<PAGE>
March 27, 1997
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Viad Corp Form 10-K
CIK 0000884219
Commission File No. 001-11015
Ladies and Gentlemen:
Pursuant to the requirements of the Securities and Exchange Act
of 1934, we are transmitting herewith the Annual Report of Viad
Corp on Form 10-K for the fiscal year ended December 31, 1996.
Manually executed signature pages and consents have been executed
prior to the time of this electronic filing and will be retained
by Viad for five years.
The financial statements do not reflect any material change by
Viad from the preceding year in any other accounting principles
or practice or in the method of applying such principles or
practice.
Copies of this report, complete with exhibits, are being filed
with the New York Stock Exchange.
Very truly yours,
/s/ Richard C. Stephan
Richard C. Stephan
Vice President-Controller
/kr
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1995
Commission File Number 001-11015
-------------------------------------------
VIAD CORP
(Exact name of registrant as specified in its charter)
Delaware 36-1169950
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
Viad Tower, Phoenix, Arizona 85077
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602-207-4000
-------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, $1.50 par value New York Stock Exchange
$4.75 Preferred Stock (stated New York Stock Exchange
value $100 per share)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
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 / /
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
As of March 14, 1997, 95,948,419 shares of Common Stock ($1.50
par value) were outstanding and the aggregate market value of the
common Stock (based on its closing price per share on such date)
held by nonaffiliates was approximately $1.68 billion.
DOCUMENTS INCORPORATED BY REFERENCE
Documents Where Incorporated
--------- ------------------
A portion of Proxy Statement for
Annual Meeting of Shareholders
to be held May 13, 1997 Part III
<PAGE>
PART I
ITEM 1. BUSINESS.
Viad Corp ("Viad" or the "Corporation") is comprised of
operating companies and a division which constitute a diversified
services business. Most of Viad's services are provided to
businesses for use by their customers. Accordingly, the
Corporation markets its services to approximately 47,000 agent
locations in the U.S. (money orders), numerous trade show
organizers and exhibitors (convention and exhibit services), 80
domestic and international airlines (in-flight food service), and
others. Occupying the number one or number two position in many
of the markets in which they compete, the Corporation's
businesses seek to provide satisfying and attractive services
with a discernible difference to the ultimate users and thereby
be considered a value-added provider by Viad's business
customers.
Viad's services are classified into three principal business
segments, namely (1) Airline Catering and Services, (2)
Convention Services, and (3) Travel and Leisure and Payment
Services. A description of each of the Viad business segments
and recent developments in each follows:
VIAD SEGMENTS
Viad is built around several company groups which are
leading competitors in their businesses, including companies
engaged in airline catering (Dobbs International Services),
airplane fueling and ground-handling (Aircraft Service
International), convention and exhibit services (GES Exposition
Services and Exhibitgroup/Giltspur), payment services (Travelers
Express), contract foodservices (Restaura), airport and cruise
ship duty-free businesses (Greyhound Leisure Services), and
travel services (Brewster Transport, Jetsave and Crystal
Holidays).
AIRLINE CATERING AND SERVICES
Airline catering, aircraft fueling and certain other ground-handling
operations are conducted through the Dobbs International
Services and Aircraft Service International groups of companies.
Dobbs International, which has been conducting airline catering
operations since 1941, is the second largest domestic in-flight
caterer. At the end of 1996, Dobbs International's in-flight
catering operations were providing in-flight meals to more than
80 domestic and international airlines at 46 airports in the
United States and 5 airports in foreign countries. United
Airlines is the largest customer of Dobbs International. Dobbs
International has been involved in a "Quality Improvement
Process" for many years and has been recognized for its
innovations by its customers and suppliers. In the fall of 1996,
Dobbs International began construction of flight kitchens at the
San Francisco International Airport and at the Philadelphia
International Airport, and in February 1997, acquired a flight
kitchen at the Miami International Airport.
The Aircraft Service International group of companies
provides certain ground-handling services such as aircraft
fueling, aircraft cleaning and baggage handling for major
domestic and international airlines at 36 airports throughout the
United States and in Freeport, Bahamas and London, England.
Dobbs International and Aircraft Service International are
focused on meeting the outsourcing needs of the airline industry,
providing a lower-cost alternative to permit airlines to reduce
costs and operate more profitably.
CONVENTION SERVICES
Convention services are provided by the Corporation's GES
Exposition and Exhibitgroup/Giltspur companies.
GES Exposition, the nation's leading supplier of convention
services, provides tradeshow design and planning, decorating,
exhibit design, preparation, installation and dismantling, audio
visual, electrical, transportation and management services for
conventions and tradeshows. In January 1996, GES Exposition
acquired Exposervice Standard Inc., a Montreal based tradeshow
and exposition service company. Panex Show Services Limited and
Stampede Display and Convention Services Limited, two Canadian
companies that provide tradeshow and exposition services in
Toronto, Calgary and Edmonton had been acquired in January 1995.
GES Exposition also acquired Concept Convention Services, Inc. in
July 1995, and Badger Exposition Services, Inc. and related
businesses in September 1995. Concept and Badger are regional
exposition services companies headquartered in Phoenix, Arizona,
and Milwaukee, Wisconsin, respectively.
Exhibitgroup/Giltspur is a designer, builder and installer
of convention and tradeshow exhibits and displays, with six
office/warehouse locations and 28 multi-use manufacturing and
office/warehouse facilities in 24 U.S. cities and a manufacturing
and warehouse facility in Toronto, Canada. Exhibitgroup/Giltspur
is operated as a division of Viad, and consists of merged
operations formerly conducted by Exhibitgroup Inc. and Giltspur
Inc. Giltspur, Inc. was acquired in October 1995. Color and
Design Exhibits Inc., an exhibit company headquartered in
Beaverton, Oregon, was acquired in July 1996. During 1995,
Exhibitgroup/Giltspur also expanded its operations by acquisition
of All West Display Inc., a company headquartered in Portland,
Oregon, and Displaymasters, Inc. and Deaton Museum Services,
Inc., companies headquartered in Minneapolis, Minnesota.
Exhibitgroup/Giltspur operates the largest exhibit and display
business in the nation.
TRAVEL AND LEISURE AND PAYMENT SERVICES
Viad's payment services business is conducted by the
Travelers Express group of companies which engages in the sale of
money orders to the public through approximately 47,000 agent
locations in the United States and Puerto Rico. Travelers
Express is the nation's leading issuer of money orders,
processing approximately 256 million money orders in 1996.
Travelers Express provides processing services for approximately
5,700 banks, credit unions and other financial institutions which
offer share drafts (the credit union industry's version of a
personal check), official checks (used by financial institutions
in place of their own bank check or cashier's check) or money
orders. Republic Money Order Company, a Travelers Express unit,
is a leader in money order-issuance technology which facilitates
the issuance of money orders through chain, convenience and
supermarket stores. In October 1995, Travelers Express acquired
PayMate, Inc. (renamed Moneyline Express), a supplier of home
banking and remote bill payment services. Travelers Express also
acquired the Minnesota-based business of First State Marketing
Corp., the nation's leading processor of rebate checks, and the
business of National Express Corporation, an Oklahoma-based money
order business, in January 1997.
Travel and leisure services are provided by the Greyhound
Leisure Services, Brewster Transport, Jetsave, Crystal Holidays
and Restaura business units.
Greyhound Leisure Services operates duty-free concessions on
41 cruise ships operating primarily in North American, Caribbean
and European waters, and also operates duty-free shops at the
Miami and Fort Lauderdale/Hollywood, Florida international
airports. It also conducts a wholesale export operation.
Brewster Transport Company Limited, an Alberta, Canada
corporation, operates tour and charter buses in the Canadian
Rockies, and engages in travel agency, hotel and snocoach tour
operations. Brewster was a 68.5% owned affiliate of the
Corporation prior to May 31, 1996, when the other 31.5% was
acquired pursuant to a share exchange (see "Discontinued
Operations"). In May 1995, Brewster acquired TransPacific Tours
Limited, a package tour company with significant access to the
Japanese marketplace. In July 1995, Brewster disposed of its
joint venture interest in the Mt. Norquay ski facility in Banff,
Alberta, Canada. Brewster owns and operates 94 intercity coaches
and 11 buses, as well as 16 snocoaches which transport sightseers
on tours of the glaciers of the Columbia Icefield.
Recreation and travel services also are provided under the
Jetsave and Crystal Holidays names. Jetsave and Crystal Holidays
are leading United Kingdom operators of tour packages and
specialty tours throughout Europe, and from Europe to the United
States, Canada, South Africa and the Bahamas. The 1996
acquisition of Tropical Places Ltd. extended the operation of
Jetsave to the Caribbean, Kenya, the Indian Ocean and the Far
East.
The Restaura group of companies' contract foodservice
division serves meals to workers at approximately 200 locations,
including employees of major companies such as General Motors and
Ford, through cafeteria, executive dining room and vending
operations at large industrial complexes, high density office
buildings, universities and other similar facilities. Restaura
also acts as the prime concessionaire for all food and beverage
services at the America West Arena in Phoenix, Arizona, and
operates 7 historic lodges in and around Glacier National Park in
Montana and Canada. In January 1997, Restaura expanded its
sports arena activities by entering into a concession agreement,
commencing in 1998, to provide food and beverage services at Bank
One Ballpark, the future home of the Arizona Diamondbacks
baseball team.
COMPETITION
The Corporation's businesses generally compete on the basis
of price, value, quality, convenience and service, and encounter
substantial competition from a large number of providers of
similar services, including numerous well-known local, regional
and national companies, private payment service companies and the
U.S. Postal Service (money orders), many of which have greater
resources than the Corporation. Travelers Express also competes
on the basis of quality and magnitude of agent network, business
automation, technology and automated controls for money order
issuance, and Dobbs International also competes on the basis of
reliability, condition of kitchen facilities and truck fleet, and
on-time record. The U.S. Postal Service and First Data
Corporation are the principal competition of Travelers Express,
and Caterair International/Sky Chefs is the principal competitor
of Dobbs International. On a national basis, Freeman Decorating
Company is the principal competitor of GES Exposition, and George
P. Johnson is the principal competitor of Exhibitgroup/Giltspur.
PATENTS AND TRADEMARKS
United States patents are currently granted for a term of 20
years from the date a patent application is filed. The Viad
companies own a number of patents which give them competitive
advantages in the marketplace, including a number of patents
owned by Exhibitgroup/Giltspur covering exhibit systems and by
Travelers Express for automated money order dispensing systems.
The Travelers Express patents cover security, automated reporting
and control, and other features which are important in the
issuance of money orders.
United States trademark registrations are for a term of 10
years, renewable every 10 years as long as the trademarks are
used in the regular course of trade. The Viad companies maintain
a portfolio of trademarks representing substantial goodwill in
the businesses using the marks.
Many trademarks used by Viad and its subsidiaries, including
the DOBBS, DOBBS INTERNATIONAL SERVICES, EXHIBITGROUP/GILTSPUR,
GES and TRAVELERS EXPRESS service marks, have substantial
importance and value. Certain rights in software held by
Travelers Express also provide competitive advantage.
GOVERNMENT REGULATION
None of Viad's businesses are heavily regulated by
governmental authorities. Nevertheless compliance with legal
requirements and government regulations are a day-to-day integral
part of the Corporation's operations and represent a normal cost
of doing business. Food safety and airport security regulations
are of importance to Dobbs International and Aircraft Service
companies, financial transactions reporting and state banking
department regulations affect Travelers Express, and
environmental, labor and employment and other regulations affect
virtually all operations. As is the case with many companies,
the Corporation faces exposure to actual or potential claims and
lawsuits involving environmental matters. Although the
Corporation is a party to certain environmental disputes, the
Corporation believes that any liabilities resulting therefrom,
after taking into consideration amounts already provided for, but
exclusive of any potential insurance recovery, should not have a
material adverse effect on the Corporation's financial position
or results of operations.
EMPLOYEES
EMPLOYMENT AT DECEMBER 31, 1996
APPROXIMATE EMPLOYEES COVERED BY
NUMBER OF COLLECTIVE BARGAINING
SEGMENT EMPLOYERS AGREEMENTS
- ------- ----------- ---------------------
Airline Catering
and Services 14,500 9,000
Convention Services 4,600 1,900
Travel and Leisure
and Payment Services 4,800 1,700
Viad believes that relations with its employees are
satisfactory and that collective bargaining agreements expiring
in 1997 will be renegotiated in the ordinary course of business
without adverse effect on Viad's operations.
Viad had approximately 170 employees at its corporate center
at December 31, 1996, providing management, financial and
accounting, tax, administrative, legal and other services to its
operating units and handling residual matters pertaining to
businesses previously discontinued or sold by the Corporation.
Viad is managed by a Board of Directors comprised of seven
nonemployee directors and one employee director and has an
executive management team consisting of six Viad officers and
four principal executives of significant operating divisions or
companies.
SEASONALITY
The first quarter is normally the slowest quarter of the
year for Viad. Due to increased leisure travel during the summer
and year-end holidays, Viad's airline catering and travel service
operations experience peak activity at these times. Convention
service companies generally experience increased activity during
the first half of the year. As a result of these factors, Viad's
1996 quarterly earnings per share from continuing operations
before nonrecurring items as a percentage of the full year's
earnings on the same basis were approximately 11% (first
quarter), 27% (second quarter), 35% (third quarter), and 27%
(fourth quarter). See Note R of Notes to Consolidated Financial
Statements.
DISCONTINUED OPERATIONS
Viad is successor to The Greyhound Corporation, a
corporation formed in 1926 which owned and operated Greyhound
Lines, the nation's largest intercity bus transportation company.
Since that time, the Corporation has evolved from a bus
transportation company, to a consumer products and services
company, then to a services company. Viad's evolution as a
focused services company was furthered in 1996 with the
separation of Greyhound Lines of Canada ("GLOC") in May 1996 and
the spin-off of the Corporation's consumer products business in
August 1996.
Effective May 31, 1996, shareholders of Greyhound Lines of
Canada voted to separate its intercity bus transportation
business and its tourism business into two independent companies.
At the same time, GLOC minority shareholders approved an
automatic share exchange proposal whereby their ownership
interests in the tourism business, aggregating 31.5 percent, were
exchanged for Viad's 68.5 percent ownership interest in the
intercity bus transportation company such that Viad became the
owner of 100 percent of the tourism company, Brewster Transport
Company Limited, in exchange for its ownership in the intercity
bus transportation company.
On August 15, 1996, Viad completed the spin-off of its
consumer products business, now conducted under the name The Dial
Corporation. In effecting the spin-off, the holders of common
stock of Viad received a distribution of one share of common
stock of The Dial Corporation for each share of Viad common
stock.
In February 1997, Viad's Board of Directors approved plans
to dispose of Viad's cruise line business, operated by Premier
Cruise Lines, Ltd.
See Notes A, D and E of Notes to Consolidated Financial
Statements for further information concerning Discontinued
Operations.
SHELF REGISTRATION
In July 1994, the Corporation filed a shelf registration
with the Securities and Exchange Commission covering $500 million
of debt and equity securities. To date, no securities have been
offered under the registration.
BUSINESS SEGMENTS
Principal business segment information is set forth in
Exhibit 13 attached hereto and made a part hereof.
ITEM 2. PROPERTIES.
Viad and its subsidiaries operate service or production
facilities and maintain sales and service offices in the United
States, Canada and the United Kingdom. The Corporation also
conducts business in certain other foreign countries.
Viad's headquarters are located at Viad Tower in Phoenix,
Arizona. Viad leases 8 floors (consisting of approximately
159,000 square feet) from a partnership owned by two subsidiaries
of the Corporation, and in addition, has control of approximately
29,600 square feet on a rent-free basis to provide building
amenities such as food service and fitness facilities.
AIRLINE CATERING AND SERVICES operates 8 administrative
offices, 36 airline service locations and 62 catering kitchens.
All of the properties are in the United States, except for 2
office/airline service locations and 5 catering kitchens which
are located in foreign countries. Ten of the catering kitchens
are owned. Two of the catering kitchens and 9 of the airline
service locations are provided by airlines to which services are
rendered. All other properties are leased.
CONVENTION SERVICES operates 34 offices and 87 multi-use
facilities (exhibit construction, office and warehouse). All of
the properties are in the United States, except for 3 offices and
9 warehouse facilities which are located in foreign countries.
One of the offices and two of the warehouses are owned; all other
properties are leased.
TRAVEL AND LEISURE AND PAYMENT SERVICES operates 25 offices,
23 foodservice facilities, 6 retail gift shops, 144 duty-free
shops (located in airports and onboard cruise ships), 8
warehouses, 3 terminals, 4 garages and 9 hotels/lodges with
ancillary foodservice and recreational facilities, and an
icefield tour facility. In addition, 160 foodservice facilities
are made available by firms to which services are provided. All
of the properties are in the United States, except for 9 offices,
1 foodservice facility, 3 terminals, 4 garages, the icefield tour
facility, and 3 hotels, which are located in foreign countries;
and approximately 123 duty-free shops are operated in
international waters on board cruise ships. Travel and Leisure
and Payment Services owns 4 hotels and 5 of the hotels are
operated pursuant to a concessionaire agreement. One warehouse,
3 foodservice facilities, 1 terminal and 3 garages are owned; all
other properties are leased. The icefield tour facility is
jointly owned and operated with Parks Canada.
Selected principal properties of the Corporation and its
subsidiaries are as follows:
LOCATION SQ FEET FUNCTION
- -------- ------- --------
AIRLINE CATERING AND SERVICES:
Atlanta International
Airport (3 kitchens),
Atlanta, Georgia 339,000 Catering Kitchen
O'Hare International
Airport (3 kitchens),
Chicago, Illinois 252,000 Catering Kitchen
Denver International
Airport, Denver,
Colorado 150,000 Catering Kitchen
Dulles International
Airport, Washington,
D.C. 120,000 Catering Kitchen
Los Angeles
International Airport,
Los Angeles,
California 104,000 Catering Kitchen*
CONVENTION SERVICES:
Roselle (Chicago),
Illinois 475,000 Exhibit construction,
office and warehouse
Fremont (San
Francisco),
California
(3 buildings) 259,000 Exhibit construction,
office and warehouse
Las Vegas, Nevada
(5 buildings) 239,000 Office and warehouse
facilities
Atlanta, Georgia 212,000 Office and warehouse
Avon (Boston),
Massachusetts 210,000 Exhibit construction,
office and warehouse
Orlando, Florida 204,000 Warehouse*
Edison, New Jersey 180,000 Exhibit construction,
office and warehouse
Chula Vista,
California 108,000 Warehouse*
Grapevine (Dallas),
Texas 180,000 Exhibit construction,
office and warehouse
Pittsburgh,
Pennsylvania 170,000 Exhibit construction,
office and warehouse
Henderson, Nevada 138,000 Warehouse
Washington, D.C. 84,000 Office and warehouse
TRAVEL AND LEISURE AND PAYMENT SERVICES:
St. Louis Park,
Minnesota 146,000 Office
Glacier Park Lodge,
Glacier Park, Montana 135,000 Hotel*
Miami, Florida 109,000 Office and warehouse
* Owned.
Management believes that Viad's facilities in the aggregate
are adequate and suitable for their purposes and that capacity is
sufficient for current needs.
ITEM 3. LEGAL PROCEEDINGS.
Several shareholder derivative complaints were filed in the
Delaware Court of Chancery in late December 1995 and early
January 1996 against members of the Corporation's Board of
Directors, and against the Corporation as a nominal defendant.
The complaints variously allege fraud, negligence, mismanagement,
corporate waste, breaches of fiduciary duty, and seek equitable
relief and recovery from or on behalf of the Corporation for
compensatory and other damages incurred by the Corporation as a
result of alleged payment of excessive compensation, improper
investments, or other improper activities. Viad and its counsel
believe the claims are without merit. A lawsuit which was filed
in the United States District Court, District of Arizona, on
December 21, 1995, alleging many of the same issues against the
same parties, against a former member of the Company's Board, and
against certain officers of the Company has been dismissed.
In addition to the derivative complaints, Viad and certain
subsidiaries are plaintiffs or defendants to various other
actions, proceedings and pending claims, including multiple
lawsuits filed by several hundred former railroad workers
claiming asbestos-related health conditions from exposure to
railroad equipment made by former subsidiaries. Certain of these
pending legal actions are or purport to be class actions. Some
of the foregoing involve, or may involve, claims for
compensatory, punitive or other damages. Litigation is subject
to many uncertainties and it is possible that some of the legal
actions, proceedings or claims referred to above could be decided
against Viad. Although the amount of liability at December 31,
1996, with respect to these matters is not ascertainable, Viad
believes that any resulting liability will not materially affect
Viad's financial position or results of operations.
A federal grand jury investigation of Viad's airline
catering subsidiary's billing practices at several airport flight
kitchen locations has been resolved with the U.S. Attorney's
Office and affected airlines by a civil settlement within
previously established reserves.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.
No matters were submitted to a vote of securityholders
during the fourth quarter of 1996.
OPTIONAL ITEM. EXECUTIVE OFFICERS OF REGISTRANT.
The names, ages and positions of the executive officers of
the Corporation as of March 15, 1997, are listed below:
EXECUTIVE POSITION
NAME AGE OFFICE HELD SINCE
- ---- --- ------ ------------------
Robert H. 52 Chairman of the 1997
Bohannon Board, President
and Chief Executive
Officer of Registrant
L. Gene Lemon 56 Vice President- 1979
Administration of
Registrant
Ronald G. 55 Vice President-Finance 1987
Nelson and Treasurer of
Registrant
Peter J. 57 Vice President and 1996
Novak General Counsel of
Registrant
Scott E. 50 Secretary and 1997
Sayre Associate General
Counsel of Registrant
Richard C. 57 Vice President- 1980
Stephan Controller of
Registrant
Charles J. 50 President and Chief 1991
Corsentino Executive Officer of
Exhibitgroup/Giltspur,
a division of
Registrant
Frederick J. 62 President and Chief 1985
Martin Executive Officer of
Dobbs International
Services, Inc., a
subsidiary of
Registrant
Philip W. 38 President and Chief 1996
Milne Executive Officer of
Travelers Express
Company, Inc., a
subsidiary of
Registrant
Paul B. 42 President and Chief 1996
Mullen Executive Officer of
GES Exposition
Services, Inc. a
subsidiary of
Registrant
Each of the foregoing officers, with the exceptions set forth
below, has served in the same, similar or other executive
positions with Viad or its subsidiaries for more than the past
five (5) years.
Prior to January 1997, Mr. Bohannon served as President and
Chief Operating Officer of Registrant since August 15, 1996.
Prior thereto he was President and Chief Executive Officer of
Travelers Express Company, Inc. since 1993, and prior to that was
a senior officer at Marine Midland Bank of Buffalo, New York.
Prior to February 1996, Mr. Novak was Deputy General Counsel
of Registrant, and prior to serving in that position was Group
General Counsel of Registrant.
Prior to August 1996, Mr. Milne was Vice President-General
Manager-Retail Payment Products of Travelers Express Company,
Inc., since May 15, 1993, and prior thereto served in similar
executive capacities at Travelers Express Company, Inc.
Prior to May 1996, Mr. Mullen was President and Chief
Executive Officer of Giltspur, Inc., since 1995. Prior thereto
he was executive vice president and chief operating officer of
Giltspur, Inc. since 1994, and prior to that, he was president of
the Pittsburgh Division of Giltspur, Inc. since 1992.
Prior to January 1997, Mr. Sayre served as Assistant
Secretary and Assistant General Counsel of Registrant since
February 1996, and prior thereto was Assistant General Counsel.
The term of office of the executive officers is until the
next annual organization meetings of the Boards of Directors of
Viad or appropriate subsidiaries, all of which are scheduled for
May or June of this year.
The Directors of Viad are divided into three classes, with
the terms of one class of Directors to expire at each Annual
Meeting of Stockholders. The current term of office of Robert H.
Bohannon is scheduled to expire at the 1999 Annual Meeting of
Stockholders.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The principal market on which the common stock of Viad is
traded is the New York Stock Exchange. The common stock is also
admitted for trading on the Midwest, Pacific, Philadelphia and
Cincinnati Exchanges. The following tables summarize the high
and low market prices as reported on the New York Stock Exchange
Composite Tape and the cash dividends declared for the two years
ended December 31, 1996:
Sales Price Range of Common Stock
1996 1995
Calendar Quarters High Low High Low
- ----------------- ---- --- ---- ---
First $33.25 $27.125 $26.125 $21.50
Second 30.75 27.50 26.375 23.50
Third (1) 30.25 13.375 25.625 20.875
Fourth 17.125 13.875 30.375 22.50
(1) On August 15, 1996, the spin-off of Viad's consumer
products business, now conducted under the name The
Dial Corporation, to the corporation's stockholders
became effective. The closing price of the
Corporation's shares immediately prior to the spin-off
on August 15, 1996 was $26.375. The high and low
prices for the period July 1, 1996 through August 15,
1996 were $30.25 and $25.25, respectively. The average
price of The Dial Corporation common stock was $13.0625
on the day immediately following the August 15
distribution, and the average price of Viad Corp common
stock was $14.3125 on the day immediately following the
distribution. Viad's high and low prices for the
period August 16, 1996, through September 30, 1996,
were $15.25 and $13.375, respectively.
Dividends Declared on Common Stock
1996 1995
---- ----
February $ .16 $ .15
May .16 .15
August .08 (2) .16
November .08 .16
TOTAL $0.48 $0.62
(2) Viad's quarterly dividend decreased from $0.16 to $0.08
per share following the spin-off of The Dial
Corporation. The Dial Corporation's initial dividend
rate after the spin-off maintained the 1995 annual
dividend rate for stockholders who retained shares of
both companies following the spin-off.
Regular quarterly dividends have been paid on the first
business day of January, April, July and October.
As of March 14, 1997, there were 67,648 holders of record of
Viad's common stock.
ITEM 6. SELECTED FINANCIAL DATA.
Applicable information is included in Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION.
Applicable information is included in Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
1. Financial Statements--See Item 14 hereof.
2. Supplementary Data--See Condensed Consolidated
Quarterly Results in Exhibit 13.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information regarding Directors of the Registrant is
included in Viad's Proxy Statement for Annual Meeting of
Shareholders to be held on May 13, 1997 ("Proxy Statement"), and
is incorporated herein and made a part hereof. The information
regarding executive officers of the Registrant is found as an
Optional Item in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION.
The information is contained in the Proxy Statement and is
incorporated herein and made a part hereof.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The information is contained in the Proxy Statement and is
incorporated herein and made a part hereof.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.
(a) The following documents are filed as a part of the
report:
FINANCIAL STATEMENTS.
The following are included in Exhibit 13: Independent
Auditors' Report and Consolidated Financial Statements
(Balance Sheet, Statements of Income, Cash Flows, and Common
Stock and Other Equity, and Notes to Financial Statements).
EXHIBITS. #
3.A Copy of Restated Certificate of Incorporation of Viad,
as amended through August 15, 1996.*
3.B Copy of Bylaws of Viad Corp, as amended through
February 20, 1997.*
4.A Instruments with respect to issues of long-term debt
have not been filed as exhibits to this Annual Report
on Form 10-K 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 July 24, 1996, among Viad, the Banks parties
thereto, Citicorp USA, Inc., as Administrative Agent,
and Bank of America National Trust and Savings
Association as Documentation Agent.*
10.A1 Copy of Employment Agreement between Viad Corp and
John W. Teets dated June 20, 1995, filed as Exhibit
10.A to Viad's Second Quarter 1995 Form 10-Q, is hereby
incorporated by reference.+
10.A2 Copy of Consulting Agreement between Viad Corp and John
W. Teets effective January 1, 1997.*+
10.B Sample forms of Contingent Agreements relating to
funding of Supplemental Executive Pensions, filed as
Exhibit (10)(T) to Viad's 1989 Form 10-K, is hereby
incorporated by reference.+
10.C Copy of Viad Corp Supplemental Pension Plan, amended
and restated as of January 1, 1987, filed as Exhibit
(10)(F) to Viad's 1986 Form 10-K, is hereby incorpor-
ated by reference.+
10.C1 Copy of amendment dated February 21, 1991, to Viad's
Supplemental Pension Plan, filed as Exhibit (10)(G)(i)
to Viad's 1990 Form 10-K, is hereby incorporated by
reference.+
10.C2 Copy of amendment dated August 18, 1993, to Viad's
Supplemental Pension Plan, filed as Exhibit 10.C to
Viad's Second Quarter 1995 Form 10-Q, is hereby
incorporated by reference.+
10.D Copy of Viad Corp Deferred Compensation Plan for
Directors, as Amended and Restated July 25, 1996.*+
10.E1 Copy of Viad Corp Management Incentive Plan, filed as
Exhibit 10.E to Viad's First Quarter 1995 Form 10-Q, is
hereby incorporated by reference.+
10.E2 Copy of Viad Corp 1997 Management Incentive Plan.*+
10.F1 Copy of form of Executive Severance Agreement between
Viad and three executive officers, filed as Exhibit
(10)(G)(i) to Viad's 1991 Form 10-K, is hereby
incorporated by reference.+
10.F2 Copy of forms of Viad Corp Executive Severance Plans
covering certain executive officers, filed as Exhibit
(10)(G)(ii) to Viad's 1992 Form 10-K, is hereby
incorporated by reference.+
10.G Copy of Travelers Express Company, Inc. Supplemental
Pension Plan amended and restated on June 12, 1995,
filed as Exhibit 10.G to Viad's Third Quarter 1995 Form
10-Q, is hereby incorporated by reference.+
10.H1 Copy of Viad Corp 1983 Stock Option and Incentive Plan,
filed as Exhibit (28) to Viad's Registration Statement
on Form S-8 (Registration No. 33-41870), is hereby
incorporated by reference.+
10.H2 Copy of amendment, effective August 1, 1994, to Viad
Corp 1983 Stock Option and Incentive Plan, filed as
Exhibit 10.H2 to Viad's 1994 Form 10-K, is hereby
incorporated by reference.+
10.I1 Copy of Viad Corp 1992 Stock Incentive Plan, filed as
Exhibit (10)(J) to Viad's 1991 Form 10-K, is hereby
incorporated by reference.+
10.I2 Copy of amendment, effective August 1, 1994, to Viad
Corp 1992 Stock Incentive Plan, filed as Exhibit 10.I2
to Viad's 1994 Form 10-K, is hereby incorporated by
reference.+
10.J Copy of 1997 Viad Corp Omnibus Incentive Plan.*+
10.K Description of Spousal Income Continuation Plan, filed
as Exhibit 10(Q) to Viad's 1985 Form 10-K, is hereby
incorporated by reference.+
10.L Copy of Viad Corp Performance Unit Incentive Plan,
filed as Exhibit 10.L to Viad's First Quarter 1995 Form
10-Q, is hereby incorporated by reference.+
10.L1 Copy of Viad Corp 1997 Performance Unit Incentive
Plan.*+
10.M Copy of Viad Corp Supplemental TRIM Plan, filed as
Exhibit 10.M to Viad'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 Viad's 1992 Form 10-K, is
hereby incorporated by reference.+
10.O Copy of Employment Agreement between Viad Corp and Paul
Mullen dated April 25, 1996.*+
10.P Copy of Viad Corp Performance-Based Stock Plan, filed
as Exhibit 10.P to Viad's 1993 Form 10-K, is hereby
incorporated by reference.+
10.Q Copy of Viad Corp Deferred Compensation Plan, filed as
Exhibit 10.Q to Viad's 1993 Form 10-K, is hereby
incorporated by reference.+
10.R Copy of form of Viad Corp 1983 Stock Option and
Incentive Plan Amended and Restated Restricted Stock
Agreements dated August 12, 1994, between Viad and
certain executive officers, filed as Exhibit 10.R to
Viad's 1994 Form 10-K, is hereby incorporated by
reference.+
10.S Copy of form of Viad Corp 1992 Stock Incentive Plan
Restricted Stock Agreements dated August 12, 1994,
between Viad and certain executive officers, filed as
Exhibit 10.S to Viad's 1994 Form 10-K, is hereby
incorporated by reference.+
10.T Copy of Viad Corp Director's Charitable Award Program
as amended through March 15, 1996, filed as Exhibit
10.T to Viad's 1995 Form 10-K, is hereby incorporated
by reference.+
10.U Copy of Employment Agreement between Viad Corp and
Robert H. Bohannon dated January 1, 1997.*+
10.V Copy of GES Exposition Services, Inc. Supplemental
Executive Retirement Plan effective August 1, 1995,
filed as Exhibit 10.V to Viad's 1995 Form 10-K, is
hereby incorporated by reference.+
11 Statement Re Computation of Per Share Earnings.*
13 Financial Information set forth in Annual Report to
Securityholders.*
21 List of Subsidiaries of Viad.*
23 Consent of Independent Auditors to the incorporation by
reference into specified registration statements on
Form S-3 or on Form S-8 of their report contained in
this report.*
24 Power of Attorney signed by directors of Viad.*
27 Financial Data Schedule.*
* Filed herewith.
+ Management contract or compensation plan or arrangement.
# Viad Corp was previously named The Dial Corp.
Note: The 1996 Annual Report to Securityholders will be
furnished to the Commission when, or before, it is sent
to securityholders.
(b) REPORTS ON FORM 8-K.
The Corporation filed no reports on Form 8-K during the last
quarterly period covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 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, in Phoenix, Arizona, on the 24th day of March, 1997.
VIAD CORP
By: /s/ Robert H. Bohannon
Chairman of the
Board, President and
Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated:
Principal Executive Officer
Date: March 24, 1997 By: /s/ Robert H. Bohannon
Director; Chairman
of the Board,
President and Chief
Executive Officer
Principal Financial Officer
Date: March 24, 1997 By: /s/ Ronald G. Nelson
Vice President-Finance and
Treasurer
Principal Accounting Officer
Date: March 24, 1997 By: /s/ Richard C. Stephan
Vice President-Controller
<PAGE>
Directors
Jess Hay
Judith K. Hofer
Jack F. Reichert
Linda Johnson Rice
Douglas L. Rock
John W. Teets
Timothy R. Wallace
Date: March 24, 1997 By: /s/ Richard C. Stephan
Attorney-in-Fact
EXHIBIT 3.A
RESTATED CERTIFICATE OF INCORPORATION
OF
THE NEW DIAL CORP.
1. The name of the corporation (which is hereinafter
referred to as the Corporation) is "The New Dial Corp."
2. The original Certificate of Incorporation was filed with
the Secretary of State of the State of Delaware on December 16,
1991, under the name The New Dial Corp.
3. This Restated Certificate of Incorporation has been duly
proposed by resolutions adopted and declared advisable by the
Board of Directors of the Corporation, duly adopted by written
consent of the sole stockholder of the Corporation in lieu of a
meeting and vote and duly executed and acknowledged by the
officers of the Corporation in accordance with the provisions of
Sections 103, 228, 242 and 245 of the General Corporation Law of
the State of Delaware and, upon filing with the Secretary of
State in accordance with Section 103 shall thenceforth supercede
the original Certificate of Incorporation and shall, as it may
thereafter be amended in accordance with its terms and applicable
law, be the Certificate of Incorporation of the Corporation.
4. The text of the Certificate of Incorporation of the
Corporation is hereby amended and restated to read in its
entirety as follows:
ARTICLE I
The name of the corporation (which is hereinafter referred
to as the "Corporation") is:
The New Dial Corp.
ARTICLE II
The address of the Corporation's registered office in the
State of Delaware is The Corporation Trust Center, 1209 Orange
Street in the City of Wilmington, County of New Castle. The name
of the Corporation's registered agent at such address is The
Corporation Trust Company.
ARTICLE III
The purpose of the Corporation shall be to engage in any
lawful act or activity for which corporations may be organized
and incorporated under the General Corporation Law of the State
of Delaware (the "GCL").
ARTICLE IV
(A) Authorized Stock. The total number of shares of stock
which the Corporation shall have authority to issue is
207,442,352, consisting of (i) Two Hundred Million (200,000,000)
shares of Common Stock, par value $1.50 per share (hereinafter
referred to as "Common Stock"), (ii) Four Hundred Forty-Two
Thousand Three Hundred Fifty-Two (442,352) shares of Series $4.75
Preferred Stock, without par value but with a stated value of One
Hundred Dollars ($100) per share (hereinafter referred to as
"$4.75 Preferred Stock"), (iii) Five Million (5,000,000) shares
of Preferred Stock, par value $.01 per share (hereinafter
referred to as "Preferred Stock") and (iv) Two Million
(2,000,000) shares of Junior Participating Preferred Stock, par
value $.01 per share (hereinafter referred to as "Junior
Preferred Stock").
(B) $4.75 Preferred Stock. The qualifications, limitations
or restrictions of the $4.75 Preferred Stock shall be as follows:
(i) The holders of the $4.75 Preferred Stock shall be
entitled to receive, when and as declared by the Board of
Directors, out of any assets of the Corporation legally
available for dividends, cumulative dividends in cash,
payable on January 15, April 15, July 15, and October 15 in
each year, beginning in the year 1992, at the annual rate of
$4.75 per share, and no more, with the first payment to
accrue from January 15, 1992 and be made on April 15, 1992.
(ii) In the event of any liquidation, dissolution or
winding up of the Corporation, the holders of the $4.75
Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to
shareholders an amount equal to $100 per share if such
liquidation, dissolution or winding up be involuntary or, if
such liquidation, dissolution or winding up be voluntary, an
amount equal to $101 per share, plus, in each case, a
further amount equal to all unpaid cumulative dividends on
the $4.75 Preferred Stock accrued to the date when such
payment shall be made available to the holders thereof,
before any distribution of assets shall be made to the
holders of the Common Stock or other shares ranking junior
to the $4.75 Preferred Stock with respect to liquidation
rights. After such amounts shall have been paid or
irrevocably set aside for payment in full to the holders of
the $4.75 Preferred Stock, they shall be entitled to no
further payment or distribution other than from any such
fund irrevocably set aside. If, upon such liquidation,
dissolution or winding up, the assets thus distributable to
the holders of the $4.75 Preferred Stock shall be
insufficient to permit the payment to such holders of the
preferential amounts aforesaid, then such assets shall be
distributed ratably among the holders of the $4.75 Preferred
Stock according to the number of shares held by each.
The liquidation, dissolution or winding up of the
Corporation, as such terms are used in the foregoing
paragraph, shall not be deemed to include any consolidation
or merger of the Corporation with or into any one or more
other corporations, or the sale of all or any of the assets
of the Corporation.
(iii) The $4.75 Preferred Stock may be redeemed at any
time, or from time to time, in whole or in part, at the
option of the Corporation, expressed by resolution of the
Board of Directors. The redemption price per share of the
$4.75 Preferred Stock shall be $101, plus an amount equal to
all unpaid cumulative dividends accrued on the shares to be
redeemed to the date fixed for redemption.
Notice of every such redemption shall be given at least
thirty days prior to the date fixed for such redemption to
the holders of record of the shares so to be redeemed, and
shall be sufficiently given if the Corporation shall cause a
copy thereof to be mailed to such holders of record at their
respective addresses as shown by the books of the
Corporation by first class mail, postage prepaid; provided,
however, that the failure to mail such notice to one or more
of such holders shall not affect the validity of such
redemption as to the other such holders.
In case of redemption of a part only of the $4.75
Preferred Stock at the time outstanding, the Corporation
shall select by lot the shares so to be redeemed. The Board
of Directors shall have full power and authority to
prescribe the manner in which the selection by lot shall be
conducted and, subject to the limitations and provisions
herein contained, the terms and conditions upon which the
$4.75 Preferred Stock shall be redeemed from time to time.
If such notice of redemption shall have been duly
given, and if on or before the redemption date specified
therein all funds necessary for such redemption shall be and
continue to be available for payment on and after the
redemption date upon surrender of the certificates for the
shares so called for redemption, then, notwithstanding that
any certificate for shares so called for redemption shall
not have been surrendered for cancellation, the shares so
called for redemption shall on and after such redemption
date no longer be deemed to be outstanding, and all rights
with respect to such shares shall forthwith on such
redemption date terminate, except only the right of the
holders of the certificates therefor, upon surrender
thereof, to receive the amount payable on redemption
thereof, without interest.
If such notice of redemption shall have been duly
given, or if the Corporation shall have granted to the bank
or trust company, hereinafter referred to, irrevocable
authorization promptly to give or complete such notice, and
if on or before the redemption date specified therein the
funds necessary for such redemption shall have been
deposited in trust for the pro rata benefit of the holders
of the shares so called for redemption with a bank or trust
company in good standing, designated in such notice, having
capital, surplus and undivided profits aggregating at least
$25,000,000 according to its then latest published statement
of condition, then, notwithstanding that such deposit shall
have been made less than thirty days after the notice of
redemption, and that any certificates for shares so called
for redemption shall not have been surrendered for
cancellation, from and after such deposit (or from and after
the redemption date if such notice of redemption shall fail
to state that the holders of the shares so called for
redemption may receive their redemption price at any time
after such deposit) all shares of $4.75 Preferred Stock with
respect to which such deposit shall have been made shall no
longer be deemed to be outstanding and all rights with
respect to such shares shall forthwith terminate, except
only the right of the holders of the certificates therefor,
upon surrender thereof, to receive the redemption price
thereof out of the funds so deposited, without interest.
Any funds so deposited, and unclaimed at the end of six
years from the redemption date, shall be released or repaid
to the Corporation, after which the certificate holders
entitled thereto shall look only to the Corporation for
payment thereof, without interest.
The shares of $4.75 Preferred Stock which shall have
been redeemed as aforesaid shall be retired, and shall be
returned to the status of authorized but unissued Series
$4.75 Preferred Stock.
(iv) So long as any shares of $4.75 Preferred Stock
shall be outstanding, the Corporation (which for purposes of
this subparagraph shall be deemed to include any predecessor
issuer of $4.75 Preferred Stock which shall have merged into
the Corporation) shall, on or before September 1 in each
year, beginning in the year 1983, pay to a bank or trust
company (hereinafter called the Sinking Fund Agent)
appointed from time to time by the Corporation and being a
bank or trust company meeting the requirements of paragraph
(iii) above, as and for a sinking fund for the $4.75
Preferred Stock a sum sufficient for the redemption in such
year, in accordance with the provisions of this paragraph
(iv) of 6,000 shares of $4.75 Preferred Stock (hereinafter
referred to as the sinking fund payment). As and for all or
any part of any sinking fund payment, the Corporation may,
on or before September 1 of each year, beginning in the year
1983, deliver to the Sinking Fund Agent certificates for
$4.75 Preferred Stock (which shall be in canceled form)
theretofore issued by the Corporation or any such
predecessor by merger to the Corporation and which were
repurchased by it or by such corporation merging into the
Corporation or redeemed otherwise than through the operation
of the sinking fund provided for in this paragraph (iv), and
receive credit upon such sinking fund payment, with respect
to a sum sufficient for the redemption, in accordance with
the provisions of this paragraph (iv), of the number of
shares of $4.75 Preferred Stock so delivered. Any moneys in
the sinking fund for the $4.75 Preferred Stock on September
1 of any year shall be applied by the Sinking Fund Agent to
the redemption on October 1 of such year of shares of $4.75
Preferred Stock at the sinking fund redemption price
consisting of $100 per share plus an amount equal to all
unpaid cumulative dividends accrued to the date fixed for
redemption on each share so to be redeemed. Such redemption
shall be effected by lot in such manner as the Sinking Fund
Agent shall determine, and the Sinking Fund Agent is
authorized to effect such redemption in the name of the
Corporation in the manner and with the effect provided by
paragraph (iii) above, except that the notice of redemption
shall state that the shares are being redeemed for the
sinking fund; provided, however, that if the amount of the
sinking fund payment in any year shall be less than $25,000,
such amount may, at the option of the Corporation, remain in
the sinking fund and be applied as part of the next
succeeding sinking fund payment. Shares of $4.75 Preferred
Stock which shall be delivered to the Sinking Fund Agent by
the Corporation as a credit upon a sinking fund payment or
which shall be called for redemption through the operation
of the sinking fund shall be retired, and, until all shares
of Series $4.75 Preferred Stock outstanding at the time of
such retirement have been redeemed or otherwise acquired by
the Corporation, shall not be delivered for credit upon any
sinking fund payment, and such shares shall be returned to
the status of authorized but unissued Series $4.75 Preferred
Stock.
If any sinking fund payment would be required at a time
when dividends upon the $4.75 Preferred Stock shall be in
arrears, the Corporation shall not be required to make a
sinking fund payment at that time, but shall nevertheless be
considered, for the purposes hereof, to be in default with
respect to its sinking fund obligations and shall be
required to make such defaulted sinking fund payment at the
earliest time thereafter when dividends upon the $4.75
Preferred Stock shall not be in arrears. Within forty days
after the Corporation shall have made any such defaulted
sinking fund payment, the Sinking Fund Agent shall apply the
same to redemption of $4.75 Preferred Stock in the manner
and at the price above in this paragraph (iv) provided.
(v) So long as any shares of $4.75 Preferred Stock
shall be outstanding, no dividends, other than dividends
payable in junior shares, shall be paid or declared, nor
shall any distribution be made, on any junior shares nor
shall any junior shares be acquired for a consideration by
the Corporation or by any subsidiary, unless:
(a) Full cumulative dividends on the $4.75
Preferred Stock for all the then past and for the then
current dividend periods shall have been paid, or
declared and set apart for payment, except as otherwise
provided in the last sentence of paragraph (i) above
and
(b) All sinking fund payments required by
paragraph (iv) above to have been made shall have been
made in full.
(vi) So long as any shares of $4.75 Preferred Stock
shall be outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least two-thirds of
the shares of $4.75 Preferred Stock at the time outstanding,
given in person or by proxy, either at a special meeting
called for the purpose or at any annual meeting of
shareholders if appropriate notice of such proposed action
is given, at which the $4.75 Preferred Stock shall vote
separately as a single class, or, alternatively, without the
written consent of the holders of all the shares of $4.75
Preferred Stock at the time outstanding
(a) Amend or repeal any provision of or add any
provision to this Certificate of Incorporation, or take
any other action, so as to alter materially any
existing provision of the $4.75 Preferred Stock; or
(b) Authorize, or increase, or issue, any class
or series of any class of the shares of the Corporation
ranking prior to the $4.75 Preferred Stock, or increase
the authorized amount of the $4.75 Preferred Stock;
provided, however, that no vote or consent of the
holders of the $4.75 Preferred Stock shall be required
to issue any shares, regardless of priority, for the
purpose of redeeming or otherwise retiring the $4.75
Preferred Stock if, prior to or contemporaneously with
the issuance thereof, provision has been made in
accordance with the provisions of paragraph (iii) above
for the redemption of all $4.75 Preferred Stock at the
time outstanding; or
(c) Sell, lease or convey all or substantially
all the property or business of the Corporation, or
voluntarily liquidate or dissolve the Corporation, or
consolidate or merge the Corporation with or into any
other corporation; provided, however, that no such vote
or consent of the holders of the $4.75 Preferred Stock
shall be required for a consolidation or merger of the
Corporation if each holder of shares of $4.75 Preferred
Stock immediately prior to such consolidation or merger
shall, upon the occurrence thereof, possess the same or
equivalent number of shares of the resulting
corporation (which may be the Corporation or another
corporation) having substantially the same terms and
provisions as the shares of $4.75 Preferred Stock and
the resulting corporation will have, immediately after
such consolidation or merger, no other shares either
authorized or outstanding ranking prior to or on a
parity with such shares.
(vii) So long as any shares of $4.75 Preferred Stock
shall be outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least a majority of
the shares of $4.75 Preferred Stock at the time outstanding,
given in person or by proxy, either at a special meeting
called for the purpose or at any annual meeting of
shareholders if appropriate notice of such proposed action
is given, at which the $4.75 Preferred Stock shall vote
separately as a single class, or, alternatively, without the
written consent of the holders of all the shares of $4.75
Preferred Stock at the time outstanding, authorize, or
increase, or issue, any class or series of any class of
shares of the Corporation ranking on a parity with the $4.75
Preferred Stock; provided, however, that no vote or consent
of the holders of the $4.75 Preferred Stock shall be
required to issue any shares, regardless of parity, for the
purpose of redeeming or otherwise retiring the $4.75
Preferred Stock, if prior to or contemporaneously with the
issuance thereof, provision has been made in accordance with
the provisions of paragraph (iii) above for the redemption
of all the $4.75 Preferred Stock at the time outstanding.
(viii) For the purposes hereof the term "ranking prior
to" the $4.75 Preferred Stock shall have reference to a
class or series of a class of shares which is preferential
to the $4.75 Preferred Stock with respect of dividends or
liquidation rights; the term "ranking on a parity with" the
$4.75 Preferred Stock shall have reference to a class or
series of a class of shares which is equal to the $4.75
Preferred Stock with respect to dividends or liquidation
rights and the term "junior shares" shall mean the Common
Stock and any other class or series of a class of shares of
the Corporation not ranking prior to or on a parity with the
$4.75 Preferred Stock.
(ix) The holders of $4.75 Preferred Stock shall have
no right to vote except as otherwise herein or by statute
specifically provided.
If and when the Corporation shall be in default in the
payment in whole or in part, of each of six quarterly
dividends (whether or not consecutive) accrued on the $4.75
Preferred Stock, whether or not earned or declared, the
holders of the outstanding $4.75 Preferred Stock, voting
separately as a single class, shall become entitled to elect
two directors of the Corporation to serve in addition to the
directors elected pursuant to Article VIII of this
Certificate of Incorporation. Such right to elect
additional directors may be exercised at any annual meeting
of shareholders, or, within the limitations hereinafter
provided, at a special meeting of shareholders held for such
purpose. If such default shall occur more than ninety days
preceding the rate of the next annual meeting of
shareholders as fixed by the Bylaws of the Corporation, then
a special meeting of the holders of the $4.75 Preferred
Stock shall be called by the Secretary of the Corporation
upon the written request of the holders of not less than 10%
of the $4.75 Preferred Stock then outstanding, such meeting
to be held within sixty days after the delivery to the
Secretary of such request. Such additional directors,
whether elected at an annual or a special meeting, shall
serve until the next annual meeting and until their
successors shall be duly elected and qualified, unless their
term shall sooner terminate pursuant to the provisions of
this paragraph (ix). At any meeting for the purpose of
electing such additional directors, the holders of 35% of
the $4.75 Preferred Stock then outstanding shall constitute
a quorum, and any such meeting shall be valid
notwithstanding that a quorum of the outstanding shares of
any other class or classes shall not be present or
represented thereat. At the time of any such meeting at
which a quorum shall be present, the number of directors
constituting the whole Board of Directors shall be deemed to
be increased by two. If a vacancy shall occur in the Board
of Directors by reason of the death, resignation or
inability to act of any such additional director, such
vacancy shall be filled only by the vote of the holders of
the $4.75 Preferred Stock, voting separately as a single
class, at a special meeting of the holders of the $4.75
Preferred Stock requested, called and held in the same
manner as the special meeting hereinabove referred to. If
and when all dividends in default on the $4.75 Preferred
Stock shall be paid or irrevocably set aside for payment,
the right of the holders of the $4.75 Preferred Stock as a
class to elect directors shall then cease, and if any
directors were elected by the holders of the $4.75 Preferred
Stock as a class, the term of such directors shall
terminate, and the number of directors constituting the
whole Board of Directors shall be reduced by the number of
such additional directors. The above provisions for the
vesting of such voting right in the holders of the $4.75
Preferred Stock as a class shall apply, however, in case of
any subsequent default under this paragraph (ix).
Except as may be required by law, the holders of $4.75
Preferred Stock shall not be entitled to receive notice of
any meeting of shareholders at which they are not entitled
to vote or consent.
Except as in this Certificate of Incorporation or in a
Preferred Stock Designation (as herein defined) or by
statute specifically provided, the holders of the Common
Stock shall have the exclusive right to vote for the
election of directors and for all other purposes. The total
number of directors may be increased without any vote or
consent of the holders of $4.75 Preferred Stock.
(x) No holder of $4.75 Preferred Stock, as such, shall
have any preemptive right to subscribe to share obligations,
warrants, rights to subscribe to shares or other securities
of the Corporation of any kind or class, whether now or
hereafter authorized.
(xi) The $4.75 Preferred Stock shall rank prior to all
other classes and/or series of stock of the Corporation,
both as to payment of dividends and as to distribution of
assets upon liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary.
(C) Preferred Stock. The Preferred Stock may be issued
from time to time in one or more series. The Board of Directors
is hereby authorized to provide for the issuance of shares of
Preferred Stock in series and, by filing a certificate pursuant
to the applicable law of the State of Delaware (hereinafter,
along with any similar designation relating to any other class of
stock which may hereafter be authorized, referred to as a
"Preferred Stock Designation"), to establish from time to time
the number of shares to be included in each such series, and to
fix the designation, powers, preferences and rights of the shares
of each such series and the qualifications, limitations and
restrictions thereof. The authority of the Board of Directors
with respect to each series shall include, but not be limited to,
determination of the following:
(i) The designation of the series, which may be by
distinguishing number, letter or title.
(ii) The number of shares of the series, which number
the Board of Directors may thereafter (except where
otherwise provided in the Preferred Stock Designation)
increase or decrease (but not below the number of shares
thereof then outstanding).
(iii) Whether dividends, if any, shall be cumulative or
noncumulative and the dividend rate of the series.
(iv) Dates at which dividends, if any, shall be
payable.
(v) The redemption rights and price or prices, if any,
for shares of the series.
(vi) The terms and amount of any sinking fund provided
for the purchase or redemption of shares of the series.
(vii) The amounts payable on and the preferences, if
any, of shares of the series in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation.
(viii) Whether the shares of the series shall be
convertible into shares of any other class or series, or any
other security, of the Corporation or any other corporation,
and, if so, the specification of such other class or series
of such other security, the conversion price or prices or
rate or rates, any adjustments thereof, the date or dates at
which such shares shall be convertible and all other terms
and conditions upon which such conversion may be made.
(ix) Restrictions on the issuance of shares of the same
series or of any other class or series.
(x) The voting rights, if any, of the holders of
shares of the series.
All shares of any series of Preferred Stock shall be
subordinate to the $4.75 Preferred Stock, with respect to the
payment of dividends as well as the distribution of assets upon
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary.
(D) Junior Preferred Stock. The qualifications,
limitations or restrictions of the Junior Preferred Stock shall
be as follows:
Section 1. Amount. The number of shares constituting the
Junior Preferred Stock shall be as set forth in paragraph (A) of
this Article IV.
Section 2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares
of $4.75 Preferred Stock or any shares of any series of
Preferred Stock (or any similar stock) ranking prior and
superior to the Junior Preferred Stock with respect to
dividends, the holders of shares of Junior Preferred Stock,
in preference to the holders of Common Stock and of any
other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September
and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Junior
Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (i) $1 or (ii) subject
to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends,
and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or
fraction of a share of Junior Preferred Stock. In the event
the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount
to which holders of shares of Junior Preferred Stock were
entitled immediately prior to such event under clause (ii)
of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately
prior to such event.
(b) The Corporation shall declare a dividend or
distribution on the Junior Preferred Stock as provided in
paragraph (a) of this Section immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1 per share
on the Junior Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative
on outstanding shares of Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Junior Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Junior
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Junior
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment
hereinafter set forth, each share of Junior Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number
of votes per share to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except as provided in this Certificate of
Incorporation, in any Preferred Stock Designation or in any
certificate of designations creating any similar stock, or
by law, the holders of shares of Junior Preferred Stock and
the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall
vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise
provided by law, holders of Junior Preferred Stock shall
have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking
any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Junior Preferred Stock
outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Junior Preferred
Stock, except dividends paid ratably on the Junior
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred
Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding
up) to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred Stock or
any shares of stock ranking on a parity with the Junior
Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates
and other relative rights and preferences of the
respective series and classes, shall determine in good
faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (a) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. Reacquired Shares. Any shares of Junior
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired promptly
after the acquisition thereof. All such shares shall upon their
retirement become authorized but unissued shares of Junior
Preferred Stock and may be reissued as part of a new series of
Junior Preferred Stock subject to the conditions and restrictions
on issuance set forth herein or in any Certificate of
Designations creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock unless,
prior thereto, the holders of shares of Junior Preferred Stock
shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, provided that the
holders of shares of Junior Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares of stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Junior Preferred Stock,
except distributions made ratably on the Junior Preferred Stock
and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the aggregate amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
each share of Junior Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject
to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into
which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of
shares of Junior Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of Junior Preferred
Stock shall not be redeemable.
Section 9. Rank. The Junior Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, junior to the
$4.75 Preferred Stock and to all series of the Corporation's
Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of
the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Junior Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Junior Preferred Stock,
voting together as a single class.
(E) Common Stock. The Common Stock shall be subject to the
express terms of the $4.75 Preferred Stock, the Junior Preferred
Stock and the Preferred Stock and any series thereof. Each share
of Common Stock shall be equal to each other share of Common
Stock. The holders of shares of Common Stock shall be entitled to
one vote for each such share upon all questions presented to the
stockholders.
(F) Vote. Except as may be provided in this Certificate of
Incorporation or in a Preferred Stock Designation, or as may be
required by law, the Common Stock shall have the exclusive right
to vote for the election of directors and for all other purposes,
and holders of $4.75 Preferred Stock, Junior Preferred Stock and
Preferred Stock shall not be entitled to receive notice of any
meeting of stockholders at which they are not entitled to vote.
(G) Record Holders. The Corporation shall be entitled to
treat the person in whose name any share of its stock is
registered as the owner thereof for all purposes and shall not be
bound to recognize any equitable or other claim to, or interest
in, such share on the part of any other person, whether or not
the Corporation shall have notice thereof, except as expressly
provided by applicable law.
ARTICLE V
The Board of Directors is hereby authorized to create and
issue, whether or not in connection with the issuance and sale of
any of its stock or other securities or property, rights
entitling the holders thereof to purchase from the Corporation
shares of stock or other securities of the Corporation or any
other corporation. The times at which and the terms upon which
such rights are to be issued will be determined by the Board of
Directors and set forth in the contracts or instruments that
evidence such rights. The authority of the Board of Directors
with respect to such rights shall include, but not be limited to,
determination of the following:
(A) The initial purchase price per share or other unit of
the stock or other securities or property to be purchased upon
exercise of such rights.
(B) Provisions relating to the times at which and the
circumstances under which such rights may be exercised or sold or
otherwise transferred, either together with or separately from,
any other stock or other securities of the Corporation.
(C) Provisions which adjust the number or exercise price of
such rights or amount or nature of the stock or other securities
or property receivable upon exercise of such rights in the event
of a combination, split or recapitalization of any stock of the
Corporation, a change in ownership of the Corporation's stock or
other securities or a reorganization, merger, consolidation, sale
of assets or other occurrence relating to the Corporation or any
stock of the Corporation, and provisions restricting the ability
of the Corporation to enter into any such transaction absent an
assumption by the other party or parties thereto of the
obligations of the Corporation under such rights.
(D) Provisions which deny the holder of a specified
percentage of the outstanding stock or other securities of the
Corporation the right to exercise such rights and/or cause the
rights held by such holder to become void.
(E) Provisions which permit the Corporation to redeem or
exchange such rights.
(F) The appointment of a rights agent with respect to such
rights.
ARTICLE VI
(A) In furtherance of, and not in limitation of, the powers
conferred by law, the Board of Directors is expressly authorized
and empowered:
(i) to adopt, amend or repeal the Bylaws of the
Corporation; provided, however, that the Bylaws adopted by
the Board of Directors under the powers hereby conferred may
be amended or repealed by the Board of Directors or by the
stockholders having voting power with respect thereto,
provided further that in the case of amendments by
stockholders, the affirmative vote of the holders of at
least 80 percent of the voting power of the then outstanding
Voting Stock, voting together as a single class, shall be
required to alter, amend or repeal any provision of the
Bylaws; and
(ii) from time to time to determine whether and to what
extent, and at what times and places, and under what
conditions and regulations, the accounts and books of the
Corporation, or any of them, shall be open to inspection of
stockholders; and, except as so determined, or as expressly
provided in this Certificate of Incorporation or in any
Preferred Stock Designation, no stockholder shall have any
right to inspect any account, book or document of the
Corporation other than such rights as may be conferred by
applicable law.
(B) The Corporation may in its Bylaws confer powers upon
the Board of Directors in addition to the foregoing and in
addition to the powers and authorities expressly conferred upon
the Board of Directors by applicable law. Notwithstanding
anything contained in this Certificate of Incorporation to the
contrary, the affirmative vote of the holders of at least 80
percent of the voting power of the then outstanding Voting Stock,
voting together as a single class, shall be required to amend,
repeal or adopt any provision inconsistent with subparagraph (i)
of paragraph (A) of this Article VI. For the purposes of this
Certificate of Incorporation, "Voting Stock" shall mean the
outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors.
ARTICLE VII
Subject to the rights of the holders of $4.75 Preferred
Stock, any series of Preferred Stock or any other series or class
of stock as set forth in the Certificate of Incorporation, to
elect additional directors under specific circumstances, any
action required or permitted to be taken by the stockholders of
the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be
effected by any consent in writing in lieu of a meeting of such
stockholders. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the affirmative
vote of at least 80 percent of the voting power of the then
outstanding Voting Stock, voting together as a single class,
shall be required to amend, repeal or adopt any provision
inconsistent with this Article VII.
