<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
Commission file number 001-11015
THE DIAL CORP
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 36-1169950
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
DIAL TOWER, PHOENIX, ARIZONA 85077
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (602)207-4000
Indicate by check mark whether the registrant (1) has filed all
Exchange Act reports required to be filed by Section 13 or 15 (d)
of the Securities Exchange Act of 1934 during the preceding 12
months, and (2) has been subject to such filing requirements for
the past 90 days.
Yes x No
--------- ---------
As of July 31, 1995, 93,209,996 shares of Common Stock ($1.50 par
value) were outstanding.<PAGE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE DIAL CORP
CONSOLIDATED BALANCE SHEET
<CAPTION>
June 30, December 31,
(000 omitted) 1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 22,022 $ 33,222
Receivables, less allowance of
$19,849 and $20,453 227,917 232,932
Inventories 226,781 229,273
Deferred income taxes 32,823 42,517
Other current assets 63,909 46,565
---------- ----------
573,452 584,509
Funds, agents' receivables and
current maturities of investments
restricted for payment service
obligations, after eliminating
$80,000 invested in Dial
commercial paper 545,619 659,708
---------- ----------
Total current assets 1,119,071 1,244,217
Investments restricted for
payment service obligations 798,396 692,818
Property and equipment 854,569 813,384
Other investments and assets 91,503 83,255
Deferred income taxes 107,596 126,787
Intangibles 820,984 820,435
---------- ----------
$ 3,792,119 $ 3,780,896
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
June 30, December 31,
(000 omitted, except number of shares) 1995 1994
---------- ----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank loans $ 231 $ 931
Accounts payable 216,286 243,982
Accrued compensation 65,485 91,992
Other current liabilities 249,281 258,065
Current portion of long-term debt 47,827 22,830
---------- ----------
579,110 617,800
Payment service obligations 1,408,095 1,438,960
---------- ----------
Total current liabilities 1,987,205 2,056,760
Long-term debt 752,768 721,718
Pension and other benefits 316,163 319,519
Other deferred items and insurance reserves 69,346 96,525
Minority interests 23,634 24,691
$4.75 Redeemable preferred stock 6,594 6,590
Common stock and other equity:
Common stock, $1.50 par value,
200,000,000 shares authorized,
97,108,724 shares issued 145,663 145,663
Additional capital 333,150 308,350
Retained income 436,980 393,233
Cumulative translation adjustments (18,179) (20,910)
Unearned employee benefits (184,987) (176,201)
Unrealized loss on securities
available for sale (7,560) (21,742)
Common stock in treasury, at cost,
4,049,889 and 4,319,624 shares (68,658) (73,300)
---------- ----------
Total common stock and other equity 636,409 555,093
---------- ----------
$ 3,792,119 $ 3,780,896
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF CONSOLIDATED INCOME
<CAPTION>
Quarter ended June 30, 1995 1994
(000 omitted, except per share data) ---------- ----------
<S> <C> <C>
Revenues $ 901,884 $ 931,948
---------- ----------
Costs and expenses:
Costs of sales and services 798,385 836,669
Unallocated corporate expense
and other items, net 10,939 10,552
Interest expense 18,252 14,784
Minority interests 585 503
---------- ----------
828,161 862,508
---------- ----------
Income before income taxes 73,723 69,440
Income taxes 26,257 26,047
---------- ----------
Net Income $ 47,466 $ 43,393
========== ==========
Net Income Per Common Share $ 0.54 $ 0.50
========== ==========
Dividends declared per common share $ 0.15 $ 0.15
========== ==========
Average outstanding common
and equivalent shares 88,348 86,540
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF CONSOLIDATED INCOME
<CAPTION>
Six months ended June 30, 1995 1994
(000 omitted, except per share data) ---------- ----------
<S> <C> <C>
Revenues $ 1,760,081 $ 1,716,850
---------- ----------
Costs and expenses:
Costs of sales and services 1,592,722 1,568,632
Unallocated corporate expense
and other items, net 22,088 21,300
Interest expense 36,679 28,991
Minority interests 648 403
---------- ----------
1,652,137 1,619,326
---------- ----------
Income before income taxes 107,944 97,524
Income taxes 38,971 36,921
---------- ----------
Net Income $ 68,973 $ 60,603
========== ==========
Net Income Per Common Share $ 0.78 $ 0.70
========== ==========
Dividends declared per common share $ 0.30 $ 0.29
========== ==========
Average outstanding common
and equivalent shares 88,211 86,288
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF RETAINED INCOME
<CAPTION>
Six months ended June 30, 1995 1994
(000 omitted) ---------- ----------
<S> <C> <C>
Balance, beginning of year $ 393,233 $ 304,481
Net income 68,973 60,603
Dividends on common and preferred shares (26,445) (25,131)
Other 1,219 318
---------- ----------
Balance, end of period $ 436,980 $ 340,271
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF CONSOLIDATED CASH FLOWS
<CAPTION>
Six months ended June 30, 1995 1994
(000 omitted) ---------- ----------
<S> <C> <C>
CASH FLOWS PROVIDED (USED) BY
OPERATING ACTIVITIES:
Net income $ 68,973 $ 60,603
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 56,186 55,941
Deferred income taxes 19,936 1,269
Other noncash items, net 2,926 (109)
Change in operating assets
and liabilities:
Receivables and inventories (15,976) (70,658)
Payment service assets and
obligations, net 90,490 148,198
Accounts payable and accrued
compensation (56,179) (29,887)
Other assets and liabilities, net (51,195) 16,202
---------- ----------
Net cash provided by operating activities 115,161 181,559
---------- ----------
CASH FLOWS PROVIDED (USED) BY
INVESTING ACTIVITIES:
Capital expenditures (45,332) (43,777)
Purchase of cruise ship previously leased (39,447)
Acquisitions of businesses and
other assets, net of cash acquired (13,136) (141,533)
Proceeds from sale of businesses and property 4,857 3,397
Proceeds from sales of securities classified as
available for sale 270,259 128,184
Proceeds from maturities of securities
classified as available for sale 6,557 6,762
Purchases of securities classified as
available for sale (309,537) (161,900)
Purchases of securities classified as
held to maturity (62,210) (107,898)
Other, net (17) (10)
---------- ----------
Net cash used by investing activities (188,006) (316,775)
---------- ----------
CASH FLOWS PROVIDED (USED) BY
FINANCING ACTIVITIES:
Proceeds from long-term borrowings 40,000 70,000
Payments on long-term borrowings (2,163) (2,130)
Net change in short-term borrowings 18,007 84,928
Dividends on common and preferred stock (26,445) (25,131)
Minority portion of subsidiary's special dividend (9,761)
Proceeds from sales of treasury stock 17,504 13,422
Net change in receivables sold 22,552
Cash payments on interest rate swaps (7,810) (6,398)
---------- ----------
Net cash provided by financing activities 61,645 124,930
---------- ----------
Net decrease in cash and cash equivalents (11,200) (10,286)
Cash and cash equivalents, beginning of year 33,222 10,659
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 22,022 $ 373
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
THE DIAL CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A--Basis of Preparation
This information should be read in conjunction with the financial
statements set forth in The Dial Corp Annual Report to
Stockholders for the year ended December 31, 1994.
