Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant
[X] |
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Filed by a Party other than
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Check the appropriate
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Preliminary Proxy
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Soliciting Material Under Rule
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Confidential, For Use of
the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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[X] |
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Definitive Proxy
Statement |
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Definitive Additional
Materials |
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The Western
Union Company |
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(Name of Registrant as
Specified In Its Charter) |
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of Person(s) Filing Proxy Statement, if Other Than the
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Table of Contents
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THE WESTERN UNION
COMPANY 12500 East Belford
Avenue Englewood, CO 80112
April 1, 2015
Dear Stockholder:
You are cordially invited to attend
the 2015 Annual Meeting of Stockholders (the Annual Meeting) of The
Western Union Company (the Company), to be held at 8:00 a.m., local
time, on Friday, May 15, 2015, at 505 Fifth Avenue, 7th Floor, New York,
NY 10017. The registration desk will open at 7:30 a.m.
The attached notice and Proxy
Statement contain details of the business to be conducted at the Annual
Meeting. In addition, the Companys 2014 Annual Report, which is being
made available to you along with the Proxy Statement, contains information
about the Company and its performance. Directors and officers of the
Company will be present at the Annual Meeting.
Your vote is
important! Whether or not you plan to
attend the Annual Meeting, please read
the Proxy Statement and then vote, at
your earliest convenience, by telephone or Internet, or request a proxy
card to complete, sign, and date and return by mail. Using the telephone
or Internet voting systems, or mailing your completed proxy card, will not
prevent you from voting in person at the Annual Meeting if you are a stockholder
of record and wish to do so.
On behalf of the Board of Directors,
I would like to express our appreciation for your continued interest in
the Company.
Regards,
Hikmet Ersek President, Chief Executive Officer and
Director |
![](westernunion_def14a1x1x2.jpg)
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Table of Contents
![](westernunion_def14a1x2x1.jpg)
THE WESTERN UNION COMPANY
12500 East Belford Avenue
Englewood, CO 80112
(866)
405-5012
Notice of Annual
Meeting of Stockholders
TO BE HELD MAY 15,
2015
_________________________________________________
NOTICE IS HEREBY GIVEN that the 2015 Annual Meeting of Stockholders (the Annual
Meeting) of The Western Union Company, a Delaware corporation (the Company),
will be held at 8:00 a.m., local time, on Friday, May 15, 2015, at 505 Fifth
Avenue, 7th Floor, New York, NY 10017, for the following purposes:
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1. |
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Elect Hikmet Ersek, Richard A.
Goodman, Jack M. Greenberg, Betsy D. Holden, Jeffery A. Joerres, Linda
Fayne Levinson, Roberto G. Mendoza, Michael A. Miles, Jr., Robert W.
Selander, Frances Fragos Townsend, and Solomon D. Trujillo to serve as
members of the Companys Board of Directors until the Companys 2016
Annual Meeting of Stockholders. |
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2. |
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Hold an advisory vote to approve
executive compensation. |
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3. |
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Approve The Western Union Company
2015 Long-Term Incentive Plan (the 2015 Plan). |
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4. |
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Ratify the selection of Ernst
& Young LLP as our independent registered public accounting firm for
2015. |
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5. |
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Vote on the stockholder proposals
described in the accompanying Proxy Statement, if properly presented at
the Annual Meeting. |
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6. |
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Transact any other business as
may properly come before the Annual Meeting or any adjournment or
postponement of the Annual Meeting. |
The Board of Directors recommends the
following votes:
● |
FOR the election of all the nominees for the Board of
Directors. |
● |
FOR the approval of a resolution to approve, on an advisory basis, the
compensation of the Companys named executive officers, as described in
the Compensation Discussion and Analysis section, the tabular disclosure
regarding such compensation, and the accompanying narrative disclosure,
set forth in the accompanying Proxy Statement. |
● |
FOR the approval of the 2015 Plan. |
● |
FOR the ratification of the selection of Ernst & Young LLP as our
independent registered public accounting firm for
2015. |
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AGAINST the stockholder proposals described in the accompanying
Proxy Statement, if properly presented at the Annual
Meeting. |
Our stockholders of record on March 19,
2015 are entitled to notice of and to vote at the Annual Meeting and at any
adjournment or postponement that may take place. A list of stockholders entitled
to vote at the Annual Meeting will be available for examination by any
stockholder at the Annual Meeting and for ten days prior to the Annual Meeting
at our principal executive offices located at 12500 East Belford Avenue,
Englewood, CO 80112.
You are cordially invited to attend the
Annual Meeting. To gain admission, you will need to show that you are a
stockholder of the Company. All stockholders will be required to show valid,
government-issued, picture identification or an employee badge issued by the
Company. If your shares are registered in your name, your name will be compared
to the list of registered stockholders to verify your share ownership. If your
shares are in the name of your broker or bank, you will need to bring evidence
of your share ownership, such as your most recent brokerage account statement or
a legal proxy from your broker. If you do not have valid picture identification
and proof that you own Company shares, you will not be admitted to the Annual
Meeting. All packages and bags are subject to inspection. Please note that the
registration desk will open at 7:30 a.m. Please arrive in advance of the start
of the Annual Meeting to allow time for identity verification.
Table of Contents
Your vote is extremely important. We
appreciate your taking the time to vote promptly. After reading the Proxy
Statement, please vote, at your earliest convenience, by telephone or Internet,
or request a proxy card to complete, sign, and date and return by mail. If you
decide to attend the Annual Meeting and would prefer to vote by ballot, your
proxy will be revoked automatically and only your vote at the Annual Meeting
will be counted. YOUR SHARES CANNOT BE VOTED UNLESS YOU VOTE BY: (i) TELEPHONE;
(ii) INTERNET; (iii) REQUESTING A PAPER PROXY CARD TO COMPLETE, SIGN, AND DATE
AND RETURN BY MAIL; OR (iv) ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
Please note that all votes cast via telephone or the Internet must be cast prior
to 11:59 p.m., Eastern Time on Thursday, May 14, 2015.
By Order of the Board of
Directors |
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![](westernunion_def14a1x3x1.jpg) |
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John R. Dye Executive Vice President, General Counsel and
Secretary
April 1, 2015 |
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YOUR VOTE IS IMPORTANT
PLEASE PROMPTLY VOTE BY TELEPHONE OR
INTERNET, OR REQUEST A PROXY CARD TO COMPLETE, SIGN, AND DATE AND RETURN BY MAIL
SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND SO THAT THE
PRESENCE OF A QUORUM MAY BE ASSURED. YOUR PROMPT ACTION WILL AID THE COMPANY IN
REDUCING THE EXPENSE OF PROXY SOLICITATION.
Table of Contents
Table of
Contents
Table of Contents
Table of Contents
Proxy Summary |
PROXY
STATEMENT |
Proxy
Summary
This summary highlights information
contained elsewhere in this Proxy Statement. This summary does not contain all
of the information you should consider, and you should read the entire Proxy
Statement before voting.
2015 Annual Meeting of
Stockholders
Date and
Time: |
Place: |
May 15, 2015 at 8:00 a.m. local
time |
505 Fifth Avenue, 7th Floor, New York, NY
10017 |
Record
Date: |
March 19,
2015 |
Meeting Agenda and Voting
Matters
Item |
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Management Proposals |
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Board Vote Recommendation |
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Page Reference (for more
detail) |
1 |
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Election of Directors |
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FOR each director |
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15 |
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nominee |
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2 |
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Advisory Vote to Approve Executive Compensation |
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FOR |
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73 |
3 |
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Approval of The Western Union Company 2015
Long-Term |
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FOR |
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76 |
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Incentive Plan |
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4 |
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Ratify the Selection of Ernst & Young
LLP as our independent |
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FOR |
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85 |
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registered public accounting firm for 2015 |
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Item |
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Stockholder Proposals |
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Board Vote Recommendation |
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Page Reference (for more
detail) |
5 |
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Stockholder Proposal Regarding Stockholder Action By Written
Consent |
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AGAINST |
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86 |
6 |
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Stockholder Proposal Regarding Political
Contributions |
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AGAINST |
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89 |
7 |
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Stockholder Proposal Regarding New Board Committee |
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AGAINST |
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93 |
Members of Our Board of
Directors
Director |
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Age |
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Director Since |
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Independent |
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Committee Memberships |
Dinyar S. Devitre |
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67 |
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2006 |
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Yes |
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CGC⧫, CC |
Hikmet Ersek |
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54 |
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2010 |
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No |
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CC+ |
Richard A. Goodman |
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66 |
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2012 |
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Yes |
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AC⧫, CBC |
Jack M. Greenberg |
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72 |
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2006 |
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Yes |
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★ |
Betsy D. Holden |
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59 |
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2006 |
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Yes |
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CBC⧫, CGC |
Linda Fayne Levinson |
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73 |
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2006 |
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Yes |
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AC, CGC |
Roberto G. Mendoza |
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69 |
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2006 |
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Yes |
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AC, CBC |
Michael A. Miles, Jr. |
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53 |
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2006 |
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Yes |
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AC, CC |
Robert W. Selander |
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64 |
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2014 |
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Yes |
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CBC, CC |
Frances Fragos Townsend |
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53 |
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2013 |
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Yes |
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CC⧫, CGC |
Solomon D. Trujillo |
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63 |
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2012 |
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Yes |
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CBC |
★ -
Chairman of the Board
AC - Audit Committee
CBC
- Compensation and Benefits Committee
CGC -
Corporate Governance and Public Policy Committee
CC - Compliance
Committee
⧫ - Committee Chair
+ - Non-voting Member
i |
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The Western Union Company Proxy
Statement |
Table of Contents
Proxy Summary |
PROXY
STATEMENT |
Director Nominee
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Age |
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Independent |
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Committee Memberships |
Jeffery A. Joerres |
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55 |
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Yes |
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* |
* Subject to Mr. Joerres election,
the Board will determine Mr. Joerres committee assignments after the
Annual Meeting. |
Information about our Board and
Committees (Page 7)
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Number of Members |
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Independence |
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Number of Meetings During Fiscal Year
2014 |
Full Board |
11 |
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91% |
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8 |
Audit Committee |
4 |
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100% |
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8 |
Compensation and Benefits Committee |
5 |
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100% |
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6 |
Corporate Governance and Public Policy Committee |
4 |
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100% |
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4 |
Compliance Committee |
5 |
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100% of voting members |
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10 |
Governance Highlights (Page
16)
✓ |
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Annual Election of Directors |
✓ |
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Proxy Access |
✓ |
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Majority Vote Standard in Uncontested
Elections |
✓ |
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Stockholder Right to Call Special
Meetings |
✓ |
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No Stockholder Rights Plan (Poison
Pill) |
✓ |
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No Supermajority Voting Provisions in the
Companys Organizational Documents |
✓ |
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Independent Board, except our Chief
Executive Officer |
✓ |
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Independent Non-Executive
Chairman |
✓ |
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Independent Board Committees |
✓ |
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Confidential Stockholder Voting |
✓ |
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Committee Authority to Retain Independent
Advisors |
✓ |
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Robust Codes of Conduct |
✓ |
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Stock Ownership Guidelines for Senior
Executives and Directors |
✓ |
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Prohibition Against Pledging and Hedging of
Company Stock by Senior Executives and Directors |
✓ |
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Stockholder
Engagement |
Core Components of Executive
Compensation (Page 44)
● |
Base Salary - Fixed compensation
component payable in cash |
● |
Annual Incentive Awards - Variable
compensation component payable in cash based on performance against
annually established performance objectives |
● |
Performance-Based Restricted Stock
Units - Stock units that vest based on the Companys achievement of
financial performance objectives and standalone stock units that vest
based on the Companys relative total shareholder return (TSR) versus
the Standard & Poors 500 Index (S&P 500 Index)
|
● |
Stock Options - Nonqualified stock
options granted with an exercise price at fair market value on the date of
grant that expire ten years after grant and become exercisable in 25%
annual increments over a four-year vesting period |
● |
Restricted Stock Units - Restricted
stock units that generally vest in 25% annual increments over a four-year
vesting period |
The Western Union Company Proxy
Statement |
| |
ii |
Table of Contents
Proxy Summary |
PROXY
STATEMENT |
Key Features of Our Executive
Compensation Program (Page 35)
What We
Do: |
✓ |
Pay-for-performance. A
significant percentage of targeted annual compensation is delivered in the
form of variable compensation that is connected to actual performance. For
2014, variable compensation comprised approximately 88% of the targeted
annual compensation for the Chief Executive Officer and, on average, 75%
of the targeted annual compensation for the other named executive officers
(excluding the 2014 promotion and retention/performance restricted stock
unit grants to such executives). |
✓ |
Linkage between performance
measures and strategic objectives.
Performance measures for incentive compensation are linked to both
strategic and operating objectives designed to create long-term
stockholder value and to hold executives accountable for their individual
performance and the performance of the Company. |
✓ |
Emphasis on future pay
opportunity vs. current pay. In
2014, all of the long-term incentive awards delivered to our named
executive officers were in the form of equity-based
compensation. |
✓ |
Mix of performance
metrics. The Company utilizes
performance metrics that emphasize absolute performance goals, which
provide the primary links between incentive compensation and the Companys
strategic operating plan and financial results, while providing balance
through relative performance goals, which measure Company performance in
comparison to the S&P 500 Index. |
✓ |
Stockholder
engagement. As part of the
Companys stockholder outreach program, the chair of the Compensation
Committee and members of management engage with stockholders to
discuss and understand their perceptions or concerns regarding our
executive compensation program. |
✓ |
Outside compensation
consultant. The Compensation
Committee retains its own compensation consultant to review the Companys
executive compensation program and practices. |
✓ |
Double trigger in the
event of a change-in-control. In
the event of a change-in-control, severance benefits are payable only upon
a double trigger. |
✓ |
Maximum payout caps for
annual cash incentive compensation and performance-based restricted stock
unit awards. |
✓ |
Clawback
Policy. The Company may recover
incentive compensation paid to an executive officer that was calculated
based upon any financial result or performance metric impacted by fraud or
misconduct of the executive officer. |
✓ |
Robust stock ownership
guidelines. Executives are
required to hold stock equal to a multiple of five times salary for our
Chief Executive Officer and two times salary for each other named
executive officer. Fifty percent of after-tax shares received as equity
compensation must be retained until an executive meets the stock ownership
guideline. |
What We Dont
Do: |
× |
No change-in-control tax
gross ups. We do not provide
change-in-control tax gross ups to individuals promoted or hired after
April 2009. Mr. Ersek is the only Company employee who remains eligible
for excise tax gross-up payments. |
× |
No repricing or buyout of
underwater stock options. None of
our equity plans permit the repricing or buyout of underwater stock
options or stock appreciation rights without stockholder approval, except
in connection with certain corporate transactions involving the
Company. |
× |
Prohibition against pledging
and hedging of Company securities by senior executives and directors.
|
× |
No dividends or dividend
equivalents accrued or paid on performance-based restricted stock unit
awards or time-based restricted stock unit
awards. |
iii |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Proxy Summary |
PROXY
STATEMENT |
Recent Compensation
Actions
For 2014, many of the compensation
decisions were designed to further align the Companys executive compensation
program with the Companys future growth and strategic operating plans and the
interests of our executives with those of our stockholders. Specifically, the
Compensation Committee approved several modifications to the compensation
program to further align the executive compensation program with evolving
investor preferences, executive compensation practices and market
trends.
These decisions included:
● |
No Executive Base Salary
Increases for 2013 or 2014:
Other than with respect to executive promotions, there were no changes in
our named executive officers base salary levels for 2013 or 2014 from the
levels effective March 2012. |
● |
Created Standalone TSR
Performance-Based Restricted Stock Units: We replaced the TSR modifier from our 2013
long-term incentive design under the Companys 2006 Long-Term Incentive
Plan (the Long-Term Incentive Plan) with a standalone TSR
performance-based restricted stock unit award (TSR PSU) in order to
enhance focus on stockholder returns. These TSR PSUs require the Company
to achieve 60th percentile relative TSR performance versus the
S&P 500 Index over a three-year performance period in order to earn
target payout, with 30th percentile relative
TSR performance resulting in threshold payout and 90th percentile relative TSR resulting in maximum payout. |
● |
Increased Performance
Period for Performance-Based Restricted Stock Units: We increased the performance period of our
performance-based restricted stock units so that they will be subject to a
three-year total performance period, versus the two-year performance
period used in prior years. |
● |
Diversified Long-Term
Incentive Plan Mix and Increased Weighting of At-Risk
Awards: We increased the
percentage of our annual equity grants that have vesting provisions that
are strictly performance-based and at-risk. For 2014, the annual |
|
equity
awards under the Long-Term Incentive Plan consisted of 80%
performance-based restricted stock units (60% financial performance-based
restricted stock units, incorporating both revenue and operating income
growth (Financial PSUs), and 20% TSR PSUs) and 20% stock options, as
compared to 67% performance-based restricted stock units and 33% stock
options in 2013. |
● |
Established Goals
Exceeding Performance During Prior Three Years: The financial performance target objectives for
the 2014 compensation program were set at constant currency growth rates
that are higher than the Companys average annual constant currency
results achieved over 2011 through 2013. The 2014 Senior Executive Annual
Incentive Plan (the Annual Incentive Plan) financial performance target
objectives were also set higher than the constant currency financial
performance target objectives and actual results under the 2013 Annual
Incentive Plan. For the 2014 Annual Incentive Plan, performance at 184% of
the target revenue growth rate and at 200% of the target operating income
growth rate is required for a maximum payout equal to 150% of the target
award. Further, the Companys relative TSR performance rank versus the
S&P 500 Index over the 2014-2016 performance period that is required
to earn a target payout under the 2014 TSR PSUs is higher than the
Companys annual relative TSR performance versus the S&P 500 Index in
each of 2011, 2012, and 2013. |
● |
Reduced Maximum Payout
Under Annual Incentive
Plan: The Compensation
Committee reduced the maximum payout opportunity under the Annual
Incentive Plan to 150% of target, as compared to the 200% of target
maximum payout opportunity that was used in prior years. |
● |
Reduced Severance
Benefits Under Executive Severance Policy: During 2014, the Compensation Committee amended
the Companys executive severance policy (the Executive Severance
Policy) to reduce the severance multiple for determining severance
benefits prior to a change-in-control from 2 to 1.5 for participants other
than the Companys Chief Executive Officer.
|
The Western Union Company Proxy
Statement |
| |
iv |
Table of Contents
Proxy Summary |
PROXY
STATEMENT |
Chief Executive Officer
Compensation
For 2014 performance, Mr. Ersek
received a cash payout under the 2014 Annual Incentive Plan of $1,314,800,
reflecting a blended payout of 88% of target based on the Companys achievement
of corporate and strategic performance goals, as compared to an 84% of target
payout for 2013 performance and no payout for 2012 performance. The Compensation Committee based Mr. Erseks award
opportunity under the Annual Incentive Plan on the achievement of
corporate and strategic performance goals and did not include individual performance
goals. As noted above, the 2014 Annual Incentive Plan financial performance
target objectives were set higher than the constant currency financial
performance target objectives and actual results under the 2013 Annual Incentive
Plan. Also for 2014, the committee awarded Mr. Ersek a discretionary bonus of
$115,000 in recognition of his leadership in enhancing the Companys global
compliance programs.
The following chart demonstrates that
variable, performance-based pay elements comprised approximately 88% of the
targeted 2014 annual compensation for Mr. Ersek (consisting of target payout
opportunity under the Annual Incentive Plan and stock option and
performance-based restricted stock unit components under the Long-Term Incentive
Plan). Pay is based on the annual base salary and target incentive opportunities
applicable to Mr. Ersek as of December 31, 2014.
Since a significant portion of Mr.
Erseks compensation is both performance-based and at-risk, we are providing
the following supplemental graph to demonstrate the difference between the
compensation granted to Mr. Ersek as required to be reported by the U.S.
Securities and Exchange Commission (the SEC) rules in the 2014 Summary
Compensation Table, and the compensation realizable by him for 2012 to
2014.
We believe the realizable
compensation shown is reflective of the Compensation Committees emphasis on
pay-for-performance in that differences between realizable pay and total
reported compensation as well as fluctuations year-over-year are primarily the
result of our varying levels of achievement against pre-established performance
goals under our Annual Incentive Plan and Long-Term Incentive Plan and our stock
performance. For example, as illustrated in the following table, 2012 realizable
compensation was significantly below 2012 reported compensation and 2013 and
2014 realizable compensation. This difference was primarily a result of a 2012
payout level of 13% of target for the Chief Executive Officer for the Companys
2012 performance-based stock unit awards, no payout for the Chief Executive
Officer under the 2012 Annual Incentive Plan, and stock price depreciation during
2012. In contrast, the improvement in realizable compensation in 2013 and 2014
is primarily attributable to our estimated performance as of December 31, 2014
against the financial performance objectives under the Companys 2013 and 2014
performance-based restricted stock unit awards and stock price
appreciation.
v |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Proxy Summary |
PROXY
STATEMENT |
(1) |
This graph and the total
realizable compensation reported in this graph provides supplemental
information regarding the compensation paid to Mr. Ersek and should not be
viewed as a substitute for the 2014 Summary Compensation
Table. |
(2) |
As reported in the Total column of
the 2014 Summary Compensation Table. |
(3) |
Amounts reported in the
calculation of total realizable compensation include (a) annualized base
salary, (b) actual bonus payments made to Mr. Ersek with respect to each
of the years shown under the Companys Annual Incentive Plan, (c) actual
amounts paid with respect to discretionary bonuses in the year in which
such bonuses are paid, (d) the value realized from the exercise of stock
options and for unexercised stock options, the difference between the
exercise price and the closing stock price on December 31, 2014, each
reported in the year granted, (e) the value realized upon vesting of
restricted stock units or performance-based restricted stock units and the
value of unvested restricted stock units or performance-based restricted
stock unit awards based on the closing stock price on December 31, 2014,
each reported in the year granted, and (f) amounts reported in the All
Other Compensation Table for the respective years. For purposes of this
table, the value of the TSR PSUs is based on target performance since the
TSR PSUs vest based on the Companys TSR at the end of the three-year
performance period compared to the Companys TSR at the beginning of the
performance period. The Financial PSUs and the 2013 performance-based
restricted stock unit awards are valued for purposes of this table based
on estimated performance as of December 31, 2014. |
(4) |
Closing stock price
as of December 31 for each year
reported. |
The Western Union Company Proxy
Statement |
| |
vi |
Table of Contents
Proxy Statement and Proxy Process |
PROXY
STATEMENT |
Proxy Statement
The Board of Directors (the Board of
Directors or the Board) of The Western Union Company (Western Union or the
Company) is soliciting your proxy to vote at the 2015 Annual Meeting of
Stockholders (the Annual Meeting) to be held on May 15, 2015 at 8:00 a.m.,
local time, and any adjournment or postponement of that meeting. The meeting
will be held at 505 Fifth Avenue, 7th Floor, New York, NY 10017.
In accordance with rules and
regulations of the SEC, instead of mailing a printed copy of our proxy materials
to each stockholder of record or beneficial owner, we furnish proxy materials,
which include this Proxy Statement and the accompanying Proxy Card, Notice of
Meeting, and Annual Report to Stockholders, to our stockholders over the
Internet unless otherwise instructed by the stockholder. If you received a
Notice of Internet Availability of Proxy Materials by mail and would like to
receive a printed copy of our proxy materials, you should follow the
instructions for requesting such materials included in the Notice of Internet
Availability of Proxy Materials.
The Notice of Internet Availability
of Proxy Materials was first mailed on or before April 1, 2015 to all
stockholders of record as of March 19, 2015 (the Record Date). The only voting
securities of the Company are shares of the
Companys common stock, $0.01 par value per share (the Common Stock),
of which there were 518,535,065 shares outstanding as of the Record Date. The closing
price of the Companys Common Stock on the Record Date was $19.25 per
share.
The Companys Annual Report to
Stockholders, which contains consolidated financial statements for the year
ended December 31, 2014, accompanies this Proxy Statement. You also may obtain a
copy of the Companys Annual Report on Form 10-K for the year ended December 31,
2014 that was filed with the SEC, without charge, by writing to Investor
Relations, The Western Union Company, 12500 East Belford Avenue, Mailstop M23IR,
Englewood, CO 80112. If you would like to
receive a copy of any exhibits listed in the Companys Annual Report on Form
10-K for the year ended December 31, 2014, please call (866) 405-5012 or submit
a request in writing to Investor Relations at the above address, and the Company
will provide you with the exhibits upon the payment of a nominal fee (which fee
will be limited to the expenses we incur in providing you with the requested
exhibits). The Companys Annual Report
on Form 10-K for the year ended December 31, 2014 and these exhibits are also
available in the Investor Relations section of www.wu.com.
1 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Proxy Statement and Proxy Process |
PROXY
STATEMENT |
The Proxy Process and Stockholder
Voting
WHY DID I RECEIVE THESE
MATERIALS? |
Our Board of Directors has made
these materials available to you on the Internet or, upon your request,
has delivered printed versions of these materials to you by mail, in
connection with the Boards solicitation of proxies for use at our Annual
Meeting, which will take place on May 15, 2015, or any adjournment or
postponement thereof. Our stockholders are invited to attend the Annual
Meeting and are requested to vote on the proposals described in this Proxy
Statement. |
WHAT DOES IT MEAN IF I
RECEIVE MORE THAN ONE NOTICE OF INTERNET AVAILABILITY OF
PROXY MATERIALS OR SET OF PROXY MATERIALS? |
This means you hold shares of
the Company in more than one way. For example, you may own some shares
directly as a Registered Holder and other shares through a broker or you
may own shares through more than one broker. In these situations, you may
receive multiple Notices of Internet Availability of Proxy Materials or,
if you request proxy materials to be delivered to you by mail, Proxy
Cards. It is necessary for you to vote, sign, and return all of the Proxy
Cards or follow the instructions for any alternative voting procedure on
each of the Notices of Internet Availability of Proxy Materials you
receive in order to vote all of the shares you own. If you request proxy
materials to be delivered to you by mail, each Proxy Card you receive will
come with its own prepaid return envelope; if you vote by mail, make sure
you return each Proxy Card in the return envelope which accompanied that
Proxy Card. |
WHY DID MY HOUSEHOLD
RECEIVE ONLY ONE COPY OF THE NOTICE OF INTERNET AVAILABILITY
OF PROXY MATERIALS OR PROXY MATERIALS? |
In addition to furnishing proxy
materials electronically, we take advantage of the SECs householding
rules to reduce the delivery cost of materials. Under such rules, only one
Notice of Internet Availability of Proxy Materials or, if you have
requested paper copies, only one set of proxy materials is delivered to
multiple stockholders sharing an address unless we have received contrary
instructions from one or more of the stockholders. If you are a
stockholder sharing an address and wish to receive a separate Notice of
Internet Availability of Proxy Materials or copy of the proxy materials,
you may so request by contacting the Broadridge Householding Department by
phone at 1-800-542-1061 or by mail to Broadridge Householding Department,
51 Mercedes Way, Edgewood, NY 11717. A separate copy will be promptly
provided following receipt of your request, and you will receive separate
materials in the future. If you currently share an address with another
stockholder but are nonetheless receiving separate copies of the
materials, you may request delivery of a single copy in the future by
contacting the Broadridge Householding Department at the number or address
shown above. |
The Western Union Company Proxy
Statement |
| |
2 |
Table of Contents
Proxy Statement and Proxy Process |
PROXY
STATEMENT |
DOES MY VOTE MATTER? |
YES! We are required to obtain stockholder approval for
the election of directors and other important matters. Each share of
Common Stock is entitled to one vote and every share voted has the same
weight. In order for the Company to obtain the necessary stockholder
approval of proposals, a quorum of stockholders (a majority of the
issued and outstanding shares entitled to vote) must be represented at the
meeting in person or by proxy. If a quorum is not obtained, the Company
must adjourn or postpone the meeting and solicit additional proxies; this
is an expensive and time-consuming process that is not in the best
interest of the Company or its stockholders. Since few stockholders can
spend the time or money to attend stockholder meetings in person, voting
by proxy is important to obtain a quorum and complete the stockholder
vote. |
HOW DO I VOTE? |
By Telephone or
InternetYou may vote your shares
via telephone as instructed on the Proxy Card, or the Internet as
instructed on the Proxy Card or the Notice of Internet Availability of
Proxy Materials. The telephone and Internet procedures are designed to
authenticate your identity, to allow you to vote your shares, and confirm
that your instructions have been properly recorded.
The telephone and Internet
voting facilities will close at 11:59 p.m., Eastern Time, on May 14, 2015.
By MailIf you request paper Proxy Cards by telephone or
Internet, you may elect to vote by mail. If you elect to do so, you should
complete, sign, and date each Proxy Card you receive, indicating your
voting preference on each proposal, and return each Proxy Card in the
prepaid envelope which accompanied that Proxy Card. If you return a signed
and dated Proxy Card but you do not indicate your voting preferences, your
shares will be voted in accordance with the recommendations of the Board
of Directors. By returning your signed and dated Proxy Card or providing
instructions by the alternative voting procedure in time to be received
for the Annual Meeting, you authorize Hikmet Ersek and John R. Dye to act
as your Proxies to vote your shares of Common Stock as
specified.
At the
MeetingShares held in your name
as the stockholder of record may be voted by you in person at the Annual
Meeting. Shares held beneficially on your behalf by a broker or agent may
be voted by you in person at the Annual Meeting only if you obtain a legal
proxy from the broker or agent that holds your shares giving you the right
to vote the shares, and you bring such proxy to the Annual
Meeting.
Shares held in The Western
Union Company Incentive Savings PlanFor shares held in The Western Union Company Incentive Savings
Plan, that plans trustee will vote such shares as directed. If no
direction is given on how to vote such shares to the trustee by mail on or
before May 12, 2015
or by Internet or telephone by
11:59 p.m. (Eastern Time) on May 14, 2015, the trustee will vote your
shares held in that plan in the same proportion as the shares for which it
receives instructions from all other participants in the
plan. |
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The Western Union Company Proxy
Statement |
Table of Contents
Proxy Statement and Proxy
Process |
PROXY
STATEMENT |
HOW MANY VOTES ARE REQUIRED TO APPROVE A
PROPOSAL? |
|
The Companys By-Laws (the
By-Laws) require directors to be elected by the majority of votes cast
with respect to such director in uncontested elections (the number of
shares voted for a director must exceed the number of votes cast
against that director with abstentions and broker non-votes not counted
as votes for or against). In a contested election (a situation in
which the number of nominees exceeds the number of directors to be
elected), the standard for election of directors will be a plurality of
the shares represented in person or by proxy at any such meeting and
entitled to vote on the election of directors.
The advisory vote to approve
executive compensation (Proposal 2), approval of The Western Union
Companys 2015 Long-Term Incentive Plan (Proposal 3), the ratification of
Ernst & Young LLPs selection as independent registered public
accounting firm (Proposal 4), the stockholder proposal regarding
stockholder action by written consent (Proposal 5), and the stockholder
proposal regarding political contributions (Proposal 6) each require the
affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the Annual Meeting and entitled to vote
thereon. The stockholder proposal regarding creation of a Board Committee
on Human Rights (Proposal 7) requires the affirmative vote of the holders
of a majority of the outstanding Common Stock of the Company entitled to
vote thereon. |
WHAT IS THE EFFECT OF NOT VOTING? |
|
It depends on how ownership of your
shares is registered and the proposal to be voted upon. If you own shares
as a Registered Holder, rather than through a broker, your unvoted shares
will not be represented at the Annual Meeting and will not count toward
the quorum requirement. Except as described below, and assuming a quorum
is obtained, your unvoted shares will not affect whether a proposal is
approved or rejected.
If you own shares through a broker
and do not vote, your broker may represent your shares at the meeting for
purposes of obtaining a quorum. Except as described in the answer to the
following question, in the absence of your voting instruction, your broker
may or may not vote your shares. |
IF I DONT VOTE, WILL MY BROKER VOTE FOR ME? |
|
If you own your shares through a
broker and you dont vote, your broker may vote your shares in its
discretion on some routine matters. With respect to other proposals,
however, your broker may not be able to vote your shares for you. With
respect to these proposals, the aggregate number of unvoted shares is
reported as the broker non-vote. Broker non-vote shares will have the
same effect as a vote against Proposal 7. With respect to each of the
other proposals, a broker non-vote share will not affect the
determination of whether the matter is approved. The Company believes that
the proposal to ratify Ernst & Young LLPs selection as independent
registered public accounting firm (Proposal 4) set forth in this Proxy
Statement is a routine matter on which brokers will be permitted to vote
any unvoted shares.
Other than Proposal 4, the Company
believes that all other proposals set forth in this Proxy Statement are
not considered routine matters and brokers will not be able to vote on
behalf of their clients if no voting instructions have been furnished.
Please vote your shares on all
proposals. |
The Western Union Company Proxy
Statement |
| |
4 |
Table of Contents
Proxy Statement and Proxy
Process |
PROXY
STATEMENT |
HOW ARE ABSTENTIONS TREATED? |
|
Whether you own your shares as a
Registered Holder or through a broker, abstentions are counted toward the
quorum requirement and are counted as votes against a proposal, other
than the proposal for the election of directors. |
IF I OWN MY SHARES THROUGH A BROKER, HOW IS MY
VOTE RECORDED? |
|
Brokers typically own shares of
Common Stock for many stockholders. In this situation, the Registered
Holder on the Companys stock register is the broker or its nominee. This
often is referred to as holding shares in Street Name. The Beneficial
Owners do not appear in the Companys stockholder register. If you hold
your shares in Street Name, and elect to vote via telephone or the
Internet, your vote will be submitted to your broker. If you request paper
Proxy Cards and elect to vote by mail, the accompanying return envelope is
addressed to return your executed Proxy Card to your broker. Shortly
before the meeting, each broker totals the votes submitted by telephone,
Internet, or mail by the Beneficial Owners for whom it holds shares, and
submits a Proxy Card reflecting the aggregate votes of such Beneficial
Owners. |
IS MY VOTE CONFIDENTIAL? |
|
In accordance with the Companys
Corporate Governance Guidelines, the vote of any stockholder will not be
revealed to anyone other than a non-employee tabulator of votes or an
independent election inspector (the Inspector of Election), except (i)
as necessary to meet applicable legal and stock exchange listing
requirements, (ii) to assert claims for or defend claims against the
Company, (iii) to allow the Inspector of Election to certify the results of
the stockholder vote, (iv) in the event a proxy, consent, or other
solicitation in opposition to the voting recommendation of the Board of
Directors takes place, (v) if a stockholder has requested that his or her
vote be disclosed, or (vi) to respond to stockholders who have written
comments on Proxy Cards. |
CAN I REVOKE MY PROXY AND CHANGE MY
VOTE? |
|
Yes. You have the right to revoke
your proxy at any time prior to the time your shares are voted. If you are
a Registered Holder, your proxy can be revoked in several ways: (i) by
timely delivery of a written revocation delivered to the Corporate
Secretary, (ii) by timely submission of another valid proxy bearing a
later date (including through any alternative voting procedure described
on the Notice of Internet Availability of Proxy Materials or Proxy Card),
or (iii) by attending the Annual Meeting and giving the
Inspector of Election notice that you intend to vote your shares in person.
If your shares are held by a broker, you must contact your broker in order
to revoke your proxy. |
WILL ANY OTHER BUSINESS BE TRANSACTED
AT THE MEETING? IF SO, HOW WILL MY PROXY BE
VOTED? |
|
Management does not know of any
business to be transacted at the Annual Meeting other than those matters
described in this Proxy Statement. The period specified in the Companys
By-Laws for submitting additional proposals to be considered at the Annual
Meeting has passed and there are no such proposals to be considered.
However, should any other matters properly come before the Annual Meeting,
and any adjournments and postponements thereof, shares with respect to
which voting authority has been granted to the Proxies will be voted by
the Proxies in accordance with their judgment. |
WHO COUNTS THE
VOTES? |
|
Votes will be counted and certified
by the Inspectors of Election, who are employees of Wells Fargo Bank,
N.A., the Companys Transfer Agent and Registrar. If you are a Registered
Holder, your telephone or Internet vote is submitted, or your executed
Proxy Card is returned, directly to Wells Fargo for tabulation. As noted
above, if you hold your shares through a broker, your broker returns a
single Proxy Card to Wells Fargo on behalf of its
clients. |
5 |
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The Western Union Company Proxy
Statement |
Table of Contents
Proxy Statement and Proxy
Process |
PROXY
STATEMENT |
HOW MUCH DOES THE PROXY SOLICITATION
COST? |
|
The Company has engaged the firm of
MacKenzie Partners, Inc., 105 Madison Avenue, New York, NY 10016, to
assist in distributing and soliciting proxies for a fee of approximately
$20,000, plus expenses. However, the proxy solicitor fee is only a small
fraction of the total cost of the proxy process. A significant expense in
the proxy process is printing and mailing the proxy materials. The Company
will also reimburse brokers, fiduciaries, and custodians for their costs
in forwarding proxy materials to Beneficial Owners of our Common Stock.
Proxies also may be solicited on behalf of the Company by directors,
officers, or employees of the Company in person or by mail, telephone, or
facsimile transmission. No additional compensation will be paid to such
directors, officers, or employees for soliciting proxies. The Company will
bear the entire cost of solicitation of proxies, including the
preparation, assembly, printing, and mailing of the Notice of Internet
Availability of Proxy Materials, and this Proxy Statement and the
accompanying Proxy Card, Notice of Meeting, and Annual Report to
Stockholders. |
Important Notice Regarding
the Availability of Proxy Materials |
The Companys Proxy Statement and Annual
Report to Stockholders are available at www.proxydocs.com/wu for Registered
Holders and at www.proxyvote.com for Beneficial Owners. To access such materials, you will need
the control/identification numbers provided to you in your Notice of Internet
Availability of Proxy Materials or your Proxy Card.
The Western Union Company Proxy
Statement |
| |
6 |
Table of Contents
Board of Directors
Information |
PROXY
STATEMENT |
Board of Directors Information
In accordance with applicable Delaware
law, the business of the Company is managed under the direction of its Board of
Directors. Pursuant to the Companys Amended and Restated Certificate of
Incorporation, the Board of Directors is to consist of not less than one nor
more than 15 directors. At the Annual Meeting, director nominees will stand for
election for one-year terms, expiring at the 2016 Annual Meeting of
Stockholders.
During 2014, the Board of Directors met
eight times
(not including committee meetings). Each of the directors attended at least 75%
of the aggregate number of meetings of the Board and Board committees on which
they served during 2014.
Board of Directors
Dinyar S. Devitre
![](westernunion_def14a3x4x1.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND DIRECTORSHIPS
Special Advisor to General Atlantic
LLC since 2008. Mr. Devitre served as Senior Vice President and Chief
Financial Officer of Altria Group, Inc. from 2002 until 2008. From 2001 to
2002, Mr. Devitre served as a private business consultant and from 1998 to
2001, he was Executive Vice President at Citibank in Europe. He started
with the Altria Group companies in 1970 and served in a variety of
positions, including President Philip Morris, Asia, Chairman and Chief
Executive Officer Philip Morris, Japan, and Senior Vice President,
Corporate Planning, Philip Morris Companies, Inc. from 1995 to 1998. Mr.
Devitre was a director of Kraft Foods Inc. from 2002 to 2007, and is a
director of SABMiller plc, Markit Ltd. and Altria Group, Inc. Mr.
Devitres term expires in 2015
and he has declined to stand for
re-election. |
Age 67 |
|
Director Since
2006 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Devitre brings to the Board
experience as the chief financial officer of a large United States-based
multinational company, as an executive and director of large consumer
goods corporations subject to regulation in multiple jurisdictions and as
an executive of a financial services company. Mr. Devitre has experience
with complex capital structures and related issues. Mr. Devitre also
provides the Board with diversity in viewpoint and international business
experience as a native of India who has lived and worked in many
countries. |
7 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Board of Directors
Information |
PROXY
STATEMENT |
Hikmet Ersek
![](westernunion_def14a3x5x1.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND DIRECTORSHIPS
President and Chief Executive
Officer of the Company since 2010. From January 2010 to August 2010, Mr.
Ersek served as the Companys Chief Operating Officer. Prior to 2010, Mr.
Ersek served as the Companys Executive Vice President and Managing
Director, Europe, Middle East, Africa and Asia Pacific Region from 2008.
From 2006 to 2008, Mr. Ersek served as the Companys Executive Vice
President and Managing Director, Europe/Middle East/Africa/South Asia.
Prior to 2006, Mr. Ersek held various positions of increasing
responsibility with the Company. Prior to joining Western Union in 1999,
Mr. Ersek was with GE Capital and Europay/ MasterCard specializing in
European payment systems and consumer finance. Mr. Erseks term expires in
2015. |
Age 54 |
|
Director Since
2010 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Ersek is the only Director who
is also an executive of the Company. Mr. Ersek provides insight as the
Companys leader, and from his prior roles as the Companys Chief
Operating Officer and leader in the Companys Europe, Middle East, Africa
and Asia Pacific region, a significant area for the Company. Mr. Ersek
provides many years of international consumer payment sales, marketing,
distribution, and operations insight from his experience with the Company,
GE Capital, and
Europay/MasterCard. |
Richard A. Goodman
![](westernunion_def14a3x5x2.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS
Executive Vice President, Global Operations of PepsiCo Inc. (PepsiCo) from 2010 to 2011. Prior to that, Mr. Goodman was PepsiCos Chief Financial Officer from 2006. From 2003 until 2006, Mr. Goodman
was Senior Vice President and Chief Financial Officer of PepsiCo International. Mr. Goodman served as Senior Vice President and Chief Financial Officer of PepsiCo Beverages International from 2001 to 2003, and as Vice President and General Auditor
of PepsiCo from 2000 to 2001. Before joining PepsiCo in 1992, Mr. Goodman was with W.R. Grace & Co. in a variety of senior financial positions. Mr. Goodman is a director of Johnson Controls Inc., Toys R Us, Inc., and Kindred
Healthcare, Inc. Mr. Goodmans term expires in 2015. |
Age 66 |
|
Director Since
2012 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Goodman brings to the Board
experience as the chief financial officer and executive of a large, United
States-based global company that manufactures, markets, and distributes a
broad range of consumer goods. Mr. Goodman has experience with complex
capital structures, and brings to the Board and management perspective
with regard to consumer products, marketing, and brand management. Mr.
Goodman also brings to the Board his experience as a board member of both
a global diversified industrial company and a global retailer.
|
The Western Union Company Proxy
Statement |
| |
8 |
Table of Contents
Board of Directors
Information |
PROXY
STATEMENT |
Jack M. Greenberg
![](westernunion_def14a3x6x1.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND
DIRECTORSHIPS
Non-Executive Chairman of the Board
of Directors. Mr. Greenberg was Chairman (from 1999) and Chief Executive
Officer (from 1998) of McDonalds Corporation until 2002. Mr. Greenberg
joined McDonalds Corporation as Executive Vice President and Chief
Finance Officer and as a member of its Board of Directors in 1982. He
served as a director of First Data from 2003 to 2006, as a director of
Abbott Laboratories from 2001 to 2007, and as a director of Manpower, Inc.
from 2003 to 2014. Mr. Greenberg is a director of The Allstate
Corporation, Hasbro, Inc., Innerworkings, Inc., where he serves as
Chairman of the Board, and Quintiles Transnational Holdings Inc. Mr.
Greenbergs term expires in 2015. |
Age 72 |
|
Director Since
2006 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Greenbergs experience as the
Chairman and Chief Executive Officer of McDonalds Corporation is
supportive of his role as Non-Executive Chairman of the Board. He has
experience working with large, global distribution networks, similar to
the Companys agent network, and operations, consumer marketing, pricing,
and trend analysis. Mr. Greenberg brings to the Board experience as the
chief financial officer of a large United States-based multinational
company. He is also a certified public accountant and an attorney. Mr.
Greenberg is the only Director who was a director of the Companys former
parent company, which provides historical context for the Companys
operations. |
Betsy D. Holden
![](westernunion_def14a3x6x2.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND
DIRECTORSHIPS
Senior Advisor to McKinsey &
Company since 2007. Ms. Holden served as President, Global Marketing and
Category Development of Kraft Foods Inc. from 2004 through 2005, Co-Chief
Executive Officer of Kraft Foods Inc. from 2001 until 2003, and President
and Chief Executive Officer of Kraft Foods North America from 2000 until
2003. Ms. Holden began her career at General Foods in 1982. She currently
serves as a director of Catamaran Corporation, Diageo plc., and Time, Inc.
Ms. Holdens term expires in 2015. |
Age 59 |
|
Director Since
2006 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Ms. Holden brings to the Board
experience as a chief executive officer of a large United States-based
multinational company and provides the Board with insights into consumer
marketing and brand management from her years of experience with Kraft
Foods. She is familiar with the challenges of operating in a highly
regulated industry. Her current role as Senior Advisor to McKinsey &
Company is focused on strategy, marketing, innovation, and board
effectiveness initiatives across a variety of industries.
|
9 |
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The Western Union Company Proxy
Statement |
Table of Contents
Board of Directors
Information |
PROXY
STATEMENT |
Linda Fayne Levinson
![](westernunion_def14a3x7x1.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND
DIRECTORSHIPS
An advisor to professionally funded,
privately held ventures. Ms. Fayne Levinson was Non-Executive Chair of the
Board of Connexus, Inc., formerly VendareNetblue, a privately held online
marketing company until 2010 when it was merged with Epic Advertising.
From 1997 until 2004, Ms. Fayne Levinson was a partner at GRP Partners, a
venture capital firm, investing in early stage technology companies in the
financial services, internet media and online retail sectors. Earlier in
her career, Ms. Fayne Levinson was an executive at American Express and a
partner at McKinsey & Company. She is a director of NCR Corporation,
Jacobs Engineering Group Inc., Ingram Micro, Inc., and Hertz Global
Holdings Inc. Ms. Fayne Levinsons term expires in
2015. |
Age 73 |
|
Director Since 2006 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Ms. Fayne Levinson provides a
combination of consumer payments business experience with that of emerging
technology and online retail services companies. She also provides general
management experience from her time at American Express, strategic
experience as a former McKinsey partner, and investment experience from
her time as a venture capital investor. Each of these areas is central to
the Companys business. Ms. Fayne Levinson also has substantial experience
with respect to executive compensation matters and corporate governance.
|
Roberto G. Mendoza
![](westernunion_def14a3x7x2.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND
DIRECTORSHIPS
Senior Managing Director of Atlas
Advisors LLC, an independent global investment banking firm, since 2010.
