose election, or nomination for election by Western Union’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of Western Union as a result of an actual or threatened solicitation by a Person other than the Board for the purpose of opposing a solicitation by any other Person with respect to the election or removal of directors, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board; |
(c) | the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Western Union (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which (i) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Common Stock and the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns Western Union or all or substantially all of Western Union’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common Stock and the Outstanding Voting Securities, as the case may be, (ii) no Person (other than Western Union; any employee benefit plan (or related trust) sponsored or maintained by Western Union or any corporation controlled by Western Union; the corporation resulting from such Corporate Transaction; and any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, 35% or more of the Outstanding Common Stock or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, 35% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or |
(d) | the consummation of a plan of complete liquidation or dissolution of Western Union. |
4. | Eligibility |
5. | Eligible Termination Reasons |
(a) | Prior to the occurrence of a Change in Control, action by the Company to involuntarily terminate the employment of an Eligible Executive with the Company, but not including a separation from service on account of death, Disability or for Cause. |
(b) | After the occurrence of a Change in Control, (i) action by the Company to involuntarily terminate the employment of an Eligible Executive with the Company, but not including a separation from service on account of death, Disability or for Cause, or (ii) voluntary separation from service from the Company by an Eligible Executive for Good Reason during the twenty-four (24) month period commencing on the date of the Change in Control. |
6. | Non-Eligible Termination Reasons |
7. | Severance and Change in Control Benefits. The provisions of this Section 7 are subject, without limitation, to the provisions of Section 9 hereof. |
(a) | Post-Termination Payments. If an Eligible Executive’s employment with the Company is terminated after the Effective Date for any reason set forth in Section 5, the Company shall pay to the Eligible Executive the following amounts in accordance with Section 10: |
(i) | Severance Pay. An amount equal to 2 (1.5 in the case of an Eligible Executive (other than Western Union’s Chief Executive Officer) whose separation from service is for an eligible termination reason under Section 5(a)) multiplied by the sum of (1) 100% of the Eligible Executive’s Base Salary and (2) the percentage of the Eligible Executive’s Base Salary established as the target bonus for the Eligible Executive under the Company’s Senior Executive Annual Incentive Plan (or the bonus plan then applicable to the Eligible Executive), for the year in which the Termination Date occurs. If an Eligible Executive’s target bonus for the year in which the Termination Date occurs has not been established at the time an amount is payable under this subsection 7(a)(i), then such amount shall be calculated using the Eligible Executive’s annual target bonus for the immediately preceding year, or, if no such prior year target bonus exists with respect to the Eligible Executive, the prior year target bonus established for a similarly situated Eligible Executive, as determined by the Committee. (The reference to the Eligible Executive’s target bonus for the year in which the Termination Date occurs in this subsection 7(a)(i) is solely for purposes of calculating the Eligible Executive’s severance pay, and shall not give the Executive any right to be paid an amount for the year in which the Termination Date occurs under the Company’s Senior Executive Annual Incentive Plan (or the bonus plan then applicable to the Eligible Executive)). |
(ii) | Bonus for Year of Termination. Subject to the Committee’s certification that the applicable performance goals for the year in which the Termination Date occurs have been achieved, an amount equal to the lesser of (1) the maximum bonus which could have been paid to the Eligible Executive under the Company’s Senior Executive Annual Incentive Plan (or the bonus plan then applicable to the Eligible Executive) for the year in which the Termination Date occurs based on actual performance for such year and (2) a prorated amount (equal to the product of (A) the Eligible Executive’s target bonus for the year in which the Termination Date occurs and (B) the ratio of the number of days the Eligible Executive was employed by the Company during such year up to and including the Termination Date to 365) of the Eligible Executive’s target bonus under the Company’s Senior Executive Annual Incentive Plan (or the bonus plan then applicable to the Eligible Executive) for the year in which the Termination Date occurs. |
