EXHIBIT 10.E
THE DIAL CORP
MANAGEMENT INCENTIVE PLAN
I. PURPOSE:
The purpose of The Dial Corp Management Incentive Plan
(Plan) is to provide key executives of The Dial Corp and its
subsidiaries with an incentive to achieve goals as set forth
under this Plan for each calendar year (Plan Year) for their
respective companies and to provide effective management and
leadership to that end.
II. PHILOSOPHY:
The Plan will provide key executives incentive bonuses based
upon appropriately weighted pre-defined net income, net
capital employed or other cash flow measure (in the case of
subsidiaries), and return on actual or pro forma equity or
similar measures of performance.
III. SUBSIDIARIES, SUBSIDIARY GROUPS, AND DIVISIONS:
A. Each subsidiary, subsidiary group, line of business or
division listed below is a "Company" for the purposes
of this Plan:
Name of Company
---------------
Aircraft Service International group
Brewster Transport Company Limited
Consumer Products group
Food Division
Household Division
International Division
Laundry Division
Soap Division
Crystal Holidays, Limited
Dobbs International Services, Inc. group
Exhibitgroup, Inc.
Greyhound Exposition Services, Inc. group*
Greyhound Leisure Services, Inc. group
Greyhound Lines of Canada Ltd.
Jetsave Inc. group
Premier Cruise Lines, Inc.
Restaura, Inc. group
Travelers Express Company, Inc. group
The Dial Corp may, by action of its Board of Directors,
add or remove business units on the list of participant
companies from time to time.
*For purposes of group and Corporate accruals only.
B. PERFORMANCE GOALS:
1. BASE EARNINGS:
A realistic "base earnings" target for the plan
year for each Company will be recommended by the
Chief Executive Officer of The Dial Corp to the
Executive Compensation Committee of The Dial Corp
Board of Directors (Committee) for approval taking
into account historical income, plan year
financial plan income (on the same basis as
determined below), overall corporate objectives,
and, if appropriate, other circumstances.
Income for subsidiary base earnings determination
and for calculating the bonus pool of each Company
shall mean net income (after deducting charges
against income for all incentives earned,
including those earned under this Plan) adjusted
to appropriately exclude the effects of gains and
losses from the sale or other disposition of
capital assets other than equipment utilized in
rental or leasing operations and vehicles.
Further, there will be a deduction from (addition
to) actual net income for the amount by which a
Company's excess of 90-day and over receivables
over its allowance for doubtful accounts has
increased (decreased) during the year.
Special treatment of any other significant unusual
or non-recurring items (for purposes of base
earnings and/or return on equity and/or net
capital employed or other cash flow calculations)
arising after a subsidiary's targets are set may
be recommended by the Chief Executive Officer of
The Dial Corp to the Committee for approval,
including, for example, appropriate adjustment of
base earnings and/or return on equity and/or net
capital employed targets to reflect planned
effects of an acquisition approved after targets
are set. Other examples include extraordinary
items, effects of a change in accounting
principles or a change in federal income tax
rates. In certain extreme cases, unplanned
effects of major litigation, remediation of
environmental matters, significant uninsured
losses or a significant restructuring, or the
bankruptcy of a major vendor or customer are
further examples of the types of items which could
be (but are not required to be) considered for
possible special treatment.
2. RETURN ON THE DIAL CORP PRO FORMA EQUITY (Except
Travelers Express Company, Inc. group):
A return on equity calculation for each Company
will be made by dividing each year's net earnings
after tax by the average quarterly (beginning of
year and each quarter-end, including year-end) pro
forma equity. For purposes of this calculation,
pro forma equity shall be deemed to be 65% of the
sum of each Company's actual equity plus its debt,
including intercompany accounts payable less
intercompany accounts receivable (net capital
employed) and net income shall be adjusted (1) to
exclude 65% of intercompany interest income and
(2) to deduct (or add) 65% of the pro forma
interest, calculated at 8% per annum, on the
excess (or deficiency) of 35% of the average
beginning and ending balance of net capital
employed over the average beginning and ending
balance of outstanding debt (pro forma additional
or excess debt), so that each Company's return on
equity is based on a pro forma 65% equity and 35%
debt structure (equivalent to a debt/equity ratio
of .54 to 1 or a debt/capital ratio of 35%) for
the net capital employed by it. A realistic
return on equity target for the Plan Year will be
recommended by the Chief Executive Officer of The
Dial Corp for approval to the Committee, taking
into account historical return on equity data,
plan year financial plan return on equity (on the
same basis as previously described), overall
corporate objectives, and, where appropriate,
other circumstances.