Previously, Mr. Mendoza co-founded Deming Mendoza & Co., LLC, a
corporate finance advisory firm, and served as one of its partners from
2009 to 2010. Mr. Mendoza served as Non-Executive Chairman of Trinsum
Group from 2007 to 2008. In 2007, Trinsum Group was formed as a result of
a merger of Marakon Associates and Integrated Finance Limited, a financial
advisory company which Mr. Mendoza co-founded and of which he served as
Chairman of the Board and Managing Director from 2002 to 2007. He also
served as Managing Director of Goldman Sachs from 2000 to 2001. From 1967
to 2000, Mr. Mendoza held positions at J.P. Morgan & Co. Inc., serving
from 1990 to 2000 as director and Vice Chairman of the Board. He currently
serves as a director of PartnerRe Ltd. and Manpower Inc. Mr. Mendozas
term expires in 2015. |
Age 69 |
|
Director Since 2006 |
|
|
EXPERIENCE, QUALIFICATIONS, ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Mendoza has substantial
experience in investment banking and financial services. Mr. Mendoza also
provides the Board with diversity in viewpoint and international business
experience as he has lived and worked and served on a variety of public
company boards, both in the United States and
abroad. |
The Western Union Company Proxy
Statement |
| |
10 |
Table of Contents
Board of Directors
Information |
PROXY
STATEMENT |
Michael A. Miles,
Jr.
![](westernunion_def14a4x1x1.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND DIRECTORSHIPS
Advisory Director of Berkshire
Partners, a private equity firm, since 2013. Previously, Mr. Miles was
President of Staples, Inc. from 2006 until 2013, and Chief Operating
Officer from 2003. Prior to that, Mr. Miles was Chief Operating Officer,
Pizza Hut for Yum! Brands, Inc. from 2000 to 2003. From 1996 to 1999, he
served Pizza Hut as Senior Vice President of Concept Development &
Franchise. Mr. Miles term expires in 2015. |
Age 53 |
|
Director Since 2006 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Miles has experience as an
executive of an international consumer goods retailer, and with large
acquisitions outside of the United States and franchise distribution
networks, which are similar to the Companys agent network. Mr. Miles also
brings U.S. and global operational expertise to the Board discussions.
|
Robert W.
Selander
![](westernunion_def14a4x1x2.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND DIRECTORSHIPS
Mr. Selander served as Executive
Vice Chairman of MasterCard Incorporated and MasterCard
International during 2010. From 1997 until 2010, Mr. Selander served
as Chief Executive Officer of MasterCard Incorporated and MasterCard
International. In addition, until 2009, Mr. Selander served as President
of MasterCard Incorporated and MasterCard International from 2002 and
1997, respectively. Prior to his election as President and Chief Executive
Officer of MasterCard International in 1997, Mr. Selander was an Executive
Vice President and President of the MasterCard International Europe,
Middle East/Africa and Canada regions. Before joining MasterCard in 1994,
Mr. Selander spent two decades with Citicorp/Citibank, N.A. Mr. Selander
has also served as a director of the Hartford Financial Services Group,
Inc. from 1998 to 2008, MasterCard Incorporated from 2002 until 2010, and
MasterCard International from 1997 until 2010. Mr. Selander currently
serves on the Board of Directors of Mozido, Inc. and the Board of Trustees
of the Fidelity Equity and High Income Funds. |
Age 64 |
|
Director Since 2014 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Selander has extensive global
business, leadership and financial services experience gained in over
thirteen years as Chief Executive Officer of MasterCard Incorporated and
MasterCard International and in senior positions at Citicorp/Citibank N.A.
Mr. Selander also has substantial board of director experience having
served as a director of MasterCard Incorporated, MasterCard International
and the Hartford Financial Services Group, Inc.
|
11 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Board of Directors
Information |
PROXY
STATEMENT |
Frances Fragos Townsend
![](westernunion_def14a4x2x1.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND DIRECTORSHIPS
Executive Vice President of
Worldwide Government, Legal and Business Affairs at MacAndrews &
Forbes Holdings Inc. since 2013, and previously served as Senior Vice
President of Worldwide Government, Legal and Business Affairs from 2010 to
2012. Ms. Fragos Townsend was a corporate partner at the law firm of Baker
Botts L.L.P. from 2009 to 2010. From 2008 to 2009, Ms. Fragos Townsend
provided consulting services and advised corporate entities on global
strategic risk and contingency planning. Prior to that, Ms. Fragos
Townsend served as Assistant to President George W. Bush for Homeland
Security and Counterterrorism and chaired the Homeland Security Council
from 2004 until 2008. She also served as Deputy Assistant to the President
and Deputy National Security Advisor Combating Terrorism from 2003 to
2004. Ms. Fragos Townsend was the first Assistant Commandant for
Intelligence for the United States Coast Guard and spent 13 years at the
United States Department of Justice in various senior positions. Ms.
Fragos Townsend is a director of Scientific Games Corporation and
Freeport-McMoRan Copper & Gold Inc.
and was a director of SIGA
Technologies, Inc. until 2014. Ms. Fragos Townsends term expires in
2015. |
Age 53 |
|
Director Since 2013 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Ms. Fragos Townsend has extensive
public policy, government, legal, and regulatory experience, and brings to
the Board valuable insights regarding the conduct of business in a highly
regulated industry. Ms. Fragos Townsend also has substantial leadership
experience as former chair of the Homeland Security Council and as a
former officer in the United States Coast Guard.
|
The Western Union Company Proxy
Statement |
| |
12 |
Table of Contents
Board of Directors
Information |
PROXY
STATEMENT |
Solomon D. Trujillo
![](westernunion_def14a4x3x1.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND DIRECTORSHIPS
Founded Trujillo Group, LLC, and has
served as chairman since 2003. Mr. Trujillo also served as the Chief
Executive Officer and as director of Telstra Corporation Limited,
Australias largest media-communications enterprise, from 2005 to 2009.
From 2003 to 2004, Mr. Trujillo was Orange SAs Chief Executive Officer.
Before that, Mr. Trujillo was Chairman, President and Chief Executive
Officer of Graviton, Inc. from 2001 until 2003. Mr. Trujillo previously
served as a director of Target Corporation from 1994 to 2014 and currently
serves as a director of WPP plc and ProAmerica Bank. Mr. Trujillos term
expires in 2015. |
Age 63 |
|
Director Since 2012 |
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Trujillo is an international
business executive with experience as a chief executive officer of global
companies in the telecommunications, media, and cable industries
headquartered in the United States, the European Union, and the
Asia-Pacific region. He has global operations experience and provides the
Board with substantial international experience and expertise in the
retail, technology, media, and communications
industries. |
Director Nominee
Jeffrey A. Joerres
![](westernunion_def14a4x3x2.jpg) |
|
PRINCIPAL OCCUPATION, BUSINESS
EXPERIENCE AND DIRECTORSHIPS
Executive Chairman of ManpowerGroup
since May 2014. From 1999 to 2014, Mr. Joerres served as CEO of
ManpowerGroup and from 2001 to 2014, he served as Chairman of the Board.
Mr. Joerres joined ManpowerGroup in 1993, and served as Vice President of
Marketing and Senior Vice President European Operations and Marketing and
Major Account Development. Mr. Joerres is the former Chair and current
director of the Federal Reserve Bank of Chicago board of directors, and
serves as a director of Johnson Controls, Inc., Artisan Partners Asset
Management and the Committee for Economic Development, and is chair of the
Future Workforce Committee of the Greater Milwaukee Committee. Mr. Joerres
served as a director of Artisan Funds, Inc. from 2001 to
2011. |
Age 55 |
|
|
|
|
EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANYS
BOARD*
Mr. Joerres brings to the Board
experience as the former chief executive officer and current executive
chairman of a large United States-based global company that delivers
workforce solutions around the world. Mr. Joerres also brings to the Board
his experience as a board member of both a global diversified industrial
company and the Federal Reserve Bank of
Chicago. |
13 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Board of Directors
Information |
PROXY
STATEMENT |
* |
|
The Board selects nominees for
Director on the basis of experience, integrity, skills, diversity, ability
to make independent analytical inquiries, understanding of the Companys
business environment, and willingness to devote adequate time to Board
duties, all in the context of an assessment of the perceived needs of the
Board at a given point in time. In addition to the individual attributes
of each of the directors described above, the Company highly values the
collective business experience and qualifications of the directors. We
believe that the experiences, viewpoints, and perspectives of our
directors result in a Board with the commitment and energy to advance the
interests of our stockholders. |
Director and Director Nominee
Qualifications Matrix
The following matrix is provided to
illustrate the skills and qualifications of our Directors and Director
Nominee.
|
|
Leadership |
|
Financial |
|
International |
|
Diversity |
Director/ Director Nominee |
|
CEO Experience |
|
CFO Experience |
|
Regulated Industry/ Government |
|
Financial Literacy |
|
Eligible
for Audit Committee Qualified Expert |
|
Emerging Markets |
|
Global Operational Experience |
|
Gender |
|
Ethnicity |
|
Geographic |
Dinyar S. Devitre |
|
X |
|
X |
|
X |
|
X |
|
X |
|
|
|
X |
|
M |
|
X |
|
X |
Hikmet Ersek |
|
X |
|
|
|
X |
|
X |
|
|
|
X |
|
X |
|
M |
|
|
|
X |
Richard A. Goodman |
|
|
|
X |
|
|
|
X |
|
X |
|
X |
|
X |
|
M |
|
|
|
|
Jack M. Greenberg |
|
X |
|
X |
|
X |
|
X |
|
X |
|
X |
|
X |
|
M |
|
|
|
|
Betsy D. Holden |
|
X |
|
|
|
X |
|
X |
|
|
|
X |
|
X |
|
F |
|
|
|
|
Jeffery A. Joerres |
|
X |
|
|
|
|
|
X |
|
|
|
|
|
X |
|
M |
|
|
|
|
Linda Fayne Levinson |
|
X |
|
|
|
X |
|
X |
|
|
|
|
|
|
|
F |
|
|
|
|
Roberto G. Mendoza |
|
|
|
|
|
X |
|
X |
|
|
|
|
|
X |
|
M |
|
X |
|
X |
Michael A. Miles, Jr. |
|
|
|
|
|
|
|
X |
|
|
|
|
|
X |
|
M |
|
|
|
|
Robert W. Selander |
|
X |
|
|
|
X |
|
X |
|
|
|
X |
|
X |
|
M |
|
|
|
|
Frances Fragos Townsend |
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
F |
|
|
|
|
Solomon D. Trujillo |
|
X |
|
|
|
X |
|
X |
|
|
|
X |
|
X |
|
M |
|
X |
|
X |
The Western Union Company Proxy
Statement |
| |
14 |
Table of Contents
Proposal 1 |
PROXY
STATEMENT |
|
Proposal 1 Election of
Directors |
The Board of Directors was previously
divided into three classes. At the Companys 2012 Annual Meeting of
Stockholders, the Companys stockholders approved a proposal to amend the
Companys Amended and Restated Certificate of Incorporation to declassify the
Board of Directors such that each director standing for election or re-election
will be elected to a one-year term. At the 2015 Annual Meeting, and at
subsequent Annual Meetings, all directors will be elected on an annual basis for
one-year terms.
Upon the recommendation of the Corporate
Governance and Public Policy Committee, the Board of Directors appointed Mr.
Robert W. Selander as a director in July 2014, subject to election by the
stockholders at the 2015 Annual Meeting and nominated Mr. Jeffrey A. Joerres in
February 2015 to stand for election at the 2015 Annual Meeting. Mr. Selander and
Mr. Joerres were originally recommended to the Corporate Governance and Public
Policy Committee by non-employee members of the Board of Directors. Except for
Mr. Devitre, who has declined to stand for re-election, the terms of each
director if re-elected or elected will expire at the 2016 Annual Meeting of
Stockholders. In the case of a vacancy, the Board of Directors may appoint
another director as a replacement, may leave the vacancy unfilled or may reduce
the number of directors on the Board. (See the Board of Directors Information
section of this Proxy Statement for information concerning all nominees.)
The Companys By-Laws require directors to
be elected by the majority of votes cast with respect to such director in
uncontested elections (the number of shares voted for a director must exceed
the number of votes cast against that director, with abstentions and broker
non-votes not counted as cast either for or against). In a contested
election (a situation in which the number of nominees exceeds the number of
directors to be elected), the standard for election of directors will be a
plurality of the shares represented in person or by proxy at any such meeting
and entitled to vote on the election of directors.
Under the Companys By-Laws, if an
incumbent director is not elected, the director will promptly tender his or her
resignation to the Board of Directors. The Corporate Governance and Public
Policy Committee will make a recommendation to the Board of Directors as to
whether to accept or reject the resignation of such incumbent director, or
whether other action should be taken. The Board of Directors will act on the
resignation, taking into account the Corporate Governance and Public Policy
Committees recommendation, and publicly disclose (by a press release, a filing
with the SEC or other broadly disseminated means of communication) its decision
regarding the tendered resignation and the rationale behind the decision within
90 days following certification of the election results. If such incumbent
directors resignation is not accepted by the Board of Directors, such director
will continue to serve until the next annual meeting and until his or her
successor is duly elected or his or her earlier resignation or
removal.
Your shares will be voted as you instruct
via the telephone or Internet voting procedure described on the Proxy Card or
the Notice of Internet Availability of Proxy Materials, or as you specify on
your Proxy Card(s) if you elect to vote by mail. If unforeseen circumstances
(such as death or disability) require the Board of Directors to substitute
another person for any of the director nominees, your shares will be voted for
that other person.
![](westernunion_def14a4x5x1.jpg) |
|
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE TO RE-ELECT MR. ERSEK, MR. GOODMAN, MR. GREENBERG, MS.
HOLDEN, MS. FAYNE LEVINSON, MR. MENDOZA, MR. MILES, MS. TOWNSEND AND MR.
TRUJILLO, AND TO ELECT MR. JOERRES AND MR. SELANDER, AS DIRECTORS TO SERVE
UNTIL THE 2016 ANNUAL MEETING OF STOCKHOLDERS OR UNTIL THEIR RESPECTIVE
SUCCESSORS ARE ELECTED AND
QUALIFIED. |
15 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Corporate
Governance
Summary of Corporate
Governance Practices
The Board of Directors believes that
strong corporate governance is key to long-term stockholder value creation. Over
the years, our Board of Directors has responded to evolving governance standards
by enhancing our practices to best serve the interests of the Companys
stockholders, including:
✓ |
|
Annual election of
directors. |
✓ |
|
Proxy access. Our By-Laws permit qualifying stockholders or groups of
qualifying stockholders that have each beneficially owned at least 3% of
the Companys Common Stock for three years to nominate up to an aggregate
of 20% of the members of the Board and have information and supporting
statements regarding those nominees included in the Companys proxy
statement. |
✓ |
|
Majority vote standard in
uncontested elections. Each director
must be elected by a majority of votes cast, rather than by a
plurality. |
✓ |
|
Stockholder right to call special
meetings. |
✓ |
|
No stockholder rights plan
(poison pill). |
✓ |
|
No supermajority voting
provisions in the Companys organizational
documents. |
✓ |
|
Independent Board, except our
Chief Executive Officer. Our Board is
comprised of all independent directors, except our Chief Executive
Officer. |
✓ |
|
Independent non-executive
chairman. The Chairman of the Board of
Directors, Jack Greenberg, is a non-executive independent
director. |
✓ |
|
Independent Board
committees. Each of the Audit,
Compensation, and Corporate Governance and Public Policy Committees is
made up of independent directors, and all voting members of the Compliance
Committee are independent. Each standing committee operates under a
written charter that has been approved by the
Board. |
✓ |
|
Confidential stockholder
voting. The Companys Corporate
Governance Guidelines provide that the vote of any stockholder will not be
revealed to anyone other than a non-employee tabulator of votes or an
independent election inspector, except under circumstances set forth in
the Companys Corporate Governance
Guidelines. |
✓ |
|
Committee authority to retain
independent advisors. Each of the
Audit, Compensation, Compliance, and Corporate Governance and Public
Policy Committees has the authority to retain independent
advisors. |
✓ |
|
Robust codes of
conduct. The Company is committed to
operating its business with honesty and integrity and maintaining the
highest level of ethical conduct. These absolute values are embodied in
our Code of Conduct and require that every customer, employee, agent and
member of the public be treated accordingly. The Company Code of Conduct
applies to all employees, but the Companys senior financial officers are
also subject to an additional code of ethics, reflecting the Companys
commitment to maintaining the highest standards of ethical conduct. In
addition, the Board of Directors is subject to a Directors Code of
Conduct. |
✓ |
|
Stock ownership guidelines for
senior executives and directors.
Significant stock ownership requirements for our senior executives and
directors strongly link the interests of management and the Board with
those of stockholders. |
✓ |
|
Prohibition against pledging and
hedging of Company stock by senior executives and
directors. As noted below in
Compensation of DirectorsProhibition Against Pledging and Hedging of the
Companys Securities and Compensation Discussion and Analysis The
Western Union Executive Compensation Program Prohibition Against Pledging and Hedging of the Companys
Securities, the Companys insider
trading policy prohibits the Companys executive officers and directors
from pledging the Companys securities or engaging in hedging or
short-term speculative trading of the Companys securities, including,
without limitation, short sales or put or call options involving the
Companys securities. |
✓ |
|
Stockholder
engagement. The Company regularly
engages with its stockholders to better understand their
perspectives. |
You can learn more about our corporate
governance by visiting the Investor Relations, Corporate Governance portion of
the Companys website, www.wu.com, or by writing to the
attention of: Investor Relations, The Western Union Company, 12500 East Belford
Avenue, Mailstop M23IR, Englewood, CO 80112.
The Western Union Company Proxy
Statement |
| |
16 |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Independence of
Directors
The Board of Directors has adopted
Corporate Governance Guidelines, which contain the standards that the Board of
Directors use to determine whether a director is independent. A director is not
independent under these categorical standards if:
● |
The director is, or has been within
the last three years, an employee of Western Union, or an immediate family
member of the director is, or has been within the last three years, an
executive officer of Western Union. |
● |
The director has received, or has an
immediate family member who has received, during any 12-month period
within the last three years, more than $120,000 in direct compensation
from Western Union, other than director and committee fees and pension or
other forms of deferred compensation for prior service (provided such
compensation is not contingent in any way on continued service).
|
● |
(i) The director is a current
partner or employee of a firm that is Western Unions internal or external
auditor; (ii) the director has an immediate family member who is a current
partner of such a firm; (iii) the director has an immediate family member
who is a current employee of such a firm and personally works on Western
Unions audit; or (iv) the director or an immediate family member was
within the last three years a partner or employee of such firm and
personally worked on Western Unions audit within that time.
|
● |
The director or an immediate family
member is, or has been within the last three years, employed as an
executive officer of another company where any of Western Unions present
executive officers at the same time serves or served on that companys
compensation committee. |
● |
The director is a current employee,
or an immediate family member is a current executive officer, of a company
that has made payments to, or received payments from, Western Union for
property or services in an amount which, in any of the last three fiscal
years, exceeded the greater of $1 million or 2% of such other companys
consolidated gross revenues. |
● |
The director is a current employee,
or an immediate family member is a current executive officer, of a company
which was indebted to Western Union, or to which Western Union was
indebted, where the total amount of either companys indebtedness to the
other, in any of the last three fiscal years, exceeded 5% or more of such
other companys total consolidated assets. |
● |
The director or an immediate family
member is a current officer, director, or trustee of a charitable
organization where Western Unions (or an affiliated charitable
foundations) annual discretionary charitable contributions to the
charitable organization, in any of the last three fiscal years, exceeded
the greater of $1 million or 5% of such charitable organizations
consolidated gross revenues. |
The Board has reviewed the independence of
the current directors and director nominee under these standards and the rules
of the New York Stock Exchange (the NYSE) and found each of Mr. Devitre, Mr.
Goodman, Mr. Greenberg, Ms. Holden, Mr. Joerres, Ms. Fayne Levinson, Mr.
Mendoza, Mr. Miles, Mr. Selander, Ms. Fragos Townsend and Mr. Trujillo to be
independent.
17 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Board Leadership
Structure and Role in Risk Oversight
The Board has a non-executive Chairman.
This position is independent from management. The Chairman sets the agendas for
and presides over the Board meetings as well as meetings of the independent
directors. The Chief Executive Officer is a member of the Board and participates
in its meetings. The Board believes that this leadership structure is
appropriate for the Company at this time because it allows for independent
oversight of management, increases management accountability, and encourages an
objective evaluation of managements performance relative to
compensation.
The Board regularly devotes time during
its meetings to review and discuss the most significant risks facing the
Company, and managements process for identifying, prioritizing, and responding
to those risks. During these discussions, the Chief Executive Officer, the
General Counsel, and the Chief Financial Officer present managements process
for assessment of risks, a description of the most significant risks facing the
Company, and any mitigating factors, plans, or policies in place to address and
monitor those risks. The Board has also delegated risk oversight authority to
its committees.
Consistent with the NYSE listing
standards, to which the Company is subject, the Audit Committee bears
responsibility for oversight of the Companys policies with respect to risk
assessment and risk management and must discuss with management the major risk
exposures facing the Company and the steps the Company has taken to monitor and
control such exposures. The Audit Committee is also responsible for assisting
Board oversight of the Companys compliance with legal and
regulatory requirements, which represent
many of the most significant risks the Company faces. During the Audit
Committees discussion of risk, the Companys Chief Executive Officer, General
Counsel, Chief Financial Officer, Chief Compliance Officer, and Chief Internal
Auditor present information and participate in discussions with the Audit
Committee regarding risk and risk management.
While the Board committee with primary
oversight of risk is the Audit Committee, the Board has delegated to other
committees the oversight of risks within their areas of responsibility and
expertise. For example, in light of the breadth and number of responsibilities
that the Audit Committee must oversee, and the importance of the evaluation and
management of risk related to the Companys compliance programs and policies
associated with anti-money laundering laws, including investigations or other
matters that may arise in relation to such laws, the Board formed a Compliance
Committee in 2013 to assist the Audit Committee and the Board with oversight of
those risks. This function was previously performed by the Corporate Governance
and Public Policy Committee. The Compliance Committee reports regularly on these
matters to the Board and Audit Committee and during the Compliance Committees
meetings, each of the General Counsel and Chief Compliance Officer regularly
present and participate in discussions. In addition, the Compensation Committee
oversees the risks associated with the Companys compensation practices,
including an annual review of the Companys risk assessment of its compensation
policies and practices for its employees and the Companys succession planning
process.
The Western Union Company Proxy
Statement |
| |
18 |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Committees of the Board
of Directors
The current members of each Board
Committee are indicated in the table below.
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
Governance |
|
Compensation |
|
|
Director |
|
Audit |
|
& Public Policy |
|
& Benefits |
|
Compliance |
Dinyar S. Devitre |
|
|
|
X♦ |
|
|
|
X |
Hikmet Ersek |
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
(non-voting) |
Richard A. Goodman |
|
X♦ |
|
|
|
X |
|
|
Jack M. Greenberg ★ |
|
|
|
|
|
|
|
|
Betsy D. Holden |
|
|
|
X |
|
X♦ |
|
|
Linda Fayne Levinson |
|
X |
|
X |
|
|
|
|
Roberto G. Mendoza |
|
X |
|
|
|
X |
|
|
Michael A. Miles, Jr. |
|
X |
|
|
|
|
|
X |
Robert W. Selander |
|
|
|
|
|
X |
|
X |
Frances Fragos Townsend |
|
|
|
X |
|
|
|
X♦ |
Solomon D. Trujillo |
|
|
|
|
|
X |
|
|
★Chairman
of the Board
♦Committee Chair
In February 2015, subject to, and
effective upon the date of, the election of Mr. Selander and the re-election of
Mr. Trujillo as directors at the 2015 Annual Meeting, the Board approved
resolutions (i) appointing Mr. Selander as the chair of the Corporate Governance
and Public Policy Committee and removing Mr. Selander as a member of the
Compliance Committee, and (ii) appointing Mr. Trujillo as a member of the
Compliance Committee.
Board and Committee Governing
Documents
Each committee operates under a charter
approved by the Board. The Companys Audit Committee Charter, Compensation and
Benefits Committee Charter, Corporate Governance and Public Policy Committee
Charter, Compliance Committee Charter, and Corporate Governance Guidelines are
available without charge through the Investor Relations, Corporate Governance
portion of the Companys website, www.wu.com, or by writing to the
attention of: Investor Relations, The Western Union Company, 12500 East Belford
Avenue, Mailstop M23IR, Englewood, CO 80112.
19 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Audit
Committee
![](westernunion_def14a5x2x1.jpg) |
Richard A.
Goodman Committee
Chair |
Additional Committee
Members: Linda Fayne Levinson, Roberto
G. Mendoza and Michael A. Miles, Jr.
Meetings Held in
2014: 8
Primary
Responsibilities: Pursuant to its
charter, the Audit Committee assists the Board of Directors in fulfilling its
oversight responsibilities with respect to:
● |
integrity of the Companys
consolidated financial statements; |
● |
compliance with legal and
regulatory requirements; |
● |
independent registered public
accounting firm qualifications and independence; and |
● |
performance of the Companys
internal audit function and independent registered public accounting
firm. |
Independence: Each member of the Audit Committee meets the
independence requirements of our Corporate Governance Guidelines, the NYSE and
the Securities Exchange Act of 1934, as amended (the Exchange Act), and as the
Board has determined, has no material relationship with the Company. Each member
of the Audit Committee is financially literate, knowledgeable, and qualified to
review financial statements. The Board has designated Mr. Goodman as a
financial expert as defined by Item 407(d) of Regulation S-K.
Service on Other Audit
Committees: No director may serve as a
member of the Audit Committee if such director serves on the audit committees of
more than two other public companies, unless the Board determines that such
simultaneous service would not impair the ability of such director to
effectively serve on the Audit Committee. Currently, none of the Audit Committee
members serve on more than three audit committees (including the Companys Audit
Committee).
The Western Union Company Proxy
Statement |
| |
20 |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Compensation and Benefits
Committee
![](westernunion_def14a5x3x1.jpg) |
Betsy D.
Holden Committee
Chair |
Additional Committee
Members: Richard A. Goodman, Roberto G.
Mendoza, Robert W. Selander, and Solomon D. Trujillo
Meetings Held in
2014: 6
Primary
Responsibilities: Pursuant to its
charter, the Compensation Committee has the authority to administer, interpret,
and take any actions it deems appropriate in connection with any incentive
compensation or equity-based plans of the Company, any salary or other
compensation plans for officers and other key employees of the Company, and any
employee benefit or fringe benefit plans, programs or policies of the Company.
Among other things, the Compensation Committee is responsible
for:
● |
in consultation with senior
management, establishing the Companys general compensation philosophy,
and overseeing the development and implementation of compensation and
benefits policies; |
● |
reviewing and approving
corporate goals and objectives relevant to the compensation of the Chief
Executive Officer and other executive officers, evaluating the performance
of the Chief Executive Officer and other executive officers in light
thereof, and setting compensation levels and other benefits for the Chief
Executive Officer (with the ratification by the independent directors of
the Board) and other executive officers based on this
evaluation; |
● |
reviewing and making
recommendations to the Board regarding severance or similar termination
agreements with the Companys Chief Executive Officer or to any person
being considered for promotion or hire into the position of Chief
Executive Officer; |
● |
approving grants and/or awards
of options, restricted stock, restricted stock units, and other forms of
equity-based compensation under the Companys equity-based
plans; |
● |
reviewing with management and
preparing an annual report regarding the Companys Compensation Discussion
and Analysis to be included in the Companys Proxy Statement and Annual
Report; |
● |
in consultation with the Chief
Executive Officer, reviewing management succession
planning; |
● |
reviewing and recommending to
the Board of Directors compensation for non-employee directors;
and |
● |
periodically reviewing the
overall effectiveness of the Companys principal strategies related to
human capital management, recruiting, retention, career development, and
diversity. |
Independence: Each member of the Compensation Committee meets the
definitions of outside director under Section 162(m) of the Internal Revenue
Code of 1986, as amended (the Code) and non-employee director under Rule
16b-3 of the Exchange Act. Each member of the Compensation Committee meets the
independence requirements of our Corporate Governance Guidelines, the NYSE and
the Exchange Act, and as the Board has determined, has no material relationship
with the Company.
21 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Compliance
Committee
![](westernunion_def14a5x4x1.jpg) |
Frances Fragos
Townsend Committee Chair
|
Additional Committee
Members: Dinyar S. Devitre, Hikmet Ersek
(non-voting member), Michael A. Miles, Jr., and Robert W. Selander
Meetings Held in
2014: 10
Primary Responsibilities:
Pursuant to its charter, the Compliance
Committee assists the Audit Committee and the Board in fulfilling the Boards
oversight responsibility for the Companys compliance with legal and regulatory
requirements. Among other things, the Compliance Committee is responsible for
reviewing:
● |
the Companys compliance
programs and policies relating to anti-money laundering laws, including
establishing procedures to be apprised of material investigations or other
material matters that may arise in relation to such laws;
and |
● |
legal, compliance or other
regulatory matters that may have a material effect on the Companys
business, financial statements or compliance policies, including material
notices to or inquiries received from governmental
agencies. |
Independence: Each voting
member of the Compliance Committee meets the independence requirements of our
Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board
has determined, has no material relationship with the Company. The Board may
appoint non-voting members to the Compliance Committee that are not independent
from the Company. The Companys Chief Executive Officer is currently a
non-voting member of the Compliance Committee.
The Western Union Company Proxy
Statement |
| |
22 |
Table of Contents
Corporate Governance |
PROXY
STATEMENT |
Corporate Governance and
Public Policy Committee
![](westernunion_def14a5x5x1.jpg) |
Dinyar S.
Devitre Committee
Chair |
Additional Committee
Members: Betsy D. Holden, Linda Fayne
Levinson, and Frances Fragos Townsend
Meetings Held in
2014: 4
Primary
Responsibilities: Pursuant to its
charter, the Corporate Governance and Public Policy Committee is responsible
for:
● |
recommending to the Board of
Directors criteria for Board and committee
membership; |
● |
considering, in consultation
with the Chairman of the Board and the Chief Executive Officer, and
recruiting candidates to fill positions on the Board of
Directors; |
● |
evaluating current directors
for re-nomination to the Board of
Directors; |
● |
recommending the director
nominees for approval by the Board of Directors and the
stockholders; |
● |
recommending to the Board of
Directors appointments to committees of the Board of
Directors; |
● |
recommending to the Board of
Directors corporate governance guidelines, reviewing the corporate
governance guidelines at least annually, and recommending modifications to
the corporate governance guidelines to the Board of
Directors; |
● |
establishing and implementing
self-evaluation procedures for the Board of Directors and its
committees; |
● |
reviewing stockholder
proposals submitted for inclusion in the Companys Proxy
Statement; |
● |
reviewing the Companys
related persons transaction policy, and as necessary, reviewing specific
related person transactions; and |
● |
reviewing and advising the
Board of Directors regarding matters of public policy and social
responsibility that are relevant to the Company or the industries in which
the Company operates. |
Independence: Each member of the Corporate Governance and Public Policy
Committee meets the independence requirements of our Corporate Governance
Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has
no material relationship with the Company.
23 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Chief Executive
Officer Succession Planning |
The Companys Board of Directors has
developed a governance framework for Chief Executive Officer succession planning
that is intended to provide for a talent-rich leadership organization that can
drive the Companys strategic objectives. Under its governance framework, the
Board of Directors:
● |
Reviews succession planning for
the Chief Executive Officer on an annual basis. As part of this process,
the Chief Executive Officer reviews the annual performance of each member
of the management team with the Board and the Board engages in a
discussion with the |
|
Chief Executive
Officer and the Chief Human Resources Officer regarding each team member
and the team members development; |
● |
Maintains a confidential plan
to address any unexpected short-term absence of the Chief Executive
Officer and identifies candidates who could act as interim Chief Executive
Officer in the event of any such unexpected absence; and |
● |
Ideally three to five years
before the retirement of the current Chief Executive Officer, manages the
succession process and determines the current Chief Executive Officers
role in that process. |
Communications with
the Board of Directors |
Any stockholder or other interested
party who desires to contact the non-management directors or the other members
of the Companys Board of Directors may do so by writing to: The Western Union
Company, Board of Directors, 12500 East Belford Avenue, Mailstop M21A2,
Englewood, CO 80112. Communications that are intended specifically for
non-management directors should be
addressed
to the attention of the Chairperson of the Corporate Governance and Public
Policy Committee. All communications will be forwarded to the Chairperson of the
Corporate Governance and Public Policy Committee unless the communication is
specifically addressed to another member of the Board, in which case, the
communication will be forwarded to that director.
Board Attendance at
Annual Stockholders Meeting |
Although the Company does not have a
formal policy regarding attendance by members of the Board of Directors at the
Companys Annual Meeting of Stockholders, it encourages directors to attend.
Ten of our eleven members of the
Board of Directors serving at the time attended the Companys 2014 Annual
Meeting of Stockholders.
Presiding Director
of Non-Management Director Meetings |
The non-management directors meet in
regularly scheduled executive sessions without management. The Chairman of the
Board of Directors, Mr. Greenberg, is the presiding director at these
meetings.
The Companys Board of Directors is
responsible for nominating directors for election by the stockholders and
filling any vacancies on the Board that may occur. The Corporate Governance and
Public Policy Committee is responsible for identifying, screening, and
recommending candidates to the Board for Board membership. The
Corporate Governance and Public Policy Committee does not
have any single method for identifying director candidates but will consider
candidates suggested by a wide range of sources, including by any stockholder,
director, or officer of the Company.
The Western Union Company Proxy
Statement |
| |
24 |
Table of Contents
Corporate
Governance |
PROXY
STATEMENT |
Director
Qualifications
General criteria for the nomination
of director candidates include experience, high ethical standards and integrity,
skills, diversity, ability to make independent analytical inquiries,
understanding of the Companys business environment, and willingness to devote
adequate time to Board dutiesall in the context of an assessment of the
perceived needs of the Board at that point in time. In exercising its director
nomination responsibilities, the Corporate Governance and Public Policy
Committee considers diversity in gender, ethnicity, background, and cultural
viewpoints when considering director nominees, given the global nature of the
Companys business. However, the Board has not adopted a formal policy governing
director diversity. The effectiveness of the nomination process is evaluated by
the Board each year as part of its annual self-evaluation and by the Corporate
Governance and Public Policy Committee as it evaluates and identifies director
candidates.
Each director is expected to ensure
that other existing and planned future commitments do not materially interfere
with the members service as a Board or Committee member. The Corporate
Governance and Public Policy Committee will consider candidates for election to
the Board suggested in writing by a stockholder and will make a recommendation
to the Board using the same criteria as it does in evaluating candidates
submitted by members of the Board of Directors. If the Company receives such a
suggestion, the Company may request additional information from the candidate to
assist in its evaluation.
Stockholder
Nominees
Stockholders may submit nominations
for director candidates by giving notice to the Corporate Secretary, The Western
Union Company, 12500 East Belford Avenue, Mailstop M21A2, Englewood, CO 80112.
The requirements for the submission of such stockholder nominations are set
forth in Article II of the Companys By-Laws, which are available on the
Companys website, www.wu.com.
Submission of
Stockholder Proposals |
Stockholder proposals, including
stockholder director nominations, requested to be included in the Companys
Proxy Statement for its 2016 Annual Meeting of Stockholders must be received by
the Company not later than December 3, 2015 and comply with the requirements of
Rule 14a-8, if applicable, and the Companys By-laws. Even if a proposal is not
submitted in time to be considered for inclusion in the Companys Proxy
Statement for its 2016 Annual Meeting of Stockholders, a proper stockholder
proposal or director nomination may still be considered
at the Companys 2016 Annual Meeting of Stockholders, but
only if the proposal or nomination is received by the Company no sooner than
January 16, 2016 and no later than February 15, 2016 and otherwise complies with
the Companys By-Laws. All proposals or nominations a stockholder wishes to
submit at the meeting should be directed to the Corporate Secretary, The Western
Union Company, 12500 East Belford Avenue, Mailstop M21A2, Englewood, CO
80112.
The Companys Directors Code of
Conduct, Code of Ethics for Senior Financial Officers, Reporting Procedure for
Accounting and Auditing Concerns, Professional Conduct Policy for Attorneys, and
the Code of Conduct are available without charge through the Investor
Relations, Corporate Governance portion of the Companys website,
www.wu.com, or by writing to the attention of: Investor Relations,
The Western Union Company, 12500 East Belford Avenue, Mailstop M23IR, Englewood,
CO 80112. In the event of an amendment to, or a waiver from, the Companys Code
of Ethics for Senior Financial Officers, the Company intends to post such
information on its website, www.wu.com.
25 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Compensation of
Directors |
PROXY
STATEMENT |
Compensation of
Directors
The following table provides information
regarding the compensation of our outside directors for 2014. Mr. Ersek, our
President and Chief Executive Officer, does not receive additional compensation
for his service as a director.
2014 DIRECTOR
COMPENSATION
|
|
Fees Earned
or |
|
Stock |
|
Option |
|
All
Other |
|
|
|
|
Paid in
Cash |
|
Awards |
|
Awards |
|
Compensation |
|
Total |
Name |
|
($000) |
|
($000)(2) |
|
($000)(3) |
|
($000)(4) |
|
($000)(5) |
Jack M. Greenberg |
|
|
125.0 |
|
|
|
175.0 |
|
|
|
175.0 |
|
|
|
19.6 |
|
|
494.6 |
Dinyar S. Devitre |
|
|
115.4 |
|
|
|
130.0 |
|
|
|
|
|
|
|
23.4 |
|
|
268.8 |
Richard A. Goodman |
|
|
110.0 |
|
|
|
65.0 |
|
|
|
65.0 |
|
|
|
25.0 |
|
|
265.0 |
Betsy D. Holden |
|
|
110.0 |
|
|
|
130.0 |
|
|
|
|
|
|
|
30.0 |
|
|
270.0 |
Linda Fayne Levinson |
|
|
95.0 |
|
|
|
130.0 |
|
|
|
|
|
|
|
|
|
|
225.0 |
Roberto G. Mendoza |
|
|
95.0 |
|
|
|
65.0 |
|
|
|
65.0 |
|
|
|
|
|
|
225.0 |
Michael A. Miles, Jr. |
|
|
95.0 |
(1) |
|
|
130.0 |
|
|
|
|
|
|
|
9.5 |
|
|
234.5 |
Wulf von Schimmelmann(6) |
|
|
32.0 |
|
|
|
130.0 |
|
|
|
|
|
|
|
1.0 |
|
|
163.0 |
Robert W. Selander(6) |
|
|
38.8 |
(1) |
|
|
29.9 |
|
|
|
29.9 |
|
|
|
25.0 |
|
|
123.6 |
Frances Fragos Townsend |
|
|
96.5 |
|
|
|
65.0 |
|
|
|
65.0 |
|
|
|
|
|
|
226.5 |
Solomon D. Trujillo |
|
|
85.0 |
|
|
|
65.0 |
|
|
|
65.0 |
|
|
|
|
|
|
215.0 |
Footnotes:
(1) |
Mr. Miles and Mr. Selander elected to receive their
annual retainer fees for 2014 in the form of equity compensation as
described below under Equity Compensation. |
(2) |
The amounts in this column represent the value of stock
units granted to each director as annual equity grants. Stock awards
consist of fully vested stock units that are settled in shares of Common
Stock and may be subject to a deferral election consistent with Internal
Revenue Code Section 409A. The amounts shown in this column are valued
based on the aggregate grant date fair value computed in accordance with
Financial Accounting Standards Board Accounting Standards Codification
Topic 718, CompensationStock Compensation (FASB ASC Topic 718). See
Note 16 to the Consolidated Financial Statements included in our Annual
Report on Form 10-K for the year ended December 31, 2014 for a discussion
of the relevant assumptions used in calculating these
amounts. |
(3) |
The amounts in this column represent the value of
options granted to each director as annual equity grants. The amounts
shown in this column are valued based on the aggregate grant date fair
value computed in accordance with FASB ASC Topic 718. See Note 16 to the
Consolidated Financial Statements included in our Annual Report on Form
10-K for the year ended December 31, 2014 for a discussion of the relevant
assumptions used in calculating these amounts. |
(4) |
All Other Compensation
represents matches under the Companys gift matching program that the
Company made in 2014. Outside directors are eligible to participate in the
Companys gift matching program on the same terms as Western Unions
executive officers and employees. As noted below, contributions made or
directed to be made to an eligible organization, up to an aggregate amount
of $25,000 per calendar year, will be matched by the Company. Matching
contributions to various charities were made in 2014 on behalf of the
following directors: Messrs. Greenberg, Devitre, Goodman, Miles and
Selander and Ms. Holden. Contributions up to $100,000 per calendar year
that a director makes to The Western Union Foundation without designating
a recipient organization will be matched by the Company $2 for every $1
contributed. The charitable contributions made by Ms. Holden represent
matches made by the Company in 2014 with respect to charitable
contributions made by Ms. Holden in 2014 and
2013. |
The Western Union Company Proxy
Statement |
| |
26 |
Table of Contents
Compensation of
Directors |
PROXY
STATEMENT |
(5) |
As of December 31, 2014, each individual who served as
an outside director during 2014 had outstanding the following number of
stock units and options: |
|
|
|
Name |
Stock
Units |
|
Options |
|
Jack M. Greenberg |
|
34,466 |
|
|
|
422,596 |
(A) |
|
|
Dinyar S. Devitre |
|
29,470 |
|
|
|
149,196 |
|
|
|
Richard A. Goodman |
|
16,001 |
|
|
|
36,814 |
|
|
|
Betsy D. Holden |
|
52,650 |
|
|
|
53,980 |
|
|
|
Linda Fayne Levinson |
|
45,861 |
|
|
|
143,253 |
|
|
|
Roberto G. Mendoza |
|
34,619 |
|
|
|
152,009 |
|
|
|
Michael A. Miles, Jr. |
|
85,244 |
|
|
|
53,980 |
|
|
|
Wulf von Schimmelmann |
|
40,890 |
|
|
|
26,789 |
|
|
|
Robert W. Selander |
|
3,967 |
|
|
|
7,480 |
|
|
|
Frances Fragos Townsend |
|
5,335 |
|
|
|
21,876 |
|
|
|
Solomon D. Trujillo |
|
12,227 |
|
|
|
36,814 |
|
|
|
(A) |
Includes 121,137 options
received pursuant to a conversion of First Data option awards to Western
Union option awards. |
|
|
(6) |
Mr. Selander was appointed to
the Board, effective July 17, 2014. Mr. von Schimmelmann ceased serving as
a director at the 2014 Annual Meeting of
Stockholders. |
Cash Compensation
In 2014, each outside director (other than
our Non-Executive Chairman) received the following cash compensation for service
on our Board and committees of our Board:
● |
an annual Board retainer fee of
$85,000; and |
● |
an annual committee chair retainer
fee of $25,000 for the chairperson of each committee of the
Board (other than Mr. Greenberg, who did not receive a committee chair
retainer fee for his service as Compliance Committee Chair from January to
May 2014; Ms. Fragos Townsend received a prorated annual committee
chair retainer fee for her service as Compliance Committee Chair for the
remainder of 2014), and a $10,000 committee member retainer fee for each
other member of the Audit Committee of our
Board. |
Equity Compensation
The 2014 outside director equity awards
were granted pursuant to our Long-Term Incentive Plan. All director equity
awards will be settled in shares of Common Stock. The purpose of these awards is
to advance the interest
of Western Union and its stockholders by
encouraging increased stock ownership by our outside directors and by helping
the Company attract, motivate, and retain highly qualified outside
directors.
Each outside director has the option of
electing to receive such directors annual retainer fees described above in the
form of (a) all cash, (b) a combination of cash, fully vested stock options, and
fully vested stock units, (c) all fully vested stock options, (d) all fully
vested stock units, (e) a combination of 75% fully vested stock options and 25%
fully vested stock units, (f) a combination of 50% fully vested stock options
and 50% fully vested stock units, or (g) a combination of 75% fully vested stock
units and 25% fully vested stock options. Each outside director may also elect
to receive such directors annual equity grant in the form of any of the above
alternatives, other than alternatives that include cash.
Each outside director (other than our
Non-Executive Chairman) is eligible to receive an annual equity grant with a
value of $130,000 for service on our Board and committees of our
Board.
27 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Compensation of
Directors |
PROXY
STATEMENT |
Compensation of Our Non-Executive
Chairman
In 2014, our Non-Executive Chairman
received the following compensation in lieu of the compensation described above
for our other outside directors:
● |
an annual retainer fee of $125,000;
and |
● |
an annual equity grant with a value
of $350,000. |
Our Non-Executive Chairman has the option
to receive his annual retainer fee in the forms discussed above under -Equity
Compensation.
Charitable Contributions
Outside directors may participate in the
Companys gift matching program on the same terms as Western Unions executive
officers and employees. Under this program, contributions up to $100,000 per
calendar year that the director makes to the Western Union Foundation (the
Foundation) without designating a recipient organization will be matched by
the Company $2 for every $1 contributed. Contributions made or directed to be
made to an eligible organization, as defined in the program, up to an aggregate
amount of $25,000 per calendar year will be equally matched by the Company
through the Foundation.
Reimbursements
Directors are reimbursed for their
expenses incurred in attending Board, committee and stockholder meetings,
including those for travel, meals, and lodging.
