<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
VIAD CORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
VIAD TOWER
PHOENIX, ARIZONA 85077-2227
Robert H. Bohannon
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
March 31, 1998
Dear Stockholder:
Your 1998 Annual Meeting will be held on Tuesday, May 12, at 9:00 a.m., in
the Ballroom of The Ritz-Carlton Phoenix, 2401 East Camelback Road, Phoenix,
Arizona. As the meeting will begin promptly at 9:00 a.m., please plan to arrive
earlier. The formal notice of the meeting follows on the next page.
No admission tickets or other credentials will be required for attendance at
the meeting. You may use the hotel's free valet parking, and, for your
convenience, arrangements have been made with the hotel to have the gratuity
charged to the Corporation. If you use this valet service, please notify the
valet that you are attending the Viad Corp stockholders' meeting.
Directors and officers will be present preceding and following the meeting
to talk with stockholders. During the meeting there will be an opportunity for
stockholder questions regarding the affairs of the Corporation and for
discussion of the business to be considered at the meeting as explained in the
notice and Proxy Statement which follow.
IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN THE ENCLOSED PROXY AS SOON AS
POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
Sincerely,
[LOGO]
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
March 31, 1998
To the Holders of Common Stock of Viad Corp:
The Annual Meeting of Stockholders of Viad Corp, a Delaware corporation,
will be held in the Ballroom of The Ritz-Carlton Phoenix, 2401 East Camelback
Road, Phoenix, Arizona 85016, on Tuesday, May 12, 1998, at 9:00 a.m., Mountain
Standard Time, for the purpose of considering and voting upon:
1. Election of directors of the Corporation as set forth in the attached
Proxy Statement; and
2. Ratification of the appointment of Deloitte & Touche LLP to audit the
accounts of the Corporation for the year 1998; and
3. Any other matters which may properly come before the meeting and any
adjournment or adjournments thereof.
Only stockholders of record of Common Stock at the close of business March
13, 1998, are entitled to receive notice of and to vote at the meeting. A list
of the stockholders entitled to vote will be available for examination by any
stockholder, for any purpose germane to the meeting, during the time of the
meeting and for ten days prior to the meeting at the principal executive offices
of the Corporation, Viad Tower, 1850 North Central Avenue, Phoenix, Arizona.
The Annual Report for the year 1997, including financial statements, is
included with your Proxy Statement.
To assure your representation at the meeting, please vote, sign and mail the
enclosed proxy, which is being solicited on behalf of the Board of Directors, as
soon as possible. If your registered address is in the United States, a return
envelope which requires no postage if mailed in the United States is enclosed
for that purpose.
SCOTT E. SAYRE
SECRETARY
PLEASE VOTE
YOUR VOTE IS IMPORTANT
<PAGE>
PROXY STATEMENT
OF
[LOGO]
VIAD TOWER
PHOENIX, ARIZONA 85077-2227
(First Mailed March 31, 1998)
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors for the 1998 Annual Meeting of Stockholders of
the Corporation. The cost of soliciting proxies will be borne by the
Corporation. Solicitation will be made primarily through the use of the mails,
but regular employees of the Corporation may solicit proxies personally, by
telephone or telegram. The Corporation has retained Norwest Bank Minnesota, N.A.
to assist it in connection with the solicitation at an estimated fee of $2,500,
plus out-of-pocket expenses. The Corporation will reimburse banks, brokerage
firms and other custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to beneficial owners of shares. The
enclosed proxy, if properly executed and returned, will be voted according to
its specifications but may be revoked at any time before it is voted by giving
notice in writing to the Secretary of the Corporation or by voting in person at
the meeting. The election inspectors will treat abstentions or a withholding of
authority as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as unvoted for purposes of determining
the approval of any matter submitted to the stockholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter. If a
stockholder is a participant in an Employees' 401(k) Plan of the Corporation or
one of its subsidiaries and/or the Viad Corp Employees' Stock Ownership Plan
Trust (ESOP Plan), the proxy will serve as a voting instruction to the
respective Trustee. In a 401(k) Plan or in the ESOP Plan, if no voting
instructions are received from a participant, the Trustees will vote those
shares in accordance with the majority of such shares voted in such Plans for
which instructions were received or in the discretion of such Trustees as their
fiduciary duty may require.
Only stockholders of record of Common Stock as of the close of business on
the record date, March 13, 1998, will be eligible to vote at the meeting. The
number of shares of Common Stock then outstanding was 99,167,866 shares. Each
outstanding share will be entitled to one vote. For those proposals for which no
directions are given, the proxy will be voted "for" the election of the
directors set forth herein and in accordance with the recommendations of the
Board of Directors or the best judgment of the proxy holders on other proposals.
To be elected, each director must receive the affirmative vote of the holders of
a plurality of the shares voting. Approval of each other proposal requires the
affirmative vote of a majority of the shares voting on each such proposal.
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held five meetings during 1997. It has established
the following standing committees of certain of its members to deal with
particular areas of responsibility:
1. The Executive Committee, which held eleven meetings during 1997,
exercises all the powers of the Board in the management of the business and
affairs of the Corporation when the Board is not in session, except as limited
by Delaware law and resolutions of the Board.
1
<PAGE>
2. The Audit Committee, which met three times in 1997, recommends
appointment of the Corporation's independent public accountants and reviews
audit reports, accounting policies, financial statements, interest rate swap
transaction reports, internal audit reports, corporate compliance programs,
internal controls, audit fees, and certain officer expenses. All members of this
Committee are nonemployee directors.
3. The Human Resources Committee, which met six times in 1997, reviews, for
recommendation to the Board, the salary of the Chief Executive Officer, and
approves salaries and compensation of executive officers and other compensation
awards under various compensation plans, and also approves grants under the
Corporation's incentive stock plans (see the Human Resources Committee Report
below). All members of this Committee are nonemployee directors.
4. The Corporate Governance and Nominating Committee, which met two times
in 1997, is responsible for proposing a slate of directors for election by the
stockholders at each annual meeting and proposing candidates to fill any
vacancies on the Board. All members of this Committee are nonemployee directors.
The Committee will consider candidates for Board membership proposed by
stockholders who have complied with the procedures described under the caption
below entitled "Submission of Stockholder Proposals and Other Information." The
Committee also reviews and from time to time proposes changes in the
Corporation's system of Corporate Governance.
Directors who are not employees of the Corporation receive an annual
retainer of $30,000 and also receive a fee of $1,500 for each Board of Directors
meeting attended and a fee of $1,000 for each Executive, Audit, Human Resources
and Corporate Governance and Nominating Committee meeting attended. Directors
who chair committees of the Board are paid an additional annual retainer of
$5,000.
Nonemployee directors may elect to participate in the Deferred Compensation
Plan for Directors under which payment of part or all of their fees and
retainers may be deferred. Nonemployee directors also were granted the right to
elect to participate in this Plan in connection with termination of the
Directors' Retirement Plan in August, 1996, pursuant to which the accrued vested
benefits of a participant were credited, in the form of stock units, to their
Deferred Compensation Plan account. This Plan provides participants with the
option to defer their compensation in the form of stock units related to the
price of the Corporation's Common Stock, as well as the option to defer in the
form of cash. All nonemployee directors are participants in this Plan. Amounts
deferred under the Plan, plus interest thereon at the long-term medium-quality
bond rate for cash accounts or dividend equivalents reinvested for stock units
accounts, as the case may be, are payable to the director or to the director's
estate or beneficiary, over such period as may be designated, upon termination
as a director. At August 15, 1996, participants in the Plan who had stock units
were credited with stock units of The Dial Corporation equal to the number of
stock units of the Corporation held by each participant, with dividend
equivalents on The Dial Corporation stock units, as declared, to be credited to
a cash account.
