UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.  )

Filed by the Registrant   ☑

Filed by a Party other than the Registrant   ☐

Check the appropriate box:

Viad Corp

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

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April 4, 2018

Dear Fellow Viad Corp Shareholder:

We look forward to your attendance in person or by proxy at the 2018 Annual Meeting of Shareholders (the “Annual Meeting”). We will hold the meeting at 8:00 a.m. Mountain Standard Time on Thursday, May 17, 2018, at the Royal Palms Hotel, 5200 East Camelback Road, Phoenix, Arizona. Please review the attached formal notice of the meeting and proxy statement for information about the matters to be voted on by shareholders.

Our directors and officers will be available at the meeting to speak with you. Shareholders will have the opportunity to ask questions or make comments related to the matters voted on and about our company. The agenda for this year’s annual meeting includes the following items:

 

 

Your vote is important, and we urge you to cast your vote promptly. Whether you plan to attend the meeting or not, we hope that your shares are represented and voted. In advance of the meeting on May 17, please cast your vote through the Internet, by telephone, or by mail. Instructions on how to vote are found in the section entitled “How to Vote” on page 1.

Thank you for continuing to support our company.

 

 

 

 

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Table of Contents

 

 

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Matters to be voted on:

Your vote is important! Please submit your proxy as soon as possible by the Internet, telephone, or mail. Submitting your proxy by one of these methods will ensure your representation at the annual meeting regardless of whether you attend the meeting. For specific instructions on how to vote your shares, please refer to the instructions on the Notice of Internet Availability of Proxy Materials you received in the mail, the section titled “How to Vote” on page 1 of this proxy statement, or, if you requested to receive printed proxy materials, your enclosed proxy card. The Board of Directors is soliciting your proxy.

By Order of the Board of Directors,

Irma Villarreal

Assistant General Counsel and Assistant Secretary

April 4, 2018

 

Important Notice Regarding the Availability of Proxy Materials

The 2018 Proxy Statement and 2017 Annual Report on Form 10-K are available at

http://www.viad.com/investors/annual-meeting-proxy-materials

 

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Important Notice Regarding the Availability of Proxy Materials for the

Annual Meeting of Shareholders to Be Held on May 17, 2018:

 

Our Notice of 2018 Annual Meeting of Shareholders, Proxy Statement, and

2017 Annual Report on Form 10-K are available at

http://www.viad.com/investors/annual-meeting-proxy-materials

Our Board of Directors (the “Board”) is providing this Proxy Statement in connection with Viad’s 2018 Annual Meeting of Shareholders to be held on Thursday, May 17, 2018 at 8:00 a.m., Mountain Standard Time, at the Royal Palms Hotel, 5200 East Camelback Road, Phoenix, Arizona and any adjournment or postponement thereof (the “Annual Meeting”).

Proxy materials or a Notice of Internet Availability of Proxy Materials (the “Notice”) are being first released or mailed on or about April 4, 2018, to all shareholders entitled to vote at the Annual Meeting. In accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials to each shareholder of record, we may furnish proxy materials by providing access to those documents on the Internet. The Notice contains instructions on how to access our proxy materials and vote online, or in the alternative, request a paper copy of the proxy materials and a proxy card.

A list of shareholders entitled to vote will be available at the Annual Meeting for examination by any shareholder for any proper purpose. The list will also be available on the same basis for 10 days prior to the Annual Meeting at our principal executive office at the address listed above.

 

 

 

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Below are highlights of certain information in this Proxy Statement. As it is only a summary, it may not contain all of the information that is important to you. For more complete information, please refer to the complete Proxy Statement and Viad Corp’s Annual Report on Form 10-K for the year ended December 31, 2017 (“2017 Form 10‑K”), before you vote. References to “we,” “us,” “our,” “the Company,” and “Viad” refer to Viad Corp and its subsidiaries. All references to “years,” unless otherwise noted, refer to our fiscal year, which ends on December 31.

 

2018 ANNUAL MEETING OF SHAREHOLDERS

 

 

HOW TO VOTE

 

Your vote is important! Please cast your vote and play a part in Viad’s future.

 

Shareholders of record, who hold shares registered in their names, can vote by:

 

 

The deadline for voting online or by telephone is 11:59 p.m. ET on May 16, 2018. If you vote by mail, your proxy card must be received before the Annual Meeting. If you hold shares in a Viad 401(k) plan, your voting instructions must be received by 11:59 p.m. ET on May 14, 2018.

 

Beneficial owners, who own shares through a bank, brokerage firm, or other nominee, can vote by returning the voting instruction form, or by following the instructions for voting via telephone or the Internet, as provided by the bank, broker, or other nominee. If you own shares in different accounts or in more than one name, you may receive different voting instructions for each type of ownership. Please vote all of your shares.

 

If you are a shareholder of record or a beneficial owner who has a legal proxy to vote the shares, you may choose to vote in person at the Annual Meeting. Even if you plan to attend our Annual Meeting in person, please cast your vote as soon as possible.

 

 

 

 

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MATTERS TO BE VOTED UPON

The following table summarizes the proposals to be voted upon at the Annual Meeting and our Board’s voting recommendations with respect to each proposal.

 

 

 FORWARD-LOOKING STATEMENTS

This proxy statement contains a number of forward-looking statements. Words, and variations of words, such as “will,” “may,” “expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,” “estimate,” “anticipate,” “deliver,” “seek,” “aim,” “potential,” “target,” “outlook,” and similar expressions are intended to identify our forward-looking statements. These forward-looking statements are not historical facts, but reflect our current estimates, projections, expectations, or trends concerning future growth, operating cash flows, availability of short-term borrowings, consumer demand, new or renewal business, investment policies, productivity improvements, ongoing cost reduction efforts, efficiency, competitiveness, strategic actions, acquisitions, the timing of hospitality and attractions’ openings, the sufficiency of our legal reserves,  show rotation, same-show revenue, segment operating income, adjusted segment EBITDA, attraction start-up costs, the realization of deferred tax assets, contributions to pension and postretirement benefit plans, legal expenses, tax rates and other tax matters, and foreign exchange rates. Actual results could differ materially from those discussed in the forward-looking statements. Our business can be affected by a host of risks and uncertainties, many of which are beyond our control. Important factors that could cause actual results to differ materially from those described in our forward looking statements include, but are not limited to, the risks discussed in our recently filed Annual Report on Form 10-K. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this proxy statement except as required by applicable law or regulation.

 

 

 

 

 

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INTRODUCTION

Our Corporate Governance and Nominating Committee (the “Governance Committee”) recommended and our Board of Directors (the “Board”) nominated the three incumbent directors listed below under “Director Nominees.”  Each of the director nominees is independent under the New York Stock Exchange (“NYSE”) listing standards, applicable SEC rules and regulations, and our Corporate Governance Guidelines (the “Guidelines”).

MAJORITY VOTE STANDARD FOR ELECTION OF DIRECTORS

Our Bylaws provide that, in an election in which the number of nominees for election equals the number of directors to be elected, director nominees must be elected by a majority of the votes cast. The Bylaws also provide that if an incumbent director nominee is not elected by a majority vote, then the director will tender his or her resignation to the Board. The Governance Committee will then recommend whether the Board should accept or reject the resignation, or whether other action should be taken. The Board is required to publicly disclose its decision, including the rationale behind it, within 90 days of certifying the election results. The director who tenders his or her resignation does 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.

SKILLS, QUALIFICATIONS, AND EXPERIENCE OF DIRECTORS

Our directors have many individual qualifications, however, our Board believes that all of our directors should have certain specific qualifications. Our Board has concluded that each director listed under the “Director Nominees” and “Directors Continuing in Office” sections of this Proxy Statement should serve on the Board. These qualifications include:

BOARD STRUCTURE

We have eight directors on our Board, and our Board is divided into three classes. 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 proposed for election at this year’s Annual Meeting.

 

 

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DIRECTOR NOMINEES

Our Board has nominated Richard H. Dozer, Virginia L. Henkels, and Robert E. Munzenrider for election at the Annual Meeting. All nominees are independent members of the Board and, if elected, each have agreed to serve another term, which will expire in 2021.

Recommendation of the Board

The Board recommends that you vote “FOR” the election of each of the three director nominees listed below.

The following information regarding each director nominee is as of March 22, 2018.

 

 

 

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DIRECTORS CONTINUING IN OFFICE

Information regarding the five directors continuing in office until the expiration of their designated terms is presented below.

For Terms Expiring at the 2019 Annual Meeting of Shareholders:

 

 

 

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For Terms Expiring at the 2020 Annual Meeting of Shareholders:

 

 

 

 

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CORPORATE GOVERNANCE POLICIES AND PRACTICES

Our Bylaws and applicable laws provide that our business and affairs be managed by or under our Board’s direction. We follow the system of governance practices in our Guidelines and in each of the Board’s committee charters. The Guidelines outline the practices our Board will follow with respect to its duties, operations, committee matters, director qualifications, selection process, compensation, independence, orientation and continuing education, chief executive officer evaluation, management succession, and annual Board and committee performance evaluations. At least annually, the Governance Committee reviews the Guidelines, and each committee reviews its charter, and recommend any changes to the Board for consideration.

To learn about our corporate governance practices, you can access our Corporate Governance Guidelines, Committee Charters and the Code of Ethics at http://www.viad.com/about-us/corporate-governance/view-on-governance. We will also provide copies of any of the following documents to shareholders upon written request to the office of the Corporate Secretary:

CORPORATE GOVERNANCE HIGHLIGHTS

We are committed to sound corporate governance and believe that adhering to a strong corporate governance framework is essential to our long-term success. Highlights of our corporate governance standards include the following:

 

 

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COMMITTEES AND DIRECTOR INDEPENDENCE

Our Board has three standing committees: the Audit Committee, the Corporate Governance and Nominating Committee, and the Human Resources Committee. Each committee meets periodically during the year, reports regularly to the full Board, and annually evaluates its performance. The table below shows each committee’s current membership and the number of times it met during 2017. The table also identifies the independent directors, as determined by our Board, based on information provided by each director concerning his or her background, employment, and affiliations, under the NYSE listing standards, applicable SEC rules and regulations, and the Guidelines. The Guidelines include categorical independence standards that meet or exceed NYSE listing standards. All of our current directors (other than Mr. Moster) are independent.