Accounting policies utilized in the preparation of the financial
information herein presented are the same as set forth in The
Dial Corp's annual financial statements except as modified for
interim accounting policies which are within the guidelines set
forth in Accounting Principles Board Opinion No. 28. The interim
consolidated financial information is unaudited. In the opinion
of management, all adjustments, consisting only of normal
recurring accruals, necessary to present fairly Dial's financial
position as of June 30, 1995, and the results of operations for
the quarters and six months ended June 30, 1995 and 1994, and the
cash flows for the six months ended June 30, 1995 and 1994 have
been included. Interim results of operations are not necessarily
indicative of the results of operations for the full year.
Certain reclassifications have been made to the prior year's
financial statements to conform to 1995 classifications.
NOTE B--Investments Restricted for Payment Service Obligations
Investments restricted for payment service obligations include
the following debt and equity securities:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- -----------
(000 omitted)
<S> <C> <C>
Securities available for sale, at
fair value (amortized cost of
$499,593 and $468,307) $ 487,302 $ 433,150
Securities held to maturity, at
amortized cost (fair value of
$320,509 and $243,156) 326,439 264,861
----------- ----------
813,741 698,011
Less current maturities (15,345) (5,193)
----------- ----------
$ 798,396 $ 692,818
=========== ==========
</TABLE>
NOTE C--Debt
At June 30, 1995 and December 31, 1994, Dial classified as long-
term debt $294 million and $275 million, respectively, of short-
term borrowings supported by unused commitments under long-term
revolving credit agreements.
NOTE D--Income Taxes
A reconciliation of the provision for income taxes and the amount
that would be computed using statutory federal income tax rates
on income before income taxes for the six months ended June 30,
is as follows:
<TABLE>
<CAPTION>
1995 1994
(000 omitted) ------------ ------------
<S> <C> <C>
Computed income taxes at statutory
federal income tax rate of 35% $ 37,780 $ 34,133
Nondeductible goodwill amortization 2,250 2,125
Minority interests 227 141
State income taxes 3,335 4,108
Tax-exempt income (4,792) (1,909)
Adjustment to estimated annual
effective rate (2,000)
Other, net 171 323
----------- -----------
Provision for income taxes $ 38,971 $ 36,921
=========== ===========
</TABLE>
NOTE E--Supplementary Information--Revenues and Operating Income
<TABLE>
<CAPTION>
Quarter ended Six months ended
June 30, June 30,
------------------------- --------------------------
1995 1994 1995 1994
(000 omitted) ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Consumer Products $ 363,893 $ 408,115 $ 701,755 $ 738,455
Services:
Airline Catering
and Services 206,509 202,225 390,965 353,688
Convention Services 131,588 135,736 285,985 263,407
Travel and Leisure
and Payment
Services (1) 199,894 185,872 381,376 361,300
----------- ----------- ----------- -----------
Total Services (1) 537,991 523,833 1,058,326 978,395
----------- ----------- ----------- -----------
$ 901,884 $ 931,948 $ 1,760,081 $ 1,716,850
=========== =========== =========== ===========
Operating Income:
Consumer Products $ 51,134 $ 49,978 $ 84,936 $ 80,130
Services:
Airline Catering
and Services 17,932 16,540 28,958 24,961
Convention
Services (2) 16,629 14,957 31,630 27,349
Travel and Leisure
and Payment
Services (1) 17,804 13,804 21,835 15,778
----------- ----------- ----------- -----------
Total
Services (1)(2) 52,365 45,301 82,423 68,088
----------- ----------- ----------- -----------
Total principal
business segments 103,499 95,279 167,359 148,218
Unallocated
corporate expense
and other
items, net (10,939) (10,552) (22,088) (21,300)
----------- ----------- ----------- -----------
$ 92,560 $ 84,727 $ 145,271 $ 126,918
=========== =========== =========== ===========
<FN>
(1) Dial's payment services subsidiary is investing increasing amounts in tax-
exempt securities. On a fully taxable equivalent basis, revenues and operating
income would be higher by $3,929,000 for the 1995 quarter and $1,422,000 for the
1994 quarter, and by $7,372,000 and $2,936,000, respectively, for the 1995 and
1994 six month periods.
(2) Operating income for the quarter and six months ended June 30, 1995
includes a one-time gain of $3,477,000 (pre-tax) due to the curtailment of
certain postretirement medical benefits in a convention services subsidiary.
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results:
There were no material changes in the nature of Dial's business,
nor were there any other changes in the general characteristics
of its operations as described and discussed in the first
paragraph of the results section of Management's Discussion and
Analysis of Results of Operations and Financial Condition
presented in The Dial Corp Annual Report to Stockholders for the
year ended December 31, 1994.
Comparison of Second Quarter of 1995 with Second Quarter of 1994:
In the second quarter of 1995, revenues decreased 3 percent to
$901.9 million, down from $931.9 million in the 1994 quarter.
Second quarter net income was $47.5 million or $0.54 per share,
up 8 percent on a per share basis from 1994's net income of $43.4
million or $0.50 per share.
Consumer Products
The Consumer Products Group's revenues were down $44.2 million or
11 percent from those of the 1994 second quarter. The revenue
decrease was due to the acceleration of the previously reported
program to effect reductions of trade customers' inventories.
This initiative, coupled with more rapid replenishment as
consumers purchase the products off the shelf, addresses the
retailers' increased emphasis on efficient consumer response.
Operating income increased $1.2 million or 2 percent from that of
the 1994 second quarter. Operating margins improved to 14.1
percent from 12.3 percent in the 1994 second quarter due
primarily to lower trade promotion costs and other savings
resulting principally from the inventory reduction program.
Skin Care division's revenues declined $33.4 million while
operating income increased $5.3 million from those of 1994's
second quarter. Sales volumes were down as a result of the
planned inventory reduction program. Strong operating income
growth in the face of declining revenues was the result of
reductions in trade spending, marketing expenditures and other
cost reduction programs.
The Food division's revenues declined $9.5 million from the 1994
quarter, due to a planned reduction of microwaveable meals and
lower sales of chili and stew. Operating income increased
slightly from that of last year's quarter, as lower manufacturing
and administrative costs more than offset the effects of lower
sales.