Indemnification
Agreements
Each outside director has entered into a
Director Indemnification Agreement with the Company to clarify indemnification
procedures. Consistent with the indemnification rights already provided to
directors of the Company in the Companys Amended and Restated Certificate of
Incorporation, each agreement provides that the Company will indemnify and hold
harmless each outside director to the fullest extent permitted or authorized by
the General Corporation Law of the State of Delaware in effect on the date of
the agreement or as such laws may be amended or replaced to increase the extent
to which a corporation may indemnify its directors.
Equity Ownership
Guidelines
Each outside director is expected to
maintain an equity investment in Western Union equal to five times his or her
annual cash retainer, which must be achieved within five years of the directors
initial election to the Board. The holdings that generally may be counted toward
achieving the equity investment guidelines include outstanding stock awards or
units, shares obtained through stock option exercises, shares owned jointly with
or separately by the directors spouse, shares purchased on the open market and
outstanding stock options received in lieu of cash retainer fees. As of March
19, 2015, all outside directors have met or, within the applicable period, are
expected to meet, these equity ownership guidelines.
Changes to Outside Director
Compensation Effective for 2015
On July 15, 2014 our Board approved the
following changes effective January 1, 2015 to the annual compensation for
outside directors:
● |
a $10,000 increase in the annual
equity grant for directors other than our Non-Executive Chairman for a
total grant value of $140,000; |
● |
a $10,000 increase in the annual
equity grant for our Non-Executive Chairman for a total grant value of
$360,000; and |
● |
a $10,000 annual cash retainer for
service on each committee of the Board (instead of only the Audit
Committee). |
Our outside directors had not received an
increase in their annual Board retainer or equity grant value since January 1,
2011.
Prohibition Against Pledging and
Hedging of the Companys Securities
The Companys Insider Trading Policy
prohibits the Companys directors from pledging the Companys securities or
engaging in hedging or short-term speculative trading of the Companys
securities, including, without limitation, short sales or put or call options
involving the Companys securities.
The Western Union Company Proxy
Statement |
| |
28 |
Table of Contents
Report of the Audit
Committee |
PROXY
STATEMENT |
Report of the Audit Committee
The Audit Committee is comprised of three
or more directors and operates under a written charter adopted by the Board. The
Audit Committee reviews the charter at least annually, updating it last in
December 2014. The charter is available through the Investor Relations,
Corporate Governance portion of the Companys website, www.wu.com.
The Board has the ultimate authority for
effective corporate governance, including the role of oversight of the
management of the Company. The Audit Committees purpose is to assist the Board
in fulfilling its oversight responsibilities with respect to the Companys
consolidated financial statements, independent registered public accounting firm
qualifications and independence, performance of the Companys internal audit
function and independent registered public accounting firm, and other matters
identified in the Audit Committee Charter. The Audit Committee relies on the
expertise and knowledge of management, the internal auditors and the independent
registered public accounting firm in carrying out its responsibilities.
Management is responsible for the preparation, presentation, and integrity of
the Companys consolidated financial statements, accounting and financial
reporting principles, internal control over financial reporting and disclosure
controls, and procedures designed to ensure compliance with accounting
standards, applicable laws, and regulations. In addition, management is
responsible for objectively reviewing and evaluating the adequacy,
effectiveness, and quality of the Companys system of internal control. The
Companys independent registered public accounting firm, Ernst & Young LLP,
is responsible for performing an independent audit of the consolidated financial
statements and for expressing an opinion on the conformity of those financial
statements with United States generally accepted accounting principles. The
Companys independent registered public accounting firm is also responsible for
expressing an opinion on the effectiveness of the Companys internal control
over financial reporting.
During fiscal year 2014, the Audit
Committee fulfilled its duties and responsibilities as outlined in its charter.
Specifically, the Audit Committee, among other
actions:
● |
reviewed and discussed with
management and the independent registered public accounting firm the
Companys quarterly earnings press releases, consolidated financial
statements, and related periodic reports filed with the
SEC; |
● |
reviewed with management, the
independent registered public accounting firm and the internal auditor,
managements assessment of the effectiveness of the Companys internal
control over financial reporting, and the effectiveness of the Companys
internal control over financial reporting; |
● |
reviewed with the independent
registered public accounting firm, management and the internal auditor, as
appropriate, the audit scope, and plans of both the independent registered
public accounting firm and internal auditor; |
● |
met in periodic executive sessions
with each of the independent registered public accounting firm,
management, and the internal auditor; |
● |
received the written disclosures and
the annual letter from Ernst & Young LLP provided to us pursuant to
Public Company Accounting Oversight Board Ethics and Independence Rule
3526, Communication with Audit
Committees Concerning Independence,
concerning their independence and discussed with Ernst & Young LLP
their independence; and |
● |
reviewed and pre-approved all fees
paid to Ernst & Young LLP, as described in Proposal 4, and considered
whether Ernst & Young LLPs provision of non-audit services to the
Company was compatible with the independence of the independent registered
public accounting firm. |
The Audit Committee has reviewed and
discussed with the Companys management and independent registered public
accounting firm the Companys audited consolidated financial statements and
related footnotes for the fiscal year ended December 31, 2014, and the
independent registered public accounting firms report on those financial
statements. Management represented to the Audit Committee that the Companys
financial statements were prepared in accordance with United States generally
accepted accounting principles.
29 |
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The Western Union Company Proxy
Statement |
Table of Contents
Report of the Audit
Committee |
PROXY
STATEMENT |
We have discussed with Ernst & Young
LLP the matters required to be discussed with the Audit Committee by Auditing
Standard No. 16, Communications with Audit
Committees, issued by the Public Company
Accounting Oversight Board. The Auditing Standard No. 16 communications include,
among other items, matters relating to the conduct of an audit of the Companys
consolidated financial statements under the standards of the Public Company
Accounting Oversight Board. This review included a discussion with management
and the independent registered public accounting firm about the quality (not
merely the acceptability) of the Companys accounting principles, the
reasonableness of significant estimates and judgments, and the disclosures in
the Companys financial statements, including the disclosures relating to
critical accounting policies.
In reliance on the review and discussions
described above, we recommended to the Board of Directors that the audited
consolidated financial statements be included in the Companys Annual Report on
Form 10-K for the year ended December 31, 2014 for filing with the
SEC.
Audit Committee
Richard A.
Goodman (Chairperson)
Linda Fayne Levinson
Roberto G.
Mendoza
Michael A. Miles, Jr.
The Western Union Company Proxy
Statement |
| |
30 |
Table of Contents
Compensation and Benefits
Committee Report |
PROXY
STATEMENT |
Compensation and Benefits Committee
Report
The Compensation and Benefits Committee
has reviewed and discussed the Companys Compensation Discussion and Analysis
with management and, based on such review and discussion, the Compensation and
Benefits Committee recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in the Companys Proxy Statement and its
Annual Report on Form 10-K.
Compensation and Benefits
Committee
Betsy D. Holden (Chairperson)
Richard
A. Goodman
Roberto G. Mendoza
Robert W. Selander
Solomon D.
Trujillo
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The Western Union Company Proxy
Statement |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
Compensation Discussion and
Analysis
Executive Summary
Business Overview
The Western Union Company provides people
and businesses with fast, reliable, and convenient ways to send money and make
payments around the world. Western Union offers its services in more than 200
countries and territories. Our business is complex: our regulatory environment
is disparate and developing; our consumers are different from those addressed by
traditional financial services firms; and our agent and client relationships are
numerous and varied. Managing these complexities is at the center of Western
Unions success, and our leadership must be capable of supporting our Companys
goals amid this complexity.
Similar to 2013, the Companys key
strategic priorities for 2014 remained focused on strengthening our consumer
money transfer business, with a continued emphasis on digital expansion; driving
accelerated growth in Western Union Business Solutions; and generating and
deploying strong cash flow for our stockholders. The performance goals and
objectives under our annual incentive and long-term incentive programs were
designed to support these strategies.
Selected 2014 results are as follows:
● |
Revenue of $5.6 billion, up 1% from
2013; |
● |
Operating income of $1.1 billion, up
3% from 2013; |
● |
Operating income margin of 20.3%,
compared to 20.0% in 2013; |
● |
Cash flow from operations of $1.0
billion, down 4% from 2013; and |
● |
TSR of 6.9% compared to 30.6% in
2013. |
Please see our 2014 Annual Report on Form
10-K for more information regarding our performance.
Recent Compensation
Actions
For 2014, many of the compensation
decisions were designed to further align the Companys executive compensation
program with the Companys future growth and strategic operating plans and the
interests of our executives with those of our stockholders. Specifically, the
Compensation Committee (the Compensation Committee or committee) approved
several modifications to the compensation program to further align the executive
compensation program with evolving investor preferences, executive compensation
practices and market trends.
These decisions included:
● |
No Executive Base Salary
Increases for 2013 or 2014: Other
than with respect to executive promotions, there were no changes in our
named executive officers base salary levels for 2013 or 2014 from the
levels effective March 2012. |
● |
Created Standalone TSR
Performance-Based Restricted Stock Units: We replaced the TSR modifier from our 2013 long-term incentive
design under the Long-Term Incentive Plan with a standalone TSR
PSU in order to enhance focus on stockholder returns. These TSR PSUs
require the Company to achieve 60th percentile relative TSR
performance versus the S&P 500 Index over a three-year performance
period in order to earn target payout, with 30th percentile
relative TSR performance resulting in threshold payout and 90th
percentile relative TSR resulting in maximum
payout. |
● |
Increased Performance Period
for Performance-Based Restricted Stock Units: We increased the performance period of our
performance-based restricted stock units so that they will be subject to a
three-year total performance period, versus the two-year performance
period used in prior years. |
|
|
● |
Diversified Long-Term
Incentive Plan Mix and Increased Weighting of At-Risk
Awards: We increased the percentage
of our annual equity grants that have vesting provisions that are strictly
performance-based and at-risk. For 2014, the annual
|
The Western Union Company Proxy
Statement |
| |
32 |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
|
equity awards under the Long-Term
Incentive Plan consisted of 80% performance-based restricted stock
units (60% Financial PSUs, incorporating both revenue and operating
income growth and 20% TSR PSUs) and 20% stock options, as compared to 67%
performance-based restricted stock units and 33% stock options in
2013. |
● |
Established Goals Exceeding
Performance During Prior Three Years: The financial performance target objectives for the 2014
compensation program were set at constant currency growth rates that are
higher than the Companys average annual constant currency results
achieved over 2011 through 2013. The 2014 Annual Incentive
Plan financial performance target objectives were also set higher than
the constant currency financial performance target objectives and actual
results under the 2013 Annual Incentive Plan. For the 2014 Annual
Incentive Plan, performance at 184% of the target revenue growth rate and
at 200% of the target operating income growth rate is required for a
maximum payout equal to 150% of the target award. Further, the Companys
relative TSR performance rank versus the S&P 500 Index over the
2014-2016 performance period that is required to earn a target payout
under the 2014 TSR PSUs is higher than the Companys annual relative TSR
performance versus the S&P 500 Index in each of 2011, 2012, and
2013. |
● |
Reduced Maximum Payout Under
Annual Incentive
Plan: The Compensation Committee
reduced the maximum payout opportunity under the Annual Incentive Plan to
150% of target, as compared to the 200% of target maximum payout
opportunity that was used in prior years. |
● |
Reduced Severance Benefits
Under Executive Severance Policy:
During 2014, the Compensation Committee amended the Executive Severance
Policy to reduce the severance multiple for determining severance benefits
prior to a change-in-control from 2 to 1.5 for participants other than the
Companys Chief Executive Officer. |
Chief Executive Officer
Compensation
For 2014 performance, Mr. Ersek received a
cash payout under the 2014 Annual Incentive Plan of $1,314,800, reflecting a
blended payout of 88% of target based on the Companys achievement of corporate
and strategic performance goals, as compared to an 84% of target payout for 2013
performance and no payout for 2012 performance. The Compensation Committee
based Mr. Erseks award opportunity under the Annual Incentive
Plan on the achievement of corporate and strategic performance goals
and did not include individual performance goals. As noted above, the 2014 Annual
Incentive Plan financial performance target objectives were set higher than the
constant currency financial performance target objectives and actual results
under the 2013 Annual Incentive Plan. Also for 2014, the committee awarded Mr.
Ersek a discretionary bonus of $115,000 in recognition of his leadership in
enhancing the Companys global compliance programs.
The following chart demonstrates that
variable, performance-based pay elements comprised approximately 88% of the
targeted 2014 annual compensation for Mr. Ersek (consisting of target payout
opportunity under the Annual Incentive Plan and stock option and
performance-based restricted stock unit components under the Long-Term Incentive
Plan). Pay is based on the annual base salary and target incentive opportunities
applicable to Mr. Ersek as of December 31, 2014.
Since a significant portion of Mr. Erseks
compensation is both performance-based and at-risk, we are providing the
following supplemental graph to demonstrate the difference between the
compensation granted to Mr. Ersek as required to be reported by the SEC rules in
the 2014 Summary Compensation Table, and the compensation realizable by him
for 2012 to 2014.
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Statement |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
We believe the realizable compensation
shown is reflective of the Compensation Committees emphasis on
pay-for-performance in that differences between realizable pay and total
reported compensation as well as fluctuations year-over-year are primarily the
result of our stock performance and our varying levels of achievement against
pre-established performance goals under our Annual Incentive Plan and Long-Term
Incentive Plan. For example, as illustrated in the table below, 2012 realizable
compensation was significantly below 2012 reported compensation and 2013 and
2014 realizable compensation. This difference was primarily a result of a
2012 payout level of 13% of target
for the Chief Executive Officer for the Companys 2012 performance-based stock
unit awards, no payout for the Chief Executive Officer under the 2012 Annual
Incentive Plan, and stock price depreciation during 2012. In contrast, the
improvement in realizable compensation in 2013 and 2014 is primarily
attributable to our estimated performance as of December 31, 2014 against the
financial performance objectives under the Companys 2013 and 2014
performance-based restricted stock unit awards and stock price
appreciation.
(1) |
This graph and the total
realizable compensation reported in this graph provides supplemental
information regarding the compensation paid to Mr. Ersek and should not be
viewed as a substitute for the 2014 Summary Compensation
Table. |
|
(2) |
As reported in the Total
column of the 2014 Summary Compensation Table. |
|
(3) |
Amounts reported in the
calculation of total realizable compensation include (a) annualized base
salary, (b) actual bonus payments made to Mr. Ersek with respect to each
of the years shown under the Companys Annual Incentive Plan, (c) actual
amounts paid with respect to discretionary bonuses in the year in which
such bonuses are paid, (d) the value realized from the exercise of stock
options and for unexercised stock options, the difference between the
exercise price and the closing stock price on December 31, 2014, each
reported in the year granted, (e) the value realized upon vesting of
restricted stock units or performance-based restricted stock units and the
value of unvested restricted stock units or performance-based restricted
stock unit awards based on the closing stock price on December 31, 2014,
each reported in the year granted, and (f) amounts reported in the All
Other Compensation Table for the respective years. For purposes of this table,
the value of the TSR PSUs is based on target performance since the TSR
PSUs vest based on the Companys TSR at the end of the three-year
performance period compared to the Companys TSR at the beginning of the
performance period. The Financial PSUs and the 2013 performance-based
restricted stock unit awards are valued for purposes of this table based
on estimated performance as of December 31, 2014. |
|
(4) |
Closing stock price as of
December 31 for each year reported. |
The Western Union Company Proxy
Statement |
| |
34 |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
Executive Compensation
Framework
The Compensation Committee reviews on an
ongoing basis the Companys executive compensation and benefits programs to
evaluate whether they support the Companys compensation philosophy and
objectives, as described in Establishing and Evaluating Executive
CompensationOur Executive Compensation
Philosophy and Objectives below, and serve
the interests of our stockholders. The Companys practices include the
following, each of which the committee believes reinforces our executive
compensation philosophy and objectives:
What We
Do: |
✓ |
Pay-for-performance. A
significant percentage of targeted annual compensation is delivered in the
form of variable compensation that is connected to actual performance. For
2014, variable compensation comprised approximately 88% of the targeted
annual compensation for the Chief Executive Officer and, on average, 75%
of the targeted annual compensation for the other named executive officers
(excluding the 2014 promotion and retention/performance restricted stock
unit grants to such executives). |
✓ |
Linkage between performance
measures and strategic objectives.
Performance measures for incentive compensation are linked to both
strategic and operating objectives designed to create long-term
stockholder value and to hold executives accountable for their individual
performance and the performance of the Company. |
✓ |
Emphasis on future pay
opportunity vs. current pay. In 2014,
all of the long-term incentive awards delivered to our named executive
officers were in the form of equity-based
compensation. |
✓ |
Mix of performance
metrics. The Company utilizes
performance metrics that emphasize absolute performance goals, which
provide the primary links between incentive compensation and the Companys
strategic operating plan and financial results, while providing balance
through relative performance goals, which measure Company performance in
comparison to the S&P 500 Index. |
✓ |
Stockholder
engagement. As part of the Companys
stockholder outreach program, the Compensation Committee chair
and members of management engage with stockholders to discuss and
understand their perceptions or concerns regarding our executive
compensation program. |
✓ |
Outside compensation
consultant. The Compensation Committee
retains its own compensation consultant to review the Companys executive
compensation program and practices. |
✓ |
Double trigger in the event of
a change-in-control. In the event of a
change-in-control, severance benefits are payable only upon a double
trigger. |
✓ |
Maximum payout caps for annual
cash incentive compensation and performance-based restricted stock unit
awards. |
✓ |
Clawback
Policy. The Company may recover
incentive compensation paid to an executive officer that was calculated
based upon any financial result or performance metric impacted by fraud or
misconduct of the executive officer. |
✓ |
Robust stock ownership
guidelines. Executives are required to
hold stock equal to a multiple of five times salary for our Chief
Executive Officer and two times salary for each other named executive
officer. Fifty percent of after-tax shares received as equity compensation
must be retained until an executive meets the stock ownership
guideline. |
What We Dont
Do: |
✕ |
No
change-in-control tax gross ups. We do
not provide change-in-control tax gross ups to individuals promoted or
hired after April 2009. Mr. Ersek is the only Company employee who remains
eligible for excise tax gross-up payments. |
✕ |
No
repricing or buyout of underwater stock options. None of our equity plans permit the repricing or buyout
of underwater stock options or stock appreciation rights without
stockholder approval, except in connection with certain corporate
transactions involving the Company. |
✕ |
Prohibition against pledging and hedging of Company securities by
senior executives and directors. |
✕ |
No
dividends or dividend equivalents accrued or paid on performance-based
restricted stock unit awards or time-based restricted stock unit
awards. |
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Statement |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
2014 Say On Pay Vote
As noted above, in its compensation review
process, the committee considers whether the Companys executive compensation
and benefits program serves the interests of the Companys stockholders. In that
respect, as part of its on-going review of the Companys executive compensation
program, the Compensation Committee considered the approval by more than 96% of
the votes cast for the Companys say on pay vote at the
Companys 2014 Annual Meeting of
Stockholders. After considering the 2014 say on pay results as well as the
positive feedback received during the Companys stockholder engagement efforts,
the committee determined that the Companys executive compensation philosophy,
compensation objectives, and compensation elements continued to be appropriate
and did not make any specific changes to the Companys executive compensation
program in response to the 2014 say on pay vote or stockholder feedback.
Stockholder Engagement
In connection with the Annual Meeting, the
Compensation Committee chair and certain members of management held discussions
regarding executive compensation matters with stockholders who the Company
believes collectively held over 30% of the Companys outstanding Common Stock as
of the Record Date to better understand their views on the Companys executive
compensation program, the say on pay vote and our executive compensation
disclosure. The committee and management found the discussions to be very
helpful in their ongoing evaluation of the Companys executive compensation
program, and intend to continue to obtain this feedback in the future.
2015 Plan Design
As part of its ongoing review of the
executive compensation program during 2014 and 2015, and based on input from the
Compensation Committees compensation consultant and the stockholder feedback
described above, the Compensation Committee determined to continue the
compensation program elements implemented in 2014, as described in this
Compensation Discussion and Analysis. Accordingly, for 2015, the Companys
executive compensation program will continue to be significantly weighted
towards performance-based compensation and will continue to include a
diversified mix of long-term incentive awards, weighted 60% Financial PSUs, 20%
TSR PSUs and 20% stock options, with Company performance under the PSUs measured
over a three-year performance period.
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Statement |
| |
36 |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
Other Corporate Governance Practices
The Board of Directors believes that
strong corporate governance is key to long-term stockholder value creation.
Please see Corporate Governance-Summary of Corporate Governance Practices
above for a summary of the Companys corporate governance practices. Highlights
include:
Governance Highlights
✓ |
Annual Election of
Directors |
✓ |
Proxy Access |
✓ |
Majority Vote Standard in Uncontested
Elections |
✓ |
Stockholder Right to Call Special
Meetings |
✓ |
No Stockholder Rights Plan (Poison
Pill) |
✓ |
No Supermajority Voting Provisions in
the Companys Organizational Documents |
✓ |
Independent Board, except our Chief
Executive Officer |
✓ |
Independent Non-Executive
Chairman |
✓ |
Independent Board
Committees |
✓ |
Confidential Stockholder
Voting |
✓ |
Committee Authority to Retain
Independent Advisors |
✓ |
Robust Codes of Conduct |
✓ |
Stock Ownership Guidelines for Senior
Executives and Directors |
✓ |
Prohibition Against Pledging and
Hedging of Company Stock by Senior Executives and Directors |
✓ |
Stockholder
Engagement |
Establishing and
Evaluating Executive Compensation |
Introduction
This Compensation Discussion and Analysis
describes how the Compensation Committee determined 2014 executive compensation,
the elements of our executive compensation program and the compensation of each
of our named executive officers. The information provided should be read
together with the information presented in the Executive Compensation section
of this Proxy Statement. For 2014, the named executive officers were:
Hikmet Ersek - President and Chief Executive Officer (September 2010 to
present)
Rajesh K. Agrawal - Executive Vice President and Interim Chief Financial
Officer (January 2014 to July 2014) and Executive Vice President and Chief
Financial Officer (July 2014 to present)
Odilon Almeida - Executive Vice President and President, Americas and
European Union (January 2014 to present)
J. David Thompson - Executive Vice President, Global Operations (November 2012
to present) and Chief Information Officer (April 2012 to present)
John R. Dye - Executive Vice President, General Counsel and Secretary (November 2011
to present)
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Statement |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
Our Executive Compensation Philosophy
and Objectives
The Compensation Committee believes the
Companys executive compensation program should reward actions and behaviors
that build a foundation for the long-term strength and performance of the
Company,
while also rewarding the achievement of
short-term performance goals. To align the Companys incentive compensation
program with the Companys overall executive compensation philosophy and
objectives, the Compensation Committee has adopted the key principles identified
in the table below.
Objectives |
|
Corresponding Principles |
●Align executive
goals with stockholder interests |
|
●Structure metrics, goal-setting and incentive payouts to result in
enterprise value creation.
●Share a reasonable portion of the Companys financial results with
employees, both on upside and downside performance.
|
●Hold executives
accountable and reward them for results
●Attract, retain, and
motivate outstanding executive talent |
|
●Establish sufficient linkage between incentive payouts and
individual and business unit performance.
●Set performance goals and operating plan to retain and motivate
leadership to achieve superior
results. |
The Board of Directors and the
Compensation Committee
The Board of Directors oversees the goals
and objectives of the Company and of the Chief Executive Officer, evaluates
succession planning with respect to the Chief Executive Officer and evaluates
the Chief Executive Officers performance. The Compensation Committee supports
the Board by establishing the Companys general compensation philosophy and
overseeing the development and implementation of the Companys compensation and
benefits policies. The Compensation Committee reviews and approves corporate
goals and objectives relevant to the compensation of the Chief Executive Officer
and other executive officers, sets the compensation levels of each of the
Executive Vice Presidents and approves the compensation of the Chief Executive
Officer, with the ratification by the independent directors of the Board. The
Compensation Committees responsibilities under its charter are further
described in the Corporate Governance section of this Proxy Statement. While
not members of the Compensation Committee, the Chairman of the Board attended
all, and the Chief Executive Officer attended all but one, of the meetings of
the Compensation Committee in 2014 to contribute to and understand the
committees oversight of and decisions relating to executive compensation. The
Chief Executive Officer did not attend
portions of the meetings relating to his
compensation. The Compensation Committee regularly conducts executive sessions
without management present.
The committee also engages in an ongoing
dialog with the Chief Executive Officer and the Compensation Committees
compensation consultant in the evaluation and establishment of the elements of
our executive compensation program. The committee also received input from the
Chief Human Resources Officer in making executive compensation decisions.
Compensation Consultants
Frederic W. Cook & Co., Inc. (the
Compensation Consultant) provides executive and
director compensation consulting services to the Compensation Committee. The
Compensation Consultant is retained by and reports to the Compensation Committee
and participates in the committee meetings. The Compensation Consultant informs
the committee on market trends, as well as regulatory issues and developments
and how they may impact the Companys executive compensation programs. The
Compensation Consultant also:
● |
Participates in the design of
executive compensation programs to help the committee evaluate the linkage
between pay and performance; |
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Statement |
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Compensation Discussion and
Analysis |
PROXY
STATEMENT |
● |
Reviews market data and advises the
committee regarding the compensation of the Companys executive officers;
|
● |
Reviews and advises the committee
regarding director compensation; and |
● |
Performs an annual risk assessment
of the Companys compensation programs, as described in the Executive
Compensation-Risk Management and Compensation section of this Proxy
Statement. |
The Compensation Consultant does not
provide any other services to the Company. The Compensation Committee has
assessed the independence of the Compensation Consultant pursuant to the NYSE
rules and the Company concluded that the Compensation Consultants work for the
Compensation Committee did not raise any conflict of interest.
During 2014, the Company also retained the
services of Towers Watson to assist the Company in evaluating the Companys
annual and long-term incentive programs. The Compensation Committee evaluated
the findings of Towers Watson in its review of the 2014 incentive program
design. The Compensation Committee has assessed the independence of Towers
Watson pursuant to the NYSE rules and the Company concluded that Towers Watsons
work did not raise any conflict of interest.
Setting 2014 Compensation
In late 2013, the Compensation Committee,
working with the Compensation Consultant and the Chief Executive Officer,
engaged in a detailed review of the Companys executive compensation programs to
evaluate whether the design and levels of each compensation element were:
● |
Appropriate to support the Companys
strategic performance objectives; |
● |
Consistent with the philosophy and
objectives described under Our
Executive Compensation Philosophy and Objectives above; and |
● |
Reasonable when compared to market
pay practices (see Market
Comparison below).
|
Specifically, the Compensation Committee
approved several modifications to the compensation program to further align the
executive compensation program with evolving investor preferences, executive
compensation practices and market trends. These modifications included:
● |
Replacing the TSR modifier included
in our 2013 Long-Term Incentive Plan design with a standalone TSR PSU
award; |
● |
Increasing the performance period
for performance-based restricted stock units so that they are subject to a
three-year total performance period, versus the two-year performance
period used in prior years; |
● |
Increasing the percentage of our
annual equity grants that have vesting provisions that are strictly
performance-based and at-risk; |
● |
Reducing the maximum payout
opportunity under the Annual Incentive Plan from 200% of target to 150% of
target; and |
● |
Establishing performance goals that
exceed performance during the prior three years. |
In early 2014, Mr. Ersek presented to the
Compensation Committee his evaluation of each of the Executive Vice Presidents
and the level of his or her salary, annual bonus targets under the Annual
Incentive Plan, and long-term incentive award targets under the Long-Term
Incentive Plan. Mr. Ersek based his assessments on each executives performance
and relative contributions to the Companys success, the performance of the
executives respective business unit or functional area, employee retention
considerations, compensation history and internal equity. Mr. Ersek also
reviewed with the committee tally sheets that presented comprehensive historical
and current compensation data for each of the Companys executive officers.
Please see Use of Tally
Sheets below for a description of this tool.
The Compensation Consultant participated in the committee meetings to provide
peer group and market data regarding executive compensation. Please see
Market Comparison for a discussion of the use of peer group and market data.
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Statement |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
In early 2014, Mr. Ersek also submitted a
self-evaluation to the Compensation Committee. The committee shared Mr. Erseks
goals for the year and his self-evaluation with the independent members of the
Board of Directors, who then evaluated Mr. Erseks performance in 2013 based on
his actual performance versus such goals. In setting Mr. Erseks compensation,
the committee considered this evaluation, market data regarding chief executive
officer compensation levels provided by the Compensation Consultant, and a tally
sheet of Mr. Erseks historical and current compensation data. No member of
management, including Mr. Ersek, made any recommendations regarding Mr. Erseks
compensation or participated in the portions of the Compensation Committee
meeting or in the meeting of the independent directors of the Board during which
Mr. Erseks compensation was determined or ratified.
Market Comparison
For 2014, the Compensation Committee
considered market pay practices when setting executive compensation, but did not
target the specific compensation elements or total compensation against the
market data. Instead, the committee used market data to assess the overall
competitiveness and reasonableness of the Companys executive compensation
program. In evaluating 2014 market data, the committee considered both peer
group proxy data and compensation survey data, but did not assign a specific
weight to either data source. While the Compensation Committee considers
relevant market pay practices when setting executive compensation, it does not
believe it appropriate to establish compensation levels based only on market
practices. The Compensation Committee believes
that compensation decisions are complex
and require a deliberate review of Company performance and peer compensation
levels. The factors that influence the amount of compensation awarded include
market competition for a particular position, an individuals experience and
past performance inside or outside the Company, compensation history, role and
responsibilities within the Company, tenure with the Company and associated
institutional knowledge, long-term potential with the Company, contributions
derived from creative and innovative thinking and leadership, money transfer or
financial services industry expertise, past and future performance objectives
and the value of the position within the Company.
The Compensation Committee believes that
the Companys peer group should reflect the markets in which the Company
competes for business, executive talent and capital. Accordingly, the Companys
peer group includes companies meeting either of the following criteria:
● |
Global brands providing virtual
products or services; or |
● |
Companies involved with payment and
processing services. |
In October 2013, the Compensation
Consultant was asked to re-evaluate the Companys peer group with respect to
revenue, operating income, number of employees, market capitalization, and other
factors. Based on this review of the members of the peer group, in December
2013 the
committee approved the deletion from the peer group of Visa and MasterCard
primarily due to the size of their revenue, operating income and market
capitalization in relation to the Company. The revised peer group was used for
evaluating 2014 compensation decisions.
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Statement |
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40 |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
The peer group used for evaluating 2014
compensation decisions consisted of the companies below. The Compensation
Consultant compiled compensation information from the peer group based on the
publicly filed documents of each member of the peer group.
|
|
2013 Revenues (in Millions) |
|
2013 Operating Income (in
Millions) |
|
Employees |
|
Market Capitalization (in Millions) (as
of 12/31/13) |
Ameriprise Financial |
|
|
$10,957 |
|
|
|
$2,178 |
|
|
|
12,235 |
|
|
|
$22,462 |
|
Automatic Data Processing |
|
|
$11,490 |
|
|
|
$2,069 |
|
|
|
60,000 |
|
|
|
$38,929 |
|
Charles Schwab |
|
|
$5,362 |
|
|
|
$1,657 |
|
|
|
13,800 |
|
|
|
$33,520 |
|
CME
Group |
|
|
$2,947 |
|
|
|
$1,729 |
|
|
|
2,600 |
|
|
|
$26,312 |
|
Comerica |
|
|
$2,637 |
|
|
|
$1,114 |
|
|
|
8,967 |
|
|
|
$8,732 |
|
Discover Financial Services |
|
|
$9,278 |
|
|
|
$4,318 |
|
|
|
13,009 |
|
|
|
$26,789 |
|
eBay |
|
|
$15,510 |
|
|
|
$3,249 |
|
|
|
31,500 |
|
|
|
$71,028 |
|
Fidelity National Information Services |
|
|
$5,992 |
|
|
|
$1,179 |
|
|
|
35,000 |
|
|
|
$15,628 |
|
Fiserv |
|
|
$4,696 |
|
|
|
$1,125 |
|
|
|
20,000 |
|
|
|
$15,270 |
|
Global Payments |
|
|
$2,415 |
|
|
|
$406 |
|
|
|
3,954 |
|
|
|
$4,737 |
|
Intuit |
|
|
$4,231 |
|
|
|
$1,229 |
|
|
|
8,000 |
|
|
|
$21,744 |
|
MoneyGram |
|
|
$1,443 |
|
|
|
$186 |
|
|
|
2,490 |
|
|
|
$1,204 |
|
NASDAQ OMX |
|
|
$3,117 |
|
|
|
$752 |
|
|
|
2,506 |
|
|
|
$6,670 |
|
Northern Trust |
|
|
$4,219 |
|
|
|
$2,130 |
|
|
|
14,200 |
|
|
|
$14,791 |
|
State Street |
|
|
$10,292 |
|
|
|
$4,774 |
|
|
|
29,660 |
|
|
|
$32,387 |
|
Total Systems Services |
|
|
$1,978 |
|
|
|
$378 |
|
|
|
8,600 |
|
|
|
$6,332 |
|
75th Percentile |
|
|
$9,531 |
|
|
|
$2,142 |
|
|
|
22,415 |
|
|
|
$28,188 |
|
Median |
|
|
$4,464 |
|
|
|
$1,443 |
|
|
|
12,622 |
|
|
|
$18,686 |
|
25th Percentile |
|
|
$2,870 |
|
|
|
$1,024 |
|
|
|
6,988 |
|
|
|
$8,217 |
|
Western Union |
|
|
$5,542 |
|
|
|
$1,107 |
|
|
|
10,000 |
|
|
|
$9,467 |
|
All data was compiled by the
Compensation Consultant who obtained peer company financial market data from
Capital IQ Compustat. The data generally represents revenue and operating income
for the most recent four quarters available to the Compensation Consultant at
the time the Compensation Consultant compiled the data in January 2014. Other
than for the Company, operating income may reflect measures not in conformity
with Generally Accepted Accounting Principles.
The Compensation Committee also uses
general industry compensation survey data in evaluating executive pay. Survey
data relies upon responses from participating companies to survey questions,
which are compiled and sorted by the surveyor based on various factors, such as
the period covered, the location of the company, and the positions under review.
Survey data provides insight into positions that may not generally be reported
in proxy statements and information about the compensation of executives of
non-public companies.
In some instances, survey data is a useful
complement to the peer group proxy data. To assist the committee in its review
of the general industry compensation survey data, the Compensation Consultant
extracts compensation information from the surveys with respect to companies
with annual revenues generally ranging from $3 billion to $10 billion. For the
2014 compensation review, the Compensation Consultant compiled compensation data
from the following general industry compensation surveys: 2013 U.S. Mercer
Benchmark Database-Executive
41 |
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Compensation Discussion and
Analysis |
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STATEMENT |
(which included data from 56 companies
with annual revenues between $5 billion and $10 billion); Equilar Top 25 (which
included custom data from 12 of the companies in the Companys peer group
described above: Ameriprise Financial, Automatic Data Processing, Charles
Schwab, CME Group, Discover Financial Services, eBay, Fidelity National
Information Services, Global Payments, MoneyGram, NASDAQ OMX, State Street and
Total Systems Services); AonHewitt 2013 US Total Compensation Measurement
Database (which included data from 59 companies with annual revenues between $5
billion and $10 billion); and 2013 Towers Watson U.S. Compensation Data Bank
General Industry Executive Database (which included data from 112 companies with
annual revenues between $3 billion and $6 billion).
In connection with Mr. Almeidas 2014
compensation review, the committee considered compensation information from the
2013 Towers Watson U.S. Compensation Data Bank General Industry Executive
Compensation Database (which included data from 119 companies with annual
revenues greater than $2 billion); 2013 Mercer Benchmark Database-Executive
(which included data from 24 companies with annual revenues between $2.5 billion
and $5 billion); AonHewitt 2013 US Total Compensation Measurement Database
(which included data from 69 companies with annual revenues between $2.5 billion
and $5 billion); and Equilar President America & Europe Compensation
Survey (which included data from three companies with a median
annual revenue of $2.9 billion). In doing
so, the committee sought to reference data for executives in a similar role as
Mr. Almeida who oversee organizations of comparable size and revenue. In
connection with Mr. Agrawals mid-year promotion, the committee considered
survey data provided by the Compensation Consultant using the Mercer, Towers
Watson, and AonHewitt surveys referenced above (which included 16
publicly-traded peer companies in payment processing and digital services) and
also considered supplemental information for chief financial officers in
financial services organizations similar in size and revenue to the Company
(which included information from the 2013 Towers Watson CBD Financial Services
Executive Compensation survey that included 46 companies with annual revenue of
$7 billion or more in the financial services industry).
Use of Tally Sheets
The Compensation Committee reviews tally
sheets that present compensation data for each of the Companys executives.
These tally sheets generally include historical and current compensation data,
valuations of future equity vesting, value of option exercises in the past five
years as well as analyses for hypothetical terminations and retirements to allow
the Compensation Committee to consider the Companys obligations under such
circumstances. The tally sheets provide context for the committee in determining
the elements and amounts of compensation paid.
The Western Union
Executive Compensation Program |
Pay-For-Performance
The principal components of the Companys
annual executive compensation program are annual base salary, annual incentive
awards, and long-term incentive awards in the form of stock options and
performance-based restricted stock units. The Compensation Committee designed
the 2014 executive compensation program so that performance-based pay elements
(Annual Incentive Plan awards, stock options and performance-based restricted
stock units) constituted a significant portion of the executive compensation
awarded, determined at target levels. The following charts demonstrate that
these variable pay elements comprised
approximately 88% of the targeted annual compensation for the Chief Executive
Officer and, on average, 75% of the targeted annual compensation for the other
named executive officers (excluding the 2014 promotion and retention/merit
restricted stock unit grants to such executives). For purposes of these charts,
the percentage of targeted annual compensation was determined based on the
annual base salary and target incentive opportunities applicable to the named
executive officer as of December 31, 2014.
The Western Union Company Proxy
Statement |
| |
42 |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
![](westernunion_def14a8x1x1.jpg)
Since a significant portion of the
compensation of our named executive officers is both performance-based and
at-risk, we are providing the following supplemental table to demonstrate the
difference between the compensation granted to our named executive officers, as
required to be reported by SEC rules in the 2014 Summary Compensation Table, and
the compensation realizable by such named executive officers for the 2012 to
2014 fiscal years. While the manner for reporting equity compensation as
realizable compensation differs from the SEC rules relating to the reporting
of compensation in the 2014 Summary Compensation Table, we believe this table
serves as a useful supplement to the 2014 Summary Compensation Table. The 2014
Realizable Compensation Table and the total realizable compensation reported in
the table provides supplemental information regarding the compensation paid to
the named executive officers and should not be viewed as a substitute for the
2014 Summary Compensation Table.
We believe the realizable compensation
shown is reflective of the Compensation Committees emphasis on
pay-for-performance in that differences between
realizable pay and total reported
compensation as well as fluctuations year-over-year are primarily the result of
our varying levels of achievement against pre-established performance goals
under our Annual Incentive Plan and Long-Term Incentive Plan and our stock performance.
For example, as illustrated in the table below, 2012 realizable compensation was
significantly below 2012 reported compensation and 2013 and 2014 realizable
compensation. This difference was primarily a result of a 2012 payout level of
13% of target for the Chief Executive Officer and 17% of target for the other
named executive officers for the Companys 2012 performance-based stock unit
awards, no payout for the Chief Executive Officer and 24% payout for the other
named executive officers under the 2012 Annual Incentive Plan, and stock price
depreciation during 2012. In contrast, the improvement in realizable compensation
in 2013 and 2014 is primarily attributable to our estimated performance as of
December 31, 2014 against the financial performance objectives under the
Companys 2013 and 2014 performance-based restricted stock unit awards and stock
price appreciation.
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Statement |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
2014 REALIZABLE COMPENSATION
TABLE
|
|
|
Proxy Reported |
|
Total Realizable |
|
Realizable |
|
|
|
Compensation |
|
Compensation |
|
as a % of |
Name |
Year |
|
($000)(1) |
|
($000)(2) |
|
Reported |
Hikmet Ersek |
2014 |
|
|
8,241.8 |
|
|
|
8,047.8 |
|
|
|
98% |
|
|
2013 |
|
|
8,775.9 |
|
|
|
8,763.5 |
|
|
|
100% |
|
|
2012 |
|
|
7,009.0 |
|
|
|
1,814.2 |
|
|
|
26% |
|
Rajesh K. Agrawal |
2014 |
|
|
3,378.2 |
|
|
|
3,389.1 |
|
|
|
100% |
|
|
2013 |
|
|
3,360.5 |
|
|
|
3,351.7 |
|
|
|
100% |
|
|
2012 |
|
|
2,706.2 |
|
|
|
1,615.6 |
|
|
|
60% |
|
Odilon Almeida |
2014 |
|
|
3,038.9 |
|
|
|
3,080.3 |
|
|
|
101% |
|
|
2013 |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
2012 |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
J. David Thompson |
2014 |
|
|
2,376.4 |
|
|
|
2,380.0 |
|
|
|
100% |
|
|
2013 |
|
|
2,233.9 |
|
|
|
2,221.2 |
|
|
|
99% |
|
|
2012 |
|
|
3,426.5 |
|
|
|
2,534.6 |
|
|
|
74% |
|
John R. Dye |
2014 |
|
|
2,134.6 |
|
|
|
2,121.7 |
|
|
|
99% |
|
|
2013 |
|
|
2,280.5 |
|
|
|
2,268.4 |
|
|
|
99% |
|
|
2012 |
|
|
2,320.8 |
|
|
|
1,691.6 |
|
|
|
73% |
|
Footnotes:
(1) |
|
As reported in the Total
column of the 2014 Summary Compensation Table. |
|
|
|
(2) |
|
Amounts reported in the
calculation of total realizable compensation include (a) annualized base
salary, (b) actual bonus payments made to each eligible executive with
respect to each of the years shown under the Companys Annual Incentive
Plan, (c) actual amounts paid with respect to discretionary bonuses in the
year in which such bonuses are paid, (d) the value realized from the
exercise of stock options and for unexercised stock options, the
difference between the exercise price and the closing stock price on
December 31, 2014, each reported in the year granted, (e) the value
realized upon vesting of restricted stock units or performance-based
restricted stock units and the value of unvested restricted stock units or
performance-based restricted stock unit awards based on the closing stock
price on December 31, 2014, each reported in the year granted, and (f)
amounts reported in the All Other Compensation Table for the respective
years. For purposes of this table, the value of the TSR PSUs is based on
target performance since the TSR PSUs vest based on the Companys TSR at
the end of the three-year performance period compared to the Companys TSR
at the beginning of the performance period. The Financial PSUs and the
2013 performance-based restricted stock unit awards are valued for
purposes of this table based on estimated performance as of December 31,
2014. |
Elements of 2014 Executive Compensation
Program
The following table lists the material
elements of the Companys 2014 executive compensation program. The committee
believes that the design of the Companys executive compensation program
balances fixed and variable compensation elements, provides alignment with the
Companys short and long-term financial and strategic priorities through the
annual and long-term incentive programs, and provides alignment with stockholder
interests.
The Western Union Company Proxy
Statement |
| |
44 |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
|
|
|
|
Why We Pay |
|
How We |
|
|
Element |
|
Key Characteristics |
|
This Element |
|
Determine Amount |
|
2014 Decisions |
Base salary |
|
Fixed compensation component payable
in cash. Reviewed annually and adjusted when appropriate. |
|
Establish a pay foundation at
competitive levels to attract and retain talented executives. |
|
Experience, job scope,
responsibilities, market data, and individual performance. |
|
Two of our named executive officers
received salary increases in connection with promotions. See page
55. |
Annual incentive awards |
|
Variable compensation component
payable in cash based on performance against annually established
performance objectives. |
|
Motivate and reward executives for performance
on key financial, strategic and/or individual objectives over the
year. Hold our executives accountable,
with payouts varying from target based on actual performance against
pre-established and communicated performance goals. |
|
Internal pay equity, market practice
and individual performance.
Participants are eligible to receive
a cash payout ranging from 0% to 150% of target based on the achievement
of corporate financial, strategic and individual/business unit goals,
except for Mr. Ersek whose award is payable based entirely on the
achievement of corporate financial and strategic goals.
The portion of the bonus opportunity
allocated to individual/business unit objectives is subject to a +/-
modifier based on a qualitative assessment of Company and employee
execution on compliance initiatives. |
|
Based on the achievement of corporate
financial, strategic and/or individual/business unit goals, the committee
certified payouts ranging from 88% to 102% of target for the named
executive officers.
See pages 46-49 and
54-56. |
Performance- based
restricted stock units |
|
Performance-based
restricted stock units vest based on the Companys achievement of
financial performance objectives (Financial PSUs) and the Companys
relative TSR performance (TSR PSUs). |
|
Coupled with stock options, aligns the
interests of executives with those of our stockholders by focusing the
executives on the Companys financial and TSR performance over a
multi-year period.
Hold our executives accountable, with payouts
varying from target based on actual performance against pre-established
and communicated performance goals. |
|
Internal pay equity, market practice
and individual performance.
Financial PSUs: Payout based on
revenue and operating income growth over 2014-2016 performance period.
TSR PSUs: Payout based on the
Companys TSR performance relative to the TSR of the S&P 500 Index
over 2014-2016 performance period. |
|
Performance-based restricted stock
units represent 80% of the long-term grant value, with 60% of the
long-term grant value delivered as Financial PSUs and 20% delivered as TSR
PSUs.
See pages 49-51 and
54-56. |
45 |
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The Western Union Company Proxy
Statement |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
|
|
|
|
Why We Pay |
|
How We |
|
|
Element |
|
Key Characteristics |
|
This Element |
|
Determine Amount |
|
2014 Decisions |
Stock options |
|
Non-qualified stock options granted
with an exercise price at fair market value on the date of grant that
expire 10 years after grant and become exercisable in 25% annual
increments over a four-year vesting period. |
|
Coupled with performance-based
restricted stock units, aligns the interests of executives with those of
our stockholders by focusing the executives on long-term objectives over a
multi-year period, including stock price growth. |
|
Internal pay equity, market practice
and individual performance. |
|
Stock options represent 20% of the
long-term grant value, as compared to a 33% weighting in 2013.
