Western Union 2015 Annual Report Download - page 79

NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
2016 Proxy Statement | 61
EXECUTIVE COMPENSATION
• 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 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 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
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 all executives other than the Chief
Executive Officer, any 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 (including our Chief Executive Officer), 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.)
Mr. Ersek is the only Company employee who remains
eligible for excise tax gross-up payments.
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.
Ms. Scott separated from the Company on March 15, 2016.
In connection with Ms. Scott’s departure, she became eligible
to receive separation benefits pursuant to the Executive
Severance Policy. Pursuant to the policy and in exchange
for Ms. Scott signing a general release of claims in favor of
the Company, Ms. Scott will receive separation pay in an
aggregate amount equal to approximately $1,437,450, to
be paid out over an 18-month period. In addition, Ms. Scott
was eligible to receive (i) a lump sum payment equal to the
difference between active employee healthcare premiums
and healthcare continuation coverage premiums ($14,593),
(ii) prorated vesting of PSUs representing 56,568 PSUs at
target, with actual payout determined based upon Company
performance during the performance period and prorated
for the period from the respective grant dates to Ms. Scott’s
termination date (estimated value of $1,045,377, based on
the Company’s closing stock price as of March 15, 2016),
(iii) prorated vesting of 48,472 stock options, prorated for
the period from the respective grant dates to Ms. Scott’s
termination date (estimated value of $133,146, based on
the difference between the option exercise prices and
the Company’s closing stock price as of March 15, 2016),
(iv) prorated 2016 target bonus, based on the greater of target
and actual performance (estimated to be $90,225, assuming
target), and (v) outplacement assistance for a maximum of
12 months (estimated to be $35,000).
For the continuing named executive officers, we have
quantified the potential payments upon termination
under various termination circumstances in the tables
set forth below. These tables assume that the covered
termination took place on December 31, 2015.