PURSUIT ATTRACTIONS & HOSPITALITY, INC.
10-Ks and 10-Qs
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Table of Contents
Viad
Corp
1850 North Central Avenue, Suite 800
Phoenix, Arizona 85004-4545
1850 North Central Avenue, Suite 800
Phoenix, Arizona 85004-4545
April 6, 2010
Dear Fellow Viad Corp Shareholder:
The 2010 Annual Meeting of Shareholders of Viad Corp will be
held on Tuesday, May 18, at 9:00 a.m., at The
Ritz-Carlton, 2401 East Camelback Road, Phoenix, Arizona 85016,
in the Pavilion Room. The meeting will begin promptly at
9:00 a.m., Mountain Standard Time, so please plan to arrive
early.
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 at 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
a 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 vote your shares by telephone or
the Internet as described on your proxy card. If you plan to
attend the meeting, you may vote in person.
Sincerely,
Paul B. Dykstra
Chairman, President and Chief
Executive Officer
Table of Contents
Table of Contents
Viad
Corp
1850 North Central Avenue, Suite 800
Phoenix, Arizona 85004-4545
1850 North Central Avenue, Suite 800
Phoenix, Arizona 85004-4545
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
AND AVAILABILITY OF PROXY
MATERIALS
April 6, 2010
To Viad Corp Shareholders:
We will hold the Annual Meeting of Shareholders of Viad Corp, a
Delaware corporation, at The Ritz-Carlton, 2401 East Camelback
Road, Phoenix, Arizona 85016 in the Pavilion Room, on Tuesday,
May 18, 2010, at 9:00 a.m., Mountain Standard Time.
The purpose of the meeting is to:
| 1. | Elect three directors to Viad’s Board of Directors, each for a three-year term; | |
| 2. | Ratify the appointment of Deloitte & Touche LLP as our independent registered public accountants (also referred to as “independent auditors”) for 2010; | |
| 3. | Consider any other matters which may properly come before the meeting and any adjournments. |
The foregoing items of business are more fully described in the
proxy statement accompanying this notice. Our 2009 Annual
Report, including financial statements, is included with your
proxy materials.
Only shareholders of record of common stock at the close of
business on March 25, 2010, are entitled to receive this
notice and to vote at the meeting. A list of shareholders
entitled to vote will be available at the meeting for
examination by any shareholder for any proper purpose. The list
will also be available on the same basis for ten days prior to
the meeting at Viad’s principal executive offices at the
address listed above.
To assure your representation at the meeting, please vote your
shares by telephone, the Internet or by signing, dating and
returning the enclosed proxy card at your earliest convenience.
The Internet and automated telephone voting features are
described on the proxy card. We have enclosed a return envelope,
which requires no postage if mailed in the United States, if you
choose to mail your proxy. Your proxy is being solicited by the
Board of Directors.
By Order of the Board of Directors
SCOTT E. SAYRE
Vice President-General Counsel
and Secretary
Important Notice
Regarding the Availability of Proxy Materials for Shareholder
Meeting:
The 2010 Proxy Statement and 2009 Annual Report are available
at
www.viad.com/proxy10.html
(or go to www.viad.com and then click onto the link “2010 Annual Meeting–Proxy Materials”).
(or go to www.viad.com and then click onto the link “2010 Annual Meeting–Proxy Materials”).
TABLE OF
CONTENTS
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Table of Contents
VIAD
CORP
1850 North Central Avenue,
Suite 800
Phoenix, Arizona
85004-4545
PROXY
STATEMENT
GENERAL
INFORMATION ABOUT THE MEETING
|
Viad Corp 2010 Annual Meeting |
Tuesday, May 18, 2010 9:00 a.m., Mountain Standard Time |
The Ritz-Carlton 2401 East Camelback Road Phoenix, Arizona 85016 |
|
Agenda
|
1. Elect three directors. | |
|
2. Ratify the appointment of Deloitte & Touche
LLP as our independent registered public accountants (also
referred to as “independent auditors”) for 2010.
|
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|
3. Any other proper business.
|
||
|
Proxies Solicited By
|
Board of Directors of Viad Corp. | |
|
First Mailing Date
|
We anticipate mailing the proxy statement on April 6, 2010. | |
|
Record Date
|
March 25, 2010. On the record date, we had 20,541,349 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, by the Internet, by automated telephone voting, or by proxy. | |
|
Proxies
|
We will vote signed returned proxies “FOR” the Board’s director nominees, and “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accountants for 2010, 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 under the “Voting Procedures/Revoking Your Proxy” section of this proxy statement. | |
|
Your Comments
|
Your comments about any aspect of our business are welcome. Although we may not respond on an individual basis, your comments receive consideration and help us measure your satisfaction. |
Prompt return of your proxy will help reduce the costs of
resolicitation.
1
Table of Contents
PROPOSAL 1: ELECTION
OF DIRECTORS
Board
Structure
The Board of Directors of Viad Corp (“Viad” or the
“Company”) consists of nine persons divided into three
classes or groups. The term of one class of directors expires at
each annual meeting, and nominees are elected to that class for
a term of three years. Three directors are to be elected at this
year’s annual meeting.
Majority Vote
Standard for Election of Directors
For uncontested elections of directors, Viad’s Bylaws
provide that the vote standard is a majority of votes cast,
which means that the number of shares voted “for” a
director nominee must exceed the number of votes cast
“against” that director nominee. The Bylaws further
provide that if a nominee who already serves as a director is
not elected by a majority vote, then the director will be
obligated to tender his or her resignation to the Board. The
Corporate Governance and Nominating Committee of the Board will
make a recommendation to the Board on whether to accept or
reject the resignation, or whether other action should be taken.
The Board will be required to publicly disclose its decision and
the rationale behind it within 90 days of the certification
of the election results. The director who tenders his or her
resignation will not participate in the Board’s decision.
In contested elections where the number of nominees exceeds the
number of directors to be elected, the Bylaws provide for a
plurality vote standard.
If a nominee, who was not already serving as a director, is not
elected at the annual meeting, the Bylaws provide that the
nominee would not become a director. All director nominees
listed below are currently serving on the Board.
Skills,
Qualifications and Experience of Viad’s Directors
While Viad’s directors have many individual qualifications,
the Board believes that certain specific qualifications are
common to all of Viad’s directors, and these qualifications
(as well as others) led the Board to conclude that each director
listed below under the “Director Nominees” and
“Directors Continuing in Office” sections should serve
on the Board. These qualifications include:
| • | Highest ethical standards and integrity; | |
| • | Willingness to act on and be accountable for Board decisions; | |
| • | Ability to provide informed and thoughtful counsel to top management on a range of issues; | |
| • | History of achievement that reflects superior standards for himself/herself and others; | |
| • | Loyalty and commitment to driving the success of Viad; | |
| • | Willingness to ask questions and pursue answers; | |
| • | Ability to take tough positions while at the same time work as a team player; | |
| • | Willingness to devote sufficient time to carrying out his/her duties and responsibilities effectively as a Board member, and commitment to serve on the Board for an extended period of time; | |
| • | Adequate time to spend learning the businesses of Viad; and | |
| • | Individual background that provides a portfolio of experience, knowledge and personal attributes commensurate with Viad’s needs. |
Director
Nominees
The Board of Directors has nominated Isabella Cunningham, Jess
Hay and Albert M. Teplin for election at the annual meeting.
These nominees are currently members of the Board of Directors
and, if elected, have agreed to serve another term, which will
expire in 2013. Information about the director nominees is
presented below.
| Isabella Cunningham | Ernest A. Sharpe Centennial Professor in Communication at The University of Texas at Austin, 1983 to present. Dr. Cunningham has been the Chair of the Department of Advertising at The University of Texas at Austin since 2001 and a Professor of Advertising with the University since 1981. She also serves as a member of many university and community organizations. She has extensive knowledge and expertise regarding the marketing industry, including the face-to-face marketing space in which Viad competes, and has been published extensively in the area of business and marketing. She has broad international business exposure, and holds a Doctor of Jurisprudence Degree from a |
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Table of Contents
| Brazilian university. She has a wealth of executive management experience holding positions on boards of directors (including Cornell Companies, Inc. from 2005 to 2006 and Dupont Photomasks, Inc. from 2001 to 2005) and numerous non-profit organizations. Age 67. Director since December 2005. | ||
| Jess Hay | Retired Chairman and Chief Executive Officer of Lomas Financial Corporation, formerly a diversified financial services company engaged principally in mortgage banking, retail banking, commercial leasing and real estate lending, and of Lomas Mortgage USA, a mortgage banking institution, from which he retired in December 1994. Chairman of the Texas Foundation for Higher Education, a non-profit organization dedicated to promoting higher education in the State of Texas, a position that he has held since 1987. As Chairman and CEO of Lomas Financial Corporation, which included during his tenure, a total of five different corporations listed on the New York Stock Exchange, Mr. Hay has had extensive experience with all of the major functions within the operations of a public company. He is also a director of MoneyGram International, Inc., Trinity Industries, Inc. and Hilltop Holdings, Inc., and previously served as a director of Exxon Mobile from 1982 to 2001 and SBC Communications from 1985 to 2004. Mr. Hay’s time serving on these boards has provided him experience with issues related to both international and domestic business operations. His prior active involvement with the Democratic National Committee also provides him with broad exposure to the political processes on the national, state and local levels. Age 79. Director since 1981. | |
| Albert M. Teplin | Retired Senior Economist for the Board of Governors of the Federal Reserve System from 2001 to October 2002. Dr. Teplin was Chief, Flow of Funds Section of the Board of Governors of the Federal Reserve System from 1989 to 2001. Dr. Teplin has broad experience analyzing economic trends and their application to business practices and government policies. His background also provides him with an ability to understand and evaluate technical financial matters pertaining to mergers, acquisitions and other significant business decisions. He is also a director of MoneyGram International, Inc. Age 64. Director since 2003. |
Recommendation of
the Board
The Board of Directors recommends that you vote
“FOR” these director nominees.
Directors
Continuing in Office
Information about the six directors continuing in office until
expiration of their designated terms is presented below.
For Terms
Expiring at the 2011 Annual Meeting:
| Wayne G. Allcott | Vice President-Arizona of U S West Corporation from 1995 to 2000, when he retired in connection with the merger of U S West (a former local and long distance telecommunications and high-speed data transmission services company) with Qwest Corporation, which provides similar services. In 2000, Mr. Allcott was appointed for a two-year term by the Governor of Arizona to chair the Governor’s Council on Workforce Development Policy. During his 35-year career with U S West, Mr. Allcott held a variety of assignments in marketing, customer services, operations and public policy. He is currently active with various non-profit organizations in Arizona. Age 67. Director since 2004. | |
| Paul B. Dykstra | Chairman, President and Chief Executive Officer of Viad since April 1, 2008; prior thereto, President and Chief Executive Officer since April 1, 2006; and prior thereto, Chief Operating Officer since January 1, 2006. Prior thereto, Mr. Dykstra was President and Chief Executive Officer of GES Exposition Services, Inc. (n/k/a Global Experience Specialists, Inc.), a subsidiary of Viad, since 2000; prior thereto, Executive Vice President-International and Corporate Development since 1999. Prior thereto, he was Executive Vice President-General Manager and held similar executive positions since 1994 with Travelers Express Company, Inc., a former subsidiary of Viad. Mr. Dykstra brings deep and broad knowledge of Viad and its businesses. Through his many executive management positions held with Viad’s businesses, Mr. Dykstra |
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Table of Contents
| has developed substantial experience in corporate strategy, operations, commercial development and sales, and accounting/finance. Age 48. Director since January 2006. | ||
| Robert C. Krueger | Former U.S. Congressman, U.S. Senator, U.S. Ambassador-at-Large and Coordinator for Mexican Affairs, U.S. Ambassador (Burundi and Botswana), Special Representative of U.S. Secretary of State to Southern African Development Community, and Duke University professor and dean. Mr. Krueger is currently a public speaker, and a consultant for businesses engaged in international trade. Mr. Krueger has extensive knowledge regarding international business. He also has historical familiarity with Viad’s operations as he served as a Viad director from 2002 until the June 2004 spin-off of MoneyGram International, Inc., where he served as a director from 2004 to 2008. Age 74. Director since May 2008. |
For Terms
Expiring at the 2012 Annual Meeting:
| Daniel Boggan Jr | Retired Senior Vice President of the National Collegiate Athletic Association (NCAA), a voluntary organization which governs college and university athletic programs, from 1996 through his retirement in August 2003. He was Chief of Staff, Office of the Mayor, Oakland, California from January 2007 to August 1, 2007; and prior thereto, Vice President-Business Development for Seibert Brandford Shank & Co., L.L.C., a municipal finance firm which provides investment banking, sales and trading, and financial advisory services, from October 2005 until March 2006, and prior thereto, a consultant for the company during 2003 and 2004 and until October 2005. Mr. Boggan is also a trustee and chairman of the board of The California Endowment, a trustee of Albion College, and a director of Collective Brands, Inc. and The Clorox Company. Mr. Boggan has specific knowledge regarding the marketing industry, sales and the industries specific to Viad. Age 64. Director since 2005. | |
| Richard H. Dozer | Chairman-Phoenix of GenSpring Family Offices, a wealth management firm for ultra high net worth families, since 2008, and also serves as treasurer of the Greater Phoenix Convention and Visitors Bureau. Prior thereto, Mr. Dozer was co-founder and a managing partner of CDK Partners, a real estate development and investment company since 2006. Prior thereto, Mr. Dozer was President of the Arizona Diamondbacks, a major league baseball franchise, from its inception in 1995 until 2006, and prior thereto was the Vice President and Chief Operating Officer of the Phoenix Suns, an NBA professional basketball franchise, from 1987 to 1995, as well as President of the US Airways Center arena (formerly, America West Arena) from 1989 to 1996. Mr. Dozer’s leadership positions with the Arizona Diamondbacks, Phoenix Suns and US Airways Center provide him with skills and experience related to operations and sales, as well as experience specific to Viad’s industries, including marketing, corporate events and branded events. Mr. Dozer also has financial experience from his audit manager position and other positions with Arthur Andersen from 1979 to 1987, during which time he held a CPA license. He previously served as a director of Stratford American Corporation from 1998 to 2006. Age 52. Director since 2008. | |
| Robert E. Munzenrider | Retired President of Harmon AutoGlass, a subsidiary of Apogee Enterprises, Inc., a national chain of retail automotive services and insurance claims processor, a position he held from 2000 to 2002. In 1999, Mr. Munzenrider served as Vice President and Chief Financial Officer of the Glass Services Segment of Apogee Enterprises. He also served during part of 1999 as Executive Vice President and Chief Financial Officer of Eliance Corp., an e-commerce transaction processor. From 1997 to 1998, Mr. Munzenrider served as Vice President and Chief Financial Officer of St. Jude Medical, Inc., an international medical device manufacturing and marketing company. Mr. Munzenrider has a strong finance and accounting background, holding his CPA license since 1971 and serving in the position of Chief Financial Officer for a majority of his professional career. In addition, he has a historical familiarity with Viad operations as he was the CFO of one of Viad’s former operating companies from 1991 - 1997. Mr. Munzenrider is also a director of ATS Medical, Inc., and previously served as a director of Criticare Systems, Inc. and CABG Medical, Inc. Age 65. Director since 2004. |
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Table of Contents
THE BOARD OF
DIRECTORS AND ITS COMMITTEES
Corporate
Governance
In accordance with applicable laws and the Bylaws of Viad, the
business and affairs of Viad are governed under the direction of
our Board of Directors. The system of governance practices
followed by Viad is set forth in the Corporate Governance
Guidelines and the charters of each of the committees of the
Board of Directors. The Corporate Governance Guidelines set
forth the practices the Board will follow with respect to the
duties of the Board, its operations and committee matters,
director qualifications and selection process, director
compensation, director independence, director orientation and
continuing education, chief executive officer evaluation,
management succession, and annual Board evaluation.
The Corporate Governance Guidelines and committee charters, as
well as the Code of Ethics applicable to Viad’s directors,
officers and employees, may be viewed on the Internet at
www.viad.com/investors/corp_governance.html, and are
available in print upon request to the Corporate Secretary of
Viad at the address listed on the first page of this proxy
statement. The Corporate Governance Guidelines and committee
charters are reviewed periodically to ensure the effective and
efficient governance of Viad and to comply in a timely manner
with all laws and the listing standards of the New York Stock
Exchange (“NYSE”) that are applicable to corporate
governance.
Board Committees
and Director Independence
The Board maintains three standing committees to assist in
fulfilling its responsibilities: Audit Committee, Corporate
Governance and Nominating Committee, and Human Resources
Committee. Each committee meets periodically during the year,
reports regularly to the full Board and annually evaluates its
performance. The table below provides current membership and
meeting information for each committee. In addition, the table
identifies the independent directors, as determined by the Board
in February 2010, within the meaning of the NYSE listing
standards, applicable Securities and Exchange Commission
(“SEC”) regulations and Viad’s Corporate
Governance Guidelines. The Corporate Governance Guidelines
include categorical standards for independence that meet or
exceed the NYSE listing standards.
|
Corporate |
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|
Governance |
Independent |
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|
Name
|
Audit | and Nominating | Human Resources | Director | ||||
|
Mr. Allcott
|
Member | Member | Yes | |||||
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Mr. Boggan
|
Member | Member | Yes | |||||
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Dr. Cunningham
|
Member | Member | Yes | |||||
|
Mr. Dozer
|
Member | Member | Yes | |||||
|
Mr. Dykstra
|
No | |||||||
|
Mr. Hay
|
Member | Chair | Yes | |||||
|
Mr. Krueger
|
Member | Yes | ||||||
|
Mr. Munzenrider
|
Member | Chair | Yes | |||||
|
Dr. Teplin
|
Chair | Member | Yes | |||||
|
2009 Meetings
|
11 | 4 | 6 | |||||
The particular areas of responsibility of each Board committee
and other related information are described below. Each
committee may form and delegate authority to a subcommittee of
one or more members of the committee.
Audit Committee. The Audit Committee appoints
Viad’s independent registered public accountants and
assists the Board in monitoring the quality and integrity of the
financial statements of Viad, the compliance by Viad with legal
and regulatory requirements, and the independence and
performance of Viad’s internal auditors and external
independent registered public accountants. The Committee
conducts regularly scheduled executive sessions with individual
members of Viad’s management and with Viad’s
independent registered public accountants. The Committee has
sole authority to appoint or replace Viad’s independent
registered public accountants. The independent registered public
accountants report directly to the Committee. The Board has
determined that all members of the Audit Committee are
financially literate, as defined by the NYSE listing standards,
and that Mr. Munzenrider qualifies as an “audit
committee financial expert,” as defined by SEC regulations.
Corporate Governance and Nominating
Committee. The Corporate Governance and
Nominating Committee is responsible for proposing a slate of
directors for election by the shareholders at each annual
meeting and for
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Table of Contents
proposing candidates to fill any vacancies on the Board. The
Committee is also responsible for an assessment of the
Board’s performance to be discussed with the full Board
annually, and for review of, and from time to time for proposal
of changes to, Viad’s Corporate Governance Guidelines and
the compensation and benefits of non-employee directors. In
connection with these responsibilities, the Committee has sole
authority to retain
and/or
terminate any search firm or compensation consultant to identify
director candidates or to assist in the evaluation of director
compensation.
Human Resources Committee. The Human Resources
Committee oversees development and implementation of a
compensation strategy designed to enhance profitability and
shareholder value. The Committee also reviews and approves,
subject to ratification by independent members of the Board, the
salary and equity and incentive compensation of the Chief
Executive Officer, approves salaries and compensation of
executive officers, and approves incentive compensation targets
and awards under various compensation plans and programs of
Viad. In addition, the Committee has sole authority to retain
and/or
terminate any compensation consultant to be used to assist in
the evaluation of the Chief Executive Officer or senior
executive compensation. The Committee also has authority to
obtain advice and assistance from internal or external legal,
accounting or other advisors. While the Corporate Governance and
Nominating Committee has responsibility to review and make
recommendations to the Board regarding non-employee director
compensation and benefits, the Human Resources Committee has
sole authority to approve grants of equity compensation to
non-employee directors under the 2007 Viad Corp Omnibus
Incentive Plan.
