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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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
VIAD TOWER
PHOENIX, ARIZONA 85077-2227
Robert H. Bohannon
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
March 31, 1999
Dear Stockholder:
Our 1999 Annual Meeting of Stockholders will be held on Tuesday, May 11, at
9:00 a.m., in the Ballroom of The Ritz-Carlton Phoenix, 2401 East Camelback
Road, Phoenix, Arizona. The meeting will begin promptly at 9:00 a.m., so please
plan to arrive earlier.
The formal notice of the meeting is 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.
Directors and officers will be available before and after the meeting to
speak with you. There will be an opportunity during the meeting for your
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.
Your vote is important. Whether you plan to attend or not, please sign,
date, and return the enclosed proxy card in the envelope provided, or you may
access the automated telephone voting feature which is described on your proxy
card. If you plan to attend the meeting, you may vote in person.
Sincerely,
[LOGO]
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-------------
March 31, 1999
To Viad Corp Common Stockholders:
We will hold the Annual Meeting of Stockholders of Viad Corp, a Delaware
corporation, in the Ballroom of The Ritz-Carlton Phoenix, 2401 East Camelback
Road, Phoenix, Arizona 85016, on Tuesday, May 11, 1999, at 9:00 a.m., Mountain
Standard Time. The purpose of the meeting is to:
1. Elect two directors;
2. Ratify appointment of Deloitte & Touche LLP as our independent auditors
for 1999; and
3. Consider any other matters which may properly come before the meeting
and any adjournments.
Only stockholders of record of common stock at the close of business March
12, 1999, are entitled to receive this notice and to vote at the meeting. A list
of stockholders entitled to vote will be available at the meeting for
examination by any stockholder for any proper purpose. The list will also be
available on the same basis for ten days prior to the meeting at our offices at
Viad Tower, 1850 North Central Avenue, Phoenix, Arizona.
Our 1998 Annual Report, including financial statements, is included with
your proxy statement.
To assure your representation at the meeting, please access the automated
telephone voting feature described on the proxy card, or vote, sign and mail the
enclosed proxy as soon as possible. We have enclosed a return envelope, which
requires no postage if mailed in the United States, for that purpose. Your proxy
is being solicited by the Board of Directors.
SCOTT E. SAYRE
SECRETARY
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
<PAGE>
VIAD CORP
1850 NORTH CENTRAL AVENUE
PHOENIX, ARIZONA 85077-2227
ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
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ANNUAL MEETING Tuesday, May 11, 1999 The Ritz-Carlton Phoenix
9:00 a.m., Mountain Standard Time 2401 East Camelback Road
Phoenix, Arizona
AGENDA 1. Elect two directors.
2. Ratify the appointment of Deloitte & Touche LLP as our
independent auditors for 1999.
3. Any other proper business.
PROXIES SOLICITED BY The Board of Directors.
FIRST MAILING DATE We anticipate first mailing the proxy statement on March 31, 1999.
RECORD DATE March 12, 1999. On the record date, we had 99,082,458 shares of our
common stock outstanding.
VOTING If you were a holder of common stock on the record date, you may
vote at the meeting. Each share held by you is entitled to one vote.
You can vote in person at the meeting, or by automated telephone
voting, or you can vote by proxy.
PROXIES We will vote signed returned proxies "FOR" the Board's nominees and
"FOR" agenda item 2 unless you vote differently on the proxy card.
The proxy holders will use their discretion on other matters. If a
nominee cannot or will not serve as a director, proxy holders will
vote for a person whom they believe will carry on our present
policies.
REVOKING YOUR PROXY You may revoke your proxy before it is voted at the meeting. To
revoke, follow the procedures listed on page 21 under "Voting
Procedures/Revoking Your Proxy."
YOUR COMMENTS Your comments about any aspects of our business are welcome.
Although we may not respond on an individual basis, your comments
receive consideration and help us measure your satisfaction.
</TABLE>
PROMPT RETURN OF YOUR PROXY WILL HELP REDUCE THE COSTS OF RESOLICITATION.
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
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ELECTION OF DIRECTORS
BOARD STRUCTURE The Board of Directors of the Corporation consists of eight persons
divided into three classes or groups. The term of one class of
directors expires at each annual meeting, and persons are elected to
that class for terms of three years. Two directors will be elected
at this year's annual meeting.
DIRECTOR NOMINEES
The Board of Directors has nominated Ms. Judith K. Hofer and Mr.
Jack F. Reichert for election at the annual meeting. Each nominee is
currently a member of the Board of Directors and has agreed to serve
another term if elected. Information about the director nominees is
presented below:
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FOR TERMS EXPIRING AT Judith K. Hofer President and Chief Executive Officer of Filene's,
THE 2002 ANNUAL a retail department store division of The May
MEETING Department Stores Company. Age 59. Director since
1984.
Jack F. Reichert Chairman of the Board, Retired, of Brunswick
Corporation, a leader in marine power, pleasure
boating and recreation products and services.
Trustee, Carroll College; Director, Professional
Bowlers Association. Age 68. Director since 1984.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THESE NOMINEES.
DIRECTORS CONTINUING IN OFFICE
Six directors will continue in office until expiration of their designated
terms. Information about the directors continuing in office is presented
below:
TERMS EXPIRING AT Robert H. Bohannon Chairman, President and Chief Executive Officer of
THE 2000 ANNUAL the Corporation. Age 54. Director since 1996.
MEETING Douglas L. Rock Chairman of the Board and Chief Executive Officer
of Smith International, Inc., a worldwide supplier
of products and services to the oil and gas
drilling and production industry. Age 52. 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 Chief Executive Officer and owner of
The Tolleson Group, a private investment group.
Also a director of Bank One Corporation, Capstead
Mortgage Corporation, First National Bank of
Chicago, Haggar Corporation and Paymentech, Inc.
Age 50. Director since 1997.
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TERMS EXPIRING AT Jess Hay Chairman, Texas Foundation for Higher Education,
THE 2001 ANNUAL and Chairman of HCB Enterprises Inc, a private
MEETING 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. Age 68. 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. Age 41. Director since
1992.
Timothy R. Wallace President and Chief Executive Officer and a
director of Trinity Industries, Inc., a
manufacturer of railcars and equipment. Age 45.
Director since 1996.
