<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 March 31, 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 April 30, 1995, 92,935,339 shares of Common Stock ($1.50
par value) were outstanding.
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE DIAL CORP
CONSOLIDATED BALANCE SHEET
<CAPTION>
March 31, December 31,
(000 omitted) 1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,281 $ 33,222
Receivables, less allowance of
$20,408 and $20,453 218,911 231,388
Inventories 233,132 229,273
Deferred income taxes 38,128 42,517
Other current assets 49,858 48,109
---------- ----------
553,310 584,509
Funds, agents' receivables and
current maturities of investments
restricted for payment service
obligations, after eliminating
$80,000 invested in Dial
commercial paper 515,928 659,708
---------- ----------
Total current assets 1,069,238 1,244,217
Investments restricted for
payment service obligations 739,298 692,818
Property and equipment 848,132 813,384
Other investments and assets 80,721 83,255
Deferred income taxes 124,780 126,787
Intangibles 820,193 820,435
---------- ----------
$ 3,682,362 $ 3,780,896
========== ==========
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
March 31, December 31,
(000 omitted, except number of shares) 1995 1994
---------- ----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank loans $ 219 $ 931
Accounts payable 200,773 243,982
Accrued compensation 55,421 91,992
Other current liabilities 270,672 258,065
Current portion of long-term debt 22,827 22,830
---------- ----------
549,912 617,800
Payment service obligations 1,332,520 1,438,960
---------- ----------
Total current liabilities 1,882,432 2,056,760
Long-term debt 768,036 721,718
Pension and other benefits 319,220 319,519
Other deferred items and insurance reserves 96,745 96,525
Minority interests 24,171 24,691
$4.75 Redeemable preferred stock 6,592 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 337,104 308,350
Retained income 401,526 393,233
Cumulative translation adjustments (20,058) (20,910)
Unearned employee benefits (195,232) (176,201)
Unrealized loss on securities
available for sale (11,800) (21,742)
Common stock in treasury, at cost,
4,231,180 and 4,319,624 shares (72,037) (73,300)
---------- ----------
Total common stock and other equity 585,166 555,093
---------- ----------
$ 3,682,362 $ 3,780,896
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF CONSOLIDATED INCOME
<CAPTION>
Three months ended March 31, 1995 1994
(000 omitted, except per share data) ---------- ----------
<S> <C> <C>
Revenues $ 858,197 $ 784,902
---------- ----------
Costs and expenses:
Costs of sales and services 794,337 731,963
Unallocated corporate expense
and other items, net 11,149 10,748
Interest expense 18,427 14,207
Minority interests 63 (100)
---------- ----------
823,976 756,818
---------- ----------
Income before income taxes 34,221 28,084
Income taxes 12,714 10,874
---------- ----------
Net Income $ 21,507 $ 17,210
========== ==========
Net Income Per Common Share $ 0.24 $ 0.20
========== ==========
Dividends declared per common share $ 0.15 $ 0.14
========== ==========
Average outstanding common
and equivalent shares 87,956 86,036
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE> <PAGE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF RETAINED INCOME
<CAPTION>
Three months ended March 31, 1995 1994
(000 omitted) ---------- ----------
<S> <C> <C>
Balance, beginning of year $ 393,233 $ 304,481
Net income 21,507 17,210
Dividends on common and preferred shares (13,214) (12,121)
Other 208
---------- ----------
Balance, end of period $ 401,526 $ 309,778
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF CONSOLIDATED CASH FLOWS
<CAPTION>
Three months ended March 31, 1995 1994
(000 omitted) ---------- ----------
<S> <C> <C>
CASH FLOWS PROVIDED (USED) BY
OPERATING ACTIVITIES:
Net income $ 21,507 $ 17,210
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation and amortization 29,202 27,176
Deferred income taxes 3,699 3,003
Other noncash items, net 3,957 1,798
Change in operating assets
and liabilities:
Receivables and inventories (17,140) (54,957)
Payment service assets and
obligations, net 40,491 109,363
Accounts payable and accrued
compensation (80,105) (54,779)
Other assets and liabilities, net 11,035 12,901
---------- ----------
Net cash provided by operating activities 12,646 61,715
---------- ----------
CASH FLOWS PROVIDED (USED) BY
INVESTING ACTIVITIES:
Capital expenditures (14,571) (16,997)
Purchase of cruise ship previously leased (39,447)
Acquisitions of businesses and
other assets, net of cash acquired (5,898) (109,269)
Proceeds from sales of securities available for sale 111,824 111,092
Purchases of securities available for sale (144,140) (103,076)
Purchases of securities held to maturity (5,029) (88,345)
Other, net 197 844
---------- ----------
Net cash used by investing activities (97,064) (205,751)
---------- ----------
CASH FLOWS PROVIDED (USED) BY
FINANCING ACTIVITIES:
Proceeds from long-term borrowings 15,000 70,000
Payments on long-term borrowings (48) (32)
Net change in short-term borrowings 30,622 81,419
Dividends on common and preferred stock (13,214) (12,121)
Minority portion of subsidiary's special dividend (9,761)
Proceeds from sale of treasury stock 9,039 8,668
Net change in receivables sold 25,000
Cash payments on interest rate swaps (1,922) (3,585)
---------- ----------
Net cash provided by financing activities 64,477 134,588
---------- ----------
Net decrease in cash
and cash equivalents (19,941) (9,448)
Cash and cash equivalents, beginning of year 33,222 10,659
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 13,281 $ 1,211
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<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 presented herein 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 March 31, 1995, and the results of operations and
cash flows for the three months ended March 31, 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 prior year's
financial statements to conform to 1995 classifications.
NOTE B--Investments Restricted for Payment Service Obligations
Investments restricted for payment service obligation includes
the following debt and equity securities:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
(000 omitted) ------------ -----------
<S> <C> <C>
Securities available for sale, at
fair value (amortized cost of
$497,978 and $468,307) $ 478,844 $ 433,150
Securities held to maturity, at
amortized cost (fair value of
$255,977 and $243,156) 269,594 264,861
----------- -----------
748,438 698,011
Less current maturities (9,140) (5,193)
----------- -----------
$ 739,298 $ 692,818
=========== ===========
</TABLE>
NOTE C--Debt
At March 31, 1995 and December 31, 1994, Dial classified as long-
term debt $306 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 three months ended March
31, is as follows:
<TABLE>
<CAPTION>
1995 1994
(000 omitted) ------------ ------------
<S> <C> <C>
Computed income taxes at statutory
federal income tax rate of 35% $ 11,977 $ 9,829
Nondeductible goodwill amortization 1,167 1,028
Minority interests 22 (35)
State income taxes 1,008 1,775
Tax-exempt income (2,238) (984)
Adjustment to estimated annual effective rate (1,000)
Other, net 778 261
----------- -----------
Provision for income taxes $ 12,714 $ 10,874
=========== ===========
</TABLE>
NOTE E--Supplementary Information--Revenues and Operating Income
<TABLE>
<CAPTION>
Three months ended March 31,
-----------------------------------------------------
Revenues Operating Income
------------------------- --------------------------
1995 1994 1995 1994
(000 omitted) ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Consumer Products $ 337,862 $ 330,340 $ 33,802 $ 30,152
----------- ----------- ----------- -----------
Services:
Airline Catering
and Services 184,456 151,463 11,026 8,421
Convention Services 154,397 127,671 15,001 12,392
Travel and Leisure
and Payment
Services (1) 181,482 175,428 4,031 1,974
----------- ----------- ----------- -----------
Total Services (1) 520,335 454,562 30,058 22,787
----------- ----------- ----------- -----------
Total principal
business segments $ 858,197 $ 784,902 63,860 52,939
=========== ===========
Unallocated
corporate expense
and other
items, net (11,149) (10,748)
----------- -----------
$ 52,711 $ 42,191
=========== ===========
<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 $3,443,000 for the 1995 quarter and $1,514,000 for the
1994 quarter, respectively.