Hewitt Associates (“Hewitt”), a nationally-known
independent consulting firm, has been retained by the Committee
and Viad’s Human Resources Department to provide services
and advice and counsel on executive compensation and to serve as
a technical resource for market data on executive and director
compensation. Viad’s Human Resources and Law Departments,
and its Corporate Secretary, support the Committee in its work
and in some cases act pursuant to delegated authority to fulfill
various functions in administering Viad’s compensation
programs. Viad’s Chief Executive Officer makes a
recommendation to the Committee on the compensation of other
executive officers of Viad; however, the Committee has sole
authority to approve, for Viad’s Chief Executive Officer
and other executive officers, (a) the annual base salary
level, (b) the annual incentive opportunity level and
granting of incentive awards, (c) the long-term incentive
opportunity level, and (d) any special or supplemental
benefits, with the salary, equity and incentive compensation of
the Chief Executive Officer being subject to ratification by
independent members of the Board.
Board Meetings
and Annual Shareholder Meeting
Under Viad’s Corporate Governance Guidelines, each director
is expected to attend the Annual Meeting of Shareholders, Board
meetings and meetings of committees on which they serve. The
Board of Directors held four regular meetings and two special
meetings during 2009. Each director who held office in 2009
attended 100% of his or her Board and committee meetings in
2009. All directors who held office in 2009 were in attendance
at the 2009 Annual Meeting of Shareholders.
Meetings of
Non-Management Directors and Presiding Director
The Board held four executive sessions of the independent,
non-management directors in 2009 and regular executive sessions
of the non-management directors have been scheduled for 2010.
Mr. Hay has served as Presiding Director of Viad since
May 17, 2005, and was designated by the Board to continue
as Presiding Director for the period beginning January 1,
2009, and ending December 31, 2010, or until such other
time as his successor is chosen by action of the non-management
directors of Viad.
Board Leadership
Structure
The Board combines the role of chairman of the board with the
role of chief executive officer (“CEO”). The Board
also has a presiding director, who is an experienced and
long-tenured independent director. The Board believes this
governance structure provides efficient and effective leadership
for Viad. Having a single person lead both the Board and
management fosters effective decision-making, enabling the
definition of corporate strategies to be driven by a unified
vision and supported by a clear path of accountability.
Furthermore, Mr. Dykstra, Viad’s Chairman and CEO, is
receptive to input from the Board, and fosters frequent
communication with members of the Board, as appropriate.
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The Board also believes that Viad has appropriate governance
practices to ensure that the full Board maintains independent
oversight, including:
| • | All directors on Viad’s Board are independent, except the chief executive officer; | |
| • | Executive sessions of the independent directors are held at regular meetings of the Board, and such meetings are chaired by the presiding director; | |
| • | An annual review of the performance of the chief executive officer is conducted by the Human Resources Committee, whose members are all independent directors; | |
| • | An annual review of the Board’s performance is lead by the Corporate Governance and Nominating Committee, whose members are all independent directors; | |
| • | The process for selecting new directors is lead by the Corporate Governance and Nominating Committee; and | |
| • | Regular succession planning reviews are conducted by the Board for the positions of the chief executive officer, as well as his senior management team and other significant management positions within Viad’s operating companies. The Board periodically reviews interim (e.g., emergency-response) and long-term succession plans with a view toward providing for orderly transitions (in the cases of both planned and unplanned management changes) related to each of Viad’s key executive positions. |
Corporate
Governance and Nominating and Human Resources Committees
Interlocks and Insider Participation
Viad is not aware of any interlocking relationships between any
member of Viad’s Human Resources Committee or Corporate
Governance and Nominating Committee and any of Viad’s
executive officers that would require disclosure under the
applicable rules promulgated under the U.S. federal
securities laws.
Review and
Approval of Transactions with Related Persons
In February 2007, the Board adopted a policy and procedures for
review, approval and monitoring of transactions involving the
Company and “related persons” (directors and executive
officers or their immediate family members, or shareholders and
their immediate family members owning 5% or greater of the
Company’s outstanding stock). The policy applies to any
transaction in which Viad or an operating company is a
participant and any related person has a direct or indirect
interest, excluding de minimus transactions of a commercial
or other nature between a related person and Viad or one of its
operating companies and any compensation arrangements with
executive officers or directors of Viad that have been approved
or authorized by the Board or the Human Resources Committee.
The Corporate Governance and Nominating Committee is responsible
for reviewing, approving
and/or
ratifying any transaction involving a related person. Management
will bring the matter to the attention of the Corporate
Governance and Nominating Committee and provide it with all
material information with respect to related person
transactions. A related person transaction must be approved in
advance whenever practicable, otherwise it must be ratified as
promptly as practicable; provided that if ratification is not
forthcoming, management will make all reasonable efforts to
cancel or annul the transaction. A related person transaction
will be submitted to the Committee for consideration at its next
meeting or, in those instances in which the President and Chief
Executive Officer determines that it is not practicable or
desirable for Viad to wait until the next Committee meeting, to
the Chairman of the Committee (who has the delegated authority
to act between Committee meetings with respect to this policy).
The Chairman of the Committee will report to the Committee at
the next Committee meeting any approval under this policy
pursuant to delegated authority. The Committee will annually
review with management existing related person transactions, if
any, and report annually to the Board, to ensure that such
transactions are being pursued in accordance with understandings
and commitments made at the time they were approved, that
payments are being made appropriately, and that such
transactions continue to serve the interests of Viad.
Director
Nominations
As provided in its charter, the Corporate Governance and
Nominating Committee has established procedures for
consideration of candidates for Board membership suggested by
its members and other sources, including shareholders. The
Committee has authority under its charter to employ a
third-party search firm to assist it in identifying candidates
for director. A shareholder who wishes to recommend a
prospective nominee for the Board should notify
7
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Viad’s Corporate Secretary in writing at the address listed
on page 1 of this proxy statement. Any such recommendation
should include:
| • | the name and address of the candidate; | |
| • | a brief biographical description, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements set forth below; and | |
| • | the candidate’s signed consent to serve as a director if elected and to be named in the proxy statement. |
The Committee will review the qualifications of any person
properly nominated by a shareholder in accordance with
Viad’s Bylaws relating to shareholder proposals as
described in the “Submission of Shareholder Proposals and
Director Nominations” section of this proxy statement.
When the Committee reviews a potential nominee, the Committee
looks specifically at the candidate’s qualifications in
light of the needs of the Board and Viad at that time given the
then current mix of director attributes. The Committee, in
accordance with Viad’s Corporate Governance Guidelines,
assesses director nominees based on their qualification as
independent, as well as consideration of diversity, skills, and
experience in the context of the current needs of the Board. The
Committee does not have a specific policy on diversity. Director
nominees also must have common qualities expected of all Viad
directors, including high personal and professional ethics,
integrity and values and a commitment to representing the
long-term interests of shareholders. The Committee also ensures
that the members of the Board, as a group, maintain the
requisite qualifications under the listing standards of the NYSE
for populating the Audit, Human Resources, and Corporate
Governance and Nominating Committees.
Viad will deliver a questionnaire to a director candidate
properly nominated by a shareholder addressing the
candidate’s independence, qualifications and other
information that would assist the Corporate Governance and
Nominating Committee in evaluating the candidate, as well as
certain information that must be disclosed about the candidate
in Viad’s proxy statement, if nominated by the Committee.
While it has been Viad’s standard practice to obtain
responses to a director candidate questionnaire, in August 2008,
the Board of Directors amended Article II of Viad’s
Bylaws to formalize this standard practice and require a
director candidate to provide responses to Viad’s director
candidate questionnaire related to background, qualification,
conflicts of interest and director independence. In addition,
the director candidate questionnaire will include a
representation and agreement to be signed by the director
candidate as to his or her independence and the lack of
conflicts of interest.
Communication
with Board of Directors
Interested parties may communicate directly with non-management
directors, including the Presiding Director,
and/or with
the Board by writing to the following address: Viad Corp, 1850
North Central Avenue, Suite 800, Phoenix, Arizona
85004-4545,
Attention: Corporate Secretary. All communications will be
delivered to the non-management directors or the Board, as the
case may be, no later than the Board’s next regularly
scheduled meeting.
Risk
Oversight
Management is responsible for assessing and managing the
Company’s various exposures to risk, including the adoption
of risk management controls, policies and procedures. The Board
oversees the management of the Company’s risk exposures by
the Company’s management. The Board has delegated to the
Audit Committee, as reflected in its charter, responsibility for
discussing with Viad’s management the major financial risk
exposures of Viad and the steps Management has taken to monitor
and control such exposures, including Viad’s risk
assessment and risk management policies. Annually, Viad conducts
a business risk assessment to identify, evaluate and prioritize
business risks that could impact Viad. Within this risk
assessment, a financial statement risk assessment and
materiality analysis is conducted, including evaluating
potential fraud schemes and scenarios that might affect Viad.
The risk assessment includes an evaluation of the significance
of the risks, the likelihood of occurrence, the risk remaining
after application of management controls, and actions necessary
to mitigate risk exposure. Management presents a report of the
results of the annual risk assessment during the meeting of the
Audit Committee that occurs annually in May. Prior to the
meeting, a written report of the results of the assessment is
provided to all members of the Board. All members of the Board
are invited to attend the Audit Committee meeting, and eight out
of the nine members of the Board were present at the May 2009
meeting when the results of the 2009 assessment were discussed.
Thereafter, at the meeting of the Board, the Chairman of the
Audit Committee provides a summary report to the Board regarding
the results of the assessment and the Audit Committee’s
discussions concerning the results. Management
8
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continuously monitors the Company’s risks throughout the
year, and major risk factors are reviewed quarterly with the
Audit Committee in connection with Viad’s preparation and
filing of its quarterly report on
Form 10-Q.
Director
Compensation Table
Each non-employee director receives compensation for service on
the Board and any of its committees. Directors who are also
officers or employees of Viad do not receive any special or
additional remuneration for service on the Board and do not
serve on any of its committees. Mr. Dykstra is the only
officer-director
serving on the Board.
The following table provides the compensation paid to the
directors in 2009, other than Mr. Dykstra, whose
compensation is disclosed in the Summary Compensation Table
provided in this proxy statement. The dollar figures presented
below in the Stock Awards column (c) of the Table represent
the grant date fair value of awards granted to the non-employee
directors, which may not reflect the actual value to be realized
by the director as economic and market risks associated with
stock awards can affect the actual value realized. The actual
value realized by the director for the stock will not be
determined until time of vesting, or in the case of option
awards, until option exercise.
|
Non-Equity |
Change in |
|||||||||||||||||||||||||||
|
Incentive |
Pension Value and |
|||||||||||||||||||||||||||
|
Fees |
Plan |
Nonqualified |
All Other |
|||||||||||||||||||||||||
|
Earned |
Stock |
Option |
Compen- |
Deferred Compensa- |
Compen- |
|||||||||||||||||||||||
|
Or Paid in
Cash1 |
Awards2 |
Awards3 |
sation |
tion Earnings |
sation4 |
Total |
||||||||||||||||||||||
|
Name
|
($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
|
Mr. Allcott
|
62,100 | 46,065 | -- | -- | -- | 6,204 | 114,369 | |||||||||||||||||||||
|
Mr. Boggan
|
54,600 | 46,065 | -- | -- | -- | 1,204 | 101,869 | |||||||||||||||||||||
|
Dr. Cunningham
|
54,600 | 46,065 | -- | -- | -- | 8,704 | 109,369 | |||||||||||||||||||||
|
Mr. Dozer
|
65,100 | 46,065 | -- | -- | -- | 5,874 | 117,039 | |||||||||||||||||||||
|
Mr.
Dykstra5
|
-- | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
|
Mr. Hay
|
95,100 | 46,065 | -- | -- | -- | 6,143 | 147,308 | |||||||||||||||||||||
|
Mr. Krueger
|
45,600 | 46,065 | -- | -- | -- | 5,740 | 97,405 | |||||||||||||||||||||
|
Mr. Munzenrider
|
67,100 | 46,065 | -- | -- | -- | 3,143 | 116,308 | |||||||||||||||||||||
|
Dr. Teplin
|
75,100 | 46,065 | -- | -- | -- | 6,204 | 127,369 | |||||||||||||||||||||
| 1 | Non-employee directors receive an annual retainer of $30,000. Committee chairmen receive an additional annual retainer of $5,000, except for the Audit Committee chairman who receives an additional annual retainer of $10,000. Mr. Hay, presiding director of Viad, receives an additional annual retainer of $25,000 for serving in that role. Non-employee 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, including travel expenses and fees associated with director education seminars. | |
| 2 | There can be no assurances that the amounts provided in this column will be realized. The amounts shown in this column reflect the grant date fair value of awards by Viad in 2009 to the non-employee directors. | |
| At December 31, 2009, the following shares of restricted stock were outstanding for the non-employee directors: Mr. Allcott, 7,000; Mr. Boggan, 7,000; Dr. Cunningham, 7,000; Mr. Dozer, 5,335; Mr. Hay, 7,000; Mr. Krueger, 4,500; Mr. Munzenrider, 6,967; and Dr. Teplin, 7,000. | ||
| In 2009, each of the non-employee directors was granted 3,000 shares of restricted stock with a grant date fair value of $46,065, which will vest three years from the date of grant, with pro rata vesting of shares upon expiration of the three-year period if a director leaves the Board prior to the end of such period for any reasons other than for “cause”, provided that full vesting will occur upon lapse of such period if the director has met certain age and holding period requirements. Full vesting may also occur upon expiration of the three-year period, at the discretion of the Human Resources Committee, if a director has terminated service due to unforeseen hardship or circumstances beyond the control of the director and such termination of service is at least six months after the date of grant. If a non-employee director were to take office after the restricted stock grant in February of each year, the new director would receive a pro rata grant of restricted stock based on the date of election and the next regularly scheduled February grant of restricted stock. | ||
| 3 | No stock options were awarded to the non-employee directors in 2009. At December 31, 2009, the following stock options were outstanding for the named directors: Mr. Allcott, 10,140; Mr. Boggan, 5,000; Dr. Cunningham, 3,125; Mr. Dozer, none; Mr. Hay, 8,425; Mr. Krueger, 1,979; Mr. Munzenrider, 10,140; and Dr. Teplin, 6,250. | |
| 4 | The amounts shown for the non-employee directors reflect the corporate matching of charitable contributions pursuant to the Directors’ Matching Gift Program, which provides for corporate matching of charitable contributions made by non-employee directors, on a dollar-for-dollar basis, up to an aggregate maximum of $5,000 per year to qualified non-profit organizations having tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. The amounts shown also reflect the premium paid by Viad on behalf of each non-employee director for accidental death and dismemberment insurance benefits of $300,000 and travel accident insurance benefits of $300,000 when they are traveling on corporate business. | |
| 5 | Refer to amounts presented in the Summary Compensation Table. |
9
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SECURITY
OWNERSHIP OF VIAD MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
AND CERTAIN BENEFICIAL OWNERS
Ownership
Guidelines for Directors and Executive Officers
We believe it is important to align the financial interests of
our directors and executive officers with those of our
shareholders. Guidelines have been adopted which specify the
minimum amount of Viad stock that directors and officers are
expected to own on a direct basis, meaning stock which is
subject to market risk, not simply held under option. The
guidelines call for each officer to own stock which has 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 non-employee director to own stock
which has a value equal to five times the annual retainer
payable to a director, and all non-employee directors have met
their goals. The executive officers named in the Summary
Compensation Table of this proxy statement have met or exceeded
their goals, except Mr. Hannan, who joined Viad in December
2008, and is working toward achieving his goal.
Security
Ownership of Management
The table below provides information concerning the beneficial
ownership of our common stock by directors and executive
officers of Viad, individually and as a group as of
March 25, 2010.
|
Amount and Nature |
||||||||
|
of |
||||||||
|
Beneficial |
Percent |
|||||||
|
Name
|
Ownership1 | of Class | ||||||
|
Named Executive Officers in Summary Compensation Table and
Current Executive Officers
|
||||||||
|
Paul B. Dykstra
|
174,680 | * | ||||||
|
Michael M. Hannan
|
13,682 | * | ||||||
|
George N. Hines
|
7,900 | * | ||||||
|
Ellen M. Ingersoll
|
94,438 | * | ||||||
|
John F. Jastrem
|
57,902 | * | ||||||
|
Thomas M. Kuczynski
|
14,990 | * | ||||||
|
G. Michael Latta
|
27,626 | * | ||||||
|
Cynthia J. Ognjanov
|
11,286 | * | ||||||
|
Scott E. Sayre
|
79,147 | * | ||||||
|
Directors
|
||||||||
|
Wayne G. Allcott
|
27,290 | * | ||||||
|
Daniel Boggan Jr.
|
17,900 | * | ||||||
|
Isabella Cunningham
|
15,400 | * | ||||||
|
Richard H. Dozer
|
9,235 | * | ||||||
|
Jess Hay
|
20,500 | * | ||||||
|
Robert C. Krueger
|
10,379 | * | ||||||
|
Robert E. Munzenrider
|
23,437 | * | ||||||
|
Albert M. Teplin
|
20,775 | * | ||||||
|
All Executive Officers and Directors as a Group (17 persons
total)
|
626,567 | 3.1 | % | |||||
| * | Less than one percent. | |
| 1 | Includes: 14,531 shares of performance-based restricted stock; 256,275 shares of restricted stock which will vest in three years from the date of grant; 2,182 performance-based restricted stock units (paid out in cash only); 9,500 restricted stock units (paid out in cash only) which will vest in three years from the date of grant; and 122,625 shares of common stock subject to stock options which were exercisable as of March 25, 2010, or within 60 days thereafter, by the directors and executive officers listed above. Performance-based restricted stock granted in 2008 vested in one-third increments in February 2009 and January 2010 with the balance to vest in January 2011 because specific performance targets were achieved at target levels. The specific performance targets for performance-based restricted stock granted in 2009 were not achieved at threshold levels for all companies (except Glacier Park) and no awards will be distributed other than to the Glacier Park participant. Glacier Park realized a 50% achievement and shares vested in one-third increments in February 2010 with the balance to vest in January 2011 and January 2012. A portion of the performance-based restricted stock units granted in 2009 were distributed in cash in March 2010 because the operating company portion of the award was achieved at slightly below target levels while the corporate component was not achieved. The remaining payouts will occur in one-third increments each year over the next two years on the first business day in January. Future vesting of restricted stock and units, including performance-based restricted stock and units, is subject generally to continued employment with the Company. |
10
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Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires Viad’s executive officers, directors, and
beneficial owners of more than 10% of Viad’s common stock,
to file initial reports of ownership and reports of changes in
ownership of Viad’s common stock with the SEC and the NYSE.
Such executive officers, directors and beneficial owners are
required by U.S. federal securities regulations to furnish
Viad with copies of all Section 16(a) forms they file. As a
matter of practice, Viad’s administrative staff assists its
executive officers and directors in preparing initial reports of
ownership and reports of changes in ownership, and files such
reports on their behalf with the SEC and the NYSE. Based solely
on a review of the copies of such forms furnished to Viad and
written representations from its executive officers and
directors, Viad believes that all executive officers, directors
and beneficial owners timely complied with the
Section 16(a) reporting requirements in 2009, except
Mr. Jastrem, who filed a Form 4 on January 5,
2010 to report that he did not timely file a Form 4 for
2,645 shares surrendered for taxes in connection with the
2009 vesting of restricted stock granted October 23, 2006.
Security
Ownership of Certain Beneficial Owners
The table below provides certain information regarding those
persons known by Viad to be the beneficial owners of more than
5% of Viad’s outstanding common stock.
|
Amount and Nature of |
Percent of |
|||||||
|
Name and Address
|
Beneficial Ownership | Class | ||||||
|
Marathon Asset Management LLP
5 Upper St. Martin’s Lane, London, UK WC2H 9EA |
3,490,4701 | 16.98 | %1 | |||||
|
BlackRock, Inc.
40 East 42nd Street, New York, NY 10022 |
1,540,7592 | 7.5 | %2 | |||||
|
Wells Fargo & Company
420 Montgomery Street, San Francisco, CA 94163 |
1,388,4323 | 6.51 | %3 | |||||
|
Dimensional Fund Advisors LP
6300 Bee Cave Road, Building One, Austin, TX 78746 |
1,265,2224 | 6.16 | %4 | |||||
| 1 | Marathon Asset Management LLP filed on January 29, 2010 with the SEC a statement on Schedule 13G. The company filing reported that it has sole voting and dispositive power over 81,000 shares. | |
| 2 | BlackRock, Inc. filed on January 29, 2010 with the SEC a statement on Schedule 13G. The company filing reported that it and its affiliated companies in the aggregate have sole voting power over 1,540,759 shares and sole dispositive power over all the shares. | |
| 3 | Wells Fargo & Company filed on January 25, 2010 with the SEC a statement on Schedule 13G. The company filing reported that it and its affiliated companies in the aggregate have sole or shared voting power over 1,325,027 shares and sole or shared dispositive power over 1,314,178 shares. | |
| 4 | Dimensional Fund Advisors LP filed on February 8, 2010 with the SEC a statement on Schedule 13G. The company filing reported that it and its affiliates in the aggregate have sole voting power over 1,229,674 shares and sole dispositive power over all the shares. |
The Audit Committee Report and the Report of the Human Resources
Committee contained in this proxy statement will not be
incorporated by reference into any present or future filings we
make with the SEC, even if those reports incorporate all or any
part of this proxy statement.
