EXHIBIT 10.B
VIAD CORP
MANAGEMENT INCENTIVE PLAN
PURSUANT TO THE 1997 VIAD CORP OMNIBUS INCENTIVE PLAN
AS AMENDED MARCH 30, 2004
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.
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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 not to exceed $750,000 in the case of a
President of any Operating Company. 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 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 may 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 overhead, 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
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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
certain companies may 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 applicable 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. CASH FLOW:
An appropriate "Cash Flow" target for the plan year for
certain companies may be recommended by the Chief Executive
Officer of Viad Corp to the Committee for approval. This
measurement is intended to place increased emphasis on
delivering available cash to Viad.
Operating Cash Flow is defined as the net change in cash
resulting from the operations of the Company. Cash flows from
operations exclude the impact of investing activities
(acquiring and disposing of investments and productive
long-lived assets) and financing activities (borrowing and
repaying debt, payment of dividends, and treasury stock
repurchases).
4. OTHER PERFORMANCE MEASUREMENTS:
An appropriate number of performance measurements other than
operating or pre-tax income, VVA, and cash flow may 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.
5. 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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6. ESTABLISHING TARGETS:
The targets for revenue, operating or pre-tax income, VVA,
cash flow 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.
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
- ------------------------------------------------------------------------------------------------
Chief Executive Officer/President 27.5% 55.0% 110.0%
25.0% 50.0% 100.0%
Executive Vice President-Senior Vice President, 22.5% 45.0% 90.0%
and Other Operating Executives 20.0% 40.0% 80.0%
Vice Presidents 17.5% 35.0% 70.0%
15.0% 30.0% 60.0%
Key Management Reporting to Officers 12.5% 25.0% 50.0%
10.0% 20.0% 40.0%
Staff Professionals 7.5% 15.0% 30.0%
5.0% 10.0% 20.0%
* 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 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
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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 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 not to exceed in the case of (i) the
Company's Chief Executive Officer, $1.5 million; and (ii) all other
Executive Officers of the Company individually, $500,000. 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 may 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. 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.
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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. OPERATING INCOME:
An appropriate "operating income" may be recommended by the
Chief Executive Officer of Viad Corp to the Committee for
approval.
Operating income is defined as operating income before
minority interest, interest expense, interest income, and
taxes, excluding unallocated corporate overhead expenses,
unusual, non-cash charges (such as goodwill impairments and
restructuring charges), and spin-off related costs.
3. VALUE ADDED MEASUREMENT:
An appropriate "Value Added" target for the plan year for
Corporate may 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.
4. CASH FLOW:
An appropriate "Cash Flow" target for the plan year for
certain companies may be recommended by the Chief Executive
Officer of Viad Corp to the Committee for approval. This
measurement is intended to place increased emphasis on
delivering available cash to Viad.
Operating Cash Flow is defined as the net change in cash
resulting from the operations of the Company. Cash flows from
operations exclude the impact of investing activities
(acquiring and disposing of investments and productive
long-lived assets) and financing activities (borrowing and
repaying debt, payment of dividends, and treasury stock
repurchases).
5. OTHER PERFORMANCE MEASUREMENTS:
An appropriate number of performance measurements other than
income per share will be established for Corporate, with the
Chief Executive
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Officer of Viad to recommend to the Committee the level of
achievement against each of the measures.
6. 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.
7. ESTABLISHING TARGETS:
The actual targets for revenue, income per share, cash flow,
operating income, 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
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share goal. Awards also will be capped when stretch performance
levels are achieved.
