Western Union 2013 Annual Report Download - page 249

2013 FORM 10-K
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
139
The Western Union Company 2006 Non-Employee Director Equity Compensation Plan
The Western Union Company 2006 Non-Employee Director Equity Compensation Plan ("2006 Director Plan") provides for
the granting of equity-based awards to non-employee directors of the Company. Options granted under the 2006 Director Plan are
issued with exercise prices equal to the fair market value of Western Union common stock on the grant date, have 10-year terms,
and vest immediately. Since options and deferred stock units under this plan vest immediately, compensation expense is recognized
on the date of grant based on the fair value of the awards when granted. Awards under the plan may be settled immediately unless
the participant elects to defer the receipt of the common shares under applicable plan rules. A maximum of 1.5 million shares of
common stock may be awarded under the 2006 Director Plan. As of December 31, 2013, the Company has awarded 1.2 million
options and 0.3 million unrestricted stock units to non-employee directors of the Company. As the shares available to be granted
under the 2006 Director Plan were depleted during 2013, the Company started granting options out of the 2006 LTIP to the non-
employee directors of the Company, as permitted by the plans. These options have the same vesting and expense terms as non-
employee director option grants under the 2006 Director Plan.
Impact of Spin-Off to Stock-Based Awards Granted Under First Data Plans
At the time of the Spin-off, First Data converted stock options, restricted stock awards and restricted stock units (collectively,
"Stock-Based Awards") of First Data stock held by Western Union and First Data employees. For Western Union employees,
outstanding First Data Stock-Based Awards were converted to new Western Union Stock-Based Awards. For First Data employees,
each outstanding First Data Stock-Based Award held prior to the Spin-off was converted into one replacement First Data Stock-
Based Award and one Western Union Stock-Based Award. The new Western Union and First Data Stock-Based Awards maintained
their pre-conversion aggregate intrinsic values, and, in the case of stock options, their ratio of the exercise price per share to their
fair value per share.
After the Spin-off, the Company receives all cash proceeds related to the exercise of all Western Union stock options, recognizes
all stock compensation expense and retains the resulting tax benefits relating to Western Union awards held by Western Union
employees. First Data recognizes all stock-based compensation expense and retains all associated tax benefits for Western Union
Stock-Based Awards held by First Data employees.
Stock Option Activity
A summary of Western Union stock option activity for the year ended December 31, 2013 was as follows (options and aggregate
intrinsic value in millions):
Year Ended December 31, 2013
Options
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
(Years)
Aggregate
Intrinsic
Value
Outstanding as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.0 $ 18.46
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 14.02
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.8) 15.86
Cancelled/forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.4) 17.86
Outstanding as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . 23.8 $ 18.05 4.4 $ 19.7
Options exercisable as of December 31 . . . . . . . . . . . . . . . . . . 18.1 $ 18.77 3.1 $ 8.4
The Company received $28.6 million, $51.9 million and $98.8 million in cash proceeds related to the exercise of stock options
during the years ended December 31, 2013, 2012 and 2011, respectively. Upon the exercise of stock options, shares of common
stock are issued from authorized common shares.