AUDIT COMMITTEE
REPORT
The
Committee
The Audit Committee of the Board is comprised solely of
independent directors and was appointed by the Board to assist
the Board in monitoring (1) the integrity of the financial
statements of Viad, (2) the independent auditors’
qualifications and independence, (3) the performance of
Viad’s internal audit function and independent auditors,
and (4) the compliance by Viad with legal and regulatory
requirements, including oversight of Viad’s Always
Honestsm
compliance and ethics program.
Meetings and
Responsibilities
The Committee met eleven times in 2009. Committee members are
also available to consult with management and with the
Company’s independent auditors throughout the year. The
Committee regularly meets in general and private sessions with
management of Viad and with Viad’s internal auditors and
external independent auditors. The
11
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Committee receives and discusses their reports and encourages
open and detailed discussion of all matters related to
responsibilities of the Committee.
Financial
Statements Recommendation
The Committee recommended that the audited financial statements
of Viad for 2009 be included in Viad’s Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 8, 2010. A copy of that report is included with your
proxy materials. In connection with its recommendation, the
Committee did the following:
| • | Reviewed and discussed the audited financial statements of Viad with management; | |
| • | Discussed with the independent auditors of Viad matters required to be discussed by generally accepted auditing standards, including standards set forth in Statement on Auditing Standards No. 114. That statement requires that the independent auditors 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; and | |
| • | Received written disclosures from the independent auditors regarding their independence as required by Rule 3526 of the Public Company Accounting Oversight Board, and discussed with the independent auditors the independent auditors’ independence. |
It is not the duty of the Committee to plan or conduct audits or
to determine that Viad’s financial statements are complete
or accurate and in accordance with generally accepted accounting
principles. Those are the responsibilities of management and
Viad’s independent auditors. In giving its recommendation
to the Board of Directors that the audited financial statements
of Viad for 2009 be included in Viad’s Annual Report on
Form 10-K,
the Committee relied on management’s representations and
the report of Viad’s independent auditors with respect to
the financial statements. A report of Viad’s management
concerning management’s responsibility for financial
reporting, and the report and opinion of Deloitte &
Touche LLP, Viad’s independent auditors, are included in
Viad’s Annual Report on
Form 10-K
and should be read in conjunction with the audited financial
statements of Viad.
Disclosure
Controls and Internal Control Over Financial
Reporting
Management is responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rule 13a-15(e))
and internal control over financial reporting (as defined in
Exchange Act
Rule 13a-15(f)),
evaluating the effectiveness of disclosure controls and
procedures and internal control over financial reporting, and
evaluating any change in internal control over financial
reporting that has materially affected, or is reasonably likely
to materially affect, internal control over financial reporting.
Deloitte & Touche LLP is responsible for expressing an
opinion on the effectiveness of Viad’s internal control
over financial reporting.
During 2009 and through the filing of Viad’s 2009 Annual
Report on
Form 10-K,
management completed the documentation, testing and evaluation
of Viad’s system of internal control over financial
reporting in response to the requirements set forth in
Section 404 of the Sarbanes-Oxley Act of 2002 and related
regulations. The Committee was kept informed of the progress of
the evaluation during the process. The Committee received
periodic updates provided by management and Deloitte &
Touche LLP at Committee meetings. The Committee has discussed
with Deloitte & Touche LLP the matters required under
Auditing Standard No. 5 (“An Audit of Internal Control
Over Financial Reporting That is Integrated With An Audit of
Financial Statements”) of the Public Company Accounting
Oversight Board. That standard requires Viad’s independent
auditors to report on their audit of Viad’s internal
control over financial reporting performed in conjunction with
their audit of Viad’s consolidated financial statements. At
the conclusion of the process, management provided the Committee
with, and the Committee reviewed, a report on the effectiveness
of Viad’s internal control over financial reporting. The
Committee also reviewed the report of Deloitte &
Touche LLP relating to its audit of the effectiveness of
Viad’s internal control over financial reporting.
AUDIT COMMITTEE
Albert M. Teplin, Chairman
Wayne G. Allcott
Richard H. Dozer
Jess Hay
Robert E. Munzenrider
Albert M. Teplin, Chairman
Wayne G. Allcott
Richard H. Dozer
Jess Hay
Robert E. Munzenrider
12
Table of Contents
REPORT OF THE
HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
The Human Resources Committee of the Board is comprised solely
of independent directors. The Committee oversees design and
implementation of an executive compensation strategy intended to
enhance the fundamental value of Viad by increasing its
earnings, cash flows, market position and financial condition,
thereby providing a logical predicate for increases in
shareholder value. The Committee has reviewed and discussed with
Viad’s management the Compensation Discussion and Analysis
provided in this proxy statement, and based on such review and
discussions, the Committee recommended to Viad’s Board of
Directors that such Compensation Discussion and Analysis be
included in this proxy statement and incorporated by reference
in Viad’s 2009 Annual Report on
Form 10-K,
filed March 8, 2010.
HUMAN RESOURCES COMMITTEE
Jess Hay, Chairman
Daniel Boggan Jr.
Isabella Cunningham
Richard H. Dozer
Albert M. Teplin
Jess Hay, Chairman
Daniel Boggan Jr.
Isabella Cunningham
Richard H. Dozer
Albert M. Teplin
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Compensation
Program Overview
Each year, the Human Resources Committee (the “HR
Committee”) of the Board reviews and approves Viad’s
executive compensation program and the compensation levels for
its executive officers. The HR Committee, comprised solely of
independent directors, has sole responsibility with respect to
Viad’s Chief Executive Officer (“CEO”) and other
executive officers, to approve (a) the annual base salary
level, (b) the annual incentive opportunity level,
achievement of performance measures and payment of incentive
awards, (c) the long-term incentive opportunity level,
grant of awards, and achievement of performance measures, and
(d) any special or supplemental benefits and perquisites.
The salary, equity and incentive compensation of Viad’s CEO
is approved by the HR Committee and is subject to ratification
by independent members of the Board. The HR Committee also has
sole authority to retain and terminate any compensation
consultant used to assist in the evaluation of the compensation
of the CEO and other executive officers.
Executive
Total Compensation Philosophy
Viad’s Board employs a pay-for-performance philosophy
through its compensation programs by aligning the financial
interests of its executive officers and key management with the
long-term financial well being of Viad and its shareholders.
This philosophy was adopted more than a decade ago. Viad’s
plans and programs are reviewed annually by the HR Committee and
no changes to the philosophy are planned for the 2010 executive
compensation programs, as the philosophy continues to support
the strategy and vision for the Company.
Viad’s compensation philosophy is designed to:
| • | Promote a performance-driven culture via compensation components that properly incent executive performance; | |
| • | Provide a competitive compensation package, including significant incentive-based components designed to reward individual and business performance; | |
| • | Attract, retain and engage the best available executive talent; | |
| • | Motivate executives and key employees to strive to achieve Viad’s long-term and short-term operating and financial goals, thereby enhancing shareholder value; | |
| • | Encourage executives and key employees to participate in the risks and rewards of ownership through investment in Viad’s common stock; and | |
| • | Foster core values of ethics and integrity and protect shareholder value through compensation forfeiture and reimbursement provisions which are triggered if an executive engages in certain conduct that is detrimental to the ethical standards or interests of Viad. |
13
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Benchmarking
and Resources
Hewitt Associates (“Hewitt”), a nationally-known
independent consulting firm, has been retained by the HR
Committee and Viad’s Human Resources Department to provide
services and advice and counsel on executive compensation and to
serve as a technical resource for market data on executive
compensation. As a participant in Hewitt’s executive
compensation database, in addition to other market surveys
described below, Viad obtains competitive market data for
executive positions, including base salary, target and actual
annual incentives, long-term incentives, and total compensation
values to assist the HR Committee in its decisions on executive
compensation.
Viad’s Human Resources and Law Departments, and its
Corporate Secretary, support the HR Committee in its work and in
some cases act pursuant to delegated authority to fulfill
various functions in administering Viad’s compensation
programs. The Human Resources Department also provides the HR
Committee with competitive compensation benchmarks using general
market surveys. Viad does not use a set of identified comparator
or peer companies in connection with the decision-making process
for executive compensation. Viad’s unique and diverse mix
of businesses – from marketing and event services to
travel and recreation services – makes it difficult to
identify a peer group that has similar characteristics. In
addition, Viad is the only publicly-held company in the United
States operating with this mix of businesses. As a result,
Viad’s Human Resources Department conducts an annual review
of compensation using competitive market data obtained from a
variety of market surveys, including Hewitt Total Compensation
Measurement, Towers Perrin, Watson Wyatt and Mercer. Market data
is collected for companies that have annual revenues roughly
similar to Viad’s annual revenues (companies with annual
revenues in the range of $500 million to $1 billion
were used for the 2009 benchmarking), without regard to specific
companies or the specific industry in which the companies
compete. Benchmark valuations are derived from these general
market surveys in consultation with Hewitt. Such competitive
data provides reference points for the HR Committee.
Elements of compensation generally are targeted at the
50th percentile of such competitive market data (as
discussed under the “Components of Compensation”
subsection below). This analysis and a number of other factors,
including an assessment of individual performance, Viad’s
operating and financial results, and internal equity
considerations, serve to guide the HR Committee in its
determination of appropriate levels of compensation for each
named executive officer in the Summary Compensation Table of
this proxy statement. The HR Committee makes the determination
on the total compensation of executive officers at the HR
Committee’s regularly scheduled meeting in February of each
year. The HR Committee’s decisions on CEO compensation are
based on market data, individual performance and the extent to
which Viad’s financial and operating goals were achieved in
the prior year. The HR Committee’s decision regarding the
CEO’s compensation must be ratified by the independent
members of the Board.
The CEO’s performance is assessed annually through a
performance review process which gathers input from superiors,
peers and subordinates. These reviews are returned to the
Chairman of the HR Committee for review and discussion with the
Committee. At the regularly-scheduled meeting in February, the
HR Committee discusses the performance of the CEO and each of
the other executive officers and determines individual executive
compensation levels for the year. For the other named executive
officers, the CEO annually gathers input regarding their
performance from superiors, peers and subordinates.
Components of
Compensation
Compensation components for the named executive officers in the
Summary Compensation Table include:
| • | annual base salary; | |
| • | short-term, annual cash incentive compensation; | |
| • | long-term incentives; | |
| • | perquisites and other personal benefits; | |
| • | retirement income and savings plans; and | |
| • | post-termination compensation and benefits. |
Timing of Pay
Decisions and Actions
Total compensation is reviewed by the HR Committee at its
regularly scheduled meeting in February. Merit adjustments, if
any, to annual base salary are effective April 1 of each year.
Awards under the short-term incentive plan (for the prior year)
and long-term performance plans are approved at the February
meeting once achievement of
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financial targets has been determined, and payment of awards is
not made until the Company’s books have been officially
closed for the prior fiscal year and the Company’s Annual
Report on
Form 10-K
is filed with the SEC. Long-term incentive compensation awards
(as discussed in more detail below) are granted at the February
meeting, and targets for the incentive plans are determined at
the March meeting of the HR Committee.
Mix of
Pay
The HR Committee and management create what they believe is the
best mix of compensation components, consistent with Viad’s
compensation philosophy, in delivering the executives’
targeted total compensation. The table below shows the 2009 mix
of compensation components for the five 2009 executive officers
named in the Summary Compensation Table on page 23 of this
proxy statement, who are referred to as the “named
executive officers” in this proxy statement.
Components of
2009 Compensation
As a Percentage (%) of Targeted Total Compensation
As a Percentage (%) of Targeted Total Compensation
|
Targeted |
||||||||||||||||
|
Annual |
||||||||||||||||
|
Base |
Incentive |
Long-Term |
Perquisites and |
|||||||||||||
|
Salary |
Bonus |
Incentives1 |
Personal Benefits |
|||||||||||||
|
Name
|
(%) | (%) | (%) | (%) | ||||||||||||
|
Paul B. Dykstra
|
25 | 20 | 45 | 10 | ||||||||||||
|
Ellen M. Ingersoll
|
29 | 16 | 44 | 11 | ||||||||||||
|
John F. Jastrem
|
36 | 20 | 30 | 14 | ||||||||||||
|
Scott E. Sayre
|
34 | 17 | 35 | 14 | ||||||||||||
|
Michael M. Hannan
|
36 | 20 | 29 | 15 | ||||||||||||
| 1 | The percentage calculation for this column is based on the grant date estimated future payouts for long-term incentives. |
Viad’s total compensation package for executives is
designed to enhance shareholder value, as well as to mitigate
the potential for excessive risk-taking by executives in
managing Viad’s businesses. The HR Committee believes that
certain design features of Viad’s executive compensation
program aid in discouraging excessive risk-taking. In
particular, the mix of pay for executives is not overly weighted
toward either annual incentives or equity compensation. The
performance goals for both annual and long-term incentives are
approved by the HR Committee to ensure against unreasonable
performance goals and targets. The awards of long-term
incentives create and maintain shareholder value over a
multi-year period because the ultimate value of each
executive’s grant will depend upon the value of Viad’s
stock at the time of vesting. This ensures that executives
consider the inherent risk of short-term decisions that may
impact the future performance of Viad, as does the retention
feature built into restricted stock and performance-based
restricted stock awards. Viad’s stock ownership guidelines
are an additional feature of Viad’s executive compensation
program. These guidelines align the financial interests of our
directors and officers with those of our shareholders (see
“Stock Ownership Guidelines” subsection below and the
“Ownership Guidelines for Directors and Executive
Officers” section of this proxy statement). As an
additional feature of Viad’s executive compensation program
designed to protect shareholder value, annual and long-term
incentive compensation is subject to forfeiture and
reimbursement provisions (see “Forfeiture and Reimbursement
Provisions for Detrimental Conduct” subsection below).
Each element of the total compensation package for the named
executive officers in the Summary Compensation Table is
discussed below.
Annual Base
Salary
The base salary program for Viad’s executives helps achieve
the objectives outlined above by attracting and retaining strong
talent. Base salaries represent the fixed portion of the
executive compensation package. Salary levels are determined
using a combination of factors including competitive benchmark
levels, the executive’s experience and tenure, Viad’s
annual merit budget and the executive’s individual
performance. Merit increase guidelines for all employees,
including the named executive officers, are determined using
published survey sources, and have ranged from 0% to 5%,
averaging approximately 3% over the past several years, although
in light of economic conditions, the base salaries for all
employees were frozen in 2009, except in limited circumstances.
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Base salaries for Viad’s named executive officers are
targeted between the 50th and 75th percentiles of the
general market survey data. Base salaries generally fall between
the minimum and maximum of the targeted range, depending upon
time in position, individual performance and qualifications for
the role. This range allows Viad to respond to changing business
conditions and manage salaries more evenly over an
executive’s career. For the named executive officers,
actual base salaries approved by the HR Committee for 2009 were
within the 50th and 75th percentile range of the
survey data, except for the base salary of Mr. Dykstra,
which was slightly below the minimum of the range largely due to
the fact that salaries of the named executive officers were
frozen for 2009.
For 2009, the base salaries of the named executive officers were
frozen with no year-over-year increases in light of economic
conditions. All employees at the Viad corporate level, including
Messrs. Dykstra and Sayre and Ms. Ingersoll, also took
a mandatory, week-long work furlough (leave without pay) as one
of Viad’s expense-reduction measures for 2009.
Mid-year 2009, the base salaries of Messrs. Hannan and
Jastrem were increased to reflect their increased
responsibilities as President of Viad’s Travel &
Recreation Group and President of Viad’s
Marketing & Events Group, respectively.
Mr. Hannan’s salary was increased from $280,000 to
$300,000 (Canadian dollars). Mr. Jastrem’s salary was
increased from $435,000 to $490,000. For 2010, the base salaries
of the named executive officers have again been frozen as a
cost-saving measure due to the slow economic recovery of the
industries in which Viad competes.
Annual
Incentives
Viad’s Management Incentive Plan (the “Plan”) is
an annual, cash-based, pay-for-performance incentive program for
executive officers and other key executives. The Plan is
designed to motivate and reward these individuals for their
contributions to Viad’s performance during the year by
making a large portion of their cash compensation variable and
dependent upon achievement of Viad’s annual financial
targets. Incentive cash payments are further designed to
emphasize results and contributions through achievement of
corporate and operating company performance targets established
by the HR Committee at the beginning of each year. When
determining the performance targets, the HR Committee considers
past financial performance of Viad and its operating companies
and the internal estimates of their current-year planned
financial performance. Incentive cash payments reflect the
extent to which targets for performance goals are met or
exceeded.
Financial targets are set such that achievement will result in
enhancement to the fundamental value of Viad, which in turn is
ultimately reflected in enhanced shareholder value. Established
growth trends, which are based on economic and business
conditions specific to Viad and each of the operating companies,
are the gauge by which meaningful targets are set and executive
performance is measured. For the past five years, the HR
Committee has not awarded a discretionary cash bonus to any
named executive officer in circumstances where performance goals
under the annual incentive plan were not met.
For 2009, the performance goals and targets, the weighting of
each performance goal as a percentage of the total award, and
the achievement levels for each performance goal are provided in
the table below.
2009 Annual
Incentive Performance Goals, Weighting and Targets
| Targeted Achievement Levels1 | ||||||||||||||||||||
|
Performance |
Weight |
Threshold |
Target |
Maximum |
||||||||||||||||
| Goal | (%) | ($) | ($) | ($) | ||||||||||||||||
|
Corporate2
|
IPS5 | 70 | % | 1.00 | 1.28 | 1.75 | ||||||||||||||
| OCF5 | 30 | % | 25,209 | 34,345 | 50,021 | |||||||||||||||
|
Experiential Marketing
Services3
|
OI5 | 65 | % | (7,000 | ) | (5,534 | ) | 500 | ||||||||||||
| OCF5 | 25 | % | (5,900 | ) | (4,475 | ) | 1,600 | |||||||||||||
| Revenue | 10 | % | 190,000 | 195,320 | 220,000 | |||||||||||||||
|
Brewster4
|
OI5 | 65 | % | 12,000 | 14,675 | 17,000 | ||||||||||||||
| OCF5 | 25 | % | 8,700 | 11,383 | 13,700 | |||||||||||||||
| Revenue | 10 | % | 50,000 | 57,758 | 65,000 | |||||||||||||||
| 1 | All dollar amounts are shown in thousands (000), except Income Per Share. All amounts are in U.S. dollars, except those of Brewster, which are in Canadian dollars. Achievement at Threshold pays out at 30% of the performance goal’s weighting. Achievement at Target pays out at 100% of the performance goal’s weighting. Achievement at Maximum pays out at 175% (the maximum achievement level) of the performance goal’s weighting. Actual results are pro-rated based on where they fall along the continuum from the Threshold amount through the Maximum amount. |
16
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| 2 | Includes P. Dykstra, E. Ingersoll, and S. Sayre. For 2009, no bonus awards were made to Viad’s corporate executives as financial results were below threshold levels for all performance goals. No discretionary cash bonus was awarded to any executive officer. | |
| 3 | Includes Exhibitgroup/Giltspur and other companies within the Experiential Marketing Services reportable segment. Includes J. Jastrem. For 2009, no bonus awards were made to executives of the Experiential Marketing Services reportable segment as financial results were below threshold levels for all performance goals. No discretionary cash bonus was awarded to any executive officer. | |
| 4 | Includes M. Hannan. For 2009, Brewster’s financial performance yielded a bonus payment of 99.4% as the actual results for the performance goals were: $14,119,000 (55.5%) for Operating Income; $12,533,000 (34.3%) for Operating Cash Flow; and, $57,315,000 (9.6%) for Revenue. | |
| 5 | “IPS” is an abbreviation for Income Per Share. “OI” is an abbreviation for Operating Income. “OCF” is an abbreviation for Operating Cash Flow. The performance goals of Income Per Share, Operating Income and Operating Cash Flow exclude unusual charges (such as impairment losses and restructuring charges), changes in accounting principles and effects of enacted tax laws resulting from major corporate tax reform legislation that were not contemplated, as well as unplanned acquisition activity (including deal costs, results of acquired companies and the related impact on interest income and/or interest expense) and special, one-time cash dividends. Operating Cash Flow is adjusted to exclude the effect of excess tax benefits on share-based compensation, restructuring payments and payments on any other Income Per Share achievement adjustments (after-tax) that impact cash flow. |
The 2009 performance goals of Income Per Share for corporate
level executives and Operating Income for operating company
level executives are stand-alone goals and awards are paid based
on achievement of the goal. The performance goals of Operating
Cash Flow and Revenue are also stand-alone goals and awards are
paid based on achievement of the target, provided that the
Income Per Share measure or the Operating Income measure is met
at the threshold amount.