See pages 49-50. |
Restricted stock units |
|
Restricted stock units that generally
vest in 25% annual increments over a four-year vesting period. |
|
Granted as promotion grants or in
recognition of prior year performance and for retention
purposes. |
|
Internal pay equity, market practice
and individual performance. |
|
Four of our named executive officers
received restricted stock unit grants.
See pages 49-51 and
54-56. |
Each of Western Unions 2014 executive
compensation program elements is described in further detail below and
individual compensation decisions are discussed in -Compensation of Our Named
Executive Officers.
Base Salary
Our philosophy is that base salaries
should meet the objectives of attracting and retaining the executives needed to
lead the business. Base salary is a fixed compensation component payable in
cash. In setting base salary levels, the committee considered the peer group and
survey data as well as the performance of the individual executive. During 2014,
Messrs. Agrawal and Almeida received increases in their base salary levels in
connection with their respective promotions. None of our other named executive
officers have received a salary increase from the levels established in March
2012 (or, if later, the executives date of hire). Please see -Compensation of
Our Named Executive Officers for further information regarding the 2014 base
salary levels.
Annual Incentive Compensation
Our Annual Incentive Plan is designed to
motivate and reward executive officers for achieving short-term performance
objectives. The Annual Incentive Plan design is intended to provide annual
incentive awards that qualify as performance-based compensation under Section
162(m) of the Internal Revenue Code. Participants
in the Annual Incentive Plan in 2014 were
Mr. Ersek and the Companys Executive Vice Presidents, which included all of the
named executive officers.
Compensation under the Annual Incentive
Plan is intended to be a significant component of an executives total
compensation opportunity in a given year, helping create a pay for performance
culture. Annual Incentive Plan compensation holds executives accountable and
rewards them based on the Companys performance.
In connection with its annual review of
the Companys executive compensation program, the Compensation Committee
approved the following design changes to the Annual Incentive Plan in order to
further enhance the pay-for-performance aspect of this program and further align
the interests of executives with those of our stockholders:
● |
Approved financial
performance target objectives under the 2014 Annual Incentive Plan that
were set higher than the constant currency financial performance target
objectives and actual results under the 2013 Annual Incentive Plan;
and |
|
|
● |
Strengthened the
emphasis on financial performance metrics by increasing the weighting of
financial performance metrics in the determination of payouts under the
Annual Incentive Plan. |
The Compensation Committee also modified
the 2014 Annual Incentive Plan design by reducing the maximum payout opportunity
from 200% of target to
The Western Union Company Proxy
Statement |
| |
46 |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
150% of target and eliminating the
restricted stock unit component which was included in the 2013 Annual Incentive
Plan design. The Compensation Committee approved the elimination of the
restricted stock unit component in order to simplify the plan design.
Target payout opportunities under the
Annual Incentive Plan are expressed as a percentage of a participants annual
base salary, with actual payouts ranging from 0% to 150% of target for various
levels of performance.
The following table sets forth each named
executive officers 2014 target award opportunity and the weighting of the
corporate, strategic and individual/business unit measures used in determining
the cash payout levels. For 2014, Messrs. Agrawal and Almeida received increases
in their target award opportunities in connection with
their respective promotions. Each of our
other named executive officers target award opportunity remained unchanged from
the level established for the executive in 2012. As discussed further below, the
weighting of the performance measures reflects the desire of the Compensation
Committee to tie a significant portion of annual incentive compensation to
corporate performance measures that the committee believes are meaningful to and
readily accessible by our investors while at the same time emphasizing strategic
performance objectives that focus on the Companys growth imperatives, and for
the named executive officers other than the Chief Executive Officer, individual
and/or business unit objectives that the committee believes are indicators of
the executives success in fulfilling the executives responsibilities and
support the Companys strategic operating plan.
|
|
|
|
|
Weighting of Performance
Measures |
|
|
Target Award |
|
|
|
|
|
Individual/ |
Executive |
|
Opportunity |
|
Corporate |
|
Strategic |
|
Business Unit |
Hikmet Ersek |
|
$1,500,000 |
|
|
80.0% |
|
20.0% |
|
|
Rajesh K. Agrawal |
|
$446,918 |
(1) |
|
50.0% |
|
20.0% |
|
30.0% |
Odilon Almeida |
|
$540,000 |
|
|
50.0% |
|
20.0% |
|
30.0% |
J. David Thompson |
|
$450,000 |
|
|
50.0% |
|
20.0% |
|
30.0% |
John R. Dye |
|
$400,000 |
|
|
50.0% |
|
20.0% |
|
30.0% |
(1) |
|
In connection with his
mid-year promotion to the position of Executive Vice President and Chief
Financial Officer, Mr. Agrawals target award opportunity was increased
from $405,000 to $495,000. The amount reported in the table reflects Mr.
Agrawals prorated award opportunity for
2014. |
Financial Performance
Metrics. As it had in previous years, the
Compensation Committee set the executives 2014 annual incentive compensation
award targets for financial performance by establishing a grid based on the
Companys revenue and operating income. These performance measures were used in
order to tie annual incentive compensation to measures of the Companys
financial performance that the committee deemed meaningful to and readily
accessible by our investors.
The Compensation Committee established the
grid metrics and corresponding payout percentages based upon input from
management regarding the Companys expected performance in the upcoming year. As
noted above, in order to drive performance above the Companys
prior year results, the 2014 financial
performance target objectives were set higher than the constant currency
financial performance target objectives and actual results under the 2013 Annual
Incentive Plan. The committee designed the grid to encourage strong, focused
performance by our executives with the maximum payout levels requiring
performance, measured on a constant currency basis, that exceeds the Companys
financial guidance. The 2014 grid provided a payout of 100% of target if the
Company achieved its internal operating plan for operating income and revenue
(revenue of approximately $5.75 billion and operating income of approximately
$1.17 billion), with a maximum payout level of 150% of target if revenue and
operating income grew
47 |
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Statement |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
by 7.0% and 11.0%, respectively, as
compared to 2013. Within the grid, a higher rate of increase for one metric
could counterbalance a lower rate of increase for the
other metric. For 2014, the grid range for
the revenue and operating income performance goals as well as the 2014
achievement are as follows:
|
|
Target Range |
|
Results |
|
Achievement (%) |
Total Revenue |
|
$5,597M-$5,928M |
|
$5,765M |
|
103% |
Operating Income |
|
$1,118M-$1,229M |
|
$1,181M |
|
111% |
Overall Achievement |
|
|
|
|
|
107% |
When the grid was established and
consistent with prior years, the committee determined that the effect of
currency fluctuations on revenue and operating income performance should be
excluded from the payout calculation, as committee members believed compensation
should not be based on factors outside of the control of our executives. In
addition, pursuant to the Annual Incentive Plan and subject to compliance with
Section 162(m) of the Internal Revenue Code, the Compensation Committee retained
discretion to adjust the performance results against the performance objectives
for major nonrecurring and non-operating expense and income items based on the
facts and circumstances involved.
The Compensation Committee did not exercise
this discretion to adjust such performance results for the 2014 Annual Incentive
Plan.
Strategic Performance
Objectives. Participants in the 2014 Annual
Incentive Plan had 20% of their award opportunity tied to the achievement of
strategic performance objectives based upon the Companys strategic operating
plan, with a focus on the Companys growth imperatives. Performance levels of
the objectives were designed to be achievable, but required the coordinated,
cross-functional focus and effort of the executives. Based on the achievement of
the strategic performance objectives, the committee certified a payout equal to
11% of each named executive officers target allocated to the strategic
performance objectives. The strategic performance objectives, their respective
weightings as well as the performance assessment for the 2014 Annual Incentive
Plan awards are as follows:
2014 Annual Incentive Plan Strategic Performance
Goals |
|
2014 Actual Performance |
Currency adjusted growth in revenue originating from digital
(weighting 6%) |
|
Below the threshold
performance goal |
Currency adjusted growth in consumer to consumer principal
via wu.com (weighting 4%) |
|
Between threshold and target performance goals |
Currency adjusted revenue growth in Western Union Business
Solutions (weighting 6%) |
|
Below the threshold
performance goal |
Currency adjusted EBITDA growth in Western Union Business
Solutions (weighting 4%) |
|
Below the threshold
performance goal |
Performance Level Achievement |
|
11% |
Individual and Business Unit
Performance Objectives. As noted in the table
on the previous page, other than for Mr. Ersek, 30% of the 2014 annual incentive
awards was subject to the achievement of individual and/or business unit
performance objectives. Weighting for each individual and business unit
performance objective ranged from 10% to 40% of the bonus opportunity allocated
to individual and/or business unit performance. These objectives varied by named
executive officer and included objectives relating to operating cash flow,
expense management, business unit revenue growth, business unit profit growth,
business
unit profit margin, execution of various
information technology projects, customer satisfaction with customer service
center support, compliance costs, management of compliance with the settlement
agreement by and between Western Union Financial Services, Inc. and the State of
Arizona, dated February 11, 2010, as amended, and global consumer fraud. To
emphasize the importance of compliance and employee engagement throughout the
organization, the individual performance objectives also included objectives
relating to compliance initiatives and employee engagement. In addition, the
2014 Annual
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Incentive Plan design included a payout
modifier with respect to the portion of the bonus opportunity allocated to
individual and business unit performance objectives. Under the plan design, the
Compensation Committee retained the discretion to modify the deemed overall
attainment of the individual and business unit performance objectives based on a
qualitative assessment performed by the Compliance Committee of the Board of
employee and Company execution on compliance initiatives. For 2014, the
Compensation Committee, based on the Compliance Committees qualitative
assessment, utilized the payout modifier to increase the 2014 Annual Incentive
Plan payouts by approximately 6% to 7% of the target award opportunity for each
named executive officer other than the Chief Executive Officer in recognition of
enhancements made to the Companys global compliance programs.
The committee believes the performance
objectives established for each of the named executive officers are indicators
of the executives success in fulfilling the executives responsibilities to the
Company and support the Companys strategic operating plan. The committee also
believes that including compliance as both a performance objective and a payout
modifier reinforces compliance as a priority throughout the organization. The
performance levels of the individual and business unit objectives were designed
to be achievable, but required strong and consistent performance by the
executive. Please see -Compensation of Our Named Executive Officers for a
discussion of the annual incentive payouts received by each named executive
officer.
Long-Term Incentive Compensation
The Long-Term Incentive Plan allows the
Compensation Committee to award various forms of long-term incentive grants,
including stock options, restricted stock units, performance-based equity and
performance-based cash awards. The Compensation Committee has sole discretion in
selecting participants for long-term incentive grants and the Compensation
Committee approves all equity grants made to our senior executives, with the
equity grants made to the Chief Executive Officer ratified by the independent
directors of the Board. When making regular annual equity grants, the
Compensation Committees practice is to approve them during the first quarter of
each
year as part of the annual compensation
review. Among other factors, the Compensation Committee considers dilution of
the Companys outstanding shares when making such grants.
2014 Enhancements to Long-Term
Incentive Awards. As part of its ongoing
review of the executive compensation program during 2014, and based on input
from the Compensation Consultant, the Compensation Committee approved certain
changes to the Companys long-term incentive program in order to further enhance
the Companys pay-for-performance philosophy and further align the interests of
executives with those of our stockholders. Accordingly, in February 2014, the
Compensation Committee approved the following modifications to the Companys
long-term incentive program:
● |
Created Standalone TSR
PSUs: We replaced the TSR modifier from
our 2013 Long-Term Incentive Plan design with a standalone TSR PSU award
in order to enhance focus on stockholder returns. |
|
|
● |
Increased Performance Period for
Performance-Based Restricted Stock Units:
We increased the performance period of our performance-based restricted
stock units from two years to three years. |
|
|
● |
Diversified Long-Term Incentive Plan
Mix and Increased Weighting of At-Risk Awards:
We increased the percentage of our annual equity grants that have vesting
provisions that are strictly performance-based and at-risk. |
|
|
● |
Established Goals
Exceeding Performance During Prior Three Years:
The financial performance target objectives for the 2014 Financial PSUs
were set at constant currency growth rates that are higher than the
Companys average annual constant currency results achieved over 2011
through 2013. Further, the Companys relative TSR performance rank versus
the S&P 500 Index over a 2014-2016 performance period that is required
to earn a target payout under the terms of the 2014 TSR PSUs is higher
than the Companys annual relative TSR performance versus the S&P 500
Index in each of 2011, 2012, and 2013. |
2014 Annual Long-Term Incentive
Awards. The Compensation Committees
objectives for the 2014 long-term incentive awards were to:
● |
Align the interests of our executives with the
interests of our stockholders by focusing on objectives that result in
stock price appreciation through the use of stock
options; |
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● |
Increase cross-functional executive focus in the coming
years on key performance metrics through Financial PSUs; |
|
|
● |
Amplify executive focus on stockholder returns through
TSR PSUs; and |
|
|
● |
Retain the services of executives through multi-year
vesting provisions. |
In February 2014, the Compensation
Committee granted the Chief Executive Officer and the Executive Vice Presidents
long-term incentive awards under the Long-Term Incentive Plan. The awards
consisted of 80% performance-based restricted stock units (60% Financial PSUs,
incorporating both revenue and operating income growth, and 20% TSR PSUs) and 20%
stock options. The committee believed that the mix of stock options, Financial
PSUs and TSR PSUs was appropriate because these forms of awards combined
represented a balanced reflection of stockholder returns and financial
performance. The stock options vest in 25% annual increments over four years and
have a 10-year term. The performance-based restricted stock unit awards are
described in greater detail below. In addition, as discussed in Compensation
of Our Named Executive Officers below, Messrs. Agrawal, Almeida, Thompson and
Dye each received time-based restricted stock unit grants in 2014 in connection
with promotions or in recognition of 2013 performance and for retention
purposes.
Financial PSUs. The 2014 Financial PSU awards will vest if and only to the
extent that specific performance goals for revenues and operating income are met
during the performance period. To motivate constant improvement over prior year
results, the performance objectives under the 2014 Financial PSUs design are
based on targeted constant currency compound annual growth rates (CAGR) for
revenue and operating income. At the beginning of the performance period, the
committee established revenue and operating income CAGR goals for each year of
the performance period, with each year weighted equally in the determination of
the award
payout. Under the terms of the awards, as
much as 150% of the targeted Financial PSUs may be earned based on the Companys
performance with respect to the revenue and operating income performance
objectives. In order to receive a threshold payout under the award, the
three-year CAGR for both revenue and operating income must be positive.
The performance objectives for payment of
the 2014 Financial PSU awards and their respective weightings are:
● |
Targeted CAGR for revenue and operating income (each
weighted 50%), comparing 2014 actual performance against 2013 actual
performance (weighting 33-1/3%); |
|
|
● |
Targeted CAGR for revenue and operating income (each
weighted 50%), comparing 2015 actual performance against 2014 actual
performance (weighting 33-1/3%); and |
|
|
● |
Targeted CAGR for revenue and operating income (each
weighted 50%), comparing 2016 actual performance against 2015 actual
performance (weighting 33-1/3%). |
Similar to the Annual Incentive Plan, when
the financial performance objectives were established, the committee determined
that the effect of currency fluctuations on revenue and operating income over
the course of the year should be excluded from the award calculation, as it
believed compensation should not be based on factors outside of the control of
our executives.
In order to achieve target performance for
the first year of the three-year performance period, the Company had to achieve
constant currency revenue and operating income growth of 3.8% and 5.5%,
respectively, as compared to 2013 actual performance. Based on 2014 performance,
the Company achieved revenues and operating income of approximately $5.76
billion and $1.18 billion, respectively, resulting in a blended achievement with
respect to the first year of the three-year performance period of 107% of
target. This portion of the award remains subject to the requirement for a
three-year positive CAGR in both revenue and operating income as well as the
participants continued service through February 20, 2017.
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The following table sets forth each named
executive officers threshold, target and maximum award opportunity with respect
to the 2014 Financial PSUs:
|
2014 Financial PSU Award
Opportunity |
Executive |
Threshold |
Target |
Maximum |
Hikmet Ersek |
|
112,571 |
|
|
225,141 |
|
|
337,712 |
|
Rajesh K. Agrawal |
|
24,391 |
|
|
48,781 |
|
|
73,172 |
|
Odilon Almeida |
|
22,515 |
|
|
45,029 |
|
|
67,544 |
|
J.
David Thompson |
|
22,515 |
|
|
45,029 |
|
|
67,544 |
|
John R. Dye |
|
18,762 |
|
|
37,524 |
|
|
56,286 |
|
TSR PSUs. As noted above, in 2014, the Company introduced a standalone TSR PSU
award in order to enhance focus on stockholder returns. These TSR PSUs require
the Company to achieve 60th percentile relative TSR performance
versus the S&P 500 Index over a three-year performance period in order to
earn target payout,
with 30th percentile relative
TSR performance resulting in threshold payout and 90th percentile
relative TSR resulting in maximum payout.
The following table sets forth each named
executive officers threshold, target and maximum award opportunities with
respect to the 2014 TSR PSUs:
|
2014 TSR PSU Award
Opportunity |
Executive |
Threshold |
Target |
Maximum |
Hikmet Ersek |
|
47,886 |
|
|
95,771 |
|
|
143,657 |
|
Rajesh K. Agrawal |
|
10,376 |
|
|
20,751 |
|
|
31,127 |
|
Odilon Almeida |
|
9,578 |
|
|
19,155 |
|
|
28,733 |
|
J.
David Thompson |
|
9,578 |
|
|
19,155 |
|
|
28,733 |
|
John R. Dye |
|
7,981 |
|
|
15,962 |
|
|
23,943 |
|
Other Elements of Compensation
To remain competitive with other employers
and to attract, retain, and motivate highly talented executives and other
employees, we provide the benefits listed in the following table to our United
States-based employees:
Benefit or Perquisite |
|
Named Executive Officers |
|
Other Officers and
Key Employees |
|
All Full-time and
Regular Part-time Employees |
401(k) Plan |
|
X |
|
X |
|
X |
Supplemental Incentive Savings Plan |
|
|
|
|
|
|
(a
nonqualified defined contribution plan) |
|
X |
|
X |
|
|
Severance and Change-in-Control Benefits |
|
X |
|
X |
|
|
Health and Welfare Benefits |
|
X |
|
X |
|
X |
Limited Perquisites |
|
X |
|
X |
|
|
Severance and Change-in-Control
Benefits. Western Union has an executive
severance policy for our executive officers. The policy helps accomplish Western
Unions compensation philosophy of attracting and retaining
exemplary talent. The committee believes
it appropriate to provide executives with the rewards and protections afforded
by the Executive Severance Policy. The policy reduces the need to negotiate
individual severance
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arrangements with departing executives and
protects our executives from termination for circumstances not of their doing.
The committee also believes the policy promotes management independence and
helps retain, stabilize, and focus the executive officers in the event of a
change-in-control. In the event of a change-in-control, the policys severance
benefits are payable only upon a double trigger. This means that severance
benefits are triggered only when an eligible executive is involuntarily
terminated (other than for cause, death, or disability), or terminates his or
her own employment voluntarily for good reason (including a material reduction
in title or position, reduction in base salary or bonus opportunity or an
increase in the executives commute to his or her current principal working
location of more than 50 miles without consent) within 24 months after the date
of a change-in-control. Severance benefits under the policy are conditioned upon
the executive executing an agreement and release which includes, among other
things, non-competition and non-solicitation restrictive covenants and a release
of claims against the Company.
During 2014, the Compensation Committee
amended the Executive Severance Policy to reduce the severance multiple for
determining severance benefits prior to a change-in-control from 2 to 1.5 for
participants other than the Companys Chief Executive Officer. This amendment
was approved after considering input from the Compensation Consultant as well as
market data. In addition, the Executive Severance Policy prohibits excise tax
gross-up payments on change-in-control benefits for those individuals who became
executives of the Company after April 2009. Mr. Ersek is the only Company
employee who remains eligible for excise tax gross-up payments.
Please see the Executive
Compensation-Potential Payments Upon Termination or Change-in-Control section
of this Proxy Statement for further information regarding the Executive
Severance Policy and the treatment of awards upon qualifying termination events
or a change-in-control.
Retirement Savings
Plans. Western Union executives on United
States payroll are eligible for retirement benefits through a qualified defined
contribution 401(k) plan, the Incentive Savings Plan, and a non-qualified
defined
contribution plan, the Supplemental
Incentive Savings Plan (SISP.) The SISP provides a vehicle for additional
deferred compensation with matching contributions from the Company. We maintain
the Incentive Savings Plan and the SISP to encourage our employees to save some
percentage of their cash compensation for their eventual retirement. Mr. Ersek
participates in the qualified defined contribution retirement plan made
available to eligible employees in Austria. The committee believes that these
types of savings plans are consistent with competitive pay practices, and are an
important element in attracting and retaining talent in a competitive market.
Please see the 2014 Nonqualified Deferred Compensation Table in the Executive
Compensation section of this Proxy Statement for further information regarding
Western Unions retirement savings plans.
Benefits and
Perquisites. The Companys global benefit
philosophy for employees, including executives, is to provide a package of
benefits consistent with local practices and competitive within individual
markets. Each of our named executive officers participates in the health and
welfare benefit plans and fringe benefit programs generally available to all
other Western Union employees in the individual market in which they are
located. In addition, in 2014 the Company provided the benefits and perquisites
as described in the 2014 Summary Compensation Table in the Executive
Compensation section of this Proxy Statement.
The Company provided its other named
executive officers with competitive perquisites and other personal benefits that
are consistent with the Companys philosophy of attracting and retaining
exemplary executive talent and, in some cases, such as the annual physical
examination, the Company provides such personal benefits because the
Compensation Committee believes they are in the interests of the Company and its
stockholders. The committee periodically reviews the levels of perquisites and
other personal benefits provided to named executive officers.
Employment Agreements. The Company generally executes an offer of employment before
an executive joins the Company. This offer describes the basic terms of the
executives employment, including his or her start date, starting salary, bonus
target and long-term incentive
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award target. The terms of the executives
employment are based thereafter on sustained good performance rather than
contractual terms, and the Companys policies, such as the Executive Severance
Policy, will apply as warranted.
Under certain circumstances, the
Compensation Committee recognizes that special arrangements with respect to an
executives employment may be necessary or desirable. For example, Mr. Ersek,
the Company, and a subsidiary of the Company entered into agreements in November
2009 relating to his 2009 promotion to Chief Operating Officer, which were
amended effective September 2010 to reflect his 2010 promotion to President and
Chief Executive Officer. Employment contracts are a competitive market practice
in Austria where Mr. Ersek resided at the time he assumed his position as Chief
Operating Officer and the Compensation Committee believes the terms of his
agreements are consistent with those for similarly situated executives in
Austria. In addition, the Company entered into a letter agreement with Mr.
Agrawal in January 2012 describing the terms and conditions applicable to Mr.
Agrawals 2012-2013 expatriate assignment. Please see the Executive
CompensationNarrative to Summary Compensation Table and Grants of Plan-Based
Awards TableEmployment
Arrangements section of this Proxy Statement
for a description of the material terms of Mr. Erseks employment agreement and
Mr. Agrawals expatriate agreement.
Stock Ownership Guidelines
To align our executives interests with
those of our stockholders and to assure that our executives own meaningful
levels of Western Union stock throughout their tenures with the Company, the
Compensation Committee established stock ownership guidelines that require each
of the named executive officers to own Company Common Stock worth a multiple of
base salary. Under the stock ownership guidelines, the executives must retain,
until the required ownership guideline levels have been achieved and thereafter
if required to maintain the required ownership levels, at least 50% of after-tax
shares resulting from the vesting of restricted stock and restricted stock units
and at least 50% of the shares acquired upon exercise of stock options after the
payment of the exercise
price, broker fees, and related tax
withholding obligations. The chart below shows the salary multiple guidelines
and the equity holdings that count towards the requirement as of March 19, 2015.
Each named executive officer has met, or is progressing towards meeting, his
respective ownership guideline.
Executive |
|
Guideline |
|
Status |
Hikmet Ersek |
|
5x
salary |
|
Meets guideline |
Rajesh K. Agrawal |
|
2x
salary |
|
Meets guideline |
Odilon Almeida |
|
2x salary |
|
Must hold 50% of |
|
|
|
|
after-tax shares until |
|
|
|
|
guideline is met |
J.
David Thompson |
|
2x
salary |
|
Meets guideline |
John R. Dye |
|
2x salary |
|
Must hold 50% of |
|
|
|
|
after-tax shares until |
|
|
|
|
guideline is met |
What Counts Toward
the Guideline |
|
What Does Not
Count Toward the Guideline |
●Western Union securities owned personally |
|
●Unexercised stock options |
●Shares held in any Western Union benefit plan |
|
●Performance-based restricted stock units |
●After-tax value of restricted stock and restricted stock
units |
|
|
Prohibition Against Pledging and
Hedging of the Companys Securities
The Companys insider trading policy
prohibits the Companys executive officers and directors from pledging the
Companys securities or engaging in hedging or short-term speculative trading of
the Companys securities, including, without limitation, short sales or put or
call options involving the Companys securities.
Clawback Policy
The Board of Directors adopted a clawback
policy in 2009. Under the policy, the Company may, in the Boards discretion and
subject to applicable law, recover incentive compensation paid to an executive
officer of the Company (defined as an individual subject to Section 16 of the
Exchange Act, at the time the incentive compensation was received by or paid to
the officer) if the compensation resulted from any financial result or
performance
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metric impacted by the executive officers
misconduct or fraud. The Board is monitoring this policy to ensure that it is
consistent with applicable laws, including any requirements under the Dodd-Frank
Wall Street Reform and Consumer Protection Act (the Dodd-Frank
Act).
Tax Implications of Executive
Compensation Program
Under Section 162(m) of the Internal
Revenue Code, named executive officer (other than the Chief Financial Officer)
compensation over $1 million for any year is generally not deductible for United
States income tax purposes. Performance-based compensation is exempt
from the deduction limit, however, if
certain requirements are met. The Compensation Committee structures compensation
to take advantage of this exemption under Section 162(m) to the extent
practicable, while satisfying the Companys compensation policies and
objectives. Because the Compensation Committee also recognizes the need to
retain flexibility to make compensation decisions that may not meet the
standards of Section 162(m) when necessary to enable the Company to continue to
attract, retain, and motivate highly-qualified executives, it reserves the
authority to approve potentially non-deductible compensation in appropriate
circumstances.
Compensation of Our Named
Executive Officers
Hikmet Ersek
President and Chief Executive Officer
Mr. Erseks 2014 compensation was weighted
significantly toward variable and performance-based incentive pay over fixed
pay, and long-term, equity-based pay over annual cash compensation, because the
Compensation Committee desired to tie a significant level of Mr. Erseks
compensation to the performance of the Company. The percentage of compensation
delivered in the form of performance-based compensation is higher for Mr. Ersek
than compared to the other named executive officers because the Compensation
Committee believes that the Chief Executive Officers leadership is one of the
key drivers of the Companys success, and that a greater percentage of the Chief
Executive Officers total compensation should be variable as a reflection of the
Companys level of performance. Market data provided by the Compensation
Consultant supported this practice as well. Accordingly, at target-level
performance for 2014, Mr. Erseks annual compensation was weighted 12% base
salary, 17% annual incentive award, and 71% long-term incentive award.
Approximately 88% of Mr. Erseks 2014 targeted total annual compensation varies
based on the Companys performance.
In February 2014, the Compensation
Committee set Mr. Erseks 2014 compensation levels, including his annual and
long-term incentive award targets, as discussed below. Mr. Erseks compensation
as Chief Executive Officer is set higher relative to the other named executive
officers. The Compensation Committee considers this
to be appropriate, based on market data
provided by the Compensation Consultant, and because his level of pay reflects
his ultimate responsibility to oversee the performance of the Company.
● |
Base Salary. For 2014, no changes were made to Mr. Erseks annual
base salary. Accordingly, Mr. Erseks annual base salary remained at
$1,000,000. |
● |
Annual Incentive Plan Target and
Payout Level. For 2014, no changes were
made to Mr. Erseks Annual Incentive Plan target of $1,500,000. The
maximum Annual Incentive Plan award that Mr. Ersek could have earned
during 2014 was 150% of Mr. Erseks target, or $2,250,000, as compared to
a maximum award opportunity of 200% of target that was used in prior
years. The Compensation Committee determined
that it was appropriate to base Mr. Erseks award opportunity under the
Annual Incentive Plan on Company financial and strategic
performance objectives and did not include on individual measures. Mr. Erseks
2014 Annual Incentive Plan award payout was $1,314,800, reflecting a
blended payout of 88% of target based on the Companys level of
achievement of the corporate and strategic performance
goals. |
● |
Discretionary
Bonus. For 2014, the committee awarded
Mr. Ersek a discretionary bonus of $115,000 in recognition of his
leadership in enhancing the Companys global compliance
programs. |
● |
Long-Term Incentive
Award. For 2014, no changes were made
to Mr. Erseks long-term incentive award target. Accordingly, Mr. Erseks
2014 long-term incentive award target remained at
$6,000,000. |
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Rajesh K.
Agrawal
Executive Vice President and
Interim Chief Financial Officer (January 2014 to July 2014) and Executive Vice
President and Chief Financial Officer (July 2014 to present)
In February 2014, the Compensation
Committee set Mr. Agrawals initial 2014 compensation levels. In connection with
his mid-year promotion to the position of Executive Vice President and Chief
Financial Officer, in July 2014, the committee adjusted Mr. Agrawals
compensation levels based on the input of the Compensation Consultant, the
historical compensation levels received by the Companys former Chief Financial
Officer, and market data.
● |
Base Salary. In connection with
Mr. Agrawals mid-year promotion, Mr. Agrawals annual base salary was
increased from $405,000 to $550,000, effective July 15,
2014. |
● |
Annual Incentive Plan Target and Payout Level. Mr. Agrawals 2014 annual incentive target was
increased from $405,000 to $495,000 due to his promotion to Chief
Financial Officer in July 2014. Accordingly, Mr. Agrawals prorated annual
incentive target for 2014 was $446,900. The maximum Annual Incentive Plan
award that Mr. Agrawal could have earned during 2014 was 150% of Mr.
Agrawals prorated target, or $670,400, as compared to a maximum award
opportunity of 200% of target that was used in prior years. Mr. Agrawals
2014 Annual Incentive Plan award payout was $442,400, reflecting a blended
payout of 99% of target based on the Companys achievement of the
corporate and strategic performance goals and Mr. Agrawals achievement of
his individual performance goals. |
● |
Discretionary Bonus. For 2014,
the committee awarded Mr. Agrawal a discretionary bonus of $13,400 in
recognition of his performance during 2014. |
● |
Long-Term Incentive Award. In
connection with his promotion, Mr. Agrawals long-term incentive award
target was increased from $1,300,000 to
$1,500,000. |
● |
Promotion Compensation.
Effective upon his promotion to the position of Executive Vice President
and Chief Financial Officer, Mr. Agrawal received a cash bonus of $80,000
and a restricted stock unit award valued at $500,000. The restricted stock
unit award is scheduled to vest in four annual installments, subject to
Mr. Agrawals continued employment through each vesting
date. |
Odilon
Almeida
Executive Vice President and
President, Americas and European Union (January 2014 to present)
In February 2014, the Compensation
Committee set Mr. Almeidas 2014 compensation levels, including his annual and
long-term incentive award targets, as discussed below. In determining Mr.
Almeidas 2014 target compensation levels, the committee considered Mr.
Almeidas 2013 performance, his increased responsibilities as Executive Vice
President and President, Americas and European Union, and market data. The
committee increased Mr. Almeidas compensation levels, including his long-term
incentive award, to reflect his increased responsibilities and to bring his
total compensation into closer alignment with the Companys other executive
officers as well as market levels.
● |
Base Salary. For 2014, Mr. Almeidas base salary was increased from
$575,000 to $600,000. |
● |
Annual Incentive Plan Target and
Payout Level. Mr. Almeidas annual
incentive target was increased from $517,500 to $540,000. The maximum
Annual Incentive Plan award that Mr. Almeida could have earned during 2014
was 150% of Mr. Almeidas target, or $810,000, as compared to a maximum
award opportunity of 200% of target that was used in prior years. Mr.
Almeidas 2014 Annual Incentive Plan award payout was $507,600, reflecting
a blended payout of 94% of target based on the Companys achievement of
the corporate and strategic performance goals and Mr. Almeidas
achievement of his individual/business unit performance
goals. |
● |
Discretionary
Bonus. For 2014, the committee awarded
Mr. Almeida a discretionary bonus of $43,200 in recognition of his
performance during 2014. |
● |
Long-Term Incentive
Award. For 2014, the committee
increased Mr. Almeidas long-term incentive award target from $750,000 to
$1,200,000. |
● |
Promotion
Compensation. Effective upon his
promotion to the position of Executive Vice President and President,
Americas and European Union, Mr. Almeida received a restricted stock unit
award valued at $450,000. The restricted stock unit award is scheduled to
vest in four annual installments, subject to Mr. Almeidas continued
employment through each vesting
date. |
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J. David
Thompson
Executive Vice President,
Global Operations and Chief Information Officer
In February 2014, the Compensation
Committee set Mr. Thompsons 2014 compensation levels, including his annual and
long-term incentive award targets, as discussed below.
● |
Base Salary. For 2014, no changes were made to Mr. Thompsons annual
base salary. Accordingly, Mr. Thompsons annual base salary remained at
$500,000. |
● |
Annual Incentive Plan Target and
Payout Level. For 2014, no changes were
made to Mr. Thompsons Annual Incentive Plan target of $450,000. The
maximum Annual Incentive Plan award that Mr. Thompson could have earned
during 2014 was 150% of Mr. Thompsons target, or $675,000, as compared to
a maximum award opportunity of 200% of target that was used in prior
years. Mr. Thompsons 2014 Annual Incentive Plan award payout was
$459,000, reflecting a blended payout of 102% of target based on the
Companys achievement of the corporate and strategic performance goals and
Mr. Thompsons achievement of his individual/business unit performance
goals. |
● |
Discretionary
Bonus. For 2014, the committee awarded
Mr. Thompson a discretionary bonus of $9,000 in recognition of his
performance during 2014. |
● |
Long-Term Incentive
Award. For 2014, no changes were made
to Mr. Thompsons long-term incentive award target. Accordingly, Mr.
Thompsons long-term incentive award target remained at
$1,200,000. |
● |
Discretionary
Awards. In early 2014, the committee
awarded Mr. Thompson a discretionary restricted stock unit award with a
grant value of $240,000 in recognition of his performance during 2013 and
for retention purposes. This restricted stock unit award is scheduled to
vest in four annual installments, subject to Mr. Thompsons continued
employment through each vesting date. In early 2015, the committee awarded
Mr. Thompson a discretionary restricted stock unit award with a grant
value of $300,000 in recognition of his performance during 2014 and for
retention purposes. This restricted stock unit award is scheduled to vest
in three equal installments on February 20, 2016, 2017 and 2018, respectively, subject to Mr. Thompsons continued
employment through each vesting date. |
John R. Dye
Executive Vice President, General Counsel and
Secretary
In February 2014, the Compensation
Committee set Mr. Dyes 2014 compensation levels, including his annual and
long-term incentive award targets, as discussed below.
● |
Base Salary. For 2014, no
changes were made to Mr. Dyes annual base salary. Accordingly, Mr. Dyes
annual base salary remained at $500,000. |
● |
Annual Incentive Plan Target and Payout Level. For 2014, no changes were made to Mr. Dyes Annual
Incentive Plan target of $400,000. The maximum Annual Incentive Plan award
that Mr. Dye could have earned during 2014 was 150% of Mr. Dyes target,
or $600,000, as compared to a maximum award opportunity of 200% of target
that was used in prior years. Mr. Dyes 2014 Annual Incentive Plan award
payout was $376,000, reflecting a blended payout of 94% of target based on
the Companys achievement of the corporate and strategic performance goals
and Mr. Dyes achievement of his individual/business unit performance
goals. |
● |
Discretionary Bonus. For 2014,
the committee awarded Mr. Dye a discretionary bonus of $8,000 in
recognition of his performance during 2014. |
● |
Long-Term Incentive Award. For
2014, no changes were made to Mr. Dyes long-term incentive award target.
Accordingly, Mr. Dyes long-term incentive award target remained at
$1,000,000. |
● |
Discretionary Award. In early
2014, the committee awarded Mr. Dye a discretionary restricted stock unit
award with a grant value of $100,000 in recognition of his performance
during 2013 and for retention purposes. The restricted stock unit award is
scheduled to vest in four annual installments, subject to Mr. Dyes
continued employment through each vesting
date. |
The Western Union Company Proxy
Statement |
| |
56 |
Table of Contents
Compensation Discussion and
Analysis |
PROXY
STATEMENT |
2015 Compensation
At its February 19, 2015 meeting, the Compensation Committee
approved the following compensation amounts and award targets for the named
executive
officers. In setting executive
compensation levels for 2015, the committee considered a number of factors
including peer group and survey data, individual characteristics and
responsibilities, and the Companys financial performance in 2014.
Named Executive Officer |
Base
Salary |
|
Annual
Incentive Award Target |
|
Long-Term
Incentive Award Target |
Hikmet Ersek |
|
$1,000,000 |
|
|
|
$1,500,000 |
|
|
|
$6,000,000 |
|
Rajesh K. Agrawal |
|
$566,500 |
|
|
|
$509,850 |
|
|
|
$1,500,000 |
|
Odilon Almeida |
|
$612,000 |
|
|
|
$550,800 |
|
|
|
$1,200,000 |
|
J.
David Thompson |
|
$540,000 |
|
|
|
$486,000 |
|
|
|
$1,200,000 |
|
John R. Dye |
|
$510,000 |
|
|
|
$408,000 |
|
|
|
$1,000,000 |
|
57 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Executive
Compensation |
PROXY
STATEMENT |
Executive
Compensation
The following table contains compensation
information for our named executive officers for the last three fiscal
years.
2014 Summary
Compensation Table
Name and
Principal Position |
|
Year |
|
Salary ($000)(1) |
|
Bonus ($000) |
|
Stock Awards ($000)(2) |
|
Option Awards ($000)(2) |
|
Non-Equity Incentive
Plan Compensation ($000)(3) |
|
Change in Pension
Value and
Non-qualified Deferred Compensation Earnings ($000) |
|
All
Other Compensation ($000)(4) |
|
Total ($000) |
Hikmet
Ersek(5) |
|
2014 |
|
|
1,000.0 |
|
|
115.0 |
(6) |
|
4,478.1 |
|
|
1,200.0 |
|
|
|
1,314.8 |
|
|
|
|
|
|
|
133.9 |
|
|
|
8,241.8 |
President and
Chief |
|
2013 |
|
|
1,000.0 |
|
|
|
|
|
4,375.0 |
|
|
2,000.0 |
|
|
|
1,260.0 |
|
|
|
|
|
|
|
140.9 |
(7) |
|
|
8,775.9 |
Executive
Officer |
|
2012 |
|
|
987.5 |
|
|
|
|
|
3,758.9 |
|
|
1,980.0 |
|
|
|
|
|
|
|
|
|
|
|
282.6 |
(7) |
|
|
7,009.0 |
Rajesh K.
Agrawal |
|
2014 |
|
|
472.0 |
|
|
93.4 |
(8) |
|
1,435.6 |
|
|
260.0 |
|
|
|
442.4 |
|
|
|
|
|
|
|
674.8 |
|
|
|
3,378.2 |
EVP and Chief |
|
2013 |
|
|
405.0 |
|
|
|
|
|
972.3 |
|
|
429.0 |
|
|
|
324.0 |
|
|
|
|
|
|
|
1,230.2 |
|
|
|
3,360.5 |
Financial
Officer |
|
2012 |
|
|
405.0 |
|
|
|
|
|
814.4 |
|
|
429.0 |
|
|
|
97.2 |
|
|
|
|
|
|
|
960.6 |
|
|
|
2,706.2 |
Odilon
Almeida |
|
2014 |
|
|
600.0 |
|
|
193.2 |
(9) |
|
1,312.6 |
|
|
240.0 |
|
|
|
507.6 |
|
|
|
|
|
|
|
185.5 |
|
|
|
3,038.9 |
EVP, President, Americas
and |
|
2013 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
European Union |
|
2012 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
J. David
Thompson |
|
2014 |
|
|
500.0 |
|
|
9.0 |
(10) |
|
1,118.0 |
|
|
240.0 |
|
|
|
459.0 |
|
|
|
|
|
|
|
50.4 |
|
|
|
2,376.4 |
EVP, Global Operations
and |
|
2013 |
|
|
500.0 |
|
|
|
|
|
916.5 |
|
|
396.0 |
|
|
|
360.0 |
|
|
|
|
|
|
|
61.4 |
|
|
|
2,233.9 |
Chief Information
Officer |
|
2012 |
|
|
344.7 |
|
|
158.6 |
|
|
2,453.8 |
|
|
330.0 |
|
|
|
74.7 |
|
|
|
|
|
|
|
64.7 |
|
|
|
3,426.5 |
John R.
Dye |
|
2014 |
|
|
500.0 |
|
|
208.0 |
(11) |
|
838.9 |
|
|
200.0 |
|
|
|
376.0 |
|
|
|
|
|
|
|
11.7 |
|
|
|
2,134.6 |
EVP, General
Counsel |
|
2013 |
|
|
500.0 |
|
|
300.0 |
|
|
770.0 |
|
|
330.0 |
|
|
|
360.0 |
|
|
|
|
|
|
|
20.5 |
|
|
|
2,280.5 |
and Secretary |
|
2012 |
|
|
500.0 |
|
|
404.0 |
|
|
469.9 |
|
|
247.5 |
|
|
|
96.0 |
|
|
|
|
|
|
|
603.4 |
|
|
|
2,320.8 |
Footnotes:
(1) |
|
Any salary adjustments, other
than for Mr. Almeida, are effective as of March of each reporting year.
Mr. Almeidas salary adjustment was effective as of January 1,
2014. |
(2) |
|
The amounts reported in these
columns for 2014 represent the annual equity grants to the named executive
officers under the Long-Term Incentive Plan and time-based restricted
stock unit awards granted to Messrs. Agrawal, Almeida, Thompson and Dye as
promotion or retention/merit grants. The amounts reported in these columns
are valued based on the aggregate grant date fair value computed in
accordance with FASB ASC Topic 718. The amounts included in the Stock
Awards column for the performance-based restricted stock units granted
during 2014 are calculated based on the probable satisfaction of the
performance conditions for such awards as of the date of grant in 2014.
Assuming the highest level of performance is achieved for the Financial
PSUs, the maximum value of the Financial PSUs at the grant date would be
as follows: Mr. Ersek$4,917,079; Mr. Agrawal$1,065,377; Mr.
Almeida$983,433; Mr. Thompson$983,433; and Mr. Dye$819,524. Under FASB
ASC Topic 718, the vesting condition related to the TSR PSUs is considered
a market condition and not a performance condition. Accordingly, there is
no grant date fair value below or in excess of the amount reflected in the
table above for the named executive officers that could be calculated and
disclosed based on achievement of the underlying market condition. See
Note 16 to the Consolidated Financial Statements included in our Annual
Reports on Form 10-K for the years ended December 31, 2014, 2013 and 2012,
respectively, for a discussion of the relevant assumptions used in
calculating the amounts reported for the applicable
year. |
(3) |
|
For 2014, the amounts reflect
the actual cash bonus received under the Annual Incentive
Plan. |
(4) |
|
Amounts included in this
column for 2014 are set forth by category in the 2014 All Other
Compensation Table below. |
The Western Union Company Proxy
Statement |
| |
58 |
Table of Contents
Executive Compensation |
PROXY
STATEMENT |
(5) |
For 2014, Mr. Erseks salary
is denominated in United States dollars but is paid to or on behalf of Mr.
Ersek in euros, based on a conversion rate that was determined each
calendar quarter. Contributions made to the Austrian retirement plan on
behalf of Mr. Ersek are denominated in euros and converted to United
States dollars for disclosure in the proxy. The conversion rates 0.72775,
0.71870, 0.73855, and 0.77381 were applied for quarters one, two, three
and four, respectively. |
|
|
(6) |
For 2014, the committee
awarded Mr. Ersek a discretionary bonus of $115,000 in recognition of his
leadership in enhancing the Companys global compliance
programs. |
|
(7) |
Includes $18,400 and $16,800
in medical premiums inadvertently not reported in 2013 and 2012,
respectively. |
|
(8) |
Mr. Agrawals bonus includes a
cash bonus of $80,000 received by Mr. Agrawal in connection with his
promotion to the position of Executive Vice President and Chief Financial
Officer, and a discretionary cash bonus of $13,400 in recognition of his
performance during 2014. |
|
(9) |
Mr. Almeidas bonus includes
the final installment of a salary supplement paid pursuant to the terms of
Mr. Almeidas offer of employment. Mr. Almeida was eligible to receive a
$150,000 salary supplement payable in each of 2013 and 2014, subject to
Mr. Almeidas continued employment through the respective payment dates.
Mr. Almeidas bonus also includes a discretionary bonus of $43,200 in
recognition of his performance during 2014. |
|
(10) |
Mr. Thompsons bonus
represents a discretionary bonus of $9,000 in recognition of his
performance during 2014. |
|
|
(11) |
Mr. Dyes bonus includes the
final installment of his sign on bonus payable pursuant to the terms of
Mr. Dyes offer of employment. Mr. Dye was eligible to receive a $600,000
bonus, payable in three equal annual installments commencing six-months
after Mr. Dyes employment commencement date of November 30, 2011. Mr.