Pursuant to the 1997 Viad Corp Omnibus Incentive Plan, 4,900 nonqualified
options to purchase Common Stock were issued to each nonemployee director
holding office on August 20, 1997, at an exercise price of $18.3438, the average
market price on the day of issue. An additional 10,000 nonqualified options to
purchase Common Stock were issued pursuant to the Plan to Mr. Tolleson on August
25, 1997, at an exercise price of $18.0625, the average market price on the day
of issue, in connection with his election as a director of Viad Corp. The
Corporation also provides nonemployee directors with accidental death and
dismemberment insurance benefits of $300,000 and, in addition, travel accident
insurance benefits of $250,000 when traveling on the Corporation's business.
All directors of the Corporation participate or are eligible to participate
in the Directors' Charitable Award Program which provides for contributions by
the Corporation on behalf of each participating director of $100,000 per year to
one or more charitable organizations designated by the director. The
contributions are made over a period of ten years following the director's
death. The program is being
2
<PAGE>
funded through the purchase of life insurance on the life of the director, with
the Corporation as beneficiary.
ELECTION OF DIRECTORS
The Board of Directors of the Corporation consists of eight persons divided
into three classes. At each annual meeting the term of one class of directors
expires and persons are elected to that class for terms of three years.
The persons appointed in the enclosed proxy intend to vote at the Annual
Meeting, and any adjournment or adjournments thereof, for the election of the
nominees for directors whose names appear below, for the term indicated or until
their respective successors have been elected and have qualified, or in the
event of disqualification, refusal or inability of any of them to serve, for the
election of such other persons as they believe will carry on the present
policies of the Corporation. Each of the nominees has agreed to serve if
elected.
DIRECTOR NOMINEES
The information regarding the director nominees has been furnished by such
nominees and is set forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, OTHER DIRECTORSHIPS,
NAME COMMITTEE MEMBERSHIPS, AGE, AND YEAR FIRST ELECTED
- --------------------------------- -------------------------------------------------------------------------------
<S> <C>
FOR TERMS EXPIRING AT THE 2001 ANNUAL MEETING
Jess Hay......................... Chairman, Texas Foundation for Higher Education, and Chairman of the Board of
HCB Enterprises Inc, a private investment firm. Retired Chairman and Chief
Executive Officer of Lomas Financial Group. Also a director of Exxon
Corporation, SBC Communications, Inc., and Trinity Industries, Inc. Mr. Hay
is a member of the Executive and Corporate Governance and Nominating
Committees and Chairman of the Human Resources Committee. Age 67. Director
since 1981.
Linda Johnson Rice............... President and Chief Operating Officer and a director of Johnson Publishing
Company, Inc., publisher of EBONY and other magazines. Also a director of
Bausch & Lomb Incorporated, and Kimberly-Clark Corporation. Ms. Rice is a
member of the Audit and Human Resources Committees and Chairman of the
Corporate Governance and Nominating Committee. Age 40. Director since 1992.
Timothy R. Wallace............... President and Chief Operating Officer and a director of Trinity Industries,
Inc., a manufacturer of railcars and equipment. Mr. Wallace is a member of
the Human Resources Committee. Age 44. Director since 1996.
</TABLE>
3
<PAGE>
DIRECTORS CONTINUING IN OFFICE
The information regarding the directors continuing in office has been
furnished by such directors and is set forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, OTHER DIRECTORSHIPS,
NAME COMMITTEE MEMBERSHIPS, AGE, AND YEAR FIRST ELECTED
- --------------------------------- -------------------------------------------------------------------------------
<S> <C>
TERMS EXPIRING AT THE 2000 ANNUAL MEETING
Robert H. Bohannon............... Chairman, President and Chief Executive Officer of the Corporation. Mr.
Bohannon is a member of the Executive Committee. Age 53. Director since 1996.
Douglas L. Rock.................. Chairman of the Board and Chief Executive Officer of Smith International, Inc.,
a supplier of products and services to the oil and gas drilling and
production industry. Mr. Rock is a member of the Audit Committee. Age 51.
Director since 1996.
John C. Tolleson................. Founder and former Chairman and Chief Executive Officer of First USA, Inc., a
financial services company specializing in the credit card business; and
currently Chairman of The Tolleson Group, a private investment group. Also a
director of Banc One Corporation, Capstead Mortgage Corporation, and
Paymentech, Inc. Mr. Tolleson is a member of the Audit Committee. Age 49.
Director since 1997.
TERMS EXPIRING AT THE 1999 ANNUAL MEETING
Judith K. Hofer.................. President and Chief Executive Officer of Filene's, a retail department store
division of The May Department Stores Company. Ms. Hofer is a member of the
Executive and Human Resources Committees and Chairman of the Audit Committee.
Age 58. Director since 1984.
Jack F. Reichert................. Chairman of the Board, Retired, and a director of Brunswick Corporation, a
leader in marine power, pleasure boating and recreation products and
services. Trustee, Carroll College; Executive in Residence, University of
Wisconsin-Milwaukee; Director, Professional Bowlers Association. Mr. Reichert
is a member of the Audit and Corporate Governance and Nominating Committees
and Chairman of the Executive Committee. Age 67. Director since 1984.
</TABLE>
4
<PAGE>
OWNERSHIP OF THE CORPORATION'S SECURITIES
The following tables set forth certain information at March 13, 1998, or
such other date as indicated, regarding those persons known to the Corporation
to be the beneficial owners of more than 5% of the Corporation's outstanding
Common Stock and the beneficial ownership, as defined by the Securities and
Exchange Commission (SEC), of such Common Stock by all directors and executive
officers of the Corporation individually and as a group:
CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP CLASS
- -------------------------------------------------------------------------------- -------------------- -------------
<S> <C> <C>
Brinson Partners, Inc.
209 S. LaSalle Street
Chicago, Illinois 60604....................................................... 5,835,554(1) 5.9%
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109................................................... 12,543,488(2) 12.6%
Franklin Resources, Inc.
777 Mariners Island Boulevard
P. O. Box 7777
San Mateo, California 94403-7777.............................................. 7,366,700(3) 7.4%
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111................................................... 7,541,852(4) 7.6%
</TABLE>
- ------------------------
(1) The ownership information set forth herein is based in its entirety on
material contained in a Schedule 13G, dated February 11, 1998, filed with
the SEC by Brinson Partners, Inc. With respect to the shares held, such
stockholder has shared voting power and shared dispositive power for all
shares owned.
(2) The ownership information set forth herein is based in its entirety on
material contained in a Schedule 13G, dated February 14, 1998, filed with
the SEC by FMR Corp. FMR Corp. is the parent holding company of Fidelity
Management and Research Company. With respect to the shares held, such
stockholder has sole voting power for 276,900 shares and sole dispositive
power for all shares owned.