The formula for determining the annual bonus award is: annual
base salary earnings times individual target bonus percentage
times the company achievement factor. As shown in the
“Target” column in the table below, the 2009 target
bonus percentages for the named executive officers in 2009
ranged from 50% to 80% of the executive’s annual base
earnings. The “Threshold” and “Maximum”
columns in the table below reflect the executive’s target
level times the company achievement factor at the threshold
level of 21% for corporate level executives and 19.5% for
operating company level executives and maximum level of 175%,
respectively. Individual target bonus percentages are
established for each executive officer based upon competitive
target bonus levels for comparable positions and are targeted at
the 50th percentile of the market. The HR Committee has
discretion to increase or decrease the actual awards based on
company and individual performance, except in the case of
executive officers, whose awards may only be decreased.
2009 Target Bonus
Payout Levels
|
Threshold |
Target |
Maximum |
||||||||||
|
Name
|
(%) | (%) | (%) | |||||||||
|
Paul B. Dykstra
|
16.80 | 80 | 140.00 | |||||||||
|
Ellen M. Ingersoll
|
11.55 | 55 | 96.25 | |||||||||
|
John F. Jastrem
|
10.725 | 551 | 96.25 | |||||||||
|
Scott E. Sayre
|
10.50 | 50 | 87.50 | |||||||||
|
Michael M. Hannan
|
10.725 | 55 | 96.25 | |||||||||
| 1 | Mr. Jastrem’s target level was changed to 65% mid-year 2009 to reflect his increased responsibilities as President of Viad’s Marketing & Events Group resulting in an averaged target bonus payout level of 60%. |
In 2008, Mr. Jastrem was granted a special, one-time
turn-around incentive award to incentivize improvements in the
2008 performance of Viad’s operating company,
Exhibitgroup/Giltspur, above and beyond the performance goals
established under Viad’s 2008 Management Incentive Plan.
There was no equivalent award for any executive officer in 2009.
Achievement was determined and approved by the HR Committee at
its meeting in February 2009. The award payout is in Viad’s
common stock, payable annually in thirds, with the first two
payments being made in February 2009 and January 2010,
respectively, and the remaining payment to be made in January
2011. This award is subject to the same forfeiture,
reimbursement and non-competition provisions that are contained
in all equity award agreements for executives. For
Mr. Jastrem’s 2008 award, achievement of operating
income above the maximum operating income target approved for
Exhibitgroup/Giltspur under the 2008 Management Incentive Plan
was weighted at 50% with a target of $2 million.
Achievement of the strategic goals component of the award was
weighted at 50%. The strategic goals component included three
performance measures: revenue growth with a target of
$189 million; client retention; and employee retention. The
revenue growth was weighted at 60%; client retention at 25%; and
employee retention at 15%. The aggregate weight of these three
performance measures was equal to the overall weight of the
strategic goal component of the award (50%). Achievement of
client retention was based on the level of retention of 27
specific, key clients. Similarly, achievement of employee
retention was based on the level of
17
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retaining 11 identified, key employees. None of the employees
was an executive officer of Viad. Each performance measure
within the strategic goals component, as well as operating
income component, was assigned a goal that corresponded to five
possible performance levels. The weighted performance level
rating for each component (operating income and strategic goals)
was combined to determine the overall performance level, which
was then used to determine the payout level. No payout for the
strategic goals component could occur unless the operating
income goal was met at the threshold level.
Long-Term
Incentives
Long-term incentives for the named executive officers in 2009
were granted using restricted stock and performance-based
restricted stock, except Mr. Hannan, who was granted
restricted stock units and performance-based restricted stock
units rather than shares of Viad common stock due to Canadian
tax considerations. Of the total long-term award value granted
to the executive officers, 58% was made up of performance-based
restricted stock (or units) and 42% from restricted stock (or
units), making more than half of the total long-term award
subject to a potential zero payout should performance goals not
be achieved. This mix places heavy emphasis on performance and
attainment of financial targets that are designed to provide for
long-term value to Viad’s shareholders, as well as
providing a retention incentive for key executives. Long-term
incentive grants are targeted between the 50th and
75th percentile range of the competitive market, as
reflected in general market surveys. In 2009, long-term
incentive grants were made within the targeted percentile range,
or slightly lower than the minimum of the range due to the
decrease in the price of Viad’s common stock as of the time
of the grant. Each of the long-term incentive plans is described
below.
Performance-Based Restricted Stock (or
Units). Key executives who have a significant
impact on Viad’s operational and financial goals, including
the named executive officers in the Summary Compensation Table,
were awarded performance-based restricted stock in 2009, except
performance-based restricted stock units were awarded to
Mr. Hannan due to Canadian tax considerations. These awards
were designed to focus management’s attention on financial
performance in 2009, and to retain the management team with a
three-year vesting schedule of one-third of the earned shares
(or units) per year starting one year after the grant date. The
HR Committee believes that vesting the shares over a three-year
period has served as an effective retention tool. Until
achievement of targets has been determined, dividends are paid
and the executive may vote the shares granted. Once achievement
is determined, dividends and voting apply only to earned shares
(unearned shares are forfeited). Mr. Hannan’s
performance-based restricted stock units have the same vesting
schedule and are paid in cash, but have no voting rights.
Dividend equivalents are paid to him.
In 2009, the grants of performance-based restricted stock to
named executive officers were not earned because targets for the
incentive performance measures established for the 2009 grant
were not achieved. Mr. Hannan earned the 2009 grant of
performance-based restricted stock units because targets were
met at 48.125%. The 2009 performance measures and targets for
performance-based restricted stock and units were the same as
the measures established for the 2009 annual incentive plan and
were weighted the same for achievement purposes (see
“Annual Incentives” subsection above). Executives may
earn from 0% to 100% of the shares (or units) granted, dependent
upon the performance of the operating company or overall
corporate results. For Mr. Hannan and other executives in
Viad’s operating companies, 50% of the award is earned
based on the achievement of the operating company’s
performance targets and the other 50% is based on the
achievement of the corporate level performance targets (see the
“Annual Incentives” subsection above). For corporate
level executives, 100% of the award is based on the achievement
of the corporate level performance targets under the Management
Incentive Plan. For 2010, performance-based restricted stock (or
units) will not be awarded (as discussed under the “Changes
to Executive Compensation in 2010” subsection below).
Time Vested Restricted Stock (or Units). In
addition to performance-based restricted stock (or
performance-based restricted stock units in the case of
Mr. Hannan) awarded in 2009, restricted stock (or
restricted stock units in the case of Mr. Hannan) was also
awarded in 2009 to a limited number of key executives, including
the named executive officers in the Summary Compensation Table.
The restricted stock and restricted stock units will vest in
full three years from the grant date. For the executives
receiving restricted stock, the executive may vote the shares
and will receive dividends during the restriction period.
Mr. Hannan, who received restricted stock units, will
receive dividend equivalents. Receipt of dividends (or dividend
equivalents) and the executive’s right to vote shares are
important links in aligning management’s interests with
those of Viad’s shareholders. The HR Committee believes
that due to the three-year cliff vesting feature of the shares
and units, this compensation element has been highly effective
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in retaining executives and in motivating executives to make
long-term decisions that will be beneficial to shareholders and
Viad.
Performance Units. The Performance Unit Plan
(“PUP”), which was established under the 2007 Viad
Corp Omnibus Incentive Plan, is intended to focus participants
on the long-term interests of our shareholders by tying the
value of units to both stock price appreciation during the
three-year performance period and to achievement of financial
measures that are key factors in increasing shareholder value.
Performance targets are set during the first quarter of the
three-year performance period, typically at the March meeting of
the HR Committee. Targets are set such that achievement will
result in enhancement to the fundamental value of Viad, which in
turn is ultimately reflected in enhanced shareholder value.
Established growth trends, which are based on economic and
business conditions specific to Viad and each of the operating
companies, are the gauge by which meaningful targets are set and
executive performance is measured.
PUP awards are paid in cash and are earned based on the degree
of achievement of the targets during the performance period and
are calculated using the average price of Viad’s common
stock during the
ten-day
trading period beginning on the day following public
announcement of Viad’s year-end financial results for the
final year of the performance period. The formula for
determining the payout of a PUP award is the number of units
originally granted to the executive multiplied by the
ten-day
average stock price described above, multiplied by the
achievement factor for the Company. The achievement factor can
range from 0% to 200%.
In 2009, performance units were not granted due to the
difficulties in setting three-year targets with the
uncertainties in the marketplace and general economy. None of
the named executives received PUP payouts for the
2007 – 2009 performance period as the performance
goals were not met.
Payouts for PUP earned during the 2006 – 2008
performance period were made in 2009 to the corporate executives
of Viad, including Messrs. Dykstra and Sayre and
Ms. Ingersoll with the achievement level of performance
targets being at the maximum (200%). Exhibitgroup/Giltspur
participants in PUP, including Mr. Jastrem, did not receive
a payout because targets at Exhibitgroup/Giltspur were not met
for the plan period. Mr. Hannan did not receive a PUP award
for this performance period as the award was granted in February
2006 and he did not join the Company until 2008. The table
provided below shows the performance goals and targets, the
weighting of each performance goal as a percentage of the total
award, and the achievement levels for each performance goal
under the 2006 – 2008 PUP award for the corporate
executives who received payouts in 2009.
2006 –
2008 PUP Performance Goals, Weighting and Targets for Corporate
Executives
| Targeted Achievement Levels1 | Actual Results | |||||||||||||||||||||||
|
Performance |
Weight |
Threshold |
Target |
Maximum |
Amount |
Weight3 |
||||||||||||||||||
|
Goal
|
(%) | ($) | ($) | ($) | ($) | (%) | ||||||||||||||||||
|
IPS2
|
60 | % | 1.56 | 1.65 | 1.78 | 2.27 | 120 | % | ||||||||||||||||
|
OCF2
|
30 | % | 55,067 | 57,800 | 60,800 | 75,039 | 60 | % | ||||||||||||||||
|
Revenue
|
10 | % | 875,333 | 916,000 | 958,000 | 985,879 | 20 | % | ||||||||||||||||
| 200 | % | |||||||||||||||||||||||
| 1 | Targeted achievement levels are based on a three-year average. All dollar amounts are shown in thousands (000), except Income Per Share. Achievement at Threshold pays out at 50% of the performance goal’s weighting. Achievement at Target pays out at 100% of the performance goal’s weighting. Achievement at Maximum pays out at 200% (the maximum achievement level) of the performance goal’s weighting. | |
| 2 | “IPS” is an abbreviation for Income Per Share. “OCF” is an abbreviation for Operating Cash Flow. | |
| 3 | Actual results are pro-rated based on where they fall along the continuum from the Threshold amount through the Maximum amount. See also Footnote 1 above. |
Vesting of Long-Term Incentives. The vesting
of restricted stock, restricted stock units, performance-based
restricted stock and performance-based restricted stock units is
subject generally to continued employment with Viad or its
operating companies, except certain termination events will
trigger post-termination benefits as discussed below under the
“Post-Termination Compensation and Benefits”
subsection below, as well as the “Potential Payment Upon
Employment Termination or Change of Control” section of
this proxy statement.
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Table of Contents
Perquisites
and Other Personal Benefits
Perquisites and other personal benefits are part of the
executive’s total compensation package and are reviewed
periodically to ensure external competitiveness. The perquisites
currently offered by the Company to the executive officers
include financial counseling and tax preparation, annual
executive physical examination, accidental death and
dismemberment insurance, executive medical insurance, club
memberships and Company-paid parking. Mr. Dykstra is also
eligible for executive life insurance, a home Internet and
security system and an automobile, plus related expenses.
Operating company presidents are also eligible for an automobile
allowance. Expense incurred for spousal travel is reimbursed to
the executive officers if spouses are invited to attend one of
the regularly scheduled Board meetings. Additional information
on perquisites and other personal benefits provided to the named
executive officers in 2009 is discussed in the “Summary
Compensation Table” of this proxy statement.
Retirement
Income and Savings Plans
All eligible employees, including the named executive officers,
may participate in the Viad Corp Capital Accumulation Plan (the
“401(k) Plan”). In addition, the named executive
officers are eligible to participate in the Supplemental 401(k)
Plan, which provides for additional employee contributions over
the annual limits set by the Internal Revenue Code for the
401(k) Plan, plus matching contributions by Viad based on the
same percentage as the 401(k) Plan. In lieu of participation in
Viad’s 401(k) Plan and Supplemental 401(k) Plan,
Mr. Hannan is a participant in the Retirement Plan for
Management Employees of Brewster.
Annual retirement benefits will be paid under applicable
schedules of the Viad Corp Supplemental Pension Plan
(“SERP”) and under the MoneyGram Pension Plan
(formerly the Viad Corp Retirement Income Plan) to
Messrs. Dykstra and Sayre and Ms. Ingersoll, although
accruals under the MoneyGram Pension Plan were frozen as of
December 31, 2003. In connection with the spin-off of
MoneyGram International, Inc. (“MoneyGram”) on
June 30, 2004, the sponsorship and administration of the
MoneyGram Pension Plan, as well as all liabilities of the
MoneyGram Pension Plan and the SERP, were assumed by MoneyGram.
In general, the compensation covered by the MoneyGram Pension
Plan is annual salary and one-half of annual bonus. Actual
benefits will be calculated primarily on the basis of the
average of a participant’s last five years of annual salary
prior to retirement and on the basis of the average of one-half
of a participant’s highest five years of annual incentive
compensation. Like all other forms of compensation, the level of
retirement benefit is determined by individual performance
assessments throughout a career, since individual performance
determines the level of compensation, which is an integral
component of savings and pension benefit formulas.
Under the Retirement Plan for Management Employees of Brewster
Inc., the annual pension payable to Mr. Hannan, assuming a
normal retirement date, is equal to 2% of his highest average
earnings for each year of credited service. “Highest
average earnings” are defined as the average of the highest
annual earnings in any three calendar years of credited service.
The maximum pension payable to Mr. Hannan cannot exceed the
dollar limits permitted under Income Tax Act of Canada.
The change in the value of the pension plans during 2009 is
included in the Summary Compensation Table. Please refer to the
“Pension Benefit Table” and the “Potential
Payment Upon Employment Termination or Change of Control”
sections of this proxy statement for further discussion of
retirement benefits.
Post-Termination
Compensation and Benefits
Certain termination events will trigger post-termination
payments and benefits for the named executive officers in the
Summary Compensation Table, including retirement, change of
control severance, termination for cause, involuntary
termination not for cause, death or disability. These are
discussed below and also under the “Potential Payment Upon
Employment Termination or Change of Control” section of
this proxy statement. Post-termination compensation provides for
either short-term (termination or change in control) or
long-term (retirement) security to the Company’s executive
officers in the event their employment with the Company ends. In
the event of involuntary termination, post-termination
compensation is intended to provide an interim financial
resource to the executive during the transition from employment
with Viad.
Retirement. Eligibility for normal retirement
is age 65 and for early retirement is age 55. The
retirement income received by the executives is discussed under
the “Retirement Income and Savings Plans” section and
in the “Pension Benefits Table” of this proxy
statement. Upon normal or early retirement, executives would
receive ownership of the restricted stock and restricted stock
units awarded to them upon the lapse of the vesting period on a
pro-rata basis (percentage of time from the grant date to the
retirement date), except that executives who have reached the
age of 60
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at the time of retirement and retire at least 2 years from
the date of the grant would receive full ownership (not
pro-rated) upon lapse of the vesting period. Executives would
receive ownership of earned performance-based restricted stock,
earned performance-based restricted stock units, and earned
performance units, on a pro-rata basis, upon lapse of the
performance period, except that executives who have reached the
age of 60 at the time of retirement and retire at least
18 months from the date of the grant would receive full
ownership (not pro-rated) upon lapse of the performance period.
Stock options not yet exercisable would fully vest upon
retirement (or six months and one day thereafter in the event
the termination date occurs within six months of the grant date)
and the executive may exercise the option rights within a
five-year period following the retirement date. Executives would
receive an accrued annual incentive bonus, if earned, on a
pro-rata basis. Mr. Dykstra is entitled to the same
benefits upon retirement pursuant to the terms of his employment
contract. In addition, he will be provided with an office and
secretarial support for five years following retirement.
Mr. Sayre is the only named executive officer eligible for
retirement, as discussed below in the “Potential Payment
Upon Employment Termination or Change of Control” section
of this proxy statement.
Change of Control Severance. Viad’s
Executive Severance Plan (Tier I) provides each of the
named executives with severance benefits if the executive’s
employment is terminated by Viad without cause or by the
executive for good reason (as those terms are defined in the
Executive Severance Plan) within 36 months after a change
of control of Viad, or by the executive for any reason (other
than for good reason, death, disability or retirement) during a
30 day window period beginning on the first anniversary of
the change of control of Viad. The purpose of the Executive
Severance Plan is to ensure, in the event of a possible change
of control of Viad, that executives will be available (without
concern for their personal financial situations) to perform
their regular duties and to advise management and the Board as
to whether the change of control proposal would be in the best
interests of Viad and its shareholders, to assist in the change
of control implementation and transition, and to perform other
appropriate actions. Severance benefits also provide an economic
means for executives to transition from Viad employment.
Participants in the plan are designated by the CEO and approved
by the HR Committee. Viad’s annual and long-term incentive
plans also provide for accelerated vesting of equity awards and
immediate payment of earned performance incentives upon a change
of control of Viad.
For purposes of these benefits, a change of control is deemed to
occur, in general, if (a) a shareholder or group of
shareholders acquires 20% or more of Viad’s common stock,
(b) the current directors in office cease to constitute at
least a majority of the Board, (c) a reorganization, merger
or consolidation, or the sale of all or substantially all of the
corporate assets occurred, or (d) there is a complete
liquidation and dissolution of Viad.
Involuntary Termination Not For
Cause. Mr. Dykstra’s employment
agreement provides that he will receive post-termination
payments and benefits upon Viad’s termination of his
employment without cause. The relevant material terms of
Mr. Dykstra’s employment agreement with Viad are
discussed in the “Potential Payment Upon Employment
Termination or Change of Control” section of this proxy
statement. For the other named executive officers, Viad has an
arrangement providing payments and benefits to them for
Viad’s termination of their employment without cause, as
discussed in the “Potential Payment Upon Employment
Termination or Change of Control” section of this proxy
statement.
Death or Disability. Mr. Dykstra’s
employment agreement does not provide for any post-termination
payments upon his employment termination due to death or
disability; however, he and the other named executive officers
will be eligible to receive benefits or rights otherwise due in
the event of their death or disability pursuant to compensation
and benefit plans and related agreements, as discussed in the
“Potential Payment Upon Employment Termination or Change of
Control” section of this proxy statement.
Forfeiture and
Reimbursement Provisions for Detrimental Conduct
In order to protect Viad and its operating companies and to help
insure the long-term success of the business, annual incentive
compensation and long-term incentive compensation (including
awards of performance-based restricted stock, restricted stock
units, performance-based restricted stock, performance-based
restricted stock units, and performance units) are subject to
forfeiture and reimbursement provisions (i.e., a
“clawback” provision) relating to the following
conduct:
| • | an officer or employee knowingly participated in misconduct that caused a misstatement of financial statements of Viad or any of its affiliates, or in misconduct which represented a material violation of Viad’s Code of Ethics or certain other policies; |
21
Table of Contents
| • | an officer or employee was aware of and failed to report an employee who was participating in misconduct that caused or could cause a misstatement of financial statements of Viad or any of its affiliates, or in misconduct which represented a material violation of Viad’s Code of Ethics or certain other policies; and | |
| • | an officer or employee acted significantly contrary to the best interests of Viad. |
The forfeiture and reimbursement provisions also relate to
violations of certain restrictions on competitive activities
following employment termination. In addition, the annual
incentive compensation and long-term incentive compensation
awards in 2009 (including awards of restricted stock, restricted
stock units, performance-based restricted stock and
performance-based restricted stock units) also provide Viad with
the right to stop the executive, through a court-ordered
injunction, from working for competitors and soliciting
customers and employees following employment termination. Viad
also may seek monetary damages for such activities.
