<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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:
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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, 2000
Dear Stockholder:
Our 2000 Annual Meeting of Stockholders will be held on Tuesday, May 9, at
9:00 a.m., in the Sunshine Room of the Camelback Inn, 5402 East Lincoln Drive,
Scottsdale, 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,
/s/ Robert H. Bohannon
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-------------
March 31, 2000
To Viad Corp Common Stockholders:
We will hold the Annual Meeting of Stockholders of Viad Corp, a Delaware
corporation, in the Sunshine Room of the Camelback Inn, 5402 East Lincoln Drive,
Scottsdale, Arizona 85253, on Tuesday, May 9, 2000, at 9:00 a.m., Mountain
Standard Time. The purpose of the meeting is to:
1. Elect three directors;
2. Ratify appointment of Deloitte & Touche LLP as our independent auditors
for 2000; 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 10, 2000, 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 1999 Annual Report on Form 10-K, 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 9, 2000 Camelback Inn
9:00 a.m., Mountain Standard Time Sunshine Room
5402 East Lincoln Drive
Scottsdale, Arizona
AGENDA 1. Elect three directors.
2. Ratify the appointment of Deloitte & Touche LLP as our independent
auditors for 2000.
3. Any other proper business.
PROXIES SOLICITED BY The Board of Directors.
FIRST MAILING DATE We anticipate mailing the proxy statement on March 31, 2000.
RECORD DATE March 10, 2000. On the record date, we had 94,063,572 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 your
proxy, 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
<PAGE>
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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. Three directors will be elected at this year's annual meeting.
DIRECTOR NOMINEES
The Board of Directors has nominated Messrs. Robert H. Bohannon, Douglas L.
Rock, and John C. Tolleson 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:
</TABLE>
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FOR TERMS EXPIRING AT THE Robert H. Bohannon Chairman, President and Chief Executive Officer of
2003 ANNUAL MEETING the Corporation. Age 55. Director since 1996.
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 53. 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, and Haggar Corporation. Age
51. Director since 1997.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THESE NOMINEES.
DIRECTORS CONTINUING IN OFFICE
Five directors will continue in office until expiration of their designated
terms. Information about the directors continuing in office is presented
below:
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 69. 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 42. Director since
1992.
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Timothy R. Wallace Chairman, President and Chief Executive Officer and
a director of Trinity Industries, Inc., a
manufacturer of railcars and equipment. Age 46.
Director since 1996.
TERMS EXPIRING AT Judith K. Hofer President and Chief Executive Officer of May
THE 2002 ANNUAL Merchandising/MDSI, a May Department Stores
MEETING Company. Age 60. 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 69. Director since 1984.
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BOARD INFORMATION
BOARD MEETINGS The Board of Directors held four regular meetings and three
special meetings during 1999. Each director attended at
least 75% of his or her Board and committee meetings except
for Mr. Rock who attended 74% of such meetings. Mr. Rock was
unable to attend certain meetings due to weather related
travel delays and business obligations occurring on the date
of scheduled meetings.
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 11
meetings during 1999. 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 assists the Board in monitoring
the quality and integrity of the financial statements of the
Corporation, the compliance by the Corporation with legal
and regulatory requirements, the independence and
performance of the Corporation's internal and external
auditors, and during 1999, progress toward Year 2000
compliance. The committee met three times in 1999. 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 five times in
1999. 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 one time in 1999. 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
PLAN retainers and fees 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 3,100 shares were granted to each nonemployee
director holding office on May 10, 1999, at an exercise
price of $29.50, the average market price on the day of
grant.
CHARITABLE AWARD PROGRAMS All directors participate in the Directors' Charitable Award
Program. The 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 insurance on the life
of each director, with the Corporation as beneficiary.
Nonemployee directors also may participate in the Directors'
Charitable Matching Program. The program provides for
corporate matching of charitable contributions made by
nonemployee directors, on a dollar-for-dollar basis, up to
an aggregate maximum of $5,000 per year.
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.
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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 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
15, 2000.