(3) The ownership information set forth herein is based in its entirety on
material contained in a Schedule 13G, dated February 10, 1998, filed with
the SEC by Franklin Resources, Inc. With respect to the shares held, such
stockholder has sole voting power and sole dispositive power for all shares
owned.
(4) The ownership information set forth herein is based in its entirety on
material contained in a Schedule 13G, dated February 12, 1998, filed with
the SEC by Loomis, Sayles & Company, L.P. With respect to the shares held,
such stockholder has sole voting power for 4,465,250 shares, shared voting
power for 52,600 shares, and sole dispositive power for all shares owned.
5
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL PERCENT OF
NAME OWNERSHIP(1) CLASS
- --------------------------------------------------------------------------------- ------------------- -----------
<S> <C> <C>
Robert H. Bohannon............................................................... 194,451 *
Charles J. Corsentino............................................................ 131,563 *
Jess Hay......................................................................... 54,153 *
Judith K. Hofer.................................................................. 63,843 *
L. Gene Lemon.................................................................... 631,757 *
Frederick J. Martin.............................................................. 350,069 *
Philip W. Milne.................................................................. 69,841 *
Paul B. Mullen................................................................... 25,745 *
Ronald G. Nelson................................................................. 183,779 *
Peter J. Novak................................................................... 176,944 *
Jack F. Reichert................................................................. 74,352 *
Linda Johnson Rice............................................................... 60,693 *
Douglas L. Rock.................................................................. 6,500 *
Scott E. Sayre................................................................... 30,839 *
Richard C. Stephan............................................................... 269,756 *
John C. Tolleson................................................................. 50,000 *
Timothy R. Wallace............................................................... 6,500 *
Wayne A. Wight................................................................... 57,511 *
All Directors and Executive Officers as a Group
(18 persons)................................................................... 2,438,296 2.5%
</TABLE>
- ------------------------
(1) Includes 202,600 shares of performance-based stock, which will not be
earned unless performance targets are met, and 1,619,712 shares of Common
Stock with respect to which all the above directors and executive officers
as a group have the right to acquire ownership within 60 calendar days
through the exercise of stock options granted under the Corporation's stock
option plans.
* Less than one percent.
The Corporation's management understands the importance of aligning the
financial interests of its director and officer groups with those of its
stockholders. Accordingly, the Corporation has established specific guidelines
relating to the minimum amount of stock directors and officers are expected to
own on a direct basis, meaning stock or stock units which are subject to market
risk, not simply held under option. Stock units are subject to market risk in
the same manner as common stock as they have a value equal to the market price
of the Corporation's Common Stock.
The Corporation's guidelines call for each officer to own stock or stock
units which have a value within a range of one and one-half to five times that
individual's annual salary, depending on his or her level of compensation as
discussed in the Human Resources Committee Report which follows. Most of these
officers have reached their goals and the remainder are continuing to invest
towards achieving their goals.
6
<PAGE>
The Corporation's guidelines also call for each director to own stock or
stock units which have a value equal to five times the annual basic retainer
payable to directors. Information concerning director ownership of Common Stock,
options and stock units at March 13, 1998, is set forth below:
<TABLE>
<CAPTION>
YEAR FIRST BENEFICIAL UNEXERCISABLE STOCK
NAME ELECTED OWNERSHIP(1) OPTIONS UNITS(2) TOTA1(3)
- ------------------------------------------------------- ----------- ------------ ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Robert H. Bohannon..................................... 1996 194,451 122,500 18,750 335,701
Jess Hay............................................... 1981 54,153 11,400 54,157 119,710
Judith K. Hofer........................................ 1984 63,843 11,400 51,482 126,725
Jack F. Reichert....................................... 1984 74,352 11,400 56,731 142,483
Linda Johnson Rice..................................... 1992 60,693 11,400 8,935 81,028
Douglas L. Rock........................................ 1996 6,500 11,400 3,286 21,186
John C. Tolleson....................................... 1997 50,000 10,000 0 60,000
Timothy R. Wallace..................................... 1996 6,500 11,400 492 18,392
</TABLE>
- ------------------------
(1) Beneficial ownership column includes Common Stock owned plus Common Stock
with respect to which a director has the right to acquire ownership within
60 calendar days through the exercise of stock options granted under the
Corporation's stock option plans. Direct ownership of Common Stock is as
follows: Mr. Bohannon, 80,481 (including 56,400 shares of performance-based
stock which will not be earned unless performance targets are met); Mr. Hay,
7,000; Ms. Hofer, 26,477; Mr. Reichert, 1,000; Ms. Rice, 3,000; Mr. Rock,
none; Mr. Tolleson, 50,000; and Mr. Wallace, none.
(2) Stock units have been acquired at the election of individual nonemployee
directors in connection with termination in August 1996 of the Directors'
Retirement Plan and by investment of Board retainer and meeting fees
pursuant to the Deferred Compensation Plan for Directors as described
previously. Stock units held by Mr. Bohannon were acquired by investment of
a portion of his 1997 bonus in stock units pursuant to the Deferred
Compensation Plan for Executives.
(3) Total Viad Corp stock-based holdings of each director, including Common
Stock, exercisable and unexercisable options, and deferred compensation in
the form of stock units. Total holdings for all directors amounted to
905,225 shares of Common Stock and/or stock units.
7
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation received for the years 1995-1997
by each of the Corporation's five most highly compensated executive officers in
1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ---------------------------- -------------
---------------------------------------------------- SECURITIES LONG-TERM
OTHER ANNUAL RESTRICTED UNDERLYING INCENTIVE
COMPENSATION STOCK AWARDS OPTIONS PAYOUTS
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) ($)(2) (#)(3) ($)(4)
- --------------------------------- --------- ----------- ----------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert H. Bohannon(6)............ 1997 650,000 450,000(7) 17,518 -- 100,000 399,933
Chairman, President 1996 307,577 225,000 25,624 -- 45,000 446,237
and CEO 1995 233,840 187,800 9,048 -- 26,349 322,500
L. Gene Lemon.................... 1997 397,400 304,000 8,783 -- 14,100 357,011
Vice President--Administration 1996 384,800 138,500 9,077 -- 22,500 214,523
1995 378,500 -- 8,470 -- 24,467 260,000
Frederick J. Martin.............. 1997 412,269 196,100 8,046 -- 29,200 286,690
President and CEO of Dobbs 1996 385,768 259,700 10,205 -- 43,800 260,732
International Services, Inc. 1995 339,600 76,400 5,479 -- 50,628 --
Paul B. Mullen(8)................ 1997 312,577 71,400(7) 6,659 -- 16,000 --
President and CEO of GES 1996 299,131 30,000 -- -- 18,400 --
Exposition Services, Inc. 1995 103,846 -- -- -- -- --
Richard C. Stephan............... 1997 333,900 255,400 7,020 -- 20,200 281,281
Vice President--Controller 1996 319,033 114,900 6,712 -- 35,300 159,633
1995 304,800 -- 6,277 -- 40,841 207,000
<CAPTION>
ALL OTHER
COMPENSATION
NAME AND PRINCIPAL POSITION ($)(5)(7)
- --------------------------------- -------------
<S> <C>
Robert H. Bohannon(6)............ 469,500
Chairman, President 58,918
and CEO 4,789
L. Gene Lemon.................... 11,922
Vice President--Administration 11,544
11,355
Frederick J. Martin.............. 4,800
President and CEO of Dobbs 3,194
International Services, Inc. 4,500
Paul B. Mullen(8)................ 76,939
President and CEO of GES 118,568
Exposition Services, Inc. 46,046
Richard C. Stephan............... 10,017
Vice President--Controller 9,571
9,144
</TABLE>
- ------------------------------
(1) Amounts shown include other annual compensation not properly categorized as
salary or bonus.