 

 

The responsibilities 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 members of our Audit Committee are Ms. Henkels and Messrs. Dozer, Mace, Schechter and Munzenrider, with Mr. Munzenrider serving as the chairperson. The Board has determined that all of the Audit Committee members are independent within the meaning of the NYSE listing standards and Rule 10A-3 of the Exchange Act. The Board has determined that all members of the Audit Committee are “financially literate,” as

 

 

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defined by NYSE listing standards, and that Ms. Henkels, and Messrs. Dozer and Munzenrider qualify as “audit committee financial experts,” within the mean of SEC regulations. The Audit Committee assists the Board in monitoring the quality and integrity of the Company’s financial statements, compliance with legal and regulatory requirements, and the independence and performance of our internal auditors and external independent registered public accountants. The Audit committee has regularly scheduled executive sessions with individual members of management and with our independent registered public accountants. The independent registered public accountants report directly to the Audit Committee and the Audit Committee has sole authority to appoint or replace the independent registered public accountants. In addition, the Audit Committee has authority to obtain advice and assistance from internal and external legal, accounting, and other advisors.  

Corporate Governance and Nominating Committee.  The members of our Corporate Governance and Nominating Committee are Dr. Cunningham and Messrs. Munzenrider, Schechter and Benett, with Mr. Benett serving as the chairperson. The Board has determined that all of the Corporate Governance and Nominating Committee members are independent within the meaning of the NYSE listing standards. Each year, the Corporate Governance and Nominating Committee proposes a slate of directors for election by the shareholders at the annual meeting, and when appropriate, proposes candidates to fill Board vacancies. The  committee also (i) annually evaluates the Board’s performance and discusses its evaluation with the full Board;  (ii) reviews, and from time to time proposes changes to the Guidelines; (iii) regularly reviews and recommends changes to the non-employee directors’ compensation and benefits; and (iv) has the sole authority to retain or terminate any search firm retained to identify director candidates, or any compensation advisor, retained to assist in reviewing and evaluating non-employee director compensation.

Human Resources Committee.  The members of our Human Resources Committee are Dr. Cunningham and Messrs. Benett, Dozer and Mace, with Mr. Mace serving as the chairperson. The Board has determined that all of the Human Resources Committee members are independent within the meaning of the NYSE listing standards. All are “non-employee” directors under SEC rules and outsider directors under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The Human Resources Committee oversees the development and implementation of the Company’s compensation philosophy and strategy as it pertains to executive officers and other employees. The Human Resources Committee also reviews and approves, subject to ratification by independent members of the Board, the salary and equity and incentive compensation of our CEO, approves salaries and compensation of our other executive officers, and approves incentive compensation targets and awards under various compensation plans and programs. In addition, the Human Resources Committee has sole authority to retain or terminate any compensation advisor retained to assist in evaluating our CEO’s and other executive officers’ compensation. The Human Resources 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 is responsible for reviewing and recommending non-employee director compensation and benefits to the Board, the Human Resources Committee has sole authority to approve grants of equity compensation to non-employee directors under the 2017 Viad Corp Omnibus Incentive Plan. The CEO makes recommendations to the Human Resources Committee with regard to the compensation of our other executive officers.  The Human Resources Committee has sole authority to approve (a) the annual base salary level; (b) the annual incentive opportunity level and granting of awards; (c) the long-term incentive opportunity level and granting of awards; and (d) any special or supplemental benefits for those executive officers.

The Human Resources Committee’s Use of an Independent Compensation Advisor. Since 2016, the Human Resources Committee has retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent compensation advisor. In 2017, FW Cook performed executive compensation market analysis, executive pay and performance alignment analysis, and director compensation analysis. The Human Resources Committee reviewed competitive pay information from general industry market surveys and the Company’s comparator group in consultation with FW Cook.

For the year ended December 31, 2017, FW Cook provided no services to us other than consulting services to the Human Resources Committee regarding executive and non-employee director compensation.

 

 

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At least annually, the Human Resources Committee reviews FW Cook’s current engagements and the objectivity and independence of its advice on executive and non-employee director compensation. The Human Resources Committee assessed, based on the six independence factors for compensation consultants outlined in the SEC rules and in its charter, whether the work of its independent compensation advisor would raise a conflict of interest in 2017. Based on a review of the six independence factors, the committee determined that FW Cook is independent and FW Cook’s services did not raise any conflicts of interest.

BOARD MEETINGS AND ANNUAL MEETING OF SHAREHOLDERS

Our Guidelines specify and we expect each director to attend the Annual Meeting of Shareholders, all Board meetings, and all meetings of committees on which they serve. We understand, however, that occasionally a director may be unable to attend a meeting. During 2017, the Board held four regular meetings and three special meetings and acted five times by unanimous written consent. During 2017, Messrs. Dozer, Mace, Moster, and Munzenrider attended 100% of the meetings of the Board and all committees on which they served; Dr. Cunningham, and Messrs. Benett and Schechter attended at least 89% of meetings of the Board and all committees on which they served. All directors attended the 2017 Annual Meeting of Shareholders.

MEETINGS OF NON-MANAGEMENT DIRECTORS

Our Board held five executive sessions of the independent, non-management directors in 2017.  The Chairman of the Board, Mr. Dozer, presides over all executive sessions.

BOARD LEADERSHIP STRUCTURE

The Board has separated the roles of Chairman and CEO. The Chairman of our Board, Mr. Dozer, is an independent director. Our CEO, Mr. Moster, also serves as a member of the Board. The Board believes the separation of the Chairman and CEO roles allows the CEO to focus his time and energy on operating and managing our Company while leveraging the Chairman’s experience and perspectives.

The Board believes that our governance practices are appropriate to ensure that the full Board maintains independent oversight, including:

The responsibilities of our independent Chairman include, but are not limited to:

 

 

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BOARD COMPOSITION AND REFRESHMENT

 

 

The continuous exchange of new ideas is vital to our Board’s success. The Board and the Governance Committee recognize that the interplay between diverse viewpoints, experience, and backgrounds more effectively promotes our shareholders’ long-term interests. The Board believes that shareholders are best served by both the outside perspectives offered by new directors as well as the valuable experience and familiarity provided by longer-serving directors. The Board and the Governance Committee believe that the Company’s recent measures to promote “board refreshment,” including efforts to reduce the Board’s average director tenure and the election of three new independent directors during the same time period, has allowed the Board to maintain an appropriate balance of tenure and outside perspectives. The Board and the Governance Committee believe that each of the director nominees possesses unique talents that contribute to the Board’s broad array of viewpoints and expertise.

HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the Human Resources Committee are or have been an officer or employee of our Company. We are not aware of any interlocking relationships between any member of the Human Resources Committee and any of our executive officers that would require disclosure under the applicable rules of the U.S. securities laws.

 

 

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RELATED PARTY TRANSACTIONS

There were no related party transactions during 2017.

DIRECTOR NOMINATIONS

As provided in its charter and the Bylaws, the Corporate Governance and Nominating Committee has established procedures to consider candidates for Board membership. The Corporate Governance and Nominating Committee has authority under its charter to employ a third-party search firm to conduct research, review candidate data, and otherwise assist the committee in identifying candidates to serve as a director. A shareholder who wishes to nominate a candidate for the Board should notify the office of the Corporate Secretary in writing at the address listed in the notice of meeting attached to this Proxy Statement. Any such recommendation must include:

The Corporate Governance and Nominating Committee reviews the qualifications of any person timely and properly nominated by a shareholder in accordance with the Bylaws and as described in the “Submission of Shareholder Proposals and Director Nominations” section of this Proxy Statement.

In reviewing potential director nominees, the Corporate Governance and Nominating Committee looks at the candidate’s qualifications in light of the Board and Viad’s needs at that time, and given the then-current mix of director attributes. The Corporate Governance and Nominating Committee assesses director nominees based on their qualification as independent, and considers the candidate’s diversity, skills, and experience. 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 our shareholders. The Corporate Governance and Nominating Committee also ensures that the members of the Board, as a group, maintain the requisite qualifications under the NYSE listing standards for members of the Audit, Human Resources, and Corporate Governance and Nominating Committees.

The Corporate Governance and Nominating Committee believes that newly elected directors offer fresh perspectives and ideas that are critical to a forward-thinking and strategic Board.  Concurrently, the Corporate Governance and Nominating Committee recognizes that longer-serving directors facilitate effective decision-making through their experience and familiarity with our business. Accordingly, the Corporate Governance and Nominating Committee and the Board seek to maintain an appropriate balance of viewpoints, skills, professional experience, and backgrounds to effectively lead the Company and serve the long-term interests of our shareholders.

COMMUNICATION WITH OUR BOARD

Interested parties may communicate directly with non-management directors, including the Chairman of the Board, by writing to the following address: Viad Corp, 1850 North Central Avenue, Suite 1900, Phoenix, Arizona 85004-4565, Attention: Office of the 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 through the adoption of risk management controls, policies, and procedures. The Board has delegated to the Audit Committee primary responsibility to review and assess areas of financial risk for the Company. The Audit

 

 

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Committee also reviews management’s plans and the steps management has taken to monitor and control risk, including risk assessment, risk management policies, information technology system controls, and policies related to data security.

The Board believes that cybersecurity is a critical component of our risk management program. Each quarter, members of senior management who are responsible for the Company’s cybersecurity risk management practices present a cybersecurity report to the Audit Committee. The report addresses a range of issues including, but not limited to, the adequacy of personnel and resources, technological advances in cybersecurity protection, progress toward reducing cybersecurity risk exposure, rapidly evolving cybersecurity threats that may affect us and the industries in which we participate, and applicable cybersecurity laws, regulations and standards. Our cybersecurity risk management practices are integrated into our overall risk management program.

