x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
For the fiscal year ended: December 31, 2009 | ||||
OR
|
||||
o | 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.) |
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, $0.01 Par Value
|
The New York Stock Exchange |
Large accelerated filer
x
|
Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
changes in immigration laws, patterns and other factors related
to migrants;
our ability to adapt technology in response to changing industry
and consumer needs or trends;
our failure to develop and introduce new products, services and
enhancements, and gain market acceptance of such products;
the failure by us, our agents or subagents to comply with our
business and technology standards and contract requirements or
applicable laws and regulations, especially laws designed to
prevent money laundering and terrorist financing,
and/or
changing regulatory or enforcement interpretations of those laws;
failure to comply with the settlement agreement with the State
of Arizona;
changes in United States or foreign laws, rules and regulations
including the Internal Revenue Code, and governmental or
judicial interpretations thereof;
changes in general economic conditions and economic conditions
in the regions and industries in which we operate;
adverse movements and volatility in capital markets and other
events which affect our liquidity, the liquidity of our agents
or clients, or the value of, or our ability to recover our
investments or amounts payable to us;
political conditions and related actions in the United States
and abroad which may adversely affect our businesses and
economic conditions as a whole;
interruptions of United States government relations with
countries in which we have or are implementing material agent
contracts;
our ability to resolve tax matters with the Internal Revenue
Service and other tax authorities consistent with our reserves;
mergers, acquisitions and integration of acquired businesses and
technologies into our company, and the realization of
anticipated financial benefits from these acquisitions;
changes in, and failure to manage effectively exposure to,
foreign exchange rates, including the impact of the regulation
of foreign exchange spreads on money transfers and payment
transactions;
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failure to maintain sufficient amounts or types of regulatory
capital to meet the changing requirements of our regulators
worldwide;
our ability to maintain our agent network and business
relationships under terms consistent with or more advantageous
to us than those currently in place;
failure to implement agent contracts according to schedule;
deterioration in consumers and clients confidence in
our business, or in money transfer providers generally;
failure to manage credit and fraud risks presented by our
agents, clients and consumers or non-performance by our banks,
lenders, other financial services providers or insurers;
any material breach of security of or interruptions in any of
our systems;
adverse rating actions by credit rating agencies;
liabilities and unanticipated developments resulting from
litigation and regulatory investigations and similar matters,
including costs, expenses, settlements and judgments;
failure to compete effectively in the money transfer industry
with respect to global and niche or corridor money transfer
providers, banks and other money transfer services providers,
including telecommunications providers, card associations,
card-based payment providers and electronic and internet
providers;
our ability to protect our brands and our other intellectual
property rights;
our failure to manage the potential both for patent protection
and patent liability in the context of a rapidly developing
legal framework for intellectual property protection;
cessation of various services provided to us by third-party
vendors;
changes in industry standards affecting our business;
changes in accounting standards, rules and interpretations;
our ability to attract and retain qualified key employees and to
manage our workforce successfully;
significantly slower growth or declines in the money transfer
market and other markets in which we operate;
adverse consequences from our spin-off from First Data
Corporation;
decisions to downsize, sell or close units, or to transition
operating activities from one location to another or to third
parties, particularly transitions from the United States to
other countries;
decisions to change our business mix;
catastrophic events; and
managements ability to identify and manage these and other
risks.
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ITEM 1.
BUSINESS
2009
2008
2007
45
%
44
%
40
%
32
%
34
%
37
%
8
%
7
%
6
%
85
%
85
%
83
%
14
%
14
%
15
%
1
%
1
%
2
%
100
%
100
%
100
%
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(a)
The geographic split is determined based upon the region where
the money transfer is initiated and the region where the money
transfer is paid. For transactions originated and paid in
different regions, we split the revenue between the two regions,
with each region receiving 50%. For money transfers initiated
and paid in the same region, 100% of the revenue is attributed
to that region.
(b)
Represents the Europe, Middle East, Africa and South Asia region
of our
consumer-to-consumer
segment.
(c)
Represents the Americas region of our
consumer-to-consumer
segment, which includes North America, Latin America, the
Caribbean and South America.
(d)
Represents the Asia Pacific region of our
consumer-to-consumer
segment.
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Global money transfer providers
Global money
transfer providers allow consumers to send money to a wide
variety of locations, in both their home countries and abroad.
Regional money transfer providers
Regional money
transfer providers, or niche players, provide the
same services as global money transfer providers, but focus on a
small group of corridors or services within one region, such as
North America to the Caribbean, Central or South America, or
Western Europe to North Africa.
Banks and postbanks
Banks and postbanks of all sizes
compete with us in a number of ways, including bank wire
services and card-based services. We believe that banks and
postbanks offer consumers wire transfer services and other money
transfer methods as an incentive to those consumers to purchase
other services and products.
Informal networks
Informal networks enable people to
transfer funds without formal mechanisms and often without
compliance with government reporting requirements. We believe
that such networks comprise a significant share of the market.
Electronic commerce
Online money transfer services
allow consumers to send and receive money electronically using
the internet.
Alternative channels
Alternative channels for
sending and receiving money include mail and commercial courier
services, money transfers using mobile phones, and card-based
options, such as ATM cards and stored-value cards.
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prohibit transactions in, to or from certain countries,
governments and individuals and entities;
impose additional identification, reporting or recordkeeping
requirements;
limit the entities capable of providing money transfer services
or impose additional licensing or registration requirements;
impose minimum capital or other financial requirements on us or
our agents;
limit or restrict the revenue which may be generated from money
transfers, including transaction fees and revenue derived from
foreign exchange;
require additional disclosures to consumers;
require the principal amount of money transfers originated in a
country to be invested in that country or held in trust until
they are paid; or
limit the number or principal amount of money transfers which
may be sent to or from the jurisdiction, whether by an
individual, through one agent or in aggregate.
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Age
Position
62
President, Chief Executive Officer and Director
61
Executive Vice President and President of Western Union
Financial Services, Inc.
49
President, Global Business Payments and Executive Vice
President, Head of Global Strategy
49
Chief Operating Officer
46
Executive Vice President and Chief Marketing Officer
44
Executive Vice President, Operations and IT
50
Executive Vice President of Communications and Corporate Affairs
47
Executive Vice President and Chief Financial Officer
51
Executive Vice President, General Counsel and Secretary
48
President, The Americas and Executive Vice President, Global
Cards and Global Key Accounts
49
Executive Vice President of Human Resources
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ITEM 1A.
RISK
FACTORS
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Our agents or other business relationships having reduced sales
or business as a result of a deterioration in economic
conditions. As a result, our agents could reduce their numbers
of locations or hours of operation, or cease doing business
altogether. Businesses using our services may make fewer
cross-currency payments or may have fewer customers making
payments to them through us, particularly businesses in those
industries that may be more affected by an economic downturn
such as the automobile, mortgage and financial services
industries.
Our revolving credit facility with a consortium of banks is one
source for funding liquidity needs and also backs our commercial
paper program. If any of the banks participating in our credit
facility fails
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to fulfill its lending commitment to us, our short-term
liquidity and ability to support borrowings under our commercial
paper program could be adversely affected.
We may be unable to refinance our existing indebtedness as it
becomes due or we may have to refinance on unfavorable terms,
which could require us to dedicate a substantial portion of our
cash flow from operations to payments on our debt, thereby
reducing funds available for working capital, capital
expenditures, acquisitions, share repurchases and other purposes.
The market value of the securities in our investment portfolio
may substantially decline. The impact of that decline in value
may adversely affect our results of operations and financial
condition.
The derivative financial instruments that we use reduce our
exposure to various market risks including changes in interest
rates and foreign exchange rates. Our counterparties to our
derivative instruments may fail to honor their obligations,
which could expose us to risks we had sought to mitigate. That
failure could have an adverse effect on our financial condition
and results of operations.
We aggregate our foreign exchange exposures in our Custom House
business, including the exposure generated by the derivative
contracts we write to our customers as part of our
cross-currency payments business, and typically hedges the net
exposure through offsetting contracts with established financial
institution counterparties. If our customers fail to honor their
obligations or if the counterparties to our offsetting positions
fail to honor their obligations, our business, financial
position and results of operations could be adversely affected.
Our exposure to receivables from our agents, consumers and
businesses could impact us. For more information on this risk,
see risk factor,
We face credit, liquidity and fraud
risks from our agents, consumers and businesses that could
adversely affect our business, financial position and results of
operations.
The third-party service providers on whom we depend may
experience difficulties in their businesses, which may impair
their ability to provide services to us and have a potential
impact on our own business. The impact of a change or temporary
stoppage of services may have an adverse effect on our business,
results of operations and financial condition.
Banks upon which we rely to conduct our businesses could fail.
This could lead to our inability to access funds
and/or
credit losses for us and could adversely impact our ability to
conduct our business.
If market disruption and volatility occurs, we could experience
difficulty in accessing capital and our business, financial
condition and results of operations could be adversely impacted.
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managing geographically separated organizations, systems and
facilities;
integrating personnel with diverse business backgrounds and
organizational cultures;
integrating the acquired technologies into our company;
realization of anticipated financial benefits from these
acquisitions and where necessary, improving internal controls of
these acquired businesses;
complying with regulatory requirements;
fluctuations in currency exchange rates;
enforcement of intellectual property rights in some foreign
countries;
difficulty entering new markets with the services of the
acquired business; and
general economic and political conditions, including legal and
other barriers to cross-border investment in general, or by
United States companies in particular.
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changes or proposed changes in laws or regulations that have the
effect of making it more difficult for consumers to transfer
money using traditional money transfer providers;
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actions by federal, state or foreign regulators that interfere
with our ability to transfer consumers money reliably, for
example, attempts to seize money transfer funds;
federal, state or foreign legal requirements, including those
that require us to provide consumer data to a greater extent
than is currently required;
any significant interruption in our systems, including by fire,
natural disaster, power loss, telecommunications failure,
terrorism, vendor failure, unauthorized entry and computer
viruses; and
any breach of our security policies or legal requirements
resulting in a compromise of consumer data.
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limiting our ability to pay dividends to our stockholders;
increasing our vulnerability to changing economic, regulatory
and industry conditions;
limiting our ability to compete and our flexibility in planning
for, or reacting to, changes in our business and the industry;
limiting our ability to borrow additional funds; and
requiring us to dedicate a substantial portion of our cash flow
from operations to payments on our debt, thereby reducing funds
available for working capital, capital expenditures,
acquisitions and other purposes.
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ITEM 1B.
UNRESOLVED
STAFF COMMENTS
ITEM 2.
PROPERTIES
ITEM 3.
LEGAL
PROCEEDINGS
ITEM 4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
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36
65
66
67
68
ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Common Stock
Dividends
Market Price
Declared
High
Low
per Share
$
15.99
$
10.05
$
18.37
12.08
20.64
15.11
20.09
17.81
0.06
$
24.31
$
18.56
$
26.15
19.86
28.62
22.90
24.64
10.48
0.04
Remaining Dollar
Total Number of Shares
Value of Shares that
Purchased as Part of
May Yet Be Purchased
Total Number of
Average Price
Publicly Announced
Under the Plans or
Shares Purchased*
Paid per Share
Plans or Programs**
Programs (in millions)
3,209,047
$
18.95
3,207,700
$
653.9
5,487,699
$
19.13
5,487,699
$
548.9
499,204
$
18.42
499,204
$
1,000.0
9,195,950
$
19.03
9,194,603
*
These amounts represent both shares authorized by the Board of
Directors for repurchase under a publicly announced plan, as
described below, as well as shares withheld from employees to
cover tax withholding obligations on restricted stock awards and
units that have vested.
**
At December 31, 2009, common stock repurchases of up to
$1.0 billion have been authorized by the Board of Directors
through December 31, 2012. Management has 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.
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ITEM 6.
SELECTED
FINANCIAL DATA
Year ended December 31,
2009
2008
2007
2006
2005
$
5,083.6
$
5,282.0
$
4,900.2
$
4,470.2
$
3,987.9
3,800.9
3,927.0
3,578.2
3,158.8
2,718.7
1,282.7
1,355.0
1,322.0
1,311.4
1,269.2
9.4
45.2
79.4
40.1
7.6
(157.9
)
(171.2
)
(189.0
)
(53.4
)
(1.7
)
(2.7
)
9.7
10.0
37.0
69.0
1,131.5
1,238.7
1,222.4
1,335.1
1,344.1
848.8
919.0
857.3
914.0
927.4
154.2
144.0
123.9
103.5
79.5
1,218.1
1,253.9
1,103.5
1,108.9
1,002.8
(98.9
)
(153.7
)
(192.1
)
(202.3
)
(65.0
)
(400.2
)
(1,314.5
)
(726.8
)
(19.9
)
2,953.9
417.2
$
1.21
$
1.26
$
1.13
$
1.20
$
1.21
$
1.21
$
1.24
$
1.11
$
1.19
$
1.21
$
0.06
$
0.04
$
0.04
$
0.01
196.1
188.1
167.7
147.1
118.5
414.8
412.1
404.5
249.4
215.1
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As of December 31,
2009
2008
2007
2006
2005
$
2,389.1
$
1,207.5
$
1,319.2
$
1,284.2
$
914.4
7,353.4
5,578.3
5,784.2
5,321.1
4,591.7
2,389.1
1,207.5
1,319.2
1,282.5
912.0
3,048.5
3,143.5
3,338.0
3,323.5
6,999.9
5,586.4
5,733.5
5,635.9
1,779.9
353.5
(8.1
)
50.7
(314.8
)
2,811.8
(a)
Revenue for the year ended December 31, 2009 included
$30.8 million of revenue related to the Custom House
acquisition in September 2009.
(b)
We followed the modified prospective method effective
January 1, 2006, which requires all stock-based payments to
employees to be recognized in the income statement based on
their respective grant date fair values over the corresponding
service periods and also requires an estimation of forfeitures
when calculating compensation expense. Stock-based compensation
expense, including stock compensation expense allocated by First
Data prior to the Spin-off on September 29, 2006, and the
impact of adopting the modified prospective method, was
$31.9 million, $26.3 million, $50.2 million and
$30.1 million for the years ended December 31, 2009,
2008, 2007 and 2006, respectively. Our stock-based compensation
expense in 2007 included a charge of $22.3 million related
to the vesting of the remaining converted unvested Western Union
stock-based awards upon the completion of the acquisition of
First Data on September 24, 2007 by an affiliate of
Kohlberg Kravis Roberts & Co.
(c)
Operating expenses for the year ended December 31, 2008
included $82.9 million of restructuring and related
expenses associated with the closure of our facilities in
Missouri and Texas and other reorganization plans.
(d)
Operating expenses for the year ended December 31, 2009
included an accrual of $71.0 million resulting from an
anticipated agreement and settlement, which resolves all
outstanding legal issues and claims with the State of Arizona
and requires us to fund a multi-state
not-for-profit
organization promoting safety and security along the United
States and Mexico border, in which California, Texas and New
Mexico will participate with Arizona. The settlement agreement
was signed on February 11, 2010.
(e)
Interest income is attributed primarily to cash balances and
loans made to several agents. In 2009 and 2008, the
Companys interest income has been impacted by a decline in
interest rates. On the Spin-off date, the Company received cash
in connection with the settlement of intercompany notes with
First Data (net of certain other payments made to First Data)
which significantly increased our international cash balances.
(f)
Interest expense primarily relates to debt incurred in
connection with the Spin-off from First Data and the refinancing
of such debt. Interest expense has been significantly higher
since September 29, 2006 due to higher borrowings balances.
(g)
Amounts were primarily recognized prior to the Spin-off and
include derivative gains and losses, net, interest income due
from First Data, and the net foreign exchange effect on notes
receivable from First Data and related foreign currency swaps
with First Data. Prior to the Spin-off, we did not have any
forward contracts that qualified as hedges, and therefore, the
gains and losses on these contracts were reflected in income
prior to that date. On September 29, 2006, we entered into
foreign currency forward positions to qualify for cash flow
hedge accounting. During the years ended December 31, 2009,
2008, 2007, 2006, and 2005, the pre-tax derivative (loss)/gain
was $(2.8) million, $(6.9) million, $8.3 million,
$(21.2) million, and $45.8 million, respectively.
Notes receivable from First Data affiliates and related foreign
currency swap agreements were settled in cash in connection with
the Spin-off. During the years ended December 31, 2006 and
2005, the interest income, net recognized from First Data,
including the impact of foreign exchange translation of the
underlying notes, was $45.8 million and $18.4 million,
respectively.
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(h)
Capital expenditures include capitalization of contract costs,
capitalization of purchased and developed software and purchases
of property and equipment.
(i)
At December 31, 2009, common stock repurchases of up to
$1.0 billion have been authorized by the Board of Directors
through December 31, 2012. During the years ended
December 31, 2009, 2008 and 2007 and the period from
September 29, 2006 through December 31, 2006, we
repurchased 24.8 million, 58.1 million,
34.7 million and 0.9 million shares, respectively.
(j)
For all periods prior to the Spin-off date, basic and diluted
earnings per share were computed utilizing the basic shares
outstanding at September 29, 2006.
(k)
Consumer-to-consumer
transactions include
consumer-to-consumer
money transfer services worldwide. Amounts include Vigo
Remittance Corp. transactions since the acquisition date of
October 21, 2005.
(l)
Global business payments transactions include Quick Collect,
Western Union Convenience Pay, Speedpay, Equity Accelerator,
Just in Time EFT, Pago Fácil and Custom House transactions
processed by us. Amounts include Pago Fácil and Custom
House transactions since their acquisition in December 2006 and
September 2009, respectively.
(m)
In connection with the Spin-off, we reported a $4.1 billion
dividend to First Data in the consolidated statements of
stockholders equity/(deficiency)/Net Investment in The
Western Union Company, consisting of notes issued to First Data
of $3.4 billion and a cash payment to First Data of
$100.0 million. The remaining dividend was comprised of
cash, consideration for an ownership interest held by a First
Data subsidiary in a Western Union agent, settlement of net
intercompany receivables, and transfers of certain liabilities,
net of assets. Subsequent to the Spin-off date, the Company had
no outstanding borrowings to First Data. Since the amount of the
dividend exceeded the historical cost of our net assets as of
September 29, 2006, a capital deficiency resulted.
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ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Consumer-to-consumer
money transfer services, provided primarily through a global
network of third-party agents using our multi-currency,
real-time money transfer processing systems. This service is
available for international cross-border transfersthat is,
the transfer of funds from one country to anotherand, in
certain countries, intra-country transfersthat is, money
transfers from one location to another in the same country.
Global business payments (formerly
consumer-to-business),
which allows for the processing of payments from consumers or
businesses to other businesses. Our business payments service
allow consumers to make payments to a variety of organizations,
including utilities, auto finance companies, mortgage servicers,
financial service providers, government agencies and other
businesses. On September 1, 2009, we acquired Canada-based
Custom House, Ltd. (Custom House), a provider of
international
business-to-business
payment services, which is included in this segment. Custom
House facilitates cross-border, cross-currency payment
transactions. While we continue to pursue further international
expansion of our offerings in this segment, the segments
revenue was primarily generated in the United States during all
periods presented.
We generated $5,083.6 million in total consolidated
revenues, representing a
year-over-year
decline of 4%. This decline was partially offset by the
acquisition of Custom House, which contributed
$30.8 million to revenue for 2009.
We generated $1,282.7 million in consolidated operating
income compared to $1,355.0 million for the comparable
period in the prior year, representing a decrease of 5%.
Operating income for the year ended December 31, 2009
included an accrual of $71.0 million resulting from an
anticipated agreement and settlement which resolves all
outstanding legal issues and claims with the State of
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Arizona and requires us to fund a multi-state
not-for-profit
organization promoting safety and security along the United
States and Mexico border, in which California, Texas and New
Mexico will participate with Arizona (the settlement
accrual). The settlement agreement was signed on
February 11, 2010. Results for 2008 included
$82.9 million in restructuring and related expenses.
Our operating income margin was 25% during the year ended
December 31, 2009, resulting in a
year-over-year
decline of 1%. The current year results included the settlement
accrual, while the prior year results included the restructuring
and related expenses mentioned above.
Consolidated net income during 2009 was $848.8 million,
representing a decline of 8% from 2008. The current results
included the settlement accrual of $53.9 million, net of
tax, while the prior year results included $51.6 million in
restructuring and related expenses, net of tax.
Our consumers transferred $71 billion in
consumer-to-consumer
principal, of which $65 billion related to cross-border
principal, which represented a decrease of 3% in both
consumer-to-consumer
principal and cross-border principal over the prior year.
Consolidated cash flows provided by operating activities were
$1,218.1 million, a decrease of 3% over 2008.
We completed two acquisitions in the year ended
December 31, 2009. In February 2009, we completed the
acquisition of the money transfer business of one of our largest
agents, European-based FEXCO, for $243.6 million, including
$157.4 million of cash consideration. As described earlier,
we acquired Custom House in September 2009 for cash
consideration of $371.0 million.
Transaction volume is the primary generator of revenue in our
businesses. Transaction volume in our
consumer-to-consumer
segment is affected by, among other things, the size of the
international migrant population and individual needs to
transfer funds in emergency situations. As noted elsewhere in
this Annual Report on
Form 10-K,
a reduction in the size of the migrant population, interruptions
in migration patterns or reduced employment opportunities
including those resulting from any changes in immigration laws,
economic development patterns or political events, could
adversely affect our transaction volume. For discussion on how
these factors have impacted us in recent periods, refer to the
consumer-to-consumer
segment discussion below.
Revenue is also impacted by changes in the fees we charge
consumers, the principal sent per transaction and by the
variance in the exchange rate set by us to the customer and the
rate at which we or our agents are able to acquire currency. We
intend to continue to implement future strategic fee reductions
and actions to reduce foreign exchange spreads, where
appropriate, taking into account growth opportunities and
including competitive factors. Decreases in our fees or foreign
exchange spreads generally reduce margins, but are done in
anticipation that they will result in increased transaction
volumes and increased revenues over time.
A majority of our cost structure is comprised of agent
commissions, which are generally variable and fluctuate as
revenues fluctuate.
Fluctuations in the exchange rate between the United States
dollar and other currencies impact our transaction fee and
foreign exchange revenue. The impact to earnings per share is
less than the revenue impact due to the translation of expenses
and our foreign currency hedging program.
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Years Ended December 31,
% Change
2009
2008
2009
2008
2007
vs. 2008
vs. 2007
$
4,036.2
$
4,240.8
$
3,989.8
(5
)%
6
%
910.3
896.3
771.3
2
%
16
%
137.1
144.9
139.1
(5
)%
4
%
5,083.6
5,282.0
4,900.2
(4
)%
8
%
2,874.9
3,093.0
2,808.4
(7
)%
10
%
926.0
834.0
769.8
11
%
8
%
3,800.9
3,927.0
3,578.2
(3
)%
10
%
1,282.7
1,355.0
1,322.0
(5
)%
2
%
9.4
45.2
79.4
(79
)%
(43
)%
(157.9
)
(171.2
)
(189.0
)
(8
)%
(9
)%
(2.8
)
(6.9
)
8.3
*
*
0.1
16.6
1.7
*
*
(151.2
)
(116.3
)
(99.6
)
30
%
17
%
1,131.5
1,238.7
1,222.4
(9
)%
1
%
282.7
319.7
365.1
(12
)%
(12
)%
$
848.8
$
919.0
$
857.3
(8
)%
7
%
$
1.21
$
1.26
$
1.13
(4
)%
12
%
$
1.21
$
1.24
$
1.11
(2
)%
12
%
698.9
730.1
760.2
701.0
738.2
772.9
*
Calculation not meaningful
42
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43
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Restructuring and Related Activities
For the year
ended December 31, 2008, restructuring and related expenses
of $62.8 million and $20.1 million are classified
within cost of services and selling, general
and administrative expenses, respectively, in the
consolidated statements of income. These restructuring and
related expenses are associated with the closure of our
facilities in Missouri and Texas and other reorganization plans
executed in 2008. No expenses were recognized for these
restructurings in 2009.
2007 Stock Compensation Charge
At the time of the
Spin-off, First Data converted stock options, restricted stock
awards, and restricted stock units (collectively,
stock-based awards) of First Data stock held by
Western Union and First Data employees. Both Western Union and
First Data
44
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employees received converted Western Union stock-based awards.
All converted stock-based awards, which had not vested prior to
September 24, 2007, were subject to the terms and
conditions applicable to the original First Data stock-based
awards, including change of control provisions which require
full vesting upon a change of control of First Data.
Accordingly, upon the completion of the acquisition of First
Data on September 24, 2007 by an affiliate of KKR, all of
these remaining converted unvested Western Union stock-based
awards vested. In connection with this accelerated vesting, we
incurred a non-cash pre-tax charge of $22.3 million during
the third quarter of 2007. Approximately one-third of this
charge was recorded within cost of services and
two-thirds was recorded within selling, general and
administrative expenses in the consolidated statements of
income.
45
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46
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47
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The accounting policies of the reporting segments are the same
as those described in the summary of significant accounting
policies.
Corporate and other overhead is allocated to the segments
primarily based on a percentage of the segments revenue
compared to total revenue.
Expenses incurred in connection with mergers and acquisitions
are included in Other.
An accrual of $71.0 million for an anticipated agreement
and settlement with the State of Arizona recorded during the
year ended December 31, 2009 has not been allocated to the
segments. On February 11, 2010, we signed this agreement
and settlement, which resolved all outstanding legal issues and
claims with the State and requires us to fund a multi-state
not-for-profit
organization promoting safety and security along the United
States and Mexico border, in which California, Texas and New
Mexico will participate with Arizona. While this item was
identifiable to our
consumer-to-consumer
segment, it was not included in the measurement of segment
operating profit provided to the CODM for purposes of assessing
segment performance and decision making with respect to resource
allocation. For additional information on the settlement
accrual, refer to Operating expenses overview.
Restructuring and related activities of $82.9 million for
the year ended December 31, 2008 have not been allocated to
the segments. While these items were identifiable to our
segments, they were not included in the measurement of segment
operating profit provided to the CODM for purposes of assessing
segment performance and decision making with respect to resource
allocation. For additional information on restructuring and
related activities refer to Operating expenses
overview.
All items not included in operating income are excluded.
Years Ended December 31,
2009
2008
2007
45
%
44
%
40
%
32
%
34
%
37
%
8
%
7
%
6
%
85
%
85
%
83
%
14
%
14
%
15
%
1
%
1
%
2
%
100
%
100
%
100
%
(a)
The geographic split is determined based upon the region where
the money transfer is initiated and the region where the money
transfer is paid. For transactions originated and paid in
different regions, we
48
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split the revenue between the two regions, with each region
receiving 50%. For money transfers initiated and paid in the
same region, 100% of the revenue is attributed to that region.
Years Ended December 31,
% Change
2009
2008
2009
2008
2007
vs. 2008
vs. 2007
$
3,373.5
$
3,532.9
$
3,286.6
(5
)%
7
%
877.1
893.1
769.3
(2
)%
16
%
50.1
45.6
37.2
10
%
23
%
$
4,300.7
$
4,471.6
$
4,093.1
(4
)%
9
%
$
1,175.5
$
1,222.7
$
1,078.3
(4
)%
13
%
27
%
27
%
26
%
196.1
188.1
167.7
4
%
12
%
Years Ended December 31,
2009
2008
10
%
23
%
(3
)%
2
%
18
%
27
%
(1
)%
16
%
(9
)%
(1
)%
5
%
22
%
(a)
In determining the revenue and transaction growth rates under
the regional view in the above table, the geographic split is
determined based upon the region where the money transfer is
initiated and the region where the money transfer is paid. For
transactions originated and paid in different regions, we split
the transaction count and revenue between the two regions, with
each region receiving 50%. For money transfers initiated and
paid in the same region, 100% of the revenue and transactions
are attributed to that region.
49
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50
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51
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52
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Years Ended December 31,
% Change
2009
2008
2009
2008
2007
vs. 2008
vs. 2007
$
621.9
$
668.1
$
665.5
(7
)%
0
%
33.2
3.2
2.0
*
*
36.6
48.5
52.4
(25
)%
(7
)%
$
691.7
$
719.8
$
719.9
(4
)%
0
%
$
171.9
$
199.4
$
223.7
(14
)%
(11
)%
25
%
28
%
31
%
414.8
412.1
404.5
1
%
2
%
*
Calculation not meaningful
53
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54
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Years Ended December 31,
% Change
2009
2008
2009
2008
2007
vs. 2008
vs. 2007
$
91.2
$
90.6
$
87.2
1
%
4
%
$
6.3
$
15.8
$
20.0
(60
)%
(21
)%
7
%
17
%
23
%
55
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56
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2009
2008
$
$
82.9
500.0
1,033.9
1,042.8
498.6
1,012.5
1,014.4
497.5
497.4
6.0
6.0
$
3,048.5
$
3,143.5
(a)
The term loan due in December 2009 (Term Loan) was
paid and financed with the issuance of the 6.500% notes due
2014 (2014 Notes) on February 26, 2009.
(b)
At December 31, 2009 and 2008, we held interest rate swaps
related to the 5.400% notes due 2011 (2011
Notes) with an aggregate notional amount of
$750 million and $550 million, respectively. The
carrying value of the 2011 Notes at December 31, 2009 and
2008 contained $34.3 million and $42.7 million,
respectively, of hedge accounting adjustments related to active
swaps as well as the unamortized portion of previously
terminated swaps. These hedge accounting adjustments will be
reclassified as reductions to interest expense over
the life of the 2011 Notes.
(c)
The 2014 Notes were issued on February 26, 2009 and the
proceeds were used to repay the Term Loan.
(d)
The carrying value of the 2016 Notes at December 31, 2009
and 2008 included $12.8 million and $15.4 million,
respectively, of hedge accounting adjustments. The remaining
unamortized portion of this previously terminated swap will be
reclassified as a reduction to interest expense over
the life of the 2016 Notes.
57
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58
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December 31, 2009
S&P
Moodys
Fitch
A-2
P-2
F2
A-
A3
A-
Stable
Stable
Stable
Our access to the commercial paper market may be limited, and if
we were downgraded below investment grade, our access to the
commercial paper market would likely be eliminated;
We may be required to pay a higher interest rate in future
financings;
Our potential pool of investors and funding sources may decrease;
Regulators may impose additional capital and other requirements
on us, including imposing restrictions on the ability of our
regulated subsidiaries to pay dividends; and
Our agent relationships may be adversely impacted, particularly
those agents that are financial institutions or post offices.
59
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60
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61
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Payments Due by Period
Total
Less than 1 Year
1-3 Years
3-5 Years
After 5 Years
$
4,490.5
$
157.0
$
1,318.9
$
717.0
$
2,297.6
522.7
154.9
42.7
52.2
30.0
30.0
120.6
14.9
47.3
38.8
19.6
107.7
28.3
37.3
22.6
19.5
80.6
70.4
10.2
81.6
75.1
4.0
2.5
$
5,558.6
$
388.4
$
1,469.9
$
810.9
$
2,366.7
(a)
We have estimated our interest payments based on (i) the
assumption that no commercial paper borrowings will be
outstanding beyond 2009 and (ii) the assumption that no
debt issuances or renewals will occur upon the maturity dates of
our notes.
