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VIAD CORP
EXHIBIT 10.D
MANAGEMENT INCENTIVE PLAN
PURSUANT TO THE 1997 VIAD CORP OMNIBUS INCENTIVE PLAN
AS AMENDED MARCH 15, 2001
I. PURPOSE:
The purpose of the Viad Corp Management Incentive Plan (Plan) is to
provide key executives of Viad Corp (Viad) 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 income and other performance
measurements.
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
Brewster Transport Company Limited/Brewster Tours group
Exhibitgroup/Giltspur group
GES Exposition Services, Inc. group
Glacier Park, Inc.
Travelers Express Company, Inc. group
Viad may, by action of its Board of Directors or its Human Resources
Committee, add or remove business units on the list of participant
companies from time to time.
B. FUNDING LIMIT:
A "funding limit" shall be established annually for each Company
participant who has been designated an Executive Officer as defined
under Section 16(b) of the Securities Exchange Act. The funding limit
shall be an amount determined by multiplying the actual net income of
the Company for the Plan Year by the percent of such income
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approved by the Human Resources Committee of the Viad Corp Board of
Directors (Committee) for such funding limit. The subsidiary
executive cannot be paid a larger bonus than the funding limit
provided by this clause, but may be paid less in the discretion of
the Committee based on the Performance Goals set forth below and
other such factors which the Committee may consider.
C. PERFORMANCE GOALS:
1. OPERATING OR PRE-TAX INCOME (as calculated for external
reporting purposes):
An appropriate "operating income" or "pre-tax income"
target for the plan year for each Company will be
recommended by the Chief Executive Officer of Viad to the
Committee for approval taking into account overall
corporate objectives, historical income and Plan Year
financial plan income (on the same basis as determined
below) and, if appropriate, other circumstances.
Operating or pre-tax income to be used in calculating the
bonus pool of each Company shall mean operating income
before minority interest, interest expense and taxes,
after deduction of corporate overheard, or pre-tax income
after minority interest, in each case adjusted to
appropriately exclude the effects of gains and losses from
the sale or other disposition of capital assets other than
vehicles. In addition, an adjustment to actual operating
or pre-tax income will be made for any increase or
decrease in cost to a subsidiary in connection with a
change in the actual formula allocation of corporate
overhead over amounts included in the Plan for the year.
Special treatment of any other significant unusual or
non-recurring items (for purposes of determining actual or
target operating or pre-tax income) arising after a
Company's targets are set may be recommended by the Chief
Executive Officer of Viad to the Committee for approval,
including, for example, appropriate adjustment of
operating or pre-tax income target or actuals to reflect
planned effects of an acquisition approved after target
has been set. Other examples include unusual items or
effects of a change in accounting principle.
Incentives to be paid under this Plan must be deducted
from the subsidiary corporation's earnings by the end of
the year. Goals must be achieved after deducting from
actual results all incentive compensation applicable to
the year, including those incentives earned under this
Plan.
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2. VALUE ADDED MEASUREMENT:
An appropriate "Value Added" target for the plan year for
each Company will be recommended by the Chief Executive
Officer of Viad Corp to the Committee for approval. This
measurement is intended to place increased emphasis on
securing an adequate return to Viad on all capital
employed in the business. Viad Value Added (VVA) compares
net operating income to the return required on capital
invested in the business.
In calculating the bonus pool of each Company, VVA shall
mean Net Operating Profit After Taxes (NOPAT is defined as
sales minus operating expenses minus taxes) minus a
Capital Charge calculated by multiplying a Cost of Capital
times the actual Capital (Capital is defined as total
assets less current and other liabilities exclusive of
debt). Certain adjustments are necessary to determine
NOPAT and Capital.
3. OTHER PERFORMANCE MEASUREMENTS:
An appropriate number of performance measurements other
than operating or pre-tax income and VVA will be
established for each Company, to place increased emphasis
on areas of importance to achieving overall corporate
objectives, with the Chief Executive Officer of Viad to
recommend to the Committee the measures to be used and, at
the end of the year, the level of achievement against
each.
4. REVENUE:
The bonus pool earned will be subject to a further
calculation whereby the total bonus pool otherwise
accruable will be adjusted by 95% (threshold) up to 105%
(maximum), depending on the achievement against the
revenue target.
5. ESTABLISHING TARGETS:
The targets for revenue, operating or pre-tax income, VVA
and for the categories of discretionary performance
measurements to be employed will be established by the
Committee no later than 90 days after the beginning of the
Plan Year after receiving the recommendations of the Chief
Executive Officer of Viad Corp.