Dyes bonus also includes a discretionary bonus of $8,000 in recognition
of his performance during 2014. |
2014 All Other Compensation
Table
|
|
|
|
|
|
|
|
Company |
|
|
|
|
|
|
|
|
Perquisites |
|
|
|
|
|
Contributions |
|
|
|
|
|
|
|
|
&
Other |
|
|
|
|
|
to Defined |
|
|
|
|
|
|
|
|
Personal |
|
Tax |
|
Contribution |
|
Insurance |
|
|
|
|
Benefits |
|
Reimbursements |
|
Plans |
|
Premiums |
|
Total |
Name |
|
($000)(1) |
|
($000)(2) |
|
($000)(3) |
|
($000)
|
|
($000) |
Hikmet Ersek |
|
|
31.2 |
|
|
|
|
7.4 |
|
|
74.9 |
|
|
20.4 |
|
|
133.9 |
Rajesh K. Agrawal |
|
|
546.8 |
(4) |
|
|
|
92.4 |
|
|
35.0 |
|
|
0.6 |
|
|
674.8 |
Odilon Almeida |
|
|
81.3 |
(5) |
|
|
|
55.0 |
|
|
47.8 |
|
|
1.4 |
|
|
185.5 |
J.
David Thompson |
|
|
2.2 |
|
|
|
|
|
|
|
34.4 |
|
|
13.8 |
|
|
50.4 |
John R. Dye |
|
|
|
|
|
|
|
|
|
|
10.4 |
|
|
1.3 |
|
|
11.7 |
Footnotes:
(1) |
Amounts in this column include
the incremental cost or valuation of executive security costs and personal
jet usage for Mr. Ersek, relocation expenses for Messrs. Agrawal (as
described in Footnote 4 to this table) and Almeida (as described in
Footnote 5 to this table), sporting event tickets for each of the named
executive officers other than Mr. Dye, car service/allowances for Mr.
Ersek, an annual physical examination, including travel expenses, for
certain named executive officers and family visa services for Messrs.
Ersek and Almeida. |
|
|
(2) |
Amounts in this column include tax gross-ups for Messrs. Ersek and Almeida for family visa services and Messrs. Agrawal and Almeida for relocation expenses. These benefits are generally available to employees asked to relocate as part of the Company’s relocation and immigration programs. |
|
(3) |
Amounts shown in this column
represent contributions made by the Company on behalf of each of the named
executive officers, except for Mr. Ersek, to the Companys Incentive
Savings Plan and/or the Supplemental Incentive Savings Plan, and
contributions made by the Company on behalf of Mr. Ersek to the Companys
defined contribution plan in Austria, the Victoria Volksbanken
Pensionskassen AG. |
59 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Executive Compensation |
PROXY
STATEMENT |
(4) |
This amount includes approximately ($545,200) paid to or on behalf of Mr. Agrawal in connection with his relocation from the United Kingdom to Colorado including foreign tax equalization payments ($479,300) and United States tax payments ($50,000). These relocation expenses were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued for payment or paid to the service provider or Mr. Agrawal, as applicable. These benefits are generally available to employees asked to relocate as part of the Company’s relocation program. |
|
(5) |
This amount includes approximately $70,600 paid to or on behalf of Mr. Almeida in connection with his relocation from Brazil to Florida including a housing allowance ($34,200) and tax-related services ($28,200). These relocation expenses were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued for payment or paid to the service provider or Mr. Almeida, as applicable. These benefits are generally available to employees asked to relocate as part of the Company’s relocation program. |
The following table summarizes awards made
to our named executive officers in 2014.
2014 Grants of Plan-Based Awards
Table
|
|
|
|
Estimated
Possible Payouts Under Non-Equity Incentive
Plan Awards(1) |
|
Estimated Future
Payouts Under Equity Incentive Plan Awards |
|
All Other Stock Awards: Number of Shares
of Stock |
|
All Other Option Awards: Number
of Securities Underlying |
|
Exercise or Base Price of Option |
|
Grant Date Fair Value
of Stock and Option |
Name |
|
Grant Date |
|
Target ($000) |
|
Maximum ($000) |
|
Threshold (#) |
|
Target (#) |
|
Maximum (#) |
|
or Units (#)(2) |
|
Options (#)(3) |
|
Awards ($/sh) |
|
Awards ($000)(4) |
Hikmet
Ersek |
|
|
|
|
1,500 |
|
|
|
2,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
112,571 |
(5) |
|
|
225,141 |
(5) |
|
|
|
337,712 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
3,278.1 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
47,886 |
(6) |
|
|
95,771 |
(6) |
|
|
|
143,657 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
1,200.0 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
303,798 |
|
|
$15.99 |
|
|
1,200.0 |
|
Rajesh K.
Agrawal |
|
|
|
|
446.9 |
(7) |
|
|
670.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
24,391 |
(5) |
|
|
48,781 |
(5) |
|
|
|
73,172 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
710.3 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
10,376 |
(6) |
|
|
20,751 |
(6) |
|
|
|
31,127 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
260.0 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,823 |
|
|
$15.99 |
|
|
260.0 |
|
|
|
7/15/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,936 |
|
|
|
|
|
|
|
|
|
465.3 |
|
Odilon
Almeida |
|
|
|
|
540.0 |
|
|
|
810.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
22,515 |
(5) |
|
|
45,029 |
(5) |
|
|
|
67,544 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
655.6 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
9,578 |
(6) |
|
|
19,155 |
(6) |
|
|
|
28,733 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
240.0 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,760 |
|
|
$15.99 |
|
|
240.0 |
|
|
|
3/28/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,761 |
|
|
|
|
|
|
|
|
|
417.0 |
|
J. David
Thompson |
|
|
|
|
450.0 |
|
|
|
675.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
22,515 |
(5) |
|
|
45,029 |
(5) |
|
|
|
67,544 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
655.6 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
9,578 |
(6) |
|
|
19,155 |
(6) |
|
|
|
28,733 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
240.0 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,760 |
|
|
$15.99 |
|
|
240.0 |
|
|
|
3/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,788 |
|
|
|
|
|
|
|
|
|
222.4 |
|
John R.
Dye |
|
|
|
|
400.0 |
|
|
|
600.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
18,762 |
(5) |
|
|
37,524 |
(5) |
|
|
|
56,286 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
546.3 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
7,981 |
(6) |
|
|
15,962 |
(6) |
|
|
|
23,943 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
200.0 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,633 |
|
|
$15.99 |
|
|
200.0 |
|
|
|
2/20/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,254 |
|
|
|
|
|
|
|
|
|
92.6 |
|
Footnotes: |
|
|
(1) |
These amounts consist of the
target and maximum cash award levels set in 2014 under the Annual
Incentive Plan. The amount actually earned by each named executive officer
is included in the Non-Equity Incentive Plan Compensation column in the
2014 Summary Compensation Table. Please see Compensation Discussion and
Analysis for further information regarding the Annual Incentive
Plan. |
|
The Western Union Company Proxy
Statement |
| |
60 |
Table of Contents
Executive Compensation |
PROXY
STATEMENT |
(2) |
These amounts represent
restricted stock units granted under the Long-Term Incentive Plan to each
of Messrs. Agrawal, Almeida, Thompson and Dye as promotion or
retention/merit grants. For actively employed executives, these restricted
stock units vest in 25% increments on each of the first through fourth
year anniversaries of the date of grant. Please see Compensation
Discussion and Analysis for further information regarding these
restricted stock unit grants. |
|
(3) |
These amounts represent stock
options granted under the Long-Term Incentive Plan. For actively employed
executives, these options vest in 25% increments on each of the first
through fourth year anniversaries of the date of grant. |
|
(4) |
The amounts shown in this
column are valued based on the aggregate grant date fair value computed in
accordance with FASB ASC Topic 718 and, in the case of the
performance-based restricted stock units, are based upon the probable
outcome of the applicable performance conditions. See Note 16 to the
Consolidated Financial Statements included in our Annual Report on Form
10-K for the year ended December 31, 2014 for a discussion of the relevant
assumptions used in calculating the amounts. |
|
(5) |
These amounts represent the
threshold, target and maximum Financial PSUs granted under the Long-Term
Incentive Plan. For actively employed executives, these Financial PSUs are
scheduled to vest on February 20, 2017, subject to the achievement of
threshold revenue and operating income performance goals. See Executive
Compensation-Narrative to Summary Compensation Table and Grants of
Plan-Based Awards Table for further information regarding this
award. |
|
(6) |
These amounts represent the
threshold, target and maximum TSR PSUs granted under the Long-Term
Incentive Plan. The TSR PSUs are scheduled to vest on February 20, 2017
based on the Companys relative TSR performance versus the S&P 500
Index over a three-year performance period. See Executive
Compensation-Narrative to Summary Compensation Table and Grants of
Plan-Based Awards Table for further information regarding this
award. |
|
(7) |
In connection with his
mid-year promotion to the position of Executive Vice President and Chief
Financial Officer, Mr. Agrawals target award opportunity was increased
from $405,000 to $495,000. The amount reported in the table reflects Mr.
Agrawals prorated award opportunity for
2014. |
Narrative to Summary
Compensation Table and Grants of Plan-Based Awards
Table |
Employment Arrangements
As noted in the Compensation Discussion
and Analysis, the Company generally executes a written offer of employment prior
to the time an executive joins the Company which describes the basic terms of
the executives employment, including his or her start date, starting salary,
bonus target, and long-term incentive award target. The terms of the executives
employment are based thereafter on sustained good performance rather than
contractual terms, and the Companys policies, such as the Executive Severance
Policy, will apply as warranted.
As noted in the Compensation Discussion
and Analysis, under certain circumstances, the Compensation Committee recognizes
that special arrangements with respect to an executives employment may be
necessary or desirable. Accordingly, during 2014, Mr. Ersek was party
to an employment agreement pursuant to
which Mr. Ersek agreed to serve as the Companys President and Chief Executive
Officer. The terms of Mr. Erseks employment agreement provide for (i)
eligibility to participate in the Annual Incentive Plan and Long-Term Incentive
Plan and (ii) eligibility to participate in retirement, health, and welfare
benefit programs on the same basis as similarly situated employees in Austria.
Mr. Erseks employment agreement also includes non-competition,
non-solicitation, and confidentiality provisions.
During 2014, the Company was also party to
a letter agreement with Mr. Agrawal describing the terms and conditions
applicable to Mr. Agrawals 2012-2013 expatriate assignment. Mr. Agrawals
letter agreement provided for, among other benefits, relocation benefits, which
included (i) customary relocation benefits
61 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Executive Compensation |
PROXY
STATEMENT |
and allowances, (ii) an annual relocation
bonus equal to one month of base salary for each 12 months of Mr. Agrawals
assignment, (iii) a housing and utility allowance not to exceed $22,000 per
month, (iv) a company car, (v) limited travel expenses for Mr. Agrawal and his
immediate family, and (vi) an education allowance for dependent
children.
The Company has an Executive Severance
Policy for the payment of certain benefits to senior executives, including our
named executive officers, upon termination of employment from Western Union.
Please see the Potential Payments Upon Termination or Change-in-Control
section for a description of the policy.
Awards
In February 2014, the Compensation
Committee granted the Chief Executive Officer and the Executive Vice Presidents
long-term incentive awards under the Long-Term Incentive Plan, consisting of 20%
stock option awards and 80% performance-based restricted stock units. The stock
options granted to each of the named executive officers are subject to
time-based vesting provisions described in the footnotes to the 2014 Grants of
Plan-Based Awards Table. The 2014 performance-based restricted stock unit awards
were weighted 60% as Financial PSUs (incorporating both revenue and operating
income growth) and 20% as TSR PSUs.
Please see the Compensation Discussion
and Analysis section of this Proxy Statement for further information regarding
the 2014 performance-based restricted stock units, including the performance
metrics applicable to such awards.
During 2014, the Compensation Committee
also granted time-based restricted stock unit awards to Messrs. Agrawal,
Almeida, Thompson, and Dye in connection with promotions or in recognition of
past performance and for
retention purposes. Please see the
footnotes to the 2014 Grants of Plan-Based Awards Table for a description of the
vesting terms applicable to these awards.
At its February 2014 meeting, the
Compensation Committee established performance objectives to be considered under
the Annual Incentive Plan for the 2014 plan year. As discussed in the
Compensation Discussion and Analysis section of this Proxy Statement,
participants are eligible to receive a cash payout ranging from 0% to 150% of
target based on the achievement of corporate financial, strategic and
individual/business unit goals, except for Mr. Ersek whose cash award is payable
based entirely on the achievement of corporate financial and strategic goals.
Please see the Compensation Discussion
and Analysis section of this Proxy Statement for more information regarding the
annual incentive awards, including the performance metrics applicable to such
awards.
Salary and Bonus in Proportion to Total
Compensation
As noted in the Compensation Discussion
and Analysis section of this Proxy Statement, the Compensation Committee
heavily weighted total direct compensation toward the variable elements, which
includes annual incentive compensation and long-term incentive compensation, in
order to hold executives accountable and reward them for the results of the
Company. Our Compensation Committee structured the compensation program to give
our named executive officers substantial alignment with stockholders, while also
permitting the committee to incentivize the named executive officers to pursue
performance that it believes increases stockholder value. Please see the
Compensation Discussion and Analysis section of this Proxy Statement for a
description of the objectives of our compensation program and overall
compensation philosophy.
The Western Union Company Proxy
Statement |
| |
62 |
Table of Contents
Executive Compensation |
PROXY
STATEMENT |
The following table provides information
regarding outstanding option awards and unvested stock awards held by each of
the named executive officers on December 31, 2014.
2014 Outstanding Equity Awards at Fiscal
Year-End Table
|
|
Option
Awards |
|
Stock
Awards |
Name |
|
Number
of Securities Underlying Unexercised Options
(#) Exercisable(1) |
|
Number
of Securities Underlying Unexercised Options
(#) Unexercisable |
|
Option Exercise Price ($) |
|
Option Expiration Date |
|
Number of Shares
or Units of Stock That Have Not Vested (#) |
|
Market Value of Shares
or Units of Stock That Have Not Vested
($000)(2) |
|
Equity Incentive Plan Awards: Number
of Unearned Shares, Units or Other Rights that Have
Not Vested (#) |
|
Equity Incentive Plan Awards: Market
or Payout Value of Unearned Shares, Units or Other Rights
That Have Not Vested ($000)(2) |
Hikmet
Ersek |
|
|
|
|
|
|
303,798 |
(3) |
|
|
15.99 |
|
|
|
2/20/2024 |
|
|
|
15,948 |
(9) |
|
|
285.6 |
|
|
|
225,141 |
(18) |
|
|
4,032.3 |
|
|
|
|
156,250 |
|
|
|
468,750 |
(4) |
|
|
14.00 |
|
|
|
2/20/2023 |
|
|
|
29,261 |
(10) |
|
|
524.1 |
|
|
|
95,771 |
(19) |
|
|
1,715.3 |
|
|
|
|
200,405 |
|
|
|
200,405 |
(5) |
|
|
17.86 |
|
|
|
2/23/2022 |
|
|
|
|
|
|
|
|
|
|
|
202,858 |
(20) |
|
|
3,633.2 |
|
|
|
|
175,394 |
|
|
|
58,465 |
(6) |
|
|
21.00 |
|
|
|
2/24/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
230,628 |
|
|
|
|
|
|
|
17.45 |
|
|
|
9/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
212,508 |
|
|
|
|
|
|
|
16.00 |
|
|
|
2/24/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
142,695 |
|
|
|
|
|
|
|
11.86 |
|
|
|
2/17/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000 |
|
|
|
|
|
|
|
22.14 |
|
|
|
2/21/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
276,127 |
|
|
|
|
|
|
|
19.13 |
|
|
|
9/29/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,820 |
|
|
|
|
|
|
|
20.10 |
|
|
|
2/13/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rajesh K.
Agrawal |
|
|
|
|
|
|
65,823 |
(3) |
|
|
15.99 |
|
|
|
2/20/2024 |
|
|
|
28,936 |
(11) |
|
|
518.2 |
|
|
|
48,781 |
(18) |
|
|
873.7 |
|
|
|
|
33,515 |
|
|
|
100,548 |
(4) |
|
|
14.00 |
|
|
|
2/20/2023 |
|
|
|
4,306 |
(9) |
|
|
77.1 |
|
|
|
20,751 |
(19) |
|
|
371.7 |
|
|
|
|
43,421 |
|
|
|
43,422 |
(5) |
|
|
17.86 |
|
|
|
2/23/2022 |
|
|
|
8,291 |
(10) |
|
|
148.5 |
|
|
|
44,173 |
(20) |
|
|
791.1 |
|
|
|
|
18,597 |
|
|
|
6,199 |
(7) |
|
|
16.49 |
|
|
|
9/15/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,671 |
|
|
|
4,224 |
(6) |
|
|
21.00 |
|
|
|
2/24/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,553 |
|
|
|
|
|
|
|
16.00 |
|
|
|
2/24/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,950 |
|
|
|
|
|
|
|
11.86 |
|
|
|
2/17/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,925 |
|
|
|
|
|
|
|
20.99 |
|
|
|
2/21/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,612 |
|
|
|
|
|
|
|
22.55 |
|
|
|
2/7/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,263 |
|
|
|
|
|
|
|
19.13 |
|
|
|
9/29/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,820 |
|
|
|
|
|
|
|
20.87 |
|
|
|
6/12/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Odilon
Almeida |
|
|
|
|
|
|
60,760 |
(3) |
|
|
15.99 |
|
|
|
2/20/2024 |
|
|
|
27,761 |
(12) |
|
|
497.2 |
|
|
|
45,029 |
(18) |
|
|
806.5 |
|
|
|
|
|
|
|
|
58,008 |
(4) |
|
|
14.00 |
|
|
|
2/20/2023 |
|
|
|
5,502 |
(9) |
|
|
98.5 |
|
|
|
19,155 |
(19) |
|
|
343.1 |
|
|
|
|
8,350 |
|
|
|
8,351 |
(5) |
|
|
17.86 |
|
|
|
2/23/2022 |
|
|
|
17,124 |
(13) |
|
|
306.7 |
|
|
|
25,484 |
(20) |
|
|
456.4 |
|
|
|
|
7,920 |
|
|
|
2,460 |
(6) |
|
|
21.00 |
|
|
|
2/24/2021 |
|
|
|
9,379 |
(14) |
|
|
168.0 |
|
|
|
|
|
|
|
|
|
|
|
|
15,000 |
|
|
|
|
|
|
|
16.00 |
|
|
|
2/24/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,500 |
|
|
|
|
|
|
|
20.99 |
|
|
|
2/21/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,525 |
|
|
|
|
|
|
|
19.13 |
|
|
|
9/29/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,955 |
|
|
|
|
|
|
|
20.10 |
|
|
|
2/13/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. David
Thompson |
|
|
|
|
|
|
60,760 |
(3) |
|
|
15.99 |
|
|
|
2/20/2024 |
|
|
|
14,788 |
(15) |
|
|
264.9 |
|
|
|
45,029 |
(18) |
|
|
806.5 |
|
|
|
|
30,937 |
|
|
|
92,813 |
(4) |
|
|
14.00 |
|
|
|
2/20/2023 |
|
|
|
4,785 |
(9) |
|
|
85.7 |
|
|
|
19,155 |
(19) |
|
|
343.1 |
|
|
|
|
33,951 |
|
|
|
33,951 |
(8) |
|
|
18.29 |
|
|
|
4/26/2022 |
|
|
|
6,228 |
(10) |
|
|
111.5 |
|
|
|
40,775 |
(20) |
|
|
730.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,281 |
(16) |
|
|
614.0 |
|
|
|
|
|
|
|
|
|
John R.
Dye |
|
|
|
|
|
|
50,633 |
(3) |
|
|
15.99 |
|
|
|
2/20/2024 |
|
|
|
6,254 |
(17) |
|
|
112.0 |
|
|
|
37,524 |
(18) |
|
|
672.1 |
|
|
|
|
25,781 |
|
|
|
77,344 |
(4) |
|
|
14.00 |
|
|
|
2/20/2023 |
|
|
|
4,253 |
(9) |
|
|
76.2 |
|
|
|
15,962 |
(19) |
|
|
285.9 |
|
|
|
|
25,051 |
|
|
|
25,051 |
(5) |
|
|
17.86 |
|
|
|
2/23/2022 |
|
|
|
4,783 |
(10) |
|
|
85.7 |
|
|
|
33,979 |
(20) |
|
|
608.6 |
|
63 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Executive Compensation |
PROXY
STATEMENT |
Footnotes:
(1) |
Grants prior to
September 29, 2006 represent option awards granted to the named executive
officer under the 2002 First Data Corporation Long Term Incentive Plan
that were replaced with substitute Western Union options that were
adjusted to preserve the pre-conversion intrinsic value of the First Data
Corporation options. A portion of the substitute options vested through
the normal passage of time. The remainder of these substitute options
became fully vested in September 2007 upon consummation of a
change-in-control of First Data Corporation. |
|
(2) |
The market value of
shares or units of stock that have not vested reflects a stock price of
$17.91, the closing stock price on December 31, 2014. |
|
(3) |
These options were
awarded on February 20, 2014, and vest in 25% increments on each of the
first through fourth year anniversaries of the date of grant; provided
that the executive is still employed by the Company on the applicable
vesting date or as otherwise provided for pursuant to the Executive
Severance Policy. |
|
(4) |
These options were
awarded on February 20, 2013, and vest in 25% increments on each of the
first through fourth year anniversaries of the date of grant; provided
that the executive is still employed by the Company on the applicable
vesting date or as otherwise provided for pursuant to the Executive
Severance Policy. |
|
(5) |
These options were
awarded on February 23, 2012, and vest in 25% increments on each of the
first through fourth year anniversaries of the date of grant; provided
that the executive is still employed by the Company on the applicable
vesting date or as otherwise provided for pursuant to the Executive
Severance Policy. |
|
(6) |
These options
vested on February 24, 2015. |
|
(7) |
These options were
awarded on September 15, 2011, and vest in 25% increments on each of the
first through fourth year anniversaries of the date of grant; provided
that the executive is still employed by the Company on the applicable
vesting date or as otherwise provided for pursuant to the Executive
Severance Policy. |
|
(8) |
These options were
awarded on April 26, 2012, and vest in 25% increments on each of the first
through fourth year anniversaries of the date of grant; provided that the
executive is still employed by the Company on the applicable vesting date
or as otherwise provided for pursuant to the Executive Severance
Policy. |
|
(9) |
Represents
restricted stock units that were granted under the 2013 Annual Incentive
Plan based on the achievement of performance-based conditions during 2013.
Thirty percent of these restricted stock units vested on February 20, 2015
and the remaining 70% of these restricted stock units are scheduled to
vest on February 20, 2016, provided the executive is still employed by the
Company on the vesting date or as otherwise provided for pursuant to the
Executive Severance Policy. |
|
(10) |
Represents
performance-based restricted stock units that vested on February 23, 2015.
The payout level for these performance-based restricted stock units was
determined based on the Companys revenue, EBITDA and growth in registered
customers performance during the 2012-2013 performance period and remained
subject to time-based vesting requirements until February 23, 2015. Under
the original terms of the award agreements, these awards were also subject
to payout modifiers based on TSR and stock price performance over the
2012-2014 performance period if the payout level for the 2012-2013
performance goals was equal to or greater than 150% of target. Because the
payout levels for these awards was equal to 17% of target for the named
executive officers other than Mr. Ersek, and 13% of target for Mr. Ersek,
the TSR and stock price payout modifiers were not
applied. |
|
(11) |
Represents
restricted stock units that were awarded on July 15, 2014, and vest in 25%
increments on each of the first through fourth year anniversaries of the
date of grant; provided that the executive is still employed by the
Company on the applicable vesting date or as otherwise provided for
pursuant to the Executive Severance Policy. |
|
(12) |
Represents
restricted stock units that were awarded on March 28, 2014, and vest in
25% increments on each of the first through fourth year anniversaries of
the date of grant; provided that the executive is still employed by the
Company on the applicable vesting date or as otherwise provided for
pursuant to the Executive Severance Policy. |
|
(13) |
Represents
restricted stock units that were awarded on February 7, 2013, and
scheduled to vest on February 7, 2016; provided that the executive is
still employed by the Company on the vesting date or as otherwise provided
for pursuant to the Executive Severance Policy. |
|
The Western Union Company Proxy
Statement |
| |
64 |
Table of Contents
Executive Compensation |
PROXY
STATEMENT |
(14) |
Represents
restricted stock units that vested on February 23, 2015. |
|
(15) |
Represents
restricted stock units that were awarded on March 17, 2014, and vest in
25% increments on each of the first through fourth year anniversaries of
the date of grant; provided that the executive is still employed by the
Company on the applicable vesting date or as otherwise provided for
pursuant to the Executive Severance Policy. |
|
(16) |
Represents
restricted stock units that were awarded on April 26, 2012, and scheduled
to vest on April 26, 2015; provided the executive is still employed on the
vesting date or as otherwise provided pursuant to the Executive Severance
Policy. |
|
(17) |
Represents
restricted stock units that were awarded on February 20, 2014, and vest in
25% increments on each of the first through fourth year anniversaries of
the date of grant; provided that the executive is still employed by the
Company on the applicable vesting date or as otherwise provided for
pursuant to the Executive Severance Policy. |
|
(18) |
Represents
performance-based restricted stock units that are scheduled to vest on
February 20, 2017 based on the Companys revenue and operating income
performance during 2014, 2015 and 2016, provided that the executive is
still employed by the Company on the vesting date or as otherwise provided
for pursuant to the Executive Severance Policy. In accordance with the SEC
executive compensation disclosure rules, the amounts reported in this
column are based on achieving the target performance
goals. |
|
(19) |
Represents
performance-based restricted stock units that are scheduled to vest on
February 20, 2017 based on the Companys TSR performance relative to the
S&P 500 Index over the 2014-2016 performance period, provided that the
executive is still employed by the Company on the applicable vesting date
or as otherwise provided for pursuant to the Executive Severance Policy.
In accordance with the SEC executive compensation disclosure rules, the
amounts reported in this column are based on achieving target vesting
levels. |
|
(20) |
Represents
performance-based restricted stock units that are scheduled to vest on
February 20, 2016; provided that the executive is still employed by the
Company on the vesting date or as otherwise provided for pursuant to the
Executive Severance Policy. The amounts reported represent the initial
payout level for these performance-based restricted stock units and was
determined based on the Companys revenue and operating income performance
during the 2013-2014 performance period. The final payout level of these
performance-based restricted stock units will be determined after the
conclusion of the 2013-2015 performance period based on the Companys TSR
performance relative to the S&P 500 Index over that
period. |
|
65 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Executive Compensation |
PROXY
STATEMENT |
The following table provides information
concerning each exercise of stock options and each vesting of stock during 2014
for each of the named executive officers.
2014 Option Exercises and Stock Vested
Table
|
|
Option
Awards |
|
Stock
Awards |
Name |
|
Number
of Shares Acquired on Exercise (#) |
|
Value Realized on
Exercise ($) |
|
Number
of Shares Acquired on Vesting (#) |
|
Value Realized on
Vesting ($) |
Hikmet Ersek |
|
|
|
|
|
|
|
|
|
|
143,572 |
|
|
|
2,347,402 |
|
Rajesh K. Agrawal |
|
|
|
|
|
|
|
|
|
|
27,608 |
|
|
|
447,791 |
|
Odilon Almeida |
|
|
23,461 |
|
|
|
79,211 |
|
|
|
7,147 |
|
|
|
116,853 |
|
J.
David Thompson |
|
|
|
|
|
|
|
|
|
|
34,281 |
|
|
|
533,070 |
|
John R. Dye |
|
|
|
|
|
|
|
|
|
|
11,353 |
|
|
|
210,939 |
|
The following table provides information
regarding compensation that has been deferred by our named executive officers
pursuant to the terms of our Supplemental Incentive Savings Plan.
2014 Nonqualified Deferred
Compensation Table |
|
|
Executive |
|
Registrant |
|
Aggregate |
|
Aggregate |
|
Aggregate |
|
|
Contributions |
|
Contributions |
|
Earnings
in |
|
Withdrawals/ |
|
Balance
at |
|
|
in Last
FY |
|
in Last
FY |
|
Last
FY |
|
Distributions |
|
Last
FYE |
Name |
|
($000)(1) |
|
($000)(2) |
|
($000) |
|
($000) |
|
($000)(3) |
Hikmet Ersek |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rajesh K. Agrawal |
|
|
43.8 |
|
|
|
24.6 |
|
|
|
45.8 |
|
|
|
|
|
|
|
410.2 |
|
Odilon Almeida |
|
|
59.8 |
|
|
|
37.4 |
|
|
|
7.5 |
|
|
|
|
|
|
|
164.2 |
|
J.
David Thompson |
|
|
68.8 |
|
|
|
24.0 |
|
|
|
11.6 |
|
|
|
|
|
|
|
228.7 |
|
John R. Dye |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
(1) |
These amounts represent
deferrals of the named executive officers salary and compensation
received under the Annual Incentive Plan and are included in the Salary
and Non-Equity Incentive Plan Compensation columns in the 2014 Summary
Compensation Table. |
|
(2) |
These amounts are included in
the All Other Compensation column in the 2014 Summary Compensation
Table. |
|
(3) |
Amounts in this column include the following amounts
that were previously reported in the Summary Compensation Table as
compensation for 2013 or 2012 (in $000s): Mr. Agrawal$75.3 and Mr.
Thompson$106.6. |
|
The Western Union Company Proxy
Statement |
| |
66 |
Table of Contents
Executive
Compensation |
PROXY
STATEMENT |
Incentive Savings Plan
We maintain a defined contribution
retirement plan (the Incentive Savings Plan or ISP) for our employees on
United States payroll, including each of our named executive officers other than
Mr. Ersek. The ISP is structured with the intention of qualifying under Section
401(a) of the Internal Revenue Code. Under the ISP, participants are permitted
to make contributions up to the maximum allowable amount under the Internal
Revenue Code. In addition, we make matching contributions equal to 100% of the
first 3% of eligible compensation contributed by participants and 50% of the
next 2% of eligible compensation contributed by participants. For 2014, each
participating named executive officer was eligible to receive a Company
contribution equal to 4% of his eligible compensation. During 2014, Mr. Ersek
participated in the qualified retirement savings plan made available to eligible
employees in Austria.
Supplemental Incentive Savings
Plan
We maintain a nonqualified supplemental
incentive savings plan (the SISP) for certain of our employees on United States
payroll, including each of our named executive officers other than Mr. Ersek.
Under the SISP, participants may defer up to 80% of their salaries, including
commissions and incentive compensation (other than annual bonuses), and may make
a separate election
to defer up to 80% of any annual bonuses
and up to 100% of any performance-based cash awards they may earn. The SISP also
provides participants the opportunity to receive credits for matching
contributions equal to the difference between the matching contributions that a
participant could receive under the ISP but for the contribution and
compensation limitations imposed by the Internal Revenue Code, and the matching
contributions allowable to the participant under the ISP. Participants are
generally permitted to choose from among the mutual funds available for
investment under the ISP for purposes of determining the imputed earnings,
gains, and losses applicable to their SISP accounts. The SISP is unfunded.
Participants may specify the timing of the payment of their accounts by choosing
either a specified payment date or electing payment upon separation from service
(or a date up to five years following separation from service), and in either
case may elect to receive their accounts in a lump sum or in annual or quarterly
installments over a period of up to ten years. With respect to each years
contributions and imputed earnings, the participant may make a separate
distribution election. Subject to the requirements of Section 409A of the
Internal Revenue Code, applicable Internal Revenue Service guidance, and the
terms of the SISP, participants may receive an early payment in the event of a
severe financial hardship and may make an election to delay the timing of their
scheduled payment by a minimum of five years.
Potential Payments Upon
Termination or Change-in-Control |
Executive Severance
Policy
We maintain an Executive Severance Policy
for the payment of certain benefits to senior executives, including our named
executive officers, upon termination of employment from Western Union and upon a
change-in-control of Western Union. Under the Executive Severance Policy, an
eligible executive will become eligible for benefits if (i) prior to a
change-in-control, he or she is involuntarily terminated by the Company other
than on account of death, disability or for cause, or (ii) after a
change-in-control, he or she is involuntarily terminated by the Company other
than on account of death, disability or for cause or terminates his or her own
employment
voluntarily for good reason (including a
material reduction in title or position, reduction in base salary or bonus
opportunity or an increase in the executives commute to his or her current
principal working location of more than 50 miles without consent) within 24
months after the date of the change-in-control. Under the Executive Severance
Policy, a change-in-control is generally defined to include:
● |
Acquisition by a person or entity of
35% or more of either the outstanding shares of the Company or the
combined voting power of such shares, with certain
exceptions; |
67 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Executive
Compensation |
PROXY
STATEMENT |
● |
An unapproved change in a majority
of the Board members; and |
● |
Certain corporate restructurings,
including certain mergers, dissolution and liquidation.
|
The Executive Severance Policy provided
for the following severance and change-in-control benefits as of December 31,
2014:
● |
Effective for senior executives
hired before February 24, 2011, a severance payment equal to the senior
executives base pay plus target bonus for the year in which the
termination occurs (the base severance pay), multiplied by two.
Effective for senior executives hired on and after February 24, 2011, a
senior executive employed by the Company for 12 months or less was
entitled to receive a severance payment equal to the base severance pay
and, for every month employed in excess of 12 months, an additional
severance payment equal to a pro rata portion of the base severance pay,
up to a maximum severance payment equal to the senior executives base
severance pay, multiplied by two. On
February 20, 2014, the Compensation Committee amended the Executive
Severance Policy to provide for a severance payment equal to the senior
executives base severance pay multiplied by 1.5 (multiplied by two in the
case of the Chief Executive Officer and in the case of all senior
executives who terminate for an eligible reason within 24 months following
a change-in-control). The provisions limiting severance payments to newly
hired senior executives continue to apply, subject to the new severance
payment cap described above. |
● |
A cash payment equal to the lesser
of the senior executives prorated target bonus under the Annual Incentive
Plan for the year in which the termination occurs or the maximum bonus
which could have been paid to the senior executive under the Annual
Incentive Plan for the year in which the termination occurs, based on
actual Company performance during such year. No
bonus will be payable unless the Compensation Committee certifies that the
performance goals under the Annual Incentive Plan have been achieved for
the year in which the termination occurs (except for eligible terminations
following a change-in-control). |
● |
Provided that the senior executive
properly elects continued health care coverage under applicable law, a
lump sum payment equal to the difference between active employee premiums
and continuation coverage premiums for 18 months of coverage.
|
● |
At the discretion of the
Compensation Committee, outplacement benefits may be provided to the
executive. |
● |
All awards made pursuant to our
Long-Term Incentive Plan, including those that are performance-based,
generally will become fully vested and exercisable if a senior executive
is involuntarily terminated without cause, or terminates for good reason,
within 24 months following a change-in-control. In such event, the right
to exercise stock options will continue for 24 months (36 months in the
case of the Chief Executive Officer) after the senior executives
termination (but not beyond their original terms).
|
● |
If a senior executive is
involuntarily terminated without cause and no change-in-control has
occurred, awards granted pursuant to our Long-Term Incentive Plan
generally will vest on a prorated basis based on the period from the grant
date to the termination date and stock options will remain exercisable
until the end of severance period under the Executive Severance Policy,
but not beyond the stock options original terms. |
● |
With respect to executives not
eligible to receive tax gross-ups, benefits triggered by a
change-in-control are subject to an automatic reduction to avoid the
imposition of excise taxes under Section 4999 of the Internal Revenue Code
in the event such reduction would result in a better after-tax result for
the executive. |
● |
For individuals who were senior
executives on or before April 30, 2009, if benefits payable after a
change-in-control exceed 110% of the maximum amount of such benefits that
would not be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code, an additional cash payment in an amount that, after
payment of all taxes on such benefits (and on such amount), provides the
senior executive with the amount necessary to pay such tax. (If the
benefits so payable do not exceed such 110% threshold, the amount thereof
will be reduced to the maximum amount not subject to such excise
tax.) |
The Western Union Company Proxy
Statement |
| |
68 |
Table of Contents
Executive
Compensation |
PROXY
STATEMENT |
The provision of severance benefits under
the Executive Severance Policy is conditioned upon the executive executing an
agreement and release which includes, among other things, non-competition and
non-solicitation restrictive covenants as well as a release of claims against
the Company. These restrictive covenants vary in duration, but generally do not
exceed two years.
For the named executive officers, we have
quantified the potential payments upon termination under various termination
circumstances in the tables set forth below. While the terms of our equity
awards include retirement-vesting provisions, none of our current named
executive officers are retirement eligible.
Payments Upon Termination or
Change-in-Control Tables
TERMINATION FOLLOWING A
CHANGE-IN-CONTROL(1)
|
|
|
|
|
|
Long-Term Incentives(5) |
|
|
Name |
|
Severance ($000)(2) |
|
Welfare Benefits ($000)(3) |
|
Performance Cash ($000) |
|
Stock Options ($000) |
|
Shares ($000) |
|
Gross-Up ($000)(4) |
|
Total ($000) |
Hikmet Ersek |
|
6,500.0 |
|
25.3 |
|
|
|
|
2,426.1 |
|
|
5,926.8 |
|
7,080.0 |
|
21,958.2 |
Rajesh K. Agrawal |
|
2,536.9 |
|
22.4 |
|
|
|
|
530.5 |
|
|
1,858.1 |
|
|
|
4,947.9 |
Odilon Almeida |
|
2,820.0 |
|
22.4 |
|
|
|
|
343.9 |
|
|
1,713.3 |
|
|
|
4,899.6 |
J.
David Thompson |
|
2,350.0 |
|
22.3 |
|
|
|
|
479.6 |
|
|
2,104.6 |
|
|
|
4,956.5 |
John R. Dye |
|
2,200.0 |
|
14.6 |
|
|
|
|
400.9 |
|
|
1,131.0 |
|
|
|
3,746.5 |
INVOLUNTARY TERMINATION OTHER THAN FOR
DEATH, DISABILITY, OR CAUSE
|
|
|
|
|
|
Long-Term Incentives(5) |
|
|
Name |
|
Severance ($000)(2) |
|
Welfare Benefits ($000)(3) |
|
Performance Cash ($000) |
|
Stock Options ($000) |
|
Shares ($000) |
|
Gross-Up ($000)(4) |
|
Total ($000) |
Hikmet Ersek |
|
6,500.0 |
|
25.3 |
|
|
|
|
984.3 |
|
|
3,794.2 |
|
|
|
11,303.8 |
Rajesh K. Agrawal |
|
2,014.4 |
|
22.4 |
|
|
|
|
219.8 |
|
|
925.2 |
|
|
|
3,181.8 |
Odilon Almeida |
|
2,250.0 |
|
22.4 |
|
|
|
|
130.8 |
|
|
889.1 |
|
|
|
3,292.3 |
J.
David Thompson |
|
1,875.0 |
|
22.3 |
|
|
|
|
193.7 |
|
|
832.8 |
|
|
|
2,923.8 |
John R. Dye |
|
1,750.0 |
|
14.6 |
|
|
|
|
162.3 |
|
|
669.8 |
|
|
|
2,596.7 |
DEATH OR DISABILITY
|
|
|
|
|
|
Long-Term Incentives(5) |
|
|
Name |
|
Severance ($000)(2) |
|
Welfare Benefits ($000)(3) |
|
Performance Cash ($000) |
|
Stock Options ($000) |
|
Shares ($000) |
|
Gross-Up ($000)(4) |
|
Total ($000) |
Hikmet Ersek |
|
|
|
|
|
|
|
|
2,426.1 |
|
|
5,926.8 |
|
|
|
8,352.9 |
Rajesh K. Agrawal |
|
|
|
|
|
|
|
|
530.5 |
|
|
1,858.1 |
|
|
|
2,388.6 |
Odilon Almeida |
|
|
|
|
|
|
|
|
343.9 |
|
|
1,713.3 |
|
|
|
2,057.2 |
J.
David Thompson |
|
|
|
|
|
|
|
|
479.6 |
|
|
2,104.6 |
|
|
|
2,584.2 |
John R. Dye |
|
|
|
|
|
|
|
|
400.9 |
|
|
1,131.0 |
|
|
|
1,531.9 |
69 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Executive
Compensation |
PROXY
STATEMENT |
Footnotes:
(1) |
Under the Executive Severance Policy, following a
change-in-control, an eligible executive will become entitled to severance
benefits if he or she is involuntarily terminated by the Company other
than on account of death, disability or for cause or terminates his or her
own employment voluntarily for good reason within 24 months after the date
of the change-in-control. |
|
|
(2) |
In accordance with the Executive Severance Policy,
amounts in this column represent severance payments equal to the named
executive officers bonus for 2014 plus 1.5 times (two times in the case
of the Chief Executive Officer and in the case of all senior executives
who terminate for an eligible reason within 24 months following a
change-in-control) the sum of the named executive officers base salary
and target bonus. |
|
(3) |
Amounts in this column represent a lump sum cash payment
equal to the product of (i) the difference in cost between the named
executive officers actual health premiums and COBRA health premiums as of
December 31, 2014 and (ii) 18, the number of months of continuing COBRA
coverage. |
|
(4) |
Amounts in this column reflect tax gross-up calculations
assuming a blended effective tax rate of approximately 40% and a 20%
excise tax incurred on excess parachute payments, as calculated in
accordance with Internal Revenue Code Sections 280G and 4999. The equity
is valued using a closing stock price of $17.91 on December 31, 2014. As
noted above, the Executive Severance Policy prohibits the Company from
providing change-in-control tax gross-ups to individuals promoted or hired
after April 2009. Accordingly, Mr. Ersek is the only Company employee who
remains eligible for excise tax gross-up payments. |
|
(5) |
Amounts in these columns reflect the long-term incentive
awards to be received upon a termination or a change-in-control calculated
in accordance with the Executive Severance Policy and the Long-Term
Incentive Plan. In the case of stock grants, the equity value represents
the value of the shares (determined by multiplying the closing stock price
of $17.91 per share on December 31, 2014 by the number of unvested
restricted stock units or, in the case of performance-based restricted
stock units, by the number of shares to be awarded based on the projected
achievement of the applicable performance objectives as of December 31,
2014, that would vest upon a change-in- control or following a qualifying
termination, death or disability). In the case of option awards, the
equity value was determined by multiplying (i) the spread between the
exercise price and the closing stock price of $17.91 per share on December
31, 2014 and (ii) the number of unvested option shares that would vest
following a qualifying termination, death, disability or upon a
change-in-control. The calculation with respect to unvested long-term
incentive awards reflects the following additional assumptions under the
Executive Severance Policy and the Long-Term Incentive
Plan: |
The Western Union Company Proxy
Statement |
| |
70 |
Table of Contents
Executive
Compensation |
PROXY
STATEMENT |
Event |
Unvested Stock
Options |
Unvested Restricted
Stock |
Performance-Based Restricted Stock
Units |
Change-in-Control and Termination
for Eligible Reason within 24-month Period |
Accelerate |
Accelerate |
Accelerated vesting and award is
payable to the extent earned based on actual performance
results. |
Change-in-Control (No
Termination) |
Vesting continues under normal
terms. |
Vesting continues under normal
terms. |
Vesting continues under normal
terms. |
Involuntary Termination (Not for
Cause prior to a Change-in-Control or after the 24-month Period following
a Change-in-Control) |
Prorated vesting by grant based on
ratio of days since grant to total days in vesting period. |
Prorated vesting by grant based on
ratio of days since grant to total days in vesting period. |
Prorated vesting by grant based on
actual performance results and ratio of days since grant to total days in
vesting period.
Effective for grants in 2012 and
later, if termination occurs prior to the one year anniversary of the
grant date, the awards are forfeited. |
Death or Disability |
Accelerate |
Accelerate |
Accelerated vesting and award is
payable to the extent earned based on actual performance
results. |
Retirement |
Effective for grants on January 31,
2011 and later, prorated vesting by grant based on ratio of days since
grant to total days in vesting period, with an exercise period equal to
the earlier of (i) two years post-termination (three years, in the case of
the CEO) and (ii) the expiration date.
Grants made prior to January 31,
2011 may be exercised until four years after the termination date or, if
earlier until the expiration date. |
Prorated vesting by grant based on
ratio of days since grant to total days in vesting period. |
Prorated vesting by grant based on
actual performance results and ratio of days since grant to total days in
vesting period. |
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Executive
Compensation |
PROXY
STATEMENT |
Risk Management and
Compensation
Appropriately incentivizing behaviors
which foster the best interests of the Company and its stockholders is an
essential part of the compensation-setting process. The Company believes that
risk-taking is necessary for continued innovation and growth, but that risks
should be encouraged within parameters that are appropriate for the long-term
health and sustainability of the business. As part of its compensation setting
process, the Company evaluates the merits of its compensation programs through a
comprehensive review of its compensation policies and programs to determine
whether they encourage unnecessary or inappropriate risk-taking by the Companys
executives and employees below the executive level. Based on this review, the
Company has concluded that the risks arising from its compensation programs are
not reasonably likely to have a material adverse effect on the
Company.
Management and the Compensation Consultant
review the Companys compensation programs, including the broad-based employee
programs and the programs tied to the performance of individual business units.
The team maps the level of enterprise risk for each business area, as
established through the Companys enterprise risk management oversight process,
with the level of compensation risk for the associated incentive programs. In
developing the risk assessment, the team reviews the compensation programs
within each business area for:
● |
The mix of fixed versus variable
pay; |
● |
The performance metrics to which pay
is tied; |
● |
Whether the pay opportunity is
capped; |
● |
The timing of
payout; |
● |
Whether clawback adjustments are
permitted; |
● |
The use of equity awards;
and |
● |
Whether stock ownership guidelines
apply. |
Annual incentive awards and long-term
incentive awards granted to executives are tied primarily to corporate
performance goals, including revenue, operating income growth, and strategic
performance objectives. These metrics encourage performance that supports the
business as a whole. The executive annual incentive awards include a maximum
payout opportunity equal to 150% of target. Our executives are also expected to
meet share ownership guidelines in order to align the executives interests with
those of our stockholders. Also, the Companys clawback policy permits the
Company to recover incentive compensation paid to an executive officer if the
compensation resulted from any financial result or metric impacted by the
executive officers misconduct or fraud. This policy helps to discourage
inappropriate risks, as executives will be held accountable for misconduct which
is harmful to the Companys financial and reputational
health.