ARTICLE VIII
(A) Subject to the rights of the holders of $4.75 Preferred
Stock, any series of Preferred Stock or any other series or class
of stock as set forth in the Certificate of Incorporation, to
elect additional directors under specific circumstances, the
number of directors of the Corporation shall be fixed by the
Bylaws of the Corporation and may be increased or decreased from
time to time in such a manner as may be prescribed by the Bylaws.
(B) Unless and except to the extent that the Bylaws of the
Corporation shall so require, the election of directors of the
Corporation need not be by written ballot.
(C) The directors, other than those who may be elected by
the holders of the $4.75 Preferred Stock, any series of Preferred
Stock or any other series or class of stock as set forth in the
Certificate of Incorporation, shall be divided into three
classes, as nearly equal in number as possible. One class of
directors shall be initially elected for a term expiring at the
annual meeting of stockholders to be held in 1992, another class
shall be initially elected for a term expiring at the annual
meeting of stockholders to be held in 1993, and another class
shall be initially elected for a term expiring at the annual
meeting of stockholders to be held in 1994. Members of each
class shall hold office until their successors are elected and
qualified. At each succeeding annual meeting of the stockholders
of the Corporation, the successors of the class of directors
whose term expires at that meeting shall be elected by a
plurality vote of all votes cast at such meeting to hold office
for a term expiring at the annual meeting of stockholders held in
the third year following the year of their election.
(D) Subject to the rights of the holders of $4.75 Preferred
Stock, any series of Preferred Stock or any other series or class
of stock as set forth in the Certificate of Incorporation, to
elect additional directors under specific circumstances, any
director may be removed from office at any time, but only for
cause and only by the affirmative vote of the holders of at least
80 percent of the voting power of the then outstanding Voting
Stock, voting together as a single class.
(E) Notwithstanding anything contained in this Certificate
of Incorporation to the contrary, the affirmative vote of the
holders of at least 80 percent of the voting power of the then
outstanding Voting Stock, voting together as a single class,
shall be required to amend, repeal or adopt any provision
inconsistent with this Article VIII.
ARTICLE IX
Section 1. Vote Required for Certain Business Combinations.
(A) Higher Vote for Certain Business Combinations. In
addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise expressly
provided in Section 2 of this Article IX:
(i) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with (a) any
Interested Stockholder (as hereinafter defined), or (b) any
other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an
Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of transactions) to or with any Interested
Stockholder, including all Affiliates of the Interested
Stockholder, of any assets of the Corporation or any
Subsidiary having an aggregate Fair Market Value (as
hereinafter defined) of $10,000,000 or more; or
(iii) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder, including all
Affiliates of the Interested Stockholder, in exchange for
cash, securities or other property (or a combination
thereof) having an aggregate Fair Market Value of
$10,000,000 or more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or
on behalf of an Interested Stockholder or any Affiliates of
an Interested Stockholder; or
(v) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other
transaction (whether or not an Interested Stockholder is a
party thereto) which has the effect, directly or indirectly,
of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of
the Corporation or any Subsidiary which are directly or
indirectly owned by any Interested Stockholder or one or
more Affiliates of the Interested Stockholder;
shall require the affirmative vote of the holders of at least
66 2/3% of the voting power of the then outstanding Voting Stock,
voting together as a single class, including the affirmative vote
of the holders of at least 66 2/3% of the voting power of the
then outstanding Voting Stock not owned directly or indirectly by
any Interested Stockholder or any Affiliate of any Interested
Stockholder. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a
lesser percentage may be permitted, by law or in any agreement
with any national securities exchange or otherwise.
(B) Definition of "Business Combination." The term
"Business Combination" as used in this Article IX shall mean any
transaction described in any one or more of clauses (i) through
(v) of paragraph (A) of this Section 1.
Section 2. When Higher Vote is Not Required. The
provisions of Section I of this Article IX shall not be
applicable to any particular Business Combination, and such
Business Combination shall require only such affirmative vote as
is required by law or any other provision of this Certificate of
Incorporation, if the conditions specified in either of the
following paragraphs (A) or (B) are met:
(A) Approval by Continuing Directors. The Business
Combination shall have been approved by a majority of the
Continuing Directors (as hereinafter defined).
(B) Price and Procedure Requirements. All of the following
conditions shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date of the
consummation of the Business Combination of consideration
other than cash, to be received per share by holders of
Common Stock in such Business Combination, shall be at least
equal to the highest of the following:
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers' fees) paid by the Interested
Stockholder for any shares of Common Stock acquired by
it (1) within the two-year period immediately prior to
the first public announcement of the proposal of such
Business Combination (the "Announcement Date"), or (2)
in the transaction in which it became an Interested
Stockholder, whichever is higher;
(b) the Fair Market Value per share of Common
Stock on the Announcement Date or on the date on which
the Interested Stockholder became an Interested
Stockholder (the "Determination Date"), whichever is
higher; and
(c) (if applicable) the price per share equal to
the Fair Market Value per share of Common Stock
determined pursuant to paragraph (B)(i)(b) above,
multiplied by the ratio of (1) the highest per share
price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of Common Stock
acquired by it within the two-year period immediately
prior to the Announcement Date to (2) the Fair Market
Value per share of Common Stock on the first day in
such two-year period upon which the Interested
Stockholder acquired any shares of Common Stock.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the
Business Combination of consideration other than cash to be
received per share by holders of shares of any other class,
other than Common Stock or Excluded Preferred Stock, of
outstanding Voting Stock shall be at least equal to the
highest of the following (it being intended that the
requirements of this paragraph (B)(ii) shall be required to
be met with respect to every such class of outstanding
Voting Stock whether or not the Interested Stockholder has
previously acquired any shares of a particular class of
Voting Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers' fees) paid by the Interested
Stockholder for any shares of such class of Voting
Stock acquired by it (1) within the two-year period
immediately prior to the Announcement Date, or (2) in
the transaction in which it became an Interested
Stockholder, whichever is higher;
(b) (if applicable) the highest preferential
amount per share to which the holders of shares of such
class of Voting Stock are entitled in the event of any
voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
(c) the Fair Market Value per share of such class
of Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher; and
(d) (if applicable) the price per share equal to
the Fair Market Value per share of such class of Voting
Stock determined pursuant to paragraph (B)(ii)(c)
above, multiplied by the ratio of (1) the highest per
share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by
the Interested Stockholder for any shares of such class
of Voting Stock acquired by it within the two-year
period immediately prior to the Announcement Date to
(2) the Fair Market Value per share of such class of
Voting Stock on the first day in such two-year period
upon which the Interested Stockholder acquired any
shares of such class of Voting Stock.
(iii) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including
Common Stock and other than Excluded Preferred Stock) shall
be in cash or in the same form as the Interested Stockholder
has previously paid for shares of such class of Voting
Stock. If the Interested Stockholder has paid for shares of
any class of Voting Stock with varying forms of
consideration, the form of consideration for such class of
Voting Stock shall be either cash or the form used to
acquire the largest number of shares of such class of Voting
Stock previously acquired by it.
(iv) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination: (a) there shall have been no failure
to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on any
outstanding preferred stock, except as approved by a
majority of the Continuing Directors; (b) there shall have
been no reduction in the annual rate of dividends paid on
the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a
majority of the Continuing Directors; (c) there shall have
been an increase in the annual rate of dividends as
necessary fully to reflect any recapitalization (including
any reverse stock split), reorganization or any similar
reorganization which has the effect of reducing the number
of outstanding shares of the Common Stock, unless the
failure so to increase such annual rate is approved by a
majority of the Continuing Directors; and (d) such
Interested Stockholder shall not have become the Beneficial
Owner of any additional Voting Stock except as part of the
transaction which results in such Interested Stockholder
becoming an Interested Stockholder.
(v) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall
not have received the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial assistance
or any tax credits or other tax advantages provided by the
Corporation, whether in anticipation of or in connection
with such Business Combination or otherwise.
(vi) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall
be mailed to shareholders of the Corporation at least thirty
(30) days prior to the consummation of such Business
Combination (whether or not such proxy or information
statement is required to be marked pursuant to such Act or
subsequent provisions).
Section 3. Certain Definitions. For purposes of this
Article IX:
(A) "Person" shall mean any individual, firm, corporation
or other entity.
(B) "Interested Stockholder" shall mean any Person (other
than the Corporation or any Subsidiary) who or which:
(i) itself, or along with its Affiliates, is the
Beneficial Owner, directly or indirectly, of more than 10%
of the then outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in
question was itself, or along with its Affiliates, the
Beneficial Owner, directly or indirectly, of 10% or more of
the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to
any Voting Stock which was at any time within the two-year
period immediately prior to the date in question
beneficially owned by any Interested Stockholder, if such
assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a
public offering within the meaning of the Securities Act of
1933.
(C) "Beneficial Owner" shall have the meaning ascribed to
such term in Rule 13d-3 of the General Rules and Regulations of
the Securities Exchange Act of 1934, as in effect on February 1,
1992. In addition, a Person shall be the "Beneficial Owner" of
any Voting Stock which such Person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding (but neither such Person
nor any such Affiliate or Associate shall be deemed to be the
Beneficial Owner of any shares of Voting Stock solely by reason
of a revocable proxy granted for a particular meeting of
stockholders, pursuant to a public solicitation of proxies for
such meeting, and with respect to which shares neither such
Person nor any such Affiliate or Associate is otherwise deemed
the Beneficial Owner).
(D) For the purpose of determining whether a Person is an
Interested Stockholder pursuant to paragraph (B) of this Section
3, the number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned through application of
paragraph (C) of this Section 3 but shall not include any other
shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options or otherwise.
(E) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as in effect on February 1, 1992.
(F) "Subsidiary" shall mean any corporation of which a
majority of any share of equity security is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Interested Stockholder set forth in
paragraph (B) of this Section 3, the term "Subsidiary" shall mean
only a corporation of which a majority of each share of equity
security is owned, directly or indirectly, by the Corporation.
(G) "Continuing Director" shall mean any member of the
Board of Directors of the Corporation (the "Board") who is
unaffiliated with the Interested Stockholder and was a member of
the Board prior to the time that the Interested Stockholder
became an Interested Stockholder, and any director who is
thereafter chosen to fill any vacancy on the Board or who is
elected and who, in either event, is unaffiliated with the
Interested Stockholder and in connection with his or her initial
assumption of office is recommended for appointment or election
by a majority of Continuing Directors then on the Board.
(H) "Fair Market Value" shall mean (i) in the case of
stock, the highest closing sale price during the 30-day period
immediately preceding the date in question of a share of such
stock on the Composite Tape for New York Stock Exchange listed
stocks, or, if such stock is not quoted on the Composite Tape, on
the New York Stock Exchange, or, if such stock is not listed on
such exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which
such is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a
share of such stock during the 30-day period preceding the date
in question on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use in
its stead, or if no such quotations are available, the fair
market value on the date in question of a share of such stock as
determined by the Board in accordance with Section 4 of this
Article IX; and (ii) in the case of property other than cash or
stock, the fair market value of such property on the date in
question as determined by the Board in accordance with Section 4
of this Article IX.
(I) In the event of any Business Combination in which the
Corporation survives, the phrase "other consideration to be
received" as used in paragraphs (B)(i) and (ii) of Section 2 of
this Article IX shall include the shares of Common Stock and/or
the shares of any other class of outstanding Voting Stock
retained by the holders of such shares.
(J) "Excluded Preferred Stock" means any series of
Preferred Stock with respect to which a majority of the
Continuing Directors have approved a Preferred Stock Designation
creating such series that expressly provides that the provisions
of this Article IX shall not apply.
Section 4. The Continuing Directors of the Corporation
shall have the power and duty to determine for the purposes of
this Article IX, on the basis of information known to them after
reasonable inquiry, all facts necessary to determine compliance
with this Article IX, including, without limitation (i) whether a
Person is an Interested Stockholder, (ii) the number of shares of
Voting Stock beneficially owned by any Person, (iii) whether a
Person is an Affiliate or Associate of another, (iv) whether the
applicable conditions set forth in paragraph (B) of Section 2 of
this Article IX have been met with respect to any Business
Combination, (v) the Fair Market Value of stock or other property
in accordance with paragraph (H) of Section 3 of this Article IX,
and (vi) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair
Market Value of $10,000,000 or more.
Section 5. No Effect on Fiduciary Obligations of Interested
Stockholders. Nothing contained in this Article IX shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Section 6. Amendment, Repeal, etc. Notwithstanding any
other provisions of this Certificate of Incorporation or the
Bylaws of the Corporation (and notwithstanding the fact that a
lesser percentage may be permitted by law, this Certificate of
Incorporation or the Bylaws of the Corporation), but in addition
to any affirmative vote of the holders of any particular class of
the Voting Stock required by law or this Certificate of
Incorporation, the affirmative vote of the holders of 66 2/3% of
the voting power of the shares of the then outstanding Voting
Stock voting together as a single class, including the
affirmative vote of the holders of 66 2/3% of the voting power of
the then outstanding Voting Stock not owned directly or
indirectly by any Interested Stockholder or any Affiliate of any
Interested Stockholder, shall be required to amend or repeal, or
adopt any provisions inconsistent with, this Article IX of this
Certificate of Incorporation.
ARTICLE X
Each person who is or was or had agreed to become a director
or officer of the Corporation, or each such person who is or was
serving or who had agreed to serve at the request of the Board of
Directors or an officer of the Corporation as an employee or
agent of the Corporation or as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise (including the heirs, executor,
administrators or estate of such person), shall be indemnified by
the Corporation, in accordance with the Bylaws of the
Corporation, to the fullest extent permitted from time to time by
the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said
law permitted the Corporation to provide prior to such amendment)
or any other applicable laws as presently or hereafter in effect.
Without limiting the generality or the effect of the foregoing,
the Corporation may enter into one or more agreements with any
person which provide for indemnification greater or different
than that provided in this Article X. Any amendment or repeal of
this Article X shall not adversely affect any right or protection
existing hereunder in respect of any act or omission occurring
prior to such amendment or repeal.
ARTICLE XI
A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit. Any amendment or repeal of this Article XI shall not
adversely affect any right or protection of a director of the
Corporation existing hereunder in respect of any act or omission
occurring prior to such amendment or repeal.
ARTICLE XII
Except as may be expressly provided in this Certificate of
Incorporation, the Corporation reserves the right at any time and
from time to time to amend, alter, change or repeal any provision
contained in this Certificate of Incorporation or a Preferred
Stock Designation, and any other provisions authorized by the
laws of the State of Delaware at the time in force may be added
or inserted, in the manner now or hereafter prescribed herein or
by applicable law, and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any
other persons whomsoever by and pursuant to this Certificate of
Incorporation in its present form or as hereafter amended are
granted subject to the right reserved in this Article XII;
provided, however, that any amendment or repeal of Article X or
Article XI of this Certificate of Incorporation shall not
adversely affect any right or protection existing hereunder in
respect of any act or omission occurring prior to such amendment
or repeal; and provided further that no Preferred Stock
Designation shall be amended after the issuance of any shares of
the series of Preferred Stock created thereby, except in
accordance with the terms of such Preferred Stock Designation and
the requirements of applicable law; and provided further that
paragraph (D) of Article IV hereof shall not be amended after the
issuance of any shares of Junior Preferred Stock, except in
accordance with the terms of such paragraph (D) and the
requirements of applicable law.
IN WITNESS WHEREOF, said The New Dial Corp. has caused this
Restated Certificate of Incorporation to be signed by its
President and attested by its Secretary and has caused its
corporate seal to be affixed, this 24th day of February, 1992.
THE NEW DIAL CORP.
By: /s/ John W. Teets
President
Attest: /s/ F.G. Emerson
Secretary
<PAGE>
CERTIFICATE OF MERGER
OF
THE DIAL CORP
INTO
THE NEW DIAL CORP.
(Under Section 252 of The General
Corporation Law of the State of Delaware)
The New Dial Corp., a corporation organized and existing
under and by virtue of the laws of the State of Delaware, DOES
HEREBY CERTIFY THAT:
1. The name and state of incorporation of each of the
constituent corporations are:
(a) The Dial Corp, an Arizona corporation; and
(b) The New Dial Corp., a Delaware corporation.
2. An agreement of merger has been approved, adopted,
certified, executed and acknowledged by The Dial Corp and by The
New Dial Corp. in accordance with the provisions of subsection
(c) of Section 252 of the General Corporation Law of the State of
Delaware.
3. The name of the surviving corporation of the merger is
The New Dial Corp.
4. The certificate of incorporation of The New Dial Corp.
shall be the certificate of incorporation of the surviving
corporation, except that at the effective time of the merger
Article I of the certificate of incorporation of The New Dial
Corp. shall be amended to read in its entirety as follows:
I. The name of the Corporation is The Dial Corp.
5. The surviving corporation is a corporation of the State
of Delaware.
6. The executed agreement of merger is on file at the
principal place of business of The New Dial Corp. at 1850 North
Central Avenue, Phoenix, Arizona 85077.
7. A copy of the agreement of merger will be furnished by
The New Dial Corp., on request and without cost, to any
stockholder of The Dial Corp or The New Dial Corp.
8. The authorized capital stock of The Dial Corp is
100,000,000 shares of common stock, par value $1.50 per share,
5,000,000 shares of preference stock, without par value, of which
442, 352 shares have been designated Series $4.75 Preferred Stock
and 600,000 shares have been designated Junior Participating
Preference Stock, and 5,000,000 shares of second preference
stock, without par value.
IN WITNESS WHEREOF, The New Dial Corp. has caused this
certificate to be executed by Richard C. Stephan, its Vice
President, and attested by F.G. Emerson, its Secretary, on this
3rd day of March, 1992.
THE NEW DIAL CORP.
By: /s/ Richard C. Stephan
Vice President
ATTEST:
By: /s/ F.G. Emerson
Secretary
<PAGE>
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
LEN INC.
INTO
THE DIAL CORP
The Dial Corp, a corporation organized and existing under
the laws of the State of Delaware, pursuant to Sections 103 and
253 of the General Corporation Law of the State of Delaware, does
hereby certify:
FIRST: That The Dial Corp (hereinafter the "Corporation")
was incorporated on December 16, 1991 under the name "The New
Dial Corp." pursuant to the General Corporation Law of the State
of Delaware, the provisions of which permit the merger of a
subsidiary corporation organized and existing under the laws of
said State into a parent corporation organized and existing under
the laws of said State.
SECOND: That this Corporation owns one hundred percent
(100%) of the outstanding shares of stock of LEN Inc.
(hereinafter "LEN"), a corporation incorporated on the 7th day of
May, 1996 pursuant to the General Corporation Law of the State of
Delaware.
THIRD: Effective as of August 15, 1996, the Corporation has
distributed all of the outstanding capital stock of The Dial
Corporation, a wholly owned subsidiary of the Corporation, to the
stockholders of the Corporation.
FOURTH: That this Corporation, by the following resolution
of its Board of Directors, duly adopted by the Board at a meeting
on the 30th day of May, 1996, determined to and does hereby merge
LEN into itself:
RESOLVED, that conditioned upon effectiveness of
the distribution of all of the outstanding capital
stock of The Dial Corporation, a wholly owned
subsidiary of the Corporation, to the stockholders of
the Corporation, the Board of Directors approves the
merger of LEN Inc., a wholly owned subsidiary of this
Corporation, with and into this Corporation, in which
this Corporation will be the surviving corporation and
will assume all of the rights and obligations of LEN
Inc. in accordance with Section 253 of the Delaware
General Corporation law (the "DGCL") and pursuant to
which the name of this Corporation shall be changed to
Viad Corp, and approves and adopts such merger; and
that the officers of the Corporation, and each of them,
are authorized to executed and file a certificate of
ownership and merger in accordance with Section 253 of
the DGCL.
IN WITNESS WHEREOF, said The Dial Corp has caused this
Certificate to be signed by Peter J. Novak, its Vice President -
General Counsel this 15th day of August, 1996.
THE DIAL CORP
By: /s/ Peter J. Novak
Vice President-
General Counsel
Exhibit 3.B
BYLAWS
OF
VIAD CORP
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
AS AMENDED FEBRUARY 20, 1997
ARTICLE I
OFFICES AND RECORDS
SECTION 1.1. DELAWARE OFFICE. The principal office of the
Corporation in the State of Delaware shall be located in the City
of Wilmington, County of New Castle, and the name and address of
its registered agent is The Corporation Trust Company, 1209
Orange Street, Wilmington, Delaware.
SECTION 1.2. OTHER OFFICES. The Corporation may have such
other offices, either within or without the State of Delaware, as
the Board of Directors may designate or as the business of the
Corporation may from time to time require.
SECTION 1.3. BOOKS AND RECORDS. The books and records of
the Corporation may be kept at the Corporation's headquarters in
Phoenix, Arizona or at such other locations as may from time to
time be designated by the Board of Directors.
ARTICLE II
STOCKHOLDERS
SECTION 2.1. ANNUAL MEETING. The annual meeting of the
stockholders of the Corporation shall be held on the second
Tuesday in May of each year, if not a legal holiday, and if a
legal holiday then on the next succeeding business day, at
9:00 a.m., local time, at the principal executive offices of the
Corporation, or at such other date, place and/or time as may be
fixed by resolution of the Board of Directors.
SECTION 2.2. SPECIAL MEETING. Subject to the rights of
the holders of the Series $4.75 Preferred Stock, without par
value but with a stated value of $100 per share (the "$4.75
Preferred Stock"), any series of preferred stock, par value $.01
per share (the "Preferred Stock"), or any other series or class
of stock as set forth in the Certificate of Incorporation of the
Corporation to elect additional directors under specified
circumstances, special meetings of the stockholders may be called
only by the Chairman of the Board or by the Board of Directors
pursuant to a resolution adopted by a majority of the total
number of directors which the Corporation would have if there
were no vacancies (the "Whole Board").
SECTION 2.3. PLACE OF MEETING. The Board of Directors may
designate the place of meeting for any meeting of the
stockholders. If no designation is made by the Board of
Directors, the place of meeting shall be the principal office of
the Corporation.
SECTION 2.4. NOTICE OF MEETING. Written or printed
notice, stating the place, day and hour of the meeting and the
purpose or purposes for which the meeting is called, shall be
prepared and delivered by the Corporation not less than ten days
nor more than sixty days before the date of the meeting, either
personally, or by mail, to each stockholder of record entitled to
vote at such meeting. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail with
postage thereon prepaid, addressed to the stockholder at his
address as it appears on the stock transfer books of the
Corporation. Such further notice shall be given as may be
required by law. Meetings may be held without notice if all
stockholders entitled to vote are present, or if notice is waived
by those not present. Any previously scheduled meeting of the
stockholders may be postponed by resolution of the Board of
Directors upon public notice given prior to the time previously
scheduled for such meeting of stockholders.
SECTION 2.5. QUORUM AND ADJOURNMENT. Except as otherwise
provided by law or by the Certificate of Incorporation, the
holders of a majority of the voting power of the outstanding
shares of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person
or by proxy, shall constitute a quorum at a meeting of
stockholders, except that when specified business is to be voted
on by a class or series voting as a class, the holders of a
majority of the shares of such class or series shall constitute a
quorum for the transaction of such business. The chairman of the
meeting or a majority of the voting power of the shares of Voting
Stock so represented may adjourn the meeting from time to time,
whether or not there is such a quorum (or in the case of
specified business to be voted on a class or series, the chairman
or a majority of the shares of such class or series so
represented may adjourn the meeting with respect to such
specified business). No notice of the time and place of adjourned
meetings need be given except as required by law. The
stockholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
SECTION 2.6. PROXIES. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing by the
stockholder or as otherwise permitted by law, or by his duly
authorized attorney-in-fact. Such proxy must be filed with the
Secretary of the Corporation or his representative at or before
the time of the meeting.
<PAGE>
SECTION 2.7. NOTICE OF STOCKHOLDER BUSINESS AND
NOMINATIONS.
(A) ANNUAL MEETINGS OF STOCKHOLDERS. (1) Nominations of
persons for election to the Board of Directors of the Corporation
and the proposal of business to be considered by the stockholders
may be made at an annual meeting of stockholders (a) pursuant to
the Corporation's notice of meeting delivered pursuant to Section
2.4 of these Bylaws, (b) by or at the direction of the Chairman
or the Board of Directors or (c) by any stockholder of the
Corporation who is entitled to vote at the meeting, who complied
with the notice procedures set forth in clauses (2) and (3) of
this paragraph (A) and this Bylaw and who was a stockholder of
record at the time such notice is delivered to the Secretary of
the Corporation.
(2) For nominations or other business to be properly
brought before an annual meeting by a stockholder pursuant to
clause (c) of paragraph (A)(1) of this Bylaw, the stockholder
must have given timely notice thereof in writing to the Secretary
of the Corporation. To be timely, a stockholder's notice shall be
delivered to the Secretary at the principal executive offices of
the Corporation not less than seventy days nor more than ninety
days prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the
date of the annual meeting is advanced by more than twenty days,
or delayed by more than seventy days, from such anniversary date,
notice by the stockholder to be timely must be so delivered not
earlier than the ninetieth day prior to such annual meeting and
not later than the close of business on the later of the
seventieth day prior to such annual meeting or the tenth day
following the day on which public announcement of the date of
such meeting is first made. Such stockholder's notice shall set
forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if
elected; (b) as to any other business that the stockholder
proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons
for conducting such business at the meeting and any material
interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as
to the stockholder giving the notice and the beneficial owner, if
any, on whose behalf the nomination or proposal is made (i) the
name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the
class and number of shares of the Corporation which are owned
beneficially and of record by such stockholder and such
beneficial owner.
(3) Notwithstanding anything in the second sentence of
paragraph (A) (2) of this Bylaw to the contrary, in the event
that the number of directors to be elected to the Board of
Directors of the Corporation is increased and there is no public
announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors made by
the Corporation at least eighty days prior to the first
anniversary of the preceding year's annual meeting, a
stockholder's notice required by this Bylaw shall also be
considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to
the Secretary at the principal executive offices of the
Corporation not later than the close of business on the tenth day
following the day on which such public announcement is first made
by the Corporation.
(B) SPECIAL MEETINGS OF STOCKHOLDERS. Only such business
shall be conducted at a special meeting of stockholders as shall
have been brought before the meeting pursuant to the
Corporation's notice of meeting pursuant to Section 2.4 of these
Bylaws. Nominations of persons for election to the Board of
Directors may be made at a special meeting of stockholders at
which directors are to be elected pursuant to the Corporation's
notice of meeting (a) by or at the direction of the Board of
Directors or (b) by any stockholder of the Corporation who is
entitled to vote at the meeting, who complies with the notice
procedures set forth in this Bylaw and who is a stockholder of
record at the time such notice is delivered to the Secretary of
the Corporation. Nominations by stockholders of persons for
election to the Board of Directors may be made at such a special
meeting of stockholders if the stockholder's notice as required
by paragraph (A) (2) of this Bylaw shall be delivered to the
Secretary at the principal executive offices of the Corporation
not earlier than the ninetieth day prior to such special meeting
and not later than the close of business on the later of the
seventieth day prior to such special meeting or the tenth day
following the day on which public announcement is first made of
the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting.
(C) GENERAL. (1) Only persons who are nominated in
accordance with the procedures set forth in this Bylaw shall be
eligible to serve as directors and only such business shall be
conducted at a meeting of stockholders as shall have been brought
before the meeting in accordance with the procedures set forth in
this Bylaw. Except as otherwise provided by law, the Restated
Certificate of Incorporation or these Bylaws, the chairman of the
meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in
this Bylaw and, if any proposed nomination or business is not in
compliance with this Bylaw, to declare that such defective
proposal or nomination shall be disregarded.
(2) For purposes of this Bylaw, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or
in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Section 13,14 or
15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw,
a stockholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Bylaw. Nothing in this
Bylaw shall be deemed to affect any rights of stockholders to
request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
SECTION 2.8. PROCEDURE FOR ELECTION OF DIRECTORS.
Election of directors at all meetings of the stockholders at
which directors are to be elected shall be by written ballot,
and, except as otherwise set forth in the Certificate of
Incorporation with respect to the right of the holders of the
$4.75 Preferred Stock, any series of Preferred Stock or any other
series or class of stock to elect additional directors under
specified circumstances, a plurality of the votes cast thereat
shall elect. Except as otherwise provided by law, the Certificate
of Incorporation or these Bylaws, all matters other than the
election of directors submitted to the stockholders at any
meeting shall be decided by a majority of the votes cast with
respect thereto.
SECTION 2.9. INSPECTORS OF ELECTIONS; OPENING AND CLOSING
THE POLLS.
(A) The Board of Directors by resolution shall appoint one
or more inspectors, which inspector or inspectors may include
individuals who serve the Corporation in other capacities,
including, without limitation, as officers, employees, agents or
representatives of the Corporation, to act at the meeting and
make a written report thereof. One or more persons may be
designated as alternate inspectors to replace any inspector who
fails to act. If no inspector or alternate has been appointed to
act, or if all inspectors or alternates who have been appointed
are unable to act, at a meeting of stockholders, the chairman of
the meeting shall appoint one or more inspectors to act at the
meeting. Each inspector, before discharging his or her duties,
shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of
his or her ability. The inspectors shall have the duties
prescribed by the General Corporation Law of the State of
Delaware.
(B) The chairman of the meeting shall fix and announce at
the meeting the date and time of the opening and the closing of
the polls for each matter upon which the stockholders will vote
at a meeting.
SECTION 2.10. NO STOCKHOLDER ACTION BY WRITTEN CONSENT.
Subject to the rights of the holders of the $4.75 Preferred
Stock, any series of Preferred Stock or any other series or class
of stock as set forth in the Certificate of Incorporation to
elect additional directors under specific circumstances, any
action required or permitted to be taken by the stockholders of
the Corporation must be effected at an annual or special meeting
of stockholders of the Corporation and may not be effected by any
consent in writing by such stockholders.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1. GENERAL POWERS. The business and affairs of
the Corporation shall be managed by or under the direction of its
Board of Directors. In addition to the powers and authorities by
these Bylaws expressly conferred upon them, the Board of
Directors may exercise all such powers of the Corporation and do
all such lawful acts and things as are not by law or by the
Certificate of Incorporation or by these Bylaws required to be
exercised or done by the stockholders.
SECTION 3.2. NUMBER, TENURE AND QUALIFICATIONS. Subject
to the rights of the holders of the $4.75 Preferred Stock, any
series of Preferred Stock, or any other series or class of stock
as set forth in the Certificate of Incorporation, to elect
directors under specified circumstances, the number of directors
shall be fixed from time to time exclusively pursuant to a
resolution adopted by a majority of the Whole Board, but shall
consist of not more than seventeen nor less than three directors.
The directors, other than those who may be elected by the holders
of the $4.75 Preferred Stock, any series of Preferred Stock, or
any other series or class of stock as set forth in the
Certificate of Incorporation, shall be divided, with respect to
the time for which they severally hold office, into three
classes, as nearly equal in number as possible, with the term of
office of the first class to expire at the 1992 annual meeting of
stockholders, the term of office of the second class to expire at
the 1993 annual meeting of stockholders and the term of office of
the third class to expire at the 1994 annual meeting of
stockholders. Each director shall hold office until his or her
successor shall have been duly elected and qualified. At each
annual meeting of stockholders, commencing with the 1992 annual
meeting, (i) directors elected to succeed those directors whose
terms then expire shall be elected for a term of office to expire
at the third succeeding annual meeting of stockholders after
their election, with each director to hold office until his or
her successor shall have been duly elected and qualified, and
(ii) if authorized by a resolution of the Board of Directors,
directors may be elected to fill any vacancy on the Board of
Directors, regardless of how such vacancy shall have been
created.
Notwithstanding the foregoing, no outside director shall be
nominated by the Board of Directors for election as a director
for another term of office unless such term of office shall begin
before he attains age 70, provided, however, that any outside
director who had attained age 65 on May 10, 1983 may be nominated
by the Board of Directors for election as a director for another
term of office unless such term of office shall begin before he
attains age 72; and no inside director's term of office shall
continue after he attains age 65 or after the termination of his
services as an officer or employee of the Corporation, unless
such continuance is approved by a majority of the outside
directors on the Board of Directors at the time the disqualifying
event occurs and each time thereafter that such inside director
is nominated for reelection. The term "outside director" means
any person who has never served as an officer or employee of the
Corporation or an affiliate and the term "inside director" means
any director who is not an "outside director." Any person who is
ineligible for re-election as a director under this paragraph
may, by a majority vote of the Board of Directors, be designated
as a "Director Emeritus" and as such shall be entitled to receive
notice of, and to attend meetings of, the Board of Directors, but
shall not vote at such meetings.
SECTION 3.3. REGULAR MEETINGS. A regular meeting of the
Board of Directors shall be held without other notice than this
Bylaw immediately after, and at the same place as, each annual
meeting of stockholders. The Board of Directors may, by
resolution, provide the time and place for the holding of
additional regular meetings without other notice than such
resolution.
SECTION 3.4. SPECIAL MEETINGS. Special meetings of the
Board of Directors shall be called at the request of the Chairman
of the Board, the President or a majority of the Board of
Directors. The person or persons authorized to call special
meetings of the Board of Directors may fix the place and time of
the meetings.
SECTION 3.5. NOTICE. Notice of any special meeting shall
be given to each director at his business or residence in writing
or by telegram or by telephone communication. If mailed, such
notice shall be deemed adequately delivered when deposited in the
United States mails so addressed, with postage thereon prepaid,
at least five days before such meeting. If by telegram, such
notice shall be deemed adequately delivered when the telegram is
delivered to the telegraph company at least twenty-four hours
before such meeting. If by facsimile transmission, such notice
shall be transmitted at least twenty-hours before such meeting.
If by telephone, the notice shall be given at least twelve hours
prior to the time set for the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice of such
meeting, except for amendments to these Bylaws as provided under
Section 7.1 of Article VII hereof. A meeting may be held at any
time without notice if all the directors are present or if those
not present waive notice of the meeting in writing, either before
or after such meeting.
SECTION 3.6. QUORUM. A whole number of directors equal to
at least a majority of the Whole Board shall constitute a quorum
for the transaction of business, but if at any meeting of the
Board of Directors there shall be less than a quorum present, a
majority of the directors present may adjourn the meeting from
time to time without further notice. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors. The directors present
at a duly organized meeting may continue to transact business
until adjournment, notwithstanding the withdrawal of enough
directors to leave less than a quorum.
SECTION 3.7. VACANCIES. Subject to the rights of the
holders of the $4.75 Preferred Stock, any series of Preferred
Stock or any other series or class of stock, as set forth in the
Certificate of Incorporation, to elect additional directors under
specified circumstances, and unless the Board of Directors
otherwise determines, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or
other cause, and newly created directorships resulting from any
increase in the authorized number of directors, may be filled
only by the affirmative vote of a majority of the remaining
directors, though less than a quorum of the Board of Directors,
and directors so chosen shall hold office for a term expiring at
the annual meeting of stockholders at which the term of office of
the class to which they have been elected expires and until such
director's successor shall have been duly elected and qualified.
No decrease in the number of authorized directors constituting
the Whole Board shall shorten the term of any incumbent director.
SECTION 3.8. EXECUTIVE COMMITTEE. The Board of Directors,
immediately following each annual meeting of stockholders or a
special meeting of the same held in lieu of the annual meeting
for the election of directors, shall meet and shall appoint from
its number an Executive Committee of such number of members as
from time to time may be selected by the Board, to serve until
the next annual or special meeting at which a majority of
directors is elected or until the respective successor of each is
duly appointed. The Executive Committee shall possess and may
exercise all the powers and authority of the Board of Directors
in the management and direction of the business and affairs of
the Corporation, except as limited by law and except for the
power to change the membership or to fill vacancies in the Board
or said Committee. The Board shall have the power at any time to
change the membership of said Committee, to fill vacancies in it
or to make rules for the conduct of its business.
SECTION 3.9. REMOVAL. Subject to the rights of the
holders of the $4.75 Preferred Stock, any series of Preferred
Stock or any other series or class of stock, as set forth in the
Certificate of Incorporation, to elect additional directors under
specified circumstances, any director, or the entire Board of
Directors, may be removed from office at any time, but only for
cause and only by the affirmative vote of the holders of at least
80 percent of the voting power of the then outstanding Voting
Stock, voting together as a single class.
ARTICLE IV
OFFICERS
SECTION 4.1. ELECTED OFFICERS. The elected officers of
the Corporation shall be a Chairman of the Board, a President, a
Secretary, a Treasurer, and such other officers as the Board of
Directors from time to time may deem proper. The Chairman of the
Board shall be chosen from the directors. All officers chosen by
the Board of Directors shall each have such powers and duties as
generally pertain to their respective offices, subject to the
specific provisions of this Article IV. Such officers shall also
have such powers and duties as from time to time may be conferred
by the Board of Directors or by any committee thereof.
SECTION 4.2. ELECTION AND TERM OF OFFICE. The elected
officers of the Corporation shall be elected annually by the
Board of Directors at the regular meeting of the Board of
Directors held after each annual meeting of the stockholders. If
the election of officers shall not be held at such meeting, such
election shall be held as soon thereafter as convenient. Subject
to Section 4.7 of these Bylaws, each officer shall hold office
until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign.
SECTION 4.3. CHAIRMAN OF THE BOARD. The Chairman of the
Board shall preside at all meetings of the stockholders and of
the Board of Directors. The Chairman of the Board shall be
responsible for the general management of the affairs of the
Corporation and shall perform all duties incidental to his office
which may be required by law and all such other duties as are
properly required of him by the Board of Directors. Except where
by law the signature of the President is required, the Chairman
of the Board shall possess the same power as the President to
sign all certificates, contracts, and other instruments of the
Corporation which may be authorized by the Board of Directors.
He shall make reports to the Board of Directors and the
stockholders, and shall perform all such other duties as are
properly required of him by the Board of Directors. He shall see
that all orders and resolutions of the Board of Directors and of
any committee thereof are carried into effect.
SECTION 4.4. PRESIDENT. The President shall act in a
general executive capacity and shall assist the Chairman of the
Board in the administration and operation of the Corporation's
business and general supervision of its policies and affairs.
The President shall, in the absence of or because of the
inability to act of the Chairman of the Board, perform all duties
of the Chairman of the Board and preside at all meetings of
stockholders and of the Board of Directors. The President may
sign, alone or with the Secretary, or an Assistant Secretary, or
any other proper officer of the Corporation authorized by the
Board of Directors, certificates, contracts, and other
instruments of the Corporation as authorized by the Board of
Directors.
SECTION 4.5. SECRETARY. The Secretary shall give, or
cause to be given, notice of all meetings of stockholders and
Directors and all other notices required by law or by these
Bylaws, and in case of his absence or refusal or neglect so to
do, any such notice may be given by any person thereunto directed
by the Chairman of the Board or the President, or by the Board of
Directors, upon whose request the meeting is called as provided
in these Bylaws. He shall record all the proceedings of the
meetings of the Board of Directors, any committees thereof and
the stockholders of the Corporation in a book to be kept for that
purpose, and shall perform such other duties as may be assigned
to him by the Board of Directors, the Chairman of the Board or
the President. He shall have the custody of the seal of the
Corporation and may affix the same to all instruments requiring
it, and attest to the same.
SECTION 4.6. TREASURER. The Treasurer shall have the
custody of the corporate funds and securities and shall keep full
and accurate account of receipts and disbursements in books
belonging to the Corporation. The Treasurer shall deposit all
moneys and other valuables in the name and to the credit of the
Corporation in such depositaries as may be designated by the
Board of Directors. The Treasurer shall disburse the funds of
the Corporation as may be ordered by the Board of Directors, the
Chairman of the Board, or the President, taking proper vouchers
for such disbursements. The Treasurer shall render to the
Chairman of the Board, the President and the Board of Directors,
whenever requested, an account of all his transactions as
Treasurer and of the financial condition of the Corporation. If
required by the Board of Directors, the Treasurer shall give the
Corporation a bond for the faithful discharge of his duties in
such amount and with such surety as the Board of Directors shall
prescribe.
SECTION 4.7. REMOVAL. Any officer elected by the Board of
Directors may be removed by a majority of the members of the
Whole Board whenever, in their judgment, the best interests of
the Corporation would be served thereby. No elected officer
shall have any contractual rights against the Corporation for
compensation by virtue of such election beyond the date of the
election of his successor, his death, his resignation or his
removal, whichever event shall first occur, except as otherwise
provided in an employment contract or an employee plan.
SECTION 4.8. VACANCIES. A newly created office and a
vacancy in any office because of death, resignation, or removal
may be filled by the Board of Directors for the unexpired portion
of the term at any meeting of the Board of Directors.
ARTICLE V
STOCK CERTIFICATES AND TRANSFERS
SECTION 5.1. STOCK CERTIFICATES AND TRANSFERS.
(A) The interest of each stockholder of the Corporation
shall be evidenced by certificates for shares of stock in such
form as the appropriate officers of the Corporation may from time
to time prescribe, provided, that the Board of Directors may
provide by resolution or resolutions that some or all of any or
all classes or series of the stock of the Corporation shall be
uncertificated shares. Notwithstanding the adoption of such a
resolution by the Board of Directors, every holder of
uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the Chairman or
Vice-Chairman of the Board of Directors, or the President or
Vice-President, and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary of the Corporation
representing the number of shares registered in certificate form.
Except as otherwise expressly provided by law, the rights and
obligations of the holders of uncertificated stock and the rights
and obligations of the holders of certificates representing stock
of the same class and series shall be identical.
(B) The certificates of stock shall be signed,
countersigned and registered in such manner as the Board of
Directors may by resolution prescribe, which resolution may
permit all or any of the signatures on such certificates to be in
facsimile. In case any officer, transfer agent or registrar who
has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by
the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
(C) The shares of the stock of the Corporation represented
by certificates shall be transferred on the books of the
Corporation by the holder thereof in person or by his attorney,
upon surrender for cancellation of certificates for the same
number of shares, with an assignment and power of transfer
endorsed thereon or attached thereto, duly executed, with such
proof of the authenticity of the signature as the corporation or
its agents may reasonably require. Upon receipt of proper
transfer instructions from the registered owner of uncertificated
shares such uncertificated shares shall be canceled and issuance
of new equivalent uncertificated shares or certificated shares
shall be made to the person entitled thereto and the transaction
shall be recorded upon the books of the Corporation. Within a
reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof
a written notice containing the information required to be set
forth or stated on certificates pursuant to the Delaware General
Corporation Law or, unless otherwise provided by the Delaware
General Corporation Law, a statement that the Corporation will
furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative participating,
optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.
SECTION 5.2. LOST, STOLEN, OR DESTROYED CERTIFICATES. No
Certificate for shares or uncertificated shares of stock in the
Corporation shall be issued in place of any certificate alleged
to have been lost, destroyed or stolen, except on production of
such evidence of such loss, destruction or theft and on delivery
to the Corporation of a bond of indemnity in such amount, upon
such terms and secured by such surety, as the Board of Directors
or any financial officer may in its or his discretion require.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. FISCAL YEAR. The fiscal year of the
Corporation shall begin on the first day of January and end on
the thirty-first day of December of each year.
SECTION 6.2. DIVIDENDS. The Board of Directors may from
time to time declare, and the Corporation may pay, dividends on
its outstanding shares in the manner and upon the terms and
conditions provided by law and its Restated Certificate of
Incorporation.
SECTION 6.3. SEAL. The corporate seal shall be in
circular form and shall have inscribed thereon the name of the
Corporation and the words "Corporate Seal--Delaware."
SECTION 6.4. WAIVER OF NOTICE. Whenever any notice is
required to be given to any stockholder or director of the
Corporation under the provisions of the General Corporation Law
of the State of Delaware, a waiver thereof in writing, signed by
the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at,
nor the purpose of, any annual or special meeting of the
stockholders of the Board of Directors need be specified in any
waiver of notice of such meeting.
SECTION 6.5. AUDITS. The accounts, books and records of
the Corporation shall be audited upon the conclusion of each
fiscal year by an independent certified public accountant
selected by the Board of Directors, and it shall be the duty of
the Board of Directors to cause such audit to be made annually.
SECTION 6.6. RESIGNATIONS. Any director or any officer,
whether elected or appointed, may resign at any time by serving
written notice of such resignation on the Chairman of the Board,
the President or the Secretary, and such resignation shall be
deemed to be effective as of the close of business on the date
said notice is received by the Chairman of the Board, the
President, or the Secretary or at such later date as is stated
therein. No formal action shall be required of the Board of
Directors or the stockholders to make any such resignation
effective.
SECTION 6.7. INDEMNIFICATION AND INSURANCE. (A) Each
person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit, or proceeding,
whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or
she or a person of whom he or she is the legal representative is
or was a director, officer or employee of the Corporation or is
or was serving at the request of the Corporation as a director,
officer, employee or agent of any other corporation or of a
partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis
of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest
extent authorized by the General Corporation Law of the State of
Delaware as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability
and loss (including, without limitation, attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred by such
person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that
except as provided in paragraph (B) of this Bylaw with respect to
proceedings seeking to enforce rights to indemnification, the
Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.
(B) If a claim under paragraph (A) of this Bylaw is not
paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant
may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of
its final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant
has not met the standards of conduct which make it permissible
under the General Corporation Law of the State of Delaware for
the Corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel or
stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the General
Corporation Law of the State of Delaware, nor an actual
determination by the Corporation (including its Board of
Directors, independent legal counsel or stockholders) that the
claimant has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(C) Following any "change in control" of the Corporation of
the type required to be reported under Item 1 of Form 8-K
promulgated under the Exchange Act, any determination as to
entitlement to indemnification shall be made by independent legal
counsel selected by the claimant, which independent legal counsel
shall be retained by the Board of Directors on behalf of the
Corporation.
(D) The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Bylaw shall not be exclusive
of any other right which any person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation,
Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise.
(E) The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability
or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss
under the General Corporation Law of the State of Delaware.
(F) The Corporation may, to the extent authorized from time
to time by the Board of Directors, grant rights to
indemnification, and rights to be paid by the Corporation the
expenses incurred in defending any proceeding in advance of its
final disposition, to any agent of the Corporation to the fullest
extent of the provisions of this Bylaw with respect to the
indemnification and advancement of expenses of directors,
officers and employees of the Corporation.
(G) The right to indemnification conferred in this Bylaw
shall be a contract right and shall include the right to be paid
by the Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; provided,
however, that if the General Corporation Law of the State of
Delaware requires, the payment of such expenses incurred by a
director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made
only upon delivery to the Corporation of an undertaking by or on
behalf of such director or officer, to repay all amounts so
advanced if it shall ultimately be determined that such director
or officer is not entitled to be indemnified under this Bylaw or
otherwise.
(H) Any amendment or repeal of this Article VI shall not
adversely affect any right or protection existing hereunder in
respect of any act or omission occurring prior to such amendment
or repeal.
SECTION 6.8. ELECTION NOT TO BE SUBJECT TO ARIZONA CONTROL
SHARE ACQUISITIONS STATUTE. The Corporation elects not to be
subject to Title 10, Chapter 23, Article 2 of the Arizona Revised
Statutes, relating to "Control Share Acquisitions."
ARTICLE VII
AMENDMENTS
SECTION 7.1. AMENDMENTS. These Bylaws may be amended,
added to, rescinded or repealed at any meeting of the Board of
Directors or of the stockholders, provided notice of the proposed
change was given in the notice of the meeting and, in the case of
a meeting of the Board of Directors, in a notice given no less
than twenty-four hours prior to the meeting; provided, however,
that, in the case of amendments by stockholders, notwithstanding
any other provisions of these Bylaws or any provision of law
which might otherwise permit a lesser vote or no vote, but in
addition to any affirmative vote of the holders of any particular
class or series of stock required by law, the Certificate of
Incorporation or these Bylaws, the affirmative vote of the
holders of at least 80 percent of the voting power of the then
outstanding Voting Stock, voting together as a single class,
shall be required to alter, amend or repeal any provision of
these Bylaws.
Exhibit 4.B
U.S. $400,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 24, 1996
Among
THE DIAL CORP
(to be known as VIAD CORP upon
the effectiveness of this Agreement)
as Borrower
and
THE BANKS NAMED HEREIN
as Lenders
and
CITICORP USA, INC.
as Administrative Agent
and
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
as Documentation Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . . 2
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . 2
SECTION 1.02. Computation of Time Periods . . . . . . . .17
SECTION 1.03. Accounting Terms. . . . . . . . . . . . . .17
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES . . . . . . . . . .18
SECTION 2.01. The Committed Advances. . . . . . . . . . .18
SECTION 2.02. Making the Committed Advances . . . . . . .18
SECTION 2.03. Making the Bid Advances . . . . . . . . . .21
SECTION 2.04. Fees. . . . . . . . . . . . . . . . . . . .25
SECTION 2.05. Termination and Reduction of the
Commitments . . . . . . . . . . . . . . . .26
SECTION 2.06. Repayment and Prepayment of Advances. . . .27
SECTION 2.07. Interest on Committed Advances. . . . . . .28
SECTION 2.08. Interest Rate Determination . . . . . . . .29
SECTION 2.09. Voluntary Conversion or Continuation of
Committed Advances. . . . . . . . . . . . .29
SECTION 2.10. Increased Costs . . . . . . . . . . . . . .30
SECTION 2.11. Payments and Computations . . . . . . . . .31
SECTION 2.12. Taxes . . . . . . . . . . . . . . . . . . .32
SECTION 2.13. Sharing of Payments, Etc. . . . . . . . . .34
SECTION 2.14. Evidence of Debt. . . . . . . . . . . . . .34
SECTION 2.15. Use of Proceeds . . . . . . . . . . . . . .35
SECTION 2.16. Extension of the Commitment Termination
Date. . . . . . . . . . . . . . . . . . . .35
SECTION 2.17. Substitution of Lenders . . . . . . . . . .36
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING . . . . . . .37
SECTION 3.01. Documents to be Delivered on the Closing
Date. . . . . . . . . . . . . . . . . . . .37
SECTION 3.02. Conditions Precedent to Effective Time. . .38
SECTION 3.03. Conditions Precedent to Each Committed
Borrowing . . . . . . . . . . . . . . . . .40
SECTION 3.04. Conditions Precedent to Each Bid
Borrowing . . . . . . . . . . . . . . . . .40
ARTICLE IV
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . .41
SECTION 4.01. Representations and Warranties of the
Borrower. . . . . . . . . . . . . . . . . .41
ARTICLE V
COVENANTS OF THE BORROWER . . . . . . . . . . . . . .44
SECTION 5.01. Affirmative Covenants . . . . . . . . . . .44
SECTION 5.02. Negative Covenants. . . . . . . . . . . . .49
ARTICLE VI
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . .51
SECTION 6.01. Events of Default . . . . . . . . . . . . .51
ARTICLE VI
THE AGENTS. . . . . . . . . . . . . . . . . . . . . .54
SECTION 7.01. Authorization and Action. . . . . . . . . .54
SECTION 7.02. Agents' Reliance, Etc.. . . . . . . . . . .55
SECTION 7.03. CUSA, B of A and Affiliates . . . . . . . .55
SECTION 7.04. Lender Credit Decision. . . . . . . . . . .56
SECTION 7.05. Indemnification . . . . . . . . . . . . . .56
SECTION 7.06. Successor Agent . . . . . . . . . . . . . .56
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . .57
SECTION 8.01. Amendments, Etc.. . . . . . . . . . . . . .57
SECTION 8.02. Notices, Etc. . . . . . . . . . . . . . . .57
SECTION 8.03. No Waiver; Remedies . . . . . . . . . . . .58
SECTION 8.04. Costs, Expenses and Indemnification . . . .58
SECTION 8.05. Right of Set-off. . . . . . . . . . . . . .59
SECTION 8.06. Binding Effect; Effectiveness; Entire
Agreement . . . . . . . . . . . . . . . . .60
SECTION 8.07. Assignments and Participations. . . . . . .60
SECTION 8.08. Confidentiality . . . . . . . . . . . . . .64
SECTION 8.09. Governing Law . . . . . . . . . . . . . . .64
SECTION 8.10. Execution in Counterparts . . . . . . . . .64
SECTION 8.11. Consent to Jurisdiction; Waiver of
Immunities. . . . . . . . . . . . . . . . .65
SECTION 8.12. Waiver of Trial by Jury . . . . . . . . . .65
<PAGE>
SCHEDULES
SCHEDULE I List of Applicable Lending Offices
EXHIBITS
EXHIBIT A-1 Notice of Committed Borrowing
EXHIBIT A-2 Notice of Bid Borrowing
EXHIBIT B Assignment and Acceptance
EXHIBIT C-1 Form of Opinion of Counsel for the Borrower as of
the Closing Date
EXHIBIT C-2 Form of Opinion of Counsel for the Borrower as of
the Effective Date
EXHIBIT D-1 Form of Opinion of Counsel to the Agents as of the
Closing Date
EXHIBIT D-2 Form of Opinion of Counsel to the Agents as of the
Effective Date
EXHIBIT E Form of Extension Request
EXHIBIT F Form of Compliance Certificate
EXHIBIT G-1 Form of Committed Note
EXHIBIT G-2 Form of Bid Note
EXHIBIT H Form of Designation Agreement
<PAGE>
U.S. $400,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 24, 1996
This AMENDED AND RESTATED CREDIT AGREEMENT (this
"Agreement") is among THE DIAL CORP, a Delaware corporation, to
be known as VIAD CORP on and after the Effective Date (as defined
below) (the "Borrower"), the banks (the "Banks") listed on the
signature pages hereof, CITICORP USA, INC. ("CUSA"), as
administrative agent for the Lenders hereunder (in such capacity,
the "Administrative Agent"), and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION ("B of A"), as documentation agent for
the Lenders hereunder (in such capacity, the "Documentation
Agent"; the Administrative Agent and the Documentation Agent
being referred to together as the "Agents"). Certain capitalized
terms have the meanings given to them in Section 1.01 hereof.
PRELIMINARY STATEMENTS
WHEREAS, the Borrower desires to effect the spin-off to the
Borrower's stockholders of the Consumer Products Business
currently being conducted by the Borrower directly and through
certain of its subsidiaries;
WHEREAS, pursuant to the Distribution Agreement, on the
Effective Date the Borrower shall (i) contribute all of the
assets and liabilities of the Consumer Products Business,
including the stock of certain subsidiaries, to The Dial
Corporation, a newly formed Delaware corporation ("Newco") and a
wholly-owned subsidiary of the Borrower, and (ii) distribute to
the holders of Borrower Common Stock approximately 94.8 million
shares of Newco Common Stock;
WHEREAS, pursuant to the Distribution Agreement and in
conjunction with the Distribution, immediately prior to the
Effective Date, Exhibitgroup shall be merged with and into the
Borrower, with the Borrower as the surviving corporation;
WHEREAS, the Borrower, certain of the Banks, the Exiting
Banks (as hereinafter defined), and Citibank and B of A, as
Agents, are parties to that certain amended and restated credit
agreement dated as of December 15, 1993, as such agreement has
been and may be amended from time to time (as so amended, the
"Existing Credit Agreement");
WHEREAS, the Borrower, the Banks, and the Agents desire to
amend and restate the Existing Credit Agreement in its entirety
in this Agreement in order to reflect the Distribution, but have
agreed that this Agreement shall not become effective (except to
the extent set forth in Section 8.06 hereof) and the Existing
Credit Agreement shall remain in place until the Effective Date
(which shall be the date of the Distribution) and the
satisfaction of the terms and conditions set forth herein;
WHEREAS, the Borrower, certain financial institutions, and
the Agents further desire to enter into the Newco Credit
Agreement concurrently with this Agreement, and the Newco Credit
Agreement shall not become effective until the Effective Date, at
which time the Borrower shall assign and Newco shall assume the
Newco Credit Agreement, upon the satisfaction of the terms and
conditions set forth therein; and
WHEREAS, the Borrower and each bank that is party to the
Existing Credit Agreement but is not a party to this Agreement
(an "Exiting Bank") have agreed, pursuant to those certain letter
agreements dated as of August 15, 1996, that all funding
obligations and other obligations of the Exiting Banks under the
Existing Credit Agreement will be terminated upon the
effectiveness of this Agreement and, except as set forth in such
letter agreements, all payment obligations and other obligations
of the Borrower with respect to the Exiting Banks under the
Existing Credit Agreement, on the terms and conditions set forth
in such letter agreements, will be satisfied upon the
effectiveness of this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"ADDITIONS TO CAPITAL" means the sum of (i) the
aggregate net proceeds, including cash and the fair market
value of property other than cash (as determined in good
faith by the Board of Directors of the Borrower as evidenced
by a Board resolution), received by the Borrower from the
issue or sale (other than to a Subsidiary) of capital stock
of the Borrower and (ii) the aggregate of 25% of the after
tax gain realized from unusual, extraordinary, and major
nonrecurring items including, but not limited to, the sale,
transfer, or other disposition of (x) any of the stock of
any of the Borrower's Subsidiaries or (y) substantially all
of the assets of any geographic or other division or line of
business of the Borrower or any of its Subsidiaries (but
excluding any after tax loss realized on any such unusual,
extraordinary, and major nonrecurring items to the extent
they exceed any after tax gains on such items).
"ADJUSTED EURODOLLAR RATE" means, for any Interest
Period for each Eurodollar Rate Advance comprising part of
the same Borrowing, an interest rate per annum equal to the
rate per annum obtained by dividing (a) the average (rounded
upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate
per annum at which deposits in U.S. dollars are offered by
the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount
substantially equal to the respective Reference Bank's
Eurodollar Rate Advance comprising part of such Borrowing
and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage. The Adjusted Eurodollar Rate for any Interest
Period for each Eurodollar Rate Advance comprising part of
the same Borrowing shall be determined by the Administrative
Agent on the basis of applicable rates furnished to and
received by the Administrative Agent from the Reference
Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of
Section 2.08.
"ADMINISTRATIVE AGENT" means CUSA, or any Person
serving as its successor agent.
"ADVANCE" means a Committed Advance or a Bid Advance.
"AFFILIATE" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or
is under common control with such Person.
"AGENT" or "AGENTS" has the meaning specified in the
introductory paragraph of this Agreement; provided, that,
for purposes of Sections 7.02, 7.04, 7.05, 8.04, 8.07(b)(iv)
and 8.12 of this Agreement the term "Agent" or "Agents", as
the case may be, shall include Arrangers.
"AGREEMENT" means this Amended and Restated Credit
Agreement as it may be amended, supplemented or otherwise
modified from time to time.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of
a Base Rate Advance, and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means, for any period for which any
interest payment is to be made with respect to any Advance,
the interest rate per annum derived by dividing (i) the sum
of the Daily Margins for each of the days included in such
period by (ii) the number of days included in such period.
"ARRANGERS" means Citicorp Securities, Inc. and BA
Securities, Inc., collectively, and each individually is an
"ARRANGER."
"ASSIGNMENT AND ACCEPTANCE" means an assignment and
acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Administrative Agent, in
substantially the form of EXHIBIT B hereto.
"BANKRUPTCY CODE" means Title 11 of the United States
Code entitled "Bankruptcy" as now and hereafter in effect,
or any successor statute.
"BASE RATE" means, for any period, a fluctuating
interest rate per annum as shall be in effect from time to
time which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate (which is a rate set by Citibank
based upon various factors including Citibank's costs
and desired return, general economic conditions and
other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or
below such announced rate);
(b) the sum of (A) 1/2 of one percent per annum,
plus (B) the rate obtained by dividing (x) the latest
three-week moving average of secondary market morning
offering rates in the United States for three-month
certificates of deposit of major United States money
market banks (such three-week moving average being
determined weekly by Citibank on the basis of such
rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or,
if such publication shall be suspended or terminated,
on the basis of quotations for such rates received by
Citibank, in either case adjusted to the nearest 1/4 of
one percent or, if there is no nearest 1/4 of one
percent, to the next higher 1/4 of one percent), by (y)
a percentage equal to 100% minus the average of the
daily percentages specified during such three-week
period by the Board of Governors of the Federal Reserve
System for determining the maximum reserve requirement
(including, but not limited to, any marginal reserve
requirements for Citibank in respect of liabilities
consisting of or including (among other liabilities)
three-month nonpersonal time deposits of at least
$100,000), plus (C) the average during such three-week
period of the daily net annual assessment rates
estimated by Citibank for determining the current
annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation for insuring three-month
deposits in the United States; or
(c) 1/2 of one percent per annum above the
Federal Funds Rate.
"BASE RATE ADVANCE" means a Committed Advance which
bears interest at a rate per annum determined on the basis
of the Base Rate, as provided in Section 2.07(a).
"BID ADVANCE" means an advance by a Lender to the
Borrower as part of a Bid Borrowing resulting from the
auction bidding procedure described in Section 2.03(a).
"BID BORROWING" means a borrowing consisting of
simultaneous Bid Advances of the same Type from each of the
Lenders whose offer to make one or more Bid Advances as part
of such borrowing has been accepted by the Borrower under
the auction bidding procedure described in Section 2.03(a).
"BID REDUCTION" has the meaning specified in Section
2.01(a).