Additionally, we conduct an annual risk assessment to identify, evaluate, and prioritize potential business risks. As a part of this assessment, we conduct a financial statement risk assessment and materiality analysis, including evaluating potential fraud schemes and scenarios that might affect us. Throughout the year, management continuously monitors potential risks and provides reports at each regular Audit Committee meeting.

COMPENSATION RISK ANALYSIS

The Board continuously monitors and manages executive compensation risk through the design of our executive compensation program. The Human Resources Committee structures our executive compensation program to mitigate the potential for excessive risk-taking by executive officers in managing our businesses. A few of the program features that serve this purpose include:

STOCK 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. Accordingly, we have adopted guidelines that specify the minimum value of Viad common stock based on a multiple of salary or retainer that directors, NEOs, other executive officers, and key senior management employees are expected to own. Only shares of stock held directly, which are inherently subject to market risk, not options to purchase shares of stock, are counted toward satisfaction of our stock ownership guidelines. Please see “Stock Ownership Guidelines” in the CD&A for additional information.

 

 

 

 

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RESTRICTION ON TRADING BY DIRECTORS AND OFFICERS

Our insider trading policy generally permits directors, NEOs, and other executive officers to engage in transactions involving Viad common stock only: (a) during a Company-prescribed trading window of limited duration; and (b) after seeking pre-clearance to avoid trading while in possession of material, non-public information. In addition, directors, NEOs, other executive officers, and employees may not engage in hedging transactions or other transactions designed to limit or eliminate the risks of owning Viad common stock.  The policy also prohibits directors, NEOs, and other executive officers from pledging Viad common stock, or using it as collateral to secure personal loans or other obligations.

 

Each non-employee director receives compensation for service on our Board and any of its committees. Directors who are also Viad officers or employees receive no special or additional remuneration for service on the Board nor do they serve on any Board committees. Mr. Moster is the only officer-director currently serving on our Board, and was the only officer-director serving on the Board during 2017.

The following table shows 2017 non-employee directors’ compensation.

 

 

In 2017, in accordance with our director compensation policy, each of the non-employee directors, other than Ms. Henkels, who joined our board in November 2017, received 2,107 shares of restricted stock with a grant date fair value of $99,977, effective as of the grant date of February 21, 2017. If a non-employee director takes office after the restricted stock grant in February of each year, as was the case with Ms. Henkels in 2017, the new director’s restricted stock grant is pro-rated based on the date of election. Accordingly, Ms. Henkels received 434 shares of restricted stock with a grant date fair value of $25,020, effective as of the November 29, 2017 grant date.

 

 

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All restricted stock granted to non-employee directors vests three years from the date of grant. However, if a non-employee director leaves the Board prior to the end of the three-year period for any reasons other than for “cause,” vesting will be pro-rated, except that the grant will be fully vested 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 non-employee director has terminated service due to unforeseen hardship or circumstances beyond his or her control and such termination of service is at least six months after the date of grant.

At December 31, 2017, 8,507 shares of restricted stock had not vested for each of the non-employee directors, except for Mr. Schechter, who had 8,107 shares of unvested restricted stock, and Ms. Henkels, who had 434 shares of unvested restricted stock.

 

 

 

 

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The following table shows the amount of Viad common stock beneficially owned at December 31, 2017 by persons that, to our knowledge, were the beneficial owners of more than 5% of our outstanding common stock (“5% Holders”), and the amount of Viad common stock beneficially owned at March 1, 2018, unless otherwise noted, by our directors, director nominees, and executive officers, individually and as a group. To our knowledge, none of the common stock owned by these individuals is subject to any pledge. Unless otherwise indicated, each of the named individuals has sole voting and investment power with respect to the shares shown, other than property rights of spouses.

 

 

 

 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers, directors, and beneficial owners of more than 10% of our common stock to report their ownership, and any changes in their ownership, to the SEC. U.S. federal securities regulations require such executive officers, directors, and beneficial owners to give us copies of all Section 16(a) forms they file. As a matter of practice, our administrative staff assists our executive officers and directors in preparing initial reports of ownership, reporting changes in ownership, and filing their reports with the SEC. We reviewed copies of reports filed pursuant to Section 16(a) of the Exchange Act and written representations from reporting persons. Based solely on that review, we believe that for the fiscal year ended December 31, 2017, all required reports under Section 16(a) were filed on a timely basis.

 

 

 

The Human Resources Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement.  Based on the review and discussions, the Human Resources Committee  recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in our 2017 Annual Report on Form 10-K, filed with the SEC on February 28, 2018.

 

HUMAN RESOURCES COMMITTEE

Edward E. Mace, Chair

Andrew B. Benett

Isabella Cunningham

Richard H. Dozer

 

 

 

 

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OVERVIEW

This Compensation Discussion and Analysis (“CD&A”) explains our NEO’s 2017 compensation program and how it is linked to our 2017 performance and strategic objectives. Our 2017 NEOs were:

 

 

Specifically, this CD&A contains the following sections:

We encourage you to read this CD&A in conjunction with “Proposal 3:  Advisory Approval of Named Executive Officer Compensation,” beginning on page 55. The tables following this CD&A provide additional compensation information for our NEOs.

I. EXECUTIVE SUMMARY

The Human Resources Committee has designed our executive compensation program to align the interests of our executive officers with those of our shareholders, and is guided by a “pay for performance” philosophy.

Our “pay for performance” philosophy is the foundation of the design and management of our executive compensation program. Our overarching objective is to attract, motivate, and retain executives who will deliver long-term shareholder value. We believe that a strong component of our success is our use of a competitive compensation program with strong links to both Company and individual performance.

Each year, the Human Resources Committee approves performance goals that drive financial and strategic goals designed to increase shareholder value. In 2017, we delivered strong financial performance and made further progress on our key long-term strategic objectives. The Committee believes that our NEOs’ 2017 compensation reflects their contributions to our performance and reflects alignment between executive pay and Company performance. Accordingly, the Board recommends that shareholders approve, in an advisory vote, our NEOs’ compensation.

EXECUTING ON OUR GROWTH STRATEGY

We continued to make significant progress against our stated growth strategy during 2017, with continued investments to enhance and scale our offerings at both GES and Pursuit. These investments, along with similar

 

 

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investments made during the past three years, are advancing our strategic goals for both business groups and delivering strong returns for enhanced shareholder value.

We are an international experiential services company with operations principally in the United States, Canada, the United Kingdom, continental Europe, and the United Arab Emirates. We generate our revenue through our two business units: GES and Pursuit. For more information about our business, please refer to the “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our 2017 Form 10-K.

GES Growth Strategy: Preferred Global, Full-Service Provider for Live Events

Our GES growth strategy is to become the preferred global, full-service provider for live events, with further reach into corporate and consumer events, exhibitions, congresses, and conferences. We expect to accomplish this by acquiring businesses and capitalizing on organic opportunities that further the following goals:

We believe that the execution of this growth strategy is differentiating GES as the preferred global, full-service provider of live event services and allows our clients to gain a greater return and enhance the visitor experience at their events.

Our acquisitions of leading event technology and audio-visual services businesses in 2014 and 2016 represented an important step in executing our growth strategy. Our ability to realize synergies and integrate those acquired businesses has resulted in the cross-selling of adjacent service offerings and new business wins over the past three years. During 2017, we focused on integrating ON Services (acquired in August 2016) and aligning our resources to capitalize on revenue and cost-saving synergies from in-sourcing and cross-selling audio-visual services. Additionally, we enhanced our event registration and data intelligence platform with the 2017 purchase of the Poken event engagement technology to deliver even more measurable event insights for organizers, exhibitors and event sponsors.

Our acquisitions are enabling us to deepen our relationships with existing clients and to grow in higher-margin areas of the live events market.  Incremental revenue from ON Services and Poken during 2017 allowed us to deliver strong revenue growth and EBITDA despite headwinds from the unfavorable timing of non-annual events and exchange rate variances.

Pursuit Growth Strategy: Refresh, Build, Buy

Our growth strategy for Pursuit is focused on the following three objectives:

In 2017, we drove strong growth from the “Refresh” component of this strategy as the significant renovations we made to our Banff Gondola in 2015 and 2016 have positioned this asset for its highest and best use.  As compared to its pre-renovation performance, we realized revenue growth of 57 percent on passenger growth of 20 percent and a 31 percent increase in revenue per passenger from a combination of ticket sales, retail and dining.  Following

 

 

 

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on the success of the upgraded dining options at the Gondola, we made similar upgrades to the dining operations at the Glacier Discovery Center, which enhanced the guest experience for our Glacier Adventure and Glacier Skywalk visitors and helped to drive increased revenue and profitability in 2017. At the same time, we completed our exit of lower-margin package tours in 2017 to focus our efforts and resources on optimizing the most profitable service lines within Pursuit.

In connection with the “Build” component of our strategy, we commenced two significant projects during 2017.  The first is the reconstruction and renovation of our Mount Royal Hotel, which was severely damaged by a fire at the end of 2016. Utilizing proceeds from our insurance policy and some additional capital, we are rebuilding the hotel to deliver an elevated guest experience that will enable us to capture higher rates and drive stronger returns.  The second significant build project is the development of a new RV and cabin park on undeveloped land located at the west entrance to Glacier National Park.  This park will provide an additional bed base adjacent to our existing dining and retail operations in West Glacier.

The “Buy” component of our strategy was also a key driver of growth for us in 2017 as we applied revenue management tactics and leveraged our existing sales and marketing teams to accelerate growth from recent acquisitions.  We delivered strong results from FlyOver Canada, a leading Vancouver-based attraction that we acquired at the end of 2016. This high-margin attraction offers significant growth opportunities from the existing asset and provides us with a new growth platform.  In late 2017, we announced the planned expansion of the FlyOver concept into Iceland and made a majority investment in an Icelandic entity that will develop the new attraction. We continue to evaluate additional locations for FlyOver attractions and other acquisitions that support our growth strategy.

