exv10w5












Exhibit 10.5




THE WESTERN UNION COMPANY

2006 NON-EMPLOYEE DIRECTOR EQUITY COMPENSATION PLAN

NONQUALIFIED STOCK OPTION GRANT — TERMS AND CONDITIONS





	1.	 	These Terms and Conditions form part of the Stock Option Agreement (the “Agreement”) pursuant
to which you have been granted a Nonqualified Stock Option (“Stock Option”) under The Western
Union Company 2006 Non-Employee Director Equity Compensation Plan (the “Plan”). A copy of the
Plan is enclosed for your convenience. The terms of the Plan are hereby incorporated in this
Agreement by reference and made a part hereof. Any capitalized terms used in this
Agreement that are not defined herein shall have the meaning set forth in the Plan.
	 
	2.	 	The number of common shares of The Western Union Company (the “Company”) subject to the Stock
Option, and the option exercise price, are specified in the attached Award Notice (which forms
part of the Agreement).
	 
	3.	 	Subject to the other provisions of this Agreement and the terms of the Plan, at any time or
times on or after the Date of Grant specified in the attached Award Notice, but not later than
the tenth anniversary of such Date of Grant, you may exercise this Stock Option as to the
number of shares of common stock of the Company (“Common Stock”) which, when added to the
number of shares of Common Stock as to which you have theretofore exercised under this Stock
Option, if any, will not exceed the total number of shares of Common Stock covered hereby.
This Stock Option may not be exercised for a fraction of a share of Common Stock of the
Company.
	 
	4.	 	This Stock Option may not be exercised unless the following conditions are met:






	 	(a)	 	Legal counsel for the Company must be satisfied at the time of exercise that
the issuance of shares upon exercise will comply with applicable U.S. federal, state,
local and foreign laws.
	 
	 	(b)	 	You pay the exercise price as follows: (i) by giving notice to the Company or
its designee of the number of whole shares of Common Stock to be purchased and by
making payment therefor in full (or arranging for such payment to the Company’s
satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by
attestation procedures established by the Company) of previously owned whole shares of
Common Stock (which you have held for at least six months or which you have purchased
on the open market) having an aggregate Fair Market Value, determined as of the date of
exercise, equal to the aggregate purchase price payable by reason of such exercise, (C)
except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to
the Company to whom you have submitted an irrevocable notice of exercise (i.e., also
known as “cashless exercise”) or (D) by a combination of (A) and (B) and (ii) by
executing such documents as the Company may reasonably request.






	5.	 	In the event that you cease to be a Non-Employee Director for any reason, you will continue
to have the right to exercise this Stock Option in accordance with the other provisions of
this Agreement and the applicable provisions of the Plan until and including the tenth
anniversary of the Date of Grant specified in the attached Award Notice.
	 
	6.	 	As long as you continue service to the Company, you may transfer Stock Options to a Family
Member or Family Entity without consideration; provided, however, in the case of a transfer of
Stock Options to a limited liability company or a partnership which is a Family Entity, such
transfer may be for consideration consisting solely of an entity interest in the limited
liability company or partnership to which the transfer is made. Any transfer of Stock Options
shall be in a form acceptable to the Committee, shall be signed by you and shall be effective
only upon written acknowledgement by the Committee of its receipt and acceptance of such
notice. If a Stock Option is transferred to a Family





 









 





	 	 	Member or Family Entity, the Stock
Option may not thereafter be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of by such Family Member or Family Entity except by will or the laws of descent and
distribution.
	 
	7.	 	Regardless of any action the Company takes with respect to any or all income tax, social
insurance, payroll tax, payment on account or other tax-related items related to your
participation in the Plan and legally applicable to you (“Tax-Related Items”), you acknowledge
that the ultimate liability for all Tax-Related Items is and remains your responsibility and
may exceed the amount actually withheld by the Company. You further acknowledge that the
Company (i) makes no representations or undertakings regarding the treatment of any
Tax-Related Items in connection with any aspect of the Stock Option, including but not limited
to, the grant, vesting, exercise of the Stock Option, the issuance of shares of Common Stock
upon exercise, the subsequent sale of shares of Common Stock acquired pursuant to the exercise
of the Stock Option and the receipt of any dividends; and (ii) do not commit to and are under
no obligation to structure the terms of the grant or any aspect of the Stock Option to reduce
or eliminate your liability for the Tax-Related Items or achieve any particular tax result.
Further, if you have become subject to tax in more than one jurisdiction between the Grant
Date and the date of any relevant taxable or tax withholding event (“Tax Date”), as
applicable, you acknowledge that the Company may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.
	 