"BORROWER" means The Dial Corp, a Delaware corporation,
to be known as Viad Corp on and after the Effective Date.
"BORROWER COMMON STOCK" means the approximately 94.8
million shares of common stock, par value of $1.50 per
share, of Borrower currently outstanding.
"BORROWING" means a Committed Borrowing or a Bid
Borrowing.
"BUSINESS DAY" means a day of the year on which banks
are not required or authorized to close in New York City or
Los Angeles and, if the applicable Business Day relates to
any Eurodollar Rate Advances, on which dealings are carried
on in the London interbank market.
"CAPITAL LEASE" means, with respect to any Person, any
lease of any property by that Person as lessee which would,
in conformity with GAAP, be required to be accounted for as
a capital lease on the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a
deposit account.
"CASH EQUIVALENTS" means (a) marketable direct
obligations issued or unconditionally guaranteed by the
United States government or issued by any agency thereof and
backed by the full faith and credit of the United States, in
each case maturing within one year from the date of
acquisition thereof, (b) marketable direct obligations
issued by any state of the United States of America or any
political subdivision of any such state or any public
instrumentality thereof maturing within one year from the
date of acquisition thereof and, at the time of acquisition,
having the highest rating generally obtainable from either
S&P or Moody's, (c) commercial paper maturing no more than
one year from the date of creation thereof and, at the time
of acquisition, having a rating of A-1 or higher from S&P or
P-1 or higher from Moody's, and (d) certificates of deposit
or bankers' acceptances maturing within one year from the
date of acquisition thereof issued by any lender.
"CITIBANK" means Citibank, N.A.
"CLOSING DATE" means the date this Agreement is
executed and the documents referred to in Section 3.01 are
delivered to the Agents, which shall be July 24, 1996 or
such other date as may be agreed upon by the Borrower and
the Agents.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMMITMENT" has the meaning specified in Section 2.01
"COMMITMENT TERMINATION DATE" means, with respect to
any Lender, the fifth anniversary of the Effective Date, or
such later date to which the Commitment Termination Date of
such Lender may be extended from time to time pursuant to
Section 2.16 (or if any such date is not a Business Day, the
next preceding Business Day).
"COMMITTED ADVANCE" means an advance by a Lender to the
Borrower as part of a borrowing consisting of simultaneous
Advances from each of the Lenders pursuant to Section 2.01
and refers to a Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "Type" of Advance.
"COMMITTED BORROWING" means a borrowing consisting of
simultaneous Committed Advances of the same Type made on the
same day pursuant to the same Notice of Borrowing by each of
the Lenders pursuant to Section 2.01(b).
"COMPLIANCE CERTIFICATE" means a certificate
substantially in the form of EXHIBIT F hereto, delivered to
the Lenders by the Borrower pursuant to Section
5.10(b)(iii).
"CONVERT," "CONVERSION" and "CONVERTED" each refers to
a conversion of Advances of one Type into Advances of
another Type pursuant to Section 2.09.
"CONSUMER PRODUCTS BUSINESS" means the consumer
products business, including certain assets and liabilities
thereof, currently being conducted by the Borrower directly
and through certain of its subsidiaries, to be contributed
to Newco pursuant to the Distribution Agreement.
"DAILY MARGIN" means, for any date of determination,
for the designated Level, Utilization Ratio applicable to
such date of determination and Type of Advance, the
following interest rates per annum:
DAILY MARGIN WHEN DAILY MARGIN WHEN
UTILIZATION RATIO UTILIZATION RATIO
IS EQUAL TO OR IS GREATER THAN
LESS THAN 0.50:1.00 0.50:1.00
---------------------------- ----------------------------------
TYPE OF ADVANCE TYPE OF ADVANCE
---------------------------- ----------------------------
BASE RATE EURODOLLAR BASE RATE EURODOLLAR
ADVANCE RATE ADVANCE ADVANCE RATE ADVANCE
LEVEL 1 0% 0.2000% 0% 0.2500%
LEVEL 2 0% 0.2400% 0% 0.2900%
LEVEL 3 0% 0.2750% 0% 0.3250%
LEVEL 4 0% 0.4375% 0% 0.4375%
LEVEL 5 0% 0.5000% 0% 0.5000%
For purposes of this definition, (a) "UTILIZATION RATIO"
means, as of any date of determination, the ratio of (1) the
aggregate outstanding principal amount of all Advances as of
such date to (2) the aggregate amount of all Commitments in
effect as of such date (whether used or unused), (b) if any
change in the rating established by S&P, Moody's or Duff &
Phelps with respect to Long-Term Debt shall result in a
change in the Level, the change in the Daily Margin shall be
effective as of the date on which such rating change is
publicly announced, and (c) if the ratings established by
any two of S&P, Moody's or Duff & Phelps with respect to
Long-Term Debt are unavailable for any reason for any day,
then the applicable level for such day shall be deemed to be
Level 5 (or, if the Requisite Lenders consent in writing,
such other Level as may be reasonably determined by the
Requisite Lenders from a rating with respect to Long-Term
Debt for such day established by another rating agency
reasonably acceptable to the Requisite Lenders).
"DEBT" means (i) indebtedness for borrowed money or for
the deferred purchase price of property or services, (ii)
obligations as lessee under Capital Leases, (iii)
obligations under guarantees in respect of indebtedness or
in respect of obligations of others of the kinds referred to
in clause (i) or (ii) above, (iv) liabilities in respect of
unfunded vested benefits under Single Employer Plans, and
(v) Withdrawal Liability incurred under ERISA by the
Borrower or any of its ERISA Affiliates to any Multi-employer Plans;
provided that "Debt" shall not include
payment obligations in the ordinary course of the business
of Travelers Express Company, Inc. ("Travelers Express")
arising from (x) payments made by banks on checks or money
orders issued by Travelers Express and presented to such
banks and (y) contingent obligations of Travelers Express to
banks which have issued official checks drawn on Travelers
Express and have paid to Travelers Express the amounts of
such official checks, to repay to such banks such amounts if
such official checks are not negotiated.
"DESIGNATED BIDDER" means (i) an Eligible Assignee or
(ii) a special purpose corporation which is engaged in
making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and that issues
(or the parent of which issues) commercial paper rated at
least "Prime-1" by Moody's or "A-1" by S&P or a comparable
rating from the successor or either of them, that, in either
case, (w) is organized under the laws of the United States
or any State thereof, (x) shall have become a party hereto
pursuant to Section 8.07(d), (e) and (f), (y) is not
otherwise a Lender and (z) shall have been consented to by
the Borrower, which consent shall not be unreasonably
withheld.
"DESIGNATION AGREEMENT" means a designation agreement
entered into by a Lender (other than a Designated Bidder)
and a Designated Bidder, and accepted by the Administrative
Agent, in substantially the form of EXHIBIT H hereto.
"DISTRIBUTION" means the distribution of approximately
94.8 million shares of Newco Common Stock, constituting 100%
of the outstanding Newco Common Stock, to the holders of
Borrower Common Stock pursuant to the Distribution
Agreement, together with the consummation of the other
transactions to occur in connection with such distribution,
as set forth in the Distribution Agreement.
"DISTRIBUTION AGREEMENT" means that certain
Distribution Agreement by and among the Borrower, Newco, and
Exhibitgroup, in the form of EXHIBIT A attached to the Form
10, with such changes as may be approved by the Requisite
Lenders.
"DISTRIBUTION TIME" means the time of the Distribution
on the Effective Date.
"DOCUMENTATION AGENT" means B of A, or any Person
serving as its successor agent.
"DOLLARS" and the sign "$" each means lawful money of
the United States of America.
"DOMESTIC LENDING OFFICE" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the
Agents.
"DUFF & PHELPS" means Duff & Phelps Inc.
"EBITDA" means, for any period, consolidated net income
plus provision for taxes of the Borrower and its
Subsidiaries (excluding extraordinary, unusual, or
nonrecurring gains or losses), plus interest expense of the
Borrower and its Subsidiaries, plus depreciation expense of
the Borrower and its Subsidiaries, plus amortization of
intangibles of the Borrower and its Subsidiaries, as
determined on a consolidated basis in conformity with GAAP;
provided that to the extent that during such period the
Borrower or any of its Subsidiaries has acquired or disposed
of a business or businesses in an amount for any transaction
or series of related transactions exceeding $15,000,000,
such calculations shall be made as if such acquisition or
disposition took place on the first day of such period (on a
pro forma basis for the portion of such period prior to the
date of such acquisition (or after the date of such
disposition) and on an actual basis for the portion of such
period after the date of such acquisition (or before the
date of such disposition)).
"EFFECTIVE DATE" means the date on which the
Distribution occurs, as provided for in the Distribution
Agreement, and the conditions set forth in Section 3.02 are
satisfied.
"EFFECTIVE TIME" means the time, immediately prior to
the Distribution Time, at which this Agreement shall become
fully effective upon satisfaction of the conditions
precedent set forth in Section 3.02 hereof.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank
organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at
least $100,000,000; (ii) a commercial bank organized under
the laws of any other country which is a member of the
Organization for Economical Cooperation and Development (the
"OECD"), or a political subdivision of any such country and
having a combined capital and surplus of at least
$100,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is
organized or another country which is also a member of the
OECD; and (iii) any Person engaged in the business of
lending and that is an Affiliate of a Lender or of a Person
of which a Lender is a Subsidiary.
"ENVIRONMENTAL LAW" means any and all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions of any
federal, state or local governmental authority within the
United States or any State or territory thereof and which
relate to the environment or the release of any materials
into the environment.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA AFFILIATE" means any Person who for purposes of
Title IV of ERISA is a member of the Borrower's controlled
group, or under common control with the Borrower, within the
meaning of Section 414 of the Code and the regulations
promulgated and rulings issued thereunder.
"ERISA EVENT" means (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA (other
than an event arising out of the transactions contemplated
by the Distribution Agreement), unless the 30-day notice
requirement with respect thereto has been waived by the
PBGC; (ii) the provision by the administrator of any Pension
Plan of a notice of intent to terminate such Pension Plan
pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (iii) the cessation of operations
at a facility in the circumstances described in Section
4062(e) of ERISA; (iv) the withdrawal by the Borrower or an
ERISA Affiliate from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (v) the failure by the Borrower
or any ERISA Affiliate to make a payment to a Pension Plan
required under Section 302(f)(1) of ERISA, which Section
imposes a lien for failure to make required payments; (vi)
the adoption of an amendment to a Pension Plan requiring the
provision of security to such Pension Plan, pursuant to
Section 307 of ERISA; or (vii) the institution by the PBGC
of proceedings to terminate a Pension Plan, pursuant to
Section 4042 of ERISA, or the occurrence of any event or
condition which, in the reasonable judgment of the Borrower,
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, a Pension Plan.
"EUROCURRENCY LIABILITIES" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any
Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on SCHEDULE I
hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"EURODOLLAR RATE ADVANCE" means a Committed Advance
which bears interest as provided in Section 2.07(b) and/or a
Bid Advance which bears interest based on the Adjusted
Eurodollar Rate as provided in Section 2.03(a).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest
Period for any Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirements
(including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for member banks in
the Federal Reserve System with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in
Section 6.01.
"EXHIBITGROUP" means Exhibitgroup Inc., a Delaware
corporation and wholly-owned subsidiary of the Borrower
which operates part of the Borrower's convention services
business, and which shall be merged into the Borrower
pursuant to the Merger.
"EXISTING CREDIT AGREEMENT" means that certain amended
and restated credit agreement, dated as of December 15,
1993, by and among the Borrower, certain of the Lenders,
certain of the Exiting Banks, and Citibank and B of A, as
Agents, as such agreement has been and may be amended from
time to time.
"FEDERAL FUNDS RATE" means, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for such day on such transactions received
by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it.
"FIXED RATE" means, for the period for each Fixed Rate
Advance comprising part of the same Bid Borrowing, the fixed
interest rate per annum determined for such Advance, as
provided in Section 2.03(a).
"FIXED RATE ADVANCE" means a Bid Advance which bears
interest at a fixed rate per annum determined as provided in
Section 2.03(a).
"FORM 8-K" means that certain Current Report on Form
8-K filed by the Borrower with the SEC on June 13, 1996.
"FORM 10" means that certain Registration Statement on
Form 10 originally filed by Newco with the SEC on June 5,
1996, as amended on July 18, 1996.
"FUNDED DEBT" means outstanding Debt of the Borrower
and its Subsidiaries of the kind described in clauses (i),
(ii) and (iii) of the definition of Debt.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as may be
approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of
the date of determination.
"HOSTILE ACQUISITION" means the acquisition of the
capital stock or other equity interests of a Person (the
"Target") through a tender offer or similar solicitation of
the owners of such capital stock or other equity interests
which has not been approved (prior to such acquisition) by
resolutions of the Board of Directors of the Target or by
similar action if the Target is not a corporation and as to
which such approval has not been withdrawn.
"INSUFFICIENCY" means, with respect to any Pension
Plan, the amount, if any, of its unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA.
"INTEREST PERIOD" means, for each Eurodollar Rate
Advance comprising part of the same Borrowing, the period
commencing on the date of such Eurodollar Rate Advance, or
on the date of continuation of such Advance as a Eurodollar
Rate Advance upon expiration of successive Interest Periods
applicable thereto, or on the date of Conversion of a Base
Rate Advance into a Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrower pursuant
to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, as the
Borrower may select in the Notice of Borrowing or the Notice
of Conversion/Continuation for such Advance; provided,
however, that:
(i) the Borrower may not select any Interest
Period which ends after the earliest Commitment
Termination Date of any Lender then in effect;
(ii) Interest Periods commencing on the same
date for Advances comprising part of the same Borrowing
shall be of the same duration; and
(iii) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day, provided, that if such extension would
cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding
Business Day.
"LENDERS" means the Banks listed on the signature pages
hereof and each Eligible Assignee that shall become a party
hereto pursuant to Section 8.07 and, except when used in
reference to a Committed Advance, a Committed Borrowing, a
Commitment or a related term, each Designated Bidder.
"LEVEL" means Level 1, Level 2, Level 3, Level 4 or
Level 5, as the case may be.
"LEVEL l" means that, as of any date of determination,
the Borrower's Long-Term Debt rating is equal to or higher
than at least two of the following: BBB+ from S&P, Baal from
Moody's and/or BBB+ from Duff & Phelps.
"LEVEL 2" means that, as of any date of determination,
the Borrower's Long-Term Debt rating is equal to at least
two of the following: BBB from S&P, Baa2 from Moody's and/or
BBB from Duff & Phelps.
"LEVEL 3" means that, as of any date of determination,
the Borrower's Long-Term Debt rating is equal to at least
two of the following: BBB- from S&P, Baa3 from Moody's
and/or BBB- from Duff & Phelps.
"LEVEL 4" means that, as of any date of determination,
the Borrower's Long-Term Debt rating is equal to at least
two of the following: BB+ from S&P, Bal from Moody's and/or
BB+ from Duff & Phelps.
"LEVEL 5" means that, as of any date of determination,
the Borrower's Long-Term Debt rating is lower than at least
two of the following: BB+ from S&P, Bal from Moody's and/or
BB+ from Duff & Phelps.
"LIEN" means any lien, mortgage, pledge, security
interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement and any
lease in the nature thereof).
"LOAN DOCUMENTS" means this Agreement and the related
documents.
"LONG-TERM DEBT" means senior, unsecured, long term
debt securities of the Borrower.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U promulgated by the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"MATERIAL SUBSIDIARY" means any Subsidiary of the
Borrower having total assets in excess of $10,000,000.
"MERGER" means the merger, pursuant to the Distribution
Agreement, of the Borrower and Exhibitgroup, with the
Borrower as the surviving corporation.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate of the Borrower is making, or is
obligated to make, contributions or has within any of the
preceding six plan years been obligated to make or accrue
contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, which (i) is
maintained for employees of the Borrower or an ERISA
Affiliate and at least one Person other than the Borrower
and its ERISA Affiliates or (ii) was so maintained and in
respect of which the Borrower or an ERISA Affiliate could
have liability under Section 4063, 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"NET INCOME" means net income in accordance with GAAP.
"NET WORTH" means minority interests, preferred stock
and common stock and other equity, as shown on the
consolidated balance sheet of the Borrower and its
Subsidiaries; provided that there shall be excluded from the
calculation of Net Worth any unrealized gains or losses (net
of taxes) on securities available for sale.
"NEWCO" means The Dial Corporation, a Delaware
corporation, which immediately prior to the Distribution
shall be capitalized by the Borrower with the assets and
liabilities of the Consumer Products Business pursuant to
the Distribution Agreement.
"NEWCO COMMON STOCK" means the approximately 94.8
million shares of common stock, par value of $0.01 per
share, of Newco to be issued pursuant to the Distribution.
"NEWCO CREDIT AGREEMENT" means the Credit Agreement
dated as of the Closing Date among the Borrower, the Banks
and the Agents, which shall not become effective until the
Effective Time upon the satisfaction or waiver of the terms
and conditions contained therein and which shall be assumed
by Newco at the Distribution Time.
"NOTICE OF BID BORROWING" has the meaning specified in
Section 2.03(a).
"NOTICE OF BORROWING" means a Notice of Committed
Borrowing or a Notice of Bid Borrowing, as the case may be.
"NOTICE OF COMMITTED BORROWING" has the meaning
specified in Section 2.02(a).
"NOTICE OF CONVERSION/CONTINUATION" has the meaning
specified in Section 2.09.
"PAYMENT OFFICE" means the principal office of CUSA,
located on the date hereof at 1 Court Square, 7th Floor Zone
1, Long Island City, N.Y. 11120 (or such other place as the
Administrative Agent may designate by notice to the Borrower
and the Lenders from time to time).
"PBGC" means the U.S. Pension Benefit Guaranty
Corporation.
"PENSION PLAN" means a Single Employer Plan or a
Multiple Employer Plan or both.
"PERSON" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event
which, after notice or lapse of time or both, would
constitute an Event of Default if that condition or event
were not cured or removed within any applicable grace or
cure period.
"REFERENCE BANKS" means, B of A, Citibank, and Bank of
Montreal.
"REGISTER" has the meaning specified in Section
8.07(c).
"REQUISITE LENDERS" means at any time Lenders holding
at least 662/3% of the then aggregate unpaid principal
amount of the Committed Advances held by Lenders, or, if no
such principal amount is then outstanding, Lenders having at
least 66-2/3 % of the Commitments (provided that, for
purposes hereof, neither the Borrower, nor any of its
Affiliates, if a Lender, shall be included in (i) the
Lenders holding such amount of the Committed Advances or
having such amount of the Commitments or (ii) determining
the aggregate unpaid principal amount of the Committed
Advances or the total Commitments).
"S&P" means Standard & Poor's Ratings Group, a division
of The McGraw-Hill Companies.
"SEC" means the Securities and Exchange Commission and
any successor agency.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (i) is
maintained for employees of the Borrower or any ERISA
Affiliate and no Person other than the Borrower and its
ERISA Affiliates or (ii) was so maintained and in respect of
which the Borrower or an ERISA Affiliate could have
liability under Section 4062 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"SUBSIDIARY" of any Person means any corporation,
association, partnership or other business entity of which
at least 50% of the total voting power of shares of stock or
other securities entitled to vote in the election of
directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person or a
combination thereof.
"SWAPS" means, with respect to any Person, payment
obligations with respect to interest rate swaps, currency
swaps and similar obligations obligating such Person to make
payments, whether periodically or upon the happening of a
contingency.
"TERMINATION DATE" means, with respect to any Lender,
the earlier of (i) the Commitment Termination Date of such
Lender and (ii) the date of termination in whole of the
Commitments of all Lenders pursuant to Section 2.05 or 6.01.
"TOTAL UTILIZATION OF COMMITMENTS" means at any date of
determination the sum of (i) the aggregate principal amount
of all Committed Advances outstanding at such date plus (ii)
the aggregate principal amount of all Bid Advances
outstanding at such date.
"TYPE" means, with reference to an Advance, a Base Rate
Advance, a Eurodollar Rate Advance, or a Fixed Rate Advance.
"WITHDRAWAL LIABILITY" has the meaning given such term
under Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but
excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP. All computations determining compliance with financial
covenants or terms, including definitions used therein, shall be
prepared in accordance with generally accepted accounting
principles in effect at the time of the preparation of, and in
conformity with those used to prepare, the historical financial
statements delivered to the Lenders pursuant to Section 4.01(e).
If at any time the computations for determining compliance with
financial covenants or provisions relating thereto utilize
generally accepted accounting principles different than those
then being utilized in the financial statements being delivered
to the Lenders, such financial statements shall be accompanied by
a reconciliation statement.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE COMMITTED ADVANCES.
(a) Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make Committed Advances
to the Borrower from time to time on any Business Day during
the period from the Effective Date until the Termination
Date of such Lender in an aggregate amount not to exceed at
any time outstanding the amount set opposite such Lender's
name on the signature pages hereof or, if such Lender has
entered into any Assignment and Acceptance, set forth for
such Lender in the Register maintained by the Administrative
Agent pursuant to Section 8.07(c), as such amount may be
reduced pursuant to Section 2.04 (such Lender's
"Commitment"); provided that the aggregate amount of the
Commitments of the Lenders shall be deemed used from time to
time to the extent of the aggregate amount of the Bid
Advances and such deemed use of the aggregate amount of the
Commitments shall be applied to the Lenders ratably
according to their respective Commitments (such deemed use
of the aggregate amount of the Commitments resulting from
the Bid Advances being the "Bid Reduction"); provided
further that (i) in no event shall the aggregate principal
amount of Committed Advances from any Lender outstanding at
any time exceed its Commitment then in effect and (ii) the
Total Utilization of Commitments shall not exceed the
aggregate Commitments then in effect.
(b) Each Committed Borrowing shall be in an aggregate
amount not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of Committed
Advances of the same Type made on the same day by the
Lenders ratably according to their respective Commitments.
Within the limits of each Lender's Commitment, the Borrower
may from time to time borrow, prepay pursuant to Section
2.06(c) and reborrow under this Section 2.01.
SECTION 2.02. MAKING THE COMMITTED ADVANCES.
(a) Each Committed Borrowing shall be made on notice,
given not later than (x) 11:00 A.M. (New York City time) on
the date of a proposed Committed Borrowing consisting of
Base Rate Advances and (y) 11:00 A.M. (New York City time)
on the third Business Day prior to the date of a proposed
Committed Borrowing consisting of Eurodollar Rate Advances,
by the Borrower to the Administrative Agent, which shall
give to each Lender prompt notice thereof by telecopier,
telex or cable. Each such notice of a Committed Borrowing (a
"Notice of Committed Borrowing") shall be by telecopier,
telex or cable, confirmed immediately in writing, in
substantially the form of EXHIBIT A-1 hereto, specifying
therein the requested (i) date of such Committed Borrowing,
(ii) Type of Committed Advances comprising such Committed
Borrowing, (iii) aggregate amount of such Committed
Borrowing, and (iv) in the case of a Committed Borrowing
comprised of Eurodollar Rate Advances, the initial Interest
Period for each such Committed Advance. The Borrower may,
subject to the conditions herein provided, borrow more than
one Committed Borrowing on any Business Day. Each Lender
shall, before 2:00 P.M. (New York City time) in the case of
a Committed Borrowing consisting of Base Rate Advances and
before 11:00 A.M. (New York City time) in the case of a
Committed Borrowing consisting of Eurodollar Rate Advances,
in each case on the date of such Committed Borrowing, make
available for the account of its Applicable Lending Office
to the Administrative Agent at its address referred to in
Section 8.02, in same day funds, such Lender's ratable
portion of such Committed Borrowing. After the
Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds
available to the Borrower at the Administrative Agent's
aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) the Borrower may not select Eurodollar Rate
Advances for any Committed Borrowing or with respect to
the Conversion or continuance of any Committed
Borrowing if the aggregate amount of such Committed
Borrowing or such Conversion or continuance is less
than $5,000,000;
(ii) there shall be no more than five Interest
Periods relating to Committed Borrowings consisting of
Eurodollar Rate Advances outstanding at any time;
(iii) if any Lender shall, at least one Business
Day before the date of any requested Committed
Borrowing, notify the Administrative Agent that the
introduction of or any change in or in the
interpretation of any law or regulation makes it
unlawful, or that any central bank or other
governmental authority asserts that it is unlawful, for
such Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate
Advances hereunder, the Commitment of such Lender to
make Eurodollar Rate Advances or to Convert all or any
portion of Base Rate Advances shall forthwith be
suspended until the Administrative Agent shall notify
the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist
and such Lender's then outstanding Eurodollar Rate
Advances, if any, shall be Base Rate Advances; to the
extent that such affected Eurodollar Rate Advances
become Base Rate Advances, all payments of principal
that would have been otherwise applied to such
Eurodollar Rate Advances shall be applied instead to
such Lender's Base Rate Advances; provided that if
Requisite Lenders are subject to the same illegality or
assertion of illegality, then the right of the Borrower
to select Eurodollar Rate Advances for such Committed
Borrowing or any subsequent Committed Borrowing or to
Convert all or any portion of Base Rate Advances shall
forthwith be suspended until the Administrative Agent
shall notify the Borrower that the circumstances
causing such suspension no longer exist, and each
Committed Advance comprising such Committed Borrowing
shall be a Base Rate Advance;
(iv) if fewer than two Reference Banks furnish
timely information to the Administrative Agent for
determining the Adjusted Eurodollar Rate for any
Eurodollar Rate Advances comprising any requested
Committed Borrowing, the right of the Borrower to
select Eurodollar Rate Advances for such Committed
Borrowing or any subsequent Committed Borrowing shall
be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist,
and each Advance comprising such Committed Borrowing
shall be made as a Base Rate Advance; and
(v) if the Requisite Lenders shall, at least
one Business Day before the date of any requested
Committed Borrowing, notify the Administrative Agent
that the Adjusted Eurodollar Rate for Eurodollar Rate
Advances comprising such Committed Borrowing will not
adequately reflect the cost to such Requisite Lenders
of making, funding or maintaining their respective
Eurodollar Rate Advances for such Committed Borrowing,
the right of the Borrower to select Eurodollar Rate
Advances for such Committed Borrowing or any subsequent
Committed Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension
no longer exist, and each Committed Advance comprising
such Committed Borrowing shall be made as a Base Rate
Advance.
(c) Each Notice of Committed Borrowing shall be
irrevocable and binding on the Borrower. In the case of any
Committed Borrowing which the related Notice of Committed
Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against
any loss, cost or expense incurred by such Lender by reason
of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Committed Borrowing or by
reason of the termination of hedging or other similar
arrangements, in each case when such Advance is not made on
such date (other than by reason of (i) a breach of a
Lender's obligations hereunder or (ii) a suspension of
Eurodollar Rate Advances under clauses (iii), (iv) or (v) of
paragraph (b) of this Section 2.02), including without
limitation, as a result of any failure to fulfill on or
before the date specified in such Notice of Committed
Borrowing for such Committed Borrowing the applicable
conditions set forth in Article III.
(d) Unless the Administrative Agent shall have
received notice from a Lender prior to the date of any
Committed Borrowing that such Lender will not make available
to the Administrative Agent such Lender's ratable portion of
such Committed Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to
the Administrative Agent on the date of such Committed
Borrowing in accordance with subsection (a) of this Section
2.02 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest
thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of
the Borrower, the interest rate applicable at the time to
Advances comprising such Committed Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender
shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Lender's
Advance as part of such Committed Borrowing for purposes of
this Agreement.
(e) The failure of any Lender to make the Advance to
be made by it as part of any Committed Borrowing shall not
relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any
other Lender to make the Advance to be made by such other
Lender on the date of any Committed Borrowing.
SECTION 2.03. MAKING THE BID ADVANCES.
(a) Each Lender severally agrees that the Borrower may
make Bid Borrowings in Dollars under this Section 2.03 from
time to time on any Business Day during the period from the
Effective Date until the date occurring one month prior to
the Termination Date, in the manner set forth below;
provided that, after giving effect to the making of each Bid
Borrowing, the Total Utilization of Commitments shall not
exceed the aggregate Commitments then in effect and the
aggregate amount of the Bid Advances of all Lenders then
outstanding shall not exceed the aggregate Commitments then
in effect.
(i) The Borrower may request a Bid Borrowing
under this Section 2.03 by delivering to the
Administrative Agent, by telecopier, telex or cable,
confirmed immediately in writing, a notice of a Bid
Borrowing (a "Notice of Bid Borrowing"), in
substantially the form of EXHIBIT A-2 hereto,
specifying the date and aggregate amount of the
proposed Bid Borrowing, the maturity date for repayment
of each Bid Advance to be made as part of such Bid
Borrowing (which maturity date may not be earlier than
the date occurring thirty (30) days (in the case of
Fixed Rate Advances) or one (1) month (in the case of
Eurodollar Rate Advances) after the date of such Bid
Borrowing, or in any case later than the Termination
Date), whether the Lenders should offer to make Fixed
Rate Advances or Eurodollar Rate Advances, the interest
payment date or dates relating thereto, and any other
terms to be applicable to such Bid Borrowing, not later
than 10:00 A.M. (New York City time) (A) at least one
(1) Business Day prior to the date of a proposed Bid
Borrowing consisting of Fixed Rate Advances and (B) at
least four (4) Business Days prior to the date of a
proposed Bid Borrowing consisting of Eurodollar Rate
Advances. The Administrative Agent shall in turn
promptly notify each Lender of each request for a Bid
Borrowing received by it from the Borrower by sending
such Lender a copy of the related Notice of Bid
Borrowing.
(ii) Each Lender may, if, in its sole
discretion, it elects to do so, irrevocably offer to
make one or more Bid Advances to the Borrower as part
of such proposed Bid Borrowing at a Fixed Rate or Rates
or a margin or margins relative to the Adjusted
Eurodollar Rate, as requested by the Borrower. Each
Lender electing to make such an offer shall do so by
notifying the Administrative Agent (which shall give
prompt notice thereof to the Borrower), before 10:00
A.M. (New York City time) (A) the date of such proposed
Bid Borrowing, in the case of a Notice of Bid Borrowing
delivered pursuant to clause (A) of paragraph (i) above
and (B) three (3) Business Days before the date of such
proposed Bid Borrowing, in the case of a Notice of Bid
Borrowing delivered pursuant to clause (B) of paragraph
(i) above, of the amount of each Bid Advance which such
Lender would be willing to make as part of such
proposed Bid Borrowing (which amount may, subject to
the proviso to the first sentence of this Section
2.03(a), exceed such Lender's Commitment, if any), the
Fixed Rate or Rates or margin or margins relative to
the Adjusted Eurodollar Rate, as requested by the
Borrower, which such Lender would be willing to accept
for such Bid Advance and such Lender's Applicable
Lending Office with respect to such Bid Advance;
provided that if the Administrative Agent in its
capacity as a Lender, or any affiliate of the
Administrative Agent in its capacity as a Lender,
shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer
before 9:00 A.M. (New York City time) on the date on
which notice of such election is to be given to the
Agent by the other Lenders.
(iii) The Borrower, in turn, (A) before 12:00
P.M. (New York City time) the date of such proposed Bid
Borrowing, in the case of a Notice of Bid Borrowing
delivered pursuant to clause (A) of paragraph (i) above
and (B) before 12:00 Noon (New York City time) three
(3) Business Days before the date of such proposed Bid
Borrowing, in the case of a Notice of Bid Borrowing
delivered pursuant to clause (B) of paragraph (i)
above, either
(x) cancel such Bid Borrowing by giving the
Administrative Agent notice to that effect, or
(y) accept one or more of the offers made by
any Lender or Lenders pursuant to paragraph (ii)
above, in its sole discretion, by giving notice to
the Administrative Agent of the amount of each Bid
Advance to be made by each Lender as part of such
Bid Borrowing, and reject any remaining offers
made by Lenders pursuant to paragraph (ii) above
by giving the Administrative Agent notice to that
effect; provided that acceptance of offers may
only be made on the basis of ascending rates for
Bid Borrowings of the same Type and duration; and
provided further that the Borrower may not accept
offers in excess of the aggregate amount requested
in the Notice of Bid Borrowing; and provided
further still if offers are made by two or more
Lenders for the same Type of Bid Borrowing for the
same duration and with the same rate of interest,
in an aggregate amount which is greater than the
amount requested, such offers shall be accepted on
a pro rata basis in proportion to the amount of
the offer made by each such Lender.
(iv) If the Borrower notifies the Administrative
Agent that such Bid Borrowing is cancelled pursuant to
paragraph (iii)(x) above, the Administrative Agent
shall give prompt notice thereof to the Lenders and
such Bid Borrowing shall not be made.
(v) If the Borrower accepts (which acceptance
may not be revoked) one or more of the offers made by
any Lender or Lenders pursuant to paragraph (iii)(y)
above, the Administrative Agent shall in turn promptly
notify (A) each Lender that has made an offer as
described in paragraph (ii) above, of the date and
aggregate amount of such Bid Borrowing and whether or
not any offer or offers made by such Lender pursuant to
paragraph (ii) above have been accepted by the
Borrower, (B) each Lender that is to make a Bid Advance
as part of such Bid Borrowing, of the amount of each
Bid Advance to be made by such Lender as part of such
Bid Borrowing, and (C) each Lender that is to make a
Bid Advance as part of such Bid Borrowing, upon
receipt, that the Administrative Agent has received
forms of documents appearing to fulfill the applicable
conditions set forth in Article III.
(b) Each Lender that is to make a Bid Advance as part
of a Bid Borrowing shall, before 1:00 P.M. (New York City
time) on the date of such Bid Borrowing specified in the
Notice of Bid Borrowing relating thereto, make available for
the account of its Applicable Lending Office to the
Administrative Agent at such account maintained at the
Payment Office for Dollars as shall have been notified by
the Administrative Agent to the Lenders prior thereto and in
same day funds, such Lender's portion of such Bid Borrowing.
Upon fulfillment of the applicable conditions set forth in
Article III and after receipt by the Administrative Agent of
such funds, the Administrative Agent will make such funds
available to the Borrower requesting a Bid Advance at the
aforesaid applicable Payment Office. Promptly after each Bid
Borrowing the Administrative Agent will notify each Lender
of the amount of the Bid Borrowing, the consequent Bid
Reduction and the dates upon which such Bid Reduction
commenced and will terminate. The Borrower shall indemnify
each Lender which is to make a Bid Advance (as a result of
the acceptance by the Borrower of one or more offers by such
Lender) as part of a Bid Borrowing against any loss, cost or
expense incurred by such Lender by reason of the liquidation
or reemployment of deposits or other funds acquired by such
Lender to fund the Bid Advance to be made by such Lender as
part of such Bid Borrowing or by reason of the termination
of hedging or other similar arrangements, in each case when
such Bid Advance is not made on such date (other than by
reason of a breach of a Lender's obligations hereunder),
including without limitation, as a result of any failure to
fulfill on or before the date specified in such notice of
Bid Borrowing for such Bid Borrowing the applicable
conditions set forth in Article III.
(c) Each Bid Borrowing shall be in an aggregate
principal amount of not less than $5,000,000 with increments
of $1,000,000 and, following the making of each Bid
Borrowing, the Borrower and each Lender shall be in
compliance with the limitations set forth in the proviso to
the first sentence of subsection (a) above.
(d) Within the limits and on the conditions set forth
in this Section 2.03, the Borrower may from time to time
borrow under this Section 2.03, repay or prepay pursuant to
subsection (e) below, and reborrow under this Section 2.03;
provided that a Notice of Bid Borrowing shall not be given
within seven (7) Business Days of the date of any other
Notice of Bid Borrowing.
(e) The Borrower shall repay to the Administrative
Agent for the account of each Lender which has made, or
holds the right to repayment of, a Bid Advance to such
Borrower on the maturity date of each Bid Advance (such
maturity date being that specified by the Borrower for
repayment of such Bid Advance in the related Notice of Bid
Borrowing delivered pursuant to subsection (a)(i) above) the
then unpaid principal amount of such Bid Advance. The
Borrower shall not have the right to prepay any principal
amount of any Bid Advance unless, and then only on the
terms, specified by the Borrower for such Bid Advance in the
related Notice of Bid Borrowing delivered pursuant to
subsection (a)(i) above.
(f) The Borrower shall pay interest on the unpaid
principal amount of each Bid Advance from the date of such
Bid Advance to the date the principal amount of such Bid
Advance is repaid in full, at the rate of interest for such
Bid Advance specified by the Lender making such Bid Advance
in its notice with respect thereto delivered pursuant to
subsection (a)(ii) above, payable on the interest payment
date or dates specified by the Borrower for such Bid Advance
in the related Notice of Bid Borrowing delivered pursuant to
subsection (a)(i) above; provided that any principal amount
of any Bid Rate Advance which is not paid when due (whether
at stated maturity, by acceleration or otherwise) shall bear
interest from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate
per annum equal at all times to (A) until the scheduled
maturity date of such Bid Advances, the greater of (x) 2%
per annum above the Base Rate in effect from time to time
and (y) 2% per annum above the rate per annum required to be
paid on such amount immediately prior to the date on which
such amount became due, and (B) from and after the scheduled
maturity date of such Bid Advances, 2% per annum above the
Base Rate in effect from time to time.
SECTION 2.04. FEES.
(a) FACILITY FEES. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender (other
than the Designated Bidders) a facility fee on such Lender's
daily average Commitment, whether used or unused and without
giving effect to any Bid Reduction, from the Effective Date
in the case of each Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which
it became a Lender in the case of each other Lender until
the Termination Date of such Lender, payable quarterly in
arrears on the last day of each March, June, September and
December during the term of such Lender's Commitment,
commencing September 30, 1996, and on the Termination Date
of such Lender, in an amount equal to the product of (i)
such Lender's daily average Commitment, whether used or
unused and without giving effect to any Bid Reduction, in
effect during the period for which such payment that is to
be made times (ii) the weighted average rate per annum that
is derived from the following rates: (a) a rate of 0.10% per
annum with respect to each day during such period that the
ratings with respect to Long-Term Debt were at Level 1, (b)
a rate of 0.110% per annum with respect to each day during
such period that such ratings were at Level 2, (c) a rate of
0.125% per annum with respect to each day during such period
that such ratings were at Level 3, (d) a rate of 0.1875% per
annum with respect to each day during such period that such
ratings were at Level 4, and (e) at the rate of 0.2500% per
annum with respect to each day during such period that such
ratings were at Level 5. If any change in the rating
established by S&P, Moody's or Duff & Phelps with respect to
Long-Term Debt shall result in a change in the Level, the
change in the commitment fee shall be effective as of the
date on which such rating change is publicly announced. If
the ratings established by any two of S&P, Moody's or Duff &
Phelps with respect to Long-Term Debt are unavailable for
any reason for any day, then the applicable level for
purposes of calculating the commitment fee for such day
shall be deemed to be Level 5 (or, if the Requisite Lenders
consent in writing, such other Level as may be reasonably
determined by the Requisite Lenders from a rating with
respect to Long-Term Debt for such day established by
another rating agency reasonably acceptable to the Requisite
Lenders).
(b) BID ADVANCE ADMINISTRATION FEE. The Borrower
agrees to pay the Administrative Agent for its own account a
handling fee as set forth in that certain fee letter dated
July 24, 1996 between the Administrative Agent and the
Borrower in connection with each request for a Bid Advance
pursuant to Section 2.03.
(c) AGENTS' FEES. The Borrower agrees to pay to each
of the Agents the fees payable to each such Agent pursuant
to the fee letters dated as of July 24, 1996 between the
Borrower and CUSA and the fee letter dated as of July 9,
1996 between the Borrower and B of A, in the amounts and at
the times specified in each of such letters.
(d) ADDITIONAL FEES. In the event the Effective Date
has not occurred on or before September 30, 1996, the
Borrower agrees to pay to the Administrative Agent for
account of each Lender the fees payable to such Lenders
pursuant to that certain fee letter dated as of July 24,
1996 between the Borrower and the Administrative Agent.
SECTION 2.05. TERMINATION AND REDUCTION OF THE COMMITMENTS.
(a) MANDATORY TERMINATION. In the event that a
mandatory prepayment in full of the Advances is required by
the Requisite Lenders pursuant to Section 2.06(b) (whether
or not there are Advances outstanding), the Commitments of
the Lenders shall immediately terminate.
(b) OPTIONAL REDUCTIONS. The Borrower shall have the
right, upon at least three (3) Business Days' notice to the
Administrative Agent, to terminate in whole or reduce
ratably in part the unused portions of the respective
Commitments of the Lenders; provided that (i) each partial
reduction shall be in the aggregate amount of $5,000,000 or
an integral multiple of $1,000,000 in excess thereof, and
(ii) the aggregate of the Commitments of the Lenders shall
not be reduced to an amount which is less than the Total
Utilization of Commitments.
(c) NO REINSTATEMENT. Once so reduced or terminated
pursuant to this Section 2.05, Commitments of the Lenders
shall not be reinstated.
SECTION 2.06. REPAYMENT AND PREPAYMENT OF ADVANCES.
(a) MANDATORY REPAYMENT ON CERTAIN DATE. The Borrower
shall repay the outstanding principal amount of (i) each
Committed Advance made by each Lender on the Termination
Date of such Lender, and (ii) each Bid Advance at the
maturity date specified in the Notice of Bid Borrowing.
(b) MANDATORY PREPAYMENT IN CERTAIN EVENTS. If any one
of the following events shall occur:
(i) any Person or Persons acting in concert
shall acquire beneficial ownership of more than 40% of
the Borrower's voting stock; or
(ii) during any period of up to 12 months,
individuals who at the beginning of such period were
directors of the Borrower shall cease to constitute a
majority of the Borrower's board of directors; or
(iii) any Debt which is outstanding in a
principal amount of at least $15,000,000 in the
aggregate (but excluding Debt arising under this
Agreement) of the Borrower or any of its Subsidiaries
(as the case may be) shall be required to be prepaid
(other than by a regularly scheduled required
prepayment or by a required prepayment of insurance
proceeds or by a required prepayment as a result of
formulas based on asset sales or excess cash flow),
redeemed, purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required
to be made, in each case prior to the stated maturity
thereof (other than as set forth in Section 6.01(d));
then, and in any such event, if the Administrative Agent
shall have received notice from the Requisite Lenders that
they elect to have the Advances prepaid in full and the
Administrative Agent shall have provided notice to the
Borrower that the Advances are to be prepaid in full, the
Borrower shall immediately prepay in full the Advances,
together with interest accrued to the date of prepayment and
will reimburse the Lenders in respect thereof pursuant to
Section 8.04(b).
(c) VOLUNTARY PREPAYMENTS OF COMMITTED BORROWINGS.
(i) The Borrower shall have no right to prepay
any principal amount of any Advances other than as
provided in this subsection (c).
(ii) The Borrower may, upon notice to the
Administrative Agent no later than 11:00 A.M. (New York
time) (i) on the date the Borrower proposes to prepay
Committed Advances in the case of Base Rate Advances
and (ii) at least two (2) Business Days' notice to the
Administrative Agent in the case of Eurodollar Rate
Advances, stating the proposed date and aggregate
principal amount of the prepayment, and if such notice
is given the Borrower shall, prepay the outstanding
principal amounts of the Advances comprising part of
the same Committed Borrowing in whole or ratably in
part; provided, however, that (x) each partial
prepayment shall be in an aggregate principal amount
not less than $5,000,000 and integral multiples of
$1,000,000 in excess thereof, and (y) in the case of
any such prepayment of any Eurodollar Rate Advance, the
Borrower shall pay all accrued interest to the date of
such prepayment on the portion of such Eurodollar Rate
Advance being prepaid and shall be obligated to
reimburse the Lenders in respect thereof pursuant to
Section 8.04(b).
(d) NO PREPAYMENT OF BID BORROWINGS. The Borrower
shall have no right to prepay any principal amount of any
Bid Advances.
SECTION 2.07. INTEREST ON COMMITTED ADVANCES. The Borrower
shall pay to each Lender interest accrued on the principal amount
of each Committed Advance outstanding from time to time from the
date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(a) BASE RATE ADVANCES. If such Committed Advance is
a Base Rate Advance, a rate per annum equal at all times to
(i) the Base Rate in effect from time to time plus (ii) the
Applicable Margin, if any, payable quarterly in arrears on
the last day of each March, June, September and December
during the term of this Agreement, commencing September 30,
1996, and on the Termination Date of the applicable Lender;
provided that any amount of principal, interest, fees and
other amounts payable under this Agreement (including,
without limitation, the principal amount of Base Rate
Advances, but excluding the principal amount of Eurodollar
Rate Advances) which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest
from the date on which such amount is due until such amount
is paid in full, payable on demand, at a rate per annum
equal at all times to 2% per annum above the Base Rate in
effect from time to time.
(b) EURODOLLAR RATE ADVANCES. If such Committed
Advance is a Eurodollar Rate Advance, a rate per annum equal
at all times during the Interest Period for such Advance to
the sum of (i) the Adjusted Eurodollar Rate for such
Interest Period plus (ii) the Applicable Margin, payable in
arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on
the day which occurs during such Interest Period three
months from the first day of such Interest Period; provided
that any principal amount of any Eurodollar Rate Advance
which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date
on which such amount is due until such amount is paid in
full, payable on demand, at a rate per annum equal at all
times to (A) during the Interest Period applicable to such
Eurodollar Rate Advance, the greater of (x) 2% per annum
above the Base Rate in effect from time to time and (y) 2%
per annum above the rate per annum required to be paid on
such amount immediately prior to the date on which such
amount became due and (B) after the expiration of such
Interest Period, 2% per annum above the Base Rate in effect
from time to time.
SECTION 2.08. INTEREST RATE DETERMINATION.
(a) Each Reference Bank agrees to furnish to the
Administrative Agent timely information for the purpose of
determining each Adjusted Eurodollar Rate. If any one or
more of the Reference Banks shall not furnish such timely
information to the Administrative Agent for the purpose of
determining any such interest rate, the Administrative Agent
shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks,
subject to Section 2.02(b)(iv).
(b) The Administrative Agent shall give prompt notice
to the Borrower and the Lenders of the applicable interest
rate determined by the Administrative Agent for purposes of
Section 2.07(a) or 2.07(b), and the applicable rate, if any,
furnished by each Reference Bank for the purpose of
determining the applicable interest rate under Section
2.07(b).
SECTION 2.09. VOLUNTARY CONVERSION OR CONTINUATION OF
COMMITTED ADVANCES.
(a) The Borrower may on any Business Day, upon notice
given to the Administrative Agent not later than 12:00 noon
(New York City time) on the third Business Day prior to the
date of the proposed Conversion or continuance (a "Notice of
Conversion/Continuation") and subject to the provisions of
Section 2.02(b), (1) Convert all Committed Advances of one
Type comprising the same Committed Borrowing into Advances
of another Type and (2) upon the expiration of any Interest
Period applicable to Committed Advances which are Eurodollar
Rate Advances, continue all (or, subject to Section 2.02(b),
any portion of) such Advances as Eurodollar Rate Advances
and the succeeding Interest Period(s) of such continued
Advances shall commence on the last day of the Interest
Period of the Advances to be continued; provided, however,
that any Conversion of any Eurodollar Rate Advances into
Base Rate Advances shall be made on, and only on, the last
day of an Interest Period for such Eurodollar Rate Advances.
Each such Notice of Conversion/Continuation shall, within
the restrictions specified above, specify (i) the date of
such continuation or Conversion, (ii) the Committed Advances
(or, subject to Section 2.02(b), any portion thereof) to be
continued or Converted, (iii) if such continuation is of, or
such Conversion is into, Eurodollar Rate Advances, the
duration of the Interest Period for each such Committed
Advance, and (iv) in the case of a continuation of or a
Conversion into a Eurodollar Rate Advance, that no Potential
Event of Default or Event of Default has occurred and is
continuing.
(b) If upon the expiration of the then existing
Interest Period applicable to any Committed Advance which is
a Eurodollar Rate Advance, the Borrower shall not have
delivered a Notice of Conversion/Continuation in accordance
with this Section 2.09, then such Advance shall upon such
expiration automatically be Converted to a Base Rate
Advance.
(c) After the occurrence of and during the continuance
of a Potential Event of Default or an Event of Default, the
Borrower may not elect to have an Advance be made or
continued as, or Converted into, a Eurodollar Rate Advance
after the expiration of any Interest Period then in effect
for that Advance.
SECTION 2.10. INCREASED COSTS.
(a) If, due to either (i) the introduction of or any
change (other than any change by way of imposition or
increase of reserve requirements in the case of Eurodollar
Rate Advances included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or
request from any central bank or other governmental
authority (whether or not having the force of law), there
shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining Eurodollar Rate
Advances, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A reasonably
detailed certificate as to the amount and manner of
calculation of such increased cost, submitted to the
Borrower and the Administrative Agent by such Lender, shall
be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender (other than Designated Bidders)
determines that compliance with any law or regulation or any
guideline or request from any central bank or other
governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required
or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of
such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender
(with a copy of such demand to the Administrative Agent),
the Borrower shall immediately pay to the Administrative
Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of
such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be
allocable to the existence of such Lender's commitment to
lend hereunder. A reasonably detailed certificate as to
such amounts and the manner of calculation thereof submitted
to the Borrower and the Administrative Agent by such Lender
shall be conclusive and binding for all purposes, absent
manifest error.
(c) If a Lender shall change its Applicable Lending
Office, such Lender shall not be entitled to receive any
greater payment under Sections 2.10 and 2.12 than the amount
such Lender would have been entitled to receive if it had
not changed its Applicable Lending Office, unless such
change was made at the request of the Borrower or at a time
when the circumstances giving rise to such greater payment
did not exist.
SECTION 2.11. PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder not
later than 1:00 P.M. (New York City time) on the day when
due in Dollars to the Administrative Agent at its address
referred to in Section 8.02 in same day funds. Subject to
the immediately succeeding sentence, the Administrative
Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal or interest or
commitment fees ratably (other than amounts payable pursuant
to Section 2.10 or 2.12 or, to the extent the Termination
Date is not the same for all Lenders, pursuant to Section
2.06(a)) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this
Agreement. Upon receipt of principal or interest paid after
an Event of Default and an acceleration or a deemed
acceleration of amounts due hereunder, the Administrative
Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal or interest
ratably in accordance with each Lender's outstanding
Advances (other than amounts payable pursuant to Section
2.10 or 2.12) to the Lenders for the account of their
respective Applicable Lending Offices. Upon its acceptance
of an Assignment and Acceptance and recording of the
information contained therein in the Register pursuant to
Section 8.07(c), from and after the effective date specified
in such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder in respect of the interest
assigned thereby to the Lender assignee thereunder, and the
parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior
to such effective date directly between themselves.
(b) All computations of interest based on the Base
Rate shall be made by the Administrative Agent on the basis
of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Adjusted Eurodollar
Rate, the Federal Funds Rate or the Fixed Rate and of
commitment fees shall be made by the Administrative Agent on
the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the
last day) occurring in the period for which such interest or
such fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes. absent manifest
error.
(c) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the
computation of payment of interest or commitment fee, as the
case may be; provided, however, if such extension would
cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business
Day.
(d) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which
any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made
such payment in full to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender.
If and to the extent that the Borrower shall not have so
made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.12. TAXES.
(a) Any and all payments by the Borrower hereunder
shall be made, in accordance with Section 2.11, free and
clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding (i) in the case of each Lender and each Agent,
taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Lender
or such Agent (as the case may be) is organized or any
political subdivision thereof or in which its principal
office is located, (ii) in the case of each Lender taxes
imposed on its net income, and franchise taxes imposed on
it, by the jurisdiction of such Lender's Applicable Lending
Office or any political subdivision thereof and (iii) in the
case of each Lender and each Agent, taxes imposed by the
United States by means of withholding at the source if and
to the extent that such taxes shall be in effect and shall
be applicable on the date hereof in the case of each Bank
and on the effective date of the Assignment and Acceptance
pursuant to which it became a Lender in the case of each
other Lender, on payments to be made to the Agents or such
Lender's Applicable Lending Office (all such nonexcluded
taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to any
Lender or either Agent, (i) the sum payable shall be
increased as may be necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Lender
or such Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which
arise from the execution, delivery or registration of, or
otherwise with respect to, this Agreement (hereinafter
referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and each
Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this
Section 2.12) paid by such Lender or such Agent (as the case
may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days
from the date such Lender or such Agent (as the case may be)
makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Administrative
Agent, at its address referred to in Section 8.02, the
original or a certified copy of a receipt evidencing payment
thereof.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case
of each other Lender, and from time to time thereafter if
requested in writing by the Borrower (but only so long as
such Lender remains lawfully able to do so), shall provide
the Borrower with Internal Revenue Service form 1001 or
4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the
United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or
business in the United States. If the form provided by a
Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall
be considered excluded from "Taxes" as defined in Section
2.12(a).
(f) For any period with respect to which a Lender has
failed to provide the Borrower with the appropriate form
described in Section 2.12(e) (other than if such failure is
due to a change in law occurring subsequent to the date on
which a form originally was required to be provided, or if
such form otherwise is not required under the first sentence
of subsection (e) above), such Lender shall not be entitled
to indemnification under Section 2.12(a) with respect to
Taxes imposed by the United States; provided, however, that
should a Lender become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower
shall, at the expense of such Lender, take such steps as the
Lender shall reasonably request to assist the Lender to
recover such Taxes.
(g) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.12
shall survive the payment in full of principal and interest
hereunder.
SECTION 2.13. SHARING OF PAYMENTS, ETC. If any Lender
shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of setoff, or otherwise) on account of
the Advances made by it (other than pursuant to Section 2.10 or
2.12 or, to the extent the Termination Date is not the same for
all Lenders, pursuant to Section 2.06(a)) in excess of its
ratable share of payments on account of the Committed Advances
obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in the Committed
Advances made by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each
of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrower agrees
that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.14. EVIDENCE OF DEBT.
(a) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from
each Advance owing to such Lender from time to time,
including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder.
(b) The Register maintained by the Administrative
Agent pursuant to Section 8.07(c) shall include a control
account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date,
amount and tenor, as applicable, of each Borrowing, the Type
of Advances comprising such Borrowing and the Interest
Period applicable thereto, (ii) the terms of each Assignment
and Acceptance delivered to and accepted by it, (iii) the
amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender
hereunder, and (iv) the amount of any sum received by the
Administrative Agent from the Borrower hereunder and each
Lender's share thereof.
(c) The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest
error.
(d) If, in the opinion of any Lender, a promissory
note or other evidence of debt is required, appropriate or
desirable to reflect or enforce the indebtedness of the
Borrower resulting from the Committed Advances or Bid
Advances made, or to be made, by such Lender to the
Borrower, then, upon request of such Lender, the Borrower
shall promptly execute and deliver to such Lender a
promissory note substantially in the form of EXHIBIT G-1 in
the case of Committed Advances and EXHIBIT G-2 in the case
of Bid Advances, payable to the order of such Lender in an
amount up to the maximum amount of Committed Advances or Bid
Advances, as the case may be, payable or to be payable by
such Borrower to the Lender from time to time hereunder.
SECTION 2.15. USE OF PROCEEDS.
(a) Advances shall be used by the Borrower for
commercial paper backup and for general corporate purposes;
provided that proceeds of Advances and proceeds of
commercial paper as to which this Agreement provides backup
shall not be used for any Hostile Acquisition.
(b) No portion of the proceeds of any Advances under
this Agreement shall be used by the Borrower or any of its
Subsidiaries in any manner which might cause the Advances or
the application of such proceeds to violate, or require any
Lender to make any filing or take any other action under,
Regulation G, Regulation U, Regulation T, or Regulation X of
the Board of Governors of the Federal Reserve System or any
other regulation of such Board or to violate the Securities
Exchange Act of 1934, in each case as in effect on the date
or dates of such Advances and such use of proceeds.
SECTION 2.16. EXTENSION OF THE COMMITMENT TERMINATION DATE.
The Borrower may not more than once in any calendar year and not
later than 45 days prior to an anniversary of the Effective Date,
request that the Commitment Termination Date of all Eligible
Lenders (as defined below) be extended for a period of one year
by delivering to the Administrative Agent a signed copy of an
extension request (an "Extension Request") in substantially the
form of EXHIBIT E hereto. The Administrative Agent shall
promptly notify each Eligible Lender of its receipt of such
Extension Request. On or prior to ten days prior to the
applicable anniversary of the Effective Date in each calendar
year in which there has been an Extension Request (the
"Determination Date"), each Eligible Lender shall notify the
Administrative Agent and the Borrower of its willingness or
unwillingness to extend its Commitment Termination Date
hereunder. Any Eligible Lender that shall fail to so notify the
Administrative Agent and the Borrower on or prior to the
Determination Date shall be deemed to have declined to so extend.
In the event that, on or prior to the Determination Date,
Eligible Lenders representing 66-2/3% or more of the aggregate
amount of the Commitments of all Eligible Lenders then in effect
shall consent to such extension, upon confirmation by the
Administrative Agent of such consent, the Administrative Agent
shall so advise the Lenders and the Borrower, and, subject to
execution of documentation evidencing such extension and
consents, the Commitment Termination Date of each Eligible Lender
(each a "Consenting Lender") that has consented on or prior to
the Determination Date to so extend shall be extended to the date
one year after the Commitment Termination Date of such Eligible
Lender in existence on the date of the related Extension Request.
Thereafter, (i) for each Consenting Lender, the term "Commitment
Termination Date" shall at all times refer to such date, unless
it is later extended pursuant to this Section 2.16, and (ii) for
each Lender that is not an Eligible Lender and for each Eligible
Lender that either has declined on or prior to the Determination
Date to so extend or is deemed to have so declined, the term
"Commitment Termination Date" shall at all times refer to the
date which was the Commitment Termination Date of such Lender
immediately prior to the delivery to the Administrative Agent of
such Extension Request. In the event that, as of the
Determination Date, the Consenting Lenders represent less than
66-2/3% of the aggregate amount of the Commitments of all
Eligible Lenders then in effect, and the Agents confirm the same,
the Administrative Agent shall so advise the Lenders and the
Borrower, and none of the Lenders' Commitment Termination Dates
shall be extended to the date indicated in the Extension Request
and each Lender's Commitment Termination Date shall continue to
be the date which was the Commitment Termination Date of such
Lender immediately prior to the delivery to the Agents of such
Extension Request. For purposes of this Section 2.16, the term
"Eligible Lenders" means, with respect to any Extension Request,
(i) all Lenders if no Lender's Commitment Termination Date had
been extended pursuant to this Section 2.16 prior to the delivery
to the Agents of such Extension Request, and (ii) in all other
cases, those Lenders which had extended their Commitment
Termination Date in the most recent extension of any Commitment
Termination Date effected pursuant to this Section 2.16.
SECTION 2.17. SUBSTITUTION OF LENDERS. If any Lender
requests compensation from the Borrower under Section 2.10(a) or
(b) or Section 2.12 or if any Lender declines to extend its
Commitment Termination Date pursuant to Section 2.16, the
Borrower shall have the right, with the assistance of the Agents,
to seek one or more Eligible Assignees (which may be one or more
of the Lenders) reasonably satisfactory to the Agents and the
Borrower to purchase the Advances and assume the Commitments of
such Lender, and the Borrower the Agents, such Lender, and such
Eligible Assignees shall execute and deliver an appropriately
completed Assignment and Acceptance pursuant to Section 8.07(a)
hereof to effect the assignment of rights to and the assumption
of obligations by such Eligible Assignees; provided that (i) such
requesting Lender shall be entitled to compensation under Section
2.10 and 2.12 for any costs incurred by it prior to its
replacement, (ii) no Event of Default, or event which with the
giving of notice or lapse of time or both would be an Event of
Default, has occurred and is continuing, (iii) the Borrower has
satisfied all of its obligations under the Loan Documents
relating to such Lender, including without limitation
obligations, if any, under Section 8.04(b), and (iv) the Borrower
shall have paid the Administrative Agent a $3,000 administrative
fee if such replacement Lender is not an existing Lender.
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING
SECTION 3.01. DOCUMENTS TO BE DELIVERED ON THE CLOSING
DATE. The Closing Date shall be deemed to have occurred when
this Agreement shall have been executed and delivered by the
parties hereto and (a) the Agents shall have received the
following, each dated the Closing Date or within two days prior
to the Closing Date unless otherwise indicated, and each in form
and substance satisfactory to the Agents unless otherwise
indicated and in sufficient copies for each Lender:
(i) Copies of resolutions of the Board of Directors
of the Borrower (or its Executive Committee, together with
evidence of the authority of the Executive Committee)
approving this Agreement, and of all documents evidencing
other necessary corporate action and governmental approvals,
if any, with respect to this Agreement, certified as of a
recent date prior to the Closing Date.
(ii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to
sign this Agreement and the other documents to be delivered
by the Borrower hereunder.
