<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
The Dial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0<ho>-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
Dial Corp Logo
1850 North Central Avenue
Phoenix, AZ 85004-4525
April 11, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders. The meeting will be held on Thursday, May 29, 1997, at the
Scottsdale Center for the Arts, 7380 East Second Street, Scottsdale, Arizona.
The meeting will begin promptly at 9:00 a.m., Mountain Standard Time. No
admission tickets or other credentials will be required for attendance at the
meeting. You may use the free parking located off of Civic Center Boulevard or
off of Second Street.
Directors and officers are expected to be present before and after the
meeting to speak with stockholders. During the meeting, there will be an
opportunity for stockholder questions regarding the affairs of the Company and
for discussion of the business to be considered at the meeting, as explained in
the Notice and Proxy Statement which follow.
IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS
SOON AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
Sincerely,
/s/ Malcolm Jozoff
Malcolm Jozoff
Chairman, President and
Chief Executive Officer
<PAGE> 3
Dial Corp Logo
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 1997
April 11, 1997
The Annual Meeting of Stockholders of The Dial Corporation, a Delaware
corporation (the "Company"), will be held at the Scottsdale Center for the Arts,
7380 East Second Street, Scottsdale, Arizona 85251 on Thursday, May 29, 1997, at
9:00 a.m., Mountain Standard Time, for the following purposes:
1. To elect Directors of the Company as set forth in the attached Proxy
Statement;
2. To consider and vote upon the performance goals and certain other terms
under The Dial Corporation 1996 Stock Incentive Plan for purposes of
Internal Revenue Code (the "Code") Section 162(m);
3. To consider and vote upon the performance goals and certain other terms
under The Dial Corporation Annual Incentive Plan for purposes of Code
Section 162(m); and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on April 4, 1997, as
the record date for determining the stockholders entitled to notice of, and to
vote at, the meeting and any adjournments thereof. A list of such stockholders
will be available at the time and place of the meeting, and for 10 days prior to
the meeting between the hours of 7:00 a.m. and 3:30 p.m., Mountain Standard
Time, at the Company's Technical and Administrative Center located at 15101
North Scottsdale Road, Scottsdale, Arizona 85254.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THIS MEETING.
PLEASE COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD IN THE RETURN
ENVELOPE AS SOON AS POSSIBLE. THIS WILL NOT LIMIT YOUR RIGHT TO ATTEND OR VOTE
AT THE MEETING.
By Order of the Board of Directors
/s/ William A. Arbitman
William A. Arbitman
Vice President and Secretary
<PAGE> 4
PROXY STATEMENT
OF
THE DIAL CORPORATION
------------------------
1850 NORTH CENTRAL AVENUE
PHOENIX, ARIZONA 85004-4525
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Dial Corporation, a Delaware
corporation ("Dial" or the "Company"), to be used at the 1997 Annual Meeting of
Stockholders of the Company (the "Annual Meeting" or the "Meeting") and at any
adjournments or postponements thereof.
The Annual Meeting of Stockholders will be held on May 29, 1997, beginning
at 9:00 a.m., Mountain Standard Time, at the Scottsdale Center for the Arts,
7380 East Second Street, Scottsdale, Arizona 85251.
This is the first Annual Meeting of Stockholders of the Company. On August
15, 1996, The Dial Corp (which has changed its name to, and is hereinafter
referred to as, Viad Corp) made a distribution (the "Distribution") as a
dividend to its stockholders consisting of all the shares of common stock, par
value $0.01 per share (the "Common Stock") of the Company, to which Viad Corp
had contributed its consumer products business. By virtue of the Distribution,
the Company became a separate, publicly held company.
This Proxy Statement and accompanying form of proxy are first being mailed
to holders of the Common Stock on or about April 11, 1997.
GENERAL INFORMATION
The enclosed proxy, if properly executed and returned, will be voted
according to its specifications but may be revoked at any time before it is
voted by giving notice in writing to the Secretary of the Corporation or by
voting in person at the Meeting. The holders of a majority of the issued and
outstanding Common Stock, present in person or by proxy, will constitute a
quorum for the transaction of business at the Annual Meeting or any adjournments
thereof. Abstentions will not be counted as votes cast on the proposed election
of Directors, but will have the effect of a vote cast in opposition to proposals
2 and 3. Broker non-votes and proxies for which authority is withheld will not
be counted as shares entitled to vote or votes cast on any matter to which they
relate. If a stockholder is a participant in an employee 401K Plan of the
Company (the "401K Plan"), the proxy will serve as a voting instruction to the
Trustee. If no voting instructions are received, the Trustee will vote those
shares in accordance with the majority of shares voted in the 401K Plan for
which instructions were received or in the discretion of such Trustee as its
fiduciary duty may require.
Only stockholders of record of Common Stock as of the close of business on
the record date, April 4, 1997, will be eligible to vote at the Meeting. The
number of shares of Common Stock then outstanding was 95,980,958 shares. Each
outstanding share will be entitled to one vote. For those proposals for which no
directions are given, the proxy will be voted "for" the election of the
Directors set forth herein and "for" proposals 2 and 3 and in accordance with
the best judgment of the proxy holders on any other proposals properly brought
before the meeting. To be elected, each Director must receive the affirmative
vote of the holders of a plurality of the votes cast. Approval of proposals 2
and 3 requires the affirmative vote of a majority of the shares present and
entitled to vote on such proposals.
<PAGE> 5
The cost of soliciting proxies will be borne by the Company. Solicitation
will be made primarily through the use of the U.S. mail, but regular employees
of the Company may solicit proxies personally, by telephone or telegram. The
Company has retained Georgeson & Company, Inc. to assist it in connection with
the solicitation at an estimated fee of $8,000 plus out-of-pocket expenses. The
Company will reimburse banks, brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to beneficial owners of shares.
BOARD OF DIRECTORS AND ITS COMMITTEES
Effective upon the Distribution, the members of the Board of Directors were
as follows: Thomas L. Gossage and Dennis C. Stanfill were elected to serve until
the 1997 Annual Meeting; Joe T. Ford and A. Thomas Young were elected to serve
until the 1998 Annual Meeting; and Donald E. Guinn and Malcolm Jozoff were
elected to serve until the 1999 Annual Meeting. As described in the Bylaws of
the Company, the Board has the authority to fix the number of Directors, to
elect Directors to fill newly created directorships resulting from any increase
in the authorized number of Directors and to fill vacancies which may arise from
any resignation, retirement or other cause. On January 27, 1997, the Board
increased its size to 10 Directors. The following Directors were elected by the
Board at that time: Joy A. Amundson and Michael T. Riordan to the class of
Directors to serve until the 1997 Annual Meeting; Barbara S. Thomas to serve
until the 1998 Annual Meeting; and, Herbert M. Baum to serve until the 1999
Annual Meeting. In order to better balance the composition of the classes, Mr.
Stanfill resigned as a member of the 1997 class of Directors and was elected to
the 1998 class. While that will extend Mr. Stanfill's service beyond the normal
retirement age for Directors, the Board believes that consideration is
outweighed by the benefits of his continued service to the new Company.
The Board of Directors, which held three meetings during 1996 following the
Distribution, has established four Committees: an Executive Committee, an Audit
Committee, an Executive Compensation Committee and a Governance Committee. With
the exception of the Executive Committee, all the Committees consist only of
non-management, independent Directors.
- The Executive Committee, which held no meetings during 1996, exercises
all the powers of the Board in the management of the business and affairs
of the Company, except as limited by Delaware law, when the Board is not
in session. Messrs. Jozoff, Ford, Guinn and Stanfill are members of this
Committee.
- The Audit Committee, which held one meeting in 1996, recommends
appointment of the Company's independent public accountants and reviews
audit reports, accounting policies, financial statements, internal
auditing reports, internal controls and audit fees. Messrs. Ford and
Young and Mses. Amundson and Thomas are members of this Committee.
- The Executive Compensation Committee, which held three meetings in 1996,
reviews, for recommendation to the Board, salaries and other compensation
awards under various compensation plans, approves salaries and
compensation of Executive Officers and also approves grants under the
Company's stock incentive plan (see the "Executive Compensation Committee
Report" below). Messrs. Stanfill, Gossage, Young and Riordan are members
of this Committee.
- The Governance Committee, which met one time in 1996, establishes the
rules and procedures for Board governance and is responsible for
proposing a slate of Directors for election by the stockholders
2
<PAGE> 6
at each annual meeting and proposing candidates to fill any vacancies on
the Board. Messrs. Guinn, Gossage and Baum are members of this Committee.
With the exception of one Director who was unable to attend one Board
meeting and one committee meeting, the Directors attended all meetings of the
Board and their respective Committees.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive an annual retainer
of $30,000, a fee of $1,500 for each Board of Directors meeting attended and a
fee of $1,000 for each Executive, Audit, Executive Compensation and Governance
Committee meeting attended.
Nonemployee Directors may elect to participate in the Deferred Compensation
Plan for Directors of the Company under which payment of part or all of their
Directors' fees and retainers is deferred. This Plan provides participants with
the option to defer their compensation in the form of stock units related to the
price of the Company's Common Stock, as well as the option to defer in the form
of cash. Such accumulated compensation, plus interest thereon at the long-term
medium-quality bond rate for cash accounts or dividend equivalents reinvested
for stock units accounts, as the case may be, is payable to the Director or to
the Director's estate or beneficiary, over such period as may be designated,
upon termination of service as a Director.
The Dial Corporation 1996 Stock Incentive Plan (the "1996 Plan") provides
generally that each Director of the Company who is not an employee of the
Company or any of its subsidiaries or affiliates is entitled, upon his or her
first election as a Director of the Company (the "Initial Grant"), and
thereafter annually on each August 15 during such Director's term (the "Annual
Grant"), to receive automatic grants of non-qualified options to purchase Common
Stock of the Company having an exercise price per share of 100% of the fair
market value of the Common Stock at the grant date of such non-qualified stock
option. The number of shares subject to each such Initial Grant and each such
Annual Grant is equal to the amount of the annual retainer then in effect
divided by an amount equal to one third (1/3) of such fair market value at the
grant date, rounded to the nearest 100 shares. A Director elected during the
course of a year will receive, upon election, a pro rata annual grant for the
year in which such election occurs, based on the number of full months between
the Director's election and the next annual grant date. In August 1996, pursuant
to the 1996 Plan, 13,400 non-qualified options to purchase Common Stock were
granted to each nonemployee Director who was a Director at such time, at the
exercise price of $13.375, the fair market value on the date of grant. In
January 1997, pursuant to the 1996 Plan, those nonemployee Directors elected
subsequent to the Distribution were each granted non-qualified options to
purchase 9,400 shares of Common Stock, at the exercise price of $14.375, the
fair market value on the date of the grant.
The Company also provides nonemployee Directors with accidental death and
dismemberment insurance benefits of $300,000 and, in addition, travel accident
insurance benefits of $250,000 when traveling on the Company's business.
The five nonemployee Directors who were Directors at the time of the
Distribution participate in a Director's Charitable Award Program which enables
each Director to contribute $100,000 per year to one or more charitable
organizations selected by the Director over a period of 10 years following the
Director's death. The program is funded through the purchase of life insurance
on the life of the Director, with the Company as beneficiary.
3
<PAGE> 7
PROPOSAL NO. 1 ELECTION OF DIRECTORS
The Board of Directors of the Company consists of 10 persons divided into
three classes. Three Directors will be elected at the Annual Meeting to serve
for a term expiring at the Company's Annual Meeting in the year 2000.
The persons appointed in the enclosed proxy intend to vote such proxy at
the Annual Meeting, and any adjournments or postponements thereof, for the
election of each of the nominees named below, for the term indicated or until
their respective successors have been elected and have qualified. The Board of
Directors knows of no reason why any of these nominees should be unable or
unwilling to serve. However, if for any reason any nominee should be unable or
unwilling to serve, the proxies will be voted for the election of such other
person to the office of Director as the Board of Directors may nominate in the
place of such nominee.
Set forth below is the principal occupation of, and certain other
information regarding, such nominees and other Directors whose terms of office
will continue after the Annual Meeting.
NOMINEES FOR TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME OTHER DIRECTORSHIPS AND AGE YEAR FIRST ELECTED
- ------------------ ------------------------------------------------ ---------------------
<S> <C> <C>
Thomas L. Gossage Mr. Gossage is a former Chairman, Chief 1996
Executive Officer and Director of Hercules (Previously a member
Incorporated, a worldwide producer of chemicals of the Board of Viad
and related products. He is also a Director of Corp since 1993)
Alliant Techsystems Inc. Age 62
Joy A. Amundson Ms. Amundson was elected Senior Vice President 1997
of Abbott Laboratories, a diversified health
care products and services company, and
President of its Chemical and Agricultural
Products Division effective June 1, 1995. She
has served Abbott Laboratories in a variety of
management positions since joining that company
in 1982. Ms. Amundson is on the Board of the
National Committee for Quality Healthcare and is
Chairman of the Board of Lutheran General
Hospital. Age 42
Michael T. Riordan Mr. Riordan was elected Chairman of Fort Howard 1997
Corporation, a paper products manufacturer, in
1997, in addition to his existing positions of
President and Chief Executive Officer. He served
as President and Chief Operating Officer and a
member of the Board of Directors of that company
since 1992. Age 46
</TABLE>
4
<PAGE> 8
DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING AT THE 1998 ANNUAL MEETING
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME OTHER DIRECTORSHIPS AND AGE YEAR FIRST ELECTED
- ------------------ ------------------------------------------------ ---------------------
<S> <C> <C>
Joe T. Ford Mr. Ford is Chairman and Chief Executive Officer 1996
and a Director of ALLTEL Corporation, a (Previously a member
telecommunications and information services of the Board of Viad
company. Age 59 Corp since 1991)
A. Thomas Young Mr. Young is a former Executive Vice President 1996
of Lockheed Martin Corporation and prior thereto (Previously a member
was President and Chief Operating Officer of of the Board of Viad
Martin Marietta Corporation. He is also a Corp since 1991)
Director of Cooper Industries, Inc., Potomac
Electric Power Co., B.F. Goodrich, Science
Applications International Corp. and Memotec
Communications Inc. Age 58
Dennis C. Stanfill Mr. Stanfill is President of the Dennis Stanfill 1996
Company, a private investment and venture (Previously a member
capital firm, and prior thereto was Senior of the Board of Viad
Advisor, Credit Lyonnais, a global bank; Corp since 1981)
Co-Chairman and Co-Chief Executive Officer of
Metro-Goldwyn-Mayer Inc.; Chairman of AME, Inc.,
a video post production company; and President
and a principal stockholder of Stanfill Bowen &
Co., Inc., a private investment and venture
capital firm. Age 70
Barbara S. Thomas Ms. Thomas is President of Pillsbury Canada 1997
Limited, a food products company, a position she
has held since 1995. She previously held senior
management positions with Pillsbury USA and
Nabisco Brands, Inc. She is a member of the
Board of Directors of the Food and Consumer
Products Manufacturers of Canada. Age 45
</TABLE>
5
<PAGE> 9
TERMS EXPIRING AT THE 1999 ANNUAL MEETING
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME OTHER DIRECTORSHIPS AND AGE YEAR FIRST ELECTED
- ------------------ ------------------------------------------------ ---------------------
<S> <C> <C>
Donald E. Guinn Mr. Guinn is Chairman Emeritus of Pacific 1996
Telesis Group, a telecommunications holding (Previously a member
company. He is also a Director of Pacific Mutual of the Board of Viad
Life Insurance Company and BankAmerica Corp since 1986)
Corporation and its subsidiary, Bank of America,
NT&SA. Age 63
Malcolm Jozoff Mr. Jozoff is Chairman, President and Chief 1996
Executive Officer of the Company. Prior to the
Distribution, he served as President and Chief
Executive Officer of the Consumer Products
Business of Viad Corp, positions to which he was
appointed in May 1996. From 1993 to 1995, he was
Chairman and Chief Executive Officer of Lenox,
Inc., a manufacturer of consumer durables. From
1967 to 1992, he was employed by The Procter &
Gamble Company, a manufacturer of consumer
products where, in 1990, he achieved the
positions of President-Health Care Sector,
Corporate Group Vice President and a member of
the Executive Committee. Mr. Jozoff also is
Director of The Columbia Gas System, Inc. and
ChemTrak Incorporated. In 1993, in connection
with a civil proceeding brought by the
Securities and Exchange Commission, Mr. Jozoff
consented, without admitting or denying the
allegations, to the entry of an order enjoining
him from violating Section 10(b) of the Exchange
Act. Age 57
Herbert M. Baum Mr. Baum is Chairman and Chief Executive Officer 1997
of Quaker State Corporation, a producer of motor
oils and lubricants, a position he has held
since 1993. From 1978 to 1992 he was employed by
Campbell Soup Company, a food products company.