</TABLE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
DIRECTOR AND NAME BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS
EXECUTIVE OFFICER --------------------------------------- ----------------------- ----------------
OWNERSHIP
<C> <S> <C> <C>
Robert H. Bohannon..................... 574,349 *
Charles J. Corsentino.................. 179,153 *
Paul B. Dykstra........................ 48,995 *
Kimbra A. Fracalossi................... 12,037 *
Jess Hay............................... 43,966 *
Judith K. Hofer........................ 80,393 *
Philip W. Milne........................ 141,321 *
Paul B. Mullen......................... 74,197 *
Ronald G. Nelson....................... 237,131 *
Peter J. Novak......................... 217,311 *
Jack F. Reichert....................... 81,544 *
Linda Johnson Rice..................... 77,243 *
Douglas L. Rock........................ 23,050 *
Scott E. Sayre......................... 52,342 *
Catherine L. Stevenson................. 27,105 *
John C. Tolleson....................... 65,150 *
Timothy R. Wallace..................... 23,050 *
Wayne A. Wight......................... 95,235 *
All Directors and Executive Officers as
a Group (18 persons)................... 2,053,572 2.2%
</TABLE>
* Less than one percent.
-----------------------------------------------------
(1) Includes 279,500 shares of performance-based stock,
which will not be earned unless performance targets are
met, and 1,353,363 shares of common stock subject to
stock options which were exercisable as of March 15,
2000, 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
NAME ELECTED OWNERSHIP(1) OPTIONS UNITS(2) TOTAL
OWNERSHIP ----------------------- ------- ------------ ------------- -------- ----------
<C> <S> <C> <C> <C> <C> <C>
Robert H. Bohannon..... 1996 574,349 167,500 52,208 794,057
Jess Hay............... 1981 43,966 5,250 55,463 104,679
Judith K. Hofer........ 1984 80,393 5,250 53,937 139,580
Jack F. Reichert....... 1984 81,544 5,250 60,625 147,419
Linda Johnson Rice..... 1992 77,243 5,250 9,151 91,644
Douglas L. Rock........ 1996 23,050 5,250 7,082 35,382
John C. Tolleson....... 1997 65,150 5,250 1,409 71,809
Timothy R. Wallace..... 1996 23,050 5,250 3,956 32,256
Totals................. 968,745 204,250 243,831 1,416,826
</TABLE>
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(1) Beneficial ownership includes common stock owned plus
common stock that a director can acquire at March 15,
2000, or during the 60 calendar day period thereafter,
through the exercise of stock options. Ownership of
common stock, excluding exercisable options, is as
follows: Mr. Bohannon, 220,379 (including 165,000
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. 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.
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>
CERTAIN BENEFICIAL
AMOUNT AND NATURE OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP PERCENT OF CLASS
OWNERS --------------------------- -------------------- ----------------
<C> <S> <C> <C>
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109 13,792,980(1) 14.66%
</TABLE>
-----------------------------------------------
(1) The ownership information set forth herein is based on
material contained in a Schedule 13G, dated February
14, 2000, filed with the SEC. FMR Corp. has sole voting
power for 236,920 shares and sole dispositive power for
all shares owned.
--------------------------------------------------------
6
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THE FOLLOWING AUDIT COMMITTEE REPORT, 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.
AUDIT COMMITTEE REPORT
THE The Audit Committee of the Board is comprised solely of
COMMITTEE independent directors and was appointed by the Board to
assist the Board in monitoring (1) the quality and integrity
of the financial statements of the Corporation, (2) the
compliance by the Corporation with legal and regulatory
requirements and (3) the independence and performance of the
Corporation's internal and external auditors.
COMMITTEE The committee met three times in 1999. Committee members are
MEETINGS AND also available to consult with management and with the
RESPONSIBILITIES Corporation's independent auditors throughout the year. The
committee regularly meets in general and private sessions
with management of the Corporation and with the
Corporation's internal and outside independent auditors. The
committee receives and discusses their reports and
encourages open and detailed discussion of all matters
related to responsibilities of the committee. The
responsibilities of the committee are set forth in its
charter, a copy of which is attached to this Proxy Statement
as Appendix A.