(b)
The timing of cash payments on unrecognized tax benefits,
including accrued interest and penalties, is inherently
uncertain because the ultimate amount and timing of such
liabilities is affected by factors which are variable and
outside our control. In 2010, we are considering making a
$250 million refundable tax deposit relating to potential
United States federal tax liabilities arising from our 2003
international restructuring. By making the deposit, interest
charges related to the amount of the deposit will cease. To the
extent the deposit is not ultimately used to satisfy federal tax
liabilities, it is refundable
62
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with interest. Due to the uncertainty surrounding this tax
deposit, the amount has not been reflected in the table above.
(c)
Many of our contracts contain clauses that allow us to terminate
the contract with notice and with a termination penalty.
Termination penalties are generally an amount less than the
original obligation. Obligations under certain contracts are
usage-based and are, therefore, estimated in the above amounts.
Historically, we have not had any significant defaults of our
contractual obligations or incurred significant penalties for
termination of our contractual obligations.
(d)
We have estimated our pension plan funding requirements,
including interest, using assumptions that are consistent with
current pension funding rates. The actual minimum required
amounts each year will vary based on the actual discount rate
and asset returns when the funding requirement is calculated. In
addition, we may make a discretionary contribution of up to
approximately $10 million to the plans in 2010, which has
not been reflected in the table above.
(e)
Represents the liability position of our foreign currency
derivative contracts as of December 31, 2009, which will
fluctuate based on market conditions.
(f)
This line item primarily includes the expected payment of
$71.0 million related to the agreement and settlement with
the State of Arizona, including amounts to be paid to fund a
multi-state
not-for-profit
organization promoting safety and security along the United
States and Mexico border, in which California, Texas and New
Mexico will participate with Arizona. The table above excludes
certain additional investments in our compliance programs along
the United States and Mexico border and the engagement of a
monitor of that program of approximately $23 million to be
incurred over the next two to four years also related to the
agreement and settlement with the State of Arizona due to the
uncertainty over the timing of payments. This balance also
represents accrued and unpaid initial payments for new and
renewed agent contracts as of December 31, 2009.
63
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Effect if Actual Results Differ from
Description
Judgments and Uncertainties
Assumptions
Income taxes, as reported in our consolidated financial
statements, represent the net amount of income taxes we expect
to pay to various taxing jurisdictions in connection with our
operations. We provide for income taxes based on amounts that we
believe we will ultimately owe after applying the required
analyses and judgments.
With respect to earnings in certain foreign jurisdictions, we
have provided for income taxes on such earnings at a more
favorable income tax rate than the combined United States
federal and state income tax rates because we expect to reinvest
these earnings outside of the United States indefinitely.
At December 31, 2009, no provision had been made for United
States federal and state income taxes on foreign earnings of
approximately $2.0 billion, which are expected to be reinvested
outside the United States indefinitely.
Upon distribution of those earnings to the United States in the
form of actual or constructive dividends, we would be subject to
United States income taxes (subject to an adjustment for foreign
tax credits), state income taxes and possible withholding taxes
payable to various foreign countries which could result in a
material impact to our financial position, results of operations
and cash flows in the period such distribution occurred.
Determination of the amount of unrecognized deferred United
States tax liability is not practicable because of the
complexities associated with its hypothetical calculation.
64
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Effect if Actual Results Differ from
Description
Judgments and Uncertainties
Assumptions
We recognize the tax benefit from an uncertain tax position only
when it is more likely than not, based on the technical merits
of the position, that the tax position will be sustained upon
examination, including the resolution of any related appeals or
litigation. The tax benefits recognized in the consolidated
financial statements from such a position are measured as the
largest benefit that has a greater than fifty percent likelihood
of being realized upon ultimate resolution.
The Internal Revenue Service (IRS) has completed audits of the United States federal consolidated income tax returns of First Data for the years 2002 through 2004, which include our taxable results for those years. Refer to Note 10 to our consolidated financial statements for a detailed discussion of these audits.
Pursuant to the tax allocation agreement signed in connection with the Spin-off from First Data, we believe we have appropriately apportioned the taxes between First Data and us.
If we are required to indemnify First Data for taxes incurred as a result of the Spin-off being taxable to First Data, it likely would have a material adverse effect on our business, financial position, results of operations and cash flows.
Table of Contents
Effect if Actual Results Differ from
Description
Judgments and Uncertainties
Assumptions
Derivative Financial Instruments
Cash Flow hedgesCash flow hedges consist of foreign currency hedging of forecasted money transfer revenues and hedges of anticipated fixed rate debt issuances. Derivative fair value changes that are captured in accumulated other comprehensive loss are reclassified to earnings in the same period or periods the hedged item affects earnings, to the extent the change in the fair value of the instrument is effective in offsetting the change in fair value of the hedged item. The portion of the change in fair value that is either considered ineffective or is excluded from the measure of effectiveness is recognized immediately in Derivative (losses)/gains, net.
Fair Value hedgesFair value hedges consist of hedges of fixed rate debt, through interest rate swaps. The changes in fair value of these hedges, along with offsetting changes in fair value of the related debt instrument are recorded in interest expense.
The details of each designated hedging relationship must be formally documented at the inception of the arrangement, including the risk management objective, hedging strategy, hedged item, specific risks being hedged, the derivative instrument, how effectiveness is being assessed and how ineffectiveness, if any, will be measured. The derivative must be highly effective in offsetting the changes in cash flows or fair value of the hedged item, and effectiveness is evaluated quarterly on a retrospective and prospective basis.
If the hedge is no longer deemed effective, we discontinue applying hedge accounting to that relationship prospectively.
As of December 31, 2009, the cumulative pre-tax unrealized losses classified within accumulated other comprehensive loss from such cash flow hedges that would be reflected in earnings if our hedges were disqualified from hedge accounting was $24.6 million.
As of December 31, 2009, the cumulative debt adjustments from our fair value hedges that would be reflected in earnings if such hedges were disqualified from hedge accounting was a $47.1 million gain.
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Effect if Actual Results Differ from
Description
Judgments and Uncertainties
Assumptions
Other Intangible Assets
We evaluate such intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of such assets may not be recoverable. In such reviews, estimated undiscounted cash flows associated with these assets are compared with their carrying amounts to determine if a write-down to fair value (normally measured by discounted cash flows) is required.
The estimated undiscounted cash flows associated with each asset requires us to make estimates and assumptions including among other things revenue growth rates, and operating margins based on our budgets and business plans.
If an event described above occurs and causes us to determine that an asset has been impaired, that could result in an impairment charge. We did not record any impairment charges related to other intangible assets during the three year period ended December 31, 2009.
The net carrying value of our other intangible assets at December 31, 2009 was $489.2 million.
Goodwill impairment is determined using a two-step process. The first step is to identify if a potential impairment exists by comparing the fair value of each reporting unit to its carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill of that reporting unit is not considered to have a potential impairment and the second step of the impairment test is not necessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second step is performed to determine the implied fair value of a reporting units goodwill, by comparing the reporting units fair value to the allocated fair values of all assets and liabilities, including any unrecognized intangible assets, as if the reporting unit had been acquired in a business combination. If the carrying amount of goodwill exceeds its implied fair value, an impairment is recognized in an amount equal to that excess.
Reporting units are defined as an operating segment or one level below an operating segment.
The determination of the reporting units also requires judgment.
If an event described above occurs and causes us to recognize a goodwill impairment charge, it could impact our reported earnings in the periods such charge occurs.
The carrying value of goodwill as of December 31, 2009 was $2,143.4 million which represented approximately 29% of our consolidated assets.
We have not recorded any goodwill impairments during the three years ended December 31, 2009.
The fair value of each of our reporting units exceeded their carrying amounts for the three years ended December 31, 2009.
Table of Contents
Effect if Actual Results Differ from
Description
Judgments and Uncertainties
Assumptions
For most acquisitions, we engage outside appraisal firms to assist in the fair value determination of identifiable intangible assets such as agent networks, customer relationships, tradenames and any other significant assets or liabilities. We adjust the preliminary purchase price allocation, as necessary, after the acquisition closing date through the end of the measurement period of one year or less as we finalize valuations for the assets acquired and liabilities assumed.
Purchase price allocation methodology requires management to
make assumptions and apply judgment to estimate the fair value
of acquired assets and liabilities. Management estimates the
fair value of assets and liabilities primarily using discounted
cash flows and replacement cost analysis.
During the last three years, we completed the following
significant acquisitions:
In September 2009, we acquired Custom
House for $371.0 million.
In February 2009, we acquired the money
transfer business of FEXCO for $243.6 million.
In 2008, we acquired an 80% interest in
our existing money transfer agent in Peru and the money transfer
assets of an agent in Panama for a total of $53.3 million.
See Note 3,
Acquisitions
, to the Notes to the
Consolidated Financial Statements, included in Item 8, of this
Annual Report on Form 10-K, for more information related to the
purchase price allocations for acquisitions completed during the
last three years.
If estimates or assumptions used to complete the purchase price
allocation and estimate the fair value of acquired assets and
liabilities significantly differed from assumptions made, the
allocation of purchase price between goodwill and intangibles
could significantly differ. Such a difference would impact
future earnings through amortization expense of these
intangibles. In addition, if forecasts supporting the valuation
of the intangibles or goodwill are not achieved, impairments
could arise, as discussed further in Goodwill Impairment
Testing and Other Intangible Assets above.
For the acquisitions discussed above, goodwill of $504.1 million
and intangibles of $208.7 million were recognized.
Table of Contents
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
69
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70
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71
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ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
Index To Consolidated Financial Statements
73
74
76
77
78
79
80
126
72
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73
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February 26, 2010
74
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February 26, 2010
75
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Year Ended December 31,
2009
2008
2007
$
4,036.2
$
4,240.8
$
3,989.8
910.3
896.3
771.3
137.1
144.9
139.1
5,083.6
5,282.0
4,900.2
2,874.9
3,093.0
2,808.4
926.0
834.0
769.8
3,800.9
3,927.0
3,578.2
1,282.7
1,355.0
1,322.0
9.4
45.2
79.4
(157.9
)
(171.2
)
(189.0
)
(2.8
)
(6.9
)
8.3
0.1
16.6
1.7
(151.2
)
(116.3
)
(99.6
)
1,131.5
1,238.7
1,222.4
282.7
319.7
365.1
$
848.8
$
919.0
$
857.3
$
1.21
$
1.26
$
1.13
$
1.21
$
1.24
$
1.11
698.9
730.1
760.2
701.0
738.2
772.9
*
As further described in Note 5, total expenses include
amounts for related parties of $257.4 million,
$305.9 million and $256.6 million for the years ended
December 31, 2009, 2008 and 2007, respectively.
76
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December 31,
2009
2008
$
1,685.2
$
1,295.6
2,389.1
1,207.5
204.3
192.3
2,143.4
1,674.2
489.2
350.6
442.2
858.1
$
7,353.4
$
5,578.3
$
501.2
$
385.7
2,389.1
1,207.5
519.0
381.6
268.9
270.1
3,048.5
3,143.5
273.2
198.0
6,999.9
5,586.4
6.9
7.1
40.7
(14.4
)
433.2
29.2
(127.3
)
(30.0
)
353.5
(8.1
)
$
7,353.4
$
5,578.3
77
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Year Ended December 31,
2009
2008
2007
$
848.8
$
919.0
$
857.3
55.9
61.7
49.1
98.3
82.3
74.8
(20.8
)
15.9
4.2
31.9
26.3
50.2
44.1
42.9
14.6
(31.4
)
6.9
16.2
75.5
35.2
43.4
138.3
91.2
15.3
(22.5
)
(27.5
)
(21.6
)
1,218.1
1,253.9
1,103.5
(27.3
)
(82.8
)
(80.9
)
(11.9
)
(17.0
)
(27.7
)
(59.7
)
(53.9
)
(83.5
)
(515.9
)
(42.8
)
255.5
(298.1
)
(1.0
)
(6.1
)
35.2
41.9
32.0
(35.8
)
(324.1
)
(453.7
)
(202.0
)
(82.8
)
(255.3
)
13.6
(3.0
)
496.6
500.0
(500.0
)
(500.0
)
23.2
300.5
216.1
(41.2
)
(28.4
)
(30.0
)
(400.2
)
(1,314.5
)
(726.8
)
(504.4
)
(1,297.7
)
(530.1
)
389.6
(497.5
)
371.4
1,295.6
1,793.1
1,421.7
$
1,685.2
$
1,295.6
$
1,793.1
$
150.0
$
171.6
$
185.8
162.8
230.3
340.9
78
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Accumulated
Total
Capital
Other
Stockholders
Common Stock
Treasury Stock
Surplus/
Retained
Comprehensive
Equity/
Comprehensive
Shares
Amount
Shares
Amount
(Deficiency)
Earnings
Loss
(Deficiency)
Income/(Loss)
772.0
$
7.7
(0.9
)
$
(19.9
)
$
(437.1
)
$
208.0
$
(73.5
)
$
(314.8
)
(0.6
)
(0.6
)
772.0
$
7.7
(0.9
)
$
(19.9
)
$
(437.1
)
$
207.4
$
(73.5
)
$
(315.4
)
857.3
857.3
$
857.3
50.2
50.2
(30.0
)
(30.0
)
(32.4
)
(677.5
)
(0.9
)
(678.4
)
(2.3
)
(53.8
)
(53.8
)
(22.7
)
(0.2
)
22.7
462.0
(461.8
)
2.8
10.6
235.4
41.5
(65.1
)
211.8
4.3
4.3
(1.5
)
(1.5
)
(1.5
)
(14.4
)
(14.4
)
(14.4
)
5.3
5.3
5.3
15.3
15.3
15.3
$
862.0
749.8
7.5
(341.1
)
453.1
(68.8
)
50.7
919.0
919.0
$
919.0
26.3
26.3
(28.4
)
(28.4
)
(58.1
)
(0.6
)
(1,314.6
)
(1,315.2
)
17.9
0.2
289.5
289.7
10.9
10.9
0.1
0.1
1.2
1.2
1.2
89.2
89.2
89.2
(5.2
)
(5.2
)
(5.2
)
(46.4
)
(46.4
)
(46.4
)
$
957.8
709.6
7.1
(14.4
)
29.2
(30.0
)
(8.1
)
848.8
848.8
$
848.8
31.9
31.9
(41.2
)
(41.2
)
(24.9
)
(0.2
)
(403.6
)
(403.8
)
1.8
23.9
23.9
(0.7
)
(0.7
)
5.5
5.5
5.5
(62.5
)
(62.5
)
(62.5
)
(29.0
)
(29.0
)
(29.0
)
(11.3
)
(11.3
)
(11.3
)
$
751.5
686.5
$
6.9
$
$
40.7
$
433.2
$
(127.3
)
$
353.5
79
Table of Contents
1.
Formation
of the Entity and Basis of Presentation
Consumer-to-consumermoney
transfer services between consumers, primarily through a global
network of third-party agents using the Companys
multi-currency, real-time money transfer processing systems.
This service is available for international cross-border
transfersthat is, the transfer of funds from one country
to anotherand, in certain countries, intra-country
transfersthat is, money transfers from one location to
another in the same country.
Global business payments (formerly
consumer-to-business) the
processing of payments from consumers or businesses to other
businesses. The Companys business payments services allow
consumers to make payments to a variety of organizations
including utilities, auto finance companies, mortgage servicers,
financial service providers, government agencies and other
businesses. As described further in Note 3,
Acquisitions, the Company acquired Canada-based
Custom House, Ltd. (Custom House), a provider of
international
business-to-business
payment services, which is included in this segment. Custom
House facilitates cross-border, cross-currency payment
transactions. While the Company continues to pursue further
international expansion of its offerings in this segment, the
segments revenue was primarily generated in the United
States during all periods presented.
80
Table of Contents
2.
Summary
of Significant Accounting Policies
For the Year Ended December 31,
2009
2008
2007
698.9
730.1
760.2
2.1
8.1
12.7
701.0
738.2
772.9
81
Table of Contents
Level 1:
Quoted prices in active markets for
identical assets or liabilities.
Level 2:
Observable inputs other than Level 1
prices such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs
that are observable or can be corroborated by observable market
data for substantially the full term of the assets or
liabilities. Western Union utilizes pricing services to value
its Level 2 financial instruments. For most of these
assets, the Company utilizes pricing services that use multiple
prices as inputs to determine daily market values. In addition,
the Trust has other investments that fall within Level 2
that are valued at net asset value which is not quoted on an
active market, however, the unit price is based on underlying
investments which are traded on an active market.
Level 3:
Unobservable inputs that are supported
by little or no market activity and that are significant to the
fair value of the assets or liabilities. Level 3 assets and
liabilities include items where the determination of fair value
requires significant management judgment or estimation. The
Company has Level 3 assets that are recognized and
disclosed at fair value on a non-recurring basis related to the
Companys business combinations, where the values of the
intangible assets and goodwill acquired in a purchase are
derived utilizing one of the three recognized approaches: the
market approach, the income approach or the cost approach.
82
Table of Contents
83
Table of Contents
December 31,
2009
2008
$
161.9
$
42.3
1,004.4
759.6
1,222.8
405.6
$
2,389.1
$
1,207.5
$
1,954.8
$
799.5
434.3
408.0
$
2,389.1
$
1,207.5
December 31,
2009
2008
$
368.5
$
319.2
50.0
38.9
28.1
25.2
16.9
16.9
75.2
74.8
1.0
1.3
539.7
476.3
(335.4
)
(284.0
)
$
204.3
$
192.3
84
Table of Contents
85
Table of Contents
December 31, 2009
December 31, 2008
Weighted-
Average
Amortization
Net of
Net of
Period
Initial
Accumulated
Initial
Accumulated
(in years)
Cost
Amortization
Cost
Amortization
6.6
$
331.0
$
189.7
$
316.2
$
213.2
11.2
250.0
205.5
78.1
49.4
3.4
102.7
35.5
74.8
22.2
4.3
78.1
11.0
77.1
14.1
24.5
42.7
35.6
43.7
38.2
3.3
6.0
6.0
8.6
8.6
5.9
34.1
5.9
28.6
4.9
8.2
$
844.6
$
489.2
$
627.1
$
350.6
86
Table of Contents
Cash Flow hedgesChanges in the fair value of derivatives
that are designated and qualify as cash flow hedges are recorded
in Accumulated other comprehensive loss. Cash flow
hedges consist of foreign currency hedging of forecasted
revenues, as well as, from time to time, hedges of anticipated
fixed rate debt issuances. Derivative fair value changes that
are captured in Accumulated other
87
Table of Contents
comprehensive loss are reclassified to earnings in the
same period or periods the hedged item affects earnings. The
portion of the change in fair value that is excluded from the
measure of effectiveness is recognized immediately in
Derivative (losses)/gains, net.
Fair Value hedgesChanges in the fair value of derivatives
that are designated as fair value hedges of fixed rate debt are
recorded in interest expense. The offsetting change in value of
the related debt instrument attributable to changes in the
benchmark interest rate is also recorded in interest expense.
UndesignatedDerivative contracts entered into to reduce
the variability related to (a) money transfer settlement
assets and obligations, generally with maturities of a few days
up to one month, and (b) certain money transfer related
foreign currency denominated cash positions and intercompany
loans, generally with maturities of less than one year, are not
designated as hedges for accounting purposes and changes in
their fair value are included in Selling, general and
administrative. Subsequent to the acquisition of Custom
House, the Company is also exposed to risk from derivative
contracts written to its customers arising from its
cross-currency
business-to-business
payments operations. These contracts have durations generally of
nine months or less. The Company aggregates its foreign exchange
exposures in its Custom House business, including the exposure
generated by the derivative contracts it writes to its customers
as part of its cross-currency payments business, and typically
hedges the net exposure through offsetting contracts with
established financial institution counterparties. To mitigate
credit risk, the Company performs credit reviews of the customer
on an ongoing basis. The changes in fair value related to these
contracts are recorded in Foreign exchange revenue.
88
Table of Contents
3.
Acquisitions
89
Table of Contents
$
2.5
152.5
6.7
272.2
118.1
78.1
$
630.1
$
23.5
152.5
31.9
51.2
259.1
$
371.0
90
Table of Contents
$
11.8
43.0
3.1
190.6
74.9
2.3
$
325.7
$
2.7
43.0
0.2
19.2
17.0
82.1
$
243.6
91
Table of Contents
Consumer-to-
Global Business
Consumer
Payments
Other
Total
$
1,389.0
$
235.9
$
14.6
$
1,639.5
39.0
39.0
(1.0
)
(1.0
)
(3.2
)
(0.1
)
(3.3
)
$
1,427.0
$
232.7
$
14.5
$
1,674.2
190.6
272.2
462.8
2.3
2.3
4.3
(0.2
)
4.1
$
1,619.9
$
509.2
$
14.3
$
2,143.4
4.
Restructuring
and Related Expenses
92
Table of Contents
Year Ended
December 31, 2008
$
62.8
20.1
$
82.9
$
51.6
93
Table of Contents
5.
Related
Party Transactions
6.
Commitments
and Contingencies
94
Table of Contents
7.
Investment
Securities
95
Table of Contents
Gross
Gross
Net
Amortized
Fair
Unrealized
Unrealized
Unrealized
Cost
Value
Gains
Losses
Gains/(Losses)
$
686.4
$
696.4
$
10.6
$
(0.6
)
$
10.0
513.8
513.8
12.2
12.4
0.2
0.2
0.1
0.2
0.1
0.1
$
1,212.5
$
1,222.8
$
10.9
$
(0.6
)
$
10.3
Gross
Gross
Net
Amortized
Fair
Unrealized
Unrealized
Unrealized
Cost
Value
Gains
Losses
Gains/(Losses)
$
192.4
$
194.0
$
2.5
$
(0.9
)
$
1.6
207.7
207.7
4.0
3.9
(0.1
)
(0.1
)
$
404.1
$
405.6
$
2.5
$
(1.0
)
$
1.5
(a)
The majority of these securities are fixed rate instruments.
96
Table of Contents
Amortized
Fair
Cost
Value
$
76.5
$
76.6
597.9
605.9
68.8
70.8
469.3
469.5
$
1,212.5
$
1,222.8
8.
Fair
Value Measurements
Fair Value Measurement Using
Assets/Liabilities
Level 1
Level 2
Level 3
at Fair Value
$
$
696.4
$
$
696.4
513.8
513.8
12.4
12.4
0.2
0.2
109.4
0.5
109.9
$
0.2
$
1,332.0
$
0.5
$
1,332.7
$
$
80.6
$
$
80.6
$
$
80.6
$
$
80.6
97
Table of Contents
9.
Other
Assets and Other Liabilities
December 31,
2009
2008
$
109.9
$
116.8
87.4
213.1
63.4
33.2
37.5
69.3
30.6
298.1
26.1
34.6
24.8
26.3
21.7
23.6
12.3
14.0
12.1
19.8
16.4
9.3
$
442.2
$
858.1
$
124.2
$
107.1
80.6
10.8
45.4
59.4
23.0
20.7
$
273.2
$
198.0
98
Table of Contents
10.
Income
Taxes
Year Ended December 31,
2009
2008
2007
$
249.7
$
416.3
$
529.3
881.8
822.4
693.1
$
1,131.5
$
1,238.7
$
1,222.4
Year Ended December 31,
2009
2008
2007
$
217.3
$
234.8
$
287.7
28.0
30.3
26.3
37.4
54.6
51.1
$
282.7
$
319.7
$
365.1
Year Ended December 31,
2009
2008
2007
35.0
%
35.0
%
35.0
%
1.5
%
1.3
%
1.7
%
(12.5
)%
(11.4
)%
(7.7
)%
1.0
%
0.9
%
0.9
%
25.0
%
25.8
%
29.9
%
99
Table of Contents
Year Ended December 31,
2009
2008
2007
$
235.8
$
219.6
$
284.9
26.0
34.5
25.5
41.8
49.7
50.5
303.6
303.8
360.9
(18.5
)
15.2
2.8
2.0
(4.2
)
0.8
(4.4
)
4.9
0.6
(20.9
)
15.9
4.2
$
282.7
$
319.7
$
365.1
December 31,
2009
2008
$
91.0
$
45.4
43.5
39.5
3.6
3.1
10.7
6.8
148.8
94.8
416.7
349.0
1.0
15.9
417.7
364.9
$
268.9
$
270.1
100
Table of Contents
2009
2008
$
361.2
$
251.4
124.3
93.8
0.4
28.4
(7.9
)
(4.4
)
(0.2
)
(4.3
)
(4.3
)
$
477.2
$
361.2
(a)
Includes recurring accruals for issues which initially arose in
previous periods.
(b)
Changes to positions taken in prior periods relate to changes in
estimates used to calculate prior period unrecognized tax
benefits.
101
Table of Contents
102
Table of Contents
11.
Employee
Benefit Plans
103
Table of Contents
2009
2008
$
398.8
$
426.0
6.1
23.6
24.4
21.1
(5.6
)
(43.4
)
(54.9
)
2.8
$
400.1
$
398.8
$
291.7
$
398.4
23.5
(51.8
)
(43.4
)
(54.9
)
4.1
275.9
291.7
$
(124.2
)
$
(107.1
)
$
400.1
$
398.8
(a)
Represents the adjustment to retained earnings of
$0.1 million for the period from October 1, 2007
through December 31, 2007. This adjustment consists of
interest costs of $6.1 million, offset by $6.2 million
which represents the expected return on plan assets less
amortization of the actuarial loss.
December 31,
2009
2008
$
(124.2
)
$
(107.1
)
169.0
150.3
$
44.8
$
43.2
104
Table of Contents
Year Ended December 31,
2009
2008
2007
$
23.6
$
24.4
$
24.6
(24.7
)
(27.5
)
(28.4
)
3.6
2.7
3.6
2.8
$
2.5
$
2.4
$
(0.2
)
2009
2008
5.30
%
6.26
%
2009
2008
2007
6.26
%
6.02
%
5.62
%
7.50
%
7.50
%
7.50
%
105
Table of Contents
Percentage of Plan Assets
at Measurement Date
2009
2008
32
%
24
%
68
%
75
%
0
%
1
%
100
%
100
%
Target Allocation
25-35
%
65-75
%
Fair Value Measurement Using
Total Assets
Level 1
Level 2
Level 3
at Fair Value
$
5.7
$
35.4
$
$
41.1
43.1
43.1
2.0
2.0
119.3
119.3
46.6
46.6
9.6
9.6
8.7
8.7
2.9
2.9
$
52.3
$
219.0
$
2.0
$
273.3
2.6
$
52.3
$
219.0
$
2.0
$
275.9
106
Table of Contents
(a)
Equity investments include 6% of securities that participate in
securities lending.
(b)
Substantially all corporate debt securities are investment grade
securities.
(c)
Other assets primarily includes investment related receivables
and futures contracts.
Asset-backed
Private equity
securities
securities
Total
$
9.8
$
2.8
$
12.6
1.0
(0.8
)
0.2
0.2
0.2
(2.3
)
(2.3
)
(8.7
)
(8.7
)
$
$
2.0
$
2.0
(a)
Market liquidity for these assets has significantly improved
since 2008 resulting in improved price transparency.
12.
Operating
Lease Commitments
$
28.3
21.5
15.8
12.0
10.6
19.5
$
107.7
107
Table of Contents
13.
Stockholders
Equity
108
Table of Contents
2009
2008
2007
$
(30.0
)
$
(68.8
)
$
(73.5
)
11.5
(2.4
)
(2.1
)
(4.3
)
0.9
0.7
(2.7
)
4.3
(0.2
)
1.0
(1.6
)
0.1
5.5
1.2
(1.5
)
(43.6
)
82.6
(55.9
)
8.9
(15.0
)
14.6
(32.9
)
25.1
31.3
5.1
(3.5
)
(4.4
)
(62.5
)
89.2
(14.4
)
(21.6
)
(8.0
)
8.1
7.6
2.8
(2.8
)
(23.1
)
8.1
(29.0
)
(5.2
)
5.3
(22.2
)
(76.1
)
20.9
8.7
28.0
(7.9
)
3.6
2.7
3.6
(1.4
)
(1.0
)
(1.3
)
(11.3
)
(46.4
)
15.3
(97.3
)
38.8
4.7
$
(127.3
)
$
(30.0
)
$
(68.8
)
(a)
The year ended December 31, 2009 includes the impact to the
foreign currency translation account of the surrender of the
Companys interest in FEXCO Group. See Note 3,
Acquisitions.
2009
2008
2007
$
6.4
$
0.9
$
(0.3
)
(17.0
)
45.5
(43.7
)
(10.9
)
18.1
23.3
(105.8
)
(94.5
)
(48.1
)
$
(127.3
)
$
(30.0
)
$
(68.8
)
109
Table of Contents
14.
Derivatives
110
Table of Contents
$
273.8
37.8
73.4
$
527.3
98.3
84.8
89.8
111
Table of Contents
Derivative Assets
Derivative Liabilities
Balance Sheet
Fair Value
Balance Sheet
Fair Value
Location
2009
2008
Location
2009
2008
Other assets
$
31.0
$
48.9
Other liabilities
$
$
Other assets
15.1
65.0
Other liabilities
31.0
6.7
$
46.1
$
113.9
$
31.0
$
6.7
Other assets
$
58.9
$
Other liabilities
$
48.2
$
Other assets
4.9
2.9
Other liabilities
1.4
4.1
$
63.8
$
2.9
$
49.6
$
4.1
$
109.9
$
116.8
$
80.6
$
10.8
112
Table of Contents
Total
2010
2011
Thereafter
$
(15.9
)
$
(8.4
)
$
(7.5
)
$
3.5
3.5
10.7
10.9
(0.2
)
31.0
20.5
10.5
$
29.3
$
26.5
$
2.8
$
Gain Recognized in Income on Derivatives
Gain/(Loss) Recognized in Income on Related Hedged Item
(b)
Income Statement
Amount
Income Statement
Amount
Location
2009
2008
2007
Hedged Items
Location
2009
2008
2007
Interest expense
$
12.9
$
58.5
$
3.6
Fixed-rate debt
Interest expense
$
11.1
$
(54.6
)
$
(3.6
)
$
12.9
$
58.5
$
3.6
$
11.1
$
(54.6
)
$
(3.6
)
(Loss)/Gain Recognized in Income on
Gain/(Loss) Reclassified from
Derivative (Ineffective Portion and Amount
Amount of (Loss)/Gain
Accumulated OCI into Income (Effective Portion)
Excluded from Effectiveness Testing) (c)
Recognized in OCI on Derivatives (Effective Portion)
Income Statement
Amount
Income Statement
Amount
2009
2008
2007
Location
2009
2008
2007
Location
2009
2008
2007
$
(43.6
)
$
82.6
$
(55.9
)
Revenue
$
34.6
$
(23.4
)
$
(29.6
)
Derivative (losses)/gains, net
$
(1.2
)
$
(9.9
)
$
8.7
Interest expense
(1.7
)
(1.7
)
(1.7
)
Derivative (losses)/gains, net
$
(43.6
)
$
82.6
$
(55.9
)
$
32.9
$
(25.1
)
$
(31.3
)
$
(1.2
)
$
(9.9
)
$
8.7
113
Table of Contents
Income Statement Location
(Loss)/Gain Recognized in Income on Derivatives
Amount
2009
2008
2007
Foreign exchange revenue
$
4.5
$
$
Selling, general and administrative
(7.4
)
13.0
(21.1
)
Derivative (losses)/gains, net
(2.8
)
3.9
(2.9
)
$
(5.7
)
$
16.9
$
(24.0
)
(a)
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. The (loss)/gain of ($7.4) million,
$13.0 million, and ($21.1) million generated by the
undesignated foreign currency contracts in 2009, 2008 and 2007,
respectively, was offset by a foreign exchange gain/(loss) on
settlement assets and obligations and cash balances of
$2.8 million, ($24.9) million and $39.1 million,
respectively.