(2) Dividends are paid on performance-based stock at the same rate as paid to
all stockholders. On December 31, 1997, the following persons held the
following amounts of Viad Corp performance-based stock valued at then
current market values: Mr. Bohannon, 56,400 shares at $1,089,225; Mr. Lemon,
23,400 shares at $451,913; Mr. Martin, 31,400 shares at $606,413; Mr.
Mullen, 15,900 shares at $307,069; and Mr. Stephan, 24,600 shares at
$475,088. In conjunction with the Corporation's spin-off of the consumer
products business effective August 15, 1996, holders of performance-based
stock granted in 1995 were credited with the number of shares of The Dial
Corporation common stock equal to the number of shares of the Corporation's
Common Stock previously awarded. On December 31, 1997, the following persons
held the following amounts of The Dial Corporation performance-based stock
valued at then current market values: Mr. Bohannon, 5,500 shares at
$114,469; Mr. Lemon, 5,000 shares at $104,063; Mr. Martin, 10,300 shares at
$214,369; and Mr. Stephan, 8,300 shares at $172,744. The 1995
performance-based stock awards (including shares of The Dial Corporation
common stock received in the distribution) will vest based on the combined
performance of the stock of Viad Corp and The Dial Corporation.
(3) As a result of the spin-off of the Corporation's consumer products business
effective August 15, 1996, securities underlying options granted in 1995
have been modified so that the aggregate exercise price and the aggregate
spread before the spin-off were preserved at the time of the spin-off.
(4) Long-term incentive payouts in 1997 included payments under the Performance
Unit Incentive Plan for the 1995-1997 performance period and the vesting of
a portion of the Viad Corp and The Dial Corporation shares granted in 1994
under the Performance-Based Stock Plan. Mr. Bohannon earned a prorated
performance unit incentive bonus with respect to the 1995-1997 performance
period for the period of time he served as President and Chief Executive
Officer of Travelers Express Company, Inc., the Corporation's payment
services subsidiary. No payout with respect to the 1995-1997 performance
period was earned at the corporate level. Long-term incentive payouts in
1996 included payments under the Performance Unit Incentive Plan for the
1994-1996 performance period and the 1996 performance period, as well as the
vesting of a portion of the Viad Corp and The Dial Corporation shares
granted in 1993 under the Performance-Based Stock Plan. Mr. Bohannon earned
a performance unit incentive bonus with respect to the 1994-1996 performance
period, prorated for the period of time he served as President and Chief
Executive Officer of Travelers Express Company, Inc. and prorated for the
period of time he served as President and Chief Operating Officer of the
Corporation. Long-term incentive payouts in 1995 included payments under the
Performance Unit Incentive Plan for the 1993-1995 performance period.
(5) Amounts represent matching contributions under the 401(k) Plan and the
Supplemental 401(k) Plan; relocation expenses of $55,870 paid to Mr.
Bohannon in 1996, and relocation expenses of $44,246 and $112,510 paid to
Mr. Mullen in 1995 and 1996, respectively; and amounts deferred pursuant to
the Deferred Compensation Plan for Executives (see footnote 7).
(6) Employment agreement, effective January 1, 1997, and expiring December 31,
1998, currently provides for an annual salary of $750,000.
(7) Mr. Bohannon and Mr. Mullen deferred $450,000 and $71,400 of their
respective 1997 bonuses (totaling $900,000 and $142,800, respectively)
pursuant to the terms of the Deferred Compensation Plan for Executives. The
deferred amounts were invested in stock units of the Corporation (18,750 and
2,975 stock units for Mr. Bohannon and Mr. Mullen, respectively, acquired at
a price of $24.00 per unit, the fair market value of Common Stock on the
date of investment) and are included in the "All Other Compensation" column.
(8) Employment agreement, effective April 25, 1996, and renewable from year to
year following the initial one-year term, currently provides for an annual
salary of $313,500.
8
<PAGE>
STOCK OPTION GRANTS
The following table sets forth information on stock option grants to each of
the five most highly compensated executive officers of the Corporation for 1997.
The amounts shown for each executive officer as potential realizable values are
based on assumed annualized rates of stock price appreciation of 5% and 10% over
the full ten-year term of the options, which would result in stock appreciation
per share of $11.54 and $29.24, respectively. The amounts shown as potential
realizable values for all stockholders represent the corresponding increases in
the market value of the approximately 91.5 million (excluding 5.1 million shares
held by the Employee Equity Trust) outstanding shares of the Corporation's
Common Stock held by all stockholders on August 20, 1997, and at the option
exercise price shown in the table below, which would total approximately $1.06
billion and $2.68 billion, respectively. THESE POTENTIAL REALIZABLE VALUES ARE
PRESENTED FOR ILLUSTRATIVE PURPOSES ONLY AND ARE BASED SOLELY ON ASSUMED RATES
OF APPRECIATION REQUIRED BY APPLICABLE SEC REGULATIONS. ACTUAL GAINS, IF ANY, ON
OPTION EXERCISES AND COMMON STOCKHOLDINGS ARE DEPENDENT ON THE FUTURE
PERFORMANCE OF THE CORPORATION'S COMMON STOCK AND OVERALL STOCK MARKET
CONDITIONS. THERE CAN BE NO ASSURANCE THAT THE POTENTIAL REALIZABLE VALUES SHOWN
IN THIS TABLE WILL BE ACHIEVED.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES AT ASSUMED ANNUAL RATES OF
UNDERLYING % OF TOTAL STOCK PRICE APPRECIATION
OPTIONS OPTIONS GRANTED EXERCISE FOR OPTION TERM
GRANTED TO EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME (#)(1) FISCAL YEAR ($/SHARE)(1) DATE 5%($) 10%($)
- ----------------------------------- ----------- ----------------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Bohannon................. 100,000 8.75% 18.3438 8/20/07 1,153,632 2,923,529
L. Gene Lemon...................... 14,100 1.23% 18.3438 8/20/07 162,662 412,218
Frederick J. Martin................ 29,200 2.55% 18.3438 8/20/07 336,860 853,671
Paul B. Mullen..................... 16,000 1.40% 18.3438 8/20/07 184,581 467,765
Richard C. Stephan................. 20,200 1.77% 18.3438 8/20/07 233,034 590,553
ALL STOCKHOLDERS' STOCK PRICE
APPRECIATION..................... N/A N/A N/A N/A 1.06 BILLION 2.68 BILLION
</TABLE>
- --------------------------
(1) The exercise price is the fair market value of the Corporation's Common
Stock on the grant date. Fifty percent (50%) of options become exercisable
one year after grant and the balance become exercisable two years after
grant. Each option contains the right to surrender the option for cash,
which right is exercisable only during certain tender offers. The exercise
price may be paid by delivery of already owned shares; and tax withholding
obligations arising upon exercise may be paid by offset of a portion of the
underlying shares being acquired, subject to certain conditions.
