Exhibit 10.1
[CBS Corporation Letterhead]
December 29, 2005
Sumner M. Redstone
c/o Viacom Inc.
1515 Broadway
New York, New York 10036
Dear Mr. Redstone:
You have previously entered into an
employment agreement with Viacom Inc., a Delaware corporation
(“ Viacom ”), effective as of July 1, 2004
(the “ Viacom Employment Agreement ”), pursuant
to which you served as chairman of the board of directors and chief
executive officer of Viacom. In connection with the merger
(the “ Merger ”) of Viacom and Viacom Merger Sub
Inc., a Delaware corporation (“ Viacom Merger Sub
”), and the related separation of the business of New Viacom
Corp., a Delaware corporation (“ New Viacom ”)
and CBS Corporation (“ CBS ”), CBS is entering
into this letter agreement with you (the “ Agreement
”). The Viacom Employment Agreement will continue in
effect until the effective date of the closing of the Merger (the
“ Effective Date ”), at which time it will be
superseded and replaced in full by this Agreement. If for any
reason the Merger is not consummated, this Agreement shall not
enter into effect and shall be considered null and void.
1.
Title; Duties; and Effective
Date . As of and
following the Effective Date, you will be employed as Executive
Chairman and Founder of CBS and will serve in this capacity
pursuant to the terms of this Agreement. As of the Effective
Date, you will no longer have the title of Chief Executive
Officer. As Executive Chairman and Founder of CBS, you shall
have all the rights, powers, authority, functions, duties and
responsibilities customarily associated with the position of an
executive chairman, and such additional rights, powers, authority,
functions, duties and responsibilities as are assigned to the
office of Chairman of the Board under CBS’s Amended and
Restated Bylaws and as the Board of Directors of CBS (the “
Board ”) may assign to you from time to time that are
commensurate with your status as Executive Chairman and
Founder. Without limiting the foregoing, you will be actively
engaged in, and have responsibility, working with the Board and the
President and Chief Executive Officer of CBS (the “
CEO ”), for (a) the overall leadership and
strategic direction of CBS, (b) providing guidance and support
to senior management of CBS, (c) the coordination of the
activities of the Board and (d) communication with
shareholders and other important constituencies. The CEO
shall report directly to you and to the Board, and you will be
given regular access to senior management of CBS. CBS
acknowledges that in addition to your services pursuant to this
Agreement, you will simultaneously serve as executive chairman and
founder of New Viacom.
2.
Compensation
. As the sole compensation for
services to be rendered by you in all capacities to CBS, its
subsidiaries and Affiliates, you will receive the compensation
specified herein from CBS. For purposes of this Agreement,
“ Affiliate ” means any corporation or other
entity that is controlled by CBS.
(a)
Salary
. For all
the services rendered by you in any capacity hereunder, CBS agrees
to pay you salary at the rate of One Million Seven Hundred Fifty
Thousand Dollars ($1,750,000) per annum (the “ Salary
”), payable in accordance with CBS’s then effective
payroll practices but no less frequently than
semi-monthly.
(b)
Deferred
Compensation . In addition to your
Salary, you shall earn, with respect to each payroll period during
your employment with CBS, additional amounts (“ Deferred
Compensation ”), the payment of which (together with the
return thereon as provided in this paragraph 2(b)), shall be
deferred until January of the first calendar year following
the year in which you cease to be an employee of CBS and payable at
that time or at such later date as shall be determined pursuant to
paragraph 13, provided , however , that, except in
the event of your death, the Deferred Compensation will not be
payable to you earlier than six (6) months following your
termination of employment. The Deferred Compensation shall be based
on an annualized rate of One Million Three Hundred Thousand Dollars
($1,300,000). Deferred Compensation shall be credited to a
bookkeeping account maintained by CBS on your behalf, the balance
of which account shall periodically be credited (or debited) with
deemed positive (or negative) return calculated in the same manner,
and at the same times, as the deemed return on your account under
the CBS Excess 401(k) Plan for Designated Senior Executives (as
such plan may be amended from time to time, the “ Excess
401(k) Plan ”) is determined (it being understood and
agreed that, if at any time during which the Deferred Compensation
remains payable, your account balance in the Excess 401(k) Plan is
distributed in full to you, your Deferred Compensation account
shall continue to be credited or debited with a deemed return based
on the investment portfolio in which your Excess 401(k) Plan
account was notionally invested immediately prior to its
distribution). CBS’s obligation to pay the Deferred
Compensation (including the return thereon provided for in this
paragraph 2(b)) shall be an unfunded obligation to be satisfied
from the general funds of CBS.
(c)
Bonus
Compensation . In addition to your
Salary and Deferred Compensation, you shall be entitled to receive
bonus compensation for each of the calendar years during your
employment with CBS, determined and payable as follows (the “
Bonus ”):
(i)
Your Bonus for
each of the calendar years or portion thereof during your
employment with CBS will be based upon achievement of the
performance goal(s) established by the compensation committee of
the Board (the “ Compensation Committee ”) for
each calendar year and partial calendar year performance period
during your employment with CBS and shall be determined, in
accordance with the CBS Senior Executive Short-Term Incentive Plan,
as the same may be amended from time to time (the “ Senior
Executive STIP ”).
2
(ii)
For 2005, the
performance goals under the STIP were established by the
compensation committee of the board of directors of Viacom pursuant
to the Viacom Employment Agreement. The Compensation
Committee and the compensation committee of the board of directors
of New Viacom (the “ New Viacom Compensation Committee
”) will jointly determine the extent to which the 2005
performance goals were achieved and the amount of your 2005
bonus. CBS will pay you 50% of the amount so determined from
the Senior Executive STIP, and New Viacom will pay you the
remaining 50%.
(iii)
Your target Bonus
for 2006 and each other calendar year or portion thereof during
your employment with CBS shall be two hundred percent (200%) of
your Salary and Deferred Compensation at the annualized rate in
effect at the end of such period. Your Bonus shall be
prorated for any partial calendar year that you are employed by CBS
under this Agreement.
(iv)
Assuming the
performance goals pre-established by the Compensation Committee for
each calendar year or partial calendar year performance period
during your employment with CBS has been achieved and certified by
the Committee, the Compensation Committee is entitled to use its
negative discretion to reduce the amount of the Bonus that you are
entitled to receive for such performance period.
(v)
Your Bonus for
any calendar year during your employment with CBS shall be payable
by February 28th of the following year. For the
avoidance of doubt, it is understood that you will receive the
Bonus to which you are entitled for each calendar year in which you
were employed, even if you are not employed on February 28th
of the following year or on the actual date on which bonuses are
paid for such year.
(vi)
In the event that
the Senior Executive STIP is amended or terminated, you will be
given an opportunity under the amended or successor plan to earn
bonus compensation equivalent to the amount that you could have
earned under this paragraph 2(c) but subject to the same
limitations.
(d)
Long Term
Compensation . This paragraph
2(d) sets forth your entitlements with respect to awards of
long-term compensation under the CBS 2004 Long-Term Management
Incentive Plan (the “ 2004 LTMIP ”) or a
successor plan (collectively, the �
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