Western Union 2013 Annual Report Download - page 85

67 | The Western Union Company – Proxy Statement
NOTICE OF 2014 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
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, 2013, and continues to provide for those
benefits, except as noted below:
• Effective for senior executives hired before February
24, 2011, a severance payment equal to the senior
executive’s 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 executive’s 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 executive’s
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 twenty-four 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
executive’s 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 eighteen 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 twenty-
four months following a change-in-control. In such
event, the right to exercise stock options will continue
for twenty-four months (thirty-six months in the case of
the Chief Executive Officer) after the senior executive’s
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 (other
than most “career share” grants) 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. “Career shares” are
time-based restricted share units that become 100%
vested on the fourth anniversary of their grant date
that were previously granted to certain executives as
additional retention awards. Generally, “career shares”
are forfeited upon a termination for any reason.
• 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.)