(b)
The 2009 gain of $11.1 million is comprised of a loss in
value on the debt of $12.9 million and amortization of
hedge accounting adjustments of $24.0 million. The 2008
loss of $54.6 million is comprised of a loss in value on
the debt of $58.5 million and amortization of hedge
accounting adjustments of $3.9 million.
(c)
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.
(d)
The Company incurred an $18.0 million loss on the
termination of these swaps in 2006 which is included in
Accumulated other comprehensive loss in the
Consolidated Balance Sheets and is reclassified as an increase
to Interest expense over the life of the related
notes.
(e)
The Company uses foreign currency forward and option contracts
as part of its international
business-to-business
payments operation. The derivative contracts are managed as part
of a broader currency portfolio that includes non-derivative
currency exposures.
(f)
The derivative contracts used in the Companys revenue
hedging program are not designated as hedges in the final month
of the contract.
114
Table of Contents
15.
Borrowings
December 31, 2009
December 31, 2008
Carrying Value
Fair Value (e)
Carrying Value
Fair Value (e)
$
$
$
82.9
$
82.9
500.0
500.0
1,033.9
1,066.4
1,042.8
962.9
498.6
559.5
1,012.5
1,080.0
1,014.4
903.5
497.5
499.4
497.4
391.4
6.0
6.0
6.0
6.0
$
3,048.5
$
3,211.3
$
3,143.5
$
2,846.7
(a)
The term loan due in December 2009 (Term Loan) was
paid and financed with the issuance of the 6.500% notes due
2014 (2014 Notes) on February 26, 2009.
(b)
At December 31, 2009 and 2008, the Company held interest
rate swaps related to the 5.400% notes due 2011 (2011
Notes) with an aggregate notional amount of
$750 million and $550 million, respectively. The
carrying value at December 31, 2009 and 2008 contained
$34.3 million and $42.7 million, respectively, of
hedge accounting adjustments related to active swaps as well as
the unamortized portion of previously terminated swaps. These
hedge accounting adjustments will be reclassified as reductions
to interest expense over the life of the 2011 Notes.
(c)
The 2014 Notes were issued on February 26, 2009 and the
proceeds were used to repay the Term Loan.
(d)
The carrying value at December 31, 2009 and 2008 included
$12.8 million and $15.4 million, respectively, of
hedge accounting adjustments. The remaining unamortized portion
of this previously terminated swap will be reclassified as a
reduction to interest expense over the life of the
2016 Notes.
(e)
At December 31, 2008, the fair value of commercial paper
approximated its carrying value due to the short term nature of
the obligations. The fair value of the Term Loan approximated
its carrying value as it was a variable rate loan and Western
Union credit spreads did not move significantly between the date
of the borrowing (December 5, 2008) and
December 31, 2008. The fair value of the fixed rate notes
is determined by obtaining quotes from multiple independent
banks and excludes the impact of discounts and related interest
rate swaps.
115
Table of Contents
116
Table of Contents
16.
Stock
Compensation Plans
117
Table of Contents
118
Table of Contents
Year Ended December 31, 2009
Weighted-Average
Remaining
Aggregate
Weighted-Average
Contractual Term
Intrinsic
Options
Exercise Price
(Years)
Value
43.6
$
19.11
3.8
12.42
(1.9
)
13.04
(2.7
)
19.34
42.8
$
18.77
5.0
$
52.9
35.7
$
19.21
4.3
$
29.4
Year Ended
December 31, 2009
Number
Weighted-Average
Outstanding
Grant-Date Fair Value
1.2
$
20.32
1.7
12.46
(0.6
)
18.96
(0.1
)
17.55
2.2
$
14.63
119
Table of Contents
Year Ended December 31,
2009
2008
2007
$
(31.9
)
$
(26.3
)
$
(50.2
)
9.9
7.7
15.1
$
(22.0
)
$
(18.6
)
$
(35.1
)
$
(0.03
)
$
(0.03
)
$
(0.05
)
$
(0.03
)
$
(0.03
)
$
(0.05
)
Year Ended December 31,
2009
2008
2007
2.0
%
3.0
%
4.5
%
0.2
%
0.2
%
0.2
%
46.3
%
31.8
%
23.8
%
5.6
5.9
6.2
$
5.41
$
7.57
$
7.35
120
Table of Contents
17.
Segments
121
Table of Contents
The accounting policies of the reportable segments are the same
as those described in the summary of significant accounting
policies.
Corporate and other overhead is allocated to the segments
primarily based on a percentage of the segments revenue
compared to total revenue.
Expenses incurred in connection with mergers and acquisitions
are included in Other.
During the year ended December 31, 2009, the Company
recorded an accrual of $71.0 million for an anticipated
agreement and settlement with the State of Arizona, which has
not been allocated to the segments. On February 11, 2010,
the Company signed an agreement and settlement which resolved
all outstanding legal issues and claims with the State and
requires the Company to fund a multi-state
not-for-profit
organization promoting safety and security along the United
States and Mexico border, in which California, Texas and New
Mexico will participate with Arizona. While this item was
identifiable to the Companys
consumer-to-consumer
segment, it was not included in the measurement of segment
operating profit provided to the CODM for purposes of assessing
segment performance and decision making with respect to resource
allocation. For additional information on the settlement
accrual, refer to Note 6.
Restructuring and related activities of $82.9 million for
the year ended December 31, 2008 were not allocated to the
segments. While these items were identifiable to the
Companys segments, they were not included in the
measurement of segment operating profit provided to the CODM for
purposes of assessing segment performance and decision making
with respect to resource allocation. For additional information
on restructuring and related activities refer to Note 4.
In connection with the change in control of First Data, the
Company incurred an accelerated stock-based compensation vesting
charge of $22.3 million during the year ended
December 31, 2007. Of the $22.3 million charge,
$18.9 million, $3.0 million and $0.4 million were
allocated to the
consumer-to-consumer,
global business payments and other segments, respectively.
All items not included in operating income are excluded.
122
Table of Contents
Years Ended December 31,
2009
2008
2007
$
3,373.5
$
3,532.9
$
3,286.6
877.1
893.1
769.3
50.1
45.6
37.2
4,300.7
4,471.6
4,093.1
621.9
668.1
665.5
33.2
3.2
2.0
36.6
48.5
52.4
691.7
719.8
719.9
40.8
39.8
37.7
50.4
50.8
49.5
91.2
90.6
87.2
$
5,083.6
$
5,282.0
$
4,900.2
$
1,175.5
$
1,222.7
$
1,078.3
171.9
199.4
223.7
6.3
15.8
20.0
1,353.7
$
1,437.9
$
1,322.0
(71.0
)
(82.9
)
$
1,282.7
$
1,355.0
$
1,322.0
$
4,602.5
$
4,305.0
$
4,734.7
1,419.0
819.5
885.6
1,331.9
453.8
163.9
$
7,353.4
$
5,578.3
$
5,784.2
$
124.2
$
111.0
$
98.5
24.3
21.1
21.8
5.7
4.0
3.6
154.2
$
136.1
$
123.9
7.9
$
154.2
$
144.0
$
123.9
$
71.6
$
114.8
$
155.7
16.7
30.5
28.1
10.6
8.4
8.3
$
98.9
$
153.7
$
192.1
123
Table of Contents
Years Ended December 31,
2009
2008
2007
$
1,584.9
$
1,760.0
$
1,825.3
3,498.7
3,522.0
3,074.9
$
5,083.6
$
5,282.0
$
4,900.2
$
161.1
$
162.3
$
172.3
43.2
30.0
28.0
$
204.3
$
192.3
$
200.3
124
Table of Contents
18.
Quarterly
Financial Information (Unaudited)
Year Ended
December 31,
Q1
Q2
Q3
Q4
2009
$
1,201.2
$
1,254.3
$
1,314.1
$
1,314.0
$
5,083.6
860.3
912.6
1,032.6
995.4
3,800.9
35.7
46.0
35.0
34.5
151.2
305.2
295.7
246.5
284.1
1,131.5
81.3
75.5
65.5
60.4
282.7
$
223.9
$
220.2
$
181.0
$
223.7
$
848.8
$
0.32
$
0.31
$
0.26
$
0.32
$
1.21
$
0.32
$
0.31
$
0.26
$
0.32
$
1.21
707.1
700.6
698.4
689.8
698.9
708.0
702.7
701.6
693.2
701.0
(a)
Includes $71.0 million in the third quarter for an
anticipated agreement and settlement with the State of Arizona.
See Note 6 Commitments and Contingencies for
more information.
Year Ended
December 31,
Q1
Q2
Q3
Q4
2008
$
1,265.9
$
1,347.1
$
1,377.4
$
1,291.6
$
5,282.0
956.6
1,010.9
1,002.2
957.3
3,927.0
16.8
28.2
42.2
29.1
116.3
292.5
308.0
333.0
305.2
1,238.7
85.4
76.5
92.2
65.6
319.7
$
207.1
$
231.5
$
240.8
$
239.6
$
919.0
$
0.28
$
0.31
$
0.33
$
0.34
$
1.26
$
0.27
$
0.31
$
0.33
$
0.34
$
1.24
746.7
736.5
724.9
712.5
730.1
756.8
747.5
737.2
713.8
738.2
(b)
Includes $24.2 million in the first quarter,
$22.9 million in the second quarter, $3.2 million in
the third quarter and $32.6 million in the fourth quarter
of restructuring and related expenses. For more information, see
Note 4, Restructuring and Related Expenses.
125
Table of Contents
CONDENSED BALANCE SHEETS
(PARENT COMPANY ONLY)
(in millions, except per share amounts)
December 31,
2009
2008
$
27.9
$
281.0
31.8
33.1
82.1
106.4
3,722.4
3,387.0
$
3,864.2
$
3,807.5
69.3
54.2
397.4
622.2
3,042.5
3,137.5
1.5
1.7
3,510.7
3,815.6
6.9
7.1
40.7
(14.4
)
433.2
29.2
(127.3
)
(30.0
)
353.5
(8.1
)
$
3,864.2
$
3,807.5
126
Table of Contents
CONDENSED STATEMENTS OF OPERATIONS
(PARENT COMPANY ONLY)
(in millions)
For the Years Ended December 31,
2009
2008
2007
$
$
$
1.8
2.8
1.1
(157.3
)
(171.0
)
(188.7
)
(155.5
)
(168.2
)
(187.6
)
941.7
1,022.3
972.3
62.6
64.9
72.6
$
848.8
$
919.0
$
857.3
127
Table of Contents
CONDENSED STATEMENTS OF CASH FLOW
(PARENT COMPANY ONLY)
(in millions)
For the Years Ended December 31,
2009
2008
2007
$
505.0
$
1,145.2
$
772.2
(0.1
)
(2.0
)
(29.0
)
(0.2
)
(379.9
)
(29.0
)
(0.3
)
(381.9
)
224.7
397.7
166.2
496.6
500.0
(500.0
)
(500.0
)
(82.8
)
(255.3
)
13.6
(3.0
)
23.2
300.5
216.1
(41.2
)
(28.4
)
(30.0
)
(400.2
)
(1,314.5
)
(726.8
)
(729.1
)
(900.0
)
(363.9
)
(253.1
)
244.9
26.4
281.0
36.1
9.7
$
27.9
$
281.0
$
36.1
128
Table of Contents
1.
Basis of
Presentation
2.
Restricted
Net Assets
3.
Related
Party Transactions
4.
Commitments
and Contingencies
129
Table of Contents
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
ITEM 9B.
OTHER
INFORMATION
130
Table of Contents
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE
COMPENSATION
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 14.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
131
Table of Contents
ITEM 15.
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
1.
Financial Statements (See Index to Consolidated Financial
Statements on page 72 of this Annual Report on
Form 10-K);
2.
Financial Statement Schedule (See Index to Consolidated
Financial Statements on page 72 of this Annual Report on
Form
10-K);
3.
The exhibits listed in the Exhibit Index
attached to this Annual Report on
Form 10-K.
132
Table of Contents
THE WESTERN UNION COMPANY (Registrant)
By:
/s/
Christina
A. Gold
Christina A. Gold, President
and
Chief Executive Officer
President, Chief Executive Officer
and Director
(Principal Executive Officer)
February 26, 2010
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
February 26, 2010
Senior Vice President, Chief
Accounting Officer and Controller
(Principal Accounting Officer)
February 26, 2010
Non-Executive Chairman of the
Board of Directors
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
133
Table of Contents
Exhibit
2
.1
Separation and Distribution Agreement, dated as of
September 29, 2006, between First Data Corporation and The
Western Union Company (filed as Exhibit 2.1 to the
Companys Current Report on
Form 8-K
filed on October 3, 2006 and incorporated herein by
reference thereto).
3
.1
Amended and Restated Certificate of Incorporation of The Western
Union Company (filed as Exhibit 4.1 to the Companys
Registration Statement on
Form S-8
(registration
no. 333-137665)
and incorporated herein by reference thereto).
3
.2
The Western Union Company By-laws, as amended on
December 11, 2008 (filed as Exhibit 3.1(ii) to the
Companys Current Report on
Form 8-K
filed on December 17, 2008 and incorporated herein by
reference thereto).
4
.1
Indenture, dated as of September 29, 2006, between The
Western Union Company and Wells Fargo Bank, National
Association, as trustee (filed as Exhibit 4.1 to the
Companys Current Report on
Form 8-K
filed on October 2, 2006 and incorporated herein by
reference thereto).
4
.2
Form of 5.930% Note due 2016 (filed as Exhibit 4.2 to
the Companys Current Report on
Form 8-K
filed on October 2, 2006 and incorporated herein by
reference thereto).
4
.3
Form of 5.930% Note due 2016 (filed as Exhibit 4.11 to
the Companys Registration Statement on
Form S-4
filed on December 22, 2006 and incorporated herein by
reference thereto).
4
.4
Supplemental Indenture, dated as of September 29, 2006,
among The Western Union Company, First Financial Management
Corporation and Wells Fargo Bank, National Association, as
trustee (filed as Exhibit 4.3 to the Companys Current
Report on
Form 8-K
filed on October 2, 2006 and incorporated herein by
reference thereto).
4
.5
Second Supplemental Indenture, dated as of November 17,
2006, among The Western Union Company, First Financial
Management Corporation and Wells Fargo Bank, National
Association, as trustee (filed as Exhibit 4.6 to the
Companys Current Report on
Form 8-K
filed on November 20, 2006 and incorporated herein by
reference thereto).
4
.6
Third Supplemental Indenture, dated as of September 6,
2007, among The Western Union Company and Wells Fargo Bank,
National Association, as trustee (filed as Exhibit 4.6 to
the Companys Annual Report on
Form 10-K
filed on February 26, 2008 and incorporated herein by
reference thereto).
4
.7
Indenture, dated as of November 17, 2006, between The
Western Union Company and Wells Fargo Bank, National
Association, as trustee (filed as Exhibit 4.1 to the
Companys Current Report on
Form 8-K
filed on November 20, 2006 and incorporated herein by
reference thereto).
4
.8
Form of 5.400% Note due 2011 (filed as Exhibit 4.3 to
the Companys Current Report on
Form 8-K
filed on November 20, 2006 and incorporated herein by
reference thereto).
4
.9
Form of 6.200% Note due 2036 (filed as Exhibit 4.4 to
the Companys Current Report on
Form 8-K
filed on November 20, 2006 and incorporated herein by
reference thereto).
4
.10
Form of 5.400% Note due 2011 (filed as Exhibit 4.13 to
the Companys Registration Statement on
Form S-4
filed on December 22, 2006 and incorporated herein by
reference thereto).
4
.11
Form of 6.200% Note due 2036 (filed as Exhibit 4.14 to
the Companys Registration Statement on
Form S-4
filed on December 22, 2006 and incorporated herein by
reference thereto).
4
.12
Form of 6.50% Note due 2014 (filed as Exhibit 4.1 to
the Companys Current Report on
Form 8-K
filed on February 26, 2009 and incorporated herein by
reference thereto).
4
.13
Supplemental Indenture, dated as of September 6, 2007,
among The Western Union Company and Wells Fargo Bank, National
Association, as trustee (filed as Exhibit 4.13 to the
Companys Annual Report on
Form 10-K
filed on February 26, 2008 and incorporated herein by
reference thereto).
10
.1
Tax Allocation Agreement, dated as of September 29, 2006,
between First Data Corporation and The Western Union Company
(filed as Exhibit 10.1 to the Companys Current Report
on
Form 8-K
filed on October 3, 2006 and incorporated herein by
reference thereto).
10
.2
Employee Matters Agreement, dated as of September 29, 2006,
between First Data Corporation and The Western Union Company
(filed as Exhibit 10.2 to the Companys Current Report
on
Form 8-K
filed on October 3, 2006 and incorporated herein by
reference thereto).
Table of Contents
Exhibit
10
.3
Transition Services Agreement, dated as of September 29,
2006, between First Data Corporation and The Western Union
Company (filed as Exhibit 10.3 to the Companys
Current Report on
Form 8-K
filed on October 3, 2006 and incorporated herein by
reference thereto).
10
.4
Patent Ownership Agreement and Covenant Not to Sue, dated as of
September 29, 2006, between First Data Corporation and The
Western Union Company (filed as Exhibit 10.4 to the
Companys Current Report on
Form 8-K
filed on October 3, 2006 and incorporated herein by
reference thereto).
10
.5
Amended and Restated Credit Agreement, dated as of
September 28, 2007, among The Western Union Company, the
banks named therein, as lenders, Wells Fargo Bank, National
Association, as syndication agent, Citibank, N.A., as
administrative agent, and Citigroup Global Markets Inc. and
Wells Fargo Bank, National Association, as joint lead arrangers
and joint book runners (filed as Exhibit 10 to the
Companys Current Report on
Form 8-K
filed on October 3, 2007 and incorporated herein by
reference thereto).
10
.6
Settlement Agreement, dated as of February 11, 2010, by and
between Western Union Financial Services, Inc. and the State of
Arizona (filed as Exhibit 10.1 to the Companys
Current Report on
Form 8-K
filed on February 16, 2010 and incorporated herein by
reference thereto).
10
.7
Form of Director Indemnification Agreement (filed as
Exhibit 10.11 to the Companys Registration Statement
on Form 10 (file
no. 001-32903)
and incorporated herein by reference thereto).*
10
.8
The Western Union Company 2006 Long-Term Incentive Plan, as
Amended and Restated Effective February 17, 2009 (filed as
Exhibit 10.10 to the Companys Annual Report on
Form 10-K
filed on February 19, 2009 and incorporated herein by
reference thereto).*
10
.9
The Western Union Company 2006 Non-Employee Director Equity
Compensation Plan, as Amended and Restated Effective
December 31, 2008 (filed as Exhibit 10.2 to the
Companys Quarterly Report on
Form 10-Q
filed on November 3, 2008 and incorporated herein by
reference thereto).*
10
.10
The Western Union Company Non-Employee Director Deferred
Compensation Plan, as Amended and Restated Effective
December 31, 2008 (filed as Exhibit 10.12 to the
Companys Annual Report on
Form 10-K
filed on February 19, 2009 and incorporated herein by
reference thereto).*
10
.11
The Western Union Company Severance/Change in Control Policy
(Executive Committee Level), as Amended and Restated Effective
January 1, 2010.*
10
.12
The Western Union Company Senior Executive Annual Incentive Plan
(filed as Exhibit 10.2 to the Companys Quarterly
Report on
Form 10-Q
filed on August 7, 2007 and incorporated herein by
reference thereto).*
10
.13
The Western Union Company Supplemental Incentive Savings Plan,
as Amended and Restated Effective January 1, 2010.*
10
.14
The Western Union Company Grandfathered Supplemental Incentive
Savings Plan, as Amended and Restated Effective January 1,
2010.*
10
.15
Form of Unrestricted Stock Unit Award Agreement Under The
Western Union Company 2006 Non-Employee Director Equity
Compensation Plan, as Amended and Restated Effective
February 17, 2009.*
10
.16
Form of Nonqualified Stock Option Award Agreement Under The
Western Union Company 2006 Non-Employee Director Equity
Compensation Plan, as Amended and Restated Effective
February 17, 2009.*
10
.17
Form of Restricted Stock Award Agreement for Executive Committee
Members Residing in the United States Under The Western Union
Company 2006 Long-Term Incentive Plan (filed as
Exhibit 10.20 to the Companys Quarterly Report on
Form 10-Q
filed on November 8, 2006 and incorporated herein by
reference thereto).*
10
.18
Form of Restricted Stock Unit Award Agreement for Executive
Committee Members Residing Outside the United States Under The
Western Union Company 2006 Long-Term Incentive Plan (filed as
Exhibit 10.21 to the Companys Quarterly Report on
Form 10-Q
filed on November 8, 2006 and incorporated herein by
reference thereto).*
Table of Contents
Exhibit
10
.19
Form of Nonqualified Stock Option Award Agreement for Executive
Committee Members Under The Western Union Company 2006 Long-Term
Incentive Plan (filed as Exhibit 10.22 to the
Companys Quarterly Report on
Form 10-Q
filed on November 8, 2006 and incorporated herein by
reference thereto).*
10
.20
Amendment to Form of Nonqualified Stock Option Award Agreement
for Executive Committee Members Under The Western Union Company
2006 Long-Term Incentive Plan (filed as Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
filed on August 5, 2008 and incorporated herein by
reference thereto).*
10
.21
Amendment to Form of Nonqualified Stock Option Award Agreement
for Executive Committee Members under the 2002 First Data
Corporation Long-Term Incentive Plan (filed as Exhibit 10.2
to the Companys Quarterly Report on
Form 10-Q
filed on August 5, 2008 and incorporated herein by
reference thereto).*
10
.22
Amendment to Form of Nonqualified Stock Option Award Agreement
for Executive Committee Members under the First Data Corporation
1992 Long-Term Incentive Plan (filed as Exhibit 10.3 to the
Companys Quarterly Report on
Form 10-Q
filed on August 5, 2008 and incorporated herein by
reference thereto).*
10
.23
Form of Nonqualified Stock Option Award Agreement for Scott T.
Scheirman Under The Western Union Company 2006 Long-Term
Incentive Plan (filed as Exhibit 10.23 to the
Companys Quarterly Report on
Form 10-Q
filed on November 8, 2006 and incorporated herein by
reference thereto).*
10
.24
Form of Restricted Stock Award Agreement for Scott T. Scheirman
Under The Western Union Company 2006 Long-Term Incentive Plan
(filed as Exhibit 10.24 to the Companys Quarterly
Report on
Form 10-Q
filed on November 8, 2006 and incorporated herein by
reference thereto).*
10
.25
Form of Nonqualified Stock Option Award Agreement for Executive
Committee Members Residing in the United States Under The
Western Union Company 2006 Long-Term Incentive Plan, as Amended
and Restated Effective December 8, 2009.*
10
.26
Form of Nonqualified Stock Option Award Agreement for Executive
Committee Member Residing in Austria Under The Western Union
Company 2006 Long-Term Incentive Plan, as Amended and Restated
Effective December 8, 2009.*
10
.27
Form of Restricted Stock Unit Award Agreement for Executive
Committee Members Residing in the United States Under The
Western Union Company 2006 Long-Term Incentive Plan, as Amended
and Restated Effective December 8, 2009.*
10
.28
Form of Restricted Stock Unit Award Agreement for Executive
Committee Member Residing in Austria Under The Western Union
Company 2006 Long-Term Incentive Plan, as Amended and Restated
Effective December 8, 2009.*
10
.29
Form of Restricted Stock Unit Award Agreement (Career Shares)
for Executive Committee Members Residing in the United States
Under The Western Union Company 2006 Long-Term Incentive Plan,
as Amended and Restated Effective December 8, 2009.*
10
.30
Form of Restricted Stock Unit Award Agreement (Career Shares)
for Executive Committee Member Residing in Austria Under The
Western Union Company 2006 Long-Term Incentive Plan, as Amended
and Restated Effective December 8, 2009.*
10
.31
Form of Restricted Stock Unit Award Agreement (Career Shares)
for Stewart A. Stockdale Under The Western Union Company 2006
Long-Term Incentive Plan.*
10
.32
Form of Cash Performance Grant Award Agreement for Executive
Committee Members (filed as Exhibit 10.33 to the
Companys Annual Report on
Form 10-K
filed on February 19, 2009 and incorporated herein by
reference thereto).*
10
.33
Form of 2010 Cash Performance Grant Award Agreement for
Executive Committee Members.*
10
.34
Form of Award Agreement under The Western Union Company Senior
Executive Annual Incentive Plan for 2010.*
10
.35
Employment Contract, dated as of November 9, 2009, between
Western Union Financial Services GmbH and Hikmet Ersek.*
10
.36
Expatriate Letter Agreement, dated as of November 9, 2009,
between Western Union Financial Services GmbH, The Western Union
Company and Hikmet Ersek.*
Table of Contents
Exhibit
10
.37
Letter Agreement, dated May 22, 2008, between The Western
Union Company and Stewart A. Stockdale (filed as
Exhibit 10.4 to the Companys Quarterly Report on
Form 10-Q
filed on August 5, 2008 and incorporated herein by
reference thereto).*
10
.38
Letter Agreement, dated February 13, 2009, between The
Western Union Company and Ranjana Clark (filed as
Exhibit 10 to the Companys Quarterly Report on
Form 10-Q
filed on May 2, 2009 and incorporated herein by reference
thereto).*
12
Computation of Ratio of Earnings to Fixed Charges
14
The Western Union Company Code of Ethics for Senior Financial
Officers, as Amended and Restated Effective December 9,
2009.
21
Subsidiaries of The Western Union Company
23
Consent of Independent Registered Public Accounting Firm
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
.LAB
XBRL Taxonomy Extension Label Linkbase Document
101
.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
101
.DEF
XBRL Taxonomy Extension Definition Linkbase Document
*
Management contracts and compensatory plans and arrangements
required to be filed as exhibits pursuant to Item 15(b) of
this report.