FINANCIAL The committee has recommended that the audited financial
STATEMENTS statements of the Corporation for 1999 be included in the
RECOMMENDATION Corporation's Annual Report on Form 10-K to be filed with
the Securities and Exchange Commission. A copy of that
report was included in your proxy materials. In connection
with its recommendation, the committee did the following:
- Reviewed and discussed the audited financial statements
of the Corporation with management
- Discussed with the independent auditors of the
Corporation matters required to be discussed by generally
accepted auditing standards, including standards set
forth in Statement on Auditing Standards No. 61. That
statement requires that the independent auditor
communicate to the committee matters related to the
conduct of the audit such as the quality of earnings;
estimates, reserves and accruals; suitability of
accounting principles; highly judgmental areas; and audit
adjustments whether or not recorded
- Received written disclosures from the independent
auditors regarding their independence as required by
Independence Standards Board Standard No. 1, and
discussed with the auditors the auditors' independence
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A report of the Corporation's management concerning
management responsibility for financial reporting, and the
report and opinion of Deloitte & Touche LLP, the
Corporation's independent auditors, are included in the
Corporation's Annual Report on Form 10-K and should be read
in conjunction with the audited financial statements of the
Corporation.
AUDIT COMMITTEE
Judith K. Hofer,
Chairman
Jack F. Reichert
Linda Johnson Rice
Douglas L. Rock
John C. Tolleson
HUMAN RESOURCES COMMITTEE REPORT
THE The Human Resources Committee of the Board is comprised
COMMITTEE solely of 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
OBJECTIVES financial 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 We conduct an in-depth review of the Corporation's executive
COMPENSATION 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
INCENTIVES based on achieving corporate and operating company
performance targets established at the beginning of each
year. The awards for 1999 reflect the extent to which
targets for the following performance goals were met or
exceeded:
- Corporate level: Income per share from continuing
operations, return on capital, and other specified
performance measurements including reduction of
investment in noncore assets, liability management,
strategic positioning, corporate center cost control, and
effective support of operating companies
- Operating company level: Net income, return on capital,
and other specified performance measurements including
revenue growth, operating income margin growth,
profitability per employee, liability management, and
growth in specified business areas
</TABLE>
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Return on capital for corporate and operating companies is a
new measurement in 1999 and is calculated based on a value
added approach with emphasis on the amount of operating
income generated in excess of a cost of capital charged
against all capital employed in the business.
Target awards are established for each executive officer as
a percentage of salary. Target awards in 1999 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 180%
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
INCENTIVES compensation 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
UNITS participants on the long-term interests of our stockholders
by tying the value of units awarded to both stock price
appreciation during the performance period and to
achievement of financial measures that are key factors in
increasing stockholder value. Target goals are set at the
beginning of the performance period, which is normally three
years in length. Goals at the corporate level are based on
return on capital and income per share from continuing
operations, while goals for operating companies are based on
return on capital and net income. The Performance Unit
Incentive Plan is offered to a limited group of key
executives, including certain of the executive officers
named in the Summary Compensation Table.
STOCK OPTIONS Stock options provide a long-term incentive for a broader
group of our key employees. Stock options encourage and
reward effective management that results in long-term
financial success and increased stockholder value. In 1999
stock options were granted for a term of ten years with an
exercise price equal to the fair market value of our stock
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 if annual
incentive goals are achieved, or after three years and four
years, respectively, if annual incentive goals are not
achieved in a particular year. Options granted since 1998
contain forfeiture and non-competition provisions.
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PERFORMANCE- Certain executive officers, including certain of the
BASED STOCK executive officers named in the Summary Compensation Table,
were also awarded performance-based stock in 1999.
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 stock and industry indices are met or
exceeded.
OWNERSHIP Stock ownership guidelines have been adopted which call for
GUIDELINES 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
COMPENSATION outstanding performance in 1999, and also on levels of
achievement of net income, return on capital and other
performance measurements set forth in incentive plans of the
Corporation. 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 $825,000 in 1999, and
an annual incentive bonus of $1,400,000, a portion of which
($200,000) was deferred and invested in a cash account under
the Deferred Compensation Plan for executives. His annual
bonus was based on achievement of income per share, return
on capital, and other performance goals.
Mr. Bohannon also earned a performance unit incentive bonus
of $1,500,000 for the 1997-1999 performance period. The
bonus was based on achievement of return on capital and
income per share goals for the three-year period ending
December 31, 1999. In 1999, he also received options to
purchase 95,000 shares of common stock with an exercise
price of $29.50 per share, and a grant of performance-based
stock in the amount of 45,000 shares which will be earned
based on the extent to which total stockholder return
targets are met relative to applicable indices over a
three-year performance period.