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BOARD INFORMATION
BOARD MEETINGS The Board of Directors held 4 regular meetings and 3 special meetings
during 1998. Each director attended at least 75% of his or her Board and
committee meetings except for Mr. Tolleson who was unable to attend
certain meetings due to commitments made prior to his election as a member
of the Board.
BOARD COMMITTEES Committees of the Board met periodically during the year, usually in
conjunction with regular meetings of the Board. The Board has established
the following standing committees to deal with particular areas of
responsibility:
THE EXECUTIVE COMMITTEE exercises all the powers of the Board when the
Board is not in session, except as limited by law and by resolutions of
the Board. The committee held 13 meetings during 1998. Current members:
Mr. Reichert, Chairman; Ms. Hofer; and Messrs. Bohannon, Hay and Rock.
THE AUDIT COMMITTEE recommends to the Board appointment of our independent
auditors and reviews audit reports, accounting policies, financial
statements, interest rate swap reports, internal audit reports, corporate
compliance programs, internal controls, audit fees, and certain officer
expenses, and during 1998, progress toward Year 2000 compliance. The
committee met 3 times in 1998. All members of this committee are
nonemployee directors. Current members: Ms. Hofer, Chairman; Ms. Rice; and
Messrs. Reichert, Rock and Tolleson.
THE HUMAN RESOURCES COMMITTEE reviews, for recommendation to the Board,
the salary of the Chief Executive Officer, and approves salaries and
compensation of executive officers. The committee also approves incentive
compensation targets and awards under various compensation plans and
grants under our incentive stock plans. The committee met 5 times in 1998.
All members of this committee are nonemployee directors. Current members:
Mr. Hay, Chairman; Mmes. Hofer and Rice; and Messrs. Tolleson and Wallace.
</TABLE>
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THE CORPORATE GOVERNANCE AND NOMINATING COMMITTEE is responsible for
proposing a slate of directors for election by the stockholders at each
annual meeting and for proposing candidates to fill any vacancies on the
Board. The committee also reviews and from time to time proposes changes
to the Corporation's system of corporate governance. The committee met 2
times in 1998. All members of this committee are nonemployee directors.
Current members: Ms. Rice, Chairman; and Messrs. Hay and Wallace. Mr.
Bohannon is an ex-officio member of this committee.
COMPENSATION OF DIRECTORS
RETAINERS AND FEES Nonemployee directors receive an annual retainer of $30,000 and committee
chairmen receive an additional annual retainer of $5,000. Nonemployee
directors also receive a fee of $1,600 for each Board meeting attended and
a fee of $1,500 for each committee meeting attended. Directors are
reimbursed for all expenses related to their service as directors.
DEFERRED COMPENSATION Nonemployee directors may defer all or part of their retainers and fees
PLAN pursuant to the Directors' Deferred Compensation Plan. These amounts can
be deferred in the form of stock units related to the price of the
Corporation's common stock or in the form of cash. Deferred accounts are
credited quarterly with dividend equivalents in the case of stock unit
accounts and interest at a long-term medium-quality bond rate in the case
of cash accounts. Deferred amounts are payable after a director ceases to
be a Board member.
OPTION GRANTS Nonemployee directors receive an initial grant of non-qualified options
when they become directors and an additional grant each year of their
term. Options to purchase 3,600 shares were granted to each nonemployee
director holding office on May 11, 1998, at an exercise price of $24.7813,
the average market price on the day of grant.
CHARITABLE AWARD All directors participate in the Directors' Charitable Award Program. The
PROGRAM program, a part of our overall support for charities, 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 will be made over a period of ten years
following the director's death. The program is being funded through the
purchase of life insurance on the life of each director, with the
Corporation as beneficiary.
OTHER BENEFITS We provide nonemployee directors with accidental death and dismemberment
insurance benefits of $300,000, and travel accident insurance benefits of
$250,000 when they are traveling on corporate business.
MANAGEMENT STOCK OWNERSHIP
OWNERSHIP GUIDELINES We believe it is important to align the financial interests of our
directors and officers with those of our stockholders. Guidelines have
been adopted which specify the minimum amount of stock that directors and
officers are expected to
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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 because they have a value
equal to the market price of our common stock.
The 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 salary level. The guidelines also
call for each nonemployee director to own stock or stock units which have
a value equal to five times the annual retainer payable to a director.
Most of our directors and officers have reached their goals, and the
remainder are continuing to invest toward achieving their goals.
The first table below provides information concerning the beneficial
ownership of our common stock by directors and executive officers of Viad,
individually and as a group. The second table provides more detailed
information concerning director ownership of Viad common stock, options
and stock units. Information in the ownership tables is as of March 12,
1999.
</TABLE>
<TABLE>
<CAPTION>
DIRECTOR AND AMOUNT AND NATURE
EXECUTIVE OFFICER OF PERCENT OF
OWNERSHIP NAME BENEFICIAL CLASS
--------------------------------------- OWNERSHIP --------------
-----------------
<C> <S> <C> <C>
George H. Alvord....................... 55,242 *
Robert H. Bohannon..................... 346,360 *
Charles J. Corsentino.................. 158,369 *
Jess Hay............................... 38,166 *
Judith K. Hofer........................ 74,593 *
L. Gene Lemon (Retired)................ 617,794 *
Frederick J. Martin (Deceased)......... 428,324 *
Philip W. Milne........................ 99,959 *
John A. Modzelewski.................... 20,905 *
Paul B. Mullen......................... 55,496 *
Ronald G. Nelson....................... 218,050 *
Peter J. Novak......................... 197,754 *
Jack F. Reichert....................... 75,744 *
Linda Johnson Rice..................... 71,744 *
Douglas L. Rock........................ 17,250 *
Scott E. Sayre......................... 41,307 *
Richard C. Stephan (Retired)........... 308,191 *
John C. Tolleson....................... 56,800 *
Timothy R. Wallace..................... 17,250 *
Wayne A. Wight......................... 80,518 *
All Directors and Executive Officers as
a Group (20 persons)................... 2,979,816(1) 3.0%
</TABLE>
* Less than one percent.
-----------------------------------------------------
(1) Includes 253,600 shares of performance-based stock,
which will not be earned unless performance targets are
met, and 1,937,401 shares of common stock subject to
stock options which were exercisable as of March 12,
1999, or within 60 days thereafter, by the directors
and executive officers listed above.