(iii) Certified copies of the Borrower's Certificate
of Incorporation, together with good standing certificates
from the state of Delaware and the jurisdiction of the
Borrower's principal place of business, each to be dated a
recent date prior to the Closing Date;
(iv) Copies of the Borrower's Bylaws, certified as of
the Closing Date by their respective Secretary or an
Assistant Secretary;
(v) Executed originals of this Agreement and the
other documents to be delivered by the Borrower hereunder;
(vi) A favorable opinion of the General Counsel of
the Borrower, substantially in the form of EXHIBIT C-1
hereto;
(vii) A favorable opinion of O'Melveny & Myers LLP,
counsel for the Agents, substantially in the form of EXHIBIT
D-1 hereto;
(viii) The Form 10, in the form filed with the SEC;
(ix) The Form 8-K, in the form filed with the SEC;
(x) A certificate of an authorized officer of the
Borrower to the effect that since December 31, 1995, there
has been no material adverse change in the operations,
business or financial or other condition or properties of
the Borrower and its Subsidiaries, taken as a whole and
since March 31, 1996 there has been no material adverse
change in the operations, business or financial or other
condition or properties of the Borrower and its
Subsidiaries, taken as a whole, in each case on a pro forma
basis after giving effect to the Distribution; and
(xi) Evidence that the Newco Credit Agreement has
been duly executed and delivered and the Closing Date
thereunder has occurred; and
(b) the Agents shall have received such other approvals,
opinions or documents as the Requisite Lenders through the Agents
may reasonably request.
SECTION 3.02. CONDITIONS PRECEDENT TO EFFECTIVE TIME. This
Agreement shall become fully effective pursuant to Section
8.06(b) at the Effective Time on the Effective Date upon the
satisfaction of, and the obligation of each Lender to make its
initial Advance is subject to, the conditions precedent that:
(a) the Agents shall have received on or before the
Effective Date the following, each dated the Effective Date
unless otherwise indicated, and each in form and substance
satisfactory to the Requisite Lenders and in sufficient
copies for each Lender:
(i) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying that the
documents, certificates and statements referred to in
Section 3.01(a)(i) through (iv) remain in full force
and effect and are true and correct as of the Effective
Date as if executed and made on the Effective Date;
(ii) A favorable opinion of the General Counsel
of the Borrower, substantially in the form of EXHIBIT
C-2 hereto;
(iii) A favorable opinion of O'Melveny & Myers
LLP, counsel for the Agents, substantially in the form
of EXHIBIT D-2 hereto;
(iv) A certificate of an authorized officer of
the Borrower certifying that the statements made in the
certificate referred to in Section 3.01(a)(x) remain
true and correct as of the Effective Date;
(v) Evidence reasonably satisfactory to the
Requisite Lenders that the Distribution Agreement is in
full force and effect and has not been amended,
supplemented, waived or otherwise modified without the
consent of Requisite Lenders, and executed and
conformed copies thereof (including all exhibits and
schedules thereto) and any amendments thereto and all
documents executed in connection therewith shall have
been delivered to Agents;
(vi) Evidence reasonably satisfactory to the
Requisite Lenders that the Merger has become effective
and that the Distribution will become effective
immediately after the Effective Time at the
Distribution Time in accordance with the terms and
conditions of the Distribution Agreement;
(vii) Evidence that the SEC has declared the Form
10 effective;
(viii) Evidence reasonably satisfactory to the
Requisite Lenders that all approvals, permits,
licenses, authorizations and consents, if any, from any
governmental or regulatory authority necessary to
effectuate the Distribution have been duly obtained and
are in full force and effect as of the Effective Date;
(ix) Evidence that the Newco Credit Agreement
has become effective in accordance with the terms and
conditions set forth therein; and
(x) Letter agreements between the Borrower and
the Exiting Banks, reasonably satisfactory to the
Requisite Lenders terminating (1) all funding
obligations and other obligations of the Exiting Banks
under the Existing Credit Agreement upon the
effectiveness of this Agreement, and (2) all payment
obligations and other obligations of the Borrower under
the Existing Credit Agreement to the Exiting Banks upon
the terms and conditions set forth in such letter
agreements; and
(b) the Agents shall have received the fees set forth
in Section 2.04(c) if such fees are payable to the Agents
and the Banks on or prior to the Effective Date; and
(c) the Agents shall have received such other
approvals, opinions or documents as the Requisite Lenders
through the Agents may reasonably request.
SECTION 3.03. CONDITIONS PRECEDENT TO EACH COMMITTED
BORROWING. The obligation of each Lender to make a Committed
Advance on the occasion of a Committed Borrowing (including the
initial Committed Borrowing) shall be subject to the further
conditions precedent that (x) the Administrative Agent shall have
received a Notice of Committed Borrowing with respect thereto in
accordance with Section 2.02 and (y) on the date of such
Borrowing (a) the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing such statements are true):
(i) The representations and warranties of the
Borrower contained in Section 4.01 are correct on and
as of the date of such Borrowing, before and after
giving effect to such Borrowing and to the application
of the proceeds therefrom, as though made on and as of
such date, except to the extent that any such
representation or warranty expressly relates only to an
earlier date, in which case they were correct as of
such earlier date; and
(ii) No event has occurred and is continuing, or
would result from such Borrowing or from the
application of the proceeds therefrom, which
constitutes an Event of Default, or a Potential Event
of Default; and
(b) the Agents shall have received such other
approvals, opinions or documents as the Requisite Lenders
through the Agents may reasonably request.
SECTION 3.04. CONDITIONS PRECEDENT TO EACH BID BORROWING.
The obligation of each Lender to make a Bid Advance on the
occasion of a Bid Borrowing (including the initial Bid Borrowing)
shall be subject to the further conditions precedent that (x) the
Administrative Agent shall have received a Notice of Bid
Borrowing with respect thereto in accordance with Section 2.03
and (y) on the date of such Borrowing the following statements
shall be true (and each of the giving of the applicable Notice of
Bid Borrowing and the acceptance by the Borrower of the proceeds
of such Borrowing shall constitute a representation and warranty
by the Borrower that on the date of such Borrowing such
statements are true):
(i) The representations and warranties of the
Borrower contained in Section 4.01 are correct on and as of
the date of such Borrowing, before and after giving effect
to such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, except to
the extent that any such representation or warranty
expressly relates only to an earlier date, in which case
they were correct as of such earlier date; and
(ii) No event has occurred and is continuing, or
would result from such Borrowing or from the application of
the proceeds therefrom, which constitutes an Event of
Default, or a Potential Event of Default.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE
BORROWER. The Borrower represents and warrants as follows:
(a) DUE ORGANIZATION, ETC. The Borrower and each
Material Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation. The Borrower and each of
its Material Subsidiaries are qualified to do business in
and are in good standing under the laws of each jurisdiction
in which failure to be so qualified would have a material
adverse effect on the Borrower and its Subsidiaries, taken
as a whole.
(b) DUE AUTHORIZATION, ETC. The execution, delivery
and performance by the Borrower of this Agreement and the
other Loan Documents are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate
action, and do not contravene (i) the Borrower's Certificate
of Incorporation or (ii) applicable law or any material
contractual restriction binding on or affecting the
Borrower.
(c) GOVERNMENTAL CONSENT. No authorization or
approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents.
(d) VALIDITY. This Agreement is the legal, valid and
binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms subject to the effect
of applicable bankruptcy, insolvency, arrangement,
moratorium and other similar laws affecting creditors'
rights generally and to the application of general
principles of equity.
(e) CONDITION OF THE BORROWER. The consolidated
balance sheet of the Borrower and its Subsidiaries as at
December 31, 1995, and the related consolidated statements
of income and retained earnings of the Borrower and its
Subsidiaries for the fiscal year then ended, copies of which
have been previously furnished to each Bank, and the pro
forma consolidated balance sheet of the Borrower and its
Subsidiaries as at March 31, 1996 and the pro forma
statements of consolidated income of the Borrower and its
Subsidiaries for the three months ended March 31, 1996 and
1995 and for the year ended December 31, 1995, in each case
after giving effect to the Distribution, copies of which are
contained in the Form 8-K furnished to each Bank pursuant to
Section 3.01(a)(ix), fairly present the consolidated
financial condition of the Borrower and its Subsidiaries (on
a pro forma basis after giving effect to the Distribution
with respect to such pro forma financial statements) as at
such date and the results of the operations of the Borrower
and its Subsidiaries for the periods ended on such dates,
all in accordance with GAAP consistently applied, and as of
the Effective Date, there has been no material adverse
change in the business, condition (financial or otherwise),
operations or properties of the Borrower and its
Subsidiaries, taken as a whole, since March 31, 1996, after
giving effect to the Distribution.
(f) LITIGATION. (i) There is no pending action or
proceeding against the Borrower or any of its Subsidiaries
before any court, governmental agency or arbitrator, and
(ii) to the knowledge of the Borrower, there is no pending
or threatened action or proceeding affecting the Borrower or
any of its Subsidiaries before any court, governmental
agency or arbitrator, which in either case, in the
reasonable judgement of the Borrower could reasonably be
expected to materially adversely affect the financial
condition or operations of the Borrower and its
Subsidiaries, taken as a whole, or with respect to actions
of third parties which purports to affect the legality,
validity or enforceability of this Agreement.
(g) MARGIN REGULATIONS. The Borrower is not engaged
in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Advance will be used
to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin
stock in any manner that violates, or would cause a
violation of, Regulation G, Regulation T, Regulation U or
Regulation X. Less than 25 percent of the fair market value
of the assets of (i) the Borrower or (ii) the Borrower and
its Subsidiaries consists of Margin Stock.
(h) PAYMENT OF TAXES. The Borrower and each of its
Subsidiaries have filed or caused to be filed all material
tax returns (federal, state, local and foreign) required to
be filed and paid all material amounts of taxes shown
thereon to be due, including interest and penalties, except
for such taxes as are being contested in good faith and by
proper proceedings and with respect to which appropriate
reserves are being maintained by the Borrower or any such
Subsidiary, as the case may be.
(i) GOVERNMENTAL REGULATION. The Borrower is not
subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act or the Investment Company Act of 1940, each as
amended, or to any Federal or state statute or regulation
limiting its ability to incur indebtedness for money
borrowed. No Subsidiary of the Borrower is subject to any
regulation that would limit the ability of the Borrower to
enter into or perform its obligations under this Agreement.
(j) ERISA.
(i) No ERISA Event which might result in
liability of the Borrower or any of its ERISA
Affiliates in excess of $10,000,000 (or, in the case of
an event described in clause (v) of the definition of
ERISA Event, $750,000) (other than for premiums payable
under Title IV of ERISA) has occurred or is reasonably
expected to occur with respect to any Pension Plan.
(ii) Schedule B (Actuarial Information) to the
most recently completed annual report prior to the
Effective Date (Form 5500 Series) for each Pension
Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Agents, is
complete and, to the best knowledge of the Borrower,
accurate, and since the date of such Schedule B there
has been no material adverse change in the funding
status of any such Pension Plan.
(iii) Neither the Borrower nor any ERISA
Affiliate has incurred, or, to the best knowledge of
the Borrower, is reasonably expected to incur, any
Withdrawal Liability to any Multiemployer Plan which
has not been satisfied or which is or might be in
excess of $10,000,000.
(iv) Neither the Borrower nor any ERISA
Affiliate has been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the
meaning of Title IV of ERISA, and, to the best
knowledge of the Borrower, no Multiemployer Plan is
reasonably expected to be in reorganization or to be
terminated within the meaning of Title IV of ERISA.
(k) ENVIRONMENTAL MATTERS.
(i) The Borrower and each of its Subsidiaries
is in compliance in all material respects with all
Environmental Laws the non-compliance with which could
reasonably be expected to have a material adverse
effect on the financial condition or operations of the
Borrower and its Subsidiaries, taken as a whole, and
(ii) there has been no "release or threatened release
of a hazardous substance" (as defined by the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. 9601 et
seq.) or any other release, emission or discharge into
the environment of any hazardous or toxic substance,
pollutant or other materials from the Borrower's or its
Subsidiaries' property other than as permitted under
applicable Environmental Law and other than those which
would not have a material adverse effect on the
financial condition or operations of the Borrower and
its Subsidiaries, taken as a whole. Other than
disposals (A) for which the Borrower has been
indemnified in full or (B) which would not have a
material adverse effect on the financial condition or
operations of the Borrower and its Subsidiaries, taken
as a whole, all "hazardous waste" (as defined by the
Resource Conservation and Recovery Act, 42 U.S.C. 6901
et seq. (1976) and the regulations thereunder, 40 CFR
Part 261 ("RCRA")) generated at the Borrower's or any
Subsidiaries' properties have in the past been and
shall continue to be disposed of at sites which
maintain valid permits under RCRA and any applicable
state or local Environmental Law.
(l) DISCLOSURE. As of the Closing Date and as of the
Effective Date, to the best of the Borrower's knowledge, no
representation or warranty of the Borrower or any of its
Subsidiaries contained in this Agreement or any other Loan
Document or statement made in the Form 10 (including all
Exhibits thereto filed with the Securities and Exchange
Commission) or the Form 8-K or in any other document,
certificate or written statement furnished to the Banks by
or on behalf of the Borrower or any of its Subsidiaries
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements contained in such agreements, documents,
certificates and statements not misleading in light of the
circumstances in which the same were made.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will unless the Requisite
Lenders shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS ETC. Comply, and cause each
of its Subsidiaries to comply, with all applicable laws,
rules, regulations and orders, such compliance to include,
without limitation, (i) complying with all Environmental
Laws and (ii) paying before the same become delinquent all
taxes, assessments and governmental charges imposed upon it
or upon its property except to the extent contested in good
faith, except where failure to so comply would not have a
material adverse effect on the business, condition
(financial or otherwise), operations or properties of the
Borrower and its Subsidiaries, taken as a whole.
(b) REPORTING REQUIREMENTS. Furnish to the
Administrative Agent (in sufficient quantity for delivery to
each Lender) for prompt distribution by the Administrative
Agent to the Lenders and furnish to the Documentation Agent:
(i) as soon as available and in any event
within 60 days after the end of each of the first three
quarters of each fiscal year of the Borrower,
consolidated balance sheets as of the end of such
quarter and consolidated statements of source and
application of funds of the Borrower and its
Subsidiaries and consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries
for such quarter and the period commencing at the end
of the previous fiscal year and ending with the end of
such quarter and certified by the chief financial
officer or chief accounting officer of the Borrower;
(ii) as soon as available and in any event
within 120 days after the end of each fiscal year of
the Borrower, a copy of the annual audit report for
such year for the Borrower and its Subsidiaries,
containing financial statements (including a
consolidated balance sheet and consolidated statement
of income and cash flows of the Borrower and its
Subsidiaries) for such year, certified by and
accompanied by an opinion of Deloitte & Touche or other
nationally recognized independent public accountants.
The opinion shall be unqualified (as to going concern,
scope of audit and disagreements over the accounting or
other treatment of offsets) and shall state that such
consolidated financial statements present fairly in all
material respects the financial position of the
Borrower and its Subsidiaries as at the dates indicated
and the results of their operations and cash flow for
the periods indicated in conformity with GAAP and that
the examination by such accountants in connection with
such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iii) together with each delivery of the report
of the Borrower and its Subsidiaries pursuant to
subsections (i) and (ii) above, a Compliance
Certificate for the year executed by the chief
financial officer or treasurer of the Borrower
demonstrating in reasonable detail compliance during
and at the end of such accounting periods with the
restrictions contained in Section 5.02(e) and (f) (and
setting forth the arithmetical computation required to
show such compliance) and stating that the signer has
reviewed the terms of this Agreement and has made, or
caused to be made under his or her supervision, a
review in reasonable detail of the transactions and
condition of the Borrower and its Subsidiaries during
the accounting period covered by such financial
statements and that such review has not disclosed the
existence during or at the end of such accounting
period, and that the signer does not have knowledge of
the existence as at the date of the compliance
certificate, of any condition or event that constitutes
an Event of Default or Potential Event of Default or,
if any such condition or event existed or exists,
specifying the nature and period of existence thereof
and what action the Borrower has taken, is taking and
proposes to take with respect thereto;
(iv) as soon as possible and in any event within
five days after the occurrence of each Event of Default
and each Potential Event of Default, continuing on the
date of such statement, a statement of an authorized
financial officer of the Borrower setting forth details
of such Event of Default or event and the action which
the Borrower has taken and proposes to take with
respect thereto;
(v) promptly after any material change in
accounting policies or reporting practices, notice and
a description in reasonable detail of such change;
(vi) promptly and in any event within 30 days
after the Borrower or any ERISA Affiliate knows or has
reason to know that any ERISA Event referred to in
clause (i) of the definition of ERISA Event with
respect to any Pension Plan has occurred which might
result in liability to the PBGC a statement of the
chief accounting officer of the Borrower describing
such ERISA Event and the action, if any, that the
Borrower or such ERISA Affiliate has taken or proposes
to take with respect thereto;
(vii) promptly and in any event within 15 days
after the Borrower or any ERISA Affiliate knows or has
reason to know that any ERISA Event (other than an
ERISA Event referred to in (vi) above) with respect to
any Pension Plan has occurred which might result in
liability to the PBGC in excess of $100,000, a
statement of the chief accounting officer of the
Borrower describing such ERISA Event and the action, if
any, that the Borrower or such ERISA Affiliate has
taken or proposes to take with respect thereto;
(viii) promptly and in any event within five
Business Days after receipt thereof by the Borrower or
any ERISA Affiliate from the PBGC, copies of each
notice from the PBGC of its intention to terminate any
Pension Plan or to have a trustee appointed to
administer any Pension Plan;
(ix) promptly and in any event within 15 days
after receipt thereof by the Borrower or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by the Borrower or any
ERISA Affiliate concerning (w) the imposition of
Withdrawal Liability by a Multiemployer Plan in excess
of $100,000, (x) the determination that a Multiemployer
Plan is, or is expected to be, in reorganization within
the meaning of Title IV of ERISA, (y) the termination
of a Multiemployer Plan within the meaning of Title IV
of ERISA or (z) the amount of liability incurred, or
expected to be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in
clause (w), (x) or (y) above;
(x) promptly after the commencement thereof,
notice of all material actions, suits and proceedings
before any court or government department, commission,
board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower or any of its
Subsidiaries, of the type described in Section 4.01(f);
(xi) promptly after the occurrence thereof,
notice of (A) any event which makes any of the
representations contained in Section 4.01(k) inaccurate
in any material respect or (B) the receipt by the
Borrower of any notice, order, directive or other
communication from a governmental authority alleging
violations of or noncompliance with any Environmental
Law which could reasonably be expected to have a
material adverse effect on the financial condition of
the Borrowers and its Subsidiaries, taken as a whole;
(xii) promptly after any change in the rating
established by S&P, Moody's or Duff & Phelps, as
applicable, with respect to Long-Term Debt, a notice of
such change, which notice shall specify the new rating,
the date on which such change was publicly announced,
and such other information with respect to such change
as any Lender through either Agent may reasonably
request;
(xiii) promptly after the sending or filing
thereof, copies of all reports which the Borrower sends
to any of its public security holders, and copies of
all reports and registration statements which the
Borrower files with the SEC or any national security
exchange;
(xiv) promptly after the Borrower or any ERISA
Affiliate creates any employee benefit plan to provide
health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former
employee of the Borrower or any of its ERISA Affiliates
(except as provided in Section 4980B of the Code and
except as provided under the terms of any employee
welfare benefit plans provided pursuant to the terms of
collective bargaining agreements) under the terms of
which the Borrower and/or any of its ERISA Affiliates
are not permitted to terminate such benefits, a notice
detailing such plan; and
(xv) such other information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as any Lender
through either Agent may from time to time reasonably
request.
(c) CORPORATE EXISTENCE, ETC. The Borrower will, and
will cause each of its Subsidiaries to, at all times
preserve and maintain its fundamental business and preserve
and keep in full force and effect its corporate existence
(except as permitted under Section 5.02(b) hereof) and all
rights, franchises and licenses necessary or desirable in
the normal conduct of its business; provided, however, that
this paragraph (c) shall not apply in any case when, in the
good faith business judgment of the Borrower, such
preservation or maintenance is neither necessary nor
appropriate for the prudent management of the business of
the Borrower.
(d) INSPECTION. The Borrower will permit and will
cause each of its Subsidiaries to permit any authorized
representative designated by either Agent or any Lender at
the expense of such Agent or such Lender, to visit and
inspect any of the properties of the Borrower or any of its
Subsidiaries, including its and their financial and
accounting records, and to take copies and to take extracts
therefrom, and discuss its and their affairs, finances and
accounts with its and their officers and independent public
accountants, all during normal hours, upon reasonable notice
and as often as may be reasonably requested.
(e) INSURANCE. The Borrower will maintain and will
cause each of its Subsidiaries to maintain insurance to such
extent and covering such risks as is usual for companies
engaged in the same or similar business and on request will
advise the Lenders of all insurance so carried.
(f) TAXES. The Borrower will and will cause each of
its Subsidiaries to pay and discharge, before the same shall
become delinquent, (x) all taxes, assessments and
governmental charges or levies imposed upon it or upon its
property and (y) all lawful claims that, if unpaid, might by
law become a lien upon their property; provided, however,
that neither the Borrower nor any such Subsidiary shall be
required to pay or discharge any such tax, assessment,
charge or levy (A) that is being contested in good faith and
by proper proceedings and for which appropriate reserves are
being maintained, or (B) the failure to pay or discharge
which would not have a material adverse effect on the
financial condition or operations of the Borrower and its
Subsidiaries taken as a whole.
(g) MAINTENANCE OF BOOKS, ETC. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of
records and accounts, in which full and correct entries
shall be made of all financial transactions and the assets
and business of the Borrower and each of its domestic
Subsidiaries in accordance with GAAP and with respect to
foreign Subsidiaries in accordance with customary accounting
standards in the applicable jurisdiction, in each case
consistently applied and consistent with prudent business
practices.
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment
hereunder, without the written consent of the Requisite Lenders:
(a) LIENS, ETC. The Borrower will not create or
suffer to exist, or permit any of its Subsidiaries to create
or suffer to exist, any Lien, upon or with respect to any of
its properties, whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any
right to receive income, in each case to secure or provide
for the payment of any Debt of any Person, unless the
Borrower's obligations hereunder shall be secured equally
and ratably with, or prior to, any such Debt; provided
however that the foregoing restriction shall not apply to
the following Liens which are permitted:
(i) Liens on assets of any Subsidiary of the
Borrower existing at the time such Person becomes a
Subsidiary (other than any such Lien created in
contemplation of becoming a Subsidiary);
(ii) Liens on accounts receivable resulting from
the sale of such accounts receivable by the Borrower or
a Subsidiary of the Borrower, so long as, at any time,
the aggregate outstanding amount of cash advanced to
the Borrower or such Subsidiary, as the case may be,
and attributable to the sale of such accounts
receivable does not exceed $300,000,000;
(iii) purchase money Liens upon or in any
property acquired or held by the Borrower or any
Subsidiary in the ordinary course of business to secure
the purchase price of such property or to secure Debt
incurred solely for the purpose of financing the
acquisition of such property (provided that the amount
of Debt secured by such Lien does not exceed 100% of
the purchase price of such property and transaction
costs relating to such acquisition) and Liens existing
on such property at the time of its acquisition (other
than any such Lien created in contemplation of such
acquisition); and the interest of the lessor thereof in
any property that is subject to a Capital Lease;
(iv) any Lien securing Debt that was incurred
prior to or during construction or improvement of
property for the purpose of financing all or part of
the cost of such construction or improvement, provided
that the amount of Debt secured by such Lien does not
exceed 100% of the fair market value of such property
after giving effect to such construction or
improvement;
(v) any Lien securing Debt of a Subsidiary
owing to the Borrower;
(vi) Liens resulting from any extension, renewal
or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Debt secured
by any Lien referred to in clauses (i), (iii) and (iv)
above so long as (x) the aggregate principal amount of
such Debt shall not increase as a result of such
extension, renewal or replacement and (y) Liens
resulting from any such extension, renewal or
replacement shall cover only such property which
secured the Debt that is being extended, renewed or
replaced; and
(vii) Liens other than Liens described in clauses
(i) through (vi) hereof, whether now existing or
hereafter arising, securing Debt in an aggregate amount
not exceeding $50,000,000.
(b) RESTRICTIONS ON FUNDAMENTAL CHANGES. The Borrower
will not, and will not permit any of its Material
Subsidiaries to, merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or a
substantial portion of its assets (whether now owned or
hereafter acquired) to any Person, or enter into any
partnership, joint venture, syndicate, pool or other
combination, unless no Event of Default or Potential Event
of Default has occurred and is continuing or would result
therefrom and, in the case of a merger or consolidation of
the Borrower, (i) the Borrower is the surviving entity or
(ii) the surviving entity assumes all of the Borrower's
obligations under this Agreement in a manner satisfactory to
the Requisite Lenders.
(c) PLAN TERMINATIONS. The Borrower will not, and
will not permit any ERISA Affiliate to, terminate any
Pension Plan so as to result in liability of the Borrower or
any ERISA Affiliate to the PBGC in excess of $15,000,000, or
permit to exist any occurrence of an event or condition
which reasonably presents a material risk of a termination
by the PBGC of any Pension Plan with respect to which the
Borrower or any ERISA Affiliate would, in the event of such
termination, incur liability to the PBGC in excess of
$15,000,000.
(d) MARGIN STOCK. The Borrower will not permit 25%
or more of the fair market value of the assets of (i) the
Borrower or (ii) the Borrower and its Subsidiaries to
consist of Margin Stock.
(e) MINIMUM NET WORTH. The Borrower will not permit
at any time Net Worth to be less than the sum of (i) 80% of
Net Worth as of the Effective Date, plus (ii) 25% of Net
Income (if a positive number) from the Effective Date to the
then most recent June 30 or December 31, plus (iii) all
Additions to Capital from the Effective Date to the then
most recent June 30 or December 31.
(f) MAXIMUM FUNDED DEBT RATIO. The Borrower will not
permit at any time the ratio of (i) Funded Debt to (ii)
EBITDA, for each period consisting of the most recently
ended four consecutive fiscal quarters of the Borrower, to
exceed 3.00 to 1.00.
(g) SWAPS. The Borrower will not and will not permit
any of its Subsidiaries to create or suffer to exist any
Lien, upon or with respect to any of its properties, whether
now owned or hereafter acquired, or assign any right to
receive income, in each case to secure or provide for the
payment of any Swaps.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of
any Advance when the same becomes due and payable or the
Borrower shall fail to pay any interest on any Advance or
any fees or other amounts payable hereunder within five days
of the date due; or
(b) Any representation or warranty made or deemed made
by the Borrower herein or by the Borrower pursuant to this
Agreement (including any notice, certificate or other
document delivered hereunder) shall prove to have been
incorrect in any material respect when made; or
(c) The Borrower shall fail to perform or observe (i)
any term, covenant or agreement contained in this Agreement
(other than any term, covenant or agreement contained in
Section 5.01(b)(iv), 5.01(c) or 5.02) on its part to be
performed or observed and the failure to perform or observe
such other term, covenant or agreement shall remain
unremedied for 30 days after the Borrower obtains knowledge
of such breach or (ii) any term, covenant or agreement
contained in Section 5.02 and either of the Agents or the
Requisite Lenders shall have notified the Borrower that an
Event of Default has occurred, or (iii) any term, covenant
or agreement contained in Section 5.01(b)(iv) or 5.01(c); or
(d) The Borrower or any of its Subsidiaries shall fail
to pay any principal of or premium or interest on any Debt
which is outstanding in a principal amount of at least
$15,000,000 in the aggregate (but excluding Debt arising
under this Agreement) of the Borrower or such Subsidiary (as
the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such
Debt; or the Borrower or any of its Subsidiaries shall fail
to perform or observe any other agreement, term or condition
contained in any agreement or instrument relating to any
such Debt (or if any other event or condition of default
under any such agreement or instrument shall exist) and such
failure, event or condition shall continue after the
applicable grace period, if any, specified in such agreement
or instrument, if the effect of such failure, event or
condition is to accelerate, or to permit the acceleration
of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable as a result of such failure,
event or condition; or
(e) The Borrower or any of its Material Subsidiaries
shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted
by or against the Borrower or any of its Material
Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief,
or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other
similar official for it or for a substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period
of 60 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the
Borrower or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions set forth
above in this subsection (e); or
(f) Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against the Borrower
or any of its Material Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any
creditor upon a final or nonappealable judgment or order or
(ii) there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in
effect;
(g) (i) Any ERISA Event with respect to a Pension
Plan shall have occurred and, 30 days after notice
thereof shall have been given to the Borrower by either
of the Agents, (x) such ERISA Event shall still exist
arid (y) the sum (determined as of the date of
occurrence of such ERISA Event) of the Insufficiency of
such Pension Plan and the Insufficiency of any and all
other Pension Plans with respect to which an ERISA
Event shall have occurred and then exist (or in the
case of a Pension Plan with respect to which an ERISA
Event described in clause (iii) through (vi) of the
definition of ERISA Event shall have occurred and then
exist, the liability related thereto) is equal to or
greater than $25,000,000; or
(ii) The Borrower or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer
Plan that it has incurred an aggregate Withdrawal
Liability for all years to such Multiemployer Plan in
an amount that, when aggregated with all other amounts
then required to be paid to Multiemployer Plans by the
Borrower and its ERISA Affiliates as Withdrawal
Liability (determined as of the date of such
notification), exceeds $25,000,000 and it is reasonably
likely that all amounts then required to be paid to
Multiemployer Plans by the Borrower and its ERISA
Affiliates as Withdrawal Liability will exceed
$25,000,000; or
(iii) The Borrower or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer
Plan that such Multiemployer Plan is in reorganization
or is being terminated, within the meaning of Title IV
or ERISA, and it is reasonably likely that as a result
of such reorganization or termination the aggregate
annual contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be
increased over the amounts contributed to such
Multiemployer Plans for the plan year of such
Multiemployer Plan immediately preceding the plan year
in which the reorganization or termination occurs by an
amount exceeding $25,000,000;
then, and in any such event, either of the Agents (i) shall
at the request, or may with the consent, of the Requisite
Lenders, by notice to the Borrower, declare the obligation
of each Lender to make Advances to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Requisite Lenders,
by notice to the Borrower, declare the Advances, all
interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the
Advances, all such interest and all such amounts shall
become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower or
any of its Subsidiaries under the Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall
automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or
any notice of any kind, all of which are hereby expressly
waived by the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. AUTHORIZATION AND ACTION. Each Lender hereby
appoints and authorizes CUSA to act as Administrative Agent under
this Agreement and B of A to act as Documentation Agent under
this Agreement and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers under this
Agreement as are delegated to each Agent by the terms hereof,
together with such powers as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or
collection of the Advances and other amounts owing hereunder), no
Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Requisite Lenders, and such
instructions shall be binding upon all Lenders; provided,
however, that no Agent shall be required to take any action which
exposes such Agent to personal liability or which is contrary to
any of the Loan Documents or applicable law. Each Agent agrees to
give to each Lender prompt notice of each notice given to it by
the Borrower pursuant to the terms of the Loan Documents.
SECTION 7.02. AGENTS' RELIANCE, ETC. Neither the Agents
nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be
taken by it or them under or in connection with any of the Loan
Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the
foregoing, the Agents: (i) may treat the payee of any Advance as
the holder thereof until the Administrative Agent receives and
accepts an Assignment and Acceptance entered into by the Lender
which is the payee of such Advance, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 8.07; (ii) may
consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) make no warranty or
representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether
written or oral) made in or in connection with any of the Loan
Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms,
covenants or conditions of any of the Loan Documents on the part
of the Borrower or to inspect the property (including the books
and records) of the Borrower; (v) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any of the Loan Documents or
any other instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect of any of the
Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 7.03. CUSA, B OF A AND AFFILIATES. With respect to
its respective Commitment and the respective Advances made by it,
CUSA and B of A shall each have the same rights and powers under
this Agreement as any other Lender and may exercise the same as
though it were not an Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include B of A and
CUSA respectively in its individual capacity. B of A or CUSA and
their respective affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in
any kind of business (including without limitation the investment
banking business) with, the Borrower, any of its subsidiaries and
any Person who may do business with or own securities of the
Borrower or any such subsidiary, all as if B of A or CUSA, as the
case may be was not Agent and without any duty to account
therefor to the Lenders.
SECTION 7.04. LENDER CREDIT DECISION. Each Lender
acknowledges that it has, independently and without reliance upon
either the Agents or any other Lender and based on the financial
statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without
reliance upon the Agents or any other Lender and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement.
SECTION 7.05. INDEMNIFICATION. The Lenders (other than the
Designated Bidders) agree to indemnify each Agent (to the extent
not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Committed Advances then held
by each of them (or if no such Advances are at the time
outstanding or if any such Advances are held by Persons which are
not Lenders, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of any
of the Loan Documents or any action taken or omitted by such
Agent under any of the Loan Documents, provided that no Lender
shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from any Agent's gross
negligence or willful misconduct. Without limitation of the
foregoing, each Lender (other than the Designated Bidders) agrees
to reimburse each Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees)
incurred by such Agent in connection with the preparation,
execution, delivery, administration, syndication, modification,
amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, the Loan Documents, to the
extent that such Agent is not reimbursed for such expenses by the
Borrower.
SECTION 7.06. SUCCESSOR AGENT. Each Agent may resign at
any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by
the Requisite Lenders. Upon any such resignation or removal, the
Requisite Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of
resignation or the Requisite Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a commercial bank
organized under the laws of the United States of America or of
any State thereof or any Bank and, in each case having a combined
capital and surplus of at least $50,000,000. Upon the acceptance
of any appointment as an Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations under the Loan Documents. After any
retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent
under the Loan Documents.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of
any provision of this Agreement, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Requisite Lenders,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section
3.01, (b) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations, (c) reduce the principal
of, or interest on, the Advances or any fees or other amounts
payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, (e) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the
Advances, or the number of Lenders, which shall be required for
the Lenders or any of them to take any action hereunder or (f)
amend Section 2.15 or this Section 8.01; and provided, further,
that no amendment, waiver or consent shall, unless in writing and
signed by an Agent in addition to the Lenders required above to
take such action, affect the rights or duties of such Agent under
this Agreement.
SECTION 8.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to the Borrower, at its address at Dial Tower,
Phoenix, Arizona 850772343, Attn: Treasurer; if to any Bank, at
its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender; if to the Administrative
Agent at its address at Citicorp USA, Inc., Loan Syndications
Operations, 1 Court Square, 7th Floor Zone 1, Long Island City,
New York 11120 (with a copy of notices, other than those given
pursuant to Sections 2.01 through 2.14 hereof, to Citicorp USA,
Inc. c/o Citicorp North America, Inc., One Sansome Street, San
Francisco, California 94104, Attn: Rosanna Bartolazo) and if to
the Documentation Agent at its address at 1455 Market Street, San
Francisco, California 94103, Agency Management Services No. 5596;
or, as to the Borrower or either Agent, at such other address as
shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the
Borrower and the Agents. All such notices and communications
shall, when personally delivered, mailed, telecopied,
telegraphed, telexed or cabled, be effective when personally
delivered, after five (5) days after being deposited in the
mails, when confirmed by telecopy response, when delivered to the
telegraph company, when confirmed by telex answerback or when
delivered to the cable company, respectively, except that notices
and communications to any Agent pursuant to Article II or VII
shall not be effective until received by such Agent.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part
of any Lender or either Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. COSTS, EXPENSES AND INDEMNIFICATION.
(a) The Borrower agrees to pay promptly on demand all
reasonable costs and out-of-pocket expenses of the Agents in
connection with the preparation, execution, delivery,
administration, syndication, modification and amendment of
this Agreement, and the other documents to be delivered
hereunder or thereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for
the Agents (including the allocated time charges of each
Agent's legal departments, as their respective internal
counsel) with respect thereto and with respect to advising
the Agents as to their rights and responsibilities under
this Agreement. The Borrower further agrees to pay promptly
on demand all costs and expenses of the Agents and of each
Lender, if any (including, without limitation, reasonable
counsel fees and out-of-pocket expenses), in connection with
the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement and the other
documents to be delivered hereunder or thereunder,
including, without limitation, reasonable counsel fees and
out-of-pocket expenses in connection with the enforcement of
rights under this Section 8.04(a). Such expenses shall be
reimbursed by the Borrower upon a presentation of statement
of account, regardless of whether the Closing Date, the
Effective Date or the Distribution occurs.
(b) If any payment of principal of any Eurodollar Rate
Advance is made other than on the last day of the interest
period for such Advance, as a result of a payment pursuant
to Section 2.06 or acceleration of the maturity of the
Advances pursuant to Section 6.01 or for any other reason,
the Borrower shall, upon demand by any Lender (with a copy
of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any
amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without
limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(c) The Borrower agrees to indemnify and hold harmless
each Agent, each Lender and each director, officer,
employee, agent, attorney and affiliate of each Agent and
each Lender (each an "indemnified person") in connection
with any expenses, losses, claims, damages or liabilities to
which an Agent, a Lender or such indemnified persons may
become subject, insofar as such expenses, losses, claims,
damages or liabilities (or actions or other proceedings
commenced or threatened in respect thereof) arise out of the
transactions referred to in this Agreement or arise from any
use or intended use of the proceeds of the Advances, or in
any way arise out of activities of the Borrower that violate
Environmental Laws, and to reimburse each Agent, each Lender
and each indemnified person, upon their demand, for any
reasonable legal or other out-of-pocket expenses incurred in
connection with investigating, defending or participating in
any such loss, claim, damage, liability, or action or other
proceeding, whether commenced or threatened (whether or not
such Agent, such Lender or any such person is a party to any
action or proceeding out of which any such expense arises).
Notwithstanding the foregoing, the Borrower shall have no
obligation hereunder to an indemnified person with respect
to indemnified liabilities which have resulted from the
gross negligence, bad faith or willful misconduct of such
indemnified person.
SECTION 8.05. RIGHT OF SET-OFF. Upon (i) the occurrence
and during the continuance of any Event of Default and (ii) the
making of the request or the granting of the consent specified by
Section 6.01 to authorize the Agents to declare the Advances due
and payable pursuant to the provisions of Section 6.01, each
Lender is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and
all deposits (time or demand, provisional or final, or general,
but not special) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of
the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement that are
then due and payable, whether or not such Lender shall have made
any demand under this Agreement. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made
by such Lender; provided that the failure to give such notice
shall not affect the validity of such set-off and application.
The rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other
rights of set-off) which such Lender may have.
SECTION 8.06. BINDING EFFECT; EFFECTIVENESS, ENTIRE
AGREEMENT.
(a) This Agreement shall be deemed to have been
executed and delivered when it shall have been executed by
the Borrower and the Agents and when the Agents shall have
been notified by each Bank that such Bank has executed it
and thereafter shall be binding upon and inure to the
benefit of the Borrower, each Agent and each Lender and
their respective successors and permitted assigns, except
that the Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior
written consent of all Lenders.
(b) This Agreement (except for the provisions of
Section 2.04(d), Articles VII and VIII hereof and related
definitions) shall not become effective and the Existing
Credit Agreement shall remain in place until the time at
which the conditions set forth in Section 3.02 have been
satisfied or otherwise waived at the Effective Time, at
which time this Agreement shall become fully effective and
replace the Existing Credit Agreement, which shall be deemed
to be completely amended and restated hereby at such time.
At such time this Agreement (including the Schedules and
Exhibits attached hereto) shall constitute the entire
agreement among the parties hereto with respect to the
subject matter hereof and supersede all prior agreements,
understandings and negotiations, both written and oral,
among the parties with respect to such subject matter,
including, but not limited to, the Existing Credit
Agreement. If the Effective Date has not occurred by
December 31, 1996, then this Agreement shall terminate on
such date and the Existing Credit Agreement shall remain in
place in accordance with its terms.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender (other than the Designated Bidders)
may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitment and the Advances owing to it); provided, however,
that (i) each such assignment shall be of a constant, and
not a varying, percentage of all of the assigning Lender's
rights and obligations under this Agreement (other than any
right to make Bid Advances or Bid Advances held by it), (ii)
after giving effect to any such assignment, (1) the
assigning Lender shall no longer have any Commitment or (2)
the amount of the Commitment of both the assigning Lender
and the Eligible Assignee party to such assignment (in each
case determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall not be
less than $10,000,000, (iii) each such assignment shall be
to an Eligible Assignee, (iv) the parties to each such
assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, and a processing and recordation
fee of $3,000 to the Administrative Agent, and (v) the
Borrower and the Agents shall have consented to such
assignment, which consent shall not be unreasonably
withheld. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in
each Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to
such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender
assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to
be a party hereto). Any Lender may at any time pledge or
assign all or any portion of its rights hereunder to a
Federal Reserve Bank; provided, that no such pledge or
assignment shall release such Lender from any of its
obligations hereunder.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with any of the
Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of
the Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (ii) such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of
the Borrower or the performance or observance by the
Borrower of any of its obligations under any of the Loan
Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee confirms
that it has received a copy of the Loan Documents, together
with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it
has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon
the Agents, such assigning Lender or any other Lender and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan
Documents; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes each
Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are
delegated to such Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a
Lender.
(c) Within five (5) days of its receipt of an
Assignment and Acceptance executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee
(together with a processing and recordation fee of $3,000
with respect thereto) and upon evidence of consent of the
Borrower and the Agents thereto, which consent shall not be
unreasonably withheld, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in
substantially the form of EXHIBIT B hereto, (1) accept such
Assignment and Acceptance and (2) record the information
contained therein in the Register. All communications with
the Borrower with respect to such consent of the Borrower
shall be sent pursuant to Section 8.02.
(d) Each Lender (other than the Designated Bidders)
may designate one or more banks or other entities to have a
right to make Bid Advances as a Lender pursuant to Section
2.03; provided, however, that (i) no such Lender shall be
entitled to make more than two such designations, (ii) each
such Lender making one or more of such designations shall
retain the right to make Bid Advances as a Lender pursuant
to Section 2.03, (iii) each such designation shall be to a
Designated Bidder and (iv) the parties to each such
designation shall execute and deliver to the Agent, for its
acceptance and recording in the Register, a Designation
Agreement. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in
each Designation Agreement, the designee thereunder shall be
a party hereto with a right to make Bid Advances as a Lender
pursuant to Section 2.03 and the obligations related
thereto.
(e) By executing and delivering a Designation
Agreement, the Lender making the designation thereunder and
its designee thereunder confirm and agree with each other
and the other parties hereto as follows: (i) such Lender
makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto; (ii)
such Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of
the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto;
(iii) such designee confirms that it has received a copy of
this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into the
Designation Agreement; (iv) such designee will,
independently and without reliance upon the Agent, such
designating Lender or any other Lender and based on such
documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such
designee confirms that it is a Designated Bidder; (vi) such
designee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such designee agrees that it
will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(f) Upon its receipt of a Designation Agreement
executed by a designating Lender and a designee representing
that it is a Designated Bidder, the Agent shall, if such
Designation Agreement has been completed and is
substantially in the form of EXHIBIT H hereto, (i) accept
such Designation Agreement, (ii) record the information
contained therein in the Register and (iii) give prompt
notice thereof to the Borrower.
(g) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each
Assignment and Acceptance and each Designation Agreement
delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and,
with respect to Lenders other than Designated Bidders, the
Commitment of, the Commitment Termination Date of, and
principal amount of the Advances owing to, each such Lender
from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agents and the
Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of the Loan
Documents. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(h) Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its
rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and
the Advances owing to it; provided, however, that (i) such
Lender's obligations under this Agreement (including,
without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall
remain the holder of any such Advance for all purposes of
this Agreement, (iv) the Borrower, the Agents and the other
Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and
obligations under the Loan Documents, (v) no Lender shall
grant any participation under which the participant shall
have rights to require such Lender to take or omit to take
any action hereunder or under the other Loan Documents or
approve any amendment to or waiver of this Agreement or the
other Loan Documents, except to the extent such amendment or
waiver would: (A) extend the Termination Date of such
Lender; or (B) reduce the interest rate or the amount of
principal or fees applicable to Advances or the Commitment
in which such participant is participating or change the
date on which interest, principal or fees applicable to
Advances or the Commitment in which such participant is
participating are payable, (vi) such Lender shall notify the
Borrower of the sale of the participation, and (vii) the
Person purchasing such participation shall agree to
customary provisions relating to the confidentiality of
nonpublic information received by such Person in connection
with its purchase of the participation.
(i) Any Lender may, in connection with any assignment
or participation or proposed assignment or participation
pursuant to this Section 8.07, disclose to the assignee or
participant or proposed assignee or participant, any
information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided that, prior
to any such disclosure, the assignee or Participant or
proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to
the Borrower received by it from such Lender.
SECTION 8.08. CONFIDENTIALITY. Each Lender agrees, insofar
as is legally possible, to use its best efforts to keep in
confidence all financial data and other information relative to
the affairs of the Borrower heretofore furnished or which may
hereafter be furnished to it pursuant to the provisions of this
Agreement; provided, however, that this Section 8.08 shall not be
applicable to information otherwise disseminated to the public by
the Borrower; and provided further that such obligation of each
Bank shall be subject to each Bank's (a) obligation to disclose
such information pursuant to a request or order under applicable
laws and regulations or pursuant to a subpoena or other legal
process, (b) right to disclose any such information to bank
examiners, its affiliates (including, without limitation, in the
case of B of A, BA Securities, Inc. and in the case of CUSA,
Citicorp Securities, Inc.), bank, auditors, accountants and its
counsel and other Banks, and (c) right to disclose any such
information, (i) in connection with the transactions set forth
herein including assignments and sales of participation interests
pursuant to Section 8.07 hereof or (ii) in or in connection with
any litigation or dispute involving the Banks and the Borrower or
any transfer or other disposition by such Bank of any of its
Advances or other extensions of credit by such Bank to the
Borrower or any of its Subsidiaries, provided that information
disclosed pursuant to this proviso shall be so disclosed subject
to such procedures as are reasonably calculated to maintain the
confidentiality thereof.
SECTION 8.09. GOVERNING LAW. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 8.10. EXECUTION IN COUNTERPARTS. This Agreement
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 8.11. CONSENT TO JURISDICTION, WAIVER OF
IMMUNITIES. The Borrower hereby irrevocably submits to the
jurisdiction of any New York state or Federal court sitting in
New York, New York in any action or proceeding arising out of or
relating to this Agreement, and the Borrower hereby irrevocably
agrees that all claims in respect of such action or proceeding
may be heard and determined in such New York state or Federal
court. The Borrower hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding. The
Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 8.11 shall affect the
right of any Lender or Agent to serve legal process in any other
manner permitted by law or affect the right of any Lender or
Agent to bring any action or proceeding against the Borrower or
its property in the courts of any other jurisdiction.
SECTION 8.12. WAIVER OF TRIAL BY JURY. THE BORROWER, THE
BANKS, THE AGENTS AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF,
OTHER LENDERS EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of
this transaction, including without limitation contract claims,
tort claims, breach of duty claims and all other common law and
statutory claims. The Borrower, the Banks, the Agents and, by
its acceptance of the benefits hereof, other Lenders each (i)
acknowledges that this waiver is a material inducement for the
Borrower, the Lenders and the Agents to enter into a business
relationship, that the Borrower, the Lenders and the Agents have
already relied on this waiver in entering into this Agreement or
accepting the benefits thereof, as the case may be, and that each
will continue to rely on this waiver in their related future
dealings and (ii) further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each
knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers "hereunto
duly authorized, as of the date first above written.
THE DIAL CORP, a Delaware
corporation (to be known as VIAD
CORP upon the on and after the
Effective Date)
By: /s/ Ronald G. Nelson
Vice President-Finance
and Treasurer
CITICORP USA, INC., as
Administrative Agent
By: /s/ Marjorie Futornick
Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Documentation Agent
By: /s/ Robert Troutman
Managing Director
<PAGE>
COMMITMENT LENDER
$42,500,000 CITICORP USA, INC.
By: /s/ Marjorie Futornick
Vice President
$42,500,000 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Robert Troutman
Managing Director
$30,000,000 BANK OF MONTREAL
By: /s/ Michael Joyce
Managing Director
$30,000,000 THE CHASE MANHATTAN BANK, N.A.
By: /s/ Ted Swimmer
Vice President
$30,000,000 CIBC INC.
By: /s/ Robert J. Wagner
Managing Director
$30,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ Gloria M. Holland
Vice President
$30,000,000 ROYAL BANK OF CANADA
By: /s/ Tom J. Oberaigner
Manager
$25,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Diana Imhoff
Vice President
$25,000,000 NBD BANK
By: /s/ James B. Junker
Authorized Agent
$20,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By: /s/ T. Akiyama
Joint General Manager
$20,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Karen E. Hoplock
Vice President
By: /s/ Thomas Lee
Associate
$15,000,000 THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY
By: /s/ T. Morgan Edwards
Deputy General Manager
$15,000,000 MELLON BANK, N.A.
By: /s/ L.C. Ivey
Vice President
$15,000,000 THE NORTHERN TRUST COMPANY
By: /s/ Martin G. Alston
Vice President
$15,000,000 UNION BANK OF CALIFORNIA
By: /s/ Cary Moore
Vice President
$15,000,000 WELLS FARGO BANK OF ARIZONA,
NATIONAL ASSOCIATION
By: /s/ Kevin Halloran
Vice President
<PAGE>
SCHEDULE I
LIST OF APPLICABLE LENDING OFFICES
DOMESTIC LENDING EURODOLLAR LENDING
NAME OF BANK OFFICE OFFICE
CITIBANK, N. A. Central Corporate Central Corporate
Customer Services Customer Services
One Court Square One Court Square
7th Floor 7th Floor
Long Island City, NY Long Island City, NY
11120 11120
Attn: Aureli Almonte Attn: Aureli Almonte
Bank Loan Syndication Bank Loan Syndication
BANK OF AMERICA 1850 Gateway Blvd. 1850 Gateway Blvd.
NATIONAL TRUST AND Concord, CA 94520 Concord, CA 94520
SAVINGS ASSOCIATION Attn: Barbara Garibaldi Attn: Barbara Garibaldi
BANK OF MONTREAL 115 South LaSalle 115 South LaSalle
12th Floor 12th Floor
Chicago, IL 60603 Chicago, IL 60603
Attn: Betty Rutherford Attn: Betty Rutherford
CIBC, INC. 2727 Paces Ferry Road 2727 Paces Ferry Road
2 Paces West 2 Paces West
Suite 1200 Suite 1200
Atlanta, Georgia 30339 Atlanta, Georgia 30339
Attn: Ann Milam Attn: Ann Milam
THE CHASE 140 East 45th Street 140 East 45th Street
MANHATTAN BANK, 29th Floor 29th Floor
N.A. New York, New York 10017 New York, New York 10017
Attn: Miranda Chin Attn: Miranda Chin
NATIONSBANK OF c/o NationsBank c/o NationsBank
TEXAS, N.A. 901 Main Street 901 Main Street
14th Floor 14th Floor
Dallas, TX 75202 Dallas, TX 75202
Attn: Stacey Smith Attn: Stacey Smith
ROYAL BANK OF 1 Financial Square 1 Financial Square
CANADA 23rd Floor 23rd Floor
New York, NY 10005 New York, NY 10005
Attn: Linda Smith Attn: Linda Smith
WELLS FARGO BANK Arizona RCBO 4101-251 Arizona RCBO 4101-251
OF ARIZONA, P.O. Box 53456 P.O. Box 53456
NATIONAL Phoenix, AZ 85072-3456 Phoenix, AZ 85072-3456
ASSOCIATION Attn: Kevin Halloran Attn: Kevin Halloran
Street Address: Street Address:
100 West Washington 100 West Washington
Phoenix, AZ 85072-3456 Phoenix, AZ 85072-3456
THE INDUSTRIAL 350 S. Grand Ave. 350 S. Grand Ave.
BANK OF JAPAN, Suite 1500 Suite 1500
LIMITED, LOS Los Angeles, CA 90071 Los Angeles, CA 90071
ANGELES AGENCY Attn: Lynn Santos Attn: Lynn Santos
THE LONG-TERM 350 S. Grand Ave. 350 S. Grand Ave.
CREDIT BANK OF Suite 3000 Suite 3000
JAPAN, LTD., Los Angeles, CA 90071 Los Angeles, CA 90071
LOS ANGELES AGENCY Attn: Cindy Ly Attn: Cindy Ly
MELLON BANK, N.A. Three Mellon Bank Center Three Mellon Bank Center
Room 2303 Room 2303
Pittsburgh, PA 15259 Pittsburgh, PA 15259
Attn: Damon Carr Attn: Damon Carr
NBD BANK 611 Woodward Avenue 611 Woodward Avenue
Detroit, MI 48226 Detroit, MI 48226
Attn: Chris Dickens Attn: Chris Dickens
MORGAN GUARANTY c/o J.P. Morgan Nassau, Bahamas Office
TRUST COMPANY OF Services, Inc. c/o J.P. Morgan Services,
NEW YORK 500 Stanton - Inc.
Christiana Road Loan Operations - 3rd Flr
Newark, Delaware 19713 500 Stanton - Christiana
Attn: Lisa Lynch Road
Newark, Delaware 19713
Attn: Lisa Lynch
THE NORTHERN 50 S. La Salle 50 S. La Salle
TRUST COMPANY B-12 B-12
Chicago, IL 60675 Chicago, IL 60675
Attn: Linda Honda Attn: Linda Honda
UNION BANK OF 550 S. Hope Street 550 S. Hope Street
CALIFORNIA 3rd Floor 3rd Floor
Los Angeles, CA 90071 Los Angeles, CA 90071
Attn: Hisako Sakamoto Attn: Hisako Sakamoto
WESTDEUTSCHE 1211 Avenue of the 1211 Avenue of the
LANDESBANK Americas Americas
GIROZENTRALE, New York, NY 10036 New York, NY 10036
NEW YORK BRANCH Attn: Cheryl Wilson Attn: Cheryl Wilson
EXHIBIT A-1
[FORM OF NOTICE OF COMMITTED BORROWING]
NOTICE OF COMMITTED BORROWING
Citicorp USA, Inc., as Administrative
Agent for the Lenders party
to the Credit Agreement
referred to below
c/o Citicorp Bank Loan
Syndications Operations
One Court Square
Long Island City, New York 11120
[Date]
Attention: [ ]
Gentlemen:
The undersigned, [The Dial Corp][Viad Corp] (the "Borrower"),
refers to that certain Amended and Restated Credit Agreement dated as
of July 24, 1996 (as it may be amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement", the
terms defined therein being used herein as therein defined), by and
among the Borrower, certain Lenders party thereto, Citicorp USA, Inc.,
as Administrative Agent for said Lenders, and Bank of America National
Trust and Savings Association, as Documentation Agent for said
Lenders. The Borrower hereby gives you notice, irrevocably, pursuant
to Section 2.02 of the Credit Agreement, that the Borrower hereby
requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing
(the "Proposed Committed Borrowing") as required by Section 2.02(a) of
the Credit Agreement:
(i) The Business Day of the Proposed Committed Borrowing
is [ ], 19[ ].
(ii) The Type of Committed Advances comprising the
Proposed Committed Borrowing is [Base Rate Advances] [Eurodollar
Rate Advances].
(iii) The aggregate amount of the Proposed Committed
Borrowing is $[ ].
(iv) If the Type of Advances comprising the Proposed
Committed Borrowing is Eurodollar Rate Advances, the Interest
Period for each Advance made as part of the Proposed Committed
Borrowing is [ ] month[s].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the
Proposed Committed Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Committed Borrowing and to the application
of the proceeds therefrom, as though made on and as of such date,
except to the extent that any such representation or warranty
expressly relates only to an earlier date, in which case they
were correct as of such earlier date; and
(B) no event has occurred and is continuing, or will result
from such Proposed Committed Borrowing or from the application of
the proceeds therefrom, which constitutes an Event of Default or
a Potential Event of Default.
Very truly yours,
[THE DIAL CORP] [VIAD CORP]
By:
Title:
EXHIBIT A-2
[FORM OF NOTICE OF BID BORROWING]
NOTICE OF BID BORROWING
Citicorp USA, Inc.,
as Administrative Agent
for the Lenders party to
the Credit Agreement referred
to below
c/o Citicorp Bank Loan
Syndications Operations
One Court Square
Long Island City, New York 11120
[Date]
Attention: [ ]
Gentlemen:
The undersigned, [The Dial Corp][Viad Corp] (the "Borrower"),
refers to that certain Amended and Restated Credit Agreement dated as
of July 24, 1996 (as it may be amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement", the
terms defined therein being used herein as therein defined), by and
among the Borrower, certain Lenders party thereto, Citicorp USA, Inc.,
as Administrative Agent for said Lenders, and Bank of America National
Trust and Savings Association, as Documentation Agent for said
Lenders. The Borrower hereby gives you notice pursuant to Section
2.03(a) of the Credit Agreement that the undersigned hereby requests a
Bid Borrowing under the Credit Agreement, and in that connection sets
forth below the terms on which such Bid Borrowing (the "Proposed Bid
Borrowing") is requested to be made:
(A) Date of Proposed Bid Borrowing:
(B) Aggregate Amount of Proposed Bid Borrowing:
(C) Maturity Date:
(D) Currency if the Proposed Bid Borrowing
is comprised of Eurodollar Advances:
(E) Interest Payment Date(s):
(F) Other Terms
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the
Proposed Bid Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Bid Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date,
except to the extent that any such representation or warranty
expressly relates only to an earlier date, in which case they
were correct as of such earlier date; and
(B) no event has occurred and is continuing, or will result
from such Proposed Bid Borrowing or from the application of the
proceeds therefrom, which constitutes an Event of Default or a
Potential Event of Default.
The undersigned hereby confirms that the Proposed Bid Borrowing
is to be made available to it in accordance with Section 2.03 of the
Credit Agreement.
Very truly yours,
[THE DIAL CORP] [VIAD CORP]
By:
Title:
EXHIBIT B
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Dated [ ], 19[ ]
Reference is made to that certain Amended and Restated Credit
Agreement dated as of July 24, 1996 (as it may be amended,
supplemented, restated or otherwise modified from time to time, the
"Credit Agreement") among [The Dial Corp][Viad Corp] (the "Borrower"),
the Lenders (as defined in the Credit Agreement), Citicorp USA, Inc.,
as Administrative Agent for the Lenders, and Bank of America National
Trust and Savings Association, as Documentation Agent for the Lenders.
Terms defined in the Credit Agreement and not defined herein are used
herein with the same meaning.
[ ] (the "Assignor") and [ ] (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns without recourse to
the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the Effective Date which
represents the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Credit Agreement,
including, without limitation, such interest in the Assignor's
Commitment and the Advances owing to the Assignor. After giving effect
to such sale and assignment, the Assignee's Commitment, the amount of
the Advances owing to the Assignee, and the Commitment Termination
Date of the Assignee will be as set forth in Section 2 of Schedule 1.
In consideration of Assignor's assignment, Assignee hereby agrees to
pay to Assignor, on the Effective Date, the amount of $[ ] in
immediately available funds by wire transfer to Assignor's office at
[ ].
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument
or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Credit
Agreement or any other instrument or document furnished pursuant
thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements
referred to in Section 4.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the
Agents, the Assignor or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes each Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement as are
delegated to such Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it
as a Lender; and (vi) specifies as its Domestic Lending Office (and
address for notices) and Eurodollar Lending Office the offices set
forth beneath its name on the signature pages hereof [and (vii)
attaches the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that
all such payments are subject to such rates at a rate reduced by an
applicable tax treaty].*
4. Following the execution of this Assignment and Acceptance by
the Assignor and the Assignee, it will be delivered to the
Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date of this Assignment and
Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto
(the "Effective Date").
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder
and (ii) the Assignor shall, to the extent provided in this Assignment
and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
- --------------
*If the Assignee is organized under the laws of a jurisdiction
outside the United States.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent
shall make all payments under the Credit Agreement in respect of the
interest assigned hereby (including, without limitation, all payments
of principal, interest and fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in
payments under the Credit Agreement for periods prior to the Effective
Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective officers
"hereunto duly authorized, as of the date first above written, such
execution being made on Schedule 1 hereto.
Schedule 1
to
Assignment and Acceptance
Dated [ ], 19[ ]
Section 1.
- ----------
Percentage Interest: [ ]%
Section 2.
- ----------
Assignee's Commitment: $[ ]
Aggregate Outstanding Principal
Amount of Advances owing to
the Assignee: $[ ]
Advances payable to the Assignee
Principal amount: [ ]
Advances payable to the Assignor
Principal amount: [ ]
Assignee's Commitment Termination
Date: [ ], 199[ ]
Section 3.
- ----------
Effective Date*: [ ], 199[ ]
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
- ------------------
' This date should be no earlier than the date of acceptance by
the Administrative Agent.
Domestic Lending Office
(and address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this [ ] day
of [ ], 199[ ]
CITICORP USA, INC., as
Administrative Agent
By:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Documentation Agent
By:
Title:
[THE DIAL CORP] [VIAD CORP]
By:
Title:
EXHIBIT C-l
[FORM OF OPINION OF COUNSEL TO BORROWER
AS OF THE CLOSING DATE]
[CLOSING DATE]
Citicorp USA, Inc.,
as Administrative Agent
1 Court Square
Long Island City, New York 11120
Bank of America National Trust
and Savings Association,
as Documentation Agent
1455 Market Street
San Francisco, California 94103
and
The Banks (the "Banks") Listed on
Schedule I Party to the Credit
Agreement Referred to Below
Re: Amended and Restated Credit Agreement dated as of July 24, 1996,
among The Dial Corp, the Banks named therein, Citicorp USA, Inc.
as Administrative Agent, and Bank of America National Trust and
Savings Association, as Documentation Agent
Ladies and Gentlemen:
I am Vice President and General Counsel of The Dial Corp, a
Delaware corporation (the "Borrower"), and as such have acted as
counsel to the Borrower in connection with the negotiation, execution
and delivery by the Borrower of the Amended and Restated Credit
Agreement dated as of July 24, 1996 (the "Credit Agreement") among the
Borrower, the Banks, Citicorp USA, Inc. as Administrative Agent, and
Bank of America National Trust and Savings Association as
Documentation Agent. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.