</TABLE>
<PAGE>
<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 First Quarter of 1995 with First Quarter of 1994:
In the first quarter of 1995, revenues increased 9 percent to
$858.2 million from $784.9 million in the 1994 quarter.
Net income was $21.5 million, up 25 percent from 1994's net
income of $17.2 million. Net income per share increased 20
percent to $0.24 per share, from 1994's $0.20 per share. There
were almost 2 million more average common and equivalent shares
outstanding in the 1995 quarter, due primarily to the effects of
stock option exercises and other issuances related to employee
benefit and dividend reinvestment plans.
Consumer Products
First quarter revenues of the Consumer Products Group increased 2
percent to $337.9 million from the 1994 quarter's $330.3 million,
while operating income increased 12 percent to $33.8 million from
1994's $30.2 million. Operating margins improved to 10 percent
from 1994's 9.1 percent.
Skin Care division's revenues and operating income increased
$15.9 million and $6.2 million, respectively. New packaging and
strong sales programs increased volumes of Dial bar and liquid
soaps, while introductions of new products helped increase sales.
Operating income increased due to the higher sales and lower
administrative costs, tempered by higher raw material costs.
Food division's revenues were $5.4 million below those of the
1994 quarter, due to a planned reduction of microwaveable meals
and lower volumes of chili and stew. Operating income increased
$700,000 from that of last year's quarter. Lower manufacturing
and administrative costs more than offset the effects of lower
sales and higher trade spending.
Household division's revenues increased $4.2 million from those
of 1994's quarter due primarily to the introduction of Dial dish
washing detergent and new Renuzit products and strong sales of
Renuzit Adjustable products, offset partially by lower sales of
Renuzit Electric and cleaning products. Renuzit Electric was
introduced during last year's first quarter and benefited from
strong promotions which were not repeated this year. Operating
income was up $900,000 from that of 1994's quarter due mostly to
lower administrative costs and marketing expenses, offset
somewhat by higher raw material costs in some areas.
Laundry division's revenues declined $5.4 million from those of
1994's quarter as volume was down due to the high wholesale sales
in the fourth quarter of 1994. Consumer purchases remain high.
Operating income was down $4.7 million due to the lower sales and
higher costs of certain raw materials and marketing and
distribution costs.
Although International's sales volumes were up somewhat from
those of 1994's first quarter, revenues were down $1.8 million
due principally to the 48-percent devaluation of the Mexican
peso. Despite the revenue declines, operating income was up
$500,000 due to a more profitable sales mix.
Services
Combined Services revenues of $520.3 million were 14 percent
greater than the 1994 quarter's $454.6 million. This year's
quarter included all of the acquired United Airlines flight
kitchens which were acquired during the first half of 1994.
Operating income rose 32 percent to $30.1 million, with all
operations contributing to the improvement.
Airline Catering and Services. The first quarter revenues of
the Airline Catering and Services group were $184.5 million, 22
percent greater than the 1994 quarter's $151.5 million. This
increase was due to having all United flight kitchens acquired
during 1994 fully operational this quarter versus only a few
during 1994's first quarter. Revenues from seven new aircraft
service locations and higher revenues from continuing locations
added to the increase. Partially offsetting these was the effect
of further airline meal service cutbacks, particularly by Delta
and USAir. Operating income of $11.0 million was 31 percent
greater than the 1994 quarter's $8.4 million and operating
margins improved to 6.0 percent from 1994's 5.6 percent, as
newly-acquired flight kitchens were in a start-up mode in 1994.
Convention Services. Convention Services' first quarter
revenues of $154.4 million were 21 percent greater than the 1994
quarter's $127.7 million, and operating income also increased 21
percent, to $15 million from $12.4 million. These increases were
due to the favorable seasonal rotation of shows in 1995's
quarter, most in Las Vegas, increased per-show revenue, increased
exhibit volume, and small acquisitions during the 1995 quarter.
Operating margins were unchanged at 9.7 percent.
Travel and Leisure and Payment Services. Revenues of these
companies were $181.5 million for the first quarter of 1995, up 3
percent from 1994's $175.4 million, while operating income
doubled to $4 million from 1994's $2 million. Dial's payment
services subsidiary continues to invest increasing amounts in tax
exempt securities. On a fully taxable equivalent basis, 1995
revenues and operating income would have been $3.4 million, or 5
percent, higher while 1994's revenues and operating income would
have been $1.5 million higher.
Canadian transportation companies' revenues increased $1 million
for the quarter, due mostly to new routes purchased in mid-1994.
Operating results improved $300,000 from the new routes.
Duty Free airport and shipboard concession operations' revenues
declined $3.9 million due mostly to the loss of a major shipboard
concession, fewer passenger days for continuing business, and
lower airport traffic. Operating income improved $100,000 due
mostly to lower operating expenses.
Cruise revenues for the first quarter were down $2.3 million due
to having two ships in drydock for repairs for a total of 44 ship
days. In addition, the Star/Ship Majestic was taken out of
service as Dial commenced a four-year charter arrangement in
February to lease the ship to a European operator. Operating
results improved $2 million as expenses were lower due to cost
reduction efforts and operating one less vessel.
Travel tour service revenues and operating income improved
$900,000 and $400,000, respectively, over those of the 1994 first
quarter, due mostly to favorable foreign exchange rates this
quarter, which also had a favorable impact on passenger volume.
Revenues of the food service companies were unchanged from those
of 1994's first quarter, while operating income was up $200,000
due to ongoing cost control efforts.
On a fully taxable equivalent basis, revenues of payment services
increased $8.5 million over those of 1994's first quarter, due
principally to increased investment income caused by rates higher
than last year's and greater funds invested. Revenues from new
product lines also contributed. On a fully taxable equivalent
basis, operating income was up $2.1 million, moderated
principally by higher commission expense and payment processing
and outsourcing fees.
Unallocated Corporate Expenses and Other Items, Net
These expenses increased $400,000, or four percent, for the
quarter in line with overall business growth.
Interest Expense
Interest expense increased $4.2 million from 1994's quarter, as
debt levels were higher than in 1994 and interest rates on
floating-rate debt were considerably higher than in 1994's first
quarter. Increased debt levels were due to expenditures
throughout 1994 for the United Airlines catering kitchens and
some small acquisitions as well as the purchase of the Majestic,
which had been leased up to February 1995.
Income Taxes
The effective tax rate in the 1995 first quarter was 37.2
percent, down from 38.7 percent last year. 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 March 31, 1995 was $791 million
compared with $745 million at December 31, 1994. The debt-to-
capital ratio at March 31, 1995 and December 31, 1994 was 0.56 to
1.
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 is undertaking programs with many
of its trade customers to effect reductions of the trade
customers' inventories over the balance of 1995 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 depress revenue growth for the
Consumer Products Group for the rest of 1995 while the trade
customers' inventories are reduced, even though consumer
purchases continue at normal rates. The Consumer Products Group
anticipates that lower trade promotion costs and other ongoing
savings resulting from the programs will more than offset the
effect of the reduced revenue growth in 1995, so that operating
income will continue to increase at about the same rate as in
prior periods. As a result, margins will increase over 1994
levels.<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The annual meeting of stockholders of The Dial Corp was
held May 9, 1995.
(b) Not applicable--(i) proxies for the meeting were
solicited pursuant to Regulation 14 under the
Securities Exchange Act of 1934, (ii) there was no
solicitation in opposition to management's nominees as
listed in the proxy statement, and (iii) all such
nominees were elected.