In 1992 he was named President-Campbell North
and South America. He also is a Director of
Meredith Corporation, Whitman Corporation, the
American Petroleum Institute and the National
Petroleum Refiners Association. Age 60
</TABLE>
6
<PAGE> 10
OWNERSHIP OF THE COMPANY'S SECURITIES
The following tables set forth certain information as of March 14, 1997, or
such other date as indicated, regarding those persons known to the Company to be
the beneficial owners of more than 5% of the Company's outstanding Common Stock
and the beneficial ownership, as defined pursuant to the Securities Exchange Act
of 1934, as amended, (the "Exchange Act"), of such Common Stock by each Director
and each Named Executive Officer (as defined below) of the Company and all
Directors and Executive Officers as a group:
CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OWNERSHIP CLASS
- ---------------------------------------------------------------- -------------------- ----------
<S> <C> <C>
Brinson Partners, Inc.,......................................... 5,532,742(1) 5.8%
209 S. LaSalle
Chicago, Illinois 60604
FMR Corp........................................................ 6,598,548(2) 6.9%
82 Devonshire Street
Boston, Massachusetts 02109
Franklin Resources, Inc......................................... 9,601,910(3) 10.1%
777 Mariners Island Blvd.
San Mateo, California 94404
Wells Fargo Bank, N.A........................................... 5,670,818(4) 5.9%
Trustee of The Dial Corporation Employee Equity Trust
100 W. Washington Street
Phoenix, Arizona 85003
</TABLE>
- ---------------
(1) The ownership information set forth herein is based in its entirety on
material contained in a Schedule 13G, dated February 9, 1997, filed with the
SEC by Brinson Partners, Inc., Brinson Trust Company, Brinson Holdings,
Inc., SBC Holding (USA), Inc. and Swiss Bank Corporation. With respect to
the shares held, each of Brinson Partners, Inc., Brinson Holdings, Inc., SBC
Holding (USA), Inc. and Swiss Bank Corporation have shared voting and shared
dispositive power, with respect to 5,532,742 shares and Brinson Trust
Company has sole voting and sole dispositive power with respect to 1,102,500
shares.
(2) The ownership information set forth herein is based in its entirety on
material contained in a Schedule 13G, dated February 14, 1997, filed with
the SEC by FMR Corp., Edward C. Johnson 3rd, and Abigail P. Johnson with
respect to shares of the Company beneficially owned as of December 31, 1996.
According to such 13G, 5,830,048 shares are beneficially owned by Fidelity
Management & Research Company, a wholly-owned subsidiary of FMR Corp. and an
investment advisor registered under Section 203 of the Investment Advisors
Act of 1940, which acts as investment adviser to various investment
companies, and 768,500 shares are beneficially owned by Fidelity Management
Trust Company, a wholly-owned subsidiary of FMR Corp., and a bank as defined
in Section 3(a)(6) of the Securities and Exchange Act of 1934, as amended.
Edward C. Johnson, 3rd, Chairman of FMR Corp., FMR Corp., through its
control of Fidelity Management & Research Company, and the Fidelity Funds
each has sole power to dispose of the 5,830,048 shares owned by the Fidelity
Funds. Johnson & FMR Corp., through its control of Fidelity Management Trust
Company, each has sole dispositive power over the 768,500 shares
beneficially owned by Fidelity Management Trust Company and sole power to
vote or direct the voting of 43,100 such shares.
(3) The ownership information set forth herein is based in its entirety on
material contained in a Schedule 13G, dated February 12, 1997, filed with
the SEC by Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson,
Jr., and Franklin Mutual Advisors, Inc. According to such 13G, Franklin
Mutual Advisors, Inc. has sole voting and dispositive power with respect to
9,079,300 shares, Franklin Advisers, Inc., a subsidiary of Franklin
Resources, Inc., has such power with respect to 391,800 shares and Franklin
Management, Inc., a subsidiary of Franklin Resources, Inc., has such power
with respect to 130,810 shares.
(4) The ownership information set forth herein is as of March 11, 1997, and is
based in its entirety on information provided by Wells Fargo Bank, N.A., as
Trustee for The Dial Corporation Employee Equity Trust. Wells Fargo Bank,
N.A. has disclaimed beneficial ownership of the shares of stock in the
Trust. Shares are periodically allocated and released from the Trust to
satisfy funding requirements under the Company's Capital Accumulation Plan
(the "Plan"). The Trust's shares will be voted, under confidential voting
procedures, by the Trustee of the Plan in the same proportion as the voting
instructions received from such Plan's participants with respect to the
Company's Common Stock allocated to such participants' accounts.
Non-instructed shares held in the Trust are voted in the same proportions as
the shares for which instructions have been received.
7
<PAGE> 11
EXECUTIVE OFFICERS AND DIRECTORS
STOCK HOLDINGS
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS
- ----------------------------------------------------------------- ----------------- ----------
<S> <C> <C>
Joy A. Amundson.................................................. 1,000 *
Herbert M. Baum.................................................. 1,000 *
Joseph L. Fischer................................................ 8,355 *
Joe T. Ford...................................................... 57,839 *
Thomas L. Gossage................................................ 29,840 *
Donald E. Guinn(2)............................................... 68,270 *
Malcolm Jozoff................................................... 178,110 *
Michael T. Riordan(2)............................................ 1,000 *
Mark R. Shook(2)................................................. 141,279 *
Dennis C. Stanfill............................................... 61,450 *
Robert B. Stearns................................................ 10,469 *
Barbara S. Thomas................................................ 1,000 *
Bernhard J. Welle(2)............................................. 144,765 *
A. Thomas Young.................................................. 51,839 *
All Directors and Executive Officers as a Group (14 persons)..... 756,216 *
</TABLE>
- ---------------
(1) Includes shares of Common Stock subject to options which are presently
exercisable or will become exercisable within 60 days. The number of shares
of Common Stock subject to such exercisable options include 5,155 held by
Mr. Fischer; 49,839 held by Mr. Ford; 27,840 held by Mr. Gossage; 67,270
held by Mr. Guinn; 103,110 held by Mr. Jozoff; 123,583 held by Mr. Shook;
54,450 held by Mr. Stanfill; 9,279 held by Mr. Stearns; 140,473 held by Mr.
Welle; 49,839 held by Mr. Young; and 630,838 for all directors and executive
officers as a group.
(2) The following individuals share voting and dispositive powers with respect
to the indicated number of shares: Mr. Guinn -- 1,000 shares; Mr.
Riordan -- 1,000 shares; Mr. Shook -- 17,696 shares; Mr. Welle -- 4,292
shares. All of the other individuals have sole voting and dispositive powers
with respect to their shares.
* Less than one percent
8
<PAGE> 12
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation received for the years 1994
through 1996 by the Chief Executive Officer and each of the Company's most
highly compensated executive officers as of December 28, 1996 (the "Named
Executive Officers"). Amounts set forth in the table and the following pages
include amounts paid by Viad Corp or its subsidiaries prior to the Distribution.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------------------
ANNUAL COMPENSATION LONG-TERM
------------------------------------ RESTRICTED SECURITIES INCENTIVE
OTHER ANNUAL STOCK UNDERLYING PLAN ALL OTHER
SALARY BONUS COMPENSATION AWARDS OPTIONS/SARs PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($)(2) (#)(3) $(4) ($)
- ------------------------------ ---- -------- -------- ------------ ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Malcolm Jozoff,............... 1996 386,738 450,000(5) 66,834 0 1,053,110 $ 0 79,666(6)
Chairman, President and 1995 0 0 0 0 0 0 0
Chief Executive Officer 1994 0 0 0 0 0 0 0
Joseph L. Fischer,............ 1996 179,638 91,720 48,345 0 148,610 12,200 59,635(7)
Former Senior Vice 1995 25,581 18,200 9,963 0 10,311 0 11,946
President --
International(8) 1994 0 0 0 0 0 0 0
Mark R. Shook,................ 1996 239,643 74,600 55 0 189,910 23,400 7,189(9)
Senior Vice President -- 1995 221,950 44,400 11,362 0 27,634 0 6,659
International 1994 190,797 124,600 25,607 0 28,046 158,600 5,585
Robert B. Stearns,............ 1996 212,581 13,600 12,769 0 189,920 12,000 4,065(10)
Senior Vice President -- 1995 113,609 23,000 7,717 0 18,559 0 0
Chief Financial Officer(11) 1994 0 0 0 0 0 0 0
Bernhard J. Welle,............ 1996 187,071 62,500 55 0 152,330 12,600 4,227(12)
Senior Vice President -- 1995 176,224 0 11 0 16,704 0 5
Human Resources 1994 168,611 110,600 16,298 0 18,766 115,200 5
</TABLE>
- ---------------
(1) The amounts shown for 1994-1996 reflect income tax gross-ups.
(2) Dividends are paid on restricted stock and performance-based stock at the
same rate as paid to all stockholders. On December 28, 1996, the following
person held the following amount of performance-based stock valued at then
current market values: Mark R. Shook, 5,800 shares of the Company and 5,800
shares of Viad at $180,525.
(3) The amounts shown for 1996 reflect grants of stock options made following
the Distribution intended to aggregate the grants that otherwise would have
been made over a period of three years, but also include, in the case of
Mr. Jozoff, an option to purchase shares of Viad common stock which was
converted in the Distribution into an option to purchase 103,110 shares of
Company common stock. At the Distribution, all outstanding options of Viad
held by the Named Executive Officers were converted into options for the
stock of the Company. In the conversion, the number of options and the
exercise price of the options were adjusted to preserve the existing value
of the outstanding Viad options. The amounts shown for 1995 and 1994
reflect the number of options granted by Viad for such year, as converted
into options for stock of the Company.
(4) The amounts shown in this column reflect payment made in connection with
the Viad Performance Unit Incentive Plan.
(5) This amount reflects a signing bonus of $150,000, an incentive payment of
$150,000 based on the occurrence of the Distribution and a $150,000
incentive payment under the Viad Management Incentive Plan.
(6) Relocation reimbursement.
(7) This amount reflects a relocation reimbursement of $55,570 and a 401(k)
Plan match of $4,065.
(8) Mr. Fischer's 1995 salary and bonus represents compensation for
approximately two months. Mr. Fischer resigned his position on February 28,
1997.
(9) This amount reflects a 401(k) Plan match of $3,254 and a Supplemental
401(k) Plan match of $3,935.
(10) This amount reflects a 401(k) Plan match of $4,065.
(11) Mr. Stearns' 1995 salary represents compensation for approximately seven
months.
(12) This amount reflects a 401(k) Plan match of $3,223 and a Supplemental
401(k) Plan match of $1,004.
9
<PAGE> 13
STOCK OPTION GRANTS
The following table sets forth information on stock option grants to each
of the Named Executive Officers in 1996. The amounts shown as potential
realizable values are based on assumed annualized rates of stock price
appreciation of 0%, 5% and 10% over the full 10 year term of the options, which
would result in stock appreciation per share of $0, $8.77 and $22.22,
respectively, for the options granted to Mr. Jozoff in May 1996; $0, $8.10 and
$20.52, respectively, for the options granted on September 24, 1996 at an
exercise price of $12.8750; and $0, $9.08 and $23.01, respectively, for the
options granted on November 21, 1996 at an exercise price of $14.4375 as a
substitute for the long-term incentive plans that were discontinued after the
Distribution. To illustrate the impact of such stock price appreciation, if the
price of the Company's Common Stock was to appreciate over the life of the
options granted on September 24, 1996 at the 0%, 5% and 10% rates described in
the table, the aggregate market value of the approximately 95.3 million shares
outstanding on that date would increase by $0, $771.9 million and $2.0 billion,
respectively. These potential realizable values are based solely on assumed
rates of appreciation required by applicable regulations of the Securities and
Exchange Commission (the "SEC"). Actual gains, if any, on option exercises and
common stockholdings are dependent on the future performance of the Company's
Common Stock and overall stock market conditions. There can be no assurance that
the potential realizable values shown in this table will be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
-------------------------------------------------- AT ASSUMED ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE APPRECIATION
SECURITIES OPTIONS EXERCISE FOR OPTION TERM
UNDERLYING GRANTED TO PRICE ------------------------------
OPTIONS EMPLOYEES IN ($/SHARE) EXPIRATION 5% 10%
NAME GRANTED(#) FISCAL YEAR (1) DATE 0% ($) ($)
- ------------------------------ ---------- ------------ --------- ---------- --- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Malcolm Jozoff.............(2) 103,110 1.65% 13.9414 5/13/06 0 904,038 2,291,001
.............(3) 510,910 8.16% 12.8750 9/24/06 0 4,136,838 10,483,567
.............(4) 439,090 7.01% 14.4375 11/21/06 0 3,986,805 10,103,329
Joseph L. Fischer..........(3) 111,610 1.78% 12.8750 9/24/06 0 903,706 2,290,170
...........(4) 37,000 0.59% 14.4375 11/21/06 0 335,949 851,359
Mark R. Shook..............(3) 142,910 2.28% 12.8750 9/24/06 0 1,157,142 2,932,427
...........(4) 47,000 0.75% 14.4375 11/21/06 0 426,746 1,081,456
Robert B. Stearns..........(3) 142,920 2.28% 12.8750 9/24/06 0 1,157,223 2,932,633
..........(4) 47,000 0.75% 14.4375 11/21/06 0 426,746 1,081,456
Bernhard J. Welle..........(3) 114,330 1.83% 12.8750 9/24/06 0 925,730 2,345,983
..........(4) 38,000 0.61% 14.4375 11/21/06 0 345,029 874,369
ALL STOCKHOLDERS' STOCK PRICE 771.9 2.0
APPRECIATION................ N/A N/A 12.8750 N/A MILLION BILLION
</TABLE>
- ---------------
(1) The exercise prices are the fair market value of the Company's Common Stock
on the grant dates. Each such option contains the right to surrender such
option for cash, which right is exercisable only upon a "change in control"
(as defined in the 1996 Plan). The exercise price may be paid by delivery of
already owned shares, and tax withholding obligations related to the
exercise may be paid by offset of the underlying shares, subject to certain
conditions.