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D. PARTICIPANT ELIGIBILITY:
The Committee will select the Executive Officers as defined under
Section 16(b) of the Securities Exchange Act eligible for
participation no later than 90 days after the beginning of the Plan
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 Viad 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 Viad Corp.
E. TARGET BONUSES:
Target bonuses will be approved by the Committee for each Executive
Officer in writing within the following parameters no later than 90
days after the beginning of the Plan Year and will be expressed as a
percentage of salary paid during the year. Target bonuses for other
eligible personnel will be established in writing within the
following parameters subject to approval by the Chief Executive
Officer of Viad Corp.
Actual bonus awards will be dependent on Company performance versus
the targets established. A threshold performance will be required
before any bonus award is earned under the net income goal. Awards
will also be capped when stretch performance levels are achieved.
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As a Percentage of Salary
Subsidiary Positions* Threshold** Target Cap
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Chief Executive Officer/President 25.0% 50% 89.25%
22.5% 45% 80.325%
20.0% 40% 71.4%
Executive Vice President-Senior Vice 20.0% 40% 71.4%
President, and Other Operating Executives
Vice Presidents 17.5% 35% 62.475%
15.0% 30% 53.55%
Key Management Reporting to Officers 12.5% 25% 44.625%
10.0% 20% 35.7%
Staff Professionals 7.5% 15% 26.775%
5.0% 10% 17.85%
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* Target Bonus, as determined by the Committee, is dependent upon
organization reporting relationships.
** Reflects minimum achievement of all performance targets. Threshold
could be lower if minimum achievement of only one performance target
is met.
F. BONUS POOL TARGET:
1. The "Bonus Pool Target" will be initially established no
later than 90 days after 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 in accordance with the Bonus
Pool Accrual Formula recommended by the Chief Executive
Officer of Viad Corp and approved by the Committee.
3. Bonus pool accruals not paid out shall not be carried
forward to any succeeding year.
G. 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 F above times the individual's actual base
salary earnings during the Plan Year, subject to
adjustments as follows:
a) discretionary upwards or downward adjustment of
formula bonus awards by the Committee after
considering the recommendation of the
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Company President or Chief Executive Officer
with the approval of the Chief Executive
Officer of Viad Corp for those executives not
affected by Section 162(m) of the Internal
Revenue Code, 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 or the funding limit with
respect to Executive Officers, 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 target bonus for such participant(s) times the
weighted average performance of the Companies in the
subsidiary group, subject to adjustments as above.
IV. VIAD CORP CORPORATE STAFF:
A. FUNDING LIMIT:
A "funding limit" shall be established annually for each Corporate
participant who has been designated an Executive Officer as defined
under Section 16(b) of the Securities Exchange Act. The funding limit
will be an amount determined by multiplying the actual net income
from continuing operations of Viad (as used in the income per share
calculation described herein) for the Plan Year by the percent of
such income approved by the Committee for such funding limit. The
executive cannot be paid a larger bonus than the funding limit
provided by this clause, but may be paid less in the discretion of
the Committee based on the Performance Goals set forth below and such
other factors which the Committee may consider.
B. PERFORMANCE GOALS:
1. INCOME PER SHARE:
An appropriate "income per share" from continuing
operations target for Viad Corp will be recommended by the
Chief Executive Officer of Viad Corp to the Committee for
approval after considering historical income per share
from continuing operations, Plan Year financial plan
income, overall corporate objectives, and, if appropriate,
other circumstances.
Income per share from continuing operations is determined
before unusual or extraordinary items, effects of changes
in accounting principles or a change in federal income tax
rates after the target has been set.
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Reclassification of a major business unit to discontinued
operations status after targets have been set would also
require adjustment because of the effect on continuing
operations results. While gains on disposition of a
business would normally not be included in determining
actual Plan Year net income or income per share, in the
event of the sale of a subsidiary or major business unit,
a portion of gain would be included equal to the
difference between the sold unit's planned net income for
the year and actual results to date of sale plus
calculated interest savings on proceeds for the balance of
the year, so that actual results are not penalized for
selling a business.
Incentives to be paid under this Plan must be deducted
from Viad's earnings by the end of the year. Goals must be
achieved after deducting from actual results all incentive
compensation applicable to the year, including those
incentives earned under this Plan.