AGGREGATED STOCK OPTION EXERCISES AND VALUES
The following table sets forth information on aggregated stock option
exercises for 1997, number of unexercised options at 1997 year-end
(exercisable/unexercisable), and 1997 year-end values (exercisable/
unexercisable) for each of the five most highly compensated executive officers
of the Corporation. THE AMOUNTS SET FORTH IN THE TWO COLUMNS RELATING TO
UNEXERCISED OPTIONS, UNLIKE THE AMOUNTS SET FORTH IN THE COLUMN HEADED "VALUE
REALIZED," HAVE NOT BEEN, AND MIGHT NEVER BE, REALIZED. THE UNDERLYING OPTIONS
MIGHT NOT BE EXERCISED; AND ACTUAL GAINS ON EXERCISE, IF ANY, WILL DEPEND ON THE
VALUE OF THE CORPORATION'S COMMON STOCK ON THE DATES OF EXERCISE. THERE CAN BE
NO ASSURANCE THAT THESE VALUES WILL BE REALIZED.
9
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FY-END AT FY-END ($)
SHARES ACQUIRED VALUE REALIZED (#) EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE(1)
- ------------------------------ --------------- ---------------- -------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Bohannon............ None None 113,970 122,500 796,060 219,219
L. Gene Lemon................. 38,353 377,946 418,318 25,350 4,133,876 74,831
Frederick J. Martin........... None None 243,872 51,100 1,924,217 147,369
Paul B. Mullen................ None None 9,200 25,200 50,025 65,525
Richard C. Stephan............ 18,447 184,769 165,017 37,850 1,192,208 115,541
</TABLE>
- ------------------------
(1) The closing price of the Corporation's Common Stock on December 31, 1997,
was $19.3125. The information shown reflects options accumulated over
periods of up to ten years.
LONG-TERM INCENTIVE PLAN GRANTS AND ESTIMATED PAYOUTS
The following table sets forth information on Performance Unit Incentive
Plan grants and Performance-Based Stock Plan grants for 1997 and the performance
period until payout and, for the Performance Unit Incentive Plan, the estimated
ranges of the payout under the Plan, for each of the five most highly
compensated executive officers of the Corporation:
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK BASED PLANS
PERFORMANCE ---------------------------------------------------------
PERIOD UNTIL THRESHOLD TARGET MAXIMUM (NUMBER
NAME NUMBER OF UNITS PAYOUT (NUMBER OF UNITS) (NUMBER OF UNITS) OF UNITS)
- --------------------------- --------------- ------------ ------------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Robert H. Bohannon......... 16,000(1) 2 years 4,000 16,000 32,000
24,000(1) 3 years 6,000 24,000 48,000
40,000(2) 3 years N/A N/A N/A
L. Gene Lemon.............. 6,350(1) 2 years 1,588 6,350 12,700
9,530(1) 3 years 2,383 9,530 19,060
8,100(2) 3 years N/A N/A N/A
Frederick J. Martin........ 8,250(1) 2 years 2,063 8,250 16,500
12,380(1) 3 years 3,095 12,380 24,760
10,500(2) 3 years N/A N/A N/A
Paul B. Mullen............. 4,250(1) 2 years 1,063 4,250 8,500
6,380(1) 3 years 1,595 6,380 12,760
7,800(2) 3 years N/A N/A N/A
Richard C. Stephan......... 5,250(1) 2 years 1,313 5,250 10,500
7,880(1) 3 years 1,970 7,880 15,760
7,700(2) 3 years N/A N/A N/A
</TABLE>
- ------------------------
(1) Granted pursuant to the Performance Unit Incentive Plan, under which the
assumed value of the units awarded is equal to $16.375, which was the price
of the Corporation's Common Stock on the initial date of grant. The value of
the units for any payment of an award is based on the average price of the
stock during the month following the performance period. The closing price
of the Corporation's Common Stock on December 31, 1997, was $19.3125.
Payouts of awards are dependent upon
10
<PAGE>
achievement of return on equity or capital and income per share or income
targets which are established at the beginning of the performance period.
(2) Performance-based stock granted under the 1997 Omnibus Incentive Plan is
earned pro rata as total stockholder return performance targets are met or
exceeded relative to the applicable stock index and proxy comparator group
existing at the time of each award. Dividends are paid on performance-based
stock at the same rate as paid to all stockholders.
EXECUTIVE SEVERANCE AND EMPLOYMENT AGREEMENTS
The Corporation has entered into executive severance agreements with Messrs.
Bohannon, Lemon and Stephan providing that if their employment terminates for
any reason (other than because of death, disability, or normal retirement)
within 18 months after a change in control of the Corporation, they shall
receive severance compensation. The maximum amounts the agreements provide for
consist of a lump sum payment of three times such executive officer's highest
yearly salary, incentive plan payments and fringe benefits. The agreements also
provide a tax gross-up feature, so that such executive officers do not have to
pay excise taxes imposed by the Internal Revenue Code on payments made pursuant
to the agreements. Benefits paid are reduced by other severance benefits paid by
the Corporation, but shall not be offset by any other amounts. Such executive
officers will also be credited with years of service equal to the greater of the
number needed to assure vesting under the retirement plans, the number of years'
salary paid under the severance plan, or the number of years needed to attain 20
years of service.
The Corporation has also entered into executive severance agreements with
Mr. Martin and Mr. Mullen and certain other executive officers which provide
benefits similar to those in the agreements described above, except that if
employment terminates involuntarily or they leave for a good reason (as defined
in such agreements) they would receive three times their yearly salary,
incentive payments and fringe benefits, and if employment terminates because
they leave voluntarily during the 30-day period following the first anniversary
of the change in control, they would receive two times such compensation.
The Corporation has entered into an Employment Agreement with Mr. Bohannon,
expiring December 31, 1998, providing for a current annual salary of $750,000.
PENSION PLANS
The following table shows estimated annual retirement benefits payable to a
covered participant who retires at age 65 or later, for the years of service and
compensation level indicated, under the Viad Companies Retirement Income Plan
and the schedule of the Supplemental Pension Plan which prevents the loss of
pension benefits otherwise payable except for the limitations of Section 415 of
the Internal Revenue Code. The compensation covered by the Retirement Plan is
annual salary and annual bonus (one-half of annual bonus in the case of Mr.
Mullen and certain other executive officers), as reported in the Summary
Compensation Table above. Final covered compensation will be calculated on the
basis of the average of a participant's last five years of covered compensation
prior to retirement; however, in some cases the average of a participant's
highest five years of annual bonus will be included in covered compensation.