Recent Acquisitions: Driving Growth with Strong Returns

Each of our recent acquisitions positions us well for long-term growth and value creation, and allows us to capitalize on certain immediate benefits:

 

 

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KEY BUSINESS RESULTS

In 2017, strong performance and leadership from our senior management team resulted in year-over-year improvements in important financial goals as we continued our trend of long-term growth and shareholder value creation.

Our business strategy focuses on providing superior experiential services to our customers and sustainable returns on invested capital to our shareholders.  Both business units continued to make progress against our strategic growth goals while also delivering strong financial results in 2017. Key financial results for 2017 include the following:  

 

 

 

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OUR PERFORMANCE: ENHANCED SHAREHOLDER VALUE

We maintained a disciplined approach to capital deployment in 2017 that enabled us to reinvest in the business, return capital to shareholders, and maintain a strong balance sheet. From 2013 to 2017, we:

 

 

 

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HIGHLIGHTS OF OUR COMPENSATION PROGRAM

Under the 2017 compensation program, the Human Resources Committee continued to follow compensation practices that emphasize the alignment of management’s interests with those of our shareholders.

Highlights of our 2017 compensation program, which are more fully discussed elsewhere in this CD&A, include the following:

 

 

 

 

 

 

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II. PAY FOR PERFORMANCE PHILOSOPHY

We actively pursue a pay for performance philosophy. Our goals are designed to drive financial performance and to enhance shareholder value, aligning the financial interests of our NEOs, key management employees, and other executive officers with our shareholders’ financial interests. Consistent with our philosophy, our compensation program is designed to accomplish the following core objectives:

III. DECISION-MAKING PROCESS

The Human Resources Committee annually reviews and approves our executive compensation program and compensation for our NEOs and other executive officers. While the CEO makes a recommendation to the Human Resources Committee regarding the compensation of other executive officers, the Human Resources Committee has sole responsibility with respect to the CEO and other executive officers to approve, prior to any adjustment or payout:

All elements of our CEO’s compensation are approved by the Human Resources Committee and are subject to ratification by all other independent members of the Board.

Base salary adjustments, if any, are effective January 1st for our CEO, and April 1st of each year for other NEOs and other executive officers.

At its February 2017 meeting, the Human Resources Committee granted long-term incentive awards to executive officers for the 2017–2019 performance period (as discussed in the CD&A subsection “Long-Term Incentives”), and at its March 2017 meeting, the Human Resources Committee determined performance goals and targets for the Performance Unit Incentive Plan for the 2017–2019 performance period.

 

 

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INDEPENDENT COMPENSATION ADVISOR

The Human Resources Committee has sole authority to retain or terminate an independent compensation advisor and to approve the advisor’s fees. For 2017, the Human Resources Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”), a national independent consulting firm, to serve as its independent compensation advisor.

In its role as the Human Resources Committee’s 2017 independent advisor, FW Cook regularly attended Human Resources Committee meetings and advised on matters including our compensation program design, competitive pay, and relative pay for performance. FW Cook also provided market data, analysis, and advice regarding our NEOs’ and other executive officers’ compensation. In addition to advising the Human Resources Committee on executive pay, FW Cook advised the Corporate Governance and Nominating Committee concerning compensation of the independent members of our Board. FW Cook has not provided any services to the Company other than the executive and director compensation consulting services provided to us and to the Corporate Governance and Nominating Committee.

COMPETITIVE ANALYSIS AND RESOURCES

In determining 2017 executive pay, FW Cook provided competitive pay data, including base salary, short-term incentives, long-term incentives, and total compensation values, from proxy statements filed by our comparator group companies (as discussed in the CD&A section “Compensation Comparator Group”) and published compensation surveys. The Human Resources Committee determined levels of compensation for each NEO after considering the competitive data and a number of other factors, including an assessment of individual performance, experience, and special expertise related to each executive officer’s responsibilities, and our operating and financial results.

Based on the information that the Human Resources Committee reviewed, and in consultation with FW Cook, our pay practices were aligned with our 2017 stated pay philosophy and strategy.

COMPENSATION COMPARATOR GROUP

Due to our unique and diverse mix of businesses (from marketing and event services to travel and recreation services), we do not have a “peer” group that accurately reflects the nature of our core businesses. However, in response to shareholder feedback, the Human Resources Committee adopted a comparator group for purposes of evaluating executive compensation. After consultation with FW Cook, the comparator group used by the Human Resources Committee in making decisions related to our 2017 executive compensation program included 14 companies whose businesses are comparable with some portion of ours, as further discussed below:

 

 

The comparator group was selected based on the following criteria:

 

 

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IV. COMPENSATION COMPONENTS

The compensation components of the 2017 executive compensation program, as well as the type of compensation and the objectives of the compensation, are:

 

 

MIX OF PAY

Our executive compensation program comprises a mix of fixed and variable pay components. For 2017, the table below summarizes the mix of annual and long-term compensation components for the CEO and other NEOs:

 

 

The mix of annual and long-term incentives in our executive compensation program is designed to align our executives’ financial interests with those of our shareholders. Some of the program features that serve these objectives include the following:

 

 

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Each component of our 2017 compensation program for NEOs is discussed below.

BASE SALARY

Base salaries represent a fixed portion of the executive compensation package. Our Human Resources Committee reviews executive base salaries annually and considers, among other factors, the executive’s base salary relative to executives in comparable roles with companies in our comparator group and other companies of comparable revenue. We describe this more fully in the CD&A subsection “Competitive Analysis and Resources.”

SHORT-TERM (ANNUAL) INCENTIVES

Our Management Incentive Plan (“MIP”) is an annual, cash-based incentive program.

The Human Resources Committee establishes the performance measures, as well as Threshold, Target, and Maximum performance levels, for each measure, at the beginning of the plan year. The performance targets are established considering both the prior fiscal year’s operating results and current fiscal year projections. The Threshold performance level is the minimum performance level required for any MIP payout, while the Maximum represents the performance level at which the maximum incentive payout may be achieved. Following the conclusion of the fiscal year, the Committee reviews the Company’s performance under each measure against the pre-established targets. Based on this review and a qualitative assessment of the Company’s performance, the Committee may approve payouts as calculated under the MIP or, considering various factors it deems appropriate, reduce the calculated payout, which may include determining that no payout is warranted under the plan. The Committee may not increase the calculated award under the MIP.

The performance measures and relative weightings for the 2017 Management Incentive Plan were:

 

 

The Human Resources Committee believes that Operating Income, Revenue, and Operating Margin are important measures of our annual operating performance. The Committee further believes that these measures reflect a number of important fundamental business elements, including cost discipline, market share, profitable growth, and optimizing our product mix.

Operating Income serves as a performance “gate” for any payout under the MIP, meaning that no payout for the Revenue or Operating Margin goals can be earned unless the Operating Income goal is achieved at or above Threshold. For 2017, achievement by the NEOs at Threshold earned a payout at 50% of the goal’s weight. Achievement at Target earned a pay out at 100%, and achievement at Maximum earned a pay out at 175% (the maximum achievement level or “cap”). The payout percentage was interpolated for performance between Threshold and Target, or between Target and Maximum.

 

 

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For 2017, annual incentives were paid to Mr. Moster, and Mses. Ingersoll, DePaoli, and Striedel as 2017 Viad performance goals under the MIP were met at 78.3% of Target, and to Mr. Barry as Pursuit 2017 performance goals under the MIP were met at 172.2% of Target.

 

 

The formula for calculating an award under our short-term incentive program is:

(Annual Base Salary Earnings) x (Target Percentage) x (Company Achievement)

For 2017, Target short-term incentive percentages for the NEOs ranged from 35% to 90% of the NEO’s annual base salary earnings.

 

 

 

 

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LONG-TERM INCENTIVES

We award grants of time-vested restricted stock and performance units as the components of our long-term incentive program for NEOs and other executive officers. The type and mix of long-term incentive awards in 2017 were:

 

 

The mix of performance units and restricted stock places a heavy emphasis on the financial performance of the Company, and provides incentives for executives to enhance 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 or payout. This mix also provides an effective retention tool for executives, as each has a three-year vesting or performance period.

PERFORMANCE UNITS

The Performance Unit Incentive Plan (“PUP”) is designed to focus participants on the long-term interests of our shareholders by tying the value of the awards to our performance over a three-year period. The performance period for the 2017-2019 PUP began on January 1, 2017, and will end on December 31, 2019. Any awards, if earned, will be paid to participating executives in the first quarter of 2020. The 2017 – 2019 PUP includes three measures of our performance:  (1) Relative Total Shareholder Return (“Relative TSR”), which measures the total return on Viad common stock against the other constituents of the Russell 2000 Index; (2) EBITDA, which rewards plan participants for increased cash flow, improved profitability, and operating efficiencies; and (3) ROIC, which encourages strong returns on invested capital in excess of our cost of capital.

The Human Resources Committee believes the Russell 2000 Index provides an appropriate comparator to measure how our stock price is performing relative to the stock prices of companies in the same stock market index and with similar market capitalizations.

The performance goals for the 2017-2019 Performance Unit Incentive Plan, along with their relative weights, are:

 

 

 

 

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Achievement and Payout

At the end of the three-year performance period, the Human Resources Committee reviews the Company’s performance under the PUP against the pre-established targets. Based on this review and a qualitative assessment of the Company’s performance over the three-year performance period, the Human Resources Committee may approve payouts as calculated under the PUP or, considering various factors it deems appropriate, reduce the calculated payout, which may include determining that no payout is warranted under the plan. The Human Resources Committee may not increase the calculated award under the PUP. The calculated value of the payouts to the NEO is determined as follows:

(Number of units) x (Unit value*) x (Achievement Factor)

 

The achievement factor ranges from 0% to 200% of the value of the performance units based on actual achievement.