This opinion is delivered to you pursuant to Section 3.01(a)(vi)
of the Credit Agreement. I have examined the Credit Agreement and I
have examined or am familiar with originals or copies, the
authenticity of which has been established to my satisfaction of such
other documents, corporate records, agreements and instruments, and
certificates of public officials and of officers of the Borrower as I
have deemed necessary or appropriate to enable me to express the
opinions set forth below. As to questions of fact material to such
opinions, I have, when relevant facts were not independently
established, relied upon certification by officers of the Borrower,
which I believe to be reliable.
The opinions hereinafter expressed are subject to the fact that I
am a member of the State Bar of Arizona and do not hold myself out as
an expert on the laws of other states or jurisdictions except (i) the
federal law of the United States of America, (ii) the General
Corporation Law of the State of Delaware, and (iii) the laws of New
York relevant to the opinions herein expressed.
Based upon the foregoing and having regard to legal
considerations which I have deemed relevant, it is my opinion that:
1. The Borrower is a corporation validly existing and in good
standing under the laws of the State of Delaware and is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions which require such qualification, except to the extent
that failure to so qualify would not have a material adverse effect on
the Borrower. The Borrower has all requisite corporate power and
authority to own and operate its properties, to conduct its business
as presently conducted, and to execute, deliver and perform its
obligations under the Credit Agreement.
2. The Credit Agreement has been duly authorized by all
necessary corporate action on the part of the Borrower and has been
duly executed and delivered by the Borrower. The Credit Agreement
constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency and
reorganization laws and other similar laws governing the enforcement
of lessors' or creditors' rights and by the effects of specific
performance, injunctive relief and other equitable remedies.
3. Neither the execution and delivery by the Borrower of the
Credit Agreement, nor consummation of the transactions contemplated
thereby, nor compliance on or prior to the date hereof with the terms
and conditions thereof by the Borrower conflicts with or is a
violation of, its certificate of incorporation or bylaws, each as in
effect on the date hereof. Neither the execution and delivery by the
Borrower of the Credit Agreement, nor the consummation of the
transactions contemplated thereby, nor compliance on or prior to the
date hereof with the terms and conditions thereof by the Borrower will
result in a violation of any applicable federal or New York law,
governmental rule or regulation or of the Corporation Law of the State
of Delaware or conflicts with, will result in a breach of, or
constitutes a default under, any provision of any indenture, agreement
or other instrument to which the Borrower is a party or any of its
properties may be bound ("Material Agreements"), or any order,
judgment or decree to which the Borrower or any of its assets are
bound ("Judicial Orders"), or will result in the creation or
imposition of any lien upon any property or assets of the Borrower
pursuant to any Material Agreement or Judicial Order.
4. Neither the making of the Advances pursuant to, nor
application of the proceeds thereof in accordance with, the Credit
Agreement, will violate Regulations G, T, U or X promulgated by the
Board of Governors of the Federal Reserve System.
5. No consent, approval or authorization of, and no
registration, declaration or filing with, any administrative,
governmental or other public authority of the United States of America
or the State of New York or under the Corporation Law of the State of
Delaware is required by law to be obtained or made by the Borrower for
the execution, delivery and performance by the Borrower of the Credit
Agreement, except such filings as may be required in the ordinary
course to keep in full force and effect rights and franchises material
to the business of the Borrower and in connection with the payment of
taxes.
6. The Borrower is not an "investment company" or a Person
directly or indirectly "controlled" by or "acting on behalf of an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
This opinion is delivered to the Agents and the Banks as of the
date hereof in connection with the Credit Agreement, and may not be
relied upon by any person other than the Agents and the Banks and
their permitted assignees, or by them in any other context, and may
not be furnished to any other person or entity without my prior
written consent, provided that each Bank and its permitted assignees
may provide this opinion (i) to bank examiners and other regulatory
authorities should they so request or in connection with their normal
examination, (ii) to the independent auditors and attorneys of such
Bank, (iii) pursuant to order or legal process of any court or
governmental agency, (iv) in connection with any legal action to which
the Bank is a party arising out of the transactions contemplated by
the Credit Agreement, or (v) in connection with the assignment of or
sale of participations in the Advances.
Very truly yours,
EXHIBIT C-2
[FORM OF OPINION OF COUNSEL TO BORROWER
AS OF THE EFFECTIVE DATE]
[EFFECTIVE DATE]
Citicorp USA, Inc.,
as Administrative Agent
1 Court Square
Long Island City, New York 11120
Bank of America National
Trust and Savings Association,
as Documentation Agent
1455 Market Street
San Francisco, California 94103
and
The Banks (the "Banks") Listed on
Schedule I Party to the Credit
Agreement Referred to Below
Re: Amended and Restated Credit Agreement dated as of July 24, 1996,
among The Dial Corp, the Banks named therein, Citicorp USA, Inc.
as Administrative Agent, and Bank of America National Trust and
Savings Association as Documentation Agent
Ladies and Gentlemen:
I am Vice President and General Counsel of The Dial Corp, a
Delaware corporation (the "Borrower"), and as such have acted as
counsel to the Borrower in connection with the negotiation, execution
and delivery by the Borrower of the Amended and Restated Credit
Agreement dated as of July 24, 1996 (the "Credit Agreement") among the
Borrower, the Banks, Citicorp USA, Inc. as Administrative Agent, and
Bank of America National Trust and Savings Association as
Documentation Agent. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.
This opinion is delivered to you pursuant to Section 3.02(a)(ii)
of the Credit Agreement. I have examined the Credit Agreement and I
have examined or am familiar with originals or copies, the
authenticity of which has been established to my satisfaction of such
other documents corporate records, agreements and instruments, and
certificates of public officials and of officers of the Borrower as I
have deemed necessary or appropriate to enable me to express the
opinions set forth below. As to questions of fact material to such
opinions, I have, when relevant facts were not independently
established, relied upon certification by officers of the Borrower,
which I believe to be reliable.
The opinions hereinafter expressed are subject to the fact that I
am a member of the State Bar of Arizona and do not hold myself out as
an expert on the laws of other states or jurisdictions except (i) the
federal law of the United States of America, (ii) the General
Corporation Law of the State of Delaware, and (iii) the laws of New
York relevant to the opinions herein expressed.
Based upon the foregoing and having regard to legal
considerations which I have deemed relevant, it is my opinion that:
1. The Borrower is a corporation validly existing and in good
standing under the laws of the State of Delaware and is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions which require such qualification, except to the extent
that failure to so qualify would not have a material adverse effect on
the Borrower. The Borrower has all requisite corporate power and
authority to own and operate its properties, to conduct its business
as presently conducted, and to execute, deliver and perform its
obligations under the Credit Agreement.
2. The Credit Agreement has been duly authorized by all
necessary corporate action on the part of the Borrower and has been
duly executed and delivered by the Borrower. The Credit Agreement
constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency and
reorganization laws and other similar laws governing the enforcement
of lessors' or creditors' rights and by the effects of specific
performance, injunctive relief and other equitable remedies.
3. Neither the execution and delivery by the Borrower of the
Credit Agreement, nor consummation of the transactions contemplated
thereby, nor compliance on or prior to the date hereof with the terms
and conditions thereof by the Borrower conflicts with or is a
violation of, its certificate of incorporation or bylaws, each as in
effect on the date hereof. Neither the execution and delivery by the
Borrower of the Credit Agreement, nor the consummation of the
transactions contemplated thereby, nor compliance on or prior to the
date hereof with the terms and conditions thereof by the Borrower will
result in a violation of any applicable federal or New York law,
governmental rule or regulation or of the Corporation Law of the State
of Delaware or conflicts with, will result in a breach of, or
constitutes a default under, any provision of any indenture, agreement
or other instrument to which the Borrower is a party or any of its
properties may be bound ("Material Agreements"), or any order,
judgment or decree to which the Borrower or any of its assets are
bound ("Judicial Orders"), or will result in the creation or
imposition of any lien upon any property or assets of the Borrower
pursuant to any Material Agreement or Judicial Order.
4. Neither the making of the Advances pursuant to, nor
application of the proceeds thereof in accordance with, the Credit
Agreement, will violate Regulations G, T, U or X promulgated by the
Board of Governors of the Federal Reserve System.
5. No consent, approval or authorization of, and no
registration, declaration or filing with, any administrative,
governmental or other public authority of the United States of America
or the State of New York or under the Corporation Law of the State of
Delaware is required by law to be obtained or made by the Borrower for
the execution, delivery and performance by the Borrower of the Credit
Agreement, except such filings as may be required in the ordinary
course to keep in full force and effect rights and franchises material
to the business of the Borrower and in connection with the payment of
taxes.
6. The Borrower is not an "investment company" or a Person
directly or indirectly "controlled" by or "acting on behalf of an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
This opinion is delivered to the Agents and the Banks as of the
date hereof in connection with the Credit Agreement, and may not be
relied upon by any person other than the Agents and the Banks and
their permitted assignees, or by them in any other context, and may
not be furnished to any other person or entity without my prior
written consent, provided that each Bank and its permitted assignees
may provide this opinion (i) to bank examiners and other regulatory
authorities should they so request or in connection with their normal
examination, (ii) to the independent auditors and attorneys of such
Bank, (iii) pursuant to order or legal process of any court or
governmental agency, (iv) in connection with any legal action to which
the Bank is a party arising out of the transactions contemplated by
the Credit Agreement, or (v) in connection with the assignment of or
sale of participations in the Advances.
Very truly yours,
EXHIBIT D-1
[FORM OF OPINION OF O'MELVENY & MYERS
AS OF THE CLOSING DATE]
[CLOSING DATE]
Citicorp USA, Inc., as
Administrative Agent
1 Court Square
Long Island City, New York 11120
Bank of America National Trust
and Savings Association, as
Documentation Agent
1455 Market Street
San Francisco, California 94103
and
The Banks Party to the Credit Agreement
Referred to Below
Re: Amended and Restated Credit Agreement dated as of July 24, 1996
among The Dial Corp, the Banks named therein, Citicorp USA, Inc.,
as Administrative Agent, and Bank of America National Trust and
Savings Association, as Documentation Agent
Gentlemen:
We have participated in the preparation of the Amended and
Restated Credit Agreement dated as of July 24, 1996 (the "Credit
Agreement"; capitalized terms defined therein and not otherwise
defined herein are used herein as therein defined) among The Dial Corp
(the "Borrower"), the Banks named therein (the "Banks"), Citicorp USA,
Inc., as Administrative Agent, and Bank of America National Trust and
Savings Association, as Documentation Agent (Documentation Agent and
Administrative Agent, collectively, are hereinafter referred to as
"Agents"), and have acted as special counsel for the Agents for the
purpose of rendering this opinion pursuant to Section 3.01(a)(vii) of
the Credit Agreement.
We have participated in various conferences and telephone
conferences with representatives of the Borrower and the Agents and
conferences and telephone calls with counsel to the Borrower, and with
your representatives, during which the Credit Agreement and related
matters have been discussed, and we have also participated in the
meeting held on the date hereof (the "Closing") incident to the
effectiveness of the Credit Agreement. We have reviewed the forms of
the Credit Agreement and the exhibits thereto, and the opinion of [L.
Gene Lemon], General Counsel of the Borrower (the "Opinion"), and
officers' certificates and other documents delivered at the Closing.
We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals or copies, the due
authority of all persons executing the same, and we have relied as to
factual matters on the documents which we have reviewed.
On the basis of such examination, our reliance upon the
assumptions contained herein and our consideration of those questions
of law we considered relevant and subject to the limitations and
qualifications in this opinion, we are of the opinion that:
1. The Credit Agreement constitutes the legally valid and
binding obligations of the Borrower, enforceable against the Borrower
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
In giving the foregoing opinion, we have assumed, without independent
investigation, that the Credit Agreement has been duly authorized by
all necessary corporate action on the part of the Borrower and has
been duly executed and delivered by the Borrower.
2. The Opinion is satisfactory in form to us and, in our
opinion, you are justified in relying thereon.
Our opinions in paragraph 1 above as to the enforceability of the
Credit Agreement are subject to:
(a) public policy considerations, statutes or court
decisions that may limit the rights of a party to obtain
indemnification against its own gross negligence, willful
misconduct or unlawful conduct; and
(b) the unenforceability under certain circumstances of
waivers of rights granted by law where the waivers are against
public policy or prohibited by law.
We express no opinion as to the effect of non-compliance by you
with any state or federal laws or regulations applicable to the
transactions contemplated by the Credit Agreement because of the
nature of your business.
The law covered by this opinion is limited to the present federal
law of the United States and the present law of the State of New York.
We express no opinion as to the laws of any other jurisdiction. This
opinion is furnished by us as special counsel for the Agents and may
be relied upon by you only in connection with the Credit Agreement. It
may not be used or relied upon by you for any other purpose or by any
other person, nor may copies be delivered to any other person, without
in each instance our prior written consent. You may, however, deliver
a copy of this opinion to permitted assignees of all or a portion of a
Lender's rights and obligations under the Credit Agreement in
connection with such assignment, and such assignees may rely on this
opinion as if it were addressed and had been delivered to them on the
date of this opinion. This opinion may also be disclosed to
regulatory and other governmental authorities having jurisdiction over
you requesting (or requiring) such disclosure.
Respectfully submitted,
EXHIBIT D-2
[FORM OF OPINION OF O'MELVENY & MYERS
AS OF THE EFFECTIVE DATE]
[EFFECTIVE DATE]
Citicorp USA, Inc., as
Administrative Agent
1 Court Square
Long Island City, New York 11120
Bank of America National Trust
and Savings Association, as
Documentation Agent
1455 Market Street
San Francisco, California 94103
and
The Banks Party to the Credit Agreement
Referred to Below
Re: Amended and Restated Credit Agreement dated as of July 24, 1996
among The Dial Corp, the Banks named therein, Citicorp USA, Inc.,
as Administrative Agent, and Bank of America National Trust and
Savings Association as Documentation Agent
Gentlemen:
We have participated in the preparation of the Amended and
Restated Credit Agreement dated as of July 24, 1996 (the "Credit
Agreement"; capitalized terms defined therein and not otherwise
defined herein are used herein as therein defined) among The Dial Corp
(the "Borrower"), the Banks named therein (the "Banks"), Citicorp USA,
Inc., as Administrative Agent, and Bank of America National Trust and
Savings Association, as Documentation Agent (Documentation Agent and
Administrative Agent, collectively, are hereinafter referred to as
"Agents"), and have acted as special counsel for the Agents for the
purpose of rendering this opinion pursuant to Section 3.01(a)(vii) of
the Credit Agreement.
We have participated in various conferences and telephone
conferences with representatives of the Borrower and the Agents and
conferences and telephone calls with counsel to the Borrower, and with
your representatives, during which the Credit Agreement and related
matters have been discussed, and we have also participated in the
meeting held on the date hereof (the "Closing") incident to the
effectiveness of the Credit Agreement. We have reviewed the forms of
the Credit Agreement and the exhibits thereto, and the opinion of [L.
Gene Lemon], General Counsel of the Borrower (the "Opinion"), and
officers' certificates and other documents delivered at the Closing.
We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals or copies, the due
authority of all persons executing the same, and we have relied as to
factual matters on the documents which we have reviewed.
On the basis of such examination, our reliance upon the
assumptions contained herein and our consideration of those questions
of law we considered relevant and subject to the limitations and
qualifications in this opinion, we are of the opinion that:
1. The Credit Agreement constitutes the legally valid and
binding obligations of the Borrower, enforceable against the Borrower
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
In giving the foregoing opinion, we have assumed, without independent
investigation, that the Credit Agreement has been duly authorized by
all necessary corporate action on the part of the Borrower and has
been duly executed and delivered by the Borrower.
2. The Opinion is satisfactory in form to us and, in our
opinion, you are justified in relying thereon.
Our opinions in paragraph 1 above as to the enforceability of the
Credit Agreement are subject to:
(a) public policy considerations, statutes or court
decisions that may limit the rights of a party to obtain
indemnification against its own gross negligence, willful
misconduct or unlawful conduct; and
(b) the unenforceability under certain circumstances of
waivers of rights granted by law where the waivers are against
public policy or prohibited by law.
We express no opinion as to the effect of non-compliance by you
with any state or federal laws or regulations applicable to the
transactions contemplated by the Credit Agreement because of the
nature of your business.
The law covered by this opinion is limited to the present federal
law of the United States and the present law of the State of New York.
We express no opinion as to the laws of any other jurisdiction.
This opinion is furnished by us as special counsel for the Agents
and may be relied upon by you only in connection with the Credit
Agreement. It may not be used or relied upon by you for any other
purpose or by any other person, nor may copies be delivered to any
other person, without in each instance our prior written consent. You
may, however, deliver a copy of this opinion to permitted assignees of
all or a portion of a Lender's rights and obligations under the Credit
Agreement in connection with such assignment, and such assignees may
rely on this opinion as if it were addressed and had been delivered to
them on the date of this opinion. This opinion may also be disclosed
to regulatory and other governmental authorities having jurisdiction
over you requesting (or requiring) such disclosure.
Respectfully submitted,
EXHIBIT E
[FORM OF EXTENSION REQUEST]
[THE DIAL CORP] [VIAD CORP]
REQUEST FOR EXTENSION OF COMMITMENT
TERMINATION DATE
[Date]
[Name and Address of Eligible Lender]
Pursuant to that certain Amended and Restated Credit Agreement
dated as of July 24, 1996 (as amended from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein
defined) among [The Dial Corp][Viad Corp] (the "Borrower"), certain
Lenders party thereto, Citicorp USA, Inc., as Administrative Agent for
said Lenders, and Bank of America National Trust and Savings
Association, as Documentation Agent for said Lenders, this represents
the Borrower's request to extend the Commitment Termination Date of
each Eligible Lender to [1] pursuant to Section 2.16 of the Credit
Agreement.
The Borrower hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the
effectiveness of the extension requested hereby ("Proposed
Extension"):
(a) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Extension, as though made on and as of
such date, except to the extent that any such representation or
warranty expressly relates only to an earlier date, in which case
they were correct as of such earlier date;
(b) no event has occurred and is continuing, or would
result from the Proposed Extension, which constitutes an Event of
Default or a Potential Event of Default; and
- -------------
[1] Insert date which is one year or two years after the latest
Commitment Termination Date in effect.
(c) the balance sheet of the Borrower and its Subsidiaries
as at [ ], 199[ ][2], and the related statements of income
and retained earnings of the Borrower and its Subsidiaries for
the fiscal year then ended, copies of each of which have been
furnished to each Lender, fairly present the financial condition
of the Borrower and its Subsidiaries as at such applicable date
and the results of the operations of the Borrower and its
Subsidiaries for the fiscal year ended on such applicable date,
all in accordance with GAAP consistently applied, and since
[ ], 199[ ][2], there has been no material adverse change
in the business, condition (financial or otherwise), operations
or properties of the Borrower and its Subsidiaries, taken as a
whole.
Please indicate your consent to such extension of the Commitment
Termination Date by signing the attached copy of this request in the
space provided below and returning the same to the undersigned.
Very truly yours,
[THE DIAL CORP] [VIAD CORP]
By:
Title:
The undersigned Eligible Lender
hereby consents to the extension
of its Commitment Termination Date
as requested above. This consent
is subject to the terms of
Section 2.16 of the Credit Agreement.
DATED:
[ELIGIBLE LENDER]
By:
Title:
- ------------------
[2] Insert date of the most recent audited balance sheet of the
Borrower and its Subsidiaries.
EXHIBIT F
[FORM OF COMPLIANCE CERTIFICATE]
The undersigned certifies that: (i) this Certificate is as of
[ ] and pertains to the period from [ ] to [ ], (ii)
the undersigned has reviewed the terms of that certain Amended and
Restated Credit Agreement, dated as of July 24, 1996, among The Dial
Corp (to be known as The Viad Corp upon the effectiveness of such
Credit Agreement), the Banks named therein, Citicorp USA, Inc., as
Administrative Agent, and Bank of America National Trust and Savings
Association, as Documentation Agent (as it may be amended,
supplemented, restated or otherwise modified from time to time, the
"Credit Agreement") and has made, or caused to be made under the
undersigned's supervision, a review in reasonable detail of the
transactions and condition of the Borrower and its Subsidiaries during
the period set forth above and (iii) such review has not disclosed the
existence during or at the end of such period, and the undersigned
does not have knowledge of the existences as of the date of this
Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default.[3] Capitalized terms used
herein shall have the meanings set forth in the Credit Agreement.
A. Net Worth
For the Borrower and its Subsidiaries:
1. Net Worth as of the Effective Date $[ ]
2. 80% multiplied (1) $[ ]
3. Net Income (if a positive number)
from the Effective Date to most
recent June 30 or December 31 $[ ]
4. 25% multiplied (3) $[ ]
- -------------
[3] If any event or condition that constitutes an Event of
Default or Potential Event of Default exists, the Certificate should
include the nature and period of existence of such event or condition
and what action the Borrower has taken, is taking and proposes to take
with respect thereto.
5. aggregate net proceeds, including
cash and the fair market value of
property other than cash, received
by the Borrower from the issue or sale
of capital stock of the Borrower
from the Effective Date to the most
recent June 30 or December 31 $[ ]
6. aggregate of 25% of the after tax
gains realized from unusual,
extraordinary, and major nonrecurring
items from the Effective Date to the
most recent June 30 or December 31 $[ ]
7. Additions to Capital [(5) plus (6)] $[ ]
8. Net Worth $[ ]
9. Minimum Net Worth permitted under
Credit Agreement
[(2) plus (4) plus (7)] $[ ]
B. Maximum Funded Debt Ratio.
For the Borrower and its Subsidiaries
(for each period consisting of the most
recently ended four consecutive fiscal
quarters of the Borrower):
1. indebtedness for borrowed money
or for the deferred purchase price
of property or services $[ ]
2. obligations as lessee under leases
which shall have been or should be,
in accordance with GAAP, recorded as
capital leases $[ ]
3. obligations under guarantees in
respect of indebtedness or
obligations of others of the
kinds referred to in clauses (1) and
(2) of this Section B $[ ]
4. Funded Debt [(1) plus (2) plus (3)] $[ ]
5. consolidated net income plus provision
for taxes (excluding extraordinary,
unusual, or nonrecurring gains or
losses) $[ ]
6. interest expense $[ ]
7. depreciation expense and
amortization of intangibles $[ ]
8. EBITDA [(5) plus (6) plus (7)] $[ ]
9. Ratio of Funded Debt to EBITDA
[(4):(8)] [ : ]
10. Maximum Funded Debt Ratio required
under Credit Agreement 3.00:1.00
By:
Title:
EXHIBIT G-1
[FORM OF PROMISSORY NOTE (COMMITTED ADVANCES)]
PROMISSORY NOTE
[ ] Dated: [ ], 19[ ]
FOR VALUE RECEIVED, the undersigned, [THE DIAL CORP][VIAD CORP],
a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of [ ] (the "Lender"), for the account of
its Applicable Lending Office, the unpaid principal amount of each
Advance made by the Lender to the Borrower pursuant to the Credit
Agreement referred to below on or before the Termination Date of the
Lender. The Borrower promises to pay interest on the unpaid principal
amount of each such Advance on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal
and interest shall be made in United States dollars in same day funds
at the Administrative Agent's office, as specified in the Credit
Agreement.
All Advances made by the Lender, the respective maturities
thereof and all repayments of principal thereof shall be recorded by
the Lender and, prior to any transfer hereof, appropriate notations to
evidence the foregoing information with respect to each such Advance
then outstanding shall be endorsed by the Lender on the schedule
attached hereto, or on a continuation of such schedule attached to and
made a part hereof, or in the records of such Lender in accordance
with its usual practice; provided that the failure of the Lender to
make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This promissory note is one of the promissory notes referred to
in Section 2.14(d) of that certain Amended and Restated Credit
Agreement dated as of July 24, 1996, among the Borrower, the Lenders
named therein, Citicorp USA, Inc., as Administrative Agent, and Bank
of America National Trust and Savings Association as Documentation
Agent (said Credit Agreement, as it may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same
meanings. Reference is hereby made to the Credit Agreement for
provisions relating to this promissory note, including, without
limitation, the mandatory and optional prepayment hereof and the
acceleration of the maturity hereof.
[THE DIAL CORP] [VIAD CORP]
By:
Title:
TRANSACTIONS ON PROMISSORY NOTE
Amount of
Advance Amount
Made This Maturity Interest of Notation
Date Date Period Rate Payment Made By
- ---- --------- -------- -------- ------- --------
EXHIBIT G-2
[FORM OF PROMISSORY NOTE (BID ADVANCES)]
PROMISSORY NOTE
[ ] Dated: [__________], 19[ ]
FOR VALUE RECEIVED, the undersigned, [THE DIAL CORP][VIAD CORP], a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order
of [ ] (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal amount of each Bid Advance (as defined below) made by the Lender
to the Borrower pursuant to the Credit Agreement on the maturity date of
such Bid Advance determined pursuant to the Credit Agreement.
The Borrower further promises to pay interest on the unpaid principal
amount of each Bid Advance from the date of such Bid Advance until such
principal amount is paid in full, at such interest rates, and payable at
such times, in accordance with the terms of the Credit Agreement .
Both principal and interest are payable in lawful money of the United
States of America to Citicorp USA, Inc., as Agent, at the office of
Citibank, N.A. located at 1 Court Square, 7th Floor, Long Island City, New
York, 11120 in same day funds. Each Bid Advance made by the Lender to the
Borrower pursuant to the Credit Agreement, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note.
This Promissory Note is one of the promissory notes referred to in
Section 2.14(d) of, and is entitled to the benefits of, that certain
Amended and Restated Credit Agreement dated as of July 24, 1996 (as it may
be amended, supplemented, restated or otherwise modified from time to time,
the "Credit Agreement") by and among Borrower, the financial institutions
named therein, Citicorp USA, Inc., as Administrative Agent and Bank of
America National Trust and Savings Association, as Documentation Agent. The
Credit Agreement, among other things, contains provisions for the making of
certain advances (the "Bid Advances") at the discretion of the Lender, and
for the acceleration of the maturity of the Bid Advances upon the happening
of certain stated events.
The date and amount of each Bid Advance, the maturity thereof and the
interest rate applicable thereto and all payments made by the Borrower on
account of principal hereof shall be recorded by the Lender and, prior to
any transfer of this Promissory Note, entered by the Lender on the grid
attached hereto, which is part of this Promissory Note, provided that the
Lender shall not be liable to the Borrower or to any other person for
failure to record any of the foregoing matters on the grid or otherwise in
the Lender's records. Such grid or such other record maintained by the
Lender shall, in the absence of manifest error, be conclusive evidence of
the matters so recorded.
The Borrower hereby waives presentment, demand, protest, and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States.
[THE DIAL CORP] [VIAD CORP]
By:
Title:
TRANSACTIONS ON PROMISSORY NOTE
Amount of
Advance Amount
Made This Maturity Interest of Notation
Date Date Period Rate Payment Made By
- ---- --------- -------- -------- ------- --------
EXHIBIT H
[FORM OF DESIGNATION AGREEMENT]
DESIGNATION AGREEMENT
Dated [ ], 19[ ]
Reference is made to that certain Amended and Restated Credit
Agreement dated as of July 24, 1996 (as it may be amended, supplemented,
restated or otherwise modified from time to time, the "Credit Agreement";
the terms defined therein being used herein as therein defined) by and
among [The Dial Corp][Viad Corp], a Delaware corporation (the "Company"),
the financial institutions named therein, Citicorp USA, Inc., as
Administrative Agent, and Bank of America National Trust and Savings
Association, as Documentation Agent.
[ ] (the "Designator") and [ ] (the
"Designee") agree as follows:
1. The Designator hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Bid Advances
pursuant to Section 2.03 of the Credit Agreement.
2. The Designator makes no representation or warranty and assumes no
responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto and (ii) the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under
the Credit Agreement or any other instrument or document furnished pursuant
thereto.
3. The Designee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 thereof and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into this Designation Agreement; (ii) agrees that it will,
independently and without reliance upon the Agent, the Designator or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) confirms that
it is a Designated Bidder; (iv) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (v) agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of the Credit Agreement are required to be performed by
it as a Lender; and (vi) specifies as its Applicable Lending Office with
respect to Bid Advances (and address for notices) the offices set forth
beneath its name on the signature page[s] hereof.
[Remainder of page intentionally left blank]
A. This Designation Agreement shall be effective upon the execution
of this Agreement by the Designator, Designee and the Agent and the
approval of the Company as provided in the Credit Agreement.
1. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
[NAME OF DESIGNATOR]
By:
Title:
[NAME OF DESIGNEE]
By:
Title:
Domestic Lending Office
(and address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this [ ] day
of [ ], 19[ ]
Citicorp USA, Inc.
as Administrative Agent
By:
Title:
Bank of America National
Trust and Savings Association
as Documentation Agent
By:
Title:
Exhibit 10.A2
J. W. TEETS CONSULTING CONTRACT
Contract effective January 1, 1997, between Viad Corp, a
corporation organized under the laws of the State of Delaware,
with its principal office located at 1850 N. Central Avenue,
Phoenix, Arizona, 85077, herein referred to as "Company," and J.
W. Teets, of Paradise Valley, Arizona, herein referred to as
"Consultant."
RECITALS
A. Company, recognizing the past experience of Consultant
as CEO of Company, desires to have the following services, as a
consultant, to be performed by Consultant: To be on call, from
time to time, as requested by the CEO of Company.
B. Consultant agrees to perform these services for Company
under the terms and conditions set forth in this contract.
In consideration of the mutual promises set forth in this
contract, it is agreed by and between Company and Consultant as
follows:
SECTION ONE
NATURE OF WORK
Consultant will perform consulting and advisory services on
behalf of the Company, as may be requested from time to time by
the CEO of Company.
SECTION TWO
PLACE OF WORK
It is understood that Consultant's services will be rendered
principally at the sixth floor of Viad Tower, Phoenix, Arizona,
but that Consultant will, on request, come to the Company's
headquarters offices or travel to other places as designated by
the CEO of the Company, to meet with Company representatives or
others.
SECTION THREE
TIME DEVOTED TO WORK
In the performance of the services, the services and the
hours Consultant is to work on any given day will be entirely
within Consultant's control and Company will rely upon Consultant
to put in such number of hours as is reasonably necessary to
fulfill the spirit and purpose of this contract. This
arrangement will probably take no more than 10 hours per week,
although there will be weeks during which Consultant may not
perform any services at all.
SECTION FOUR
PAYMENT
Company will pay Consultant the total sum of One Hundred and
Twenty Thousand Dollars ($120,000) annually, payable on the first
of each month in monthly installments. In addition, Consultant
will be reimbursed for all traveling and living expenses while
away from the area of the City of Phoenix, State of Arizona.
Consultant agrees to submit receipts or other evidence of such
authorized expenses to Company in order to obtain reimbursement.
SECTION FIVE
OFFICE SPACE
Although this Consulting Contract is for a period of 2
years, Company will provide Consultant with suitable office space
and secretarial services on the sixth floor of Viad Tower for a
period of 5 years from the date of this Contract.
SECTION SIX
DURATION
The parties hereto contemplate that this contract will run
for two years from date hereof. At any time, Consultant may
notify Company that the Contract shall be terminated 60 days
after such notice. All consulting payments shall cease but
Consultant shall continue to have the use of the office space and
secretarial services for the full five-year term herein.
SECTION SEVEN
STATUS OF CONSULTANT
This contract calls for the performance of the services of
Consultant as an independent contractor and Consultant will not
be considered an employee of the Company for any purpose.
SECTION EIGHT
SERVICES FOR OTHERS
Inasmuch as Consultant will acquire or have access to
information that is of a highly confidential and secret nature,
it is expected that Consultant will maintain the information in a
confidential manner. Further, in consideration of the execution
of this Contract, Consultant will not become interested, directly
or indirectly, either as an employee, owner, partner, agent,
stockholder, director, officer or otherwise in a business, trade
or occupation which competes with the business of the Company or
any of its subsidiaries. This covenant not to compete shall
expire on December 31, 1998, and shall survive any early
termination under Section Six.
SECTION NINE
USE OF COMPANY AIRCRAFT
In order to provide reasonable security to Consultant and
his spouse while traveling after retirement, Consultant, subject
to Aircraft availability, may use the Company Aircraft for a
period of one year from January 1, 1997: (1) when conducting
Company business directed and approved by the CEO of the Company;
or (2) when Aircraft is scheduled for use by Company officers or
approved employees and there are passengers thereon. Consultant
shall be charged not more than the taxable income as provided by
the Internal Revenue Code or regulations promulgated thereunder
for use of Corporate Aircraft. Consultant's use of Aircraft
shall be limited to a maximum of 50 flight hours.
IN WITNESS WHEREOF, the parties have executed this agreement
at Phoenix, Arizona, the day and year first above written.
By: /s/ Robert H. Bohannon /s/ John W. Teets
for VIAD Corp
Exhibit 10.D
DEFERRED COMPENSATION PLAN
FOR DIRECTORS OF
THE DIAL CORP
AS AMENDED AND RESTATED
JULY 25, 1996
1. ESTABLISHMENT AND CONTINUATION OF PLAN.
There was heretofore established, in recognition of the
valuable services provided to Greyhound Dial Corporation by
the individuals who serve as members of its Board of
Directors, an unfunded plan of voluntary deferred compen-
sation known as the "Directors Deferred Compensation Plan"
(Plan). The Dial Corp, a Delaware corporation and successor
by operation of law to Greyhound Dial Corporation, intends
to distribute to its stockholders (the Spin-Off) one share
of common stock, $0.01 par value, of The Dial Corporation,
its wholly-owned subsidiary (Consumer Products) which will
own and operate its consumer products business (Consumer
Products Common Stock). Following the Spin-Off, The Dial
Corp will change its name to "Vied Corp". All references
herein to the "Corporation" mean The Dial Corp, prior to the
Spin-Off, and Viad Corp, following the Spin-Off. All
Directors of the Corporation, except Directors receiving a
regular salary as an employee of the Corporation or one of
its subsidiaries, are eligible to participate in this Plan.
All Directors who become directors of Consumer Products and
cease to be directors of the Corporation in connection with
the Spin-Off will no longer be eligible to participate in
this Plan, and all obligations accrued prior to the date of
the Spin-Off under this Plan with respect to such
individuals will be assumed by Consumer Products. A
Director may elect to defer under this Plan any retainer or
meeting attendance fee otherwise payable to him or her
(Compensation) by the Corporation or by domestic
subsidiaries of this Corporation (subsidiaries).
2. EFFECTIVE DATE.
This Plan became effective on January 1, 1981.
3. ELECTION TO PARTICIPATE IN THE PLAN.
A. (i) A Director of this Corporation may elect to
defer the receipt of all or a specified part of the
Compensation otherwise payable to him or her during a
calendar year by the Corporation or its subsidiaries. Any
person who shall become a Director during any calendar year,
and who was not a Director of the Corporation or its
subsidiaries on the preceding December 31, may elect before
the Director's term begins to defer such Compensation. Such
election shall also specify whether the account shall be
treated as a cash account under Section 4A or a stock unit
account under Section 4B; provided that an election to defer
Compensation into a stock unit account must be specifically
approved by the Board of Directors of the Corporation. If
the account is to be a stock unit account, the Compensation
shall be converted into stock units by dividing the closing
price of the Corporation's Common Stock (as reported for the
New York Stock Exchange-Composite Transactions) on the day
such Compensation is payable into such Compensation.
(ii) In connection with the Spin-Off, the Dial
Director's Retirement Plan (the "Retirement Plan") will be
terminated. As of the Distribution Date, the Corporation
will credit, to an existing or newly-established, stock unit
account for each Director eligible to participate in this
Plan who is a participant under the Retirement Plan (and who
does not elect to continue to receive cash payments under
the Retirement Plan) a number of stock units equal to (A)
the present value of such Director's vested accrued benefits
under the Retirement Plan divided by (B) the closing price
of the Corporation's Common Stock (as reported for the New
York Stock Exchange-Composite Transactions) as of the first
trading day following the Distribution Date. Such stock unit
account shall thereafter be maintained in accordance with
this Plan.
B. Any election under this Plan, unless otherwise
provided therein, shall be made by delivering a signed
request to the Secretary of the Corporation on or before
December 31 with respect to the following calendar year, or,
for a new Director, on or before his or her term begins. An
election shall continue from year to year, unless
specifically limited, until terminated by a signed request
in the same manner in which an election is made. However,
any such termination shall not become effective until the
end of the calendar year in which notice of termination is
given.
C. Each Director may, by notice delivered to the
Secretary of the Corporation, convert: (i) the aggregate
balance in his or her deferred compensation account (either
before or after payments from the account may have
commenced) from an account in the form of stock units to an
account in the form of cash in an amount equal to such stock
units balance multiplied by the closing price of the Common
Stock of the Corporation (as reported from the New York
Stock Exchange-Composite Transactions) on the last trading
day of the month in which such notice is given, said account
to accrue interest as set forth in Section 4 below or (ii)
convert the aggregate balance in his or her deferred
compensation account (either before or after installment
payments from the account may have commenced) from an
account in the form of cash to an account in the form of
stock units in an amount equal to cash balance divided by
the closing price of the Common Stock of the Corporation (as
reported for the New York Stock Exchange-Composite
Transactions) on the last trading day of the month in which
such notice is given, said account to accrue dividend
equivalents as set forth in Section 4 below; provided
however, that no such notice of conversion ("Conversion
Notice") (a) may be given within six months following the
date of an election by such Director, with respect to any
plan of the Corporation, that effected a Discretionary
Transaction (as defined in Rule 16b-3(f) under the
Securities Exchange Act of 1934) that was an acquisition (if
the Conversion Notice is pursuant to clause (i)) or a
disposition (if the Conversion Notice is pursuant to clause
(ii)) or (b) may be given after an individual ceases to be a
Director.
4. ACCRUAL OF INTEREST OR DIVIDEND EQUIVALENTS.
A. If a Director has elected to defer Compensation in
the form of cash, then interest on the unpaid balance of
such Director's deferred compensation account, consisting of
both accumulated Compensation and interest, if any, will be
credited on the last day of each quarter based upon the
yield on Merrill Lynch Taxable Bond Index-Long Term Medium
Quality (A3) Industrial Bonds in effect at the beginning of
such quarter, said interest to commence with the date such
compensation was otherwise payable. After payment of
deferred Compensation commences, interest shall accrue on
the unpaid balance thereof in the same manner until all such
deferred Compensation has been paid.
B. If a Director has elected to defer Compensation in
the form of stock units, then, in the event of a dividend
paid in cash, stock of the Corporation (other than Common
Stock) or property, additional credits (dividend
equivalents) shall be made to the Director's stock unit
account consisting of a number of stock units equal to the
amount of such dividend per share (or the fair market value,
on the date of payment, of dividends paid in stock or
property), multiplied by the aggregate number of stock units
credited to such Director's deferred compensation account on
the record date for the payment of such dividend, divided by
the last closing price of the Corporation's Common Stock (as
reported for the New York State Exchange-Composite
transactions) prior to the date such dividend is payable to
stockholders. After payment of deferred Compensation
commences, dividend equivalents shall accrue on the unpaid
balance thereof in the same manner until all such deferred
Compensation has been paid.
C. In the event of a dividend of Common Stock de-
clared and paid by the Corporation, an additional credit
shall be made to the Director's stock unit account of a
number of stock units equal to the number of shares of the
Corporation's Common Stock which the Director would have
received as a stock dividend had he or she been the owner on
the record date for the payment of such stock dividend of
the number of shares of Common Stock equal to the number of
units in such stock unit account on such date. After
payment of deferred Compensation commences, additional
credits for stock dividends shall accrue on the unpaid
balance thereof in the same manner until all such deferred
Compensation has been paid.
D. Notwithstanding and in lieu of the foregoing, in
the case of the dividend distribution by the Corporation of
the Consumer Products Common Stock in the Spin-Off, a new
stock unit and cash account (the Special Account) will be
established for each Director (in addition to any existing
stock unit account) which will be credited with a number of
units representing Consumer Products Common Stock equal to
the number of stock units in such Director's account
immediately prior to the Spin-Off. From and after the Spin-Off, the
Corporation will credit the Special Account with
amount(s) denominated in cash, representing all dividends
paid by Consumer Products on the Consumer Products Common
Stock, whether paid in cash, Consumer Products Common Stock,
other stock or property, in an amount equal to the amount of
such dividend per share of Consumer Products Common Stock
(or the fair market value on the date of payment of
dividends paid in stock or property) multiplied by the
aggregate number of stock units credited to such Director's
Special Account on the record date for payment of such
dividend. The amount credited as cash shall thereafter
accrue interest in accordance with Section 4A. A Director
may convert the stock unit portion of the Special Account
into an account in the form of cash by using the notice
procedures in Section 3C without regard to the six months
restriction set forth in the proviso thereto (it being
understood that the closing price of the Consumer Products
Common Stock, instead of Corporation Common Stock, will be
used for such conversion). Section 3C may not, however, be
used to convert a cash account into additional units of
Consumer Products Common Stock in the Special Account.
5. ACCOUNTING.
No fund or escrow deposit shall be established by any de-
ferred Compensation payable pursuant to this Plan, and the
obligation to pay deferred Compensation hereunder shall be a
general unsecured obligation of the Corporation, payable out
of its general account, and deferred Compensation shall
accrue to the general account of the Corporation. However,
the Controller of the Corporation shall maintain an account
and properly credit Compensation to each such account, and
keep a record of all sums which each participating Director
has elected to have paid as deferred Compensation and of
interest or dividend equivalents accrued thereon. Within
sixty (60) days after the close of each calendar year the
Controller shall furnish each Director who has participated
in the Plan a statement of all sums and stock units,
including interest and dividend equivalents, which have
accrued to the account of such Director as of the end of
such calendar year.
6. PAYMENT FROM DIRECTORS' ACCOUNTS.
A. After a Director ceases to be a director of the
Corporation, the aggregate amount of deferred compensation
credited to a Director's account, either in the form of cash
or stock units, together with interest or dividend
equivalents accrued thereon, shall be paid in a lump sum or,
if the Director elects, in substantially equal quarterly,
semi-annual, or annual installments over a period of years,
not greater than ten (10), specified by the Director. Such
election must be made by written notice delivered to the
Secretary of the Corporation prior to December 31 of the
year preceding the year in which, and at least six months
prior to the date on which, the Director ceases to be a
director. The first installment (or the lump sum payment)
shall be made promptly following the date on which the
Director ceases to be a Director of the Corporation, and any
subsequent installments shall be paid promptly at the
beginning of each succeeding specified period until the
entire amount credited to the Director's account shall have
been paid. To the extent installment payments are elected,
and the Director's account consists of cash as well as stock
units, a pro rata portion of the cash, and the cash
equivalent of a pro rata portion of the stock units, shall
be paid with each installment. If the participating
Director dies before receiving the balance of his or her
deferred compensation account, then payment shall be made in
a lump sum to any beneficiary or beneficiaries which may be
designated, as provided in paragraph B of this Section 6, or
in the absence of such designation, or, in the event that
the beneficiary designated by such Director shall have
predeceased such Director, to such Director's estate.
B. Each Director who elects to participate in this
Plan may file with the Secretary of the Corporation a notice
in writing designating one or more beneficiaries to whom
payment shall be made in the event of such Director's death
prior to receiving payment of any or all of the deferred
Compensation hereunder.
C. If the Director has elected to defer Compensation
in the form of cash, the Corporation shall distribute a sum
in cash to such Director, pursuant to his or her election
provided for in paragraph A of this Section 6. If the
Director has elected to defer Compensation in the form of
stock units, the Corporation shall distribute to such
Director, pursuant to his or her election provided for in
paragraph A of this Section 6, the cash equivalent of the
portion of the stock units being distributed in such
installment which will be calculated by multiplying (i) the
average of the month-end closing prices of the Corporation's
Common Stock (or Consumer Products Common Stock, in the case
of stock units in the Special Account) for the last 12
months preceding the date of each distribution, as reported
for the New York Stock Exchange-Composite Transactions, by
(ii) the number of stock units being distributed in such
installment.
7. CHANGE OF CONTROL OR CHANGE IN CAPITALIZATION.
A. If a tender offer or exchange offer for shares of
Common Stock of the Corporation (other than such an offer by
the Corporation) is commenced, or if the stockholders of the
Corporation shall approve an agreement providing either for
a transaction in which the Corporation will cease to be an
independent publicly owned corporation or for a sale or
other disposition of all or substantially all the assets of
the Corporation (Change of Control), a lump sum cash payment
shall be made to each Director participating in the Plan of
the aggregate current balance of his or her deferred
compensation account accrued to the Director's deferred
compensation account on the date of the Change of Control,
notwithstanding any other provision herein. If the Director
has elected to defer Compensation in the form of stock
units, the Corporation shall distribute to such Director the
sum in cash equal to the closing price of the Corporation's
Common Stock on the day preceding the date of the Change of
Control (as reported for the New York Stock Exchange-Composite
Transactions) multiplied by the number of stock
units in such account. Any notice by a Director to change
or terminate his or her election to defer Compensation or
before the date of the Change of Control shall be effective
as of the date of the Change of Control, notwithstanding any
other provision herein.
B. Any recapitalization, reclassification, split up,
sale of assets, combination or merger not otherwise provided
for herein which affects the outstanding shares of Common
Stock of the Corporation (or the stock subject to the
Special Account) or any other relevant change in the
capitalization of the Corporation (or, in the case of the
Special Account, Consumer Products) shall be appropriately
adjusted for by the Board of Directors of this Corporation,
and any such adjustments shall be final, conclusive and
binding.
8. NONALIENATION OF BENEFITS.
No right or benefit under this Plan shall be subject to
anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to alienate, sell,
assign, pledge, encumber or charge the same shall be void.
To the extent permitted by law, no right or benefit
hereunder shall in any manner be attachable for or otherwise
available to satisfy the debts, contracts, liabilities or
torts of the person entitled to such right or benefit.
9. APPLICABLE LAW.
The Plan will be construed and enforced according to the
laws of the State of Delaware; provided that the obligations
of the Corporation shall be subject to any applicable law
relating to the property interests of the survivors of a
deceased person and to any limitations on the power of the
person to dispose of his or her interest in the deferred
Compensation.
10. AMENDMENT OR TERMINATION OF PLAN.
The Board of Directors of the Corporation may amend or
terminate this Plan at any time, provided, however, any
amendment or termination of this Plan shall not affect the
rights of participating Directors or beneficiaries to
payments, in accordance with Section 6 or 7, of amounts
accrued to the credit of such Directors or beneficiaries at
the time of such amendment or termination.
Exhibit 10.E2
VIAD CORP
ANNUAL MANAGEMENT INCENTIVE PLAN
PURSUANT TO THE VIAD 1997 OMNIBUS INCENTIVE PLAN
I. PURPOSE:
The purpose of the Viad Corp Management Incentive Plan
(Plan) is to provide key executives of Viad 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
and other performance measurements.
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
Crystal Holidays, Limited
Dobbs International Services, Inc. group
Exhibitgroup/Giltspur, Inc.
GES Exposition Services, Inc. group
Greyhound Leisure Services, Inc. group
Jetsave Inc. group
Premier Cruise Lines, Inc.
Restaura, Inc. group
Travelers Express Company, Inc. group
Viad Corp may, by action if its Board of Directors
or its Human Resources Committee, add or remove
business units on the list of participant companies
from time to time.
B. FUNDING LIMIT:
A "funding limit" shall be established annually for
each Company participant who has been designated an
Executive Officer as defined under Section 16b of
the Securities Exchange Act. The funding limit
shall be an amount determined by multiplying the
actual net income of the Company for the Plan Year
by the percent of such income approved by the Human
Resources Committee of the Viad Corp Board of
Directors (Committee) for such funding limit. The
subsidiary executive cannot be paid a larger bonus
than the funding limit provided by this clause, but
may be paid less in the discretion of the HR
Committee based on the Performance Goals set forth
below and other such factors which the HR Committee
may consider.
C. PERFORMANCE GOALS:
1. NET INCOME:
An appropriate "net income" target for the plan
year for each Company will be recommended by
the Chief Executive Officer of Viad Corp to the
Committee for approval taking into account
overall corporate objectives, historical income
and Plan Year financial plan income (on the
same basis as determined below) and, if
appropriate, other circumstances.
Net income to be used in 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 vehicles. There will be an addback to
actual net income for any additional
intercompany interest cost (net of tax)
incurred during the year by a subsidiary as the
result of any special dividend paid (in excess
of 100% of net income for the year). In
addition, an addback to actual net income will
be allowed for any increased cost to a
subsidiary for an increase in the formula
allocation of corpoate overhead over amounts
included in the Plan for the year.
Special treatment of any other significant
unusual or non-recurring items (for purposes of
determining actual Plan Year net income)
arising after a Company's targets are set may be
recommended by the Chief Executive Officer of
Viad Corp to the Committee for approval,
including, for example, appropriate adjustment
of net income target to reflect planned effects
of an acquisition approved after target has
been set. Other examples include extraordinary
items, effects of a change in accounting
principles or a change in federal income tax
rates.
2. OTHER PERFORMANCE MEASUREMENTS:
An appropriate number of performance
measurements other than net income will be
established for each Company, to place
increased emphasis on areas of importance to
achieving overall corporate objectives, with
the Chief Executive Officer of Viad to
recommend to the HR committee the measures to
be used and, at the end of the year, the level
of achievement against each. Measures which
may be used include, but are not limited to:
1) Cash flow growth
2) Operating income margin growth*
3) Revenue growth*
4) Receivables-days outstanding/timely and
accurate billing
5) Working capital control
6) Control/reduce workers compensation and
liability claims/costs
7) Profitability per employee
8) Growth in funds for payment service
* Fully taxable equivalent basis (where
appropriate)
3. ESTABLISHING TARGETS:
The actual target for net income and the
categories of discretionary performance
measurement to be 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 Viad Corp.
D. 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 Viad 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 Viad Corp.
E. 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 paid during the year. Target
bonuses for other eligible personnel will be
established in writing within the following
parameters subject to approval by the Chief
Executive Officer of Viad 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 under the net income goal.
Awards will also be capped when stretch performance
levels are achieved.
As a Percentage of Salary
Subsidiary Positions Threshold** Target Cap
- -----------------------------------------------------------------
Chief Executive Officer/
President* 22.5% 45% 80.325%
20.0% 40% 71.4%
Executive Vice President-
Senior Vice President, and
Other Operating Executives 20.0% 40% 71.4%
Vice Presidents* 17.5% 35% 62.475%
15.0% 30% 53.55%
Key Management Reporting
to Officers* 12.5% 25% 44.625%
10.0% 20% 35.7%
Staff Professionals* 7.5% 15% 26.775%
5.0% 10% 17.85%
- -----------------------------------------------------------------
* Target Bonus, as determined by the Committee, is dependent
upon organization reporting relationships.
** Reflects minimum achievement of both performance targets.
Threshold could be lower if minimum achievement of only
one performance target is met.
F. 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 2/3 of the sum of target bonuses:
(i) no bonus will be earned if less
than 90% of the net income
target is achieved;
(ii) 50% (threshold) to 100% will be
earned if 90% to 100% of the net
income target is achieved;
(iii) 100% to 178.5% will be earned if
100% to 110% of the net income
target is achieved.
(b) on 1/3 of the sum of target bonuses:
(i) No bonuses will be earned if
achievement relating to the
other designated performance
measurements is considered
unsatisfactory;
(ii) 50% (threshold) to 178.5% will
be earned as determined by the
Committee after considering the
recommendation of the Chief
Executive Officer of Viad of the
level of acceptable achievement
relating to the other designated
performance measurements.
Notwithstanding 2.a) i), ii) and
iii), of this paragraph F, the
ratable accrual of the net
income target 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%, for a Company as
may be designated by the
Committee after considering the
recommendations of the Chief
Executive Officer of Viad Corp;
however, the Committee may, when
appropriate, adjust such ranges
upward or downward.
Further, the bonus pool shall
include any excess of the
funding limit established
pursuant to paragraph B for a
Company's Executive Officer(s)
over the amount of bonus pool
funds otherwise provided with
respect to such person(s)
pursuant to 2a) and b) of this
Paragraph F.
3. Bonus pool accruals not paid out shall not be
carried forward to any succeeding year.
G. 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 F above
times the individual's actual base salary
earnings during the Plan Year, subject to
adjustments as follows:
(a) iscretionary upwards 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 Viad 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 or the
funding limit with respect to Executive
Officers, 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 target bonus for
such participant(s) times the weighted average
performance of the Companies in the subsidiary
group, subject to adjustments as above.
IV. VIAD CORP CORPORATE STAFF:
A. FUNDING LIMIT:
A "funding limit" shall be established annually for
each Corporate participant who has been designated
an Executive Officer as defined under Section 16b of
the Securities Exchange Act. The funding limit will
be an amount determined by multiplying the actual
net income from continuing operations of the
Corporation (as used in the income per share
calculation described herein) for the Plan Year by
the percent of such income approved by the Committee
for such funding limit. The executive cannot be
paid a larger bonus than the funding limit provided
by this clause, but may be paid less in the
discretion of the Committee based on the Performance
Goals set forth below and such other factors which
the Committee may consider.
B. PERFORMANCE GOALS:
1. INCOME PER SHARE:
An appropriate "income per share" from
continuing operations target for Viad Corp will
be recommended by the Chief Executive Officer
of Viad Corp to the Committee for approval
after considering historical income per share
from continuing operations, Plan Year financial
plan income, overall corporate objectives, and,
if appropriate, other circumstances.
Income per share from continuing operations is
determined before extraordinary items, effects
of changes in accounting principles or a change
in federal income tax rates after the target
has been set. (For example, new FASB release
on Earnings per share to be effective for
periods after December 15, 1997, but not taken
into account in setting 1997 target income per
share.) 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. While gains on disposition
of a business would normally not be included in
determining actual Plan Year net income or
income per share, in the event of the sale of a
subsidiary or major business unit, a portion of
gain would be included equal to the difference
between the sold unit's planned net income for
the year and actual results to date of sale
plus calculated interest savings on proceeds
for the balance of the year, so that actual
results are not penalized for selling a
business.
2. OTHER PERFORMANCE MEASUREMENTS:
An appropriate number of performance
measurements other than income per share will
be established for Corporate, with the Chief
Executive Officer of Viad to recommend to the
Human Resources Committee the level of
achievement against each of the measures.
The measures to be considered include, but are
not limited to:
1) Reduction of investment in non-core
assets
2) Cash flow growth
3) Management of 'legacy' liabilities of
discontinued and/or sold businesses
(primarily for legal, self-insurance,
reinsurance and environmental matters)
4) Strategic positioning through effective
portfolio management
5) Corporate center cost control
6) Successfully exiting the discontinued
cruise business in 1997
7) Maintain or improve to mid-BBB Viad's
debt ratings from each of the rating
agencies
8) Through analysis and support, identify
and help correct problems in operating
units
3. ESTABLISHING TARGETS:
The actual target for income per share and the
other performance measurements to be used 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 Viad 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
recommended by the appropriate staff Vice President
and as approved by the Chief Executive Officer of
Viad 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 Viad
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 Viad 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 under the income per share
goal. Awards also will be capped when stretch
performance levels are achieved.
As a Percentage of Salary
Corporate Positions Threshold** Target Cap
- ----------------------------------------------------------------
Chairman, President &
Chief Executive Officer 30.00% 60% 102.0%
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 Organization Reporting Relationships.
** Reflects minimum of achievement of both performance
targets. Threshold could be less if minimum achievement
of only one performance target is met.
E. 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 2/3 of the sum of the target bonuses:
(i) no bonus will be earned if less
than 90% of income per share
target is achieved;
(ii) 50% to 100% will be earned if
90% to 100% of income per share
target is achieved; and
(iii) 100% to 170% will be earned if
100% to 110% of income per share
target is achieved.
b) on 1/3 of the sum of target bonuses:
(i) no bonus will be earned if
achievement relating to the
other designated performance
measurements is considered
unsatisfactory;
(ii) from 50% (threshold) to 170%
will be earned as designated by
the Committee after considering
the recommendation of the Chief
Executive Officer of Viad of the
level of acceptable achievement
relating to the other designated
performance measures
provided no less than an amount equal to
12.5% of the actual bonus accruals
earned under section III of this Plan or
any 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 Viad Corp. For
purposes of this determination only, the
178.5% upper limit shall not apply on
such actual bonus accrual calculations
for subsidiaries, subsidiary groups and
divisions, and the calculation will
exclude the excess if any, of funding
limit amounts over bonus pool funds
otherwise calculated under this
provision.
c) Notwithstanding 2. a) i), ii) and iii)
of this paragraph E, the ratable accrual
of the income per share target 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.
Further, the bonus pool shall include
any excess of the funding limit
established pursuant to Paragraph B for
each Corporate Executive Officer over
the amount of bonus pool funds otherwise
provided with respect to such persons
pursuant to 2 a) and b) of this
Paragraph E.
3. Bonus pool accruals not paid out shall not be
carried forward to any succeeding year.
F. 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 Viad 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 or the funding limit with
respect to Executive Officers and the aggregate
recommended bonuses may not exceed the bonus
pool for other than Special Achievement Awards.
V. SPECIAL ACHIEVEMENT AWARDS:
Special bonuses of up to 15% of base salary for
exceptional performance to employees (primarily 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 F and IV E.
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 Viad Corp.
VII. COMPENSATION ADVISORY COMMITTEE:
The Compensation Advisory Committee is appointed by the
Chief Executive Officer of Viad 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 Viad 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 Viad 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 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 Viad 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 Viad
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 not
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 Viad Corp or one of its subsidiaries on the
date bonuses are paid will not receive a bonus payment.
XII. EFFECTIVE DATE:
The Plan shall be effective January 1, 1997, provided
however, that any award made under this Plan is subject to
the approval of the Viad 1997 Omnibus Incentive Plan by
the stockholders of Viad Corp.
Exhibit 10.J
1997 VIAD CORP OMNIBUS INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the Plan is to give the Company a significant
advantage in attracting, retaining and motivating officers,
employees and directors and to provide the Company and its
subsidiaries with the ability to provide incentives more directly
linked to the profitability of the Company's businesses and
increases in stockholder value. It is the current intent of the
Committee that the Plan shall replace the 1992 Stock Incentive
Plan for purposes of new Awards and that the Viad Corp Management
Incentive Plan, the Viad Corp Performance Unit Incentive Plan,
and the Viad Corp Performance-Based Stock Plan continue under the
auspices of Sections 7 and 8 hereof subject to the discretion of
the Committee under the terms and conditions of this Plan.
For purposes of the Plan, the following terms are defined as
set forth below:
(a) "AFFILIATE" means a corporation or other entity
controlled by the Company and designated by the Committee as
such.
(b) "AWARD" means an award of Stock Appreciation Rights,
Stock Options, Restricted Stock or Performance-Based Awards.
(c) "AWARD CYCLE" will mean a period of consecutive fiscal
years or portions thereof designated by the Committee over which
Awards of Restricted Stock or Performance-Based Awards are to be
earned.
(d) "BOARD" means the Board of Directors of the Company.
(e) "CAUSE" means (1) the conviction of a participant for
committing a felony under federal law or the law of the state in
which such action occurred, (2) dishonesty in the course of
fulfilling a participant's employment duties or (3) willful and
deliberate failure on the part of a participant to perform his
employment duties in any material respect, or such other events
as will be determined by the Committee. The Committee will have
the sole discretion to determine whether "Cause" exists, and its
determination will be final.
(f) "CHANGE IN CONTROL" and "CHANGE IN CONTROL PRICE" have
the meanings set forth in Sections 9(b) and (c), respectively.
(g) "CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto.
(h) "COMMISSION" means the Securities and Exchange
Commission or any successor agency.
(i) "COMMITTEE" means the Committee referred to in
Section 2.
(j) "COMMON STOCK" means common stock, par value $1.50 per
share, of the Company.
(k) "COMPANY" means Viad Corp, a Delaware corporation.
(l) "COMPANY UNIT" means any subsidiary, group of
subsidiaries, line of business or division of the Company, as
designated by the Committee.
(m) "DISABILITY" means permanent and total disability as
determined under procedures established by the Committee for
purposes of the Plan.
(n) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time, and any successor thereto.
(o) "FAIR MARKET VALUE" means, as of any given date, the
mean between the highest and lowest reported sales prices of the
Stock on the New York Stock Exchange Composite Tape or, if not
listed on such exchange, on any other national exchange on which
the Stock is listed or on the Nasdaq Stock Market. If there is
no regular public trading market for such Stock, the Fair Market
Value of the Stock will be determined by the Committee in good
faith. In connection with the administration of specific
sections of the Plan, and in connection with the grant of
particular Awards, the Committee may adopt alternative defi-
nitions of "Fair Market Value" as appropriate.