11
<PAGE>
PENSION PLAN TABLE(1)(2)
<TABLE>
<CAPTION>
YEARS OF SERVICE(3)
----------------------------------------------------------
30
REMUNERATION 10 YEARS 15 YEARS 20 YEARS 25 YEARS YEARS(4)
- --------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 125,000........................ $ 19,638 $ 29,457 $ 39,277 $ 49,096 $ 58,915
150,000........................ 23,888 35,832 47,777 59,721 71,665
175,000........................ 28,138 42,207 56,277 70,346 84,415
200,000........................ 32,388 48,582 64,777 80,971 97,165
225,000........................ 36,638 54,957 73,277 91,596 109,915
250,000........................ 40,888 61,332 81,777 102,221 122,665
300,000........................ 49,388 74,082 98,777 123,471 148,165
400,000........................ 66,388 99,582 132,777 165,971 199,165
500,000........................ 83,388 125,082 166,777 208,471 250,165
600,000........................ 100,388 150,582 200,777 250,971 301,165
700,000........................ 117,388 176,082 234,777 293,471 352,165
800,000........................ 134,388 201,582 268,777 335,971 403,165
900,000........................ 151,388 227,082 302,777 378,471 454,165
1,000,000....................... 168,388 252,582 336,777 420,971 505,165
1,100,000....................... 185,388 278,082 370,777 463,471 556,165
1,200,000....................... 202,388 303,582 404,777 505,971 607,165
1,300,000....................... 219,388 329,082 438,777 548,471 658,165
1,400,000....................... 236,388 354,582 472,777 590,971 709,165
1,500,000....................... 253,388 380,082 506,777 633,471 760,165
1,600,000....................... 270,388 405,582 540,777 675,971 811,165
</TABLE>
- ------------------------
(1) The Internal Revenue Code (Code) and the Employee Retirement Income
Security Act (ERISA) limit the annual benefits which may be paid from a
tax-qualified retirement plan. As permitted by the Code and ERISA, the
Corporation has supplemental plans which authorize the payment of benefits
calculated under provisions of the retirement plan which may be above the
limits permitted under the Code and ERISA for those executives entitled to
participate in the supplemental plans.
(2) Benefits are computed on a single-life annuity basis. Such benefits reflect
a reduction to recognize some of the Social Security benefits to be received
by the employee. The amounts set forth are before any adjustment for joint
and survivorship provisions, which would reduce, in some cases, the amounts
shown in the table.
(3) The number of credited years of service for Messrs. Bohannon, Lemon,
Martin, Mullen and Stephan are: 4, 28, 20, 21, and 28 years, respectively.
Messrs. Bohannon, Lemon, Martin, Mullen and Stephan's estimated annual
retirement benefits are: $359,913, $418,518, $213,540, $214,430, and
$353,922, respectively. A portion of Mr. Mullen's retirement benefits has
been accrued under retirement plans and supplemental pension plans which
have been frozen. Future accrued benefits for Mr. Mullen are attributable to
a supplemental pension plan.
(4) The Corporation's Retirement Income Plan limits the years of service
credited for purposes of calculating benefits to a maximum of 30 years. Its
Supplemental Pension Plan contains similar limits and further provides that
pension benefits set forth in this column will be payable to designated
executive officers who have completed twenty or more years of service and
have attained age 55, including Mr. Bohannon.
LEGAL PROCEEDINGS
Several stockholder 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
12
<PAGE>
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 pending or potential claims by or on behalf of approximately
6,500 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, 1997, with respect to these
matters is not ascertainable, Viad believes that any resulting liability will
not have a material effect on 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,
exclusive of any potential insurance recoveries, will not have a material effect
on Viad's financial position or results of operations.
------------------------
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
CORPORATION'S PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE
FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE
FOLLOWING REPORT AND THE STOCKHOLDER RETURN PERFORMANCE GRAPH SHALL NOT BE
INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
HUMAN RESOURCES COMMITTEE REPORT
This report has been prepared by the Human Resources Committee (Committee)
of the Board of Directors. Under the Committee's direction, the Corporation has
implemented an executive compensation strategy designed to enhance profitability
and stockholder value. This strategy has served the stockholders of the
Corporation for many years by motivating and rewarding executives for achieving
the Corporation's goals.
EXECUTIVE COMPENSATION STRATEGY
The Corporation's primary executive compensation strategy is to closely
align the financial interests of senior managers with those of the stockholders.
Specific objectives of the executive compensation strategy are:
- To maximize stockholder value and to provide incentives to increase stock
value relative to the market
- To provide a compensation package competitive with comparator companies
- To attract and retain highly effective executive talent
- To motivate executives to achieve the Corporation's key business goals
- To put a significant amount of pay at risk in keeping with the
Corporation's pay-for-performance objective
- To encourage "at risk" investment in the Corporation through ownership of
Common Stock or stock units of the Corporation
13
<PAGE>
To support these objectives, a significant portion of executive compensation
is tied to achieving specific business goals that favorably impact the
Corporation's stock price.
MANAGING COMPENSATION
Each year the Committee conducts an in-depth review of the Corporation's
executive compensation program. This review is based in part on a comprehensive
study by a nationally recognized independent consulting firm. The consultant's
report assesses the effectiveness of the compensation program in achieving the
strategy and objectives established by the Committee. In addition, it provides a
comparison relative to practices and costs typical among a group of companies in
comparable industries among which the Corporation competes for executive talent.
The companies chosen for the comparator group used for compensation purposes
generally are not the same companies which comprise the comparator or published
industry indexes in the performance graph included in this Proxy Statement. The
Committee believes that the Corporation's most direct competitors for executive
talent are not necessarily the companies that would be included in the indexes
established for comparing stockholder returns.
The compensation program for the Corporation's executive officers for 1997
was focused on performance based criteria and was designed by reference to
target compensation packages of executive officers at approximately the 60th
percentile of the comparator companies, but such level of compensation would be
earned only if aggressive performance criteria were achieved.
The preceding Summary Compensation Table shows the overall levels of
incentive compensation and the year-to-year variations which indicate the strong
relationship between incentive compensation and performance.
COMPONENTS OF COMPENSATION
Total compensation for the Corporation's executive officers includes:
- Base salary
- Annual and long-term incentives
- Benefits
- Perquisites
A significant amount of compensation is tied to the attainment of corporate
or subsidiary performance goals. For example, annual and long-term incentives at
target comprise approximately 74% of the aggregate compensation package for Mr.
Bohannon and approximately 55% for other executive officers. The Committee
believes this reinforces the pay-for-performance commitment and encourages
executive officers to focus on adding value to the Corporation.
The Committee, in determining the Corporation's compensation policies and
practices, endeavors to maximize the tax deductibility of executive compensation
under the provisions of Section 162(m) of the Internal Revenue Code. However, it
does not intend to permit the provisions of such Section to erode the
effectiveness of the Corporation's overall system of compensation policies and
practices.
BASE SALARY
Each year the Committee evaluates the named executive officers' salaries
based on performance during the prior period and competitive surveys of the
Corporation's comparator companies provided by the Corporation's compensation
consultants. Performance factors considered for the named executive officers
include various aspects of personal qualities, communication skills, management
leadership skills, strategic orientation and commitment to competitive
advantage, with both objective and subjective judgments being made in the annual
performance appraisal process.
14
<PAGE>
The Corporation entered into an employment agreement with Mr. Bohannon in
connection with his election as Chairman of the Board, President and Chief
Executive Officer of the Corporation, effective January 1, 1997. The agreement
replaced a prior agreement between the Corporation and Mr. Bohannon. In making
its determination as to the terms and conditions of the agreement, the Committee
considered the following:
- Scope of duties, responsibilities and expectations of the position
- Executive experience
- General competitive practice for similar companies, particularly the
Corporation's comparator companies
- Appropriate allocation between salary and performance-based incentive
compensation
Mr. Bohannon has a current base salary of $750,000.