5
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<TABLE>
<CAPTION>
DIRECTOR YEAR FIRST BENEFICIAL UNEXERCISABLE STOCK
OWNERSHIP NAME ELECTED OWNERSHIP(1) OPTIONS UNITS(2) TOTAL
----------------------- ---------- ---------- ----------- --------- ---------
<C> <S> <C> <C> <C> <C> <C>
Robert H. Bohannon..... 1996 346,360 85,000 51,575 482,935
Jess Hay............... 1981 38,166 4,250 54,799 97,215
Judith K. Hofer........ 1984 74,593 4,250 52,092 130,935
Jack F. Reichert....... 1984 75,744 4,250 58,700 138,694
Linda Johnson Rice..... 1992 71,744 4,250 9,041 85,035
Douglas L. Rock........ 1996 17,250 4,250 4,983 26,483
John C. Tolleson....... 1997 56,800 6,800 1,392 64,992
Timothy R. Wallace..... 1996 17,250 4,250 2,238 23,738
Totals................. 697,907 117,300 234,820 1,050,027
</TABLE>
-----------------------------------------------
(1) Beneficial ownership includes common stock owned plus
common stock that a director can acquire at March 12,
1999, or 60 calendar days thereafter, through the
exercise of stock options. Direct ownership of common
stock, excluding exercisable options, is as follows:
Mr. Bohannon, 124,890 (including 80,900 shares of
performance-based stock which will not be earned unless
performance targets are met); Mr. Hay,10,000; Ms.
Hofer, 26,477; Mr. Reichert, 1,000; Ms. Rice, 3,000;
Mr. Rock, none; Mr. Tolleson, 50,000; and Mr. Wallace,
none.
(2) In the case of Mr. Bohannon, represents stock units
held under the Deferred Compensation Plan for
executives and in the case of all other directors,
represents stock units held under the Deferred
Compensation Plan for directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below provides certain information regarding those
persons known by the Corporation to be the beneficial owners
of more than 5% of the Corporation's outstanding common
stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF
CERTAIN BENEFICIAL BENEFICIAL PERCENT OF
OWNERS NAME AND ADDRESS OWNERSHIP CLASS
--------------------------------------- ----------------- -------------
<C> <S> <C> <C>
Brinson Partners, Inc.
209 S. LaSalle Street
Chicago, Illinois 60604 5,421,459(1) 5.5%
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109 12,923,548(2) 13.0%
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111 5,961,907(3) 6.0%
</TABLE>
--------------------------------------------------------
(1) The ownership information set forth herein is based on
material contained in a Schedule 13G, dated February 3,
1999, filed with the SEC. Brinson Partners, Inc., an
indirect wholly owned subsidiary of UBS AG, has shared
voting power and shared dispositive power for all
shares owned.
6
<PAGE>
(2) The ownership information set forth herein is based on
material contained in a Schedule 13G, dated February 1,
1999, filed with the SEC. FMR Corp. has sole voting
power for 227,900 shares and sole dispositive power for
all shares owned.
(3) The ownership information set forth herein is based on
material contained in a Schedule 13G, dated February
10, 1999, filed with the SEC. Loomis, Sayles & Company,
L.P. has sole voting power for 3,820,265 shares, shared
voting power for 63,000 shares, and sole dispositive
power for all shares owned.
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THE FOLLOWING HUMAN RESOURCES COMMITTEE REPORT AND STOCKHOLDER RETURN
PERFORMANCE GRAPH WILL NOT BE INCORPORATED BY REFERENCE INTO ANY PRESENT
OR FUTURE FILINGS WE MAKE WITH THE SECURITIES AND EXCHANGE COMMISSION,
EVEN IF THOSE REPORTS INCORPORATE ALL OR ANY PART OF THIS PROXY STATEMENT.
HUMAN RESOURCES COMMITTEE REPORT
THE The Human Resources Committee of the Board is comprised solely of
COMMITTEE independent directors. The committee oversees development and
implementation of an executive compensation strategy designed to enhance
profitability and stockholder value. Advice and assistance from
independent compensation consultants is obtained periodically in
connection with various matters.
OVERALL Our compensation program is designed to closely align the financial
OBJECTIVES interests of our executives and key employees with the financial interests
of our stockholders. Specific objectives are to:
- Maximize stockholder value
- Provide a competitive compensation package
- Attract and retain the best executive talent
- Motivate executives and key employees to achieve our key business goals
- Put a significant amount of pay at risk in keeping with our pay-for-
performance objective
- Encourage "at risk" investment in the Corporation through ownership of
common stock or stock units of the Corporation
- Balance short-term and long-term strategic goals
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MANAGING COMPENSATION We conduct an in-depth review of the Corporation's executive compensation
program each year. Our review is based in part on a comprehensive study by
a nationally recognized independent consulting firm. Their study helps us
to assess the effectiveness of our compensation program and also provides
a comparison relative to compensation practices and costs typical among a
group of companies in comparable industries among which the Corporation
competes for executive talent.
Our executive compensation program is focused on performance-based
criteria and is designed to ensure that incentive compensation is earned
only to the extent that aggressive performance targets are achieved.
COMPONENTS OF Total compensation for our executive officers includes:
COMPENSATION - Base salary
- Annual and long-term incentives
- Benefits
A significant amount of executive compensation is based on achievement of
corporate or operating company performance goals. For example, annual and
long-term incentive compensation at target levels comprises approximately
74% of the aggregate compensation package for Mr. Bohannon and
approximately 60% for other executive officers. Our compensation program
is designed to reinforce our pay-for-performance commitment and to
encourage executive officers to focus on maximizing stockholder value.
Benefits and perquisites are generally similar to those provided by our
compensation comparator companies.
BASE SALARY We evaluate base salaries of executive officers every year. The evaluation
is based on the individual's performance during the prior period and
independent compensation surveys of comparator companies.
ANNUAL Executive officers are eligible for an annual cash bonus based on
INCENTIVES achieving corporate and operating company performance targets established
at the beginning of each year. The awards for 1998 reflect the extent to
which targets for the following performance goals were met or exceeded:
- Corporate level: Income per share from continuing operations and other
specified performance measurements including reduction of noncore
assets, cash flow growth, liability management, corporate center cost
control, and effective and timely Year 2000 compliance.
