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 10, 2017

Dear Fellow Viad Corp Shareholder:

We look forward to your attendance in person or by proxy at the 2017 Annual Meeting of Shareholders of Viad Corp.  We will hold the meeting on Thursday, May 18, 2017, at 8:00 a.m., Mountain Standard Time, at The Camby Hotel, 2401 East Camelback Road, Phoenix, Arizona 85016.  The formal notice of the meeting and proxy statement are attached and provide information about the matters to be acted upon by shareholders.

Directors and officers will be available at the meeting to speak with you.  There will be an opportunity during the meeting for your questions regarding the affairs of the Company and for a discussion of the business to be considered at the meeting, as explained in the notice and proxy statement.  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, please sign, date and return the enclosed proxy card in the envelope provided, or you may vote your shares by telephone or the Internet as described on your proxy card.  If you plan to attend the meeting, you may vote in person.

Thank you for your continued support of Viad Corp.

 

 

 

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Thursday, May 18, 2017

8:00 a.m.

The Camby Hotel, 2401 East Camelback Road, Phoenix, Arizona 85016

The 2017 Annual Meeting of Shareholders of Viad Corp, a Delaware corporation, will be held at The Camby Hotel, 2401 East Camelback Road, Phoenix, Arizona 85016, on Thursday, May 18, 2017, at 8:00 a.m., Mountain Standard Time.  No admission tickets or other credentials will be required for attendance at the meeting.  You may use the hotel’s free valet parking.  The purposes of the meeting are to:

The foregoing items of business are more fully described in the proxy statement accompanying this notice.  Our 2016 Annual Report, including financial statements, is included with your proxy materials. Only shareholders of record of common stock at the close of business on March 23, 2017 are entitled to receive this notice and to vote at the meeting.  A list of shareholders entitled to vote will be available at the meeting for examination by any shareholder for any proper purpose.  The list will also be available on the same basis for 10 days prior to the meeting at Viad’s principal executive office at the address listed above.  To assure your representation at the meeting, please vote your shares by telephone, the Internet or by signing, dating and returning the enclosed proxy card at your earliest convenience.  The Internet and automated telephone voting features are described on the proxy card.  We have enclosed a return envelope, which requires no postage if mailed in the United States, if you choose to mail your proxy.  Your proxy is being solicited by the Board of Directors.

 

 

Important Notice Regarding the Availability of Proxy Materials

The 2017 Proxy Statement and 2016 Annual Report are available at

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

 

 

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Table of Contents

 

 

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Prompt return of your proxy will help reduce the costs of resolicitation.

 

 

 

 

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INTRODUCTION

Upon the recommendation of the Corporate Governance and Nominating Committee, the Board of Directors (the “Board of Directors” or the “Board”) of Viad Corp (“Viad,” “we” or the “Company”) has nominated the two persons listed below under the “Director Nominees” section to serve as directors.  Each of the director nominees proposed for election at this year’s annual meeting is an independent director within the meaning of the New York Stock Exchange (“NYSE”) listing standards, applicable Securities and Exchange Commission (“SEC”) regulations and Viad’s Corporate Governance Guidelines.

MAJORITY VOTE STANDARD FOR ELECTION OF DIRECTORS

Viad’s Bylaws (the “Bylaws”) provide that the vote standard is a majority of votes cast for uncontested elections of directors, which means that the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee.  The Bylaws further provide that if a nominee who already serves as a director is not elected by a majority vote, then the director will be obligated to tender his or her resignation to the Board.  The Corporate Governance and Nominating Committee of the Board will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will be required to publicly disclose its decision and the rationale behind it within 90 days of the certification of the election results.  The director who tenders his or her resignation will not participate in the Board’s decision.  In contested elections where the number of nominees exceeds the number of directors to be elected, the Bylaws provide for a plurality vote standard.  If a nominee who was not already serving as a director is not elected at the annual meeting, the nominee would not become a director.

SKILLS, QUALIFICATIONS AND EXPERIENCE OF DIRECTORS

While Viad’s directors have many individual qualifications, our Board believes that certain specific qualifications are common to all of Viad’s directors, and these qualifications (as well as others) led the Board to conclude that each director listed below under the “Director Nominees” and “Directors Continuing in Office” sections should serve on the Board. These qualifications include:

 

 

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BOARD STRUCTURE

Our Board consists of eight persons divided into three classes or groups.  The term of one class of directors expires at each annual meeting, and nominees are elected to that class for a term of three years.  Two directors are proposed for election at this year’s Annual Meeting of Shareholders.

DIRECTOR NOMINEES

Our Board of Directors has nominated Edward E. Mace and Joshua E. Schechter for election at the 2017 Annual Meeting of Shareholders.  Both nominees are independent members of the Board of Directors and, if elected, have agreed to serve another term, which will expire in 2020.  Information about the director nominees is presented below.

Recommendation of the Board

The Board of Directors recommends that you vote “FOR” these director nominees.

 

 

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DIRECTORS CONTINUING IN OFFICE

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

For Terms Expiring at the 2018 Annual Meeting:

 

 

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For Terms Expiring at the 2019 Annual Meeting:

 

 

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CORPORATE GOVERNANCE POLICIES AND PRACTICES

In accordance with applicable laws and the Bylaws, the business and affairs of Viad are governed under the direction of the Board of Directors.  The system of governance practices followed by Viad is set forth in our Corporate Governance Guidelines and in the charters of each of the committees of the Board of Directors.  The Corporate Governance Guidelines set forth the practices our Board will follow with respect to its duties, operations, committee matters, director qualifications and selection process, director compensation, director independence, director orientation and continuing education, chief executive officer evaluation, management succession and annual Board and committee performance evaluation.  The Corporate Governance Guidelines and committee charters are reviewed periodically to ensure the effective and efficient governance of Viad and compliance in a timely manner with all laws and the listing standards of the NYSE that are applicable to corporate governance.

Corporate governance information, including the Corporate Governance Guidelines, committee charters and the Code of Ethics applicable to Viad’s directors, officers and employees may be viewed on Viad’s web site at http://www.viad.com/about-us/corporate-governance/view-on-governance.  They are also available in print upon written request to the Corporate Secretary of Viad at the address listed in the notice of meeting attached to this proxy statement.

CORPORATE GOVERNANCE HIGHLIGHTS

We are proud of our corporate governance program.  Highlights of the corporate governance standards of our Company are provided below:

 

 

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COMMITTEES AND DIRECTOR INDEPENDENCE

Our Board maintains three standing committees to assist in fulfilling its responsibilities: 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 provides current membership and 2016 meeting information for each committee.  In addition, the table identifies the independent directors, as determined by our Board, within the meaning of the NYSE listing standards, applicable SEC regulations and Viad’s Corporate Governance Guidelines. The Corporate Governance Guidelines include categorical standards for independence that meet or exceed the NYSE listing standards.  Mr. Moster is the only officer-director serving on our Board, and was the only officer-director serving on the Board during 2016.

 

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The particular areas of responsibility of each Board committee and other related information are described below.  Each committee below may form and delegate authority to a subcommittee of one or more members of the committee.

Audit Committee.  The Audit Committee assists the Board in monitoring the quality and integrity of the financial statements of Viad, the compliance by Viad with legal and regulatory requirements and the independence and performance of Viad’s internal auditors and external independent registered public accountants.  The committee conducts regularly scheduled executive sessions with individual members of Viad’s management and with Viad’s independent registered public accountants.  The committee has sole authority to appoint or replace Viad’s independent registered public accountants.  The independent registered public accountants report directly to the committee.  In addition, the committee has authority to obtain advice and assistance from internal and external legal, accounting and other advisors.  The Board has determined that all members of the Audit Committee are “financially literate,” as defined by NYSE listing standards, and that Mr. Munzenrider qualifies as an “audit committee financial expert,” as defined by SEC regulations.

 

 

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Corporate Governance and Nominating Committee.  The Corporate Governance and Nominating Committee proposes a slate of directors for election by the shareholders at each annual meeting and proposes candidates to fill any vacancies on the Board.  The committee is also responsible for an assessment of the Board’s performance to be discussed with the full Board annually, and for review of, and from time to time for proposal of changes to, the Corporate Governance Guidelines and the compensation and benefits of non-employee directors.  The committee has sole authority to retain and/or terminate any search firm or compensation consultant used to identify director candidates or to assist in the evaluation of director compensation.

Human Resources Committee.  The Human Resources Committee oversees development and implementation of a compensation strategy designed to enhance profitability and shareholder value.  The committee also reviews and approves, subject to ratification by independent members of the Board, the salary and equity and incentive compensation of Viad’s CEO, approves salaries and compensation of other executive officers of Viad and approves incentive compensation targets and awards under various compensation plans and programs of Viad. In addition, the committee has sole authority to retain and/or terminate any compensation consultant used to assist in the evaluation of the compensation of Viad’s CEO and other executive officers.  The committee also has authority to obtain advice and assistance from internal or external legal, accounting or other advisors.  While the Corporate Governance and Nominating Committee is responsible for reviewing and making recommendations to the Board regarding non-employee director compensation and benefits, the Human Resources Committee has sole authority to approve grants of equity compensation to non-employee directors under the 2007 Viad Corp Omnibus Incentive Plan.  The CEO makes a recommendation to the committee on the compensation of other executive officers of Viad; however, the committee has sole authority to approve, for the CEO and other executive officers: (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, with the salary, equity and incentive compensation of the CEO being subject to ratification by independent members of the Board.

Independent Compensation Consultant to Human Resources Committee.  The Human Resources Committee retained Frederick W. Cook & Co., Inc. (“FW Cook”) in 2016 as the committee’s independent compensation consultant.  In 2016, FW Cook performed executive compensation market analysis and executive pay and performance alignment analysis.  The committee derived benchmark valuations from general industry market surveys and the Company’s comparator group in consultation with FW Cook.  Viad paid FW Cook in 2016 only for services and advice related to executive compensation.  The 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. Based on a review of the six independence factors, the committee determined that the services provided by FW Cook to Viad had not raised a conflict of interest.

BOARD MEETINGS AND ANNUAL SHAREHOLDERS MEETING

Under Viad’s Corporate Governance Guidelines, each director is expected to attend the Annual Meeting of Shareholders, Board meetings and meetings of committees on which they serve.  The Board of Directors held four regular meetings and four special meetings during 2016.  Each director attended 100% of his or her Board and committee meetings in 2016 and all directors were in attendance at the 2016 Annual Meeting of Shareholders.

MEETINGS OF NON-MANAGEMENT DIRECTORS

Our Board held five executive sessions of the independent, non-management directors in 2016.

BOARD LEADERSHIP STRUCTURE

Viad 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 will allow the CEO to focus his time and energy on operating and managing the Company while leveraging the Chairman’s experience and perspectives.  Mr. Dozer does not have an employment contract with the Company.

 

 

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

 

 

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BOARD COMPOSITION AND REFRESHMENT

 

 

The continuous exchange of new ideas is vital to the success of our Board.  The Board and the Corporate Governance and Nominating Committee recognize that the interplay between diverse viewpoints, experience and backgrounds more effectively promotes the long-term interests of Viad’s shareholders.  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 that longer-serving directors bring.  The Board and the committee believe that the Company’s recent measures to promote “board refreshment,” including efforts to reduce the Board’s average director tenure from 8.7 years as of January 1, 2012 to 6.4 years as of March 31, 2017, and the election of three new independent directors during the same time period, has allowed the Board to maintain an appropriate balance of tenure, turnover and skills.  The Board and the committee believe that each of the director nominees possesses unique talents that contribute to the Board’s broad array of viewpoints and expertise.

CORPORATE GOVERNANCE AND NOMINATING AND HUMAN RESOURCES COMMITTEES INTERLOCKS AND INSIDER PARTICIPATION

Viad is not aware of any interlocking relationships between any member of the Human Resources Committee or Corporate Governance and Nominating Committee and any of Viad’s executive officers that would require disclosure under the applicable rules promulgated under the U.S. federal securities laws.

REVIEW AND APPROVAL OF TRANSACTIONS WITH RELATED PERSONS

Our Board adopted in February 2007 a written policy and procedures for review, approval and monitoring of transactions involving the Company and “related persons” (including directors, director nominees, executive officers, shareholders owning 5% or greater of the Company’s outstanding stock and their immediate family members). The policy applies to any transaction in which Viad or an operating company is a participant and any related person has a direct or indirect interest, excluding de minimus transactions of a commercial or other nature between a related person and Viad or one of its operating companies, as well as any compensation arrangements with executive officers or directors of Viad that have been approved or authorized by the Board or the Human Resources Committee.