The Household division's second quarter revenues were up $6.0
million, driven mainly by Dial's new dishwashing detergent and
Renuzit product introductions, offset partially by a decline in
Renuzit Electric and cleaning products. Renuzit Electric
benefited from strong promotions in 1994 which were not repeated
in 1995. Operating income remained even compared to the second
quarter of 1994, as raw material cost increases and promotion
expenses for new products offset the effects of increased sales.
Laundry division revenues for the second quarter decreased $7.5
million due partially to volume softness in dry detergents. The
discontinuance of low margin business for fabric softeners also
contributed to the decline in revenues while liquid detergent
volumes declined due to promotional shifts to the second half of
1995. Operating income declined $4.7 million due to the reduced
volume, higher raw material costs, and increased marketing and
distribution expenditures in areas other than liquid detergents.
International division's revenues and operating income improved
$100,000 and $300,000, respectively, over those of the 1994
second quarter.
Services
Combined Services revenues were $538 million, $14.2 million (3
percent) greater than the 1994 second quarter's amounts.
Excluding a one-time gain of $3.5 million (pre-tax) on
curtailment of certain postretirement medical benefits in the
Convention Services Segment, combined services posted an 8
percent increase in second quarter operating income.
Airline Catering and Services. The second quarter revenues
of the Airline Catering and Services Group were $206.5 million, a
2 percent increase from the 1994 quarter, with operating income
increasing $1.4 million, or 8 percent, as new contracts awarded
in the first half of 1995 only began to come on stream late in
the second quarter, while the effects of further airline meal
service cutbacks on certain domestic flights of short duration
unfavorably affected the comparisons of revenues and operating
income. Operating margins improved to 8.7 percent from 1994's
8.2 percent, as the United flight kitchens became fully
operational during 1995 versus the start-up and training period
in 1994.
Convention Services. Convention Services revenues decreased
$4.1 million (3 percent). Excluding a one-time gain on
curtailment of certain postretirement medical benefits of $3.5
million (pre-tax), operating income declined 12 percent. On this
same basis, operating margins declined from 11 percent in the
second quarter of 1994 to 10 percent in the 1995 quarter.
Revenues, operating income and margins were impacted by shows not
repeated each year and by changes in the location of certain
shows.
Travel and Leisure and Payment Services. Revenues of these
companies were up $14 million (8 percent) to $199.9 million,
while operating income increased 29 percent to $17.8 million.
Dial's payment services subsidiary continues to invest increasing
amounts in tax-exempt securities. On a fully taxable equivalent
basis, 1995 second quarter revenues and operating income would
have been higher by $3.9 million, while 1994's second quarter
revenues and operating income would have been $1.4 million
higher. Operating margins, on the fully taxable equivalent
basis, increased to 10.7 percent from 8.1 percent.
Canadian transportation services companies' revenues and
operating income increased $12.6 million and $1.4 million,
respectively, during the second quarter. Revenue increases from
a newly acquired tour operator, strong growth in existing package
tour operations, improved hotel occupancy rates, and higher
Courier Express, sightseeing and snowfield revenues were
partially offset by a decrease in charter revenues as a result of
redeployment of the bus fleet to passenger route acquisitions in
mid-1994. Operating income increases are attributed to the
revenue increases as well as cost reduction programs, which more
than offset the expense of terminating a small joint venture.
Duty Free and shipboard concession revenues declined $3 million
from the second quarter of 1994, due primarily to the loss of a
major shipboard concession, fewer passenger days for continuing
business, and lower airport traffic where duty-free shops are
operated. Operating income improved $100,000 as a result of
lower operating expenses and concentration on higher gross margin
products.
Cruise revenues declined $300,000 from 1994's second quarter.
Loss of revenues from the Star/Ship Majestic, which was taken out
of service as Dial commenced a four-year charter arrangement in
February 1995, were largely offset by revenue increases on the
Star/Ship Atlantic and the Star/Ship Oceanic. Operating income
improved $800,000 due to cost reduction efforts and operating one
less vessel.
Travel tour service revenues and operating income improved $1.4
million and $400,000, respectively, over those of the 1994 second
quarter, driven by an increase in passenger volumes as well as
favorable foreign exchange rates.
Revenues and operating income of the food service companies
declined $600,000 and $700,000, respectively, from those of the
1994 second quarter. The decrease in revenues and operating
income is principally due to the sale of a non-core operation,
including certain one-time costs, as well as inclement weather at
Glacier National Park.
On a fully taxable equivalent basis, revenues of payment services
increased $9.5 million over the 1994 second quarter. The revenue
increase is attributed principally to new product lines and
increased investment income due to higher rates, greater funds
invested and increased realized securities gains. Operating
income, on the fully taxable equivalent basis, increased $4.8
million, including the increased realized investment gains and
moderated by higher commission expense for official checks and
other volume related costs.
Interest Expense
Interest expense increased $3.5 million from 1994's second
quarter, primarily because both debt levels and interest rates on
floating-rate debt were higher in 1995 than in 1994. Increased
debt levels were principally due to the purchase of the Star/Ship
Majestic, which had previously been leased, in February 1995.
Income Taxes
The effective tax rate in the 1995 second quarter was 35.6
percent, down from 37.5 percent in 1994. The reduction in the
effective tax rate results primarily from the increased use of
tax-exempt investments by Dial's payment services subsidiary.
Comparison of First Six Months of 1995 to the
First Six Months of 1994:
Revenues for the first six months of 1995 increased nearly 3
percent to $1.8 billion from $1.7 billion in the same period of
1994.
For the first six months of 1995, net income was $69 million, up
from 1994's net income of $60.6 million. On a per share basis,
the 1995 period's net income of $0.78 per share was 11 percent
higher than 1994's $0.70.
Consumer Products
For the first six months of 1995, the Consumer Products Group's
revenues of $701.8 million were down $36.7 million or 5 percent
from those of the 1994 period. The revenue decrease was
primarily due to the acceleration of the previously reported
program to effect reductions of trade customers' inventories.
Operating income of $84.9 million was $4.8 million or 6 percent
higher than that of the 1994 period. Operating margins improved
to 12.1 percent from 10.9 percent in the 1994 period due
primarily to lower trade promotion costs and other savings
resulting principally from the inventory reduction initiative.
Skin Care division's revenues declined $17.5 million while
operating income increased $11.5 million compared to the first
six months of 1994. Sales volumes were down as a result of the
inventory reduction program. Operating income increased as a
result of reductions in trade spending, marketing expenditures
and other cost reduction programs.
The Food division's revenues declined $15 million from the first
six months in 1994 due to a planned reduction of microwaveable
meals and lower sales of chili and stew. Operating income
increased $900,000, as lower manufacturing and administrative
costs more than offset the effects of lower sales.
