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Exhibit 10(R)
[CBS LOGO]
CBS CORPORATION Xxxxx X. XxXxxxxxxx 00 Xxxx 00xx Xxxxxx
Xxxxxxxx Xxx Xxxx, XX 00000
CONFIDENTIAL AND PROPRIETARY
March 2, 1999
Xx. Xxxxx X. Xxxxxxxx
Executive Vice President
and General Counsel
CBS Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xxx:
CBS Corporation (the "Company") recognizes the importance of
maintaining a high level of executive performance and expertise and of retaining
the services of certain Company executives, such as yourself, who are key to the
execution of corporate strategy. The purpose of this letter agreement
("Agreement") is to provide an incentive for you to remain with the Company as
an executive by providing you with assurances that you will receive certain
payments and/or other benefits in the event that your employment with the
Company terminates under the circumstances set forth herein, as long as you
comply with all of the terms and conditions of the Agreement.
The Agreement is intended to set forth the terms and conditions to
which you and the Company have agreed regarding the termination of your
employment under certain circumstances, and supersedes all prior agreements and
understandings with respect to the subject matter hereof.
Certain capitalized terms and phrases used in the Agreement are defined
in Section 10(c) below.
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1. Eligibility for Payments and Other Benefits
(a) Limitations and Conditions. In addition to any further limitations
and/or conditions that may be set forth in the Agreement with respect to a
particular payment or other benefit, your receipt of any and all payments and
other benefits under the Agreement is subject to the limits set forth in Section
7 and subject to your compliance with all of the provisions of Section 8 and the
terms and conditions of any applicable plans or programs, as they may be
modified hereby, pursuant to which you receive such payments or other benefits.
(b) Eligibility for Separation Pay and Financial Counseling Benefits
Pursuant to Section 2. You will be eligible to receive the separation payment
and other separation benefits set forth in Section 2, in lieu of any and all
other separation/severance payments or salary continuation payments, if your
employment is Terminated after the Effective Date and on or before the fifth
anniversary of the Effective Date or such later anniversary of the Effective
Date as may be determined from time to time pursuant to the following paragraph
(the "Section 2 Final Anniversary Date").
On March 2 of each year, beginning in 2000, the Section 2 Final
Anniversary Date will be automatically extended for one additional year unless,
prior to such March 2, the Company notifies you to the contrary in writing.
(c) Eligibility for Supplemental Pension Payments Pursuant to Section
3. You will be eligible to receive the applicable Supplemental Pension Payments
set forth in Section 3(b) or 3(c) if your employment is Terminated at any time
after the Effective Date. If, after the Effective Date, you die while an
employee of any CBS Company and leave a surviving spouse, your spouse will be
eligible to receive the applicable Supplemental Pension Payments set forth in
Section 3(e).
(d) Eligibility for Certain Welfare Benefits Pursuant to Section 4. You
will be eligible to receive the welfare benefits set forth in Section 4 if your
employment is Terminated at any time after the Effective Date.
(e) Eligibility for Stock Option Benefits Pursuant to Section 5. You
will be eligible to receive the stock option benefits set forth in Section 5,
subject to your compliance with all of the provisions of your Company stock
option agreement(s), as modified by the Agreement, if your employment is
Terminated at any time after the Effective Date.
(f) Eligibility for Home Sale Payment Pursuant to Section 6. You will
be eligible to receive the home sale payment set forth in Section 6 if (1) your
employment is Terminated after the Effective Date and prior to the third
anniversary of the Effective
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Date and (2) within the twenty-four (24) month period after your Termination you
either relocate your primary residence out of the New York, New York commuting
area or you change your primary residence in the New York, New York commuting
area to another residence in the New York, New York commuting area with a price
lower than your Cost (as defined in Section 6).
(g) Mitigation. You will not be required to mitigate the amount of any
payment or other benefit provided for in Sections 2, 3, 4, 5 and/or 6, and
except as otherwise set forth in Section 4 with respect to certain welfare
benefits, the amount of any payments and/or other benefits which would otherwise
be provided to you pursuant to Sections 2, 3, 4, 5 and/or 6 will not be reduced
by any compensation earned by you, or any retirement or other benefits provided
to you, as the result of your employment by another employer after your
Termination Date.
In the event that you receive payments or other benefits in accordance
with Section 9(c) and/or 9(d), you will not be required to mitigate the amount
of such payments or other benefits, and the amount of such payments and other
benefits will not be reduced by any compensation earned by you, or any
retirement or other benefits provided to you, as the result of your employment
by the Company or another employer after the Succession Effective Date.