The Corporate Governance and Nominating Committee is responsible for reviewing, approving and/or ratifying any transaction involving a related person.  Management will bring the matter to the attention of the Corporate Governance and Nominating Committee and provide it with all material information with respect to related person transactions.  A related person transaction must be approved in advance whenever practicable, otherwise it must be ratified as promptly as practicable; provided that if ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the transaction.  In determining whether to authorize, approve and/or ratify a related person transaction, the committee considers all information that it determines is reasonable under the circumstances.  Specifically, the committee inquires into whether the transaction is fair and reasonable and whether the terms of the transaction are more or less favorable to Viad than terms Viad could obtain in a comparable arm’s length transaction with an unrelated third party.  A related person transaction will be submitted to the committee for consideration at its next meeting or, in those instances in which the CEO determines that it is not practicable or desirable for Viad to wait until the next committee meeting, to the Chair of the committee (who has the delegated authority to act between committee meetings with respect to this policy).  The Chair of the

 

 

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committee will report to the committee at the next committee meeting any approval under this policy pursuant to delegated authority.  The committee will annually review with the General Counsel existing related person transactions, if any, and report annually to the Board, to ensure that such transactions are being pursued in accordance with understandings and commitments made at the time they were approved, that payments are being made appropriately and that such transactions continue to serve the best interests of Viad.

There have been no transactions between the Company and a related person since January 1, 2016.

DIRECTOR NOMINATIONS

As provided in its committee charter and the Bylaws, the Corporate Governance and Nominating Committee has established procedures for consideration of candidates for Board membership suggested by its members and other sources, including shareholders.  The committee has authority under its charter to employ a third-party search firm to conduct research, review candidate data and otherwise assist the committee in identifying candidates to serve as a director of our Company.  A shareholder who wishes to recommend a prospective nominee for the Board should notify Viad’s 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 will review the qualifications of any person timely and properly nominated by a shareholder in accordance with the Bylaws relating to shareholder proposals as described in the “Submission of Shareholder Proposals and Director Nominations” section of this proxy statement.

When the Corporate Governance and Nominating Committee reviews a potential nominee, it looks at the candidate’s qualifications in light of the needs of our Board and Viad at that time given the then-current mix of director attributes.  The committee, in accordance with Viad’s Corporate Governance Guidelines, assesses director nominees based on their qualification as independent, as well as consideration of diversity, skills and experience in the context of the current needs of our Board.  The committee does not have a specific policy on diversity.  Director nominees also must have common qualities expected of all Viad directors, including high personal and professional ethics, integrity and values, and a commitment to representing the long-term interests of shareholders.  The committee also ensures that the members of the Board, as a group, maintain the requisite qualifications under the listing standards of the NYSE for populating the Audit, Human Resources and Corporate Governance and Nominating Committees.

In determining whether to nominate an existing director for re-election, the Corporate Governance and Nominating Committee will consider, among other factors, the tenure of the director.  The committee understands that new directors offer fresh perspectives and ideas that are critical to a forward-thinking and strategic Board, but also recognizes that longer-serving directors facilitate effective decision-making through their experience and familiarity with the Company’s businesses and policies.  Accordingly, in deciding whether to nominate an incumbent director for re-election, the committee considers the mix of different tenures of the directors, taking into account the benefits of directors with longer tenures, including greater board stability and continuity of organizational knowledge, and the benefits of directors with shorter tenures, including their new perspectives and a willingness to re-examine the status quo.  The Board and the committee believe that such an approach to board refreshment maintains an appropriate balance of viewpoints, skills, professional experience and backgrounds, and effectively advances the long-term interests of Viad’s shareholders.

Viad will deliver a questionnaire to a director candidate intended to be nominated by a shareholder addressing the candidate’s independence, qualifications and other information that would assist the Corporate Governance and Nominating Committee in evaluating the candidate, as well as certain information that must be disclosed about

 

 

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the candidate in Viad’s proxy statement, if nominated by the committee.  In accordance with the Bylaws, a director candidate is required to provide responses to Viad’s director candidate questionnaire related to background, qualification, conflicts of interest and director independence.  In addition, the director candidate questionnaire includes a representation and agreement to be signed by the director candidate as to his or her independence and the lack of conflicts of interest.

COMMUNICATION WITH BOARD OF DIRECTORS

Interested parties may communicate directly with non-management directors, including the Chairman of the Board, and/or with the Board by writing to the following address:  Viad Corp, 1850 North Central Avenue, Suite 1900, Phoenix, Arizona 85004-4565, Attention: Corporate Secretary.  All communications will be delivered to the non-management directors or the Board, as the case may be, no later than the Board’s next regularly scheduled meeting.

RISK OVERSIGHT

Management is responsible for assessing and managing the Company’s various exposures to risk, including the adoption of risk management controls, policies and procedures. Our Board oversees the management of the Company’s risk exposures by the Company’s management.  Our Board has delegated to the Audit Committee, as reflected in its charter, responsibility for discussing with Viad’s management the major financial risk exposures of Viad and the steps management has taken to monitor and control such exposures, including Viad’s risk assessment, risk management policies, information technology system controls and policies and data security.

The Board believes that cybersecurity is a critical component of the risk management program.  Each quarter members of Viad’s senior management who are responsible for the Company’s cybersecurity risk management practices present a cybersecurity report to the Audit Committee.  The reports address a range of issues relevant to Viad’s cybersecurity, 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 the Company and the industries in which Viad participates, and applicable cybersecurity laws, regulations and standards. The Company’s cybersecurity risk management practices are integrated into our overall risk management program.

Additionally, each year, Viad conducts a risk assessment to identify, evaluate and prioritize potential business risks.  As a part of this business risk assessment, a financial statement risk assessment and materiality analysis is conducted, including evaluating potential fraud schemes and scenarios that might affect Viad.  The risk assessment includes an evaluation of the significance of the risks, the likelihood of occurrence, the risk remaining after application of management controls and actions necessary to mitigate risk exposure.  Management presents a report on the results of the annual risk assessment during a regularly scheduled meeting of the Audit Committee, typically its May meeting, and all members of the Board are invited to attend this meeting.  Prior to the meeting, a written report of the results of the assessment is provided to all members of our Board.  Thereafter, at the meeting of the Board, the Chair of the Audit Committee provides a summary report to the full Board regarding the results of the assessment and the Audit Committee’s discussions concerning the results.  Management continuously monitors the Company’s risks throughout the year.  The Board’s role in risk oversight has not affected its leadership structure.

COMPENSATION RISK ANALYSIS

The Board also continuously monitors and manages executive compensation risk through the design of the Company’s executive compensation program.  The Human Resources Committee of the Board has structured the program in a way that mitigates the potential for excessive risk-taking by NEOs in managing Viad’s businesses.  A few of the program’s features that serve this purpose are:

 

 

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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 amount of Viad common stock that directors, NEOs, other executive officers and key senior management employees are expected to own on a direct basis, meaning stock which is subject to market risk, not simply held under option.  The stock ownership guidelines call for each executive officer to own Company common stock that has an aggregate value within a range of 1.5 to 5.0 times the executive’s annual salary, depending on salary level.  The guidelines also call for each non-employee director to own Company common stock that has an aggregate value equal to 5.0 times the annual retainer payable to a non-employee director.  All non-employee directors have met or exceeded their goals.  Ms. Ingersoll and Ms. DePaoli currently exceed the stock ownership guidelines, and Mr. Moster, Mr. Barry and Ms. Striedel are working toward achieving compliance with the stock ownership guidelines.  For equity grants in 2013 and thereafter, the Company places a hold on vested restricted stock earned by NEOs, net of taxes, until the NEO’s total stock ownership meets the Company’s stock ownership guidelines or the NEO is no longer an employee of the Company.

RESTRICTION ON TRADING BY DIRECTORS AND OFFICERS

The Company’s policy on insider trading generally permits directors, NEOs and other executive officers to engage in transactions involving the Company’s common stock and other securities 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, the Company’s policy on insider trading prohibits directors, NEOs and other executive officers and employees from engaging in hedging transactions or other transactions designed to limit or eliminate the risks of owning Viad stock, and prohibits directors, NEOs and other executive officers from pledging, or using as collateral, the Company’s securities in order to secure personal loans or other obligations.

 

 

 

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Each non-employee director receives compensation for service on our Board and any of its committees.  Directors who are also officers or employees of Viad do not receive any special or additional remuneration for service on the Board and do not serve on any of its committees.   Mr. Moster is the only officer-director currently serving on our Board, and was the only officer-director serving on the Board during 2016.

The Corporate Governance and Nominating Committee periodically reviews director compensation, taking into account factors such as workload and market data.  In February 2016, the committee recommended an increase in certain components of the compensation of our non-employee directors after advice of Frederick W. Cook & Co. Inc., the committee’s independent director compensation consultant, which reviewed and discussed with the committee director compensation data of our comparator group used for executive compensation benchmarking (as discussed in the CD&A section of our proxy statement) and published public company director compensation surveys.  The changes recommended by the consultant and approved by our Board are aligned with the market median.  Viad’s prior increase to director compensation occurred in 2012.  The Board approved in February 2016 the committee’s recommended changes to non-employee director compensation, as reflected in the table below.

The table below provides the 2016 compensation of the non-employee directors on our Board.  The dollar figures presented in column (c) of the table below represent the grant date fair value of the 2016 stock awards, which may not reflect the actual value to be realized by the director as economic and market risks associated with stock awards can affect the actual value realized.  The actual value realized by the director for the stock will not be determined until time of vesting, for purposes of paying taxes on the vesting event, and at the time of sale for all other purposes.

 

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In 2016, each of the non-employee directors was granted 3,700 shares of restricted stock with a grant date fair value of $99,826, which reflects an increase from $75,000 to $100,000 in the value of the annual equity award to non-employee directors, effective as of the grant date of February 23, 2016.  All restricted stock granted to non-employee directors will vest three years from the date of grant, with pro-rata vesting of shares upon expiration of the three-year period if a non-employee director leaves the Board prior to the end of such period for any reasons other than for “cause,” provided that full vesting will occur upon lapse of such period if he or she 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.  If a non-employee director were to take office after the restricted stock grant in February of each year, the new director would receive a pro-rata grant of restricted stock based on the date of election and the next regularly scheduled February grant of restricted stock.

At December 31, 2016, 9,500 shares of restricted stock had not vested for each of the non-employee directors, except for Mr. Schechter, who had 6,000 shares of restricted stock that had not vested.

 

 

DIRECTORS AND EXECUTIVE OFFICERS

Except as otherwise noted in the footnotes below: (i) the table below provides information concerning the beneficial ownership of Viad’s common stock by directors and executive officers of Viad, individually and as a group, as of March 1, 2017; and (ii) each person or entity identified in the table below, to our knowledge, has sole voting and investment power with respect to the securities they hold, other than property rights of spouses.  

 

 

 

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CERTAIN SHAREHOLDERS

The table below provides certain information regarding those persons known by Viad to be the beneficial owners of more than 5% of Viad’s outstanding common stock as of December 31, 2016.

 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires Viad’s executive officers, directors and beneficial owners of more than 10% of Viad’s common stock to file initial reports of ownership and reports of changes in ownership of Viad’s common stock with the SEC and the NYSE.  Such executive officers, directors and beneficial owners are required by U.S. federal securities regulations to furnish Viad with copies of all Section 16(a) forms they file.  As a matter of practice, Viad’s administrative staff assists its executive officers and directors in preparing initial reports of ownership and reports of changes in ownership, and files such reports on their behalf with the SEC and the NYSE.  Based solely on a review of the copies of such forms furnished to Viad and written representations from its executive officers and directors, Viad believes that all executive officers, directors and beneficial owners timely complied with the Section 16(a) reporting requirements in 2016.

 

 

OVERVIEW

This Compensation Discussion and Analysis (“CD&A”) section explains the 2016 compensation program for Viad’s named executive officers (“NEOs”) and how the program is linked to the Company’s 2016 performance and strategic objectives.    Viad’s 2016 NEOs are listed below:

 

 

Specifically, this CD&A contains the following sections:

 

 

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The Company encourages you to read this CD&A in conjunction with “Proposal 3: Advisory Approval of Named Executive Officer Compensation,” beginning on page 57.  The tables following this CD&A provide additional compensation information about the NEOs.

I. EXECUTIVE SUMMARY

OUR PRIMARY OBJECTIVE: PAY FOR PERFORMANCE

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

Consistent with the Company’s “pay for performance” philosophy, at the start of each year, the Human Resources Committee (the “Committee”) of Viad’s Board of Directors (the “Board”) approves challenging performance goals that drive financial and strategic goals designed to increase shareholder value.  In 2016, the Company delivered strong financial performance and continued to make progress on its key long-term strategic objectives, and the Committee made compensation decisions that reflect the effective leadership and strong performance of the Company’s executive officers.  The pay for performance objective of our compensation program incentivizes our key executives to make strategic decisions that further the long-term financial interests of the Company, and ultimately, allow both management and shareholders to share in the Company’s success.  We believe our compensation decisions demonstrate an alignment between pay and performance.  In addition, these decisions support our focus on enhancing shareholder value, and these decisions also support the Board’s recommendation to shareholders to approve, in an advisory vote, the compensation of the NEOs.

OUR PERFORMANCE: EXECUTING ON OUR GROWTH STRATEGY TO ENHANCE VALUE

We continued to make significant progress against our stated growth strategy during 2016, with four key acquisitions and the renovation of our leading attraction, the Banff Gondola. These investments, along with similar investments made during 2014, 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 in the United States, Canada, the United Kingdom, continental Europe and the United Arab Emirates.  We generate our revenue through our two business groups: GES (previously referred to as the Marketing & Events Group) and Pursuit (previously referred to as the Travel & Recreation Group).  For more information about our business, please refer to the “Business” and “Management’s Discussion & Analysis of Financial Condition and Results of Operations” sections of our 2016 Annual Report on Form 10-K, filed with the SEC on March 6, 2017.