(c) Matters voted upon at the annual meeting for which
proxies were solicited pursuant to Regulation 14 under
the Securities Exchange Act of 1934:
1. The election of Directors as follows:
Joe T. Ford
-----------
Affirmative Vote................ 78,240,990
Against......................... 0
Withheld........................ 429,002
Abstentions..................... 0
Broker non-votes................ 0
Jess Hay
--------
Affirmative Vote................ 78,165,696
Against......................... 0
Withheld........................ 504,296
Abstentions..................... 0
Broker non-votes................ 0
Linda Johnson Rice
------------------
Affirmative Vote................ 78,173,182
Against......................... 0
Withheld........................ 496,810
Abstentions..................... 0
Broker non-votes................ 0
A. Thomas Young
---------------
Affirmative Vote................ 78,233,937
Against......................... 0
Withheld........................ 436,055
Abstentions..................... 0
Broker non-votes................ 0
2. The appointment of Deloitte & Touche LLP to audit
the accounts of Dial and its subsidiaries for the
fiscal year 1995.
Affirmative Vote................ 78,233,180
Against......................... 177,084
Withheld........................ 0
Abstentions..................... 259,728
Broker non-votes................ 0
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit No. 10.E - Copy of The Dial Corp Management
Incentive Plan, as amended March 28, 1995.
Exhibit No. 10.L - Copy of The Dial Corp Performance
Unit Incentive Plan, as amended March 28, 1995.
Exhibit No. 11 - Statement Re Computation of Per Share
Earnings.
Exhibit No. 27 - Financial Data Schedule
Exhibits Previously Filed Which Are Incorporated By
Reference - See Exhibit Index.
(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)
May 11, 1995 By /s/ Richard C. Stephan
------------------------
Richard C. Stephan
Vice President-Controller
(Chief Accounting Officer
and Authorized Officer)
<PAGE>
<PAGE>
EXHIBIT INDEX
3.A Copy of Restated Certificate of Incorporation of Dial,
as amended through March 3, 1992, filed as Exhibit
(3)(A) to Dial's 1991 Form 10-K, is hereby incorporated
by reference.
3.B Copy of Bylaws of Dial, as amended through February 21,
1992, filed as Exhibit (3)(B) to Dial's 1991 Form 10-K,
is hereby incorporated by reference.
4.A Instruments with respect to issues of long-term debt
have not been filed as exhibits to Dial's most recent
Annual Report on Form 10-K or this Form 10-Q if the
authorized principal amount of any one of such issues
does not exceed 10% of total assets of the Corporation
and its subsidiaries on a consolidated basis. The
Corporation agrees to furnish a copy of each such
instrument to the Securities and Exchange Commission
upon request.
4.B Copy of Amended and Restated Credit Agreement dated as
of December 15, 1993, among Dial, the Banks parties
thereto, Bank of America National Trust and Savings
Association as Agent and Reporting Agent and Citibank,
N.A. as Agent and Funding Agent, filed as Exhibit 4.B
to Dial's 1993 Form 10-K, is hereby incorporated by
reference.
4.B1 Copy of First Amendment to Amended and Restated Credit
Agreement dated as of September 23, 1994, filed as
Exhibit 4.B1 to Dial's 1994 Form 10-K, is hereby
incorporated by reference.
10.A Copy of Employment Agreement between Dial and John W.
Teets dated April 14, 1987, filed as Exhibit (10)(A) to
Dial's 1989 Form 10-K, is hereby incorporated by
reference.+
10.B Sample forms of Contingent Agreements relating to
funding of Supplemental Executive Pensions, filed as
Exhibit (10)(T) to Dial's 1989 Form 10-K, is hereby
incorporated by reference.+
10.C Copy of Dial's Supplemental Pension Plan, amended and
restated as of January 1, 1987, filed as Exhibit
(10)(F) to Dial's 1986 Form 10-K, is hereby incorpor-
ated by reference.+
10.C1 Copy of amendment dated February 21, 1991, to Dial's
Supplemental Pension Plan, filed as Exhibit (10)(G)(i)
to Dial's 1990 Form 10-K, is hereby incorporated by
reference.+
10.D Copy of Dial's Deferred Compensation Plan for
Directors, adopted November 20, 1980, as amended
through February 21, 1991, filed as Exhibit (10)(H) to
Dial's 1990 Form 10-K, is hereby incorporated by
reference.+
10.E Copy of The Dial Corp Management Incentive Plan, as
amended March 28, 1995.*+
10.F1 Copy of form of Executive Severance Agreement between
Dial and three executive officers, filed as Exhibit
(10)(G)(i) to Dial's 1991 Form 10-K, is hereby
incorporated by reference.+
10.F2 Copy of forms of The Dial Corp Executive Severance
Plans covering certain executive officers, filed as
Exhibit (10)(G)(ii) to Dial's 1992 Form 10-K, is hereby
incorporated by reference.+
10.G Copy of Travelers Express Company, Inc. Supplemental
Pension Plan, filed as Exhibit (10)(L) to Dial's 1984
Form 10-K, is hereby incorporated by reference.+
10.H1 Copy of Dial's 1983 Stock Option and Incentive Plan,
filed as Exhibit (28) to Dial's Registration Statement
on Form S-8 (Registration No. 33-23713), is hereby
incorporated by reference.+
10.H2 Copy of amendment, effective August 1, 1994, to Dial's
1983 Stock Option and Incentive Plan, filed as Exhibit
10.H2 to Dial's 1994 Form 10-K, is hereby incorporated
by reference.+
10.I1 Copy of The Dial Corp 1992 Stock Incentive Plan, filed
as Exhibit (10)(J) to Dial's 1991 Form 10-K, is hereby
incorporated by reference.+
10.I2 Copy of amendment, effective August 1, 1994, to The
Dial Corp 1992 Stock Incentive Plan, filed as Exhibit
10.I2 to Dial's 1994 Form 10-K, is hereby incorporated
by reference.+
10.J Description of Spousal Income Continuation Plan, filed
as Exhibit 10(Q) to Dial's 1985 Form 10-K, is hereby
incorporated by reference.+
10.K Copy of Dial's Director's Retirement Benefit Plan,
filed as Exhibit (10)(R) to Dial's 1988 Form 10-K, is
hereby incorporated by reference.+
10.L Copy of The Dial Corp Performance Unit Incentive Plan,
as amended March 28, 1995.*+
10.M Copy of The Dial Corp Supplemental TRIM Plan, filed as
Exhibit 10.M to Dial's 1994 Form 10-K, is hereby
incorporated by reference.+
10.N Copy of Employment Agreement between GES Exposition
Services and Norton Rittmaster dated May 20, 1982,
filed as Exhibit (10)(O) to Dial's 1992 Form 10-K, is
hereby incorporated by reference.+
10.O Copy of GES Exposition Services' Incentive Compensation
Plan, filed as Exhibit (10)(P) to Dial's 1992 Form 10-
K, is hereby incorporated by reference.+
10.P Copy of The Dial Corp Performance-Based Stock Plan,
filed as Exhibit 10.P to Dial's 1993 Form 10-K, is
hereby incorporated by reference.+
10.Q Copy of The Dial Corp Deferred Compensation Plan, filed
as Exhibit 10.Q to Dial's 1993 Form 10-K, is hereby
incorporated by reference.+
10.R Copy of form of The Dial Corp 1983 Stock Option and
Incentive Plan Amended and Restated Restricted Stock
Agreements dated August 12, 1994, between Dial and six
executive officers, filed as Exhibit 10.R to Dial's
1994 Form 10-K, is hereby incorporated by reference.+
10.S Copy of form of The Dial Corp 1992 Stock Incentive Plan
Restricted Stock Agreements dated August 12, 1994,
between Dial and six executive officers, filed as
Exhibit 10.S to Dial's 1994 Form 10-K, is hereby
incorporated by reference.+
11 Statement Re Computation of Per Share Earnings.*
27 Financial Data Schedule.*
_________________
* Filed herewith.
+ Management contract or compensation plan or arrangement.
<PAGE>
THE DIAL CORP
MANAGEMENT INCENTIVE PLAN
I. PURPOSE:
The purpose of The Dial Corp Management Incentive Plan
(Plan) is to provide key executives of The Dial Corp and its
subsidiaries with an incentive to achieve goals as set forth
under this Plan for each calendar year (Plan Year) for their
respective companies and to provide effective management and
leadership to that end.