(b) | Continued Benefits Coverage. If an Eligible Executive’s employment with the Company terminates after the Effective Date for any reason set forth in Section 5, the Eligible Executive and his or her eligible dependents shall be given the opportunity to elect continued group health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”) with respect to all group health plans that are subject to COBRA in which the Eligible Executive and his or her dependents were participating immediately prior to such termination. Provided that the Eligible Executive (and/or his or her dependents) timely elects such coverage, the Company shall pay to the Eligible Executive, as an additional Severance Benefit, a lump sum approximately equal to the difference in cost between COBRA premiums and active employee premiums for 18 months of COBRA coverage as calculated by the Company in its discretion as of the Termination Date, which payment shall constitute taxable income to the Eligible Executive and which shall be paid in a lump sum in accordance with Section 10. |
(i) | Non-Change in Control. |
a. | Long-Term Incentive Awards Granted On and After February 17, 2009. Effective for awards granted on and after February 17, 2009 under The Western Union Company 2006 Long-Term Incentive Plan (or a successor plan) (the “LTIP”) to an individual who is an Eligible Executive on the date the award is granted, if the Eligible Executive’s employment with the Company is terminated for an eligible termination reason described in Section 5(a), then the unvested portion of awards held by the Eligible Executive that are eligible to become fully vested and exercisable or payable contingent upon the Eligible Executive’s continued employment and the passage of time (whether or not the Company or the Eligible Executive have attained any specified performance goals) (“Time Vested Awards”), other than awards classified by the Committee at the time of grant as “Career Shares” (if applicable to the Eligible Executive) and awards that provide for a deferral of compensation within the meaning of Code Section 409A, shall vest on a prorated basis effective on the Eligible Executive’s Termination Date. Such prorated vesting shall be calculated on a grant-by-grant basis by multiplying the unvested portion of each such award by a fraction, the numerator of which is the number of days that have elapsed between the grant date and the Eligible Executive’s Termination Date and the denominator of which is the number of days between the grant date and the date the award would have become fully vested had the Eligible Executive not terminated his or her employment. Solely for awards granted prior to February 24, 2011which are subject to a graduated vesting schedule, the foregoing calculation shall be performed as if each vesting tranche of the award was a separate grant. Fractions of a share resulting from the calculations shall be rounded to the nearest whole share. The vested portion of any nonqualified stock option and stock appreciation right awards held by an Eligible Executive on his or her Termination Date (and which were granted while an Eligible Executive), including any portion that had previously become vested and the prorated portion that vests effective on the Eligible Executive’s Termination Date in accordance with this subsection, shall be exercisable until the end of the Eligible Executive’s Severance Period (or, if earlier, the expiration of the original term of the award) but not thereafter. Notwithstanding the foregoing, if, at the time of an Eligible Executive’s termination of employment, the Eligible Executive has satisfied the applicable age or age and service requirement for “Retirement” under the LTIP, the following rules shall apply: (i) all outstanding nonqualified stock options held by the Eligible Executive which were granted prior to February 24, 2011 shall continue to vest in accordance with the terms of the applicable award agreement, and to the extent vested, shall be exercisable in accordance with their terms until the date which is four years after the Eligible Executive’s Termination Date (or, if earlier, the expiration of the original term of the award) but not thereafter, and (ii) all outstanding nonqualified stock options or stock appreciation rights held by the Eligible Executive which were granted on or after February 24, 2011 shall vest, to the extent not already vested, on a prorated basis (calculated in the manner described above in this subsection for awards granted on or after February 24, 2011) effective on the Eligible Executive’s Termination Date, and all such vested nonqualified stock options and stock appreciation rights shall be exercisable in accordance with their terms until the earlier of (A) the date which is two years after the Eligible Executive’s Termination Date or the end of the Eligible Executive’s Severance Period (if the award was granted while an Eligible Executive), whichever is later, or (B) the expiration of the original term of the award. |