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Proposal
2 Advisory Vote to Approve Executive
Compensation |
The Company is providing stockholders an
advisory vote to approve executive compensation as required by Section 14A of
the Exchange Act. Section 14A was added to the Exchange Act by Section 951 of
the Dodd-Frank Act. The advisory vote to approve executive compensation is a
non-binding vote on the compensation of the Companys named executive officers,
as described in the Compensation Discussion and Analysis section, the tabular
disclosure regarding such compensation, and the accompanying narrative
disclosure, set forth in this Proxy Statement. The advisory vote to approve
executive compensation is not a vote on the Companys general compensation
policies or the compensation of the Companys Board of Directors. The Dodd-Frank
Act requires the Company to hold the advisory vote to approve executive
compensation at least once every three years. At the 2011 Annual Meeting of
Stockholders, the Company asked stockholders to indicate if it should hold an
advisory vote to approve the compensation of named executive officers every one,
two or three years, with the Board recommending an annual advisory vote. Our
stockholders approved this recommendation. Because the Board views it as a good
corporate governance practice, the Company is again asking stockholders to
approve the compensation of named executive officers as disclosed in this Proxy
Statement.
At the 2014 Annual Meeting of
Stockholders, the Company provided stockholders with the opportunity to cast an
advisory vote to approve the compensation of the Companys named executive
officers as disclosed in the Proxy Statement for the 2014 Annual Meeting of
Stockholders, and the Companys stockholders overwhelmingly approved the
proposal, with approval by more than 96% of the votes cast for the proposal at
the 2014 Annual Meeting of Stockholders.
The Company believes that its compensation
policies and procedures, which are outlined in the Compensation Discussion and
Analysis section of this Proxy Statement, support the goals of:
● |
Aligning our executives goals with
our stockholders interests; |
● |
Holding our executives accountable
and rewarding them for results; and |
● |
Attracting, retaining, and
motivating outstanding executive talent. |
The Compensation Committee of the Board
continually reviews the Companys executive compensation and benefits program to
evaluate whether they support these goals, and serve the interests of the Companys
stockholders. The Companys executive compensation practices include the
following, as discussed in more detail in the Compensation Discussion and
Analysis section of this Proxy Statement.
● |
What We Do: |
✓ |
Pay-for-performance. |
✓ |
Linkage between performance measures
and strategic objectives. |
✓ |
Emphasis on future pay opportunity
vs. current pay. |
✓ |
Mix of performance
metrics. |
✓ |
Stockholder
engagement. |
✓ |
Outside compensation
consultant. |
✓ |
Double trigger in the event of a
change-in-control. |
✓ |
Maximum payout caps for annual cash
incentive compensation and performance-based restricted stock unit
awards. |
✓ |
Clawback Policy. |
✓ |
Robust stock ownership
guidelines. |
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● |
What We Dont
Do: |
✕ |
No change-in-control tax gross
ups for individuals promoted or hired after April 2009. Mr. Ersek is
the only Company employee who remains eligible for excise tax gross-up
payments. |
✕ |
No repricing or buyout of underwater
stock options. |
✕ |
Prohibition against pledging and
hedging of Company securities by senior executives and directors.
|
✕ |
No dividends or dividend equivalents
accrued or paid on performance-based restricted stock unit awards or
time-based restricted stock unit awards. |
Recent Compensation
Actions
For 2014, many of the compensation
decisions were designed to further align the Companys executive compensation
program with the Companys future growth and strategic operating plans and the
interests of our executives with those of our stockholders. Specifically, the
Compensation Committee approved several modifications to the compensation
program to further align the executive compensation program with evolving
investor preferences, executive compensation practices and market
trends.
These decisions included:
● |
No Executive Base Salary Increases for 2013 or
2014: Other than with respect to
executive promotions, there were no changes in our named executive
officers base salary levels for 2013 or 2014 from the levels effective
March 2012. |
● |
Created Standalone TSR Performance-Based Restricted Stock
Units: We replaced the TSR modifier
from our 2013 Long-Term Incentive Plan
design with a standalone TSR
PSU in order to enhance focus on stockholder returns. These TSR PSUs
require the Company to achieve 60th percentile relative TSR
performance versus the S&P 500 Index over a three-year performance
period in order to earn target payout, with 30th percentile
relative TSR performance resulting in threshold payout and 90th
percentile relative TSR resulting in maximum
payout. |
● |
Increased Performance Period for Performance-Based Restricted Stock
Units: We increased the performance
period of our performance-based restricted stock units so that they will
be subject to a three-year total performance period, versus the two-year
performance period used in prior
years. |
● |
Diversified Long-Term
Incentive Plan Mix and Increased Weighting of At-Risk
Awards: We increased the percentage
of our annual equity grants that have vesting provisions that are strictly
performance-based and at-risk. For 2014, the annual equity awards under
the Long-Term Incentive Plan consisted of 80% performance-based restricted
stock units (60% Financial PSUs, incorporating both revenue and operating
income growth, and 20% TSR PSUs) and 20% stock options, as compared to 67%
performance-based restricted stock units and 33% stock options in
2013. |
● |
Established Goals Exceeding
Performance During Prior Three Years: The financial performance target objectives for the 2014
compensation program were set at constant currency growth rates that are
higher than the Companys average annual constant currency results
achieved over 2011 through 2013. The 2014 Annual Incentive
Plan financial performance target objectives were also set higher than
the constant currency financial performance target objectives and actual
results under the 2013 Annual Incentive Plan. For the 2014 Annual
Incentive Plan, performance at 184% of the target revenue growth rate and
at 200% of the target operating income growth rate is required for a
maximum payout equal to 150% of the target award. Further, the Companys
relative TSR performance rank versus the S&P 500 Index over the
2014-2016 performance period that is required to earn a target payout
under the 2014 TSR PSUs is higher than the Companys annual relative TSR
performance versus the S&P 500 Index in each of 2011, 2012, and
2013. |
● |
Reduced Maximum Payout Under
Annual Incentive
Plan: The Compensation Committee
reduced the maximum payout opportunity under the Annual Incentive Plan to
150% of target, as compared to the 200% of target maximum payout
opportunity that was used in prior years. |
● |
Reduced Severance Benefits
Under Executive Severance Policy:
During 2014, the Compensation Committee amended the Executive Severance
Policy to reduce the severance multiple for determining severance benefits
prior to a change-in-control from 2 to 1.5 for participants other than the
Companys Chief Executive Officer.
|
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We believe that these practices, in
combination with a competitive market review, limited executive perquisites, and
reasonable severance pay multiples contribute to an executive compensation
program that is competitive yet strongly aligned with stockholder
interests.
The Board recommends that you vote in
favor of the following say-on-pay resolution:
RESOLVED, that the stockholders of the
Company approve, on an advisory basis, the compensation of the Companys named
executive officers, as disclosed pursuant to Item 402 of Regulation S-K in the
Compensation Discussion and Analysis section, the tabular disclosure regarding
such compensation, and the accompanying narrative disclosure, each as set forth
in the Companys Proxy Statement for its 2015 Annual Meeting of
Stockholders.
Required Vote
The affirmative vote of the holders of a
majority of shares of the Companys Common Stock present in person or
represented by proxy at the meeting and entitled to vote on the subject matter
is required to approve this Proposal 2.
Because your vote is advisory, it will not
be binding upon the Board of Directors. However, the Compensation Committee may
take into account the outcome of the vote when considering future executive
compensation arrangements.
![](westernunion_def14a12x1x1.jpg) |
|
THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE FOR PROPOSAL 2. |
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Proposal 3 |
PROXY
STATEMENT |
|
Proposal
3 Approval of The Western Union Company 2015 Long-Term Incentive Plan |
At the Annual Meeting, our stockholders
will be asked to approve The Western Union Company 2015 Long-Term Incentive Plan
(the 2015 Plan). The 2015 Plan was approved by the Board on February 20, 2015,
subject to stockholder approval, and will replace The Western Union Company 2006
Long-Term Incentive Plan (the 2006 Plan). As of December 31, 2014, there were
approximately 37,556,580 shares of Common Stock that remained available for
future issuances under the 2006 Plan and which will cease to be available for
future grants if the 2015 Plan is approved by stockholders. If the 2015 Plan is
approved by stockholders, we will continue to be able to make awards of
long-term equity incentives, which are critical for attracting, motivating,
rewarding and retaining a talented management team who will contribute to our
success. The Board believes that the Company has used equity in a reasonable
manner, with a three-year average burn rate of approximately 1.0% of the
Companys outstanding shares of Common Stock.
The purposes of the 2015 Plan are to:
● |
advance the interests of the Company by
attracting and retaining high caliber employees, and other key individuals
who perform services for the Company or its subsidiaries or
affiliates; |
|
|
● |
align the interests of our stockholders and
recipients of awards under the 2015 Plan by increasing the proprietary
interest of such recipients in the Companys growth and success; and |
|
|
● |
motivate award recipients to act in the
long-term best interests of the Company and its
stockholders. |
Under the 2015 Plan, the Company may
grant:
● |
non-qualified stock options; |
|
|
● |
incentive stock options (within the meaning of
Section 422 of the Code); |
|
|
● |
stock appreciation rights (SARs), in the form
of free-standing SARs or tandem SARs; |
● |
restricted stock, restricted
stock units, bonus stock, bonus stock units and deferred stock units
(collectively, Stock Awards); and |
|
|
● |
performance
grants. |
As of March 19, 2015, approximately 10,000 employees and 10 non-employee directors
would be eligible to participate in the 2015 Plan; however, participation in our long-term incentive program
has historically been limited to non-employee directors and certain senior-level employees, which, as of March 19,
2015, included approximately 760 employees.
Plan Highlights
Some of the key features of the 2015 Plan
are as follows:
● |
The 2015 Plan will be
administered by a committee of the Board or a subcommittee thereof (the
Plan Committee), comprised entirely of independent
directors; |
|
|
● |
Stock options and SARs granted
under the 2015 Plan may not be repriced without stockholder
approval; |
|
|
● |
Under the terms of the 2015
Plan, outstanding stock options, SARs, Stock Awards and Performance grants
are subject to double trigger vesting upon a change in control meaning
that both a qualifying termination of employment and a change in control
must occur prior to the accelerated vesting of such awards;
|
● |
The 2015 Plan prohibits the
grant of dividend equivalents with respect to options and
SARs; |
|
|
● |
Options, SARs, restricted
stock and restricted stock unit awards will be subject to a minimum
vesting or restriction period of one-year, subject to certain exceptions
described in the 2015 Plan and the accelerated vesting upon certain
termination events; |
|
|
● |
Liberal share recycling is
prohibited meaning that the 2015 Plan does not recycle shares that were
not issued or delivered upon the net settlement or net exercise of an
option or SAR, shares delivered to or withheld by us to pay the purchase
price or |
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withholding taxes relating to an outstanding award or
shares repurchased by us on the open market with the proceeds of a stock
option exercise; |
|
|
● |
Under the 2015 Plan, 31,000,000 shares of Common Stock
will initially be available for awards; |
|
|
● |
Except with respect to substitute awards granted in
connection with a corporate transaction, the purchase price of options and
the base price for SARs granted under the 2015 Plan may not be less than
the fair market value of a share of Common Stock on the date of grant;
and |
|
|
● |
Awards granted under the 2015 Plan will be subject to our
clawback policy, as in effect from time to time. |
Description of the 2015 Plan
The following description is qualified in
its entirety by reference to the plan document, a copy of which is attached to
this Proxy Statement as Annex I and incorporated herein by reference.
Administration
The 2015 Plan will be administered by the
Plan Committee, consisting of two or more members of the Board, each of whom
will be (i) a non-employee director within the meaning of Rule 16b-3 under the
Exchange Act, (ii) an outside director within the meaning of Section 162(m) of
the Code, and (iii) independent within the meaning of the rules of the NYSE.
It is currently anticipated that the Compensation Committee will administer the
2015 Plan.
Subject to the terms of the 2015 Plan, the
Plan Committee will have the authority to select eligible persons to receive
awards and determine all of the terms and conditions of each award. The
Committee may approve an award agreement that, upon the termination of an award
holders employment or service, provides that, or may, in its sole discretion
based on a review of all relevant facts and circumstances, otherwise take action
regarding an agreement such that (i) any or all outstanding options and SARs
will become exercisable in part or in full, (ii) all or a portion of the
restriction period applicable to any outstanding Stock Award will lapse, (iii)
all or a portion of the performance period applicable to any outstanding award
will lapse and (iv) the performance measures
applicable to any outstanding award (if
any) will be deemed to be satisfied at the maximum or any other level. The Plan
Committee will also have authority to establish rules and regulations for
administering the 2015 Plan and to decide questions of interpretation or
application of any provision of the 2015 Plan.
The Plan Committee may delegate some or
all of its power and authority under the 2015 Plan to the Board or, subject to
applicable law, to another committee, a member of the Board, the President and
Chief Executive Officer or such other executive officer of the Company as the
Plan Committee deems appropriate, except that (i) it may not delegate its power
and authority to the Board, another committee, a member of the Board or the
President and Chief Executive Officer or any other executive officer with regard
to awards to persons who are covered employees within the meaning of Section
162(m) of the Code or are likely to become such while an award is outstanding,
and (ii) it may not delegate its power and authority to another committee, a
member of the Board, the President and Chief Executive Officer or any other
executive officer with regard to (y) awards to persons subject to Section 16 of
the Exchange Act, or (z) any decision regarding the impact of a change in
control on awards issued under the 2015 Plan.
Available Shares
Under the 2015 Plan, 31,000,000 shares
of Common Stock will initially be available for all awards, subject to
adjustment in the event of a stock split, stock dividend, recapitalization,
reorganization, merger, spin-off or other similar change or event. No more than
31,000,000 shares of Common Stock in the aggregate may be issued under the
2015 Plan in connection with incentive stock options. The number of shares of
Common Stock that remain available for future grants under the 2015 Plan will be
reduced by the aggregate number of shares of Common Stock that become subject to
outstanding stock options, outstanding free-standing SARs, outstanding Stock
Awards and outstanding performance grants denominated in shares of Common
Stock.
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Shares of Common Stock subject to an
outstanding option, free-standing SAR, Stock Award or Performance Grant granted
under the 2015 Plan, the 2006 Plan or any other plan previously maintained by
the Company under which equity awards remain outstanding as of the effective
date of the 2015 Plan that are not issued or delivered by reason of (i) the
expiration, termination, cancellation or forfeiture of such award (excluding
shares of Common Stock subject to an option cancelled upon settlement of a
related tandem SAR or subject to a tandem SAR cancelled upon exercise of a
related option), or (ii) the settlement of such award in cash, will again be
available under the 2015 Plan; provided, however, that shares of Common Stock
subject to an award under the 2015 Plan will not again be available for issuance
under the 2015 Plan if such shares are (a) shares that were subject to an option
or SAR and were not issued or delivered upon the net settlement or net exercise
of such option or SAR, (b) shares delivered to or withheld by the Company to pay
the purchase price or withholding taxes relating to an outstanding award or (c)
shares repurchased by the Company on the open market with the proceeds of an
option exercise.
To the extent necessary for an award to be
qualified-performance based compensation under Section 162(m) of the Code, (i)
the maximum number of shares of Common Stock with respect to which options or
SARs or a combination thereof that may be granted during any calendar year to
any person will be 2,200,000, subject to adjustment in the event of a stock
split, stock dividend, recapitalization, reorganization, merger, spin-off or
other similar change or event, (ii) the maximum number of shares of Common Stock
with respect to which Stock Awards subject to performance measures or
performance grants denominated in shares of Common Stock that may be earned by
any person for each 12-month period during a performance period will be
2,200,000, subject to adjustment in the event of a stock split, stock
dividend, recapitalization, reorganization, merger, spin-off or other similar
change or event, and (iii) the maximum amount that may be earned by any person
for each 12-month period during a performance period with respect to performance
grants denominated in cash will be $8,000,000; provided, however, that the per
person limits included in this sentence will be multiplied by two for
awards granted to a participant in the year in which the participants
employment with the Company commences. The aggregate grant date fair value of shares of Common Stock that may be granted during
any fiscal year of the Company to any non-employee director will not exceed $800,000; provided, however, that (i) the limit included
in this sentence will be multiplied by two in the year in which a non-employee director commences service on the Board and (ii)
the limit included in this sentence will not apply to awards made pursuant to an election to receive the award in lieu of all
or a portion of fees received for service on the Board or any Board committee. On March 19, 2015, the closing sales price per
share of Common Stock as reported on the NYSE was $19.25.
Eligible Employees.
Participants in the 2015 Plan will consist
of such officers, other employees, non-employee directors, consultants,
independent contractors, and agents (including any individuals expected to
become any of the foregoing) of the Company, its subsidiaries and its
affiliates, as selected by the Plan Committee in its sole discretion.
Change in Control
If an award holders employment is
terminated by the Company, a subsidiary or an affiliate without cause (or
otherwise terminates for an eligible reason according to the terms of any
applicable Company severance policy) within 24 months following a change in
control, then upon such termination of employment (i) each outstanding option
and SAR held by such holder will become fully vested and exercisable, (ii) the
restriction period applicable to each outstanding award held by such holder will
lapse, and (iii) performance grants will vest or become exercisable or payable
in accordance with the applicable award agreement.
Under the terms of the 2015 Plan, a change
in control is generally defined as (i) certain acquisitions of 35% or more of
the then outstanding shares of Common Stock, (ii) a change in our Board
during any 24 month period resulting in the incumbent directors ceasing to constitute at least a majority
of our Board, (iii) the consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the
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Company (unless, among other conditions, the Companys
stockholders receive more than 50% of the stock of the resulting company) or
(iv) the consummation of a complete liquidation or dissolution of the
Company.
Effective Date, Termination and
Amendment
If approved by our stockholders at the
Annual Meeting, the 2015 Plan will become effective as of the date of such
stockholder approval, and will terminate as of the first annual meeting of the
Companys stockholders to occur on or after the tenth anniversary of the
effective date, unless earlier terminated by the Board. The Board may amend the
2015 Plan at any time, subject to stockholder approval if (i) required by
applicable law, rule or regulation, including Section 162(m) of the Code, or any
rule of the NYSE, (ii) such amendment would increase the maximum number of
shares of Common Stock available under the 2015 Plan, or (iii) the Board seeks
to modify the option and SAR repricing provisions in the 2015 Plan. No amendment
may impair the rights of a holder of an outstanding award without the consent of
such holder.
Non-Transferability
The 2015 Plan restricts the ability of a
participant from transferring awards granted under the 2015 Plan other than by
will, the laws of descent and distribution or pursuant to beneficiary
designation procedures approved by the Company or, to the extent expressly
permitted in the award agreement, to the holders family members, a trust or
entity established by the holder for estate planning purposes or a charitable
organization designated by the holder, in each case, without
consideration.
Stock Options and SARs
The 2015 Plan provides for the grant of
non-qualified stock options, incentive stock options and SARs. The Plan
Committee will determine the conditions to the exercisability of each option and
SAR.
Each option will be exercisable for no
more than ten (10) years after its date of grant, unless the option is an
incentive stock option and the optionee owns greater than ten percent (10%) of
the voting power of all shares of capital stock of the Company (a ten percent
holder), in which case the option will be exercisable for no more
than five years after its date of grant.
Except in the case of substitute awards granted in connection with a corporate
transaction, the purchase price of an option will not be less than 100% of the
fair market value of a share of Common Stock on the date of grant, unless the
option is an incentive stock option and the optionee is a ten percent holder, in
which case the option purchase price will be the price required by the Code.
Each SAR will be exercisable for no more
than ten (10) years after its date of grant. Except in the case of substitute
awards granted in connection with a corporate transaction, the base price of a
SAR will not be less than 100% of the fair market value of a share of Common
Stock on the date of grant, provided that the base price of a SAR granted in
tandem with an option (a tandem SAR) will be the purchase price of the related
option. A SAR entitles the holder to receive upon exercise (subject to
withholding taxes) shares of Common Stock (which may be restricted stock) or, to
the extent provided in the award agreement, cash or a combination thereof, with
an aggregate value equal to the difference between the fair market value of the
shares of Common Stock on the exercise date and the base price of the SAR.
Except as otherwise provided under the
2015 Plan, no option or SAR award may become exercisable until one year from the
grant date, provided that this minimum vesting period will not apply in the case
of an option or SAR that becomes exercisable as a result of the attainment of a
specified performance measure or in the case of an option or SAR granted as an
employee recognition award, a retention award, or to a non-employee director or
a newly hired employee; provided that except for a stock option or SAR granted
to a non-employee director or as otherwise provided for under the 2015 Plan no
portion of any such option or SAR may become exercisable until six months from
the grant date.
Unless otherwise specified in an award
agreement, outstanding options and SARs will vest in full in the event of a
participants termination of employment due to death or disability and will vest
on a pro rata basis in the event of a participants termination of employment
due to retirement.
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Subject to the adjustment provisions set
forth in the 2015 Plan, neither the Board nor the Plan Committee will, without
the approval of the Companys stockholders, (i) reduce the purchase price or
base price of any previously granted option or SAR, (ii) cancel any previously
granted option or SAR when the purchase price or base price per share of Common
Stock subject to the option or SAR exceeds the fair market value of a share of
Common Stock in exchange for cash or another award (other than in connection
with a change in control) or (iii) take any other action with respect to an
option or SAR that would be treated as a repricing under the rules and
regulations of the principal U.S. national securities exchange on which the
shares of Common Stock are listed.
Stock Awards
The 2015 Plan provides for the grant of
Stock Awards. The Plan Committee may grant a Stock Award either as a restricted
stock award, restricted stock unit award, bonus stock award, bonus stock unit
award or deferred stock unit award. Except as otherwise determined by the Plan
Committee, restricted stock awards or restricted stock unit awards will be
subject to forfeiture if the holder does not remain continuously in the
employment or service of the Company during the specified restriction period or
performance period or if specified performance measures (if any) are not
attained during the performance period. Except as otherwise provided under the
2015 Plan, the restriction period applicable to a restricted stock award or
restricted stock unit award may not lapse until one year from the grant date,
provided that the minimum restriction period will not apply in the case of a
restricted stock award or restricted stock unit award that vests as a result of
the attainment of a specified performance measure or in the case of a restricted
stock award or restricted stock unit award granted as an employee recognition
award, a retention award, or to a newly hired employee; provided that except as
provided for under the 2015 Plan the minimum restriction period applicable to
such award will be six months.
Unless otherwise set forth in an award
agreement, the restriction period applicable to an outstanding stock award will
lapse and the performance measures applicable to such award will be deemed to
have been satisfied at the maximum level in the event a participants
termination
of employment due to death or disability.
In the case of restricted stock unit awards, unless otherwise set forth in an
award agreement, in the event a participants employment terminates due to
retirement, a prorated portion of such restricted stock units will vest, with
the vesting of any restricted stock unit awards that are subject to performance
based vesting conditions determined based on actual satisfaction of the
underlying performance measures during the performance period.
Unless otherwise set forth in a restricted
stock award agreement, the holder of shares of restricted stock awarded will
have rights as a stockholder of the Company, including the voting rights, the
right to receive dividends and the right to participate in any capital
adjustment applicable to all holders of shares of Common Stock. With respect to
restricted stock awards subject to performance-based vesting conditions and,
unless the Plan Committee determines otherwise, restricted stock awards subject
only to time-based vesting conditions, in each case, a distribution with respect
to shares of Common Stock, including a regular cash dividend, will be deposited
with the Company and replaced with additional restricted stock awards, subject
to the same restrictions as the shares of Common Stock with respect to which
such distribution was made.
The agreement awarding restricted stock
units will specify (i) whether such award may be settled in shares of Common
Stock, cash or a combination thereof, and (ii) whether the holder will be
entitled to receive on a current or deferred basis, dividend equivalents, or the
deemed reinvestment of any deferred dividend equivalents, with respect to such
award. Any dividend equivalents with respect to restricted stock units that are
subject to performance-based vesting conditions will be subject to the same
restrictions as such restricted stock units. Prior to settlement of a restricted
stock unit award in Common Stock, the holder of a restricted stock unit will
have no rights as a stockholder of the Company.
Bonus stock awards and bonus stock units will not be subject to any restriction period
or performance measures. The award agreement relating to a bonus stock unit award will specify (i) whether such award may
be settled in shares of Common Stock, cash or the combination thereof and (ii) whether the holder will be entitled
to receive,
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on a current or deferred basis, dividend equivalents, or the deemed reinvestment of any deferred dividend
equivalents, with respect to such award. Prior to the settlement of a bonus
stock unit award in Common Stock, the holder of a bonus stock unit award will
not have any rights as a stockholder of the Company.
The agreement relating to deferred stock units will specify (i) whether such award may
be settled in shares of Common Stock, cash or a combination thereof, and (ii) whether the holder will be entitled to
receive on a current or deferred basis, dividend equivalents, or the deemed reinvestment of any deferred dividend
equivalents, with respect to such award. Under the terms of the 2015 Plan, deferred stock unit awards will not be subject
to any restriction period or performance measures. Prior to settlement of a deferred stock unit award in Common Stock, the
holder of a deferred stock unit will have no rights as a stockholder of the Company, except to the extent the Plan Committee
grants dividend equivalents on deferred stock unit awards that are settled in shares of Common Stock.
Performance Grants
The 2015 Plan also provides for the
granting of performance grants. The agreement relating to a performance grant
will specify (i) whether such award may be settled in shares of Common Stock,
restricted stock, restricted stock units, cash or a combination thereof, and
(ii) whether the holder will be entitled to receive, on a current or deferred
basis, dividend equivalents. Any dividend or dividend equivalents with respect
to a performance grant that remains subject to performance-based vesting
conditions will be subject to the same restrictions as such performance grant.
The agreement relating to a performance grant will provide, in the manner
determined by the Plan Committee, for the vesting of such performance grant if
the specified performance measures are satisfied or met during the specified
performance period. Prior to the settlement of a performance grant in Common
Stock or restricted stock, the holder of such award will have no rights as a
stockholder of the Company with respect to such shares. Unless otherwise set
forth in an award agreement, in the event a participants employment terminates
due to disability, death or retirement, a prorated portion of the performance
grant will vest based on actual satisfaction of the underlying performance
measures during the performance period.
Performance Measures
Under the 2015 Plan, the vesting,
exercisability or payment of certain awards may be made subject to the
satisfaction of performance measures. The performance goals applicable to a
particular award will be determined by the Plan Committee at the time of grant.
In the case of an award that is intended to qualify for the performance-based
exemption from the $1 million deduction limit under Section 162(m) of the Code,
as described below, the performance measures will be one or more of the
following corporate-wide or subsidiary, division, operating unit or individual
measures: the attainment by a share of Common Stock of a specified value within
or for a specified period of time; earnings; earnings per share; earnings before
interest expense and taxes (EBIT); earnings before interest, taxes,
depreciation, and amortization (EBITDA); return on equity; return on assets;
return on total capital; return to stockholders (including dividends); total
shareholder return; revenues; cash flow(s); cost reduction goals; net income;
operating income; profit margin; expense management; economic profit; economic
value added; customer satisfaction; productivity; employee retention; succession
management; management of the cost of insurance claims; achievement of
regulatory compliance performance goals; measurable marketing effectiveness;
achievement of diversity goals; or any combination of the foregoing. Each such
goal may be expressed on an absolute or relative basis and may include
comparisons based on current internal targets, the past performance of the
Company (including the performance of one or more subsidiaries, divisions or
operating units) or the past or current performance of other companies (or a
combination of such past and current performance). The applicable performance
measures may be applied on a pre- or post-tax basis and may be adjusted or
amended in accordance with Section 162(m) of the Code to include or exclude
objectively determinable components of any performance measure, including,
without limitation, special charges such as restructuring or impairment charges,
debt refinancing costs, extraordinary or noncash items, unusual, nonrecurring or
one-time events affecting the Company or its financial statements or changes in
law or accounting principles.
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Clawback of Awards
Except to the extent prohibited by law,
awards granted under the 2015 Plan and any cash payment or shares of Common
Stock delivered pursuant to an award are subject to forfeiture and recovery by
the Company pursuant to any clawback or recoupment policy which the Company may
adopt from time to time, including any policy which the Company may be required
to adopt under the Dodd-Frank Act or as otherwise required by law.
New Plan Benefits
The number of stock options and other
forms of awards that will be granted under the 2015 Plan is not currently
determinable.
U.S. Federal Income Tax Consequences
The following is a brief summary of
certain United States federal income tax consequences generally arising with
respect to awards under the 2015 Plan. This discussion does not address all
aspects of the United States federal income tax consequences of participating in
the 2015 Plan that may be relevant to participants in light of their personal
investment or tax circumstances and does not discuss any state, local or
non-United States tax consequences of participating in the 2015 Plan. Each
participant is advised to consult his or her personal tax advisor concerning the
application of the United States federal income tax laws to such participants
particular situation, as well as the applicability and effect of any state,
local or non-United States tax laws before taking any actions with respect to
any awards.
Section 162(m) of the Code
Section 162(m) of the Code generally
limits to $1 million the amount that a publicly held corporation is allowed each
year to deduct for the compensation paid to the corporations chief executive
officer and the corporations three most highly compensated executive officers
other than the chief executive officer and the chief financial officer. However,
qualified performance-based compensation is not subject to the $1 million
deduction limit. To qualify as qualified performance based-compensation, the
following requirements must be satisfied: (i) the performance goals are
determined by
a committee consisting solely of two or
more outside directors, (ii) the material terms under which the compensation
is to be paid, including the employees eligible to receive compensation, the
business criteria on which the performance goals are based and either the
maximum amount of compensation that could be paid to any employee or the formula
used to calculate the amount of compensation to be paid to the employee if the
performance goal is attained, are approved by the corporations stockholders,
and (iii) the committee certifies that the applicable performance goals are
satisfied before payment of any qualified performance-based compensation is
made. The Plan Committee currently consists solely of outside directors for
purposes of Section 162(m) of the Code. As a result, certain compensation under
the 2015 Plan, such as that payable with respect to options and SARs, is not
expected to be subject to the $1 million deduction limit, but other compensation
payable under the 2015 Plan, such as any Stock Award that is not subject to
Section 162(m) performance measures, would be subject to such limit.
Stock Options
A participant will not recognize taxable
income at the time an option is granted and the Company will not be entitled to
a tax deduction at that time. A participant will recognize compensation taxable
as ordinary income (and subject to income tax withholding in respect of an
employee) upon exercise of a non-qualified stock option equal to the excess of
the fair market value of the shares purchased over their purchase price, and the
Company will be entitled to a corresponding deduction. A participant will not
recognize income (except for purposes of the alternative minimum tax) upon
exercise of an incentive stock option. If the shares acquired by exercise of an
incentive stock option are held for at least two years from the date the option
was granted and one year from the date it was exercised, any gain or loss
arising from a subsequent disposition of those shares will be taxed as long-term
capital gain or loss, and the Company will not be entitled to any deduction. If,
however, such shares are disposed of within the above-described period, then in
the year of that disposition the participant will recognize compensation taxable
as ordinary income equal to the excess of the lesser of (1) the
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amount realized upon that disposition, and
(2) the excess of the fair market value of those shares on the date of exercise
over the purchase price, and the Company will be entitled to a corresponding
deduction.
SARs
A participant will not recognize taxable
income at the time SARs are granted and the Company will not be entitled to a
tax deduction at that time. Upon exercise, the participant will recognize
compensation taxable as ordinary income (and subject to income tax withholding
in respect of an employee) in an amount equal to the fair market value of any
shares delivered and the amount of cash paid by the Company. This amount is
deductible by the Company as compensation expense.
Stock Awards
A participant will not recognize taxable
income at the time restricted stock is granted and the Company will not be
entitled to a tax deduction at that time, unless the participant makes an
election to be taxed at that time. If such election is made, the participant
will recognize compensation taxable as ordinary income (and subject to income
tax withholding in respect of an employee) at the time of the grant in an amount
equal to the excess of the fair market value for the shares at such time over
the amount, if any, paid for those shares. If such election is not made, the
participant will recognize compensation taxable as ordinary income (and subject
to income tax withholding in respect of an employee) at the time the
restrictions constituting a substantial risk of forfeiture lapse in an amount
equal to the excess of the fair market value of the shares at such time over the
amount, if any, paid for those shares. The amount of ordinary income recognized
by making the above-described election or upon the lapse of restrictions is
deductible by the Company as compensation expense, except to the extent the
deduction limits of Section 162(m) of the Code apply. In addition, a participant
receiving dividends with respect to restricted stock for which the
above-described election has not been made and prior to the time the
restrictions
lapse will recognize compensation taxable
as ordinary income (and subject to income tax withholding in respect of an
employee), rather than dividend income, in an amount equal to the dividends paid
and the Company will be entitled to a corresponding deduction, except to the
extent the deduction limits of Section 162(m) of the Code apply.
A participant will not recognize taxable
income at the time a restricted stock unit is granted and the Company will not
be entitled to a tax deduction at that time. Upon settlement of restricted stock
units, the participant will recognize compensation taxable as ordinary income
(and subject to income tax withholding in respect of an employee) in an amount
equal to the fair market value of any shares delivered and the amount of any
cash paid by the Company. The amount of ordinary income recognized is deductible
by the Company as compensation expense, except to the extent the deduction
limits of Section 162(m) of the Code apply.
A participant will generally recognize
compensation taxable as ordinary income (and subject to income tax withholding
in respect of an employee) at the time bonus stock is granted. The Company is
entitled to a corresponding deduction at the time ordinary income is recognized
by the participant, except to the extent the deduction limits of Section 162(m)
of the Code apply.
A participant will not recognize taxable
income at the time a bonus stock unit or deferred stock unit is granted and the
Company will not be entitled to a tax deduction at that time. Upon settlement of
bonus stock units or deferred stock units, the participant will recognize
compensation taxable as ordinary income (and subject to income tax withholding
in respect of an employee) in an amount equal to the fair market value of any
shares delivered and, in the case of deferred stock units, the amount of any
cash paid by the Company. The amount of ordinary income recognized is deductible
by the Company as compensation expense, except to the extent the deduction
limits of Section 162(m) of the Code apply.
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Performance Grants
A participant will not recognize taxable
income at the time performance grants are made and the Company will not be
entitled to a tax deduction at that time. Upon settlement of performance grants,
the participant will recognize compensation taxable as ordinary income (and
subject to income tax withholding in respect of an employee) in an amount equal
to the fair market value of any shares delivered and the amount of cash paid by
the Company. This amount is deductible by the Company as compensation expense,
except to the extent the deduction limits of Section 162(m) of the Code apply.
Required Vote
The affirmative vote of the holders of a
majority of shares of the Companys Common Stock present in person or
represented by proxy at the meeting and entitled to vote on the subject matter
is required to approve this Proposal 3.
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THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE FOR PROPOSAL
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Proposal
4 Ratification of Selection of
Auditors |
The Board of Directors and the Audit
Committee recommend to the stockholders the ratification of the selection of
Ernst & Young LLP, independent registered public accounting firm, to audit
the accounts of the Company and its subsidiaries for 2015. Ernst & Young LLP
has served as the Companys independent registered public accounting firm since
the Company became a public company in 2006. Consistent with the regulations
adopted pursuant to the Sarbanes-Oxley Act of 2002, the lead audit partner
having primary responsibility for the audit and the concurring audit partner are
rotated every five years.
A representative of Ernst & Young LLP
will be present at the Annual Meeting, will have the opportunity to make a
statement, and will be available to respond to appropriate questions.
Summary of Independent Registered
Public Accounting Firms Fees for 2014 and 2013
Audit Fees. Ernst & Young LLPs fees for the Companys annual audits were $5.6
million and $5.4 million in 2014 and 2013, respectively. Audit fees primarily
include fees related to the integrated audit of the Companys annual
consolidated financial statements and internal control over financial reporting;
the review of its quarterly consolidated financial statements; statutory audits
required domestically and internationally; comfort letters, consents, and
assistance with and review of documents filed with the SEC; and other accounting
and financial reporting consultation and research work billed as audit fees or
necessary to comply with the standards of the Public Company Accounting
Oversight Board (United States).
Audit-Related Fees. Ernst & Young LLPs fees for audit-related services that
are reasonably related to the performance of the audits or reviews of the
Companys consolidated financial statements (and not included in the section
entitled Audit Fees above) were $0.4 million in each of 2014 and 2013.
Audit-related fees primarily include fees related to service auditor
examinations, due diligence related to mergers and acquisitions, attest services
that
are not required by statute or regulation
and consultation concerning financial accounting and reporting standards not
classified as audit fees.
Tax Fees. Ernst & Young LLPs fees for tax compliance, tax advice and tax
planning services to the Company were $0.7 million in each of 2014 and 2013. Tax
advice and tax planning fees included consultations, analysis, and assistance
with domestic and foreign tax matters, including value-added and goods and
service taxes, local tax authority audits, and other miscellaneous tax
consultations, including tax services requested as part of the Companys
procedures for commercial agreements, the acquisition of new entities, and other
potential business transactions.
During 2014 and 2013, all audit and
non-audit services provided by the independent registered public accounting firm
were pre-approved, consistent with the pre-approval policy of the Audit
Committee. The pre-approval policy requires that all services provided by the
independent registered public accounting firm be pre-approved by the Audit
Committee or one or more members of the Audit Committee designated by the Audit
Committee.
Required Vote
The affirmative vote of the holders of a
majority of shares of the Companys Common Stock present in person or
represented by proxy at the meeting and entitled to vote on the subject matter
is required to approve this Proposal 4. In the event the stockholders fail to
ratify the selection of Ernst & Young LLP, the Audit Committee of the Board
of Directors will consider it a direction to select another independent
registered public accounting firm for the subsequent year. Even if the selection
is ratified, the Audit Committee, in its discretion, may select a new
independent registered public accounting firm at any time during the year, if it
feels that such a change would be in the best interest of the Company and its
stockholders.
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THE BOARD OF DIRECTORS AND THE
AUDIT COMMITTEE RECOMMEND THAT YOU VOTE FOR PROPOSAL
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Proposal
5 Stockholder Proposal Regarding Stockholder Action by
Written Consent |
John Chevedden, 2215 Nelson Ave., No. 205,
Redondo Beach, CA 90278, owner of more than $2,000 worth of shares of the
Companys Common Stock, has notified the Company that he intends to present a
proposal for consideration at the 2015 Annual Meeting of Stockholders. As
required by the Exchange Act, the text of the stockholder proposal and
supporting statement appear as submitted to the Company by the
proponent of such proposal. The Board of Directors and the Company accept no
responsibility for the contents of the proposal or the supporting
statement.
[WU: Rule 14a-8 Proposal, November 28,
2014]
Proposal 5 - Right to Act by Written
Consent
Resolved, Shareholders request that our
board of directors undertake such steps as may be necessary to permit written
consent by shareholders entitled to cast the minimum number of votes that would
be necessary to authorize the action at a meeting at which all shareholders
entitled to vote thereon were present and voting. This written consent is to be
consistent with applicable law and consistent with giving shareholders the
fullest power to act by written consent consistent with applicable law. This
includes shareholder ability to initiate any topic for written consent
consistent with applicable law.
A shareholder right to act by written
consent and to call a special meeting are 2 complimentary ways to bring an
important matter to the attention of both management and shareholders outside
the annual meeting cycle.
A shareholder right to act by written
consent is one method to equalize our limited provisions for shareholders to
call a special meeting. For instance it takes 20% of Western Union shareholders,
with at least one-year of continuously stock ownership, to call a special
meeting. Delaware law allows 10% of shareholders to call a special meeting
without mandating a holding period.
Potentially 50% of Western Union
shareholders could be disenfranchised from having any voice whatsoever in
calling a special meeting due to our one-year rule. The average holding period
for stock is less than one-year according to Stock Market Investors Have Become
Absurdly Impatient.
Our clearly improvable corporate
governance (as reported in 2014) is an added incentive to vote for this
proposal:
In regard to our board 5 directors owned
zero stock which is not a good sign. Jack Greenberg, our chairman, received our
highest negative votes. Mr. Greenberg and Linda Fayne Levinson (on our audit
committee) were potentially overextended with director responsibilities at 5
companies each.
In regard to executive pay unvested equity
pay partially or fully accelerates upon CEO termination according to GMI
Ratings, an independent investment research firm. Western Union had not
disclosed specific, quantifiable performance objectives for our CEO. Western
Union gives long-term incentive pay to executives without requiring the company
to perform above the median of its peer group. Incentive plans that pay for
mediocre performance undermine the link between pay and performance. Our CEOs
annual incentives did not rise or fall in line with annual financial
performance. Shareholders had 11% potential stock dilution.
Returning to the core topic of this
proposal from the context of our clearly improvable corporate governance, please
vote to protect shareholder value:
Right to Act by Written Consent-
Proposal 5
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BOARDS STATEMENT OPPOSING THE
PROPOSAL
After careful consideration, and for the
following reasons, the Board believes that the proposal is not in the best
interests of the Company or its stockholders, and the Board recommends voting
AGAINST this proposal.
The Company believes that permitting
stockholder action by written consent could lead to substantial confusion and
disruption for stockholders. The board
believes that permitting stockholder action by written consent is not an
appropriate corporate governance model for a widely-held public company like
Western Union. Consider the following:
● |
Currently, any matter that Western
Union or its stockholders wish to present for a stockholder vote must be
presented at a meeting of the stockholders, thus allowing all stockholders
to consider, discuss and vote on the pending matter. |
● |
In contrast, the written consent
proposal at issue would permit a group of stockholders with no fiduciary
duties to other stockholders to initiate action without prior notice,
either to the other stockholders or to the Company, and without giving all
stockholders an opportunity to participate and consider arguments,
including those of the Company, for and against the
action. |
● |
Stockholder action by written
consent would allow for the solicitation of multiple, even conflicting,
written consents by multiple stockholder groups, potentially creating
substantial confusion and disruption for
stockholders. |
The Board of Directors is already
highly accountable to stockholders. The
proposal suggests that the written consent right is necessary to keep the Board
accountable to stockholders. Our current policies, however, implement the goal
of accountability without the governance risk to stockholders and the Company
associated with action by written consent as contemplated by the proposal. The
Company has implemented a comprehensive package of corporate governance
practices and policies that enable stockholders to hold the Board accountable
and, where necessary, take quick action to support their interests. Elements of
this comprehensive package include:
● |
The Board of Directors is
declassified, with majority voting for uncontested Director
elections. |
● |
The Company was among the first U.S.
companies to adopt the proxy access right for its
stockholders. |
● |
A stockholder or group of
stockholders holding 20% or more of our outstanding shares may call a
special meeting. |
● |
Our Amended and Restated Certificate
of Incorporation and By-Laws have no supermajority
provisions. |
The Board of Directors has a
demonstrated history of commitment to high standards of corporate
governance. In recent years, the Board has
taken the following actions:
● |
Adopted majority voting for
uncontested Director elections (2007). |
● |
Declassified its Board of Directors,
ensuring that directors would be elected annually (process initiated in
2012). |
● |
Added the right for stockholders to
call special meetings to the By-Laws (2013). |
● |
Adopted a proxy access right for
its stockholders (2013). |
The Board has repeatedly responded to
stockholder concerns. There is, accordingly, no need for stockholders to be
given the right to act by written consent.
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Required Vote; Recommendation
Only
The affirmative vote of the holders of a
majority of shares of the Companys Common Stock present in person or
represented by proxy at the Annual Meeting and entitled to vote on the subject
matter is required to approve this Proposal 5. Stockholders should be aware that
this stockholder proposal is simply a request that the Board take the action
stated in the proposal. Approval of this proposal may not result in the
requested action being taken by the Board, and therefore, its approval would not
effectuate the actions requested by the proposal.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE AGAINST PROPOSAL 5.
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Proposal
6 Stockholder Proposal Regarding Political
Contributions |
The New York State Common Retirement Fund,
59 Maiden Lane 30th Floor, New York, NY 10038, owner of more than
$2,000 worth of shares of the Companys Common Stock, has notified the Company
that it intends to present a proposal for consideration at the 2015 Annual
Meeting of Stockholders. As required by the Exchange Act, the text of the
stockholder proposal and supporting statement appear as submitted to the Company
by the proponent. The Board of Directors and the Company accept no
responsibility for the contents of the proposal or the supporting
statement.
Resolved, that the shareholders of Western Union Company, (Company) hereby
request that the Company provide a report, updated semiannually, disclosing the
Companys:
1. |
Policies and procedures
for making, with corporate funds or assets, contributions and expenditures
(direct or indirect) to (a) participate or intervene in any political
campaign on behalf of (or in opposition to) any candidate for public
office, or (b) influence the general public, or any segment thereof, with
respect to an election or referendum. |
|
2. |
Monetary and
non-monetary contributions and expenditures (direct and indirect) used in
the manner described in section 1 above, including: |
|
|
a. |
The identity of the recipient as
well as the amount paid to each; and |
|
|
b. |
The title(s) of the person(s) in
the Company responsible for decision-making. |
The report shall be presented to the board
of directors or relevant board committee and posted on the Companys
website.
Stockholder Supporting
Statement
As long-term shareholders of Western
Union, we support transparency and accountability in corporate spending on
political activities. These include any activities considered intervention in
any political campaign under the Internal Revenue Code, such as direct and
indirect contributions to political candidates, parties, or organizations;
independent expenditures; or electioneering communications on behalf of federal,
state or local candidates.
Disclosure is in the best interest of the
company and its shareholders and critical for compliance with federal ethics
laws. Moreover, the Supreme Courts Citizens
United decision recognized the importance of
political spending disclosure for shareholders when it said, [D]isclosure
permits citizens and shareholders to react to the speech of corporate entities
in a proper way. This transparency enables the electorate to make informed
decisions and give proper weight to different speakers and messages. Gaps in
transparency and accountability may expose the company to reputational and
business risks that could threaten long-term shareholder value.
Western Union contributed at least
$434,950 in corporate funds since the 2004 election cycle.