II. PHILOSOPHY:
The Plan will provide key executives incentive bonuses based
upon appropriately weighted pre-defined net income, net
capital employed or other cash flow measure (in the case of
subsidiaries), and return on actual or pro forma equity or
similar measures of performance.
III. SUBSIDIARIES, SUBSIDIARY GROUPS, AND DIVISIONS:
A. Each subsidiary, subsidiary group, line of business or
division listed below is a "Company" for the purposes
of this Plan:
Name of Company
_______________
Aircraft Service International group
Brewster Transport Company Limited
Consumer Products division
Crystal Holidays, Limited
Dobbs International Services, Inc. group
Exhibitgroup, Inc.
Greyhound Exposition Services, Inc. group*
Greyhound Leisure Services, Inc. group
Greyhound Lines of Canada Ltd.
Jetsave Inc. group
Premier Cruise Lines, Inc.
Restaura, Inc. group
Travelers Express Company, Inc. group
The Dial Corp may, by action of its Board of Directors
or its Executive Compensation Committee, add or remove
business units on the list of participant companies
from time to time.
*effective 1-1-96.
B. PERFORMANCE GOALS:
1. BASE EARNINGS:
A realistic "base earnings" target for the plan
year for each Company will be recommended by the
Chief Executive Officer of The Dial Corp to the
Executive Compensation Committee of The Dial Corp
Board of Directors (Committee) for approval taking
into account historical income and Plan Year
financial plan income (on the same basis as
determined below), overall corporate objectives,
and, if appropriate, other circumstances.
Income for subsidiary base earnings determination
and for calculating the bonus pool of each Company
shall mean net income (after deducting charges
against income for all incentives earned,
including those earned under this Plan) adjusted
to appropriately exclude the effects of gains and
losses from the sale or other disposition of
capital assets other than equipment utilized in
rental or leasing operations and vehicles.
Further, there will be a deduction from (addition
to) actual net income for the after-tax amount by
which a Company's excess of 90-day and over
receivables over its allowance for doubtful
accounts has increased (decreased) during the
year.
Special treatment of any other significant unusual
or non-recurring items (for purposes of base
earnings and/or return on equity and/or net
capital employed or other cash flow calculations)
arising after a subsidiary's targets are set may
be recommended by the Chief Executive Officer of
The Dial Corp to the Committee for approval,
including, for example, appropriate adjustment of
base earnings and/or return on equity and/or net
capital employed targets to reflect planned
effects of an acquisition approved after targets
are set. Other examples include extraordinary
items, effects of a change in accounting
principles or a change in federal income tax
rates. In certain extreme cases, unplanned
effects of major litigation, remediation of
environmental matters, significant uninsured
losses or a significant restructuring, or the
bankruptcy of a major vendor or customer are
further examples of the types of items which could
be (but are not required to be) considered for
possible special treatment.
2. RETURN ON THE DIAL CORP PRO FORMA EQUITY (Except
Travelers Express Company, Inc. group):
Yearly return on equity calculations for each
Company (except Travelers Express) will be made by
dividing annual historical and Plan Year financial
plan net earnings after tax by the average
quarterly (beginning of year and each quarter-end,
including year-end) pro forma equity. For
purposes of this calculation, pro forma equity
shall be deemed to be 65% of the sum of each
Company's actual equity plus its debt, including
intercompany accounts payable less intercompany
accounts receivable (net capital employed) and net
income shall be adjusted (1) to exclude 65% of
intercompany interest income and (2) to deduct (or
add) 65% of the pro forma interest, calculated at
8% per annum, on the excess (or deficiency) of 35%
of the average beginning and ending balance of net
capital employed over the average beginning and
ending balance of outstanding debt (pro forma
additional or excess debt), so that each Company's
return on equity is based on a pro forma 65%
equity and 35% debt structure (equivalent to a
debt/equity ratio of .54 to 1 or a debt/capital
ratio of 35%) for the net capital employed by it.
A realistic return on equity target for the Plan
Year will be recommended by the Chief Executive
Officer of The Dial Corp for approval to the
Committee, taking into account historical return
on equity data, Plan Year financial plan return on
equity (on the same basis as previously
described), overall corporate objectives, and,
where appropriate, other circumstances.
3. RETURN ON THE DIAL CORP EQUITY (Travelers Express
Company, Inc. group):
Yearly return on equity calculations for the
Travelers Express Company, Inc. group will be made
by dividing annual historical and Plan Year
financial plan net income after taxes by the
average quarterly (beginning of year and each
quarter-end, including year-end) equity. A
realistic return on equity target for the Plan
Year will be recommended by the Chief Executive
Officer of The Dial Corp for approval to the
Committee, taking into account historical return
on equity data, Plan Year financial plan return on
equity (on the same basis as previously
described), overall corporate objectives, and,
where appropriate, other circumstances.
4. NET CAPITAL EMPLOYED (or other cash flow measure):
Realistic monthly net capital employed (as defined
in [2] above) targets for the Plan Year will be
recommended by the Chief Executive Officer of The
Dial Corp for approval to the Committee, taking
into account planned capital expenditures and
working capital levels, overall corporate
objectives, and, where appropriate, other
circumstances. The effects of any major unplanned
sale of assets, acquisition, or capital
expenditures will be considered on an individual
basis in determining performance as compared to
target.
5. ESTABLISHING TARGETS:
The actual targets for base earnings, return on
equity and net capital employed will be
established by the Committee no later than 90 days
after the beginning of the Plan Year after
receiving the recommendations of the Chief
Executive Officer of The Dial Corp.
C. PARTICIPANT ELIGIBILITY:
The Committee will select the Executive Officers as
defined under Section 16b of the Securities Exchange
Act eligible for participation no later than 90 days
after the beginning of the Plan Year. Other personnel
will be eligible for participation as designated by
each Company President or Chief Executive Officer and
recommended to the Chief Executive Officer of The Dial
Corp for approval, limited only to those executives who
occupy a position in which they can significantly
affect operating results as pre-defined by appropriate
and consistent criteria, i.e., base salary not less
than $49,000 per year, or base salary not less than 50%
of the Company's Chief Executive Officer, or position
not more than the third organizational level below the
Company Chief Executive Officer or another applicable
criteria.
NOTE: Individuals not qualifying under the criteria
established for the Plan Year who were included in the
previous year will be grandfathered (continue as
qualified participants until retirement, reassignment,
or termination of employment) if designated by the
Company President or Chief Executive Officer, and
approved by the Chief Executive Officer of The Dial
Corp.
D. TARGET BONUSES:
Target bonuses will be approved by the Committee for
each Executive Officer in writing within the following
parameters no later than 90 days after the beginning of
the Plan Year and will be expressed as a percentage of
salary. Target bonuses for other eligible personnel
will be established in writing within the following
parameters subject to approval by the Chief Executive
Officer of The Dial Corp.
Actual bonus awards will be dependent on Company
performance versus the targets established. A
threshold performance will be required before any bonus
award is earned. Awards will also be capped when
stretch performance levels are achieved.
As a Percentage of Salary
Subsidiary Positions Threshold** Target Cap***
____________________ ___________ ______ ______
Chief Executive Officer/ 22.5% 45% 76.5%
President* 20.0% 40% 68.0%
Executive Vice President, 20.0% 40% 68.0%
Senior Vice President,
and Other Operating Executives
Vice Presidents* 17.5% 35% 59.5%
15.0% 30% 51.0%
Key Management Reporting 12.5% 25% 42.5%
to Officers* 10.0% 20% 34.0%
Staff Professionals* 7.5% 15% 25.5%
5.0% 10% 17.0%
_________________________________________________________________
* Target Bonus, as determined by the Committee, is dependent
upon organizational reporting relationships.
** Reflects minimum achievement of both performance targets.
Threshold could be one-half of this amount if minimum
achievement of only one performance target is met.
*** Cap could be up to 105% of amounts shown if net capital
employed (or other cash flow measure) targets are achieved.