The Household division's first six months' revenues and operating
income were up $10.3 million and $1 million, respectively, over
the same period in 1994, due primarily to strong sales of Dial's
new dishwashing detergent and Renuzit product introductions,
offset partially by a decline in Renuzit Electric and cleaning
products. Renuzit Electric benefited from strong promotions in
1994 which were not repeated in 1995. Operating income increased
over the 1994 six month period as raw material cost increases and
promotional expenses for new product introductions partially
offset the effects of increased sales.
Laundry division revenues for the first six months of 1995
decreased $12.9 million due to high sales to trade customers in
the fourth quarter of 1994 and volume softness in dry detergents.
Operating income declined $9.4 million as a result of the reduced
volume, higher raw material costs, and increased marketing and
distribution expenditures.
International division's revenues decreased $1.7 million compared
to the first six months of 1994, due principally to the
devaluation of the Mexican peso in the first quarter of 1995.
Despite the revenue declines, operating income increased $800,000
due to a more profitable sales mix.
Services
Combined Services revenues for the first six months of 1995 were
$1.1 billion, $79.9 million (8 percent) greater than that of the
1994 period. Excluding the one-time gain of $3.5 million (pre-
tax) on curtailment of certain postretirement medical benefits in
the Convention Services Segment, combined services posted a 16
percent increase in six month operating income.
Airline Catering and Services. These companies' revenues and
operating income of $391 million and $29 million, respectively,
were up $37.3 million (11 percent) and $4 million (16 percent),
respectively, from those of 1994's first six months. The increase
was due to having all United flight kitchens acquired during 1994
fully operational this year as the start-up of newly acquired
flight kitchens continued during the 1994 first half. Seven new
aircraft service locations and other new business from continuing
locations also contributed to the increase, partially offset by
the effect of further airline meal service cutbacks on certain
domestic flights of short duration. Operating margins improved
to 7.4 percent from 1994's 7.1 percent, as the United flight
kitchens became fully operational during 1995 versus the start-up
and training period in 1994.
Convention Services. Convention Services' first half
revenues of $286 million were 9 percent greater than the 1994
period. Excluding the one-time curtailment gain described above,
operating income increased 3 percent to $28.2 million. Operating
margins decreased to 9.8 percent from 10.4 percent, due largely
to the effects of shows not repeated each year and by changes in
the location of certain shows.
Travel and Leisure and Payment Services. For the first six
months of 1995, revenues of these companies were $381.4 million,
up $20.1 million (nearly 6 percent), while operating income
increased 38 percent to $21.8 million. Dial's payment services
subsidiary continues to invest increasing amounts in tax-exempt
securities. On a fully taxable equivalent basis, revenues and
operating income would have been higher by $7.4 million and $2.9
million, respectively, for the 1995 and 1994 six month periods.
Operating margins, on the fully taxable equivalent basis,
increased to 7.5 percent from 5.1 percent in the 1994 six month
period.
Canadian transportation services companies' revenues increased
$13.6 million over the 1994 six month period while operating
income increased $1.7 million in U. S. dollars. Revenue increases
from a newly acquired tour operator, strong growth in existing
package tour operations, improved hotel occupancy rates, and
higher Courier Express, sightseeing and snowfield revenues were
partially offset by a decrease in charter revenues as a result of
redeployment of the bus fleet to passenger route acquisitions in
mid-1994. Operating income increases are attributed to the
revenue increases as well as cost reduction programs, which more
than offset the expense of terminating a small joint venture.
Duty Free airport and shipboard concession revenues declined $6.9
million from the first half of 1994, due primarily to the loss of
a major shipboard concession and fewer passenger days for
continuing business. Operating income improved $200,000, due
mostly to lower operating expenses.
Cruise revenues were down $2.5 million from 1994's first six
months due to having two ships in drydock for repairs for a total
of 44 ship days during the first quarter of 1995. In addition,
the Star/Ship Majestic was taken out of service in February as
Dial commenced a four-year charter arrangement to lease the ship
to a European operator. Operating results improved $2.8 million
due to favorable occupancy rates, lower expenses resulting from
cost reduction efforts and operating one less vessel.
Travel tour service revenues and operating income improved $2.3
million and $800,000, respectively, over the first six months of
1994, due primarily to favorable foreign exchange rates this
year, which also has had a favorable impact on passenger volumes.
Revenues and operating income of the food service companies were
both down $600,000 from the same period in 1994 due to the sale
of a non-core operation, including certain one-time costs, as
well as inclement weather at Glacier National Park.
On a fully taxable equivalent basis, revenues of payment services
increased $18 million over those of 1994's first six months, due
principally to increased investment income, revenues from new
product lines and increased realized investment gains.
Investment income increased due to higher rates and greater funds
invested than in 1994. On a fully taxable equivalent basis,
operating income increased $6.9 million, including the increased
realized investment gains and moderated principally by higher
commission expense for official checks and other volume related
costs.
Interest Expense
Interest expense for the first six months of 1995 increased $7.7
million over the first six months of 1994, as both debt levels
and interest rates on floating-rate debt were higher than in
1994. Debt level increases are primarily due to the purchase of
the Star/Ship Majestic in February 1995.
Income Taxes
The effective tax rate for the first six months of 1995 was 36.1
percent, down from 37.9 percent in the comparable period of 1994.
The reduction in the effective tax rate results primarily from
the increased use of tax-exempt investments by Dial's payment
services subsidiary.
Liquidity and Capital Resources:
The Dial Corp's total debt at June 30, 1995 was $800.8 million
compared with $745.5 million at December 31, 1994. The debt-to-
capital ratios at June 30, 1995 and December 31, 1994 were 0.55
to 1 and 0.56 to 1, respectively. The increase in debt was
attributable primarily to the purchase of the Star/Ship Majestic,
which was previously leased, in early 1995.
There were no other material changes in The Dial Corp's financial
condition nor were there any substantive changes relative to
matters discussed in the Liquidity and Capital Resources section
of Management's Discussion and Analysis of Results of Operations
and Financial Condition as presented in The Dial Corp Annual
Report to Stockholders for the year ended December 31, 1994.
Recent Developments:
Dial's Consumer Products Group plans to continue programs with
many of its trade customers designed to effect reductions of the
trade customers' inventories over the balance of 1995. These
programs are coupled with more rapid replenishment as consumers
purchase the products off the shelf, to address the retailers'
increased emphasis on efficient consumer response. This will
continue to depress revenues for the Consumer Products Group for
the rest of 1995 while the trade customers' inventories are
reduced, even though consumer purchases are expected to continue
at normal rates. The Consumer Products Group anticipates that
lower trade promotion costs and other savings resulting from the
programs will more than offset the effect of the reduced revenues
in 1995, so that operating income and margins should continue to
increase over 1994 levels.