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

Our growth strategy for GES is to become the preferred global full-service provider for live events, with further reach to 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:

 

 

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We believe that the execution of this growth strategy will differentiate GES as the preferred, comprehensive provider of live event services and allow our clients to gain a greater return at their events and enhance the exhibitor experience.

Our 2014 acquisitions represented an important first step in executing our growth strategy.  Our ability to realize synergies and integrate those acquired businesses resulted in the cross-selling of adjacent service offerings and new business wins in both 2015 and 2016.  Our August 2016 acquisition of the ON Services business gives us important scale in the large U.S. audio-visual services market and provides revenue synergies from cross-selling and cost synergies from in-sourcing our audio-visual equipment needs.  

Pursuit Growth Strategy: Refresh, Build, Buy

For Pursuit, we continue to pursue our Refresh, Build, Buy growth strategy, which is focused on three objectives:

In 2016, we executed on the “Refresh” component of this strategy by completing significant renovations to the Banff Gondola, which welcomes about 600,000 guests each year.  We believe the gondola renovations have positioned this important asset for its highest and best use, which we believe will ultimately improve margins and returns.  For similar reasons, we made the decision to exit certain lower-margin, capital-intensive activities in our transportation and package tours lines of business in 2016.  We believe that this decision will allow us to focus our efforts on optimizing the most profitable service lines within Pursuit and free up capital to invest in new opportunities with higher margins and returns.

We also executed on the “Buy” component of our strategy with three key acquisitions that bring a combination of leading attractions and hospitality assets.  Maligne Lake Tours and CATC, which we acquired during the 2016 first quarter, were successfully integrated during the year and exceeded our financial expectations.  FlyOver Canada, which we acquired at the end of 2016, is a leading attraction in Vancouver, Canada that we believe has significant growth opportunities both from the existing asset and from potential expansion of the concept to other markets.  We believe that these high-margin assets will deliver strong returns under our ownership as we apply revenue management tactics and leverage our existing sales and marketing teams to accelerate their growth.

Recent Acquisitions: Driving Growth with Strong Returns

Each of our recent acquisitions not only positions us well for long-term growth and value creation, but also allows us to capitalize on certain immediate benefits:

 

 

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OUR PERFORMANCE: KEY BUSINESS RESULTS

In 2016, 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 enhanced shareholder value creation.

Our business strategy focuses on providing superior experiential services to our customers and superior and sustainable returns on invested capital to our shareholders.  

Both business groups met or exceeded expectations during 2016, with the newly-acquired businesses and renovated gondola posting solid performance and positioning us well for a strong 2017.

The Company’s long-term performance has been similarly strong, as we have improved performance on key financial metrics over the past five years.

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OUR PERFORMANCE: ENHANCED SHAREHOLDER VALUE

Viad’s commitment to rewarding our executives for their disciplined approach to capital deployment and strong management of working capital has enabled the Company to both protect and reward its shareholders.

Solid financial performance under the leadership of our management team has allowed the Company to maintain a strong balance sheet, while also reinvesting in the business and returning capital to shareholders.  From 2012 to 2016, we have:

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HIGHLIGHTS OF OUR COMPENSATION PROGRAM

The Committee has adopted practices that drive NEO performance and align executive pay with shareholder interests.

 

 

 

 

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The Committee, in consultation with its independent compensation consultant, oversees, approves and assesses the effectiveness of each element of our compensation program in relation to our compensation philosophy and the market.

The table below describes certain elements of our program and their link to our specific compensation objectives:

 

 

Additionally, the compensation elements of base salary, perquisites and personal benefits and post-termination compensation and benefits are designed to attract and retain key executives.

Under the 2016 compensation program, the Committee continued to follow compensation practices that align management’s interests with those of our shareholders.

Highlights of our 2016 compensation program, which are more fully discussed elsewhere in this CD&A, include the following:

 

 

 

 

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OUR SHAREHOLDER OUTREACH PROGRAM

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

It is the policy of the Board that at least one director is available for consultation and direct communication with shareholders, as appropriate.  Mr. Dozer has acted as a liaison between the Board and shareholders on investor matters since April 2013, and has continued in that role since being elected Independent Chairman of the Board in December 2014.

The Committee, the Board and executive leadership are committed to considering the perspectives of our shareholders on all aspects of our business, including executive compensation.  Consistent with that commitment, our management and Board members have used the Company’s 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 the Company’s long-standing philosophy that executive compensation should be based on long-term performance and shareholder value creation.  The Company has incorporated specific shareholder suggestions into our executive compensation program, as appropriate, and these changes have been incorporated into the disclosures in this proxy statement.  As feedback, many shareholders gave a general indication that they viewed favorably the executive compensation changes Viad has implemented.

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

The Company’s current executive compensation program reflects shareholder feedback received as a result of the Company’s active engagement with shareholders through our ongoing shareholder outreach efforts.

At the 2016 Annual Meeting of Shareholders, approximately 99% of the voting shareholders approved the Company’s 2015 executive compensation program for NEOs. We believe that these voting results reflect our shareholders’ endorsement of the recent structural changes made to, and the current direction of, our executive compensation program, and affirm 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 the Committee believes our current program adequately and effectively addresses shareholder concerns, promotes the Company’s business strategy and aligns pay with performance and shareholder value.  Based on feedback received from our shareholder outreach program, the Committee did not implement significant changes to our executive compensation program for 2017.

 

 

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PAY FOR PERFORMANCE: CEO TOTAL DIRECT COMPENSATION REALIZED

Our CEO’s total direct compensation realized is in line with our pay for performance philosophy.

While not intended to replace the information in the “Summary Compensation Table” section of this proxy statement, which includes equity grants based on accounting values, the table below supplements the Summary Compensation Table by presenting the total direct compensation actually realized by our CEO during 2016.  Total direct compensation realized is comprised of the direct compensation actually received by the CEO during the year, including base salary, compensation received upon vesting of restricted stock and payouts of performance units under the Performance Unit Incentive Plan, as well as the CEO’s short term (annual) incentive payments earned during 2016 and paid out in March of the following year.  Since Mr. Moster will not actually receive the long-term incentive compensation awarded to him in 2016 until future years, the value of this compensation, when realized, will likely differ significantly from the amounts shown in the Summary Compensation Table.  Accordingly, we believe total direct compensation actually realized is more representative of compensation received than the amounts shown in the Summary Compensation Table, and is a better measure of how CEO pay compares to company performance.

 

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CORPORATE GOVERNANCE HIGHLIGHTS

The Company is committed to sound corporate governance in addition to its commitment to a pay for performance executive compensation philosophy.

Highlights of the corporate governance standards of our Company are provided below:

 

 

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Additional information about our corporate governance practices is provided in the “Board of Directors and Corporate Governance” section of this proxy statement.

II. PAY FOR PERFORMANCE PHILOSOPHY

Viad employs a pay for performance compensation philosophy through the use of compensation components that motivate achievement of performance goals designed to enhance shareholder value, which aligns the financial interests of our NEOs, key management and other executive officers with the long-term financial interests of our shareholders.  Consistent with that philosophy, Viad’s compensation program is designed to accomplish the following core objectives:

 

 

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III. DECISION-MAKING PROCESS

The Committee reviews and approves Viad’s executive compensation program and the compensation levels for the NEOs and other executive officers.  While the CEO makes a recommendation to the Committee on the compensation of other executive officers, the Committee has sole responsibility with respect to the CEO and other executive officers to approve:

The salary, equity and incentive compensation of the CEO is approved by the Committee and is subject to ratification by all other independent members of the Board.

The Committee also has sole authority to retain and terminate any compensation consultant used to assist in the evaluation of the compensation of the CEO, the NEOs and other executive officers.

Total compensation is reviewed by the Committee at its regularly scheduled meeting in February.  Merit adjustments, if any, to annual base salary are effective April 1 of each year.  Awards earned under the short-term (annual) incentive plan (for the prior year) and long-term performance plans are generally also approved at the February meeting of the Committee.  Once achievement of financial targets established for the prior year is determined, the payment of incentive awards, if earned, is not made until the Company’s books have been officially closed for the prior fiscal year and Viad’s financial statements have been filed with the SEC.  Long-term incentive compensation awards for the 2016-2018 performance period (as discussed in the CD&A subsection “Long-Term Incentives”) were granted at the February 2016 meeting of the Committee, and performance goals and targets for the 2016-2018 performance period of the Performance Unit Incentive Plan were determined at the March 2016 meeting of the Committee.

INDEPENDENT COMPENSATION CONSULTANT

The Committee has sole authority to retain, terminate and approve the fees of its compensation consultant. The Committee engaged Frederick W. Cook & Co., Inc. (“FW Cook”), a national independent consulting firm, to serve as the Committee’s independent compensation consultant in 2016.

In its role as the Committee’s independent advisor in 2016, FW Cook regularly attended Committee meetings and advised on matters including compensation program design, benchmarking compensation and relative pay for performance. FW Cook also provided market data, analysis and advice regarding compensation of our NEOs and other executive officers.  FW Cook has not provided any services to the Company other than executive compensation consulting services provided to the Committee.

BENCHMARKING AND RESOURCES

In connection with Viad’s consideration of its overall compensation program for the NEOs and other executive officers, FW Cook provided services and advice on executive compensation matters.  In determining 2016 competitive executive pay, FW Cook provided pay data, including base salary, short-term incentives, long-term incentives and total compensation values, from proxy statements of the comparator group companies (as discussed in the CD&A section “Compensation Comparator Group”) and published compensation surveys.  The Committee determined appropriate 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 the responsibilities of an executive officer, Viad’s operating and financial results, the extent to which Viad’s financial and operating goals were achieved in the prior year and advice from FW Cook.

 

 

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Based on the information reviewed by the Committee in consultation with FW Cook, Viad’s 2016 pay practices were aligned with our stated pay philosophy of targeting total direct compensation at the 50^th percentile, as well as with general industry best practices with respect to both plan design and administration.

COMPENSATION COMPARATOR GROUP

We do not have a “peer” group that accurately reflects the nature of our core businesses because of our unique and diverse mix of businesses (from marketing and event services to travel and recreation services).  However, due to shareholder feedback, the Committee adopted a comparator group for purposes of benchmarking executive compensation.  After consultation with FW Cook, the comparator group used by the Committee in its decision-making process for the 2016 executive compensation program included 11 companies whose businesses are generally aligned with Viad’s businesses, as discussed further below:

 

The companies within the comparator group were selected based on the following criteria:

IV. COMPONENTS OF COMPENSATION

The compensation components of the 2016 executive compensation program, as well as the type of compensation and the objectives of the compensation, are included in the table below:

 

 

 

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MIX OF PAY

The Committee and management created a mix of compensation components, consistent with Viad’s executive compensation philosophy, to deliver the NEOs’ 2016 targeted total compensation.

The table below shows the 2016 mix of compensation components for the NEOs:

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Viad’s executive compensation program, including this mix of pay, is designed to enhance shareholder value and mitigate the potential for excessive risk-taking by NEOs in managing Viad’s businesses.  Some of the program’s features that serve these two purposes are:

Each component of the 2016 total compensation of the NEOs is discussed below.

BASE SALARY

The base salary component helps achieve the objectives outlined above by attracting and retaining strong talent.  Base salaries represent a fixed portion of the executive compensation package and are determined based on the factors discussed in the CD&A subsection “Benchmarking and Resources.”  The Company awards merit increases based on performance and other factors, including current base pay relative to the Company’s comparator group and other competitive market data used for benchmarking purposes.

 

 

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The base salary of our CEO was increased 21% (from $600,000 to $725,000) effective January 1, 2016, and the other NEOs received a base salary increase ranging from 2.5% - 5.0%, effective April 1, 2016.  The change in the CEO’s base salary brought his base salary closer to the 50^th percentile of our comparator group.

SHORT-TERM (ANNUAL) INCENTIVES

Viad’s Management Incentive Plan (“MIP”) is an annual, cash-based, pay for performance incentive program.  The MIP is designed to motivate and reward contributions to Viad’s performance during the year by making a significant portion of cash compensation variable and dependent upon achievement of Viad’s annual targets for performance goals.  The performance goals and the targets for those performance goals are established by the Committee at the beginning of each year.  Short-term incentive cash payouts reflect the extent to which annual targets for performance goals are met or exceeded.

Targets for performance goals are set with the intent that achievement will ultimately result in enhancement to shareholder value.  When determining the targets, the Committee considers the past financial performance of Viad and its operating companies and its internal estimates of the current-year planned financial performance.  Established growth trends, or improved profitability and operating efficiencies, which are based on economic and business conditions specific to Viad’s businesses, are the gauge by which meaningful targets are set and executive performance is measured.

The Committee uses three performance levels when setting MIP targets: Threshold, Target and Maximum.  The performance levels are set relative to the prior fiscal year’s actual results and current fiscal year projections.  The Committee expects the Company to achieve or exceed the Target level of performance, which is intended to be a stretch target.  The Threshold performance level is the minimum performance level required for any MIP payout, while the Maximum level of performance is set at a high level of performance that requires significant efforts and exceptional execution to achieve.