E. BONUS POOL TARGET:
1. The "Bonus Pool Target" will be initially
established no later than 90 days after the
beginning of the Plan Year and will be adjusted to
equal the sum of the target bonuses of all
designated participants in each Company based upon
actual Plan Year salaries, as outlined in
paragraph D above, plus 15% for Special
Achievement Awards.
2. The bonus pool will accrue ratably such that
a) on 50% of the sum of target bonuses:
i) no bonus will be earned if less than 80%
of the base earnings target is achieved;
ii) 50% to 100% will be earned if 80% to
100% of the base earnings target is
achieved;
iii) 100% to 170% will be earned if 100% to
120% of the base earnings target is
achieved; and
iv) the bonus pool earned shall be subject
to a further calculation whereby 90%,
95%, 100%, 105%, or 110% of such base
earnings bonus pool otherwise accruable
will be the final bonus pool hereunder,
depending on the average of the twelve
months' achievement against net capital
employed (or other cash flow) targets.
b) on 50% of the sum of target bonuses:
i) no bonus will be earned if less than 80%
of the return on equity target is
achieved;
ii) 50% to 100% will be earned if 80% to
100% of the return on equity target is
achieved; and
iii) 100% to 170% will be earned if 100% to
120% of the return on equity target is
achieved.
c) Notwithstanding 2. a) i), ii), and iii); and
b) i), ii), and iii); of this paragraph E,
the ratable accrual of either or both targets
may be established for threshold within the
range of above 80% up to and including 95%
and for maximum within the range of below
120% down to 105%, for certain subsidiaries
of this Company as may be designated by the
Committee after considering the
recommendations of the Chief Executive
Officer of The Dial Corp; however, the
Committee may, when appropriate, adjust such
ranges upward or downward.
3. Bonus pool accruals not paid out shall not be
carried forward to any succeeding year.
F. INDIVIDUAL BONUS AWARDS:
1. Indicated bonus awards will be equal to the
product of the target bonus percentage times the
weighted average percentage of bonus pool accrued
as determined in paragraph E above times the
individual's actual base salary earnings during
the Plan Year, subject to adjustments as follows:
a) discretionary upward or downward adjustment
of formula bonus awards by the Committee
after considering the recommendation of the
Company President or Chief Executive Officer
with the approval of the Chief Executive
Officer of The Dial Corp for those executives
not affected by Section 162(m) of the
Internal Revenue Code, and
b) discretionary downward adjustment of awards
by the Committee for those executive officers
affected by Section 162(m) of the Internal
Revenue Code, and
c) no individual award may exceed the
individual's capped target award and the
aggregate recommended bonuses may not exceed
the bonus pool accrued for other than Special
Achievement Awards.
2. Bonuses awarded to the participating management
staff of subsidiary groups may be paid from funds
accrued based upon the bonus pool target for such
participants times the weighted average
performance of the Companies in the subsidiary
group, subject to adjustments as above.
IV. THE DIAL CORP CORPORATE STAFF:
A. PERFORMANCE GOALS:
1. BASE EARNINGS PER SHARE:
A realistic "base earnings per share" from
continuing operations target for The Dial Corp
will be recommended by the Chief Executive Officer
of The Dial Corp to the Committee for approval
after considering historical earnings per share
from continuing operations, Plan Year financial
plan income, overall corporate objectives, and, if
appropriate, other circumstances.
Special treatment of any significant unusual or
non-recurring items (for purposes of base earnings
per share and/or return on equity calculations)
arising after targets are set for Corporate staff
may be recommended by the Chief Executive Officer
of The Dial Corp for approval by the Committee,
including appropriate adjustment of base earnings
per share and/or return on equity targets to
reflect planned effects of a major acquisition or
change in capital structure approved after targets
are set. Other examples include extraordinary
items, one time gains or losses arising from
discontinued operations, effects of a change in
accounting principles or a change in federal
income tax rates. Reclassification of a major
business unit to discontinued operations status
after targets have been set would also require
adjustment because of effect on continuing
operations results. Generally, restructuring
charges, gain or loss on sale of a smaller
subsidiary, or other one-time income or loss items
mentioned in the subsidiary section would not be
considered for special treatment for corporate
staff, as the corporate mission is to achieve the
targets notwithstanding the effects of such items.
2. RETURN ON COMMON STOCKHOLDERS' EQUITY:
Return on common stockholders' equity calculations
will be made by dividing each year's net income
(after taxes) from continuing operations, less
preferred stock dividend requirements, by the
monthly average of common stockholders' equity
(return on common equity). Consideration will be
given to any known or anticipated changes in
equity structure and appropriate industry
averages, and a realistic return on common
stockholders' equity target for the Plan Year will
be recommended by the Chief Executive Officer of
The Dial Corp to the Committee for approval,
taking into account historical return on common
stockholders' equity data, Plan Year financial
plan return on common stockholders' equity (on the
same basis as previously described), overall
corporate objectives, and, if appropriate, other
circumstances.
3. ESTABLISHING TARGETS
The actual targets for base earnings per share and
return on equity will be established by the
Committee no later than 90 days after the
beginning of the Plan year after receiving the
recommendations of the Chief Executive Officer of
The Dial Corp.
B. PARTICIPANT ELIGIBILITY:
The Committee will select the Executive Officers as
defined under Section 16b of the Securities Exchange
Act eligible for participation no later than 90 days
after the beginning of the Plan Year. Other personnel
will be eligible for participation as recommended by
the appropriate staff Vice President and as approved by
the Chief Executive Officer of The Dial Corp, limited
only to those executives who occupy a position in which
they can significantly affect operating results as
defined by the following criteria:
a) Salary grade 25 and above; and
b) Not more than Organizational Level Four below the
Chief Executive Officer.
NOTE: Individuals not qualifying under the criteria
established for the Plan Year who were included in the
previous year will be grandfathered (continue as
qualified participants until retirement, reassignment,
or termination of employment) if designated by the
appropriate Vice President and approved by the Chief
Executive Officer of The Dial Corp.
C. TARGET BONUSES:
Target bonuses will be approved by the Committee for
each Executive Officer in writing within the following
parameters no later than 90 days after the beginning of
the Plan Year and will be expressed as a percentage of
salary. Target bonuses for other eligible personnel
will be established in writing within the following
parameters subject to approval by the Chief Executive
Officer of The Dial Corp.
Actual bonus awards will be dependent on Company
performance versus the targets established. A
threshold performance will be required before any bonus
award is earned. Awards also will be capped when
stretch performance levels are achieved.
As a Percentage of Salary
Corporate Positions Threshold** Target Cap
___________________ ___________ ______ ______
Chairman, President & 30.00% 60% 102.0%
Chief Executive Officer
Senior Advisory Group 22.50% 45% 76.5%
Corporate Staff Officers 20.00% 40% 68.0%
Staff Directors* 17.50% 35% 59.5%
15.00% 30% 51.0%
12.50% 25% 42.5%
10.00% 20% 34.0%
Staff Professionals* 7.50% 15% 25.5%
5.00% 10% 17.0%
_________________________________________________________________
* Target Bonus, as determined by the Committee, is dependent
upon Organizational Reporting Relationships.
** Reflects minimum of achievement of both performance targets.
Threshold could be one-half of this amount if minimum
achievement of only one performance target is met.
D. BONUS POOL TARGET
1. The "Bonus Pool Target" will be established no
later than 90 days after the beginning of the Plan
Year and will be adjusted to equal the sum of the
target bonuses of all qualified participants based
upon actual Plan Year base salaries, as outlined
in paragraph C above, plus 15% for Special
Achievement Awards.