1. | Purpose | |
This severance/change in control policy (the Policy) is maintained by The Western Union Company, a Delaware corporation (Western Union), to enable Western Union to offer a form of income protection to its Eligible Executives in the event their employment with the Company is involuntarily terminated other than for Cause or, in the event of a Change in Control, if their employment terminates involuntarily other than for Cause or for Good Reason during the twenty-four months following the Change in Control. | ||
This Policy shall constitute a welfare plan within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and shall be construed in a manner consistent with such intent. | ||
2. | Effective Date | |
This Policy was originally adopted as of September 29, 2006 (the Effective Date). The Policy is hereby amended and restated effective January 1, 2010. | ||
3. | Definitions | |
Base Salary means the Eligible Executives current annualized rate of base cash compensation as paid on each regularly scheduled payday for the Eligible Executives regular work schedule as of his or her Termination Date, including any before-tax contributions that are deducted for Company benefit plan purposes. Base Salary shall not include taxable or nontaxable fringe benefits or awards, vacation, performance awards, bonus, commission or other incentive pay, or any payments which are not made on each regular payday, regardless of how such payments may be characterized. | ||
Board means the Board of Directors of Western Union. | ||
Cause means the willful and continued failure by an Eligible Executive to substantially perform the duties assigned by the Company (other than a failure resulting from Disability), the willful engagement by an Eligible Executive in conduct which is demonstrably injurious to the Company (monetarily or otherwise), any act of dishonesty, the commission of a felony, the continued failure by an Eligible Executive to meet performance standards, an Eligible Executives excessive absenteeism or a significant violation by an Eligible Executive of any statutory or common law duty of loyalty to the Company. | ||
Change in Control means |
(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 25% 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 25% or more of the Outstanding Common Stock or 25% 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 Unions 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 60% 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 Unions 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, 25% or more of the Outstanding Common Stock or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, 25% 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 |
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(d) | the consummation of a plan of complete liquidation or dissolution of Western Union. |
Committee means the Compensation and Benefits Committee of the Board or its delegate or successor. | ||
Company means Western Union, including any of its 50% or more owned or controlled subsidiaries or any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise, including, without limitation, any successor due to a Change in Control) to substantially all of the business or assets of Western Union, except that for purposes of Section 16, the definition of Change in Control, and other provisions where the context so requires, Company means Western Union or any such successor. | ||
Disability means the inability of the Eligible Executive to substantially perform such Eligible Executives duties and responsibilities due to a physical or mental condition (i) that would entitle such Eligible Executive to benefits under the Companys long-term disability plan under which he or she is covered or, if the Committee deems it relevant, any disability rights provided as a matter of local law or (ii) if such Eligible Executive is not eligible for long-term disability benefits under any plan sponsored by the Company, that would, as determined by the Committee, entitle such Eligible Executive to benefits under the Companys long-term disability plan if the Eligible Executive were eligible therefor. | ||
Eligible Executive means, effective prior to October 1, 2008, an individual who is designated by Western Union as an insider for purposes of Section 16 of the Exchange Act and who is a member of Western Unions Executive Committee on the earlier of his or her Termination Date or the date of a Change in Control. Effective October 1, 2008, Eligible Executive means an individual who is designated by Western Union as an insider for purposes of Section 16 of the Exchange Act and who is the Chief Executive Officer of Western Union or is an Executive Vice President of Western Union who reports directly to the Chief Executive Officer on the earlier of his or her Termination Date or the date of a Change in Control, provided that individuals who were Eligible Executives as defined under this Policy as of September 30, 2008 shall remain eligible for this Policy (other than individuals who have waived their eligibility for this Policy in writing). | ||
Exchange Act means the Securities Exchange Act of 1934, as amended. | ||
Good Reason means any one or more of the following: (i) action by the Company resulting in a material diminution of the Eligible Executives titles or positions with the Company, (ii) a reduction in the Eligible Executives Base Salary or bonus, or (iii) action by the Company to require the relocation of the Eligible Executive more than fifty (50) miles from the Eligible Executives current principal work location without the executives consent. Within 30 days after the Eligible Executive becomes aware of one or more actions or inactions described in the preceding sentence, the Eligible Executive shall deliver written notice to the Company of the action(s) or inaction(s) (the Good Reason Notice). The Company shall have 30 days after the Good Reason Notice is delivered to cure the particular action(s) or inaction(s). If the Company so effects a cure, the Good Reason Notice will be deemed rescinded and of no further force and effect. | ||
Severance Benefits means the benefits payable to an Eligible Executive pursuant to this Policy, other than the Change in Control benefits payable pursuant to Sections 7(c)(ii)(b) and 8 hereof. |
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Severance Period means with respect to Western Unions Chief Executive Officer, the 36 consecutive month period commencing on the executives Termination Date, and with respect to all other Eligible Executives, the 24 consecutive month period commencing on the Eligible Executives Termination Date. | ||
Termination Date means the date on which the Eligible Executives employment with the Company terminates for a reason set forth under Section 5. | ||
4. | Eligibility | |
All Eligible Executives who have been on the Companys payroll for at least three months are eligible to receive benefits according to the terms of this Policy. Eligible Executives are not eligible for any benefits under this Policy during the first three months of their employment. | ||
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. |
An Eligible Executive shall not be entitled to any benefits under this Policy upon a separation from service for an eligible termination reason under this Section 5 if the Eligible Executive becomes employed by any subsidiary or affiliate of Western Union (as determined under Internal Revenue Code (Code) Section 414(b) or (c), but substituting a 50 percent ownership level for the 80 percent ownership level therein) immediately following his or her termination of employment from the Company by which the Eligible Executive is employed. | ||
6. | Non-Eligible Termination Reasons | |
A non-eligible termination reason is any reason for an Eligible Executives separation from service by or from the Company that is not an eligible termination reason described in Section 5. | ||
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 Executives 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 multiplied by the sum of (1) 100% of the Eligible Executives Base Salary and (2) the percentage of the Eligible Executives Base Salary established as the target bonus for the Eligible Executive under the Companys Senior |
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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 Executives 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 Executives 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 Executives 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 Executives 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 Companys Senior Executive Annual Incentive Plan (or the bonus plan then applicable to the Eligible Executive)). | |||
(ii) | Bonus for Year of Termination . Subject to the Committees 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 Companys 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 Executives target bonus for the year in which the Termination Date occurs and (B) the ratio of the number of days elapsed during such year prior to the Termination Date to 365) of the Eligible Executives target bonus under the Companys 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 Executives 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. | ||
An Eligible Executive receiving Severance Benefits under this Policy shall also be entitled to receive during the Severance Period any financial planning benefits which the Eligible Executive was receiving as of the Termination Date, subject to the terms of the Executive Committee Financial Planning Program, but shall not be entitled to receive any other perquisites after the Termination Date. The Eligible Executives continued group health coverage under this subsection shall cease as of the date the Eligible Executive becomes eligible to receive such benefits under a subsequent employers benefit program, to the extent permitted under COBRA. |
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Eligible Executives receiving Severance Benefits under this Policy are not eligible to continue contributions to the Companys qualified retirement plans or nonqualified deferred compensation program. | |||
(c) | Long-Term Incentive Awards |
(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 to an Eligible Executive under The Western Union Company 2006 Long-Term Incentive Plan (or a successor plan) (the LTIP), if the Eligible Executives employment with the Company is terminated for an eligible termination reason described in Section 5(a), then awards held by the Eligible Executive that are eligible to become fully vested and exercisable or payable contingent upon the Eligible Executives 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 Executives 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 Executives 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. For awards 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 prorated portion of any nonqualified stock option and stock appreciation right awards that become vested in accordance with this subsection shall be exercisable until the end of the Eligible Executives Severance Period (or, if earlier, the expiration of the original term of the award) but not thereafter. | ||
If an Eligible Executives employment with the Company is terminated during a performance period for an eligible termination reason described in Section 5(a), any cash Performance Grants (as defined in the LTIP) awarded to the Eligible Executive under the LTIP (if applicable) with respect to such performance period shall be payable on a prorated basis based upon actual performance results at the end of the applicable performance period as determined by the Committee in its sole discretion, and shall be paid at the time specified in the applicable award (and if applicable, deferral) agreement. Such prorated payment shall be calculated on a grant-by-grant basis by multiplying the Performance Grant award the Eligible Executive would have received had the Eligible Executive remained employed (based upon actual performance results at the end of the applicable performance period as determined by the Committee) by a fraction, the numerator of which is the number of days that have elapsed between the grant date and the Eligible |
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Executives Termination Date and the denominator of which is the number of days in the performance period. All other outstanding awards granted to the Eligible Executive under the LTIP on and after February 17, 2009, and any Time Vested Awards that provide for a deferral of compensation within the meaning of Code Section 409A, shall be payable, if at all, in accordance with the terms of the LTIP and the applicable award (and, if applicable, deferral) agreements. | |||
b. | Long-Term Incentive Awards Granted Prior to February 17, 2009 . Effective for awards granted prior to February 17, 2009 to an Eligible Executive under the LTIP, if the Eligible Executives 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 continue to vest solely on account of the passage of time during the Eligible Executives Severance Period and, to the extent vested, shall be exercisable in accordance with their terms until the end of the Eligible Executives 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 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 Executives 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 Executives 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 to an Eligible Executive under the LTIP, if the Eligible Executives 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 Executives Termination Date. In the event this subsection applies, nonqualified stock options and stock appreciation rights granted to an Eligible Executive shall be exercisable until the end of the Eligible Executives Severance Period (or, if earlier, the expiration of the original term of the award) but not thereafter. If an Eligible Executives 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 Time Vested Awards held by the Eligible Executive, other than awards that provide for a deferral of compensation within the |
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meaning of Code Section 409A, shall vest on a prorated basis effective on the Eligible Executives Termination Date, and such prorated vesting shall be calculated in the manner described in Section 7(c)(i)a above. | |||
In the event of a Change in Control, any cash Performance Grants awarded to an Eligible Executive under the LTIP (if applicable) shall be converted into restricted cash (representing only a contingent, unfunded and unsecured obligation of the Company) as of the effective date of the Change in Control, such conversion to be based upon target performance if less than 50% of the performance period has elapsed as of the effective date of the Change in Control, or based upon actual performance results as determined by the Committee in its sole discretion if 50% or more of the performance period has elapsed as of the effective date of the Change in Control. If the Eligible Executives 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 such restricted cash shall be paid to the Eligible Executive in a lump sum within 30 days following the six month anniversary of the Eligible Executives separation from service (or, if different, on the date specified in the applicable award and, if applicable, deferral agreement). In the event of a Change in Control, all other outstanding awards granted to the Eligible Executive under the LTIP, and any awards that provide for a deferral of compensation within the meaning of Code Section 409A, shall be payable, if at all, in accordance with the terms of the LTIP and the applicable award (and, if applicable, deferral) agreements. | |||
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 to an Eligible Executive under the LTIP 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 Executives 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 shall remain exercisable until the end of the Eligible Executives 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 |
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(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 Executives 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. | ||
(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 Employees 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 Firms 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 |
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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: |
(i) | give the Company any information reasonably requested by the Company relating to such claim; | ||
(ii) | take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company; | ||
(iii) | cooperate with the Company in good faith in order effectively to contest such claim; and | ||
(iv) | permit the Company to participate in any proceedings relating to such claim; |
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred by the Eligible Executive in connection with such contest and shall indemnify and hold the Eligible Executive harmless, on an after-tax basis, for any Excise Tax or federal, state or local income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Eligible Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Eligible Executive agrees to prosecute such contest to a determination before |
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any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided further, that if the Company directs the Eligible Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Eligible Executive on an interest-free basis and shall indemnify and hold the Eligible Executive harmless, on an after-tax basis, from any Excise Tax or federal, state or local income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Eligible Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Companys control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Eligible Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. Any payment or cost owed to the Eligible Executive pursuant to this Section 8(c) shall be made no later than December 31 of the year following the year in which the related taxes are remitted to the taxing authority or, if no taxes are paid, the end of the taxable year following the year in which such contest is finally resolved. | |||
(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 Companys 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 | |
The provision of Severance Benefits under this Policy is conditioned upon the Eligible Executive timely signing an Agreement and Release (in a form satisfactory to the Company) which will include restrictive covenants and a comprehensive release of all claims. In this Agreement and Release, the Eligible Executive will be asked to release the Company and its directors, officers, employees and agents from any and all claims the Eligible Executive may have against them, including but not limited to any contract, tort, or wage and hour claims, and any claims under Title VII, the ADEA, the ADA, ERISA, and other federal, state, local or foreign laws. Under the Agreement and Release, the Eligible Executive must also agree not to solicit business similar to any business offered by the Company from any Company customer, not to advise any entity to cancel or limit its business with the Company, not to recruit, solicit, or encourage any employee to leave their employment with the Company, not to perform the same or substantially the same functions or job duties that the Eligible Executive performed for the Company for any business enterprise engaging in activities that compete with the business activities of the Company, not to disclose any of Companys trade secrets or confidential information, and not to disparage the Company or its employees in any way. These obligations are in addition to any other non-solicitation, noncompete, nondisclosure, or confidentiality agreements the Eligible Executive may |
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have executed while employed by Company. No Severance Benefits will commence under this Policy prior to the eighth day following the date on which the Company has received the Eligible Executives fully executed Agreement and Release. | ||
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 Companys payroll practice during the Eligible Executives 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 Companys 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 Executives 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 Executives 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). | ||
(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 Executives estate in one lump sum upon the Eligible Executives 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 Executives Severance Benefits under this Policy any other severance, termination, or similar benefits 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 |
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made on account of notice periods during which the Eligible Executive is released from further duties as provided 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 Executives 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 Executives 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 Executives estate. |
12. | Outplacement | |
In the Committees sole and absolute discretion, Eligible Executives who are eligible for Severance Benefits under the Policy also may be eligible for outplacement services selected by the Company. Eligibility for and the scope of any outplacement services will be determined in the sole discretion of the Committee. Under no circumstances shall any Eligible Executive be eligible to receive a cash payment or any other benefit in lieu of outplacement services. | ||
Any outplacement services provided under this Section 12 must be provided to the Eligible Employee no later than December 31 of the second calendar year following the calendar year in which the Termination Date occurs. | ||
13. | Re-employment and Other Employment | |
In the event an Eligible Executive is re-employed by the Company prior to the commencement of or within the Severance Period, the payment of any Severance Benefits payable with respect to the prior termination immediately will cease and such Severance Benefits shall no longer be payable under this Policy. | ||
Subject to Section 9 of this Policy, if an Eligible Executive obtains employment (other than with the Company) while receiving Severance Benefits, the Eligible Executive shall continue to receive any remaining cash Severance Benefits in accordance with the payment schedule then in effect, but, except as otherwise required under applicable law, he or she will no longer be eligible to receive continued benefits under Section 7(b) of this Policy as of the date the Eligible Executive becomes eligible to receive such benefits under a subsequent employers benefit programs. | ||
14. | Funding | |
This Policy is not funded, and payment of benefits hereunder shall be made solely from the general assets of the Company. An Eligible Executive entitled to benefits hereunder shall have only the rights of a general creditor of the Company. |
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15. | Administration | |
This Policy shall be administered by the Committee, which as the Named Fiduciary shall have the absolute discretion and exclusive right to interpret, construe and administer the Policy and to make final determinations on all questions arising under the Policy, including but not limited to questions concerning eligibility for, the amount of and receipt of Policy benefits. All decisions of the Committee will be conclusive, final and binding upon the parties. Notwithstanding the foregoing, upon the occurrence of a Change in Control, determinations of the Committee hereunder shall be subject to de novo judicial review. | ||
16. | Amendment or Termination of the Policy | |
Western Union reserves the right to amend or terminate this Policy at any time in its sole discretion, provided, however , that during the period commencing upon the earliest of (a) the signing of a definitive agreement that, if consummated, would result in a Change in Control, (b) the filing of a tender offer with the Securities and Exchange Commission that, if accepted, would result in a Change in Control, or (c) the election of a director to the Board who is not a member of the Incumbent Board (each, a Triggering Event) and ending upon the earlier of (x) the date on which the Committee in its sole discretion determines that the Triggering Event will not actually result in a Change in Control, or (y) the 36-month anniversary of the Change in Control, the Company shall not amend or terminate this Policy as it applies to an Eligible Executive without the consent of such affected Eligible Executive. Notwithstanding the foregoing, this Policy may be amended at any time, without the consent of any Eligible Executive, as necessary or desirable to comply with the requirements, or avoid the application, of Code Section 409A. | ||
17. | Limitation on Individually Negotiated Severance Arrangements | |
As of the Effective Date, this Policy is intended to be the sole source of severance and change in control benefits for Eligible Executives. Absent prior Board approval, no individual agreement shall be entered into with any Eligible Executive or any person being considered for promotion or hire as an Eligible Executive which would provide severance or change in control-type benefits. | ||
18. | Section 409A | |
Notwithstanding any provision of this Policy, the Policy will be construed, administered or deemed amended as necessary to comply with the requirements of Code Section 409A to avoid taxation under Code Section 409A(a)(1) to the extent subject to Code Section 409A. The Committee, in its sole discretion shall determine the requirements of Code Section 409A applicable to the Policy and shall interpret the terms of the Policy consistently therewith. Under no circumstances, however, shall the Company or any affiliate or any of its or their employees, officers, directors, service providers or agents have any liability to any person for any taxes, penalties or interest due on amounts paid or payable under the Policy, including any taxes, penalties or interest imposed under Code Section 409A. The payments to Eligible Executives pursuant to this Policy are also intended to be exempt from Code Section 409A to the maximum extent possible, first, to the extent such payments are scheduled to be paid and are in fact paid during the short-term deferral period, as short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4), and then under the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii), and for this purpose each payment shall be considered a separate |
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payment such that the determination of whether a payment qualifies as a short-term deferral shall be made without regard to whether other payments so qualify and the determination of whether a payment qualifies under the separation pay exemption shall be made without regard to any payments which qualify as short-term deferrals. To the extent any amounts under this Policy are payable by reference to an Eligible Executives termination of employment, such term shall be deemed to refer to the Eligible Executives separation from service, within the meaning of Code Section 409A. Notwithstanding any other provision in this Policy, if an Eligible Executive is a specified employee, as defined in Section 409A of the Code, as of the date of the Eligible Executives separation from service, then to the extent any amount payable under this Policy (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Code Section 409A, (ii) is payable upon the Eligible Executives separation from service and (iii) under the terms of this Policy would be payable prior to the six-month anniversary of the Eligible Executives 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 the Eligible Executives death. | ||
19. | Miscellaneous | |
No Eligible Executive shall vest in any entitlement to or eligibility for benefits under this Policy until he or she has satisfied all requirements for eligibility and the conditions required to receive the benefits specified in this Policy have been satisfied. No interest shall accrue on any benefit to which an Eligible Executive may be entitled under this Policy. No benefits hereunder, whether or not in pay status, shall be subject to any pledge or assignment, and no creditor may attach or garnish any Eligible Executives Policy benefits. This Policy does not create any contract of employment or right to employment for any period of time. Employment with the Company is at-will, and may be terminated by either the Company or the Eligible Executive at any time for any reason. | ||
20. | Review Procedure | |
Executives eligible to receive benefits under this Policy will be notified of such eligibility as soon as administratively practicable after the event occurs which gives rise to the provision of Policy benefits. If an executive who believes he or she is eligible to receive Policy benefits does not receive such notice or disagrees with the amount of benefits set forth in such notice, or if an executive is informed that he or she is not eligible for benefits under this Policy, the executive (or his or her legal representative) may file a written claim for benefits with the Companys senior human resources executive or such other officer or body designated by the Committee for this purpose. The written claim must include the facts supporting the claim, the amount claimed, and the executives name and mailing address. | ||
If the claim is denied in part or in full, the Companys senior human resources executive (or other designated officer or body) will notify the executive by mail no later than 90 days after receipt of the written claim. If special circumstances require an extension of time for processing the claim, the executive will be notified in writing before the end of the initial 90-day period. If the claim is denied, the notice of denial will state the specific reasons for the denial, the provisions of the Policy on which the denial is based, a description of any additional information or material required by the Committee to consider the claim (if applicable), as well as an explanation as to why such information or material is necessary, an explanation of the Policys review procedures and the time limits applicable to such procedures, as well as a statement of the executives right to bring a civil action under ERISA Section 502(a) in the event of an adverse determination upon review. |
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An executive (or his or her legal representative) may appeal a denial by filing a written appeal with the Committee. The written appeal must be received no later than 60 days after the executive or legal representative received the notice of denial. During the same 60-day period, the executive or legal representative may have reasonable access to relevant documents, records, or other information and may submit written comments and supporting documents, records and other materials to the Committee. A document, record, or other information shall be considered relevant to the claim if such document, record, or other information (i) was relied upon in making the benefit determination, (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination, or (iii) demonstrates compliance with the administrative processes and safeguards designed to ensure and verify that benefit claim determinations are made in accordance with the Policy and that, where appropriate, the Policy provisions have been applied consistently with respect to similarly situated executives or designated beneficiaries. | ||
The Committee will review the appeal and notify the executive or legal representative by mail of its final decision within 60 days. If special circumstances require and extension of time for processing the claim, the executive will be notified in writing before the end of the initial 60-day period. If the claim is denied, the notice of denial will state the reason for the denial, references to the specific Sections of the Policy on which the denial is based, a statement that the executive may receive, upon request and free of charge, copies of all documents and information relevant to the appeal, a description of the Policys claims and appeals procedures, and a statement of the executives right to bring an action under Section 502 of ERISA. |
As a participant in the Policy, an Eligible Executive is entitled to certain rights and protections under ERISA which provides that all Policy participants shall be entitled to: | ||
Receive Information About The Policy And Benefits | ||
The executive may examine, without charge, at the Policy administrators office and at other specified locations such as worksites, all documents governing the policy and a copy of the latest annual report (Form 5500 Series) filed with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. | ||
The executive may obtain, upon written request to the Policy administrator, copies of documents governing the operation of the Policy including copies of the latest annual report (Form 5500 Series). The Policy administrator may make a reasonable charge for the copies. | ||
The executive may receive a summary of the Policys annual financial report. The Policy administrator is required by law to furnish each participant with a copy of this summary annual report. | ||
Prudent Actions by Policy Fiduciaries |
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Name of Policy | Type of Policy | Policy Year: | ||
The Western Union Company Severance/Change
in Control Policy |
Welfare | 1/1 - 12/31 |
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(Executive Committee Level) | ||
Type of Policy Administration | ||
Self-Administered | ||
Policy Sponsor | ||
The Western Union Company
12500 E. Belford Avenue Englewood, CO 80112 |
||
Policy Administrator | ||
Compensation and Benefits Committee of the Board of Directors
c/o The Western Union Company Office of the General Counsel 12500 E. Belford Avenue Englewood, CO 80112 |
||
Agent for Service of Legal Process | ||
The Western Union Company
Office of the General Counsel 12500 E. Belford Avenue Englewood, CO 80112 |
||
In addition, service of legal process may be made upon the Policy administrator. | ||
Identification Number (Policy Sponsor) | ||
20-4531180 | ||
Identification Number (Policy) | ||
506 | ||
THIS DESCRIPTION OF THE WESTERN UNION COMPANY SEVERANCE/CHANGE IN CONTROL POLICY FOR EXECUTIVE COMMITTEE-LEVEL PARTICIPANTS SERVES AS THE OFFICIAL POLICY DOCUMENT AND AS THE LEGAL SUMMARY PLAN DESCRIPTION. |
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(a) | liability equal to the bookkeeping accounts for deferrals contributed after December 31, 2004, plus related earnings, by Participants who are Business Employees. | ||
(b) | liability equal to the bookkeeping accounts for employer matching contributions, Service-Related Contributions, and ISP Plus Contributions to the extent non-vested as of December 31, 2004, and for employer matching contributions, Service-Related Contributions, and ISP Plus Contributions credited after December 31, 2004, plus related earnings, by Participants who are Business Employees. |
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(a) | Accident or illness of the Participant, the Participants spouse or dependent (as defined in Code § 152, without regard to Code § 152(b)(1), (b)(2) and (d)(1)(B)); | ||
(b) | Loss of the Participants property due to casualty; or | ||
(c) | Similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. |
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(a) | Newly Eligible Employees . An eligible Employee who has not previously been eligible to participate in the Plan (or any other plan required to be aggregated with the Plan pursuant to Code § 409A) and who wishes to participate in the Plan must execute a Deferred Compensation Agreement within 30 days after he or she first becomes eligible to participate in the Plan (or any other plan required to be aggregated with the Plan pursuant to Code § 409A). The Deferred Compensation Agreement shall be irrevocable with respect to the current Plan Year, except as otherwise provided in the Plan, and shall be effective only with respect to compensation payable for services performed subsequent to the execution of the Deferred Compensation Agreement. The Employee may change his or her Deferred Compensation Agreement election with respect to services |
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to be performed in any subsequent Plan Year under the provisions in Section 3.3(c). | |||
In the Employees first year of participation, if the Bonus or Performance Grant for which the election is made is an annual bonus or is otherwise based on a specified performance period, then the Employees Deferred Compensation Agreement election with respect to the Bonus or Performance Grant will apply only to the portion of the Bonus or Performance Grant equal to the total amount of the Bonus or Performance Grant multiplied by the ratio of the number of days remaining in the performance period after the date of the Deferred Compensation Agreement over the total number of days in the performance period. | |||
(b) | Former Participants with No Account Balance and Employees Ineligible for Two Years . If a former Participant has been paid all amounts deferred under the Plan (and all other plans required to be aggregated with the Plan pursuant to Code § 409A) and on or before the date of the last payment was not eligible to continue to participate in the Plan (or any other plan required to be aggregated with the Plan pursuant to Code § 409A) for periods after the last payment (other than through an election of a different time and form of payment with respect to amounts paid), the Employee may be treated as newly eligible to participate in the Plan pursuant to Section 3.3(a) as of the first date following such payment that the Employee again becomes eligible to participate in the Plan. If an Employee has ceased to be eligible to defer amounts under the Plan (and all other plans required to be aggregated with the Plan pursuant to Code § 409A) (other than the accrual of earnings), regardless of whether all amounts deferred under the Plan (and all other plans required to be aggregated with the Plan pursuant to Code § 409A) have been paid, and subsequently becomes eligible to participate in the Plan again, the Employee may be treated as newly eligible to participate pursuant to Section 3.3(a) if the Employee has not been eligible to participate in the Plan (or any other plan required to be aggregated with the Plan pursuant to Code § 409A) (other than the accrual of earnings) at any time during the 24-month period ending on the date that the Employee again becomes eligible to participate in the Plan. | ||
(c) | Previously Eligible Employees . An eligible Employee who has previously been eligible to participate in the Plan (or any other plan required to be aggregated with the Plan pursuant to Code § 409A) but is not treated as newly eligible to participate in the Plan under Section 3.3(b) and who wishes to change his or her deferral election or make an initial deferral election must enter into a Deferred Compensation Agreement with respect to compensation paid for services performed during a Plan Year at any time prior to the beginning of that Plan Year. The new Deferred Compensation Agreement election shall be effective for such Plan Year |
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and all subsequent Plan Years, except that the Employee may change his or her Deferred Compensation Agreement deferral election at any time through the December 31 prior to the beginning of a Plan Year. After the December 31 prior to the beginning of the Plan Year, the Deferred Compensation Agreement deferral election shall become irrevocable with respect to that Plan Year, except as otherwise provided in the Plan. The Committee may, in its sole discretion, establish earlier deadlines or annual enrollment periods for such election changes during which such elections must be made. | |||
(d) | Elections to Defer Performance Grants . Notwithstanding the forgoing provisions of this Section 3.3, an eligible Employee may elect to defer a Performance Grant at any time on or before the date that is six months before the end of the applicable performance period, provided (i) the Employee has performed services for the Company or an Affiliate continuously from the later of the beginning of the performance period or the date the Performance Measures are established for the Performance Grant in writing (which shall be no later than 90 days after the commencement of the performance period) through the date of this election and (ii) the amount payable in respect of the Performance Grant is not calculable and substantially certain to be paid as of the time of this election. | ||
(e) | Cancellation of Deferral Election for 401(k) Plan Hardship Distribution . Notwithstanding a Participants deferral election in his or her Deferred Compensation Agreement, a Participants deferral election shall be cancelled if required under the 401(k) plan sponsored by the Company or an Affiliate which is the Participants Employer due to the Participants receipt of a hardship distribution from such 401(k) plan, pursuant to the requirements of Code § 1.401(k)-1(d)(3). After the cancellation required under the 401(k) plan has expired, the Participant may execute a new Deferred Compensation Agreement, in accordance with the timing requirements for previously eligible employees under Section 3.3(c). |
(a) | dollar for dollar on the sum of the Participants contributions to the ISP (other than catch-up contributions) and the Participants contributions of Salary and Bonus to the Plan, up to the first 3% of the sum of (i) the Participants Compensation (as defined in the ISP without regard to the Code § 401(a)(17) limitation) for the pay period, plus (ii) Salary and Bonus amounts deferred under the Plan for the pay period, and $.50 for each dollar on the sum of the Participants contributions to the ISP (other than catch-up |
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contributions) and the Participants Salary and Bonus contributions to the Plan, up to the next 2% of the sum of (i) the Participants Compensation (as defined in the ISP without regard to the Code § 401(a)(17) limitation) for the pay period, plus (ii) Salary and Bonus amounts deferred under the Plan for the pay period, | |||
(b) | minus the amount of employer matching contributions contributed to the Participants ISP accounts for the pay period; |
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Years of Service | Vesting Percentage | ||||
Less than 1
|
0 | % | |||
1
|
25 | % | |||
2
|
50 | % | |||
3
|
75 | % | |||
4 or more
|
100 | % |
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Years of Service | Vesting Percentage | ||||
Less than 1
|
0 | % | |||
1
|
25 | % | |||
2
|
50 | % | |||
3
|
75 | % | |||
4 or more
|
100 | % |
(a) | Specified Payment Date . The date the Participant specifies in a Distribution Election that has not been postponed pursuant to Section 6.4. With respect to elections for Plan Years commencing on and after January 1, 2007, the payment date may be any calendar date that is more than four years following the end of the Plan Year to which the Deferred Compensation Agreement relates. | ||
(b) | Separation from Service . The date the Participant has a Separation from Service, or a specified time following the Participants Separation from |
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Service. A Participant may elect immediate commencement or a time following Separation from Service that is prior to the 5 th anniversary of the Participants Separation from Service. Notwithstanding any other provision of the Plan, if the Participant is a Specified Employee on the date of his or her Separation from Service, any amounts otherwise payable prior to the 6 th month anniversary of the Participants Separation from Service shall be delayed until the day following the 6 th month anniversary of the Participants Separation from Service. |
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(a) | the change does not accelerate any payments within the meaning of Code § 409A; | ||
(b) | the Participant executes a new Distribution Election at least 12 months prior to the earliest date payment would have commenced under the prior Distribution Election; | ||
(c) | any payments under the new Distribution Election will not commence earlier than 5 years from the date the payments would have otherwise commenced under the prior Distribution Election; and | ||
(d) | the new Distribution Election will not take effect until 12 months after the date it was executed by the Participant. |
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The Plan Administrators claim denial notice shall set forth: |
(b) | the specific reason or reasons for the denial; | ||
(c) | specific references to pertinent Plan provisions on which the denial is based; | ||
(d) | a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why the material or information is necessary; and | ||
(e) | an explanation of the Plans claims review procedure describing the steps to be taken by a claimant who wishes to submit his or her claim for review, including any applicable time limits, and a statement of the Participants or beneficiarys right to bring a civil action under ERISA § 502(a) if the claim is denied on review. |
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(f) | submit in writing any comments, documents, records and other information relating to the claim and request a review; | ||
(g) | review pertinent Plan documents; and | ||
(h) | upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim. A document, record, or other information shall be considered relevant to the claim if such document, record, or other information (i) was relied upon in making the benefit determination, (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination, or (iii) demonstrates compliance with the administrative processes and safeguards designed to ensure and verify that benefit claim determinations are made in accordance with the Plan and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated Participants or Designated Beneficiaries. |
(a) | The decision on review shall be made by the Committee, who may in its discretion hold a hearing on the denied claim. The Committee shall make its decision solely on the basis of the written record, including documents and written materials submitted by the Participant or Designated Beneficiary (or the authorized representative of the Participant or Designated Beneficiary). The Committee shall make its decision promptly, which shall ordinarily be not later than 60 days (45 days in the event of a claim involving a Disability) after the Plans receipt of the request for review, unless special circumstances (such as the need to hold a hearing) require an extension of time for processing. In that case a decision shall be rendered as soon as possible, but not later than 120 days (90 days in the event of a claim involving a Disability) after receipt of the request for review. If an extension of time is required due to special circumstances, the Committee will provide written notice of the extension to the Participant or Designated Beneficiary prior to the time the |
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extension commences, stating the special circumstances requiring the extension and the date by which a final decision is expected. | |||