(2) Represents an option to purchase 50,000 shares of Viad Common Stock at an
exercise price of $28.7500 which was converted in the Distribution into an
option to purchase 103,110 shares of the Company's Common Stock at an
exercise price of $13.9414. The option was immediately vested, although the
shares issuable upon exercise are subject to transfer restrictions for the
first year from the date of grant, and fifty percent remain subject to such
restrictions for two years from the date of grant. In the event of a "change
in
10
<PAGE> 14
control" these options become fully vested and exercisable to the full
extent of the original grant. Other terms of this option are as described in
footnote (1).
(3) After one year, one-third of the options become exercisable when the average
closing market price over 20 consecutive days equals or exceeds 133% of the
option price, two-thirds when such price equals or exceeds 167% of the
option price and 100% when such price equals or exceeds 200% of the option
price. All such options become exercisable, in any event, after five years
from the date of grant. The term of the options is 10 years. In the event of
a "change in control", these options become fully vested and exercisable to
the full extent of the original grant. Other terms of these options are as
described in footnote (1).
(4) As a substitute for long-term incentive plans discontinued after the
Distribution, an additional grant of nonqualified options to purchase shares
at the fair market value of the Company's Common Stock on the grant date was
made to the Named Executive Officers and other officers of the Company. The
vesting of these options is the same as described in footnote (3) and other
terms of the options are the same as those described in footnote (1).
AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information for each of the Named Executive
Officers with respect to the exercise of stock options during 1996 and the
fiscal year-end value of unexercised options. The amounts set forth in the two
columns relating to unexercised options, unlike the amounts set forth in the
column headed "Value Realized," have not been, and might never be, realized. The
options might not be exercised and actual gains on exercise, if any, will depend
on the value of the Company's Common Stock on the date of exercise. There can be
no assurance that these values will be realized.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES VALUE OPTIONS AT FY-END(#)(1) AT FY-END($)(2)
ACQUIRED ON REALIZED ----------------------------- -----------------------------
NAME EXERCISE(#) ($) EXERCISABLE NON-EXERCISABLE EXERCISABLE NON-EXERCISABLE
- --------------------------- ----------- -------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Malcolm Jozoff............. 0 0 103,110 950,000 44,708 766,365
Joseph L. Fischer.......... 0 0 5,155 153,766 11,765 179,183
Mark R. Shook.............. 6,240 71,727 130,871 203,727 706,894 248,413
Robert B. Stearns.......... 0 0 9,279 199,200 22,865 237,248
Bernhard J. Welle.......... 0 0 140,473 160,682 870,798 192,076
</TABLE>
- ---------------
(1) At the Distribution, all outstanding options of Viad Corp held by the Named
Executive Officers were converted into options for the stock of the Company.
In the conversion, the number of options and the exercise price of the
options were adjusted to preserve the existing value of the outstanding
options.
(2) The valuation is based on the closing price of the Company's common stock on
December 27, 1996, of $14.3750. The information shown reflects options
accumulated over periods of up to 10 years.
EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
On May 13, 1996, Viad entered into a three-year employment agreement with
Mr. Jozoff, providing for Mr. Jozoff to serve as President and Chief Executive
Officer of the Consumer Products Business of Viad Corp and, effective as of the
Distribution, as Chairman, President and Chief Executive Officer of the Company,
which assumed the employment agreement effective as of the Distribution.
Pursuant to the employment agreement, Mr. Jozoff received cash compensation and
option awards during 1996 as disclosed in the Summary Compensation Table.
The employment agreement provides that following the Distribution the
Company will pay Mr. Jozoff a base salary of $650,000 per annum and that Mr.
Jozoff will be eligible to receive an annual bonus grant and
11
<PAGE> 15
stock options from the Company in accordance with the provisions of the
Company's Annual Incentive Plan and Stock Incentive Plan.
The employment agreement also makes Mr. Jozoff eligible to participate in
all employee benefit plans of the Company available to senior executives, and
provides that, if Mr. Jozoff is still employed by the Company at the end of the
term of the employment agreement, for purposes of his pension benefits, he will
receive, retroactively and until termination of his employment, two years of
employment credit toward retirement for each one year employed.
The Company has entered into an executive severance agreement with each of
the Named Executive Officers and certain other officers which provides that, if
within two years after a change in control of the Company their employment
terminates involuntarily or they leave for a good reason (as defined), or
voluntarily, during the 30-day period following the first anniversary of the
change in control, they would receive three times their salary, incentive
payments and fringe benefits. The agreements also provide a tax gross-up
feature, so that such officers do not have to pay excise taxes imposed by the
Internal Revenue Code (the "Code") on payments made pursuant to the agreement.
The officers also will be credited with three additional years of service under
the Company's retirement plans.
PENSION PLANS
The following table shows estimated annual retirement benefits payable to a
covered participant who retires at age 65 or later, for the years of service and
remuneration level indicated, under The Dial Corporation Retirement Income Plan
and the schedule of The Dial Corporation Supplemental Pension Plan, which
prevents the loss of pension benefits otherwise payable except for the
limitations of Section 415 of the Code. The remuneration covered by the
Retirement Plan is annual salary and annual bonus, as reported in the Pension
Plan Table below. The final remuneration will be calculated on the basis of the
average of the participant's last five years of covered remuneration prior to
retirement.
12
<PAGE> 16
PENSION PLAN TABLE(1),(2)
<TABLE>
<CAPTION>
YEARS OF SERVICE(3)
-----------------------------------------------
REMUNERATION 15 20 25 30(4)
- ------------ ------- ------- --------- ---------
<S> <C> <C> <C> <C>
125,000.... 30,744 40,992 51,241 61,489
150,000.... 37,307 49,742 62,178 74,614
175,000.... 43,869 58,492 73,116 87,739
200,000.... 50,432 67,242 84,053 100,864
225,000.... 56,994 75,992 94,991 113,989
250,000.... 63,557 84,742 105,928 127,114
300,000.... 76,682 102,242 127,803 153,364
400,000.... 102,932 137,242 171,553 205,864
500,000.... 129,182 172,242 215,303 258,364
600,000.... 155,432 207,242 259,053 310,864
700,000.... 181,682 242,242 302,803 363,364
800,000.... 207,932 277,242 346,553 415,864
900,000.... 234,182 312,242 390,303 468,364
1,000,000.. 260,432 347,242 434,053 520,864
1,100,000.. 286,682 382,242 477,803 573,364
1,200,000.. 312,932 417,242 521,553 625,864
1,300,000.. 339,182 452,242 565,303 678,364
1,400,000.. 365,432 487,242 609,053 730,864
1,500,000.. 391,682 522,242 652,803 783,364
1,600,000.. 417,932 557,242 696,553 835,864
1,700,000.. 444,182 592,242 740,303 888,364
1,800,000.. 470,432 627,242 784,053 940,864
1,900,000.. 496,682 662,242 827,803 993,364
2,000,000.. 522,932 697,242 871,553 1,045,864
2,100,000.. 549,182 732,242 915,303 1,098,364
2,200,000.. 575,432 767,242 959,053 1,150,864
2,300,000.. 601,682 802,242 1,002,803 1,203,364
2,400,000.. 627,932 837,242 1,046,553 1,255,864
2,500,000.. 654,182 872,242 1,090,303 1,308,364
2,600,000.. 680,432 907,242 1,134,053 1,360,864
2,700,000.. 706,682 942,242 1,177,803 1,413,364
</TABLE>
- ---------------
(1) The Code, and the Employee Retirement Income Security Act ("ERISA"), limit
the annual benefits which may be paid from a tax-qualified retirement plan.
As permitted by the Code and ERISA, the Company has a supplemental plan
which authorizes the payment of benefits calculated under provisions of the
retirement plan which may be above the limits permitted under the Code and
ERISA for those executives entitled to participate in the supplemental plan.
(2) Benefits are computed on a single-life annuity basis. Such benefits reflect
a reduction to recognize some of the Social Security benefits to be received
by the employee. The amounts set forth are before any adjustment for joint
and survivorship provisions, which would reduce, in some cases, the amounts
shown in the table.
(3) The number of credited years of service for Messrs. Jozoff, Shook, Stearns,
and Welle are 1, 14, 2, and 9, respectively. Estimated retirement benefits
for Messrs. Jozoff, Shook, Stearns, and Welle are $370,300*, $217,000,
$165,000, and $156,000, respectively. No information is shown for Mr.
Fischer as he resigned from the Company effective February 28, 1997, and has
no vested pension benefits.
(4) The Company's Retirement Income Plan limits the years of service credited
for purposes of calculating benefits to a maximum of 30 years. The Company's
Supplemental Pension Plan contains similar limits.
* Assumes 1 extra year of service for each year of credited service after 3
years of employment projected to age 65, pursuant to Mr. Jozoff's employment
agreement.
13
<PAGE> 17
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act, that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following report and the Performance Graph shall not be
incorporated by reference into any such filing.
EXECUTIVE COMPENSATION COMMITTEE REPORT
Prior to the Distribution, all compensation matters that pertained to the
Executive Officers of the Company were considered by the Viad Executive
Compensation Committee and, where required, by the full Board of Directors of
Viad Corp. As a result, until August 1996, compensation decisions affecting the
Company's Executive Officers were made in the context of the compensation
policies followed by Viad Corp.
The Board of Directors of the Company was originally elected in connection
with the Distribution. Messrs. Gossage, Guinn, Stanfill and Young were appointed
to the Company's Executive Compensation Committee (the "Committee") effective
August 15, 1996. Mr. Guinn served on the Committee until the appointment of Mr.
Riordan to the Committee effective January 27, 1997. Since its inception, the
Committee has reviewed and approved certain compensation actions relating to the
Company's 1996 fiscal period, which actions are described in this report. The
Committee also considered and approved a philosophy for executive compensation,
the details of which are also articulated herein.
COMMITTEE ROLE IN OVERSEEING EXECUTIVE COMPENSATION POLICY
A primary role of the Committee is to determine and oversee the
administration of compensation for the Company's Executive Officers. In this
capacity, the Committee is dedicated to ensuring that the Company's compensation
policies and practices are used effectively to support the achievement of the
Company's short-and long-term business objectives.
To preserve objectivity in the achievement of its goals, the Committee is
comprised of four independent, nonemployee Directors who have no "interlocking"
relationships as defined by the SEC. It is the Committee's overall goal to
develop executive compensation policies that are consistent with, and linked to,
strategic business objectives and the Company's compensation philosophy. The
Committee approves the design of, assesses the effectiveness of, and administers
executive compensation programs in support of compensation policies. The
Committee also reviews and approves all salary arrangements and other
remuneration for executives, evaluates executive performance and considers
related matters.
The purpose of the report of the Committee is to inform stockholders of the
Committee's compensation policies for Executive Officers and the rationale for
compensation paid to the Chief Executive Officer (CEO).
COMPENSATION PHILOSOPHY
The Company's primary business objective is to maximize stockholder value
over the long term. To accomplish this objective, the Company has developed a
comprehensive business strategy. The strategy is to continue to seek growth in
revenues and income from the Company's strong core brands, as well as by
expanding existing lines and introducing new products, to cut costs, to develop
its international business and to further expand its business through strategic
acquisitions.
14
<PAGE> 18
The following compensation policies are intended to facilitate the
achievement of the Company's business strategies:
LONG-TERM AND AT-RISK FOCUS
An integrated total compensation program should be structured to
appropriately balance short- and long-term business and financial strategic
goals. A significant amount of total pay for Executive Officers should be
comprised of at-risk pay to align executive interests with stockholder interests
and directly tie compensation value to performance. Emphasis should be placed on
long-term incentives to reinforce the Company's primary business objective.
PAY FOR PERFORMANCE
Executives' total compensation programs should strengthen the relationship
between pay and performance by emphasizing variable, at-risk compensation that
is dependent upon the level of success in meeting specified corporate
performance goals. Individual performance should also affect incentive
compensation earned. A pay-for-performance philosophy can best be accomplished
through annual and longer-term incentives.
EQUITY ORIENTATION
The at-risk components of pay offered should primarily be comprised of
equity-based pay opportunities. Encouraging a personal proprietary interest
provides Executive Officers with a close identification with the Company and
aligns executives' interests with those of stockholders. This promotes a
continuing focus on building profitability and stockholder value. The Committee
has established stock ownership guidelines for executives (one to three times
base salary) to establish expectations for building beneficial shareholdings
over time.
MANAGEMENT DEVELOPMENT
Compensation opportunities should enhance the Company's ability to attract,
retain and encourage the development of exceptionally knowledgeable and
experienced Executive Officers upon whom, in large part, the successful
operation and management of the Company depends.
PAY OPPORTUNITIES
Each program element should target compensation levels at rates that are
reflective of current market practices. Offering market-comparable pay
opportunities allows the Company to maintain a stable, successful management
team.
As part of its overall compensation philosophy, the Committee has
determined appropriate target levels for base salary, annual incentives and
long-term compensation. The Committee has determined that base salaries should
be targeted at the 50th percentile of the market and that individual pay
determinations will be based on individual responsibilities and contributions.
Annual incentives will be targeted at the 50th percentile of market with
opportunities to attain the 75th percentile with superior performance. Long-term
compensation will consist of stock options with the level of awards to be
competitive with long-term compensation plans of the Company's competitors.
Total compensation (base salary, annual incentives and long-term compensation)
will consist of a mix of the components and will provide an opportunity to earn
between the 50th and 75th percentiles for superior
15
<PAGE> 19
performance, with a strong emphasis on variable pay. The Committee believes
these targeted levels are consistent with the Company's overall compensation
philosophy.
Competitive market data is provided by independent compensation
consultants. The data provided compares the Company's compensation practices to
a group of comparator companies. The Company's market for compensation
comparison purposes is comprised of a group of companies (the "Comparator
Group") who tend to have national and international business operations and
sales volumes, market capitalizations, employment levels and lines of business
similar to those of the Company. The Committee reviews and approves the
selection of companies used for compensation comparison purposes.
The companies chosen for the Comparator Group used for compensation
purposes generally are not the same companies which comprise the peer group
index in the Performance Graph included in this proxy statement, although some
overlap exists. The Committee believes that the Company's most direct
competitors for executive talent are not necessarily restricted to all of the
companies that would be included in a peer group established for comparing
stockholder returns.
The key elements of the Company's executive compensation are base salary,
annual incentives, long-term compensation and benefits. These key elements are
addressed separately below. In determining compensation, the Compensation
Committee considers all elements of an Executive Officer's total compensation
package, including severance plans, insurance and other benefits.
BASE SALARIES
The Compensation Committee regularly reviews each Executive Officer's base
salary. Base salaries are targeted at market levels. Base salaries for Executive
Officers are initially determined by evaluating executives' levels of
responsibility, prior experience, breadth of knowledge, internal equity issues
and external pay practices.
Base salaries offer security to executives and allow the Company to attract
competent executive talent and maintain a stable management team. They also
allow executives to be rewarded for individual performance based on the
Company's evaluation process which encourages the development of executives.
Increases to base salaries are driven primarily by individual performance.
Individual performance is evaluated based on sustained levels of individual
contribution to the Company. When evaluating individual performance, the
Compensation Committee considers the executive's efforts in promoting the
Company's objectives; continuing educational and management training; improving
product quality; developing relationships with customers, suppliers and
employees; demonstrating leadership abilities among co-workers; and other goals.
On May 13, 1996, Viad Corp entered into a three year employment agreement
with Mr. Jozoff, providing that following the Distribution, Mr. Jozoff would
serve as the Chairman, President and Chief Executive Officer of the Company.