b. | Long-Term Incentive Awards Granted Prior to February 17, 2009. Effective for awards granted prior to February 17, 2009 under the LTIP to an individual who is an Eligible Executive on the date the award is granted, if the Eligible Executive’s employment with the Company is terminated for an eligible termination reason described in Section 5(a), all outstanding nonqualified stock options held by the Eligible Executive shall (1) if, at the time of an Eligible Executive’s termination of employment, the Eligible Executive has satisfied the applicable age or age and service requirement for “Retirement” under the LTIP, continue to vest in accordance with the terms of the applicable award agreement, and to the extent vested, shall be exercisable in accordance with their terms until the date which is four years after the effective date of the Eligible Executive’s termination of employment (or, if earlier, the expiration of the original term of the award) but not thereafter or (2) in all other cases, continue to vest solely on account of the passage of time during the Eligible Executive’s Severance Period and, to the extent vested, shall be exercisable in accordance with their terms until the end of the Eligible Executive’s Severance Period (or, if earlier, the expiration of the original term of the award) but not thereafter. All Stock Awards (as defined in the LTIP) held by an Eligible Executive (and which were granted while an Eligible Executive) whose employment with the Company is terminated for an eligible termination reason described in Section 5(a) shall vest on a prorated basis effective on the Eligible Executive’s Termination Date. Such prorated vesting shall be calculated on a grant-by-grant basis by multiplying the number of unvested shares subject to each Stock Award by a fraction, the numerator of which is the number of days that have elapsed between the grant date and the Eligible Executive’s Termination Date and the denominator of which is the number of days between the grant date and the date the shares would have become fully vested had the Eligible Executive not terminated his or her employment. Fractions of a share resulting from the calculations shall be rounded to the nearest whole share. |
(ii) | Change in Control. |
a. | Long-Term Incentive Awards Granted On and After February 17, 2009. Effective for awards granted on and after February 17, 2009 under the LTIP to an individual who is an Eligible Executive on the date the award is granted, if the Eligible Executive’s employment with the Company terminates for an eligible termination reason described in Section 5(b) during the 24-month period commencing on the effective date of a Change in Control, then Time Vested Awards held by the Eligible Executive (including but not limited to grants of nonqualified stock options, stock appreciation rights, restricted stock awards, and restricted stock unit awards), other than awards that provide for a deferral of compensation within the meaning of Code Section 409A, shall become fully vested and exercisable or payable effective on the Eligible Executive’s Termination Date. In the event this subsection applies, nonqualified stock options and stock appreciation rights granted to an Eligible Executive (while an Eligible Executive) shall be exercisable until the later of (1) the date specified in the applicable award agreement or (2) the end of the Eligible Executive’s Severance Period (or, if earlier, the expiration of the original term of the award) but not thereafter. If an Eligible Executive’s employment with the Company terminates for an eligible termination reason described in Section 5(b) after the 24-month period commencing on the effective date of a Change in Control, then the unvested portion of Time Vested Awards held by the Eligible Executive (which were granted while an Eligible Executive), other than awards that provide for a deferral of compensation within the meaning of Code Section 409A, shall vest on a prorated basis effective on the Eligible Executive’s Termination Date, and such prorated vesting shall be calculated in the manner described in Section 7(c)(i)a above. The vested portion of any nonqualified stock option and stock appreciation right awards held by such an Eligible Executive on his or her Termination Date (and which were granted while an Eligible Executive), including any portion that had previously become vested and the prorated portion that vests effective on the Eligible Executive’s Termination Date in accordance with this subsection, shall be exercisable until the later of (1) the date specified in the applicable award agreement or (2) the end of the Eligible Executive’s Severance Period (or, if earlier, the expiration of the original term of the award) but not thereafter. |