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- Operating company level: Net income and other specified performance
measurements including revenue growth, operating income margin growth,
profitability per employee, effective and timely Year 2000 compliance,
and reductions in working capital.
Target awards are established for each executive officer as a percentage
of salary. Target awards in 1998 ranged from 40% to 75% of the executive's
base salary, depending on the level of responsibility. Actual bonus awards
at the corporate level can range from no award to a maximum of 170% of
target, depending on achievement of corporate goals and discretionary
adjustment based on individual performance. Actual bonus awards at the
operating company level can range from no award to a maximum of 178.5% of
target, depending on achievement of operating company goals and
discretionary adjustment based on individual performance.
Executives, from time to time, receive special awards in recognition of
outstanding performance or results.
Awards to executive officers may not exceed a funding limit established
with respect to each executive. The limit is expressed as a percentage of
the Corporation's net income.
LONG-TERM Our long-term incentive plans are designed to link executive compensation
INCENTIVES to stockholder value, to encourage short-term actions consistent with
achievement of long-term growth, to reward measurable performance and to
build stock ownership among executive officers. Long-term incentives are
provided through performance unit, stock option and performance-based
stock grants.
PERFORMANCE The Performance Unit Incentive Plan is intended to focus participants on
UNITS the long-term interests of our stockholders by tying the value of units
awarded to achievement of financial measures and to our common stock
performance. Target goals are set at the beginning of the performance
period. Goals at the corporate level are based on return on equity and
income per share from continuing operations, while goals for operating
companies, other than our payment services subsidiary, 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
executive officers named in the Summary Compensation Table.
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.
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Award payments for units earned are based on the average daily price of
our common stock during a ten trading day period following release of
earnings after the performance period. Performance unit incentive bonuses
paid to executive officers for the period ending December 31, 1998, were
based on achieving income and return on equity targets for the two-year
performance period ending on that date.
STOCK OPTIONS AND Stock options provide a long-term incentive for a broader group of our key
PERFORMANCE-BASED employees. Stock options encourage and reward effective management that
STOCK results in long-term financial success and increased stockholder value. In
1998 stock options were granted for a term of ten years with an exercise
price equal to the fair market value on the date of grant. As a result,
the options have value only to the extent that the price of our stock
increases. Half the number of options granted can be exercised after one
year and the other half after two years. Options granted in 1998 contain
forfeiture and non-competition provisions.
Certain executive officers, including the executive officers named in the
Summary Compensation Table, were also awarded performance-based stock in
1998. Performance-based stock awards are designed to focus management's
attention on value creation as measured by returns to our stockholders; to
retain the management team; and to build stock ownership by executive
officers. Performance periods are generally three years in length. The
stock will be earned only if performance targets, relative to the
applicable industry index and proxy comparator group existing at the time
of each award, are met or exceeded.
OWNERSHIP GUIDELINES Stock ownership guidelines have been adopted which call for executives to
own a minimum amount of stock on a direct basis, meaning stock or stock
units of the Corporation which are at risk in the market and not simply
held under option. The minimum required amount is based on multiples of
salary ranging from one and one-half to five times an individual's annual
salary, depending on salary level.
CEO Mr. Bohannon's total compensation reflects the Corporation's outstanding
COMPENSATION performance in 1998. It also reflects the Committee's assessment of his
individual performance, compensation levels at comparator companies, and
our belief that retention of his services is of vital importance to the
Corporation and its stockholders.
Mr. Bohannon received a base salary of $750,000 in 1998, an annual
incentive bonus of $1,250,000, a portion of which ($456,000) was deferred
and invested in a cash account under the Deferred Compensation Plan for
executives, and a special award of 12,000 shares of common stock. His
annual bonus was based on maximum achievement of income per share and
other performance goals, and the special stock award was based on
outstanding financial and operational results in 1998, including
successful liquidation of the Corporation's noncore assets and businesses
which did not meet required performance criteria.
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Mr. Bohannon also earned a performance unit incentive bonus of $898,600
for the 1997-1998 performance period, 100% of which was deferred into a
stock unit account under the Deferred Compensation Plan for executives.
The bonus was based on achievement of return on equity and income per
share goals for the two-year period ending December 31, 1998. In 1998, he
also received options to purchase 70,000 shares of common stock with an
exercise price of $24.7813 per share, and a grant of performance-based
stock in the amount of 30,000 shares which will be earned based on the
extent to which total stockholder return targets are met relative to total
stockholder return of comparator groups over a three-year performance
period.
Approximately 74% of Mr. Bohannon's total compensation in 1998 consisted
of annual and long-term incentive compensation which is at risk because it
is tied to achievement of challenging performance goals and to the price
of our stock.
EMPLOYMENT AGREEMENT The Corporation entered into a new employment agreement with Mr. Bohannon
in 1998. Terms and provisions of the agreement are generally described on
page 17.
LIMIT ON Section 162(m) of the Internal Revenue Code disallows a corporate income
DEDUCTIBILITY OF tax deduction on compensation paid to an executive officer named in the
CERTAIN COMPENSATION Summary Compensation Table that exceeds one million dollars during the tax
year, subject to certain permitted exceptions. To the extent compensation
is based upon attaining performance goals set by the committee, the
compensation is not included in computation of the limit. The committee
intends, to the extent possible and where it believes it is in the best
interest of the Corporation and its stockholders, to qualify such
compensation as tax deductible. However, it does not intend to permit the
provisions of Section 162(m) to erode the effectiveness of the
Corporation's overall system of compensation policies and practices. The
Board 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 deduction.
</TABLE>
11
<PAGE>
<TABLE>
<C> <S>
CONCLUSION We believe that our executive compensation program has successfully
focused the Corporation's senior management on building profitability and
stockholder value. Base salaries and incentive grants are competitive with
those offered at comparator companies, and a significant portion of
executive compensation is linked directly to individual and corporate
performance and to our stock price performance.
In 1998, as in previous years, the overwhelming majority of the
Corporation's executive compensation was at risk and dependent on
performance. We will continue to link executive compensation to corporate
performance and enhancement of stockholder value.