(CQ: http://moneyline.cq.com and National Institute on Money
in State Politics: http://www.followthemoney.org)
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However, relying on publicly available
data does not provide a complete picture of the Companys political spending.
For example, the Companys payments to trade associations used for political
activities are undisclosed and unknown. In some cases, even management does not
know how trade associations use their companys money politically. The proposal
asks the Company to disclose all of its political spending, including payments
to trade associations and other tax exempt organizations used for political
purposes. This would bring our Company in line with a growing number of leading
companies, including Exelon, Merck and Microsoft that support political
disclosure and accountability and present this information on their
websites.
The Companys Board and its shareholders
need comprehensive disclosure to be able to fully evaluate the political use of
corporate assets. We urge your support for this critical governance
reform.
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BOARDS STATEMENT OPPOSING THE
PROPOSAL
After careful consideration, and for the
following reasons, the Board believes that the proposal is not in the best
interests of the Company or its stockholders, and the Board recommends voting
AGAINST this proposal.
The Company
has historically made an extremely limited number of political
contributions. The Companys political
contributions are not financially material to the company. In 2014, 2013, and
2012, these contributions totaled approximately $8,500, $11,500 and $13,700
respectively. In 2014, the Companys total expenses relating to political
contributions were de minimis when compared to the Companys total operating
costs of approximately $4.5 billion.
The Company
is both transparent and accountable regarding its political
contributions. On a limited basis we have
pursued and will continue to pursue efforts to help inform public policy
decisions that have the potential to affect our customers, employees, and the
communities in which we operate. To the extent this is done through a small
number of corporate political contributions, such contributions are already
strictly controlled. Consider our current standards, policies and practices
regarding corporate political contributions:
● |
The Company maintains a formal
policy regarding political activities, political contributions and
lobbying activities, which is contained in the Companys Code of Conduct
and which is publicly available in the Corporate Governance section of
our Investor Relations website. |
|
|
● |
Our policy contains standards for participating
in the political process for both the Company and its employees. |
|
|
● |
With respect to political contributions, the
Code of Conduct provides that the permission of the Companys General
Counsels office is needed before any political contributions are made on
behalf of the Company. |
|
|
● |
The Code of Conduct also provides that a senior
executive officer of the Companys Government Relations department and the
General Counsels office be consulted prior to contacting a government
official or retaining a lobbyist. |
The Company
is also transparent and accountable regarding its membership in trade
associations. Participation as a trade
association member comes with the understanding that we may not always agree
with all of the positions of the organizations or other members but that we
believe that the associations we belong to take many positions and address many
issues in a meaningful and influential manner and in a way that will be to the
Companys benefit. We believe the below practices allow the Company to reap
these benefits while remaining both transparent and accountable:
● |
Although we must pay regular membership fees,
we do not normally make additional non-dues contributions to support a
groups targeted political contributions. |
|
|
● |
We closely monitor the appropriateness and
effectiveness of the political activities undertaken by the most
significant trade associations of which we are a
member. |
Significant
disclosure regarding the Companys political activities and related policies is
already publicly available. Consider the
following:
● |
Under federal law, all contributions by the
Western Union Political Action Committee, the sole political action
committee affiliated with the Company, are required to be reported, and a
list of such contributions is publicly available at the website of the
United States Federal Election
Commission. |
91 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Proposal 6 |
PROXY
STATEMENT |
● |
Contributions made directly by the Company are
most frequently made to state-level candidates and representatives, and
the Company believes that those persons generally publicly disclose such
contributions, as required by state law. |
|
|
● |
Federal law prohibits corporations from
contributing corporate treasury funds to federal candidates or federal
campaign committees. |
Given all of
the above, we believe that this proposal is unnecessary, costly and largely
duplicative of current reporting systems and accountability measures. We believe
that participating in the political process in a transparent manner is key to
good governance and an important way to enhance stockholder value and promote
healthy corporate citizenship. We do not believe, however, that implementing a
semiannual report on our political activity would increase stockholder value or
provide stockholders with any more meaningful information than is already
available. If adopted, the proposal would apply only to Western Union and to no
other company and would cause Western Union to incur undue costs and
administrative burdens without commensurate benefit to our
stockholders.
Required Vote; Recommendation
Only
The affirmative vote of the holders of a
majority of shares of the Companys Common Stock present in person or
represented by proxy at the Annual Meeting and entitled to vote on the subject
matter is required to approve this Proposal 6. Stockholders should be aware that
this stockholder proposal is simply a request that the Board take the action
stated in the proposal. Approval of this proposal may not result in the
requested action being taken by the Board, and therefore, its approval would not
effectuate the actions requested by the proposal.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE AGAINST PROPOSAL 6.
The Western Union Company Proxy
Statement |
| |
92 |
Table of Contents
Proposal 7 |
PROXY
STATEMENT |
|
Proposal 7 Stockholder
Proposal Regarding New Board
Committee |
NorthStar Asset Management Funded Pension
Plan, P.O. Box 301840, Boston, MA 02130, owner of more than $2,000 worth of
shares of the Companys Common Stock, has notified the Company that it intends
to present a proposal for consideration at the 2015 Annual Meeting of
Stockholders. As required by the Exchange Act, the text of the stockholder
proposal and supporting statement appear as submitted to the Company by the
proponent of the proposal. The Board of Directors and the Company accept no
responsibility for the contents of the proposal or the supporting
statement.
BOARD COMMITTEE ON HUMAN
RIGHTS
RESOLVED: Shareholders hereby amend
Article III of the By-Laws, by inserting a new Section 11:
Section 11. Board Committee on Human
Rights. There is established a Board Committee on Human Rights, to review
the implications of company policies, above and beyond matters of legal
compliance, for the human rights of individuals in the US and worldwide,
including assessing the impacts of company operations and supply chains on
resources and public welfare in host communities.
The Board of Directors is authorized, by
resolution, in its discretion and consistent with these By-Laws, the Articles of
Incorporation and applicable law to: (1) select the members of the Board
Committee on Human Rights, (2) provide said committee with funds for operating
expenses, (3) adopt a charter to govern said Committees operations, (4) empower
said Committee to solicit public input and to issue periodic reports to
shareholders and the public, at reasonable expense and excluding confidential
information, including but not limited to an annual report on the findings of
the Board Committee, and (5) any other measures within the Boards discretion
consistent with these By-Laws and applicable law. Nothing herein shall restrict
the power of the Board of Directors to manage the business and affairs of the
company. The Board Committee on Human Rights shall not incur any costs to the
company except as authorized by the Board of Directors.
SUPPORTING STATEMENT
As reported by the Interfaith Center on
Corporate Responsibility, the forceful exploitation of personsfor labor or
sexual purposesis the third largest illegal business globally. Due to our
Companys popularity as a reputable financial conduit, we may be unknowingly
complicit in human trafficking transactions and subsequent
exploitation.
The money transfer industry intersects
with the lives of migrant workers. The right of migrant workers to live abroad
safely, complete gainful work that benefits both themselves and their host
community, and send funds back to their home countries is vital to our companys
success. Challenges to our clients ability to migrate freely and safely will
harm our bottom line.
Our Companys continued operation without
a strong human rights policy poses serious risks to our reputation and share
value. Western Union has faced numerous lawsuits based on predatory fees and
unfair exchange rates, resulting in millions of shareholder dollars being spent
on settlements. The cost of unintentional involvement in violations of
fundamental human rights related to migration or trafficking must not be
underestimated.
The proposed by-law would establish a
separate Board Committee on Human Rights, which would elevate board level
oversight and governance regarding human rights issues raised by the companys
activities and policies and provide a vehicle to fulfill the Boards fiduciary
responsibilities for oversight of these issues. The proposed by-law would
establish the vehicle of a Board Committee, but would leave the process of
appointment and implementation of the Committee to the full Board of
Directors.
93 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Proposal 7 |
PROXY
STATEMENT |
BOARDS STATEMENT OPPOSING THE
PROPOSAL
After careful consideration, and for the
following reasons, the Board believes that the proposal is not in the best
interests of the Company or its stockholders, and the Board recommends voting
AGAINST this proposal.
The Company
believes that its current policies, practices and procedures demonstrate our
commitment to human rights. While we share
the proponents concern for human rights, we believe that adoption of this
proposal is unnecessary. The manner in which we conduct our global operations is
consistent with the spirit and intent of widely recognized international
principles aimed at promoting human rights. Although governments have the
primary duty to protect and ensure fulfillment of human rights, the Company
recognizes that it plays an important role in respecting human rights in the
communities in which it operates. Consider the following:
● |
The Company works cooperatively and
constructively with host governments, communities and nongovernmental
organizations and engages with subject matter experts who help build on
its understanding of human rights issues relevant to its business. |
|
|
● |
We are committed to operating in full
compliance with applicable laws in every country where we conduct business
and our standard business practices require adherence to local, state,
federal and international laws and regulations on human rights matters,
including with respect to forced labor and human trafficking, two concerns
highlighted in the proposal. |
|
|
● |
Our employees are required by our
Code of Conduct, which is available in the Corporate Governance section
of our Investor Relations website, to comply with the laws in the numerous
countries in which we operate. |
|
|
● |
The Company participates in the
United States Homeland Security Departments Blue Campaign to fight human
trafficking through training efforts. |
The
formation of a new Board Committee on Human Rights, as this proposal
contemplates, is unnecessary because the Company already has an established
Board committee that reviews and advises the Board regarding matters of public
policy and social responsibility. The
Corporate Governance and Public Policy Committee considers policies, programs
and practices concerning a broad array of public policy issues, including human
rights. This Committee also has the power to form sub-committees to focus on
particular issues of concern, making an amendment to the By-Laws and the
creation of another standing committee unnecessary. The formation of a new Board
Committee on Human Rights would add nothing to the range of substantive issues
currently considered by the existing committee and would, in fact, be
duplicative.
The adoption
of this proposal is potentially adverse to the interests of the Company and our
stockholders. Western Union has been a leader
in adopting good governance practices in recent years, including the
declassification of the Board, granting stockholders the right to call a special
meeting, and adopting a proxy access By-Law amendment. Adopting good
governance practices, however, should be driven by reasoned consideration and
thoughtful implementation rather than by good intentions that result in new but
unnecessary governance structures. The Board does not believe that amending the
By-Laws to require the establishment of a new committee on human rights is an
effective way for the Companys practices and goals to continually evolve and
improve in response to changing conditions. Instead, such an additional and
redundant committee would distract the Board from its other responsibilities to
the Company and its stockholders without adding to the Companys existing
commitment to human rights and social responsibility.
Required Vote
The affirmative vote of the holders of a
majority of the outstanding Common Stock entitled to vote on the subject matter
is required to approve this Proposal 7.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE AGAINST PROPOSAL 7.
The Western Union Company Proxy
Statement |
| |
94 |
Table of Contents
Equity Compensation Plan
Information |
PROXY
STATEMENT |
Equity Compensation Plan
Information
The following table gives information, as
of December 31, 2014, about our Common Stock that may be issued upon the
exercise of options and settlement of other equity awards under all compensation
plans under which equity securities are reserved for issuance. The Western Union
Company 2006 Long-Term Incentive Plan and The Western Union Company 2006
Non-Employee Director Equity Compensation Plan are our only equity compensation
plans pursuant to which our equity securities are authorized for
issuance.
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities |
|
|
|
|
|
|
|
|
|
|
|
|
remaining available |
|
|
|
|
|
|
|
|
|
|
|
|
for future issuance |
|
|
|
|
|
|
|
|
|
|
|
|
under equity |
|
|
Number of securities to be |
|
Weighted-average |
|
compensation plans |
|
|
issued upon exercise of |
|
exercise price of |
|
(excluding |
|
|
outstanding options, |
|
outstanding options, |
|
securities reflected in |
Plan category |
|
warrants and
rights |
|
warrants and
rights |
|
column
(a)) |
|
|
(a) |
|
(b) |
|
(c) |
Equity compensation plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
approved by security
holders |
|
|
24,047,620 |
(1) |
|
|
|
17.80 |
(2) |
|
|
|
37,556,580 |
(3) |
Equity compensation plans not |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
approved by security
holders |
|
|
|
|
|
|
|
N/A |
|
|
|
|
|
|
Total |
|
|
24,047,620 |
(1) |
|
|
|
17.80 |
(2) |
|
|
|
37,556,580 |
(3) |
Footnotes:
(1) |
|
Includes 7,610,616 restricted
stock units, performance-based restricted stock units, deferred stock
units, and bonus stock units that were outstanding on December 31, 2014
under The Western Union Company 2006 Long-Term Incentive Plan and The
Western Union Company 2006 Non-Employee Director Equity Compensation Plan.
Restricted stock unit awards, deferred stock unit awards and bonus stock
units may be settled only for shares of Common Stock on a one-for-one
basis. The number included for performance-based restricted stock units
reflects grant date units awarded. Assuming maximum payout for
performance-based restricted stock unit grants that have not completed the
required performance period, the number of securities to be issued would
increase by 403,818. Please see the Compensation Discussion and Analysis
section of this Proxy Statement for further information regarding the 2014
performance-based restricted stock units, including the performance
metrics applicable to such awards. |
|
|
|
(2) |
|
Only option awards were used
in computing the weighted-average exercise price. |
|
(3) |
|
This amount represents shares
of Common Stock available for issuance under The Western Union Company
2006 Long-Term Incentive Plan and The Western Union Company 2006
Non-Employee Director Equity Compensation Plan. Awards available for grant
under The Western Union Company 2006 Long-Term Incentive Plan include
stock options, stock appreciation rights, restricted stock, restricted
stock units, bonus stock, bonus stock units, performance grants, and any
combination of the foregoing awards. Awards available for grant under The
Western Union Company 2006 Non-Employee Director Equity Compensation Plan
include non-qualified stock options, stock appreciation rights, restricted
stock, restricted stock units, unrestricted stock units, and any
combination of the foregoing awards. |
95 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Stock Beneficially Owned by Directors,
Executive Officers and Our Largest Stockholders |
PROXY
STATEMENT |
Stock Beneficially Owned by Directors,
Executive Officers and Our Largest Stockholders
The following table sets forth the
beneficial ownership of Common Stock by each person or group that is known by us
to be the beneficial owner of more than five percent (5%) of our Common Stock,
all directors and nominees, each of the executive officers named in the 2014
Summary Compensation Table contained in this Proxy Statement, and all directors
and executive officers as a group. Except as otherwise noted, (i) the
information is as of March 19, 2015, (ii) each person has sole voting and
investment power of the shares, and (iii) the business address of each person
shown below is 12500 East Belford Avenue, Englewood, CO 80112.
|
|
|
|
Amount
and |
|
Percentage
of |
|
|
|
|
Nature
of |
|
Outstanding |
Name of Beneficial Owner |
|
Address |
|
Beneficial
Ownership |
|
Shares |
5% Owners |
|
|
|
|
|
|
|
|
Capital Research Global Investors, a
division of |
|
333 South Hope Street, |
|
66,309,190 |
(1) |
|
12.7% |
(1) |
Capital Research and Management
Company |
|
Los
Angeles, CA 90071 |
|
|
|
|
|
|
FMR
LLC |
|
245
Summer Street, Boston, MA 02210 |
|
43,250,394 |
(2) |
|
8.275% |
(2) |
The
Vanguard Group |
|
100
Vanguard Boulevard, Malvern, PA 19355 |
|
42,471,296 |
(3) |
|
8.12% |
(3) |
BlackRock, Inc. |
|
55
East 52nd Street, New York, NY 10022 |
|
32,318,450 |
(4) |
|
6.2% |
(4) |
T. Rowe Price Associates, Inc. |
|
100 E. Pratt Street, |
|
31,757,599 |
(5) |
|
6.0% |
(5) |
|
|
Baltimore, MD 21202 |
|
|
|
|
|
|
Directors and Named Executive Officers(6) |
|
|
|
|
|
|
|
|
Dinyar S. Devitre |
|
|
|
172,996 |
(7) |
|
* |
|
Hikmet Ersek |
|
|
|
2,202,332 |
|
|
* |
|
Richard A. Goodman |
|
|
|
36,814 |
|
|
* |
|
Jack M. Greenberg |
|
|
|
493,513 |
|
|
* |
|
Betsy D. Holden |
|
|
|
58,980 |
|
|
* |
|
Jeffrey A. Joerres |
|
|
|
0 |
|
|
* |
|
Linda Fayne Levinson |
|
|
|
143,253 |
|
|
* |
|
Roberto G. Mendoza |
|
|
|
171,347 |
|
|
* |
|
Michael A. Miles, Jr. |
|
|
|
53,980 |
|
|
* |
|
Robert W. Selander |
|
|
|
26,818 |
|
|
* |
|
Frances Fragos Townsend |
|
|
|
39,883 |
|
|
* |
|
Solomon D. Trujillo |
|
|
|
67,952 |
(8) |
|
* |
|
Odilon Almeida |
|
|
|
155,529 |
|
|
* |
|
Rajesh K. Agrawal |
|
|
|
432,982 |
|
|
* |
|
John R. Dye |
|
|
|
130,494 |
|
|
* |
|
J.
David Thompson |
|
|
|
193,421 |
|
|
* |
|
All directors and executive officers as a
group |
|
|
|
|
|
|
|
|
(20
persons) |
|
|
|
4,996,951 |
|
|
* |
|
* Less than 1% |
|
|
|
|
|
|
|
|
The Western Union Company Proxy
Statement |
| |
96 |
Table of Contents
Stock Beneficially Owned by
Directors, Executive Officers and Our Largest Stockholders |
PROXY
STATEMENT |
(1) |
The number of shares held and
percentage of outstanding shares were obtained from the holders Amendment
No. 2 to Schedule 13G filing with the Securities and Exchange Commission
dated February 13, 2015, which reports ownership as of December 31, 2014.
The Schedule 13G filing indicates that the holder had sole power to vote
or direct the vote of, and sole power to dispose or to direct the
disposition of, 66,309,190 shares, and shared power to vote or direct the
vote of, and shared power to dispose or to direct the disposition of, no
shares. |
|
|
(2) |
The number of shares held and
percentage of outstanding shares were obtained from the holders Amendment
No. 1 to Schedule 13G filing with the Securities and Exchange Commission
dated February 13, 2015 which reports ownership as of December 31, 2014.
The Schedule 13G filing indicates that the holder had sole power to vote
or direct the vote of 1,072,118 shares, sole power to dispose or to direct
the disposition of 43,250,394 shares, and shared power to vote or direct
the vote of, and shared power to dispose of or to direct the disposition
of, no shares. |
|
(3) |
The number of shares held and
percentage of outstanding shares were obtained from the holders Amendment
No. 1 to Schedule 13G filing with the Securities and Exchange Commission
dated February 10, 2015, which reports ownership as of December 31, 2014.
The Schedule 13G filing indicates that the holder had sole power to vote
or direct the vote of 927,501 shares, sole power to dispose or to direct
the disposition of 41,599,307 shares, shared power to vote or direct the
vote of no shares, and shared power to dispose of or to direct the
disposition of 871,989 shares. |
|
(4) |
The number of shares held and
percentage of outstanding shares were obtained from the holders Amendment
No. 4 to Schedule 13G filing with the Securities and Exchange Commission
dated February 9, 2015, which reports ownership as of December 31, 2014.
The Schedule 13G filing indicates that the holder had sole power to vote
or direct the vote of 27,725,115, sole power to dispose or to direct the
disposition of 32,318,450 shares, and shared power to vote or direct the
vote of, and shared power to dispose or to direct the disposition of, no
shares. |
|
(5) |
The number of shares held and
percentage of outstanding shares were obtained from the holders Schedule
13G filing with the Securities and Exchange Commission dated February 12,
2015, which reports ownership as of December 31, 2014. The Schedule 13G
filing indicates that the holder had sole power to vote or direct the vote
of 11,366,515, sole power to dispose or to direct the disposition of
31,655,749 shares, and shared power to vote or direct the vote of, and
shared power to dispose or to direct the disposition of, no
shares. |
|
(6) |
The number of shares reported
includes shares covered by options that are exercisable within 60 days of
March 19,2015 as follows: Mr. Devitre, 149,196; Mr. Ersek, 1,882,693; Mr.
Goodman, 36,814; Mr. Greenberg, 420,801; Ms. Holden, 53,980; Mr. Joerres
0; Ms. Fayne Levinson, 143,253; Mr. Mendoza, 171,347; Mr. Miles, 53,980;
Mr. Selander, 26,818; Ms. Fragos Townsend 39,883; Mr. Trujillo, 56,152;
Mr. Almeida 144,591; Mr. Agrawal, 388,432; Mr. Dye, 101,796; Mr. Thompson,
127,991; all directors and executive officers as a group, 4,312,385. The
number of shares reported includes RSUs that will vest within 60 days of
March 19, 2015 as follows: Mr. Almeida, 6,940; Mr. Thompson,
34,281. |
|
(7) |
Mr. Devitre shares with his
spouse the power to vote or direct the vote of, and the power to dispose
or direct the disposition of, 23,800 shares. |
|
(8) |
Mr. Trujillo shares with his
spouse through a family trust the power to vote or direct the vote of, and
the power to dispose or direct the disposition of, 11,800
shares. |
Certain Transactions and Other
Matters |
PROXY
STATEMENT |
Certain Transactions and Other
Matters
We or one of our subsidiaries may
occasionally enter into transactions with certain related persons. Related
persons include our executive officers, directors, nominees for directors, 5% or
more beneficial owners of our Common Stock and immediate family members of these
persons. We refer to transactions involving amounts in excess of $120,000 and in
which the related person has a direct or indirect material interest as related
person transactions. Each related person transaction must be
approved or ratified in accordance with
the Companys written Related Person Transactions Policy by the Corporate
Governance and Public Policy Committee of the Board of Directors or, if the
Corporate Governance and Public Policy Committee of the Board of Directors
determines that the approval or ratification of such related person transaction
should be considered by all disinterested members of the Board of Directors, by
the vote of a majority of such disinterested members.
97 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
Certain Transactions and Other
Matters |
PROXY
STATEMENT |
The Corporate Governance and Public Policy
Committee considers all relevant factors when determining whether to approve or
ratify a related person transaction including, without limitation, the
following:
● |
the size of the transaction and the
amount payable to a related person; |
● |
the nature of the interest of the
related person in the transaction; |
● |
whether the transaction may involve
a conflict of interest; and |
● |
whether the transaction involves the
provision of goods or services to the Company that are available from
unaffiliated third parties and, if so, whether the transaction is on terms
and made under circumstances that are at least as favorable to the Company
as would be available in comparable transactions with or involving
unaffiliated third parties. |
The Companys Related Person Transactions
Policy is available through the Investor Relations, Corporate Governance
portion of the Companys website, www.wu.com.
Section 16(a) Beneficial
Ownership Reporting Compliance |
PROXY
STATEMENT |
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Exchange
Act requires the Companys directors, executive officers and persons who own
more than 10% of the Companys Common Stock, as well as certain affiliates of
such persons, to file with the SEC and the NYSE initial reports of ownership and
reports of changes in ownership of the Companys Common Stock. Based solely on
the Companys review of the reports that have been filed by or on behalf of such
persons in this regard and written representations from our executive officers
and directors that no other reports were required, during and for the fiscal
year ended December 31, 2014, the Company believes that all Section 16(a) filing
requirements applicable to the Companys directors,
executive officers, and greater than 10%
stockholders were met, except that one Form 4 filing was inadvertently filed
late for Mr. Almeida due to a clerical error.
* * *
This Proxy Statement is provided to you at
the direction of the Board of Directors.
John R. Dye
Executive Vice
President,
General Counsel and
Secretary
The Western Union Company Proxy
Statement |
| |
98 |
Table of Contents
The Western Union Company
2015 Long-Term Incentive Plan
I.
Introduction
1.1. Purposes. The purposes of The Western Union Company 2015 Long-Term
Incentive Plan (the Plan) are (i) to advance the interests of The Western
Union Company (the Company) by attracting and retaining high caliber
employees, and other key individuals who perform services for the Company, a
Subsidiary or an Affiliate, (ii) to align the interests of the Companys
stockholders and recipients of awards under this Plan by increasing the
proprietary interest of such recipients in the Companys growth and success and
(iii) to motivate award recipients to act in the long-term best interests of the
Company and its stockholders.
1.2. Definitions.
Adjustment
Events shall have the meaning set forth
in the definition of Performance Measures in this Section 1.2.
Affiliate shall mean any entity of which the Company owns or controls,
directly or indirectly, less than 50% but at least 20% of the outstanding shares
of stock normally entitled to vote for the election of directors (or comparable
equity participation and voting power).
Agreement shall mean the written or electronic agreement evidencing an
award hereunder between the Company and the recipient of such award and shall
include any terms and conditions that may apply to such award.
Board shall mean the Board of Directors of the Company.
Bonus Stock shall mean shares of Common Stock that are not subject to a
Restriction Period or Performance Measures.
Bonus Stock
Award shall mean an award of Bonus
Stock.
Bonus Stock
Unit shall mean the right to receive one
share of Common Stock or, in lieu thereof and to the extent provided for in the
Agreement, the Fair Market Value thereof in cash, which is not subject to a
Restriction Period or Performance Measures.
Bonus Stock Unit
Award shall mean an award of Bonus Stock
Units under this Plan.
Cause shall mean, unless otherwise defined in an Agreement, the
willful and continued failure to substantially perform the duties assigned by
the Company, a Subsidiary or an Affiliate (other than a failure resulting from
the award recipients Disability), the willful engaging in conduct which is
demonstrably injurious to the Company, a Subsidiary or an Affiliate (monetarily
or otherwise), any act of dishonesty, the commission of a felony, the continued
failure to meet performance standards, excessive absenteeism, or a significant
violation of any statutory or common law duty of loyalty to the Company, a
Subsidiary or an Affiliate.
Change in
Control shall mean:
(a) the acquisition by any individual,
entity or group (a Person), including any person within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act, of 35% or
more of either (i) the then outstanding shares of common stock of the Company
(the Outstanding Common Stock) or (ii) the combined voting power of the
then outstanding securities of the Company entitled to vote generally in the
election of directors (the Outstanding Voting Securities); excluding,
however, the following: (A) any acquisition directly from the Company (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 the Company), (B) any acquisition by the
Company, (C) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company 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 the Company or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company) shall become the beneficial owner of
A-1 |
| |
The Western Union Company Proxy
Statement |
Table of Contents
35% or more of the Outstanding Common
Stock or 35% or more of the Outstanding Voting Securities by reason of an
acquisition by the Company, and such Person shall, after such acquisition by the
Company, 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) during any twenty-four (24) month
period, the cessation of individuals, who constitute the Board as of the date
this Plan is adopted by the Board (the Incumbent Board), to constitute
at least a majority of such Incumbent Board; provided that any individual who
becomes a director of the Company subsequent to the date this Plan is approved
by the Board whose election, or nomination for election by the Companys
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 the Company 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 the Company (a Corporate Transaction); excluding,
however, a Corporate Transaction pursuant to which (i) all or substantially all
of the individuals or entities who are the beneficial owners, respectively, of
the Outstanding Common Stock and the Outstanding Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly or
indirectly, more than 50% of, respectively, the outstanding shares of common
stock, and the combined voting power of the outstanding securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Corporate Transaction (including, without
limitation, a
corporation which as a result of such
transaction owns the Company or all or substantially all of the Companys 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: the Company; any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; the corporation resulting from such Corporate
Transaction; and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 35% or more of the Outstanding
Common Stock or the Outstanding Voting Securities, as the case may be) will
beneficially own, directly or indirectly, 35% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding securities
of such corporation entitled to vote generally in the election of directors and
(iii) individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the corporation
resulting from such Corporate Transaction; or
(d) the consummation of a plan of complete
liquidation or dissolution of the Company.
Code shall mean the United States Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
Committee shall mean the committee designated by the Board or a
subcommittee thereof, consisting of two or more members of the Board, each of
whom shall be (i) a non-employee director within the meaning of Rule 16b-3
under the Exchange Act, (ii) an outside director within the meaning of Section
162(m) of the Code and (iii) independent within the meaning of the rules of
the New York Stock Exchange or, if the Common Stock is not listed on the New
York Stock Exchange, within the meaning of the rules of the principal stock
exchange on which the Common Stock is then traded.
Common Stock shall mean the common stock of the
Company.
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Company has the meaning specified in Section 1.1.
Corporate
Transaction shall have the meaning set
forth in the definition of Change in Control in this Section 1.2.
Deferred Stock
Unit shall mean the right to receive one
share of Common Stock or, in lieu thereof and to the extent provided for in the
Agreement, the Fair Market Value thereof in cash, which is not subject to a
Restriction Period or Performance Measures. The Committee shall specify in the
Agreement whether a Deferred Stock Unit Award shall be payable in Common Stock,
cash, or any combination thereof.
Deferred Stock Unit
Award shall mean an award of Deferred
Stock Units under this Plan.
Disability shall mean the inability of the holder of an award to perform
substantially such holders duties and responsibilities due to a physical or
mental condition (i) that would entitle such holder to benefits under the
Companys Long-Term Disability Plan (or similar disability plan of the Company,
a Subsidiary or an Affiliate in which such holder is a participant) or if the
Committee deems it relevant, any disability rights provided as a matter of local
law or (ii) if such holder is not eligible for long-term disability benefits
under any plan sponsored by the Company, a Subsidiary, or an Affiliate, that
would, as determined by the Committee, entitle such holder to benefits under the
Companys Long-Term Disability Plan if such holder were eligible therefor. In
the case of Incentive Stock Options, the term Disability shall have the same
meaning as Permanent and Total Disability as such term is defined in this
Section 1.2.
Exchange Act shall mean the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
Fair Market
Value shall mean the closing price of a
share of Common Stock as reported on the New York Stock Exchange or in the New
York Stock Exchange Composite Transactions, as the case may be, on the date as
of which such value is being determined; provided, however, that
if there shall be no reported transactions for such date, Fair Market Value
shall be based on the appropriate closing price on the next preceding date
for which transactions were reported; and
provided further that if Fair Market Value for any date cannot be so determined,
Fair Market Value shall be determined by the Committee by whatever means or
methods as the Committee, in the good faith exercise of its discretion, shall at
such time deem appropriate and in compliance with Section 409A of the Code.
Notwithstanding the preceding sentence, solely for purposes of determining an
award holders tax payment obligations under Section 5.5, in lieu of the
definition of Fair Market Value in the preceding sentence, the Committee may
determine that Fair Market Value shall mean the average of the high and low
transaction prices of a share of Common Stock as reported in the New York Stock
Exchange Composite Transactions on the date as of which such value is being
determined or, if there shall be no reported transactions for such date, on the
next preceding date for which transactions were reported.
Free-Standing
SAR shall mean a SAR which is not
granted in tandem with, or by reference to, a Stock Option, which entitles the
holder thereof to receive, upon exercise, shares of Common Stock (which may be
Restricted Stock) or, to the extent provided in the applicable Agreement, cash
or a combination thereof, with an aggregate value equal to the excess of the
Fair Market Value of one share of Common Stock on the date of exercise over the
base price of such SAR, multiplied by the number of such SARs which are
exercised.
Incentive Stock
Option shall mean an option to purchase
shares of Common Stock that meets the requirements of Section 422 of the Code,
or any successor provision, which is intended by the Committee to constitute an
Incentive Stock Option.
Incumbent
Board shall have the meaning set forth
in the definition of Change in Control in this Section 1.2.
Non-Employee
Director shall mean a member of the
Board who is not an employee of the Company or any Subsidiary or
Affiliate.
Nonqualified Stock
Option shall mean an option to purchase
shares of Common Stock which is not an Incentive Stock
Option.
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Outstanding Common
Stock shall have the meaning set forth
in the definition of Change in Control in this Section 1.2.
Outstanding Voting
Securities shall have the meaning set
forth in the definition of Change in Control in this Section 1.2.
Performance
Grant shall mean an award conferring a
right, contingent upon the attainment of specified Performance Measures within a
specified Performance Period, to receive shares of Common Stock, Restricted
Stock, Restricted Stock Units, cash, or any combination thereof, as determined
by the Committee or as evidenced in the Agreement relating to such Performance
Grant.
Performance
Measures shall mean the criteria and
objectives, established by the Committee, which must be satisfied or met (i) as
a condition to the grant or exercisability of all or a portion of a Stock Option
or SAR, (ii) as a condition to the grant of a Stock Award or (iii) during the
applicable Restriction Period or Performance Period as a condition to the
holders receipt, in the case of a Stock Award, of the shares of Common Stock
subject to such award and/or of payment with respect to such award, or, in the
case of a Performance Grant, of the shares of Common Stock, Restricted Stock or
Restricted Stock Units subject to such award and/or of payment with respect to
such award. In the case of an award that is intended to be qualified
performance-based compensation under Section 162(m) of the Code and the
regulations thereunder, such criteria and objectives shall be one or more of the
following corporate-wide or subsidiary, division, operating unit or individual
measures: the attainment by a share of Common Stock of a specified value within
or for a specified period of time; earnings; earnings per share; earnings before
interest expense and taxes (EBIT); earnings before interest, taxes,
depreciation, and amortization (EBITDA); return on equity; return on assets;
return on total capital; return to stockholders (including dividends); total
shareholder return; revenues; cash flow(s); cost reduction goals; net income;
operating income; profit margin; expense management; economic profit; economic
value added; customer satisfaction; productivity; employee retention; succession
management; management of the cost of
insurance claims; achievement of
regulatory compliance performance goals; measurable marketing effectiveness;
achievement of diversity goals; or any combination of the foregoing. Each such
goal may be expressed on an absolute or relative basis and may include
comparisons based on current internal targets, the past performance of the
Company (including the performance of one or more subsidiaries, divisions, or
operating units) or the past or current performance of other companies (or a
combination of such past and current performance). If the Committee desires that
compensation payable pursuant to any award subject to Performance Measures be
qualified performance-based compensation within the meaning of Section 162(m)
of the Code, the Performance Measures shall satisfy all applicable requirements
imposed under United States Treasury Regulations promulgated under Section
162(m) of the Code, including the requirement that such Performance Measures be
stated in terms of an objective formula or standard. The applicable Performance
Measures may be applied on a pre- or post-tax basis and may be adjusted in
accordance with Section 162(m) of the Code to include or exclude objectively
determinable components of any Performance Measure, including, without
limitation, special charges such as restructuring or impairment charges, debt
refinancing costs, extraordinary or noncash items, unusual, nonrecurring or
one-time events affecting the Company or its financial statements or changes in
law or accounting principles (Adjustment Events). In the sole discretion of
the Committee, unless such action would cause a grant to a covered employee
(within the meaning of Section 162(m) of the Code) to fail to qualify as
qualified performance-based compensation under Section 162(m) of the Code, the
Committee may amend or adjust the Performance Measures or other terms and
conditions of an outstanding award in recognition of any Adjustment Events. With
respect to participants who are not covered employees and who, in the
Committees judgment, are not likely to be covered employees at any time during
the applicable Performance Period or during any period in which an award may be
paid following a Performance Period, the performance goals may consist of any
objective or subjective corporate-wide or subsidiary, division, operating unit
or individual measures, whether or not listed herein.
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Performance
Period shall mean any period designated
by the Committee or specified in an Agreement during which (i) the Performance
Measures applicable to an award shall be measured and (ii) the conditions to
vesting applicable to an award shall remain in effect.
Permanent and Total
Disability shall have the meaning set
forth in Section 22(e)(3) of the Code or any successor thereto.
Person shall have the meaning set forth in the definition of Change
in Control set forth in this Section 1.2.
Plan shall have the meaning set forth in Section 1.1.
Plan Share
Limit shall have the meaning set forth
in Section 1.5.
Post-Termination Exercise
Period shall mean the period specified
in or pursuant to Section 2.3(a), Section 2.3(b), Section 2.3(d) or Section
2.3(e) following termination of employment with or service to the Company during
which a Stock Option or SAR may be exercised.
Prior Plan shall mean The Western Union Company 2006 Long-Term Incentive
Plan and each other plan previously maintained by the Company under which equity
awards remain outstanding as of the effective date of this Plan.
Related
Employment shall mean the employment or
performance of services by an individual for an employer that is neither the
Company nor a Subsidiary nor an Affiliate, provided that (i) such employment or
performance of services is undertaken by the individual at the request of the
Company, a Subsidiary or an Affiliate, (ii) immediately prior to undertaking
such employment or performance of services, the individual was employed by or
performing service for the Company, a Subsidiary, or an Affiliate or was engaged
in Related Employment and (iii) such employment or performance of services is in
the best interests of the Company as determined by the Committee and is
recognized by the Committee, in its discretion, as Related Employment. The death
or Disability of an individual or his or her involuntary termination of
employment during a period of Related Employment shall be treated, for purposes
of this Plan, as if the death,
Disability or involuntary termination had
occurred while the individual was employed by or performing services for the
Company, a Subsidiary or an Affiliate.
Restricted
Stock shall mean shares of Common Stock
which are subject to a Restriction Period and which may, in addition thereto, be
subject to the attainment of specified Performance Measures within a specified
Performance Period.
Restricted Stock
Award shall mean an award of Restricted
Stock under this Plan.
Restricted Stock
Unit shall mean the right to receive one
share of Common Stock or, in lieu thereof and to the extent provided for in the
Agreement, the Fair Market Value thereof in cash, which shall be contingent upon
the expiration of a specified Restriction Period and which may, in addition
thereto, be contingent upon the attainment of specified Performance Measures
within a specified Performance Period. The Committee shall specify in the
Agreement whether a Restricted Stock Unit Award shall be payable in Common
Stock, cash, or any combination thereof.
Restricted Stock Unit
Award shall mean an award of Restricted
Stock Units under this Plan.
Restriction
Period shall mean any period designated
by the Committee during which (i) the Common Stock subject to a Restricted Stock
Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise
encumbered or disposed of, except as provided in this Plan or the Agreement
relating to such award or (ii) the vesting conditions applicable to a Restricted
Stock Unit Award shall remain in effect.
Retirement shall mean an employees termination of employment with or
service to the Company (other than a termination by reason of death or
Disability or for Cause) on or after (i) age 65, or (ii) age 55, provided the
employee has completed at least 10 Years of Service; provided,
however, that any employee who is Retirement eligible under the Prior
Plan as of the effective date of this Plan shall be deemed Retirement eligible
for purposes of this Plan.
SAR shall mean a stock appreciation right which may be a Free-Standing SAR
or a Tandem SAR.
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Stock Award shall mean a Restricted Stock Award, a Restricted Stock Unit
Award, a Bonus Stock Award, a Bonus Stock Unit Award or a Deferred Stock Unit
Award.
Stock Option shall mean a Nonqualified Stock Option or an Incentive Stock
Option.
Subsidiary shall mean any entity of which the Company owns or controls,
directly or indirectly, 50% or more of the outstanding shares of stock normally
entitled to vote for the election of directors (or comparable equity
participation and voting power).
Substitute
Award shall mean an award granted under
this Plan upon the assumption of, or in substitution for, outstanding equity
awards previously granted by a company or other entity in connection with a
corporate transaction, including a merger, combination, consolidation or
acquisition of property or stock; provided, however, that in no
event shall the term Substitute Award be construed to refer to an award made
in connection with the cancellation and repricing of a Stock Option or
SAR.
Tandem SAR shall mean a SAR which is granted in tandem with, or by
reference to, a Stock Option (including a Nonqualified Stock Option granted
prior to the date of grant of the SAR), which entitles the holder thereof to
receive, upon exercise of such SAR and surrender for cancellation of all or a
portion of such Stock Option, shares of Common Stock (which may be Restricted
Stock) or, to the extent provided in the applicable Agreement, cash or a
combination thereof, with an aggregate value equal to the excess of the Fair
Market Value of one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of shares of Common Stock subject to
such Stock Option, or portion thereof, which is surrendered.
Tax Date shall have the meaning set forth in Section 5.5.
Ten Percent
Holder shall have the meaning set forth
in Section 2.1(a).
Years of
Service shall mean the number of full
years of uninterrupted service as a regular full-time employee or part-time
employee from such employees most recent date of hire. Years of Service also
includes (i) time spent
on Company-approved leave of absences,
provided that no more than one (1) cumulative Year of Service shall be credited
for such leave of absences and (ii) prior service with certain acquired
companies or other affiliated companies provided the prior service is negotiated
for in the applicable acquisition agreement.
1.3. Administration.
This Plan shall be administered by the
Committee. The Committee may grant any one or a combination of the following
awards under this Plan to eligible persons: (i) Stock Options (in the form of
Nonqualified Stock Options or Incentive Stock Options); (ii) SARs (in the form
of Free-Standing SARs or Tandem SARs); (iii) Stock Awards (in the form of
Restricted Stock Awards, Restricted Stock Unit Awards, Bonus Stock Awards, Bonus
Stock Unit Awards, and Deferred Stock Unit Awards); and (iv) Performance
Grants.
The Committee shall, subject to the terms
of this Plan, select eligible persons for participation in this Plan and
determine the form, amount and timing of each award to such persons, the
exercise price or base price associated with the award, the time and conditions
of exercise or settlement of the award and all other terms and conditions of the
award, including, without limitation, the form of the Agreement evidencing the
award.
The Committee shall, subject to the terms
of this Plan, interpret this Plan and the application thereof, establish, amend
and revoke rules and regulations it deems necessary or desirable for the
administration of this Plan, adopt sub-plans applicable to specific
Subsidiaries, Affiliates or locations and may impose, incidental to the grant of
an award, conditions with respect to the award, such as limiting competitive
employment or other activities to the extent permitted under local law. The
Committee may require, as a condition to the issuance, exercise, settlement or
acceptance of an award under this Plan, that the award recipient agree to
mandatory arbitration to settle any disputes relating to such award. All such
interpretations, rules, regulations and conditions shall be final, binding and
conclusive.
The Committee may delegate some or all of
its power and authority hereunder to the Board or, subject to applicable law, to
another committee, a member of the Board, the President and Chief Executive
Officer or such other
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executive officer of the Company as the
Committee deems appropriate; provided, however, that (i) the
Committee may not delegate its power and authority to the Board, another
committee, a member of the Board, the President and Chief Executive Officer or
other executive officer of the Company with regard to the grant of an award to
any person who is a covered employee within the meaning of Section 162(m) of
the Code or who, in the Committees judgment, is likely to be a covered employee
at any time during the period an award hereunder to such employee would be
outstanding and (ii) the Committee may not delegate its power and authority to
another committee, a member of the Board, the President and Chief Executive
Officer or other executive officer of the Company with regard to (y) the
selection for participation in this Plan of an officer, Non-Employee Director or
other person subject to Section 16 of the Exchange Act or decisions concerning
the timing, pricing or amount of an award to such an officer, Non-Employee
Director or other person and (z) any decision regarding the impact of a Change
in Control on awards issued under the Plan.
No member of the Board or Committee, and
neither the President and Chief Executive Officer nor any other executive
officer to whom the Committee delegates any of its power and authority
hereunder, shall be liable for any act, omission, interpretation, construction
or determination made in connection with this Plan in good faith, and the
members of the Board and the Committee and the President and Chief Executive
Officer or other executive officers shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including attorneys fees) arising therefrom to the full extent permitted by
law (except as otherwise may be provided in the Companys Certificate of
Incorporation and/or By-laws) and under any directors and officers liability
insurance that may be in effect from time to time.
A majority of the Committee shall
constitute a quorum. The acts of the Committee shall be either (i) acts of a
majority of the members of the Committee present at any meeting at which a
quorum is present or (ii) acts approved in writing by all of the members of the
Committee without a meeting.
1.4. Eligibility.
Participants in this Plan shall consist of
such officers, other employees, Non-Employee Directors, consultants, independent
contractors, agents and persons expected to become officers, other employees,
Non-Employee Directors, consultants, independent contractors and agents of the
Company, its Subsidiaries and its Affiliates, as the Committee in its sole
discretion may select from time to time. The Committees selection of a person
to participate in this Plan at any time shall not require the Committee to
select such person to participate in this Plan at any other time.
1.5. Shares
Available.
(a) Plan Share Limit. Subject to
adjustment as provided in Section 5.7, (i) 31,000,000 shares of Common Stock
shall initially be available for awards under this Plan (the Plan Share
Limit), and (ii) no more than 31,000,000 shares of Common Stock in the
aggregate may be issued under this Plan in connection with Incentive Stock
Options. The number of shares of Common Stock that remain available for future
grants under the Plan shall be reduced by the sum of the aggregate number of
shares of Common Stock which become subject to outstanding Stock Options,
outstanding Free-Standing SARs, outstanding Stock Awards and outstanding
Performance Grants denominated in shares of Common Stock.
The number of shares of Common Stock
available for awards under this Plan shall not be reduced by (i) the number of
shares of Common Stock subject to Substitute Awards or (ii) available shares
under a stockholder approved plan of a company or other entity which was a party
to a corporate transaction with the Company (as appropriately adjusted to
reflect such corporate transaction) which become subject to awards granted under
this Plan (subject to applicable stock exchange requirements).
(b) Increases. The Plan Share
Limit, as reduced pursuant to Section 1.5(a), shall be increased by shares of
Common Stock subject to an outstanding award granted under this Plan or the
Prior Plan that are not issued or delivered by reason of (i) the expiration,
termination, cancellation or forfeiture of such award (excluding shares subject
to a Stock Option cancelled upon settlement in shares of
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a related Tandem SAR or shares subject to
a Tandem SAR cancelled upon exercise of a related Stock Option) or (ii) the
settlement of such award in cash; provided, however, that shares
of Common Stock subject to an award under this Plan shall not again be available
for issuance under this Plan if such shares are (x) shares that were subject to
a Stock Option or a SAR and were not issued or delivered upon the net settlement
or net exercise of such Stock Option or SAR, (y) shares delivered to or withheld
by the Company to pay the purchase price or the withholding taxes related to an
outstanding award or (z) shares repurchased by the Company on the open market
with the proceeds of an option exercise.
(c) Source of Shares. Shares of
Common Stock shall be made available from authorized but unissued shares,
treasury shares, reacquired shares, or any combination thereof.