In July 1995, Dial exercised its option to purchase the Star/Ship
Atlantic cruise ship, previously under a lease agreement, for
$71.7 million.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Dial has been named defendant in three lawsuits (U.S. District
Court, Eastern Division, Virginia (Norfolk Division) Spring 1993;
Circuit Court of Kanawha County West Virginia, July 1995; and
Superior Court of California for the City of Los Angeles, July
1995) filed by several hundred former railroad workers claiming
asbestos-related health conditions. Dial has tolling agreements
in place with some plaintiffs in these lawsuits as well as other
claimants. The claims relate to former subsidiaries and their
production of railroad locomotives. Due to their preliminary
nature, the extent of the claims as they relate to Dial are not
ascertainable at this time, however, Dial does not believe that
any resulting liability should materially affect its financial
position.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders of The Dial Corp was held May
9, 1995, and matters voted on were reported in the quarterly
report of The Dial Corp on Form 10-Q for the quarterly period
ended March 31, 1995.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit No. 10.A - Copy of Employment
Agreement between The Dial Corp and John W.
Teets dated June 20, 1995.
Exhibit No. 10.B - Copy of The Dial Corp Director's
Charitable Award Program.
Exhibit No. 10.C - Copy of amendment dated August 18,
1993, to The Dial Corp Supplemental Pension Plan.
Exhibit No. 11 - Statement Re Computation of Per Share
Earnings.
Exhibit No. 27 - Financial Data Schedule
(b) No Reports on Form 8-K have been filed by
the registrant during the quarter for which
this report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE DIAL CORP
(Registrant)
August 14, 1995 By /s/Richard C. Stephan
------------------------
Richard C. Stephan
Vice President-Controller
(Chief Accounting Officer
and Authorized Officer)
<PAGE>
<TABLE>
Exhibit 11
Page 1 of 2
THE DIAL CORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(000 omitted)
<CAPTION>
Quarter ended June 30,
----------------------------
Primary: 1995 1994
------------ ------------
<S> <C> <C>
Net income $ 47,466 $ 43,393
Less: Preferred stock dividends (281) (281)
------------ ------------
$ 47,185 $ 43,112
============ ============
Weighted average common shares outstanding
before common equivalents 86,562 84,788
Common equivalent stock options 1,904 1,752
------------ ------------
88,466 86,540
============ ============
Net income per share (dollars) $ 0.54 $ 0.50
============ ============
</TABLE>
<TABLE>
<CAPTION>
Quarter ended June 30,
---------------------------------------------------------
1995 1994
--------------------------- ----------------------------
Common Net Common Net
Fully Diluted: Shares Income Shares Income
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Weighted average common
and equivalent shares
and net income
per above 88,466 $ 47,185 86,540 $ 43,112
------------ ------------ ------------ ------------
88,466 $ 47,185 86,540 $ 43,112
============ ============ ============ ============
Net income per
share (dollars) $ 0.54 $ 0.50
============ ============
</TABLE>
<PAGE>
<TABLE>
Exhibit 11
Page 2 of 2
THE DIAL CORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(000 omitted)
<CAPTION>
Six months ended
June 30,
----------------------------
Primary: 1995 1994
------------ ------------
<S> <C> <C>
Net income $ 68,973 $ 60,603
Less: Preferred stock dividends (562) (561)
------------ ------------
$ 68,411 $ 60,042
============ ============
Weighted average common shares outstanding
before common equivalents 86,355 84,612
Common equivalent stock options 1,876 1,676
------------ ------------
88,211 86,288
============ ============
Net income per share (dollars) $ 0.78 $ 0.70
============ ============
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30,
---------------------------------------------------------
1995 1994
-------------------------- ----------------------------
Common Net Common Net
Fully Diluted: Shares Income Shares Income
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Weighted average common
and equivalent shares
and net income
per above 88,211 $ 68,411 86,288 $ 60,042
Common equivalent
stock options 84
------------ ------------ ------------ ------------
88,295 $ 68,411 86,288 $ 60,042
============ ============ ============ ============
Net income per
share (dollars) $ 0.77 $ 0.70
============ ============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE DIAL CORP'S
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
<MULTIPLIER> 1,000
<CAPTION>
Exhibit 27
Page 1 of 2
THE DIAL CORP
FINANCIAL DATA SCHEDULE
<S> <C>
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<PERIOD-TYPE> 6-MOS
<CASH> 22,022
<SECURITIES> 0
<RECEIVABLES> 247,766
<ALLOWANCES> 19,849
<INVENTORY> 226,781
<CURRENT-ASSETS> 1,119,071
<PP&E> 1,502,108
<DEPRECIATION> 647,539
<TOTAL-ASSETS> 3,792,119
<PAGE>
<CAPTION>
Exhibit 27
Page 2 of 2
<S> <C>
<CURRENT-LIABILITIES> 1,987,205
<BONDS> 752,768
<COMMON> 145,663
6,594
0
<OTHER-SE> 490,746
<TOTAL-LIABILITY-AND-EQUITY> 3,792,119
<SALES> 701,755
<TOTAL-REVENUES> 1,760,081
<CGS> 616,819
<TOTAL-COSTS> 1,592,722
<OTHER-EXPENSES> 22,088
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36,679
<INCOME-PRETAX> 107,944
<INCOME-TAX> 38,971
<INCOME-CONTINUING> 68,973
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,973
<EPS-PRIMARY> 0.78
<EPS-DILUTED> 0.77
</TABLE>
<PAGE>
EXHIBIT 10.A
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated June 20, 1995,
between The Dial Corp, a Delaware corporation (the "Company"),
and John W. Teets (the "Executive").
WHEREAS, the Executive has made extraordinary contributions
to the Company in his capacity as Chairman and Chief Executive
Officer, especially in connection with the Company's
restructuring and repositioning, to the great benefit of its
shareholders;
WHEREAS, the Company, as successor to The Greyhound
Corporation, and the Executive are currently parties to an
agreement dated April 14, 1987 (the "Prior Agreement") relating
to the Executive's employment with the Company; and
WHEREAS, the Company desires the Executive to continue
serving as its Chairman and Chief Executive Officer, and the
Company and the Executive desire to enter into this Agreement,
which shall restate and supersede the Prior Agreement in all
respects.
NOW, THEREFORE, in consideration of the premises and the
respective covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties
agree as follows:
1. Employment. The Company hereby agrees to continue to
employ the Executive, and the Executive hereby agrees to continue
to serve the Company, on the terms and conditions set forth
herein.
2. Term. The term of employment of the Executive by the
Company hereunder shall commence on June 20, 1995, and such term
shall end on September 30, 1998 (the "Expiration Date"), unless
sooner terminated as hereinafter provided.