2. The bonus pool will accrue ratably such that
a) on 50% of the sum of the target bonuses:
i) no bonus will be earned if less than 90%
of earnings per share target is
achieved;
ii) 50% to 100% will be earned if 90% to
100% of earnings per share target is
achieved; and
iii) 100% to 170% will be earned if 100% to
110% of earnings per share target is
achieved.
b) on 50% of the sum of target bonuses:
i) no bonus will be earned if less than 90%
of the return on equity target is
achieved;
ii) 50% to 100% will be earned if 90% to
100% of the return on equity target is
achieved; and
iii) 100% to 170% will be earned if 100% to
110% of the return on equity target is
achieved
provided no less than an amount equal to 12.5% of
the actual bonus accruals earned under section III
of this Plan or any spin-off Line of Business
Incentive Plan established after 1984, for
participants under section III herein will be
earned hereunder, up to an aggregate maximum of
170% of Bonus Pool Target and transferred by the
companies covered in section III, herein, to The
Dial Corp. For purposes of this determination
only, the 170% (plus up to 8.5% upward cash flow
adjustment) upper limit shall not apply on such
actual bonus accrual calculations for
subsidiaries, subsidiary groups and divisions.
c) Notwithstanding 2. a)i),ii) and iii); and
b)i),ii), and iii); of this paragraph D, the
ratable accrual of either or both targets may
be established for threshold within the range
of above 90% up to and including 95% and for
maximum within the range of below 110% down
to-105% as may be designated by the
Committee; however, the Committee may, when
appropriate, adjust such ranges upward or
downward.
3. Bonus pool accruals not paid out shall not be
carried forward to any succeeding year.
E. INDIVIDUAL BONUS AWARDS:
Indicated bonus awards will be equal to the product of
the target bonus percentage times the weighted average
percentage of bonus pool accrued as determined in
paragraph D above times the individual's actual Plan
Year base salary earnings, subject to adjustments as
follows:
a) discretionary upward or downward adjustment of
formula awards by the Committee after considering
the recommendations of the Chief Executive Officer
of The Dial Corp for those executives not affected
by Section 162(m) of the Internal Revenue Code.
b) discretionary downward adjustment of awards by the
Committee for those Executive Officers affected by
Section 162(m) of the Internal Revenue Code, and
c) no individual award may exceed the individual's
capped target award and the aggregate recommended
bonuses may not exceed the bonus pool accrued for
other than Special Achievement Awards.
V. SPECIAL ACHIEVEMENT AWARDS:
Special bonuses of up to 15% of base salary for exceptional
performance to exempt employees who are not participants in
this Plan, including newly hired employees, may be
recommended at the discretion of the Chief Executive Officer
to the Committee from the separate funds for discretionary
awards provided for under paragraphs III E and IV D.
Special Achievement Awards may be granted to participants in
exceptional cases from any funds accrued under this Plan, as
recommended by the Chief Executive Officer to the Committee
for approval.
VI. APPROVAL AND DISTRIBUTION:
The individual incentive bonus amounts and the terms of
payment thereof will be fixed following the close of the
Plan Year by the Committee. Any award made under this Plan
is subject to the approval of this Plan by the stockholders
of The Dial Corp.
VII. COMPENSATION ADVISORY COMMITTEE:
The Compensation Advisory Committee is appointed by the
Chief Executive Officer of The Dial Corp to assist the
Committee in the implementation and administration of this
Plan. The Compensation Advisory Committee shall propose
administrative guidelines to the Committee to govern
interpretations of this Plan and to resolve ambiguities, if
any, but the Compensation Advisory Committee will not have
the power to terminate, alter, amend, or modify this Plan or
any actions hereunder in any way at any time.
VIII. SPECIAL COMPENSATION STATUS:
All bonuses paid under this Plan shall be deemed to be
special compensation and, therefore, unless otherwise
provided for in another plan or agreement, will not be
included in determining the earnings of the recipients for
the purposes of any pension, group insurance or other plan
or agreement of a Company or of The Dial Corp. Participants
in this Plan shall not be eligible for any contractual or
other short-term (sales, productivity, etc.) incentive plan
except in those cases where participation is weighted
between this Plan and any such other short-term incentive
plan.
IX. DEFERRALS:
Participants subject to taxation of income by the United
States may submit to the Committee, prior to November 15 of
the year in which the bonus is being earned a written
request that all or a portion, but not less than $1,000, of
their bonus awards to be determined, if any, be irrevocably
deferred substantially in accordance with the terms and
conditions of a deferred compensation plan approved by the
Board of Directors of The Dial Corp or, if applicable, one
of its subsidiaries. Participants subject to taxation of
income by other jurisdictions may submit to the Committee a
written request that all or a portion of their bonus awards
be deferred in accordance with the terms and conditions of a
plan which is adopted by the Board of Directors of a
participant's Company. Upon the receipt of any such
request, the Committee thereunder shall determine whether
such request should be honored in whole or in part and shall
forthwith advise each participant of its determination on
such request.
X. PLAN TERMINATION:
This Plan shall continue in effect until such time as it may
be canceled or otherwise terminated by action of the Board
of Directors of The Dial Corp and will not become effective
with respect to any Company unless and until its Board of
Directors adopts a specific plan for such Company. While it
is contemplated that incentive awards from the Plan will be
made, the Board of Directors of The Dial Corp, or any other
Company hereunder, may terminate, amend, alter, or modify
this Plan at any time and from time to time. Participation
in the Plan shall create no right to participate in any
future year's Plan.
XI. EMPLOYEE RIGHTS:
No participant in this Plan shall be deemed to have a right
to any part or share of this Plan. This Plan does not
create for any employee or participant any right to be
retained in service by any Company, nor affect the right of
any such Company to discharge any employee or participant
from employment. Except as provided for in administrative
guidelines, a participant who is not an employee of The Dial
Corp or one of its subsidiaries on the date bonuses are paid
will not receive a bonus payment.
<PAGE>
THE DIAL CORP
PERFORMANCE UNIT INCENTIVE PLAN
1. PURPOSE
The purpose of the Plan is to promote the long-term interests of
the Corporation and its shareholders by providing a means for
attracting and retaining designated key executives of the
Corporation and its Affiliates through a system of cash rewards
for the accomplishment of long-term predefined objectives.
2. DEFINITIONS
The following definitions are applicable to the Plan:
"Affiliate" - Any "Parent Corporation" or "Subsidiary
Corporation" of the Corporation as such terms are defined in
Section 425(e) and (f), or the successor provisions, if any,
respectively, of the Code (as defined herein).
"Award" - The grant by the Committee of a Performance Unit
or Units as provided in the Plan.
"Board" - The Board of Directors of The Dial Corp.
"Code" - The Internal Revenue Code of 1986, as amended, or
its successor general income tax law of the United States.
"Committee" - The Executive Compensation Committee of the
Board.
"Corporation" - The Dial Corp.
"Participant" - Any executive of the Corporation or any of
its Affiliates who is selected by the Committee to receive
an Award.
"Performance Period" - The period of time selected by the
Committee for the purpose of determining performance goals
and measuring the degree of accomplishment. Generally, the
Performance Period will be a period of three successive
fiscal years of the Corporation.
"Performance Unit Award" - An Award.
"Plan" - The Performance Unit Incentive Plan of the
Corporation.
"Unit" - The basis for any Award under the Plan.
3. ADMINISTRATION
The Plan shall be administered by the Committee. Except as
limited by the express provisions of the Plan, the Committee
shall have sole and complete authority and discretion to (i)
select Participants and grant Awards; (ii) determine the number
of Units to be subject to Awards generally, as well as to
individual Awards granted under the Plan; (iii) determine the
targets that must be achieved in order for the Awards to be
payable and the other terms and conditions upon which Awards
shall be granted under the Plan; (iv) prescribe the form and
terms of instruments evidencing such grants; and (v) establish
from time to time regulations for the administration of the Plan,
interpret the Plan, and make all determinations deemed necessary
or advisable for the administration of the Plan.
4. PERFORMANCE GOALS
The Performance Unit Incentive Plan is intended to provide
Participants with a substantial incentive to achieve or surpass
two pre-defined long-range financial goals which have been
selected because they are key factors (goals) in increasing
shareholder value. One of the key goals for CORPORATE and
SUBSIDIARY Participants is Average Three-Year Return on Equity,
utilizing a pro forma return on equity calculation for
subsidiaries (other than Travelers Express) which effectively
adjusts each to the overall financial objective of a capital
structure of 35% debt and 65% equity.