Approximately 81% of Mr. Bohannon's total compensation in
1999 consisted of annual and long-term incentive
compensation which was at risk because it was tied to
achievement of challenging performance goals and to the
price of our stock.
EMPLOYMENT The Corporation entered into an employment agreement with
AGREEMENT Mr. Bohannon in 1998. Terms and provisions of the agreement
are generally described on page 17.
</TABLE>
11
<PAGE>
<TABLE>
<C> <S>
LIMIT ON Section 162(m) of the Internal Revenue Code disallows a
DEDUCTIBILITY OF corporate income tax deduction on compensation paid to an
CERTAIN executive officer named in the Summary Compensation Table
COMPENSATION 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 such plan to be eligible for
deduction.
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 1999, 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, 1999, 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>
Viad S&P Consumer
Corp Midcap 400 Services Index
Dec94 $100 $100 $100
Dec95 $143 $131 $119
Dec96 $157 $156 $144
Dec97 $188 $206 $189
Dec98 $299 $246 $252
Dec99 $278 $282 $180
</TABLE>
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Viad Corp........................................... 100.0 142.8 156.6 187.9 299.0 277.7
S&P Midcap 400...................................... 100.0 130.9 155.9 206.2 245.5 281.6
Commercial & Consumer Services...................... 100.0 119.1 144.0 188.8 251.9 179.5
</TABLE>
- ---------------------------------
(1) Assumes $100 invested on the last trading day of 1994 and all dividends
reinvested.
13
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes the compensation we paid in 1997, 1998 and 1999
to the Chairman, President and Chief Executive Officer and each of the four
other most highly compensated executive officers of the Corporation, based on
1999 salary and bonus.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------------------- ---------------------------------------------
AWARDS PAYOUTS
---------------------------- --------------
OTHER ANNUAL RESTRICTED SECURITIES LONG-TERM
COMPENSATION STOCK UNDERLYING INCENTIVE
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) AWARDS ($)(2) OPTIONS (#) PAYOUTS ($)(3)
- ------------------------------ -------- ---------- --------- ------------ ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert H. Bohannon(5)......... 1999 825,000 1,400,000 14,701 -- 95,000 1,828,363
Chairman, President 1998 750,000 1,569,500(6) 277,219 -- 70,000 1,081,461(7)
and CEO 1997 650,000 450,000(8) 17,518 -- 100,000 399,933
Philip W. Milne............... 1999 298,087 239,400 6,889 -- 16,000 536,875(7)
President and CEO Travelers 1998 242,623 194,900 7,339 -- 14,500 285,900(7)
Express Company, Inc. 1997 206,954 166,200 3,900 -- 18,000 142,100(7)
Ronald G. Nelson.............. 1999 305,675 259,800 7,332 -- 9,400 450,550
Vice President-Finance 1998 271,150 313,900(6) 95,408 -- 14,100 376,837
and Treasurer 1997 257,233 196,800 7,273 -- 14,100 181,210
Peter J. Novak................ 1999 303,225 232,000 8,809 -- 11,400 405,412
Vice President and General 1998 273,975 316,100(6) 96,996 -- 15,000 202,200
Counsel 1997 231,533 88,550(8) 5,650 -- 13,500 --
Wayne A. Wight................ 1999 205,450 139,700 12,017 -- 8,800 --
Vice President-Corporate 1998 193,725 248,200(6) 94,127 -- 12,000 --
Development 1997 167,700 85,500 -- -- 12,600 --
<CAPTION>
ALL OTHER
COMPENSATION
NAME AND PRINCIPAL POSITION ($)(4)
- ------------------------------ ------------
<S> <C>
Robert H. Bohannon(5)......... 30,000
Chairman, President 22,500
and CEO 469,500(8)
Philip W. Milne............... 4,800
President and CEO Travelers 4,500
Express Company, Inc. 4,500
Ronald G. Nelson.............. 12,227
Vice President-Finance 8,135
and Treasurer 7,717
Peter J. Novak................ 12,129
Vice President and General 8,220
Counsel 95,496(8)
Wayne A. Wight................ 8,218
Vice President-Corporate 5,812
Development 5,031
</TABLE>
- ------------------------------
(1) Amounts shown represent reimbursement to executives for payment of taxes
on certain items.