Limit on
Deductibility of Certain Compensation
Section 162(m) of the Internal Revenue Code disallows a
corporate income tax deduction on compensation paid to an
executive officer named in the Summary Compensation Table that
exceeds $1.0 million during the tax year, subject to
certain permitted exceptions. To the extent compensation is
based upon attaining performance measures set by the HR
Committee and meets the other requirements of
Section 162(m), the compensation is not included in
computation of the limit. The HR Committee intends, to the
extent possible and where it believes it is in the best interest
of Viad and its shareholders, 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
Viad’s overall system of compensation policies and
practices. The Board submitted performance measures and certain
other terms under the 1997 Viad Corp Omnibus Incentive Plan and
the 2007 Viad Corp Omnibus Incentive Plan for approval at the
1997, 2002 and 2007 Annual Meeting of Shareholders, as required
to allow certain of the compensation payable under such plans to
be eligible for deduction. For purposes of meeting the
requirements of Section 162(m), under the 2007 Viad Corp
Omnibus Incentive Plan, the maximum aggregate amount awarded or
credited with respect to cash-based awards, including annual
incentive awards and performance units, to any one participant
in any one plan year may not exceed $5.0 million.
Stock
Ownership Guidelines
Stock ownership guidelines were adopted in 1993 requiring
executives to own a minimum amount of stock on a direct basis,
meaning stock of Viad which is subject to market risk 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.
Viad believes it is important to align the financial interests
of our executives with those of our shareholders.
Mr. Dykstra has ownership guidelines of five times his
annual base salary. Ms. Ingersoll and Messrs. Hannan,
Jastrem and Sayre have ownership guidelines of three times their
base salaries. As of the end of 2009, all of the named executive
officers had met or exceeded their goals, except
Mr. Hannan, who was named President of Brewster Inc. in
December 2008, and is working toward achieving his goal.
Changes to
Executive Compensation in 2010
In 2010, the value of the overall mix of long-term incentive
grants will change to 50% restricted stock (or units) and 50%
stock options. This mix of restricted stock (or units) and stock
options will continue to provide incentives for executives to
create and maintain shareholder value over a multi-year period
because the ultimate value of each executive’s grant will
depend upon the value of Viad’s stock at the time of
vesting, in the case of restricted stock (or units), and upon
exercise in the case of vested stock options. This mix also
continues to provide an effective retention tool for executives.
The 2010 awards of restricted stock (or units) will have the
same features as the 2009 awards, including a three-year vesting
period, receipt of dividends, and, in the case of restricted
stock, voting rights (see “Long-Term Incentives”
subsection above). Stock options will have a three-year graded
vesting period, one-third each year starting in the first year
after the grant. The options will expire ten years from the date
of grant. Awards of restricted stock and options will be subject
to the forfeiture and reimbursement provisions discussed in the
“Forfeiture and Reimbursement Provisions for Detrimental
Conduct” subsection above.
22
Table of Contents
Summary
Compensation Table
The following table summarizes the compensation paid in 2007,
2008 and 2009 to the Chairman, President and Chief Executive
Officer, the Chief Financial Officer and each of the three other
most highly compensated executive officers of Viad.
The amounts presented below in the Stock Awards column
(e) and Option Awards column (f) of the Table
represent the grant date fair value of awards granted to the
named executive officers and may not reflect the actual value to
be realized by the executive officer. Variables that can affect
the actual value realized by the named executive officer include
achievement levels of performance targets, economic and market
risks associated with stock and option awards, and basing
performance unit values on the market price of Viad’s
stock. The actual value realized by the named executive officer
will not be determined until the time of vesting in the case of
restricted stock, restricted stock units, performance-based
restricted stock and performance-based restricted stock units,
or until option exercise in the case of option awards.
|
Change in |
||||||||||||||||||||||||||||||||||||
|
Pension |
||||||||||||||||||||||||||||||||||||
|
Non-Equity |
Value and |
|||||||||||||||||||||||||||||||||||
|
Incentive |
Nonqualified |
|||||||||||||||||||||||||||||||||||
|
Plan |
Deferred |
All Other |
||||||||||||||||||||||||||||||||||
|
Stock |
Option |
Compen- |
Comp. |
Compen- |
||||||||||||||||||||||||||||||||
|
Name and |
Salary1 |
Bonus |
Awards2 |
Awards3 |
sation4 |
Earnings5 |
sation6 |
Total |
||||||||||||||||||||||||||||
|
Principal Position
|
Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
|
Paul B. Dykstra
|
2009 | 615,385 | -- | 1,105,560 | -- | -- | 591,392 | 274,340 | 7 | 2,586,677 | ||||||||||||||||||||||||||
|
Chairman, President
|
2008 | 618,750 | -- | 1,555,260 | -- | 680,000 | 181,676 | 274,440 | 3,310,126 | |||||||||||||||||||||||||||
|
and CEO
|
2007 | 587,500 | -- | 1,222,233 | -- | 810,500 | 74,971 | 206,166 | 2,901,370 | |||||||||||||||||||||||||||
|
Michael M.
Hannan8
|
2009 | 255,953 | -- | 179,654 | -- | 157,857 | 14,848 | 118,868 | 9 | 727,180 | ||||||||||||||||||||||||||
|
Group President-
|
2008 | 13,173 | -- | -- | 66,600 | -- | 722 | -- | 80,495 | |||||||||||||||||||||||||||
|
Travel & Recreation
|
2007 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||
|
Ellen M. Ingersoll
|
2009 | 342,646 | -- | 538,961 | -- | -- | 33,704 | 116,186 | 10 | 1,031,497 | ||||||||||||||||||||||||||
|
Chief Financial Officer
|
2008 | 344,750 | -- | 791,154 | -- | 260,300 | 2,836 | 128,069 | 1,527,109 | |||||||||||||||||||||||||||
| 2007 | 335,000 | -- | 653,396 | -- | 322,400 | 26 | 121,115 | 1,431,937 | ||||||||||||||||||||||||||||
|
John F.
Jastrem11
|
2009 | 452,500 | -- | 508,228 | -- | -- | 198 | 58,976 | 12 | 1,019,902 | ||||||||||||||||||||||||||
|
Former Group President-
|
2008 | 411,250 | -- | 858,483 | -- | 297,000 | 79 | 58,486 | 1,625,298 | |||||||||||||||||||||||||||
|
Marketing & Events
|
2007 | 400,000 | 350,000 | 395,881 | -- | 332,300 | 20 | 62,727 | 1,540,928 | |||||||||||||||||||||||||||
|
Scott E. Sayre
|
2009 | 298,338 | -- | 307,101 | -- | -- | 198,155 | 84,290 | 13 | 887,884 | ||||||||||||||||||||||||||
|
Vice President-General
|
2008 | 300,050 | -- | 520,674 | -- | 206,000 | 13 | 144,666 | 1,171,403 | |||||||||||||||||||||||||||
|
Counsel and Secretary
|
2007 | 291,200 | -- | 438,159 | -- | 254,800 | 3 | 125,453 | 1,109,615 | |||||||||||||||||||||||||||
| 1 | For 2009, all employees at the Viad corporate level, including Messrs. Dykstra and Sayre and Ms. Ingersoll, took a mandatory week-long work furlough (without pay) as one of Viad’s expense-reduction measures during 2009. Mr. Jastrem’s base salary was increased in October 2008 from $415,000 to $435,000, but the increased pay was not remitted to him timely, so in February 2010, Mr. Jastrem was paid $18,600, plus interest, representing additional base compensation and an additional amount for his earned annual cash incentive award under the 2008 Management Incentive Plan. | |
| 2 | The amounts shown reflect the grant date fair value of long-term incentives awarded to the named executive officers, including: restricted stock granted in years 2007 through 2009 (except for Mr. Hannan who did not receive a grant until 2009 after taking office and whose grant is in the form of restricted stock units); and performance-based restricted stock granted in years 2007 and 2008 (except for Mr. Jastrem, who did not receive a grant until 2007 after taking office and Mr. Hannan, who did not receive a grant until 2009 after taking office and whose grant is in the form of performance-based restricted stock units). In addition, the amounts shown include the grant date fair value of the performance units granted in 2007 and 2008 to the named executive officers (except for Mr. Hannan, who has not received any performance unit awards). Performance goals for the 2007 performance unit awards were not achieved at threshold and consequently no payments to the named executive officers were made, including the following grant date fair value amounts shown in column (e) of the table: Mr. Dykstra, $453,533; Ms. Ingersoll, $249,828; Mr. Jastrem, $153,740; and Mr. Sayre, $153,740. No performance units were granted in 2009. In addition, the performance goals for the 2009 performance-based restricted stock awards were not achieved at threshold and consequently no payments to the named executive officers were made, including the following grant date fair value amounts shown in column (e) of the table: Mr. Dykstra, $644,910; Ms. Ingersoll, $314,778; Mr. Jastrem, $210,364; and Mr. Sayre, $179,654. Mr. Hannan’s 2009 award of performance-based restricted stock units was achieved at 48.125% and thus $54,157 of his award, as reflected in column (e) of the table, was not earned. | |
| Mr. Jastrem’s 2008 stock awards, as reported in Viad’s 2009 proxy statement, totaled $483,483. This amount represented the grant date fair value of stock awards granted to Mr. Jastrem in 2008. In contrast, the recently released SEC rules require a disclosure of the compensation paid to the named executive officers. Per the new SEC rules, the amount of Mr. Jastrem’s 2008 stock awards, as reported in this table, is $858,483. This increased amount is due to a special performance-based award of Viad’s common stock (payable annually in thirds with the first two payouts in February 2009 and January 2010, respectively) for the achievement of certain performance measures in excess of the maximum achievement levels established for Exhibitgroup/Giltspur under the 2008 Management Incentive Plan and for the achievement of certain other strategic goals, as discussed in the “Compensation Discussion and Analysis” section of this proxy statement. The value of this award was $375,000, based on a grant date of February 23, 2009, which is when the HR Committee approved the achievement of the award. |
23
Table of Contents
| Assumptions made in the valuation of stock awards under this column are discussed in Viad’s 2009 Annual Report on Form 10-K, filed March 8, 2010, in Notes 1 and 2 of Notes to Consolidated Financial Statements and are incorporated herein by reference. | ||
| 3 | No stock options were granted to the named executive officers in 2009, 2008 or 2007, except for Mr. Hannan, who received a grant of 10,000 non-qualified stock options upon taking office as President of Brewster Inc. on December 1, 2008. | |
| 4 | The amounts shown represent incentive cash awards under the 2009 and 2008 Management Incentive Plans, pursuant to the 2007 Viad Corp Omnibus Incentive Plan, and the 2007 Management Incentive Plan, pursuant to the 1997 Viad Corp Omnibus Incentive Plan. Performance targets for 2009 were attained at 99.4% of target for Brewster and at 0% of target for Viad corporate and Exhibitgroup/Giltspur. Performance targets for 2008 were attained at 137.3% of target for Viad corporate and at 131.3% of target for Exhibitgroup/Giltspur. Performance targets were not met for Brewster in 2008 and no bonus was paid. Performance targets for 2007 were attained at the maximum performance level (175% of target) for Viad corporate and 107.4% of target for Exhibitgroup/Giltspur. | |
| 5 | The amounts shown represent the year-over-year change in actuarial present value of the SERP and Brewster’s pension plan. For 2009, the year-over-year change from 2008 to 2009 was $590,692 for Mr. Dykstra, $33,619 for Ms. Ingersoll, $198,133 for Mr. Sayre, $14,848 for Mr. Hannan and $0 for Mr. Jastrem. For 2008, the year-over-year change from 2007 to 2008 was $181,089 for Mr. Dykstra, $2,761 for Ms. Ingersoll, $722 for Mr. Hannan and $0 for Messrs. Jastrem and Sayre. For 2007, the year-over-year change from 2006 to 2007 was $74,725 for Mr. Dykstra and $0 for the other named executive officers. In connection with the spin-off of MoneyGram International, Inc. on June 30, 2004, liabilities associated with these SERP obligations are the responsibility of MoneyGram. The amounts shown also reflect above-market earnings of $258, $222, and $107 in 2009, 2008, and 2007, respectively, on Mr. Dykstra’s benefits under the Viad Corp Deferred Compensation Plan, and above-market earnings on the Supplemental 401(k) Plan of $442 for Mr. Dykstra, $85 for Ms. Ingersoll, $198 for Mr. Jastrem and $22 for Mr. Sayre in 2009; $365 for Mr. Dykstra, $75 for Ms. Ingersoll, $79 for Mr. Jastrem and $13 for Mr. Sayre in 2008; and $139 for Mr. Dykstra, $26 for Ms. Ingersoll, $20 for Mr. Jastrem and $3 for Mr. Sayre in 2007. The term “above-market earnings” represents an earning rate that exceeds 120% of the applicable federal long-term rate (as prescribed under the Internal Revenue Code Section 1274(d)). | |
| 6 | The aggregate incremental cost of perquisites is the actual cost incurred by Viad as a result of providing such items. | |
| 7 | Mr. Dykstra’s perquisites and other personal benefits for 2009 include: executive life insurance; executive medical coverage; accidental death and dismemberment insurance; office parking; tax planning and financial counseling services; annual executive physical examination; health club membership; airline club memberships; social club dues; home security system; and Company-provided vehicle and auto-related expenses. The amount reported for 2009 includes: the perquisites and other personal benefits listed in the prior sentence; matching contributions under the 401(k) Plan and Supplemental 401(k) Plan of $24,615; a lump-sum payment of $172,000 for the period from January 1, 2009 through December 31, 2009 in lieu of the Company accruing pension benefits for Schedule B participants of the SERP, such amount being equal to the accrued benefit calculated for that period, plus a tax gross-up; and tax gross-ups of $13,839 for tax planning and financial counseling services and $1,337 for executive medical coverage. | |
| 8 | Mr. Hannan took office as President of Brewster Inc. on December 1, 2008. He is a Canadian citizen and resident. His 2009 base salary and all other compensation for 2009 shown in this Table were converted into U.S. dollars at the rate of 0.8791 to 1. Mr. Hannan’s 2008 base salary was converted into U.S. dollars at the rate of 0.8155 to 1. His 2009 award under the 2009 Management Incentive Plan was converted on the date of payment at a rate of 0.9897 to 1. All stock unit awards were originated in U.S. dollars and did not require conversion. | |
| 9 | Mr. Hannan’s perquisites and other personal benefits include: executive medical coverage; annual executive physical examination; executive marketing club membership; a Company-provided vehicle and auto-related expenses; home security system; and relocation expenses of $85,584 related to relocating from Vancouver, British Columbia to Brewster’s offices in Banff, Alberta. | |
| 10 | Ms. Ingersoll’s perquisites and other personal benefits for 2009 include: executive medical coverage; accidental death and dismemberment insurance; annual executive physical examination; office parking; and tax planning and financial counseling services. The amount reported for 2009 includes: the perquisites and other personal benefits listed in the prior sentence; matching contributions under the 401(k) Plan and Supplemental 401(k) Plan of $13,706; a lump-sum payment of $67,000 for the period from January 1, 2009 through December 31, 2009 in lieu of the Company accruing pension benefits for Schedule B participants of the SERP, such amount being equal to the accrued benefit calculated for that period, plus a tax gross-up; and tax gross-ups of $5,577 for tax planning and financial counseling services, and $1,903 for executive medical coverage. | |
| 11 | Effective March 19, 2010, Mr. Jastrem stepped-down as Group President - Marketing & Events and left Viad, as he decided to retire. Mr. Dykstra assumed leadership of the Marketing & Events Group while a replacement search for the position of Group President is being conducted. | |
| 12 | Mr. Jastrem’s perquisites and other personal benefits for 2009 include: executive medical coverage; accidental death and dismemberment insurance; annual executive physical examination; health club membership; executive marketing club memberships; and a vehicle allowance. The amount reported for 2009 includes: the perquisites and other personal benefits listed in the prior sentence; matching contributions under the 401(k) Plan of $18,100; and tax gross-ups of $2,401 for executive medical coverage and $1,460 for club memberships. | |
| 13 | Mr. Sayre’s perquisites and other personal benefits for 2009 include: executive medical coverage; accidental death and dismemberment insurance; office parking; tax planning and financial counseling services; annual executive physical examination; and health club membership. The amount reported for 2009 includes: the perquisites and other personal benefits listed in the prior sentence; matching contributions under the 401(k) Plan of $11,934; a lump-sum payment of $40,000 for the period from January 1, 2009 through December 31, 2009 in lieu of the Company accruing pension benefits for Schedule B participants of the SERP, such amount being equal to the accrued benefit calculated for that period, plus a tax gross-up; and tax gross-ups of $5,506 for tax planning and financial counseling services and $1,877 for executive medical coverage. |
Compensation
Consultant
As discussed in the “Compensation Discussion and
Analysis” section of this proxy statement, in 2009 Hewitt
provided services and advice related to executive compensation.
Hewitt also provided market data related to director
compensation. In addition to compensation advice, in 2009 Hewitt
also provided to Viad at the request of Viad management the
following advice and services: actuarial services on qualified
and non-qualified retirement programs; federal payroll tax
calculations; and advice related to management positions in
connection with Viad’s
24
Table of Contents
centralization of the human resources function at the corporate
level for all of Viad’s operations. For these 2009 services
and advice, Viad paid Hewitt in the aggregate $207,442. Viad
paid Hewitt $38,229 in the aggregate for its 2009 services and
advice related to executive and director compensation.
Grants of
Plan-Based Awards
The table below supplements the disclosure in the Summary
Compensation Table on plan-based awards. The table provides, by
grant date, the estimated future payouts for awards granted in
2009 under equity incentive and non-equity incentive plans, and
the number of shares or units underlying awards granted in 2009
that have been paid out. All awards in 2009 were granted
pursuant to the 2007 Viad Corp Omnibus Incentive Plan.