b. | Long-Term Incentive Awards Granted Prior to February 17, 2009. In the event of a Change in Control, all outstanding awards granted prior to February 17, 2009 under the LTIP to an individual who is an Eligible Executive on the date the award is granted shall become fully vested and exercisable or payable as of the effective date of the Change in Control. In the event this subsection applies, if the Eligible Executive’s employment with the Company terminates for an eligible termination reason described in Section 5(b) during the 24-month period beginning on the effective date of the Change in Control, then nonqualified stock options granted to the Eligible Executive (while an Eligible Executive) shall remain exercisable until the later of (1) the date specified in the applicable award agreement or (2) the end of the Eligible Executive’s Severance Period (or, if earlier, the expiration of the original term of the award) but not thereafter. |
(d) | Legal Fees. Effective for Termination Dates occurring on or after the date of a Change in Control, if after exhausting the administrative remedies provided for in Section 20 herein, an Eligible Executive commences litigation regarding a bona fide claim for damages or other relief arising as a result of a claim for benefits under the Policy, and as a result thereof, whether by judgment or settlement, becomes entitled to receive benefits in an amount greater than prior to such litigation, the Company shall reimburse the reasonable legal fees and related expenses that are incurred by the Eligible Executive in connection with such litigation. Any such reimbursement shall be paid as soon as practicable following the resolution of the litigation, and in no event later than March 15 of the calendar year following the calendar year in which the resolution of such litigation occurs. |
8. | Certain Additional Payments |
(a) | In the event it is determined that any payments or benefits provided by the Company to or on behalf of an Eligible Executive who first became an Eligible Executive before April 30, 2009 (whether pursuant to the terms of this Policy or otherwise) (any such payments or benefits being referred to in this Section as “Payments”), but determined without taking into account any additional payments required under this Section, would be subject to the excise tax imposed by Code Section 4999, or any interest or penalties are incurred by the Eligible Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, collectively referred to herein as the “Excise Tax”), then the Eligible Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount so that after payment by the Eligible Executive of all federal, state and local taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any federal, state or local income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, the Eligible Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing, if it is determined that the Eligible Executive otherwise would be entitled to a Gross-Up Payment, but that the Payments to the Eligible Executive do not exceed 110% of the amount which is one dollar less than the smallest amount that would give rise to any Excise Tax (the “Reduced Amount”), then no Gross-Up Payment shall be made to the Eligible Executive and the Payments shall be reduced to the Reduced Amount. In such event, the reduction will occur in the following order: (i) reduction of cash payments; (ii) cancellation of accelerated vesting of equity awards; and (iii) reduction of other employee benefits. If acceleration of vesting of compensation from an Eligible Executive’s equity awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant unless the Eligible Executive elects in writing a different order for cancellation. Any Gross-Up Payment made pursuant to this Section 8(a) shall be made to the Eligible Executive no later than December 31 of the year following the year in which any Excise Tax is remitted to the taxing authority. No Gross-Up Payment shall be made pursuant to this Section 8(a) to any Eligible Executive who first becomes an Eligible Executive on or after April 30, 2009, and, in addition, Payments to such an Eligible Executive shall be reduced to the Reduced Amount (in the order described above), if such reduction would provide the Eligible Executive a greater net after-tax amount (after taking into account federal, state, local and social security taxes). |