3. RETURN ON THE DIAL CORP EQUITY (Travelers Express
Company, Inc. group):
A return on equity calculation for the Travelers
Express Company, Inc. group will be made by
dividing each year's net income after taxes by the
average quarterly (beginning of year and each
quarter-end, including year-end) equity. A
realistic return on equity target for the Plan
Year will be recommended by the Chief Executive
Officer of The Dial Corp for approval to the
Committee, taking into account historical return
on equity data, plan year financial plan return on
equity (on the same basis as previously
described), overall corporate objectives, and,
where appropriate, other circumstances.
4. NET CAPITAL EMPLOYED (or other cash flow measure):
Realistic monthly net capital employed (as defined
in [2] above) targets for the Plan Year will be
recommended by the Chief Executive Officer of The
Dial Corp for approval to the Committee, taking
into account planned capital expenditures and
working capital levels, overall corporate
objectives, and, where appropriate, other
circumstances. The effects of any major unplanned
sale of assets, acquisition, or capital
expenditures will be considered on an individual
basis in determining performance as compared to
target.
5. ESTABLISHING TARGETS:
The actual targets for base earnings, return on
equity and net capital employed will be
established by the Committee after receiving the
recommendations of the Chief Executive Officer of
The Dial Corp.
C. PARTICIPANT ELIGIBILITY:
The Committee will select the Executive Officers as
defined under Section 16b of the Securities Exchange
Act eligible for participation prior to the beginning
of the year. Other personnel will be eligible for
participation as designated by each Company President
or Chief Executive Officer and recommended to the Chief
Executive Officer of The Dial Corp for approval,
limited only to those executives who occupy a position
in which they can significantly affect operating
results as pre-defined by appropriate and consistent
criteria, i.e., base salary not less than $49,000 per
year, or base salary not less than 50% of the Company's
Chief Executive Officer, or position not more than the
third organizational level below the Company Chief
Executive Officer or another applicable criteria.
NOTE: Individuals not qualifying under the criteria
established for the Plan Year who were included in the
previous year will be grandfathered (continue as
qualified participants until retirement, reassignment,
or termination of employment) if designated by the
Company President or Chief Executive Officer, and
approved by the Chief Executive Officer of The Dial
Corp.
D. TARGET BONUSES:
Target bonuses will be approved by the Committee for
each Executive Officer in writing within the following
parameters prior to the beginning of the Plan Year and
will be expressed as a percentage of salary. Target
bonuses for other eligible personnel will be
established in writing within the following parameters
subject to approval by the Chief Executive Officer of
The Dial Corp.
Actual bonus awards will be dependent on Company
performance versus the targets established prior to the
beginning of the year. A threshold performance will be
required before any bonus award is earned. Awards will
also be capped when stretch performance levels are
achieved.
AS A PERCENTAGE OF SALARY
SUBSIDIARY
POSITIONS THRESHOLD** TARGET CAP***
- ---------- ----------- ------ ------
Chief Executive
Officer/President* 22.5% 45% 76.5%
20.0% 40% 68.0%
Executive Vice
President, Senior
Vice President,
and Other Operating
Executives 20.0% 40% 68.0%
Vice Presidents* 17.5% 35% 59.5%
15.0% 30% 51.0%
Key Management
Reporting to Officers* 12.5% 25% 42.5%
10.0% 20% 34.0%
Staff Professionals* 7.5% 15% 25.5%
5.0% 10% 17.0%
- ----------------------------
* Target Bonus, as determined by the Committee, is dependent
upon organizational reporting relationships.
** Reflects minimum achievement of both performance targets.
Threshold could be one-half of this amount if minimum
achievement of only one performance target is met.
*** Cap could be up to 105% of amounts shown if net capital
employed (or other cash flow measure) targets are achieved.
E. BONUS POOL TARGET:
1. The "Bonus Pool Target" will be initially
established prior to the beginning of the Plan
Year and will be adjusted to equal the sum of the
target bonuses of all designated participants in
each Company based upon actual Plan Year salaries,
as outlined in paragraph D above, plus 15% for
Special Achievement Awards.