|
All Other |
||||||||||||||||||||||||||||||||||||||||||||
|
All Other |
Option |
|||||||||||||||||||||||||||||||||||||||||||
|
Stock |
Awards: |
Exercise |
Grant |
|||||||||||||||||||||||||||||||||||||||||
|
Awards: |
Number |
or |
Date |
|||||||||||||||||||||||||||||||||||||||||
|
Estimated Future Payouts |
Number |
of |
Base |
Fair Value |
||||||||||||||||||||||||||||||||||||||||
|
Under Non-Equity |
Estimated Future Payouts |
of |
Securities |
Price |
of Stock |
|||||||||||||||||||||||||||||||||||||||
| Incentive Plan Awards3 | Under Equity Incentive Plan Awards4 |
Shares |
Under- |
of |
and |
|||||||||||||||||||||||||||||||||||||||
|
Thresh- |
Maxi- |
Thresh- |
Maxi- |
of Stock |
lying |
Option |
Options |
|||||||||||||||||||||||||||||||||||||
|
Grant |
old |
Target |
mum |
old |
Target |
mum |
or Units |
Options |
Awards |
Awards6 |
||||||||||||||||||||||||||||||||||
|
Name1
|
Date2 | ($) | ($) | ($) | (#) | (#) | (#) | (#)5 | (#) | ($/Sh) | ($) | |||||||||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||
|
P. Dykstra
|
105,000 | 500,000 | 875,000 | |||||||||||||||||||||||||||||||||||||||||
|
RS
|
2/23 | 30,000 | 30,000 | 30,000 | -- | -- | -- | 460,050 | ||||||||||||||||||||||||||||||||||||
|
PBRS
|
2/23 | 10,500 | 42,000 | 42,000 | -- | -- | -- | 644,910 | ||||||||||||||||||||||||||||||||||||
|
E. Ingersoll
|
40,200 | 191,400 | 335,000 | |||||||||||||||||||||||||||||||||||||||||
|
RS
|
2/23 | 14,600 | 14,600 | 14,600 | -- | -- | -- | 224,183 | ||||||||||||||||||||||||||||||||||||
|
PBRS
|
2/23 | 5,125 | 20,500 | 20,500 | -- | -- | -- | 314,778 | ||||||||||||||||||||||||||||||||||||
|
J. Jastrem
|
54,400 | 278,900 | 488,000 | |||||||||||||||||||||||||||||||||||||||||
|
RS
|
2/23 | 9,700 | 9,700 | 9,700 | -- | -- | -- | 148,944 | ||||||||||||||||||||||||||||||||||||
|
PBRS
|
2/23 | 1,713 | 13,700 | 13,700 | -- | -- | -- | 210,364 | ||||||||||||||||||||||||||||||||||||
|
RS7
|
7/23 | 8,500 | 8,500 | 8,500 | -- | -- | -- | 148,920 | ||||||||||||||||||||||||||||||||||||
|
S. Sayre
|
31,800 | 151,500 | 265,100 | |||||||||||||||||||||||||||||||||||||||||
|
RS
|
2/23 | 8,300 | 8,300 | 8,300 | -- | -- | -- | 127,447 | ||||||||||||||||||||||||||||||||||||
|
PBRS
|
2/23 | 2,925 | 11,700 | 11,700 | -- | -- | -- | 179,654 | ||||||||||||||||||||||||||||||||||||
|
M. Hannan8
|
31,000 | 158,800 | 277,800 | |||||||||||||||||||||||||||||||||||||||||
|
RSU
|
2/23 | 4,900 | 4,900 | 4,900 | -- | -- | -- | 75,240 | ||||||||||||||||||||||||||||||||||||
|
PBRSU
|
2/23 | 714 | 5,709 | 5,709 | 1,091 | -- | -- | 104,414 | ||||||||||||||||||||||||||||||||||||
| 1 | “RS” represents awards of restricted stock. “RSU” represents awards of restricted stock units. “PBRS” represents awards of performance-based restricted stock. “PBRSU” represents awards of performance-based restricted stock units. | |
| 2 | Grant dates shown occurred in 2009. | |
| 3 | The amounts shown in column (d) above reflect the possible payment if performance measures are achieved at target level under the 2009 Management Incentive Plan. The amounts shown in column (c) above reflect the possible minimum payment level under the 2009 Management Incentive Plan which is 21% of target for Viad corporate level and 19.5% for Viad operating companies. The amounts shown in column (e) are 175% of the target amount shown in column (d). However, none of the named executive officers received an annual cash incentive payout under the 2009 Management Incentive Plan as performance goals were not met at the minimum payout level, except Mr. Hannan who received an annual cash incentive payout in March 2010 as the 2009 performance goals of Brewster were achieved at 99.4% of target. These results are reflected in the Summary Compensation Table at column (g) (“Non-Equity Incentive Plan Compensation”). No additional payment under the 2009 Management Incentive Plan will be made for the 2009 performance period. | |
| 4 | The three columns under “Estimated Future Payouts Under Equity Incentive Plan Awards” present the estimated threshold, target and maximum payouts as of the grant date for all 2009 equity grants of restricted stock, restricted stock units, performance-based restricted stock and performance-based restricted stock units to the named executive officers, excluding one-third of the portion of Mr. Hannan’s 2009 grant of performance-based restricted stock units that was earned and which vested in February 2010 because a portion of the specific performance measures established in the year of grant were achieved at 48.125% of target. This payout to Mr. Hannan is reflected in this table under column (i). Although dollar amounts are reflected in columns (f) – (h) for the 2009 grants of performance-based restricted stock to the remaining named executive officers, no shares have been or will be distributed as the 2009 performance goals were not met. | |
| 5 | See footnote 4 above. | |
| 6 | The fair value of the restricted stock, restricted stock unit, performance-based restricted stock and performance-based restricted stock unit awards granted on February 23, 2009, was $15.36 per share. The actual value realized by the named executive officer for the 2009 restricted stock and restricted stock unit awards, and for the 2009 performance-based restricted stock units in the case of Mr. Hannan, will not be determined until the time of vesting. Performance-based restricted stock was not earned and thus will not be distributed. | |
| 7 | Mr. Jastrem received a special restricted stock award in July 2009 in connection with his increased responsibilities as President of Viad’s Marketing & Events Group. | |
| 8 | The estimated future payouts for Mr. Hannan for an award under the 2009 Management Incentive Plan have been converted from Canadian dollars to U.S. dollars at a rate of 0.9897 to 1, as shown in columns (c) – (e) of the table. |
25
Table of Contents
Employment
Agreements
Mr. Dykstra is employed pursuant to an employment agreement
dated May 15, 2007. He is the only named executive officer
with an employment agreement. Mr. Dykstra’s agreement
provides for an initial two-year employment term and thereafter
on each anniversary date of the agreement the remaining one-year
term is increased by an additional one-year period, unless the
Human Resources Committee of the Board provides notice of its
intent not to extend the employment period. The agreement
provides for an initial annual base salary of $600,000.
Mr. Dykstra’s annual base salary is reviewed at least
annually by the Human Resources Committee of the Board, which
may in its sole discretion recommend an increase to the annual
base salary, subject to approval by the Board. Effective
April 1, 2008, his annual base salary was $625,000, and he
did not receive an increase in salary in 2009 as the base
salaries of the named executive officers were frozen in light of
economic conditions. The agreement also provides that
Mr. Dykstra is entitled to participate in all bonus and
long-term incentive compensation plans and programs and other
fringe benefit programs offered to other senior executives of
Viad in accordance with the terms of such plans and programs.
Further, he is entitled to participate in all savings,
retirement, medical and other welfare benefit plans to the same
extent as other senior executives of Viad. His perquisites and
other personal benefits include executive medical coverage;
executive life insurance; accidental death and dismemberment
insurance coverage; office parking; tax planning and financial
counseling services; annual executive physical examination; dues
for health club, country club, airline club and social club;
Company-provided vehicle and auto-related expenses, and home
security system. Additional information regarding the terms of
Mr. Dykstra’s employment agreement is provided in the
“Post-Termination Compensation and Benefits”
subsection of the “Compensation Discussion and
Analysis” section and in the “Potential Payment Upon
Employment Termination or Change of Control” section of
this proxy statement.
Outstanding
Equity Awards at Fiscal Year-End Table
The table below includes all outstanding options and unvested
stock awards of the named executive officers in the Summary
Compensation Table as of December 31, 2009, including
awards subject to performance conditions.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
|
Equity |
||||||||||||||||||||||||||||||||||||
|
Incentive |
||||||||||||||||||||||||||||||||||||
|
Equity |
Plan |
|||||||||||||||||||||||||||||||||||
|
Incentive |
Awards: |
|||||||||||||||||||||||||||||||||||
|
Plan |
Market or |
|||||||||||||||||||||||||||||||||||
|
Equity |
Awards: |
Payout |
||||||||||||||||||||||||||||||||||
|
Incentive |
Number of |
Value of |
||||||||||||||||||||||||||||||||||
|
Plan Awards: |
Number |
Market |
Unearned |
Unearned |
||||||||||||||||||||||||||||||||
|
Number of |
Number of |
Number of |
of Shares |
Value of |
Shares, |
Shares, |
||||||||||||||||||||||||||||||
|
Securities |
Securities |
Securities |
or Units |
Shares or |
Units or |
Units or |
||||||||||||||||||||||||||||||
|
Underlying |
Underlying |
Underlying |
of Stock |
Units of |
Other |
Other |
||||||||||||||||||||||||||||||
|
Unexercised |
Unexercised |
Unexercised |
Option |
That Have |
Stock That |
Rights |
Rights That |
|||||||||||||||||||||||||||||
|
Options |
Options |
Unearned |
Exercise |
Option |
Not |
Have Not |
That Have |
Have Not |
||||||||||||||||||||||||||||
|
Exercisable |
Unexercisable |
Options |
Price |
Expiration |
Vested |
Vested |
Not Vested |
Vested |
||||||||||||||||||||||||||||
|
Name
|
(#)1 | (#)2 | (#)2 | ($)3 | Date | (#) | ($)4 | (#)5 | ($)4 | |||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
|
P. Dykstra
|
||||||||||||||||||||||||||||||||||||
|
Viad
|
||||||||||||||||||||||||||||||||||||
|
02/17/2000
|
3,251 | 23.32 | 02/17/2010 | |||||||||||||||||||||||||||||||||
|
02/15/2001
|
5,125 | 24.05 | 02/15/2011 | |||||||||||||||||||||||||||||||||
|
11/15/2001
|
4,000 | 19.65 | 11/15/2011 | |||||||||||||||||||||||||||||||||
|
03/26/2002
|
6,850 | 26.07 | 03/26/2012 | |||||||||||||||||||||||||||||||||
|
02/19/2003
|
4,412 | 19.57 | 02/19/2013 | |||||||||||||||||||||||||||||||||
|
02/18/2004
|
5,475 | 24.22 | 02/18/2011 | |||||||||||||||||||||||||||||||||
|
RS/PBRS6
|
N/A | N/A | 65,866 | 1,358,816 | 42,000 | 866,460 | ||||||||||||||||||||||||||||||
|
PUP7
|
N/A | N/A | -- | -- | 29,800 | 614,800 | ||||||||||||||||||||||||||||||
|
MoneyGram8
|
||||||||||||||||||||||||||||||||||||
|
02/17/2000
|
8,007 | 18.61 | 02/17/2010 | |||||||||||||||||||||||||||||||||
|
02/15/2001
|
20,500 | 19.19 | 02/15/2011 | |||||||||||||||||||||||||||||||||
|
03/26/2002
|
27,400 | 20.80 | 03/26/2012 | |||||||||||||||||||||||||||||||||
|
02/19/2003
|
27,400 | 15.62 | 02/19/2013 | |||||||||||||||||||||||||||||||||
|
02/18/2004
|
21,900 | 19.32 | 02/18/2011 | |||||||||||||||||||||||||||||||||
26
Table of Contents
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
|
Equity |
||||||||||||||||||||||||||||||||||||
|
Incentive |
||||||||||||||||||||||||||||||||||||
|
Equity |
Plan |
|||||||||||||||||||||||||||||||||||
|
Incentive |
Awards: |
|||||||||||||||||||||||||||||||||||
|
Plan |
Market or |
|||||||||||||||||||||||||||||||||||
|
Equity |
Awards: |
Payout |
||||||||||||||||||||||||||||||||||
|
Incentive |
Number of |
Value of |
||||||||||||||||||||||||||||||||||
|
Plan Awards: |
Number |
Market |
Unearned |
Unearned |
||||||||||||||||||||||||||||||||
|
Number of |
Number of |
Number of |
of Shares |
Value of |
Shares, |
Shares, |
||||||||||||||||||||||||||||||
|
Securities |
Securities |
Securities |
or Units |
Shares or |
Units or |
Units or |
||||||||||||||||||||||||||||||
|
Underlying |
Underlying |
Underlying |
of Stock |
Units of |
Other |
Other |
||||||||||||||||||||||||||||||
|
Unexercised |
Unexercised |
Unexercised |
Option |
That Have |
Stock That |
Rights |
Rights That |
|||||||||||||||||||||||||||||
|
Options |
Options |
Unearned |
Exercise |
Option |
Not |
Have Not |
That Have |
Have Not |
||||||||||||||||||||||||||||
|
Exercisable |
Unexercisable |
Options |
Price |
Expiration |
Vested |
Vested |
Not Vested |
Vested |
||||||||||||||||||||||||||||
|
Name
|
(#)1 | (#)2 | (#)2 | ($)3 | Date | (#) | ($)4 | (#)5 | ($)4 | |||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
|
E. Ingersoll
|
||||||||||||||||||||||||||||||||||||
|
Viad
|
||||||||||||||||||||||||||||||||||||
|
03/26/2002
|
3,200 | 26.07 | 03/26/2012 | |||||||||||||||||||||||||||||||||
|
02/19/2003
|
7,499 | 19.57 | 02/19/2013 | |||||||||||||||||||||||||||||||||
|
02/18/2004
|
6,000 | 24.22 | 02/18/2011 | |||||||||||||||||||||||||||||||||
|
RS/PBRS6
|
N/A | N/A | 32,866 | 678,026 | 20,500 | 422,915 | ||||||||||||||||||||||||||||||
|
PUP7
|
N/A | N/A | -- | -- | 15,700 | 323,900 | ||||||||||||||||||||||||||||||
|
MoneyGram8
|
||||||||||||||||||||||||||||||||||||
|
03/26/2002
|
8,800 | 20.80 | 03/26/2012 | |||||||||||||||||||||||||||||||||
|
02/19/2003
|
30,000 | 15.62 | 02/19/2013 | |||||||||||||||||||||||||||||||||
|
02/18/2004
|
24,000 | 19.32 | 02/18/2011 | |||||||||||||||||||||||||||||||||
|
J. Jastrem
|
||||||||||||||||||||||||||||||||||||
|
Viad
|
||||||||||||||||||||||||||||||||||||
|
RS/PBRS6
|
N/A | N/A | 45,447 | 937,572 | 13,700 | 282,631 | ||||||||||||||||||||||||||||||
|
PUP7
|
N/A | N/A | -- | -- | 9,600 | 59,400 | ||||||||||||||||||||||||||||||
|
M. Hannan
|
||||||||||||||||||||||||||||||||||||
|
Viad
|
||||||||||||||||||||||||||||||||||||
|
12/01/2008
|
2,000 | 8,000 | 24.90 | 12/01/2015 | ||||||||||||||||||||||||||||||||
|
Units6
|
N/A | N/A | 4,900 | 101,087 | 6,800 | 17,536 | ||||||||||||||||||||||||||||||
|
S. Sayre
|
||||||||||||||||||||||||||||||||||||
|
Viad
|
||||||||||||||||||||||||||||||||||||
|
02/17/2000
|
2,100 | 23.32 | 02/17/2010 | |||||||||||||||||||||||||||||||||
|
02/15/2001
|
3,406 | 24.05 | 02/15/2011 | |||||||||||||||||||||||||||||||||
|
11/15/2001
|
6,750 | 19.65 | 11/15/2011 | |||||||||||||||||||||||||||||||||
|
03/26/2002
|
4,575 | 26.07 | 03/26/2012 | |||||||||||||||||||||||||||||||||
|
02/19/2003
|
4,849 | 19.57 | 02/19/2013 | |||||||||||||||||||||||||||||||||
|
02/18/2004
|
3,875 | 24.22 | 02/18/2011 | |||||||||||||||||||||||||||||||||
|
RS/PBRS6
|
N/A | N/A | 20,466 | 422,214 | 11,700 | 241,371 | ||||||||||||||||||||||||||||||
|
PUP7
|
N/A | N/A | -- | -- | 10,000 | 206,300 | ||||||||||||||||||||||||||||||
|
MoneyGram8
|
||||||||||||||||||||||||||||||||||||
|
02/17/2000
|
8,400 | 18.61 | 02/17/2010 | |||||||||||||||||||||||||||||||||
|
02/15/2001
|
13,625 | 19.19 | 02/15/2011 | |||||||||||||||||||||||||||||||||
|
11/15/2001
|
27,000 | 15.68 | 11/15/2011 | |||||||||||||||||||||||||||||||||
|
03/26/2002
|
18,300 | 20.80 | 03/26/2012 | |||||||||||||||||||||||||||||||||
|
02/19/2003
|
19,400 | 15.62 | 02/19/2013 | |||||||||||||||||||||||||||||||||
|
02/18/2004
|
15,500 | 19.32 | 02/18/2011 | |||||||||||||||||||||||||||||||||
| 1 | Viad stock option awards for the named executive officers included a combination of incentive stock options and non-qualified stock options for all grants, except Mr. Hannan’s sole grant was in the form of non-qualified stock options due to Canadian tax considerations, and Messrs. Dykstra and Sayre received non-qualified stock options only for the grant on 11/15/2001. All MoneyGram awards are non-qualified stock options. See Footnote 8 below for a discussion about MoneyGram. | |
| 2 | The stock options granted in 2002 and prior thereto have a ten-year term and vested in two equal annual installments, beginning one year from the date of grant. The stock options granted in 2003 have a ten-year term and vested in three equal annual installments beginning one year after the date of grant and ending three years after the date of grant. Stock options granted thereafter have a seven-year term and vest in five equal annual installments beginning one year from the date of grant and ending five years after the date of grant. | |
| 3 | The exercise price of Viad stock options is equal to the average of the high and low selling prices of Viad’s common stock on the NYSE on the grant date. See Footnote 8 below for a discussion regarding the treatment of stock options in connection with the MoneyGram spin-off. | |
| 4 | The market value of shares or units of stock was computed by multiplying the number of shares or units by $20.63, the closing market price of Viad’s common stock at December 31, 2009, except the value shown for Mr. Jastrem’s performance units and Mr. Hannan’s performance-based restricted stock units were calculated by multiplying $20.63 by the threshold level (30% of the total units in the case of Mr. Jastrem and 12.5% of the total units in the case of Mr. Hannan) as the achievement levels for Exhibitgroup/Giltspur and Brewster for the 2008 incentive compensation awards were not met. |
27
Table of Contents
| 5 | The amounts shown in this column are as of December 31, 2009. Certain awards reflected in column (i) were earned and did vest in February 2010 upon the approval by the Human Resources Committee of the Board of the achievement of the performance targets established for such stock awards. | |
| 6 | “RS/PBRS” is an abbreviation for restricted stock and performance-based restricted stock. “Units” is an abbreviation for restricted stock units and performance-based restricted stock units. | |
| 7 | “PUP” is an abbreviation for performance units. | |
| 8 | Listed under the “MoneyGram” heading are non-qualified stock options of MoneyGram, granted to the executive officer prior to Viad’s spin-off of MoneyGram in June 2004. Viad distributed all of the shares of MoneyGram common stock as a dividend on Viad’s common stock on the date of the spin-off. Stock option awards were adjusted in connection with the spin-off. Each option to purchase shares of Viad’s common stock was converted to consist of an adjusted option to purchase the same number of shares of MoneyGram common stock as before the spin-off, and an option to purchase one-fourth the number of shares of Viad’s common stock as before the spin-off due to the one-for-four reverse stock split of Viad’s common stock that occurred in connection with the spin-off. The conversion resulted in two options with a combined intrinsic value equal to the intrinsic value of the Viad option (with an exercise price of the high and low selling prices of Viad’s common stock on the grant date) before taking into account the effect of the spin-off and reverse stock split. The terms and conditions of the options are generally the same as those of the pre-spin Viad stock options. |
Option Exercises
and Stock Vested Table
For the named executive officers in the Summary Compensation
Table, the table below lists stock options exercised in 2009,
and restricted stock, performance-based restricted stock and
performance units, which vested during 2009.
| Option Awards | Stock Awards | |||||||||||||||
|
Number of |
Value |
Number of Shares |
||||||||||||||
|
Shares Acquired |
Realized |
Acquired on |
Value Realized |
|||||||||||||
|
on Exercise |
on
Exercise1 |
Vesting |
on
Vesting2 |
|||||||||||||
|
Name
|
(#) | ($) | (#) | ($) | ||||||||||||
| (a) | (b) | (c) | (d) | (e) | ||||||||||||
|
P. Dykstra
|
||||||||||||||||
|
RS/PBRS3
|
-- | -- | 27,133 | 478,621 | ||||||||||||
|
PUP4
|
-- | -- | 24,000 | 403,300 | ||||||||||||
|
E. Ingersoll
|
||||||||||||||||
|
RS/PBRS3
|
-- | -- | 16,533 | 287,958 | ||||||||||||
|
PUP4
|
-- | -- | 12,800 | 215,100 | ||||||||||||
|
J. Jastrem
|
||||||||||||||||
|
RS/PBRS3
|
-- | -- | 21,008 | 386,731 | ||||||||||||
|
S. Sayre
|
||||||||||||||||
|
RS/PBRS3
|
-- | -- | 10,567 | 193,253 | ||||||||||||
|
PUP4
|
-- | -- | 13,400 | 225,200 | ||||||||||||
|
M. Hannan
|
||||||||||||||||
|
None
|
-- | -- | -- | -- | ||||||||||||
| 1 | The value realized is calculated by taking the difference between the exercise price and the fair market value of the stock times the number of options exercised. The exercise price of a stock option is the average of the high and low selling price of Viad’s common stock on the date of grant. The fair market value of an exercised option is the average of the high and low selling price of Viad’s common stock on the date of exercise. No options were exercised by the named executive officers during 2009. | |
| 2 | The value realized upon the vesting of RS/PBRS is the average of the high and low price of Viad’s common stock on the date of vesting times the number of shares vesting. The value realized upon vesting of PUP is the average of the high and low price of Viad’s common stock for the 10-day period following the Company’s public announcement of its full year earnings for fiscal 2009. | |
| 3 | “RS/PBRS” is an abbreviation for restricted stock and performance-based restricted stock. | |
| 4 | “PUP” is an abbreviation for performance units. |
28
Table of Contents
Pension Benefits
Table
The table below provides the present value of the accumulated
benefits of the named executive officers in the Summary
Compensation Table under the identified pension plans. The
liability related to the payment of benefits under Viad’s
SERP, as disclosed in the table below, was assumed by MoneyGram
in connection with the spin-off of MoneyGram by Viad in June
2004.
|
Number of Years |
Present Value of |
Payments During |
||||||||||||
|
Name
|
Plan Name | Credited Service (#) | Accumulated Benefit ($) | Last Fiscal Year ($) | ||||||||||
| (a) | (b) | (c) | (d) | (e) | ||||||||||
|
P.