(p) "INCENTIVE STOCK OPTION" means any Stock Option
intended to be and designated as an "incentive stock option"
within the meaning of Section 422 of the Code.
(q) "MIP" means the Company's Management Incentive Plan
providing annual cash bonus awards to participating employees
based upon predetermined goals and objectives.
(r) "NET INCOME" means the consolidated net income of the
Company determined in accordance with GAAP before extraordinary,
unusual and other non-recurring items.
(s) "NON-EMPLOYEE DIRECTOR" means a member of the Board who
qualifies as a "Non-Employee Director" as defined in Rule
16b-3(b)(3), as promulgated by the Commission under the Exchange
Act, or any successor definition adopted by the Commission.
(t) "NON-QUALIFIED STOCK OPTION" means any Stock Option
that is not an Incentive Stock Option.
(u) "PERFORMANCE GOALS" means the performance goals estab-
lished by the Committee in connection with the grant of
Restricted Stock or Performance-Based Awards. In the case of
Qualified Performance-Based Awards, such goals (1) will be based
on the attainment of specified levels of one or more of the fol-
lowing measures with respect to the Company or any Company Unit,
as applicable: sales or revenues, costs or expenses, net profit
after tax, gross profit, operating profit, base earnings, return
on actual or pro forma equity or net assets or capital, net
capital employed, earnings per share, earnings per share from
continuing operations, operating income, operating income margin,
net income, stockholder return including performance (total
stockholder return) relative to the S&P 500 or similar index or
performance (total stockholder return) relative to the proxy
comparator group, in both cases as determined pursuant to Rule
402(l) of Regulation S-K promulgated under the Exchange Act, cash
generation, unit volume and change in working capital and (2)
will be set by the Committee within the time period prescribed by
Section 162(m) of the Code and related regulations.
(v) "PERFORMANCE-BASED AWARD" means an Award made pursuant
to Section 8.
(w) "PERFORMANCE-BASED RESTRICTED STOCK AWARD" has the
meaning set forth in Section 7(c)(1) hereof.
(x) "PLAN" means the 1997 Viad Corp Omnibus Incentive Plan,
as set forth herein and as hereinafter amended from time to time.
(y) "PREFERRED STOCK" means preferred stock, par value
$0.01, of the Company.
(z) "QUALIFIED PERFORMANCE-BASED AWARDS" means an Award of
Restricted Stock or a Performance-Based Award designated as such
by the Committee at the time of grant, based upon a determination
that (1) the recipient is or may be a "covered employee" within
the meaning of Section 162(m)(3) of the Code in the year in which
the Company would expect to be able to claim a tax deduction with
respect to such Restricted Stock or Performance-Based Award and
(2) the Committee wishes such Award to qualify for the exemption
from the limitation on deductibility imposed by Section 162(m) of
the Code that is set forth in Section 162(m)(4)(C).
(aa) "RESTRICTED STOCK" means an award granted under
Section 7.
(bb) "RETIREMENT" means retirement from active employment
under a pension plan of the Company, any subsidiary or Affiliate,
or under an employment contract with any of them, or termination
of employment at or after age 55 under circumstances which the
Committee, in its sole discretion, deems equivalent to
retirement.
(cc) "RULE 16b-3" means Rule 16b-3, as promulgated by the
Commission under Section 16(b) of the Exchange Act, as amended
from time to time.
(dd) "STOCK" means the Common Stock or Preferred Stock.
(ee) "STOCK APPRECIATION RIGHT" means a right granted under
Section 6.
(ff) "STOCK OPTION" means an option granted under Section 5.
(gg) "TERMINATION OF EMPLOYMENT" means the termination of
the participant's employment with the Company and any subsidiary
or Affiliate. A participant employed by a subsidiary or an
Affiliate will also be deemed to incur a Termination of
Employment if the subsidiary or Affiliate ceases to be such a
subsidiary or Affiliate, as the case may be, and the participant
does not immediately thereafter become an employee of the Company
or another subsidiary or Affiliate. Transfers among the Company
and its subsidiaries and Affiliates, as well as temporary
absences from employment because of illness, vacation or leave of
absence, will not be considered a Termination of Employment.
In addition, certain other terms used herein have
definitions given to them in the first place in which they are
used.
SECTION 2. ADMINISTRATION.
The Plan will be administered by the Human Resources
Committee of the Board pursuant to authority delegated by the
Board in accordance with the Company's By-Laws. If at any time
there is no such Human Resources Committee or such Human
Resources Committee shall fail to be composed of at least two
directors each of whom is a Non-Employee Director and is an
"outside director" under Section 162(m)(4) of the Code, the Plan
will be administered by a Committee selected by the Board and
composed of not less than two individuals, each of whom is such a
Non-Employee Director and such an "outside director."
The Committee will have plenary authority to grant Awards
pursuant to the terms of the Plan to officers, employees and
directors of the Company and its subsidiaries and Affiliates, but
the Committee may not grant MIP Awards larger than the limits
provided in Section 3.
Among other things, the Committee will have the authority,
subject to the terms of the Plan:
(a) to select the officers, employees and directors to whom
Awards may from time to time be granted;
(b) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock and Performance-Based Awards or any combination
thereof are to be granted hereunder;
(c) to determine the number of shares of Stock or the
amount of cash to be covered by each Award granted hereunder;
(d) to determine the terms and conditions of any Award
granted hereunder (including, but not limited to, the option
price (subject to Section 5(a)), any vesting condition,
restriction or limitation (which may be related to the
performance of the participant, the Company or any subsidiary,
Affiliate or Company Unit) and any rule vesting acceleration or
waiver of forfeiture regarding any Award and any shares of Stock
relating thereto, based on such factors as the Committee will
determine) provided, however, that the Committee will have no
power to accelerate the vesting, or waive the forfeiture, of any
Qualified Performance-Based Awards;
(e) to modify, amend or adjust the terms and conditions, at
any time or from time to time, of any Award, including but not
limited to Performance Goals; provided, however, that the
Committee may not adjust upwards the amount payable with respect
to any Qualified Performance-Based Award or waive or alter the
Performance Goals associated therewith;
(f) to determine to what extent and under what
circumstances Stock and other amounts payable with respect to an
Award will be deferred; and
(g) to determine under what circumstances a Stock Option
may be settled in cash or Stock under Section 5(j).
The Committee will have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices
governing the Plan as it from time to time deems advisable, to
interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any agreement relating thereto) and to
otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then
in office, except that the members thereof may (1) delegate to
designated officers or employees of the Company such of its
powers and authorities under the Plan as it deems appropriate
(provided that no such delegation may be made that would cause
Awards or other transactions under the Plan to fail to be exempt
from Section 16(b) of the Exchange Act or that would cause
Qualified Performance-Based Awards to cease to so qualify) and
(2) authorize any one or more members or any designated officer
or employee of the Company to execute and deliver documents on
behalf of the Committee.
Any determination made by the Committee or pursuant to del-
egated authority pursuant to the provisions of the Plan with
respect to any Award will be made in the sole discretion of the
Committee or such delegates at the time of the grant of the Award
or, unless in contravention of any express term of the Plan, at
any time thereafter. All decisions made by the Committee or any
appropriately delegated officer(s) or employee(s) pursuant to the
provision of the Plan will be final and binding on all persons,
including the Company and Plan participants.
SECTION 3. STOCK SUBJECT TO PLAN AND LIMITS ON AWARDS.
(a) Subject to adjustment as provided herein, the number of
shares of Common Stock of the Company available for grant under
the Plan in each calendar year (including partial calendar years)
during which the Plan is in effect shall be equal to two percent
(2.0%) of the total number of shares of Common Stock of the
Company outstanding as of the first day of each such year for
which the Plan is in effect; provided that any shares available
for grant in a particular calendar year (or partial calendar
year) which are not, in fact, granted in such year shall be added
to the shares available for grant in any subsequent calendar
year.
(b) Subject to adjustment as provided herein, the number of
shares of Stock covered by Awards granted to any one participant
will not exceed 750,000 shares for any consecutive three-year
period and the aggregate dollar amount for Awards denominated
solely in cash will not exceed $7.5 million for any such period.
(c) In addition, and subject to adjustment as provided
herein, no more than 7.5 million shares of Common Stock will be
cumulatively available for the grant of Incentive Stock Options
over the life of the Plan.
(d) Shares subject to an option or award under the Plan may
be authorized and unissued shares or may be "treasury shares."
In the event of any merger, reorganization, consolidation, re-
capitalization, spin-off, stock dividend, stock split, extraor-
dinary distribution with respect to the Stock or other change in
corporate structure affecting the Stock, such substitution or
adjustments will be made in the aggregate number and kind of
shares reserved for issuance under the Plan, in the aggregate
limit on grants to individuals, in the number, kind, and option
price of shares subject to outstanding Stock Options and Stock
Appreciation Rights, in the number and kind of shares subject to
other outstanding Awards granted under the Plan and/or such other
equitable substitutions or adjustments as may be determined to be
appropriate by the Committee or the Board, in its sole
discretion; provided, however, that the number of shares subject
to any Award will always be a whole number.
(e) Awards under the MIP may not exceed in the case of (i)
the Company's Chief Executive Officer, one and one-half percent
(1.5%) of net income as defined; (ii) a president of any of the
Company's operating companies, whether or not incorporated, six-tenths of
one percent (0.6%) of net income as defined; and (iii)
all other executive officers of the Company, one-half of one
percent (0.5%) of net income as defined.
SECTION 4. ELIGIBILITY.
Officers, employees and directors of the Company, its
subsidiaries and Affiliates who are responsible for or contribute
to the management, growth and profitability of the business of
the Company, its subsidiaries and Affiliates are eligible to be
granted Awards under the Plan.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone or in addition to other
Awards granted under the Plan and may be of two types: Incentive
Stock Options and Non-Qualified Stock Options. Any Stock Option
granted under the Plan will be in such form as the Committee may
from time to time approve.
The Committee will have the authority to grant any optionee
Incentive Stock Options, Non-Qualified Stock Options or both
types of Stock Options (in each case with or without Stock
Appreciation Rights). Incentive Stock Options may be granted
only to employees of the Company and its subsidiaries (within the
meaning of Section 424(f) of the Code). To the extent that any
Stock Option is not designated as an Incentive Stock Option or
even if so designated does not qualify as an Incentive Stock
Option, it will be deemed to be a Non-Qualified Stock Option.
Stock Options will be evidenced by option agreements, the
terms and provisions of which may differ. An option agreement
will indicate on its face whether it is an agreement for an
Incentive Stock Option or a Non-Qualified Stock Option. The
grant of a Stock Option will occur on the date the Committee by
resolution selects an individual to be a participant in any grant
of a Stock Option, determines the number of shares of Stock to be
subject to such Stock Option to be granted to such individual and
specifies the terms and provisions of the Stock Option. The
Company will notify a participant of any grant of a Stock Option,
and a written option agreement or agreements will be duly
executed and delivered by the Company to the participant.
Anything in the Plan to the contrary notwithstanding, no
term of the Plan relating to Incentive Stock Options will be
interpreted, amended or altered nor will any discretion or au-
thority granted under the Plan be exercised so as to disqualify
the Plan under Section 422 of the Code or, without the consent of
the optionee affected, to disqualify any Incentive Stock Option
under such Section 422.
Stock Options granted under the Plan will be subject to the
following terms and conditions and will contain such additional
terms and conditions as the Committee will deem desirable:
(a) OPTION PRICE. The option price per share of Stock pur-
chasable under a Stock Option will be determined by the Committee
and set forth in the option agreement, and will not be less than
the Fair Market Value of the Stock subject to the Stock Option on
the date of grant.
(b) OPTION TERM. The term of each Stock Option will be
fixed by the Committee, but no Incentive Stock Option may be
exercisable more than 10 years after the date the Incentive Stock
Option is granted.
(c) EXERCISABILITY. Except as otherwise provided herein,
Stock Options will be exercisable at such time or times and
subject to such terms and conditions as will be determined by the
Committee. If the Committee provides that any Stock Option is
exercisable only in installments, the Committee may at any time
waive such installment exercise provisions, in whole or in part,
based on such factors as the Committee may determine. In
addition, the Committee may at any time accelerate the
exercisability of any Stock Option.
(d) METHOD OF EXERCISE. Subject to the provisions of this
Section 5, Stock Options may be exercised, in whole or in part,
at any time during the option term by giving written notice of
exercise to the Company specifying the number of shares of Stock
subject to the Stock Option to be purchased.
Such notice must be accompanied by payment in full of the
purchase price by certified or bank check or such other
instrument as the Company may accept. An option agreement may
provide that, if approved by the Committee, payment in full or in
part may also be made in the form of unrestricted Stock already
owned by the optionee of the same class as the Stock subject to
the Stock Option and, in the case of the exercise of a Non-Qualified Stock
Option, Restricted Stock subject to an Award
hereunder which is of the same class as the Stock subject to the
Stock Option (in both cases based on the Fair Market Value of the
Stock on the date the Stock Option is exercised); provided,
however, that, in the case of an Incentive Stock Option, the
right to make a payment in the form of already owned shares of
Stock of the same class as the Stock subject to the Stock Option
may be authorized only at the time the Stock Option is granted.
In addition, an option agreement may provide that in the dis-
cretion of the Committee, payment for any shares subject to a
Stock Option may also be made by instruction to the Committee to
withhold a number of such shares having a Fair Market Value on
the date of exercise equal to the aggregate exercise price of
such Stock Option.
If payment of the option exercise price of a Non-Qualified
Stock Option is made in whole or in part in the form of
Restricted Stock, the number of shares of Stock to be received
upon such exercise equal to the number of shares of Restricted
Stock used for payment of the option exercise price will be
subject to the same forfeiture restrictions to which such
Restricted Stock was subject, unless otherwise determined by the
Committee.
No shares of Stock will be issued until full payment
therefor has been made. Subject to any forfeiture restrictions
that may apply if a Stock Option is exercised using Restricted
Stock, an optionee will have all of the rights of a stockholder
of the Company holding the class or series of Stock that is
subject to such Stock Option (including, if applicable, the right
to vote the shares and the right to receive dividends), when the
optionee has given written notice of exercise, has paid in full
for such shares and, if requested, has given the representation
described in Section 12(a).
(e) NONTRANSFERABILITY OF STOCK OPTIONS. (1) No Stock
Option will be transferable by the optionee other than (A) by
will or by the laws of descent and distribution or (B) in the
case of a Non-Qualified Stock Option, pursuant to a qualified
domestic relations order (as defined in the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder). All Stock Options will be exercisable,
during the optionee's lifetime, only by the optionee or by the
guardian or legal representative of the optionee, it being
understood that the terms "holder" and "optionee" include the
guardian and legal representative of the optionee named in the
option agreement and any person to whom a Stock Option is
transferred by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order.
(2) Notwithstanding Section 5(e)(1) above, the
Committee may grant Stock Options that are transferable, or amend
outstanding Stock Options to make them transferable, by the
optionee (any such Stock Option so granted or amended a
"Transferable Option") to one or more members of the optionee's
immediate family, to partnerships of which the only partners are
members of the optionee's immediate family, or to trusts
established by the optionee for the benefit of one or more
members of the optionee's immediate family. For this purpose the
term "immediate family" means the optionee's spouse, children or
grandchildren. Consideration may not be paid for the transfer of
a Transferable Option. A transferee described in this Section
5(e)(2) shall be subject to all terms and conditions applicable
to the Transferable Option prior to its transfer. The option
agreement with respect to a Transferable Option shall set forth
its transfer restrictions, such option agreement shall be
approved by the Committee, and only Stock Options granted pursu-
ant to a stock option agreement expressly permitting transfer
pursuant to this Section 5(e)(2) shall be so transferable.
(f) TERMINATION BY DEATH. If an optionee's employment
terminates by reason of death, any Stock Option held by such
optionee may thereafter be exercised, to the extent then
exercisable, or on such accelerated basis as the Committee may
determine, for a period of one year (or such other period as the
Committee may specify in the option agreement) from the date of
such death or until the expiration of the stated term of such
Stock Option, whichever period is the shorter.
(g) TERMINATION BY REASON OF DISABILITY. If an optionee's
employment terminates by reason of Disability, any Stock Option
held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of
termination, or on such accelerated basis as the Committee may
determine, for a period of three years (or such shorter period
as the Committee may specify in the option agreement) from the
date of such termination of employment or until the expiration of
the stated term of such Stock Option, whichever period is the
shorter; provided, however, that if the optionee dies within such
three-year period (or such shorter period), any unexercised Stock
Option held by such optionee will, notwithstanding the expiration
of such three-year (or such shorter) period, continue to be exer-
cisable to the extent to which it was exercisable at the time of
death for a period of 12 months from the date of such death or
until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination of
employment by reason of Disability, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option.
(h) TERMINATION BY REASON OF RETIREMENT. If an optionee's
employment terminates by reason of Retirement, any Stock Option
held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of
termination, or on such accelerated basis as the Committee may
determine, for a period of five years (or such shorter period as
the Committee may specify in the option agreement) from the date
of such termination of employment or until the expiration of the
stated term of such Stock Option, whichever period is the
shorter; provided, however, that if the optionee dies within such
five-year period (or such shorter period), any unexercised Stock
Option held by such optionee will, notwithstanding the expiration
of such five-year (or such shorter) period, continue to be exer-
cisable to the extent to which it was exercisable at the time of
death for a period of 12 months from the date of such death or
until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination of
employment by reason of Retirement, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option.
(i) OTHER TERMINATION. Unless otherwise determined by the
Committee, if an optionee incurs a Termination of Employment for
any reason other than death, Disability or Retirement or Cause,
any Stock Option held by such optionee will thereupon terminate,
except that such Stock Option, to the extent then exercisable, or
on such accelerated basis as the Committee may determine, may be
exercised for the lesser of three months from the date of such
Termination of Employment or the balance of such Stock Option's
term; provided, however, that if the optionee dies within such
three-month period, any unexercised Stock Option held by such
optionee will, notwithstanding the expiration of such three-month
period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of 12 months from
the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is the shorter. In the
event of Termination of Employment, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option.
(j) CASHING OUT OF STOCK OPTION. On receipt of written
notice of exercise, the Committee may elect to cash out all or
part of the shares of Stock for which a Stock Option is being
exercised by paying the optionee an amount, in cash or Stock,
equal to the excess of the Fair Market Value of the Stock over
the option price times the number of shares of Stock for which
the Option is being exercised on the effective date of such
cash-out.
(k) CHANGE IN CONTROL CASH-OUT. Subject to Section 12(h),
but notwithstanding any other provision of the Plan, during the
60-day period from and after a Change in Control (the "Exercise
Period"), unless the Committee determines otherwise at the time
of grant, an optionee will have the right, whether or not the
Stock Option is fully exercisable and in lieu of the payment of
the exercise price for the shares of Stock being purchased under
the Stock Option and by giving notice to the Company, to elect
(within the Exercise Period) to surrender all or part of the
Stock Option to the Company and to receive cash, within 30 days
of such notice, in an amount equal to the amount by which the
Change in Control Price per share of Stock on the date of such
election will exceed the exercise price per share of Stock under
the Stock Option (the "Spread") multiplied by the number of
shares of Stock granted under the Stock Option as to which the
right granted under this Section 5(k) will have been exercised.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) GRANT AND EXERCISE. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option
granted under the Plan. In the case of a Non-Qualified Stock
Option, such rights may be granted either at or after the time of
grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of
such Stock Option. A Stock Appreciation Right will terminate and
no longer be exercisable upon the termination or exercise of the
related Stock Option.
A Stock Appreciation Right may be exercised by an optionee
in accordance with Section 6(b) by surrendering the applicable
portion of the related Stock Option in accordance with procedures
established by the Committee. Upon such exercise and surrender,
the optionee will be entitled to receive an amount determined in
the manner prescribed in Section 6(b). Stock Options which have
been so surrendered will no longer be exercisable to the extent
the related Stock Appreciation Rights have been exercised.
(b) TERMS AND CONDITIONS. Stock Appreciation Rights will
be subject to such terms and conditions as will be determined by
the Committee, including the following:
(1) Stock Appreciation Rights will be exercisable only
at such time or times and to the extent that the Stock
Options to which they relate are exercisable in accordance
with the provisions of Section 5 and this Section 6;
(2) Upon the exercise of a Stock Appreciation Right,
an optionee will be entitled to receive an amount in cash,
shares of Stock or both equal in value to the excess of the
Fair Market Value of one share of Stock as of the date of
exercise over the option price per share specified in the
related Stock Option multiplied by the number of shares in
respect of which the Stock Appreciation Right has been exer-
cised, with the Committee having the right to determine the
form of payment;
(3) Stock Appreciation Rights will be transferable
only to permitted transferees of the underlying Stock Option
in accordance with Section 5(e).
SECTION 7. RESTRICTED STOCK.
(a) ADMINISTRATION. Shares of Restricted Stock may be
awarded either alone or in addition to other Awards granted under
the Plan. The Committee will determine the individuals to whom
and the time or times at which grants of Restricted Stock will be
awarded, the number of shares to be awarded to any participant,
the conditions for vesting, the time or times within which such
Awards may be subject to forfeiture and any other terms and con-
ditions of the Awards, in addition to those contained in Section
7(c).
(b) AWARDS AND CERTIFICATES. Shares of Restricted Stock
will be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of one
or more stock certificates. Except as otherwise set forth in a
Restricted Stock Agreement, any certificate issued in respect of
shares of Restricted Stock will be registered in the name of such
participant and will bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award,
substantially in the following form:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and con-
ditions (including forfeiture) of the 1997 Incentive Plan
and a Restricted Stock Agreement. Copies of such Plan and
Agreement are on file at the offices of Viad Corp, Viad
Tower, Phoenix, Arizona."
The Committee may require that the certificates evidencing such
shares be held in custody by the Company until the restrictions
thereon have lapsed and that, as a condition of any Award of
Restricted Stock, the participant has delivered a stock power,
endorsed in blank, relating to the Stock covered by such Award.
(c) TERMS AND CONDITIONS. Shares of Restricted Stock will
be subject to the following terms and conditions:
(1) The Committee may, prior to or at the time of
grant, designate an Award of Restricted Stock as a Qualified
Performance-Based Award, in which event it will condition
the grant or vesting, as applicable, of such Restricted
Stock upon the attainment of Performance Goals. If the Com-
mittee does not designate an Award of Restricted Stock as a
Qualified Performance-Based Award, it may also condition the
grant or vesting thereof upon the attainment of Performance
Goals or such other performance-based criteria as the
Committee shall establish (such an Award, a "Performance-Based
Restricted Stock Award"). Regardless of whether an
Award of Restricted Stock is a Qualified Performance-Based
Award or a Performance-Based Restricted Stock Award, the
Committee may also condition the grant or vesting upon the
continued service of the participant. The provisions of Re-
stricted Stock Awards (including the conditions for grant or
vesting and any applicable Performance Goals) need not be
the same with respect to each recipient. The Committee may
at any time, in its sole discretion, accelerate or waive, in
whole or in part, any of the foregoing restrictions;
provided, however, that in the case of Restricted Stock that
is a Qualified Performance-Based Award, the applicable
Performance Goals have been satisfied.
(2) Subject to the provisions of the Plan and the
Restricted Stock Agreement referred to in Section 7(c)(8),
during the period set by the Committee, commencing with the
date of such Award for which such participant's continued
service is required (the "Restriction Period") and until the
later of (A) the expiration of the Restriction Period and
(B) the date the applicable Performance Goals (if any) are
satisfied, the participant will not be permitted to sell,
assign, transfer, pledge or otherwise encumber shares of
Restricted Stock.
(3) Except as provided in this paragraph (3) and
Sections 7(c)(1) and (2) and the Restricted Stock Agreement,
the participant will have, with respect to the shares of Re-
stricted Stock, all of the rights of a stockholder of the
Company holding the class or series of Stock that is the
subject of the Restricted Stock, including, if applicable,
the right to vote the shares and the right to receive any
dividends. If so determined by the Committee in the ap-
plicable Restricted Stock Agreement and subject to Section
12(f) of the Plan, (A) dividends consisting of cash, stock
or other property (other than Stock) on the class or series
of Stock that is the subject of the Restricted Stock shall
be automatically deferred and reinvested in additional
Restricted Stock (in the case of stock or other property,
based on the fair market value thereof, and the Fair Market
Value of the Stock, in each case as of the record date for
the dividend) held subject to the vesting of the underlying
Restricted Stock, or held subject to meeting any Performance
Goals applicable to the underlying Restricted Stock, and (B)
dividends payable in Stock shall be paid in the form of
Restricted Stock of the same class as the Stock with which
such dividend was paid and shall be held subject to the
vesting of the underlying Restricted Stock, or held subject
to meeting any Performance Goals applicable to the
underlying Restricted Stock.
(4) Except to the extent otherwise provided in the
applicable Restricted Stock Agreement, Section 7(c)(1),
7(c)(2), 7(c)(5) or 9(a)(2), upon a participant's Termi-
nation of Employment for any reason during the Restriction
Period or before any applicable Performance Goals are met,
all shares still subject to restriction will be forfeited by
the participant.
(5) Except to the extent otherwise provided in Section
9(a)(2), in the event that a participant retires or such
participant's employment is involuntarily terminated (other
than for Cause), the Committee will have the discretion to
waive in whole or in part any or all remaining restrictions
(other than, in the case of Restricted Stock which is a
Qualified Performance-Based Award, satisfaction of the
applicable Performance Goals unless the participant's
employment is terminated by reason of death or Disability)
with respect to any or all of such participant's shares of
Restricted Stock.
(6) Except as otherwise provided herein or as required
by law, if and when any applicable Performance Goals are
satisfied and the Restriction Period expires without a prior
forfeiture of the Restricted Stock, unlegended certificates
for such shares will be delivered to the participant upon
surrender of legended certificates.
(7) Awards of Restricted Stock, the vesting of which
is not conditioned upon the attainment of Performance Goals
or other performance-based criteria, is limited to twenty
percent (20%) of the number of shares of Common Stock of the
Corporation available for grant under the Plan in each
calendar year.
(8) Each Award will be confirmed by, and be subject to
the terms of, a Restricted Stock Agreement.
SECTION 8. PERFORMANCE-BASED AWARDS.
(a) ADMINISTRATION. Performance-Based Awards may be award-
ed either alone or in addition to other Awards granted under the
Plan. Subject to the terms and conditions of the Plan, the
Committee shall determine the officers and employees to whom and
the time or times at which Performance-Based Awards will be
awarded, the number or amount of Performance-Based Awards to be
awarded to any participant, whether such Performance-Based Award
shall be denominated in a number of shares of Stock, an amount of
cash, or some combination thereof, the duration of the Award
Cycle and any other terms and conditions of the Award, in
addition to those contained in Section 8(b).
(b) TERMS AND CONDITIONS. Performance-Based Awards will be
subject to the following terms and conditions:
(1) The Committee may, prior to or at the time of the
grant, designate Performance-Based Awards as Qualified
Performance-Based Awards, in which event it will condition
the settlement thereof upon the attainment of Performance
Goals. If the Committee does not designate Performance-Based Awards as
Qualified Performance-Based Awards, it may
also condition the settlement thereof upon the attainment of
Performance Goals or such other performance-based criteria
as the Committee shall establish. Regardless of whether
Performance-Based Awards are Qualified Performance-Based
Awards, the Committee may also condition the settlement
thereof upon the continued service of the participant. The
provisions of such Performance-Based Awards (including
without limitation any applicable Performance Goals) need
not be the same with respect to each recipient. Subject to
the provisions of the Plan and the Performance-Based Award
Agreement referred to in Section 8(b)(5), Performance-Based
Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered during the Award Cycle.
(2) Unless otherwise provided by the Committee (A)
from time to time pursuant to the administration of
particular Award programs under this Section 8, such as the
Viad Corp Management Incentive Plan, the Viad Corp
Performance Unit Incentive Plan or the Viad Corp
Performance-Based Stock Plan or (B) in any agreement
relating to an Award, and except as provided in Section
8(b)(3), upon a participant's Termination of Employment for
any reason prior to the payment of an Award under this
Section 8, all rights to receive cash or Stock in settlement
of the Award shall be forfeited by the participant.
(3) In the event that a participant's employment is
terminated (other than for Cause), or in the event a par-
ticipant retires, the Committee shall have the discretion to
waive, in whole or in part, any or all remaining payment
limitations (other than, in the case of Awards that are
Qualified Performance-Based Awards, satisfaction of the
applicable Performance Goals unless the participant's
employment is terminated by reason of death or Disability)
with respect to any or all of such participant's Awards.
(4) At the expiration of the Award Cycle, the Com-
mittee will evaluate the Company's performance in light of
any Performance Goals for such Award, and will determine the
extent to which a Performance-Based Award granted to the
participant has been earned, and the Committee will then
cause to be delivered to the participant, as specified in
the grant of such Award: (A) a number of shares of Stock
equal to the number of shares determined by the Committee to
have been earned or (B) cash equal to the amount determined
by the Committee to have been earned or (C) a combination of
shares of Stock and cash if so specified in the Award.
(5) No Performance-Based Award may be assigned,
transferred, or otherwise encumbered except, in the event of
the death of a participant, by will or the laws of descent
and distribution.
(6) Each Award will be confirmed by, and be subject
to, the terms of a Performance-Based Award Agreement.
SECTION 9. CHANGE IN CONTROL PROVISIONS.
(a) IMPACT OF EVENT. Notwithstanding any other provision
of the Plan to the contrary, in the event of a Change in Control:
(1) Any Stock Options and Stock Appreciation Rights
outstanding as of the date such Change in Control is
determined to have occurred and not then exercisable and
vested will become fully exercisable and vested to the full
extent of the original grant;
(2) The restrictions and conditions to vesting
applicable to any Restricted Stock will lapse, and such Re-
stricted Stock will become free of all restrictions and
become fully vested and transferable to the full extent of
the original grant;
(3) Performance-Based Awards will be considered to be
earned and payable to the extent, if any, and in an amount,
if any, and otherwise, in accordance with the provisions of
the agreement relating to such Awards.
(b) DEFINITION OF CHANGE IN CONTROL. For purposes of the
Plan, a "Change in Control" will mean the happening of any of the
following events:
(1) An acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty percent (20%) or more of either (A) the then outstanding
shares of common stock of the Company (the "Outstanding Company
Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); excluding, however, the following: (i) any
acquisition directly from the Company, other than an acquisition
by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the
Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(A), (B) and (C) of subsection (3) of this Section 9(b); or
(2) A change in the composition of the Board such that
the individuals who, as of February 20, 1997, constitute the
Board (such Board will be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of this
Section 9(b), that any individual who becomes a member of the
Board subsequent to February 20, 1997, whose election, or nomi-
nation for election by the Company's stockholders, was approved
by a vote of at least a majority of those individuals who are
members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso) will be
considered as though such individual were a member of the Incum-
bent Board; but, provided further, that any such individual whose
initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board will not be so
considered as a member of the Incumbent Board; or
(3) The approval by the stockholders of the Company of
a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company ("Corporate Transaction") (or, if consummation of such
Corporate Transaction is subject, at the time of such approval by
stockholders, to the consent of any government or governmental
agency, the earlier of the obtaining of such consent or the
consummation of the Corporate Transaction); excluding, however,
such a Corporate Transaction pursuant to which (A) all or
substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than sixty percent (60%) of,
respectively, the outstanding shares of common stock, and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be,
(B) no Person (other than the Company, any employee benefit plan
(or related trust) of the Company or such corporation resulting
from such Corporate Transaction) will beneficially own, directly
or indirectly, twenty percent (20%) or more of, respectively, the
outstanding shares of common stock of the corporation resulting
from such Corporate Transaction or the combined voting power of
the outstanding voting securities of such corporation entitled to
vote generally in the election of directors except to the extent
that such ownership existed prior to the Corporate Transaction
and (C) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate
Transaction; or
(4) The approval by the stockholders of the Company of
a complete liquidation or dissolution of the Company.
(c) CHANGE IN CONTROL PRICE. For purposes of the Plan,
"Change in Control Price" means the higher of (1) the highest
reported sales price, regular way, of a share of Stock in any
transaction reported on the New York Stock Exchange Composite
Tape or other national exchange on which such shares are listed
or on The Nasdaq Stock Market during the 60-day period prior to
and including the date of a Change in Control or (2) if the
Change in Control is the result of a tender or exchange offer or
a Corporate Transaction, the highest price per share of Stock
paid in such tender or exchange offer or Corporate Transaction;
provided, however, that in the case of Incentive Stock Options
and Stock Appreciation Rights relating to Incentive Stock
Options, the Change in Control Price will be in all cases the
Fair Market Value of the Stock on the date such Incentive Stock
Option or Stock Appreciation Right is exercised. To the extent
that the consideration paid in any such transaction described
above consists all or in part of securities or other non-cash
consideration, the value of such securities or other non-cash
consideration will be determined in the sole discretion of the
Board.
SECTION 10. TERM, AMENDMENT AND TERMINATION.
The Plan will terminate May 31, 2007, but may be terminated
sooner at any time by the Board, provided that no Incentive Stock
Options shall be granted under the Plan after February 19, 2007.
Awards outstanding as of the date of any such termination will
not be affected or impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no
amendment, alteration or discontinuation will be made which
would (a) impair the rights of an optionee under a Stock Option
or a recipient of a Stock Appreciation Right, Restricted Stock
Award or Performance-Based Award theretofore granted without the
optionee's or recipient's consent, except such an amendment which
is necessary to cause any Award or transaction under the Plan to
qualify, or to continue to qualify, for the exemption provided by
Rule 16b-3, or (b) disqualify any Award or transaction under the
Plan from the exemption provided by Rule 16b-3. In addition, no
such amendment may be made without the approval of the Company's
stockholders to the extent such approval is required by law or
agreement.
The Committee may amend the terms of any Stock Option or
other Award theretofore granted, prospectively or retroactively,
but no such amendment will (1) impair the rights of any holder
without the holder's consent except such an amendment which is
necessary to cause any Award or transaction under the Plan to
qualify, or to continue to qualify, for the exemption provided by
Rule 16b-3 or (2) amend any Qualified Performance-Based Award in
such a way as to cause it to cease to qualify for the exemption
set forth in Section 162(m)(4)(C). The Committee may also
substitute new Stock Options for previously granted Stock
Options, including previously granted Stock Options having higher
option prices.
Subject to the above provisions, the Board will have
authority to amend the Plan to take into account changes in law
and tax and accounting rules, as well as other developments and
to grant Awards which qualify for beneficial treatment under such
rules without stockholder approval.
SECTION 11. UNFUNDED STATUS OF PLAN.
It is presently intended that the Plan constitute an
"unfunded" plan for incentive and deferred compensation. The
Committee may authorize the creation of trusts or other arrange-
ments to meet the obligations created under the Plan to deliver
Stock or make payments; provided, however, that, unless the Com-
mittee otherwise determines, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of
the Plan.
SECTION 12. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing or
receiving shares pursuant to an Award to represent to and agree
with the Company in writing that such person is acquiring any
shares without a view to the distribution thereof. The
certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on trans-
fer.
All certificates for shares of Stock or other securities
delivered under the Plan will be subject to such stock transfer
orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the
Commission, any stock exchange upon which the Stock is then
listed and any applicable federal or state securities law, and
the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
Notwithstanding any other provision of the Plan or
agreements made pursuant thereto, the Company shall not be re-
quired to issue or deliver any certificate or certificates for
shares of Stock under the Plan prior to fulfillment of all of the
following conditions:
(1) Listing or approval for listing upon notice of
issuance, of such shares on the New York Stock Exchange,
Inc., or such other securities exchange as may at the time
be the principal market for the Stock;
(2) Any registration or other qualification of such
shares of the Company under any state or federal law or
regulation, or the maintaining in effect of any such
registration or other qualification which the Committee
shall, in its absolute discretion upon the advice of
counsel, deem necessary or advisable; and
(3) Obtaining any other consent, approval, or permit
from any state or federal governmental agency which the
Committee shall, in its absolute discretion after receiving
the advice of counsel, determine to be necessary or
advisable.
(b) Nothing contained in the Plan will prevent the Company
or any subsidiary or Affiliate from adopting other or additional
compensation arrangements for its employees.
(c) The adoption of the Plan will not confer upon any
employee any right to continued employment nor will it interfere
in any way with the right of the Company or any subsidiary or
Affiliate to terminate the employment of any employee at any
time.
(d) No later than the date as of which an amount first
becomes includible in the gross income of the participant for
Federal income tax purposes with respect to any Award under the
Plan, the participant will pay to the Company, or make
arrangements satisfactory to the Company regarding the payment
of, any federal, state, local or foreign taxes of any kind
required by law to be withheld with respect to such amount. Un-
less otherwise determined by the Company, withholding obligations
may be settled with Stock, including Stock that is part of the
Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan will be conditional on
such payment or arrangements, and the Company and its Affiliates
will, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to the participant.
The Committee may establish such procedures as it deems
appropriate, including the making of irrevocable elections, for
the settlement of withholding obligations with Stock.
(e) At the time of grant, the Committee may provide in
connection with any grant made under the Plan that the shares of
Stock received as a result of such grant will be subject to a
right of first refusal pursuant to which the participant will be
required to offer to the Company any shares that the participant
wishes to sell at the then Fair Market Value of the Stock, sub-
ject to such other terms and conditions as the Committee may
specify at the time of grant.
(f) The reinvestment of dividends in additional Restricted
Stock at the time of any dividend payment will only be
permissible if sufficient shares of Stock are available under
Section 3 for such reinvestment (taking into account then
outstanding Stock Options and other Awards).
(g) The Committee will establish such procedures as it
deems appropriate for a participant to designate a beneficiary to
whom any amounts payable in the event of the participant's death
are to be paid or by whom any rights of the participant, after
the participant's death, may be exercised.
(h) Notwithstanding any other provision of the Plan or any
agreement relating to any Award hereunder, if any right granted
pursuant to this Plan would make a Change in Control transaction
ineligible for pooling-of-interests-accounting under APB No. 16
that, but for the nature of such grant, would otherwise be
eligible for such accounting treatment, the Committee will have
the ability, in its sole discretion, to substitute for the cash
payable pursuant to such grant Common Stock with a Fair Market
Value equal to the cash that would otherwise be payable
hereunder.
(i) The Plan and all Awards made and actions taken
thereunder will be governed by and construed in accordance with
the laws of the State of Delaware.
SECTION 13. EFFECTIVE DATE OF PLAN.
The Plan will be effective on the later of (a) the time it
is approved by the Board and (b) the time certain provisions of
the Plan are approved by stockholders for tax purposes.
SECTION 14. DIRECTOR STOCK OPTIONS.
(a) Each director of the Company who is not otherwise an
employee of the Company or any of its subsidiaries or Affiliates,
will (1) on the date of his or her first election as a director
of the Company (such initial grant being an "Initial Grant"), and
(2) annually on the third Thursday of August, during such
director's term (the "Annual Grant"), automatically be granted
Non-Qualified Stock Options to purchase Common Stock having an
exercise price per share of Common Stock equal to 100% of Fair
Market Value per share of Common Stock at the date of grant of
such Non-Qualified Stock Option. The number of shares subject to
each such Initial Grant, and each such Annual Grant, will be
equal to the annual retainer fee in effect at the date of grant
for non-employee directors of the Company divided by an amount
equal to one-third (1/3) of the Fair Market Value of the Common
Stock at the date of grant, rounded to the nearest 100 shares. A
non-employee director who is first elected as a director of the
Company during the course of a year (i.e., on a date other than
the date of the Annual Grant) will, in addition to the Initial
Grant, receive upon election a grant of Non-Qualified Stock
Options prorated to reflect the number of months served in the
initial year of service, with the number of shares of Common
Stock subject to such Stock Option being equal to (1) the number
of shares subject to the Initial Grant multiplied by (2) a frac-
tion the numerator of which will be the number of months from the
date of such election through the date of the next Annual Grant
and the denominator of which will be twelve (12).
(b) An automatic director Stock Option will be granted
hereunder only if as of each date of grant the director (1) is
not otherwise an employee of the Company or any of its sub-
sidiaries or Affiliates, (2) has not been an employee of the
Company or any of its subsidiaries or Affiliates for any part of
the preceding fiscal year, and (3) has served on the Board
continuously since the commencement of his term.
(c) Except as expressly provided in this Section 14, any
Stock Option granted hereunder will be subject to the terms and
conditions of the Plan as if the grant were made pursuant to
Section 5 hereof including, without limitation, the rights set
forth in Section 5(j) hereof.
Exhibit 10.L1
VIAD CORP
PERFORMANCE UNIT INCENTIVE PLAN
PURSUANT TO THE VIAD 1997 OMNIBUS 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 Viad Corp.
"Code" - The Internal Revenue Code of 1986, as amended,
or its successor general income tax law of the United
States.
"Committee" - The Human Resources Committee of the
Board.
"Corporation" - Viad 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. The first goal for CORPORATE
and TRAVELERS EXPRESS COMPANY Participants is Average Three-Year Return
on Equity and for other Subsidiary Participants
is Average Three-Year Return on Capital (Assets). A minimum
(threshold) Return on Capital (Assets) or Return on Equity
target will be established and must be met or exceeded
before the Net Income Growth target can produce earned
awards. Further, there cannot be a year when a Subsidiary's
net income is down from the prior year or the threshold will
not be met.
The second goal for each SUBSIDIARY Participant principally
emphasizes growth in Average Three-Year Net Income.
The second goal for Corporate Participants also emphasizes
Growth in Average Three-Year Net Income but the target will
be based on income per share from continuing operations, the
most appropriate measure in increasing shareholder value.
5. DETERMINATION OF TARGETS
A. AVERAGE THREE-YEAR SUBSIDIARY RETURN ON CAPITAL
(ASSETS) (EXCEPT TRAVELERS EXPRESS)
Return on Capital (Assets) calculations 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), total assets. Consideration
will be given to any known or anticipated changes, and
an appropriate weighted average annual Return on
Capital (Assets) 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, including year-by-year Return on
Capital (Assets) (on the same basis as previously
described), overall Corporate objectives and, where
appropriate, other circumstances. Intercompany amounts
will be excluded from Capital (Assets). Cash and
marketable securities will be included, except for
Brewster Transport's investments on behalf of its
Canadian parent companies. Accounts receivable sold
will be reinstated as Capital (Assets) so that all
accounts receivables are included and returns will not
be affected by fluctuations in sold receivables.
Capitalized value of leases entered into during the
Performance Period for major assets (whether a sale-leaseback or a
new lease) will be added to Capital
(Assets) to properly include such assets, whether owned
or leased. Major construction in process projects,
which qualify for capitalization of interest under FASB
rules, shall not be included in Capital (Assets) until
operational (e.g. Banc One Ballpark - Restaura).
Finally, classifications of assets must be consistent
with previous years' practices.
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 data, and an appropriate 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. Unplanned changes in unrealized
securities gains and losses, an element of
stockholder's equity pursuant to SFAS No. 115, are to
be excluded in determining equity amounts to be used in
the calculation of actual Return on Equity hereunder.
C. AVERAGE THREE-YEAR VIAD RETURN ON COMMON STOCKHOLDERS'
EQUITY
Return on common stockholders' equity calculations will
be made for Viad 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 relevant industry data, and an
appropriate 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. Similar
to the Travelers Express Return on Equity definition
above, unplanned changes in unrealized securities gains
and losses are to be excluded in calculating actual
Viad return on Equity hereunder, along with unplanned
changes in unrealized foreign currency translation
adjustments.
D. AVERAGE THREE-YEAR GROWTH IN SUBSIDIARY EARNINGS
An appropriate average three-year net income 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 GROWTH IN THREE-YEAR VIAD INCOME PER SHARE
An appropriate average three-year "Income Per Share"
from continuing operations target for Viad Corp will be
established after considering historical income 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 Viad Corp.
Performance Units will be earned based upon (1)
achieving the minimum (threshold) Return on Equity or
Capital (Assets) Target and (2) the degree of
achievement of the net income or income per share
target over the Performance Period following the date
of grant. Earned Units can range, based on operating
performance, from 0% to 200% of the target Units.
6. OTHER PLAN PROVISIONS
Subsidiary net income and Viad income per share from
continuing operations are determined before extraordinary
items, effects of changes in accounting principles or a
change in federal income tax rates after the target has been
set. (For example, new FASB release on Earnings per share
to be effective for periods after December 15, 1997 but not
considered when targets were set). Reclassification of a
major business unit to discontinued operations status after
targets have been set would also require adjustment because
of effect on Viad continuing operations results. While
gains on disposition of a business would normally not be
included in determining income per share, in the event of
the sale of a subsidiary or major business unit, a portion
of gain would be included for the difference between the
sold unit's planned net income for the performance period
and actual results to date of sale plus calculated interest
savings on proceeds for the balance of the performance
period, so that actual results are not penalized for selling
a business.
There will be an addback to actual net income for any
additional intercompany interest cost (net of tax) incurred
by a subsidiary as the result of any special dividend paid
(in excess of 100% of net income for a year) during the
applicable performance period. In addition, an addback to
actual net income will be allowed for any increased cost to
a subsidiary for an increase in the formula allocation of
corporate overhead over amounts included in the
Plan/Forecast at the beginning of the applicable performance
period.
Incentives to be paid under this Plan must be deducted from
the subsidiary 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. RANGE OF PERFORMANCE AWARDS
The range of values for the Corporation's or a Subsidiary
Company's net income or income per share 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.
Performance Units will be earned based upon meeting or
exceeding the minimum (threshold) Return target and the
degree of achievement of the pre-defined net income
(subsidiary) or income per share from continuing operations
(Viad Corp) goals.
PERFORMANCE UNIT AWARD ILLUSTRATION:
Return Threshold Met No (1) Yes Yes Yes Yes Yes Yes Yes Yes
% of Net Income/Income
per Share Target
Achieved (Illustration
Assumes Target at
100% reflects 10%
compounded annual
growth) (2) (1) 95.5% 97.0% 98.5% 100% 102% 104% 106% 108%
Percent of Award
Earned 0%(1) 25% 50% 75% 100% 125% 150% 175% 200%
(1) Unless performance period Return threshold has been met, and for
subsidiaries, each year's net income exceeds prior year, no award can
be earned regardless of achievement against average
Income target.
(2) Percent of award earned will be interpolated when falling between the
25% increments.
8. PARTICIPANT ELIGIBILITY
Personnel will be eligible for participation as recommended
by the Viad 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 Viad
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
capitalization 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. PAYMENTS 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. For
those Executive Officers affected by Section 162(m) of the
Internal Revenue Code, awards will be subject to
discretionary downward adjustment 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
The Plan shall be effective January 1, 1997, provided
however, that any Award made under this Plan is subject to
the approval of the Viad 1997 Omnibus Incentive Plan by the
stockholders of Viad Corp.
Exhibit 10.O
April 25, 1996
Paul Mullen
3900 Cuba Road
Long Grove, IL 60047
Dear Paul:
The provisions of this letter, when accepted by you, shall
constitute an "Agreement" governing your employment with GES
Exposition Services, Inc. ("GES"), a wholly-owned subsidiary of
The Dial Corp ("Employer").
EMPLOYMENT - You shall be employed as President and Chief
Executive Officer of GES during the term of this Agreement. You
will devote your best efforts, energies, skill and all of your
working time to the discharge of the duties and responsibilities
as may from time-to-time be prescribed by Employer's Chief
Executive Officer; to serve the best interest of Employer and
GES; to perform your tasks to the reasonable satisfaction of the
Employer's Chief Executive Officer; and to be responsible to
Employer's Chief Executive Officer for the performance of the
business of GES and its subsidiaries.
TERM - The term of your employment shall be one year from
the date your employment with GES commences and shall continue
from year-to-year thereafter unless written notice of termination
is given by Employer or you, six (6) months prior to your
anniversary date, or six (6) months prior to your anniversary
date of any year thereafter, as the case may be.
COMPENSATION - You will be provided a base compensation of
$300,000 per year. This base compensation will remain fixed for
a period of time until Employer determines when market conditions
would indicate merit increases, based upon your performance,
should commence. You will be entitled to participate in
incentive compensation plans of Employer which shall include
Employer's Management Incentive Plan ("MIP") with a target
eligibility of 30% of base compensation, and, subject to
Employer's Board approval, will be eligible to participate in
Employer's Performance Unit Plan ("PUP"), and Employer's
Performance-Based Stock Plan, copies of which will be forwarded
to you.
Your 1996 MIP participation with GES will be based on
partial year targets for that period of time in which you are
President and Chief Executive Officer.
RELOCATION - GES will provide you with assistance in your
relocation from your current residence to Las Vegas, Nevada, by
means of its Employee Relocation Program, the details of which
will be forwarded to you.
The Employee Relocation Program will be amended to provide
six (6) months payment on the lesser amount of mortgage interest,
taxes, insurance, utilities and general maintenance. These
payments are conditioned upon your listing of your Long Grove,
Illinois residence for sale.
In addition, you will be reimbursed for up to six (6) months
of temporary living expenses and weekly airline trips from Las
Vegas to Chicago.
Further, you will be given a sum of $10,000 to cover
miscellaneous moving expenses.
OTHER BENEFITS - You shall be entitled to all fringe
benefits or perquisites provided by Employer or GES to its
executives generally using, whenever applicable, base
compensation as the basis for determining such benefit. The
benefits shall include, inter alia, participation in the
Employer's 1992 Stock Incentive Plan, Executive Severance Plan,
executive health, dental, life and disability plans, and the GES
401K Plan and the GES Supplemental Employees Retirement Plan,
copies of which will be supplied to you.
In addition, in your case, such benefits or perquisites
shall also include the use of a luxury automobile, financial
counseling, a country club's monthly dues (excluding initiation
fees), and a luncheon and health club dues. You are also
authorized to obtain first class air travel while on Employer or
GES business.
NON-COMPETE - It is agreed that, in the event of termination
of your employment by either party, you will not, for a period of
twelve (12) months from the date of such termination, directly or
indirectly, solicit or do business with the clients of GES or
Exhibitgroup/Giltspur or any of its affiliated companies.
SEPTEMBER 13, 1995 LETTER - In exchange for your waiving any
rights and claims to the Letter dated September 13, 1995, from
Giltspur, Inc., you will be paid $218,750, less statutory
deductions, promptly.
SEVERANCE - In the event that your termination of employment
is for a reason other than voluntary resignation or that you have
been convicted of a felony, or a crime of moral turpitude, fraud
or dishonesty, you will be paid a severance of one year's base
compensation at your then current salary. The payment shall be in
a lump sum, less statutory deductions.
TERMINATION - Employer may suspend or terminate this
Agreement and your employment at any time should you:
(a) become incapable for more than 180 days of
satisfactorily performing the duties required of your
position due to personal injury or other physical or
mental illness or disease; or
(b) engage in activities that would constitute a conflict
of interest with Employer, GES or GES subsidiaries; or
(c) be convicted of a felony, or a crime of moral
turpitude, fraud or dishonesty, or commit an act which,
in the judgment of a majority of Employer's Board of
Directors, subjects Employer, GES or GES subsidiaries
to public disrespect, scandal or ridicule or adversely
affects the utility of your services to Employer or
GES; or
(d) knowingly disregard or violate any instruction or
policy established by Employer or GES with respect to
the operation of the business and affairs of Employer,
GES or GES's subsidiaries.
If GES terminates your employment for cause, or if you
terminate your employment as a result of your resignation or
death, you (or your estate in the event of your death) shall be
entitled to receive salary to the date of termination, but shall
have no right or claim to an incentive award or bonus for the
year in which termination occurs except if your employment
terminates by your death.
If you accept employment on the terms and conditions set
forth in this letter, please indicate by your signature in the
space provided and return one copy to me. This matter is to be
kept confidential so that, if you accept, we may plan for an
orderly and proper transition of executive management.
Very truly yours,
/s/ John W. Teets
Chairman and CEO
The Dial Corp
ACCEPTED AND AGREED:
/s/ Paul Mullen
Date:
Exhibit 10.U
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT entered into effective the 1st day
of January, 1997, between VIAD CORP, a Delaware corporation
(hereinafter called "Employer"), and Robert H. Bohannon
(hereinafter called "Employee").
WITNESSETH:
1. EMPLOYMENT.
Employer hereby employs Employee and Employee hereby agrees
to serve Employer in the capacity hereinafter described for the
employment term hereinafter set forth. Employee has been elected
to the Board of Directors of Viad Corp; in addition, he is hereby
employed as Chief Executive Officer, President and Chairman of
the Board of Viad Corp, at its headquarters in Phoenix, Arizona.
Employee agrees (a) to serve in such position or in any other
senior executive position to which he may be elected or appointed
by Employer's Board of Directors during the term of this
Agreement, (b) to devote his best efforts, energies, skill and
all of his working time to the discharge of the duties and
responsibilities as Chief Executive Officer, President and
Chairman of the Board, and (c) to perform his tasks to Employer's
reasonable satisfaction.
2. COMPENSATION AND BENEFITS.
As remuneration for services performed hereunder, Employee
shall receive the salary, benefits and incentive compensation
that are listed on Schedule "A", attached.
3. TERM.
This Agreement shall become effective immediately and shall
terminate on December 31, 1998.
4. EXECUTIVE SEVERANCE AGREEMENT.
Employer shall enter into an Executive Severance Agreement
with Employee dealing with the threat or occurrence of a bid or
other action to take over control of the Employer. The Executive
Severance Agreement shall be comparable in form and substance to
the executive severance agreement of Employee's predecessor
previously approved by the Board of Directors of Employer
5. TERMINATION.
Employer may terminate this Agreement at any time if:
(a) Employee, by reason of physical or mental illness,
shall have been unable to perform satisfactorily the services to
be rendered by him hereunder for a consecutive period of one
hundred eighty (180) days. Should such incapacity occur,
Employee shall be entitled to the retirement benefits as provided
on Schedule "A".
(b) Employee should be convicted of a felony or a crime
involving moral turpitude, fraud, or dishonesty, or commit an act
which, in the judgment of a majority of Employer's Board of
Directors, as evidenced by action recorded in the official
minutes of a meeting of such Directors, subjects Employer or its
subsidiaries to public disrespect, scandal or ridicule or
adversely affects the utility of your services to Employer.
(c) Should Employee be requested by a majority of the Board
of Directors to resign from the Employer as an officer and Board
member, the Employee, in such case, shall be entitled to all
benefits earned on Schedule "A" up to the date of resignation and
Employee shall be entitled to 150% of salary due for the
remaining term of this Agreement, and all other compensation
listed on Schedule "A" shall cease as of the date of resignation.
5. BOARD OF DIRECTORS.
Executive shall report to the Board of Directors of Viad
Corp in discharging his duties and responsibilities.
IN WITNESS WHEREOF, the parties hereto have caused this
Employment Agreement to be executed effective as of the 1 st day
of January, 1997.
VIAD CORP
By: /s/ Peter J. Novak
Vice President &
General Counsel
ATTEST:
By: /s/ Scott E. Sayre
Secretary
/s/ Robert H. Bohannon
<PAGE>
SCHEDULE "A"
CHIEF EXECUTIVE OFFICER, PRESIDENT & CHAIRMAN OF THE BOARD
Base Salary $600,000
MIP Target Bonus % 60%
Stock Options Eligible
Performance Based Stock Eligible
Performance Unit Plan Eligible (same as MIP)
First Class Air Travel Eligible
Company Paid AD&D $300,000 Company Paid
Health Club Corporate Fitness Center - reserved
locker at $25/month or outside club
(paid up to $25 after first $25
paid by employee)
Luncheon Club Monthly dues at Arizona Club or the
Mansion Club
Country Club Monthly dues
Financial Counseling
Services Choice of counselor at Ayco or
Arthur Andersen
Executive Medical Provides supplemental coverage to
the base plan, including co-pays
and deductibles
Parking Reserved company-paid parking
Executive Physical
Supplemental Executive Retirement Plan - B
Automobile
Other Standard Benefits
<PAGE>
<TABLE>
Exhibit 11
VIAD CORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(000 omitted)
<CAPTION>
Year ended December 31,
----------------------------------------------
1996 1995 1994
PRIMARY: ----------- ----------- -----------
<S> <C> <C> <C>
Net income (loss) $ 28,377 $ (16,559) $ 140,311
Less: Preferred stock dividends (1,125) (1,124) (1,123)
Subsidiary dilutive securities (9)
---------- ----------- -----------
$ 27,252 $ (17,683) $ 139,179
========== =========== ===========
Weighted average common shares
outstanding before common
equivalents 89,173 86,865 85,069
Common equivalent stock options 2,464 1,842 1,577
---------- ----------- -----------
91,637 88,707 86,646
========== =========== ===========
Net income (loss) per share (dollars) $ 0.30 $ (0.20) $ 1.61
========== =========== ===========
FULLY DILUTED:
Adjusted net income (loss) per above $ 27,252 $ (17,683) $ 139,179
========== =========== ==========
Average common and equivalent
shares per above 91,637 88,707 86,646
Common equivalent stock options 573 934
---------- ----------- ----------
92,210 89,641 86,646
========== =========== ==========
Net income (loss) per share (dollars) $ 0.30 $ (0.20) $ 1.61
========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VIAD CORP SELECTED FINANCIAL AND OTHER DATA
Year ended December 31, 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATIONS (000 omitted)
Revenues $2,263,228 $1,976,745 $1,806,597 $1,337,940 $1,340,745
=========== =========== =========== =========== ===========
Income from continuing
operations (1) $ 69,071 $ 70,781 $ 61,173 $ 31,975 $ 10,768
Income (loss) from
discontinued
operations (2) (40,694) (73,465) 79,138 110,111 (69,028)
----------- ----------- ----------- ----------- -----------
Income (loss) before
extraordinary charge
and cumulative effect
of changes in
accounting principle 28,377 (2,684) 140,311 142,086 (58,260)
Extraordinary charge
for early retirement
of debt (21,601)
Cumulative effect of
changes in accounting
principle (3) (13,875) (23,255)
----------- ----------- ----------- ----------- -----------
Net income (loss) $ 28,377 $ (16,559) $ 140,311 $ 120,485 $ (81,515)
=========== =========== =========== =========== ===========
INCOME (LOSS) PER COMMON
SHARE (dollars)
Continuing
operations (1) $ 0.74 $ 0.79 $ 0.69 $ 0.36 $ 0.12
Discontinued
operations (2) (0.44) (0.83) 0.92 1.29 (0.82)
----------- ----------- ----------- ----------- -----------
Income (loss) before
extraordinary charge
and cumulative effect
of changes in
accounting principle 0.30 (0.04) 1.61 1.65 (0.70)
Extraordinary charge (0.25)
Cumulative effect of
changes in accounting
principle (3) (0.16) (0.28)
----------- ----------- ----------- ----------- -----------
Net income (loss) per
common share $ 0.30 $ (0.20) $ 1.61 $ 1.40 $ (0.98)
=========== =========== =========== =========== ===========
Dividends declared per
common share (4) $ 0.48 $ 0.62 $ 0.59 $ 0.56 $ 0.60
=========== =========== =========== =========== ===========
Average outstanding
common and equivalent
shares (000 omitted) 91,637 88,707 86,646 85,406 84,026
=========== =========== =========== =========== ===========
FINANCIAL POSITION AT
YEAR-END (000 omitted)
Total assets $3,453,312 $3,716,548 $3,228,083 $2,699,283 $2,580,540
Total debt (4) 521,127 889,291 741,969 629,829 675,608
$4.75 Redeemable
preferred stock 6,604 6,597 6,590 6,586 6,586
Common stock and
other equity (4) 432,218 548,169 555,093 469,688 390,395
=========== =========== =========== =========== ===========
PEOPLE
Stockholders of record 69,772 63,925 55,241 51,300 50,688
Employees of continuing
operations (average) 24,807 25,504 26,573 19,038 20,630
=========== =========== =========== =========== ===========
<FN>
(1) Includes a nonrecurring gain on the sale of Viad's interest in the Phoenix Suns of $19,025,000, or $0.21 per
share, and nonrecurring spin-off costs and management transition expenses of $28,985,000, or $0.32 per share, in
1996. Also includes a nonrecurring gain of $2,260,000, or $0.03 per share, due to the curtailment of certain
postretirement medical benefits in 1995. After deducting restructuring and other charges of $13,200,000, or $0.16
per share, in 1992 .
(2) See Notes A and E of Notes to Consolidated Financial Statements.
(3) Initial application of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" in 1995 and SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" in 1992.
(4) The declines in dividends declared per common share, total debt and common stock and other equity in 1996
reflect the spin-off of The Dial Corporation. Viad's quarterly dividend decreased from $0.16 to $0.08 per share
following the spin-off. The Dial Corporation's initial dividend rate after the spin-off maintained the 1995 annual
dividend rate for stockholders who retained shares of both companies following the spin-off.