2. The bonus pool will accrue ratably such that
a) on 50% of the sum of target bonuses:
i) no bonus will be earned if less than 80%
of the base earnings target is achieved;
ii) 50% to 100% will be earned if 80% to
100% of the base earnings target is
achieved;
iii) 100% to 170% will be earned if 100% to
120% of the base earnings target is
achieved; and
iv) the bonus pool earned shall be subject
to a further calculation whereby 90%,
95%, 100%, 105%, or 110% of such base
earnings bonus pool otherwise accruable
will be the final bonus pool hereunder,
depending on the average of the twelve
months' achievement against net capital
employed (or other cash flow) targets.
b) on 50% of the sum of target bonuses:
i) no bonus will be earned if less than 80%
of the return on equity target is
achieved;
ii) 50% to 100% will be earned if 80% to
100% of the return on equity target is
achieved; and
iii) 100% to 170% will be earned if 100% to
120% of the return on equity target is
achieved.
c) Notwithstanding 2. a) i), ii), and iii); and
b) i), ii), and iii); of this paragraph E,
the ratable accrual of either or both targets
may be established for threshold within the
range of above 80% up to and including 95%
and for maximum within the range of below
120% down to 110%, for certain subsidiaries
of this Company as may be designated by the
Committee after considering the
recommendations of the Chief Executive
Officer of The Dial Corp.
3. Bonus pool accruals not paid out shall not be
carried forward to any succeeding year.
F. INDIVIDUAL BONUS AWARDS:
1. Indicated bonus awards will be equal to the
product of the target bonus percentage times the
weighted average percentage of bonus pool accrued
as determined in paragraph E above times the
individual's actual base salary earnings during
the Plan Year, subject to adjustments as follows:
a) discretionary upward or downward adjustment
of formula bonus awards by the Committee
after considering the recommendation of the
Company President or Chief Executive Officer
with the approval of the Chief Executive
Officer of The Dial Corp, and
b) discretionary downward adjustment of awards
by the Committee for those executive officers
affected by Section 162(m) of the Internal
Revenue Code, and
c) no individual award may exceed the
individual's capped target award and the
aggregate recommended bonuses may not exceed
the bonus pool accrued for other than Special
Achievement Awards.
2. Bonuses awarded to the participating management
staff of subsidiary groups may be paid from funds
accrued based upon the bonus pool target for such
participants times the weighted average
performance of the Companies in the subsidiary
group, subject to adjustments as above.
IV. THE DIAL CORP CORPORATE STAFF:
A. PERFORMANCE GOALS:
1. BASE EARNINGS PER SHARE:
A realistic "base earnings per share" from
continuing operations target for The Dial Corp
will be recommended by the Chief Executive Officer
of The Dial Corp to the Committee for approval
after considering historical earnings per share
from continuing operations, plan year financial
plan income, overall corporate objectives, and, if
appropriate, other circumstances.
Special treatment of any significant unusual or
non-recurring items (for purposes of base earnings
per share and/or return on equity calculations)
arising after targets are set for Corporate staff
may be recommended by the Chief Executive Officer
of The Dial Corp for approval by the Committee,
including appropriate adjustment of base earnings
per share and/or return on equity targets to
reflect planned effects of a major acquisition or
change in capital structure approved after targets
are set. Other examples include extraordinary
items, one time gains or losses arising from
discontinued operations, effects of a change in
accounting principles or a change in federal
income tax rates. Reclassification of a major
business unit to discontinued operations status
after targets have been set would also require
adjustment because of effect on continuing
operations results. Generally, restructuring
charges, gain or loss on sale of a smaller
subsidiary, or other one-time income or loss items
mentioned in the subsidiary section would not be
considered for special treatment for corporate
staff, as the corporate mission is to successfully
manage the effects of such items.
2. RETURN ON COMMON STOCKHOLDERS' EQUITY:
A return on common stockholders' equity
calculation will be made by dividing each year's
net income (after taxes) from continuing
operations, less preferred stock dividend
requirements, by the monthly average of common
stockholders' equity (return on common equity).