Dykstra1
|
SERP | 20.340 | 1,680,729 | -- | ||||||||||
|
E.
Ingersoll1
|
SERP | 2.439 | 104,461 | -- | ||||||||||
|
J. Jastrem
|
N/A | -- | -- | -- | ||||||||||
|
S. Sayre1,
3
|
SERP | 24.721 | 1,736,573 | -- | ||||||||||
|
M. Hannan2
|
Retirement Plan for Management Employee of Brewster Inc. |
1.0833 | 15,684 | -- | ||||||||||
| 1 | Messrs. Dykstra and Sayre and Ms. Ingersoll participate in the SERP, which provides retirement benefits based on final average earnings, which is the five-year average of the last 60 months of annual base salary plus 50% of the annual incentive compensation for the five calendar years in which they were highest. Once commenced, the full benefit is payable for the life of the executive. Upon the executive’s death, 50% of the benefit is payable for the life of the surviving spouse, if applicable. These three executives are entitled to a pension benefit at age 60 equal to A + (B x C) – D, where: | |
|
A
= (1.15% x Years of service from
1/1/1998 through 6/30/2004 x Final average earnings)
|
||
|
+ |
||
| (0.55% x Years of service from 1/1/1998 through 6/30/2004 x Final average earnings in excess of the covered compensation breakpoint); | ||
|
B
= (1.834% x Years of service
prior to 1998 x Final average earnings as of 12/31/1997 using
100% of the annual incentive compensation) |
||
|
- |
||
| (1.667% x Years of service prior to 1998 x Primary Social Security benefit); | ||
| C = (Final average earnings) / (Final average earnings as of 12/31/1997 using 100% of the annual incentive compensation); and | ||
| D = Annual benefit from the MoneyGram Pension Plan and the Travelers Express Company, Inc. Supplemental Pension Plan, if applicable. | ||
| 2 | Under the Retirement Plan for Management Employees of Brewster Inc., the annual pension payable to Mr. Hannan, assuming a normal retirement date, is equal to 2% of his highest average earnings for each year of credited service. “Highest average earnings” are defined as the average of the highest annual earnings in any three (3) calendar years of credited service. The maximum pension payable to Mr. Hannan cannot exceed the dollar limits permitted under the Income Tax Act of Canada. | |
| 3 | Mr. Sayre is eligible for early retirement benefits under the SERP and has been eligible since age 55. |
Non-qualified
Deferred Compensation Table
The following table provides the amounts contributed to a
non-qualified deferred compensation plan during 2008.
|
Executive |
Registrant |
Aggregate |
Aggregate |
Aggregate |
||||||||||||||||
|
Contributions in |
Contributions in |
Earnings in |
Withdrawals/ |
Balance at Last |
||||||||||||||||
|
Last Fiscal Year |
Last Fiscal Year |
Last Fiscal Year |
Distributions |
Fiscal Year End |
||||||||||||||||
|
Name
|
($)1 | ($)2 | ($) | ($) | ($)3 | |||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
|
P. Dykstra
|
||||||||||||||||||||
|
Supplemental 401(k) Plan
|
26,577 | 14,816 | 21,573 | -- | 363,922 | |||||||||||||||
|
VCDCP4
|
-- | -- | 12,601 | -- | 185,075 | |||||||||||||||
|
E. Ingersoll
|
||||||||||||||||||||
|
Supplemental 401(k) Plan
|
-- | 3,906 | 4,162 | -- | 67,745 | |||||||||||||||
|
J. Jastrem
|
||||||||||||||||||||
|
Supplemental 401(k) Plan
|
27,375 | 16,716 | 8,213 | -- | 137,233 | |||||||||||||||
|
S. Sayre
|
||||||||||||||||||||
|
Supplemental 401(k) Plan
|
1,867 | 2,134 | 1,092 | -- | 20,700 | |||||||||||||||
|
M. Hannan5
|
-- | -- | -- | -- | -- | |||||||||||||||
| 1 | These amounts are contributed by the executive out of his or her annual base salary which is reported as compensation in the Summary Compensation Table under column (c) (“Salary”). | |
| 2 | The Company’s matching contribution under the Supplemental 401(k) Plan is the same as provided under the 401(k) Plan generally available to all employees, which is a 100% match of the first 3% of annual base salary contributed by the executive officer and 50% of the next 2% of annual |
29
Table of Contents
| base salary contributed by the executive officer. Matching contributions are reported as compensation in the Summary Compensation Table under column (i) (“All Other Compensation”). | ||
| 3 | Viad’s proxy statements prior to 2004 reported these amounts in the applicable year within the Summary Compensation Table wherein the executive officer’s annual contributions were reported under the “Salary” column and Viad’s annual matching contributions were reported under the “All Other Compensation” column. | |
| 4 | “VCDCP” is an abbreviation for the Viad Corp Deferred Compensation Plan. In connection with the freeze of the VCDCP in 2004, all participants in the VCDCP received lump-sum distributions of their total deferred compensation accounts, except Global Experience Specialists, Inc. (“GES”) maintains deferrals as its obligation for participating employees and former employees of GES and Viad’s former operating unit, Exhibitgroup/Giltspur (whose assets and liabilities were transferred to GES on December 31, 2009) pending distribution in accordance with the terms of the VCDCP. No new deferrals have been permitted since 2004. Mr. Dykstra’s deferred amount under VCDCP reflects interest accrued in 2009 on deferrals made prior to 2004 while he was employed by GES. | |
| 5 | Viad’s Supplemental 401(k) program is a U.S. based retirement program and Mr. Hannan is a Canadian citizen and resident, and thus not eligible. |
Potential Payment
Upon Employment Termination or Change of Control
Certain termination events will trigger post-termination
payments and benefits for the named executive officers in the
Summary Compensation Table. Each termination event and the
amount that could be payable to the executive officers under
each termination event is provided in the table below, assuming
a qualifying termination date of December 31, 2009 with a
closing price of $20.63 per share for Viad’s common stock,
except where specifically indicated below.
Retirement
Upon normal or early retirement, executives would receive
ownership of the restricted stock and restricted stock units
awarded to them upon the lapse of the vesting period on a
pro-rata basis (percentage of time from the grant date to the
retirement date), except that executives who have reached the
age of 60 at the time of retirement and retire at least
2 years from the date of the grant would receive full
ownership (not pro-rated) upon lapse of the vesting period.
Executives would receive ownership of earned performance-based
restricted stock, earned performance-based restricted stock
units, and earned performance units, on a pro-rata basis, upon
lapse of the performance period, except that executives who have
reached the age of 60 at the time of retirement and retire at
least 18 months from the date of the grant would receive
full ownership (not pro-rated) upon lapse of the performance
period. Stock options not yet exercisable would fully vest upon
retirement (or six months and one day thereafter in the event
the termination date occurs within six months of the grant date)
and the executive may exercise the option rights within a
five-year period following the retirement date. Executives would
receive an accrued annual incentive bonus, if earned, on a
pro-rata basis. Mr. Dykstra is entitled to the same
benefits upon retirement pursuant to the terms of his employment
contract. In addition, he will be provided with an office and
secretarial support for five years following retirement.
The table below shows the cash amount and the value of the
vested equity that could be received by Mr. Sayre upon
retirement (the only named executive officer eligible to receive
retirement benefits), assuming a qualifying termination date of
December 31, 2009. Eligibility for normal retirement is
age 65 and for early retirement is age 55. This amount
does not include retirement income. Further disclosures
regarding retirement income and benefits are provided under the
“Retirement Income and Savings Plans” subsection of
the “Compensation Discussion and Analysis” section and
in the “Pension Benefits Table” section of this proxy
statement.
Estimated
Benefits in the Event of Retirement
In Dollars ($)
In Dollars ($)
|
Restricted |
Performance - Based |
Performance |
Annual Incentive |
|||||||||||||||||
| Stock2 | Restricted Stock | Units | Cash Bonus2 | Total Benefits | ||||||||||||||||
|
S. Sayre1
|
203,549 | 104,512 | 82,500 | -- | 390,561 | |||||||||||||||
| 1 | Mr. Sayre is the only named executive officer currently eligible for retirement. | |
| 2 | The 2009 Management Incentive Plan provides that the named executive officers will be entitled to receive an accrued annual cash incentive payment, if earned, pro-rated to the date of employment termination. For 2009, no bonus awards were made to Viad corporate level executives, including Mr. Sayre, as the performance goals for Viad corporate level were not met. |
30
Table of Contents
Change of
Control and Change of Control Severance
Viad’s Executive Severance Plan (Tier I) provides
each of the named executive officers with severance benefits if
the executive’s employment is terminated by Viad without
cause or by the executive for good reason (as those terms are
defined in the plan) within 36 months after a change of
control of Viad, or by the executive for any reason (other than
for good reason, death, disability or retirement) during a
30-day
window period beginning on the first anniversary of a change of
control of Viad. Under those circumstances, the executive would
receive from Viad a lump-sum severance compensation equal to a
multiple of the following sum:
| • | The executive’s highest annual salary; plus | |
| • | The executive’s target cash bonus under the Management Incentive Plan for the fiscal year in which the change of control occurs. |
The multiple, in the case of termination by Viad without cause
or the executive’s termination for good reason, will equal
the product of three times a fraction, the numerator of which is
36 minus the number of full months the executive was employed
following a change of control and the denominator of which is
36. In the case of the executive’s voluntary termination
during the window period, the multiple will be two.
The first table below shows the cash amount and the value of
vested equity and other benefits that could be received in the
case of an executive’s termination without cause or the
executive’s voluntary termination for good reason under a
change of control, assuming that the executive had a qualifying
termination date of December 31, 2009. The second table
below shows the amount payable and the value of vested equity
and other benefits upon the executive’s voluntary
termination during the window period after a change of control,
assuming the same termination date.
Estimated
Benefits in the Event of a Change of Control with
Involuntary/Without Cause or Voluntary/Good Reason Termination
In Dollars ($)
In Dollars ($)
|
Aggregate |
||||||||||||||||||||||||
| P. Dykstra | E. Ingersoll | J. Jastrem | S. Sayre | M. Hannan | Payments | |||||||||||||||||||
|
Cash Severance
Payment1
|
3,375,000 | 1,618,200 | 2,306,700 | 1,363,500 | 1,326,924 | 9,990,324 | ||||||||||||||||||
|
Annual Incentive Cash
Bonus2, 5
|
-- | -- | -- | -- | -- | -- | ||||||||||||||||||
|
Stock Options3,
5
|
-- | -- | -- | -- | -- | -- | ||||||||||||||||||
|
Restricted Stock (or
Units)3, 5
|
1,064,508 | 526,065 | 843,375 | 317,702 | 101,087 | 2,852,737 | ||||||||||||||||||
|
PBRS (or
Units)3, 5
|
1,160,768 | 574,876 | 376,828 | 345,883 | 140,284 | 2,598,639 | ||||||||||||||||||
|
Performance
Units4, 5
|
491,000 | 260,600 | 159,500 | 165,000 | -- | 1,076,100 | ||||||||||||||||||
|
Incremental Pension
Benefit6
|
315,521 | 6,087 | -- | 63,518 | -- | 385,126 | ||||||||||||||||||
|
Welfare Benefits and
Perquisites7
|
136,799 | 97,887 | 100,079 | 68,962 | 51,502 | 455,229 | ||||||||||||||||||
|
Outplacement Services
|
30,000 | 30,000 | 30,000 | 30,000 | 30,000 | 150,000 | ||||||||||||||||||
|
Estimated Excise Tax and
Gross-Up8
|
-- | -- | 1,048,112 | -- | -- | 1,048,112 | ||||||||||||||||||
|
Totals
|
6,573,596 | 3,113,715 | 4,864,594 | 2,354,565 | 1,649,797 | 18,556,267 | ||||||||||||||||||
| 1 | Discussed in the paragraphs above this table. | |
| 2 | If there is a change of control, regardless of whether there is a termination of employment in connection therewith, each of the named executive officers would be entitled to receive a pro rata portion of the annual cash incentive granted under the Management Incentive Plan, calculated on the basis of achievement of performance measures through the date of the change of control. For 2009, no bonus awards were made as the performance goals were not met, except Mr. Hannan because the performance goals for Brewster were achieved (see the “Summary Compensation Table” and the “Compensation Discussion and Analysis” sections of this proxy statement). | |
| 3 | Immediate full vesting of equity grants will occur, and the executive will have the ability to surrender options for cash. The vesting of the restricted stock, restricted stock units, performance-based restricted stock (“PBRS”) and performance-based restricted stock units would occur, and the cash amount for the granted performance units and annual incentive cash bonus would be paid to the executive, upon a change of control whether or not the named executive officer were terminated in connection with the change of control. | |
| 4 | If there is a change of control, regardless of whether there is a termination of employment in connection therewith, each of the named executive officers would be entitled to receive a cash payment for performance units granted pursuant to the Performance Unit Plan, calculated as if each of the pre-defined targets were met at 100%, and pro-rated from the date of the grant to the date of the change of control. | |
| 5 | If the payouts and vesting were to occur upon the change of control, then the performance units and the annual cash incentive would not be paid out again and no additional vesting of the restricted stock, restricted stock units, performance-based restricted stock and performance-based restricted stock units would occur in the event of an employment termination in connection with a change of control. | |
| 6 | The Executive Severance Plan also provides a special retirement benefit to executives in the form of an additional benefit accrual under the SERP determined as if the executive continued employment during the severance period with the severance compensation included in his or her final average compensation as defined by the SERP. Benefits under the MoneyGram Pension Plan were frozen as of December 31, 2003 and would not be affected by a change of control. This special retirement benefit applies to all named executives, except Mr. Jastrem and Mr. Hannan. |
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Table of Contents
| 7 | The executive receives continued welfare benefits coverage for the severance period of (i) three years times a fraction, the numerator of which is 36 minus the number of full months from the date of the change of control through the last day of the executive’s employment, and the denominator of which is 36 months, in the case of Viad’s termination without cause or the executive’s termination for good reason; or (ii) two years in the case of the executive’s voluntary termination during the window period; except that such benefits would terminate upon the executive’s death or normal retirement date of 65, whichever occurs first. | |
| 8 | The Executive Severance Plan also provides a payment to the executive (and tax gross-up) to make the executive whole for any excise taxes on change of control payments, and for payment of any legal fees incurred by the executive to enforce his or her rights under this Plan. Excise tax payments occur when the benefit paid to an executive is in excess of a fixed multiple of the executive’s five year average total taxable compensation. Such a scenario is most likely to occur when an executive has less than five years of service with the Company. |
Estimated
Benefits in the Event of a Change of Control with Voluntary
Termination During
Window1
In Dollars ($)
In Dollars ($)
|
Aggregate |
||||||||||||||||||||||||
| P. Dykstra | E. Ingersoll | J. Jastrem | S. Sayre | M. Hannan | Payments | |||||||||||||||||||
|
Cash Severance Payment
|
2,250,000 | 1,078,800 | 1,537,800 | 909,000 | 884,616 | 6,660,216 | ||||||||||||||||||
|
Annual Incentive Cash Bonus
|
-- | -- | -- | -- | 157,857 | 157,857 | ||||||||||||||||||
|
Stock Options
|
-- | -- | -- | -- | -- | -- | ||||||||||||||||||
|
Restricted Stock (or Units)
|
1,064,508 | 526,065 | 843,375 | 317,702 | 101,087 | 2,852,737 | ||||||||||||||||||
|
PBRS (or Units)
|
1,160,768 | 574,876 | 376,828 | 345,883 | 140,284 | 2,598,639 | ||||||||||||||||||
|
Performance Units
|
491,000 | 260,600 | 159,500 | 165,000 | -- | 1,076,100 | ||||||||||||||||||
|
Incremental Pension Benefit
|
110,067 | 2,541 | -- | 33,945 | -- | 146,553 | ||||||||||||||||||
|
Welfare Benefits and Perquisites
|
91,200 | 65,258 | 66,720 | 45,975 | 34,334 | 303,487 | ||||||||||||||||||
|
Outplacement
|
30,000 | 30,000 | 30,000 | 30,000 | 30,000 | 150,000 | ||||||||||||||||||
|
Estimated Excise Tax and
Gross-Up
|
-- | -- | -- | -- | -- | -- | ||||||||||||||||||
|
Totals
|
5,197,543 | 2,538,140 | 3,014,223 | 1,847,505 | 1,348,178 | 13,945,589 | ||||||||||||||||||
| 1 | See the footnotes in the first table of this section for an explanation of the benefits. |
Involuntary
Termination Not For Cause
The following table shows the cash amount and values of vested
equity awards and other benefits that could be received by the
named executive officers in the event Viad terminates employment
without cause (not for death, disability or cause), assuming
that the executive had a qualifying termination date of
December 31, 2009.
Estimated
Benefits in the Event of Involuntary Termination Not For Cause
In Dollars ($)
In Dollars ($)
|
Aggregate |
||||||||||||||||||||||||
| P. Dykstra1 | E. Ingersoll2 | J. Jastrem2 | S. Sayre2 | M. Hannan2 | Payments | |||||||||||||||||||
|
Cash Severance Payment
|
1,250,000 | 232,000 | 245,000 | 303,000 | 142,500 | 2,172,500 | ||||||||||||||||||
|
Annual Incentive Cash Bonus
|
-- | -- | -- | -- | 157,857 | 157,857 | ||||||||||||||||||
|
Stock Options
|
-- | -- | -- | -- | -- | -- | ||||||||||||||||||
|
Restricted Stock (or Units)
|
572,139 | 526,065 | 843,375 | 317,702 | 101,087 | 2,360,368 | ||||||||||||||||||
|
PBRS (or Units)
|
294,308 | 151,961 | 94,197 | 104,512 | 67,512 | 712,490 | ||||||||||||||||||
|
Performance Units
|
247,600 | 126,500 | 77,000 | 82,500 | -- | 533,600 | ||||||||||||||||||
|
Welfare Benefits
|
62,500 | 34,800 | 49,000 | 30,300 | 28,500 | 205,100 | ||||||||||||||||||
|
Outplacement
|
30,000 | 30,000 | 30,000 | 30,000 | 30,000 | 150,000 | ||||||||||||||||||
|
Totals
|
2,456,547 | 1,101,326 | 1,338,572 | 868,014 | 527,456 | 6,291,915 | ||||||||||||||||||
| 1 |
Mr. Dykstra’s employment
agreement provides that he will receive post-termination
payments and benefits upon Viad’s termination of his
employment without cause, including: |
|
|
• Lump
sum cash payment of the sum of (1) two times his
then-current annual salary and (2) a pro-rata portion of
his then-current target cash bonus under the Management
Incentive Plan;
|
||
|
• Vesting
of his unvested options and restricted stock awards upon
expiration of the vesting period, each on a pro-rata basis;
|
||
|
• Vesting
of earned performance-based restricted stock and earned
performance units upon expiration of the performance period,
each on a pro-rata basis;
|
||
|
• Outplacement
services; and
|
||
|
• Continued
participation in employee health and welfare benefit plans for
two years.
|
32
Table of Contents
| Such payments and benefits would be in lieu of all other severance that might be payable to Mr. Dykstra under any Viad severance policies or under the terms of the stock option agreement or other incentive stock award agreements. | ||
| 2 | The other named executive officers will receive outplacement services and full ownership of restricted stock, restricted stock units, earned performance-based restricted stock, earned performance-based restricted stock units, and earned performance units upon lapse of the vesting or performance period. In February 2007, the Board adopted, upon recommendation of the Human Resources Committee of the Board, a severance arrangement for executive officers of Viad, which codified Viad’s historical, discretionary practice to provide severance cash payments for Viad’s termination of an executive officer without cause (not for death, disability or cause). Under the Executive Officer Continuation of Pay Policy, executives with less than seven years of service with Viad would receive six months of salary, while executive officers with seven or more years of service with Viad may receive up to one year’s salary. Executive officers all would receive continued health and welfare benefits during the severance period and a pro rata annual cash incentive award under the Management Incentive Plan for the calendar year in which they were last employed, if earned. For 2009, no bonus awards were made as the performance goals were not met, except Mr. Hannan because the performance goals for Brewster were achieved (see the “Summary Compensation Table” and the “Compensation Discussion and Analysis” sections of this proxy statement). | |
| No payment, however, would be made under the Executive Officer Continuation of Pay Policy unless the executive officer executes a general release containing a release of all claims against Viad, a covenant not to sue, a non-competition covenant and a non-disparagement agreement, in form and substance satisfactory to Viad. The terms of any written agreement relating to severance payment upon termination of an executive officer without cause that is approved by the Board will supersede the policy, and exceptions to the policy may be made if recommended by the Chief Executive Officer of Viad and approved by the Human Resources Committee of the Board. |
Voluntary
Termination for Good Reason
Mr. Dykstra’s employment agreement provides for
post-termination payments upon his voluntary termination of
employment for “Good Reason”. Upon employment
termination, Mr. Dykstra will receive the same payments and
benefits described above under the “Involuntary Termination
Not For Cause” subsection, and such payment would be in
lieu of all other severance that might be payable to
Mr. Dykstra under any Viad severance policies or under the
terms of the stock option agreement or other incentive stock
award agreement. “Good Reason” conditions to
voluntarily terminate his employment, include the following,
provided they occur without Mr. Dykstra’s consent:
| • | Material reduction or change in Mr. Dykstra’s authority, duties, or responsibilities; | |
| • | Material reduction in his annual base salary, unless made as part of an across-the-board reduction of annual base salary for other executive officers of Viad under the direction of the Board; | |
| • | Office relocation requiring an increased commute of more than fifty miles; | |
| • | Material breach of employment agreement by Viad; and | |
| • | Successor to Viad fails to assume Viad’s obligations under the employment agreement. |
Mr. Dykstra’s employment agreement requires notice to
be provided to Viad within ninety days of the Good Reason
condition and provides Viad with an opportunity to remedy the
situation. If the situation is remedied within thirty days of
the notice, then the post-termination payments described in this
section would not be made to Mr. Dykstra.