/TABLE
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION OF VIAD CORP
RESULTS OF OPERATIONS:
On August 15, 1996, Viad Corp ("Viad"), previously known as The Dial Corp,
completed the spin-off of its consumer products business, now conducted
under the name The Dial Corporation. In effecting the spin-off, one share
of The Dial Corporation common stock was distributed for each share of
Viad common stock outstanding (the "Distribution"). Effective May 31,
1996, shareholders of a majority-owned Viad subsidiary, Greyhound Lines of
Canada ("GLOC"), voted to separate its intercity bus transportation
business and its tourism business into two independent companies. At the
same time, GLOC minority shareholders approved an automatic share exchange
proposal whereby their ownership interests in the tourism company,
aggregating 31.5 percent, were exchanged for Viad's 68.5 percent ownership
interest in the intercity bus transportation company such that Viad became
the owner of 100 percent of the tourism company, Brewster Transport
Company Limited, in exchange for its ownership in the intercity bus
transportation business. In February 1997, Viad's Board of Directors
approved plans to dispose of Viad's cruise line business, operated by
Premier Cruise Lines. See Liquidity and Capital Resources and Note E of
Notes to Consolidated Financial Statements.
The accompanying Consolidated Financial Statements of Viad include the
accounts of Viad and all of its subsidiaries. The statements have been
prepared to reflect the historical financial position and results of
operations as adjusted for the reclassification of the consumer products,
Canadian intercity bus transportation and cruise line businesses as
discontinued operations for all periods presented.
1996 vs. 1995:
Revenues for 1996 were $2.3 billion compared with $2 billion in 1995.
Before nonrecurring items, income from continuing operations in 1996 was
$79 million, or $0.85 per share, compared with $68.5 million, or $0.76 per
share, in 1995. After a nonrecurring gain on the sale of Viad's interest
in the Phoenix Suns of $19 million, or $0.21 per share, and nonrecurring
spin-off costs and management transition expenses of $29 million, or $0.32
per share, in 1996, income from continuing operations was $69.1 million,
or $0.74 per share. Income from continuing operations of $70.8 million, or
$0.79 per share, in 1995 included a nonrecurring gain of $2.3 million, or
$0.03 per share, arising from the curtailment of certain postretirement
medical benefits by a Convention Services subsidiary.
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Income from continuing operations
(000 omitted):
Before nonrecurring items $ 79,031 $ 68,521
Gain on sale of interest in
Phoenix Suns, net of tax
provision of $11,464 19,025
Spin-off costs and management
transition expenses, net of
tax benefit of $4,015 (28,985)
Curtailment of certain post-
retirement medical benefits,
net of tax provision of $1,217 2,260
----------- -----------
Income from continuing operations $ 69,071 $ 70,781
=========== ===========
Income per common share from
continuing operations (dollars):
Before nonrecurring items $ 0.85 $ 0.76
Gain on sale of interest
in Phoenix Suns 0.21
Spin-off costs and management
transition expenses (0.32)
Curtailment of certain post-
retirement medical benefits 0.03
----------- -----------
Income per common share from
continuing operations $ 0.74 $ 0.79
=========== ===========
</TABLE>
Viad reported 1996 net income of $28.4 million, or $0.30 per share,
compared with a net loss of $16.6 million, or $0.20 per share, in 1995.
The 1996 net income is after deducting a loss from discontinued operations
of $40.7 million, or $0.44 per share, while the 1995 net loss included a
loss from discontinued operations of $73.5 million, or $0.83 per share.
See Note E of Notes to Consolidated Financial Statements. The 1995 net
loss is also after deducting a one-time charge of $13.9 million (net of
tax benefit of $8.5 million), or $0.16 per share, to record the cumulative
effect to January 1, 1995, of the initial application of SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." As discussed further in Note C of Notes to
Consolidated Financial Statements, the SFAS No. 121 adjustment is a
noncash charge for assets held for disposal at January 1, 1995.
Airline Catering and Services. Revenues of the Airline Catering and
Services segment increased $57.6 million, or 7 percent, to $858 million in
1996, with operating income increasing $5.5 million, or 8 percent. The
increase in revenues and operating income is attributed primarily to new
business, including an eight-city airline catering contract from
Continental Airlines phased in through the first part of 1996. Income from
the airplane fueling and ground handling services area was essentially
even with the prior year, due primarily to higher workers compensation
insurance costs. Operating margins increased to 8.7 percent from 1995's
8.6 percent, due to improved airline catering margins.
Convention Services. Convention Services' 1996 revenues of $774 million
were up $185 million, or 31 percent, from those of the 1995 period, due
primarily to the acquisition of Giltspur, Inc., in October 1995. Special
events held in 1996, including the Atlanta Olympics and the Democratic
National Convention, contributed to the revenue increase. Excluding the
nonrecurring gain of $3.5 million on the curtailment of certain
postretirement medical benefits in 1995, operating income increased $13.4
million, or 26 percent, as a result of the Giltspur acquisition and
improved cost controls. On this same basis, operating margins decreased to
8.3 percent in 1996 from 8.7 percent in 1995, as the mix of convention
business changed with the addition of Giltspur.
Travel and Leisure and Payment Services. Revenues of the Travel and
Leisure and Payment Services segment were $631.2 million in 1996, up $43.8
million, or 7 percent, over those of 1995. Viad'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 $21.5 million and $16 million higher in 1996 and
1995, respectively. While reported operating income of $65.6 million was
down $400,000, or 1 percent, from that of 1995, operating income actually
increased $5.1 million, or 6 percent, over the prior year on the fully
taxable equivalent basis. Operating margins on the fully taxable
equivalent basis would be 13.3 percent in 1996, down slightly from 13.6
percent in 1995.
On the fully taxable equivalent basis, 1996 revenues and operating income
of payment services increased $15.4 million and $2.2 million,
respectively, over those of 1995. The revenue increase was due principally
to increased investment income arising from larger investment balances in
1996 than in 1995, which overcame lower realized investment gains.
Operating income increased due to the higher net revenues but was
partially offset by lower realized investment gains, increased commissions
and other expenses associated with increased official check business.
Duty Free airport and shipboard concession revenues increased $44.1
million from 1995 to 1996, due primarily to the December 1995 revision of
an airport concession contract, which was formerly on a management fee
basis. Operating income improved $1.7 million, as the cost of sales from
the revised airport concession arrangement offset much of the related
revenue increase.
Travel tour service revenues and operating income improved $11.3 million
and $2.3 million, respectively, from 1995 levels, as a result of
contributions from tour operations acquired in 1995, strong growth in
icefield tour revenues, and improved passenger volumes and hotel occupancy
rates.
Revenues and operating income of the food service companies were down $1.3
million and $600,000, respectively, from those of 1995. General Motors
strike activity during 1996 temporarily closed plants served by Restaura's
contract foodservice operation. In addition, two fast food locations were
closed during 1996.
Unallocated Corporate Expense and Other Items, Net. Excluding an $872,000
increase in expenses of selling receivables, unallocated corporate expense
and other items, net, rose 6 percent.
Interest Expense. Interest expense for 1996 increased $100,000 over that
of 1995. Higher interest rates were offset by lower levels of debt
outstanding.
Income Taxes. Excluding the effect of nonrecurring items (see Note D of
Notes to Consolidated Financial Statements) from both periods, the 1996
effective tax rate was 30.4 percent compared to 29.3 percent in 1995. The
relatively low tax rates in 1996 and 1995 result from the increased use
of tax-exempt investments by Viad's payment services subsidiary. Including
the effect of nonrecurring items, the 1996 effective tax rate was 37.8
percent, as no tax benefit was recorded on significant portions of
spin-off costs and management transition expenses, compared to 29.5
percent in 1995.
1995 vs. 1994:
Revenues for 1995 were $2 billion compared with $1.8 billion in 1994.
Income from continuing operations for 1995 was $70.8 million, or $0.79 per
share, including the nonrecurring gain of $2.3 million, or $0.03 per
share, on the curtailment of certain postretirement medical benefits
discussed previously. Income from continuing operations in 1994 was $61.2
million, or $0.69 per share.
Viad had a net loss of $16.6 million, or $0.20 per share, in 1995 compared
with net income of $140.3 million, or $1.61 per share, in 1994. The 1995
net loss is after deducting a loss from discontinued operations of $73.5
million, or $0.83 per share, while the 1994 net income included income
from discontinued operations of $79.1 million, or $0.92 per share. See
Note E of Notes to Consolidated Financial Statements. The 1995 net loss is
also after deducting a one-time charge of $13.9 million, or $0.16 per
share, from the initial application of SFAS No. 121 mentioned previously.
Airline Catering and Services. Revenues of the Airline Catering and
Services segment for 1995 of $800.3 million increased $36.7 million, or 5
percent, from 1994, with operating income increasing $6.2 million, or 10
percent. The increase is primarily attributed to having the United
Airlines flight kitchens, acquired in the first half of 1994, operational
throughout 1995. Additional 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
8.6 percent from 1994's 8.2 percent, as the former United flight kitchens
reached normal efficiency levels during 1995 versus the start-up and
training period in 1994.
Convention Services. Convention Services' 1995 revenues of $589 million
were up $66.3 million, or 13 percent, from those of the 1994 period, due
primarily to acquisitions in 1995, including Giltspur, Inc., in the fourth
quarter of 1995. Excluding the nonrecurring $3.5 million gain on the
curtailment of certain postretirement medical benefits, operating income
increased $500,000, or 1 percent, while operating margins on that same
basis decreased to 8.7 percent in 1995 from 9.7 percent in 1994. Operating
income and margins were impacted by certain shows not repeated each year
and by higher costs of staging shows in certain locales, which more than
offset the fourth quarter 1995 contribution from Giltspur.
Travel and Leisure and Payment Services. Revenues of the Travel and
Leisure and Payment Services segment were $587.4 million in 1995, up $67.2
million, or 13 percent, over those of 1994. These companies reported
operating income of $66 million, up $5.3 million, or 9 percent, from that
of 1994. Viad's payment services subsidiary continues to invest increasing
amounts in tax-exempt securities. On a fully taxable equivalent basis,
revenues and operating income would be higher by $16 million and $7.9
million for 1995 and 1994, respectively. Operating margins on the fully
taxable equivalent basis would be 13.6 percent in 1995, up from 13.0
percent in 1994.
On the fully taxable equivalent basis, 1995 revenues of payment services
would be $41.9 million higher than those of 1994, due principally to
increased investment income, revenues from new product lines and increased
realized investment gains. Investment income increased due to higher
investment yields and higher fund balances in 1995 than in 1994. On the
fully taxable equivalent basis, payment services operating income would be
$12.4 million above that in 1994, as the higher revenues more than offset
higher commission expense for official checks and other volume-related
costs.
Duty Free airport and shipboard concession revenues declined $1.4 million
from 1994 to 1995, due primarily to 1994 including revenues of a major
shipboard concession phased out over the first ten months of 1994 and
fewer passenger days for continuing business, which were offset in part by
revenues from a revised airport concession arrangement late in 1995.
Operating income improved $700,000, due mostly to lower operating expenses
and the effect of higher revenue per passenger day.
Travel tour service revenues and operating income improved $39.9 million
and $2.9 million, respectively, from 1994 levels, due primarily to strong
growth in existing package tour operations, improved passenger volumes and
hotel occupancy, favorable foreign exchange rates, and acquisitions of
tour operations in Ireland and Canada.
Food service revenues improved $3.1 million from those of 1994. Increased
business at General Motors locations and at the America West Arena was
partly offset by the closing of certain fast food outlets and the sale of
a noncore operation in the second quarter of 1995. Operating income of the
food service companies increased $100,000 from 1994 to 1995 as operating
income generated from higher revenues was mostly offset by certain
one-time costs associated with the sale of the noncore operation.
Unallocated Corporate Expense and Other Items, Net. Unallocated corporate
expense and other items, net, decreased $200,000, or 1 percent, from that
of 1994.
Interest Expense. Interest expense for 1995 increased $5.7 million over
that of 1994, as both debt levels and interest rates on floating-rate debt
were higher in 1995 than in 1994. Debt level increases were due primarily
to the acquisition of Giltspur in October 1995.
Income Taxes. The 1995 effective tax rate was 29.5 percent, down from 32.6
percent in 1994. This reduction in the effective tax rate resulted
primarily from the increased use of tax-exempt investments by Viad's
payment services subsidiary.
LIQUIDITY AND CAPITAL RESOURCES:
In connection with the Distribution described in Notes A, E and I of Notes
to Consolidated Financial Statements, in August 1996 Viad borrowed $280
million under a new $350 million bank credit facility and used the
proceeds to repay floating-rate indebtedness of Viad. The credit facility
and the related liability were then assumed by The Dial Corporation upon
the spin-off, thereby transferring that portion of Viad's outstanding
indebtedness deemed attributable to The Dial Corporation. On a pro forma
basis, after giving effect to the debt assumed by The Dial Corporation and
the reduction of equity upon the Distribution, Viad's debt-to-capital
ratio would have been approximately 0.60 to 1 at December 31, 1995. The
debt-to-capital ratio at December 31, 1996 was 0.54 to 1. Capital is
defined as total debt plus minority interests, preferred stock and common
stock and other equity.
In July 1994, a Shelf Registration filed with the Securities and Exchange
Commission became effective. Under the Shelf Registration, Viad can issue
up to an aggregate $500 million of debt and equity securities. No
securities have yet been issued under the program. The Shelf Registration
enhances Viad's future financing options.
Viad's payment service operations generate funds from the sale of money
orders and other payment instruments (classified as "Payment service
obligations"). The proceeds of such sales are invested by Viad's payment
services subsidiary, in accordance with applicable state laws, in highly
liquid debt instruments (classified, along with cash on hand and cash in
transit from agents, as "Funds, agents' receivables and current maturities
of investments restricted for payment service obligations"), which before
consolidating eliminations included investment-grade commercial paper
issued by Viad and supported along with the rest of Viad's outstanding
commercial paper by a credit commitment under a long-term revolving bank
credit agreement, as described in Note I of Notes to Consolidated
Financial Statements; and in a portfolio of high-quality investments (all
of the investments at December 31, 1996 have ratings of A- or higher or
are collateralized by federal agency securities), including federal, state
and municipal obligations, asset-backed securities and corporate debt
securities (classified as "Investments restricted for payment service
obligations"). These investments are restricted by state regulatory
agencies for use by Viad's payment services subsidiary to satisfy the
liability to pay, upon presentment, the face amount of such payment
service obligations, and accordingly such assets are not available to
satisfy working capital or other financing requirements of Viad.
Fluctuations in the balances of payment service assets and obligations
result from varying levels of sales of money orders and other payment
instruments, the timing of the collections of agents' receivables and the
timing of the presentment of such instruments.
With respect to working capital, in order to minimize the effects of
borrowing costs on earnings, Viad strives to maintain current assets
(principally cash, inventories and receivables) at the lowest practicable
levels while at the same time taking advantage of the payment terms
offered by trade creditors. These efforts notwithstanding, working capital
requirements fluctuate significantly from seasonal factors as well as
changes in levels of receivables and inventories caused by numerous
business factors.
Viad satisfies a portion of its working capital and other financing
requirements with short-term borrowings (through commercial paper, bank
note programs and bank lines of credit) and the sale of receivables. As
discussed in Note I of Notes to Consolidated Financial Statements,
short-term borrowings are supported by a long-term revolving bank credit
agreement. Effective with the Distribution in August 1996, Viad's
borrowings are supported by unused commitments under a $400 million
long-term revolving bank credit agreement.
In addition, as discussed further in Note O of Notes to Consolidated
Financial Statements, Viad has an agreement to sell up to $75 million of
trade accounts receivable under which the purchaser has agreed to invest
collected amounts in new purchases. The accounts receivable sold totaled
$75 million at December 31, 1996. The agreement expires in August 1997 but
is expected to be extended annually.
As discussed in Note J of Notes to Consolidated Financial Statements, in
September 1992 Viad sold 10,491,800 shares of treasury stock to Viad's
Employee Equity Trust (the "Trust"). This Trust is being used to fund
certain existing employee compensation and benefit plans over the
scheduled 15-year term of the Trust. The Trust acquired the shares of
common stock from Viad for a $200 million promissory note at the date of
sale. For financial reporting purposes, the Trust is consolidated with
Viad. The fair market value of the shares held by the Trust, representing
unearned employee benefits, was recorded as a deduction from common stock
and other equity, and is reduced as employee benefits are funded. At
December 31, 1996, a total of 5,670,818 shares remained in the Trust and
were available to fund future benefit obligations.
Capital spending has been reduced by obtaining, where appropriate,
equipment and other property under operating leases. Viad's capital asset
needs and working capital requirements are expected to be financed
primarily with internally generated funds. Viad has entered into a
long-term concession contract, commencing in 1998, to provide food and
beverage service at Bank One Ballpark, which will be the home of the
Arizona Diamondbacks, a new major league baseball franchise. The ballpark
is currently under construction in Phoenix, Arizona. In conjunction with
the concession agreement, Viad has committed to capital expenditures of up
to $30 million for build-out of the ballpark's food and beverage
facilities in late 1997 and early 1998, which is expected to result in
higher than normal annual capital expenditures in 1997. Cash flows from
operations, receivables sales, proceeds from the sale of businesses and
noncore assets and proceeds from the exercise of stock options during the
past three years have generally been sufficient to finance capital
expenditures, the purchase of businesses and cash dividends to
stockholders. Viad expects these trends to continue with operating cash
flows, proceeds from the sale of noncore assets and proceeds from the sale
of Trust shares and other treasury stock generally being sufficient to
finance its business. Should financing requirements exceed such sources of
funds, Viad believes it has adequate external financing sources available,
including Viad's $500 million Shelf Registration, to cover any such
shortfall.
As indicated in Note M of Notes to Consolidated Financial Statements,
Viad has certain unfunded pension and other postretirement benefit plans
that require payments over extended periods of time. Such future benefit
payments are not expected to materially affect Viad's liquidity.
As of December 31, 1996, Viad has recorded U.S. deferred income tax assets
totaling $80.5 million, which Viad believes to be fully realizable in
future years. The realization of such benefits will require average annual
taxable income over the next 15 years (the current Federal loss
carryforward period) of approximately $15 million. Viad's average U.S.
pretax income from continuing operations, exclusive of nondeductible
goodwill amortization and minority interests, over the past three years
has been approximately $93 million. Furthermore, approximately $34 million
of the deferred income tax benefits relate to unfunded pension,
compensation and other employee benefits which will become deductible for
income tax purposes as they are paid, which will occur over extended
periods of time.
Viad is subject to various environmental laws and regulations of the
United States as well as of the states and other countries in whose
jurisdictions Viad has or had operations and is subject to certain
international agreements. As is the case with many companies, Viad faces
exposure to actual or potential claims and lawsuits involving
environmental matters. Viad believes that any liabilities resulting
therefrom, after taking into consideration amounts already provided for,
but exclusive of any potential insurance recovery, should not have a
material adverse effect on Viad's financial position or results of
operations.
BUSINESS OUTLOOK AND RECENT DEVELOPMENTS:
Viad has actively sought to implement a focused business strategy through
acquisitions and divestitures. Viad, formerly named The Greyhound
Corporation and later The Dial Corp, has acted consistently to strengthen
its focus on its core businesses through acquisitions of complementary
businesses, the 1992 spin-off of its financial services and insurance
business and the 1996 spin-off of its consumer products business to
stockholders. Since 1983, Viad has also divested noncore businesses,
including its meat packing business, its domestic intercity bus business,
its computer leasing business and its transportation manufacturing and
replacement parts business. The May 1996 disposition of the Canadian
intercity bus transportation business and the planned disposition of its
cruise line business are a continuation of the overall strategy.
Going forward, Viad will continue to evaluate and determine the best use
of its resources and continue to assess alternatives and pursue objectives
appropriate to its specific businesses. Viad also will continue to pursue
the sale of noncore assets, including various real estate holdings. In the
fourth quarter of 1996, Viad sold its interest in the Phoenix Suns.
The challenges for Viad's businesses for 1997 and beyond are many. Viad's
focus will primarily be in its three core businesses--airline catering,
convention services and payment services. The key to success will be to
excel in providing the highest quality of services in these markets and
continue to grow revenues and operating income in an increasingly
competitive and changing marketplace. Viad will continue to focus on
improving and maintaining healthy operating margins, through monitoring
and reducing costs and expenses. Viad remains aggressive in its commitment
to continue to enhance stockholder value in the years ahead.
As provided by the "Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995," Viad cautions readers that, in addition to
the historical information contained herein, this annual report includes
certain forward-looking statements, assumptions and discussions which
involve risks and uncertainties, including, but not limited to, economic,
competitive and capital marketplace factors which affect Viad's
operations, markets, products, services and prices which could cause
Viad's future results and stockholder values to differ materially from
those expressed or implied in any forward-looking comments made by, or on
behalf of, Viad.
MANAGEMENT'S REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING
The management of Viad Corp has the responsibility for preparing and
assuring the integrity and objectivity of the accompanying financial
statements and other financial information in this report. The financial
statements were developed using generally accepted accounting principles
and appropriate policies, consistently applied except for the change in
1995 to comply with new accounting requirements for impairment of
long-lived assets as discussed in Note C of Notes to Consolidated
Financial Statements. They reflect, where applicable, management's best
estimates and judgments and include disclosures and explanations which are
relevant to an understanding of the financial affairs of the Company.
The Company's financial statements have been audited by Deloitte & Touche
LLP, independent auditors elected by the stockholders. Management has made
available to Deloitte & Touche LLP all of the Company's financial records
and related data, and has made appropriate and complete written and oral
representations and disclosures in connection with the audit.
Management has established and maintains a system of internal control that
it believes provides reasonable assurance as to the integrity and
reliability of the financial statements, the protection of assets and the
prevention and detection of fraudulent financial reporting. The system of
internal control is believed to provide for appropriate division of
responsibilities and is documented by written policies and procedures that
are utilized by employees involved in the financial reporting process.
Management also recognizes its responsibility for fostering a strong
ethical climate. This responsibility is characterized and reflected in the
Company's Code of Corporate Conduct, which is communicated to all of the
Company's executives and managers.
The Company also maintains a comprehensive internal auditing function
which independently monitors compliance and assesses the effectiveness of
the internal controls and recommends potential improvements thereto. In
addition, as part of their audit of the Company's financial statements,
the independent auditors review and evaluate selected internal accounting
and other controls to establish a basis for reliance thereon in
determining the audit tests to be applied. There is close coordination of
audit planning and coverage between the Company's internal auditing
function and the independent auditors. Management has considered the
recommendations of both internal auditing and the independent auditors
concerning the Company's system of internal control and has taken actions
believed to be cost-effective in the circumstances to implement
appropriate recommendations and otherwise enhance controls. Management
believes that the Company's system of internal control accomplishes the
objectives discussed herein.
The Board of Directors oversees the Company's financial reporting through
its Audit Committee, which regularly meets with management representatives
and, jointly and separately, with the independent auditors and internal
auditing management to review interest rate swap activity, accounting,
auditing and financial reporting matters.
/s/ Richard C. Stephan
Richard C. Stephan
Vice President--Controller
/s/ Ronald G. Nelson
Ronald G. Nelson
Vice President--Finance
and Treasurer
/s/ Gerald L. Berner
Gerald L. Berner
Vice President--Internal Auditing
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of Viad Corp:
We have audited the accompanying consolidated balance sheets of Viad Corp
(formerly named The Dial Corp) as of December 31, 1996 and 1995, and the
related consolidated statements of income, common stock and other equity
and of cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Viad Corp as of December
31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.
As discussed in Note C of Notes to Consolidated Financial Statements, the
Company changed its method of accounting for impairment of long-lived
assets in 1995.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Phoenix, Arizona
February 21, 1997
<PAGE>
<PAGE>
VIAD CORP CONSOLIDATED BALANCE SHEET
December 31, (000 omitted, except share data)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,422 $ 17,945
Receivables, less allowance of
$12,744 and $14,760 163,262 149,631
Inventories 93,730 83,132
Deferred income taxes 32,567 30,689
Other current assets 59,562 36,198
----------- -----------
353,543 317,595
Funds, agents' receivables and
current maturities of investments
restricted for payment service
obligations, after eliminating
$90,000 invested in Viad
commercial paper 670,258 786,081
----------- -----------
Total current assets 1,023,801 1,103,676
Investments restricted for payment
service obligations 1,144,279 880,035
Property and equipment 473,039 447,553
Other investments and assets 125,705 103,508
Investments in discontinued operations 97,958 625,737
Deferred income taxes 47,904 36,707
Intangibles 540,626 519,332
----------- -----------
$3,453,312 $3,716,548
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 148,990 $ 108,999
Accrued compensation 68,976 64,780
Other current liabilities 263,049 239,654
Current portion of long-term debt 2,348 77,450
----------- -----------
483,363 490,883
Payment service obligations 1,869,480 1,739,508
----------- -----------
Total current liabilities 2,352,843 2,230,391
Long-term debt 518,779 811,841
Pension and other benefits 61,689 59,519
Other deferred items and insurance
reserves 73,291 47,413
Commitments and contingent liabilities
(Notes J, N, O and P)
Minority interests 7,888 12,618
$4.75 Redeemable preferred stock 6,604 6,597
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 282,203 362,205
Retained income 146,664 322,439
Cumulative translation adjustments (1,519) (18,380)
Unearned employee benefits (118,766) (213,996)
Unrealized gain on securities
classified as available for
sale, net of tax 205 1,456
Common stock in treasury, at cost,
1,162,718 and 2,877,500 shares (22,232) (51,218)
----------- -----------
Total common stock and other equity 432,218 548,169
----------- -----------
$3,453,312 $3,716,548
=========== ===========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
VIAD CORP STATEMENT OF CONSOLIDATED INCOME
Year ended December 31, (000 omitted, except per share data)
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES $2,263,228 $1,976,745 $1,806,597
=========== =========== ===========
Costs and expenses:
Costs of sales and services 2,058,846 1,787,420 1,632,776
Unallocated corporate
expense and other
items, net 36,131 33,354 33,594
Interest expense 53,019 52,897 47,247
Nonrecurring items:
Gain on sale of interest
in Phoenix Suns (30,489)
Spin-off costs and
management transition
expenses 33,000
Minority interests 1,752 2,629 2,279
----------- ----------- -----------
2,152,259 1,876,300 1,715,896
----------- ----------- -----------
Income before income taxes 110,969 100,445 90,701
Income taxes 41,898 29,664 29,528
----------- ----------- -----------
INCOME FROM CONTINUING
OPERATIONS 69,071 70,781 61,173
Income (loss) from
discontinued operations (40,694) (73,465) 79,138
----------- ----------- -----------
Income (loss) before
cumulative effect of
change in accounting
principle 28,377 (2,684) 140,311
Cumulative effect, net of tax
benefit of $8,459, to
January 1,1995, of initial
application of SFAS No. 121,
"Accounting for the Impairment
of Long-Lived Assets and for
Long-Lived Assets to Be
Disposed Of" (13,875)
----------- ----------- -----------
NET INCOME (LOSS) $ 28,377 $ (16,559) $ 140,311
=========== =========== ===========
INCOME (LOSS) PER
COMMON SHARE:
Continuing operations $ 0.74 $ 0.79 $ 0.69
Discontinued operations (0.44) (0.83) 0.92
----------- ----------- -----------
Income (loss) before
cumulative effect of
change in accounting
principle 0.30 (0.04) 1.61
Cumulative effect, to
January 1, 1995, of
initial application
of SFAS No. 121 (0.16)
----------- ----------- -----------
NET INCOME (LOSS) PER
COMMON SHARE $ 0.30 $ (0.20) $ 1.61
=========== =========== ===========
Dividends declared per
common share $ 0.48 $ 0.62 $ 0.59
=========== =========== ===========
Average outstanding
common and
equivalent shares 91,637 88,707 86,646
=========== =========== ===========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
VIAD CORP STATEMENT OF CONSOLIDATED CASH FLOWS
Year ended December 31, (000 omitted)
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS PROVIDED (USED) BY
OPERATING ACTIVITIES:
Net income (loss) $ 28,377 $ (16,559) $ 140,311
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and
amortization 74,444 68,872 62,685
Deferred income taxes 8,685 9,133 13,422
Loss (income) from
discontinued operations 40,694 73,465 (79,138)
Spin-off costs and manage-
ment transition expenses 33,000
Cumulative effect of change
in accounting principle 13,875
Gains on sales of property
and other assets, net (42,382) (11,350) (4,087)
Other noncash items, net 13,774 11,901 10,639
Change in operating
assets and liabilities:
Receivables and
inventories (20,083) (33,682) (20,536)
Payment service assets
and obligations, net 242,728 186,908 166,200
Accounts payable and
accrued compensation 38,472 5,458 15,532
Other assets and
liabilities, net (63,995) (31,747) 39,528
----------- ----------- -----------
Net cash provided by
operating activities 353,714 276,274 344,556
----------- ----------- -----------
CASH FLOWS PROVIDED (USED) BY
INVESTING ACTIVITIES:
Capital expenditures (82,149) (59,585) (54,989)
Acquisitions of businesses,
net of cash acquired (21,731) (93,803) (145,042)
Proceeds from sales of
property and other assets 44,687 11,614 6,025
Investments restricted for
payment service obligations:
Proceeds from sales and
maturities of securities
classified as available
for sale 581,192 485,664 237,972
Proceeds from sales and
maturities of securities
classified as held to
maturity 25,584 22,201
Purchases of securities
classified as available
for sale (630,685) (577,884) (341,716)
Purchases of securities
classified as held to
maturity (241,616) (103,553) (105,023)
Investments in and advances
from (to) discontinued
operations, net 50,530 (100,858) (37,245)
----------- ----------- -----------
Net cash used by
investing activities (274,188) (416,204) (440,018)
----------- ----------- -----------
CASH FLOWS PROVIDED (USED) BY
FINANCING ACTIVITIES:
Proceeds from long-term
borrowings 40,000 70,000
Payments on long-term
borrowings (77,615) (2,314) (2,238)
Net change in short-term
borrowings classified
as long-term debt (12,888) 100,388 44,296
Dividends on common and
preferred stock (43,869) (55,024) (51,401)
Minority portion of subsi-
diary's special dividend (9,761)
Proceeds from sales of
treasury stock 40,032 32,062 28,546
Net change in receivables
sold 14,203 36,797 6,000
Cash payments on interest
rate swaps (12,912) (16,802) (17,795)
----------- ----------- -----------
Net cash provided (used)
by financing activities (93,049) 135,107 67,647
----------- ----------- -----------
Net decrease in cash and
cash equivalents (13,523) (4,823) (27,815)
Cash and cash equivalents,
beginning of year 17,945 22,768 50,583
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 4,422 $ 17,945 $ 22,768
=========== =========== ===========
SIGNIFICANT NONCASH INVESTING
AND FINANCING ACTIVITIES:
Assumption of debt by
The Dial Corporation $ 280,000
Distribution of equity
in the consumer products
business to Viad
stockholders 155,450
Acquisition of minority
interest in the Canadian
tourism business in
exchange for Viad's
ownership in the inter-
city bus transportation
business 20,150
-----------
Decrease in investments
in discontinued
operations $ 455,600
===========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
VIAD CORP STATEMENT OF CONSOLIDATED COMMON STOCK AND OTHER EQUITY
Year ended December 31, (000 omitted)
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCK:
Balance, beginning of year $ 145,663 $ 145,663 $ 72,832
Two-for-one stock split 72,831
----------- ----------- -----------
Balance, end of year $ 145,663 $ 145,663 $ 145,663
=========== =========== ===========
ADDITIONAL CAPITAL:
Balance, beginning of year $ 362,205 $ 308,350 $ 378,814
Two-for-one stock split (72,831)
Treasury shares issued in
connection with employee
benefit plans (9,986) (752) (2,763)
Treasury shares issued in
connection with dividend
reinvestment plan 3,168 2,949 1,175
Net change in unamortized
amount of performance-
based and restricted
stock awards 2,070 2,428 (4,456)
Employee Equity Trust
adjustment to market value 13,422 54,484 8,635
Distribution of consumer
products business to
Viad stockholders (88,607)
Treasury shares issued in
connection with acquisition
of subsidiary (5,202)
Other, net (69) (52) (224)
----------- ----------- -----------
Balance, end of year $ 282,203 $ 362,205 $ 308,350
=========== =========== ===========
RETAINED INCOME:
Balance, beginning of year $ 322,439 $ 393,233 $ 304,481
Net income (loss) 28,377 (16,559) 140,311
Dividends on common and
preferred stock (43,869) (55,024) (51,401)
Distribution of consumer
products business to
Viad stockholders (160,026)
Other, net (257) 789 (158)
----------- ----------- -----------
Balance, end of year $ 146,664 $ 322,439 $ 393,233
=========== =========== ===========
CUMULATIVE TRANSLATION
ADJUSTMENTS:
Balance, beginning of year $ (18,380) $ (20,910) $ (9,889)
Unrealized translation
gain (loss) 19 2,530 (11,021)
Distribution of consumer
products business to
Viad stockholders 4,576
Disposition of Canadian
intercity bus
transportation business 12,266
----------- ----------- -----------
Balance, end of year $ (1,519) $ (18,380) $ (20,910)
=========== =========== ===========
UNEARNED EMPLOYEE BENEFITS:
Balance, beginning of year $ (213,996) $ (176,201) $ (189,940)
Employee benefits earned 20,045 16,689 22,374
Employee Equity Trust
adjustment to market value (13,422) (54,484) (8,635)
Distribution of consumer
products business to
Viad stockholders 88,607
----------- ----------- -----------
Balance, end of year $ (118,766) $ (213,996) $ (176,201)
=========== =========== ===========
UNREALIZED GAIN (LOSS) ON
SECURITIES CLASSIFIED AS
AVAILABLE FOR SALE:
Balance, beginning of year $ 1,456 $ (21,742) $ --
Unrealized loss on
securities classified as
available for sale at
January 1, 1994, due to
adoption of SFAS No. 115 (1,369)
Net change in unrealized
gain (loss) (1,251) 23,198 (20,373)
----------- ----------- -----------
Balance, end of year $ 205 $ 1,456 $ (21,742)
=========== =========== ===========
COMMON STOCK IN TREASURY:
Balance, beginning of year $ (51,218) $ (73,300) $ (86,610)
Shares issued in connection
with employee benefit
plans 19,453 8,448 4,794
Shares issued in connection
with dividend reinvestment
plan 9,417 6,368 4,866
Shares issued in connection
with acquisition of
subsidiary 5,131
Other, net 116 2,135 3,650
----------- ----------- -----------
Balance, end of year $ (22,232) $ (51,218) $ (73,300)
=========== =========== ===========
COMMON STOCK AND OTHER EQUITY $ 432,218 $ 548,169 $ 555,093
=========== =========== ===========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
VIAD CORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 1996, 1995 and 1994
A. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation. The Consolidated Financial Statements of Viad
Corp ("Viad"), previously known as The Dial Corp, include the accounts of
Viad and all of its subsidiaries. On August 15, 1996, Viad spun off its
consumer products business, now conducted under the name The Dial
Corporation. Viad also disposed of its 68.5 percent ownership interest in
its Canadian intercity bus transportation business on May 31, 1996. In
February 1997, Viad's Board of Directors approved plans to dispose of
Viad's cruise line business. The accompanying financial statements have
been prepared to reflect the historical financial position and results of
operations as adjusted for the reclassification of the consumer products,
Canadian intercity bus transportation and cruise line businesses as
discontinued operations for all periods presented. See Note E of Notes to
Consolidated Financial Statements.
The Consolidated Financial Statements are prepared in accordance with
generally accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Intercompany accounts and transactions between Viad and its subsidiaries
have been eliminated in consolidation. Described below are those
accounting policies particularly significant to Viad, including those
selected from acceptable alternatives.
Cash Equivalents. Viad considers all highly liquid investments with
original maturities of three months or less from date of purchase as cash
equivalents.
Inventories. Inventories, which consist primarily of duty-free
merchandise, exhibit materials, food and supplies used in providing
services, are stated at the lower of cost (first-in, first-out and average
cost methods) or market.
Funds and Agents' Receivables and Investments Restricted for Payment
Service Obligations. Viad's payment service operations generate funds from
the sale of money orders and other payment instruments (classified as
"Payment service obligations"). The proceeds of such sales are invested by
Viad's payment services subsidiary, in accordance with applicable state
laws, in highly liquid debt instruments (classified, along with cash on
hand and cash in transit from agents, as "Funds, agents' receivables and
current maturities of investments restricted for payment service
obligations"), which before consolidating eliminations, included
investment-grade commercial paper issued by Viad and supported along with
the rest of Viad's outstanding commercial paper by a credit commitment
under a long-term revolving bank credit agreement, as described in Note I
of Notes to Consolidated Financial Statements; and in a portfolio of
high-quality investments (all of the investments at December 31, 1996,
have ratings of A- or higher or are collateralized by federal agency
securities), including federal, state and municipal obligations,
asset-backed securities and corporate debt securities (classified as
"Investments restricted for payment service obligations"). These
investments are restricted by state regulatory agencies for use by Viad's
payment services subsidiary to satisfy the liability to pay, upon
presentment, the face amount of such payment service obligations and
accordingly such assets are not available to satisfy working capital or
other financing requirements of Viad.
Effective January 1, 1994, Viad adopted Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." Viad is required by SFAS No. 115 to classify
securities into one of three categories at acquisition: available for
sale, held to maturity, or trading, with different reporting requirements
for each classification. See Note F of Notes to Consolidated Financial
Statements for a discussion of the classification and reporting of these
securities.
Impairment of Long-Lived Assets. As discussed further in Note C of Notes
to Consolidated Financial Statements, in the fourth quarter of 1995, Viad
elected the early adoption of SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS
No. 121 establishes the accounting standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill related
to those assets which are to be held and used and for long-lived assets
and certain identifiable intangibles which are to be disposed of.
In accordance with the provisions of SFAS No. 121, Viad reviews the
carrying values of its long-lived assets and identifiable intangibles for
possible impairment whenever events or changes in circumstances indicate
that the carrying amount of assets to be held and used may not be
recoverable. SFAS No. 121 requires that for assets to be held and used, if
the sum of the expected future undiscounted cash flows is less than the
carrying amount of the asset, an impairment loss should be recognized,
measured as the amount by which the carrying amount exceeds the fair value
of the asset. For assets to be disposed of, Viad reports long-lived assets
and certain identifiable intangibles at the lower of carrying amount or
fair value less cost to sell.
Property and Equipment. Property and equipment are stated at cost, net of
impairment write-downs. Depreciation is provided principally by use of the
straight-line method at annual rates as follows:
Buildings 2% to 5%
Machinery and other equipment 5% to 33%
Leasehold improvements Lesser of lease term
or useful life
Intangibles. Intangibles are carried at cost less accumulated
amortization. Intangibles are amortized on the straight-line method over
the estimated lives or periods of expected benefit, but not in excess of
40 years. Viad evaluates the carrying value of goodwill and other
intangible assets at each reporting period for possible impairment in
accordance with the provisions of SFAS No. 121 described above.
Pension and Other Benefits. Trusteed, noncontributory pension plans cover
substantially all employees, with benefit levels supplemented in most
cases by defined matching company stock contributions to employees' 401(k)
plans. Defined benefits are based primarily on final average pay and years
of service. Funding policies provide that payments to defined benefit
pension trusts shall be at least equal to the minimum funding required by
applicable regulations. Certain defined pension benefits, primarily those
in excess of benefit levels under qualified pension plans, are unfunded.
Viad has unfunded defined benefit postretirement plans that provide
medical and life insurance for eligible retirees and dependents. The
related postretirement benefit liabilities are recognized over the period
that services are provided by employees.
Foreign Currency Translation. In accordance with SFAS No. 52, "Foreign
Currency Translation," the assets and liabilities of Viad's foreign
subsidiaries are translated into U.S. dollars at exchange rates in effect
at the balance sheet date, with resulting unrealized translation gains and
losses accumulated in a separate component of common stock and other
equity. Income and expense items are converted into U.S. dollars at
average rates of exchange prevailing during the year.
Derivatives. Amounts receivable or payable under swap agreements are
accrued and recognized as an adjustment to the expense of the related
transaction as discussed in Notes I and O of Notes to Consolidated
Financial Statements. Gains and losses from foreign exchange forward
contracts which hedge identifiable foreign currency commitments are
deferred and recognized in income in the same period as the hedged
transaction.
Stock-Based Compensation. In October 1995, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 123, "Accounting for Stock-Based
Compensation." As permitted by SFAS No. 123, Viad uses the intrinsic value
method prescribed by APB No. 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for its plans.
Accordingly, no compensation expense has been recognized for its
stock-based compensation plans other than for performance-based and
restricted stock awards and stock appreciation rights. A summary of the
pro forma effects on reported income from continuing operations and
earnings per share from continuing operations for 1996 and 1995 as if the
fair value method of accounting defined in SFAS No. 123 had been applied
is included in Note K of Notes to Consolidated Financial Statements.
Sale of Receivables. In June 1996, FASB issued SFAS No. 125, "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." SFAS No.125 permits sale accounting treatment for transfers
of financial assets in which the transferor surrenders control over those
assets and consideration other than beneficial interests in the
transferred assets is received in exchange. SFAS No. 125 defines the
conditions under which a transferor has surrendered control.
Viad currently accounts for the sale of Viad's trade accounts receivables
under SFAS No. 77, "Reporting by Transferors for Transfers of Receivables
with Recourse." Viad will adopt SFAS No. 125 on January 1, 1997, as
required. Sale of trade accounts receivables entered into after December
31, 1996 are expected to be structured in a manner that qualifies for sale
accounting under SFAS No. 125. The adoption of SFAS No. 125 is not
expected to have a material effect on Viad's financial position or results
of operations.
Net Income (Loss) Per Common Share. Net income (loss) per common share is
based on net income (loss) after preferred stock dividend requirements and
the weighted average number of common shares outstanding during each year
after giving effect to stock options considered to be dilutive common
stock equivalents. Fully diluted net income (loss) per common share is not
materially different from primary net income (loss) per common share.
Employee Stock Ownership Plan ("ESOP") shares are treated as outstanding
for net income (loss) per share calculations. The average outstanding
common and equivalent shares does not include shares held by the Employee
Equity Trust (the "Trust"). Shares held by the Trust are not considered
outstanding for net income (loss) per share calculations until the shares
are released from the Trust.
B. ACQUISITIONS OF BUSINESSES
During 1996, Viad purchased two convention services companies, a travel
tour company and the remaining interest in several airline catering joint
ventures. Viad also acquired the remaining minority interest in its
Canadian tourism business, Brewster Transport Company Limited, in a
noncash exchange, as described in Note E of Notes to Consolidated
Financial Statements.
During 1995, Viad acquired Giltspur, Inc., an exhibit construction and
services company, and several smaller companies.
Also during 1995, Viad acquired all of the common stock of a small payment
services company in exchange for approximately 300,000 shares of Viad's
common stock. The acquisition was accounted for as a pooling of interests.
Prior period financial statements have not been restated, as the results
of the acquired company are not significant to the consolidated results of
operations. The accompanying financial statements include the accounts and
results of operations from the date of acquisition.
During 1994, Viad completed its acquisition of the final eleven of fifteen
airline catering kitchens from United Airlines and also acquired several
smaller companies.
Except for the pooling of interests transaction described above, the
acquisitions were accounted for as purchases. The purchase prices,
including acquisition costs, were allocated to the net tangible and
intangible assets acquired based on estimated fair values at the dates of
the acquisitions. The difference between the purchase prices and the
related fair values of net assets acquired represents goodwill. The
results of the acquired operations have been included in the Statement of
Consolidated Income from the dates of acquisition. The results of
operations of the acquired companies from the beginning of the year to the
dates of acquisition are not material.
Net cash paid, assets acquired and debt and other liabilities assumed in
all acquisitions of businesses accounted for as purchases for the years
ended December 31 were as follows:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Assets acquired:
Property and equipment $ 3,813 $ 17,672 $ 73,494
Intangibles, primarily
goodwill (1) 16,620 83,650 67,947
Other assets 9,517 56,354 9,472
Debt and other liabilities
assumed (8,219) (63,873) (5,871)
----------- ----------- -----------
Net cash paid $ 21,731 $ 93,803 $ 145,042
=========== =========== ===========
<FN>
(1) Excludes additional goodwill of $15,688,000 recorded in 1996 in connection with the
acquisition of the remaining minority interest in the Canadian tourism business in a noncash
exchange.
</TABLE>
C. IMPAIRMENT OF LONG-LIVED ASSETS
In the fourth quarter of 1995, Viad elected the early adoption of SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." The initial application of SFAS No.
121 to long-lived assets held for disposal at January 1, 1995, resulted in
a noncash charge of $13,875,000 (net of tax benefit of $8,459,000) and is
reported in the Statement of Consolidated Income as a cumulative effect of
a change in accounting principle. The charge represents the adjustment
required to individually remeasure such assets at the lower of carrying
amount or fair value less cost to sell. Long-lived assets held for
disposal consist principally of miscellaneous real estate remaining from
businesses previously disposed of by Viad, including former bus terminal
properties retained upon disposition of Greyhound Lines, Inc. in 1987,
land parcels retained upon the spin-off of FINOVA in 1992, and other
nonoperating properties. These assets had a total carrying value of
$17,914,000 and $18,452,000 at December 31, 1996 and 1995, respectively.
While these assets are being actively marketed, Viad expects that the
period of disposal may exceed one year for most of the assets.
D. NONRECURRING ITEMS
On December 31, 1996, Viad sold its 26 percent limited partnership
interest in the Phoenix Suns National Basketball Association team for
$31,500,000, resulting in a gain of $30,489,000 ($19,025,000 after-tax),
after deducting transaction costs and carrying amount of the investment.
As discussed in Note E of Notes to Consolidated Financial Statements, on
August 15, 1996, Viad completed the spin-off of its consumer products
business. Spin-off costs and management transition expenses totaling
$33,000,000 ($28,985,000 after-tax) have been recorded as expenses of
continuing operations. In addition, $5,000,000 of such costs, without tax
benefit, were allocated to the consumer products business and are
classified as discontinued operations expense. These charges are comprised
primarily of spin-off transaction costs, professional fees and
compensation required by certain former executive officers' employment
contracts.
In addition, a gain of $3,477,000 ($2,260,000 after-tax) arising from the
curtailment of certain postretirement medical benefits by a Convention
Services subsidiary was recorded in 1995.
E. DISCONTINUED OPERATIONS
On August 15, 1996, Viad completed the spin-off of its consumer products
business, now conducted under the name The Dial Corporation. In effecting
the spin-off, the holders of common stock of Viad received a Distribution
(the "Distribution")of one share of common stock of The Dial Corporation
for each share of Viad common stock. In conjunction with the spin-off,
certain liabilities and deferred income tax assets related primarily to
specified pension and postretirement plans of former employees of Armour
and Company, which was previously a subsidiary of Viad, were transferred
to and assumed by The Dial Corporation. Accordingly, income (loss) from
operations of the consumer products business, presented as a discontinued
operation, includes expenses arising from such items.
Effective May 31, 1996, shareholders of Greyhound Lines of Canada ("GLOC")
voted to separate its intercity bus transportation business and its
tourism business into two independent companies. At the same time, GLOC
minority shareholders approved an automatic share exchange proposal
whereby their ownership interests in the tourism business, aggregating
31.5 percent, were exchanged for Viad's 68.5 percent ownership interest in
the intercity bus transportation company such that Viad became the owner
of 100 percent of the tourism company, Brewster Transport Company Limited,
in exchange for its ownership in the intercity bus transportation company.
As a result, the Canadian intercity bus transportation company is
presented as a discontinued operation.
In February 1997, Viad's Board of Directors approved plans to dispose of
Viad's cruise line business, operated by Premier Cruise Lines. The
Star/Ship Majestic, formerly on charter to a European operator, was sold
in December 1996, and Viad announced the sale of the Star/Ship Atlantic in
January 1997, with closing scheduled for later in the first quarter of
1997.
Revenues applicable to the operations of the discontinued consumer
products, Canadian intercity bus transportation and cruise line businesses
totaled $998,792,000, $1,598,325,000 and $1,740,250,000 in 1996, 1995 and
1994, respectively. Interest expense of $13,096,000, $20,425,000 and
$12,468,000 in 1996, 1995 and 1994, respectively, was allocated to the
consumer products business based on the lesser of a) interest on the debt
and interest rate swap assumed by The Dial Corporation as described in
Note I of Notes to Consolidated Financial Statements or b) the amount of
intercompany interest that had historically been charged by Viad on
interest-bearing advances based on the prime lending rate. Interest
allocated to the intercity bus transportation and cruise line businesses
was not material.
The caption "Income (loss) from discontinued operations" in the Statement
of Consolidated Income for the years ended December 31 includes the
following:
<TABLE>
<CAPTION>
(000 omitted)
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Consumer products business:
Income (loss) from operations
through August 15, 1996,
net of tax provision
(benefit) of $22,817,
$(22,974) and $52,165 (1) $ 35,620 $ (33,105) $ 84,031
Spin-off costs and manage-
ment transition expenses,
without tax benefit (5,000)
----------- ----------- -----------
30,620 (33,105) 84,031
----------- ----------- -----------
Canadian intercity bus
transportation business,
net of applicable minority
interests:
Income (loss) from operations
through May 31, 1996, net
of tax (benefit) provision
of $(510), $4,975 and
$3,350 (583) 3,954 2,681
Cumulative effect, net of
tax provision of $905, to
January 1, 1995, of initial
application of SFAS No. 121,
to Canadian intercity bus
transportation assets held
for disposal (3,821)
Transaction costs, loss on
disposition and foreign
currency translation
losses (2) (15,866)
----------- ----------- -----------
(16,449) 133 2,681
----------- ----------- -----------
Cruise line business:
Loss from operations, net
of tax benefit of $174,
$23,517 and $3,659 (3) (70) (40,493) (7,574)
Estimated loss on disposal,
including provision of
$3,000 for operating losses
during phase-out period, net
of tax benefit of $19,250 (35,750)
----------- ----------- -----------
(35,820) (40,493) (7,574)
----------- ----------- -----------
Provisions related to
previously discontinued
businesses, net of tax
benefit of $10,955 (4) (19,045)
----------- ----------- -----------
Income (loss) from
discontinued operations $ (40,694) $ (73,465) $ 79,138
=========== =========== ===========
<FN>
(1) After deducting restructuring charges and asset write-downs of $135,600,000
($82,100,000 after-tax) in 1995.
(2) Includes spin-off and exchange transaction costs, totaling $1,579,000, associated with
the disposition of the Canadian intercity bus transportation business, along with a loss
recorded on the disposition of $2,021,000 and recognition of previously unrealized foreign
currency translation losses of $12,266,000. The translation losses had previously been
deducted from common stock and other equity in accordance with SFAS No. 52.
(3) After deducting asset write-downs of $55,500,000 ($35,100,000 after-tax) in 1995.
(4) Represents additional provisions for self insurance, legal and remediation matters
arising from previously discontinued businesses.
</TABLE>
F. INVESTMENTS IN DEBT AND EQUITY SECURITIES
Effective January 1, 1994, Viad adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." SFAS No. 115 requires
the classification of securities into one of three categories at
acquisition: available for sale, held to maturity, or trading. Viad has no
securities classified in the trading category. Securities are included in
the Consolidated Balance Sheet under the caption, "Investments restricted
for payment service obligations" except for those securities expected to
be sold or maturing within one year which are included under the caption,
"Funds, agents' receivables and current maturities of investments
restricted for payment service obligations."
Although Viad's investment portfolio exposes Viad to certain credit risks,
Viad believes the high quality of its investments (all of the investments
at December 31, 1996 have ratings of A- or higher or are collateralized by
federal agency securities) reduces this risk substantially. Viad regularly
monitors credit and market risk exposures and takes steps to mitigate the
likelihood of these exposures resulting in actual loss.
Securities Classified as Available for Sale. Securities that are being
held for indefinite periods of time, including those securities which may
be sold in response to needs for liquidity or changes in interest rates,
are classified as securities available for sale and are carried at fair
value, with the net unrealized holding gain or loss, after-tax, reported
as a separate component of common stock and other equity, with no effect
on current results of operations. The net unrealized gain of $205,000 and
$1,456,000 (net of deferred tax liability of $130,000 and $851,000) at
December 31, 1996 and 1995, respectively, are included in the Consolidated
Balance Sheet as a separate component of common stock and other equity
under the caption, "Unrealized gain on securities classified as available
for sale." The decrease in the unrealized gain during 1996 was due
principally to increases in market interest rates, while the net change
during 1995 (from an unrealized loss to an unrealized gain) was due
principally to decreases in market interest rates.
A summary of securities classified as available for sale at December 31,
1996 is set forth below:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
(000 omitted) Cost Gains Losses Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Government
agencies $ 9,717 $ -- $ 294 $ 9,423
Obligations of states
and political
subdivisions 493,829 4,233 2,372 495,690
Corporate debt
securities 48,833 2 891 47,944
Mortgage-backed and
other asset-backed
securities 145,904 183 1,226 144,861
Preferred stock 50,359 937 237 51,059
---------- ---------- ---------- ----------
Securities classified
as available
for sale $ 748,642 $ 5,355 $ 5,020 $ 748,977
=========== =========== ========== ==========
</TABLE>
A summary of securities classified as available for sale at December 31, 1995
is set forth below:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
(000 omitted) Cost Gains Losses Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Government
agencies $ 49,852 $ 366 $ 64 $ 50,154
Obligations of states
and political
subdivisions 424,860 5,681 1,049 429,492
Corporate debt
securities 101,313 1,116 695 101,734
Mortgage-backed and
other asset-backed
securities 92,478 427 3,180 89,725
Debt securities
issued by foreign
governments 10,261 61 10,200
Preferred stock 22,379 43 277 22,145
---------- ---------- ---------- ----------
Securities classified
as available
for sale $ 701,143 $ 7,633 $ 5,326 $ 703,450
========== ========== ========== ==========
</TABLE>
Scheduled maturities of securities classified as available for
sale at December 31, 1996 were as follows:
<TABLE>
<CAPTION>
Amortized Fair
(000 omitted) Cost Value
---------- ----------
<S> <C> <C>
Due in:
1997 $ -- $ --
1998-2001 100,060 99,091
2002-2006 197,447 198,771
2007 and later 254,872 255,195
Mortgage-backed and other
asset-backed securities 145,904 144,861
Preferred stock 50,359 51,059
---------- ----------
$ 748,642 $ 748,977
========== ==========
</TABLE>
Actual maturities may differ from scheduled maturities because the
borrowers have the right to call or prepay certain obligations, sometimes
without penalties. Maturities of mortgage-backed and other asset-backed
securities depend on the repayment characteristics and experience of the
underlying obligations.
Gross gains of $3,039,000 and $5,150,000 were realized during 1996 and
1995, respectively. Gross losses of $1,130,000 and $11,000 were realized
during 1996 and 1995, respectively. Gross gains and losses are based on
the specific identification method of determining cost.
Securities Classified as Held to Maturity. Securities classified as held
to maturity, which consist of securities that management has the ability
and intent to hold to maturity, are carried at amortized cost, and are
summarized as follows at December 31, 1996:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
(000 omitted) Cost Gains Losses Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Government
agencies $ 59,707 $ 3 $ 2,029 $ 57,681
Obligations of states
and political
subdivisions 206,164 1,917 1,154 206,927
Corporate debt
securities 66,491 1,246 65,245
Mortgage-backed and
other asset-backed
securities 70,515 242 310 70,447
Other securities 3,044 66 2,978
---------- ---------- ---------- ----------
Securities classified
as held to
maturity $ 405,921 $ 2,162 $ 4,805 $ 403,278
========== ========== ========== ==========
</TABLE>
A summary of securities classified as held to maturity at
December 31, 1995, is set forth below:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
(000 omitted) Cost Gains Losses Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Government
agencies $ 27,458 $ 62 $ 98 $ 27,422
Obligations of states
and political
subdivisions 82,291 1,570 161 83,700
Corporate debt
securities 71,919 32 687 71,264
Other securities 8,603 241 44 8,800
---------- ---------- ---------- ----------
Securities classified
as held to
maturity $ 190,271 $ 1,905 $ 990 $ 191,186
========== ========== ========== ==========
</TABLE>
Scheduled maturities of securities classified as held to
maturity at December 31, 1996 were as follows:
<TABLE>
<CAPTION>
Amortized Fair
(000 omitted) Cost Value
---------- ----------
<S> <C> <C>
Due in:
1997 $ 10,619 $ 10,584
1998-2001 69,039 67,837
2002-2006 79,714 77,546
2007 and later 176,034 176,864
Mortgage-backed and other
asset-backed securities 70,515 70,447
---------- ----------
$ 405,921 $ 403,278
========== ==========
</TABLE>
As mentioned above, actual maturities may differ from scheduled maturities
because the borrowers have the right to call or prepay certain
obligations, sometimes without penalties. Maturities of mortgage-backed
and other asset-backed securities depend on the repayment characteristics
and experience of the underlying obligations.
During 1995, Viad's payment services subsidiary sold a $6,846,000 security
(amortized cost) classified as held to maturity in response to an issuer's
tender offer to call its outstanding bonds. State money order regulations
require that defined amounts of securities held by Viad's payment services
subsidiary maintain an investment-grade rating to be classified as
permissible investments. The security was sold as Viad's payment services
subsidiary believed that any remaining investment outstanding after the
tender offer would be unrated, thus jeopardizing the security's
classification as a permissible investment. The sale was an isolated and
unusual event that Viad's payment services subsidiary could not have
reasonably anticipated when the security was classified as held to
maturity. There was no gain or loss realized on the sale.
A one-time reclassification was made effective December 31, 1995 upon
reassessment of the appropriateness of the classifications of all
securities held, as permitted by the Financial Accounting Standards Board
in its November 1995 "Guide to Implementation of Statement 115 on
Accounting for Certain Investments in Debt and Equity Securities."
Securities with an amortized cost of $140,884,000 were transferred from
securities classified as held to maturity to securities classified as
available for sale. The related net unrealized gains on these securities
totaling $972,000 (net of deferred taxes of $597,000) are included in the
Consolidated Balance Sheet under the caption, "Unrealized gain on
securities classified as available for sale," along with net unrealized
gains on securities previously classified as available for sale.
There were no other sales or transfers of securities classified as held to
maturity during 1996 or 1995.
G. PROPERTY AND EQUIPMENT
Property and equipment at December 31 consisted of the following:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995
----------- -----------
<S> <C> <C>
Land $ 53,057 $ 53,907
Buildings and leasehold improvements 300,149 289,216
Machinery and other equipment 505,276 442,260
----------- -----------
858,482 785,383
Less accumulated depreciation 385,443 337,830
----------- -----------
Property and equipment $ 473,039 $ 447,553
=========== ===========
</TABLE>
H. INTANGIBLES
Intangibles at December 31 consisted of the following:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995
----------- -----------
<S> <C> <C>
Goodwill $ 585,468 $ 547,391
Other intangibles 60,054 61,516
----------- -----------
645,522 608,907
Less accumulated amortization 104,896 89,575
----------- -----------
Intangibles $ 540,626 $ 519,332
=========== ===========
</TABLE>
I. DEBT
Long-term debt at December 31 was as follows:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995
----------- -----------
<S> <C> <C>
Senior debt: (1)
Short-term borrowings:
Commercial paper (net of $90,000
issued to Viad's payment
services subsidiary), 5.9%
(1995) weighted average
interest rate at December 31 $ -- $ 115,888
Promissory notes, 6.4% (1996)
and 6.0% (1995) weighted average
interest rate at December 31 84,000 261,000
Senior notes, 6.1% (1996) and 6.2%
(1995) weighted average interest
rate at December 31, due to 2009 314,583 389,519
Guarantee of ESOP debt, floating rate
indexed to LIBOR, 4.6% (1996 and
1995) at December 31, due to 2009 26,000 28,000
Real estate mortgages and other
obligations, 6.0% (1996) and 6.1%
(1995) weighted average interest
rate at December 31, due to 2016 19,627 17,967
----------- -----------
444,210 812,374
Subordinated debt, 10.5% debentures,
due 2006 76,917 76,917
----------- -----------
521,127 889,291
Less current portion 2,348 77,450
----------- -----------
Long-term debt $ 518,779 $ 811,841
=========== ===========
<FN>
(1) Rates shown are exclusive of the effects of commitment fees and other costs of
long-term revolving bank credit used to support short-term borrowings, and exclusive of
the effects of interest rate swap agreements on certain short-term and long-term
borrowings.
</TABLE>
Interest paid in 1996, 1995 and 1994 was approximately $61,402,000,
$67,082,000 and $52,271,000, respectively.
In July 1994, a Shelf Registration filed with the Securities and Exchange
Commission became effective. Under the Shelf Registration, Viad can issue
up to an aggregate $500,000,000 of debt and equity securities. No
securities have yet been issued under the program. The Shelf Registration
enhances Viad's future financing options.
As discussed further in Note O of Notes to Consolidated Financial
Statements, Viad has entered into (a) interest rate swap agreements which
convert floating interest rates on existing and anticipated replacement
short-term borrowings into fixed interest rates ("variable to fixed
swaps") and (b) interest rate swap agreements which convert fixed interest
rates on a portion of the Senior notes and other debt into floating
interest rates ("fixed to variable swaps"). The net effect of interest
rate swap agreements was to increase interest expense by $3,404,000,
$4,671,000 and $2,863,000 for 1996, 1995 and 1994, respectively. The
weighted average interest rate on total debt, inclusive of the effect of
interest rate swap agreements, was 7.8%, 7.2% and 6.5% for 1996, 1995 and
1994, respectively.