Following the Distribution, the Company assumed the employment agreement with
Mr. Jozoff. The employment agreement provides that prior to the Distribution,
Mr. Jozoff would receive a minimum base salary of $600,000 per annum and that
following the Distribution, Mr. Jozoff would receive a minimum base salary of
$650,000 per annum. From May 13 to December 31, 1996, Mr. Jozoff received base
salary payments of $386,738.
ANNUAL INCENTIVES
In November 1996, the Committee adopted The Dial Corporation Annual
Incentive Plan, effective January 1, 1997 ("Annual Incentive Plan"). The Annual
Incentive Plan promotes the Company's pay-for-
16
<PAGE> 20
performance philosophy by providing all nonunion employees, including
executives, with direct financial incentives in the form of annual cash bonuses
to achieve Company and individual performance goals. Annual bonus opportunities
allow the Company to communicate specific goals that are of primary importance
during the coming year and motivate executives to achieve these goals.
Each year, the Committee will establish specific goals relating to each
executive's bonus opportunity. Eligible executives will be assigned threshold,
target and maximum bonus levels based on a percentage of base salary. Executives
earn bonuses to the extent to which preestablished goals are achieved.
The Committee has determined that participants' awards will be based 70% on
Company performance and 30% on individual performance. Company goals are based
on net revenue growth, operating margin and asset turnover for the year.
Individual performance is based on quantifiable performance measures; however,
no bonus is paid unless the predetermined thresholds for overall Company goals
are reached.
Bonus awards are set at levels comparable to typical levels of the
Comparator Group. Performance goals are considered by the Committee to be
challenging, but achievable. For 1997, the Committee has established targets at
levels which are significantly above the Company's results achieved in prior
years.
In 1996, Mr. Jozoff and the Company's other Executive Officers received
annual incentive payments pursuant to Viad's Management Incentive Plan (the
"Viad MIP"). The annual incentive payments in 1996 were actually based on two
separate performance periods; from January 1, 1996, through the Distribution and
the period from the Distribution through December 31, 1996. Except with respect
to Mr. Fischer, all of the annual incentive payments reflected in the Summary
Table on page 9 reflect payments attributable to the first performance period
under the Viad MIP. For the second performance period, the performance
objectives for the Named Executive Officers were generally based on the
Company's return on equity and operating/net income measures. The Company did
not reach its objectives for the second period and, accordingly, there were no
incentive payments to Named Executive Officers relating to the second period,
except for Mr. Fischer. Mr. Fischer's performance objectives were based on the
performance of one of the Company's lines of business and, based on the level of
achievement of that objective, Mr. Fischer received an incentive payment of
$25,220 related to the second performance period. Pursuant to his employment
agreement, Mr. Jozoff received a sign-on bonus of $150,000 and annual incentive
payments of $150,000 related to the occurrence of the Distribution. Mr. Jozoff
also received an annual incentive payment of $150,000 attributable to the first
performance period under the Viad MIP.
LONG-TERM INCENTIVES
In keeping with the Company's commitment to provide a total compensation
package which favors at-risk components of pay, long-term incentives comprise
the largest portion of an executive's total compensation package. When awarding
long-term incentives, the Committee considers the executive's level of
responsibility, prior experience, historical award data, various performance
criteria and compensation practices of the Comparator Group. The Committee's
objective is to provide executives with long-term incentive award opportunities
that are at a competitive market level. In certain instances, the Committee may
provide individuals with long-term incentive award opportunities that are above
or below market level based on an executive's experience and actual performance.
Long-term incentives are provided pursuant to the 1996 Plan.
17
<PAGE> 21
STOCK OPTIONS
To date, stock options have been granted at an option price not less than
the fair market value of the Common Stock on the date of grant. Accordingly,
stock options have value only if the stock price appreciates from the date the
options are granted. This plan focuses executives on the creation of stockholder
value over the long term and encourages equity ownership in the Company.
In 1996, in an effort to align the interests of the Company's executives
with the interests of the Company's stockholders at the Distribution, the
Committee decided to provide executives with a front-loaded grant of stock
options (three times a normal grant) with performance-based vesting. The stock
options have an exercise price equal to the fair market value of the shares on
the date of grant. After one year, one-third of the options become exercisable
when the average closing market price over 20 consecutive days equals or exceeds
133% of the option price, two-thirds when such price equals or exceeds 167% of
the option price and 100% when such price equals or exceeds 200% of the option
price. In the event that the stock price objectives are not met, the options
will not fully vest until five years from the date of grant. In the event of a
"change in control", the options become fully vested and exercisable to the full
extent of the original grant. The term of the options is 10 years. It is the
Committee's intention not to make further grants of stock options to Executive
Officers who received such front-loaded grants prior to 1999, except in the case
of an Executive Officer's promotion or significant increase in responsibility.
As a substitute for long-term incentive plans discontinued after the
Distribution, an additional grant of non-qualified options was awarded to the
Executive Officers of the Company. These options have the same vesting
provisions as those described above.
In 1996, the Committee awarded Mr. Jozoff options to purchase 510,910
shares and 439,090 shares with exercise prices of $12.8750 and $14.4375,
respectively, as is detailed in the table on page 10. Mr. Jozoff's 1996 stock
option grants were intended to provide a competitive long-term incentive award
taking into consideration the establishment of the Company as an independent
entity. Pursuant to the employment agreement, at the time of his hire, Mr.
Jozoff received options to purchase 50,000 shares of Viad's common stock. At the
Distribution, these options were converted into options to acquire 103,110
shares of the Company's Common Stock at an exercise price of $13.9414 per share.
The conversion was intended to preserve for Mr. Jozoff the economic value of the
shares, including the spread between the exercise price and the fair market
value of the shares subject to the Viad options. Mr. Jozoff now owns 75,000
shares of the Company's Common Stock and with the 1996 grant holds options to
purchase an additional 1,053,110 shares. This equity interest provides an
appropriate link to the interests of stockholders.
BENEFITS
Benefits offered to key executives serve a different purpose than do the
other elements of compensation. In general, they provide protection against
financial hardship that can result from illness, disability or death. Benefits
offered to key executives are generally those offered to the general employee
population with some variation to promote tax efficiency and replacement of
benefit opportunities lost to regulatory limits.
INTERNAL REVENUE CODE SECTION 162(M) CONSIDERATIONS
Section 162(m) of the Code provides that executive compensation in excess
of $1 million will not be deductible for purposes of corporate income taxes
unless it is performance-based compensation and is paid pursuant to a plan
meeting certain requirements of the Code. The Committee intends to continue
increased reliance on performance-based compensation programs. Such programs
will be designed to fulfill, in the best possible manner, future corporate
business objectives. The Committee currently anticipates that to the extent
practicable and in the Company's best interest such programs will be designed to
satisfy the requirements of
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<PAGE> 22
Section 162(m) with respect to the deductibility of compensation paid.
Consistent with this philosophy, the Board of Directors is submitting certain
terms of The Dial Corporation's Annual Incentive Plan (the "Annual Incentive
Plan") and the 1996 Plan to the stockholders for approval of performance goals
and certain other terms in order to secure the deductibility of
performance-based awards under Section 162(m). The Committee recognizes that
there may be business considerations that dictate that compensation may be paid
that is not deductible under Section 162(m).
CONCLUSION
The Compensation Committee believes these executive compensation policies
and programs serve the interests of stockholders and the Company effectively.
The various pay vehicles offered are appropriately balanced to provide increased
motivation for executives to contribute to the Company's overall future success,
thereby enhancing the value of the Company for the stockholders' benefit.
We will continue to monitor the effectiveness of the Company's total
compensation program to meet the current needs of the Company.
Dennis C. Stanfill (Chairman)
Thomas L. Gossage
Michael T. Riordan
A. Thomas Young
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<PAGE> 23
PERFORMANCE GRAPH
The graph below provides a comparison of cumulative total stockholder
returns, assuming reinvestment of dividends, for the Company as compared with
the cumulative total return of the S&P 500 Stock Index and the S&P Consumer
Products -- Staples Composite Index. This graph covers the period of time from
August 16, 1996, the date following the Distribution, through December 27, 1996,
the last trading date of the Company's fiscal year.
<TABLE>
<CAPTION>
Measurement Period The Dial S&P 500 Consumer
(Fiscal Year Covered) Corporation Products-Staples S&P 500
<S> <C> <C> <C>
Aug. 16 100.00 100.00 100.00
Sept. 30 105.33 103.74 103.91
Dec. 27 110.77 112.11 114.99
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's Directors and
certain Executive Officers to file initial reports of ownership and transactions
in the Company's common stock with the SEC. The Company believes that all SEC
filing requirements applicable to its Directors and Executive Officers with
respect to the Company's fiscal year ending December 28, 1996, were complied
with, except one filing by Lowell L. Robertson, Senior Vice President and
Controller, who inadvertently failed to file an initial ownership report on a
timely basis, and Jane M. Melville, a former Executive Officer of the Company,
who inadvertently failed to file one report on a timely basis relating to one
transaction. In making this disclosure, the Company has relied solely on written
representations of its Directors and Executive Officers and copies of the
reports that have been received by the Company.
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<PAGE> 24
PROPOSAL NO. 2 APPROVAL OF PERFORMANCE GOALS AND CERTAIN OTHER TERMS UNDER THE
DIAL CORPORATION 1996 STOCK INCENTIVE PLAN FOR PURPOSES OF CODE
SECTION 162(m)
In connection with the Distribution, the Board of Directors of the Company
adopted, and Viad Corp as sole stockholder approved, The Dial Corporation 1996
Stock Incentive Plan (the "1996 Plan").
Section 162(m) of the Code generally does not allow publicly held companies
to deduct in any one year compensation of more than $1 million paid to their
chief executive officers, or any of their other four most highly compensated
executive officers, unless such payments are "performance-based" in accordance
with conditions specified in that law. In order for compensation to qualify for
the "performance-based" compensation exemption, Section 162(m) requires
stockholder approval of the employees eligible to receive such compensation as
well as an express limitation on the number of shares which may be awarded to
any individual during a specified period as stock options, stock appreciation
rights (SARs) and restricted stock. In addition, for awards other than stock
options and SARs granted with fair market value exercise prices, stockholder
approval of the material terms of the performance goals upon which such awards
are to be conditioned is required.
The 1996 Plan includes features intended to permit the Executive
Compensation Committee of the Board (the "Committee") to grant awards to
employees that will qualify as performance-based compensation. Officers,
employees and Directors of the Company, its subsidiaries and affiliates are
eligible to participate in the 1996 Plan. The 1996 Plan limits the number of
shares with respect to which incentive stock options, non-qualified stock
options, stock appreciation rights and restricted stock may be granted over any
consecutive three-year period to any one participant to 1,000,000 shares (plus
the number of shares which were necessary to replace outstanding options to
purchase Viad shares in connection with the Distribution). The 1996 Plan
provides that the Committee may condition exercise of an Award on attainment of
an objective performance goal or goals based on one or more of the following
performance criteria: earnings per share, sales, net profit after tax, gross
profit, operating profit, cash generation, unit volume, return on equity, change
in working capital, return on capital, stockholder return or stock price
appreciation; and that such criteria will be set by the Committee within the
time period prescribed by Section 162(m) of the Code or the related regulations.
The Board is seeking stockholder approval of the foregoing eligibility
requirements, award limits and performance goals. If approved by stockholders,
this proposal would enable the Company to make awards under the Plan, during a
five-year period ending with the date of the Annual Meeting of Stockholders in
2002, which would be designed to continue to provide tax deductions for the
Company.
As of December 28, 1996, options to purchase 10.2 million shares of Common
Stock were outstanding.
The following summary of certain provisions of the 1996 Plan is qualified
in its entirety by reference to the full text of the 1996 Plan, which was filed
as an exhibit to Amendment No. 2 to the Company's Registration Statement on Form
10.
ADMINISTRATION
The 1996 Plan provides that grants and awards and other determinations
under the 1996 Plan are to be made by the Committee as long as such Committee is
composed of at least two Directors, each of whom is a "nonemployee Director" for
purposes of Rule 16b-3 under the Exchange Act and is an "outside Director" under
Section 162(m) of the Code.
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<PAGE> 25
STOCK SUBJECT TO THE 1996 PLAN
Awards with respect to both Common Stock and preferred stock of the Company
(together, "Stock") may be made under the 1996 Plan. The 1996 Plan provides that
the aggregate number of shares of Stock with respect to which options, SARs and
restricted stock may be granted to any one participant may not exceed 1,000,000
shares for any consecutive three-year period (plus the number of shares
necessary to effect the conversion of options to purchase common stock of Viad
into options to purchase Common Stock of the Company in connection with the
Distribution). In addition, no more than 9,600,000 shares of Common Stock will
be cumulatively available under the 1996 Plan for the grant of options
qualifying as "Incentive Stock Options" under the Code. The closing price of the
Common Stock on the New York Stock Exchange on March 14, 1997 was $15.875 per
share.
ELIGIBILITY
Officers, employees and Directors of the Company, its subsidiaries and
affiliates, are eligible to receive options and other awards under the 1996
Plan. The Plan provides for the automatic grants to nonemployee Directors
described above under "Director Compensation," but Directors are eligible to
receive other awards under the 1996 Plan.
DURATION
The 1996 Plan was effective as of August 15, 1996, and will continue in
effect until terminated by the Board of Directors. The Board of Directors may
amend, alter or discontinue the 1996 Plan except that no such action may be
taken which would disqualify any award or transaction under the 1996 Plan from
the exemption provided by Rule 16b-3 under the Exchange Act and, if such action
would impair the rights of holders of outstanding awards, such holder's consent
is required (unless the amendment is to maintain qualification of an award or
transaction for exemption under Rule 16b-3). Finally, no amendment requiring
stockholder approval by law or agreement may be made without such approval.
STOCK OPTIONS, SARS AND RESTRICTED STOCK
Under the 1996 Plan, the Committee has the power to grant Incentive Stock
Options, nonqualified stock options, related SARs and restricted stock, and,
consistent with the 1996 Plan, to fix the terms and conditions of, and to
determine the persons to receive, such awards. In general, stock options under
the 1996 Plan will be granted with an exercise price no less than the fair
market value of the shares on the date of grant, and to date all stock options
have been granted with exercise prices at the fair market value of the shares;
however, the Committee has the authority to grant non-qualified stock options
with an exercise price of less than such fair market value. Performance-based
awards under the 1996 Plan may be made which are not intended to, or need not,
qualify as performance-based for Section 162(m) purposes in addition to awards
intended to so qualify. The 1996 Plan provides that appropriate adjustments will
be made in the amount of shares reserved for issuance under the 1996 Plan, in
the number, option price or kind of shares subject to outstanding options and
SARs, and in the number or kind of shares subject to other outstanding awards
under the 1996 Plan in the event of any merger, reorganization, consolidation,
recapitalization, spinoff, stock dividend, stock split, extraordinary
distribution or other change in corporate structure. In addition, the 1996 Plan
provides that all options and SARs become exercisable and vest, and all
restricted stock vests and becomes fully transferable, upon a "Change in
Control" (as defined in the 1996 Plan), and that, unless otherwise provided at
the time of the grant, optionees may elect to receive cash for their options on
certain terms following a Change in Control.
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<PAGE> 26
FEDERAL INCOME TAX CONSEQUENCES.