3. Nature of Duties. The Executive shall serve as
Chairman and Chief Executive Officer of the Company and, subject
to the direction of the Board of Directors of the Company (the
"Board"), shall have full authority for management of the Company
and all its operations, financial affairs, facilities and
investments. The Executive shall serve as a member of the Board,
shall act as the duly authorized representative of the Board and
shall be an ex officio member of all committees of the Board.
However, the Executive agrees to relinquish the position of Chief
Executive Officer prior to the Expiration Date if requested to do
so by the Board to facilitate an orderly senior management
succession plan, it being understood that such request and
relinquishment shall not constitute a breach by the Company or a
termination of this Agreement; thereafter, the Executive shall
remain Chairman and shall continue to receive the compensation
and benefits provided for in this Agreement. The Executive shall
devote substantially all of his working time and efforts to the
business and affairs of the Company; provided, that the Executive
shall be free to serve as a director or officer or both of such
not-for-profit corporations as he may desire, to join and
participate in such committees for community or national affairs
as he may select and to join and serve on business corporation
boards of directors, so long as such activities do not
significantly interfere with the performance of the Executive's
duties hereunder and, in the case of public business corporation
boards of which the Executive was not a member when he executed
this Agreement, only with the prior approval of the Executive
Compensation Committee of the Board.
4. Place of Performance. The Executive shall be based at
the principal executive offices of the Company in the city of
Phoenix, Arizona, or at such other principal executive office as
is agreeable to the Executive, except for required travel on the
Company's business.
5. Compensation and Related Matters.
(a) Base Salary. During the Executive's employment
hereunder, the Company shall pay to the Executive an annual base
salary of $1,000,000, effective July 1, 1995, such salary to be
paid in conformity with the Company's policies relating to
salaried employees. The Board will periodically review the
Executive's base salary and, effective September 1, 1996, and
September 1, 1997, may increase his base salary by the amount, if
any, the Board determines to be appropriate.
(b) Annual Bonus. The Executive shall be eligible to
participate in the annual bonus program available to senior
executives of the Company for its 1996 and later fiscal years,
but his entitlement to any bonus shall be determined on the basis
of criteria approved by the Executive Compensation Committee of
the Board and ratified by the Board.
(c) Stock Options. Restricted Stock and Incentive
Plans. The Executive shall be eligible to participate in all
stock option, restricted stock and incentive plans available to
senior executives of the Company, but his entitlement to any
grant or award shall be determined on the basis of criteria
approved by the Executive Compensation Committee of the Board and
ratified by the Board.
(d) Other Benefits. During the Executive's employment
hereunder, the Executive (1) shall be entitled to participate in
all employee benefit plans, which are generally available to the
Company's senior executive employees (subject to, and on a basis
consistent with, the terms, conditions and overall administration
of such plans, programs and arrangements); and (2) shall receive
pension benefits, supplemental executive retirement benefits,
health insurance plans, executive medical benefits, fitness
programs, life insurance, accidental death and dismemberment
benefits, vacation time, reimbursement of club membership
expenses, perquisites and other fringe benefits no less favorable
in the aggregate to the Executive than those provided to him by
the Company immediately before this Agreement.
(e) Insurance; Indemnification. During the
Executive's employment hereunder, the Company shall maintain
appropriate liability insurance under which the Executive shall
be an insured party. In addition, the Company shall indemnify
the Executive in the manner set forth in its Charter and By-laws,
and the existing Indemnification Agreement between the Company
and the Executive (the "Indemnification Agreement") shall remain
in full force. The Company shall also indemnify the Executive,
to the extent permitted by law, with respect to public service
activities and not-for-profit board membership he undertakes in
accordance with Section 3.
(f) Expenses. The Executive shall be entitled to
receive prompt reimbursement for all reasonable and customary
travel and business expenses he incurs (including, when the
Executive deems necessary, expenses incurred with respect to his
spouse) in connection with the Executive's employment hereunder;
provided, that such expenses are accounted for in accordance with
the policies and procedures established by the Company.
6. Compensation Upon Termination.
(a) Termination for Just Cause.
(1) Compensation Upon Termination for Just Cause:
The Company may terminate the Executive's employment for just
cause at any time without advance notice, in which case it shall
pay to the Executive, as soon as practicable thereafter, any
accrued but unpaid base salary under Section 5(a) hereof and
shall pay to the Executive, in accordance with the terms of the
applicable plan or program, all other unpaid amounts to which the
Executive is then entitled under any compensation or benefit plan
or program of the Company. The Company shall have no further
obligations to the Executive under this Agreement, except any
ongoing indemnification obligation under Section 5(e).
(2) Just Cause. For purposes of this Agreement,
"just cause" shall include, but not be limited to: (i) the
Executive's conviction of a felony; (ii) the Executive's refusal
to abide by or follow written directions that have been given by
the Board or that may be given by the Board hereafter; and (iii)
the Executive's failure adequately to cooperate with the Board in
planning and implementing a senior management succession plan.
(3) Resignation Alternative. If the Company
decides to terminate the Executive for just cause, it shall
notify the Executive of its intention to do so and give the
Executive 48 hours within which to resign voluntarily in lieu of
being terminated. If the Executive resigns during this period,
the Executive shall receive the payments and benefits described
in Section (6)(b) in lieu of those provided in this Section
(6)(a). The Executive acknowledges and agrees that he shall not
be entitled to any other amounts from the Company or any
affiliate on account of his termination of employment pursuant to
this Section 6(a)(3).
(b) Voluntary Termination. The Executive may
terminate employment voluntarily at any time after giving the
Company at least 180 days, advance written notice. (This advance
written notice requirement shall not apply, however, if the
Executive, on account of his termination of employment, would
receive benefits under his Executive Severance Agreement dated
March 18, 1992 (the "Severance Agreement"). If the Executive
voluntarily terminates employment, the Company shall pay to the
Executive, as soon as practicable thereafter, any accrued but
unpaid base salary under Section 5(a) hereof as of the date of
such termination and shall pay to the Executive, in accordance
with the terms of the applicable plan or program, all other
unpaid amounts to which the Executive is then entitled under any
compensation or benefit plan or program of the Company. The
Executive shall also be entitled to use of an office, as provided
in Section 6(f). In addition, if the Executive voluntarily
terminates employment more than 6 months before his 65th
birthday, the Executive shall be entitled to receive the
separation benefits provided in Schedule A attached to this
Agreement. The Company shall have no further obligations to the
Executive under this Agreement, except any ongoing
indemnification obligation under Section 5(e).