In the case of the other named executive officers, their salaries generally
were targeted at between the 50th and 75th percentile of the salaries of
comparable executives at the Corporation's comparator companies, and during 1997
such officers received increases maintaining them, on average, at such
percentiles of salaries at such companies.
ANNUAL INCENTIVES
Executives are eligible for an annual bonus based on achieving corporate and
business unit performance targets established each year. Performance targets are
set by the Committee at the beginning of the performance period. The awards for
1997 reflect the extent to which targets for the following goals were approached
or exceeded:
- Corporate level: Income per share from continuing operations (weighted at
66 2/3%) and other specified performance measurements including, but not
limited to, reduction of noncore assets, cash flow growth, liability
management, corporate center cost control, and maintenance or improvement
of debt ratings (weighted at 33 1/3%).
- Operating company level: Net income (weighted at 66 2/3%) and other
specified performance measurements including, but not limited to, revenue
growth, operating income margin growth, cash flow growth, and
profitability per employee (weighted at 33 1/3%).
Individual target bonuses in 1997 ranged from 10% to 60% of the executive's
base salary, depending on the level of responsibility. Actual bonus awards at
the corporate level range from 0% to 170% of target, depending on achievement of
corporate goals and discretionary adjustment based on individual performance,
but not to exceed the individual's funding limit expressed as a percentage of
the Corporation's net income as defined, such percentage being determined by the
Committee at the beginning of the period. Actual bonus awards at the operating
company level range from 0% to a maximum of 178.5% of target, depending on
achievement of operating company goals and discretionary adjustment based on
individual performance.
For 1997, Mr. Bohannon received an annual bonus of $900,000, one-half of
which was deferred pursuant to the Deferred Compensation Plan for Executives and
invested in stock units of the Corporation at a price of $24.00 per unit. The
bonuses of Messrs. Bohannon, Lemon and Stephan were based on the Corporation
achieving applicable income per share and other performance targets, and also,
in the case of the bonus awarded to Mr. Bohannon, a determination by the
Committee that a special award was appropriate in recognition of the outstanding
results achieved in 1997. The bonuses for the executive officers receiving
bonuses at the operating company level were based on achieving net income and
other performance targets for their respective units, subject to a funding
limit.
15
<PAGE>
LONG-TERM INCENTIVES
To accomplish the objectives of the executive compensation program and to
encourage short-term actions consistent with longer-term improvement, the
long-term incentive plans are designed to reward measurable performance and to
build stock ownership among executive officers. Three long-term incentive
vehicles (performance units, stock options, and performance-based stock) are
utilized to achieve the Corporation's objectives.
The Performance Unit Incentive Plan is intended to focus participants on the
long-term interests of stockholders by tying incentive payments not only to the
achievement of financial measures but also to common stock performance. At the
corporate level, goals are based on return on equity and income per share from
continuing operations. For the operating companies other than the Corporation's
payment services subsidiary, the goals are based on return on capital and net
income. Goals for the payment services subsidiary are based on return on equity
and net income. The Performance Unit Incentive Plan is offered to a limited
group of key executives, including the executives whose compensation is detailed
above.
Awards are paid if, at the end of the applicable performance period,
specific financial targets are met. Targets are set by the Committee at the
beginning of the performance period.
Performance unit grants are based on the Corporation's Common Stock price on
the date of the grant and on a competitive dollar value by position for
executive officers and a multiple of salary for other executives, in each case
giving consideration to data provided by an independent consulting firm
concerning competitive practices of the comparator companies. Participant awards
can be earned depending on the degree of achievement of two financial goals
based on a matrix of 0% to 200% of the number of award units originally granted.
Award payments are based on the stock price during the month following the
performance period. The maximum amount of award units will be earned if both the
return on equity or capital threshold target and the maximum income target for
the performance period are met. Proportionately fewer units are earned for less
than maximum income results. If either income or average annual return on equity
or capital is below the threshold level, no units are earned. In addition, no
units will be earned by operating companies if net income in any year of the
performance period does not exceed prior year net income. Performance periods
generally are three years in length. In conjunction with the spin-off of the
consumer products business of the Corporation in 1996, a special one-year
performance period award was granted in 1996 in lieu of the normal three-year
grant with proportionately smaller performance unit grants. A special two-year
performance period award, in addition to the normal three-year award, was
granted in 1997 with proportionately smaller performance unit grants. The
special two-year performance period award granted in 1997, taken with the
special one-year performance period award granted in 1996, completes awards for
the three-year 1996-1998 performance period cycle.
At the end of the 1995-1997 performance period, Mr. Bohannon earned a
prorated performance unit incentive bonus of $205,200 under the Performance Unit
Incentive Plan with respect to the period of time he served as President and
Chief Executive Officer of Travelers Express Company, Inc., the Corporation's
payment services subsidiary. No performance unit incentive plan bonus was earned
at the corporate level. The performance unit incentive bonus for Mr. Bohannon
and the performance unit incentive bonuses of the other executive officers
receiving bonuses for results at the operating company level were based on
achieving the income and return on equity targets for the three-year performance
period ending December 31, 1997.
The Stock Incentive Plan provides a long-term incentive for a broader group
of key employees. Stock options encourage and reward effective management that
results in long-term financial success. In 1997 stock options were granted for a
term of ten years with an exercise price at fair market value on the date of
grant. Half the number of options granted can be exercised after one year and
the other half after two years. Stock option grants are a part of the named
executive officers' total compensation package, and the amounts granted are
based on a dollar value by position based on competitive practices of the
Corporation's comparator companies.
16
<PAGE>
In 1997, the Committee also awarded certain executive officers
performance-based stock. Awards under the Corporation's Performance-Based Stock
Plan are based on multiples of salaries based on competitive practices of the
Corporation's comparator companies and are made for the purposes of focusing
management's attention on value creation as measured by returns to stockholders;
retaining the management team; and building stock ownership by executive
officers in the Corporation's Common Stock. The stock will be earned only if
performance targets, relative to the applicable stock index and proxy comparator
group existing at the time of each award, are met or exceeded.
In 1997, Mr. Bohannon received options to purchase 100,000 shares of Common
Stock with an exercise price of $18.3438 per share; and, including the 1997
grant, at year-end he held options to purchase 236,470 shares. In 1997 Mr.
Bohannon also received a grant of performance-based stock in the amount of
40,000 shares. He now beneficially owns 194,451 shares of the Corporation's
Common Stock, including 56,400 shares of performance-based stock which will not
be earned by Mr. Bohannon unless the performance targets are met.
Guidelines have been adopted encouraging officers and key executives to own
a dollar amount of investment equal to a multiple of their base pay of Common
Stock or stock units of the Corporation which are at risk in the market and not
simply held under option. These multiples range from one and one-half to five
times base pay, depending on the level of compensation of individuals within the
group.