Under existing law and regulations, the grant of non-qualified stock
options and SARs will not result in income taxable to the employee or provide
deductions to the Company. However, the exercise of a non-qualified stock option
or a SAR results in taxable income to the holder, and the Company is generally
entitled to a corresponding deduction. At the time of the exercise of a
non-qualified stock option, the amount so taxable and so deductible will be the
excess of the fair market value of the shares purchased over their option price.
Upon the exercise of a SAR, the participant will be taxed at ordinary income tax
rates on the amount of the cash and the fair market value of the shares received
by the employee, and the Company will be generally entitled to a corresponding
deduction.
No income is recognized by an optionee when an Incentive Stock Option is
granted or exercised. If the holder holds the shares received on exercise of an
Incentive Stock Option for at least two years from the date of grant and one
year from date of exercise, any gain realized by the holder on the disposition
of the stock will be accorded long-term capital gain treatment, and no deduction
will be allowed to the Company. If the holding period requirements are not
satisfied, the employee will recognize ordinary income at the time of
disposition equal to the lesser of (i) the gain realized on the disposition, or
(ii) the difference between the option price and the fair market value of the
shares on the date of exercise. Any additional gain on the disposition not
reflected above will be long-term or short-term capital gain, depending upon the
length of time the shares are held. The Company will be entitled to an income
tax deduction equal to the amount of ordinary income recognized by the employee.
An employee who is granted a restricted stock award will not be taxed upon
the acquisition of such shares so long as the interest in such shares is subject
to a "substantial risk of forfeiture" within the meaning of Section 83 of the
Code. Upon lapse or release of the restrictions, the recipient will be taxed at
ordinary income tax rates on an amount equal to the current fair market value of
the shares. Any awards that are not subject to a substantial risk of forfeiture
will be taxed at the time of grant. The Company will be generally entitled to a
corresponding deduction when the value of the award is included in the
recipient's taxable income. The basis of restricted shares held after lapse or
termination of restrictions will be equal to their fair market value on the date
of lapse or termination of restrictions, and upon subsequent disposition any
further gain or loss will be long-term or short-term capital gain or loss,
depending upon the length of time the shares are held.
An employee may elect to be taxed at ordinary income tax rates on the full
fair market value of the restricted shares at the time of transfer. If the
election is made, the basis of the shares so acquired will be equal to the fair
market value at the time of transfer, no tax will be payable upon the subsequent
lapse or release of the restrictions, and any gain or loss upon disposition will
be a capital gain or loss.
A participant will realize ordinary income as a result of performance
awards at the time Common Stock is transferred or cash is paid in an amount
equal to the value of the shares delivered plus the cash paid.
The general rules for the Company's deductions described above are subject
to the limitations of Section 162(m) described above. Stockholder approval of
the performance goals and certain other terms of the 1996 Plan will enable the
Committee to design awards thereunder that are fully deductible. However,
additional limitations on deductibility may apply in the event of a Change in
Control.
The foregoing discussion is not a complete description of the federal
income tax aspects of Awards under the 1996 Plan and is intended for the
information of stockholders considering how to vote with respect to this
Proposal and not as tax guidance to participants in the 1996 Plan. Different tax
rules may apply to specific participants and transactions under the 1996 Plan.
23
<PAGE> 27
An affirmative vote of a majority of the shares present, in person or by
proxy, and entitled to vote at the Annual Meeting is required to approve this
Proposal.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE ADOPTION OF THIS
PROPOSAL TO APPROVE PERFORMANCE GOALS AND CERTAIN OTHER TERMS OF THE DIAL
CORPORATION 1996 STOCK INCENTIVE PLAN AND RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL NO. 3 APPROVAL OF PERFORMANCE GOALS AND CERTAIN OTHER TERMS UNDER THE
DIAL CORPORATION ANNUAL INCENTIVE PLAN FOR PURPOSES OF CODE
SECTION 162(m)
On November 21, 1996, the Board of Directors adopted The Dial Corporation
Annual Incentive Plan (the "Annual Incentive Plan"), which provides for the
awarding of bonuses to all salaried, nonunion employees of the Company and its
subsidiaries subject to the attainment of certain performance criteria. Certain
performance goals and other terms of the Annual Incentive Plan were approved by
the Board subject to stockholder approval as described herein.
As discussed above, Section 162(m) of the Code limits to $1 million the
federal income tax deduction that public companies may claim in any given tax
year for compensation paid to any of its top five Executive Officers except if
such compensation is "performance-based" as defined in that law.
In the case of a cash incentive plan, such as the Annual Incentive Plan,
the Section 162(m) requirements can be satisfied if stockholder approval is
obtained with respect to (1) the employees eligible to receive the
performance-based compensation, (2) a limit on the amount payable to any
participant during a specified period and (3) the business criteria on which the
performance goals are based.
Under the Annual Incentive Plan, eligible participants will be all
salaried, nonunion employees of the Company and its subsidiaries. The maximum
award that may be paid to any participant for any one year is $2 million.
Finally, the performance criteria on which awards intended to qualify for the
exemption from the Section 162(m) deductibility limit will be based are:
operating margin, net revenue growth, asset turnover, cash flow, earnings per
share, cash flow return on investment, expenses, gross or net margin, increase
in stock price, inventory turnover, market share, net income, return on assets,
economic value added, return on equity, return on investment, return on sales,
revenue and total stockholder return. In establishing performance goals based on
such criteria, the Committee may apply the performance criteria as a measure of
the performance of any, all or any combination of the Company, any subsidiary,
any division, group or other unit of the Company or a subsidiary, or any product
category or categories. The Committee also will determine the percentages of
target awards that will be paid if the performance goal or goals are met and the
method by which such amounts will be calculated.
The Board is seeking stockholder approval of the foregoing eligibility
requirements, award limits and performance criteria. If approved by
stockholders, this Proposal would enable the Company to make awards under the
Annual Incentive Plan during a five year period ending with the date of the
Annual Meeting of Stockholders in 2002, which would be designed to continue to
provide tax deductions for the Company.
The following is a brief description of certain material features of the
Annual Incentive Plan. This summary is qualified in its entirety by reference to
the terms of the Annual Incentive Plan which has been filed with the SEC as an
exhibit to the Company's Annual Report on Form 10-K for the year ended December
28, 1996.
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<PAGE> 28
TERM
The Annual Incentive Plan will be effective as of January 1, 1997, subject
as described above to approval of this Proposal by stockholders.
PARTICIPANTS
Participants in the Annual Incentive Plan will be all salaried, nonunion
employees of the Company and its subsidiaries who are selected annually to
participate in the Annual Incentive Plan by the Committee.
ADMINISTRATION
The Annual Incentive Plan will be administered by the Committee, which will
have authority to prescribe rules relating to the Annual Incentive Plan. The
decisions of the Committee with respect to the Annual Incentive Plan will be
final and conclusive.
DETERMINATION OF AWARD
At the end of each fiscal year, in the case of awards intended to qualify
under Section 162(m), the Committee will determine and certify for each
participant if the performance goal or goals have been met and the amount of the
award, if any, to be paid. Awards will be paid to participants in cash following
such determination within 45 days after the end of such fiscal year. Subject to
the terms of the Plan, the Committee may, in its discretion, reduce or eliminate
any calculated award to be paid to a participant, but may not increase such
award. In the case of retirement, death or disability or in the case of a
"change in control" of the Company as defined in the Annual Incentive Plan
during the year, participants' awards will be adjusted pro rata based on the
period of employment prior to such event.
AMENDMENT AND TERMINATION
The Annual Incentive Plan may be amended or terminated by the Committee at
any time; stockholder approval will be required if any such amendment would
require stockholder approval to maintain the qualification of awards under the
Annual Incentive Plan as performance-based compensation under Section 162(m) of
the Code.
If approved by stockholders, this Proposal would not limit the Company's
right to award or pay other forms of compensation to the Company's Executive
Officers which does not qualify under Section 162(m), whether or not the
performance goals for annual incentive awards described in this Proposal are
achieved in any future year, and whether or not such other forms of compensation
would be deductible, if the Committee determines that the payment of such
compensation is in the best interests of the Company and its stockholders.
FISCAL YEAR 1997 AWARDS
The Committee has established performance goals and target awards under the
Annual Incentive Plan for fiscal year 1997 for all Plan participants. In the
case of Mr. Jozoff, an award representing a portion of his potential 1997
incentive compensation may not qualify under Section 162(m). The actual awards
to be paid under the Annual Incentive Plan (or that would have been payable
under the Plan for fiscal year 1996, had the Annual Incentive Plan then been in
effect) cannot be determined at this time since the awards are dependent on the
Company's financial performance for fiscal year 1997.
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<PAGE> 29
An affirmative vote of a majority of the shares present, in person or by
proxy, and entitled to vote at the Annual Meeting is required to approve this
Proposal.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE ADOPTION OF THIS
PROPOSAL TO APPROVE PERFORMANCE GOALS AND CERTAIN OTHER TERMS OF THE DIAL
CORPORATION ANNUAL INCENTIVE PLAN AND RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
SUBMISSION OF STOCKHOLDER PROPOSALS AND OTHER INFORMATION
From time to time stockholders may submit proposals which they intend to
present at the Annual Meeting, and which may be proper subjects for inclusion in
the Proxy Statement and form of proxy. To be considered for inclusion in the
Proxy Statement, proposals must be submitted on a timely basis. Proposals
intended to be presented at the 1998 Annual Meeting of Stockholders must be
received by the Company no later than December 12, 1997. Any such proposals, as
well as any questions related thereto, should be directed to the Secretary of
the Company.
In the event a stockholder wishes to nominate a candidate for election as a
Director, or wishes to propose any other matter for consideration at the
stockholder meeting, other than proposals covered by the first paragraph of this
section, written notice of such stockholder's intent to make such nomination or
request such other action must be given to the Secretary of the Company, The
Dial Corporation, 1850 North Central Avenue, Suite 2012, Phoenix, Arizona
85004-4525, pursuant to certain procedures set out in the Company's Bylaws, a
copy of which is available upon request from the Secretary of the Company. The
Chairman of the Annual Meeting of Stockholders may refuse to acknowledge the
nomination of any person or the request for such other action not made in
compliance with the foregoing procedure.
A copy of the Company's 1996 Annual Report on Form 10-K filed with the SEC
may be obtained by stockholders upon written request to the Office of the
Secretary, 1850 North Central Avenue, Suite 2012, Phoenix, Arizona 85004-4525.
OTHER BUSINESS
The Board of Directors knows of no other matters to be brought before the
Meeting. If any other business should properly come before the Meeting, the
persons appointed in the enclosed proxy have discretionary authority to vote in
accordance with their best judgment.
By order of the Board of Directors
/s/ William A. Arbitman
William A. Arbitman
Vice President and Secretary
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APPENDIX
--------
The Dial Corporation
Annual Incentive Plan
Article 1. Establishment and Purpose
1.1 ESTABLISHMENT OF THE PLAN. The Dial Corporation, a Delaware corporation
(the "Company"), hereby establishes an annual incentive compensation plan to be
known as "The Dial Corporation Annual Incentive Plan" (the "Plan"), as set forth
in this document. The Plan permits the awarding of annual bonuses to Employees
of the Company, based on the achievement of preestablished performance goals.
Upon approval by the Board of Directors of the Company, the Plan shall become
effective as of January 1, 1997 (the "Effective Date") and shall remain in
effect until December 31, 2006, or until earlier terminated by the Board.
1.2 PURPOSE. The primary purposes of the Plan are to: (a) motivate
participants toward achieving annual goals that are within group and/or
individual control, and are considered key to the Company's success; (b)
encourage teamwork among Participants in various segments of the Company; and
(c) reward performance with pay that varies in relation to the extent to which
the preestablished goals are achieved.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the defined meaning is intended, the term is capitalized:
2.1 "TARGET AWARD" means the various levels of incentive award payouts which
a Participant may earn under the Plan, as established by the Committee pursuant
to Sections 5.1 and 5.2 herein.
2.2 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.3 "CAUSE" means: (a) willful misconduct on the part of a Participant that
is materially detrimental to the Company; or (b) the conviction of a Participant
for the commission of a felony or crime involving moral turpitude; provided,
however, that if the Participant has entered into an employment agreement that
is binding as of the date of employment termination, and if such employment
agreement defines "Cause," such definition of "Cause" shall apply. "Cause" under
either (a) or (b) shall be determined in good faith by the Committee.
2.4 "CHANGE IN CONTROL." For the purpose of this Plan, a Change in Control"
shall mean:
(a) The acquisition by any individual, entity, or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (hereinafter "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
1
<PAGE> 31
Exchange Act) of twenty percent (20%) or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection
(a), the following acquisitions shall not constitute a Change in
Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (iv) any acquisition by
any corporation pursuant to a transaction which complies with clauses
(i), (ii), and (iii) of subsection (c) of this Section 2.4; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the effective date of this Plan whose election,
or nomination for election by the Company's stockholders, was approved
by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individuals whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger, consolidation, sale, or other
disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, twenty percent (20%) or more
of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to
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<PAGE> 32
the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such
Business Combination; or
(d) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
2.5 "CODE" means the Internal Revenue Code of 1986, as amended.
2.6 "COMMITTEE" means a committee of two (2) or more individuals, appointed
by the Board to administer the Plan, pursuant to Article 3 herein.
2.7 "COMPANY" means The Dial Corporation, a Delaware corporation (including
any and all Subsidiaries), and any successor thereto.
2.8 "COVERED EMPLOYEE" means a Participant who, as of the date of payout of a
Final Award, is one of the group of "covered employees," as defined in the
Regulations promulgated under Code Section 162(m), or any successor statute.
2.9 "DISABILITY" means a disability as determined under the disability plan
of the Company or Subsidiary applicable to the Participant.
2.10 "EFFECTIVE DATE" means the date the Plan becomes effective, as set forth
in Section 1.1 herein.
2.11 "EMPLOYEE" means a nonunion, full-time, salaried employee of the
Company. The plan excludes any employees on a sales incentives plan and
temporary employees.
2.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.13 "FINAL AWARD" means the actual award earned during a Plan Year by a
Participant, as determined by the Committee following the end of the Plan Year.
2.14 "PARTICIPANT" means an Employee who is actively participating in the
Plan.
2.15 "PLAN" means The Dial Corporation Annual Incentive Plan, as set forth
herein.
2.16 "PLAN YEAR" means the Company's fiscal year.
2.17 "RETIREMENT" shall have the meaning ascribed to such term in the
Company's tax-qualified retirement pension plan.
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<PAGE> 33
2.18 "SUBSIDIARY" means any corporation (other than the Company) in which the
Company or a Subsidiary of the Company owns fifty percent (50%) or more of the
total combined voting power of all classes of stock.
2.19 "TARGET AWARD" means the award to be paid to Participants when the
Company meets "targeted" performance results, as established by the Committee.
2.20 "ACTUAL ANNUAL EARNINGS" means the actual earnings that will be used to
calculate the final award.
Article 3. Administration
3.1 THE COMMITTEE. The Plan shall initially be administered by the Executive
Compensation Committee of the Board. Subject to the terms of this Plan, the
Board may appoint a successor Committee to administer the Plan. The members of
the Committee shall be appointed by, and shall serve at the discretion of, the
Board.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the size and types of Target Awards and
Final Awards; determine the terms and conditions of Target Awards in a manner
consistent with the Plan; construe and interpret the Plan and any agreement or
instrument entered into under the Plan; establish, amend, or waive rules and
regulations for the Plan's administration; and (subject to the provisions of
Article 8 herein) amend the terms and conditions of any outstanding Target Award
to the extent such terms and conditions are within the discretion of the
Committee as provided in the Plan. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of the
Plan. As permitted by law, the Committee may delegate its authorities as
identified hereunder.