 

 

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The Relative TSR performance goal is subject to achievement as follows:

 

 

Performance unit awards for the 2017–2019 PUP may be earned based on the degree of achievement of the performance measures over the performance period. The Human Resources Committee believes the three-year performance period motivates executives to make decisions that will benefit Viad shareholders over the long term.

2015–2017 Performance Unit Award Plan Payouts

The Human Resources Committee reviewed and approved the performance results under the 2015-2017 PUP in February 2018. The Committee also approved payouts to executive officers based on these results. The performance results under the 2015–2017 PUP were as follows:

 

 

 

 

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Historical PUP Achievement

This chart shows actual achievement from performance-based long-term incentives over the three most recently completed performance periods, as a percentage of target. It illustrates that our PUP is at-risk compensation and actual payouts can, and often do, vary considerably from year to year. The variation in achievement is consistent with the Human Resource Committee’s primary objective of tying incentive compensation to our long-term financial performance.

 

HISTORICAL PUP ACHIEVEMENT (% OF TARGET)

 

*There was no payout for Viad Consolidated during the 2013-2015 performance period.

TIME-VESTED RESTRICTED STOCK

Except for the CEO, whose long-term incentive award consisted entirely of performance units in 2017, restricted stock awards were granted to the NEOs and other executives who had a significant impact on our operational and financial goals.

Restricted stock awards vest three years after the date of grant and, for all awards made after 2013, the holding period will continue unless and until the NEOs and other executives meet our stock ownership guidelines.  We describe our stock ownership guidelines more fully under “Stock Ownership Guidelines for Directors and Executive Officers” in this Proxy Statement.

Recipients of restricted stock may vote the underlying shares and will receive dividends during the restricted period.

PERQUISITES AND OTHER PERSONAL BENEFITS

Perquisites and other personal benefits are part of each NEO’s total compensation package and are reviewed periodically to ensure external competitiveness. The perquisites we provide to our NEOs include an annual executive physical examination, accidental death and dismemberment insurance, business travel accident insurance, and Company-paid parking.  We provide a company-leased automobile to Mr. Moster.

 

 

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The value of perquisites provided to our NEOs have an annual target value between $3,000 and $8,000 per NEO, other than our CEO’s personal use of a Company car (valued at $11,601 for 2017). Consistent with our policy, we do not make any tax gross-up payments for any NEO perquisites or personal benefits. Additional information on perquisites and other personal benefits is provided in the “Summary Compensation Table” section of this Proxy Statement.

POST-EMPLOYMENT COMPENSATION

Certain termination events will trigger post-employment payments and benefits for our NEOs, including retirement, change in control severance, termination for cause, involuntary termination not for cause, and death or disability. These are discussed under the “Potential Payments upon Employment Termination or Change in Control” section of this Proxy Statement. Post-termination compensation provides for our executive officers’ short-term (termination or change in control) or long-term (retirement) security should their employment end. In the event of involuntary termination, post-termination compensation is intended to provide an interim financial resource to the executive during the transition from Viad employment.

RETIREMENT INCOME AND SAVINGS PLANS

In connection with the 2004 MoneyGram spin-off, MoneyGram became solely responsible for paying annual retirement benefits to all executives who participated in the SERP and the MoneyGram Pension Plan. As of the spin-off date, MoneyGram assumed all liability for pension benefits for employees participating in the MoneyGram Pension Plan and the SERP, including our CFO. In addition to the retirement benefits paid by MoneyGram under the SERP and the MoneyGram Pension Plan, our CFO also receives retirement benefits from Viad under the Defined Contribution Plan, which the Company established in 2013 to replace the annual payment of lump-sum cash awards, including tax gross-ups, previously made to certain SERP participants. The lump-sum awards were instituted in 2005 in connection with the MoneyGram spin-off in 2004, at which time the credited service benefits for the SERP’s participants were frozen and were made solely in lieu of our accruing pension benefits for our CFO and other SERP participants. Except for our CFO, none of the NEOs participate in the SERP, the Defined Contribution Plan, or the MoneyGram Pension Plan.

All eligible U.S. employees may participate in the Viad Corp Capital Accumulation Plan (the “401(k) Plan”). In addition, Messrs. Moster and Barry, and Ms. Ingersoll are eligible to participate in the Viad Corp Supplemental 401(k) Plan (the “Supplemental 401(k)”), which provides for additional employee contributions over the annual limits set by the Internal Revenue Code for the 401(k) Plan, plus company matching contributions on the same percentage as the 401(k) Plan.

The change in the value of the pension plans during 2017 is included in the “Summary Compensation Table” section of this Proxy Statement. Please refer to the “Pension Benefit Table” and the “Potential Payments upon Employment Termination or Change in Control” sections of this Proxy Statement for further discussion of retirement benefits.

POST-TERMINATION COMPENSATION AND BENEFITS

Change in Control Severance

Under our previous Executive Severance Plan (Tier I) (the “Grandfathered Plan”), a participating NEO is eligible for severance benefits if we terminate the NEO’s employment without cause or by the NEO’s voluntary termination for good reason (as those terms are defined in the Grandfathered Plan) within 36 months after a Viad change in control, or by the NEO for any reason (other than for good reason, death, disability or retirement). As of February 26, 2017, we eliminated tax gross-up provisions and modified single-trigger provisions in the Grandfathered Plan, which was part of a sunset amendment we adopted in 2013. In 2013, we also adopted a new Executive Severance Plan (Tier I) for all NEOs hired in 2013 and thereafter (the “Executive Severance Plan”). The Executive Severance Plan does not contain a “modified single-trigger” provision or allow excise tax gross-ups in the event of a change in control.

 

 

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The purpose of the Grandfathered Plan and the Executive Severance Plan is to ensure, in the event of a possible change in control, that the NEOs 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 in control proposal would be in our or our shareholders’ best interests.  NEOs may also be called upon to assist in the change in control implementation and transition, and to perform other appropriate actions. Severance benefits also provide an economic means for the NEOs to transition from Viad employment. Our CEO recommends the participants in these plans and the Human Resources Committee then approves the recommendations. Upon a change in control, our annual and long-term incentive plans also provide for accelerated vesting of equity awards and payment of annual incentive and performance units, as discussed in the “Potential Payments upon Employment Termination or Change in Control” section of this Proxy Statement.

Severance Agreements

Messrs. Moster and Barry each have a severance agreement providing for a post-termination severance payment in the event we terminate either of them for any reason other than for cause, or if the executive voluntarily terminates his employment for “good reason.”  The severance agreements are further discussed in the “Potential Payments upon Employment Termination or Change in Control” section of this Proxy Statement.

V. OTHER ASPECTS OF OUR COMPENSATION PROGRAM

CLAWBACK PROVISIONS FOR DETRIMENTAL CONDUCT

In order to protect the Company, annual and long-term incentive compensation is subject to forfeiture and reimbursement (i.e., clawback) provisions relating to the following conduct:

The clawback provisions also relate to violations of certain restrictions on competitive activities following employment termination. In addition, we have the right to stop a NEO, through a court-ordered injunction, from working for competitors and soliciting customers and employees following employment termination. We may also seek monetary damages for such activities.

The following incentive compensation is subject to clawback provisions:

As discussed in the “Highlights of Our Compensation Program” subsection of this CD&A, all long-term incentive agreements include clawback provisions applying to NEOs and other executive officers if terminated in the first year of the vesting period. Under the clawback provisions, an executive must forfeit any long-term incentive

 

 

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awards covered by those agreements if the executive’s employment is terminated due to retirement, death, disability, or termination without cause within 12 months after the grant date. Long-term incentive awards will vest pro rata if the termination occurs after the 12-month forfeiture period lapses and the executive executes a separation agreement and release, and the amount of the award will be based on the length of time the executive was employed during the applicable vesting or performance period. The clawback provisions provide a retention incentive for our executives, and we believe that they provide a more appropriate balance between our interests and those of our executives.

STOCK OWNERSHIP GUIDELINES

Our stock ownership guidelines were adopted to promote alignment between executives and shareholders and to encourage actions to enhance long-term shareholder value. The guidelines require executives to own a minimum amount of stock on a direct basis, meaning Viad common stock that is subject to market risk and not simply held as options. The minimum required amount ranges from 1.5 to 5.0 times an executive’s annual base salary, depending on organization level, as summarized below:

 

 

Ms. Ingersoll’s Viad common stock ownership currently exceeds the stock ownership guidelines. Messrs. Moster and Barry and Ms. Striedel are working toward achieving compliance with the stock ownership guidelines.  Effective with the 2013 grants of long-term incentives, we placed a hold on vested restricted stock earned by each NEO, net of taxes, until the NEO’s total stock ownership meets our stock ownership guidelines or the NEO is no longer our employee.

LIMIT ON DEDUCTIBILITY OF CERTAIN COMPENSATION

Prior to December 22, 2017, when the Tax Cuts and Jobs Act of 2017 (“TCJA”) was signed into law, Section 162(m) of the Internal Revenue Code generally disallowed a tax deduction to publicly held companies for compensation paid to certain NEOs in excess of $1 million per officer in any year that did not qualify as performance-based. All fiscal year 2017 compensation decisions complied with Section 162(m).

Under the TCJA, the performance-based exception has been repealed and the $1 million deduction limit now applies to anyone serving as the chief executive officer or the chief financial officer at any time during the taxable year and the top three other highest compensated executive officers serving at fiscal year-end. The new rules generally apply to taxable years beginning after December 31, 2017, but do not apply to remuneration provided pursuant to a written binding contract in effect on November 2, 2017, that is not modified in any material respect after that date. Certain of our PUP awards granted prior to November 2, 2017, may be eligible to qualify under the performance-based exception.

OUR SHAREHOLDER OUTREACH PROGRAM

Our shareholder outreach program facilitates robust and meaningful discussions with our shareholders.

We ensure that at least one director is available for consultation and direct communication with shareholders, as appropriate. Since April 2013, our Chairman, Mr. Dozer, has acted as liaison between the Board and shareholders on investor matters.