The 2016 performance goals for short-term incentive compensation were chosen because each of the goals strongly aligned with the overall business objectives of Viad for the year.  The 2016 goals included:

 

 

The Committee believes the Company’s Operating Income and Operating Margin reflect a number of important competitive and business elements, including cost discipline, market share and product mix, and are therefore significant barometers of our overall performance.  The performance goals of Operating Income and Operating Margin are also tied to achievement of Return on Invested Capital (“ROIC”) objectives.  Revenue growth aligns well with market share and growth objectives within both Viad’s GES and Pursuit Groups.

Operating Income serves as a performance “gate” for any payout under the MIP, such 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 2016, achievement by the NEOs at Threshold pays out at 50% of the performance goal’s weight.  Achievement at Target pays out at 100% of the performance goal’s weight.  Achievement at Maximum pays out at 175% (the maximum achievement level or “cap”) of the performance goal’s weight.  Actual results are prorated based on where they fall along the continuum from the Threshold amount through the Target amount, and from the Target amount through the Maximum amount.

The Committee does not award a discretionary cash bonus to any NEO in circumstances where performance goals under the short-term incentive plan are not met at Threshold or better.  In the case of NEOs, the Committee may apply negative discretion to decrease the actual awards based on Company and individual performance, but may not apply discretion to increase actual awards beyond what is earned.

 

 

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For 2016, annual incentives were paid to Mr. Moster, Ms. Ingersoll, Ms. DePaoli and Ms. Striedel because 2016 performance goals of Viad Consolidated were met at 123.6% of Target, and to Mr. Barry because 2016 performance goals of Pursuit were met at 175% of Target.

 

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The formula for calculating an award under Viad’s short-term incentive program is as follows:

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

For 2016, Target short-term incentive percentages for the NEOs ranged from 50% to 80% of the NEO’s annual base salary earnings.

 

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LONG-TERM INCENTIVES

The type and value of the overall mix of long-term incentive grants in 2016 are provided in the table below:

 

 

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 performance units to both Relative TSR during a three-year performance period and to achievement of financial measures that are key factors in increasing shareholder value, including ROIC and EBITDA.  Targets for performance goals are set by the Committee during the first quarter of each three-year performance period.  Targets are set such that achievement should ultimately result in enhanced shareholder value.

Performance unit awards under our current program are measured by three factors which the Committee believes promote Viad’s pay for performance philosophy: (1) Relative TSR, which bears a direct link to shareholder value; (2) EBITDA, which rewards NEOs for increased cash flow, improved profitability and operating efficiencies; and (3) ROIC, which encourages strong returns on invested capital in excess of Viad’s cost of capital.

The Russell 2000 Index is used for purposes of measuring Relative TSR.  The Committee believes the Russell 2000 Index provides an appropriate benchmark 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 2016 performance goals and weighting for long-term incentive compensation are provided in the table below:

 

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The performance unit goals and weighting in our PUP awards illustrate the Committee’s continuous effort to align NEO pay with measures that are important to our shareholders.  The Committee has adopted transparent, uniform goals and weighting for performance unit awards that promote Viad’s business strategy and strengthen the link between NEO performance and shareholder value.  The performance unit goals of EBITDA and ROIC directly advance our strategic growth objectives by strengthening the link between NEO compensation and profitable top-line growth, increased operating efficiencies and achieving synergies from newly-acquired businesses.  Relative TSR, which was added as a performance unit goal in 2014 for the 2014-2016 performance period, directly aligns NEO compensation with our stock price performance relative to companies in the same stock market index.  The Committee believes that the performance goals of EBITDA, ROIC and Relative TSR play a critical role in fostering our strategic initiatives to accelerate the growth of both business groups and enhance value for our shareholders.

Achievement and Payout

The formula for calculating a NEO’s performance unit award is as follows:

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

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

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

 

 

Performance unit awards for the 2016-2018 performance period are earned based on the degree of achievement of the targets during the performance period.  The Committee believes the three-year cliff vesting feature of the

 

 

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performance units will motivate executives to make long-term decisions during the 2016-2018 performance period that will be beneficial to shareholders and Viad. If earned, the performance cycle for performance unit awards made in 2016 is for the three-year performance period beginning January 1, 2016 and ending December 31, 2018.  Performance units earned by NEOs for the 2016-2018 performance period will be paid in 2019.

 

As discussed in the CD&A subsection “Highlights of Our Compensation Program,” beginning with the 2016-2018 performance period, 70% of our CEO’s performance units will be paid out in Viad common stock and 30% in cash, if targets are achieved.  The Committee believes that such a change more closely aligns our CEO’s compensation with the performance of our stock and the interests of our shareholders.  Awards to the other NEOs and executives will be paid out in cash, if targets are achieved.

 

No performance unit award payouts were made to any NEO in 2016 for the 2013-2015 performance period, as the performance period thresholds for Viad Consolidated and GES were not met and Mr. Barry, the only NEO whose performance unit awards are based on the performance of Pursuit, was hired after the units for the 2013-2015 performance period had been granted.

Degree of Rigor – Performance Unit Awards

The degree of rigor for achievement and payouts of the Company’s performance unit awards can be seen by looking at historical results.  The table below provides the actual achievement from performance-based long-term incentives over the three most recently completed performance periods.  As illustrated by the table below, the Company’s performance unit awards are at-risk compensation awards whose 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 variable, incentive compensation to the Company’s long-term financial performance:

HISTORICAL PUP ACHIEVEMENT (% OF TARGET)*

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TIME-VESTED RESTRICTED STOCK

Except for the CEO, whose long-term incentive award consisted entirely of performance units, restricted stock awards were granted in 2016 to the NEOs and other executives who have a significant impact on Viad’s operational and financial goals.

The restricted stock awards promote shareholder interests and our pay for performance philosophy.  Restricted stock will not vest until three years after the date of grant, and the holding period will continue for 2013 grants and thereafter unless and until the Company’s stock ownership guidelines are met.

Recipients of restricted stock may vote the underlying shares and will receive dividends during the restriction period.  The restricted stock units do not have voting rights, but do provide for dividend equivalents.  Receipt of dividends (or dividend equivalents) and the right to vote shares are important links in aligning management’s interests with those of Viad’s shareholders.

SPECIAL DIVIDENDS AND ADJUSTMENTS TO LONG-TERM INCENTIVES

As part of its ongoing efforts to enhance shareholder value, the Company paid special dividends on its outstanding common stock of $2.50 per share on November 14, 2013 to shareholders of record as of November 7, 2013, and $1.50 per share on February 14, 2014 to shareholders of record as of February 7, 2014.  In accordance with the mandatory provisions of the 2007 Viad Corp Omnibus Incentive Plan and the 1997 Viad Corp Omnibus Incentive Plan, the Committee approved equitable adjustments to outstanding long-term incentive awards of stock options and performance units issued pursuant to those plans in order to prevent the special dividends from diluting the rights of participants under those plans.  The equitable adjustments to the outstanding stock options reduced the exercise price and increased the number of shares of common stock underlying such options.  The equitable adjustments to the performance units reflect the effects of the special dividends for Pursuit at the end of the 2013-2015 performance period, as performance goals established for Pursuit were met.

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 offered by the Company to the NEOs include an annual executive physical examination, accidental death and dismemberment and business travel insurance and Company-paid parking, and Mr. Moster also continues to use a Company-leased automobile and receives an annual social club allowance.

The Committee believes that the NEO perquisites, each with a target value between $3,000 and $8,000 per NEO, other than our CEO’s personal use of a Company car (valued at approximately $11,000) and his annual social club allowance ($13,500 for 2016), provide value to the Company.  Consistent with Company 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 provided to the NEOs in 2016 is discussed in the “Summary Compensation Table” section of this proxy statement.

POST-EMPLOYMENT COMPENSATION

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

 

 

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RETIREMENT INCOME AND SAVINGS PLANS

In connection with the spin-off of MoneyGram in 2004, MoneyGram became solely responsible for paying annual retirement benefits to all executives who are participants in the SERP and the MoneyGram Pension Plan.  As of the spin-off date, MoneyGram assumed all liability for pension benefits for Company 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 the Company 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 participants of the SERP.  The lump-sum awards were instituted in 2005 in connection with the Company’s spin-off of MoneyGram in 2004, at which time the credited service benefits for the SERP’s participants were frozen, and were made solely in lieu of the Company accruing pension benefits for our CFO and other participants of the SERP.  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, Mr. Moster, Ms. Ingersoll, Mr. Barry and Ms. DePaoli are eligible to participate in the Viad Corp Supplemental 401(k) Plan, which provides for additional employee contributions over the annual limits set by the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) for the 401(k) Plan, plus matching contributions by Viad based on the same percentage as the 401(k) Plan.

The change in the value of the pension plans during 2016 is included in the “Summary Compensation Table” section of this proxy statement.  Please refer to the “Pension Benefit Table” and the “Potential Payment 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 Viad’s previous Executive Severance Plan (Tier I) (the “Grandfathered Plan”), a participating NEO is eligible for severance benefits if the NEO’s employment is terminated by Viad 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 of Viad, or by the NEO for any reason (other than for good reason, death, disability or retirement) during a 30-day window period beginning on the first anniversary of a change in control of Viad.  The Company eliminated the tax gross-up provisions and modified single-trigger provisions in the Grandfathered Plan as of February 26, 2017, which was part of a sunset amendment adopted by the Company in 2013.  In 2013, the Company 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.

The purpose of the Grandfathered Plan and the Executive Severance Plan is to ensure, in the event of a possible change in control of Viad, 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 the best interests of Viad and its shareholders, 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.  Participants in these plans are designated by the CEO and approved by the Committee.  Upon a change in control, Viad’s 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 Payment Upon Employment Termination or Change in Control” section of this proxy statement.

Severance Agreements

Mr. Moster and Mr. Barry each have a severance agreement providing for a post-termination severance payment in the event of the termination of employment by Viad for any reason other than for cause, or upon a voluntary

 

 

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termination of employment by the executive for “good reason.”  The severance agreements are further discussed in the “Potential Payment Upon Employment Termination or Change in Control” section of this proxy statement.

EMPLOYMENT AGREEMENTS

No NEO is a party to any employment agreement with the Company.

V. OTHER ASPECTS OF OUR COMPENSATION PROGRAM

CLAWBACK PROVISIONS FOR DETRIMENTAL CONDUCT

In order to protect Viad and its operating companies and to help ensure the long-term success of the business, annual and long-term incentive compensation are 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, Viad has the right to stop the NEO, through a court-ordered injunction, from working for competitors and soliciting customers and employees following employment termination.  Viad also may seek monetary damages for such activities.

The following incentive compensation is subject to clawback provisions:

As discussed in the “Highlights of Our Compensation Program” subsection of this CD&A, the Company’s long-term incentive agreements entered into in 2014 and thereafter include clawback provisions applying to certain NEOs and other executive officers terminated in the first year of the vesting period.  Under the clawback provisions, an executive must forfeit any long-term incentive 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 satisfactory to the Company, 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 Viad’s interests and those of its executives.

 

 

 

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STOCK OWNERSHIP GUIDELINES

The Company’s stock ownership guidelines were adopted to promote alignment between executives and shareholders in order 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 stock of Viad which is subject to market risk and not simply held under option. The minimum required amount is based on multiples of salary ranging from 1.5 to 5.0 times an executive’s annual base salary, depending on salary level, as summarized below:

Ms. Ingersoll and Ms. DePaoli currently exceed the stock ownership guidelines.  Mr. Moster, Mr. Barry and Ms. Striedel are working toward achieving compliance with the stock ownership guidelines.  Effective with the 2013 grants of long-term incentives, the Company places a hold on vested restricted stock earned by each NEO, net of taxes, until the NEO’s total stock ownership meets the Company’s stock ownership guidelines or the NEO is no longer an employee of the Company.

LIMIT ON DEDUCTIBILITY OF CERTAIN COMPENSATION

Section 162(m) of the Internal Revenue Code limits the Company’s deduction for compensation paid to the NEOs to $1 million during the tax year, subject to certain permitted exceptions. The Company intends to structure its compensation arrangements in a manner that would comply with Section 162(m).  Although the Committee plans to evaluate and limit the impact of Section 162(m), it believes that the tax deduction is only one of several relevant considerations in setting compensation.  Accordingly, if it is deemed necessary and in the best interests of the Company to attract and retain executive talent to compete successfully and to motivate such executives to achieve the goals inherent in our business strategy, the Committee may approve compensation to executive officers which exceeds the limits of deductibility.  In this regard, certain portions of compensation paid to the NEOs may not be deductible for federal income tax purposes under Section 162(m).

 

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.

 

 

The Human Resources Committee of the Board is comprised solely of independent directors.  The Committee oversees design and implementation of an executive compensation strategy intended to enhance the fundamental value of Viad by increasing its earnings, cash flows, market position and financial condition, thereby providing a logical predicate for increases in shareholder value.  The Committee has reviewed and discussed with Viad’s management the Compensation Discussion and Analysis provided in this proxy statement and, based on such review and discussions, recommended to the Board of Directors that such Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in Viad’s 2016 Annual Report on Form 10-K, filed with the SEC on March 6, 2017.