3.3 DECISIONS BINDING. All determinations and decisions of the Committee as
to any disputed question arising under the Plan, including questions of
construction and interpretation, shall be final, binding, and conclusive upon
all parties.
3.4 INDEMNIFICATION. Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party, or in which he or she may be involved by reason of any action taken or
failure to act under the Plan, and against and from any and all amounts paid by
him or her in settlement thereof, with the Company's approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Certificate
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of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.
Article 4. Eligibility and Participation
4.1 ELIGIBILITY. Employees as defined in 2.11 shall be eligible to
participate in the Plan.
4.2 PARTICIPATION. Participation in the Plan shall be determined annually by
the Committee. Employees who are chosen to participate in the Plan in any given
Plan Year shall be so notified in writing, and shall be apprised of the
performance measure(s), performance goal(s), and related Award Opportunities for
the relevant Plan Year, as soon as is practicable.
4.3 PARTIAL PLAN YEAR PARTICIPATION. Except as provided in Article 8 herein,
an Employee who becomes eligible after the beginning of a Plan Year may
participate in the Plan on a prorata basis for that Plan Year. The Committee, in
its sole discretion, retains the right to prohibit or allow participation in the
initial Plan Year of eligibility for any of the aforementioned Employees.
4.4 NO RIGHT TO PARTICIPATE. No Participant or other Employee shall at any
time have a right to be selected for participation in the Plan for any Plan
Year, despite having previously participated in the Plan.
Article 5. Award Determination
5.1 PERFORMANCE MEASURES AND PERFORMANCE GOALS. Prior to the beginning of
each Plan Year, or as soon as practicable thereafter, the Committee shall select
performance measures and shall establish performance goals for that Plan Year.
Except as provided in Article 8 herein, the performance measures may be based on
any combination of corporate and/or individual goals.
The Committee may establish one or more performance measures which must be
achieved for any Participant to receive any portion of his or her Final Award
payment for that Plan Year.
5.2 TARGET AWARD. Prior to the beginning of each Plan Year, or as soon as
practicable thereafter, the Committee shall establish, in writing, Target Awards
which correspond to various levels of achievement of the preestablished
performance goals. Except as provided in Article 8 herein, in the event a
Participant changes job levels during a Plan Year, the Participant's Target
Award may be adjusted to reflect the amount of time at each job level during the
Plan Year.
5.3 ADJUSTMENT OF PERFORMANCE GOALS AND TARGET AWARD. Once established,
performance goals normally shall not be changed during the Plan Year. However,
except as provided in Article 8 herein, if the Committee determines that
external changes or other unanticipated business conditions have materially
affected the fairness of the goals, then the Committee may approve appropriate
adjustments to the performance goals (either up or down) during the Plan Year as
such goals apply to the Target Award of
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specified Participants. In addition, the Committee shall have the authority to
reduce or eliminate the Final Award determinations, based upon any objective or
subjective criteria it deems appropriate.
Notwithstanding any other provision of this Plan, in the event of any
change in corporate capitalization, such as a stock split, or a corporate
transaction, such as any merger, consolidation, separation, including a
spin-off, or other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization comes within the definition
of such term in Code Section 368), or any partial or complete liquidation of the
Company, such adjustment shall be made in the Target Award and/or the
performance measures or performance goals related to then-current performance
periods, as may be determined to be appropriate and equitable by the Committee,
in its sole discretion, to prevent dilution or enlargement of rights; provided,
however, that subject to Article 8 herein, any such adjustment shall not be made
if it would eliminate the ability of the Target Award held by Covered Employees
to qualify for the "performance-based" exception under Code Section 162(m).
5.4 FINAL AWARD DETERMINATIONS. At the end of each Plan Year, Final Awards
shall be computed for each Participant as determined by the Committee. Subject
to the terms of Article 8 herein, Final Award amounts may vary above or below
the Target Award, based on the level of achievement of the pre-established
corporate and/or divisional performance goals.
5.5 AWARD LIMIT. The Committee may establish guidelines governing the maximum
Final Awards that may be earned by Participants (either in the aggregate, by
Employee class, or among individual Participants) in each Plan Year. The
guidelines may be expressed as a percentage of Company-wide goals or financial
measures, or such other measures as the Committee shall from time to time
determine; provided, however, that the maximum payout with respect to a Final
Award payable to any one Participant in connection with performance in any one
Plan Year shall be two million dollars ($2,000,000).
5.6 THRESHOLD LEVELS OF PERFORMANCE. The Committee may establish minimum
levels of performance goal achievement, below which no payouts of Final Awards
shall be made to any Participant.
Article 6. Payment of Final Awards
6.1 FORM AND TIMING OF PAYMENT. Unless a deferral election is made by a
Participant pursuant to Section 6.2 herein, each Participant's Final Award shall
be paid in cash, in one lump sum, within forty-five (45) calendar days after the
end of each Plan Year.
6.2 DEFERRAL OF FINAL AWARD PAYOUTS. The Committee may permit (or require, if
necessary, to preserve full deductibility under Code Section 162(m)) a
Participant to defer such Participant's receipt of the payment of cash that
would otherwise be due pursuant to his or her Final Award. If any such deferral
election is required or permitted,
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the Committee shall, in its sole discretion, establish rules and procedures for
such payment deferrals.
6.2 UNSECURED INTEREST. No participant or any other party claiming an
interest in amounts earned under the Plan shall have any interest whatsoever in
any specific asset of the Company. To the extent that any party acquires a right
to receive payments under the Plan, such right shall be equivalent to that of an
unsecured general creditor of the Company.
Article 7. Termination of Employment
7.1 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT. In the
event a Participant's employment is terminated by reason of death, Disability,
or Retirement, the Final Award determined in accordance with Section 5.4 herein
shall be reduced to reflect participation prior to termination only. The reduced
award shall be determined by multiplying said Final Award by a fraction; the
numerator of which is the number of days of employment in the Plan Year through
the date of employment termination, and the denominator of which is three
hundred sixty-five (365). In the case of a Participant's Disability, the
employment termination shall be deemed to have occurred on the date that the
Committee determines the definition of Disability to have been satisfied.
The Final Award thus determined shall be paid within seventy-five (75)
calendar days following the end of the Plan Year in which employment termination
occurs.
7.2 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event a Participant's
employment is terminated for any reason other than death, Disability, or
Retirement (of which the Committee shall be the sole judge), all of the
Participant's rights to a Final Award for the Plan Year then in progress shall
be forfeited. However, except in the event of an involuntary employment
termination for Cause, the Committee, in its sole discretion, may pay a prorated
award for the portion of the Plan Year that the Participant was employed by the
Company, computed as determined by the Committee.
Article 8. Covered Employees
8.1 APPLICABILITY OF ARTICLE 8. The provisions of this Article 8 shall apply
only to Covered Employees. In the event of any inconsistencies between this
Article 8 and the other Plan provisions as they pertain to Covered Employees,
the provisions of this Article 8 shall control.
8.2 ESTABLISHMENT OF TARGET AWARDS. Except as provided in Section 8.8 herein,
the Target Awards for Covered Employees shall be established as a percentage of
each Covered Employee's Base Salary (as defined below). Within ninety (90) days
after the beginning of each Plan Year, the Committee shall establish, in
writing, various levels of Final Awards which will be paid with respect to
specified levels of attainment of the preestablished performance goals.
8.4 COMPONENTS OF TARGET AWARDS. Each Covered Employee's Target Award shall
be based on: (a) the potential Final Awards corresponding to various levels of
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achievement of the pre-established performance goals, as established by the
Committee; and (b) Company and business unit performance in relation to the
pre-established performance goals.
Except as provided in Section 8.8 herein, performance measures which may
serve as determinants of Covered Employees' Award Opportunities shall be limited
to one or more of the following: operating margin (including a definition such
as earnings before interest and taxes divided by net revenues), net revenue
growth, asset turnover (including a definition such as revenue divided by
average total assets), cash flow, earnings per share, economic value added,
cash-flow return on investment, expenses, gross or net margin, increase in stock
price, inventory turnover, market share, net income (before or after taxes),
return on assets, return on equity, return on investment, return on sales,
revenue, and total shareholder return. These performance measures may be applied
singly or in tandem, and may be linked to Companywide performance, business unit
performance, or both.
8.5 NO MID-YEAR CHANGE IN AWARD OPPORTUNITIES. Except as provided in Section
8.8 herein, each Covered Employee's Final Award shall be based exclusively on
the Target Award levels established by the Committee pursuant to Section 8.2
herein.
8.6 NONADJUSTMENT OF PERFORMANCE GOALS. Except as provided in Section 8.8
herein, performance goals shall not be changed following their establishment,
and Covered Employees shall not receive any payout when the minimum
company/corporation performance goals are not met or exceeded.
8.7 INDIVIDUAL PERFORMANCE EVALUATION AND DISCRETIONARY ADJUSTMENTS. Except
as provided in Section 8.8 herein, subjective evaluations of performance shall
not be applied to increase Final Awards. However, the Committee shall have the
discretion to decrease or eliminate the amount of the Final Award otherwise
payable to a Covered Employee.
8.8 POSSIBLE MODIFICATIONS. If, on the advice of the Company's tax counsel,
the Committee determines that Code Section 162(m) and the Regulations thereunder
will not adversely affect the deductibility for federal income tax purposes of
any amount paid under the Plan by permitting greater discretion and/or
flexibility with respect to Target Awards granted to Covered Employees pursuant
to this Article 8, then the Committee may, in its sole discretion, apply such
greater discretion and/or flexibility to such Target Awards as is consistent
with the terms of this Plan, and without regard to the restrictive provisions of
this Article 8.
Without limiting the generality of the foregoing, in the event it is
determined that the Committee may make adjustments to performance goals to
reflect the impact of events that are extraordinary and/or nonrecurring without
precluding compliance with Code Section 162(m), such adjustments may be made.
Further, in determining the degree to which performance goals have been
satisfied in any year, the Committee shall disregard the impact of accounting
changes made by the Financial Accounting Standards Board which become effective
after the performance goals for such year have been established.
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In the event the Committee determines that compliance with Code Section
162(m) is not desired with respect to any Target Awards granted or to be granted
under the Plan, then compliance with Code Section 162(m) will not be required
(for example, if such a determination is made, the performance measures
specified in Section 8.4 herein need not be the only determinants of Final
Awards, and subjective discretion may be applied to increase the Final Awards of
Covered Employees). In addition, in the event that changes are made to Code
Section 162(m) to permit greater flexibility with respect to any Award
Opportunities under the Plan, the Committee may, subject to this Article 8, make
any adjustments it deems appropriate.
Article 9. Rights of Participants
9.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any time,
nor confer upon any Participant any right to continue in the employ of the
Company.
9.2 NONTRANSFERABILITY. No right or interest of any Participant in the Plan
shall be assignable or transferable, or subject to any lien, directly, by
operation of law or otherwise, including, but not limited to, execution, levy,
garnishment, attachment, pledge, and bankruptcy.
Article 10. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during his or her lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.
Article 11. Change in Control
In the event of a Change in Control, each Participant shall be entitled to a
pro rata payment of his or her Target Award for the Plan Year during which such
Change in Control occurs. The Final Award deemed earned by each Participant in
such year shall equal the greater of: (i) the Participant's Target Award for
such year; or (ii) the estimated actual performance as of the date of the Change
in Control, projected to the end of such year, as determined by the Compensation
Committee. The proration applicable to the Target Awards in the year of a Change
in Control shall be determined as a function of the number of days within the
Plan Year prior to the effective date of the Change in Control, in relation to
three hundred sixty-five (365). Such amount shall be paid in cash to each
Participant within thirty (30) days after the effective date of the Change in
Control.
Article 12. Amendments
The Committee, in its sole discretion, without notice, at any time and from
time to time, may modify or amend, in whole or in part, any or all of the
provisions of the Plan,
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or suspend or terminate it entirely; provided, however, that no such
modification, amendment, suspension, or termination may, without the consent of
a Participant (or his or her beneficiary in the case of the death of the
Participant), materially reduce the right of a Participant (or his or her
beneficiary as the case may be) to a payment or distribution hereunder to which
he or she is entitled.
Article 13. Miscellaneous
13.1 GOVERNING LAW. The Plan, and all agreements hereunder, shall be governed
by and construed in accordance with the laws of the state of Delaware.
13.2 WITHHOLDING TAXES. The Company shall have the right to deduct from all
payments under the Plan any Federal, state, or local taxes required by law to be
withheld with respect to such payments.
13.3 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular, and the singular shall include the plural.
13.4 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
13.5 COSTS OF THE PLAN. All costs of implementing and administering the Plan
shall be borne by the Company.
13.6 SUCCESSORS. All obligations of the Company under the Plan shall be
binding upon and inure to the benefit of any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
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THE DIAL CORPORATION
1996 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of the Plan is to give the Company a significant advantage in
attracting, retaining and motivating officers, employees and directors and to
provide the Company and its subsidiaries with the ability to provide incentives
more directly linked to the profitability of the Company's businesses and
increases in stockholder value.
2. ADMINISTRATION OF THE PLAN.
The Plan will be administered by the Executive Compensation Committee of
the Board pursuant to authority delegated by the Board in accordance with the
Company's By-Laws. If at any time there is no such Executive Compensation
Committee or such Executive Compensation Committee shall fail to be composed of
at least two directors each of whom (1) is a Non-Employee Director and (2) is an
"outside director" under Section 162(m)(4) of the Code, the Plan will be
administered by a Committee selected by the Board and composed of not less than
two individuals, each of whom is such a Non-Employee Director and such an
"outside director".
The Committee will have plenary authority to grant Awards pursuant to the
terms of the Plan to officers, employees and directors of the Company and its
subsidiaries and Affiliates.
Among other things, the Committee will have the authority, subject to the
terms of the Plan:
(a) to select the officers, employees and directors to whom Awards may
from time to time be granted;
(b) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights and Restricted Stock or
any combination thereof are to be granted hereunder;
(c) to determine the number of shares of Stock to be covered by each Award
granted hereunder;
(d) to determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the option price (subject to Section 5(a)), any
vesting condition, restriction or limitation (which may be related to the
performance of the participant, the Company or any subsidiary or Affiliate) and
any vesting acceleration or waiver of forfeiture regarding any Award and the
shares of Stock relating thereto, based on such factors as the Committee shall
determine; provided, however, that the Committee will have no power to
accelerate the vesting, or waive the forfeiture, of any Qualified
Performance-Based Awards;
(e) to modify, amend or adjust the terms and conditions, at any time or
from time to time, of any Award, including but not limited to Performance Goals;
provided, however, that the Committee may not adjust upwards the amount payable
with respect to any Qualified Performance-Based Award or waive or alter the
Performance Goals associated therewith; and
(f) to determine to what extent and under what circumstances Stock and
other amounts payable with respect to an Award will be deferred.
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The Committee will have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it from
time to time deems advisable, to interpret the terms and provisions of the Plan
and any Award issued under the Plan (and any agreement relating thereto) and to
otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may (1) delegate to designated officers or
employees of the Company such of its powers and authorities under the Plan as it
deems appropriate (provided that no such delegation may be made that would cause
Awards or other transactions under the Plan to fail to be exempt from Section
16(b) of the Exchange Act) and (2) authorize any one or more members of the
Committee or any designated officer or employee of the Company to execute and
deliver documents on behalf of the Committee.