In connection with the Distribution as discussed in Notes A and E of Notes
to Consolidated Financial Statements, on August 15, 1996, Viad borrowed
$280,000,000 under a new $350,000,000 bank credit facility and used the
proceeds to repay floating-rate indebtedness of Viad. The credit facility
and related liability were then assumed by The Dial Corporation upon the
spin-off, thereby transferring that portion of Viad's outstanding
indebtedness deemed attributable to The Dial Corporation. In conjunction
with the indebtedness transferred to The Dial Corporation, Viad also
transferred a variable to fixed swap agreement in the notional amount of
$65,000,000 to The Dial Corporation.
Viad satisfies its short-term borrowing requirements with bank lines of
credit and the issuance of commercial paper and promissory notes. At
December 31, 1996, outstanding commercial paper and promissory notes are
supported by unused commitments under a $400,000,000 long-term revolving
bank credit agreement, which expires on August 15, 2001. Annually, at
Viad's request and with the participating banks' consent, the term of the
agreement may be extended for a further one-year period. The interest rate
applicable to borrowings under the $400,000,000 credit commitment is, at
Viad's option, indexed to the bank prime rate or the London Interbank
Offering Rate ("LIBOR"), plus appropriate spreads over such indices during
the period of the credit agreement. The agreement also provides for
commitment fees. Such spreads and fees will change moderately should
Viad's debt ratings change. Viad, in the event that it becomes advisable,
intends to exercise its right under the agreement to borrow for the
purpose of refinancing short-term borrowings; accordingly, short-term
borrowings totaling $84,000,000 and $376,888,000 at December 31, 1996 and
1995, respectively, have been classified as long-term debt.
Annual maturities of long-term debt due in the next five years will
approximate $2,348,000 (1997), $32,461,000 (1998), $17,311,000 (1999),
$32,370,000 (2000), $152,092,000 (2001) and $284,545,000 thereafter.
Included in the year 2001 is $84,000,000 which represents the maturity of
short-term borrowings assuming they had been refinanced utilizing the
revolving credit facility through August 15, 2001.
Viad's long-term debt agreements include various restrictive covenants and
require the maintenance of certain defined financial ratios with which
Viad is in compliance.
J. PREFERRED STOCK AND COMMON STOCK AND OTHER EQUITY
At December 31, 1996, there were 97,108,724 shares of common stock issued
and 95,946,006 shares outstanding. At December 31, 1996, a total of
5,670,818 of the outstanding shares were held by Viad's Employee Equity
Trust.
Viad has 442,352 shares of $4.75 Preferred Stock authorized, of which
370,352 shares are issued. The holders of the $4.75 Preferred Stock are
entitled to a liquidation preference of $100 per share and to annual
cumulative sinking fund redemptions of 6,000 shares. Viad presently holds
135,326 shares which will be applied to this sinking fund requirement; the
235,026 shares held by others are scheduled to be redeemed in the years
2019 to 2058. In addition, Viad has authorized 5,000,000 and 2,000,000
shares of Preferred Stock and Junior Participating Preferred Stock,
respectively.
Viad has one Preferred Stock Purchase Right ("Right") outstanding on each
outstanding share of its common stock. The Rights contain provisions to
protect stockholders in the event of an unsolicited attempt to acquire
Viad which is not believed by the Board of Directors to be in the best
interest of stockholders. The Rights are represented by the common share
certificates and are not exercisable or transferable apart from the common
stock until such a situation arises. The Rights may be redeemed by Viad at
$0.025 per Right prior to the time any person or group has acquired 20% or
more of Viad's shares. Viad has reserved 1,000,000 shares of Junior
Participating Preferred Stock for issuance in connection with the Rights.
Viad funds a portion of its matching contributions to employees' 401(k)
plans through a leveraged ESOP. All eligible employees of Viad and its
participating affiliates, other than certain employees covered by
collective bargaining agreements that do not expressly provide for
participation of such employees in an ESOP, may participate in the ESOP.
The ESOP borrowed $40,000,000 to purchase treasury shares in 1989. The
ESOP's obligation to repay this borrowing is guaranteed by Viad;
therefore, the unpaid balance of the borrowing ($26,000,000 and
$28,000,000 at December 31, 1996 and 1995, respectively) has been
reflected in the accompanying balance sheet as long-term debt and the
amount representing unearned employee benefits ($25,906,000 and
$27,971,000 at December 31,1996 and 1995, respectively) has been recorded
as a deduction from common stock and other equity. The liability is
reduced as the ESOP repays the borrowing, and the amount in common stock
and other equity is reduced as the employee benefits are charged to
expense. The ESOP intends to repay the loan (plus interest) using Viad
contributions and dividends received on the shares of common stock held by
the ESOP. Information regarding ESOP transactions for the years ended
December 31 was as follows:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Amounts paid by ESOP for:
Debt repayment $ 2,000 $ 2,000 $ 2,000
Interest 1,200 1,491 1,161
Amounts received from Viad as:
Dividends 1,138 1,185 1,218
Contributions 2,064 2,178 1,785
</TABLE>
Shares are released for allocation to participants based upon the ratio of
the year's principal and interest payments to the sum of the total
principal and interest payments expected over the life of the plan.
Expense of the ESOP is recognized based upon the greater of cumulative
cash payments to the plan or 80% of the cumulative expense that would have
been recognized under the shares allocated method, in accordance with
Statement of Position 76-3, "Accounting for Certain Employee Stock
Ownership Plans" and Emerging Issues Task Force Abstract No. 89-8,
"Expense Recognition for Employee Stock Ownership Plans." Under this
method, Viad has recorded expense of $2,138,000, $1,817,000 and $1,684,000
in 1996, 1995 and 1994, respectively.
In conjunction with the August 15, 1996, spin-off of Viad's consumer
products business, the ESOP received one share of common stock of The Dial
Corporation for every share of Viad common stock then held by the ESOP.
The ESOP is selling The Dial Corporation shares on the open market and
using the proceeds to purchase shares of Viad's common stock.
Unallocated shares held by the ESOP at December 31 were as follows:
<TABLE>
<CAPTION>
The Dial
Viad Corp Corporation
----------- -----------
<S> <C> <C>
Unallocated shares at December 31, 1994 1,972,251
Shares allocated (164,785)
----------- -----------
Unallocated shares at December 31, 1995 1,807,466
Shares allocated (233,933)
Shares received upon spin-off of the
consumer products business 1,735,166
Shares sold in the open market (671,800)
Shares purchased in the open market 631,500
----------- -----------
Unallocated shares at December 31, 1996 2,205,033 1,063,366
=========== ===========
</TABLE>
In September 1992, Viad sold 10,491,800 shares of treasury stock to Viad's
Employee Equity Trust (the "Trust") for a $200,000,000 promissory note.
The Trust is used to fund certain existing employee compensation and
benefit plans over the scheduled 15-year term. Through December 31, 1996,
the Trust had issued 4,820,982 shares to fund such benefits. For financial
reporting purposes, the Trust is consolidated with Viad and the promissory
note is eliminated in consolidation. The fair market value of the
5,670,818 remaining shares held by the Trust, representing unearned
employee benefits, is shown as a deduction from common stock and other
equity and is reduced as employee benefits are funded. All dividends and
interest transactions between the Trust and Viad are eliminated.
Differences between cost and fair value of shares held and/or released are
included in additional capital. Unearned employee benefits at December 31,
1996 and 1995 were $92,860,000 and $186,025,000, respectively.
In conjunction with the spin-off of Viad's consumer products business, The
Dial Corporation's newly formed Employee Equity Trust received one share
of common stock of The Dial Corporation for every share of Viad common
stock held by Viad's Trust. Viad's promissory note was amended such that
$53,464,000 of the remaining principal balance ($108,100,000 as of August
15, 1996) was assumed by The Dial Corporation's Employee Equity Trust. The
allocation of the promissory note was based on the relative market
capitalizations of Viad and The Dial Corporation immediately following the
Distribution. At December 31, 1996, the balance of the promissory note due
to Viad was $54,636,000.
At December 31, 1996, retained income of $63,450,000 was unrestricted as
to payment of dividends by Viad.
K. STOCK-BASED COMPENSATION
Viad's Stock Incentive Plan (the "Plan") provides for the following types
of awards to officers, directors and certain key employees: (a) stock
options (both incentive stock options and nonqualified stock options), (b)
Stock Appreciation Rights ("SARs") and (c) restricted stock, including
performance-based stock. The Plan authorizes the issuance of options for
up to 2 1/2% of the total number of shares of common stock outstanding as
of the first day of each year; provided that any shares available for
grant in a particular calendar year which are not, in fact, granted in
such year shall not be added to shares available for grant in any
subsequent calendar year. In addition to the limitation set forth above
with respect to the number of shares available for grant in any single
calendar year, no more than 10,000,000 shares of common stock shall be
cumulatively available for grant of incentive options over the life of the
Plan. In addition, 1,000,000 shares of Preferred Stock are reserved for
distribution under the Plan.
The stock options, SARs and Limited SARs ("LSARs") outstanding at December
31, 1996 are granted for terms of ten years. For stock options and SARs,
50% become exercisable after one year and the balance become exercisable
after two years from the date of grant. Stock options and SARs are
exercisable based on the market value at the date of grant. LSARs vest
fully at date of grant and are exercisable only for a limited period (in
the event of certain tenders or exchange offers for Viad's common stock).
SARs and/or LSARs are issued in tandem with certain stock options and the
exercise of one reduces, to the extent exercised, the number of shares
represented by the other(s). SAR exercises totaled 131,520 and 28,852
shares in 1996 and 1994, respectively. There were no SARs exercised in
1995.
In conjunction with the spin-off of Viad's consumer products business, the
number of shares and the exercise price of each option, related LSAR and
SAR held by employees of Viad who remained employees of Viad after the
spin-off were modified so that the aggregate exercise price and the
aggregate spread before the spin-off were preserved at the time of the
spin-off. Options and related LSARs and SARs held by employees of Viad who
became employees of The Dial Corporation were surrendered in accordance
with the related agreements.
Restricted stock awards (266,352 shares awarded in 1994 at an estimated
fair value per share of $22.44) vest over periods not exceeding five years
from date of grant. There were no restricted stock awards in 1996 or 1995
and all awards had vested by August 15, 1996. Performance-based stock
awards (141,700, 149,500 and 184,100 shares awarded in 1996, 1995 and
1994, respectively, at an estimated fair value per share of $13.88, $24.56
and $23.00, respectively) vest, based on total shareholder return relative
to the applicable stock index and the proxy comparator groups existing at
the time of each award, over a three-year period from the date of grant.
The performance period for the 1993 performance-based stock award ended
during 1996. Shares which vested at the end of the performance period
totaled 39,596. Holders of the performance-based and restricted stock have
the right to receive dividends and vote the shares but may not sell,
assign, transfer, pledge or otherwise encumber the stock. In conjunction
with the spin-off of Viad's consumer products business, a holder of
unvested performance-based stock was credited with the number of shares of
The Dial Corporation common stock equal to the number of shares of Viad
common stock awarded. For performance-based stock awards outstanding on
the Distribution date, the stock awarded (including shares of The Dial
Corporation common stock received in the Distribution) will vest based on
the combined performance of Viad and The Dial Corporation shares.
Information with respect to stock options granted and exercised for the
years ended December 31, at historical number of shares and option
exercise prices, is as follows:
<TABLE>
<CAPTION>
Weighted
Average
Exercise
Shares Price
----------- -----------
<S> <C> <C>
Options outstanding at December 31, 1993 7,766,740 $ 15.83
Granted 1,449,800 22.98
Exercised (839,124) 14.31
Canceled (205,728) 19.59
-----------
Options outstanding at December 31, 1994 (1) 8,171,688 17.18
Granted 1,378,000 24.57
Exercised (1,068,428) 15.29
Canceled (205,336) 21.35
-----------
Options outstanding at December 31, 1995 (1) 8,275,924 18.55
Before spin-off of the consumer
products business:
Granted 50,000 28.75
Exercised (1,488,373) 15.44
Canceled (159,070) 15.20
Modification due to the Distribution,
net (2) 1,968,392 N/A
After spin-off of the consumer
products business:
Granted 1,691,100 13.88
Exercised (236,229) 9.26
Canceled (78,837) 12.80
-----------
Options outstanding at December 31, 1996 (1) 10,022,907 10.82
===========
<FN>
(1) Options exercisable totaled 7,580,872 shares, 6,274,649 shares and 6,004,118 shares
at December 31, 1996, 1995 and 1994, respectively.
(2) Net of options surrendered by employees of Viad who became employees of The Dial
Corporation after the Distribution.
</TABLE>
The following tables summarize information concerning stock options
outstanding and exercisable at December 31, 1996:
<TABLE>
<CAPTION>
Options Outstanding:
Weighted
Average Weighted
Remaining Average
Range of Contractual Exercise
Exercise Prices Shares Life Price
- --------------- ----------- ----------- -----------
<S> <C> <C> <C>
$6.16 to $9.00 2,455,215 2.8 years $ 7.16
$9.01 to $12.00 2,798,169 5.9 years 10.20
$12.01 to $13.88 4,769,523 8.7 years 13.07
-----------
$6.16 to $13.88 10,022,907 6.5 years 10.82
===========
Options Exercisable:
Weighted
Average
Range of Exercise
Exercise Prices Shares Price
- --------------- ----------- -----------
<S> <C> <C>
$6.16 to $9.00 2,455,215 $ 7.16
$9.01 to $12.00 2,797,228 10.20
$12.01 to $13.88 2,328,429 12.50
-----------
$6.16 to $13.88 7,580,872 9.92
===========
</TABLE>
Viad applies APB No. 25, "Accounting for Stock Issued to Employees," and
related interpretations in accounting for its stock-based compensation
plans. Accordingly, no compensation expense has been recognized for its
stock-based compensation plans other than for performance-based and
restricted stock awards and SAR exercises, which totaled $4,444,000,
$3,736,000 and $3,359,000 in 1996, 1995 and 1994, respectively.
In October 1995, FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation." Had Viad elected to recognize compensation cost for stock
options and performance-based stock awards in accordance with the fair
value method of accounting defined in SFAS No. 123, income from continuing
operations and earnings per share from continuing operations would be as
presented in the table below. The effects of applying SFAS No. 123 in this
disclosure are not indicative of future amounts.
<TABLE>
<CAPTION>
(000 omitted, except per share data) 1996 1995
----------- -----------
<S> <C> <C>
Income from continuing operations,
as reported $ 69,071 $ 70,781
Additional compensation: (1)
Stock option grants and
performance-based stock awards (2,876) (527)
Modification of existing stock
option grants (2) (5,716)
----------- -----------
Pro forma income from
continuing operations $ 60,479 $ 70,254
=========== ===========
Pro forma earnings per share
from continuing operations $ 0.65 $ 0.78
=========== ===========
<FN>
(1) Compensation cost calculated under SFAS NO. 123 is expensed ratably over the vesting
period. Compensation cost is net of estimated forfeitures and the tax benefit on
nonqualified stock options.
(2) In connection with the spin-off of the consumer products business, the number of
shares and the exercise price of each option held by employees of Viad who remained
employees of Viad after the spin-off were modified so that the aggregate exercise price
and the aggregate spread before the spin-off were preserved at the time of the spin-off.
SFAS No. 123 requires such options modified as a result of a spin-off to be treated as new
grants.
</TABLE>
The estimated fair value of stock options granted during 1996 and 1995 was
$3.47 and $5.90 per share, respectively. The fair value of each stock
option grant is estimated on the date of grant using the Black-Scholes
option pricing model with the following assumptions:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Expected dividend yield 2.3% 2.6%
Expected volatility 22% 22%
Risk-free interest rate 6.38% 6.35%
Expected life 5 years 5 years
</TABLE>
L. INCOME TAXES
Deferred income tax assets (liabilities) included in the
Consolidated Balance Sheet at December 31 related to the
following:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995
----------- -----------
<S> <C> <C>
Property and equipment $ (20,203) $ (26,142)
Pension, compensation and other
employee benefits 33,675 21,235
Provisions for losses 35,622 44,465
Deferred state income taxes 4,994 5,158
Other deferred income tax assets 39,711 38,788
Other deferred income tax liabilities (25,452) (30,523)
----------- -----------
68,347 52,981
Foreign deferred tax liabilities
included above 12,124 14,415
----------- -----------
United States deferred tax assets $ 80,471 $ 67,396
=========== ===========
</TABLE>
The consolidated provision for income taxes on income from
continuing operations for the years ended December 31 consisted
of the following:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Current:
United States:
Federal $ 19,827 $ 13,363 $ 10,544
State 6,528 1,633 1,460
Foreign 6,858 5,535 4,102
----------- ----------- -----------
33,213 20,531 16,106
Deferred 8,685 9,133 13,422
----------- ----------- -----------
Income taxes $ 41,898 $ 29,664 $ 29,528
=========== =========== ===========
</TABLE>
Certain tax benefits related primarily to stock option exercises and
dividends paid to the ESOP are credited to common stock and other equity
and amounted to $3,401,000, $2,536,000 and $1,939,000 in 1996, 1995 and
1994, respectively.
Eligible subsidiaries (including The Dial Corporation up to the spin-off
date) are included in the consolidated federal and other applicable income
tax returns of Viad. Certain benefits of tax losses and credits, which
would not have been currently available to certain subsidiaries or The
Dial Corporation on a separate return basis, have been credited to those
subsidiaries or The Dial Corporation by Viad. These benefits are included
in the determination of the income taxes of those subsidiaries and The
Dial Corporation and this policy has been documented by written agreements
where appropriate.
Income taxes paid in 1996, 1995 and 1994, including amounts paid on behalf
of The Dial Corporation as part of consolidated federal and other
applicable tax returns of Viad, amounted to $19,792,000, $21,502,000 and
$58,643,000, respectively.
A reconciliation of the provision for income taxes on income from
continuing operations and the amount that would be computed using
statutory federal income tax rates for the years ended December 31 was as
follows:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Computed income taxes at
statutory federal income
tax rate of 35% $ 38,839 $ 35,156 $ 31,745
Nondeductible goodwill
amortization 3,937 2,988 3,529
Minority interests 613 920 798
State income taxes 5,636 1,685 1,588
Tax-exempt income (13,968) (10,400) (5,133)
Spin-off costs and management
transition expenses 6,300
Other, net 541 (685) (2,999)
----------- ----------- -----------
Income taxes $ 41,898 $ 29,664 $ 29,528
=========== =========== ===========
</TABLE>
United States and foreign income before income taxes from continuing
operations for the years ended December 31 was as follows:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
United States $ 88,819 $ 82,271 $ 76,862
Foreign 22,150 18,174 13,839
----------- ----------- -----------
Income before income taxes $ 110,969 $ 100,445 $ 90,701
=========== =========== ===========
</TABLE>
M. PENSION AND OTHER BENEFITS
In conjunction with the spin-off of Viad's consumer products business
described in Notes A and E of Notes to Consolidated Financial Statements,
certain liabilities and deferred income tax assets related to specified
pension and postretirement plans of former employees of Armour and
Company, which was previously a subsidiary of Viad, were transferred to
and assumed by The Dial Corporation. Data related to such plans have been
excluded from the information presented below.
Pension Benefits. Continuing operations net periodic pension cost for the
years ended December 31 included the following components:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Service cost benefits earned
during the period $ 6,341 $ 5,614 $ 6,407
Interest cost on projected
benefit obligation 12,757 11,191 10,284
Actual return on plan assets (15,045) (23,200) (1,322)
Net amortization and deferral 2,345 10,695 (10,547)
Other items, primarily
defined contribution and
multiemployer plans 12,478 11,841 9,490
----------- ----------- -----------
Net pension cost $ 18,876 $ 16,141 $ 14,312
=========== =========== ===========
</TABLE>
Weighted average assumptions used were:
<TABLE>
<CAPTION>
December 31, 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Discount rate for obligation 8.0% 8.0% 8.5%
Rate of increase in
compensation levels 5.0% 5.0% 5.0%
Long-term rate of
return on assets 9.5% 9.5% 9.5%
</TABLE>
The following table indicates the plans' funded status and amounts
recognized in Viad's Consolidated Balance Sheet at December 31:
<TABLE>
<CAPTION>
Overfunded Plans
(Assets Exceed
Accumulated Benefits) Unfunded Plans
---------------------- ----------------------
(000 omitted) 1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Actuarial present value
of benefit obligations:
Vested benefit
obligation $ 123,265 $ 111,567 $ 19,330 $ 16,023
========== ========== ========== ==========
Accumulated benefit
obligation $ 130,015 $ 118,041 $ 19,889 $ 16,559
========== ========== ========== ==========
Projected benefit
obligation $ 148,997 $ 137,960 $ 24,818 $ 22,119
Market value of plan
assets, primarily
equity and fixed
income securities 152,907 143,955
---------- ---------- ---------- ----------
Plan assets over
(under) projected
benefit obligation 3,910 5,995 (24,818) (22,119)
Unrecognized
transition (asset)
obligation (3,940) (4,837) 1,143 1,419
Unrecognized prior
service cost 381 406 5,931 4,268
Unrecognized net loss 4,263 4,946 3,947 4,533
Additional minimum
liability (6,600) (5,617)
---------- ---------- ---------- ----------
Prepaid (accrued)
pension cost $ 4,614 $ 6,510 $ (20,397) $ (17,516)
========== ========== ========== ==========
</TABLE>
Postretirement Benefits Other than Pensions. Viad and its subsidiaries
have unfunded defined benefit postretirement plans that provide medical
and life insurance for eligible employees, retirees and dependents. In
addition, Viad retained the obligations for such benefits for eligible
retirees of Greyhound Lines, Inc. (sold in 1987).
The status of the plans as of December 31 was as follows:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995
----------- -----------
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees $ 27,304 $ 27,959
Fully eligible active plan participants 5,096 5,452
Other active plan participants 8,759 8,742
----------- -----------
Accumulated postretirement
benefit obligation 41,159 42,153
Unrecognized prior service reduction 1,201 1,287
Unrecognized net gain 7,424 4,642
----------- -----------
Accrued postretirement benefit cost $ 49,784 $ 48,082
=========== ===========
Discount rate for obligation 8.0% 8.0%
</TABLE>
The assumed health care cost trend rate used in measuring the 1996 and
1995 accumulated postretirement benefit obligation was 11% and 12%,
respectively, gradually declining to 5% by the year 2002 and remaining at
that level thereafter for retirees below age 65, and 8% and 8.5%,
respectively, gradually declining to 5% by the year 2002 and remaining at
that level thereafter for retirees above age 65.
A one-percentage-point increase in the assumed health care cost trend rate
for each year would increase the accumulated postretirement benefit
obligation as of December 31, 1996 by approximately 11% and the ongoing
annual expense by approximately 13%.
The net periodic postretirement benefit cost for the years ended December
31 includes the following components:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Service cost benefits earned
during the period $ 794 $ 1,061 $ 1,793
Interest cost on accumulated
postretirement benefit
obligation 2,936 3,415 3,776
Net amortization and deferral (538) (154) 3
----------- ----------- -----------
Net periodic postretirement
benefit cost $ 3,192 $ 4,322 $ 5,572
=========== =========== ===========
Curtailment gains due to
termination of certain
benefits $ -- $ 3,477 $ 500
=========== =========== ===========
</TABLE>
N. LEASES
Certain retail facilities, plants, offices and equipment are leased. The
leases expire in periods ranging from one to 50 years and some provide for
renewal options ranging from one to 36 years. Leases which expire are
generally renewed or replaced by similar leases.
At December 31, 1996, Viad's future minimum rental payments and related
sublease rentals receivable with respect to noncancelable operating leases
with terms in excess of one year were as follows:
<TABLE>
<CAPTION>
Rentals
Receivable
Rental Under
(000 omitted) Payments Subleases
----------- -----------
<S> <C> <C>
1997 $ 48,360 $ 2,139
1998 42,633 1,120
1999 37,103 834
2000 26,932 536
2001 20,735 378
Thereafter 166,031 904
----------- -----------
Total $ 341,794 $ 5,911
=========== ===========
</TABLE>
At the end of the lease term, Viad has an option to purchase a certain
leased asset for a purchase price of $14,200,000. If the purchase option
is not exercised, Viad will make a residual guarantee payment of
$10,500,000 which is refundable to the extent that the lessor's subsequent
sales proceeds exceed certain levels.
Information regarding net operating lease rentals for the years ended
December 31 was as follows:
<TABLE>
<CAPTION>
(000 omitted) 1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Minimum rentals $ 60,522 $ 57,131 $ 52,481
Contingent rentals (1) 887 2,898 7,434
Sublease rentals (2,025) (2,947) (1,974)
----------- ----------- -----------
Total rentals, net $ 59,384 $ 57,082 $ 57,941
=========== =========== ===========
<FN>
(1) Contingent rentals on operating leases are based primarily on sales and revenues for
buildings and leasehold improvements and on usage for other equipment. Does not include
contingent fees under concession agreements.
</TABLE>
Net operating lease rentals and future minimum rental payments do not
include a minimum annual guarantee of $9,600,000, subject to adjustment
under certain circumstances, from 1996 through 2000 under an airport
duty-free concession agreement.
O. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND FAIR VALUE OF
FINANCIAL INSTRUMENTS
Financial Instruments with Off-Balance-Sheet Risk. Viad is a party to
financial instruments with off-balance-sheet risk which are entered into
in the normal course of business to meet its financing needs and to manage
its exposure to fluctuations in interest rates and foreign exchange rates.
These financial instruments include a revolving sale of receivables
agreement, interest rate swap agreements and foreign exchange forward
contracts. The instruments involve, to a varying degree, elements of
credit, market, interest rate and exchange rate risk in addition to
amounts recognized in the financial statements. Viad does not hold or
issue financial instruments for trading purposes.
At December 31, 1996, Viad had an agreement to sell on a revolving basis
undivided participating interests in a defined pool of trade accounts
receivable from customers of Viad's airline catering and services and
convention services subsidiaries in an amount not to exceed $75,000,000 as
a means of accelerating cash flow. The agreement expires in August 1997
but is expected to be extended annually. Viad's expense of selling
receivables amounted to approximately $3,029,000, $2,157,000 and
$1,000,000 in 1996, 1995 and 1994, respectively. During the third quarter
of 1996, Viad reclassified expenses related to the receivables sales
program from Costs of sales and services for the segment, to Unallocated
corporate expense and other items, net. Total operating income remained
unchanged. This reclassification was made to improve comparability with
other companies.
Under the terms of the receivables sales agreement, Viad has retained
substantially the same risk of credit loss as if the receivables had not
been sold as Viad is obligated to replace uncollectible receivables with
new accounts receivable. The accounts receivable sold totaled $75,000,000
and $60,797,000 at December 31, 1996 and December 31, 1995, respectively.
The average balance of proceeds from the sale of accounts receivable
approximated $51,500,000, $31,600,000 and $22,000,000 during 1996, 1995
and 1994, respectively.
Viad enters into interest rate swap agreements as a means of managing its
interest rate exposure. The agreements are contracts to exchange fixed and
floating interest rate payments periodically over the life of the
agreements without the exchange of the underlying notional amounts. The
notional amounts of such agreements are used to measure amounts to be paid
or received and do not represent the amount of exposure to credit loss.
The amounts to be paid or received under the interest rate swap agreements
are accrued consistently with the terms of the agreements and market
interest rates. Viad maintains formal procedures for entering into
interest rate swap transactions, and management regularly monitors and
reports to the Audit Committee of the Board of Directors on interest rate
swap activity. The agreements are with major financial institutions which
are currently expected to fully perform under the terms of the agreements,
thereby mitigating the credit risk from the transactions in the event of
nonperformance by the counterparties. In addition, Viad continuously
monitors the credit ratings of the counterparties, and the likelihood of
default is considered remote.
In addition to the types of interest rate swap agreements used as hedges
of obligations as described in Note I of Notes to Consolidated Financial
Statements, Viad's payment services subsidiary has entered into swap
agreements to mitigate fluctuations in commissions paid to selling agents
of its official check program.
The following table indicates the types of swap agreements and their
weighted average pay/receive rates in effect at December 31. The
variable-rate portion of the swaps is generally based on LIBOR. Changes in
LIBOR rates could significantly affect the floating-rate information and
future cash flows.
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Variable to fixed swaps: (1)
Notional amount (000 omitted) $ 557,600 $ 307,600
Average pay rate (2) 6.7% 6.5%
Average receive rate 5.6% 5.8%
Fixed to variable swaps: (1)
Notional amount (000 omitted) $ 245,000 $ 245,000
Average pay rate 5.7% 5.7%
Average receive rate 5.7% 5.7%
Variable to variable swap: (1)
Notional amount (000 omitted) $ 75,000 $ 75,000
Average pay rate 5.2% 5.1%
Average receive rate 5.8% 4.8%
<FN>
(1) The variable to fixed swap agreements expire as follows: $240,000,000 (1998),
$150,000,000 (1999) and $167,600,000 (2000). The fixed to variable swap agreements expire
as follows: $15,000,000 (1997), $30,000,000 (2002) and $200,000,000 (2003). The variable
to variable swap agreement expires in 1998.
(2) The average pay rate has been adjusted to reflect the amortization of cash
consideration received at inception of certain of the swap agreements in exchange for
Viad's payment of an "off-market" fixed rate.
</TABLE>
Viad also enters into foreign exchange forward contracts to hedge
identifiable foreign currency commitments including intercompany
transactions with Viad's foreign subsidiaries. These contracts are
purchased to reduce the impact of foreign currency fluctuations on
operating results. Viad does not engage in foreign currency speculation.
While the hedging instruments are subject to the risk of loss from changes
in exchange rates, these losses would generally be offset by gains on the
exposures being hedged. Gains and losses on those hedging instruments that
are designated and effective as hedges of firmly committed foreign
currency transactions are deferred and recognized in income in the same
period as the hedged transaction. Viad's theoretical risk in these
transactions is the cost of replacing, at current market rates, these
contracts in the event of default by the other party. Management believes
the risk of incurring such losses is remote as the contracts are entered
into with major financial institutions.
The following table summarizes by major currency the contractual amounts
(stated in U.S. dollar equivalent) to purchase and sell foreign currencies
at December 31, 1996. The contracts mature through February 1998, with 47%
of the purchase contracts expiring in January 1997.
<TABLE>
<CAPTION>
(000 omitted) Purchase Sell
----------- -----------
<S> <C> <C>
Canadian dollar $ 56,353 $ --
Italian lira 34,725
French franc 26,728 219
Austrian schilling 22,427
British pound 15,850 29,958
Other 14,351 1,354
----------- -----------
$ 170,434 $ 31,531
=========== ===========
</TABLE>
Fair Value of Financial Instruments. The following disclosure of the
estimated fair value of financial instruments is made in accordance with
the requirements of SFAS No. 107, "Disclosures About Fair Value of
Financial Instruments." The estimated fair value amounts have been
determined by Viad using available market information and the valuation
methodologies described below. However, considerable judgment is required
in interpreting market data to develop the estimates of fair value.
Accordingly, the estimates presented herein may not be indicative of the
amounts that Viad could realize in a current market exchange. The use of
different market assumptions or valuation methodologies may have a
material effect on the estimated fair value amounts.
The carrying values of cash and cash equivalents, receivables, accounts
payable and payment service obligations approximate fair values due to the
short-term maturities of these instruments. The amortized cost and fair
value of investments in debt and equity securities are disclosed in Note
F of Notes to Consolidated Financial Statements. The carrying amounts and
estimated fair values of Viad's other financial instruments at December 31
are as follows:
<TABLE>
<CAPTION>
1996 1995
---------------------- ----------------------
Carrying Fair Carrying Fair
(000 omitted) Amount Value Amount Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Total debt $ (521,127) $ (528,306) $ (889,291) $ (913,322)
Interest rate
swaps (1) (5,546) (24,169) (11,820) (32,731)
Foreign exchange
forward
contracts (2) -- (12,694) -- 2,680
<FN>
(1) Carrying amount represents accrued interest and unamortized cash proceeds.
(2) Expected to be offset in 1997 by gains on the currency exposures being hedged.
</TABLE>
The methods and assumptions used to estimate the fair values of the
financial instruments are summarized as follows:
Debt--The fair value of debt was estimated by discounting the future cash
flows using rates currently available for debt of similar terms and
maturity. The carrying values of commercial paper and promissory notes
were assumed to approximate fair values due to their short-term
maturities.
Interest rate swaps--The fair values were estimated by discounting the
expected cash flows using rates currently available for interest rate
swaps of similar terms and maturities. The fair value represents the
estimated amount that Viad would pay to the dealer to terminate the swap
agreement at December 31.
Foreign exchange forward contracts--The fair value is estimated using
quoted exchange rates of these or similar instruments.
P. LITIGATION AND CLAIMS
Several shareholder derivative complaints were filed in the Delaware Court
of Chancery in late December 1995 and early January 1996 against members
of Viad's Board of Directors, and against Viad as a nominal defendant. The
complaints variously allege fraud, negligence, mismanagement, corporate
waste, breaches of fiduciary duty, and seek equitable relief and recovery
from or on behalf of Viad for compensatory and other damages incurred by
Viad as a result of alleged payment of excessive compensation, improper
investments or other improper activities. Viad and its counsel believe the
claims are without merit. In addition, Viad and certain subsidiaries are
plaintiffs or defendants to various other actions, proceedings and pending
claims, including multiple lawsuits filed by several hundred former
railroad workers claiming asbestos-related health conditions from exposure
to railroad equipment made by former subsidiaries. Certain of these
pending legal actions are or purport to be class actions. Some of the
foregoing involve, or may involve, compensatory, punitive or other
damages. Litigation is subject to many uncertainties and it is possible
that some of the legal actions, proceedings or claims referred to above
could be decided against Viad. Although the amount of liability at
December 31, 1996, with respect to these matters is not ascertainable,
Viad believes that any resulting liability will not materially affect
Viad's financial position or results of operations.
Viad is subject to various environmental laws and regulations of the
United States as well as of the states and other countries in whose
jurisdictions Viad has or had operations and is subject to certain
international agreements. As is the case with many companies, Viad faces
exposure to actual or potential claims and lawsuits involving
environmental matters. Although Viad is a party to certain environmental
disputes, Viad believes that any liabilities resulting therefrom, after
taking into consideration amounts already provided for, but exclusive of
any potential insurance recoveries, will not have a material adverse
effect on Viad's financial position or results of operations.
Q. PRINCIPAL BUSINESS SEGMENTS
Description of Business. Viad operates in three principal business
segments. Viad's Airline Catering and Services segment engages in airline
catering operations, providing in-flight meals to domestic and
international airlines as well as providing airplane fueling and ground
handling services. The Convention Services segment provides decorating,
exhibit preparation, installation, electrical, transportation and
management services for conventions and tradeshows and is a designer and
builder of convention and other exhibits and displays. Viad's Travel and
Leisure and Payment Services segment offers money orders throughout the
nation and performs official check and negotiable instrument clearing
services for banks and credit unions; operates duty-free airport and
shipboard concessions and contract foodservice facilities; and engages in
certain hotel/lodge operations and recreation and travel services.
<PAGE>
<TABLE>
<CAPTION>
Year ended December 31,
(000 omitted) 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Airline Catering and
Services $ 857,953 $ 800,338 $ 763,658 $ 502,775 $ 527,832
Convention Services 774,040 588,978 522,683 356,267 238,694
Travel and Leisure and
Payment Services (1) 631,235 587,429 520,256 478,898 574,219
----------- ----------- ----------- ----------- -----------
$2,263,228 $1,976,745 $1,806,597 $1,337,940 $1,340,745
=========== =========== =========== =========== ===========
Operating Income: (2)
Airline Catering and
Services (3) $ 74,254 $ 68,712 $ 62,533 $ 41,989 $ 41,391
Convention Services (4) 64,508 54,593 50,614 27,849 20,281
Travel and Leisure and
Payment Services (1)(4) 65,620 66,020 60,674 60,248 40,453
----------- ----------- ----------- ----------- -----------
Total principal business
segments 204,382 189,325 173,821 130,086 102,125
Unallocated corporate
expense and other items,
net (3) (36,131) (33,354) (33,594) (30,314) (23,979)
----------- ----------- ----------- ----------- -----------
$ 168,251 $ 155,971 $ 140,227 $ 99,772 $ 78,146
=========== =========== =========== =========== ===========
<FN>
(1) Viad'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 $21,489,000, $16,000,000,
$7,897,000, $3,967,000 and $982,000 for 1996, 1995, 1994, 1993 and 1992, respectively.
(2) Operating income by segment represents Revenues less Costs of sales and services. Unallocated corporate
and other items, net, are then deducted from total operating income of principal business segments to arrive
at total operating income.
(3) As described in Note O of Notes to Consolidated Financial Statements, during the third quarter of 1996,
Viad reclassified expenses related to its receivables sales program from Costs of sales and services to
Unallocated corporate expense and other items, net. As a result, operating income of the Airline Catering
and Services segment and unallocated corporate expense increased by approximately $2,157,000, $1,000,000,
$604,000 and $608,000 for 1995, 1994, 1993 and 1992, respectively. Total operating income remained unchanged.
(4) Includes a nonrecurring gain of $3,477,000 due to the curtailment of certain postretirement medical
benefits in the Convention Services segment in 1995. After deducting restructuring and other charges of
$20,000,000 for Travel and Leisure and Payment Services in 1992.
</TABLE>
Major Customers. Major customers are defined as those which individually
accounted for more than 10% of Viad's revenues. Sales to one major customer
in the Airline Catering and Services segment accounted for 13%, 14% and 13%
of Viad's consolidated revenues in 1996, 1995 and 1994, respectively.
<TABLE>
<CAPTION>
Principal Business Segments
----------------------------------------------
Airline Travel and
Catering Leisure and
and Convention Payment
(000 omitted) Services Services Services Subtotal Corporate Total
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
1996:
Assets at year end:
Before intangibles,
restricted assets
and investment in
discontinued
operation $ 237,957 $ 215,241 $ 303,487 $ 756,685 $ 243,506 $1,000,191
Assets restricted for
payment service
obligations 1,814,537 1,814,537 1,814,537
Investment in
discontinued
operation 97,958 97,958
Intangibles 275,387 197,613 64,099 537,099 3,527 540,626
---------- ---------- ---------- ---------- ---------- ----------
$ 513,344 $ 412,854 $2,182,123 $3,108,321 $ 344,991 $3,453,312
========== ========== ========== ========== ========== ==========
Capital expenditures $ 26,814 $ 25,258 $ 24,795 $ 76,867 $ 5,282 $ 82,149
========== ========== ========== ========== ========== ==========
Depreciation and
amortization:
Depreciation $ 21,706 $ 13,599 $ 17,658 $ 52,963 $ 5,492 $ 58,455
Amortization of
intangibles 8,702 4,541 2,746 15,989 15,989
---------- ---------- ---------- ---------- ---------- ----------
$ 30,408 $ 18,140 $ 20,404 $ 68,952 $ 5,492 $ 74,444
========== ========== ========== ========== ========== ==========
1995:
Assets at year end:
Before intangibles,
restricted assets
and investments in
discontinued
operations $ 212,887 $ 198,209 $ 304,585 $ 715,681 $ 189,682 $ 905,363
Assets restricted for
payment service
obligations 1,666,116 1,666,116 1,666,116
Investments in
discontinued
operations 625,737 625,737
Intangibles 282,599 186,298 46,185 515,082 4,250 519,332
---------- ---------- ---------- ---------- ---------- ----------
$ 495,486 $ 384,507 $2,016,886 $2,896,879 $ 819,669 $3,716,548
========== ========== ========== ========== ========== ==========
Capital expenditures $ 15,185 $ 15,035 $ 27,369 $ 57,589 $ 1,996 $ 59,585
========== ========== ========== ========== ========== ==========
Depreciation and
amortization:
Depreciation $ 21,461 $ 10,306 $ 16,991 $ 48,758 $ 5,242 $ 54,000
Amortization of
intangibles 8,775 3,706 2,391 14,872 14,872
---------- ---------- ---------- ---------- ---------- ----------
$ 30,236 $ 14,012 $ 19,382 $ 63,630 $ 5,242 $ 68,872
========== ========== ========== ========== ========== ==========
1994:
Assets at year end:
Before intangibles,
restricted assets
and investments in
discontinued
operations $ 231,417 $ 127,191 $ 280,868 $ 639,476 $ 205,002 $ 844,478
Assets restricted for
payment service
obligations 1,339,802 1,339,802 1,339,802
Investments in
discontinued
operations 598,344 598,344
Intangibles 291,337 112,870 36,486 440,693 4,766 445,459
---------- ---------- ---------- ---------- ---------- ----------
$ 522,754 $ 240,061 $1,657,156 $2,419,971 $ 808,112 $3,228,083
========== ========== ========== ========== ========== ==========
Capital expenditures $ 22,214 $ 11,415 $ 18,481 $ 52,110 $ 2,879 $ 54,989
========== ========== ========== ========== ========== ==========
Depreciation and
amortization:
Depreciation $ 20,125 $ 8,370 $ 16,542 $ 45,037 $ 4,982 $ 50,019
Amortization of
intangibles 8,362 2,748 1,556 12,666 12,666
---------- ---------- ---------- ---------- ---------- ----------
$ 28,487 $ 11,118 $ 18,098 $ 57,703 $ 4,982 $ 62,685
========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE>
R. CONDENSED CONSOLIDATED QUARTERLY RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
First Quarter Second Quarter
---------------------- ----------------------
(000 omitted) 1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Airline Catering
and Services $ 193,263 $ 184,456 $ 214,719 $ 206,509
Convention Services 195,012 154,397 192,904 131,588
Travel and Leisure and
Payment Services (1) 143,448 131,112 160,405 141,044
---------- ---------- ---------- ----------
$ 531,723 $ 469,965 $ 568,028 $ 479,141
========== ========== ========== ==========
Operating income:
Airline Catering
and Services (2) $ 12,305 $ 11,437 $ 19,974 $ 18,592
Convention Services(3) 17,134 15,001 18,669 16,629
Travel and Leisure and
Payment Services (1) 6,023 9,242 15,448 15,734
---------- ---------- ---------- ----------
Total principal
business segments 35,462 35,680 54,091 50,955
Unallocated corporate
expense and other
items, net (2) (9,541) (9,290) (9,382) (8,329)
---------- ---------- ---------- ----------
$ 25,921 $ 26,390 $ 44,709 $ 42,626
========== ========== ========== ==========
Income (loss):
Continuing
operations (3)(4) $ 8,512 $ 8,429 $ 9,006 $ 20,505
Discontinued
operations 15,982 9,257 5,112 26,961
---------- ---------- ---------- ----------
Income (loss) before
cumulative effect
of change in
accounting principle 24,494 17,686 14,118 47,466
Cumulative effect of
change in accounting
principle (5) (13,875)
---------- ---------- ---------- ----------
Net income (loss) $ 24,494 $ 3,811 $ 14,118 $ 47,466
========== ========== ========== ==========
Income (loss) per common
share (dollars):
Continuing
operations (3)(4) $ 0.09 $ 0.09 $ 0.10 $ 0.23
Discontinued
operations 0.18 0.11 0.05 0.31
---------- ---------- ---------- ----------
Income (loss) before
cumulative effect
of change in
accounting principle 0.27 0.20 0.15 0.54
Cumulative effect of
change in accounting
principle (5) (0.16)
---------- ---------- ---------- ----------
Net income (loss) per
common share $ 0.27 $ 0.04 $ 0.15 $ 0.54
========== ========== ========== ==========
Third Quarter Fourth Quarter
---------------------- ----------------------
(000 omitted) 1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Airline Catering
and Services $ 225,712 $ 212,951 $ 224,259 $ 196,422
Convention Services 191,591 130,302 194,533 172,691
Travel and Leisure and
Payment Services (1) 180,987 174,320 146,395 140,953
---------- ---------- ---------- ----------
$ 598,290 $ 517,573 $ 565,187 $ 510,066
========== ========== ========== ==========
Operating income:
Airline Catering
and Services (2) $ 22,712 $ 21,029 $ 19,263 $ 17,654
Convention Services (3) 12,956 9,896 15,749 13,067
Travel and Leisure and
Payment Services (1) 28,084 27,851 16,065 13,193
---------- ---------- ---------- ----------
Total principal
business segments 63,752 58,776 51,077 43,914
Unallocated corporate
expense and other
items, net (2) (8,143) (6,839) (9,065) (8,896)
---------- ---------- ---------- ----------
$ 55,609 $ 51,937 $ 42,012 $ 35,018
========== ========== ========== ==========
Income (loss):
Continuing
operations (3)(4) $ 25,089 $ 23,724 $ 26,464 $ 18,123
Discontinued
operations (4,667) (113,461) (57,121) 3,778
---------- ---------- ---------- ----------
Income (loss) before
cumulative effect of
change in accounting
principle 20,422 (89,737) (30,657) 21,901
Cumulative effect of
change in accounting
principle (5)
---------- ---------- ---------- ----------
Net income (loss) $ 20,422 $ (89,737) $ (30,657) $ 21,901
========== ========== ========== ==========
Income (loss) per common
share (dollars):
Continuing
operations (3)(4) $ 0.27 $ 0.27 $ 0.28 $ 0.20
Discontinued
operations (0.05) (1.29) (0.62) 0.04
---------- ---------- ---------- ----------
Income (loss) before
cumulative effect of
change in accounting
principle 0.22 (1.02) (0.34) 0.24
Cumulative effect of
change in accounting
principle (5)
---------- ---------- ---------- ----------
Net income (loss) per
common share $ 0.22 $ (1.02) $ (0.34) $ 0.24
========== ========== ========== ==========
<FN>
(1) Viad'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 the following amounts:
1996 1995
---------- ----------
First Quarter $4,355,000 $3,443,000
Second Quarter 4,672,000 3,929,000
Third Quarter 6,136,000 4,129,000
Fourth Quarter 6,326,000 4,499,000
(2) As described in Note O of Notes to Consolidated Financial Statements, during the
third quarter of 1996, Viad reclassified expenses related to its receivables sales
program from Costs of sales and services to Unallocated corporate expense and other
items, net. As a result, operating income of the Airline Catering and Services segment
and unallocated corporate expense increased by approximately $514,000 and $496,000 in
the 1996 first and second quarters, respectively, and by approximately $411,000,
$660,000, $530,000 and $556,000 for the 1995 first, second, third and fourth quarters,
respectively. Total operating income remained unchanged.
(3) Includes a nonrecurring gain of $3,477,000 ($2,260,000 after-tax), or $0.03 per
share, due to the curtailment of certain postretirement medical benefits in the second
quarter of 1995 (see Note D of Notes to Consolidated Financial Statements).
(4) Includes gain on sale of interest in the Phoenix Suns of $19,025,000 (after-tax),
or $0.21 per share, in the fourth quarter of 1996. Also includes spin-off costs and
management transition expenses of $12,000,000 (after-tax), or $0.13 per share,
$3,000,000 (after-tax), or $0.03 per share, and $13,985,000 (after-tax), or $0.16 per
share, in the second, third and fourth quarters of 1996, respectively (see Note D of
Notes to Consolidated Financial Statements).
(5) Initial application of SFAS No. 121 (see Note C of Notes to Consolidated Financial
Statements).
</TABLE>
Exhibit 21
VIAD CORP
(DELAWARE)
Active and Inactive (I) Subsidiaries and Affiliates*
as of December 31, 1996
AIRLINE CATERING & SERVICES GROUP
AIRCRAFT SERVICE INTERNATIONAL, INC. (Delaware)
ASII Holding GmbH (Germany)
Bahamas Airport Services Limited (Bahama)
Freeport Flight Services Limited (Bahama)
Dispatch Services, Inc. (Florida)
Florida Aviation Fueling Company, Inc. (Florida)
Greyhound-Dobbs Incorporated (Delaware)
Carson International Inc. (Delaware)+
Dobbs Houses, Inc. (Delaware)+
DOBBS INTERNATIONAL SERVICES, INC. (Delaware)
Dobbs Houses International, Inc. (Delaware)
CONVENTION SERVICES GROUP
EXG, Inc. (Delaware)
Giltspur Exhibits of Canada, Inc. (Ontario)
David H. Gibson Company, Inc. (Texas)
Longchamp International Inc. (Delaware)
GES EXPOSITION SERVICES, INC. (Nevada)
Concourse Graphics, Inc. (Delaware)
Expo-Tech Electrical & Plumbing Services, Inc. (California)
Shows Unlimited, Inc. (Nevada)
United Exposition Service Redevelopment Corporation
(Missouri)
Las Vegas Convention Service Co. (Nevada)
Panex Show Services Ltd. (Canada)
Exposervice Standard Inc. (Canada)
Clarkson-Conway Inc. (Canada)
Stampede Display and Convention Services Ltd. (Alberta)
CORPORATE AND OTHER
The Dial Corp (International) (Arizona)
Essex Place Inc. (Arizona)
GCMC Inc. (Arizona)
Grey Gateway Realty Corporation (Arizona)
GRT Inc. (Arizona)
Viad Realty Corporation (Arizona)
Greyhound Realty of Texas Inc. (Texas)
TRAVEL & LEISURE & PAYMENT SERVICES GROUP
Crystal Holidays, Inc. (Colorado)
Faber Enterprises, Inc. (Delaware)
Faber Drug Co., Inc. (Illinois) (70%)
Franklin Ventures, Inc. (Illinois)
GREYHOUND LEISURE SERVICES, INC. (Florida)
European Cruise Shops Limited (Cayman Islands) (51%)
Greyhound-ANA Venture Company (Florida) (51%)
International Cruise Shops, Ltd. (Cayman Islands)
Greyhound Support Services, Inc. (Delaware) (I)
Greyhound Maintenance, Inc. (Arizona)
Greyhound World Travel GmbH (Germany)
JETSAVE INC. (Florida)
RESTAURA, INC. (Michigan)
Glacier Park, Inc. (Arizona) (80%)
Waterton Transport Company, Limited (Alberta)
TRANSPORTATION LEASING CO. (California)~~
GCCP, Inc. (Delaware)~~
Greyhound Canada Holdings, Inc. (Alberta)~~
The Dial Corporation (Canada) Ltd. (Alberta)~~
Brewster Tours Inc. (Canada)
BREWSTER TRANSPORT COMPANY LIMITED (Alberta)
Cascade Holdings (Banff) Inc. (Alberta)
TRAVELERS EXPRESS COMPANY, INC. (Minnesota)
CAG Inc. (Nevada)
FSMC, Inc. (Minnesota)
Moneyline Express, Inc. (Wisconsin)
RM/BS GP Inc. (Minnesota)
Travelers Express Co. (P.R.) Inc. (Puerto Rico)
Viad Service Companies Limited (United Kingdom)
Aircraft Service Limited (United Kingdom)#
Crystal Holidays, Limited (United Kingdom)
Crystal Dial Limited (United Kingdom)
Guernsey Travel Service Limited (United Kingdom)
Jersey Travel Service Limited (United Kingdom)
Seejersey Limited (United Kingdom)
Dobbs International (U.K.) Limited (United Kingdom)#
Charles Grimsey Associates Limited (United Kingdom)
Greyhound World Travel Limited (United Kingdom)
Irish Group Travel Limited (Ireland)
Jetsave Limited (United Kingdom)
Airborne Travel (Holdings) Limited (United Kingdom)
Tropical Places Limited (United Kingdom)
American Holidays (N.I.) Limited (Northern Ireland)
Jetsave Transatlantic Limited (United Kingdom)
# Indicates an Airline Catering & Services Group Subsidiary
~~ Indicates a Corporate and Other Subsidiary
+ Indicates a Travel & Leisure & Payment Services Group
Subsidiary
* Parent-subsidiary or affiliate relationships are shown by
marginal indentation. State, province or country of
incorporation and ownership percentage are shown in
parentheses following name, except that no ownership
percentage appears for subsidiaries owned 100% (in the
aggregate) by Viad Corp. List does not include companies in
which the aggregate direct and indirect interest of Viad
Corp is 50% or less.
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors
Viad Corp
Phoenix, Arizona
We consent to the incorporation by reference in Registration
Statement Nos. 33-41870, 33-57630, 33-64493, 33-56531 on Form S-8
and Nos. 33-54465, 333-06357, 33-55360, 33-64495 on form S-3 of
Viad Corp (formerly named The Dial Corp), of our report dated
February 21, 1997, appearing in this Annual Report on Form 10-K
of Viad Corp for the year ended December 31, 1996.
/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona
March 25, 1997
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director whose
signature appears below constitutes and appoints Richard C.
Stephan and Robert H. Bohannon, and each of them severally, his
or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to
sign the Form 10-K Annual Report of Viad Corp for the fiscal year
ended December 31, 1996, and any and all amendments thereto, and
to file the same, with all exhibits thereto, and other documents
in connection herewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he or
she might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or either of them, or
their or his or her substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
/s/ Jess Hay February 20, 1997
/s/ Judith K. Hofer February 20, 1997
/s/ Jack F. Reichert February 20, 1997
/s/ Linda Johnson Rice February 20, 1997
/s/ Douglas L. Rock February 20, 1997
/s/ John W. Teets February 20, 1997
/s/ Timothy R. Wallace February 20, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM VIAD CORP'S
FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<CAPTION>
Exhibit 27
VIAD CORP
FINANCIAL DATA SCHEDULE
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<PERIOD-TYPE> YEAR
<CASH> 4,422
<SECURITIES> 0
<RECEIVABLES> 176,006
<ALLOWANCES> 12,744
<INVENTORY> 93,730
<CURRENT-ASSETS> 1,023,801
<PP&E> 858,482
<DEPRECIATION> 385,443
<TOTAL-ASSETS> 3,453,312
<CURRENT-LIABILITIES> 2,352,843
<BONDS> 518,779
<COMMON> 145,663
6,604
0
<OTHER-SE> 286,555
<TOTAL-LIABILITY-AND-EQUITY> 3,453,312
<SALES> 0
<TOTAL-REVENUES> 2,263,228
<CGS> 0
<TOTAL-COSTS> 2,058,846
<OTHER-EXPENSES> 36,131
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53,019
<INCOME-PRETAX> 110,969
<INCOME-TAX> 41,898
<INCOME-CONTINUING> 69,071
<DISCONTINUED> (40,694)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,377
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM VIAD CORP'S
FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
THE FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1995 AND 1994 HAVE
BEEN RESTATED TO REFLECT THE HISTORICAL
FINANCIAL POSITION AND RESULTS OF
OPERATIONS AS ADJUSTED FOR THE
RECLASSIFICATION OF VIAD'S CRUISE LINE
BUSINESS AS A DISCONTINUED OPERATION.
<RESTATED>
<MULTIPLIER> 1,000
<CAPTION>
Exhibit 27
VIAD CORP
RESTATED FINANCIAL DATA SCHEDULE
<S> <C> <C>
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-END> DEC-31-1995 DEC-31-1994
<PERIOD-TYPE> YEAR YEAR
<CASH> 17,945 22,768
<SECURITIES> 0 0
<RECEIVABLES> 164,391 146,300
<ALLOWANCES> 14,760 16,185
<INVENTORY> 83,132 68,680
<CURRENT-ASSETS> 1,103,676 922,120
<PP&E> 785,383 745,520
<DEPRECIATION> 337,830 308,106
<TOTAL-ASSETS> 3,716,548 3,228,083
<CURRENT-LIABILITIES> 2,230,391 1,803,141
<BONDS> 811,841 718,774
<COMMON> 145,663 145,663
6,597 6,590
0 0
<OTHER-SE> 402,506 409,430
<TOTAL-LIABILITY-AND-EQUITY> 3,716,548 3,228,083
<SALES> 0 0
<TOTAL-REVENUES> 1,976,745 1,806,597
<CGS> 0 0
<TOTAL-COSTS> 1,787,420 1,632,776
<OTHER-EXPENSES> 33,354 33,594
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 52,897 47,247
<INCOME-PRETAX> 100,445 90,701
<INCOME-TAX> 29,664 29,528
<INCOME-CONTINUING> 70,781 61,173
<DISCONTINUED> (73,465) 79,138
<EXTRAORDINARY> 0 0
<CHANGES> (13,875) 0
<NET-INCOME> (16,559) 140,311
<EPS-PRIMARY> (0.20) 1.61
<EPS-DILUTED> (0.20) 1.61
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM VIAD CORP'S
FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
THE INTERIM STATEMENTS THE PERIODS ENDED
MARCH 31, 1996, JUNE 30, 1996 AND
SEPTEMBER 30, 1996 HAVE BEEN RESTATED TO
REFLECT THE HISTORICAL FINANCIAL POSITION
AND RESULTS OF OPERATIONS AS ADJUSTED FOR
THE RECLASSIFICATION OF VIAD'S CRUISE LINE
BUSINESS AS A DISCONTINUED OPERATION.
<RESTATED>
<MULTIPLIER> 1,000
<CAPTION>
Exhibit 27
VIAD CORP
RESTATED FINANCIAL DATA SCHEDULE
<S> <C> <C> <C>
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996 DEC-31-1996
<PERIOD-END> MAR-31-1996 JUN-30-1996 SEP-30-1996
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<CASH> 22,497 9,017 10,307
<SECURITIES> 0 0 0
<RECEIVABLES> 188,624 252,262 208,662
<ALLOWANCES> 15,407 15,623 17,038
<INVENTORY> 88,812 96,391 93,482
<CURRENT-ASSETS> 904,127 1,089,710 889,162
<PP&E> 800,998 816,434 824,542
<DEPRECIATION> 355,121 364,769 374,124
<TOTAL-ASSETS> 3,512,447 3,749,236 3,201,988
<CURRENT-LIABILITIES> 1,997,569 2,218,879 2,027,718
<BONDS> 822,733 822,938 582,460
<COMMON> 145,663 145,663 145,663
6,599 6,601 6,604
0 0 0
<OTHER-SE> 420,042 439,975 316,276
<TOTAL-LIABILITY-AND-EQUITY> 3,512,447 3,749,236 3,201,988
<SALES> 0 0 0
<TOTAL-REVENUES> 531,723 1,099,751 1,698,041
<CGS> 0 0 0
<TOTAL-COSTS> 496,261 1,010,198 1,544,736
<OTHER-EXPENSES> 9,541 18,923 27,066
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 13,490 27,034 40,554
<INCOME-PRETAX> 12,277 30,961 69,114
<INCOME-TAX> 3,765 13,443 26,507
<INCOME-CONTINUING> 8,512 17,518 42,607
<DISCONTINUED> 15,982 21,094 16,427
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 24,494 38,612 59,034
<EPS-PRIMARY> 0.27 0.42 0.64
<EPS-DILUTED> 0.27 0.42 0.64
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM VIAD CORP'S
FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
THE INTERIM STATEMENTS THE PERIODS ENDED
MARCH 31, 1995, JUNE 30, 1995 AND
SEPTEMBER 30, 1995 HAVE BEEN RESTATED TO
REFLECT THE HISTORICAL FINANCIAL POSITION
AND RESULTS OF OPERATIONS AS ADJUSTED FOR
THE RECLASSIFICATION OF VIAD'S CRUISE LINE
BUSINESS AS A DISCONTINUED OPERATION.
<RESTATED>
<MULTIPLIER> 1,000
<CAPTION>
Exhibit 27
VIAD CORP
RESTATED FINANCIAL DATA SCHEDULE
<S> <C> <C> <C>
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1995 JUN-30-1995 SEP-30-1995
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<CASH> 6,572 12,162 8,862
<SECURITIES> 0 0 0
<RECEIVABLES> 159,037 145,170 140,498
<ALLOWANCES> 16,200 15,671 14,764
<INVENTORY> 69,520 73,520 68,944
<CURRENT-ASSETS> 778,052 814,059 858,706
<PP&E> 744,341 752,712 765,751
<DEPRECIATION> 313,843 322,135 332,264
<TOTAL-ASSETS> 3,185,062 3,312,033 3,336,800
<CURRENT-LIABILITIES> 1,688,493 1,807,961 1,950,880
<BONDS> 765,079 750,347 728,338
<COMMON> 145,663 145,663 145,663
6,592 6,594 6,596
0 0 0
<OTHER-SE> 421,812 473,051 383,630
<TOTAL-LIABILITY-AND-EQUITY> 3,185,062 3,312,033 3,336,800
<SALES> 0 0 0
<TOTAL-REVENUES> 469,965 949,106 1,466,679
<CGS> 0 0 0
<TOTAL-COSTS> 434,285 862,471 1,321,268
<OTHER-EXPENSES> 9,290 17,619 24,458
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 13,415 26,521 39,691
<INCOME-PRETAX> 12,771 41,755 78,589
<INCOME-TAX> 4,342 12,821 25,931
<INCOME-CONTINUING> 8,429 28,934 52,658
<DISCONTINUED> 9,257 36,218 (77,243)
<EXTRAORDINARY> 0 0 0
<CHANGES> (13,875) (13,875) (13,875)
<NET-INCOME> 3,811 51,277 (38,460)
<EPS-PRIMARY> 0.04 0.58 (0.44)
<EPS-DILUTED> 0.04 0.58 (0.44)
</TABLE>