(c) Termination Without Just Cause. The Company,
without advance notice, may terminate the Executive's employment
other than for just cause under Section 6(a) or for Disability
under Section 6(d), in which case the Company shall pay to the
Executive, over the remainder of the term of this Agreement, all
payments or benefits (or their equivalent) under Section 5 that
would have been paid or provided to the Executive over such
period had he remained employed by the Company, but only to the
extent that the target requirements for bonus or other incentive
plans have been satisfied. The Executive shall also be entitled
to use of an office, as provided in Section 6(f). For purposes
of determining post-termination payments pursuant to this
paragraph, a bonus award under Section 5(b) and a stock option
grant or other incentive award under Section 5(c) shall not be
less than the corresponding award or grant made to the Executive
for 1993 or 1994, whichever was the more highly compensated year
in terms of aggregate bonuses, option grants and incentive
awards. Payments or benefits under this paragraph (c) shall not
be due with respect to periods following the Executive's death,
as provided more fully in Section 6(e) which shall then be
applicable. The Company shall have no further obligations to the
Executive under this Agreement, except any ongoing
indemnification obligation under Section 5(e), and the Executive
agrees that he shall have no rights or remedies in the event of
his termination without just cause other than those set forth in
this Section 6(c).
(d) Termination for Disability. If the Board
determines, in its sole discretion, that the Executive is
incapacitated by a physical or mental condition, illness or
injury which has prevented him (or inevitably will prevent him)
from being able to perform his duties under this Agreement in a
satisfactory fashion for substantially all of a 90 consecutive
day period, the Executive shall be deemed to have a "Disability."
The Board may terminate the Executive's employment on account of
a Disability, in which case, the Executive shall receive the
payments or benefits that would have been due under Section 6(b)
had he terminated employment voluntarily and, in addition, the
Executive shall continue to receive base salary payments
following his termination (reduced by any other Company-provided
disability benefits available to Mr. Teets) until the earliest of
(1) the Expiration Date, (2) the 180th day following the first
day of the 90 day period referred to in the preceding sentence,
or (3) the Executive's death, as provided more fully in Section
6(e) which shall then become applicable. The Executive shall
also be entitled to use of an office, as provided in Section
6(f). The Company shall have no further obligations to the
Executive under this Agreement, except any ongoing
indemnification obligation under Section 5(e).
(e) Death. If the Executive dies while this Agreement
is in effect or while amounts or benefits are being provided
under Section 6(c) or 6(d) on account of the Executive's
termination without just cause or for Disability, no further
amounts or benefits shall be due except for (1) death benefits
payable under the express terms of employee benefit plans in
which the Executive participated and (2) any accrued but unpaid
base salary under Section 5(a) hereof. The Company shall pay any
amount due under Section 5(a) to the Executive's estate as soon
as practicable after his death, and shall pay his estate or, if
applicable, his designated beneficiary, any other amount or
benefit due under any compensation or benefit plan or program of
the Company in accordance with the terms of the applicable plan
or program. The Company shall have no further obligations with
respect to the Executive under this Agreement, except any ongoing
indemnification obligation under Section 5(e).
(f) Office Facilities Following Termination. After
the Executive's termination of employment for any reason other
than just cause or death, the Company shall provide the Executive
with a suitable, fully equipped office and suitable secretarial
and office support services for five years. The office shall be
located at an appropriate location acceptable to the Executive,
other than the Company's headquarter offices.
7. Notice. For purposes of this Agreement, notices,
demands and all other communications provided for in this
Agreement shall be given in writing and shall be deemed to have
been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Company:
F.G. Emerson
Vice President & Secretary
The Dial Corp
1850 N. Central Avenue
Phoenix, Arizona 85077-2400
With a copy to:
The then Chairman of the
Executive Compensation Committee
of the Board of Directors of
The Dial Corp
If to the Executive:
J. W. Teets
Chief Executive Officer
The Dial Corp
1850 N. Central Avenue
Phoenix, Arizona 85077-2400
With a copy to:
L. G. Lemon
Vice President & General Counsel
The Dial Corp
1850 N. Central Avenue
Phoenix, Arizona 85077-2212
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing signed by the Executive and
such officer of the Company as may be specifically designated by
the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any
conditions or provisions of this Agreement to be performed by
such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior
or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the State of Delaware without regard to its
conflicts of law principles. This Agreement shall be binding
upon and shall inure to the benefit of the Executive and his
estate and the Company and any successor thereto, but neither
this Agreement nor any rights arising hereunder may be assigned
or pledged by the Executive, except to the extent permitted under
the terms of the benefit plans in which the Executive
participates.
9. Validity. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the
validity or enforceability or any other provision of this
Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the
same instrument.
11. Prior Agreement. This Agreement shall supersede the
Prior Agreement in all respects; the Prior Agreement is hereby
terminated and canceled.
12. Entire Agreement. This Agreement, the Severance
Agreement and the Indemnification Agreement constitute the entire
agreement and understanding with respect to the employment of the
Executive by the Company. To the extent that the Executive
receives or becomes entitled to receive any payments or other
benefits pursuant to the Severance Agreement, the amounts to
which the Executive may become entitled pursuant to Section 6 of
this Agreement shall be offset by such payments or benefits.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
The Dial Corp
By: /s/ Dennis S. Stanfill
Chairman, Executive
Compensation Committee
By: /s/ Frederick G. Emerson
Vice President &
Secretary
John W. Teets
/s/ John W. Teets
6/20/95
<PAGE>
SCHEDULE A
TO
EMPLOYMENT AGREEMENT
OF
JOHN W. TEETS
DATED
June 20, 1995
In the event Mr. Teets is eligible for special separation
benefits in accordance with the provisions of Section 6(b) of his
Employment Agreement dated June 20, 1995, the Compensation
Committee of the Board of Directors of The Dial Corp shall apply
13 Credits for Mr. Teets, benefit. The Compensation Committee
shall do so in the manner permitted under this Schedule which it
determines to be most beneficial to Mr. Teets after discussing
the matter with Mr. Teets. Mr. Teets, views shall be taken into
account by the Compensation Committee, but they shall not be
binding. The Compensation Committee may use Mr. Teets, 13
Credits in any of the following ways:
a) ADDITIONAL CREDITED SERVICE for pension benefit
accrual purposes, on the basis that 1 Credit
equals 1 year of credited service.
b) ADDITIONAL AGE with respect to actuarial
adjustments to Mr. Teets' pension benefit for
early or late benefit commencement, on the basis
that 1 credit equals 1 year of deemed age.
c) CONTINUED PAY AT 2/3RDS OF BASE SALARY for 3 weeks
for each full year of Mr. Teets, service with The
Dial Corp and its predecessors, with medical,
dental, life and AD & D benefits (or their
equivalent) being continued during the salary
continuation period on substantially the same
basis as they are then being provided to similarly
situated active employees. This option costs 3
Credits and can only be utilized once.
d) CASH PAYMENT equal to 10% of Mr Teets' last annual
base salary for each credit used.