We consider our shareholders’ perspectives on all aspects of our business, including executive compensation. Our management and our Board have used the shareholder outreach program to gather shareholder input on a range of topics related to executive compensation and governance matters, including the alignment between pay and performance and our long-standing philosophy that a significant portion of executive compensation should be based on sustained, long-term performance and shareholder value creation.

 

 

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Our current executive compensation program is responsive to feedback received in connection with the Company’s extensive shareholder outreach efforts.

At the 2017 Annual Meeting of Shareholders, approximately 99% of the voting shareholders approved, on an advisory basis, the Company’s 2016 NEO compensation program. We believe that these voting results reflect our shareholders’ endorsement of the current direction of our executive compensation program, and affirm the alignment of our program with shareholder interests. We continue to maintain an active and open dialogue with our shareholders to identify ways to further refine and improve our executive compensation program, and we believe our current program adequately and effectively addresses shareholder concerns, promotes our business strategy, and aligns pay with performance and shareholder value.

OPPORTUNITY FOR SHAREHOLDER FEEDBACK

We value feedback from our shareholders about our executive compensation philosophy and program, and welcome shareholders to express their views to the Board in writing. For more information about shareholder feedback opportunities, please refer to the “Communication with Board of Directors” section of this proxy statement.

 

 

 

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SUMMARY COMPENSATION TABLE FOR FISCAL YEARS ENDED 2017, 2016, AND 2015

The following table shows compensation paid, accrued, or awarded to our Chief Executive Officer, our Chief Financial Officer, and our three most highly compensated executive officers for the years indicated.

The amounts presented below in column (e), “Stock Awards,” and column (f), “Option Awards” do not reflect actual pay, but rather represent the grant date fair value of awards granted to the NEOs and may not reflect the actual value to be realized by each NEO. Variables that can affect the actual value realized by the NEOs include achievement levels of performance targets, economic and market risks associated with stock and option awards, and performance unit valuation based on the market price of Viad common stock. For tax purposes, the actual value realized by the NEOs will not be determined until the time of vesting, in the case of restricted stock and performance units, or until option exercise, in the case of option awards. For all other purposes, the actual value realized by the NEOs will not be determined until sale of the vested or underlying stock.

 

 

 

 

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PENSION ARRANGEMENTS

As discussed in Note 3 to the Summary Compensation Table and in the CD&A section of this Proxy Statement, MoneyGram is solely responsible for paying annual retirement benefits to our CFO under the SERP and the MoneyGram Pension Plan pursuant to its agreement to assume such liabilities after MoneyGram’s 2004 spin-off from Viad. MoneyGram assumed all liability for pension benefits for employees participating in the MoneyGram Pension Plan. MoneyGram assumed all liability for the SERP as of the spin-off date including, for our CFO as well as other participants, any benefit increases based on final average earnings and covered compensation as of the date of termination of employment with us and our subsidiaries.

 

 

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Our CFO also receives retirement benefits under the Defined Contribution Plan, which we established in 2013 to replace the annual payment of lump-sum cash awards, including tax gross-ups, previously made to her. The lump-sum awards began in 2005 in connection with the 2004 MoneyGram spin-off, at which time the credited service benefits for the SERP’s participants were frozen, and were made solely in lieu of accruing pension benefits for our CFO as a participant of the SERP.

Our CFO is the only participant in the Defined Contribution Plan. Our CEO does not participate in the Defined Contribution Plan, and the Company does not intend to add any new participants in the future. Since 2004, the Company has not added any new participants to its legacy pension plans, including the SERP and the MoneyGram Pension Plan, and does not intend to add any new participants in the future.

EMPLOYMENT AGREEMENTS

We do not have employment agreements with our NEOs, other than the severance agreements as described in the CD&A subsection “Post-Termination Compensation and Benefits – Severance Agreements.”

GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR ENDED DECEMBER 31, 2017

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 2017 under equity incentive and non-equity incentive plans, and the number of shares or units underlying awards granted in 2017 that have been paid out. All awards in 2017 were granted pursuant to the 2007 Viad Corp Omnibus Incentive Plan. For a description of all other material terms of the awards described in the table below, please refer to the “Short-Term (Annual) Incentives” and “Long-Term Incentives” subsections of the “Compensation Discussion and Analysis” section of this Proxy Statement.

 

 

 

 

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR ENDED DECEMBER 31, 2017

The table below includes all NEOs’ outstanding options and unvested stock awards as of December 31, 2017, including awards subject to performance conditions.

 

 

 

 

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OPTION EXERCISES AND STOCK VESTED FOR FISCAL YEAR ENDED DECEMBER 31, 2017

For the named executive officers, the table below lists stock options exercised in 2017 and restricted stock that vested during 2017.

 

 

 

 

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PENSION BENEFITS FOR FISCAL YEAR ENDED DECEMBER 31, 2017

This table shows the present value of our CFO’s accumulated benefits.  She is the only NEO who receives benefits under a pension plan of Viad or its subsidiaries. MoneyGram assumed the liability related to the payment of benefits under the SERP in connection with our June 2004 MoneyGram spin-off.

 

 

+

(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); and

Ms. Ingersoll is not eligible to receive benefits under the SERP prior to age 55. If Ms. Ingersoll elects to receive benefits at or after age 55 and before age 60, she will receive a reduction of 0.25% for each monthly benefit payment prior to her 60th birthday.

NON-QUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR ENDED DECEMBER 31, 2017

The following table provides the amounts contributed to non-qualified deferred compensation plans during 2017.

 

 

 

 

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POTENTIAL PAYMENTS UPON EMPLOYMENT TERMINATION OR CHANGE IN CONTROL

Certain termination events will trigger post-termination payments and benefits for our NEOs. Each termination event and the amount that could be payable to NEOs under each termination event is provided in the tables below, assuming a qualifying termination date of December 31, 2017, with a closing price of $55.40 per share for Viad’s common stock on December 29, 2017, the last trading day of the year, except where specifically indicated below.

RETIREMENT

Upon normal or early retirement, NEOs would receive ownership of the restricted stock (or units) and earned performance 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), provided that the NEO’s retirement occurs at least 12 months after the grant date of such awards and the executive executes a separation agreement and release satisfactory to the Company. All other restricted stock (or units) and performance units held by the NEO will be forfeited upon the NEO’s retirement. 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 NEO may exercise the option rights on or before the earlier of: (1) the fifth anniversary of the NEO’s retirement date; or (2) the date on which the options expire. Under the MIP, NEOs receive an accrued annual incentive bonus, if earned, on a pro-rata basis. Eligibility for normal retirement is age 65 and 55 for early retirement. Currently, none of our NEOs are eligible to receive retirement benefits.

Our CFO is also entitled to retirement benefits as a participant in the Defined Contribution Plan, which we established in 2013 to replace the payment of lump-sum cash awards, including tax gross-ups, previously made to her. The contribution amounts are based on a formula that is intended to achieve an income replacement target at retirement. The form and amounts of payments under the Defined Contribution Plan are more fully described in the “Non-Qualified Deferred Compensation Table,” “Summary Compensation Table” and “Pension Arrangements” sections of this Proxy Statement.

 

 

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CHANGE IN CONTROL AND CHANGE IN CONTROL SEVERANCE

Grandfathered Executive Severance Plan

Under our previous Executive Severance Plan (Tier I) (the “Grandfathered Plan”), a participating NEO is eligible for severance benefits if the NEO’s employment is terminated without cause or by the NEO for good reason (as those terms are defined in the Grandfathered Plan) within 36 months after a change in control, or by the NEO for any reason (other than for good reason, death, disability or retirement). Under those circumstances, the executive would receive a lump-sum payment, as severance compensation, equal to a multiple of the following sum:

The multiple, in the case of termination without cause or termination by the NEO 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 in control and the denominator of which is 36.

As referenced in the “Post-Termination Compensation and Benefits – Change in Control Severance” subsection of the CD&A section of this Proxy Statement, as of February 26, 2017, we phased out the modified single-trigger provisions, as well as all tax gross-up provisions, under the Grandfathered Plan. Mr. Moster and Ms. Ingersoll, each of whom was hired prior to 2013, participate in the Grandfathered Plan.

Executive Severance Plan

In 2013, we adopted a new Executive Severance Plan (Tier I) (the “Executive Severance Plan”), which does not contain any tax gross-up or modified single-trigger provisions and applies to NEOs hired in 2013 and thereafter. Mr. Barry and Ms. Striedel participate in the Executive Severance Plan. Under the Executive Severance Plan, a participating NEO is eligible for severance benefits if the NEO’s employment is terminated 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 in control. Under those circumstances, the executive would receive a lump-sum payment, as severance compensation, equal to a multiple of the following sum:

The multiple is equal to the product of three times a fraction, the numerator of which is 36 minus the number of full months the NEO was employed following a change in control and the denominator of which is 36.

The table below shows the cash amount payable and the value of equity and other benefits that could be received in the case of an NEO’s termination without cause or the NEO’s voluntary termination for good reason in connection with a change in control, assuming that the NEO had a qualifying termination date of December 31, 2017.

 

 

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Estimated Benefits in the Event of a Change in Control with Involuntary/Without Cause or Voluntary/Good Reason Termination, In Dollars ($)

 

 

 

 

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INVOLUNTARY TERMINATION NOT FOR CAUSE

In February 2007, the Board adopted, upon recommendation of the Human Resources Committee, a severance arrangement for our executive officers, which codified our historical, discretionary practice to provide severance cash payments if we terminated an executive officer without cause (not for death, disability or cause). Except for Mr. Moster and Mr. Barry, who would receive lump-sum cash payments pursuant to the terms of their respective severance agreements, under the Executive Officer Pay Continuation Policy, executive officers with less than seven years of service would receive six months of salary, and executive officers with seven or more years of service would receive up to one year’s salary. Executive officers would receive continued health and welfare benefits and a pro-rata annual cash incentive award under the MIP for the calendar year in which they were last employed, if earned. The executive officer will also receive outplacement services. No payment, however, would be made under the Executive Officer Pay Continuation Policy unless the executive officer executes a general release containing a release of all claims against us, a covenant not to sue, a non-competition covenant and a non-disparagement agreement, in form and substance satisfactory to us. 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 our CEO and approved by the Human Resources Committee.