(2) Dividends are paid on performance-based stock at the same rate as paid to
all stockholders. On December 31, 1999, the named executives held shares
of performance-based stock having aggregate values as follows:
Mr. Bohannon, 115,000 shares valued at $3,205,625; Mr. Milne, 19,600
shares valued at $546,350; Mr. Nelson, 17,900 shares valued at $498,963;
and Mr. Novak, 18,100 shares valued at $504,538.
(3) Long-term incentive payouts in 1999 included payments under the
Performance Unit Incentive Plan for the 1997-1999 performance period and
the vesting of the Viad Corp shares granted in 1996 under the
Performance-Based Stock Plan. 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. (See
footnote 7.)
(4) Amounts represent matching contributions under the 401(k) Plan and the
Supplemental 401(k) Plan, and amounts deferred pursuant to the Deferred
Compensation Plan for executives. (See footnote 8.)
(5) Employment agreement dated April 1, 1998 currently provides for an annual
salary of $850,000.
(6) Includes a special award of shares of common stock (12,000 shares for
Mr. Bohannon and 4,000 shares each for Messrs. Nelson, Novak and Wight).
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. Milne deferred $139,405 of his 1999 long-term incentive payout
pursuant to the terms of the Deferred Compensation Plan for Executives.
The deferral was invested in stock units of the Corporation (5,690 stock
units acquired at a price of $24.50 per unit, the closing price of the
common stock on the date of the investment). Mr. Bohannon and Mr. Milne
deferred $898,600 and $125,000 of their respective 1998 long-term
incentive payouts. The deferrals were invested in stock units of the
Corporation (32,602 and 4,535 stock units, respectively, acquired at a
price of $27.5625 per unit, the closing price of the common stock on the
date of the investment). Mr. Milne deferred $49,735 of his 1997 long-term
incentive payout. The deferral was invested in stock units of the
Corporation (2,072 stock units, acquired at a price of $24.00 per unit,
the closing price of the common stock on the date of investment). The
amounts deferred are included in the "Long-Term Incentive Payouts" column.
(8) Mr. Bohannon and Mr. Novak deferred $450,000 and $88,550 of their
respective 1997 annual incentive 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
the common stock on the date of investment). The amounts deferred 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 1999 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 $18.55 and
$47.02 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 10, 1999, the option grant date. The
aggregate price appreciation for all of our stockholders
would total approximately $1.77 billion and $4.50 billion,
respectively.
OPTION GRANTS IN LAST FISCAL YEAR
</TABLE>
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR ($/SHARE)(1) DATE
---------------------- -------------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
Robert H. Bohannon.... 95,000 11.87% 29.50 5/10/09
Philip W. Milne....... 16,000 2.00% 29.50 5/10/09
Ronald G. Nelson...... 9,400 1.17% 29.50 5/10/09
Peter J. Novak........ 11,400 1.42% 29.50 5/10/09
Wayne A. Wight........ 8,800 1.10% 29.50 5/10/09
ALL STOCKHOLDERS'
STOCK PRICE APPRE-
CIATION............. N/A N/A N/A N/A
----------------------
(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 10, 1999, the
grant date. Fifty percent of options become exercisable one year after
grant and the balance become exercisable two years after grant if annual
incentive plan goals are achieved, or after three years and four years,
respectively, if annual incentive plan goals are not achieved in a
particular year. The options are subject to forfeiture and non-competition
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.
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIA-
NAME TION FOR OPTION TERM
---------------------- ---------------------------
5%($) 10%($)
------------ ------------
<S> <C> <C>
Robert H. Bohannon.... 1,762,488 4,466,473
Philip W. Milne....... 296,840 752,248
Ronald G. Nelson...... 174,394 441,946
Peter J. Novak........ 211,499 535,977
Wayne A. Wight........ 163,262 413,736
ALL STOCKHOLDERS'
STOCK PRICE APPRE-
CIATION............. 1.77 BILLION 4.50 BILLION
----------------------
(1) The option exerc
of our common st
grant date. Fift
grant and the ba
incentive plan g
respectively, if
particular year.