Consideration will be given to any known or
anticipated changes in equity structure and
appropriate industry averages, and a realistic
return on common stockholders' equity target for
the Plan Year will be recommended by the Chief
Executive Officer of The Dial Corp to the
Committee for approval, taking into account
historical return on common stockholders' equity
data, Plan Year financial plan return on common
stockholders' equity (on the same basis as
previously described), overall corporate
objectives, and, if appropriate, other
circumstances.
B. PARTICIPANT ELIGIBILITY:
The Committee will select the Executive Officers as
defined under Section 16b of the Securities Exchange
Act eligible for participation prior to the beginning
of the year. Other personnel will be eligible for
participation as recommended by the appropriate staff
Vice President and as approved by the Chief Executive
Officer of The Dial Corp, limited only to those
executives who occupy a position in which they can
significantly affect operating results as defined by
the following criteria:
a) Salary grade 25 and above; and
b) Not more than Organizational Level Four below the
Chief Executive Officer.
NOTE: Individuals not qualifying under the criteria
established for the Plan Year who were included in the
previous year will be grandfathered (continue as
qualified participants until retirement, reassignment,
or termination of employment) if designated by the
appropriate Vice President and approved by the Chief
Executive Officer of The Dial Corp.
C. TARGET BONUSES:
Target bonuses will be approved by the Committee for
each Executive Officer in writing within the following
parameters prior to the beginning of the Plan Year and
will be expressed as a percentage of salary. Target
bonuses for other eligible personnel will be
established in writing within the following parameters
subject to approval by the Chief Executive Officer of
The Dial Corp.
Actual bonus awards will be dependent on Company
performance versus the targets established prior to the
beginning of the year. A threshold performance will be
required before any bonus award is earned. Awards also
will be capped when stretch performance levels are
achieved.
AS A PERCENTAGE OF SALARY
CORPORATE
POSITIONS THRESHOLD** TARGET CAP***
- ---------- ----------- ------ ------
Chairman, 30.00% 60% 102.0%
President &
Chief Executive
Officer
Senior Advisory 22.50% 45% 76.5%
Group
Corporate Staff 20.00% 40% 68.0%
Officers
Staff Directors* 17.50% 35% 59.5%
15.00% 30% 51.0%
12.50% 25% 42.5%
10.00% 20% 34.0%
Staff 7.50% 15% 25.5%
Professionals* 5.00% 10% 17.0%
- ------------------------------
* Target Bonus, as determined by the Committee, is dependent
upon Organizational Reporting Relationships.
** Reflects minimum of achievement of both performance targets.
Threshold could be one-half of this amount if minimum
achievement of only one performance target is met.
D. BONUS POOL TARGET
1. The "Bonus Pool Target" will be established prior
to the beginning of the Plan Year and will be
adjusted to equal the sum of the target bonuses of
all qualified participants based upon actual Plan
Year base salaries, as outlined in paragraph C
above, plus 15% for Special Achievement Awards.
2. The bonus pool will accrue ratably such that
a) on 50% of the sum of the target bonuses:
i) no bonus will be earned if less than 80%
of earnings per share target is
achieved;
ii) 50% to 100% will be earned if 80% to
100% of earnings per share target is
achieved; and
iii) 100% to 170% will be earned if 100% to
120% of earnings per share target is
achieved.
b) on 50% of the sum of target bonuses:
i) no bonus will be earned if less than 80%
of the return on equity target is
achieved;
ii) 50% to 100% will be earned if 80% to
100% of the return on equity target is
achieved; and
iii) 100% to 170% will be earned if 100% to
120% of the return on equity target is
achieved
provided no less than an amount equal to 12.5% of
the actual bonus accruals earned under section III
of this Plan or any spin-off Line of Business
Incentive Plan established after 1984, for
participants under section III herein will be
earned hereunder, up to an aggregate maximum of
170% of Bonus Pool Target and transferred by the
companies covered in section III, herein, to The
Dial Corp. For purposes of this determination
only, the 170% (plus up to 8.5% upward cash flow
adjustment) upper limit shall not apply on such
actual bonus accrual calculations for
subsidiaries, subsidiary groups and divisions.
c) Notwithstanding 2. a)i),ii) and iii); and
b)i),ii), and iii); of this paragraph D, the
ratable accrual of either or both targets may
be established for threshold within the range
of 80% up to and including 95% and for
maximum within the range of below 120% down
to 105% as may be designated by the
Committee.