(b) | The decision on review shall be in writing, written in a manner calculated to be understood by the Participant or Designated Beneficiary. If the claim is denied, the written notice shall include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement of the Participants or Designated Beneficiarys right to bring an action under ERISA § 502(a), and a statement that the Participant or Designated Beneficiary is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimants claim for benefits. A document, record, or other information shall be considered relevant to the claim if such document, record, or other information (i) was relied upon in making the benefit determination, (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination, or (iii) demonstrates compliance with the administrative processes and safeguards designed to ensure and verify that benefit claim determinations are made in accordance with the Plan and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated claimants. | ||
(c) | The Committees decision on review shall be final. In the event the decision on review is not provided to the Participant or Designated Beneficiary within the time required, the claim shall be deemed denied on review. |
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(a) | liability equal to the bookkeeping accounts for deferrals contributed before January 1, 2005, plus related earnings, by Participants who are Business Employees. | ||
(b) | liability equal to the bookkeeping accounts for employer matching contributions, service-related contributions, and ISP Plus contributions to the extent 100% vested as of December 31, 2004 (collectively, Vested Employer Contributions), plus related earnings on the Vested Employer Contributions, by Participants who are Business Employees. | ||
(c) | liability equal to the bookkeeping accounts for account balances accumulated under other deferred compensation plans or programs of First Data Corporation that were merged into the First Data SISP, as listed in Appendix A, for Participants who are Business Employees. |
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(a) | Change For Following Calendar Year . A Participant who wishes to change an election to defer Compensation may do so at any time by notifying the Committee in writing of such change in election. Such written change must be submitted in all events prior to December 31 of the year immediately preceding the calendar year for which the change in election is to be effective. The Committee may, in its sole discretion, establish earlier deadlines or annual enrollment periods for such election changes during which such elections must be made. | ||
(b) | Change For Current Calendar Year . A Participant who wishes to change an election to defer Compensation on or after January 1 of any calendar year for which the change in election is to be effective must submit a written request to the Committee to revoke his or her existing deferral election. The request must state why the Participant believes he or she should be permitted to revoke the prior election. Requests will be reviewed as soon as administratively feasible and, if a change is permitted by the Committee in its sole discretion, the change will be effective for all remaining pay periods following the date of the determination. |
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(a) | Investment Allocation Upon Termination (Prior to the Spin-Off Date) . Effective prior to the Spin-Off Date, upon Termination, the Participants entire Deferred Account shall be automatically allocated to the Fixed Income Fund Account pending distribution thereof, notwithstanding any elections or allocation decisions previously made by the Participant. The deemed earnings rate for the Fixed Income Fund Account shall apply prospectively from the date of Termination to all undistributed amounts of the Participants Deferred Account. Prior to the Spin-Off Date, from and after the date of Termination, the Participant shall have no rights under this Plan to alter the Investment Account to which his or her Deferred Account is allocated, or to request any change in previous distribution election(s). | ||
(b) | Investment Allocation Upon Termination (On and After the Spin-Off Date) . On and after the Spin-Off Date, upon Termination, the Participants elections and allocation decisions previously made by the Participant shall continue to apply, and the Participant shall be permitted to change Investment Accounts in his or her discretion in the same manner as an active Employee. Participants who terminated prior to the Spin-Off Date shall again be permitted to change Investment Accounts in their discretion in the same manner as an active Employee. | ||
(c) | Payment of Deferred Account Upon Termination . Upon Termination, a Participant shall be paid his or her Deferred Account in a lump sum or in quarterly or annual installments calculated to distribute his or her Deferred Account over a period of not more than 10 years, as elected by the Participant in his or her Deferred Compensation Agreement. Payments shall commence on the date and shall be made in the manner elected by the Participant in the Deferred Compensation Agreement. Unpaid balances under the installment election shall continue to be credited with imputed gains or losses. |
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The Plan Administrators claim denial notice shall set forth: |
(b) | the specific reason or reasons for the denial; | ||
(c) | specific references to pertinent Plan provisions on which the denial is based; | ||
(d) | a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why the material or information is necessary; and | ||
(e) | an explanation of the Plans claims review procedure describing the steps to be taken by a claimant who wishes to submit his or her claim for review, including any applicable time limits, and a statement of the Participants or beneficiarys right to bring a civil action under ERISA § 502(a) if the claim is denied on review. |
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(a) | submit in writing any comments, documents, records and other information relating to the claim and request a review; | ||
(b) | review pertinent Plan documents; and | ||
(c) | upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim. A document, record, or other information shall be considered relevant to the claim if such document, record, or other information (i) was relied upon in making the benefit determination, (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination, or (iii) demonstrates compliance with the administrative processes and safeguards designed to ensure and verify that benefit claim determinations are made in accordance with the Plan and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated Participants or Designated Beneficiaries. |
(a) | The decision on review shall be made by the Committee, who may in its discretion hold a hearing on the denied claim. The Committee shall make its decision solely on the basis of the written record, including documents and written materials submitted by the Participant or Designated Beneficiary (or the authorized representative of the Participant or Designated Beneficiary). The Committee shall make its decision promptly, which shall ordinarily be not later than 60 days after the Plans receipt of the request for review, unless special circumstances (such as the need to hold a hearing) require an extension of time for processing. In that case a decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request for review. If an extension of time is required due to special circumstances, the Committee will provide written notice of the extension to the Participant or Designated Beneficiary prior to the time the extension commences, stating the special circumstances requiring the extension and the date by which a final decision is expected. |
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(b) | The decision on review shall be in writing, written in a manner calculated to be understood by the Participant or Designated Beneficiary. If the claim is denied, the written notice shall include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement of the Participants or Designated Beneficiarys right to bring an action under ERISA § 502(a), and a statement that the Participant or Designated Beneficiary is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimants claim for benefits. A document, record, or other information shall be considered relevant to the claim if such document, record, or other information (i) was relied upon in making the benefit determination, (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination, or (iii) demonstrates compliance with the administrative processes and safeguards designed to ensure and verify that benefit claim determinations are made in accordance with the Plan and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated claimants. | ||
(c) | The Committees decision on review shall be final. In the event the decision on review is not provided to the Participant or Designated Beneficiary within the time required, the claim shall be deemed denied on review. |
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* | indicates merger of plans only to extent of participant elections to transfer accrued liabilities to this Plan. |
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1. | The Employee elects the following form of distribution of his or her Deferred Account balance (choose one): |
2. | The Employee elects the following payment start date (choose one): |
3. | If at the time on termination of employment, the value of the Employees Deferred Account balance is less than $50,000, the entire Deferred Account balance will be distributed as soon as administratively feasible to the employee as a single lump sum. |
4. | Beneficiary Designation: |
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1. | Pursuant to The Western Union Company 2006 Non-Employee Director Equity Compensation Plan (the Plan), The Western Union Company (the Company) hereby grants to you (Director) as of (the Grant Date), the number of Unrestricted Stock Units (the Units) relating to shares of the Companys common stock specified in the attached Stock Unit Award Notice (which forms part of this Agreement), subject to the conditions and restrictions set forth in this Agreement and the Plan. Each Unit shall provide for the issuance and transfer to Director of one share of the Companys common stock. Upon issuance and transfer of the shares of common stock subject to the Units, Director shall have all rights incident to ownership, including but not limited to voting rights and the right to receive dividends. | |
2. | The terms of the Plan are hereby incorporated in this instrument 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. | |
3. | The Company, in its sole discretion, may require, prior to the issuance or delivery of any shares of common stock pursuant to the Units, payment by Director of any Federal, state, local or other taxes which may be required to be withheld or paid in connection with the Award. | |
4. | Prior to the settlement of the Units, Director will be paid amounts equal to the regular cash dividends that would have been payable to Director if Director had received and held the shares of common stock underlying the Units, which payment shall be made as soon as practicable after the payment of dividends with respect to the Companys common stock but in no event later than March 15 of the calendar year immediately following the calendar year in which such dividends are paid with respect to the Companys common stock. No amounts will be paid with respect to record dates for dividends occurring prior the Grant Date. Prior to the issuance and transfer of the shares of common stock underlying the Units, Director shall not be a shareholder of record with respect to such shares and shall have no voting rights with respect to such shares. | |
5. | The Units may not be sold, assigned, transferred, pledged, or otherwise disposed of, except by will or the laws of descent and distribution, or otherwise as provided by the Plan. If Director or anyone claiming under or through Director attempts to make any such sale, transfer, assignment, pledge or other disposition of the Units in violation of this Paragraph 5, such attempted violation shall be null, void, and without effect. | |
6. | 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 Director under this Agreement without Directors written consent. The Committee may, in its sole discretion, permit Director to surrender the Units in order to exercise or realize the rights under other Awards under the Plan, or in exchange for the grant of new Awards under the Plan, or require Director to surrender the Units as a condition precedent of new Awards under the Plan. |
7. | 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 Director and all persons claiming under or through Director. By accepting this grant of Units or other benefit under the Plan, Director and each person claiming under or through Director 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. | |
8. | This Award is discretionary, non-binding for future years and there is no promise or guarantee that such grants will be offered to the Director in future years. | |
9. | 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 laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws. |
2
1. | These Terms and Conditions form part of the Stock Option Agreement (the Agreement) pursuant to which you have been granted a Nonqualified Stock Option (Stock Option) under The Western Union Company 2006 Non-Employee Director Equity Compensation 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, and the option exercise price, are 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, at any time or times on or after the Date of Grant specified in the attached Award Notice, but not later than the tenth anniversary of such Date of Grant, you may exercise this Stock Option as to the number of shares of common stock of the Company (Common Stock) which, when added to the number of shares of Common Stock as to which you have theretofore exercised under this Stock Option, if any, will not exceed the total number of shares of Common Stock covered hereby. This Stock Option may not be exercised for a fraction of a share of Common Stock of the Company. | |
4. | This Stock Option may not be exercised unless the following conditions are met: |
(a) | 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. | ||
(b) | 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 Companys satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of previously owned whole shares of Common Stock (which you have held for at least six months or which you have purchased on the open market) 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 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. |
5. | In the event that you cease to be a Non-Employee Director for any reason, you will continue to have the right to exercise this Stock Option in accordance with the other provisions of this Agreement and the applicable provisions of the Plan until and including the tenth anniversary of the Date of Grant specified in the attached Award Notice. | |
6. | As long as you continue service to the Company, you may transfer Stock Options to a Family Member or Family Entity without consideration; provided, however, in the case of a transfer of Stock Options 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 Stock Options 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 a 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. | ||
7. | The Board or Committee may amend or terminate the Plan and the Committee may amend (or its delegate may amend) these Terms and Conditions. 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. | |
8. | 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. | |
9. | 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 laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws. |
2
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). 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 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 Companys 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 |
Executive Committee (U.S.) |
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 shall continue to vest in accordance |
Executive Committee (U.S.) |
with its terms, and to the extent vested, may thereafter be exercised by you (or your legal representative or similar person) until the date which is four 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 Companys Executive Committee, this Stock Option shall vest on a prorated basis effective on your termination date. Such prorated vesting shall be calculated by multiplying the unvested portion of the Stock Option by a fraction, the numerator of which is the number of days that have elapsed between the grant date and your termination date and the denominator of which is the number of days between the grant date and the date the Stock Option would have become fully vested, treating each separate vesting tranche of the Stock Option as a separate Stock Option award. The 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 prorated portion of the Stock Option that vests in accordance with such 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 Companys 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. | ||
(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 (30 th ) 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 (30 th ) day following your termination of employment or service, then |
Executive Committee (U.S.) |
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 Companys General Counsel. |
7. | If you are an eligible participant in the Severance/Change in Control Policy applicable to members of the Companys 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 Board or Committee may amend or terminate the Plan and the Committee may amend (or its delegate may amend) these Terms and Conditions. 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. |
9. | 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. |
10. | 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. |
11. | You acknowledge that you have read the Companys Clawback Policy. In consideration of the grant of this Stock Option, you agree to abide by the Companys Clawback Policy and any determinations of the Board pursuant to the Clawback Policy. Without limiting the foregoing, and notwithstanding |
Executive Committee (U.S.) |
any provision of this Agreement to the contrary, if the Board determines that any Incentive Compensation (as defined in the Companys 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:
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Executive Committee (U.S.) |
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). 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 Companys 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. |
This option may not be exercised for a fraction of a common share of the Company. | ||
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 Companys 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. |
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 shall continue to vest in accordance with its terms, and to the extent vested, may thereafter be exercised by you (or your legal representative or similar person) until the date which is four 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 Companys Executive Committee, this Stock Option shall vest on a prorated basis effective on your termination date. Such prorated vesting shall be calculated by multiplying the unvested portion of the Stock Option by a fraction, the numerator of which is the number of days that have elapsed between the grant date and your termination date and the denominator of which is the number of days between the grant date and the date the Stock Option would have become fully vested, treating each separate vesting tranche of the Stock Option as a separate Stock Option award. The 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 prorated portion of the Stock Option that vests in accordance with such 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 Companys 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. | ||
(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. |
Executive Committee (Austria) |
(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 (30 th ) 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 (30 th ) 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 Companys 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 |
Executive Committee (Austria) |
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 Companys 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 |
Executive Committee (Austria) |
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 recipients 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 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 should be aware that you may be entitled to revoke this Agreement and your acceptance of the grant of the Stock Option pursuant to the Austrian Consumer Protection Act under the following conditions: (a) if you sign this Agreement outside of the business premises of your employer, you may be entitled to revoke the Agreement provided the revocation is made within one week of your acceptance; or (b) if circumstances relevant to your decision to enter into the Agreement, as presented by the Company, either do not materialize or materialize to a significantly reduced extent, though no fault of your own, you may be entitled to revoke the Agreement. This revocation must be made within one week of the time that it is foreseeable that the circumstances mentioned above do not materialize or materialize at a significantly reduced extent. If you revoke under sections (a) or (b) listed above, the revocation must be in written form to be valid. It is sufficient if you return this Agreement to the Company or the Companys representative with language which can be understood as your refusal to conclude or honor this Agreement. |
15. | You acknowledge that you have read the Companys Clawback Policy. In consideration of the grant of this Stock Option, you agree to abide by the Companys 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 Companys 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:
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Signature:
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Executive Committee (Austria) |
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 Companys 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 the 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, all restrictions on the Units shall lapse and the Shares subject to the Units 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 in Executives discretion. The three year period in which the Units may be forfeited by the Executive is defined as the Restricted Period. |
Notwithstanding the foregoing provisions in this paragraph 3, you will forfeit all rights to the Units unless you accept 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 prior to the third anniversary of the Grant Date. 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. In addition, notwithstanding any other provision of the Plan or this Agreement, in order for the restrictions on the Units to lapse, you must execute and return to the Company or accept electronically an updated restrictive covenant agreement (and exhibits) if requested by the Company which may contain certain noncompete, nonsolicitation and/or nondisclosure provisions. Failure to execute or electronically accept such an agreement prior to vesting will cause the Units to continue to be subject to restriction. |
Prior to the issuance and transfer of Shares upon vesting, the Units will represent only an unfunded and unsecured obligation of the Company. Any Units that vest in accordance with paragraphs 3, 7 or 9 will be settled as soon as administratively practicable after vesting ( i.e., upon lapse of the restrictions on the Units). If at any time the Company determines, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental authority is necessary or desirable as a condition to the issuance and transfer of Shares to the |
Executive (or his or her estate), such issuance and transfer will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained. |
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 having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation, or (4) 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 Executives right to any unvested Units (and any associated dividend equivalents) if Executives 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 Executives 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 applicable to members of the Companys Executive Committee, any then-restricted Units shall vest on a prorated basis effective on Executives termination date. Such prorated vesting shall be calculated by multiplying the number of Units by a fraction, the numerator of which is the number of days that have elapsed between the Grant Date and Executives termination date and the denominator of which is the number of days between the Grant Date and the third anniversary of the Grant Date. If Executive dies or incurs a Disability during a period of continuous employment with the Company or a Subsidiary or Affiliate during the Restricted Period, Executive shall immediately vest, as of the date of such termination of employment, in any then-unvested Units. Executive shall not vest in any unvested Units by reason of Retirement. |
8. | Prior to the issuance and transfer of Shares upon vesting, Executive will be credited with amounts equal to the regular cash dividends that would be payable to Executive if Executive had been transferred such Shares, which amounts shall accrue during the Restricted Period and be paid in cash upon lapse of the Restricted Period; provided, however, that if the Company adopts a shareholder-wide dividend reinvestment program during the Restricted Period, the Committee may direct that Executive be credited with additional Restricted Stock Units equal to the |
dividends that would be payable with respect to the Shares on or after the date of adoption of such program if Executive had been transferred such Shares and which shall be subject to the same terms as this Agreement, with the increase in the number of Restricted Stock Units equal to the number of Shares that could be purchased with the dividends based on the value of the Shares at the time such dividends are paid (in lieu of crediting Executive with any fractional Units, the Committee may direct that amounts equal to the fair market value of any such fractional Units accrue during the restricted period and be paid in cash upon lapse of the restrictions). This Paragraph 8 will not apply with respect to record dates for dividends occurring prior to the Grant Date or after the Restricted Period has lapsed. During the Restricted Period, Executive (and any person succeeding to Executives rights pursuant to the Plan) will not be a shareholder of record of the Shares underlying the Units and will have no voting or other shareholder rights with respect to such Shares. |
9. | If Executive is eligible to participate in the Severance/Change in Control Policy applicable to members of the Companys Executive Committee at the time of a Change in Control and Executives 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 any remaining restrictions applicable to the Units shall immediately lapse effective on the date of Executives 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 Executives 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. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executives termination of employment due to death, Disability or for an eligible reason under the Severance/Change in Control Policy applicable to members of the Companys Executive Committee 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 $ of operating income during the fiscal year ending December 31, 2010, as determined by the Committee based on the Companys 2010 annual financial statements. | |
16. | Executive acknowledges that Executive has read the Companys Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Companys 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 Companys Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executives 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 Executives 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. |
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:
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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 Companys common stock (Shares), such grant contingent upon your acceptance of these terms and conditions and subject to the restrictions 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 the 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, all restrictions on the Units shall lapse and the Shares subject to the Units shall be issued and transferred to Executive. Effective on and after such date, subject to applicable local laws and Company policies, Executive may hold, assign, pledge, sell, or transfer the Shares in Executives discretion. The three year period in which the Units may be forfeited by the Executive is defined as the Restricted Period. Notwithstanding the foregoing provisions in this paragraph 3, you will forfeit all rights to the Units unless you accept 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 prior to the third anniversary of the Grant Date. 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. |
Prior to the issuance and transfer of Shares upon vesting, the Units will represent only an unfunded and unsecured obligation of the Company. Any Units that vest in accordance with paragraphs 3, 7 or 9 will be settled as soon as administratively practicable after vesting ( i.e., upon lapse of the restrictions on the Units). If at any time the Company determines, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any foreign, state or federal law, or the consent or approval of any governmental authority is necessary or desirable as a condition to the issuance and transfer of Shares to the Executive (or his or her estate), such issuance and transfer will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained. |
4. | Regardless of any action the Company or Executives employer 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), Executive acknowledges that the ultimate liability for all Tax Related Items legally due by Executive is and remains Executives responsibility and that the Company and/or Executives employer (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the Units, including the grant of the Units, the vesting of the Units, the conversion of the Units into Shares, the subsequent sale of any Shares acquired at vesting and the receipt of any dividends or dividend equivalents; and (ii) do not commit to structure the terms of the grant or any aspect of the Units to reduce or eliminate Executives liability for Tax Related Items. |
Prior to the issuance and transfer of Shares upon vesting of the Units, Executive shall pay, or make adequate arrangements satisfactory to the Company or to Executives employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or Executives employer. In this regard, Executive authorizes the Company or Executives employer to withhold all applicable Tax Related Items legally payable by Executive from Executives wages or other cash compensation payable to Executive by the Company or Executives employer. Alternatively, or in addition, if permissible under local law, the Executive may elect to satisfy his obligations with respect to all applicable Tax Related Items by any of the following means: (1) making a cash payment to the Company or Executives employer, (2) authorizing the Company to sell Shares to be issued on vesting of the Units to satisfy such obligation, or (3) 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, equal to the amount necessary to satisfy any such obligation. Shares of common stock withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. Executive shall pay to the Company or to Executives employer any amount of Tax Related Items that the Company or Executives employer may be required to withhold as a result of Executives receipt of the Units, the vesting of the Units, or the conversion of the vested Units to Shares that cannot be satisfied by the means previously described. The Company may refuse to deliver Shares to the Executive if Executive fails to comply with Executives obligations in connection with the Tax Related Items as described herein. |
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 Executives right to any unvested Units (and any associated dividend equivalents) if Executives 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 Executives 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 applicable to members of the Companys Executive Committee, any then-restricted Units shall vest on a prorated basis effective on Executives termination date. Such prorated vesting shall be calculated by multiplying the number of Units by a fraction, the numerator of which is the number of days that have elapsed between the Grant Date and Executives termination date and the denominator of which is the number of days between the Grant Date and the third anniversary of the Grant Date. If Executive dies or incurs a Disability during a period of continuous employment with the Company or a Subsidiary or Affiliate during the Restricted Period, Executive shall immediately vest, as of the date of such termination of employment, in any then-unvested Units. Executive shall not vest in any unvested Units by reason of Retirement. | ||
8. | Prior to the issuance and transfer of Shares upon vesting, Executive will be credited with amounts equal to the regular cash dividends that would be payable to Executive if Executive had been transferred such Shares, which amounts shall accrue during the Restricted Period and be paid in cash upon lapse of the Restricted Period; provided, however, that if the Company adopts a shareholder-wide dividend reinvestment program during the Restricted Period, the Committee may direct that Executive be credited with additional Restricted Stock Units equal to the dividends that would be payable with respect to the Shares on or after the date of adoption of such program if Executive had been transferred such Shares and which shall be subject to the same terms as this Agreement, with the increase in the number of Restricted Stock Units equal to the number of Shares that could be purchased with the dividends based on the value of the Shares at the time such dividends are paid (in lieu of crediting Executive with any fractional Units, the Committee may direct that amounts equal to the fair market value of any such fractional Units accrue during the restricted period and be paid in cash upon lapse of the restrictions). This Paragraph 8 will not apply with respect to record dates for dividends occurring prior to the Grant Date or after the Restricted Period has lapsed. During the Restricted Period, Executive (and any person succeeding to Executives rights pursuant to the Plan) will not be a shareholder of record of the Shares underlying the Units and will have no voting or other shareholder rights with respect to such Shares. | |
9. | If Executive is eligible to participate in the Severance/Change in Control Policy applicable to members of the Companys Executive Committee at the time of a Change in Control and Executives 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 any remaining restrictions applicable to the Units shall immediately lapse effective on the date of Executives 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 Executives 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 Company; (iv) Executives 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 Executives employer, and the Units are outside the scope of Executives 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 Executives employment by the Company or the Executives employer (for any reason whatsoever and whether or not in breach of local labor laws) and Executive irrevocably releases the Company and Executives 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 or her entitlement to pursue such claim; and (xii) in the event of involuntary termination of Executives employment (whether or not in breach of local labor laws), Executives right to receive the Units and vest under the Plan, if any, will terminate effective as of the date that Executive is no longer actively employed and will not be extended by any notice period mandated under local law ( e.g., active employment would not include a period of garden leave or similar period pursuant to local law); furthermore, in the event of involuntary termination of employment (whether or not in breach of local labor laws), |
Executives right to receive Shares pursuant to the Units after termination of employment, if any, will be measured by the date of termination of Executives active employment and will not be extended by a notice period mandated under local law; the Committee shall have the exclusive discretion to determine when the Executive is no longer actively employed for purposes of the award of the Units. | ||
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. | 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 Agreement by and among, as applicable, your employer, the Company and the Companys 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, and details of all equity awards to you under the Plan, 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 recipients country may have different data privacy laws and protection than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. 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, escrow agent or other third party with whom the Shares received upon vesting of the Units may be deposited. 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 refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to receive a transfer of Shares following the expiration of the Restricted Period. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative. |
15. | The Company may, in its sole discretion, decide to deliver any documents related to the Units awarded under the Plan or future Units that may be awarded under the Plan by electronic means or request Executives consent to participate in the Plan by electronic means. Executive hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another 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. | If Executive has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version differs from the English version, the English version will control. |
18. | Executive should be aware that Executive may be entitled to revoke this Agreement and Executives acceptance of the grant of the Units pursuant to the Austrian Consumer Protection Act under the following conditions: (a) if Executive signs this Agreement outside of the business premises of Executives employer, Executive may be entitled to revoke the Agreement provided the revocation is made within one week of Executives acceptance; or (b) if circumstances relevant to Executives decision to enter into the Agreement, as presented by the Company, either do not materialize or materialize to a significantly reduced extent, through no fault of Executives, Executive may be entitled to revoke the Agreement. This revocation must be made within one week of the time that it is foreseeable that the circumstances mentioned above do not materialize or materialize at a significantly reduced extent. If Executive revokes under sections (a) or (b) listed above, the revocation must be in written form to be valid. It is sufficient if Executive returns this Agreement to the Company or the Companys representative with language which can be understood as Executives refusal to conclude or honor this Agreement. |
19. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executives termination of employment due to death, Disability or for an eligible reason under the Severance/Change in Control Policy applicable to members of the Companys Executive Committee 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 $ of operating income during the fiscal year ending December 31, 2010, as determined by the Committee based on the Companys 2010 annual financial statements. |
20. | Executive acknowledges that Executive has read the Companys Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Companys 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 Companys Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executives 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 Executives 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. |
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Hikmet Ersek |
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 Companys 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 the 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 fourth anniversary of the Grant Date, all restrictions on the Units shall lapse and the Shares subject to the Units 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 in Executives discretion. The four year period in which the Units may be forfeited by the Executive is defined as the Restricted Period. | |
Notwithstanding the foregoing provisions in this paragraph 3, you will forfeit all rights to the Units unless you accept 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 prior to the fourth anniversary of the Grant Date. 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. In addition, notwithstanding any other provision of the Plan or this Agreement, in order for the restrictions on the Units to lapse, you must execute and return to the Company or accept electronically an updated restrictive covenant agreement (and exhibits) if requested by the Company which may contain certain noncompete, nonsolicitation and/or nondisclosure provisions. Failure to execute or electronically accept such an agreement prior to vesting will cause the Units to continue to be subject to restriction. | ||
Prior to the issuance and transfer of Shares upon vesting, the Units will represent only an unfunded and unsecured obligation of the Company. Any Units that vest in accordance with paragraphs 3, 7 or 9 will be settled as soon as administratively practicable after vesting ( i.e., upon lapse of the restrictions on the Units). If at any time the Company determines, in its |
Career Shares Award (U.S.) | 1 |
discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental authority is necessary or desirable as a condition to the issuance and transfer of Shares to the Executive (or his or her estate), such issuance and transfer will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained. | ||
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 having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation, or (4) 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 Executives right to any unvested Units (and any associated dividend equivalents) if Executives 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 dies or incurs a Disability during a period of continuous employment with the Company or a Subsidiary or Affiliate during the Restricted Period, Executive shall immediately vest, as of the date of such termination of employment, in any then-unvested Units. Executive shall not vest in any unvested Units by reason of Retirement. | |
8. | Prior to the issuance and transfer of Shares upon vesting, Executive will be credited with amounts equal to the regular cash dividends that would be payable to Executive if Executive had been transferred such Shares, which amounts shall accrue during the Restricted Period and be paid in cash upon lapse of the Restricted Period; provided, however, that if the Company adopts a shareholder-wide dividend reinvestment program during the Restricted Period, the Committee may direct that Executive be credited with additional Restricted Stock Units equal to the dividends that would be payable with respect to the Shares on or after the date of adoption of such program if Executive had been transferred such Shares and which shall be subject to the same terms as this Agreement, with the increase in the number of Restricted Stock Units equal to |
Career Shares Award (U.S.) | 2 |
the number of Shares that could be purchased with the dividends based on the value of the Shares at the time such dividends are paid (in lieu of crediting Executive with any fractional Units, the Committee may direct that amounts equal to the fair market value of any such fractional Units accrue during the restricted period and be paid in cash upon lapse of the restrictions). This Paragraph 8 will not apply with respect to record dates for dividends occurring prior to the Grant Date or after the Restricted Period has lapsed. During the Restricted Period, Executive (and any person succeeding to Executives rights pursuant to the Plan) will not be a shareholder of record of the Shares underlying the Units and will have no voting or other shareholder rights with respect to such Shares. | ||
9. | If Executive is eligible to participate in the Severance/Change in Control Policy applicable to members of the Companys Executive Committee at the time of a Change in Control and Executives 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 any remaining restrictions applicable to the Units shall immediately lapse effective on the date of Executives 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 Executives 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 |
Career Shares Award (U.S.) | 3 |
Agreement to be construed as to foster the intent of this Agreement and the Plan. | ||
15. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executives termination of employment due to death, Disability or for an eligible reason under the Severance/Change in Control Policy applicable to members of the Companys Executive Committee 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 $ of operating income during the fiscal year ending December 31, 2010, as determined by the Committee based on the Companys 2010 annual financial statements. | |
16. | Executive acknowledges that Executive has read the Companys Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Companys 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 Companys Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executives 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 Executives 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. |
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:
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Signature:
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Printed Name: | |||||||
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Date:
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Career Shares Award (U.S.) | 4 |
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 Companys common stock (Shares), such grant contingent upon your acceptance of these terms and conditions and subject to the restrictions 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 the 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 fourth anniversary of the Grant Date, all restrictions on the Units shall lapse and the Shares subject to the Units shall be issued and transferred to Executive. Effective on and after such date, subject to applicable local laws and Company policies, Executive may hold, assign, pledge, sell, or transfer the Shares in Executives discretion. The four year period in which the Units may be forfeited by the Executive is defined as the Restricted Period. Notwithstanding the foregoing provisions in this paragraph 3, you will forfeit all rights to the Units unless you accept 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 prior to the fourth anniversary of the Grant Date. 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. | |