(b) | Subject to the provisions of Section 8(c), all determinations required to be made under this Section, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be used in arriving at such determination, shall be made by the independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control (the “Accounting Firm”). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint another nationally recognized independent registered public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). The Accounting Firm shall provide its calculations, together with detailed supporting documentation, to the Company and the Eligible Executive within fifteen (15) calendar days after the date on which the Eligible Employee’s right to Payment is triggered (if requested at that time by the Company or the Eligible Executive) or such other time as agreed between the Company and the Eligible Executive. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 8, shall be paid by the Company to the Eligible Executive within five business days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by the Eligible Executive, it shall furnish the Eligible Executive with a written opinion that no Excise Tax will be imposed. Any good faith determination by the Accounting Firm shall be binding upon the Company and the Eligible Executive. As a result of the uncertainty in the application of Code Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8(c) and the Eligible Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Eligible Executive. If the related Excise Taxes have been remitted to the taxing authority by the Eligible Executive, the Company shall reimburse the Eligible Executive for the Underpayment no later than December 31 of the year following the year in which the Excise Taxes were remitted to the taxing authority. |
(c) | The Eligible Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than 10 business days after the Eligible Executive is informed in writing of such claim, and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Eligible Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Eligible Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Eligible Executive in writing prior to the expiration of such period that it desires to contest such claim, the Eligible Executive shall: |
(d) | If, after the receipt by the Eligible Executive of an amount advanced by the Company pursuant to Section 8(c), the Eligible Executive becomes entitled to receive, and receives, any refund with respect to such claim, the Eligible Executive shall (subject to the Company’s complying with the requirements of Section 8(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Eligible Executive of an amount advanced by the Company pursuant to Section 8(c), a determination is made that the Eligible Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Eligible Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. |
9. | Requirement of Release and Restrictive Covenant |
10. | Method of Payment of Severance Benefits Under Sections 7(a) and 7(b) |
(a) | Severance Benefits payable hereunder to an Eligible Executive pursuant to Section 7(a)(i) of this Policy on account of a separation from service for an eligible termination reason under Section 5(a) shall be paid in substantially equal installments consistent with the Company’s payroll practice during the Eligible Executive’s Severance Period and shall be paid in full no later than the end of such period. The bonus for the year in which the Termination Date occurs payable hereunder to an Eligible Executive pursuant to Section 7(a)(ii) of this Policy on account of a separation from service for an eligible termination reason under Section 5(a) shall be paid to the Eligible Executive in a lump sum cash payment at the same time as bonus payments for such year are paid to other executives under the Company’s Senior Executive Annual Incentive Plan (or other bonus plan applicable to the Eligible Executive for such year). The cash payment referenced in Section 7(b) of this Policy shall be made in a lump sum on or as soon as practicable after the first date on which the Eligible Executive begins to receive severance payments in accordance with the first sentence of this Section 10(a), and in no event later than March 15 of the calendar year following the calendar year in which the Eligible Executive’s separation from service occurs. |