HUMAN RESOURCES COMMITTEE
Jess Hay, Chairman
Judith K. Hofer
Linda Johnson Rice
John C. Tolleson
Timothy R. Wallace
</TABLE>
12
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing, for the five-year period ended
December 31, 1998, the yearly percentage change in the cumulative total
stockholder return on the Corporation's common stock to 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>
COMMERCIAL &
<S> <C> <C> <C>
Consumer
Viad Corp S&P Midcap 400 Services Index
Dec 93 100.0 100.0 100.0
Dec 94 108.2 96.5 95.0
Dec 95 154.5 126.2 113.1
Dec 96 169.5 150.4 136.7
Dec 97 203.4 198.9 179.3
Dec 98 323.7 236.8 239.2
</TABLE>
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Viad Corp........................................... 100.0 108.2 154.5 169.5 203.4 323.7
S&P Midcap 400...................................... 100.0 96.5 126.2 150.4 198.9 236.8
Commercial & Consumer Services...................... 100.0 95.0 113.1 136.7 179.3 239.2
</TABLE>
- ---------------------------------
1 Assumes $100 invested on the last trading day of 1993 and all dividends
reinvested.
13
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes the compensation we paid in 1996, 1997 and 1998
to the Chairman, President and Chief Executive Officer and each of the four
other most highly compensated executive officers of the Corporation, based on
1998 salary and bonus.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------------
OTHER ANNUAL
COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1)
- ---------------------------------------- ---- ---------- --------- ------------
<S> <C> <C> <C> <C>
Robert H. Bohannon(5)................... 1998 750,000 1,569,500(6) 331,434
Chairman, President 1997 650,000 450,000 (7) 17,518
and CEO 1996 307,577 225,000 25,624
L. Gene Lemon........................... 1998 400,457 412,900 (6) 97,660
Vice President-Administration 1997 397,400 304,000 8,783
(Retired 12/31/98) 1996 384,800 138,500 9,077
Frederick J. Martin..................... 1998 433,225 348,000 9,157
President and CEO of Dobbs 1997 412,269 196,100 8,046
International Services, Inc. 1996 385,768 259,700 10,205
(Deceased 1/30/99)
Peter J. Novak.......................... 1998 273,975 316,100 (6) 96,996
Vice President and General 1997 231,533 88,550 (7) 5,650
Counsel 1996 204,483 73,600 11,088
Richard C. Stephan...................... 1998 342,700 368,700 (6) 95,347
Vice President-Controller 1997 333,900 255,400 7,020
(Retired 3/31/99) 1996 319,033 114,900 6,712
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------
AWARDS PAYOUTS
------------------------- ------------
RESTRICTED LONG-TERM
STOCK SECURITIES INCENTIVE ALL OTHER
AWARDS UNDERLYING PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION ($)(2) OPTIONS (#) ($)(3) ($)(4)
- ---------------------------------------- ----------- ----------- ------------ ------------
<S> <C><C> <C> <C> <C>
Robert H. Bohannon(5)................... -- 70,000 1,081,461(7) 22,500
Chairman, President -- 100,000 399,933 469,500(7)
and CEO -- 45,000 446,237 58,918
L. Gene Lemon........................... -- 12,000 522,837 51,371
Vice President-Administration -- 14,100 357,011 11,922
(Retired 12/31/98) -- 22,500 214,523 11,544
Frederick J. Martin..................... -- 20,900 636,649 4,800
President and CEO of Dobbs -- 29,200 286,690 4,800
International Services, Inc. -- 43,800 260,732 3,194
(Deceased 1/30/99)
Peter J. Novak.......................... -- 15,000 202,200 8,220
Vice President and General -- 13,500 -- 95,496(7)
Counsel -- 16,300 -- 6,104
Richard C. Stephan...................... -- 17,000 570,854 10,281
Vice President-Controller -- 20,200 281,281 10,017
(Retired 3/31/99) -- 35,300 159,633 9,571
</TABLE>
- ---------------------------------
(1) Amounts shown represent reimbursement to executives for payment of taxes
on certain items, and in the case of Mr. Bohannon includes $54,215 other
annual compensation, of which $15,443 represents financial counseling in
1998.
(2) Dividends are paid on performance-based stock at the same rate as paid to
all stockholders. On December 31, 1998, the named executives held shares
of performance-based stock having aggregate values as follows: Mr.
Bohannon, 80,900 shares valued at $2,457,338; Mr. Lemon, 25,000 shares
valued at $759,375; Mr. Martin, 29,200 shares valued at $886,950; Mr.
Novak, 15,900 shares valued at $482,963; and Mr. Stephan, 24,100 shares
valued at $732,038.
(3) Long-term incentive payouts in 1998 included payments under the
Performance Unit Incentive Plan for the 1997-1998 performance period and
the vesting of a portion of the Viad Corp and The Dial Corporation shares
granted in 1995 under the Performance-Based Stock Plan. 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. In 1997 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., a 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.
(4) Amounts represent matching contributions under the 401(k) Plan and the
Supplemental 401(k) Plan, accrued vacation of $38,211 paid upon retirement
to Mr. Lemon in 1998, relocation expenses of $55,870 paid to Mr. Bohannon
in 1996, and amounts deferred pursuant to the Deferred Compensation Plan
for executives (see footnote 7).
(5) Employment agreement dated April 1, 1998 currently provides for an annual
salary of $750,000.
(6) Includes a special award of shares of common stock (12,000 shares for Mr.
Bohannon and 4,000 shares each for Messrs. Lemon, Novak and Stephan). The
special award was based on outstanding financial and operational results
in 1998, including successful liquidation of the Corporation's noncore
assets and businesses which did not meet required performance criteria.
(7) Mr. Bohannon deferred his total 1998 long-term incentive payout of
$898,600, pursuant to the terms of the Deferred Compensation Plan for
executives. The long-term incentive deferral was invested in stock units
of the Corporation (32,602 units acquired at a price of $27.5625 per unit,
the closing price of common stock on the date of investment). This
deferred amount is included in the "Long-Term Incentive Payouts" column.
Mr. Bohannon and Mr. Novak deferred $450,000 and $88,550 of their
respective 1997 bonuses (totaling $900,000 and $177,100, respectively).