Prior to the issuance and transfer of Shares upon vesting, the Units will represent only an unfunded and unsecured obligation of the Company. Any Units that vest in accordance with paragraphs 3, 7 or 9 will be settled as soon as administratively practicable after vesting ( i.e., upon lapse of the restrictions on the Units). If at any time the Company determines, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any foreign, state or federal law, or the consent or approval of any governmental authority is necessary or desirable as a condition to the issuance and transfer of Shares to the Executive (or his or her estate), such issuance and transfer will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained. |
Career Shares Award (Austria) | 1 |
4. | Regardless of any action the Company or Executives employer 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), Executive acknowledges that the ultimate liability for all Tax Related Items legally due by Executive is and remains Executives responsibility and that the Company and/or Executives employer (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the Units, including the grant of the Units, the vesting of the Units, the conversion of the Units into Shares, the subsequent sale of any Shares acquired at vesting and the receipt of any dividends or dividend equivalents; and (ii) do not commit to structure the terms of the grant or any aspect of the Units to reduce or eliminate Executives liability for Tax Related Items. | |
Prior to the issuance and transfer of Shares upon vesting of the Units, Executive shall pay, or make adequate arrangements satisfactory to the Company or to Executives employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or Executives employer. In this regard, Executive authorizes the Company or Executives employer to withhold all applicable Tax Related Items legally payable by Executive from Executives wages or other cash compensation payable to Executive by the Company or Executives employer. Alternatively, or in addition, if permissible under local law, the Executive may elect to satisfy his obligations with respect to all applicable Tax Related Items by any of the following means: (1) making a cash payment to the Company or Executives employer, (2) authorizing the Company to sell Shares to be issued on vesting of the Units to satisfy such obligation, or (3) 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, equal to the amount necessary to satisfy any such obligation. Shares of common stock withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. Executive shall pay to the Company or to Executives employer any amount of Tax Related Items that the Company or Executives employer may be required to withhold as a result of Executives receipt of the Units, the vesting of the Units, or the conversion of the vested Units to Shares that cannot be satisfied by the means previously described. The Company may refuse to deliver Shares to the Executive if Executive fails to comply with Executives obligations in connection with the Tax Related Items as described herein. | ||
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 Executives right to any unvested Units (and any associated dividend equivalents) if Executives 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). |
Career Shares Award (Austria) | 2 |
7. | If Executive dies or incurs a Disability during a period of continuous employment with the Company or a Subsidiary or Affiliate during the Restricted Period, Executive shall immediately vest, as of the date of such termination of employment, in any then-unvested Units. Executive shall not vest in any unvested Units by reason of Retirement. | |
8. | Prior to the issuance and transfer of Shares upon vesting, Executive will be credited with amounts equal to the regular cash dividends that would be payable to Executive if Executive had been transferred such Shares, which amounts shall accrue during the Restricted Period and be paid in cash upon lapse of the Restricted Period; provided, however, that if the Company adopts a shareholder-wide dividend reinvestment program during the Restricted Period, the Committee may direct that Executive be credited with additional Restricted Stock Units equal to the dividends that would be payable with respect to the Shares on or after the date of adoption of such program if Executive had been transferred such Shares and which shall be subject to the same terms as this Agreement, with the increase in the number of Restricted Stock Units equal to the number of Shares that could be purchased with the dividends based on the value of the Shares at the time such dividends are paid (in lieu of crediting Executive with any fractional Units, the Committee may direct that amounts equal to the fair market value of any such fractional Units accrue during the restricted period and be paid in cash upon lapse of the restrictions). This Paragraph 8 will not apply with respect to record dates for dividends occurring prior to the Grant Date or after the Restricted Period has lapsed. During the Restricted Period, Executive (and any person succeeding to Executives rights pursuant to the Plan) will not be a shareholder of record of the Shares underlying the Units and will have no voting or other shareholder rights with respect to such Shares. | |
9. | If Executive is eligible to participate in the Severance/Change in Control Policy applicable to members of the Companys Executive Committee at the time of a Change in Control and Executives 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 any remaining restrictions applicable to the Units shall immediately lapse effective on the date of Executives 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 Executives 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 |
Career Shares Award (Austria) | 3 |
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 Company; (iv) Executives 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 Executives employer, and the Units are outside the scope of Executives 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 Executives employment by the Company or the Executives employer (for any reason whatsoever and whether or not in breach of local labor laws) and Executive irrevocably releases the Company and Executives 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 or her entitlement to pursue such claim; and (xii) in the event of involuntary termination of Executives employment (whether or not in breach of local labor laws), Executives right to receive the Units and vest under the Plan, if any, will terminate effective as of the date that Executive is no longer actively employed and will not be extended by any notice period mandated under local law ( e.g., active employment would not include a period of garden leave or similar period pursuant to local law); furthermore, in the event of involuntary termination of employment (whether or not in breach of local labor laws), Executives right to receive Shares pursuant to the Units after termination of employment, if any, will be measured by the date of termination of Executives active employment and will not be extended by a notice period mandated under local law; the Committee shall have the exclusive discretion to determine when the Executive is no longer actively employed for purposes of the award of the Units. |
Career Shares Award (Austria) | 4 |
\
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. | 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 Agreement by and among, as applicable, your employer, the Company and the Companys 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, and details of all equity awards to you under the Plan, 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 recipients country may have different data privacy laws and protection than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. 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, escrow agent or other third party with whom the Shares received upon vesting of the Units may be deposited. 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 refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to receive a transfer of Shares following the expiration of the Restricted Period. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative. | ||
15. | The Company may, in its sole discretion, decide to deliver any documents related to the Units awarded under the Plan or future Units that may be awarded under the Plan by electronic means or request Executives consent to participate in the Plan by electronic means. Executive hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. |
Career Shares Award (Austria) | 5 |
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. | If Executive has received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version differs from the English version, the English version will control. | |
18. | Executive should be aware that Executive may be entitled to revoke this Agreement and Executives acceptance of the grant of the Units pursuant to the Austrian Consumer Protection Act under the following conditions: (a) if Executive signs this Agreement outside of the business premises of Executives employer, Executive may be entitled to revoke the Agreement provided the revocation is made within one week of Executives acceptance; or (b) if circumstances relevant to Executives decision to enter into the Agreement, as presented by the Company, either do not materialize or materialize to a significantly reduced extent, through no fault of Executives, Executive may be entitled to revoke the Agreement. This revocation must be made within one week of the time that it is foreseeable that the circumstances mentioned above do not materialize or materialize at a significantly reduced extent. If Executive revokes under sections (a) or (b) listed above, the revocation must be in written form to be valid. It is sufficient if Executive returns this Agreement to the Company or the Companys representative with language which can be understood as Executives refusal to conclude or honor this Agreement. | |
19. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executives termination of employment due to death, Disability or for an eligible reason under the Severance/Change in Control Policy applicable to members of the Companys Executive Committee 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 $ of operating income during the fiscal year ending December 31, 2010, as determined by the Committee based on the Companys 2010 annual financial statements. | |
20. | Executive acknowledges that Executive has read the Companys Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Companys 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 Companys Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executives misconduct or fraud and that compensation should be recovered |
Career Shares Award (Austria) | 6 |
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 Executives 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. |
Career Shares Award (Austria) | 7 |
By:
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Title:
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Hikmet Ersek
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Career Shares Award (Austria) | 8 |
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 Companys 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 the 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 fourth anniversary of the Grant Date, all restrictions on the Units shall lapse and the Shares subject to the Units 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 in Executives discretion. The four year period in which the Units may be forfeited by the Executive is defined as the Restricted Period. | |
Notwithstanding the foregoing provisions in this paragraph 3, you will forfeit all rights to the Units unless you accept 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 prior to the fourth anniversary of the Grant Date. 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. In addition, notwithstanding any other provision of the Plan or this Agreement, in order for the restrictions on the Units to lapse, you must execute and return to the Company or accept electronically an updated restrictive covenant agreement (and exhibits) if requested by the Company which may contain certain noncompete, nonsolicitation and/or nondisclosure provisions. Failure to execute or electronically accept such an agreement prior to vesting will cause the Units to continue to be subject to restriction. | ||
Prior to the issuance and transfer of Shares upon vesting, the Units will represent only an unfunded and unsecured obligation of the Company. Any Units that vest in accordance with paragraphs 3, 6, 7 or 9 will be settled as soon as administratively practicable after vesting ( i.e., upon lapse of the restrictions on the Units). If at any time the Company determines, in its |
Career Shares Award (U.S.) Stockdale | 1 |
discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental authority is necessary or desirable as a condition to the issuance and transfer of Shares to the Executive (or his estate), such issuance and transfer will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained. | ||
4. | Executive may elect to satisfy his 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, or (4) 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 Executives right to any unvested Units (and any associated dividend equivalents) if Executives 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); provided that, subject to the Committees certification that the performance goal specified in paragraph 15 has been achieved, if Executives employment with the Company or a Subsidiary or Affiliate is involuntarily terminated by Executives employer without Cause during the Restricted Period, then the Units (and any associated dividend equivalents) shall vest in full on the later of the date the Committee certifies that the performance goal specified in paragraph 15 has been achieved or the date on which Executives employment terminates. | |
7. | If Executive dies or incurs a Disability during a period of continuous employment with the Company or a Subsidiary or Affiliate during the Restricted Period, Executive shall immediately vest, as of the date of such termination of employment, in any then-unvested Units (and any associated dividend equivalents). Executive shall not vest in any unvested Units by reason of Retirement. | |
8. | Prior to the issuance and transfer of Shares upon vesting, Executive will be credited with amounts equal to the regular cash dividends that would be payable to Executive if Executive had |
Career Shares Award (U.S.) Stockdale | 2 |
been transferred such Shares, which amounts shall accrue during the Restricted Period and be paid in cash upon lapse of the Restricted Period; provided, however, that if the Company adopts a shareholder-wide dividend reinvestment program during the Restricted Period, the Committee may direct that Executive be credited with additional Restricted Stock Units equal to the dividends that would be payable with respect to the Shares on or after the date of adoption of such program if Executive had been transferred such Shares and which shall be subject to the same terms as this Agreement, with the increase in the number of Restricted Stock Units equal to the number of Shares that could be purchased with the dividends based on the value of the Shares at the time such dividends are paid (in lieu of crediting Executive with any fractional Units, the Committee may direct that amounts equal to the fair market value of any such fractional Units accrue during the restricted period and be paid in cash upon lapse of the restrictions). This paragraph 8 will not apply with respect to record dates for dividends occurring prior to the Grant Date or after the Restricted Period has lapsed. During the Restricted Period, Executive (and any person succeeding to Executives rights pursuant to the Plan) will not be a shareholder of record of the Shares underlying the Units and will have no voting or other shareholder rights with respect to such Shares. | ||
9. | If Executive is eligible to participate in the Severance/Change in Control Policy applicable to members of the Companys Executive Committee at the time of a Change in Control and Executives 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 any remaining restrictions applicable to the Units (and any associated dividend equivalents) shall immediately lapse effective on the date of Executives 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 Executives 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 |
Career Shares Award (U.S.) Stockdale | 3 |
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. | Notwithstanding any other provision of the Plan or this Agreement, except as otherwise provided in the case of Executives termination of employment due to death, Disability or for an eligible reason under the Severance/Change in Control Policy applicable to members of the Companys Executive Committee 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 $10 million of operating income during the fiscal year ending December 31, 2010, as determined by the Committee based on the Companys 2010 annual financial statements. | |
16. | Executive acknowledges that Executive has read the Companys Clawback Policy. In consideration of the grant of the Units, Executive agrees to abide by the Companys 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 Companys Clawback Policy) received by or paid to Executive resulted from any financial result or performance metric that was impacted by Executives 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 Executives 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. |
Career Shares Award (U.S.) Stockdale | 4 |
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:
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Signature: | Printed Name: | |||||||||
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Date:
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Career Shares Award (U.S.) Stockdale | 5 |
2010 Grants | Exhibit 10.33 |
Grant Date:
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[Insert Date] | |
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Maximum Award:
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___% of the pool established through which the Performance Grant Awards will be funded (the Performance Grant Funding Pool) | |
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Performance Period:
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January 1, 2010 December 31, 2011 | |
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Performance Grant Funding Pool:
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0.5% of Combined Consolidated Operating Income for fiscal years 2010 and 2011 | |
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Vesting Date:
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December 31, 2012 |
THE WESTERN UNION COMPANY, | ||||||||
a Delaware corporation | ||||||||
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By: | |||||||
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Name: |
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Title: | |||||||
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2010 Grants |
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3
4
5
2010 Incentive Awards | Exhibit 10.34 |
Maximum Award:
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___% of the Incentive Pool | |
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Target Award:
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[ ] | |
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Performance Period:
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January 1, 2010 December 31, 2010 | |
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Incentive Pool:
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3.0% of Operating Income for fiscal year 2010 | |
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Vesting Date:
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December 31, 2010 |
THE WESTERN UNION COMPANY, | ||||||||
a Delaware corporation | ||||||||
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By: | |||||||
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Name: |
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Title: | |||||||
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2010 Incentive Awards |
2
3
1. | APPOINTMENT/TERM OF AGREEMENT | |
1.1 | The term of your expatriate assignment as COO of The Western Union Company pursuant to this Agreement begins on 1 January 2010, in accordance with the clauses and conditions listed in this Agreement. You will continue to receive service credit from the Company for the time you have spent with any Group Company and will be entitled to all applicable rights under the laws of Austria. | |
You have been appointed to the position as a managing director (Geschäftsührer) of the Company as a matter of Austrian corporate law by a shareholders resolution as of 4 November 2009. | ||
Upon the termination or expiry of the Expatriate Agreement your function as COO will also terminate. If this Agreement is not also terminated, you will continue to be Managing Director of the Company, and the parties will attempt to identify a role for you that is mutually acceptable. | ||
In the event the Board approves your appointment to the position of Chief Executive Officer of The Western Union Company and you accept such position, you agree that the expatriate assignment shall immediately end under the Expatriate Agreement, that you will give notice of immediate termination of this Agreement and that you will become employed by Western Union, LLC (or another U.S. subsidiary of The Western Union Company) and be based in the U.S. | ||
1.2 | You accept that you are being employed in accordance with the clauses and terms set forth in this Agreement, and officially state that you are not employed by any other company and that you are free of any commitment to any other employer. You agree that you are responsible for any work or employment dispute arising from a breach in this regard. |
1.3 | You agree to perform any functions and duties related to your position and pursuant to the Companys instruction and to attend training courses when required to do so by the Company. | |
Your rights, obligations and powers as Managing Director are set forth by law, the Companys articles of association, the resolutions of the shareholders of the Company, the organization chart, the internal rules of procedure for the managing board, the Act on White Collar Workers (Angestelltengesetz) and this Agreement. | ||
As Managing Director you shall fully and faithfully carry out all directions and instructions given to you by the Company. You shall regularly and at all times upon request, report to the shareholders of the Company and the Chief Executive Officer of The Western Union Company. | ||
As Managing Director you shall have signing power together with the other Managing Directors. | ||
You agree to comply with the Companys decision should it determine it necessary or appropriate to change your job title, reporting relationships, job duties and responsibilities, the legal entity which employs you and the jurisdiction where you are expected to perform your duties (despite your residence) on the basis of your performance or the Companys business requirements. Any such change will not be deemed to violate the terms of this Agreement or constitute any basis for constructive or involuntary termination of employment, provided that your base salary is not reduced and your other remuneration for services rendered to the company is not substantially reduced. | ||
1.4 | The Company may, in its discretion, second your services to another company in the Companys related group of companies (Group Companies, see 1.8 below), During the term of the Expatriate Agreement, your normal place of work will be Englewood, Colorado U.S.A. and you shall be called to work at that place on all days devoted to business, except for travel for professional reasons or as otherwise provided in the Expatriate Agreement during the term of the expatriate assignment. You expressly agree and accept that your workplace may be changed or transferred. In addition, you expressly agree and accept that you may be required to travel worldwide on the Companys business and to work in other countries in the proper performance of your duties or as the Company may reasonably direct, at no extra pay or remuneration. The Company will, insofar as is reasonably possible, undertake to obtain all necessary work permits, visas and permission to enable you to work in such places as you may be required to work. | |
1.5 | The Company will have the right to unilaterally change the scope of your duties, taking into account you qualifications, so long as such change is reasonable for you. Furthermore, the Company shall have the right to assign unilaterally its rights, interests and privileges in this Agreement to Group Companies. You consent to any future or subsequent transfer of your employment to Group Companies. | |
1.6 | For purposes of this Agreement, Group Companies means the Company, its ultimate parent, The Western Union Company, and any Affiliate of the Company or The Western Union Company. | |
1.7 | Affiliate means a person that directly, or indirectly through one of more intermediaries, owns or controls, is owned or is controlled by, or is under common ownership or control with, another person. As used in this clause, control means the power to direct the management or affairs of a person, and ownership means the beneficial ownership of at least 5% of the voting securities of the person. The Western Union Company shall be deemed to control any settlement network in which it has any equity ownership. As used in this clause, person means any corporation, limited or general partnership, limited liability company, joint venture, association, organization or other entity. |
2. | REMUNERATION | |
2.1 | For giving your entire time and attention to the work assigned to you, you shall receive a basic annual salary of 600,000 subject to the approval of the Compensation Committee, Such annual basic salary shall be payable in 14 equal partial amounts, 12 of which shall be payable at the beginning of each calendar month and the remaining two at such times as corresponds to the Companys normal payroll practices, in each case net of all the deductions or withholdings authorized or required by law. | |
2.2 | You are entitled to a company car, or alternatively a car allowance, in accordance with Western Unions Car Policy as amended from time to time. The company car is available to you also for private use. The private use is a benefit in kind and is taxable to you according to local tax law. This benefit may be changed into a car allowance in the future at Western Unions discretion Any relevant income taxes relating to the benefit of the car shall be borne by you. | |
Upon termination of the Agreement you shall return to the Company promptly and without separate request the company car and all pertinent documents, keys and other accessories, at the latest at the end of the employment relationship. In the event of release from the obligation to work, the Company can revoke the entitlement to private use of the company car as of the date of the release and you shall return the company car and all pertinent documents, keys and other accessories within 14 days after revocation. There shall be no right of retention. | ||
The parties acknowledge that you are a managing employee (leitender Angestellter) within the meaning of the Austrian Working Hours Act Arbeitszeitgesetz and thus are not subject to the provisions of that Act (Arbeitszeitgesetz, § 1 Abs 2 Z 8). You understand that your remuneration includes any overtime required of you in the course of your duties and responsibilities by virtue of this Agreement. You agree that you may not claim remuneration for that overtime (if any) subject to applicable law, as the fixed salary as set out above and the bonus set out under section 3 and all possible further payments cover all work provided by you, including work on Saturdays, Sundays and Public Holidays as well as night-work and travel times. | ||
2.3 | In consideration of changes in the cost-of-living index (consumer price index), your performance and the operational situation of the Company, the Company may adjust your remuneration on an annual basis at the discretion of the Company, subject to the approval of the Compensation Committee. | |
2.4 | The Company is registered with the relevant Austrian local Social Security Authority (Gebietskrankenkasse), according to the requirements of applicable law. | |
2.5 | In consequence of your entry date at Western Union, your employment will continue to be subject to the severance payment regimes as set forth in sections 23 et seq. of the Austrian White Collar Employees Act (Angestelltengesetz); you will therefore not participate in any company provision fund (betriebliche Vorsorgekasse) arrangement | |
3. | INCENTIVE BONUS (NON-SALARY) | |
3.1 | You will continue to be eligible to participate in the Senior Executive Annual Incentive Plan (Plan). This Plan provides you with an opportunity to earn an incentive bonus upon the attainment of annual corporate, business unit/division, and individual performance goals. Pursuant to the Plan, you may, but are not guaranteed to, receive additional payments in an amount to be determined by the Compensation Committee in its sole discretion, in addition to your base salary, if all Plan criteria are satisfied and if specified levels of corporate, business unit/division, and individual performance on an annual basis are attained. You acknowledge the discretionary character of such payments, in particular that such payments are determined by the Compensation Committee in its sole discretion and are also contingent upon attainment of specified levels of corporate, business unit/division, and individual performance on an annual basis. You furthermore acknowledge that eligibility for any such payments is contingent upon |
you executing an acknowledgement and acceptance of the terms and conditions applicable to your participation in the Plan if requested by the Company. You acknowledge that participation in the Plan during any one year confers no rights upon you or any obligations on the Company to continue the Plan, or to make any payments of any kind, in succeeding years, and you renounce any claim that any repetition of any such payments, even if the repeated payments are in the same or similar amount as in the previous year, gives you the right to claim the payment of such amount or to any payment whatsoever in any succeeding year. You acknowledge that any payments made to you under the Plan will be made by the Company and not The Western Union Company and that your participation in the Plan does not establish or imply an employment relationship between you and The Western Union Company. You will be provided detailed written information about the Plan, including the terms and conditions applicable to your participation therein | ||
3.2 | Your target incentive bonus under the Plan, if any, is determined by the Compensation Committee in its sole discretion and may change from year to year in the Compensation Committees sole discretion. | |
3.3 | As the amount of the incentive bonus under the Plan is contingent upon annual corporate, business unit/division, and individual performance, the final bonus amount, if any, is determined after the end of the respective calendar year and after relevant figures have become available. Payment of the incentive bonus, if any, will be made to you in the first quarter of the following year (e.g. the 2010 Plan payment, if any, will be made in the first quarter of the 2011 calendar year). | |
3.4 | The voluntary, non-binding character of the possible remuneration described in this section, which can be cancelled at any time, is understood by both parties. You acknowledge the voluntary character of such remuneration and hereby explicitly waive any entitlement of receiving any remuneration in the future. | |
3.5 | You acknowledge that Plan payments are not provided with the character of salary and are excluded from the definition of salary, integrated salary or acquired rights subject to the requirements of applicable law. | |
4. | LONG-TERM INCENTIVE (NON-SALARY) | |
4.1 | The Company may, from time to time, recommend to the Compensation Committee that you be considered for trie grant of long-term incentive awards under The Western Union Companys Long-Term Incentive Plan (LTIP). Such awards may include options to purchase shares of the common stock of The Western Union Company, the grant of restricted stock units applicable to such common stock, and/or the grant of cash-based performance awards. These grants require the approval of the Compensation Committee and the acceptance by you of the terms and conditions of each grant. All your rights and obligations with respect to any stock options, restricted stock units, cash-based performance awards or other LTIP awards granted to you are subject to the terms and conditions of the LTIP as well as the terms and conditions of the applicable award agreements. | |
4.2 | There is no guarantee or promise that any future LTIP awards will be made or recommended. You understand the discretionary character of any grant under the LTIP and understand that any repetition of any such grants, even if the repeated grants are in the same or similar amount as in a previous year, do not give you any right or claim to any grant whatsoever in any succeeding year. You acknowledge that any grant made under the LTIP does not create any contractual right to receive future grants or any benefits in lieu of LTIP grants, and that your participation in the LTIP does not establish or imply an employment relationship between you and The Western Union Company. You further acknowledge that in accepting any such grant you may be subject to certain tax and exchange control regulations, and that it is your individual responsibility to comply with any regulations as a result of your acceptance of any grant under the LTIP. | |
4.3 | The voluntary, non-binding character of the possible remuneration described in this section, which can be cancelled at any time, is understood by both parties. You acknowledge the voluntary character of such |
remuneration and hereby explicitly waive any entitlement of receiving any remuneration in the future. | ||
4.4 | You acknowledge that LTIP awards are not provided with the character of salary and are excluded from the definition of salary, integrated salary or acquired rights subject to the requirements of applicable law. | |
5. | BENEFITS |
6. | ANNUAL LEAVE, SICK LEAVE AND HOLIDAYS | |
6.1 | You will be entitled to the full paid vacation as established by applicable law and related to your years of employment. The length of your employment with the Company, and your time employed with any of the Group Companies counts towards your years of service. Such combination of length of your employment is credited solely for the purpose of calculating your length of annual leave. Only your employment with the Company is taken into account for purposes of any pension or severance calculation, subject to the requirements of applicable law. | |
6.2 | Annual leave not used during the year in which it has been accrued may be carried forward for use during the succeeding two years. Any such carried-forward leave that is not used in the immediately succeeding two years will be cancelled. You will not be entitled to any payment in lieu of cancelled or unused annual leave. | |
6.3 | Any current or future benefits exceeding the benefits provided for in this Agreement are granted voluntarily and may be revoked and/or changed unilaterally by Western Union at any time; the granting of such benefits, if any, even if it were to occur more than one time, does not give rise to any entitlement to such benefits for future periods. | |
6.4 | Your entitlement to statutory public holidays, sick leave and other leaves of absence shall be according to the Companys policies, work rules and subject to the requirement of applicable law, provided that public holidays will be observed in accordance with Western Union business practices. | |
7. | FULL TIME WORK | |
7.1 | During the term of the Expatriate Agreement, you will observe the work schedule in effect at your place of assignment. Normal working hours of your employment will be at least 40 hours per week. From time to time, you may be required by the Company or by the nature of the work assigned to you to work beyond these normal working hours or overtime as may be necessary and reasonable in the proper performance of your duties. As a managerial employee who is authorised or delegated by the Company to hire employees, give other benefits to employees, reduce other employees wages, or terminate other employees employment, you are not subject to the Austrian Working Hours Act (sec. 1 para 2 subpara 8 of the Austrian Working Hours Act, Arbeitszeitgesetz) and thus not entitled to any extra pay or remuneration for working beyond normal working hours or overtime. | |
You should make yourself available to the Company at any time if the demands of the business so require. |
7.2 | Except as otherwise provided in the Expatriate Agreement during the term of the expatriate assignment and such other perquisites as are in place for other similarly situated executives, you are not entitled to any pay, perquisites, or benefits other than as set forth above or as regulated in the agreement in place between you and the Company for your participation in the Companys pension fund scheme (Pensionskassenzusage), or the agreements reflecting outstanding long-term incentive awards granted to you under the applicable long-term incentive plans, all of which shall continue to apply unchanged. | |
8. | OTHER ACTIVITIES OF EMPLOYEE | |
8.1 | For purposes of this Section 8, Company and its Group Companies are referred to as the Company. During the term of your employment under this Agreement, you acknowledge that you shall devote your time to work for the Company and shall accept no other work, whether compensated or not, directly or indirectly (whether in the form of cash or a non-cash benefit), without receiving prior written permission, if that other work involves working during Company work hours, using Company facilities or equipment, and/or if such activity might interfere with the interests of the Company, impair your performance of your employment duties for the Company, the reputation of the Company, or conflict with The Western Union Company Code of Conduct. Nor shall you perform services or engage in activities, in any capacity, whether compensated or not, directly or indirectly, with or for any person or entity in competition with the businesses of the Company, without receiving prior written permission. | |
8.2 | Therefore, you may not operate an independent commercial business or trade for your own or anothers benefit in Western Unions line of business, unless you have received the written permission of The Board of Directors of The Western Union Company. Notwithstanding this provision 8.2, you are entitled to hold not more than five percent (5%) of the issued shares of a company, the shares of which are listed on a recognized stock exchange even if such company carries on a competitive business. | |
8.3 | If you violate any obligations in this section 8, in addition to any and all other of its rights, Western Union may claim compensation for damages suffered by the violation or, alternatively, may require that any transactions made for your benefit be treated as made for Western Unions benefit. With respect to transactions made for the benefit of others, Western Union may demand that you surrender any compensation that you have received for such transactions or that you assign to Western Union your claim(s) to any compensation for such transactions. Western Unions exercise or failure to exercise any of the rights set forth in this section will not affect Western Unions right to dismiss your employment for violation of the non-compete obligation. | |
8.4 | You agree to afford Western Union your full capacity of work. | |
9. | USE OF SOFTWARE/TOOLS AND COMMUNICATIONS | |
9.1 | If you have recourse to documents, correspondence, software, software package and materials, either handwritten or computerized, or more generally all means of communication, in particular Internet or Intranet, you agree to use such tools for professional purposes only and not to take copies or reproduce such tools for your personal use or for any other use. You shall take care of these tools and must inform Western Union in case of any deterioration, loss or theft, and will comply with Western Unions rules relating to the installation and use of such tools as applicable within Western Union. | |
9.2 | You acknowledge that the Companys local and wide area network infrastructure and its telecommunications system and its components, including for example telephones, facsimile machines, photocopiers, printers, personal organizers, palmtops, Blackberries, computers and servers, as well as the applications running on and services provided by these systems including e-mail and voicemail, Internet and Intranet, and file storage facilities (IT systems) and all oral communications, telephone conversations, information and messages or any part of a message (whether in the form of data, texts, images, speech or any other form) transferred via and/or stored on the IT systems, including any |
obligations or violate applicable laws or Company policy. You further agree that the covenants in this Agreement are reasonable and necessary to protect the Companys legitimate business interests in its customer relationships, Trade Secrets, Confidential Information, and Third Party Information. | ||
Therefore, you agree to observe the non-disclosure obligation as set out in this Section 11. | ||
11.3 | Company Trade Secrets includes but is not limited to the following: |
11.4 | Company Confidential Information means any data or information and documentation, other than Trade Secrets, which is valuable to the Company and not generally known to the public, including but not limited to: |
11.5 | Third Party Information means any data or information of the Companys customers, suppliers, consumers or employees that the Company is prohibited by law, contract or Company policy from disclosing. By way of example such information includes but is not limited to: |
11.6 | You agree that for so long as the pertinent information or documentation remains a Trade Secret, you will not use, disclose, or disseminate to any other person, organization, or entity or otherwise employ any Trade Secrets. You further agree that during your employment and after the cessation of your employment with the Company, you will not use, disclose, or disseminate to any other person, organization, or entity or otherwise employ any Confidential Information. The obligations set forth herein shall not apply to any Trade Secrets or Confidential Information which shall have become generally known to competitors of the Company through no act or omission of yourself. | |
11.7 | You agree that for so long as the pertinent information or documentation is subject to protection under Company nondisclosure obligations, policy or applicable law, but in any event not less than two (2) years after the cessation of your employment with the Company, you will not use, disclose, or disseminate to any other person, organization, or entity or otherwise employ any Third Party Information. | |
11.8 | Upon cessation of your employment with the Company or at any time the Company requests, you agree to return all Third Party Information as well as Company materials and Trade Secrets and Confidential Information, and all copies thereof (including without limitation, all memoranda and notes containing the names, addresses, and needs of the Companys customers and prospective customers) in your possession or over which you exercise control, and regardless of whether such materials were prepared by the Company, you, or a third party. | |
11.9 | Any breach or failure to observe this condition may subject you to immediate dismissal without compensation or severance payment, subject to the requirements of the applicable law. The Company will have the right to take other appropriate legal actions before or after that dismissal. | |
11.10 | Should you be required by law, regulation or court order to disclose any information you are not required to disclose under this condition, you should notify the Company prior to making such disclosure in order to allow the Company to seek a protective order or other appropriate remedy from the proper authority. You agree to cooperate with the Company in seeking such court order or other remedy, and further agree that if the Company is not successful in obtaining such court order, you shall furnish only that portion of the information that is legally required and shall exercise all reasonable efforts to obtain reliable assurances that confidential treatment will be accorded the information disclosed. | |
11.11 | Your obligations under this Section 11 survive termination of your employment relationship with the Company. | |
12. | PROCESSING AND USE OF EMPLOYEE INFORMATION |
13. | CODE OF CONDUCT AND POLICIES | |
13.1 | You agree that you are bound by the provisions of The Western Union Companys Code of Conduct (Code of Conduct) and other rules, regulations and policies, as that Code of Conduct and those rules, regulations and policies may be amended from time to time. You acknowledge that it shall be your duty to know and understand this Code of Conduct and, in the course of your employment, any change in this Code of Conduct and any other policies, which you may access through Western Unions employee-only intranet website. | |
13.2 | You also agree to perform all aspects of your job in accordance with law, to strictly follow all workplace safety rules, to protect the property of the Company, to maintain the highest standards of personal and professional ethics, to actively participate in training arranged by the Company, and to continue to develop and improve your professional skills. | |
13.3 | You further acknowledge that Western Union may take action in case of a violation of any of the provisions contained in the Code of Conduct and other rules, regulations and policies, including immediate dismissal of your employment. | |
14. | TAX LIABILITIES |
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equivalent to 6 months, unless Austrian mandatory law provides for a longer notice period
for termination by the Company (in which case such longer notice period applies also to you).
This notice period shall not apply in the event you terminate this Agreement as a result of
your appointment to the position of Chief Executive Officer of The Western Union Company.
15.4
If the Company decides to terminate this Agreement without just cause being given prior to
the expiry date, the Company shall observe a notice period equivalent to 6 months or longer if
required as a matter of mandatory Austrian law.
15.5
Should this Agreement be terminated by giving notice either from you or the Company, and the
Company will grant you leave for the rest of the notice period, or for any part of such
period, you explicitly consent that you will consume your remaining days of vacation, if any,
within such period of leave, provided that doing so is possible and reasonable.