provisions. Each
during certain t
already owned sh
exercise may be
acquired, subjec
</TABLE>
15
<PAGE>
<TABLE>
<C> <S>
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
1999 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
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED ON AT FY-END (#) AT FY-END ($)
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE(1)
-------------------------- ----------- ------------ ---------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Bohannon........ None None 271,470 130,000 3,148,327 108,280
Philip W. Milne........... 2,800 56,395 76,757 23,250 980,388 22,429
Ronald G. Nelson.......... 9,000 167,490 146,265 16,450 2,154,231 21,811
Peter J. Novak............ 22,388 535,456 118,038 18,900 1,770,246 23,203
Wayne A. Wight............ 4,856 65,548 47,447 14,800 556,233 18,562
-------------------------
(1) The closing price of the Corporation's common stock on December 31, 1999, was $27.875. 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 1999 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.... 32,000 3 years 8,000 32,000 64,000
Philip W. Milne....... 5,220 3 years 1,305 5,220 10,440
Ronald G. Nelson...... 7,000 3 years 1,750 7,000 14,000
Peter J. Novak........ 5,640 3 years 1,410 5,640 11,280
Wayne A. Wight........ None N/A N/A N/A N/A
PERFORMANCE-BASED STOCK PLAN(2)
Robert H. Bohannon.... 45,000 3 years N/A N/A N/A
Philip W. Milne....... 6,500 3 years N/A N/A N/A
Ronald G. Nelson...... 5,900 3 years N/A N/A N/A
Peter J. Novak........ 6,300 3 years N/A N/A N/A
Wayne A. Wight........ None N/A N/A N/A N/A
----------------------
</TABLE>
<TABLE>
<C> <S>
(1) The assumed value of the units awarded was $29.50,
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 capital and
income per share from continuing operations or net
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 indices existing at the
time of each award. Dividends are paid on
performance-based stock at the same rate as paid to
all stockholders.
</TABLE>
<TABLE>
<C> <S>
EXECUTIVE EMPLOYMENT 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
$850,000, 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 executive officers. Payment of awards under
the incentive compensation plans is subject to the sole
discretion of the Human Resources Committee.
</TABLE>
17
<PAGE>
<TABLE>
<C> <S>
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.
SEVERANCE The Corporation has entered into an executive severance
AGREEMENTS agreement with Mr. 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 the other executive officers named in the
Summary Compensation Table. 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.
</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 (one-half of annual bonus in the case of
certain executive officers), 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>
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........ $ 19,432 $ 29,148 $ 38,864 $ 48,580 $ 58,295
150,000.......... 23,682 35,523 47,364 59,205 71,045
175,000.......... 27,932 41,898 55,864 69,830 83,795
200,000.......... 32,182 48,273 64,364 80,455 96,545
225,000.......... 36,432 54,648 72,864 91,080 109,295
250,000.......... 40,682 61,023 81,364 101,705 122,045
300,000.......... 49,182 73,773 98,364 122,955 147,545
400,000.......... 66,182 99,273 132,364 165,455 198,545
500,000.......... 83,182 124,773 166,364 207,955 249,545
600,000.......... 100,182 150,273 200,364 250,455 300,545
700,000.......... 117,182 175,773 234,364 292,955 351,545
800,000.......... 134,182 201,273 268,364 335,455 402,545
900,000.......... 151,182 226,773 302,364 377,955 453,545
1,000,000........ 168,182 252,273 336,364 420,455 504,545
1,100,000........ 185,182 277,773 370,364 462,955 555,545
1,200,000........ 202,182 303,273 404,364 505,455 606,545
1,300,000........ 219,182 328,773 438,364 547,955 657,545
1,400,000........ 236,182 354,273 472,364 590,455 708,545
1,500,000........ 253,182 379,773 506,364 632,955 759,545
1,600,000........ 270,182 405,273 540,364 675,455 810,545
1,700,000........ 287,182 430,773 574,364 717,955 861,545
1,800,000........ 304,182 456,273 608,364 760,455 912,545
1,900,000........ 321,182 481,773 642,364 802,955 963,545
2,000,000........ 338,182 507,273 676,364 845,455 1,014,545
2,100,000........ 355,182 532,773 710,364 887,955 1,065,545
2,200,000........ 372,182 558,273 744,364 930,455 1,116,545
2,300,000........ 389,182 583,773 778,364 972,955 1,167,545
2,400,000........ 406,182 609,273 812,364 1,015,455 1,218,545
2,500,000........ 423,182 634,773 846,364 1,057,955 1,269,545
</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
19
<PAGE>
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 are before any adjustment
for joint and survivorship provisions, which would
reduce, in some cases, the amounts shown in the table.