The second goal for each SUBSIDIARY Participant principally
emphasizes Average Three-Year Real Earnings Growth. The targets
for this goal will take several different forms in recognition of
the need to tailor the target to the most important factors for
the unit (as well as to overall corporate objectives). For
example, while operating income is normally the best indicator of
earnings growth, the target will be based on net income when
tax-exempt income (Travelers Express) or income from equity in
joint ventures (Dobbs International, GLSI) come into play, as
operating income would not give the full picture in such
circumstances. Goals for subsidiaries should be meaningful,
easily understood and consistent with the overall objectives.
The second goal for CORPORATE Participants also emphasizes
Average Three-Year Real Earnings Growth but the target will be
based on earnings per share from continuing operations, the most
appropriate measure in increasing shareholder value.
5. DETERMINATION OF TARGETS
A. Average Three-Year Subsidiary Pro Forma Return On Equity
(Except Travelers Express Company, Inc., group)
Return on Equity calculations for each Subsidiary Company except
Travelers Express will be made by dividing each year's net
earnings after tax by the average quarterly (beginning of year
and each quarter-end, including year-end) pro forma equity. For
purposes of this calculation, pro forma equity shall be deemed to
be 65% of the sum of each Subsidiary Company's actual equity plus
its debt, including intercompany accounts payable less
intercompany accounts receivable (net capital employed). Net
income shall be adjusted (1) to exclude the after-tax effect of
intercompany interest expense and the after-tax effect of
intercompany interest income and (2) to deduct the after-tax
effect of the pro forma interest, calculated at 8% per annum, on
the excess of 35% of the average beginning and ending balance of
net capital employed over the average beginning and ending
balance of outstanding debt (pro forma debt), so that each
company's Return on Equity is based on a pro forma 65% equity and
35% debt structure for the net capital employed by it. In all
cases, the after-tax calculations are to be made using the
statutory federal income tax rate applicable to such year. In
establishing a realistic weighted average annual Return on Equity
target for the Performance Period, consideration will be given to
industry averages whenever known as well as the Performance
Period Financial Plan year-by-year Return on Equity (on the same
basis as previously described), overall Corporate objectives and,
where appropriate, other circumstances. An appropriate range of
values above and below such target will then be selected to
measure achievement above or below the target.
B. Average Three-Year Return on Equity (Travelers Express)
Return on Equity calculations for Travelers Express will be made
by dividing each year's net income after taxes by the average
quarterly (beginning of year and each quarter-end, including
year-end) equity. Consideration will then be given to any known
or anticipated changes in equity structure and available industry
averages, and a realistic weighted average annual Return on
Equity target for the three-year Performance Period will be
established, taking into account all factors mentioned as well as
the three-year Performance Period Financial Plan year-by-year
Return on Equity (on the same basis as previously described),
overall Corporate objectives and, where appropriate, other
circumstances. An appropriate range of values above and below
such target will then be selected to measure achievement above or
below the target.
C. Average Three-Year Dial Return on Common Stockholders'
Equity
Return on common stockholders' equity calculations will be made
for The Dial Corp by dividing each year's net income after taxes
less preferred dividend requirements by the year's monthly
average of common stockholders' equity (return on common equity).
Consideration will then be given to any known or anticipated
changes in equity structure and to appropriate industry averages,
and a realistic weighted average annual Return on Equity target
for the three-year Performance Period will be established taking
into account all factors mentioned as well as the three-year
Performance Period Financial Plan year-by-year return on equity
(on the same basis as previously described), overall Corporate
objectives and, where appropriate, other circumstances. An
appropriate range of values above and below such target will then
be selected to measure achievement above or below the target.
D. Average Three-Year Subsidiary Earnings Growth
A realistic average three-year earnings target for the
Performance Period for each Subsidiary Company will be
established taking into account historical income, financial plan
income for the Performance Period, overall Corporate objectives,
and if appropriate, other circumstances. An appropriate range of
values above and below such target will then be selected to
measure achievement above or below the target.
E. Average Three-Year Dial Earnings Per Share Growth
A realistic "Earnings Per Share" from continuing operations
target for The Dial Corp will be established after considering
historical earnings per share from continuing operations,
financial plan income for the Performance Period, overall
Corporate objectives and, if appropriate, other circumstances.
An appropriate range of values above and below such target will
then be selected to measure achievement above or below the
target.
F. Establishing Targets
The appropriate targets, range of values above and below such
targets and the Performance Period to be used as a basis for the
measurement of performance for Awards under the Plan will be
determined by the Committee no later than 90 days after the
beginning of each new Performance Period during the life of the
Plan, after giving consideration to the recommendations of the
Chief Executive Officer of The Dial Corp. Performance Units will
be earned based upon the degree of achievement of the pre-defined
targets over the Performance Period following the date of grant.
Earned Units can range, based on operating company performance
using an award matrix, from 0% to 200% of the target Units.
6. OTHER PLAN PROVISIONS
Special treatment of any significant unusual or non-recurring
items (for purposes of earnings and/or Return on Equity
calculation) arising after targets are set may be recommended by
the Chief Executive Officer of The Dial Corp to the Committee for
approval including revision to either or both targets in the
event of any significant acquisition or divestiture made during
the Performance Period to give effect, as appropriate, to planned
effects of such acquisition or divestiture during the Performance
Period. Other examples include extraordinary items, gains or
losses arising from discontinued operations, effects of a change
in accounting principles or a change in federal income tax rates.
Reclassification of a major business unit to discontinued
operations status after targets have been set would also require
adjustment because of effect on continuing operations results.
For subsidiaries, in certain extreme cases, unplanned effects of
major litigation, remediation of environmental matters,
significant uninsured losses, a significant restructuring or the
bankruptcy of a major vendor or customer are further examples of
the types of items which could be (but are not required to be)
considered by the Chief Executive Officer of The Dial Corp for
recommendation to the Committee for possible special treatment.
Conversely, the general rule for Corporate measurements is that
restructuring charges affecting years after 1992, gain or loss on
sale of a smaller subsidiary or other one-time income or loss
items mentioned above regarding subsidiaries would not be
considered for special treatment as the Corporate mission is to
achieve the targets notwithstanding the effects of such items.
Incentives to be paid under this Plan must be deducted from the
corporation's earnings during the Performance Period (generally
in the third year, when the amounts to be paid can be reasonably
estimated). Goals must be achieved after deducting from actual
results all incentive compensation applicable to such performance
periods, including those incentives earned under this Plan.
7. AWARD MATRIX
The range of values for the Corporation's or a Subsidiary
Company's performance is set at a minimum of 80% of target for
threshold and capped at 120% of the target. Notwithstanding the
foregoing, targets may be established for threshold within the
range of above 80% up to and including 95% and for maximum within
the range of below 120% down to 105%, as may be designated by the
Committee; however, the Committee may, when appropriate, adjust
such ranges upward or downward. The Return on Equity target and
range of values will be entered on the vertical axis of the
appropriate Performance Unit Award Matrix. The weighted average
annual Return on Equity target for the Performance Period will
represent a meaningful improvement over average historical
returns except in extremely unusual circumstances. Actual
weighted average annual Return on Equity performance for each
Participant will be determined at the end of the three-year
Performance Period based on the appropriate definition set forth
above. Similarly, the average three-year Real Earnings Growth
target and range of values will be entered on the horizontal axis
of the Performance Unit Award Matrix, and actual results will be
determined at the end of the three-year Performance Period based
on the appropriate definition.
Performance Units will be earned based upon the degree of
achievement of the pre-defined goals using the Performance Unit
Award Matrix.