	 	 	Prior to the Tax Date, you will pay or make adequate arrangements satisfactory to the
Company to satisfy all Tax-Related Items. In this regard, you authorize the Company or its
agent, at its discretion, to satisfy the obligations with regard to all Tax-Related Items by
one or a combination of the following: (A) accept a cash payment in U.S. dollars in the
amount of Tax-Related Items, (B) withhold whole shares of Common Stock which would otherwise
be delivered to you having an aggregate Fair Market Value, determined as of the Tax Date, or
withhold an amount of cash from any cash compensation which would otherwise be payable to
you by the Company equal to the amount necessary to satisfy the Tax-Related Items, or (C)
withhold from proceeds of the sale of shares of Common Stock acquired pursuant to the
exercise of the Stock Option either through
a voluntary sale or through a mandatory sale arranged by the Company (on your behalf
pursuant to this authorization).
	 
	 	 	To avoid any negative accounting treatment, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding amounts or other
applicable withholding rates. If the obligation for Tax-Related Items is satisfied by
withholding in shares of Common Stock, for tax purposes, you are deemed to have been issued
the full number of shares of Common Stock subject to the exercised Stock Option,
notwithstanding that a number of shares of Common Stock are held back solely for the purpose
of paying the Tax-Related Items due as a result of any aspect of Director’s participation in
the Plan. Finally, you shall pay to the Company any amount of Tax-Related Items that the
Company may be required to withhold or account for as a result of your participation in the
Plan that cannot be satisfied by the means previously described. The Company may refuse to
issue or deliver the shares of Common Stock or the proceeds of the sale of shares of Common
Stock to the Director, if Director fails to comply with his or her obligations in connection
with the Tax-Related Items.
	 
	8.	 	The Board or Committee may amend or terminate the Plan and the Committee may amend (or its
delegate may amend) these Terms and Conditions. No amendment may impair your rights as an
option holder without your consent. The determination of such impairment shall be made by the
Committee in its sole discretion.




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	9.	 	The Committee (or its delegate) administers the Plan and has discretion to interpret the Plan
and this Agreement. Any decision or interpretation rendered by the Committee or its delegate
shall be final, conclusive and binding on you and all persons claiming under or through you.
By accepting this grant or other benefit under the Plan, you and each person claiming under or
through you shall be conclusively deemed to have indicated acceptance and ratification of, and
consent to, any action taken under the Plan by the Committee or its delegate
	 
	10.	 	This Award is discretionary, non-binding for future years and there is no promise or
guarantee that such grants will be offered to the Director in future years.
	 
	11.	 	The Company is not providing any tax, legal or financial advice, nor is the Company making
any recommendations regarding your participation in the Plan, or your acquisition or sale of
the shares of Common Stock acquired pursuant to the exercise of the Stock Option. You are
hereby advised to consult with your own personal tax, legal and financial advisors regarding
your participation in the Plan before taking any action related to the Plan.
	 
	12.	 	The validity, construction, interpretation, administration and effect of the Plan and this
Agreement and rights relating to the Plan and to this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Delaware in the United
States of America, as provided in the Plan. For purposes of litigating any dispute that
arises directly or indirectly under the Stock Option or the Agreement, the parties hereby
submit to and consent to the jurisdiction of the State of Colorado in the United States of
America, and agree that such litigation shall be conducted only in the courts of Arapahoe
County in the State of Colorado in
the United States of America, or the federal courts for the United States of America for the
District of Colorado, and no other courts, where this grant is made and/or to be performed.
	 
	13.	 	If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby and the invalid, illegal or unenforceable
provisions shall be deemed null and void; however, to the extent permissible by law, any
provisions which could be deemed null and void shall first be construed, interpreted or
revised retroactively to permit this Agreement to be construed as to foster the intent of this
Agreement and the Plan.
	 
	14.	 	The Company may, in its sole discretion, decide to deliver any documents related to current
or future participation in the Plan by electronic means. Director hereby consents to receive
such documents by electronic delivery and agrees to participate in the Plan through an online
or electronic system established and maintained by the Company or a third party designated by
the Company.
	 
	15.	 	The Company reserves the right to impose other requirements on your participation in the
Plan, on the Stock Option and on any shares of Common Stock purchased upon exercise of the
Stock Option under the Plan, to the extent the Company determines it is necessary or advisable
in order to comply with local law or facilitate the administration of the Plan, and to require
you to sign any additional agreements or undertakings that may be necessary to accomplish the
foregoing.






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