The deferred amounts were invested in stock units of the Corporation
(18,750 and 3,690 stock units for Mr. Bohannon and Mr. Novak,
respectively, acquired at a price of $24.00 per unit, the closing price of
common stock on the date of investment). The amounts deferred in 1997 are
included in the "All Other Compensation" column. \
14
<PAGE>
<TABLE>
<S> <C>
STOCK OPTION GRANTS
The following table provides information on stock option grants in 1998 to
the executive officers named in the Summary Compensation Table. The
amounts shown as potential realizable values are presented for
illustrative purposes only. They are calculated based solely on
arbitrarily assumed rates of appreciation required by the SEC. The
ultimate value of the options depends on the future performance of our
common stock and overall stock market conditions. There can be no
assurance that the potential realizable values shown in the table will be
achieved.
Assuming an annual stock price appreciation of 5% and 10% from the grant
date through the 10-year term of the option, the amounts shown as
potential realizable values would result in an increase in the stock price
of $15.59 and $39.49 per share, respectively. The amounts shown as
potential realizable values for all stockholders represent the
corresponding increase in the aggregate market value of outstanding shares
of common stock held by all our stockholders on May 11, 1998, the option
grant date. The aggregate price appreciation for all of our stockholders
would total approximately $1.48 billion and $3.74 billion, respectively.
OPTION GRANTS IN LAST FISCAL YEAR
</TABLE>
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS
--------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS OPTIONS GRANTED EXERCISE OPTION TERM
GRANTED TO EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME (#)(1) FISCAL YEAR ($/SHARE)(1) DATE 10%($)
- -------------------------- ------------- --------------- ----------- ----------- -------------
5%($)
-------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Bohannon........ 70,000 7.28% 24.7813 5/11/08 1,090,950 2,764,636
L. Gene Lemon(2).......... 12,000 1.25% 24.7813 5/11/08 187,020 473,938
Frederick J. Martin(2).... 20,900 2.17% 24.7813 5/11/08 325,727 825,441
Peter J. Novak............ 15,000 1.56% 24.7813 5/11/08 233,775 592,422
Richard C. Stephan(2)..... 17,000 1.77% 24.7813 5/11/08 264,945 671,412
ALL STOCKHOLDERS' STOCK
PRICE APPRECIATION...... N/A N/A N/A N/A 1.48 BILLION 3.74 BILLION
</TABLE>
<TABLE>
<S> <C>
-------------------------------
(1) The option exercise price is the average of the high and low selling prices of our
common stock on the New York Stock Exchange on May 11, 1998, the grant date. Fifty percent
of options become exercisable one year after grant and the balance become exercisable
two years after grant. The options are subject to forfeiture and noncompetition
provisions. Each option contains the right to surrender the option for cash during
certain tender offers. The exercise price may be paid by delivery of already owned
shares, and tax withholding obligations resulting from the exercise may be paid by
surrendering a portion of the shares being acquired, subject to certain conditions.
(2) Potential realizable value amounts shown are as of the date of grant through the
10-year option term. Provisions relating to retirement and death cause Mr. Lemon's and Mr.
Stephan's option terms to expire five years after their respective retirement dates
and Mr. Martin's option term to expire one year after his death.
</TABLE>
15
<PAGE>
<TABLE>
<S> <C>
AGGREGATED STOCK OPTION EXERCISES AND VALUES
The following table lists the number of shares acquired and the value realized as a result
of option exercises during 1998 by the executive officers listed in the Summary Compensation
Table. The amounts listed in the column relating to the value of 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 our common stock on the dates of exercise. There can be
no assurance that these values will be realized.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FY-END (#) AT FY-END ($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE(1)
- ------------------------------ ------------- ------------ -------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Bohannon............ None None 186,470 120,000 3,029,663 993,119
L. Gene Lemon................. 65,015 1,123,076 371,603 19,050 7,492,389 151,944
Frederick J. Martin........... None None 280,372 35,500 5,159,056 292,564
Peter J. Novak................ 25,629 521,094 126,176 21,750 2,462,492 165,116
Richard C. Stephan............ 18,629 206,367 174,138 27,100 3,064,571 216,608
- ---------------------------------
(1) The closing price of the Corporation's common stock on December 31, 1998, was $30.375. The
information shown reflects options accumulated over periods of up to ten years.
</TABLE>
16
<PAGE>
<TABLE>
<S> <C>
LONG-TERM INCENTIVE PLAN GRANTS AND ESTIMATED PAYOUTS
The following table provides information on Performance Unit Incentive
Plan grants and Performance-Based Stock Plan grants made in 1998 to each
of the executive officers named in the Summary Compensation Table.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
</TABLE>
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK BASED PLANS
---------------------------------------
NUMBER OF PERFORMANCE THRESHOLD TARGET MAXIMUM
UNITS OR PERIOD (NUMBER OF (NUMBER OF (NUMBER OF
NAME SHARES UNTIL PAYOUT UNITS) UNITS) UNITS)
--------------------------- ----------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PERFORMANCE UNITS INCENTIVE PLAN(1)
Robert H. Bohannon......... 20,630 3 years 5,160 20,630 41,260
L. Gene Lemon.............. 5,000(3) 3 years 1,250 5,000 10,000
Frederick J. Martin........ 7,500(3) 3 years 1,880 7,500 15,000
Peter J. Novak............. 5,810 3 years 1,450 5,810 11,620
Richard C. Stephan......... 6,480(3) 3 years 1,620 6,480 12,960
PERFORMANCE-BASED STOCK PLAN(2)
Robert H. Bohannon......... 30,000 3 years N/A N/A N/A
L. Gene Lemon.............. 6,600(3) 3 years N/A N/A N/A
Frederick J. Martin........ 8,100 3 years N/A N/A N/A
Peter J. Novak............. 6,600 3 years N/A N/A N/A
Richard C. Stephan......... 7,800(3) 3 years N/A N/A N/A
</TABLE>
<TABLE>
<C> <S>
---------------------------------
(1) The assumed value of the units awarded was $28.375, which was the average price of the
Corporation's common stock on the date of grant. The value of the units for any
payment of an award is based on the average daily price of the stock during a ten
trading day period following public announcement of annual earnings after the
performance period. Payouts of awards are dependent upon 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) The stock is earned pro rata to the extent our 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.