2. VALUE ADDED MEASUREMENT:
An appropriate "Value Added" target for the plan year for
Corporate will be recommended by the Chief Executive
Officer of Viad for approval by the Human Resources
Committee. This measurement is intended to place increased
emphasis on securing an adequate return to Viad on all
capital employed in the business. Viad Value Added (VVA)
compares operating income to the return required on
capital invested in the business.
In calculating the bonus pool for Corporate, VVA shall
mean Net Operating Profit After Taxes (NOPAT is defined as
sales minus operating expenses minus taxes) minus a
Capital Charge calculated by multiplying a Cost of Capital
times the actual Capital (Capital is defined as total
assets less current and other liabilities exclusive of
debt). Certain adjustments are necessary to determine
NOPAT and Capital.
3. OTHER PERFORMANCE MEASUREMENTS:
An appropriate number of performance measurements other
than income per share will be established for Corporate,
with the Chief Executive Officer of Viad to recommend to
the Committee the level of achievement against each of the
measures.
4. REVENUE:
The bonus pool earned will be subject to a further
calculation whereby the total bonus pool otherwise
accruable will be adjusted by 95% (threshold) up to 105%
(maximum) depending on the achievement against the revenue
target.
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5. ESTABLISHING TARGETS:
The actual targets for revenue, income per share, VVA and
for the performance measurements to be used will be
established by the Committee no later than 90 days after
the beginning of the Plan Year after receiving the
recommendations of the Chief Executive Officer of Viad
Corp.
C. PARTICIPANT ELIGIBILITY:
The Committee will select the Executive Officers as defined under
Section 16(b) of the Securities Exchange Act eligible for
participation no later than 90 days after the beginning of the Plan
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 Viad 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 Viad Corp.
D. TARGET BONUSES:
Target bonuses will be approved by the Committee for each Executive
Officer in writing within the following parameters no later than 90
days after 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 Viad Corp.
Actual bonus awards will be dependent on Company performance versus
the targets established. A threshold performance will be required
before any bonus award is earned under the income per share goal.
Awards also will be capped when stretch performance levels are
achieved.
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As a Percentage of Salary
Corporate Positions Threshold** Target Cap
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Chairman, President & Chief Executive 37.5% 75% 137.8%
Officer
Senior Advisory Group 25.0% 50% 89.25%
22.5% 45% 80.325%
Corporate Staff Officers 20.0% 40% 71.4%
Staff Directors* 17.5% 35% 62.475%
15.0% 30% 53.55%
12.5% 25% 44.625%
10.0% 20% 35.7%
Staff Professionals* 7.5% 15% 26.775%
5.0% 10% 17.85%
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* Target Bonus, as determined by the Committee, is dependent upon
organization reporting relationships.
** Reflects minimum of achievement of all performance targets. Threshold
could be lower if minimum achievement of only one performance target
is met.
E. BONUS POOL TARGET:
1. The "Bonus Pool Target" will be established no later than
90 days after 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 in accordance with the Bonus
Pool Accrual Formula recommended by the Chief Executive
Officer of Viad Corp and approved by the Committee.
3. Bonus pool accruals not paid out shall not be carried
forward to any succeeding year.
F. 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 Viad
Corp for those executives not affected by Section 162(m)
of the Internal Revenue Code,
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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 or the funding limit with respect to
Executive Officers and the aggregate recommended bonuses
may not exceed the bonus pool for other than Special
Achievement Awards.
V. SPECIAL ACHIEVEMENT AWARDS:
Special bonuses of up to 15% of base salary for exceptional
performance to employees (primarily 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 F and IV E.
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 Viad Corp.
VII. COMPENSATION ADVISORY COMMITTEE:
The Compensation Advisory Committee is appointed by the Chief
Executive Officer of Viad 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 Viad 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.
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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 a specified minimum, 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 Viad 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 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 Viad 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 Viad 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, except as provided in Paragraph XII. 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 Viad Corp or one of its subsidiaries on the
date bonuses are paid will not receive a bonus payment.
XII. EFFECT OF CHANGE OF CONTROL:
Notwithstanding anything to the contrary in this Plan, in the event
of a Change of Control (as defined in the 1997 Viad Corp Omnibus
Incentive Plan) each participant in the Plan shall be entitled to a
prorata bonus award calculated on the basis of achievement of
performance goals through the date of the Change of Control.
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XIII. EFFECTIVE DATE:
The Plan shall be effective January 1, 1997, provided however, that
any award made under this Plan is subject to the approval of the 1997 Viad Corp
Omnibus Incentive Plan by the stockholders of Viad Corp.
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