15.6
Upon termination of employment, and without need of further notice or demand, you shall
immediately transfer and deliver to the Company any property of the Company, and its Group
Companies which may be in your possession, custody or under your control including, without
limitation, all papers, documents, notes, memoranda, records and writings, in whatever form or
stored in whatever media, which in any way relate to the business of the Company and its Group
Companies and/or to the business of the clients of the Company and its Group Companies
together with all extracts or copies thereof.
15.7
Should you have unpaid or pending obligations to the Company, monetary or otherwise, upon the
termination of your employment for any reason or cause, you expressly agree and authorize the
Company to make the necessary deductions from the salary, bonuses and any other amounts or
benefits that may be due to you, to effect settlement or payment of your unpaid or pending
obligations. This is without prejudice to the right of the Company to effect settlement or
payment of your obligations through other legal means should the salary, bonuses and any other
amounts or benefits due to you be insufficient to cover your unpaid or pending obligations.
16.
NON-SOLICITATION
16.1
NON-SOLICATION OF CUSTOMERS
16.1.1
You agree that while employed by the Company, or at a Group Company (if applicable) (for
section 16, the Company and any applicable Group Company shall be referred to as the Company),
you have had and will have contact with and has become and will become aware of the Companys
customers and the representatives of those customers, their names and addresses, specific
customer needs and requirements, and leads and references to prospective customers, and that
you have benefited and added and will continue to benefit and add to the Companys goodwill
with its customers and in the marketplace generally. You further agree that loss of such
customers will cause the Company significant and irreparable harm.
16.1.2
Accordingly, you agree that, for twelve (12) months after the cessation of your employment
with the Company, you will not solicit, contact, call upon, accept orders from, or attempt to
communicate with any customer or prospective customer of the Company for the purpose of
providing any products or services substantially similar to those you provided while employed
with the Company. This restriction shall apply only to any customer or prospective customer of
the Company with whom you had contact or about whom you learned Trade Secrets or Confidential
Information, during the last twenty-four (24) months of your employment with the Company. For
the purpose of this section, contact means interaction between you and the customer or
prospective customer which takes place to further the business relationship, or making sales
to or performing services for the customer or prospective customer on behalf of the Company.
16.2. | NON-SOLICITATION OF EMPLOYEES AND OTHERS. | |
16.2.1 | You acknowledge and agree that solely as a result of employment with the Company, you have and will come into contact with and have acquired and will acquire Trade Secrets or Confidential Information regarding some, most, or all of the Companys employees, consultants, contractors, or agents (for purposes of this section, collectively referred to as worker). | |
16.2.2 | Accordingly, both during employment with the Company and for twelve (12) months after the cessation of employment with the Company, you will not recruit, hire, or attempt to recruit or hire, directly or by assisting others, any other worker of the Company with whom you had contact or about whom you learned Trade Secrets or Confidential Information during your last twenty-four (24) months of employment with the Company. For the purposes of this section, contact means any business-related interaction between you and the other worker. | |
17. | NON-COMPETITION |
17.1 | In the event of termination of your employment with the Company occurring for any reason whatsoever except if (i) you terminate with just cause being given, or (ii) the Company terminates without you having given cause to do so and without undertaking to continue to pay your remuneration according to Section 2 above for the period set forth in Paragraph (c) below, you hereby undertake not to enter into the service of a company studying, manufacturing or selling (including wholesale and retail) products or services that are identical or similar to those that are studied, manufactured or sold by the Company, or which are intended to provide the same or comparable benefits to the purchasers of such products or services in any countries or regions, including but not limited to Vienna and Austria. You agree that you shall refrain from taking a direct or indirect interest, in any form whatsoever, including in particular through consultancy work or acquisition of shareholding (except for current stock exchange transactions) in an activity of this type, be it in existence or in the process of creation. | |
17.2 | You agree that this obligation of non-competition applies to Vienna and Austria as well as to the other countries in which you may have performed your duties during your work within the Company. Should you so desire, the list of countries in which you may have performed your duties during your work within the Company will be given to you, within 12 business days following receipt of such request. | |
17.3 | This non-competition covenant is for the duration of TWELVE MONTHS as from the effective date of termination of this Agreement. | |
17.4 | During the non-competition period, you undertake to communicate to the Company, if the latter so requests, the name and address of your new employer. The Company reserves the right to inform the new employer of the existence and contents of the present non-competition clause. You agree that you shall inform the latter of the present non-competition clause prior to entering into any commitment. | |
17.5 | Upon termination of this Agreement and if this non-competition covenant is still in force at this time, you hereby agree that this special provision be included in any work certificate that will be given to you. |
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18.
INDEMNIFICATION AND CLAWBACK
18.1
You agree to indemnify and hold all Group Companies harmless from all losses,
liabilities, claims and damages (including lawyers fees) which may arise out of or as a
result of any of your unauthorized act or any act caused by you in contravention of this
Agreement.
18.2
Any payment according to the provision in this Agreement shall be without prejudice to the
right the Company expressly reserves to engage proceedings against you in reparation for the
financial and moral damage actually suffered by any Group Company.
18.3
You acknowledge that you have read The Western Union Companys Clawback Policy (the
Clawback Policy). In consideration of the various elements of Incentive Compensation (as
defined in the Clawback Policy) awarded or granted to you, you agree to abide by the Clawback
Policy and any determinations of the Board pursuant to the Clawback Policy. You acknowledge
that the Board shall have full discretion to make such determinations. 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 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 therefore be recovered from you (such
amount to be recovered, the Clawbacked Compensation), then upon such determination, the
Company or The Western Union Company (acting through the Board) may recover such Clawbacked
Compensation by any suitable remedy determined by the Board. The foregoing right to recover
certain elements of compensation shall be separate from any other relief available to the
Company or The Western Union 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.
19.
EXECUTION AND LANGUAGE OF AGREEMENT
19.1
This Agreement is executed in two originals, with each party to retain one original.
19.2
If there is any translation of this Agreement to other languages, the English version shall
govern.
19.3
This Agreement may be executed in any number of counterparts, which shall together constitute
one agreement. Any party may enter into this Agreement by signing any such counterpart, but
this Agreement shall not be effective until each party has executed at least one counterpart.
20.
SEVERABILITY
20.1
In the event that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be invalid, illegal, unenforceable or void by any court of competent
jurisdiction, this Agreement shall continue in full force and effect without said provision;
provided that the Company reserves the right to determine whether such severability shall be
effective if it materially changes the benefit of this Agreement to the Company. Such holding
shall not invalidate or render unenforceable any other provision hereof.
20.2
Without limiting the generality of 20.1, each provision of the non-disclosure,
non-solicitation and non-compete undertakings set out in 11, 16 and 17 shall, notwithstanding
the manner in which it has been grouped with or grammatically linked to the others, be
construed as imposing a separate and an independent obligation, severable from the rest of
them. Without limiting the foregoing
20.2.1
the non-disclosure undertakings in terms of 11 shall be severable in respect
of
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every month of period for which the confidentiality undertakings are stipulated to be
applicable;
every category of Trade Secrets, Confidential Information and Third Party
Information;
20.2.2
the non-solicitation undertakings in 16 shall be severable in respect of
each of 16.1 and 16.2 and;
each month of the non-solicitation period;
every activity in which you are prohibited from acting;
every capacity in which you are prohibited from acting;
each category of customer;
each category of employee;
20.2.3
the non-compete undertakings in 17 shall be severable in respect of
each month of the non-competition period;
every locality falling within the prescribed area;
every capacity and activity in which you are prohibited from acting;
20.3
The non-disclosure, non-solicitation and non-compete undertakings set out in 11, 16 and 17
are stipulations for the benefit of the Group Companies and the Company and their respective
successors-in-title and assigns, which shall be entitled to elect whether to exercise their /
its rights hereunder or not. By signing this Agreement the Company accepts the benefits on
behalf of each such person. Such acceptance by the Company constitutes a separate acceptance
on behalf of each such person for the time being and, to the extent that such acceptance may
not constitute valid acceptance on behalf of such person, that person may accept such benefits
in the future by giving written notice to that effect to you.
20.4
The failure by the Group Companies and the Company or any of their successors-in-title or
assigns to exercise any of its rights in terms of the foregoing non-disclosure,
non-solicitation and non-complete undertakings; or
succeed in any proceedings instated by it to enforce any of its rights in terms of the
foregoing non-disclosure, non-solicitation and non-complete undertakings;
shall not preclude the Group Companies and the Company or any of their respective
successors-in-title and assigns from exercising any such rights in consequence of any
subsequent breach by you or of any subsequent decision of any court, as the case may be.
20.5
Should the non-disclosure, non-solicitation and non-compete undertakings set out in 11, 16
and 17 or part thereof be found by any competent court to be defective or unenforceable for
any reason whatever, the remaining provisions of 11, 16 and 17 shall continue to be of full
force and effect.
20.6 | Notwithstanding anything set out in this 20, the undertakings set out in 17 shall not be enforceable against you only in the following circumstances |
21. | SURVIVAL |
23. | GOVERNING LAW AND JURISDICTION | |
23.1 | The execution, interpretation and enforcement of this Agreement and the respective rights and obligations of the parties shall be governed and construed in accordance with the laws of Austria. | |
23.2 | Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as present in force. The appointing authority shall be the Secretary General of the International Arbitral Centre of the Austrian Federal Economic Chamber. The number of arbitrators shall be three. The place of arbitration shall be Vienna. The language to be used in the arbitral proceedings shall be English. |
24. | SUCCESSORSHIP | |
This Agreement inures to the benefit of any successors or assigns of the Company, the Group Companies and your obligations apply equally to the Company, the Group Companies and its successors or assigns. |
Western Union Financial Services GmbH
|
||
|
||
/s/ Tim Keane
|
Date: 9 November 2009 | |
represented by its sole shareholder,
|
||
Western Union Processing Limited
|
Agreed and Accepted By:
|
/s/ Hikmet Ersek
|
|||
|
||||
Date:
|
9 November 2009 |
Affiliates reflecting the geography and product evolution of the business, including the appointment of business leaders in key geographical regions and for key product roles. Additionally, the Board and the Chief Executive Officer will consider when the title of President of The Western Union Company may be offered to you. In addition, on or about May 2010 and December 2010, you will have formal reviews with the Board, during which the Board will provide you with its appraisal of your performance and potential as a candidate for the position of Chief Executive Officer and you will have the opportunity to discuss your level of interest in such position. | ||
The terms and conditions in this Letter Agreement, including your assignment as Chief Operating Officer, will be in effect for this assignment only. Your expatriate assignment will generally be subject to the terms of the Expatriate Policy (the Expatriate Policy), but if there is any conflict between the terms of the Expatriate Policy and this Letter Agreement, the terms of this Letter Agreement will govern. | ||
1. | Compensation: |
A. | Base Salary: Your base compensation is described in Section 2.1 of the Employment Agreement. | ||
B. | Incentive Bonus: Your annual cash incentive bonus opportunity is described in Section 3 of the Employment Agreement. |
2. | Benefits: |
A. | Insurance Plans and Retirement Benefits: Except to the extent you are no longer eligible for certain benefits offered to the employees of the Austrian Company as a result of this assignment, you will be eligible to participate in the Austrian Companys retirement, health and welfare benefits under the terms and conditions applicable to similarly situated employees in Austria, In addition, with respect to medical, dental and vision benefits coverage during your assignment, you will be enrolled in the Aetna Global Benefits program. Western Unions International Benefits team will assist you in enrollment and answer any questions you may have regarding the program. Once enrolled you will have access to the Aetna Global Benefits online Member Services Center. This online resource offers a wide range of automated tools and information designed to help you use and understand your global benefits. You will soon receive a welcome letter and package which will contain your username and password. Your Aetna Global Benefits plan administrator contact, Karen Thompson, can be contacted at +1.720.332.5354 or at Karen.thompson@westernunion.com. | ||
B. | Work Schedules/Holidays/Vacation: Your work schedule, holidays, vacation and other leave benefits are described in Sections 6 and 7 of the Employment Agreement; provided that you will observe the work schedule in effect at your place of assignment and will accrue vacation based on the Expatriate Policy (the greater of your Austria vacation schedule or four weeks). Unused annual vacation leave accrued in Austria prior to your departure to the Host Country will be carried forward with you to this assignment. Holidays will be |
observed in accordance with Western Union business practices in the USA or Austria, depending upon your working location as of the date of the holiday. |
3. | Relocation Benefits: | |
You will be eligible for relocation benefits during the term of your assignment as outlined below, provided that you are performing services in accordance with this assignment or as otherwise directed by the Company on the date the relocation benefit or payment is scheduled to be made. Upon receipt of your signed acceptance of this Letter Agreement, Weichert Relocation Resources, Inc. (WRRI), Western Unions designated relocation company, will contact you to begin administering the relocation program. Amounts included below may constitute taxable income to you, however they will be provided to you on a net basis, (ie., will be grossed-up for any applicable taxes by the Company), but generally will not be taken into account as compensation for purposes of other Company benefit plans. You should take no action relating to your relocation until you have been contacted by your Relocation Specialist. |
A. | Miscellaneous Relocation Allowance: In accordance with the terms of the Expatriate Policy, you will receive a one-time Miscellaneous Relocation Allowance net payment equal to 1/24 th of your annual base salary, to be paid immediately prior to your departure. | ||
B. | Work Permits/Visas: If legal work authorization is required, it must be granted before you depart for the Host Country, WRRI will coordinate assistance for you to obtain the proper visas/work permits for you and your family. To the extent that you pay any visas, passport, and/or immigration expenses personally, you will be reimbursed. | ||
C. | Present Housing Arrangements: Should you choose to keep your present home, you will be paid a monthly amount of 300 to cover incidental expenditures related to its maintenance and upkeep (no receipts required). If you rent/lease a residence in your Home Country at the time you are offered and accept this expatriate assignment, the Company will pay the costs associated with the early termination of your current lease agreement. | ||
D. | House Hunting Trips/Family Visits: The Company will pay for a maximum of three trips for your spouse and your dependent children to visit you prior to the time at which your family joins you in the U.S. (which, unless the Company and you mutually agree otherwise, will be no later than September of 2010), any of which trips may be used for house hunting purposes. The Company will pay the reasonable costs associated with these trips, including reasonable airfare (based upon Western Unions Travel Policy), lodging and meals, and car rental. |
E. | Shipment and Storage of Household Goods/Personal Effects: WRRI will be authorized to assist with the move of your household belongings to your new location. To expedite delivery of your goods, you will be entitled to an air shipment of up to 500 pounds (not to exceed 80 cubic feet) for items you need immediately at your new location. The remainder will be shipped via surface transportation. Your surface shipment allowance will be 10,000 pounds. When necessary, the Company will pay for storage and insurance for the remainder of your household goods during the time of your expatriate assignment. The cost of Company-paid storage will be for reasonable and customary household and personal goods. In no event will excess food supplies, firewood, building supplies, farm machinery, cars, vans, boats, trailers, or airplanes be stored at the Company expense. Responsibility for costs of storing items not listed here will be determined on a case-by-case basis, at the Companys discretion. Return to your Home Country is subject to the terms of the Western Union Expatriate Policy. | ||
F. | Automobile Shipment/Sale: As noted under Automobile below, you will remain entitled to a company car in Austria (or alternatively a car allowance) in accordance with the Austrian Car Policy, and in addition the Company will provide you with an automobile for your use in the Host Country. However, because the Company will not pay for shipment or storage of your personal car(s), you will need to make arrangements to sell your personal car(s) or leave it/them with someone while you and your family are in the U.S. Should you incur a forced sale loss on your car, the Company will partially reimburse you for this loss. The amount eligible for reimbursement will be the difference between the sales price of the car and the average of the retail and trade-in values for the make and model of your car (based on published local data), up to a maximum of $2,500 USD per car (with a maximum of two cars being subject to this forced sale loss reimbursement). You must, however, secure more than one bid for your car and reimbursement will be based on the highest bid. If you choose to sell to a family member, you must secure bids from two dealers or private parties who are not members of your family as a basis for the forced sale loss reimbursement calculation. If the car is leased at the time you accept this assignment and you are assessed a penalty for early lease cancellation, the Company will reimburse for this cost. | ||
G. | Household Pets: If you choose to take your pets with you on assignment (dogs and cats only), the Company will pay for the cost of transporting up to two pets from your Home Country to your Host Country. Coordination, compliance with applicable laws, and costs other than transportation are your responsibility. Your Host Country has very stringent animal quarantine regulations and a further quarantine period may be required for pets returning home from a foreign country upon your relocation to your Home Country. | ||
H. | Transportation to the Host Country: The Company will reimburse the cost of a one-way first class ticket from the original location to the new location for you and your immediate family members. You will be reimbursed by submitting an expense report to WRRI. This process will be explained in your consultation call |
with WRRI, which will take place shortly after your acceptance and signature of this Letter Agreement. Return to your home country is subject to the terms of the Western Union Expatriate Policy. | |||
I. | Travel to Home Country/Home Leave: Prior to the time at which your family joins you in the U.S. (which, unless the Company and you mutually agree otherwise, will be no later than September of 2010), you will be permitted to make trips to and work from Austria, as agreed with the Chief Executive Officer. After your family joins you in the U.S., the Company will pay the round trip first class airfare for you and your family to visit Europe two times during each twelve-month period. Any days absent from work for specified home leave will count as vacation days. If you have dependent children attending a college or university outside the Host Country, the Company will pay for two roundtrips each year between the Host Country and the airport serving the college or university, in place of and not in addition to the home leave trip. | ||
J. | Temporary Living Expenses: The Company will reimburse you for reasonable temporary living expenses while your goods are in transit for up to a total of 45 days after you are required to vacate your regular Austrian residence and/or upon arrival in the U.S. | ||
K. | Destination Services: WRRI will coordinate with a Company designated vendor to assist you with house hunting and information/familiarization in the host location. The Company will pay up to the local equivalent of $5,000 USD in agency fees. | ||
L. | Housing Allowance: The Company will provide assistance to you in locating residential accommodations in the Denver, Colorado metropolitan area. The cost for your housing and utilities will be paid in full during the term of your assignment. | ||
M. | Automobile: You will remain entitled to a company car in Austria, or alternatively a car allowance, in accordance with the Austrian Car Policy, as amended from time to time. In addition, the Company will provide you with one automobile deemed appropriate for your use in the Host Country. Insurance, maintenance, fuel, taxes, and registration costs for this vehicle and any costs you incur in obtaining a local drivers license will be borne by the Company. If any Company-provided automobile is considered taxable income to you, it will not be taken into account as compensation for purposes of other Company benefit plans. | ||
N. | Education: The Company will pay the cost of private primary/secondary schooling at local Host Country international schools for your dependent children (the costs of colleges or universities for your dependent children are not included). |
4. | Tax Reimbursement/Tax Services: |
In no event shall the payments referenced in this paragraph 5 be made later than the deadline specified in the Western Union Tax Equalization Policy. | ||
PricewaterhouseCoopers services are limited to tax advice directly related to your assignment and do not extend to personal tax advice or financial planning. | ||
5. | Processing and Use of Employee Information: | |
By executing this Agreement, you agree and explicitly and unambiguously consent that for employment and management purposes, your personal data will be collected, processed, used, stored, maintained, and transferred between the Austrian Company and The Western Union Company, its subsidiaries, Affiliates, parent, and third party service providers, according to business requirements, including in electronic form, expressly authorizing the transfer of your personal data to the same companies. Your employee data will be kept secure and confidential in accordance with Company policy and national legislation. The Company will regularly update your data with your assistance and as you request. You will retain the right of access to your data and the right to have incorrect data corrected. The data provided will not be used for any marketing purposes. By executing this Agreement, you explicitly consent to the Companys collection, retention, and transmittal of your personal data outside of Austria, for all valid and appropriate purposes related to your employment. | ||
6. | Code of Conduct; and Compliance with Laws | |
You agree that you are bound by the provisions of the Western Union Code of Conduct and other rules, regulations and policies, as the Code of Conduct, rules, regulations and policies may be amended from time to time. | ||
You also agree to perform all aspects of your job in accordance with all applicable laws, regulations and other rules having the force in law, including those of Austria and the U.S., to strictly follow all workplace safety rules, to protect the property of the Company, to maintain the highest standards of personal and professional ethics, to actively participate in training arranged by the Company, and to continue to develop and improve your professional skills. | ||
7. | Term and Termination | |
This assignment will be for a period of 24 months and will expire automatically at the end of such period without notice unless (i) terminated earlier pursuant to this Section, or (ii) terminated earlier as a result of termination of the Employment Agreement (see its Section 15), or (iii) it is agreed between you and the Company that the assignment is extended in writing. | ||
The Company shall have the right, at any time during the assignment, to terminate this assignment (without simultaneous termination of the Employment Agreement) with one months prior notice. If you wish to terminate |
this assignment prior to its expiration, provided that you consult in advance with the Company, you may terminate this assignment (without simultaneous termination of the Employment Agreement) with one months prior notice. If you voluntarily terminate this assignment on or before December 31, 2010 (unless you have been approved for and accepted the position of Chief Executive Officer of The Western Union Company or have become eligible for the termination payments described below), you will be required to repay a prorated portion of the relocation and tax equalization benefits you have received pursuant to Sections 3 and 4 of this Letter Agreement, based on the number of days between the beginning and end date of this assignment. If your employment with the Company is terminated as well, you acknowledge that such termination of employment will require the immediate settlement of all outstanding tax, travel and other advances in relation to the present assignment. If you are living in Company-paid leased housing, you agree to vacate the housing within 30 days of your termination of employment. | ||
If (1) on or before the expiration of the term of this assignment (or any extension hereof) you are notified that you will not be considered a candidate for the position of Chief Executive Officer of The Western Union Company, and you elect, within 30 calendar days of such notification, to terminate your employment pursuant to Section 15 of the Employment Agreement, or (2) during or upon the expiration of the term of this assignment (or any extension hereof) you are offered the position of Chief Executive Officer of The Western Union Company and, after consultation with the Board, you decline to accept such offer and elect, within 30 calendar days of the date you decline such offer, to terminate your employment pursuant to Section 15 of the Employment Agreement, you will be eligible to receive the benefits provided under The Western Union Company Severance/Change in Control Policy (Executive Committee Level) (the Severance Policy) as then in effect as if your employment had terminated for an eligible reason under the Severance Policy (other than benefits that would apply only in the event of a Change in Control as defined in the Severance Policy) (the Termination Pay). The Termination Pay shall be reduced by any other severance, termination, or similar benefits payable to you by the Company, including, but not limited to, any amounts payable under the Employment Agreement, the Severance Policy, or statutory severance benefits or payments made on account of notice periods during which you are released from further duties as provided pursuant to the law of any country or political subdivision thereof. The Termination Pay will be paid in 24 substantially equal monthly installments and shall be paid in full no later than 24 months after the termination of employment with the Austrian Company, subject to the requirements of Section 409A of the Internal Revenue Code of 1986, if applicable to you. The Board of Directors of The Western Union Company and/or the Compensation Committee, may, in their absolute discretion, agree to accelerate the vesting of certain outstanding Long-Term Incentive Plan awards held by you and/or to provide additional benefits to you in the event this paragraph applies. In order to receive the Termination Pay, you must timely sign an Agreement and Release (in a form satisfactory to the Company) which will include restrictive covenants and a comprehensive release of all claims. Under the Agreement and Release, you must agree not to solicit business similar to any business offered by the Company from any Company customer, not to advise any entity to cancel or limit its business with the Company, not to recruit, solicit, or encourage any employee to leave their employment with the Company, not to perform the same or substantially |
the same functions or job duties that you performed for the Company for any business enterprise engaging in activities that compete with the business activities of the Company, not to disclose any of Companys trade secrets or confidential information, and not to disparage the Company or its employees in any way. These obligations are in addition to the restrictive covenants and undertakings in the Employment Agreement and to any other non-solicitation, noncompete, nondisclosure, or confidentiality agreements that you may have executed while employed by Company. In addition, the payment of the Termination Pay will always be conditional upon your full compliance with any restrictive covenants and undertakings in the Employment Agreement applying to the post-contract period, and you acknowledge that they can be recouped if such covenants or undertakings are violated. In the event this paragraph applies, you will be repatriated back to Vienna, Austria in accordance with the terms of the Expatriate Policy. | ||
The Company will notify you on or before the expiration of this assignment (or any extension hereof) whether you will be considered a candidate for the position of Chief Executive Officer of The Western Union Company; provided, however, that the Company will have no obligation to provide such notification to you if (1) you have elected to terminate this assignment prior to its expiration pursuant to the second paragraph of this Section 7, or (2) the Company has terminated this assignment on account of your termination of employment for Cause as defined in the Severance Policy. In no case will you be eligible for the Termination Pay if your employment is terminated for Cause as defined in the Severance Policy. | ||
8. | Successors to the Company | |
The terms of this Letter Agreement shall inure to the benefit of any successors or assigns of the Company, and your obligations apply equally to the Company and its successors or assigns. | ||
9. | Severability, and Governing Law | |
In the event any provision of this Letter Agreement is deemed unenforceable, you agree that a court of competent jurisdiction shall have jurisdiction to reform such provision to the extent necessary to cause it to be enforceable to the maximum extent permitted by law. The provisions in this Letter Agreement are severable, and if any provision is determined to be prohibited or unenforceable in any jurisdiction, the remaining provisions shall nevertheless be binding and enforceable. The execution, interpretation and enforcement of this Letter Agreement and the respective rights and obligations of the parties shall be governed and construed in accordance with the laws of Austria. Both parties shall submit to the exclusive jurisdiction of the Austrian courts in the event of a dispute relating to this Agreement. | ||
10. | Amendments | |
Any modifications to the terms of this Letter Agreement must be memorialized in writing and signed by both you, the Austrian Company and the Western Union Company. |
11. | Other Agreements | |
You acknowledge that this Letter Agreement during its term is made a part of your Employment Agreement between you and Western Union Financial Services GmbH, effective January 1, 2010. | ||
12. | Paragraph Headings | |
The paragraph headings in this Letter Agreement are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof. | ||
13. | Special 409A Provisions | |
This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the Code), and shall be interpreted and construed consistently with such intent. The payments to you pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible. To the extent any amounts under this Agreement are payable by reference to your termination of employment, such term shall be deemed to refer to your separation from service, within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if you are a specified employee, as defined in Section 409A of the Code, as of the date of your 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 your separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of your 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 your death. Any reimbursement or advancement payable to you pursuant to this Agreement shall be conditioned on the submission by you of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to you as soon as administratively possible following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which you incurred the reimbursable expense. Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year. The right to any reimbursement or in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit. | ||
14. | Counterparts | |
This Letter Agreement may be executed in any number of counterparts, which shall together constitute one agreement. Any party may enter into this Letter Agreement by signing any such counterpart, but this Letter Agreement shall not be effective until each party has executed at least one counterpart. |
/s/ Tim Keane
|
Date: 9 November 2009 | |
represented by its sole shareholder,
|
||
Western Union Processing Limited
|
||
|
||
The Western Union Company
|
||
|
||
/s/ Grover Wray
|
||
Date: 9 November 2009
|
A signed copy of this document (PDF or paper copy) should be sent to Western Union Global Mobility Department c/o M21B12 or for relocation services to be initiated. |
(1) | consistent group HR reporting throughout the Companys locations globally; | |
(2) | accurate consolidation of HR data on a global basis for the purpose of implementing, administering, and managing the Employees participation in the compensation and benefits plans of the Company (the Plans ) and tracking incentive and other compensation eligibility and actual payments; | |
(3) | compliance with tax, finance, and securities laws as well as laws and orders requiring disclosure of HR data vis-à-vis authorities; | |
(4) | compliance training, certifications and related regulatory requirements; | |
(5) | employee training and certifications; | |
(6) | reporting and monitoring of health and safety of employees, and development of a risk management; | |
(7) | compliance with terms of the Plans; | |
(8) | administration of all human resource and employment programs; | |
(9) | consistent administration of the Plans throughout the Companys international locations; and | |
(10) | the Companys parts as listed in Appendix 1 (the Relevant Companies ) to facilitate the employment relationship by processing the Employees HR data to provide the Employee with his/her employment or career development including possible relocation; and to facilitate the following: |
- | payroll administration, administering pension plans and other employee benefits, control of remuneration comparisons; | ||
- | generating of holiday and absence records; | ||
- | establishing contact to the next of kin; | ||
- | disciplinary and/or grievance proceedings and appraisals; | ||
- | statistical analyses regarding performance, conduct, sickness and employment costs; | ||
- | establishing equal opportunities; | ||
- | general employee training; compliance training and tracking; | ||
- | disclosures to prospective employers and/or shareholders as part of a merger, acquisition, takeover or corporate re-organization; | ||
- | detection or prevention of fraud or any offenses; | ||
- | the provision of information as required by any governmental authority or other authority; legal proceedings (including prospective proceedings); obtaining legal advice, or otherwise establishing, exercising or defending legal rights; | ||
- | financial disclosures to creditors or credit reporting agencies authorized by the employee. |
by
|
/s/ Hikmet Ersek
|
1) | The Western Union Company, a Delaware Corporation(US Head Office) | ||
2) | Western Union Financial Services Inc., a Colorado Corporation | ||
3) | Western Union LLC, a Colorado Corporation |
9 November 2009
Page 31 of 32
DATA ELEMENT
Description/Comments
PS Employee ID (automatically created when new hire data is saved)
Employee ID in Payroll System (DATEV) 5 digits
Name Prefix: Mr., Ms. etc (English titles)
Forename
Surname
Home address of employee (3 address lines available for Street Name, Number and any additional address info if necessary)
Zipcode/Postal Code of employees home address
City of employees home address
Phone Number (drop down available for different phone types e.g. Home, Cellular, ...) Data provided by employees on voluntary basis
Female/Male/Unknown
Married/Single/Divorced/Separated etc
phone number of emergency contact
voluntary
indicates format of Social Security Number
indicates type of Social Security Number (e.g. VSNR, EUVSNR, ...)
Social Security Number
Nationality
exact date of birth (day, month, year)
possibility to enter in PS if applicable
Permit country
Type of permit (e.g. work permit, residency permit)
End date of permit (query can be run on a regular basis to identify expiring permits)
Office address/stop code
automatically updated from action/reason codes e.g. active, terminated, leave of absence, maternity etc.
Employment Start Date (= effective date entered on first panel Personal Data Name)
Left and come back new start date
Employment via an acquisition
Date probation due to end e.g. 6 months post start date
automatically calculated date taken for seniority calculation (usually TWUC hire date)
automatically calculated current length of employment
determines which fields are shown in PS
Standard BU or International BU
Place of work (specific location codes available details saved on location table: address, country, effective date)
Cost center number (specific department IDs available details saved on department table: location, company, contact listing e.g.