Any determination made by the Committee or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Award will be made in
the sole discretion of the Committee or such delegate(s) at the time of the
grant of the Award or, unless in contravention of any express term of the Plan,
at any time thereafter. All decisions made by the Committee or any appropriately
delegated officer(s) or employee(s) pursuant to the provisions of the Plan will
be final and binding on all persons, including the Company and Plan
participants.
3. STOCK SUBJECT TO THE PLAN.
The aggregate number of shares of Stock covered by Awards granted to any
one participant will not exceed 1,000,000 shares for any consecutive three year
period plus the number of shares necessary to provide new Awards to replace
outstanding awards of Old Dial pursuant to the Distribution Agreement
("Replacement Awards"). No more than 9,600,000 shares of Common Stock will be
cumulatively available for the grant of Incentive Stock Options under the Plan.
Shares subject to an Award under the Plan may be authorized and unissued shares
or may be "treasury shares."
In the event of any merger, reorganization, consolidation,
recapitalization, spin-off, stock dividend, stock split, extraordinary
distribution with respect to the Stock or other change in corporate structure
affecting the Stock, such substitution or adjustments shall be made in the
aggregate number of shares reserved for issuance under the Plan, in the number,
or kind, and option price of shares subject to outstanding Stock Options and
Stock Appreciation Rights, and in the number, or kind, of shares subject to
other outstanding Awards granted under the Plan as may be determined to be
appropriate by the Committee or the Board in its sole discretion; provided,
however, that the number of shares subject to any Award shall always be a whole
number.
4. ELIGIBILITY.
Officers, employees and directors of the Company, its subsidiaries, and
Affiliates who are responsible for or contribute to the management, growth and
profitability of the business of the Company, its subsidiaries and Affiliates
are eligible to be granted Awards under the Plan.
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5. STOCK OPTIONS.
Stock Options may be granted alone or in addition to other Awards granted
under the Plan and may be of two types: Incentive Stock Options and
Non-Qualified Stock Options. Any Stock Option granted under the Plan will be in
such form as the Committee may from time to time approve.
The Committee will have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights). Incentive Stock Options
may be granted only to employees of the Company and its subsidiaries (within the
meaning of Section 424(f) of the Code). To the extent that any Stock Option is
not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it will be deemed to be a Non-Qualified
Stock Option.
Stock Options will be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement will indicate on its face
whether it is an agreement for an Incentive Stock Option or a Non-Qualified
Stock Option. The grant of a Stock Option will occur on the date the Committee
by resolution selects an individual to be a participant in any grant of a Stock
Option, determines the number of shares of Stock to be subject to such Stock
Option to be granted to such individual and specifies the terms and provisions
of the Stock Option. The Company will notify a participant of any grant of a
Stock Option, and a written option agreement or agreements shall be duly
executed and delivered by the Company to the participant.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options will be interpreted, amended or altered nor
shall any discretion or authority granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
optionee affected, to disqualify any Incentive Stock Option under such Section
422.
Stock Options granted under the Plan will be subject to the following
terms and conditions and will contain such additional terms and conditions as
the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee and set forth in the option
agreement. It is the intention under the Plan that such option price will not be
less than the Fair Market Value of the Stock subject to the Stock Option on the
date of grant; provided, however, that (1) the Committee may, from time to time,
grant Awards of Stock Options with an exercise price of less than Fair Market
Value and (2) the option prices for Replacement Awards will be determined in
accordance with the Distribution Agreement.
(b) Option Term. The term of each Stock Option will be fixed by the
Committee, but no Incentive Stock Option may be exercisable more than 10 years
after the date the Stock Option is granted.
(c) Exercisability. Except as otherwise provided herein, Stock Options
will be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time accelerate the exercisability of any Stock Option.
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(d) Method of Exercise. Subject to the provisions of this Section 5, Stock
Options may be exercised, in whole or in part, at any time during the option
term by giving written notice of exercise to the Company specifying the number
of shares of Stock subject to the Stock Option to be purchased.
Such notice must be accompanied by payment in full of the purchase price
by certified or bank check or such other instrument as the Company may accept.
An option agreement may provide that, if approved by the Committee, payment in
full or in part may also be made in the form of unrestricted Stock already owned
by the optionee of the same class as the Stock subject to the Stock Option and,
in the case of the exercise of a Non-Qualified Stock Option, Restricted Stock
subject to an Award hereunder which is of the same class as the Stock subject to
the Stock Option, in both cases based on the Fair Market Value of the Stock on
the date the Stock Option is exercised; provided, however, that, in the case of
an Incentive Stock Option, the right to make a payment in the form of already
owned shares of Stock of the same class as the Stock subject to the Stock Option
may be authorized only at the time the Stock Option is granted. In addition, an
option agreement may provide that in the discretion of the Committee, payment
for any shares subject to a Stock Option may also be made by instruction to the
Committee to withhold a number of such shares having a Fair Market Value on the
date of exercise equal to the aggregate exercise price of such Stock Option.
If payment of the option exercise price of a Non-Qualified Stock Option is
made in whole or in part in the form of Restricted Stock, the number of shares
of Stock to be received upon such exercise equal to the number of shares of
Restricted Stock used for payment of the option exercise price will be subject
to the same forfeiture restrictions to which such Restricted Stock was subject,
unless otherwise determined by the Committee.
No shares of Stock will be issued until full payment therefor has been
made. Subject to any forfeiture restrictions that may apply if a Stock Option is
exercised using Restricted Stock, an optionee will have all of the rights of a
stockholder of the Company holding the class or series of Stock that is subject
to such Stock Option (including, if applicable, the right to vote the shares and
the right to receive dividends), when the optionee has given written notice of
exercise, has paid in full for such shares and, if requested, has given the
representation described in Section 11(a).
(e) Nontransferability of Stock Options. (1) No Stock Option will be
transferable by the optionee other than (A) by will or by the laws of descent
and distribution or (B) in the case of a Non-Qualified Stock Option, pursuant to
a qualified domestic relations order (as defined in the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder). All Stock Options will be exercisable, during the optionee's
lifetime, only by the optionee or by the guardian or legal representative of the
optionee, it being understood that the terms "holder" and "optionee" include the
guardian and legal representative of the optionee named in the option agreement
and any person to whom an option is transferred by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order.
(2) Notwithstanding Section 5(e)(1) above, the Committee may grant
Stock Options that are transferable, or amend outstanding Stock Options to make
them transferable, by the optionee (any such Stock Option so granted or amended
a "Transferable Option") to one or more members of the optionee's immediate
family, to partnerships of which the only partners are members of the optionee's
immediate family, or to trusts established by the optionee for the benefit of
one or more members of the optionee's immediate family. For this purpose the
term "immediate family" means the optionee's spouse, children or grandchildren.
Consideration may not be paid for the transfer of a Transferable Option. A
transferee described in this Section 5(e)(2) will be subject to all terms and
conditions applicable to the
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Transferable Option prior to its transfer. The option agreement with respect to
a Transferable Option will set forth its transfer restrictions, such option
agreement shall be approved by the Committee, and only Stock Options granted
pursuant to a stock option agreement expressly permitting transfer pursuant to
this Section 5(e)(2) will be so transferable.
(f) Termination by Death. If an optionee's employment terminates by reason
of death, any Stock Option held by such optionee may thereafter be exercised, to
the extent then exercisable, or on such accelerated basis as the Committee may
determine, for a period of one year (or such other period as the Committee may
specify in the option agreement) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(g) Termination by Reason of Disability or Retirement. If an optionee's
employment terminates by reason of Disability or Retirement, any Stock Option
held by such optionee may thereafter be exercised by the optionee, to the extent
it was exercisable at the time of termination, or on such accelerated basis as
the Committee may determine, for a period of three years (or such shorter period
as the Committee may specify in the option agreement) from the date of such
termination of employment or until the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided, however, that if the
optionee dies within such three-year period (or such shorter period), any
unexercised Stock Option held by such optionee shall, notwithstanding the
expiration of such three-year (or such shorter) period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of termination of employment by reason of Disability or Retirement, if an
Incentive Stock Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.
(h) Other Termination. Unless otherwise determined by the Committee, (1)
if an optionee incurs a Termination of Employment for Cause, all Stock Options
held by such optionee will thereupon terminate and (2) if an optionee incurs a
Termination of Employment for any reason other than death, Disability,
Retirement, or Cause, any Stock Option held by such optionee shall thereupon
terminate, except that such Stock Option, to the extent then exercisable, or on
such accelerated basis as the Committee may determine, may be exercised for the
lesser of three months from the date of such Termination of Employment or the
balance of such Stock Option's term; provided, however, that if the optionee
dies within such three-month period, any unexercised Stock Option held by such
optionee shall, notwithstanding the expiration of such three-month period,
continue to be exercisable to the extent to which it was exercisable at the time
of death for a period of 12 months from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter. In the event of Termination of Employment, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(i) Cashing Out of Stock Option. On receipt of written notice of exercise,
the Committee may elect to cash out all or part of the portion of the shares of
Stock for which a Stock Option is being exercised by paying the optionee an
amount, in cash or Stock, equal to the excess of the Fair Market Value of the
Stock over the option price times the number of shares of Stock for which the
Option is being exercised on the effective date of such cash out.
(j) Change in Control Cash-Out. Notwithstanding any other provision of the
Plan, during the 60-day period from and after a Change in Control (the "Exercise
Period"), unless the Committee shall
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determine otherwise at the time of grant, an optionee shall have the right,
whether or not the Stock Option is fully exercisable and in lieu of the payment
of the exercise price for the shares of Stock being purchased under the Stock
Option and by giving notice to the Company, to elect (within the Exercise
Period) to surrender all or part of the Stock Option to the Company and to
receive cash, within 30 days of such notice, in an amount equal to the amount by
which the Change in Control Price per share of Stock on the date of such
election shall exceed the exercise price per share of Stock under the Stock
Option (the "Spread") multiplied by the number of shares of Stock granted under
the Stock Option as to which the right granted under this Section 5(j) shall
have been exercised.
6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right will terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 6(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee will be entitled to receive an amount
determined in the manner prescribed in Section 6(b). Stock Options which have
been so surrendered will no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights will be subject to
such terms and conditions as shall be determined by the Committee, including the
following:
(1) Stock Appreciation Rights will be exercisable only at such time
or times and to the extent that the Stock Options to which they relate are
exercisable in accordance with the provisions of Section 5 and this
Section 6.
(2) Upon the exercise of a Stock Appreciation Right, an optionee
will be entitled to receive an amount in cash, shares of Stock or both
equal in value to the excess of the Fair Market Value of one share of
Stock as of the date of exercise over the option price per share specified
in the related Stock Option multiplied by the number of shares in respect
of which the Stock Appreciation Right shall has been exercised, with the
Committee having the right to determine the form of payment.
(3) Stock Appreciation Rights will be transferable only to permitted
transferees of the underlying Stock Option in accordance with Section
5(e).
7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock may be awarded either alone
or in addition to other Awards granted under the Plan. The Committee will
determine the individuals to whom and the time or times at which grants of
Restricted Stock will be awarded, the number of shares to be awarded to any
participant, the conditions for vesting, the time or times within which such
Awards may be subject to
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forfeiture and any other terms and conditions of the Awards, in addition to
those contained in Section 7(c).
(b) Awards and Certificates. Shares of Restricted Stock will be evidenced
in such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates. Except as otherwise
set forth in a Restricted Stock Agreement, any certificate issued in respect of
shares of Restricted Stock will be registered in the name of such participant
and will bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the 1996 Stock Incentive Plan and a Restricted Stock
Agreement. Copies of such Plan and Agreement are on file at the office
of The Dial Corporation, 1850 N. Central Avenue, Phoenix, Arizona
85004-1752."
The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon have lapsed and that,
as a condition of any Award of Restricted Stock, the participant have delivered
a stock power, endorsed in blank, relating to the Stock covered by such Award.
(c) Terms and Conditions. Shares of Restricted Stock will be subject to
the following terms and conditions:
(1) The Committee may, prior to or at the time of grant, designate
an Award of Restricted Stock as a Qualified Performance-Based Award, in
which event it will condition the grant or vesting, as applicable, of such
Restricted Stock upon the attainment of Performance Goals. If the
Committee does not designate an Award of Restricted Stock as a Qualified
Performance-Based Award, it may also condition the grant or vesting
thereof upon the attainment of Performance Goals. Regardless of whether an
Award of Restricted Stock is a Qualified Performance-Based Award, the
Committee may also condition the grant or vesting upon the continued
service of the participant. The provisions of Restricted Stock Awards
(including the conditions for grant or vesting and any applicable
Performance Goals) need not be the same with respect to each recipient.
The Committee may at any time, in its sole discretion, accelerate or
waive, in whole or in part, any of the foregoing restrictions; provided,
however, that in the case of Restricted Stock that is a Qualified
Performance-Based Award, the applicable Performance Goals have been
satisfied.
(2) Subject to the provisions of the Plan (including Section 5(d))
and the Restricted Stock Agreement referred to in Section 7(c)(7), during
a period set by the Committee, commencing with the date of such Award for
which such participant's continued service is required (the "Restriction
Period") and until the later of (A) the expiration of the Restriction
Period and (B) the date the applicable Performance Goals (if any) are
satisfied, the participant will not be permitted to sell, assign,
transfer, pledge or otherwise encumber shares of Restricted Stock.
(3) Except as provided in this paragraph (3) and Sections 7(c)(1)
and (2) and the Restricted Stock Agreement, the participant will have,
with respect to the shares of Restricted Stock, all of the rights of a
stockholder of the Company holding the class or series of Stock that
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is the subject of the Restricted Stock, including, if applicable, the
right to vote the shares and the right to receive any dividends. If so
determined by the Committee in the applicable Restricted Stock Agreement
and subject to Section 11(f) of the Plan, (A) dividends consisting of
cash, stock or other property (other than Stock) on the class or series of
Stock that is the subject of the Restricted Stock shall be automatically
deferred and reinvested in additional Restricted Stock (in the case of
stock or other property, based on the fair market value thereof, and the
Fair Market Value of the stock, in each case as of the record date for the
dividend) held subject to the vesting of the underlying Restricted Stock,
or held subject to meeting Performance Goals applicable to the underlying
Restricted Stock, and (B) dividends payable in Stock shall be paid in the
form of Restricted Stock of the same class as the Stock with which such
dividend was paid and shall be held subject to the vesting of the
underlying Restricted Stock, or held subject to meeting Performance Goals
applicable to the underlying Restricted Stock.
(4) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement and Sections 7(c)(1), 7(c)(2), 7(c)(5) and
8(a)(2), upon a participant's Termination of Employment for any reason
during the Restriction Period or before any applicable Performance Goals
are met, all shares still subject to restriction shall be
forfeited by the participant.
(5) Except to the extent otherwise provided in Section 8(a)(2), in
the event that a participant retires or such participant's employment is
involuntarily terminated (other than for Cause), the Committee will have
the discretion to waive in whole or in part any or all remaining
restrictions (other than, in the case of Restricted Stock which is a
Qualified Performance-Based Award, satisfaction of the applicable
Performance Goals unless the participant's employment is terminated by
reason of death or Disability) with respect to any or all of such
participant's shares of Restricted Stock.
(6) Except as otherwise provided herein or as required by law, if
and when applicable Performance Goals are satisfied and the Restriction
Period expires without a prior forfeiture of the Restricted Stock,
unlegended certificates for such shares will be delivered to the
participant upon surrender of legended certificates.