1.6. Per Person Limits.
To the extent necessary for an award to be
qualified performance-based compensation under Section 162(m) of the Code and
the regulations thereunder (i) the maximum number of shares of Common Stock with
respect to which Stock Options or SARs, or a combination thereof, may be granted
during a calendar year to any person shall be 2,200,000, subject to adjustment
as provided in Section 5.7, (ii) the maximum number of shares of Common Stock
with respect to which Stock Awards subject to Performance Measures or
Performance Grants denominated in Common Stock that may be earned by any person
for each 12-month period during a Performance Period shall be 2,200,000, subject
to adjustment as provided in Section 5.7, and (iii) the maximum amount that may
be earned by any person for each 12-month period during a Performance Period
with respect to Performance Grants denominated in cash shall be $8,000,000;
provided, however, that each of the per person limits set forth in
this sentence shall be multiplied by two for awards granted to a participant in
the year in which such participants employment with the Company commences. The
aggregate grant date fair value of shares of Common Stock that may be granted
during any fiscal year of the Company to any Non-Employee Director shall not
exceed $800,000; provided, however, that (i) the limit set forth
in this sentence shall be multiplied by two in the year in which a Non-Employee
Director commences service
on the Board and (ii) the limit set forth
in this sentence shall not apply to awards made pursuant to an election to
receive the award in lieu of all or a portion of fees received for service on
the Board or any committee thereunder.
1.7. Employment.
Except as provided otherwise in this Plan or
an Agreement, for purposes of this Plan, references to employment with the
Company or employment with or service to the Company shall mean the employment
with or service to the Company, a Subsidiary or an Affiliate, including
transfers of employment between the Company, a Subsidiary and an Affiliate,
approved leaves of absence (or leaves protected under applicable local law), and
Related Employment.
II. Stock Options and
Stock Appreciation Rights
2.1. Stock Options.
The Committee may, in its discretion, grant
Stock Options to such eligible persons as may be selected by the Committee. Each
Stock Option, or portion thereof, that is not an Incentive Stock Option shall be
a Nonqualified Stock Option. An Incentive Stock Option may not be granted to any
person who is not an employee of the Company or any parent or subsidiary (as
defined in Section 424 of the Code). Each Incentive Stock Option shall be
granted within ten years of the date this Plan is adopted by the Board. To the
extent the aggregate Fair Market Value (determined as of the date of grant) of
shares of Common Stock with respect to which options designated as Incentive
Stock Options are exercisable for the first time by a participant during any
calendar year (under this Plan or any other plan of the Company, or any parent
or subsidiary as defined in Section 424 of the Code) exceeds the amount
(currently $100,000) established by the Code, such options shall constitute
Nonqualified Stock Options.
Stock Options shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable:
(a) Number of Shares and Purchase
Price. The number of shares of Common Stock subject to a Stock Option shall
be determined by the Committee. The purchase price per share of Common Stock
purchasable upon exercise
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of a Stock Option shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date of grant of
such Stock Option; provided, however, that if an Incentive Stock
Option shall be granted to any person who, at the time such Incentive Stock
Option is granted, owns capital stock possessing more than ten percent of the
total combined voting power of all classes of capital stock of the Company (or
of any parent or subsidiary as defined in Section 424 of the Code) (a Ten
Percent Holder), the purchase price per share of Common Stock shall be the
price (currently 110% of Fair Market Value) required by the Code in order to
constitute an Incentive Stock Option.
Notwithstanding the foregoing, in the case
of a Stock Option that is a Substitute Award, the purchase price per share of
the shares of Common Stock subject to such Stock Option may be less than 100% of
the Fair Market Value per share on the date of grant, provided, that the excess
of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is
granted) of the shares of Common Stock subject to the Substitute Award, over (b)
the aggregate purchase price thereof does not exceed the excess of: (x) the
aggregate fair market value (as of the time immediately preceding the
transaction giving rise to the Substitute Award, such fair market value to be
determined by the Committee) of the shares of the predecessor company or other
entity that were subject to the grant assumed or substituted for by the Company,
over (y) the aggregate purchase price of such shares.
(b) Option Period and
Exercisability. The period during which a Stock Option may be exercised shall be
determined by the Committee; provided, however, that no Stock
Option shall be exercised later than ten years after its date of grant; provided
further, that if an Incentive Stock Option shall be granted to a Ten Percent
Holder, such Incentive Stock Option shall not be exercised later than five years
after its date of grant. The Committee may, in its discretion, establish
Performance Measures which shall be satisfied or met as a condition to the grant
of a Stock Option or to the exercisability of all or a portion of a Stock
Option. The Committee shall determine whether a Stock Option shall become
exercisable in cumulative or non-cumulative installments and in part or in full
at any time. An exercisable Stock Option, or portion thereof, may be exercised
only with respect to whole shares of Common Stock.
(c) Method of Exercise. A Stock
Option may be exercised (i) by giving written or electronic notice to the
Company or its designated agent, in accordance with procedures prescribed by the
Company, specifying the number of whole shares of Common Stock to be purchased
and accompanied by payment therefor in full (or arrangement made 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 shares of Common Stock 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) 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 date of exercise, equal to the amount necessary to satisfy
such obligation, (D) except as may be prohibited by applicable law, in cash by a
broker-dealer acceptable to the Company to whom the optionee has submitted an
irrevocable notice of exercise, or (E) by a combination of (A), (B) and (C), in
each case to the extent set forth in the Agreement relating to the Stock Option,
(ii) if applicable, by surrendering to the Company any Tandem SARs which are
cancelled by reason of the exercise of the option and (iii) by executing such
documents as the Company may reasonably request. Any fraction of a share of
Common Stock which would be required to pay such purchase price shall be
disregarded and the remaining amount due shall be paid in cash by the optionee.
No certificate or other indicia of ownership representing Common Stock shall be
delivered until the full purchase price therefor, and any withholding taxes
thereon, as described in Section 5.5, have been paid (or arrangement made for
such payment to the Companys satisfaction).
2.2. Stock Appreciation Rights.
The Committee may, in its discretion, grant
SARs to such eligible persons as may be selected by the Committee. The Agreement
relating to a SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.
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SARs shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem
advisable:
(a) Number of SARs and Base Price.
The number of SARs subject to an award shall be determined by the Committee. Any
Tandem SAR related to an Incentive Stock Option shall be granted at the same
time that such Incentive Stock Option is granted. The base price of a Tandem SAR
shall be the purchase price per share of the related option. The base price of a
Free-Standing SAR shall be determined by the Committee; provided,
however, that such base price shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date of grant of such SAR (or, if
earlier, the date of grant of the option for which the SAR is exchanged or
substituted).
Notwithstanding the foregoing, in the case
of a SAR that is a Substitute Award, the base price per share of the shares of
Common Stock subject to such SAR may be less than 100% of the Fair Market Value
per share on the date of grant, provided, that the excess of: (a) the aggregate
Fair Market Value (as of the date such Substitute Award is granted) of the
shares of Common Stock subject to the Substitute Award, over (b) the aggregate
base price thereof does not exceed the excess of: (x) the aggregate fair market
value (as of the time immediately preceding the transaction giving rise to the
Substitute Award, such fair market value to be determined by the Committee) of
the shares of the predecessor company or other entity that were subject to the
grant assumed or substituted for by the Company, over (y) the aggregate base
price of such shares.
(b) Exercise Period and
Exercisability. The Agreement relating to an award of SARs shall specify
whether such award may be settled in shares of Common Stock (including shares of
Restricted Stock) or cash or a combination thereof. The period for the exercise
of a SAR shall be determined by the Committee; provided, however,
that no SAR shall be exercised later than ten years after its date of grant;
provided further, that no Tandem SAR shall be exercised later than the
expiration, cancellation, forfeiture or other termination of the related
option. The Committee may, in its
discretion, establish Performance Measures which shall be satisfied or met as a
condition to the grant of a SAR or to the exercisability of all or a portion of
a SAR. The Committee shall determine whether a SAR may be exercised in
cumulative or non-cumulative installments and in part or in full at any time. An
exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem
SAR, only with respect to whole Common Shares and, in the case of a
Free-Standing SAR, only with respect to a whole number of SARs. If a SAR is
exercised for shares of Restricted Stock, a certificate or certificates or other
indicia of ownership representing such Restricted Stock shall be issued in
accordance with Section 3.2(c) or such shares shall be transferred to the holder
in book entry form with restrictions on the shares duly noted and the holder of
such Restricted Stock shall have such rights of a stockholder of the Company as
determined pursuant to Section 3.2(d). Prior to the exercise of a SAR for
shares of Common Stock, including Restricted Stock, the holder of such SAR shall
have no rights as a stockholder of the Company with respect to the shares of
Common Stock subject to such SAR and shall have rights as a stockholder of the
Company in accordance with Section 5.11.
(c) Method of Exercise. A Tandem
SAR may be exercised (i) by giving written or electronic notice to the Company
or its designated agent, in accordance with procedures prescribed by the
Company, specifying the number of whole SARs which are being exercised, (ii) by
surrendering to the Company any Stock Options which are cancelled by reason of
the exercise of the Tandem SAR and (iii) by executing such documents as the
Company may reasonably request. A Free-Standing SAR may be exercised (A) by
giving written or electronic notice to the Company or its designated agent, in
accordance with procedures prescribed by the Company, specifying the whole
number of SARs which are being exercised and (B) by executing such documents as
the Company may reasonably request. No shares of Common Stock shall be issued
and no certificate representing shares of Common Stock shall be delivered until
any withholding taxes thereon, as described in Section 5.5, have been paid (or
arrangement made for such payment to the Companys
satisfaction).
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2.3. Termination of Employment or
Service.
(a) Disability. Unless otherwise
specified in the Agreement, if the employment with or service to the Company of
the holder of a Stock Option or SAR terminates by reason of Disability, each
Stock Option and SAR held by such holder shall become fully vested and
exercisable and may thereafter be exercised by such holder (or such holders
legal representative or similar person) until the date which is one year after
the effective date of such holders termination of employment or service, or if
earlier, the expiration date of the term of such Stock Option or SAR.
(b) Retirement. Unless otherwise
specified in the Agreement, if the employment with or service to the Company of
the holder of a Stock Option or SAR terminates by reason of Retirement, each
Stock Option and SAR held by such holder, to the extent not already vested,
shall vest on a prorated basis on the effective date of the holders termination
of employment or service. Such prorated vesting shall be calculated on a
grant-by-grant basis by multiplying the unvested portion of each such Stock
Option and SAR award by a fraction, the numerator of which is the number of days
that have elapsed between the grant date and the effective date of the holders
termination of employment or service and the denominator of which is the number
of days between the grant date and the date the Stock Option or SAR award would
have become fully vested and exercisable had the holder not terminated his or
her employment or service. Unless otherwise specified in the Agreement, a vested
Stock Option and SAR held by such holder may be exercised by the holder (or such
holders legal representative or similar person) until the date which is two
years after the effective date of such holders termination of employment or
service, or if earlier, the expiration date of the term of such Stock Option or
SAR.
(c) Death. Unless otherwise
specified in the Agreement, if the employment with or service to the Company of
the holder of a Stock Option or SAR terminates by reason of death, each Stock
Option and SAR held by such holder shall become fully vested and exercisable and
may thereafter be exercised by such holders 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 such
Stock Option or SAR.
(d) Involuntary Termination Without
Cause. Unless otherwise specified in the Agreement, and except as provided
in Section 5.8, if the employment with or service to the Company of the holder
of a Stock Option or SAR is terminated by the Company, a Subsidiary or an
Affiliate without Cause, each Stock Option and SAR held by such holder shall
cease to vest, and to the extent already vested, may thereafter be exercised by
such holder (or such holders 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 such Stock Option or SAR.
(e) Termination for Cause. If the
employment with or service to the Company of the holder of a Stock Option or SAR
is terminated for Cause, each Stock Option and SAR held by such holder shall
cease to vest, and to the extent already vested, may thereafter be exercised by
such holder (or such holders legal representative or similar person) until the
close of the New York Stock Exchange (if open) on the date of such holders
termination of employment or service. If the New York Stock Exchange is closed
at the time of such holders termination of employment, then such Stock Option
or SAR shall be forfeited at the time such holders employment is terminated and
shall be canceled by the Company.
(f) Other Termination. Unless
otherwise specified in the Agreement, if the employment with or service to the
Company of the holder of a Stock Option or SAR terminates for any reason other
than Disability, Retirement, death, involuntary termination without Cause, or
termination for Cause, each Stock Option and SAR held by such holder shall cease
to vest, and to the extent already vested, may thereafter be exercised by such
holder (or such holders legal representative or similar person) until the close
of the New York Stock Exchange (if open) on the date which is the thirtieth
(30th) day following such holders termination of employment or
service. If the New York Stock Exchange is closed on such date, then such Stock
Option or SAR shall be forfeited and shall be
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canceled by the Company effective with the
close of the New York Stock Exchange on the next following day in which the New
York Stock Exchange is open.
(g) Death Following Termination of
Employment or Service. Unless otherwise specified in the Agreement, if the
holder of a Stock Option or SAR dies during the applicable Post-Termination
Exercise Period, each Stock Option and SAR held by such holder shall be
exercisable only to the extent that such Stock Option or SAR is exercisable on
the date of such holders death and may thereafter be exercised by the holders
executor, administrator, legal representative, beneficiary or similar person
until the date which ends on the earlier of (i) one year after the date of death
or, if later, the end of the applicable Post-Termination Exercise Period or (ii)
the expiration date of the term of such Stock Option or SAR.
2.4. Dividend Equivalents.
Notwithstanding anything in an Agreement to
the contrary, the holder of a Stock Option or SAR shall not be entitled to
receive dividend equivalents with respect to the number of shares of Common
Stock subject to such Stock Option or SAR.
2.5. Repricing and Discounting.
Other than pursuant to Section 5.7, neither
the Board nor the Committee shall without the approval of the Companys
stockholders (i) lower the purchase price or base price per share of Common
Stock subject to a Stock Option or SAR after it is granted, (ii) cancel a Stock
Option or SAR when the purchase price or base price per share of Common Stock
subject to such Stock Option or SAR exceeds the Fair Market Value of one share
of Common Stock in exchange for cash or another award (other than in connection
with a Change in Control), or (iii) take any other action with respect to a
Stock Option or SAR that would be treated as a repricing under the rules and
regulations of the principal U.S. national securities exchange on which the
shares of Common Stock are listed.
2.6. Minimum Vesting Period.
Except as provided in this subsection or as
otherwise provided under the Plan, no Stock Option or SAR award may become
exercisable until one year from the date such Stock Option or SAR was granted.
The limitations of the preceding sentence shall not apply in the case of a Stock
Option or SAR that becomes exercisable as a result of the attainment of a
specified Performance Measure or in the
case of a Stock Option or SAR granted as an employee recognition award, a
retention award, or to a Non-Employee Director or a newly hired employee;
provided that except for a Stock Option or SAR granted to a Non-Employee
Director or as otherwise provided for under the Plan no portion of any such
Stock Option or SAR may become exercisable until six months from the date the
Stock Option or SAR was granted. The exceptions in the preceding sentence to the
general minimum vesting provisions of this subsection, other than the exceptions
applying to a Stock Option or SAR granted to a Non-Employee Director or that
becomes exercisable as a result of the attainment of a specified Performance
Measure, are intended to be applied only in special circumstances as determined
by the Committee (or its delegate).
III. Stock
Awards
3.1. Stock Awards.
The Committee may, in its discretion, grant
Stock Awards to such eligible persons as may be selected by the Committee. The
Agreement relating to the Stock Award shall specify whether the Stock Award is a
Restricted Stock Award, Restricted Stock Unit Award, Bonus Stock Award, Bonus
Stock Unit Award or Deferred Stock Unit Award.
3.2. Terms of Stock Awards.
Stock Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable.
(a) Number of Shares and Other
Terms. The number of shares of Common Stock subject to a Stock Award and the
Performance Measures (if any) and the Restriction Period applicable to a
Restricted Stock Award or a Restricted Stock Unit Award shall be determined by
the Committee.
(b) Vesting and Forfeiture. The
Agreement relating to a Restricted Stock Award or Restricted Stock Unit Award
shall provide, in the manner determined by the Committee, in its discretion, and
subject to the provisions of this Plan, for the vesting of the shares of Common
Stock subject to such award, in the case of a Restricted Stock Award, or for the
vesting of the Restricted Stock Unit Award itself, in the case of Restricted
Stock
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Unit Award, (i) if specified Performance
Measures are satisfied or met during the specified Restriction Period or
Performance Period or (ii) if the holder of such award remains continuously in
the employment of or service to the Company during the specified Restriction
Period or Performance Period, and for the forfeiture of all or a portion of the
shares of Common Stock subject to such award in the case of a Restricted Stock
Award, or for the forfeiture of the Restricted Stock Unit Award itself, in the
case of a Restricted Stock Unit Award, (x) if specified Performance Measures are
not satisfied or met during the specified Restriction Period or Performance
Period or (y) if the holder of such award does not remain continuously in the
employment of or service to the Company during the specified Restriction Period
or Performance Period.
(c) Stock Issuance. During the
Restriction Period, the shares of Restricted Stock shall be held by a custodian
in book entry form with restrictions on such shares duly noted or,
alternatively, a certificate or certificates representing a Restricted Stock
Award shall be registered in the holders name and may bear a legend, in
addition to any legend which may be required pursuant to Section 5.6, indicating
that the ownership of the shares of Common Stock represented thereby is subject
to the restrictions, terms and conditions of this Plan and the Agreement
relating to the Restricted Stock Award. As determined by the Committee, all such
certificates shall be deposited with the Company, together with stock powers or
other instruments of assignment (including a power of attorney), each endorsed
in blank with a guarantee of signature if deemed necessary or appropriate by the
Company, which would permit transfer to the Company of all or a portion of the
shares of Common Stock subject to the Restricted Stock Award in the event such
award is forfeited in whole or in part. Upon termination of any applicable
Restriction Period (and the satisfaction or attainment of any applicable
Performance Measures), upon the grant of a Bonus Stock Award, or upon the
settlement of a Bonus Stock Unit Award, in each case subject to the Companys
right to require payment of any taxes in accordance with Section 5.5, the
restrictions shall be removed from the requisite number of any shares of Common
Stock that are held in book entry form, and all
certificates evidencing ownership of the
requisite number of shares of Common Stock shall be delivered to the holder of
such award.
(d) Rights with Respect to Restricted
Stock Awards. Unless otherwise set forth in the Agreement relating to a
Restricted Stock Award, and subject to the Committees right to cause such Award
to be cancelled pursuant to an adjustment under Section 5.7, the holder of such
award shall have all rights as a stockholder of the Company, including voting
rights, the right to receive dividends and the right to participate in any
capital adjustment applicable to all holders of Common Stock; provided,
however, that (i) unless the Committee determines otherwise, with respect
to Restricted Stock Awards subject only to time-based vesting conditions and
(ii) with respect to Restricted Stock Awards subject to performance-based
vesting conditions, in each case, a distribution with respect to shares of
Common Stock, including a regular cash dividend, shall be deposited with the
Company and replaced with additional Restricted Stock Awards with a Fair Market
Value equal to such distribution and otherwise subject to the same restrictions
as the shares of Common Stock with respect to which such distribution was
made.
(e) Rights and Provisions Applicable to
Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock
Unit Award shall specify (i) whether such award may be settled in Common Stock
or cash or a combination thereof and (ii) whether the holder thereof shall be
entitled to receive, on a current or deferred basis, dividend equivalents, or
the deemed reinvestment of any deferred dividend equivalents, with respect to
the number of shares of Common Stock subject to such award. Any dividend
equivalents with respect to Restricted Stock Units that are subject to
performance-based vesting conditions shall be subject to the same restrictions
as such Restricted Stock Units. Prior to the settlement of a Restricted Stock
Unit Award, the holder thereof shall not have any rights as a stockholder of the
Company with respect to the shares of Common Stock subject to such award, except
to the extent that the Committee, in its sole discretion, may grant dividend
equivalents on Restricted Stock Unit Awards which are settled in shares of
Common Stock. No shares of Common Stock and no certificates or other indicia of
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ownership representing shares of Common
Stock that are subject to a Restricted Stock Unit Award shall be issued upon the
grant of a Restricted Stock Unit Award. Instead, shares of Common Stock subject
to Restricted Stock Unit Awards and the certificates or other indicia of
ownership representing such shares of Common Stock shall only be distributed at
the time of settlement of such Restricted Stock Unit Awards in accordance with
the terms and conditions of this Plan and the Agreement relating to such
Restricted Stock Unit Award.
(f) Minimum Restriction Period.
Except as provided in this subsection or as otherwise provided under the Plan,
the Restriction Period applicable to a Restricted Stock Award or Restricted
Stock Unit Award may not lapse until one year from the date such award was
granted. The limitations of the preceding sentence shall not apply in the case
of a Restricted Stock Award or Restricted Stock Unit Award that vests as a
result of the attainment of a specified Performance Measure or in the case of a
Restricted Stock Award or Restricted Stock Unit Award granted as an employee
recognition award, a retention award, or to a newly hired employee; provided
that except as provided for under the Plan the minimum Restriction Period
applicable to such award shall be six months. The exceptions in the preceding
sentence to the general minimum vesting provisions of this subsection, other
than the exception applying to a Restricted Stock Award or Restricted Stock Unit
Award that vests as a result of the attainment of a specified Performance
Measure, are intended to be applied only in special circumstances as determined
by the Committee (or its delegate).
(g) Rights and Provisions Applicable to
Bonus Stock Unit Awards and Bonus Stock Awards. The number of shares of
Common Stock subject to a Bonus Stock Award or Bonus Stock Unit Award shall be
determined by the Committee. Bonus Stock Awards and Bonus Stock Unit Awards
shall not be subject to any Restriction Periods or Performance Measures. The
Agreement relating to a Bonus Stock Unit Award shall specify (i) whether such
award may be settled in Common Stock or cash or a combination thereof and (ii)
whether the holder thereof shall be entitled to receive, on a current or
deferred basis, dividend equivalents, or the deemed reinvestment of any deferred
dividend equivalents, with respect to the number
of shares of Common Stock subject to such
award. Prior to the settlement of a Bonus Stock Unit Award, the holder thereof
shall not have any rights as a stockholder of the Company with respect to the
shares of Common Stock subject to such award, except to the extent that the
Committee, in its sole discretion, may grant dividend equivalents on Bonus Stock
Unit Awards. No shares of Common Stock and no certificates or other indicia of
ownership representing shares of Common Stock that are subject to a Bonus Stock
Unit Award shall be issued upon the grant of a Bonus Stock Unit
Award.
(h) Rights and Provisions Applicable to
Deferred Stock Unit Awards. The Agreement relating to a Deferred Stock Unit
Award shall specify (i) whether such award may be settled in Common Stock or
cash or a combination thereof and (ii) whether the holder thereof shall be
entitled to receive, on a current or deferred basis, dividend equivalents, or
the deemed reinvestment of any deferred dividend equivalents, with respect to
the number of shares of Common Stock subject to such award. Deferred Stock Unit
Awards shall not be subject to any Restriction Periods or Performance Measures.
Prior to the settlement of a Deferred Stock Unit Award, the holder thereof shall
not have any rights as a stockholder of the Company with respect to the shares
of Common Stock subject to such award, except to the extent that the Committee,
in its sole discretion, may grant dividend equivalents on Deferred Stock Unit
Awards which are settled in shares of Common Stock. No shares of Common Stock
and no certificates or other indicia of ownership representing shares of Common
Stock that are subject to a Deferred Stock Unit Award shall be issued upon the
grant of a Deferred Stock Unit Award. Instead, shares of Common Stock subject to
Deferred Stock Unit Awards and the certificates or other indicia of ownership
representing such shares of Common Stock shall only be distributed at the time
of settlement of such Deferred Stock Unit Awards in accordance with the terms
and conditions of this Plan and the Agreement relating to such Deferred Stock
Unit Award.
3.3. Termination of Employment or
Service.
(a) Disability and Death. Unless
otherwise set forth in the Agreement relating to a Stock Award, if the
employment with or service to the Company of the holder of such award terminates
by reason of Disability or death, the
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Restriction Period shall terminate as of
the effective date of such holders termination of employment or service and all
Performance Measures applicable to such award shall be deemed to have been
satisfied at the maximum level.
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(i) In the case of Restricted Stock
Unit Awards which are not subject to Performance Measures, unless
otherwise set forth in the Agreement, if the employment with or service to
the Company of the holder of such award terminates by reason of
Retirement, a prorated portion of such Restricted Stock Unit Award shall
vest and be settled on the date on which the holders employment with or
service to the Company terminates, and the remaining portion of such award
shall be forfeited by such holder and canceled by the Company. Such
proration shall be calculated on a grant-by-grant basis by multiplying the
number of unvested Restricted Stock Units by a fraction, the numerator of
which is the number of days that have elapsed between the grant date and
the effective date of the holders termination of employment or service
and the denominator of which is the number of days between the grant date
and the date the Restriction Period applicable to the Restricted Stock
Unit Award would have lapsed in full.
(ii) In the case of Restricted Stock
Unit Awards which are subject to Performance Measures, unless otherwise
set forth in the Agreement, if the employment with or service to the
Company of the holder of such award terminates by reason of Retirement, a
prorated portion of the amount of such Restricted Stock Unit Award which
is actually earned, based upon satisfaction of the Performance Measures
during the applicable performance period, shall vest and be settled on the
later of (i) date on which the holders employment with or service to the
Company terminates or (ii) as soon as practicable following the end of the
applicable performance period, and in no event later than March 15 of the
calendar year following the calendar year in which the applicable
performance period ends, and the remaining portion of such award shall be
forfeited by such holder and canceled by the Company. Such proration shall
be calculated on a grant-by-grant basis by multiplying the number of
unvested Restricted Stock Units by a fraction, the numerator of which is
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number of days that have elapsed
between the grant date and the effective date of the holders termination
of employment or service and the denominator of which is the number of
days between the grant date and the date the Restriction Period applicable
to the Restricted Stock Unit Award would have lapsed in
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(c) Other Termination. Unless
otherwise set forth in the Agreement relating to a Stock Award, and except as
provided in Section 3.3(b) and Section 5.8, if the employment with or service to
the Company of the holder of a Stock Award terminates for any reason other than
Disability or death, the portion of such award which is subject to a Restriction
Period on the effective date of such holders termination of employment or
service shall be immediately forfeited by such holder and canceled by the
Company.
IV. Performance
Grants
4.1. Performance Grants.
The Committee may, in its discretion, make
Performance Grants to such eligible persons as may be selected by the
Committee.
4.2. Terms of Performance
Grants. Performance Grants shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable.
(a) Amount of Performance Grant and
Performance Measures. The Agreement shall set forth the amount of the
Performance Grant and a description of the Performance Measures and the
Performance Period applicable to such Performance Grant, as determined by the
Committee in its discretion.
(b) Vesting and Forfeiture. The
Agreement shall provide, in the manner determined by the Committee in its
discretion, for the vesting of a Performance Grant, if specified Performance
Measures are satisfied during the specified Performance Period, and for the
forfeiture of all or a portion of such award, if specified Performance Measures
are not satisfied during the specified Performance Period.
(c) Settlement of Vested Performance
Grants. The Agreement (i) shall specify whether a Performance Grant may be
settled in shares of Common Stock, Restricted
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Stock, Restricted Stock Units, cash or a
combination thereof and (ii) may specify whether the holder thereof shall be
entitled to receive, on a current or deferred basis, dividend equivalents, and,
if determined by the Committee, interest on or the deemed reinvestment of any
deferred dividend equivalents, with respect to the number of shares of Common
Stock subject to such award, if any; provided, however, any
dividend equivalents with respect to a Performance Grant that is subject to
performance-based vesting conditions shall be subject to the same restrictions
as such Performance Grant. If a Performance Grant is settled in shares of
Restricted Stock, a certificate or certificates or other indicia of ownership
representing such Restricted Stock shall be issued in accordance with Section
3.2(c) and the holder of such Restricted Stock shall have such rights of a
stockholder of the Company as determined pursuant to Section 3.2(d). Prior to
the settlement of a Performance Grant in shares of Common Stock or Restricted
Stock the holder of such award shall have no rights as a stockholder of the
Company with respect to any shares of Common Stock subject to such award and
shall have rights as a stockholder of the Company in accordance with Section
5.11.
4.3. Termination of Employment or
Service.
(a) Disability, Retirement and
Death. Unless otherwise set forth in the Agreement, if the employment with
or service to the Company of the holder of a Performance Grant terminates during
the Performance Period by reason of Disability, Retirement or death, the
Performance Period shall continue and the holder, or the holders executor,
administrator, legal representative, beneficiary or similar person, as
applicable, shall be entitled to a prorated award. Such prorated award shall be
equal to the value of the award at the end of the Performance Period multiplied
by a fraction, the numerator of which shall equal the number of days such holder
was employed with or performing services for the Company during the Performance
Period and the denominator of which shall equal the number of days in the
Performance Period; provided, however, that such holder, or such
holders executor, administrator, legal representative, beneficiary or similar
person, as applicable, shall not be entitled to payment or distribution of such
Performance Grant earlier than the date set forth in the
Agreement.
(b) Other Termination. Unless
otherwise set forth in the Agreement, if the employment with or service to the
Company of the holder of a Performance Grant terminates during the Performance
Period for any reason other than Disability, Retirement or death, each
Performance Grant that is not vested shall be immediately forfeited.
V. General
5.1. Effective Date and Term of
Plan. This Plan shall be submitted to the
stockholders of the Company for approval at the Companys 2015 annual meeting of
stockholders and, if so approved, the Plan shall become effective as of the date
on which the Plan was approved by the Companys stockholders. Once effective,
this Plan shall supersede and replace the Prior Plan; provided, that the Prior
Plan shall remain in effect with respect to all outstanding awards granted under
the Prior Plan until such awards have been exercised, forfeited, cancelled,
expired, or otherwise terminated in accordance with the terms of such awards.
This Plan shall terminate as of the first annual meeting of the Companys
stockholders to occur on or after the tenth anniversary of its effective date,
unless terminated earlier by the Board; provided, however, that no
Incentive Stock Options shall be granted after the tenth anniversary of the date
on which the Plan was approved by the Board. Termination of this Plan shall not
affect the terms or conditions of any award granted prior to termination. Awards
hereunder may be made at any time prior to the termination of this
Plan.
5.2. Amendments.
The Board or the Committee may amend or
terminate this Plan, and except as provided in Section 2.5, the Committee may
amend outstanding awards under this Plan in any manner as it shall deem
advisable in its sole discretion, subject to any requirement of stockholder
approval required by applicable law, rule or regulation, including Section
162(m) and Section 422 of the Code and the rules of the New York Stock Exchange;
provided, however, that no amendment of the Plan shall be made
without stockholder approval if such amendment would (i) increase the maximum
number of shares of Common Stock available under this Plan (subject to Section
5.7) or (ii) modify the prohibitions on the repricing or discounting of Stock
Options and SARs contained in Section 2.5. No amendment of the Plan or an
outstanding
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award may impair the rights of a holder
(the determination of which shall be made by the Committee in its sole
discretion) of an outstanding award without the consent of such
holder.
5.3. Agreement. The Company may condition an award holders right (a) to
exercise, vest or settle the award and (b) to receive delivery of shares, on the
execution and delivery to the Company of the Agreement and the completion of
other requirements, including, but not limited to, the execution of a
nonsolicitation agreement by the recipient and delivery thereof to the Company.
Notwithstanding anything contained herein to the contrary, the Committee may
approve an Agreement that, upon the termination of an award holders employment
or service, provides that, or may, in its sole discretion based on a review of
all relevant facts and circumstances, otherwise take action regarding an
Agreement such that (i) any or all outstanding Stock Options and SARs shall
become exercisable in part or in full, (ii) all or a portion of the Restriction
Period applicable to any outstanding Stock Award shall lapse, (iii) all or a
portion of the Performance Period applicable to any outstanding award shall
lapse and (iv) the Performance Measures applicable to any outstanding award (if
any) shall be deemed to be satisfied at the maximum or any other
level.
5.4. Non-Transferability.
No award shall be transferable other than by
will, the laws of descent and distribution or pursuant to beneficiary
designation procedures approved by the Company or, to the extent expressly
permitted in the Agreement relating to such award, to the holders family
members, a trust or entity established by the holder for estate planning
purposes or a charitable organization designated by the holder, in each case,
without consideration. Except to the extent permitted by the foregoing sentence
or the Agreement relating to an award, each award may be exercised or settled
during the holders lifetime only by the holder or the holders legal
representative or similar person. Except as permitted by the second preceding
sentence, no award may be sold, transferred, assigned, pledged, hypothecated,
encumbered or otherwise disposed of (whether by operation of law or otherwise)
or be subject to execution, attachment or similar process. Upon any attempt to
so
sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of any award, such award and all
rights thereunder shall immediately become null and void.
5.5. Tax Withholding.
The Company shall have the right to require,
as of the grant, vesting, or exercise of an award, the sale of any shares of
Common Stock, the receipt of any dividends or the payment of any cash pursuant
to an award made hereunder, payment by the holder of such award of any federal,
state, local, foreign or other income, social insurance, payroll or other
tax-related items which may be required to be withheld or paid in connection
with such award. An Agreement may provide that (i) the Company shall withhold
whole shares of Common Stock which would otherwise be delivered to a holder
having an aggregate Fair Market Value determined as of the date the obligation
to withhold or pay taxes arises in connection with an award (the Tax Date) in
the amount necessary to satisfy any such obligation, or withhold an amount of
cash which would otherwise be payable to a holder, including withholding from
wages or other cash compensation otherwise due to the holder, in the amount
necessary to satisfy any such obligation or (ii) the holder may satisfy any such
obligation 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 a holder, equal to the amount necessary to satisfy any
such obligation, (D) a cash payment to the Company by a broker-dealer acceptable
to the Company to whom the holder has submitted an irrevocable notice of
exercise (in the case of a Stock Option) or an irrevocable notice of sale (in
the case of a Stock Award), in each case to the extent set forth in the
Agreement relating to an award, or (E) any combination of (A), (B) and (C).
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
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statutory withholding rate. Any fraction
of a share of Common Stock which would be required to satisfy such an obligation
shall be disregarded and the remaining amount due shall be paid in cash by the
holder.
5.6. Restrictions on Shares.
Each award made hereunder shall be subject to
the requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the vesting, exercise or
settlement of such award or the delivery of shares thereunder, such award shall
not vest, be exercised or settled and such shares shall not be delivered unless
such listing, registration, qualification, consent, approval or other action
shall have been effected or obtained, free of any conditions not acceptable to
the Company. In addition, the Committee may condition the grant of an award on
compliance with certain listing, registration or other qualifications applicable
to the award under any law or any obligation to obtain the consent or approval
of a governmental body. The Company may require that certificates or other
indicia of ownership evidencing shares of Common Stock delivered pursuant to any
award made hereunder bear a legend indicating that the sale, transfer or other
disposition thereof by the holder is prohibited except in compliance with the
Securities Act of 1933, as amended, and the rules and regulations
thereunder.
5.7. Adjustment.
In the event of any equity restructuring
(within the meaning of Financial Accounting Standards Board Accounting Standards
Codification Topic 718, CompensationStock Compensation) that causes the per
share value of shares of Common Stock to change, such as a stock dividend, stock
split, spinoff, rights offering or recapitalization through an extraordinary
dividend, the number and class of securities available under this Plan, the
terms of each outstanding Stock Option and SAR (including the number and class
of securities subject to each outstanding Stock Option or SAR and the purchase
price or base price per share), the terms of each outstanding Stock Award
(including the number and class of securities subject thereto), the terms of
each outstanding Performance Grant (including the number and
class of securities subject thereto), the
maximum number of securities with respect to which Stock Options or SARs may be
granted during any fiscal year of the Company to any one grantee, the maximum
number of shares of Common Stock that may be awarded during any fiscal year of
the Company to any one grantee pursuant to a Stock Award that is subject to
Performance Measures or a Performance Grant shall be appropriately adjusted by
the Committee, such adjustments to be made in the case of outstanding Stock
Options and SARs without an increase in the aggregate purchase price or base
price and in accordance with Section 409A of the Code. In the event of any other
change in corporate capitalization, including a merger, consolidation,
reorganization, or partial or complete liquidation of the Company, such
equitable adjustments described in the foregoing sentence may be made as
determined to be appropriate and equitable by the Committee to prevent dilution
or enlargement of rights of participants. In either case, the decision of the
Committee regarding any such adjustment shall be final, binding and
conclusive.
5.8. Change in Control.
If an award holders employment is terminated
by the Company, a Subsidiary or an Affiliate without Cause (or otherwise
terminates for an eligible reason according to the terms of the Company
severance policy applicable to the holder as of the effective date of a Change
in Control) during the period commencing on and ending twenty-four months after
the effective date of the Change in Control, then effective on the holders date
of termination of employment (i) each outstanding Stock Option and SAR held by
such holder shall become fully vested and exercisable, (ii) the Restriction
Period applicable to each outstanding award held by such holder shall lapse, and
(iii) Performance Grants shall vest or become exercisable or payable in
accordance with the applicable Agreements; provided, however, that
awards that provide for a deferral of compensation within the meaning of Section
409A of the Code be settled in accordance with the applicable Agreements,
subject to the terms of the Plan and Section 409A of the Code. Notwithstanding
any provision of this Plan to the contrary, each Stock Option or SAR granted to
such holder shall remain exercisable by the holder (or his or her legal
representative or similar person)
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until the earlier of (y) the date that
ends on the later of (1) one-year following the award holders termination of
employment under this section, (2) the expiration of the applicable
Post-Termination Exercise Period under the Plan, (3) the expiration of any
post-termination exercise period mandated by local statute, or (4) if an award
holder is subject to a severance policy as of the effective date of a Change in
Control, the end of the severance period applicable to the holder under such
severance policy, or (z) the expiration date of the term of the Stock Option or
SAR.
5.9. Deferrals. The Committee may determine that the delivery of shares of
Common Stock or the payment of cash, or a combination thereof, upon the exercise
or settlement of all or a portion of any award (other than awards of Incentive
Stock Options, Nonqualified Stock Options and SARs) made hereunder shall be
deferred, or the Committee may, in its sole discretion, approve deferral
elections made by holders of awards. Deferrals shall be for such periods and
upon such terms as the Committee may determine in its sole discretion, subject
to the requirements of Section 409A of the Code.
5.10. No Right of Participation or
Employment. No person shall have any
right to participate in this Plan. Neither this Plan nor any award made
hereunder shall confer upon any person any right to continued employment by the
Company, any Subsidiary or any Affiliate of the Company or affect in any manner
the right of the Company, any Subsidiary or any Affiliate of the Company to
terminate the employment of any person at any time without liability
hereunder.
5.11. Rights as Stockholder.
No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an award hereunder unless and
until such person becomes a stockholder of record with respect to such shares of
Common Stock or equity security.
5.12. Designation of
Beneficiary. If permitted by the
Committee, the holder of an award may file with the Committee a written
designation of one or more persons as such holders beneficiary or beneficiaries
(both primary and contingent) in the event of the holders death. To the extent
an outstanding Stock Option or SAR granted
hereunder is exercisable, such beneficiary
or beneficiaries shall be entitled to exercise such Stock Option or SAR to the
extent permitted under local law.
Each beneficiary designation shall become
effective only when filed in writing with the Committee during the holders
lifetime on a form prescribed by the Committee. The spouse of a married holder
domiciled in a community property jurisdiction shall join in any designation of
a beneficiary other than such spouse. The filing with the Committee of a new
beneficiary designation shall cancel all previously filed beneficiary
designations.
If a holder fails to designate a
beneficiary, or if all designated beneficiaries of a holder predecease the
holder, then each outstanding Stock Option and SAR hereunder held by such
holder, to the extent exercisable, may be exercised by such holders executor,
administrator, legal representative or similar person.
5.13. Governing Law.
This Plan, each award hereunder and the
related Agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the Code or the laws of the
United States, 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.
5.14. Foreign Employees.
The Committee may adopt, amend or rescind
rules, procedures or sub-plans relating to the operation and administration of
the Plan to accommodate the specific requirements of local laws and procedures
and to foster and promote achievement of the purposes of this Plan. Without
limiting the generality of the foregoing, the Committee is specifically
authorized to adopt rules, procedures and sub-plans with provisions that limit
or modify rights on death, Disability or Retirement or on termination of
employment; available methods of exercise or settlement of an award; payment of
income, social insurance contributions and payroll taxes; the withholding
procedures and handling of any stock certificates or other indicia of ownership
which vary with local requirements. The Committee may also adopt rules,
procedures or sub-plans applicable to particular Subsidiaries, Affiliates or
locations. The rules of such sub-plans may take precedence over other provisions
of this Plan, with the exception of Sections 1.5 and 5.2,
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but unless otherwise superseded by the
terms of such sub-plan, the provisions of this Plan shall govern the operation
of such sub-plan.
5.15. Termination of Employment or
Service. Unless otherwise determined by
the Committee, an award holder employed by or providing service to an entity
that is a Subsidiary or an Affiliate under this Plan shall be deemed to have
terminated employment with or service to the Company for purposes of this Plan
on the date that such entity ceases to be a Subsidiary or an Affiliate
hereunder.
5.16. Code Section 409A.
Notwithstanding anything in this Plan to the
contrary (for purposes of this Section 5.16, Plan shall include all Agreements
under the Plan), the Plan will be construed, administered or deemed amended as
necessary to comply with the requirements of Section 409A of the Code to avoid
taxation under Section 409A(a)(1) of the Code to the extent subject to Section
409A of the Code. The Committee, in its sole discretion, shall determine the
requirements of Section 409A of the Code applicable to the Plan and shall
interpret the terms of the Plan consistently therewith. Under no circumstances,
however, shall the Company or any Subsidiary or 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 Plan, including any taxes, penalties or interest imposed under
Section 409A of the Code. Any payments to award holders pursuant to this Plan
are also intended to be exempt from Section 409A of the Code 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, if applicable, 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 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 Plan are payable by reference to an award holders
termination of employment, such term shall be deemed to refer to the award
holders separation from service, within the meaning of Section 409A of the
Code. Notwithstanding any other provision in this Plan, if an award holder is a
specified employee, as defined in Section 409A of the Code, as of the date of
the award holders separation from service, then to the extent any amount
payable under this Plan (i) constitutes the payment of nonqualified deferred
compensation, within the meaning of Section 409A of the Code, (ii) is payable
upon the award holders separation from service and (iii) under the terms of
this Plan would be payable prior to the six-month anniversary of the award
holders 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 award holders death.
5.17. Awards Subject to
Clawback. Except to the extent prohibited
by law, the awards granted under this Plan and any cash payment or Common Stock
delivered pursuant to an award are subject to forfeiture, recovery by the
Company or other action pursuant to the applicable Agreement or any clawback or
recoupment policy which the Company may adopt from time to time, including
without limitation any such policy which the Company may be required to adopt
under the Dodd-Frank Wall Street Reform and Consumer Protection Act and
implementing rules and regulations thereunder, or as otherwise required by
law.
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Shareowner Services P.O. Box 64945 St. Paul, MN
55164-0945 |
Address Change?
Mark box, sign, and indicate changes below:
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TO VOTE BY INTERNET OR TELEPHONE, SEE REVERSE SIDE OF THIS PROXY
CARD. |
TO VOTE BY MAIL AS THE BOARD OF
DIRECTORS RECOMMENDS ON ALL ITEMS BELOW,
SIMPLY SIGN, DATE, AND RETURN THIS
PROXY CARD.
The Board of Directors Recommends a
Vote FOR Items 1 through 4.
Election of
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2. |
Advisory Vote to Approve Executive
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Approval of The Western Union Company 2015 Long-Term
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Ratification of Selection of Ernst & Young LLP as
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The Board of Directors
Recommends a Vote AGAINST Items 5 through 7. |
5. |
Stockholder Proposal Regarding
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THIS PROXY WHEN PROPERLY EXECUTED
WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS
1 THROUGH 4, AND AGAINST ITEMS 5 THROUGH 7. For shares held in The Western Union Company Incentive Savings Plan (the
Plan), the Plans Trustee will vote the shares as directed. If no direction is
given on how to vote the shares to the Trustee by mail on or before May 12, 2015
or by Internet or phone by 11:59 p.m. (ET) on May 12, 2015, the Plans Trustee
will vote your shares held in the Plan in the same proportion as the shares for
which it receives instructions from all other participants in the
Plan.
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Please sign exactly as your
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sign. Trustees, administrators, etc., should include title and authority.
Corporations should provide full name of corporation and title of authorized
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Table of Contents
THE WESTERN UNION
COMPANY
ANNUAL MEETING OF STOCKHOLDERS
May
15, 2015
8:00 a.m. (ET)
505 Fifth Avenue, 7th Floor
New York, NY
10017
The Western Union
Company 12500 East Belford Avenue Englewood, CO
80112 |
proxy |
This proxy is solicited by the Board
of Directors for use at the Annual Meeting on May 15, 2015.
The shares of stock you hold in your
account or in a dividend reinvestment account will be voted as you specify on
the reverse side.
If no choice is specified, the proxy
will be voted FOR Items 1 through 4 and AGAINST Items 5 through
7.
By signing the proxy, you revoke
all prior proxies and appoint Hikmet Ersek and John R. Dye, and each of them with full
power of substitution, to vote your shares on the matters shown on the reverse
side and any other matters which may come before the Annual Meeting and
all adjournments and postponements thereof.
Vote by Internet, Telephone or
Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the
named proxies to vote your shares
in the same manner as if you marked, signed
and returned your proxy card.
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INTERNET www.proxypush.com/wu |
PHONE 1-866-883-3382 |
MAIL
Mark, sign and
date your proxy card and return it in the postage-paid envelope provided. |
Use the Internet to vote your
proxy until 11:59 p.m. (ET) on May 14, 2015. |
Use a touch-tone
telephone to vote your proxy until 11:59
p.m. (ET) on May 14,
2015. |
If you vote your proxy by Internet or
by Telephone, you do NOT need to mail back your Proxy Card.
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