HUMAN RESOURCES COMMITTEE

Edward E. Mace, Chair

Andrew B. Benett

Richard H. Dozer

Robert E. Munzenrider

Margaret E. Pederson

 

 

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SUMMARY COMPENSATION TABLE

The following table summarizes the compensation in 2016 and, where applicable, 2015 and 2014, of our Chief Executive Officer, our Chief Financial Officer, each of the three other most highly compensated executive officers of Viad in 2016 (collectively, the “named executive officers” or “NEOs”).

The amounts presented below in column (e), “Stock Awards,” and column (f), “Option Awards,” of the Summary Compensation Table 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’s 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 spin-off from Viad in 2004.   MoneyGram assumed all liability for pension benefits for Company employees participating in the MoneyGram Pension Plan.  MoneyGram assumed all liability for the SERP as of the spin-off date including, for our

 

 

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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 the Company and its subsidiaries.

Our CFO also receives retirement benefits from the Company 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 her.  The lump-sum awards were instituted in 2005 in connection with the Company’s spin-off of MoneyGram in 2004, at which time the credited service benefits for the SERP’s participants were frozen, and were made solely in lieu of the Company 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 AGREEMENT

The Company is not a party to any employment agreement with any NEOs.

GRANTS OF PLAN-BASED AWARDS TABLE

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 2016 under equity incentive and non-equity incentive plans, and the number of shares or units underlying awards granted in 2016 that have been paid out.  All awards in 2016 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-END TABLE

The table below includes all outstanding options and unvested stock awards of the named executive officers as of December 31, 2016, including awards subject to performance conditions.

 

 

 

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OPTION EXERCISES AND STOCK VESTED TABLE

For the named executive officers, the table below lists stock options exercised in 2016 and restricted stock which vested during 2016.

 

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PENSION BENEFITS TABLE

The table below provides the present value of the accumulated benefits of our CFO, the only NEO who receives benefits under a pension plan of Viad or its subsidiaries.  The liability related to the payment of benefits under the

 

 

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SERP, as disclosed in the table below, was assumed by MoneyGram in connection with the spin-off of MoneyGram by Viad in June 2004.

 

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+

(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 60^th birthday.

NON-QUALIFIED DEFERRED COMPENSATION TABLE

The following table provides the amounts contributed to non-qualified deferred compensation plans during 2016.

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POTENTIAL PAYMENT UPON EMPLOYMENT TERMINATION OR CHANGE IN CONTROL

Certain termination events will trigger post-termination payments and benefits for the named executive officers.  Each termination event and the amount that could be payable to the executive officers under each termination event is provided in the tables below, assuming a qualifying termination date of December 31, 2016 with a closing price of $44.10 per share for Viad’s common stock, except where specifically indicated below.

RETIREMENT

Upon normal or early retirement, executives would receive ownership of the restricted stock (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 executive’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 executive will be forfeited upon the executive’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 executive may exercise the option rights on or before the earlier of: (1) the fifth anniversary of the executive’s retirement date; or (2) the date on which the options expire.  Executives would receive, under the Management Incentive Plan (“MIP”), an accrued annual incentive bonus, if earned, on a pro-rata basis.  Eligibility for normal retirement is age 65 and for early retirement is age 55.  Currently, none of the named executive officers are eligible to receive retirement benefits.

 

 

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Our CFO is also entitled to retirement benefits as a participant in the Defined Contribution Plan, which Viad 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.

CHANGE IN CONTROL AND CHANGE IN CONTROL SEVERANCE

Grandfathered Executive Severance Plan

Under Viad’s previous Executive Severance Plan (Tier I) (the “Grandfathered Plan”), a participating NEO is eligible for severance benefits if the executive’s employment is terminated by Viad without cause or by the executive for good reason (as those terms are defined in the Grandfathered Plan) within 36 months after a change in control of Viad, or by the executive for any reason (other than for good reason, death, disability or retirement) during a 30-day window period beginning on the first anniversary of a change in control of Viad (often referred to as a “modified single-trigger”).  Under those circumstances, the executive would receive from Viad a lump-sum payment, as severance compensation, equal to a multiple of the following sum:

The multiple, in the case of termination by Viad without cause or the executive’s termination for good reason, will equal the product of three times a fraction, the numerator of which is 36 minus the number of full months the executive was employed following a change in control and the denominator of which is 36.  In the case of the executive’s voluntary termination during the window period, the multiple will be two.

As referenced in the “Post-Termination Compensation and Benefits – Change in Control Severance” subsection of the “Compensation Discussion and Analysis” section of this Proxy Statement, the Company instituted a three-year phase out of the modified single-trigger provisions, as well as all tax gross-up provisions, under the Grandfathered Plan as of February 26, 2017.  Mr. Moster, Ms. Ingersoll, and Ms. DePaoli, each of whom was hired prior to 2013, participate in the Grandfathered Plan.

Executive Severance Plan

In 2013, the Company 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 executive’s employment is terminated by Viad without cause or by the executive for good reason (as those terms are defined in the Executive Severance Plan) within 36 months after a change in control of Viad.  Under those circumstances, the executive would receive from Viad 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 executive was employed following a change in control and the denominator of which is 36.

The first table below shows the cash amount payable and the value of equity and other benefits that could be received in the case of an executive’s termination without cause or the executive’s voluntary termination for good reason under a change in control, assuming that the executive had a qualifying termination date of December 31, 2016.  The second table below shows the cash amount payable and the value of equity and other benefits upon

 

 

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the executive’s voluntary termination during the window period after a change in control, assuming the same termination date.

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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Estimated Benefits in the Event of a Change in Control with Voluntary Termination During Window¹, In Dollars ($)

 

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INVOLUNTARY TERMINATION NOT FOR CAUSE

The following table shows the cash amount and values of equity awards and other benefits that could be received by the named executive officers in the event Viad terminates employment without cause (not in connection with a change in control and not for death, disability or cause), assuming that the executive had a qualifying termination date of December 31, 2016.

 

 

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

 

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Voluntary Termination for Good Reason

Mr. Moster and Mr. Barry each have a severance agreement with the Company.  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 employment termination, Mr. Moster and Mr. 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 Viad, in its reasonable discretion.  Mr. Moster’s receipt of post-termination benefits is also conditioned on his resignation from Viad’s Board of Directors.

DEATH OR DISABILITY

The following table shows the cash amount and the value of equity that could be received by a named executive officer in the event of employment termination due to disability, or by the named executive officer’s estate in the event of employment termination due to death, assuming that the executive had a qualifying termination date of December 31, 2016.

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

 

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CLAWBACK PROVISIONS FOR DETRIMENTAL CONDUCT

In order to protect Viad and its operating companies and to help ensure the long-term success of the business, annual incentive compensation and long-term incentive compensation are 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, the annual incentive compensation and long-term incentive compensation award agreements also provide Viad with the right to stop the NEO, through a court-ordered injunction, from working for competitors and from soliciting customers and employees following employment termination.  Viad also may seek monetary damages for such activities.

The following incentive compensation is subject to clawback provisions:

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information, as of December 31, 2016, with respect to shares of Viad’s common stock that may be issued under existing equity compensation plans.  The category “Equity Compensation Plans Approved by Security Holders” in the table below consists of the 1997 Viad Corp Omnibus Incentive Plan and the 2007 Viad Corp Omnibus Incentive Plan, the latter of which was approved by Viad’s shareholders at the 2007 Annual Meeting of Shareholders on May 15, 2007 and re-approved at the 2012 Annual Meeting of Shareholders on May 15, 2012.

 

 

 

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THE COMMITTEE

The Audit Committee of the Board, which is comprised solely of independent directors, was appointed by the Board to assist the Board in monitoring (1) the integrity of the financial statements of Viad, (2) the independent auditor’s qualifications and independence, (3) the performance of Viad’s internal audit function and the independent auditor and (4) the compliance by Viad with legal and regulatory requirements, including oversight of Viad’s Always Honest® Compliance and Ethics Program. The Board of Directors has determined that each member of the Audit Committee is financially literate under the listing standards of the NYSE and under the SEC’s standards relating to independence of audit committees, and that Mr. Munzenrider qualifies as an “audit committee financial expert,” as defined by SEC regulations.

MEETINGS AND RESPONSIBILITIES

The Audit Committee met 11 times in 2016.  Audit Committee members are also available to consult with management and the independent auditor throughout the year.  The Audit Committee regularly meets in general and private sessions with management of Viad and with Viad’s internal auditors and the independent auditor.  The Audit Committee receives and discusses its reports and encourages open and detailed discussion of all matters related to responsibilities of the Audit Committee.

REAPPOINTMENT OF INDEPENDENT AUDITOR AND SELECTION OF LEAD AUDIT PARTNER

The Audit Committee has appointed Deloitte & Touche LLP as our independent auditor for 2017, and the Board ratified the appointment.  In determining whether to reappoint Deloitte & Touche LLP as Viad’s independent auditor, the Audit Committee took into consideration a number of factors, including, but not limited to, the firm’s independence, the length of time the firm has been engaged, the quality of the ongoing discussions with the firm, the firm’s familiarity with Viad’s global operations and businesses, accounting policies and practices and internal control over financial reporting and an assessment of the professional qualifications and past performance of the firm and the lead audit partner.  Based on this evaluation, the Audit Committee believes that Deloitte & Touche LLP is independent and should serve as Viad’s independent auditor for 2017.

In accordance with the Securities Exchange Act of 1934, as amended, and the policies of Deloitte & Touche LLP, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to the Company.  For lead audit partners, the maximum number of consecutive years of service is five years.  The process for selection of the lead audit partner under this rotation policy involves a meeting between the Chair of the Audit Committee and the candidates for the role, as well as discussion of the full Audit Committee and with Viad’s management.

FINANCIAL STATEMENTS RECOMMENDATION

The Audit Committee recommended that the audited financial statements of Viad for 2016 be included in Viad’s 2016 Annual Report on Form 10-K, filed with the SEC on March 6, 2017.  A copy of that report is included with your proxy materials.  In connection with its recommendation, the Audit Committee did the following:

 

 

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It is not the duty of the Audit Committee to plan or conduct audits or to determine that Viad’s financial statements are complete or accurate or in accordance with generally accepted accounting principles.  Those are the responsibilities of management and Viad’s independent auditor.  In giving its recommendation to the Board of Directors that the audited financial statements of Viad for 2016 be included in Viad’s 2016 Annual Report on Form 10-K, the Audit Committee relied on management’s representations and the report of Viad’s independent auditor with respect to the financial statements.  A report of Viad’s management concerning management’s responsibility for financial reporting, and the report and opinion of Deloitte & Touche LLP, Viad’s independent auditor, are included in Viad’s 2016 Annual Report on Form 10-K, and should be read in conjunction with the audited financial statements of Viad.

DISCLOSURE CONTROLS AND INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)), evaluating the effectiveness of disclosure controls and procedures and internal control over financial reporting, and evaluating any change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.  Deloitte & Touche LLP is responsible for expressing an opinion on the effectiveness of Viad’s internal control over financial reporting.

During 2016 and through the filing of Viad’s 2016 Annual Report on Form 10-K, management completed the documentation, testing and evaluation of Viad’s system of internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations.  The Audit Committee was kept informed of the progress of the evaluation during the process and received periodic updates provided by management and Deloitte & Touche LLP at Audit Committee meetings.

The Audit Committee has discussed with Deloitte & Touche LLP the matters required under Auditing Standard No. 5 (“An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements”) of the Public Company Accounting Oversight Board.  That standard requires Viad’s independent auditor to report on their audit of Viad’s internal control over financial reporting performed in conjunction with their audit of Viad’s consolidated financial statements.  At the conclusion of the process, management provided the Audit Committee with, and the Audit Committee reviewed, a report on the effectiveness of Viad’s internal control over financial reporting.

The Audit Committee also reviewed the report of Deloitte & Touche LLP relating to its audit of the effectiveness of Viad’s internal control over financial reporting.

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 Securities Exchange Act of 1934, 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

Isabella Cunningham

Richard H. Dozer

Edward E. Mace

Joshua E. Schechter

 

 

 

 

 

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The following resolution concerning the appointment of Deloitte & Touche LLP as Viad’s independent auditor will be offered at the 2017 Annual Meeting of Shareholders:

RESOLVED, that the appointment of Deloitte & Touche LLP by the Audit Committee of the Board of Directors of Viad Corp (the “Corporation”) to audit the accounts of the Corporation and its subsidiaries for the fiscal year 2017 is hereby ratified.

Deloitte & Touche LLP has audited our accounts and those of our subsidiaries for many years.  Although the listing standards of the NYSE and the charter of the Committee require Viad’s independent registered public accountants to be engaged, retained and supervised by the Committee, the Board considers the selection of the independent registered public accountants to be an important matter of shareholder concern and is submitting appointment of Deloitte & Touche LLP for ratification by shareholders as a matter of good corporate practice.  No determination has been made as to what action the Audit Committee and the Board would take if the shareholders do not approve the appointment.

Viad anticipates that a representative of Deloitte & Touche LLP will attend the 2017 Annual Meeting, respond to appropriate questions and be afforded the opportunity to make a statement.