(7) Each Award will be confirmed by, and be subject to the terms of,
a Restricted Stock Agreement.
8. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control:
(1) Any Stock Options and Stock Appreciation Right outstanding as of
the date such Change in Control is determined to have occurred and not
then exercisable and vested will become fully exercisable and vested to
the full extent of the original grant.
(2) The restrictions and conditions to vesting applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free
of all restrictions and become fully vested and transferable to the full
extent of the original grant.
(b) Definition of Change in Control. For purposes of the Plan, a
"Change in Control" shall mean the happening of any of the following events:
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(1) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (A) the then outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock") or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding,
however, the following: (i) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (3) of this Section
8(b); or
(2) A change in the composition of the Board such that the
individuals who, as of the date that the Distribution is effective,
constitute the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, for purposes of this Section 8(b), that
any individual who becomes a member of the Board subsequent to the date
that the Distribution is effective, whose election, or nomination for
election by the Company's stockholders, was approved by vote of at least a
majority of those individuals who are members of the Board and who were
also members of the Incumbent Board (or deemed to be such pursuant to this
proviso) will be considered as though such individual were a member of the
Incumbent Board; but, provided, further, that any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms as used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board will not be considered as a member of the Incumbent
Board; or
(3) The approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company ("Corporate
Transaction") (or, if consummation of such Corporate Transaction is
subject, at the time of such approval by stockholders, to the consent of
any government or governmental agency, the earlier of the obtaining of
such consent or the consummation of the Corporate Transaction); excluding,
however, such a Corporate Transaction pursuant to which (A) all or
substantially all of the individuals and entities who are the beneficial
owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 60%
of, respectively, the outstanding shares of common stock, and the combined
voting power of the then outstanding voting 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 Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) no Person (other than
the Company, any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Corporate Transaction) will
beneficially own, directly or indirectly, 20% or more of, respectively,
the outstanding shares of common stock of the corporation resulting from
such Corporate
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Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the
election of directors except to the extent that such ownership existed
prior to the Corporate Transaction and (C) 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
(4) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(c) Change in Control Price. For purposes of the Plan, "Change in Control
Price" means the higher of (1) the highest reported sales price, regular way, of
a share of Stock in any transaction reported on the New York Stock Exchange
Composite Tape or other national exchange on which such shares are listed or on
the NASDAQ National Market System or on NASDAQ during the 60-day period prior to
and including the date of a Change in Control or (2) if the Change in Control is
the result of a tender or exchange offer or a Corporate Transaction, the highest
price per share of Stock paid in such tender or exchange offer or Corporate
Transaction; provided, however, that in the case of Incentive Stock Options and
Stock Appreciation Rights relating to Incentive Stock Options, the Change in
Control Price will be in all cases the Fair Market Value of the Stock on the
date such Incentive Stock Option or Stock Appreciation Right is exercised. To
the extent that the consideration paid in any such transaction described above
consists all or in part of securities or other non-cash consideration, the value
of such securities or other non-cash consideration will be determined in the
sole discretion of the Board.
9. TERM, AMENDMENT AND TERMINATION.
The Plan will have no fixed termination date, but may be terminated at any
time by the Board. Awards outstanding as of the date of any such termination
will not be affected or impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (a) impair the rights of
an optionee under a Stock Option or a recipient of a Stock Appreciation Right or
Restricted Stock Award theretofore granted without the optionee's or recipient's
consent, except such an amendment which is necessary to cause any Award or
transaction under the Plan to qualify, or to continue to qualify, for the
exemption provided by Rule 16b-3, or (b) disqualify any Award or transaction
under the Plan from the exemption provided by Rule 16b-3. In addition, no such
amendment may be made without the approval of the Company's stockholders to the
extent such approval is required by law or agreement.
The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment will
(1) impair the rights of any holder without the holder's consent except such an
amendment which is necessary to cause any Award or transaction under the Plan to
qualify, or to continue to qualify, for the exemption provided by Rule 16b-3 or
(2) amend any Qualified Performance-Based Award in such a way as to cause it to
cease to qualify for the exemption set forth in Section 162(m)(4)(C). The
Committee may also substitute new Stock Options for previously granted Stock
Options, including previously granted Stock Options having higher option prices.
Subject to the above provisions, the Board will have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
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10. UNFUNDED STATUS OF THE PLAN.
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Stock or make payments; provided, however, that, unless the Committee
otherwise determines, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan.
11. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing or receiving shares
pursuant to an Award to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to the distribution thereof.
The certificates for such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock or other securities delivered under
the Plan will be subject to such stock transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Commission, any stock exchange upon which the Stock is then
listed and any applicable Federal or state securities law, and the Committee may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in the Plan will prevent the Company or any
subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) The adoption of the Plan will not confer upon any employee any right
to continued employment nor will it interfere in any way with the right of the
Company or any subsidiary or Affiliate to terminate the employment of any
employee at any time.
(d) No later than the date as of which an amount first becomes includible
in the gross income of the participant for Federal income tax purposes with
respect to any Award under the Plan, the participant will pay to the Company, or
make arrangements satisfactory to the Company regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the
Company, withholding obligations may be settled with Stock, including Stock that
is part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan will be conditional on such payment or
arrangements, and the Company and its Affiliates will, to the extent permitted
by law, have the right to deduct any such taxes from any payment otherwise due
to the participant. The Committee may establish such procedures as it deems
appropriate, including the making of irrevocable elections, for the settlement
of withholding obligations with Stock.
(e) At the time of grant, the Committee may provide in connection with any
grant made under the Plan that the shares of Stock received as a result of such
grant will be subject to a right of first refusal pursuant to which the
participant will be required to offer to the Company any shares that the
participant wishes to sell at the then Fair Market Value of the Stock, subject
to such other terms and conditions as the Committee may specify at the time of
grant.
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(f) The reinvestment of dividends in additional Restricted Stock at the
time of any dividend payment shall only be permissible if sufficient shares of
Stock are available under Section 3 for such reinvestment (taking into account
then outstanding Stock Options and other Awards).
(g) The Committee will establish such procedures as it deems appropriate
for a participant to designate a beneficiary to whom any amounts payable in the
event of the participant's death are to be paid or by whom any rights of the
participant, after the participant's death, may be exercised.
(h) Notwithstanding any other provision of the Plan or any agreement
relating to any Award hereunder, if any right granted pursuant to this Plan
would make a Change in Control transaction ineligible for
pooling-of-interests-accounting under APB No. 16 that, but for the nature of
such grant, would otherwise be eligible for such accounting treatment, the
Committee will have the ability, in its sole discretion, to substitute for the
cash payable pursuant to such grant Common Stock with a Fair Market Value equal
to the cash that would otherwise be payable hereunder.
(i) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.
12. EFFECTIVE DATE OF THE PLAN.
The Plan shall be effective on August 15, 1996.
13. DIRECTOR STOCK OPTIONS.
(a) Each director of the Company who is not otherwise an employee of the
Company or any of its subsidiaries or Affiliates, will (1) on the date of his or
her first election as a director of the Company, which election will be deemed
to occur on August 15, 1996 for individuals who become directors of the Company
in connection with the Distribution (any such initial grant, an "Initial
Grant"), and (2) on August 15, 1996 and thereafter annually, on the third
Thursday in August, during such director's term (the "Annual Grant"),
automatically be granted Non-Qualified Stock Options to purchase Common Stock
having an exercise price per share of Common Stock equal to 100% of Fair Market
Value per share of Common Stock at the date of grant of such Non-Qualified Stock
Option. The number of shares subject to each such Initial Grant, and each such
Annual Grant, will be equal to the annual retainer fee in effect at the date of
grant for nonemployee directors of the Company divided by an amount equal to
one-third (1/3) of the Fair Market Value of the Common Stock at the date of
grant, rounded to the nearest 100 shares. A nonemployee director elected during
the course of a year (i.e., on a date other than the date of the Annual Grant)
will, in addition to the Initial Grant, receive upon election a grant of
Non-Qualified Stock Options prorated for the year in which the election occurs,
with the number of shares of Common Stock subject to such Stock Options being
equal to (1) the number of shares subject to the Initial Grant multiplied by (2)
a fraction the numerator of which is the number of full calendar months from the
date of such election through the date of the next Annual Grant and the
denominator of which is twelve.
(b) An automatic director Stock Option will be granted hereunder only if
as of each date of grant the director (1) is not otherwise an employee of the
Company or any of its subsidiaries or Affiliates, (2) has not been an employee
of the Company or any of its subsidiaries or Affiliates for any part of the
preceding fiscal year, and (3) has served on the Board continuously since the
commencement of his term.
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(c) Except as expressly provided in this Section 13, any Stock Option
granted hereunder will be subject to the terms and conditions of the Plan as if
the grant were made pursuant to Section 5 hereof including, without limitation,
the rights set forth in Section 5(j) hereof.
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GLOSSARY OF DEFINED TERMS
For purposes of the Plan, the following terms are defined as set forth below:
(a) "Affiliate" means a corporation or other entity controlled by the
Company and designated by the Committee as such.
(b) "Award" means Stock Appreciation Right, Stock Option or Restricted
Stock.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means (1) the conviction of a participant for committing a
felony under federal law or the law of the state in which such action occurred,
(2) dishonesty in the course of fulfilling a participant's employment duties or
(3) willful and deliberate failure on the part of a participant to perform his
employment duties in any material respect, or such other events as shall be
determined by the Committee. The Committee will have the sole discretion to
determine whether "Cause" exists, and its determination will be final.
(e) "Change in Control" and "Change in Control Price" have the meanings
set forth in Sections 8(b) and (c), respectively.
(f) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
(g) "Commission" means the Securities and Exchange Commission or any
successor agency.
(h) "Committee" means the Committee referred to in Section 2.
(i) "Common Stock" means common stock, par value $0.01 per share, of the
Company.
(j) "Company" means The Dial Corporation, a Delaware corporation.
(k) "Disability" means permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan.
(l) "Distribution" means the distribution of shares of Company Common
Stock by The Dial Corp (which, in connection with such distribution, will be
renamed "Viad Corp," herein referred to as "Old Dial") to the holders of common
stock of Old Dial, par value $1.50 per share.
(m) "Distribution Agreement" means the Distribution Agreement, dated as of
July 25, 1996, by and among Old Dial, the Company and Exhibitgroup Inc.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
(o) "Fair Market Value" means, as of any given date, the mean between the
highest and lowest reported sales prices of the Stock on the New York Stock
Exchange Composite Tape or, if not listed on such exchange, on any other
national exchange on which the Stock is listed or on the NASDAQ National
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Market System or on NASDAQ. If there is no regular public trading market for
such Stock, the Fair Market Value of the Stock will be determined by the
Committee in good faith.
(p) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(q) "Non-Employee Director" means a member of the Board who qualifies as a
"Non-Employee Director" as defined in Rule 16b-3(b)(3), as promulgated by the
Commission under the Exchange Act, or any successor definition adopted by the
Commission.
(r) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(s) "Performance Goals" means the performance goals established by the
Committee prior to the grant of Restricted Stock. In the case of Qualified
Performance-Based Awards, such goals (1) will be based on the attainment of
specified levels of one or more of the following measures: earnings per share,
sales, net profit after tax, gross profit, operating profit, cash generation,
unit volume, return on equity, change in working capital, return on capital,
stockholder return or such other performance measures as the Committee selects
and discloses to stockholders in connection with stockholder approval for
purposes of Section 162(m) of the Code and related regulations and (2) will be
set by the Committee within the time period prescribed by Section 162(m) of the
Code and related regulations.
(t) "Plan" means The Dial Corporation 1996 Stock Incentive Plan, as set
forth herein and as hereinafter amended from time to time.
(u) "Preferred Stock" means preferred stock, par value $0.01, of the
Company.
(v) "Qualified Performance-Based Awards" means an Award of Restricted
Stock designated as such by the Committee at the time of grant, based upon a
determination that (1) the recipient is or may be a "covered employee" within
the meaning of Section 162(m)(3) of the Code in the year in which the Company
would expect to be able to claim a tax deduction with respect to such Restricted
Stock and (2) the Committee wishes such Award to qualify for the exemption from
the limitation on deductibility imposed by Section 162(m) of the Code that is
set forth in Section 162(m)(4)(C).
(w) "Replacement Awards" means Stock Options granted to replace
outstanding options to purchase Old Dial common stock pursuant to the
Distribution Agreement.
(x) "Restricted Stock" means an award granted under Section 7.
(y) "Retirement" means retirement from active employment under a pension
plan of the Company, any subsidiary or Affiliate, or under an employment
contract with any of them, or termination of employment at or after age 55 under
circumstances which the Committee, in it sole discretion, deems equivalent to
retirement.
(a) "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
(aa) "Stock" means the Common Stock or Preferred Stock.
(bb) "Stock Appreciation Right" means a right granted under Section 6.
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(cc) "Stock Option" means an option granted under Section 5.
(dd) "Termination of Employment" means the termination of the
participant's employment with the Company and any subsidiary or Affiliate. A
participant employed by a subsidiary or an Affiliate shall also be deemed to
incur a Termination of Employment if the subsidiary or Affiliate ceases to be
such a subsidiary or Affiliate, as the case may be, and the participant does not
immediately thereafter become an employee of the Company or another subsidiary
or Affiliate. Transfers among the Company and its subsidiaries and Affiliates,
as well as temporary absences from employment because of illness, vacation or
leave of absence, will not be considered a Termination of Employment.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
16
<PAGE> 56
Proxy
THE DIAL CORPORATION
c/o Harris Trust & Savings Bank, P.O. Box 830, Chicago, Illinois 60690 This
Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Malcolm Jozoff, Joe T. Ford and Donald E.
Guinn, and each of them, to have all the powers hereunder, including full power
of substitution, as Proxies for the undersigned to vote as indicated below, at
the Annual Meeting of Stockholders of The Dial Corporation (the "Corporation")
to be held on Thursday, May 29, 1997, and at any adjournment or adjournments
thereof, all shares of stock which the undersigned is entitled to vote, with all
voting rights the undersigned would have if personally present. This card also
provides voting instructions for shares of the Corporation held for the account
of the undersigned, if any, under the 401(k) plans of the Corporation.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is given, this proxy will be voted FOR proposals 1, 2 and 3.
PLEASE COMPLETE, SIGN AND DATE ON REVERSE SIDE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE> 57
Please mark vote in oval in the following manner using dark ink only.
<TABLE>
<CAPTION>
The Board of Directors recommends a vote FOR: For All
For Withhold Except Nominee(s)
1. Election of directors whose terms All All Written Below
<S> <C> <C> <C>
expire in 2000: / / / / / /
Nominees: Thomas L. Gossage, Joy A. Amundson
and Michael T. Riordan.
- ----------------------------------
(Except nominee(s) written above.)
2. Approval of the performance goals and certain For Against Abstain
other terms under The Dial Corporation 1996 Stock / / / / / /
Incentive Plan for purposes of Internal Revenue Code
Section 162(m).
3. Approval of the performance goals and For Against Abstain
certain other terms under The Dial Corporation / / / / / /
Annual Incentive Plan for purposes of Internal
Revenue Code Section 162(m).
4. In their discretion, the Proxies are authorized to
vote upon such other business as may properly come before
the meeting or any adjournments thereof.
</TABLE>
Dated: , 1997
---------------------------------------
- -----------------------------------------------
Signature
- -----------------------------------------------
Signature, if held jointly
Please sign exactly as name appears on your account. If shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized partner.