Credits may be used in any combination, except as noted with
respect to option c). Once used, credits expire. Credits may
not be used to increase benefits under a qualified pension plan
if that would jeopardize the plan's tax status, but they may be
used to increase benefits under the Greyhound Supplemental
Pension Plan.
<PAGE>
EXHIBIT 10.B
THE DIAL CORP
DIRECTOR'S CHARITABLE AWARD PROGRAM
1. PURPOSE OF THE PROGRAM.
The Dial Corp Director's Charitable Award Program (the
"Program") allows each eligible Director of The Dial Corp
(the "Corporation") to recommend that the Corporation make a
donation of $1,000,000 to the eligible tax-exempt
organization(s) (the "Donee(s)") selected by the Director,
with the donation to be made, in the Director's name, in ten
equal annual installments, with the first installment to be
made as soon as is practicable after the Director's death.
The purpose of the Program is to recognize the interest of
the Corporation and its Directors in supporting worthy
educational institutions and other charitable organizations.
2. ELIGIBILITY.
All persons serving as Directors of the Corporation as of
February 15, 1995, shall be eligible to participate in the
Program. All Directors who join the Corporation's Board of
Directors after that date shall be immediately eligible to
participate in the Program upon election to the Board.
3. RECOMMENDATION OF DONATION.
When a Director becomes eligible to participate in the
Program, he or she shall make a written recommendation to
the Corporation, on a form approved by the Corporation for
this purpose, designating the Donee(s) which he or she
intends to be the recipient(s) of the Corporation donation
to be made on his or her behalf. A Director may revise or
revoke any such recommendation prior to his or her death by
signing a new recommendation form and submitting it to the
Corporation.
4. AMOUNT AND TIMING OF DONATION.
Each eligible Director may choose one organization to
receive a corporate donation of $1,000,000, or two or more
organizations to receive donations aggregating $1,000,000.
Each recommended organization must be recommended to receive
a donation of at least $100,000. The donation will be made
by the Corporation in ten equal annual installments, with
the first installment to be made as soon as is practicable
after the Director's death. If a Director recommends more
than one organization to receive a donation, each will
receive a prorated portion of each annual installment. Each
annual installment payment will be divided among the
recommended organizations in the same proportions as the
total donation amount has been allocated among the
organizations by the Director.
5. DONEES.
In order to be eligible to receive a donation, a recommended
organization must initially, and at the time a donation is
to be made, qualify to receive tax-deductible donations
under the Internal Revenue Code, and be reviewed and
approved by the Corporate Contributions Committee. A
recommendation will be approved unless it is determined, in
the exercise of good faith judgment, that a donation to the
organization would be detrimental to the best interests of
the Corporation. A Director's private foundation is
eligible to receive donations under the Program. If an
organization recommended by a Director ceases to qualify as
a Donee, and if the Director does not submit a form to
change the recommendation before his or her death, the
amount recommended to be donated to the organization will
instead be donated to the Director's remaining recommended
qualified Donee(s) on a prorated basis. If none of the
recommended organizations qualify, the donation will be made
to the organization(s) selected by the Corporation.
6. VESTING.
A Director will be vested in the Program when he or she
completes five years of Board service, or in the event (a)
he or she dies or becomes disabled while serving as a
Director, (b) if not an employee of the Corporation, he or
she retires at the mandatory retirement age for non-employee
directors, (c) if an employee of the Corporation, he or she
retires on or after his or her normal retirement date, or
(d) there is a Change of Control of the Corporation. For
persons serving as Directors on February 15, 1995, Board
service prior to that date will count as vesting service.
If a Director terminates Board service (other than due to
death, disability or mandatory retirement) before becoming
vested, no donation will be made on his or her behalf.
7. FUNDING AND PROGRAM ASSETS.
The Corporation may fund the Program or it may choose not to
fund the Program. If the Corporation elects to fund the
Program in any manner, neither the Directors nor their
recommended Donee(s) shall have any rights or interests in
any assets of the Corporation identified for such purpose.
Nothing contained in the Program shall create, or be deemed
to create, a trust, actual or constructive, for the benefit
of a Director or any Donee recommended by a Director to
receive a donation, or shall give, or be deemed to give, any
Director or recommended Donee any interest in any assets of
the Program or the Corporation. If the Corporation elects
to fund the Program through life insurance policies, a
participating Director agrees to cooperate and fulfill the
enrollment requirements necessary to obtain insurance on his
or her life.
8. AMENDMENT OR TERMINATION.
The Board of Directors of the Corporation may, at any time,
without the consent of the Directors participating in the
Program, amend, suspend, or terminate the Program. However,
once a Director becomes vested in the Program, the Program
may not be amended, suspended or terminated with respect to
such Director without his or her consent; provided, the
Board can elect, unless a change of control of the
Corporation has occurred, to terminate the Program with
respect to any Director whose Board service is terminated as
a result of a felony conviction, or a conviction of a crime
involving moral turpitude, fraud or dishonesty, whether or
not he or she is vested.
9. ADMINISTRATION.
The Program shall be administered by the Executive
Compensation Committee of the Board of Directors of the
Corporation. The Committee shall have plenary authority in
its discretion, but subject to the provisions of the
Program, to prescribe, amend, and rescind rules, regulations
and procedures relating to the Program. The determinations
of the Committee on the foregoing matters shall be
conclusive and binding on all interested parties.
10. CHANGE OF CONTROL.
If there is a Change of Control of the Corporation, all
participants serving as Directors at the time of the Change
of Control shall become immediately vested in the Program,
and, notwithstanding the provisions of Section 8, the
Program shall not thereafter be amended or terminated with
respect to any person participating in the Program at the
time of the Change of Control. For the purpose of the
Program, the term "Change of Control" shall have the same
meaning as is defined for that term in The Dial Corp 1992
Stock Incentive Plan.
11. GOVERNING LAW.
The Program shall be construed and enforced according to the
laws of State of Arizona, and all provisions thereof shall
be administered according to the laws of said state.
12. EFFECTIVE DATE.
The Program effective date is February 15, 1995. The
recommendation of a Director will not be effective until he
or she completes the Program enrollment requirements.
<PAGE>
EXHIBIT 10.C
RESOLUTION ADOPTED BY THE
BOARD OF DIRECTORS OF
THE DIAL CORP
AUGUST 18, 1993
RESOLVED, that the Dial Companies Supplemental Retirement
Plan, which covers employees of this Corporation and various of
its subsidiaries, be amended as follows:
The second sentence of Schedule B of the Plan
shall be as follows:
The Benefit shall be subject to no reduction
if the Eligible Employee retires on or
following his or her 60th birthday; and a
reduction of .25% for each month his or her
retirement precedes his or her 60th birthday.