LIMIT ON DEDUCTIBILITY OF CERTAIN COMPENSATION
In 1993, Congress adopted legislation that prohibited publicly held
companies from deducting certain compensation paid to a named executive officer
that exceeds one million dollars during the tax year. To the extent compensation
is based upon the attainment of performance goals set by the Committee, the
compensation is not included in the computation of the limit. The Committee
intends, to the extent feasible and where it believes it is in the best interest
of the Corporation and its stockholders, to qualify such compensation as tax
deductible. In this regard, the Board of Directors submitted performance goals
and certain other terms under the Viad Corp Omnibus Incentive Plan for approval
at the 1997 Annual Meeting of Stockholders, as required to allow certain of the
compensation payable under this plan to be eligible for the deduction.
CONCLUSION
The Committee believes that the 1997 grants of stock options and
performance-based stock, and short and long-term cash incentive plans, have
successfully focused the Corporation's senior management on building
profitability and stockholder value. The grants are competitive with those
offered at comparator companies. Through these programs, a significant portion
of the Corporation's executive compensation is linked directly to individual and
corporate performance and to stock price performance.
In 1997, as in previous years, the overwhelming majority of the
Corporation's executive compensation was at risk. The Committee intends to
continue to link executive compensation to corporate performance and stockholder
return.
HUMAN RESOURCES COMMITTEE
Jess Hay, Chairman
Judith K. Hofer
Linda Johnson Rice
Timothy R. Wallace
17
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing, for the five-year period ended
December 31, 1997, the yearly percentage change in the cumulative total
stockholder return on the Corporation's Common Stock against the cumulative
total return of the Standard & Poor's Midcap 400 Stock Index and the Commercial
and Consumer Services Industry Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
VIAD CORP S&P MIDCAP 400 COMMERCIAL & CONSUMER SERVICES INDEX
<S> <C> <C> <C>
Dec 92 100.0 100.0 100.0
Dec 93 98.8 113.9 100.9
Dec 94 107.0 109.9 95.8
Dec 95 152.7 143.8 114.1
Dec 96 167.4 171.3 138.0
Dec 97 201.0 226.5 180.9
</TABLE>
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Viad Corp...................................................... 100.0 98.8 107.0 152.7 167.4 201.0
S&P Midcap 400................................................. 100.0 113.9 109.9 143.8 171.3 226.5
Commercial & Consumer Services................................. 100.0 100.9 95.8 114.1 138.0 180.9
</TABLE>
- ------------------------
(1) Assumes $100 invested on the last trading day of 1992 and all dividends
were reinvested.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The following resolution concerning the appointment of independent public
accountants will be offered at the meeting:
RESOLVED, that the appointment of Deloitte & Touche LLP to audit the
accounts of the Corporation and its subsidiaries for the fiscal year 1998 is
hereby ratified and approved.
Deloitte & Touche LLP has audited the accounts of the Corporation and its
subsidiaries for many years and has been appointed by the Board of Directors of
the Corporation upon the recommendation of the Corporation's Audit Committee as
the Corporation's independent public accountants for 1998. It is expected that a
representative of Deloitte & Touche LLP will attend the meeting, respond to
appropriate questions, and be afforded the opportunity to make a statement.
18
<PAGE>
Members of the Audit Committee of the Board of Directors, none of whom are
employees of the Corporation, are Judith K. Hofer, Chairman, Jack F. Reichert,
Linda Johnson Rice, Douglas L. Rock, and John C. Tolleson.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE CORPORATION'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR 1998.
SUBMISSION OF STOCKHOLDER PROPOSALS AND OTHER INFORMATION
From time to time stockholders present proposals which may be proper
subjects for inclusion in the Proxy Statement and form of proxy for
consideration at the Annual Meeting of Stockholders. To be considered, proposals
must be submitted on a timely basis. Proposals for the 1999 Annual Meeting of
Stockholders must be received by the Corporation no later than December 1, 1998.
Any such proposals, as well as any questions related thereto, should be directed
to the Secretary of the Corporation.
A copy of the Corporation's 1997 Annual Report on Form 10-K to the
Securities and Exchange Commission may be obtained by stockholders upon written
request to Carol Kotek, Viad Corp, Stockholder Relations Department, Viad Tower,
Phoenix, Arizona 85077-2227.
In the event a stockholder wishes to propose a candidate for consideration
by the Corporate Governance and Nominating Committee as a possible nominee for
election as a director, or wishes to propose any other matter for consideration
at the stockholders meeting, other than proposals covered by the first paragraph
of this section, written notice of such stockholder's intent to make such
nomination or request such other action must be given to the Secretary of the
Corporation, Viad Corp, Viad Tower, Phoenix, Arizona 85077-2227 pursuant to
certain procedures set out in the Corporation's Bylaws, a copy of which is
available upon request from the Secretary of the Corporation. The chairman of
the stockholders meeting may refuse to acknowledge the nomination of any person
or the request for such other action not made in compliance with the foregoing
procedure.
OTHER BUSINESS
The Board of Directors knows of no other matters to be brought before the
meeting. If any other business should properly come before the meeting, the
persons appointed in the enclosed proxy have discretionary authority to vote in
accordance with their best judgment.
By Order of the Board of Directors
Scott E. Sayre
SECRETARY
19
<PAGE>
VIAD CORP
ANNUAL MEETING
TUESDAY, MAY 12, 1998
9:00 A.M., MOUNTAIN STANDARD TIME
* PLEASE DETACH HERE *
[LOGO]
UNLESS YOU INDICATE OTHERWISE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
BOARD OF DIRECTORS RECOMMENDATIONS.
* PLEASE DETACH HERE *
- -------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD USING THE ENCLOSED ENVELOPE.
<TABLE>
<S> <C> <C> <C> <C>
1. Election of directors: Jess Hay #1 Linda Johnson Rice #2 / / FOR all nominees listed (except / / WITHHOLD
Timothy R. Wallace #3 as marked to the contrary below) AUTHORITY
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE ---------------------------------------
THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) ---------------------------------------
2. Ratification of appointment of Deloitte & Touche llp as independent public / / For / / Against / / Abstain
accountants for 1998.
3. To consider and act upon such other matters as may properly come before the
meeting or any adjournments thereof.
Address Change? Mark Box / /
Indicate changes below:
Date _____________________________
-------------------------------------
-------------------------------------
Signature(s) in Box
THIS PROXY CARD MUST BE SIGNED EXACTLY AS
NAME APPEARS THEREON. When shares are held
by joint tenants, both should sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title
as such. If a corporation, please sign in
full corporate name by president or other
authorized officer. If a partnership, please
sign in partnership name by authorized person.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
VIAD CORP THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
VIAD TOWER
1850 NORTH CENTRAL AVENUE
PHOENIX, ARIZONA 85077
The undersigned hereby appoints Robert H. Bohannon and Jack F. Reichert, or
either of them, with full power of substitution to each, as attorneys and
proxies to represent the undersigned at the Annual Meeting of Stockholders of
Viad Corp to be held on Tuesday, May 12, 1998, at 9:00 a.m., Mountain Standard
Time, and at any adjournment(s) thereof, and to vote all shares of Common Stock
which the undersigned may be entitled to vote at said meeting as directed below
with respect to the proposals as set forth in the proxy statement, and in their
discretion upon any other matters that may properly come before said meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN YOUR PROXY AS SOON AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
--------------------
SEE REVERSE SIDE
--------------------