(b) | Severance Benefits payable hereunder to an Eligible Executive pursuant to Sections 7(a) and 7(b) of this Policy on account of a separation from service for an eligible termination reason under Section 5(b) shall be paid, if the Change in Control which makes Section 5(b) applicable constitutes a “change in control event” under Treasury Regulation §1.409A-3(i)(5), in a lump sum within 30 days following the Eligible Executive’s separation from service, and, if such Change in Control does not constitute a “change in control event” under Treasury Regulation §1.409A-3(i)(5), in the manner set forth in Section 10(a). In determining the amount of the lump sum, Section 7(a)(ii) shall be applied without regard to clause (1) and without regard to the requirement in Section 7(a)(ii) that the Committee certify that the applicable performance goals for the year in which the Termination Date occurs have been achieved. |
(c) | If an Eligible Executive dies after becoming eligible for Severance Benefits and executing an Agreement and Release but before full receipt of Severance Benefits, the remaining Severance Benefits, if any, will be paid to the Eligible Executive's estate in one lump sum upon the Eligible Executive’s death. If an Eligible Executive dies after becoming eligible for Severance Benefits but prior to executing an Agreement and Release, his or her estate or representative may not execute an Agreement and Release and no Severance Benefits will be paid under this Policy. All payments will be net of amounts withheld with respect to taxes, offsets, or other obligations. |
11. | Offsets |
(a) | Non-duplication of Benefits. The Company may, in its discretion and to the extent permitted under applicable law, offset against the Eligible Executive’s Severance Benefits under this Policy any other severance, termination, compensation for non-competition commitments (whether paid during the term of employment or post-termination), or similar benefits or amounts payable to the Eligible Executive by the Company, including, but not limited to any amounts paid under any employment agreement or other individual contractual arrangement, amounts paid pursuant to federal, state, or local workers’ notification or office closing requirements, or statutory severance benefits or payments made on account of any notice period (including but not limited to payments made in lieu of notice or for periods during which the Eligible Executive is released from further duties) as provided under any employment agreement or other individual contractual arrangement or pursuant to the law of any country or political subdivision thereof. |
(b) | Debts and Property. The Company also may, in its discretion and to the extent permitted under applicable law, offset against the Eligible Executive's Severance Benefits under this Policy the value of unreturned property and any outstanding loan, debt or other amount the Eligible Executive owes to the Company. The entire amount of any offset taken pursuant to this Section 11(b) shall not exceed $5,000 in any taxable year, and the offset shall be taken at the same time and in the same amount as such amount would have been otherwise due from the Eligible Executive. |
(c) | Overpayment. The Company may recover any overpayment of Severance Benefits made to an Eligible Executive or an Eligible Executive's estate under this Policy or, to the extent permitted by applicable law, offset any other overpayment made to the Eligible Executive against any Severance Benefits or other amount the Company owes the Eligible Executive or the Eligible Executive's estate. |
12. | Outplacement |
13. | Re-employment and Other Employment |
14. | Funding |
15. | Administration |
16. | Amendment or Termination of the Policy |
17. | Limitation on Individually Negotiated Severance Arrangements |
18. | Section 409A |
19. | Miscellaneous |
20. | Review Procedure |
Three Months Ended March 31, | Years Ended December 31, | ||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||
Earnings: | |||||||||||||||||||||||
Income before income taxes | $ | 227.4 | $ | 926.9 | $ | 1,168.8 | $ | 1,274.6 | $ | 1,145.2 | $ | 1,131.5 | |||||||||||
Fixed charges | 48.6 | 198.8 | 177.8 | 182.9 | 178.0 | 172.8 | |||||||||||||||||
Other adjustments | (1.2 | ) | (0.7 | ) | 5.3 | 2.6 | (3.1 | ) | (0.9 | ) | |||||||||||||
Total earnings (a) | $ | 274.8 | $ | 1,125.0 | $ | 1,351.9 | $ | 1,460.1 | $ | 1,320.1 | $ | 1,303.4 | |||||||||||
Fixed charges: | |||||||||||||||||||||||
Interest expense | $ | 47.6 | $ | 195.6 | $ | 179.6 | $ | 181.9 | $ | 169.9 | $ | 157.9 | |||||||||||
Other adjustments | 1.0 | 3.2 | (1.8 | ) | 1.0 | 8.1 | 14.9 | ||||||||||||||||
Total fixed charges (b) | $ | 48.6 | $ | 198.8 | $ | 177.8 | $ | 182.9 | $ | 178.0 | $ | 172.8 | |||||||||||
Ratio of earnings to fixed charges (a/b) | 5.7 | 5.7 | 7.6 | 8.0 | 7.4 | 7.5 |
(1) | Registration Statements (Form S-3 Nos. 333-191606 and 333-191608) of The Western Union Company, and |