(3) Messrs. Lemon and Stephan retired from the Corporation December 31, 1998, and March
31, 1999, respectively, and Mr. Martin died January 30, 1999. Accordingly, the number of
performance units earned at the end of the performance period will be prorated with
respect to each individual. The number of shares of performance-based stock will also
be prorated in the case of Messrs. Lemon and Stephan.
</TABLE>
<TABLE>
<C> <S>
EXECUTIVE EMPLOYMENT, CONSULTING AND SEVERANCE AGREEMENTS
EMPLOYMENT AGREEMENT Mr. Bohannon is employed pursuant to an employment agreement dated April
1, 1998, having an initial term of three years. The three-year term of his
agreement is automatically renewed each year.
The agreement provides for a current annual salary of $750,000, subject to
adjustment by action of the Human Resources Committee and Board. The
agreement also provides that Mr. Bohannon is entitled to participate in
all incentive compensation and other fringe benefit programs offered to
other
</TABLE>
17
<PAGE>
<TABLE>
<C> <S>
executive officers. Payment of awards under the incentive compensation
plans is subject to the sole discretion of the Human Resources Committee.
The agreement may be terminated by the Corporation for cause or at the
discretion of the Board. Mr. Bohannon may also terminate the agreement
upon at least 180 days' advance written notice. Severance obligations of
the Corporation vary depending on the circumstances of termination. Mr.
Bohannon has agreed not to compete with the Corporation for a three-year
period following termination of his employment.
CONSULTING The Corporation has entered into a consulting agreement with Mr. Stephan
AGREEMENT effective as of March 31, 1999, the date of his retirement. Mr. Stephan
will provide consulting services, primarily in the area of accounting, for
a two-year period at an annual fee of $70,000.
SEVERANCE The Corporation has entered into an executive severance agreement with Mr.
AGREEMENTS Bohannon. The agreement provides that if his 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, he will
receive severance compensation. The maximum amount the agreement provides
for consists of a lump sum payment of three times his highest yearly
salary, incentive plan payments and fringe benefits. The agreement also
provides a tax gross-up feature, so that he does not have to pay excise
taxes imposed by the Internal Revenue Code on payments made pursuant to
the agreement. Payments are reduced by other severance benefits paid by
the Corporation, but would not be offset by any other amounts. Mr.
Bohannon will also be credited with years of service equal to the number
of years needed to attain 20 years of service.
The Corporation has also entered into an executive severance agreement
with Mr. Novak and certain other executive officers. The agreements
provide benefits similar to those in the agreement 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.
Messrs. Lemon, Martin and Stephan were parties to executive severance
agreements prior to retirement in the case of Messrs. Lemon and Stephan,
and death in the case of Mr. Martin. The agreements are no longer in
effect.
</TABLE>
18
<PAGE>
<TABLE>
<C> <S>
PENSION PLANS
The following table shows estimated annual retirement benefits payable to
covered participants for the years of service and compensation level
indicated. It assumes retirement at age 65. The benefits are paid under
the Viad Companies Retirement Income Plan and applicable schedules 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 these plans is annual
salary and annual bonus, as reported in the Summary Compensation Table.
Actual benefits 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.
</TABLE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE(1,2)
YEARS OF SERVICE(3)
------------------------------------------------------
REMUNERATION 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
------------------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 125,000.......... $ 19,538 $ 29,307 $ 39,075 $ 48,845 $ 58,614
150,000............ 23,788 35,682 47,575 59,470 71,364
175,000............ 28,038 42,057 56,075 70,095 84,114
200,000............ 32,288 48,432 64,575 80,720 96,864
225,000............ 36,538 54,807 73,075 91,345 109,614
250,000............ 40,788 61,182 81,575 101,970 122,364
300,000............ 49,288 73,932 98,575 123,220 147,864
400,000............ 66,288 99,432 132,575 165,720 198,864
500,000............ 83,288 124,932 166,575 208,220 249,864
600,000............ 100,288 150,432 200,575 250,720 300,864
700,000............ 117,288 175,932 234,575 293,220 351,864
800,000............ 134,288 201,432 268,575 335,720 402,864
900,000............ 151,288 226,932 302,575 378,220 453,864
1,000,000.......... 168,288 252,432 336,575 420,720 504,864
1,100,000.......... 185,288 277,932 370,575 463,220 555,864
1,200,000.......... 202,288 303,432 404,575 505,720 606,864
1,300,000.......... 219,288 328,932 438,575 548,220 657,864
1,400,000.......... 236,288 354,432 472,575 590,720 708,864
1,500,000.......... 253,288 379,932 506,575 633,220 759,864
1,600,000.......... 270,288 405,432 540,575 675,720 810,864
1,700,000.......... 287,288 430,932 574,575 718,220 861,864
1,800,000.......... 304,288 456,432 608,575 760,720 912,864
1,900,000.......... 321,288 481,932 642,575 803,220 963,864
2,000,000.......... 338,288 507,432 676,575 845,720 1,014,864
</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, we
have 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 shown
19
<PAGE>
are before any adjustment for joint and survivorship
provisions, which would reduce, in some cases, the
amounts shown in the table.
(3) Messrs. Bohannon and Novak currently have 5 years and
30 years of credited service, respectively. The
estimated annual retirement benefits payable to Messrs.
Bohannon and Novak, assuming retirement at age 65 with
17 years credited service in the case of Mr. Bohannon
and a full 30 years credited service in the case of Mr.
Novak, are $612,445, and $286,311, respectively. Mr.
Lemon retired effective December 31, 1998, with an
annual retirement benefit of $362,874; Mr. Stephan
retired effective March 31, 1999, with an annual
retirement benefit of $319,044; and Mr. Martin died
January 30, 1999, with an annual retirement benefit of
$71,764, payable to his surviving spouse.
<TABLE>
<C> <S>
LEGAL PROCEEDINGS
The Corporation and certain subsidiaries are plaintiffs or defendants to
various 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 could be decided against us.
Although the amount of liability at December 31, 1998, with respect to
these matters is not ascertainable, we believe that any resulting
liability will not have a material effect on our financial position or
results of operations.