(3) Messrs. Bohannon, Milne, Nelson, Novak and Wight
currently have 7 years, 9 years, 30 years, 30 years,
and 30 years of credited service, respectively.
<TABLE>
<C> <S>
Mr. Bohannon will receive pension benefits equal to 30% of
average covered compensation if he retires at age 58; 50% of
average covered compensation if he retires at age 60; and
60% of average covered compensation if he retires at age 65,
with retirement benefits to be calculated on a pro rata
basis if he retires at age 59 or between the ages of 60 and
65. At March 15, 2000, the estimated annual benefit payable
to him upon his retirement at age 65 is $1,182,000.
LEGAL PROCEEDINGS
The Corporation and certain subsidiaries are plaintiffs or
defendants to various actions, proceedings and pending
claims. 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, 1999, with respect to these
matters is not ascertainable, we believe that any resulting
liability will not have a material effect on our financial
statements. Potential liability for previously reported
railroad-asbestos related claims has been resolved favorably
for the Corporation.
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
statements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors served on the Human Resources
Committee during all of 1999: Mr. Hay, Chairman; Mmes. Hofer
and Rice; and Mr. Wallace. Mr. Tolleson was appointed to
the Committee in February, 1999. 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 2000 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 2000, 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 2000.
VOTING PROCEDURES/REVOKING YOUR PROXY
VOTING Directors must receive a plurality of the shares present and
PROCEDURES voting in 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
OF PROXIES use of the mails, but regular employees of the Corporation
may solicit proxies personally, by telephone or otherwise.
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 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 2001 Annual
Meeting of Stockholders no later than December 3, 2000, for
possible inclusion in the proxy statement, or between
January 9 and February 8, 2001, for possible consideration
at the meeting, which is expected to be held on Tuesday, May
8, 2001. 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 1999 ANNUAL REPORT ON FORM 10-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
ENCLOSED HEREWITH. YOU MAY ALSO OBTAIN OUR OTHER SEC FILINGS
AND CERTAIN OTHER INFORMATION CONCERNING THE CORPORATION
THROUGH THE INTERNET AT WWW.SEC.GOV AND WWW.VIAD.COM,
RESPECTIVELY.
By Order of the Board of
Directors
Scott E. Sayre
SECRETARY
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
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22
<PAGE>
APPENDIX A
CHARTER OF VIAD CORP
AUDIT COMMITTEE
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the quality and integrity of the financial statements of the Corporation,
(2) the compliance by the Corporation with legal and regulatory requirements and
(3) the independence and performance of the Corporation's internal and external
auditors.
The members of the Audit Committee shall be appointed by the Board on the
recommendation of the Corporate Governance and Nominating Committee, and shall
meet the independence and experience requirements of the New York Stock
Exchange.
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants to advise the committee. The Audit Committee may request
any officer or employee of the Corporation or the Corporation's outside counsel
or independent auditor to attend a meeting of the committee or to meet with any
members of, or consultants to, the committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board for approval.
2. Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices as
well as discuss the adequacy of internal controls that could significantly
affect the Corporation's financial statements.
3. Review an analysis prepared by management of significant financial
reporting issues and judgments made in connection with the preparation of
the Corporation's financial statements and the opinion of the independent
auditor with respect to their audit of the financial statements.
4. Review the Corporation's quarterly financial statements prior to the
release of quarterly earnings if advised by management or the independent
auditors that such review is desirable or necessary under the
circumstances. This review may be performed by the committee or its
chairperson.
5. Meet periodically with management to review the Corporation's major
financial risk exposures and the steps management has taken to monitor and
control such exposures.
6. Review major changes to the Corporation's accounting principles and
practices and to the internal auditor's standards, as suggested by the
internal auditors, management or independent auditor.