The following table shows the cash amount and values of equity awards and other benefits that could be received by the NEOs in the event any of them are terminated without cause (not in connection with a change in control and not for death, disability or cause), assuming that the NEO had a qualifying termination date of December 31, 2017.

Estimated Benefits in the Event of Involuntary Termination Not For Cause, In Dollars ($)

 

 

 

 

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VOLUNTARY TERMINATION FOR GOOD REASON

Messrs. Moster and Barry each have a severance agreement with us. The agreements provide for post-termination payments upon a voluntary termination of employment by the executive for “good reason.”  A “good reason” condition includes any of the following:

Upon termination, Messrs. Moster and Barry will receive the same payments and benefits described under the “Involuntary Termination Not For Cause” subsection, provided that they timely execute a release of all claims, waiver of rights, and covenant not to sue in a form satisfactory to us, in our reasonable discretion. Mr. Moster’s receipt of post-termination benefits is also conditioned on his resignation from our Board of Directors.

DEATH OR DISABILITY

The following table shows the cash amount and the value of equity that could be received by an NEO in the event of employment termination due to disability, or by the NEO’s estate in the event of employment termination due to death, assuming that the NEO had a qualifying termination date of December 31, 2017.

Estimated Benefit in the Event of Death or Disability, In Dollars ($)

 

 

 

 

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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information, as of December 31, 2017, with respect to shares of our 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 and the 2017 Viad Corp Omnibus Incentive Plan, the latter of which was approved by our shareholders at the 2017 Annual Meeting of Shareholders on May 18, 2017.

 

 

CEO PAY RATIO

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), we are providing the following disclosure that compares the annual total compensation of our “median employee” to the annual total compensation of our Principal Executive Officer, our CEO.

To determine our median employee, we included base salary, which could be paid in the form of hourly wages, and commissions paid, as the consistently applied compensation measure for all employees. We selected these pay elements because they were the most consistently paid across our organization. We reviewed compensation as of October 13, 2017, to determine our median employee. As of that date, we had 18,223 employees according to the definition provided under Dodd-Frank, though not all of these employees were actively working at that time. In determining our median employee, we excluded employees from countries that represent 5% or less of our global headcount. The excluded countries were Hong Kong, The Netherlands, Romania, Switzerland, and the United Arab Emirates. Combined, this population represented 192 employees, or less than 1% of our total headcount.

We applied statistical sampling to develop a narrow range of employees around our estimated median pay of $4,662. Using a range of pay within 10% of this estimated median, we identified 591 employees. We then conducted further analysis of prior years’ earnings to identify 30 employees from this group with relatively stable

 

 

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earnings over the past several years. Finally, from this list of 30 employees, we selected our median employee, who was a part-time employee in 2017 and who was represented by a union.

Having determined our median employee, we collected additional elements of pay pursuant to Item 402(c)(2)(x) of Regulation S-K, which is the same methodology used to determine compensation for our CEO and our other NEOs in the Summary Compensation Table above. The table below provides the annual total compensation for our median employee and for our CEO, as well as the ratio of our CEO’s total compensation to that of the median employee.

 

 

Supplemental Pay Ratio Disclosure

Due to the nature of our business, we employ both full-time and part-time employees. In many cases, and particularly for those who are represented by a union or work for us on a seasonal basis, our employees may work for a few days or a few months during the year. These same employees may work for us for many successive years on a part-time basis, but the limited number of total working hours means that their pay, and consequently the median pay of our employee population, is low relative to a population comprising only our full-time employees.

For comparison, we are providing a supplemental pay ratio calculation based on a median employee selected using the same methodology as above, with the exception that it excludes part-time and seasonal employees.

 

 

The SEC’s rules for identifying the median compensated employee and calculating the pay ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee populations and compensation practices.  As a result, the pay ratio reported by other companies may not be comparable to the pay ratio we are reporting, as other companies have different employee populations and compensation practices, and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.

 

 

 

 

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Management has primary responsibility for Viad’s financial statements and the reporting process, including the systems of internal control over financial reporting. Our role as the Audit Committee is to oversee Viad’s accounting and financial reporting processes and audits of the Company’s financial statements. In addition, we assist the Board in its oversight of:

Disclosure Controls and Internal Control Over Financial Reporting

Management develops and maintains adequate systems of internal accounting and financial controls and the independent registered public accounting firm expresses an opinion on the effectiveness of Viad’s internal control over financial reporting.

During 2017, management tested and evaluated its system of internal control over financial reporting. Management regularly updated the independent registered public accounting firm and us regarding that review. We also reviewed the independent registered public accounting firm’s report relating to its audit of the effectiveness of the Company’s internal control over financial reporting.

Independent Registered Public Accounting Firm

Viad’s independent registered public accounting firm for 2018 is Deloitte & Touche LLP. In determining whether to reappoint Deloitte & Touche LLP, we took into consideration, among other things, the firm’s independence, the length of time the firm has been engaged, the quality of the ongoing discussions with the firm, and the firm’s familiarity with Viad’s global operations and businesses, accounting policies and practices and internal control over financial reporting. We also assessed the firm’s, and the lead audit partner’s, professional qualifications and past performance. We concluded that Deloitte & Touche LLP is independent and should serve as Viad’s independent registered public accounting firm for 2018.

Financial Statements Recommendation

Management prepared the Company’s 2017 financial statements, and Deloitte & Touche LLP audited and then issued a report on those financial statements indicating that they are complete, accurate, and in accordance with generally accepted accounting principles. We recommended that the Company’s 2017 audited financial statements be included in Viad’s 2017 Annual Report on Form 10-K, filed with the SEC on February 28, 2018. A copy of Deloitte and Touche LLP’s report is included with your proxy materials. In connection with our recommendation, we:

 

 

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This Audit Committee report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Exchange Act, as amended, except to the extent that Viad specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

 

AUDIT COMMITTEE

Robert E. Munzenrider, Chair

Richard H. Dozer

Virginia L. Henkels

Edward E. Mace

Joshua E. Schechter

 

 

The Audit Committee is directly responsible for the selection, appointment, compensation, retention, oversight, and termination of the independent registered public accountants. The Audit Committee selected Deloitte & Touche LLP, a registered public accounting firm, as our independent registered public accounting firm for 2018.

Deloitte & Touche LLP has audited our accounts and those of our subsidiaries for many years. Although the NYSE listing standards and Audit Committee charter require the Audit Committee to engage, retain and supervise the independent registered public accountants, the Board considers the selection of the independent registered public accountants to be an important matter for shareholders.  Therefore, the Board is submitting the 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 the Board would take if the shareholders do not approve the appointment.

We expect that representatives of Deloitte & Touche LLP will be present at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and to respond to appropriate questions from shareholders.

Recommendation of the Board

The Board recommends that you vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2018.

AUDIT COMMITTEE PRE-APPROVAL POLICY

The Audit Committee’s written policy is to pre-approve all audit and permissible non-audit services provided by Deloitte & Touche LLP, our independent registered public accounting firm. These services may include audit services, audit-related services, tax services, and other permissible non-audit services. Any service incorporated within the independent registered public accountants’ engagement letter that the Committee approves, 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 Committee, is deemed pre-approved up to the dollar amount provided in such annual service plan.

 

 

 

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During the year, the independent registered public accountants also provide additional accounting research and consultation services required by, and incidental to, the audit of our 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 Committee. The Committee may also pre-approve services on a case-by-case basis during the year, or the Committee Chairman may give such pre-approval in writing on behalf of the Committee. The Chairman reviews his pre-approvals with the full Committee not later than the Committee’s next meeting.

The Committee’s approval of proposed services and fees are noted in the Committee’s meeting minutes or by signature on behalf of the Committee on the engagement letter. The independent registered public accountants are periodically requested to summarize the services and fees paid to date, and report to the Committee whether the services and fees have been pre-approved in accordance with the Committee’s required pre-approval process.

FEES AND SERVICES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The following is a summary of the aggregate fees Deloitte & Touche LLP billed us for professional services provided for the fiscal years ended December 31, 2017 and 2016.

 

 

 

The Human Resources Committee, which is composed entirely of independent directors, and the full Board believe that the executive compensation policies, procedures and decisions made with respect to our NEOs are competitive, are based on our pay for performance philosophy, and are focused on achieving our goals and enhancing shareholder value.

The following proposal, which is being submitted pursuant to Section 14A of the Exchange Act, provides our shareholders with an opportunity to vote to approve, on an advisory basis, our NEOs’ compensation, as disclosed in this Proxy Statement. This vote, which occurs annually, is not intended to address any specific element of our executive compensation program, but rather the overall compensation program for our NEOs. In considering your vote, you may wish to review the “Compensation Discussion and Analysis” section of this Proxy Statement, which

 

 

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provides details of our compensation policies, procedures, and decisions regarding the NEOs, as well as the tables and other information in the “Executive Compensation” section of this Proxy Statement.

For the reasons discussed above and in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Board asks our shareholders to vote “FOR” the adoption of the following resolution to be presented at the Annual Meeting:

RESOLVED, that the Viad Corp (the “Company”) shareholders approve, on an advisory basis, the overall compensation of the Company’s named executive officers set forth in the Compensation Discussion and Analysis, Summary Compensation Table, and related compensation tables, notes, and narrative discussion in the Proxy Statement for the Company’s 2018 Annual Meeting of Shareholders.

Although this advisory vote is not binding upon the Board or Viad, the Board and the Human Resources Committee will review, consider, and take into account the voting results, as they have in previous years, when making future decisions regarding executive compensation to the extent they can determine the cause of any significant negative voting.