3. Bonus pool accruals not paid out shall not be
carried forward to any succeeding year.
E. INDIVIDUAL BONUS AWARDS:
Indicated bonus awards will be equal to the product of
the target bonus percentage times the weighted average
percentage of bonus pool accrued as determined in
paragraph D above times the individual's actual Plan
Year base salary earnings, subject to adjustments as
follows:
a) discretionary upward or downward adjustment
of formula awards by the Committee after
considering the recommendations of the Chief
Executive Officer of The Dial Corp,
b) discretionary downward adjustment of awards
by the Committee for those Executive Officers
affected by Section 162(m) of the Internal
Revenue Code, and
c) no individual award may exceed the
individual's capped target award and the
aggregate recommended bonuses may not exceed
the bonus pool accrued for other than Special
Achievement Awards.
V. SPECIAL ACHIEVEMENT AWARDS:
Special bonuses of up to 15% of base salary for exceptional
performance to exempt employees who are not participants in
this Plan, including newly hired employees, may be
recommended at the discretion of the Chief Executive Officer
to the Committee from the separate funds for discretionary
awards provided for under paragraphs III E and IV D.
Special Achievement Awards may be granted to participants in
exceptional cases from any funds accrued under this Plan, as
recommended by the Chief Executive Officer to the Committee
for approval.
VI. APPROVAL AND DISTRIBUTION:
The individual incentive bonus amounts and the terms of
payment thereof will be fixed following the close of the
Plan Year by the Committee. Any award made under this Plan
is subject to the approval of this Plan by the stockholders
of The Dial Corp.
VII. COMPENSATION ADVISORY COMMITTEE:
The Compensation Advisory Committee is appointed by the
Chief Executive Officer of The Dial Corp to assist the
Committee in the implementation and administration of this
Plan. The Compensation Advisory Committee shall propose
administrative guidelines to the Committee to govern
interpretations of this Plan and to resolve ambiguities, if
any, but the Compensation Advisory Committee will not have
the power to terminate, alter, amend, or modify this Plan or
any actions hereunder in any way at any time.
VIII. SPECIAL COMPENSATION STATUS:
All bonuses paid under this Plan shall be deemed to be
special compensation and, therefore, unless otherwise
provided for in another plan or agreement, will not be
included in determining the earnings of the recipients for
the purposes of any pension, group insurance or other plan
or agreement of a Company or of The Dial Corp. Participants
in this Plan shall not be eligible for any contractual or
other short-term (sales, productivity, etc.) incentive plan
except in those cases where participation is weighted
between this Plan and any such other short-term incentive
plan.
IX. DEFERRALS:
Participants subject to taxation of income by the United
States may submit to the Committee, prior to November 15 of
the year in which the bonus is being earned a written
request that all or a portion, but not less than $1,000, of
their bonus awards to be determined, if any, be irrevocably
deferred substantially in accordance with the terms and
conditions of a deferred compensation plan approved by the
Board of Directors of The Dial Corp or, if applicable, one
of its subsidiaries. Participants subject to taxation of
income by other jurisdictions may submit to the Committee a
written request that all or a portion of their bonus awards
be deferred in accordance with the terms and conditions of a
plan which is adopted by the Board of Directors of a
participant's Company. Upon the receipt of any such
request, the Committee thereunder shall determine whether
such request should be honored in whole or in part and shall
forthwith advise each participant of its determination on
such request.
X. PLAN TERMINATION:
This Plan shall continue in effect until such time as it may
be canceled or otherwise terminated by action of the Board
of Directors of The Dial Corp and will not become effective
with respect to any Company unless and until its Board of
Directors adopts a specific plan for such Company. While it
is contemplated that incentive awards from the Plan will be
made, the Board of Directors of The Dial Corp, or any other
Company hereunder, may terminate, amend, alter, or modify
this Plan at any time and from time to time. Participation
in the Plan shall create no right to participate in any
future year's Plan.
XI. EMPLOYEE RIGHTS:
No participant in this Plan shall be deemed to have a right
to any part or share of this Plan. This Plan does not
create for any employee or participant any right to be
retained in service by any Company, nor affect the right of
any such Company to discharge any employee or participant
from employment. Except as provided for in administrative
guidelines, a participant who is not an employee of The Dial
Corp or one of its subsidiaries on the date bonuses are paid
will not receive a bonus payment.