Death or
Disability
The following table shows the cash amount and the value of
vested equity that could be received by the named executive
officers in the event of employment termination due to death or
disability, assuming that the executive had a qualifying
termination date of December 31, 2009.
Estimated Benefit
in the Event of Death or Disability
In Dollars ($)
In Dollars ($)
|
Aggregate |
||||||||||||||||||||||||
| P. Dykstra | E. Ingersoll | J. Jastrem | S. Sayre | M. Hannan | Payments | |||||||||||||||||||
|
Annual Incentive Cash
Bonus1
|
-- | -- | -- | -- | 157,857 | 157,857 | ||||||||||||||||||
|
Stock
Options2
|
-- | -- | -- | -- | -- | -- | ||||||||||||||||||
|
Restricted Stock (or
Units)3
|
572,139 | 526,065 | 843,375 | 317,702 | 101,087 | 2,360,368 | ||||||||||||||||||
|
PBRS (or
Units)3
|
294,308 | 151,961 | 94,197 | 104,512 | 67,512 | 712,490 | ||||||||||||||||||
|
Performance
Units3
|
247,600 | 126,500 | 77,000 | 82,500 | -- | 533,600 | ||||||||||||||||||
|
Totals
|
1,114,047 | 804,526 | 1,014,572 | 504,714 | 326,456 | 3,764,315 | ||||||||||||||||||
| 1 | The Management Incentive Plan provides that the named executive officers will be entitled to receive the accrued cash incentive payment, if earned, pro-rated to the date of employment termination. For 2009, no bonus awards were made as the performance goals were not met, except Mr. Hannan because the performance goals for Brewster were achieved (see the “Summary Compensation Table” and the “Compensation Discussion and Analysis” sections of this proxy statement). |
33
Table of Contents
| 2 | Stock options, if not exercisable, will fully vest upon the date of death or disability (or six months and one day thereafter in the event the termination date occurs within six months of the grant date) and the executive (or personal representative) may exercise the option rights within three years following the date of disability or 12 months following the date of death. | |
| 3 | The named executive officers will receive full ownership of restricted stock, restricted stock units, earned performance-based restricted stock, earned performance-based restricted stock units, and earned performance units upon lapse of the vesting or performance period. |
Forfeiture and
Reimbursement Provisions – Non-Compete,
Non-Solicitation, Non-Disparagement
If an executive competes with Viad within two years of
employment termination in the case of awards made prior to 2009,
and 18 months of employment termination in the case of
awards made in or after 2009, the following compensation will be
subject to forfeiture and reimbursement (i.e.,
“clawback” provisions):
| • | awards of restricted stock, restricted stock units, performance-based restricted stock, performance-based restricted stock units and performance units granted in the last two years of employment; | |
| • | all cash bonuses paid during the last 12 months of employment for awards made prior to 2009, and 18 months for awards made in or after 2009; | |
| • | outstanding, vested but not exercised, stock options; and | |
| • | any gain (without regard to tax effects) realized from the exercise of an option subject to the forfeiture and reimbursement provisions. |
The forfeiture and reimbursement provisions also relate to
violations of certain restrictions on competitive activities
following employment termination. The annual incentive
compensation and long-term incentive compensation awards in 2009
(including awards of restricted stock, restricted stock units,
performance-based restricted stock, performance-based restricted
stock units) also provide Viad with the right to stop the
executive, through a court-ordered injunction, from working for
competitors and soliciting customers and employees following
employment termination. Viad also may seek monetary damages for
such activities.
The “Compensation Discussion and Analysis” section of
this proxy statement describes additional forfeiture and
reimbursement provisions under the annual incentive and
long-term compensation plans and programs for an
executive’s misconduct or disparagement of Viad.
Securities
Authorized for Issuance under Equity Compensation
Plans
The following table provides information as of December 31,
2009, with respect to shares of Viad’s common stock that
may be issued under existing equity compensation plans. The
category “Equity Compensation Plans Approved by Security
Holders” in the table below consists of the 2007 Viad Corp
Omnibus Incentive Plan, which was approved by Viad’s
shareholders at the 2007 Annual Meeting of Shareholders on
May 15, 2007.
|
Number of |
Number of securities |
|||||||||||
|
securities to be |
remaining available |
|||||||||||
|
issued upon |
Weighted-average |
for future issuance |
||||||||||
|
exercise of |
exercise price ($) |
under equity |
||||||||||
|
outstanding |
of outstanding |
compensation plans |
||||||||||
|
options, warrants |
options, warrants |
(excluding securities |
||||||||||
|
and rights |
and rights |
reflected in column
(a))1 |
||||||||||
|
Plan Category
|
(a) | (b) | (c) | |||||||||
|
Equity compensation plans approved by security holders |
||||||||||||
|
2007 Viad Corp Omnibus
Incentive Plan (“2007 Plan”) |
36,600 | 31.37 | 1,284,086 | |||||||||
|
1997 Viad Corp Omnibus
Incentive Plan (“1997 Plan”) |
546,003 | 25.23 | -- | |||||||||
|
Equity compensation plans not approved by security holders |
-- | -- | -- | |||||||||
|
Total
|
582,603 | 25.62 | 1,284,086 | |||||||||
| 1 | The 2007 Plan, with a ten-year life, provides for the following types of awards to officers, directors and certain other employees: (a) incentive and non-qualified stock options; (b) restricted stock and restricted stock units; (c) performance units or performance shares; (d) stock appreciation rights; (e) cash-based awards and (f) certain other stock-based awards. The number of shares of common stock available for grant under the 2007 Plan is limited to 1,700,000 shares plus shares awarded under the 1997 Plan, approved by shareholders, that subsequently cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent the shares are exercised for, or settled in, vested and non-forfeited shares) up to an aggregate maximum of 1,500,000 shares. |
34
Table of Contents
PROPOSAL 2: RATIFICATION
OF VIAD’S INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS
The Audit Committee of the Board has appointed
Deloitte & Touche LLP as our independent registered
public accountants (independent auditors) for 2010, and the
Board of Directors ratified the appointment. The following
resolution concerning the appointment of Deloitte &
Touche LLP as Viad’s independent auditors will be offered
at the meeting:
RESOLVED, that the appointment of Deloitte & Touche
LLP by the Audit Committee of the Board of Directors of Viad
Corp to audit the accounts of the Corporation and its
subsidiaries for the fiscal year 2010 is hereby ratified.
Deloitte & Touche LLP has audited our accounts and
those of our subsidiaries for many years. Although the listing
standards of the NYSE and the charter of the Audit Committee
require Viad’s independent registered public accountants to
be engaged, retained and supervised by the Audit Committee, the
Board considers the selection of the independent registered
public accountants to be an important matter of shareholder
concern and is submitting appointment of Deloitte &
Touche LLP for ratification by shareholders as a matter of good
corporate practice. No determination has been made as to what
action the Audit Committee and Board would take if shareholders
do not approve the appointment.
Viad anticipates that a representative of Deloitte &
Touche LLP will attend the meeting, respond to appropriate
questions, and be afforded the opportunity to make a statement.
Recommendation of
the Board
The Board of Directors recommends that you vote
“FOR” the ratification of the
appointment of Deloitte & Touche LLP as Viad’s
independent registered public accountants for 2010.
Fees and Services
of Independent Registered Public Accountants
The following is a summary of the aggregate fees billed to Viad
by its independent registered public accountants,
Deloitte & Touche LLP, the member firms of Deloitte
Touche Tohmatsu, and their respective affiliates (collectively,
“Deloitte & Touche LLP”) for professional
services provided for the fiscal years ended December 31,
2008 and 2009.
|
Fee Category
|
2008 Fees ($) | 2009 Fees ($) | ||||||
|
Audit
Fees1
|
2,050,400 | 1,765,500 | ||||||
|
Audit-Related
Fees2
|
249,400 | 201,400 | ||||||
|
Tax Fees3
|
157,400 | 201,000 | ||||||
|
All Other
Fees4
|
-- | -- | ||||||
|
Total Fees
|
2,457,200 | 2,167,900 | ||||||
| 1 | Audit Fees. Consists of fees billed for professional services provided for the audits of Viad’s financial statements for the fiscal years ended December 31, 2008 and 2009, and for review of the financial statements included in Viad’s Quarterly Reports on Form 10-Q for those fiscal years. Fees in 2008 and 2009 also were incurred in connection with the audit of Viad’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. | |
| 2 | Audit-Related Fees. Consists of fees billed for services provided to Viad for audit-related services, which generally include fees for separate audits of employee benefit and pension plans, certain due diligence assistance and consultation, and ad hoc fees for consultation on financial accounting and reporting standards. | |
| 3 | Tax Fees. Consists of fees billed for services provided to Viad for tax services, which generally include fees for corporate tax planning, consultation and compliance. | |
| 4 | All Other Fees. Consists of fees billed for all other services provided to Viad, which generally include fees for consultation regarding computer system controls and human capital consultations. No services were performed related to financial information systems design and implementation for the fiscal years ended December 31, 2008 and 2009. |
None of the above-described professional services were approved
by the Audit Committee in reliance on the de minimus
exception to the pre-approval requirements under federal
securities laws and regulations.
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Pre-Approval of
Services of Independent Registered Public Accountants
The Audit Committee’s written policy is to pre-approve all
audit and permissible non-audit services provided by Viad’s
independent registered public accountants, which is
Deloitte & Touche LLP. These services may include
audit services, audit-related services, tax services and other
permissible non-audit services. Any service incorporated within
the engagement letter of the independent registered public
accountants, which is approved by the Audit Committee, is deemed
pre-approved. Any service identified as to type and estimated
fee in the written annual service plan of the independent
registered public accountants, which is approved by the Audit
Committee, is deemed pre-approved up to the dollar amount
provided in such annual service plan.
During the year, the independent registered public accountants
also provide additional accounting research and consultation
services required by, and incident to, the audit of Viad’s
financial statements and related reporting compliance. These
additional audit-related services are pre-approved up to the
amount provided in the annual service plan which is approved by
the Audit Committee. The Audit Committee may also pre-approve
services on a
case-by-case
basis during the year, or the Chairman of the Audit Committee
may give such pre-approval in writing on behalf of the Audit
Committee. The Chairman reviews his pre-approvals with the full
Audit Committee not later than at the committee’s next
meeting.
The Audit Committee’s approval of proposed services and
fees are noted in the meeting minutes of the Audit Committee
and/or by
signature on behalf of the Audit Committee on the engagement
letter. The independent registered public accountants are
periodically requested to summarize the services and fees paid
to date, and management is required to report whether the
services and fees have been pre-approved in accordance with the
required pre-approval process of the Audit Committee.
Non-Audit
Services of Independent Registered Public Accountants
The Audit Committee has considered whether the provision of
non-audit services by Deloitte & Touche LLP is
compatible with maintaining auditor independence.
VOTING PROCEDURES
AND REVOKING YOUR PROXY
Voting
Procedures
In order to be elected as a director in an uncontested election,
the number of shares voted “for” a director nominee
from the shares present and voting in person or by proxy must
exceed the number of votes cast “against” the director
nominee. In contested elections where the number of nominees
exceeds the number of directors to be elected, director nominees
must receive a plurality of the shares present and 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 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.
Shareholders who fail to return a proxy or attend the meeting
will not count towards determining any required plurality,
majority or quorum. Shareholders and brokers returning proxies
or attending the meeting who are entitled to vote on the subject
matter and who abstain from voting on a proposition will count
towards determining a quorum, plurality or majority for that
proposition. Banks and brokers that have not received voting
instructions from their clients may vote their clients’
shares on the election of directors and ratifying the
appointment of our independent registered public accounting firm.
Your proxy will be voted in accordance with the instructions you
place on the proxy card. Unless you vote otherwise, all shares
represented by your returned signed proxy will be voted as noted
on page 1 of this proxy statement. If you are a participant
in a 401(k) plan of Viad or one of its subsidiaries, your proxy
will serve as a voting instruction to the respective Trustee. In
a 401(k) 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.
Viad has adopted a procedure approved by the SEC called
“householding” in order to reduce printing and mailing
costs. Shareholders of record who have the same address and last
name will receive only one copy of this proxy statement and
Viad’s 2009 Annual Report, unless one or more of these
shareholders notifies Viad that they wish to continue receiving
individual copies. Shareholders who participate in householding
will continue to receive separate
36
Table of Contents
proxy cards. If you do not wish to participate in householding
and prefer to receive a separate copy of this proxy statement
and Viad’s 2009 Annual Report, or if you prefer to receive
separate copies of these documents in the future, please contact
Viad’s transfer agent, Wells Fargo Shareowner Services,
P.O. Box 64874, St. Paul, MN
55164-0874
(telephone number:
1-800-453-2235).
Beneficial owners can request information about householding
from their banks, brokers or other holders of record.
Revoking Your
Proxy
Proxies may be revoked if you:
| • | Deliver a signed, written revocation letter, dated later than the proxy, to Scott E. Sayre, Vice President-General Counsel and Secretary, at our Phoenix address listed on page 1 above. | |
| • | Deliver a signed proxy, dated later than the first one, to Viad Corp; c/o Shareowner Services; P.O. Box 64873; St. Paul, Minnesota 55164-0873. | |
| • | Attend the meeting and vote in person rather than by proxy. Your attendance at the meeting will not revoke your proxy unless you choose to vote in person. |
Solicitation of
Proxies
The cost of solicitation will be borne by Viad. Solicitation of
proxies will be made primarily through the use of the mails, but
regular employees of Viad may solicit proxies personally, by
telephone or otherwise. Viad 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
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
From time to time shareholders submit proposals and director
nominations which may be proper subjects for inclusion in the
proxy statement and form of proxy for consideration at the
Annual Meeting of Shareholders. To be considered in the proxy
statement or at an annual or special meeting, proposals and
director nominations must be submitted on a timely basis, in
addition to meeting other legal requirements. Viad must receive
proposals and nominations for the 2010 Annual Meeting of
Shareholders no later than December 7, 2010, for possible
inclusion in the proxy statement, or on or between
January 18, 2011 and February 17, 2011, for possible
consideration at the meeting, which is expected to be held on
Tuesday, May 17, 2011. Proposals, director nominations, or
related questions should be directed in writing to the
undersigned at the address listed on page 1 above.
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 Viad’s 2009 Annual Report filed with the SEC is
enclosed herewith. You may also obtain Viad’s other SEC
filings and certain other information concerning Viad through
the Internet at www.sec.gov and www.viad.com,
respectively. Information contained in any website referenced in
this proxy statement is not incorporated by reference in this
proxy statement.
By Order of the Board of Directors
SCOTT E. SAYRE
Vice President-General Counsel and Secretary
Vice President-General Counsel and Secretary
PLEASE
VOTE -- YOUR VOTE IS IMPORTANT
37
Table of Contents
| VIAD CORP |
| ANNUAL MEETING OF STOCKHOLDERS |
| Tuesday, May 18, 2010 |
| 9:00 a.m. Mountain Standard Time |
| The Ritz-Carlton |
| 2401 East Camelback Road |
| Phoenix, AZ 85016 |
| Viad Corp |
| 1850 North Central Avenue, Suite 800 |
| Phoenix, Arizona 85004-4545 proxy |
| This proxy is solicited by the Board of Directors for use at the Annual Meeting of |
| Stockholders on |
| May 18, 2010. |
| The shares of Viad Corp common stock you hold in your account will be voted as you specify on the reverse side. |
| If no choice is specified, the proxy will be voted “FOR” all nominees and Item 2. |
| By signing the proxy, you revoke all prior proxies and appoint Paul B. Dykstra and Robert E. Munzenrider, and each of them 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 of Stockholders and all adjournments. |
| See reverse for voting instructions. |
| 101405 |
Table of Contents
| Shareowner ServicesSM P.O. Box 64945 |
| St. Paul, MN 55164-0945 |
| COMPANY # |
| Vote by Internet, Telephone or Mail |
| 24 Hours a Day, 7 Days a Week Your phone or Internet vote authorizes the named |
| proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. |
| INTERNET — www.eproxy.com/vvi Use the Internet to vote your proxy until |
| 12:00 p.m. (CT) on May 17, 2010. |
| PHONE — 1-800-560-1965 |
| Use a touch-tone telephone to vote your proxy until 12:00 p.m. (CT) on May 17, 2010. |
| MAIL — Mark, sign and date your proxy card and return it in the postage-paid envelope provided. |
| If you vote your proxy by Internet or by Telephone, you |
| do NOT need to mail back your Voting Instruction Card. |
| TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW, |
| SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD. |
| please detach here |
| The Board of Directors Recommends a Vote FOR all nominees and Item 2. |
| Election of directors: FOR AGAINST ABSTAIN 1a. Isabella Cunningham |
| 1b. Jess Hay 1c. Albert M. Teplin 2. Ratify the appointment of Deloitte & Touche LLP as our |
| independent public accountants for 2010. For Against Abstain To help us save printing and postage costs, would you prefer to receive proxy materials electronically via the Internet? If yes, mark box. |
| 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) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, |
| adminis trators, etc., should include title and authority. Corporations should provide full name of corporation and title |
| of authorized officer signing the Proxy. |
TABLE OF CONTENTS
GENERAL INFORMATION ABOUT THE MEETINGPROPOSAL 1: ELECTION OF DIRECTORSBoard StructureMajority Vote Standard for Election of DirectorsSkills, Qualifications and Experience of Viads DirectorsDirector NomineesRecommendation of the BoardDirectors Continuing in OfficeTHE BOARD OF DIRECTORS AND ITS COMMITTEESCorporate GovernanceBoard Committees and Director IndependenceBoard Meetings and Annual Shareholder MeetingMeetings of Non-Management Directors and Presiding DirectorBoard Leadership StructureCorporate Governance and Nominating and Human Resources Committees Interlocks and Insider ParticipationReview and Approval of Transactions with Related PersonsDirector NominationsCommunication with Board of DirectorsRisk OversightDirector Compensation TableSECURITY OWNERSHIP OF VIAD MANAGEMENT AND CERTAIN BENEFICIAL OWNERSOwnership Guidelines for Directors and Executive OfficersSecurity Ownership of ManagementSection 16(a) Beneficial Ownership Reporting ComplianceSecurity Ownership of Certain Beneficial OwnersAUDIT COMMITTEE REPORTREPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATIONEXECUTIVE COMPENSATIONCompensation Discussion and AnalysisSummary Compensation TableCompensation ConsultantGrants of Plan-Based AwardsEmployment AgreementsOutstanding Equity Awards at Fiscal Year-End TableOption Exercises and Stock Vested TablePension Benefits TableNonqualified Deferred Compensation TablePotential Payment Upon Employment Termination or Change of ControlSecurities Authorized for Issuance under Equity Compensation PlansPROPOSAL 2: RATIFICATION OF VIADS INDEPENDENT REGISTERED PUBLIC ACCOUNTANTSRecommendation of the BoardFees and Services of Independent Registered Public AccountantsPre-Approval of Services of Independent Registered Public AccountantsNon-Audit Services of Independent Registered Public AccountantsVOTING PROCEDURES AND REVOKING YOUR PROXYSUBMISSION OF SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONSOTHER BUSINESS