As a Percentage of Salary
Corporate Positions Threshold** Target Cap
- ---------------------------------------------------------------------------------------------
Chairman, President & Chief Executive Officer 45.0% 90.0% 180.0%
Senior Advisory Group 27.5% 55.0% 110.0%
25.0% 50.0% 100.0%
22.5% 45.0% 90.0%
Corporate Staff Officers 20.0% 40.0% 80.0%
Staff Directors* 17.5% 35.0% 70.0%
15.0% 30.0% 60.0%
12.5% 25.0% 50.0%
Staff Professionals* 10.0% 20.0% 40.0%
7.5% 15.0% 30.0%
* 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. REPAYMENT PROVISIONS:
A. NON-COMPETE:
Unless a Change of Control (as defined in the Viad Corp Omnibus
Incentive Plan, as amended) shall have occurred after the date
hereof:
1. In order to better protect the goodwill of Viad and its
Affiliates (as defined in the Plan) and to prevent the
disclosure of Viad's or its Affiliates' trade secrets and
confidential information and thereby help insure the long-term
success of the business, each participant in this Plan,
without prior written consent of Viad, will not engage in any
activity or provide any services, whether as a director,
manager, supervisor, employee, adviser, agent, consultant,
owner of more than five (5) percent of any enterprise or
otherwise, for a period of two (2) years following the date of
such participant's termination of employment with Viad or any
of its Affiliates, in connection with the manufacture,
development, advertising, promotion, design, or sale of any
service or product which is the same as or similar to or
competitive with any services or products of Viad or its
Affiliates (including both existing services or products as
well as services or products known to such participant, as a
consequence of such participant's employment with Viad or one
of its Affiliates, to be in development):
a) with respect to which such participant's work has been
directly concerned at any time during the two (2) years
preceding termination of employment with Viad or one of
its Affiliates, or
b) with respect to which during that period of time such
participant, as a consequence of participant's job
performance and duties, acquired knowledge of trade
secrets or other confidential information of Viad or its
Affiliates.
2. For purposes of the provisions of paragraph V A, it shall be
conclusively presumed that a participant in this Plan has
knowledge of information he or she was directly exposed to
through actual receipt or review of memos or documents
containing such information, or through actual attendance at
meetings at which such information was discussed or disclosed.
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3. If, at any time within two (2) years following the date of a
participant's termination of employment with Viad or any of
its Affiliates, such participant engages in any conduct agreed
to be avoided in accordance with paragraph V A, then all
bonuses paid under this Plan to such participant during the
last 12 months of employment shall be returned or otherwise
repaid by such participant to Viad. Participants in this Plan
consent to the deduction from any amounts Viad or any of its
Affiliates owes to such participants to the extent of the
amounts such participants owe Viad hereunder.
B. MISCONDUCT:
Unless a Change of Control shall have occurred after the date
hereof, all bonuses paid for 2003 and thereafter under this Plan to
any participant shall be returned or otherwise repaid by such
participant to Viad, if Viad reasonably determines that during a
participant's employment with Viad or any of its Affiliates:
a) such participant knowingly participated in misconduct
that causes a misstatement of the financial statements
of Viad or any of its Affiliates or misconduct which
represents a material violation of any code of ethics of
Viad applicable to such participant or of the Always
Honest compliance program or similar program of Viad; or
b) such participant was aware of and failed to report, as
required by any code of ethics of Viad applicable to
such participant or by the Always Honest compliance
program or similar program of Viad, misconduct that
causes a misstatement of the financial statements of
Viad or any of its Affiliates or misconduct which
represents a material knowing violation of any code of
ethics of Viad applicable to such participant or of the
Always Honest compliance program or similar program of
Viad.
Participants in this Plan consent to the deduction from any amounts
Viad or any of its Affiliates owes to such participants to the
extent of the amounts such participants owe Viad hereunder.
C. ACTS CONTRARY TO VIAD:
Unless a Change of Control shall have occurred after the date
hereof, if Viad reasonably determines that at any time within two
(2) years after the award of any bonus under this Plan to a
participant that such participant has acted significantly contrary
to the best interests of Viad, including, but not limited to, any
direct or indirect intentional disparagement of Viad, then any bonus
paid under this Plan to such participant during the prior 2-year
period shall be returned or otherwise repaid by the participant to
Viad. Participants in this Plan consent to the deduction from any
amounts Viad or any of its Affiliates owes to such participants to
the extent of the amounts such participants owe Viad hereunder.
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D. The Corporation's reasonable determination required under paragraphs
V B and V C shall be made by the Human Resources Committee of the
Corporation's Board of Directors, in the case of executive officers
of the Corporation, and by the Chief Executive Officer and Corporate
Compliance Officer of the Corporation, in the case of all other
officers and employees.
VI. 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.
VII. 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.
VIII. 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.
IX. 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.
X. 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
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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.
XI. 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.
XII. 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 XIII. 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.
XIII. 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.
XIV. 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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