Exhibit 10.1
[New Viacom Corp. 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 ”), New Viacom is
entering into this letter agreement with you (the “
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 . Effective as
of the effective date of the Merger (the “ Effective
Date ”), you will be employed as Executive Chairman and
Founder of New Viacom and will serve in this capacity pursuant to
the terms of this Agreement. As Executive Chairman and
Founder of New Viacom, 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 New Viacom’s Amended and Restated Bylaws and as
the Board of Directors of New Viacom (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 New Viacom (the “ CEO ”),
for (a) the overall leadership and strategic direction of New
Viacom, (b) providing guidance and support to senior
management of New Viacom, (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 New Viacom. New
Viacom acknowledges that in addition to your services pursuant to
this Agreement, you will simultaneously serve as executive chairman
and founder of CBS.
2.
Compensation
. As the sole compensation for
services to be rendered by you in all capacities to New Viacom, its
subsidiaries and Affiliates, you will receive the
compensation specified herein from New
Viacom. For purposes of this Agreement, “
Affiliate ” means any corporation or other entity that
is controlled by New Viacom.
(a)
Salary
. For all
the services rendered by you in any capacity hereunder, New Viacom
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 New
Viacom’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 New Viacom, 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 New
Viacom 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 New Viacom 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 New Viacom
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). New Viacom’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 New Viacom.
(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 New Viacom, determined and payable as follows (the
“ Bonus ”):
(i)
Your Bonus for
each of the calendar years or portion thereof during your
employment with New Viacom 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 New Viacom and shall be determined, in
accordance with the New Viacom Senior Executive Short-Term
Incentive Plan, as the same may be amended from time to time (the
“ Senior Executive STIP ”).
(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
2
Employment
Agreement. The Compensation Committee and the compensation
committee of the board of directors of CBS (the “ CBS
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 New Viacom 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 New
Viacom 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 New Viacom 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 New Viacom 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 New Viacom Long-Term Management
Incentive Plan or a successor plan (collectively, the “
LTMIP ”):
(i)
Stock Option
Grants . Pursuant to the
Viacom Employment Agreement, the compensation committee of the
board of
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