EVP, HR-Rep, Finance contact, ... Shared Services Indicator, Segment Alignment Indicator)
automatically created by effective date of department change (action/reason)
pre-set on department table indicates if employee works for a shared services dept. or not (e.g. HR, Finance, ...)
pre-set on department table indicates business unit that employee is supporting (e.g. WUFSI WUI, ...)
includes job title, manager level info (e.g. Non-Manager, Director, VP, ...), salary admin plan, grade, std hrs, regular/temp job, job
function code e.g. HR, Marketing etc.)
automatically created by effective date of job change
9 November 2009
Page 32 of 32
DATA ELEMENT
Description/Comments
regular/temporary employee
full time/part time employee
hours of work on shift pattern (Y/N field)
pre-set on job code table contractual hours of work e.g 40 hours (link to job code table)
full time equivalent automatically calculated in PS
H= hourly paid, S= salaried
e.g. Consultant, Contractor, Expat,
Trainee, ...
Payroll code Fixed for Company
(Employment Contract)
date when employment contract was
signed
(# hire date/effective date of contract) + if employment contract
changes, details of change need to be tracked
(e.g. Legal changes, change of shift, ... but not changes related to employee e.g. change of
standard hours) TO CHECK STATUS OF EMPLOYMENT CONTRACT -
will be saved on Job Labor panel
pre-set on job code table includes number of pay months per year, standard working hours, currency, company code (link from salary plan table to job code
table)
pre-set on job code table = salary grade (paygroups); includes currency, salary ranges, salary admin plan link from salary grade table to job code table
automatically created by effective date of grade change
annual base salary
monthly, weekly, annually defaulting to annual
automatically created by effective date of salary change indicates effective date of last salary increase
automatically loaded from Performance Management System for all emps
automatically loaded from Performance Management System performance ratings on individual employee
automatically loaded from Performance Management System
Bonus Plan (e.g. WU-IC ELG for eligible emps, WU-IC-NE for non-eligible emps)
Bonus Target Amount
Start of plan (i.e. effective date of (new) bonus target if bonus target changes during the year)
default to none n/a outside USA
INT for all international employees
Full work phone number (incl. country code, city code, tel # and extension)
Job title (possibility to specify job title more closer e.g. by region
Supervisors employee PS 6 digit ED (Supervisor Name is linked to this shows up next to Supv ID)
e.g. hire, promotion, termination reasons, pay rate change, maternity
e.g. new hire, merit linked to action
automatically shows date of data entry for action/reason (not always equal to effective date!!!)
every action/reason needs to have an effective date (e.g. promotion eff. 06/01/2003)
Date employment ends
Degree of disability acknowledged by competent authority, duration
This Letter Agreement will serve to confirm our mutual understanding of the terms and conditions applicable to your assignment as Chief Operating Officer of The Western Union Company, effective January 1, 2010. In this role you will be reporting to Christina Gold (Chief Executive Officer). The position will be initially located in Englewood, Colorado, U.S.A. (the Host Country) and will be subject to your obtaining and maintaining the required Host Country entry documents or visas and your acceptance of the terms and conditions outlined in this Letter Agreement. The duration of your assignment will not exceed 24 months (unless the parties mutually agree to extend this assignment). This assignment may be shorter in duration under certain circumstances. Your home city and country are Vienna, Austria (the Home Country) and you will remain employed by Western Union Financial Services Gmbh (the Austrian Company) during the term of this assignment, unless you, The Western Union Company and the Austrian Company mutually agree otherwise (hereinafter The Western Union Company and the Austrian Company are referred to collectively as the Company unless specifically designated). This assignment is subject to your execution of the employment agreement with the Austrian Company to which this Letter Agreement is attached as Exhibit 1 (the Employment Agreement). | ||
The terms and conditions of this Letter Agreement, which forms a part of the Employment Agreement during the term of the Letter Agreement, are subject to the approval of the Board of Directors of The Western Union Company (the Board) and/or the Compensation and Benefits Committee of the Board (the Compensation Committee). In the event the Board approves your appointment to the position of Chief Executive Officer of The Western Union Company and you accept such position, you agree that this assignment shall immediately end, that you will give notice of immediate termination of the Employment Agreement with the Austrian Company, and that you will become employed by Western Union, LLC (or another U.S. subsidiary of The Western Union Company) and be based in the U.S. The terms and conditions of any such employment will be determined at a later date. | ||
In your role as Chief Operating Officer, and in consultation with and subject to the approval of the Chief Executive Officer, you will have the right to create an organizational structure for The Western Union Company and its |
Affiliates reflecting the geography and product evolution of the business, including the appointment of business leaders in key geographical regions and for key product roles. Additionally, the Board and the Chief Executive Officer will consider when the title of President of The Western Union Company may be offered to you. In addition, on or about May 2010 and December 2010, you will have formal reviews with the Board, during which the Board will provide you with its appraisal of your performance and potential as a candidate for the position of Chief Executive Officer and you will have the opportunity to discuss your level of interest in such position. | ||
The terms and conditions in this Letter Agreement, including your assignment as Chief Operating Officer, will be in effect for this assignment only. Your expatriate assignment will generally be subject to the terms of the Expatriate Policy (the Expatriate Policy), but if there is any conflict between the terms of the Expatriate Policy and this Letter Agreement, the terms of this Letter Agreement will govern. | ||
1. | Compensation: |
A. | Base Salary: Your base compensation is described in Section 2.1 of the Employment Agreement. | ||
B. | Incentive Bonus: Your annual cash incentive bonus opportunity is described in Section 3 of the Employment Agreement. |
2. | Benefits: |
A. | Insurance Plans and Retirement Benefits: Except to the extent you are no longer eligible for certain benefits offered to the employees of the Austrian Company as a result of this assignment, you will be eligible to participate in the Austrian Companys retirement, health and welfare benefits under the terms and conditions applicable to similarly situated employees in Austria, In addition, with respect to medical, dental and vision benefits coverage during your assignment, you will be enrolled in the Aetna Global Benefits program. Western Unions International Benefits team will assist you in enrollment and answer any questions you may have regarding the program. Once enrolled you will have access to the Aetna Global Benefits online Member Services Center. This online resource offers a wide range of automated tools and information designed to help you use and understand your global benefits. You will soon receive a welcome letter and package which will contain your username and password. Your Aetna Global Benefits plan administrator contact, Karen Thompson, can be contacted at +1.720.332.5354 or at Karen.thompson@westernunion.com. | ||
B. | Work Schedules/Holidays/Vacation: Your work schedule, holidays, vacation and other leave benefits are described in Sections 6 and 7 of the Employment Agreement; provided that you will observe the work schedule in effect at your place of assignment and will accrue vacation based on the Expatriate Policy (the greater of your Austria vacation schedule or four weeks). Unused annual vacation leave accrued in Austria prior to your departure to the Host Country will be carried forward with you to this assignment. Holidays will be |
observed in accordance with Western Union business practices in the USA or Austria, depending upon your working location as of the date of the holiday. |
3. | Relocation Benefits : | |
You will be eligible for relocation benefits during the term of your assignment as outlined below, provided that you are performing services in accordance with this assignment or as otherwise directed by the Company on the date the relocation benefit or payment is scheduled to be made. Upon receipt of your signed acceptance of this Letter Agreement, Weichert Relocation Resources, Inc. (WRRI), Western Unions designated relocation company, will contact you to begin administering the relocation program. Amounts included below may constitute taxable income to you, however they will be provided to you on a net basis, (ie., will be grossed-up for any applicable taxes by the Company), but generally will not be taken into account as compensation for purposes of other Company benefit plans. You should take no action relating to your relocation until you have been contacted by your Relocation Specialist. |
A. | Miscellaneous Relocation Allowance: In accordance with the terms of the Expatriate Policy, you will receive a one-time Miscellaneous Relocation Allowance net payment equal to 1/24 th of your annual base salary, to be paid immediately prior to your departure. | ||
B. | Work Permits/Visas: If legal work authorization is required, it must be granted before you depart for the Host Country. WRRI will coordinate assistance for you to obtain the proper visas/work permits for you and your family. To the extent that you pay any visas, passport, and/or immigration expenses personally, you will be reimbursed. | ||
C. | Present Housing Arrangements: Should you choose to keep your present home, you will be paid a monthly amount of 300 to cover incidental expenditures related to its maintenance and upkeep (no receipts required). If you rent/lease a residence in your Home Country at the time you are offered and accept this expatriate assignment, the Company will pay the costs associated with the early termination of your current lease agreement. | ||
D. | House Hunting Trips/Family Visits: The Company will pay for a maximum of three trips for your spouse and your dependent children to visit you prior to the time at which your family joins you in the U.S. (which, unless the Company and you mutually agree otherwise, will be no later than September of 2010), any of which trips may be used for house hunting purposes. The Company will pay the reasonable costs associated with these trips, including reasonable airfare (based upon Western Unions Travel Policy), lodging and meals, and car rental. |
E. | Shipment and Storage of Household Goods/Personal Effects: WRRI will be authorized to assist with the move of your household belongings to your new location. To expedite delivery of your goods, you will be entitled to an air shipment of up to 500 pounds (not to exceed 80 cubic feet) for items you need immediately at your new location. The remainder will be shipped via surface transportation. Your surface shipment allowance will be 10,000 pounds. When necessary, the Company will pay for storage and insurance for the remainder of your household goods during the time of your expatriate assignment. The cost of Company-paid storage will be for reasonable and customary household and personal goods. In no event will excess food supplies, firewood, building supplies, farm machinery, cars, vans, boats, trailers, or airplanes be stored at the Company expense. Responsibility for costs of storing items not listed here will be determined on a case-by-case basis, at the Companys discretion. Return to your Home Country is subject to the terms of the Western Union Expatriate Policy. | ||
F. | Automobile Shipment/Sale: As noted under Automobile below, you will remain entitled to a company car in Austria (or alternatively a car allowance) in accordance with the Austrian Car Policy, and in addition the Company will provide you with an automobile for your use in the Host Country. However, because the Company will not pay for shipment or storage of your personal car(s), you will need to make arrangements to sell your personal car(s) or leave it/them with someone while you and your family are in the U.S. Should you incur a forced sale loss on your car, the Company will partially reimburse you for this loss. The amount eligible for reimbursement will be the difference between the sales price of the car and the average of the retail and trade-in values for the make and model of your car (based on published local data), up to a maximum of $2,500 USD per car (with a maximum of two cars being subject to this forced sale loss reimbursement). You must, however, secure more than one bid for your car and reimbursement will be based on the highest bid. If you choose to sell to a family member, you must secure bids from two dealers or private parties who are not members of your family as a basis for the forced sale loss reimbursement calculation. If the car is leased at the time you accept this assignment and you are assessed a penalty for early lease cancellation, the Company will reimburse for this cost. | ||
G. | Household Pets: If you choose to take your pets with you on assignment (dogs and cats only), the Company will pay for the cost of transporting up to two pets from your Home Country to your Host Country. Coordination, compliance with applicable laws, and costs other than transportation are your responsibility. Your Host Country has very stringent animal quarantine regulations and a further quarantine period may be required for pets returning home from a foreign country upon your relocation to your Home Country. | ||
H. | Transportation to the Host Country: The Company will reimburse the cost of a one-way first class ticket from the original location to the new location for you and your immediate family members. You will be reimbursed by submitting an expense report to WRRI. This process will be explained in your consultation call |
with WRRI, which will take place shortly after your acceptance and signature of this Letter Agreement. Return to your home country is subject to the terms of the Western Union Expatriate Policy. | |||
I. | Travel to Home Country/Home Leave: Prior to the time at which your family joins you in the U.S. (which, unless the Company and you mutually agree otherwise, will be no later than September of 2010), you will be permitted to make trips to and work from Austria, as agreed with the Chief Executive Officer. After your family joins you in the U.S., the Company will pay the round trip first class airfare for you and your family to visit Europe two times during each twelve-month period. Any days absent from work for specified home leave will count as vacation days. If you have dependent children attending a college or university outside the Host Country, the Company will pay for two roundtrips each year between the Host Country and the airport serving the college or university, in place of and not in addition to the home leave trip. | ||
J. | Temporary Living Expenses: The Company will reimburse you for reasonable temporary living expenses while your goods are in transit for up to a total of 45 days after you are required to vacate your regular Austrian residence and/or upon arrival in the U.S. | ||
K. | Destination Services: WRRI will coordinate with a Company designated vendor to assist you with house hunting and information/femiliarization in the host location. The Company will pay up to the local equivalent of $5,000 USD in agency fees. | ||
L. | Housing Allowance: The Company will provide assistance to you in locating residential accommodations in the Denver, Colorado metropolitan area. The cost for your housing and utilities will be paid in full during the term of your assignment. | ||
M. | Automobile: You will remain entitled to a company car in Austria, or alternatively a car allowance, in accordance with the Austrian Car Policy, as amended from time to time. In addition, the Company will provide you with one automobile deemed appropriate for your use in the Host Country. Insurance, maintenance, fuel, taxes, and registration costs for this vehicle and any costs you incur in obtaining a local drivers license will be borne by the Company. If any Company-provided automobile is considered taxable income to you, it will not be taken into account as compensation for purposes of other Company benefit plans. | ||
N. | Education: The Company will pay the cost of private primary/secondary schooling at local Host Country international schools for your dependent children (the costs of colleges or universities for your dependent children are not included). |
4. | Tax Reimbursement/Tax Services: | |
During your expatriate assignment, you will continue to be responsible for payment of applicable Austrian taxes. You will also be subject to U.S. income taxes on the income you earn while on assignment. The Western Union Tax Equalization Policy is intended to leave you in a net after-tax position substantially equivalent to what you would experience if you were subject only to Austrian taxes during this period. | ||
The process of calculating and withholding your income tax responsibility requires the Company to estimate your hypothetical Austrian income tax liability, based on your total Austrian taxable income earned during the year for services provided to the Company (which includes base salary, bonus, mobility allowances, stock option exercises and other long-term incentive award proceeds). This hypothetical tax liability will be withheld from your pay in lieu of Austrian actual taxes and will reduce your take-home pay ratably throughout the year. Actual withholding for Austrian social insurance contributions and other employment taxes will also continue during your expatriate assignment. To clarify the foregoing, the Company will be responsible for making any actual home and host country income taxes incurred on your compensation during the length of your assignment. Pursuant to the Western Union Tax Equalization Policy, your tax responsibility for compensation that you would have received without regard to this assignment (such as base salary, bonus, and the proceeds from long-term incentive awards), should be substantially equivalent to the liability you would have incurred on this income had you remained in Austria. Therefore, for example, if you exercise stock options during the assignment, your tax liability as a result of such exercise will be similar to what your Austrian tax liability would have been had you exercised the stock options in Austria. | ||
PricewaterhouseCoopers will assist in the filing of your Austrian and U.S. Federal and state income tax returns. When your actual Austrian tax returns are completed, PricewaterhouseCoopers will calculate your final theoretical Austrian tax liability. This amount will be similar to the hypothetical tax previously withheld, but will be revised to incorporate facts and amounts as reported in your actual Austrian income tax returns. This theoretical tax amount for the year involved is the amount you are responsible to pay. If the hypothetical tax amount previously withheld exceeds this amount, you will be refunded the excess. If the hypothetical tax amount withheld is insufficient to cover this liability, you will be responsible to pay the difference to the Company. The Company will be responsible for payment of actual Austrian and U.S. Federal and state income taxes over and above your final theoretical Austrian tax liability as calculated by PricewaterhouseCoopers. Remittance of actual tax amounts to either or both U.S. and Austrian tax authorities will be coordinated by the Company and PricewaterhouseCoopers. | ||
If your employment terminates for any reason during your expatriate assignment, tax equalization will end as of the date of termination and the theoretical Austrian tax will be calculated based as if you repatriated on the date of termination. |
In no event shall the payments referenced in this paragraph 5 be made later than the deadline specified in the Western Union Tax Equalization Policy. | ||
PricewaterhouseCoopers services are limited to tax advice directly related to your assignment and do not extend to personal tax advice or financial planning. | ||
5. | Processing and Use of Employee Information: | |
By executing this Agreement, you agree and explicitly and unambiguously consent that for employment and management purposes, your personal data will be collected, processed, used, stored, maintained, and transferred between the Austrian Company and The Western Union Company, its subsidiaries, Affiliates, parent, and third party service providers, according to business requirements, including in electronic form, expressly authorizing the transfer of your personal data to the same companies. Your employee data will be kept secure and confidential in accordance with Company policy and national legislation. The Company will regularly update your data with your assistance and as you request. You will retain the right of access to your data and the right to have incorrect data corrected. The data provided will not be used for any marketing purposes. By executing this Agreement, you explicitly consent to the Companys collection, retention, and transmittal of your personal data outside of Austria, for all valid and appropriate purposes related to your employment. | ||
6. | Code of Conduct; and Compliance with Laws | |
You agree that you are bound by the provisions of the Western Union Code of Conduct and other rules, regulations and policies, as the Code of Conduct, rules, regulations and policies may be amended from time to time. | ||
You also agree to perform all aspects of your job in accordance with all applicable laws, regulations and other rules having the force in law, including those of Austria and the U.S., to strictly follow all workplace safety rules, to protect the property of the Company, to maintain the highest standards of personal and professional ethics, to actively participate in training arranged by the Company, and to continue to develop and improve your professional skills. | ||
7. | Term and Termination | |
This assignment will be for a period of 24 months and will expire automatically at the end of such period without notice unless (i) terminated earlier pursuant to this Section, or (ii) terminated earlier as a result of termination of the Employment Agreement (see its Section 15), or (iii) it is agreed between you and the Company that the assignment is extended in writing. | ||
The Company shall have the right, at any time during the assignment, to terminate this assignment (without simultaneous termination of the Employment Agreement) with one months prior notice. If you wish to terminate |
this assignment prior to its expiration, provided that you consult in advance with the Company, you may terminate this assignment (without simultaneous termination of the Employment Agreement) with one months prior notice. If you voluntarily terminate this assignment on or before December 31, 2010 (unless you have been approved for and accepted the position of Chief Executive Officer of The Western Union Company or have become eligible for the termination payments described below), you will be required to repay a prorated portion of the relocation and tax equalization benefits you have received pursuant to Sections 3 and 4 of this Letter Agreement, based on the number of days between the beginning and end date of this assignment. If your employment with the Company is terminated as well, you acknowledge that such termination of employment will require the immediate settlement of all outstanding tax, travel and other advances in relation to the present assignment. If you are living in Company-paid leased housing, you agree to vacate the housing within 30 days of your termination of employment. | ||
If (1) on or before the expiration of the term of this assignment (or any extension hereof) you are notified that you will not be considered a candidate for the position of Chief Executive Officer of The Western Union Company, and you elect, within 30 calendar days of such notification, to terminate your employment pursuant to Section 15 of the Employment Agreement, or (2) during or upon the expiration of the term of this assignment (or any extension hereof) you are offered the position of Chief Executive Officer of The Western Union Company and, after consultation with the Board, you decline to accept such offer and elect, within 30 calendar days of the date you decline such offer, to terminate your employment pursuant to Section 15 of the Employment Agreement, you will be eligible to receive the benefits provided under The Western Union Company Severance/Change in Control Policy (Executive Committee Level) (the Severance Policy) as then in effect as if your employment had terminated for an eligible reason under the Severance Policy (other than benefits that would apply only in the event of a Change in Control as defined in the Severance Policy) (the Termination Pay). The Termination Pay shall be reduced by any other severance, termination, or similar benefits payable to you by the Company, including, but not limited to, any amounts payable under the Employment Agreement, the Severance Policy, or statutory severance benefits or payments made on account of notice periods during which you are released from further duties as provided pursuant to the law of any country or political subdivision thereof. The Termination Pay will be paid in 24 substantially equal monthly installments and shall be paid in full no later than 24 months after the termination of employment with the Austrian Company, subject to the requirements of Section 409A of the Internal Revenue Code of 1986, if applicable to you. The Board of Directors of The Western Union Company and/or the Compensation Committee, may, in their absolute discretion, agree to accelerate the vesting of certain outstanding Long-Term Incentive Plan awards held by you and/or to provide additional benefits to you in the event this paragraph applies. In order to receive the Termination Pay, you must timely sign an Agreement and Release (in a form satisfactory to the Company) which will include restrictive covenants and a comprehensive release of all claims. Under the Agreement and Release, you must agree not to solicit business similar to any business offered by (he Company from any Company customer, not to advise any entity to cancel or limit its business with the Company, not to recruit, solicit, or encourage any employee to leave their employment with the Company, not to perform the same or substantially |
the same functions or job duties that you performed for the Company for any business enterprise engaging in activities that compete with the business activities of the Company, not to disclose any of Companys trade secrets or confidential information, and not to disparage the Company or its employees in any way. These obligations are in addition to the restrictive covenants and undertakings in the Employment Agreement and to any other non-solicitation, noncompete, nondisclosure, or confidentiality agreements that you may have executed while employed by Company. In addition, the payment of the Termination Pay will always be conditional upon your full compliance with any restrictive covenants and undertakings in the Employment Agreement applying to the post-contract period, and you acknowledge that they can be recouped if such covenants or undertakings are violated. In the event this paragraph applies, you will be repatriated back to Vienna, Austria in accordance with the terms of the Expatriate Policy. | ||
The Company will notify you on or before the expiration of this assignment (or any extension hereof) whether you will be considered a candidate for the position of Chief Executive Officer of The Western Union Company; provided, however, that the Company will have no obligation to provide such notification to you if (1) you have elected to terminate this assignment prior to its expiration pursuant to the second paragraph of this Section 7, or (2) the Company has terminated this assignment on account of your termination of employment for Cause as defined in the Severance Policy. In no case will you be eligible for the Termination Pay if your employment is terminated for Cause as defined in the Severance Policy. | ||
8. | Successors to the Company | |
The terms of this Letter Agreement shall inure to the benefit of any successors or assigns of the Company, and your obligations apply equally to the Company and its successors or assigns. | ||
9. | Severability, and Governing Law | |
In the event any provision of this Letter Agreement is deemed unenforceable, you agree that a court of competent jurisdiction shall have jurisdiction to reform such provision to the extent necessary to cause it to be enforceable to the maximum extent permitted by law. The provisions in this Letter Agreement are severable, and if any provision is determined to be prohibited or unenforceable in any jurisdiction, the remaining provisions shall nevertheless be binding and enforceable. The execution, interpretation and enforcement of this Letter Agreement and the respective rights and obligations of the parties shall be governed and construed in accordance with the laws of Austria. Both parties shall submit to the exclusive jurisdiction of the Austrian courts in the event of a dispute relating to this Agreement. | ||
10. | Amendments | |
Any modifications to the terms of this Letter Agreement must be memorialized in writing and signed by both you, the Austrian Company and the Western Union Company. |
11. | Other Agreements | |
You acknowledge that this Letter Agreement during its term is made a part of your Employment Agreement between you and Western Union Financial Services GmbH, effective January 1, 2010. | ||
12. | Paragraph Headings | |
The paragraph headings in this Letter Agreement are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof. | ||
13. | Special 409A Provisions | |
This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the Code), and shall be interpreted and construed consistently with such intent. The payments to you pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible. To the extent any amounts under this Agreement are payable by reference to your termination of employment, such term shall be deemed to refer to your separation from service, within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if you are a specified employee, as defined in Section 409A of the Code, as of the date of your 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 your separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of your 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 your death. Any reimbursement or advancement payable to you pursuant to this Agreement shall be conditioned on the submission by you of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to you as soon as administratively possible following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which you incurred the reimbursable expense. Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year. The right to any reimbursement or in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit. | ||
14. | Counterparts | |
This Letter Agreement may be executed in any number of counterparts, which shall together constitute one agreement. Any party may enter into this Letter Agreement by signing any such counterpart, but this Letter Agreement shall not be effective until each party has executed at least one counterpart. |
/s/ Tim Keane
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Date: 9 November 2009 | |
represented by its sole shareholder,
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Western Union Processing Limited
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The Western Union Company
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/s/ Grover Wray
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Date: 9 November 2009
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A signed copy of this document (PDF or paper copy) should be sent to Western Union Global Mobility Department c/o M21B12 or for relocation services to be initiated. |
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
Earnings:
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Income before income taxes
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$ | 1,131.5 | $ | 1,238.7 | $ | 1,222.4 | $ | 1,335.1 | $ | 1,344.1 | ||||||||||
Fixed charges
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172.8 | 184.8 | 204.1 | 56.9 | 7.9 | |||||||||||||||
Other adjustments
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(0.9 | ) | (4.6 | ) | 1.2 | (7.2 | ) | (2.3 | ) | |||||||||||
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Total earnings (a)
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$ | 1,303.4 | $ | 1,418.9 | $ | 1,427.7 | $ | 1,384.8 | $ | 1,349.7 | ||||||||||
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Fixed charges:
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Interest expense
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$ | 157.9 | $ | 171.2 | $ | 189.0 | $ | 55.2 | $ | 6.2 | ||||||||||
Other adjustments
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14.9 | 13.6 | 15.1 | 1.7 | 1.7 | |||||||||||||||
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Total fixed charges (b)
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$ | 172.8 | $ | 184.8 | $ | 204.1 | $ | 56.9 | $ | 7.9 | ||||||||||
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Ratio of earnings to fixed charges (a/b)
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7.5 | 7.7 | 7.0 | 24.3 | 170.8 |
| Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships. | |
| Provide constituents with information that is accurate, complete, objective, relevant, timely and understandable. | |
| Provide full, fair, accurate, timely, and understandable disclosure in reports and documents that Western Union files with, or submits to, the Securities and Exchange Commission and in other public communications made by Western Union. | |
| Comply with rules and regulations of federal, state, provincial and local governments, and other appropriate private and public regulatory agencies. | |
| Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing the officers independent judgment to be subordinated. | |
| Respect the confidentiality of information acquired in the course of the officers work except when authorized or otherwise legally obligated to disclose the information. Confidential information acquired in the course of the officers work may not be used for personal advantage. | |
| Share knowledge and maintain skills important and relevant to the needs of the officers constituents. | |
| Proactively promote ethical behavior as a responsible partner among peers in the officers work environment and community. | |
| Achieve responsible use of and control over all assets and resources employed or entrusted to the officer. |
2
Jurisdiction of | ||
Name of Subsidiary | Incorporation | |
A. Serviban S.A.
|
Peru | |
American Rapid Corporation
|
Delaware, USA | |
CHL Management Services Limited Partnership
|
Canada | |
Custom House (Retail) Ltd.
|
Canada | |
Custom House (NZ) Ltd.
|
New Zealand | |
Custom House (Online) Ltd.
|
Canada | |
Custom House (USA) Ltd.
|
Delaware, USA | |
Custom House Currency Exchange (Australia) Pty. Ltd.
|
Australia | |
Custom House Currency Exchange (Singapore) Pt. Ltd.
|
Singapore | |
Custom House Holdings (USA) Ltd.
|
Washington, USA | |
Custom House Financial (UK) Ltd.
|
United Kingdom | |
Custom House S.P.A.
|
Italy | |
Custom House ULC
|
Canada | |
E Commerce Group Products Inc.
|
New York, USA | |
E Commerce Group, Inc.
|
New York, USA | |
Western Union Holding (Bermuda) Ltd.
|
Bermuda | |
Western Union (Bermuda) Holding Finance Ltd.
|
Bermuda | |
Western Union Management (Bermuda) Limited
|
Bermuda | |
First Financial Management Corporation
|
Georgia, USA | |
Global Collection Services, S.A.
|
Argentina | |
Grant Financial Group, Inc.
|
California, USA | |
Grupo Dinámico Empresarial, S.A. de C.V.
|
Mexico | |
LawNet, Inc.
|
New York, USA | |
LegalTech, Inc.
|
New York, USA | |
Montvale Mortgage Associates, LLC
|
Delaware, USA | |
MT Caribbean Holdings Srl
|
Barbados | |
MT Global Holdings Ltd.
|
Bermuda | |
MT Group Ltd.
|
Bermuda | |
MT Holdings (Bermuda) Ltd.
|
Bermuda | |
MT International Holdings, Ltd.
|
Bermuda | |
MT International Operations Ltd.
|
Bermuda | |
MT International Operations Partnership
|
Bermuda | |
MT Network Holdings Ltd.
|
Bermuda | |
MT Payment Services Operations EU/EEA Limited
|
Ireland | |
MT Processing Holdings Ltd.
|
Bermuda | |
MT Worldwide Holdings Ltd.
|
Bermuda | |
OOO Western Union MT East
|
Russian Federation | |
Operaciones Internationales OV, S. de R.L. de C.V.
|
Mexico | |
Orlandi de Mexico S.A. de C.V.
|
Mexico | |
Red Global SA
|
Argentina | |
PayBills.com Inc.
|
New York, USA | |
Paymap, Inc.
|
Delaware, USA | |
Servicio Electrónico de Pago S.A.
|
Argentina | |
Servicio Integral de Envios, S. de R.L. de C.V.
|
Mexico | |
Servicios de Apoyo GDE, S.A. de C.V.
|
Mexico | |
Societe Financiere de Paiements S.A.S.
|
France | |
SpeedPay, Inc.
|
New York, USA | |
The Western Union Real Estate Holdings LLC
|
Delaware, USA | |
Transfer Express de Panama S.A.
|
Panama | |
Union del Oeste de Costa Rica SrL
|
Costa Rica | |
Vigo Remittance Canada Company
|
Nova Scotia, Canada | |
Vigo Remittance Corp.
|
Delaware, USA | |
Vigo Remittance Espana SA
|
Spain |
Jurisdiction of
Name of Subsidiary
Incorporation
United Kingdom
Australia
Ireland
Chile
Delaware, USA
Germany
Brazil
Greece
Austria
New York, USA
Argentina
Australia
Belgium
Ontario, Canada
Delaware, USA
France
Germany
Austria
Hong Kong
Italy
Korea
Luxembourg
Delaware, USA
Colorado, USA
United Kingdom
Georgia, USA
Austria
Ireland
Ireland
Italy
Colorado, USA
Morocco
Bermuda
Nova Scotia, Canada
France
Ireland
Germany
Ireland
United Kingdom
Ireland
Peru
Ireland
Ireland
United Kingdom
Ireland
Greece
Panama
Norway
Ireland
United Kingdom
Spain
Sweden
Netherlands
Luxembourg
Luxembourg
Maryland, USA
Jurisdiction of
Name of Subsidiary
Incorporation
India
Philippines
Singapore
Spain
Spain
Ireland
Bermuda
Beijing
Peru
(1) | Registration Statements (Form S-3 Nos. 333-147189 and 333-150722) 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; |
1. | I have reviewed this Annual Report on Form 10-K of The Western Union Company; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 26, 2010
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/s/
Christina A. Gold
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Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of The Western Union Company; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 26, 2010
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/s/
Scott T. Scheirman
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Executive Vice President and 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: February 26, 2010
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/s/ Christina A. Gold | |
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Christina A. Gold | |
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Chief Executive Officer | |
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Date: February 26, 2010
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/s/ Scott T. Scheirman | |
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Scott T. Scheirman | |
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Executive Vice President and Chief Financial Officer |