Recommendation of the Board

The Board of Directors recommends that you vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as Viad’s independent registered public accountants for 2017.

FEES AND SERVICES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

The following is a summary of the aggregate fees billed to Viad by its independent registered public accountants, Deloitte & Touche LLP, for professional services provided for the fiscal years ended December 31, 2015 and 2016.

 

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None of the above-described professional services were approved by the Audit Committee in reliance on the de minimus exception to the pre-approval requirements under federal securities laws and regulations.

The Audit Committee has considered whether the provision of non-audit services by Deloitte & Touche LLP is compatible with maintaining auditor independence.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

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

During the year, the independent registered public accountants also provide additional accounting research and consultation services required by, and incidental to, the audit of Viad’s financial statements and related reporting compliance. These additional audit-related services are pre-approved up to the amount provided in the annual service plan, which is approved by the Committee.  The Committee may also pre-approve services on a case-by-case basis during the year, or the Chairman of the Committee 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 at the Committee’s next meeting.

The Committee’s approval of proposed services and fees are noted in the meeting minutes of the Committee and/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 required pre-approval process of the Committee.

 

 

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

The following proposal, which is being submitted pursuant to Section 14A of the Exchange Act, provides Viad’s shareholders with an opportunity to vote to approve, on an advisory basis, the compensation of Viad’s NEOs, as disclosed in this proxy statement.  This vote, which occurs annually, is not intended to address any specific element of Viad’s executive compensation program, but rather the overall compensation program for Viad’s named executive officers.  In considering your vote, you may wish to review the “Compensation Discussion and Analysis” section of this proxy statement, which provides details as to Viad’s 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 Viad’s shareholders to vote “FOR” the adoption of the following resolution to be presented at the 2017 Annual Meeting of Shareholders:

 

 

 

 

 

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RESOLVED, that the shareholders of Viad Corp (the “Corporation”) approve, on an advisory basis, the overall compensation of the Corporation’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 Corporation’s 2017 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 and 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” this proposal.

 

PROPOSAL 4: ADVISORY VOTE ON FREQUENCY OF AN ADVISORY VOTE

ON NAMED EXECUTIVE OFFICER COMPENSATION

The following proposal provides Viad’s shareholders with an opportunity to vote, on an advisory basis, on the frequency of the shareholders’ advisory vote on the compensation of Viad’s NEOs, similar to Proposal 3, above.  On the proxy card, shareholders will be able to select one of four options for this proposal: one year; two years; three years; or abstain.  Section 14A of the Exchange Act requires the Company to hold at least once every six years this advisory shareholder vote on the frequency of the shareholders’ advisory vote on NEO compensation.  At the Company’s 2011 annual meeting of shareholders, an overwhelming majority voted to hold the shareholder advisory vote on the compensation of Viad’s NEOs every year.  Since 2011, at each annual meeting of shareholders, Viad’s shareholders have voted on the compensation of Viad’s NEOs.

After careful consideration of this proposal, Viad’s Board recommends that an advisory vote on executive compensation occur each year.  The Board believes that holding the advisory vote annually will continue to provide the HR Committee and the Board with more frequent shareholder feedback on compensation disclosures. You are not voting to approve or disapprove the Board’s recommendation for an annual vote.  Rather, you are being asked to select the frequency of advisory shareholder votes on executive compensation that is preferable to you.

The Board will review and take the voting results of this proposal into account in making a determination concerning the frequency of future advisory votes on executive compensation.  However, this advisory vote is not binding upon the Board or Viad, and the Board may decide in the future to conduct the advisory vote on executive compensation on a less frequent basis.    

Recommendation of the Board

The Board of Directors recommends that shareholders vote to conduct future advisory votes on the compensation of Viad’s named executive officers every “ONE YEAR.”

PROPOSAL 5: APPROVAL OF THE 2017 VIAD CORP OMNIBUS INCENTIVE PLAN

INTRODUCTION

We ask that our shareholders vote to approve the 2017 Viad Corp Omnibus Incentive Plan (the “2017 Plan”).  The 2017 Plan was adopted by our Board of Directors on February 22, 2017, subject to approval by our shareholders.  We will not grant any new awards under the 2007 Viad Corp Omnibus Incentive Plan (the “2007 Plan”) after shareholder approval of the 2017 Plan.  Shares available for issuance under the 2007 Plan will not be available for issuance under the 2017 Plan.

 

The 2017 Plan is an important part of the Company’s overall compensation program.  It allows the Company to make annual and long-term incentive awards to the Company’s employees and directors.  The purpose of the 2017 Plan is to give the Company a competitive advantage in attracting, retaining and motivating employees and

 

 

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directors and to provide them with incentives that are directly linked to the future growth and profitability of the Company’s business.

If the 2017 Plan is approved by shareholders, it will allow awards under the 2017 Plan to qualify as tax-deductible performance-based compensation under Section 162(m) of the Code.  To qualify as performance-based compensation under Section 162(m) of the Code, the compensation must (among other requirements) be subject to attainment of performance goals that have been disclosed to shareholders and approved by a majority shareholder vote.  In addition, Section 162(m) of the Code generally places a $1 million annual limit on a Company’s tax deduction for compensation paid to certain senior executives, other than compensation that satisfies the applicable requirements for a performance-based compensation exception.  We are asking shareholders to approve the material terms of the performance goals under the 2017 Plan so that the Company may make awards that qualify as performance-based compensation under Section 162(m), and thus, would be tax deductible.  For purposes of Section 162(m), the material terms of the performance goals requiring shareholder approval include the following:

By approving the 2017 Plan, the shareholders will be approving, among other things, the eligibility requirements, performance goals and limits on various cash and stock awards contained therein for purposes of Section 162(m).

PROMOTION OF GOOD COMPENSATION PRACTICES

The 2017 Plan is designed to reinforce the alignment between equity compensation arrangements for employees and directors, and shareholders’ interests and, as highlighted below, includes a number of provisions that the Company believes represent best practices, including:

 

 

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KEY DATA

The following table includes information regarding outstanding equity awards, shares available for future equity awards under the Company’s existing equity compensation plan (i.e., the 2007 Plan – upon shareholder approval of the 2017 Plan, the 2007 Plan will no longer grant new awards and the available shares will not be made available for issuance under the 2017 Plan) and total shares outstanding as of March 23, 2017:  

In 2014, 2015 and 2016, the Company granted equity awards (including restricted stock, restricted stock units and performance units to be paid in Viad common stock if performance goals are earned) representing a total of approximately 299,589 shares, 15,900 units and 33,700 shares, respectively.  Stock options were not granted in 2014, 2015 or 2016.  Burn rate refers to how fast a company uses the supply of shares authorized for awards under its stock plans.  The burn rate is calculated by dividing the number of shares subject to equity awards granted in a particular year by the weighted average number of shares outstanding during the year.  Over the last three years we have maintained an average annual burn rate of 0.92% of shares of common stock outstanding.  The Board expects to continue to grant awards under the 2017 Plan consistent with the Company’s historic rates.

 

 

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SUMMARY OF TERMS OF THE 2017 PLAN

The principal features of the 2017 Plan are described below.  This summary is qualified in its entirety by reference to the full text of the 2017 Plan, a copy of which is attached as Appendix B to this Proxy Statement and incorporated into this Proxy Statement by reference. Please refer to Appendix B for more information.

Administration

The 2017 Plan is administered by the Human Resources Committee of the Board (the “Committee”), an independent committee of our Board.  Among other things, the Committee has the authority to select individuals to whom awards may be granted, to determine the type of award as well as the number of shares of common stock to be covered by each award and to determine the terms and conditions of any such awards.

Term

Awards under the 2017 Plan may be made for ten years following the date that shareholders approve the 2017 Plan at this year’s annual meeting of shareholders.

Eligibility

Awards may be granted under the 2017 Plan to employees and directors of Viad and Viad’s subsidiaries and affiliates.  As of December 31, 2016, there were seven non-employee directors of Viad and approximately 3,400 employees of Viad and Viad’s subsidiaries and affiliates.  During 2016, in addition to our seven non-employee directors who received restricted stock awards, a total of approximately 200 individuals received one or more awards under Viad’s existing 2007 Plan, most of whom received only cash-based awards for the achievement of the annual performance goals for 2016.  As of March 23, 2017, in addition to our seven non-employee directors who received restricted stock awards, a total of approximately 85 individuals had received one or more awards in 2017 under Viad’s existing 2007 Plan.

Shares Subject to the 2017 Plan and Limits on Awards

The 2017 Plan provides that the aggregate number of shares of our common stock that may be subject to awards under the 2017 Plan cannot exceed 1,750,000.  The maximum number of shares that may be granted pursuant to incentive stock options is 1,750,000.  

The calendar year limits under the 2017 Plan on grants to individuals for awards intended to qualify under Section 162(m) of the Code are as follows:

 

 

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With respect to non-employee directors, the maximum number of shares subject to awards that may be granted during a single fiscal year, taken together with any cash fees paid to such non-employee director during the fiscal year, shall not exceed $400,000 in total value (calculating the value of the equity award based on the grant date fair value). This limit shall not apply to the independent Chairman of the Board, whose compensation will be approved by the other independent directors on the Board with the independent Chairman abstaining.

The foregoing share limits are subject to adjustment in certain circumstances to prevent dilution or enlargement.  

The shares subject to grant under the 2017 Plan are to be made available from authorized but unissued shares or from treasury shares, as determined from time to time by the Board.  If a stock appreciation right is exercised for shares, the total number of shares subject to such stock appreciation right will be deemed delivered for purposes of determining the maximum number of shares available for delivery under the 2017 Plan.  If the exercise price of any option is satisfied by delivering shares to the Company, the total number of shares subject to such option will be deemed delivered for purposes of determining the maximum number of shares available for delivery pursuant to awards under the 2017 Plan.  Shares subject to an award that are not delivered to a participant because such shares are used to satisfy an applicable tax withholding or exercise price obligation will be deemed delivered under the 2017 Plan and will not again be available for delivery in connection with awards.  Shares purchased on the open market using the cash proceeds from the exercise of an option will not be added to the shares available for delivery under the 2017 Plan in determining the maximum number of shares available for delivery pursuant to awards under the 2017 Plan.  

Minimum Vesting

Any award under the 2017 Plan must provide for a minimum vesting period of at least one year, except that up to five percent of the Shares available for grant under the 2017 Plan may be issued without regard to the foregoing requirement.

Types of Awards and Terms and Conditions

The Committee has the authority to grant the following types of awards subject to the following terms and conditions:

 

 

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PERFORMANCE MEASURES FOR PERFORMANCE-BASED COMPENSATION

Cash-based awards and awards of performance units, performance shares, restricted stock and restricted stock units under the 2017 Plan may be designated by the Committee as awards intended to qualify for exemption as “Qualified Performance-Based Compensation” for purposes of the federal tax deductibility limits of Section 162(m).  The 2017 Plan is designed to meet the requirements of Section 162(m) and provides the objective performance goals described below upon which the settlement of Qualified Performance-Based Compensation may be conditioned.  The 2017 Plan also provides for grants of cash-based awards and awards of performance units, performance shares, restricted stock and restricted stock units with a performance requirement that are not intended to, or need not, qualify for the Section 162(m) exemption and to which such restrictions, including shareholder approved performance goals, do not apply.

The performance goals upon which the payment or vesting of an award that is intended to qualify as Qualified Performance-Based Compensation (as discussed above) are limited to the following Performance Measures:

 

 

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The performance goals may relate to the individual participant, to Viad as a whole, or to a subsidiary, division, department, region, function or business unit of Viad in which the participant is employed.  Performance awards may be granted either alone or in addition to other grants made under the 2017 Plan.  The performance measure may be set by reference to an absolute standard or a comparison to specified companies or groups of companies, or other external measures.  The Committee may provide with respect to Qualified Performance-Based Compensation that any evaluation of achievement of the performance measures may include or exclude any of the following events that occur during the performance period of the award: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) unusual or infrequently occurring items as described in ASC Topic 225 and/or in management’s discussion and analysis of financial condition and results of operations appearing in Viad’s annual report to shareholders for the applicable year, (f) acquisitions or divestitures, and (g) foreign exchange gains and losses.

CHANGE OF CONTROL

Unless provided otherwise in the applicable award agreement, in the event of a “change of control” of the company (as defined in the 2017 Plan), if equivalent replacement awards are substituted for awards granted and outstanding under the 2017 Plan at the time of such change of control, then, upon a “qualified termination of employment” (as defined in the 2017 Plan),

If equivalent replacement awards are not substituted for awards granted and outstanding under the 2017 Plan at the time of such change of control, upon the occurrence of a change of control, unless otherwise provided in the applicable award agreement, (i) all then-outstanding awards (other than performance-based awards) will vest in full, be free of restrictions, and be deemed to be earned and payable in full, and (ii) any performance-based award will be deemed earned in full based on performance goal achievement at the greater of the applicable target level and the level of achievement as determined by the committee not later than the date of the change of control based on actual performance.