We are subject to various environmental laws and regulations of the United
States as well as of the states and other countries in whose jurisdictions
we have or had operations and are subject to certain international
agreements. As is the case with many companies, we face exposure to actual
or potential claims and lawsuits involving environmental matters. Although
we are a party to certain environmental disputes, we believe 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 our financial position or results of
operations.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors served on the Human Resources Committee during all
of 1998: Mr. Hay, Chairman; Mmes. Hofer and Rice; and Mr. Wallace. None of
these directors is or has been an officer or employee of the Corporation
or any of its subsidiaries or has had any other relationship with the
Corporation or any of its subsidiaries requiring disclosure under the
applicable rules of the Securities and Exchange Commission.
</TABLE>
20
<PAGE>
<TABLE>
<C> <S>
SELECTION OF INDEPENDENT AUDITORS
The following resolution concerning the appointment of independent
auditors 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 1999
is hereby ratified and approved.
Deloitte & Touche LLP has audited our accounts and those of our
subsidiaries for many years. The Board appointed them as our independent
auditors for 1999, upon recommendation of our Audit Committee. We expect
that a representative of Deloitte & Touche LLP will attend the meeting,
respond to appropriate questions, and be afforded the opportunity to make
a statement.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE APPOINTMENT
OF DELOITTE & TOUCHE LLP AS THE CORPORATION'S INDEPENDENT AUDITORS FOR
1999.
VOTING PROCEDURES/REVOKING YOUR PROXY
VOTING Directors must receive a plurality of the shares present and voting in
PROCEDURES person or by proxy, in order to be elected. A plurality means receiving
the largest number of votes, regardless of whether that is a majority. All
matters other than the election of directors submitted to you at the
meeting will be decided by a majority of the votes cast on the matter,
except as otherwise provided by law or our Certificate of Incorporation or
Bylaws. You may not cumulate votes.
Stockholders who fail to return a proxy or attend the meeting will not
count towards determining any required plurality, majority or quorum.
Stockholders and brokers returning proxies or attending the meeting who
abstain from voting on a proposition will count towards determining a
quorum, plurality or majority for that proposition.
If you are a participant in a 401(k) plan of the Corporation or one of its
subsidiaries and/or the Viad Corp Employees' Stock Ownership Plan Trust
(ESOP Plan), your 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 shares voted in such Plans for
which instructions were received or in the discretion of such Trustees as
their fiduciary duty may require.
Your proxy will be voted in accordance with the instructions you place on
the proxy card. Unless otherwise stated, all shares represented by your
returned signed proxy will be voted as noted on the first page of this
proxy statement.
PROXY REVOCATION Proxies may be revoked if you:
- Deliver a signed, written revocation letter, dated later than the proxy,
to Scott E. Sayre, Secretary, at our Phoenix address listed above.
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- Deliver a signed proxy, dated later than the first one, to Norwest Bank
Minnesota, N.A.; Shareowner Services; P.O. Box 64854; St. Paul,
Minnesota 55164-0854.
- Attend the meeting and vote in person or by proxy. Attending the meeting
alone will not revoke your proxy.
SOLICITATION Solicitation of proxies will be made primarily through the use of the
OF PROXIES 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 $1,500, plus out-of-pocket expenses. We 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.
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 in
the proxy statement or considered at an annual or special meeting,
proposals must be submitted on a timely basis, in addition to meeting
other legal requirements. We must receive proposals for the 2000 Annual
Meeting of Stockholders no later than December 2, 1999, for possible
inclusion in the proxy statement, or between January 12 and February 11,
2000, for possible consideration at the meeting, which is expected to be
held on Tuesday, May 9, 2000. Proposals or related questions should be
directed in writing to the undersigned.
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.
A COPY OF THE CORPORATION'S 1998 ANNUAL REPORT ON FORM 10-K TO THE
SECURITIES AND EXCHANGE COMMISSION MAY BE OBTAINED BY STOCKHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST TO CAROL KOTEK, VIAD CORP, CORPORATE
SECRETARY'S DEPARTMENT, VIAD TOWER, PHOENIX, ARIZONA 85077-2227. YOU MAY
ALSO OBTAIN OUR SEC FILINGS THROUGH THE INTERNET AT WWW.SEC.GOV.
By Order of the Board of Directors
Scott E. Sayre
SECRETARY
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
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VOTE BY TELEPHONE
VIAD QUICK *** EASY *** IMMEDIATE COMPANY #
CALL TOLL FREE *** ON A TOUCH TONE TELEPHONE CONTROL #
1-800-240-6326 - ANYTIME
- -----------------------------------------------------------------------------------------------------------------------------------
Your telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, dated, signed and
returned your proxy card. The deadline for telephone voting is noon (ET), May 10, 1999.
AUTOMATED TELEPHONE VOTING INSTRUCTIONS
1. Using a touch-tone telephone, dial 1-800-240-6326. Please make sure you stay on the line until you receive a confirmation of
your vote.
2. When prompted, enter the 3-digit Company Number located in the box on the upper right-hand corner of the proxy card.
3. When prompted, enter your 7-digit numeric Control Number that follows the Company Number.
OPTION #1: To vote as the Board of Directors recommends on ALL proposals: Press "1". When asked, please confirm your vote by
pressing "1". THANK YOU FOR VOTING.
OPTION #2: If you choose to vote on each proposal separately: Press "0". You will hear these instructions:
Proposal 1: To vote FOR ALL nominees, press "1"; to WITHHOLD FOR ALL nominees, press "9"; to WITHHOLD FOR AN INDIVIDUAL
nominee, press "0" and listen to the instructions.
Proposal 2: To vote FOR, press "1"; AGAINST, press "9"; ABSTAIN, press "0".
UNLESS YOU INDICATE OTHERWISE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING "1".
THANK YOU FOR VOTING. IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK YOUR PROXY.
- Please detach here -
- -----------------------------------------------------------------------------------------------------------------------------------
1. Election of directors: Judith K. Hofer 01 Jack F. Reichert 02 / / FOR all nominees listed (except / / WITHHOLD
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 / / FOR / / AGAINST / / ABSTAIN
auditors for 1999.
Address Change? Mark Box / / Date
Indicate changes below: -----------------------------------------------
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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.
VIAD CORP
ANNUAL MEETING
TUESDAY, MAY 11, 1999
9:00 A.M., MOUNTAIN STANDARD TIME
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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 Jess Hay, 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
11, 1999, 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
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