7. Recommend to the Board the appointment of the independent auditor, which
firm is ultimately accountable to the Audit Committee and the Board.
8. Evaluate together with the Board the performance of the independent auditor
and, if so determined by the Audit Committee, recommend that the Board
replace the independent auditor.
9. Approve the fees to be paid to the independent auditor.
10. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and if so
determined by the Audit Committee, recommend that the Board take
appropriate action to satisfy itself of the independence of the auditor.
11. Meet with the senior internal auditing executive to review the planned
audit activities and internal department organization.
A-1
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12. Review the appointment and replacement of the senior internal auditing
executive.
13. Review significant reports to management prepared by the internal auditing
department and management's responses, as well as any problems or
difficulties the internal auditing department may have encountered.
14. Meet with the independent auditor prior to the audit to review the planning
of the audit.
15. Obtain from the independent auditor assurance that no response obligation
has arisen pursuant to Section 10A of the Private Securities Litigation
Reform Act of 1995 (relating to auditor disclosure of corporate fraud).
16. Review with management, including the Corporation's General Counsel and the
Corporation's senior internal auditing executive, and with the independent
auditor, the status of the Corporation's subsidiary/foreign affiliated
entities' conformity with applicable legal requirements and the
Corporation's Code of Conduct.
17. Discuss with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to the conduct of the
audit.
18. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Corporation's annual proxy statement.
19. Advise the Board with respect to the Corporation's policies and procedures
regarding compliance with applicable laws and regulations and with the
Corporation's Code of Conduct.
20. Review with the Corporation's General Counsel legal matters that may have a
material impact on the financial statements, the Corporation's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.
21. Meet at least annually with the principal financial officer or principal
accounting officer, the senior internal auditing executive and the
independent auditor in separate executive sessions.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Corporation's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles. It
is the responsibility of management to prepare the financial statements and it
is the responsibility of the independent auditor to conduct audits and express
an opinion on the financial statements. Nor is it the duty of the Audit
Committee to conduct investigations, to resolve disagreements, if any, between
management and the independent auditor or to assure compliance with laws and
regulations and the Corporation's Code of Conduct.
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<PAGE>
VIAD CORP
ANNUAL MEETING OF STOCKHOLDERS
Tuesday, May 9, 2000
9:00 a.m. Mountain Standard Time
Camelback Inn -- Sunshine Room
5402 East Lincoln Drive
Scottsdale, Arizona
Logo VIAD CORP
PROXY
- --------------------------------------------------------------------------------
This proxy is solicited on behalf of the Board of Directors for use at the
Annual Meeting on May 9, 2000.
The shares of stock you hold in your account will be voted as you specify.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2.
By signing the proxy, you revoke all prior proxies and appoint Robert H.
Bohannon and Jess Hay, and each of them, as attorneys and proxies, with full
power of substitution, to vote your shares on the matters shown on the
reverse side and any other matters which may come before the Annual Meeting
and all adjournments.
IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN YOUR PROXY AS SOON AS
POSSIBLE, WHETHER OR NOT YOU PLAN ON ATTENDING THE MEETING.
SEE REVERSE SIDE FOR VOTING INSTRUCTIONS.
<PAGE>
-------------------------
COMPANY #
/ / CONTROL #
-------------------------
THERE ARE TWO WAYS TO VOTE YOUR PROXY:
Your telephone vote authorizes the Named Proxies to vote your shares in the
same manner as if you marked, signed and returned your proxy card.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY *** IMMEDIATE
- - Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week.
- - You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
- - Follow the simple instructions the Voice provides you.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid
envelope we've provided or return it to Viad Corp, c/o Shareowner Services-TM-,
P.O. Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY PHONE, PLEASE DO NOT MAIL YOUR PROXY CARD.
- PLEASE DETACH HERE -
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. Election of directors: 01 Robert H. Bohannon / / Vote FOR
02 Douglas L. Rock all nominees
03 John C. Tolleson (except as marked)
/ / Vote WITHHELD
from all nominees
(Instructions: To withhold authority to vote for any ----------------
indicated 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 auditors for 2000.
/ / For / / Against / / Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box / /
Indicate changes below: Date ________________________
-----------------------
-----------------------
Signature(s) in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full
name of corporation and title of
authorized officer signing the proxy.