PERFORMANCE UNIT AWARD MATRIX:
Percent of Award Earned
________________________________________
|
| 100% 125% 150% 175% 200%
Return | 75% 100% 125% 150% 175%
on | 50% 75% 100% 125% 150%
Equity | 25% 50% 75% 100% 125%
| 0% 25% 50% 75% 100%
|
________________________________________
Improvement in Real Earnings
8. PARTICIPANT ELIGIBILITY
Personnel will be eligible for participation as recommended by
The Dial Corp Chief Executive Officer for approval by the
Committee no later than 90 days after the beginning of each new
Performance Period during the life of the Plan, limited only to
those key executives who contribute in a substantial measure to
the successful performance of the Corporation or its Affiliates.
The Chief Executive Officer will recommend for approval by the
Committee which Affiliates among its Affiliates should be
included in the Plan.
9. AWARD DETERMINATION
The number of Units to be awarded will be determined, generally,
by multiplying a factor times the Participant's annual base
salary in effect at the time the Award is granted and dividing
the result by the average of the high and low of the
Corporation's Common Stock on the date of approval of the grant
by the Committee. The Award factor will be recommended by the
Chief Executive Officer of The Dial Corp for approval by the
Committee annually no later than 90 days after the beginning of
each new performance period. The Committee may adjust the number
of Units awarded in its discretion.
10. GENERAL TERMS AND CONDITIONS
The Committee shall have full and complete authority and
discretion, except as expressly limited by the Plan, to grant
Units and to provide the terms and conditions (which need not be
identical among Participants) thereof. Without limiting the
generality of the foregoing, the Committee may specify a
Performance Period of not less than two years or not more than
five years, rather than the three-year Performance Period
provided for above, and such time period will be substituted as
appropriate to properly effect the specified Performance Period.
No Participant or any person claiming under or through such
person shall have any right or interest, whether vested or
otherwise, in the Plan or in any Award thereunder, contingent or
otherwise, unless and until all the terms, conditions, and
provisions of the Plan and its approved administrative
requirements that affect such Participant or such other person
shall have been complied with. Nothing contained in the Plan or
its Administrative Guidelines shall (i) require the Corporation
to segregate cash or other property on behalf of any Participant
or (ii) affect the rights and power of the Corporation or its
Affiliates to dismiss and/or discharge any Participant at any
time.
Any recapitalization, reclassification, stock split, stock
dividend sale of assets, combination or merger not otherwise
provided for herein which affects the outstanding shares of
Common Stock of the Corporation or any other change in the
capitaliztion of the Corporation affecting the Common Stock shall
be appropriately adjusted for by the Committee or the Board, and
any such adjustments shall be final, conclusive and binding.
11. PAYMENT OF AWARDS
(a) Performance Unit Awards which may become payable under
this Plan shall be calculated as determined by the Committee
but any resulting Performance Unit Award payable shall be
subject to the following calculation: each Unit payable
shall be multiplied by the average of the daily means of the
market prices of the Corporation's Common Stock during the
month following the Performance Period. Performance Unit
Awards earned will be determined as of the third Thursday of
February following the close of the Performance Period and
distribution of the Award will be made within ninety (90)
days following the close of the Performance Period. Awards
will be subject to discretionary downward adjustment, for
those executive officers affected by Section 162(m) of the
Internal Revenue Code, by the Committee.
(b) Performance Unit Awards granted under this Plan shall
be payable during the lifetime of the Participant to whom
such Award was granted only to such Participant; and, except
as provided in (d) and (e) of this Section 7, no such Award
will be payable unless at the time of payment such
Participant is an employee of and has continuously since the
grant thereof been an employee of, the Corporation or an
Affiliate. Neither absence on leave, if approved by the
Corporation, nor any transfer of employment between
Affiliates or between an Affiliate and the Corporation shall
be considered an interruption or termination of employment
for purposes of this Plan.
(c) Prior to the expiration of the Performance Period, all
Participants will be provided an irrevocable option to defer
all or a portion of any earned Performance Unit Award, if
there be one but not less than $1,000, in written form as
prescribed by the Board under the provisions of a deferred
compensation plan for executives of the Corporation and its
Affiliates, if one be adopted.
(d) If a Participant to whom a Performance Unit Award was
granted shall cease to be employed by the Corporation or its
Affiliate for any reason (other than death, disability, or
retirement) prior to the completion of any applicable
Performance Period, said Performance Unit Award will be
withdrawn and subsequent payment in any form at any time
will not be made.
(e) If a Participant to whom a Performance Unit Award was
granted shall cease to be employed by the Corporation or its
Affiliate due to early, normal, or deferred retirement, or
in the event of the death or disability of the Participant,
during the Performance Period stipulated in the Performance
Unit Award, such Award shall be prorated for the period of
time from date of grant to date of retirement, disability or
death, as applicable, and become payable within ninety (90)
days following the close of the Performance Period to the
Participant or the person to whom interest therein is
transferred by will or by the laws of descent and
distribution. Performance Unit Awards shall be determined
at the same time and in the same manner (except for
applicable proration) as described in Section 11 (a).
(f) There shall be deducted from all payment of Awards any
taxes required to be withheld by any Federal, State, or
local government and paid over to any such government in
respect to any such payment.
12. ASSIGNMENTS AND TRANSFERS
No Award to any Participant under the provisions of the Plan may
be assigned, transferred, or otherwise encumbered except, in the
event of death of a Participant, by will or the laws of descent
and distribution.
13. AMENDMENT OR TERMINATION
The Board may amend, suspend, or terminate the Plan or any
portion thereof at any time provided, however, that no such
amendment, suspension, or termination shall invalidate the Awards
already made to any Participant pursuant to the Plan, without his
consent.
14. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall be effective January 1, 1994, provided however,
that any Award made under this Plan is subject to the approval of
this Plan by the stockholders of The Dial Corp.
<PAGE>
<TABLE>
Exhibit 11
Page 1 of 1
THE DIAL CORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(000 omitted)
<CAPTION>
Three months ended March 31,
----------------------------
Primary: 1995 1994
------------ ------------
<S> <C> <C>
Net income $ 21,507 $ 17,210
Less: Preferred stock dividends (281) (280)
Subsidiary dilutive securities (4)
------------ ------------
$ 21,222 $ 16,930
============ ============
Average common shares outstanding
before common equivalents 86,108 84,436
Common equivalent stock options 1,848 1,600
------------ ------------
87,956 86,036
============ ============
Net income per share (dollars) $ 0.24 $ 0.20
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three months ended March 31,
-------------------------------------------------------
1995 1994
-------------------------- ----------------------------
Common Common
Fully Diluted: Shares Income Shares Income
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Average common and
equivalent shares
and net income
per above 87,956 $ 21,222 86,036 $ 16,930
Common equivalent
stock options 286
------------ ------------ ------------ ------------
88,242 $ 21,222 86,036 $ 16,930
============ ============ ============ ============
Net income per
share (dollars) $ 0.24 $ 0.20
============ ============
</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 MARCH
31, 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> MAR-31-1995
<PERIOD-TYPE> 3-MOS
<CASH> 13,281
<SECURITIES> 0
<RECEIVABLES> 218,911
<ALLOWANCES> 20,408
<INVENTORY> 233,132
<CURRENT-ASSETS> 1,069,238
<PP&E> 1,482,085
<DEPRECIATION> 633,953
<TOTAL-ASSETS> 3,682,362
<PAGE>
<CAPTION>
Exhibit 27
Page 2 of 2
<S> <C>
<CURRENT-LIABILITIES> 1,882,432
<BONDS> 768,036
<COMMON> 145,663
6,592
0
<OTHER-SE> 439,503
<TOTAL-LIABILITY-AND-EQUITY> 3,682,362
<SALES> 337,862
<TOTAL-REVENUES> 858,197
<CGS> 304,060
<TOTAL-COSTS> 794,337
<OTHER-EXPENSES> 11,149
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,427
<INCOME-PRETAX> 34,221
<INCOME-TAX> 12,714
<INCOME-CONTINUING> 21,507
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,507
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
</TABLE>