Recommendation of the Board

The Board of Directors recommends that you vote “FOR” the approval, on an advisory basis, of our Named Executive Officer compensation.

 

VOTING PROCEDURES

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 shares voted “against” the director nominee. To be elected 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. A plurality means receiving the largest number of votes, regardless of whether that is a majority. All matters submitted to you at the Annual Meeting will be decided by a majority of the votes cast, except as otherwise provided by law or our Certificate of Incorporation or Bylaws. You may not cumulate votes.

Shares voted by shareholders who fail to return a proxy or attend the meeting will not count towards determining any required plurality, majority, or quorum. Abstentions and broker non-votes from shareholders and brokers who return their proxies, or who attend the meeting and are entitled to vote on the subject matter, will count towards determining a quorum for that proposal.

Banks and brokers and other nominees that have not received voting instructions from their clients may vote their clients’ shares on Proposal 2 (ratifying the appointment of Deloitte & Touche LLP as our independent registered public accounting firm), but not on Proposals 1 or 3. Under NYSE rules, the only agenda item to be acted upon at our 2018 Annual Meeting of Shareholders with respect to which a broker or nominee will be permitted to exercise voting discretion is Proposal 2. Therefore, if a beneficial holder of Viad common stock does not give the broker or nominee specific voting instructions on Proposals 1 or 3, the holder’s shares will not be voted on those proposals and a broker non-vote will occur. The affirmative vote of holders of the majority of all votes cast by holders of Viad’s outstanding stock entitled to vote is required to approve each of the proposals. Abstentions and broker non-votes will not be included in the vote totals and, as such, will have no effect on the outcome of the proposals.

Your proxy will be voted in accordance with your instructions. 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 participate in a 401(k) plan of Viad or one of its subsidiaries, your proxy will serve as a voting instruction to the respective trustee. If you do not provide voting instructions, 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.

 

 

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To reduce printing and mailing costs, we adopted a procedure approved by the SEC called “householding.” Shareholders of record who have indicated that they would like to continue to receive copies of the proxy materials and who have the same address and last name will receive only one copy of this Proxy Statement and 2017 Form 10-K, unless one or more of these shareholders notifies us that they wish to continue receiving individual copies. Shareholders who participate in householding will continue to receive separate proxy cards. If you do not wish to participate in householding and prefer to receive a separate copy of this Proxy Statement and the 2017 Form 10-K, if you prefer to receive separate copies of these documents in the future, or if you are currently receiving separate copies of these documents and would like to request delivery of a single copy of the documents in the future, please contact EQ Shareowner Services, P.O. Box 64874, St. Paul, MN 55164-0874 (telephone number: 1-800-453-2235). We will promptly deliver a separate copy of this Proxy Statement and 2017 Form 10-K upon receiving your request. Beneficial owners can request information about householding from their banks, brokers, or other nominees.

REVOKING YOUR PROXY

Your proxy may be revoked if you either:

SOLICITATION OF PROXIES

We will pay for the cost of solicitation. We will solicit proxies primarily through the mail, but our directors, officers, and regular employees may solicit proxies personally, by telephone, or otherwise, and no additional compensation will be paid to such individuals. We will also reimburse banks, brokerage firms, and other custodians, nominees and fiduciaries for their reasonable expenses in sending proxy materials to beneficial owners of shares.

 

Pursuant to Rule 14a-8 of the Exchange Act, shareholder proposals intended for inclusion in the Proxy Statement to be furnished to all shareholders entitled to vote at our 2019 Annual Meeting of Shareholders must be received at our principal executive offices not later than the close of business, Arizona local time, on December 5, 2018, which is 120 days prior to the first anniversary of the mailing date of this Proxy Statement. Any proposal must comply with the requirements as to form and substance established by the SEC for such proposal to be included in our Proxy Statement.

Our Bylaws require that any shareholder proposal that is not submitted for inclusion in next year’s Proxy Statement under SEC Rule 14a-8, but is instead sought to be presented directly at the 2019 Annual Meeting, must be received at our principal executive offices not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the 2018 annual meeting. As a result, to be timely, proposals, including director nominations, submitted pursuant to these provisions of our Bylaws must be received no earlier than the close of business on December 5, 2018, and no later than the close of business on February 19, 2019.

Proposals, director nominations or related questions should be directed in writing to the undersigned at the address listed in the notice of meeting attached to this Proxy Statement.

 

 

 

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The Board of Directors knows of no other matters to be brought before the Annual Meeting. If any other business should properly come before the Annual Meeting, the persons appointed in the enclosed proxy have discretionary authority to vote in accordance with their best judgment.

The Proxy Statement and the 2017 Form 10-K are available on our website at www.viad.com by clicking the link “Annual Meeting-Proxy Materials” under the “Investors” section, or by written request to the office of the Corporate Secretary at the address listed in the notice of meeting attached to this Proxy Statement. You may also obtain our other SEC filings and certain other information through the Internet at www.sec.gov and our website at www.viad.com. Information contained in any website referenced in this Proxy Statement is not part of this Proxy Statement and is not incorporated by reference in this Proxy Statement.

 

PLEASE SIGN, DATE AND MAIL YOUR PROXY NOW

OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET.

WE APPRECIATE YOUR PROMPT RESPONSE!

 

 

 

 

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

This Proxy Statement includes the presentation of “Adjusted Segment EBITDA,” which is supplemental to results presented under GAAP and may not be comparable to similarly titled measures presented by other companies. Adjusted Segment EBITDA should be considered in addition to, but not as a substitute for, other similar measures reported in accordance with GAAP. The use of this non-GAAP financial measure is limited, compared to the GAAP measure of net income attributable to Viad, because it does not consider a variety of items affecting our consolidated financial performance as reconciled below. Because this non-GAAP measure does not consider all items affecting our consolidated financial performance, a user of our financial information should consider net income attributable to Viad as an important measure of financial performance because it provides a more complete measure of our performance.

Management believes that the presentation of Adjusted Segment EBITDA provides useful information to investors regarding our results of operations for trending, analyzing, and benchmarking the performance and value of our business. Management also believes that the presentation of Adjusted Segment EBITDA for acquisitions and other major capital projects enables investors to assess how effectively management is investing capital, both from a valuation and return perspective.

We define “Adjusted Segment EBITDA” as segment operating income (as defined below) before non-cash depreciation and amortization, acquisition integration and transaction-related costs, if any, start-up costs related to FlyOver Iceland (in 2017) and fire-related business interruption matters (in 2016). Management uses Adjusted Segment EBITDA to measure the profit and performance of our operating segments and acquisitions to facilitate period-to-period comparisons.

We define “Segment Operating Income” as net income attributable to Viad before income (loss) from discontinued operations, corporate activities, interest expense and interest income, income taxes, restructuring charges, impairment losses and recoveries, and the reduction/increase for income/loss attributable to non-controlling or redeemable non-controlling interests. Management uses Segment Operating Income to measure the profit and performance of our operating segments to facilitate period-to-period comparisons.

 

 

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A reconciliation of net income attributable to Viad to Adjusted Segment EBITDA is as follows:

 

 

Note - Certain amounts above may not total due to rounding.

 

 

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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.  KEEP THIS PORTION FOR YOUR RECORDS  DETACH AND RETURN THIS PORTION ONLY  TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:  Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date  0 0 0  0 0 0  0 0 0  0 0 0  0 0 0  0000369211_1 R1.0.1.17  VIAD CORP  1850 NORTH CENTRAL AVE., SUITE 1900  PHOENIX, AZ 85004-4565  VOTE BY INTERNET - www.proxyvote.com  Use the Internet to transmit your voting instructions and for electronic delivery of  information. Vote by 11:59 P.M. ET on 05/16/2018 for shares held directly and by 11:59  P.M. ET on 05/14/2018 for shares held in a Plan. Have your proxy card in hand when you  access the web site and follow the instructions to obtain your records and to create an  electronic voting instruction form.  ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS  If you would like to reduce the costs incurred by our company in mailing proxy materials,  you can consent to receiving all future proxy statements, proxy cards and annual reports  electronically via e-mail or the Internet. To sign up for electronic delivery, please follow  the instructions above to vote using the Internet and, when prompted, indicate that you  agree to receive or access proxy materials electronically in future years.  VOTE BY PHONE - 1-800-690-6903  Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET  on 05/16/2018 for shares held directly and by 11:59 P.M. ET on 05/14/2018 for shares  held in a Plan. Have your proxy card in hand when you call and then follow the  instructions.  VOTE BY MAIL  Mark, sign and date your proxy card and return it in the postage-paid envelope we have  provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,  NY 11717.  The Board of Directors recommends you vote FOR  the following:  1. Election of Directors  Nominees  For Against Abstain  1A Richard H. Dozer  1B Virginia L. Henkels  1C Robert E. Munzenrider  The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain  2. Ratification of the selection of Deloitte & Touche LLP as Viad's independent registered public accounting firm  for 2018.  3. Advisory approval of named executive officer compensation.  NOTE: Such other business as may properly come before the meeting or any adjournment thereof.  Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary,  please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or  partnership, please sign in full corporate or partnership name by authorized officer.

 

 

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0000369211_2 R1.0.1.17  Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement and Annual Report  are available at www.proxyvote.com  Viad Corp  Annual Meeting of Shareholders  May 17, 2018 8:00 AM  This proxy is solicited by the Board of Directors  The shareholder(s) hereby appoint(s) Steven W. Moster and Irma Villarreal, or either of them, as proxies, each  with the power to appoint (his/her) substitute, and hereby authorizes them to represent and to vote, as  designated on the reverse side of this ballot, all of the shares of Common stock of Viad Corp that the  shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 8:00 AM, MST on  5/17/2018, at the Royal Palms Hotel, 5200 East Camelback Road, Phoenix, AZ 85018, and any adjournment or  postponement thereof.  This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is  made, this proxy will be voted in accordance with the Board of Directors' recommendations.  Continued and to be signed on reverse side