(2) | Registration Statement (Form S-8 No. 333-137665) pertaining to The Western Union Company 2006 Long-Term Incentive Plan, The Western Union Company 2006 Non-Employee Director Equity Compensation Plan, and The Western Union Company Supplemental Incentive Savings Plan; |
/s/ Ernst & Young LLP | |
Denver, Colorado | |
May 1, 2014 |
Date: | May 1, 2014 | /S/ HIKMET ERSEK |
Hikmet Ersek | ||
President and Chief Executive Officer |
Date: | May 1, 2014 | /S/ RAJESH K. AGRAWAL |
Rajesh K. Agrawal | ||
Executive Vice President and Interim Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of The Western Union Company. |
Date: | May 1, 2014 | /S/ HIKMET ERSEK |
Hikmet Ersek | ||
President and Chief Executive Officer |
Date: | May 1, 2014 | /S/ RAJESH K. AGRAWAL |
Rajesh K. Agrawal | ||
Executive Vice President and Interim Chief Financial Officer |
Productivity and Cost-Savings Initiatives Expenses (Details Numeric) (USD $)
In Millions, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Consumer-to-Consumer [Member]
|
|
Productivity and Cost-Savings Initiatives by Segment | |
Productivity and Cost-Savings Initiatives, Costs Incurred to Date | $ 3.2 |
Consumer-to-Business [Member]
|
|
Productivity and Cost-Savings Initiatives by Segment | |
Productivity and Cost-Savings Initiatives, Costs Incurred to Date | 0.5 |
Other [Member]
|
|
Productivity and Cost-Savings Initiatives by Segment | |
Productivity and Cost-Savings Initiatives, Costs Incurred to Date | $ 0.5 |
Derivatives (Details 3) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
|||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | $ (0.6) | $ 0.5 | ||||||||||||
Gain/(Loss) Recognized in Income on Undesignated Hedges | (1.6) | 8.4 | ||||||||||||
Fair Value Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in Income on Derivatives | 3.8 | (0.6) | ||||||||||||
Gain/(Loss) Recognized in Income on Related Hedged Item | (0.3) | [1] | 3.3 | [1] | ||||||||||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | (0.2) | (0.1) | ||||||||||||
Cash Flow Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion) | 2.3 | 23.8 | ||||||||||||
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (1.0) | (0.4) | ||||||||||||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | (0.6) | [2] | (0.2) | [2] | ||||||||||
Interest expense [Member] | Fair Value Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | (0.2) | (0.1) | ||||||||||||
Derivative gains/(losses), net [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in Income on Undesignated Hedges | 0 | [3] | 0.7 | [3] | ||||||||||
Selling, general and administrative [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in Income on Undesignated Hedges | (1.6) | [4] | 7.7 | [4] | ||||||||||
Interest Rate Contracts [Member] | Cash Flow Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion) | 0 | [5] | 0 | [5] | ||||||||||
Interest Rate Contracts [Member] | Interest expense [Member] | Fair Value Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in Income on Derivatives | 3.8 | (0.6) | ||||||||||||
Interest Rate Contracts [Member] | Interest expense [Member] | Cash Flow Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (0.9) | [5] | (0.9) | [5] | ||||||||||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | [5] | 0 | [5] | ||||||||||
Fixed-rate debt [Member] | Interest expense [Member] | Fair Value Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in Income on Related Hedged Item | (0.3) | [1] | 3.3 | [1] | ||||||||||
Foreign currency contracts [Member] | Cash Flow Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion) | 2.3 | 23.8 | ||||||||||||
Foreign currency contracts [Member] | Revenue [Member] | Cash Flow Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (0.1) | 0.5 | ||||||||||||
Foreign currency contracts [Member] | Derivative gains/(losses), net [Member] | Cash Flow Hedges [Member]
|
||||||||||||||
Hedges [Abstract] | ||||||||||||||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | $ (0.6) | [2] | $ (0.2) | [2] | ||||||||||
|
Stockholders' Equity (Details Numeric) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 15 Months Ended | |
---|---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
Jun. 30, 2015
Authorized Repurchase Plan [Member]
|
|
Equity [Line Items] | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 320.4 | ||
Stockholders' Equity (Numeric) [Abstract] | |||
Cash dividends declared per common share | $ 0.125 | $ 0.125 | |
Cash dividends paid | 67.6 | 70.3 | |
Cash dividends declared | 67.6 | 70.3 | |
Repurchase of common shares | 10.9 | 13.3 | |
Repurchase of common shares excluding commission | $ 179.6 | $ 189.8 | |
Average Cost of repurchase of common shares excluding commission | $ 16.44 | $ 14.30 |
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