AMENDMENT AND DISCONTINUANCE

The 2017 Plan may be amended, altered or discontinued by the Board of Directors, but no amendment, alteration or discontinuance may impair the rights of a participant with respect to an award previously granted without the participant’s consent.  Amendments to the 2017 Plan will require shareholder approval to the extent such approval is required by law or the listing standards of the applicable exchange.  The 2017 Plan will terminate on May 17, 2027.

PLAN BENEFITS

All awards made under the 2017 Plan are discretionary.  Therefore, the benefits and amounts that will be received or allocated under the 2017 Plan are not determinable at this time. However, please refer to the “Grants of Plan-Based Awards Table” section of this proxy statement, which provides information on the grants made to the NEOs in 2016, and to the “Compensation of Directors” section of this proxy statement, which provides information on grants made to our non-employee directors in 2016.  

 

 

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U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of certain federal income tax consequences of awards made under the 2017 Plan based upon the laws in effect on the date hereof.  The discussion is general in nature and does not take into account a number of considerations which may apply in light of the circumstances of a particular participant under the 2017 Plan.  The income tax consequences under applicable state and local tax laws may not be the same as under federal income tax laws.

Non-Qualified Stock Options.  A participant will not recognize taxable income at the time of grant of a non-qualified stock option, and the Company will not be entitled to a tax deduction at such time.  A participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) upon exercise of a non-qualified stock option equal to the excess of the fair market value of the shares purchased over their exercise price, and the Company generally will be entitled to a corresponding deduction.

Incentive Stock Options.  A participant will not recognize taxable income at the time of grant of an incentive stock option. A participant will not recognize taxable income (except for purposes of the alternative minimum tax) upon exercise of an incentive stock option.  If the shares acquired by exercise of an incentive stock option are held for the longer of two years from the date the stock option was granted and one year from the date the shares were transferred, any gain or loss arising from a subsequent disposition of such shares will be taxed as long-term capital gain or loss, and the Company will not be entitled to any deduction.  If, however, such shares are disposed of within such two- or one-year periods, then in the year of such disposition the participant will recognize compensation taxable as ordinary income equal to the excess of the lesser of the amount realized upon such disposition and the fair market value of such shares on the date of exercise over the exercise price, and the Company generally will be entitled to a corresponding deduction.  The excess of the amount realized through the disposition date over the fair market value of the stock on the exercise date will be treated as capital gain.

 SARs.  A participant will not recognize taxable income at the time of grant of a SAR, and the Company will not be entitled to a tax deduction at such time.  Upon exercise, a participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) equal to the fair market value of any shares delivered and the amount of cash paid by the Company, and the Company generally will be entitled to a corresponding deduction.

 Restricted Stock.  A participant will not recognize taxable income at the time of grant of shares of restricted stock, and the Company will not be entitled to a tax deduction at such time, unless the participant makes an election under Section 83(b) of the Code to be taxed at such time.  If such election is made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time of the grant equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares.  If such election is not made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time the restrictions lapse in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares.  The Company is entitled to a corresponding deduction at the time the ordinary income is recognized by the participant, except to the extent the deduction limits of Section 162(m) of the Code apply.  In addition, a participant receiving dividends with respect to restricted stock for which the above-described election has not been made and prior to the time the restrictions lapse will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee), rather than dividend income.  The Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code apply.

Restricted Stock Units.  A participant will not recognize taxable income at the time of grant of a restricted stock unit, and the Company will not be entitled to a tax deduction at such time. A participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time of settlement of the award equal to the fair market value of any shares delivered and the amount of cash paid by the Company, and the Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code apply.

 

 

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Performance Units/Performance Shares.  Participants under the 2017 Plan incur no income tax liability upon the initial grant of performance units or performance shares.  At the end of the performance or measurement period, however, employees realize ordinary income on any amounts received in cash or common stock.  Any subsequent appreciation on the common stock is treated as a capital gain.

Cash-Based Awards/Other Stock-Based Awards.  Any cash payments or the fair market value of any common stock or other property an employee receives in connection with cash-based awards or other stock-based awards are includable in income in the year received or made available to the employee without substantial limitations or restrictions. Generally, Viad will be entitled to deduct the amount the employee includes in income as a business expense in the year of payment.

Section 162(m) Limitations.  As explained above, Section 162(m) of the Code generally places a $1 million annual limit on a Company’s tax deduction for compensation paid to certain senior executives, other than compensation that satisfies the applicable requirements for a performance-based compensation exception.  The 2017 Plan is designed so that stock options and SARs qualify for this exemption, and it also permits the committee to grant other awards designed to qualify for this exception.  However, the Committee reserves the right to grant awards that do not qualify for this exception, and, in some cases, the exception may cease to be available for some or all awards that otherwise so qualify.  Thus, it is possible that Section 162(m) of the Code may disallow compensation deductions that would otherwise be available to the Company.

The foregoing general tax discussion is intended for the information of shareholders considering how to vote with respect to this proposal and not as tax guidance to participants in the 2017 Plan.  Participants are strongly urged to consult their own tax advisors regarding the federal, state, local, foreign and other tax consequences to them of participating in the 2017 Plan.

REQUIRED VOTE

At the Annual Meeting, shareholders will be asked to approve the 2017 Plan.  This proposal requires the affirmative vote of a majority of the voting power of the shares of Viad common stock, present in person or represented by proxy, voting together as a single class.  Abstentions and broker non-votes will be counted toward the tabulation of votes cast on the approval of the proposal to approve the 2017 Plan, and will have the same effect as votes against that proposal.

 

Recommendation of the Board

The Board of Directors recommends that you vote “FOR” this proposal.

 

 

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VOTING PROCEDURES

In order to be elected as a director in an uncontested election, the number of shares voted “for” a director nominee from the shares present and voting in person or by proxy must exceed the number of shares voted “against” the director nominee.  In contested elections where the number of nominees exceeds the number of directors to be elected, director nominees must receive a plurality of the shares present and voting in person or by proxy in order to be elected.  A plurality means receiving the largest number of votes, regardless of whether that is a majority.  All matters submitted to you at the meeting will be decided by a majority of the votes cast on the matter, except as otherwise provided by law or our Certificate of Incorporation or the 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 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 Viad’s independent registered public accountants), but not on Proposals 1, 3, 4 or 5.  Under the rules of the NYSE, the only agenda item to be acted upon at our 2017 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, 3, 4 or 5, 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 the instructions you place on the proxy card.  Unless you vote otherwise, all shares represented by your returned signed proxy will be voted as noted on page 1 of this proxy statement.  If you are a participant in a 401(k) plan of Viad or one of its subsidiaries, your proxy will serve as a voting instruction to the respective trustee.  In a 401(k) plan, if no voting instructions are received from a participant, the trustees will vote those shares in accordance with the majority of shares voted in such plans for which instructions were received or in the discretion of such trustees as their fiduciary duty may require.

Viad has adopted a procedure approved by the SEC called “householding” in order to reduce printing and mailing costs.  Shareholders of record who have the same address and last name will receive only one copy of this proxy statement and the Annual Report, unless one or more of these shareholders notifies Viad that they wish to continue receiving individual copies.  Shareholders who participate in householding will continue to receive separate proxy cards.  If you do not wish to participate in householding and prefer to receive a separate copy of this proxy statement and the Annual Report, 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 Viad’s transfer agent, Wells Fargo Shareowner Services, P.O. Box 64874, St. Paul, MN 55164-0874 (telephone number: 1-800-453-2235).  Viad will promptly deliver a separate copy of this proxy statement and the Annual Report upon receiving your request.  Beneficial owners can request information about householding from their banks, brokers or other holders of record.

REVOKING YOUR PROXY

Your proxy may be revoked if you either:

 

 

 

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SOLICITATION OF PROXIES

The cost of solicitation will be borne by Viad.  Solicitation of proxies will be made primarily through the use of the mails, but directors, officers and regular employees of Viad may solicit proxies personally, by telephone or otherwise, and no additional compensation will be paid to such individuals.  Viad will also reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to beneficial owners of shares.

 

 

 

Shareholders may submit proposals and director nominations which may be proper subjects for inclusion in the proxy statement and form of proxy for consideration at the Annual Meeting of Shareholders.  To be considered in the proxy statement or at an annual or special meeting, proposals and director nominations must be submitted on a timely basis, in addition to meeting other legal requirements.  Viad must receive proposals and nominations for the 2018 Annual Meeting of Shareholders no later than the close of business, Arizona local time, on December 11, 2017, for possible inclusion in the proxy statement, or on or between the open of business, Arizona local time, on January 18, 2018 and the close of business, Arizona local time, on February 17, 2018, for possible consideration at the meeting, which is expected to be held on Thursday, May 17, 2018.  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.

 

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

A copy of Viad’s 2016 Annual Report filed with the SEC is enclosed herewith and is available on Viad’s website at www.viad.com by clicking onto the link “Annual Meeting-Proxy Materials” under the “Investors” section, or upon written request to Viad’s corporate secretary at the address listed in the notice of meeting attached to this proxy statement.  You may also obtain Viad’s other SEC filings and certain other information concerning Viad through the Internet at www.sec.gov and www.viad.com, respectively.  Information contained in any website referenced in this proxy statement is not part of this proxy statement and is not incorporated by reference in this proxy statement.

By Order of the Board of Directors

DEBORAH J. DEPAOLI

General Counsel and Secretary

 

 

 

 

 

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND FORWARD-LOOKING STATEMENTS

This document includes the presentation of "Adjusted Segment EBITDA", which is supplemental to results presented under accounting principles generally accepted in the United States of America (“GAAP”) and may not be comparable to similarly titled measures presented by other companies.  This non-GAAP measure is utilized by management to facilitate period-to-period comparisons and analysis of Viad’s operating performance and should be considered in addition to, but not as substitutes 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 Viad’s consolidated financial performance as reconciled below.  Because this non-GAAP measures does not consider all items affecting Viad’s consolidated financial performance, a user of Viad’s financial information should consider net income attributable to Viad as an important measure of financial performance because it provides a more complete measure of the Company’s performance.

Management believes that the presentation of Adjusted Segment EBITDA provides useful information to investors regarding Viad’s results of operations for trending, analyzing and benchmarking the performance and value of Viad’s 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 into major corporate development projects, both from a valuation and return perspective.

This document also includes the following forward-looking non-GAAP financial measure:  Adjusted Segment EBITDA. The company does not provide a reconciliation of this forward-looking non-GAAP financial measure to the most directly comparable GAAP financial measure because, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible, not all of the information necessary for a quantitative reconciliation of this forward-looking non-GAAP financial measure to the most directly comparable GAAP financial measure is available to the company without unreasonable efforts. Specifically, recent acquisitions include preliminary recordings of the fair values of the assets acquired and liabilities assumed as of the acquisition date; purchase price allocations are not yet finalized and are subject to change within the measurement period (up to one year from the acquisition date) as the assessment of property and equipment, intangible assets, and working capital are finalized. Consequently, any attempt to disclose such reconciliations would imply a degree of precision that could be confusing or misleading to investors. It is probable that the forward-looking non-GAAP financial measure may be materially different from the corresponding GAAP financial measure.

“Adjusted Segment EBITDA” is defined by Viad as segment operating income (as defined below) before non-cash depreciation and amortization and acquisition integration costs, if any. Adjusted Segment EBITDA is utilized by management to measure the profit and performance of Viad’s operating segments and acquisitions to facilitate period-to-period comparisons.

“Segment operating income” is defined by Viad 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 for income attributable to non-controlling interest. Segment operating income is utilized by management to measure the profit and performance of Viad’s 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 foot due to rounding.

 

 

 

 

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Cautionary Note on Forward-Looking Statements

As provided by the safe harbor provision under the Private Securities Litigation Reform Act of 1995, Viad cautions readers that, in addition to historical information contained herein, this proxy statement includes certain information, assumptions and discussions that may constitute forward-looking statements. These forward-looking statements are not historical facts, but reflect 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, legal expenses, tax rates and other tax matters, foreign exchange rates, and the realization of restructuring cost savings. Actual results could differ materially from those discussed in the forward-looking statements. Viad’s businesses can be affected by a host of risks and uncertainties. Among other things, natural disasters, gains and losses of customers, consumer demand patterns, labor relations, purchasing decisions related to customer demand for exhibition and event services, existing and new competition, industry alliances, consolidation and growth patterns within the industries in which Viad competes, acquisitions, capital allocations, adverse developments in liabilities associated with discontinued operations, changes in the levels of interest rates and any deterioration in the economy, may individually or in combination impact future results. In addition to factors mentioned elsewhere, economic, competitive, governmental, technological, capital marketplace and other factors, including terrorist activities or war, a pandemic health crisis and international conditions, could affect the forward-looking statements in this proxy statement.  Additional information concerning business and other risk factors that could cause actual results to materially differ from those in the forward-looking statements can be found in Viad’s annual and quarterly reports filed with the SEC.

Information about Viad obtained from sources other than the Company may be out-of-date or incorrect. Please rely only on Company press releases, SEC filings and other information provided by the Company, keeping in mind that forward-looking statements speak only as of the date made. Viad undertakes no obligation to update any forward-looking statements, including prior forward-looking statements, to reflect events or circumstances arising after the date as of which the forward-looking statements were made.

 

 

 

 

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APPENDIX B - 2017 VIAD CORP OMNIBUS INCENTIVE PLAN

 

 

2017 Viad Corp Omnibus Incentive Plan

 

Article 1. Establishment, Purpose, and Duration

This Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Covered Employee annual incentive awards, Cash-Based Awards, and Other Stock-Based Awards.

This Plan shall become effective upon shareholder approval (the “Effective Date”) and shall remain in effect as provided in Section 1.3 hereof.

Article 2. Definitions

Whenever used in this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized.

 

 

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Article 3. Administration

 

 

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Article 4. Shares Subject to This Plan and Maximum Awards

4.2Minimum Vesting.  Any Award under this Plan shall provide for a minimum vesting or performance period of at least one year; provided, however, that up to five percent of the Shares available for grant pursuant to Section 4.1 may be issued without regard to the foregoing requirement.

 

 

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With respect to Non-employee Directors, the maximum number of Shares subject to Awards that may be granted in any one Plan Year, taken together with any cash fees paid to such Non-employee Director during such Plan Year, shall not exceed four hundred thousand dollars ($400,000) in total value (calculating the value of any such Shares awarded based on their grant date fair value). This limit shall not apply to the independent Chairman of the Board, whose compensation will be approved by the other Non-employee Directors of the Board with the independent Chairman abstaining.

 

 

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Article 5. Eligibility and Participation

Article 6. Stock Options

 

 

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A condition of the issuance of the Shares as to which an Option shall be exercised shall be the payment of the Option Price. The Option Price of any Option shall be payable to the Company in full either: (a) in cash or its equivalent; (b) by tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Option Price (provided that except as otherwise determined by the Committee, the Shares that are tendered must have been held by the Participant for at least six (6) months (or such other period, if any, as the Committee may permit) prior to their tender to satisfy the Option Price if acquired under this Plan or any other compensation plan maintained by the Company or have been purchased on the open market); (c) by a cashless (broker-assisted) exercise; (d) by a combination of (a), (b), and/or (c); or (e) any other method approved or accepted by the Committee in its sole discretion.

Subject to any governing rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment (including satisfaction of any applicable tax withholding), the Company shall deliver to the Participant evidence of book entry Shares, or upon the Participant’s request, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s).

Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars.

Article 7. Stock Appreciation Rights

 

 

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Subject to the terms and conditions of this Plan, the Committee shall have complete discretion in determining the number of SARs granted to each Participant and, consistent with the provisions of this Plan, in determining the terms and conditions pertaining to such SARs.

The Grant Price for each grant of a Freestanding SAR or a Tandem SAR shall be determined by the Committee and shall be specified in the Award Agreement; provided, however, the Grant Price on the date of grant must be at least equal to one hundred percent (100%) of the FMV of the Shares as determined on the date of grant.

At the discretion of the Committee, the payment upon SAR exercise may be in cash, Shares, or any combination thereof, or in any other manner approved by the Committee in its sole discretion. The Committee’s determination regarding the form of SAR payout shall be set forth in the Award Agreement pertaining to the grant of the SAR.

Article 8. Restricted Stock and Restricted Stock Units

 

 

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8.3Other Restrictions. The Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to this Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock or each Restricted Stock Unit, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions, and/or restrictions under applicable laws or under the requirements of any stock exchange or market upon which such Shares are listed or traded, or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Stock or Restricted Stock Units.

To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Shares of Restricted Stock in the Company’s possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied or lapse.

Except as otherwise provided in this Article 8, Shares of Restricted Stock covered by each Restricted Stock Award shall become freely transferable by the Participant after all conditions and restrictions applicable to such Shares have been satisfied or lapse (including satisfaction of any applicable tax withholding obligations), and Restricted Stock Units shall be paid in cash, Shares, or a combination of cash and Shares as the Committee, in its sole discretion, shall determine.

8.4Certificate Legend. In addition to any legends placed on certificates pursuant to Section 8.3, each certificate representing Shares of Restricted Stock granted pursuant to this Plan may bear a legend such as the following or as otherwise determined by the Committee in its sole discretion:

“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the 2017 Viad Corp Omnibus Incentive Plan and a Restricted Stock Agreement. Copies of such Plan and Agreement are on file at the offices of Viad Corp, 1850 North Central Avenue, Suite 1900, Phoenix, Arizona.”

Article 9. Performance Units/Performance Shares

 

 

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Article 10. Cash-Based Awards and Other Stock-Based Awards

 

 

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Article 11. Transferability of Awards

Article 12. Performance Measures

Any Performance Measure(s) may be used to measure the performance of the Company, Subsidiary, and/or Affiliate as a whole or any business unit of the Company, Subsidiary, and/or Affiliate or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group of comparator companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Company may select Performance Measure (k) above as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Article 12.

 

 

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Article 13. Non-employee Director Awards

Non-employee Directors may only be granted Awards under the Plan in accordance with this Article 13 and which shall not be subject to management’s discretion. From time to time, the Board shall set the amount(s) and type(s) of equity awards that shall be granted to all Non-employee Directors on a periodic, nondiscriminatory basis pursuant to the Plan, as well as any additional amount(s), if any, to be awarded, also on a periodic, nondiscriminatory basis, based on each of the following: the number of committees of the Board on which a Non-employee Director serves, service of a Non-employee Director as the chair of a Committee of the Board, service of a Non-employee Director as Chairman of the Board, or the first selection or appointment of an individual to the Board as a Non-employee Director. Subject to the limits set forth in Section 4.1 and the foregoing, the Board shall grant such Awards to Non-employee Directors and any non-employee chairman of the Board, and grant new Non-employee Director Awards, as it shall from time to time determine.

Article 14. Dividends and Dividend Equivalents

Other than with respect to Options and SARs, which shall not have dividend rights, any Participant selected by the Committee may be granted dividends or dividend equivalents based on the dividends declared on Shares that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests, or expires, as determined by the Committee. The dividends or dividend equivalents may be subject to any limitations and/or restrictions determined by the Committee. Such dividend equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such limitations as may be determined by the Committee.  A Participant shall be eligible to receive dividends or dividend equivalents in respect of any Award of Performance Shares or Performance Units that are payable upon the achievement of Performance Measures only to the extent that the Performance Measures for the relevant Performance Period are achieved.

Article 15. Beneficiary Designation

Each Participant under this Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Plan is to be paid in case of his death before he receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such beneficiary designation,

 

 

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benefits remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid or exercised by the Participant’s executor, administrator, or legal representative.

Article 16. Rights of Participants

Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company, its Affiliates, and/or its Subsidiaries and, accordingly, subject to Articles 3 and 18, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company, its Affiliates, and/or its Subsidiaries.

Article 17. Change of Control

17.2Impact of Change in Control.  Upon the occurrence of a Change in Control, unless otherwise provided in the applicable Award Agreement:

 

 

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Article 18. Amendment, Modification, Suspension, and Termination

 

 

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Article 19. Withholding

Article 20. Successors

All obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

Article 21. General Provisions

 

 

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Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate applicable law.

 

 

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The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

21.19Section 409A of the Code.  The Plan is intended to comply with the requirements of Section 409A of the Code or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A of the Code, it is intended that this Plan be administered in all respects in accordance with Section 409A of the Code.  Each payment under any Award that constitutes non-qualified deferred compensation subject to Section 409A of the Code shall be treated as a separate payment for purposes of Section 409A of the Code.  In no event may a Participant, directly or indirectly, designate the calendar year of any payment to be made under any Award that constitutes non-qualified deferred compensation subject to Section 409A of the Code.  Notwithstanding anything in the Plan or any Award Agreement to the contrary, with respect to any Award that constitutes “nonqualified deferred compensation” within the meaning of Section 409A of the Code, (a) “termination of employment” (or any like phrase) shall mean a “separation from service” as defined under Section 409A of the Code (a “Separation from Service”), and (b) in the event that a Participant is a “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company), amounts that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code that would otherwise be payable during the six month period immediately following a Participant’s Separation from Service by reason of such Separation from Service shall instead be paid or provided on the first business day following the date that is six months following the Participant’s Separation from Service.  

 

 

 

 

 

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VIAD  CORP  ANNUAL  MEETING  OF  SHAREHOLDERS  Thursday,  May  18,  2017    8:00  a.m.  Mountain  Standard  Time  The  Camby  Hotel  2401  East  Camelback  Road  Phoenix,  AZ  85016    Viad  Corp1850  North  Central  Avenue,  Suite  1900  Phoenix,  Arizona  85004-4565  proxy    This  proxy  is  solicited  by  the  Board  of  Directors  for  use  at  the  Annual  Meeting  of  Shareholders  on  May  18,  2017.    The  shares  of  Viad  Corp  common  stock  you  hold  in  your  account  will  be  voted  as  you  specify  on  the  reverse  side.    By  signing  this  proxy,  you  revoke  all  prior  proxies  and  appoint  Richard  H.  Dozer  and  Robert  E.  Munzenrider,  and  each  of  them  with  full  power  of  substitution,  to  vote  your  shares  on  the matters  shown  on  the  reverse  side  and  any  other  matters  which  may  come  before  the  Annual  Meeting  of  Shareholders  and  all  adjournments.    THIS  PROXY,  WHEN  PROPERLY  EXECUTED,  WILL  BE  VOTED  AS  DIRECTED  OR,  IF  NO  DIRECTION  IS  GIVEN,  WILL  BE  VOTED  FOR  PROPOSALS  1,  2,  3  AND  5,  AND  FOR  1  YEAR  ON  PROPOSAL  4.    See  reverse  for  voting  instructions.    

 

 

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Shareowner  Services    P.O.  Box  64945  St.  Paul,  MN  55164-0945  Vote  by  Internet,  Telephone  or Mail24  Hours  a  Day,  7  Days  a  Week    Your  phone  or  Internet  vote  authorizes  the  named  proxies  to  vote  your  shares  in  the  same  manner  as  if  you  marked,  signed  and  returned  your  proxy  card.    •  INTERNET  –  www.proxypush.com/vvi  Use  the  Internet  to  vote  your  proxy  until  11:59  p.m.  (CT)  on  May  17,  2017.  •  PHONE  –  1-866-883-3382  Use  a  touch-tone  telephone  to  vote  your  proxy  until  11:59  p.m.  (CT)  on  May  17,  2017.    •  MAIL  –  Mark,  sign  and  date  your  proxy  card  and  return  it  in  the  postage-paid  envelope  provided.  If  you  vote  your  proxy  by  Internet  or  by  Telephone,  youdo  NOT  need  to  mail  back  your  Voting  Instruction  Card.    TO  VOTE  BY  MAIL  AS  THE  BOARD  OF  DIRECTORS  RECOMMENDS  ON  ALL  ITEMS  BELOW,  SIMPLY  SIGN,  DATE  AND  RETURN  THIS  PROXY  CARD.     T TTh hhe  eeB BBo ooa aar rrd  ddo oof  ffD DDi iir rre eec cct tto oor rrs  ssR RRe eec cco oom mmm mme een nnd dds  ssa  aaV VVo oot tte  eeF FFO OOR  RRP PPr rro oop ppo oos ssa aal  ll1 11,  ,,2 22,  ,,3  33a aan nnd  dd5  55F FFO OOR  RR1  11Y YYe eea aar  rro oon  nnP PPr rro oop ppo oos ssa aal  ll4 44.  ..  1.  Election  of  directors:  FOR  AGAINST  ABSTAIN  1a.  Edward  E.  Mace  ¦ ¦¦¦  ¦¦¦  ¦¦ 1b.  Joshua  E.  Schechter  ¦ ¦¦¦  ¦¦¦  ¦¦  2.  Ratification  of  the  appointment  of  Deloitte  &  Touche  LLP  as  Viad’s  ¦  ¦¦For  ¦  ¦¦Against  ¦  ¦¦Abstain independent  public  accountants  for  2017.    3.  Advisory  approval  of  named  executive  officer  compensation.  ¦  ¦¦For  ¦  ¦¦Against  ¦  ¦¦Abstain  4.  Advisory  vote  on  the  frequency  of  holding  future  advisory  ¦  ¦¦1  Year  ¦  ¦¦2  Years  ¦  ¦¦3  Years  ¦  ¦¦Abstain votes  on  compensation  of  named  executive  officers.    5.  Proposal  to  approve  the  2017  Viad  Corp  Omnibus  Incentive  Plan.  ¦  ¦¦For  ¦  ¦¦Against  ¦  ¦¦Abstain  THIS  PROXY,  WHEN  PROPERLY  EXECUTED,  WILL  BE  VOTED  AS  DIRECTED  OR,  IF  NO  DIRECTION  IS  GIVEN,  WILL  BE  VOTED  FOR  PROPOSALS  1,  2,  3  and  5  and  FOR  1  YEAR  ON  PROPOSAL  4.    Date  ____________________________________________  Address  Change?  Mark  Box  ¦  ¦¦Sign  and  indicate  changes  below:    Signature(s)  in  Box    Please  sign  exactly  as  your  name(s)  appears  on  this  Proxy. If  shares  are  held  in  joint  tenancy,  all  joint  tenants  must  sign. Trustees,  administrators,  etc.,  must  include  title  and  authority. Corporations  must  provide  full  name  of  corporation  and  title  of  authorized  officer  signing  this  Proxy.