2. Separation Pay and Financial Counseling Benefits
Upon Termination on or before the Section 2 Final Anniversary Date, as
in effect on your Termination Date, you will be entitled to receive the
following payment and other benefits.
(a) Separation Pay. After Termination, you will be entitled to receive
as Separation Pay an amount equal to the greater of the two amounts calculated
pursuant to Section 2(a)(1) and 2(a)(2) below:
(1) two times the sum of: (x) an amount equal to your annual base
salary in effect on the Termination Date (or, if higher, an amount
equal to your highest annual base salary in effect at any time on or
after the Effective Date and before your Termination Date) (the higher
of such two annual base salary amounts hereafter the "Termination Date
Annual Base Salary"); and (y) an amount equal to your target annual
incentive award opportunity, if any, for the year in which your
employment is Terminated (or, if higher, an amount equal to the average
of your actual annual incentive awards for the two years immediately
preceding the year in which your employment is Terminated) (the higher
of such two annual incentive amounts hereafter the "Termination Date
Annual Incentive"); and
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(2) an amount equal to the aggregate of all severance/separation or
salary continuation payments, under any CBS Company plan(s) or
program(s) or otherwise, that you would otherwise be entitled to
receive on Termination.
Whether your Separation Pay is calculated pursuant to Section 2(a)(1)
or 2(a)(2), such payment will be provided solely pursuant to the terms of the
Agreement and not pursuant to any CBS Company plan or program.
This Separation Pay will be in lieu of any and all other
severance/separation or salary continuation payments you might otherwise have
been entitled to receive under any CBS Company plan or program or otherwise.
Your Separation Pay will be payable to you in a single lump sum payment
within 30 days after your Termination Date.
If you should die after your Termination Date but before you receive
your Separation Pay, such Separation Pay will be payable (at the same time and
in the same amount that would have been payable to you) to your surviving
spouse, if any, or, if you do not have a spouse or if your spouse predeceases
you, to your estate.
(b) Financial Counseling. You will be entitled to AYCO financial
counseling, or to similar financial counseling services provided by another
financial advisor selected by the Company, up to a cost to the Company of
$5,000, for a period of up to six (6) months after your Termination Date.
3. Supplemental Pension Payments
(a) Supplemental Pension Payments. Upon Termination, you will be
entitled to receive Supplemental Pension Payments, determined in accordance with
Section 3(b) if you are receiving Separation Pay pursuant to Section 2(a) or
determined in accordance with Section 3(c) if you are not receiving Separation
Pay pursuant to Section 2(a).
(b) Supplemental Pension Payments if Separation Pay is Applicable. If,
upon Termination, you are entitled to receive Separation Pay pursuant to Section
2(a), then you will receive Supplemental Pension Payments beginning in the month
immediately following the second anniversary of your Termination Date calculated
as set forth in the following paragraph and in the form you elect pursuant to
Section 3(d) below:
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Supplemental Pension Calculation. Your annual Supplemental Pension
Payment will be the larger of the two amounts calculated pursuant to Section
3(b)(1) and 3(b)(2) below, respectively, and will, in either case, be paid to
you net of the aggregate of any payments or other benefits you actually receive
under any CBS Company executive pension and/or executive retirement plans apart
from the Agreement (expressed as an annual amount calculated on the basis of a
single life annuity commencing on the second anniversary of your Termination
Date):
(1) an annual amount equal to your base amount (determined by
multiplying (x) 1.47%, times (y) your Section 3(b) Average Annual
Compensation, times (z) your number of years of Section 3(b) Credited
Service (including any fraction of a whole year)) minus your Section
3(b) Qualified Plan Benefit; and
(2) the aggregate annual supplemental pension amount (expressed as a
single life annuity) that would be payable to you under the terms of
all CBS Company executive pension and/or other executive retirement
plans that you are eligible to participate in as in effect on your
Termination Date as if you had remained an employee of the Company
until the second anniversary of your Termination Date with an annual
base salary equal to your Termination Date Annual Base Salary and had
received two additional annual incentive awards, each in an amount
equal to your Termination Date Annual Incentive, and as if you had met
all of the requirements/qualifications for benefits under said plans
and your employment had terminated on the second anniversary of your
Termination Date.
(c) Supplemental Pension Payments if Separation Pay is Not Applicable.
If your employment is Terminated but you are not eligible to receive Separation
Pay pursuant to Section 2(a), then you will receive Supplemental Pension
Payments beginning in the month immediately following your Termination Date
calculated as set forth in the following paragraph and in the form you elect
pursuant to Section 3(d) below:
Supplemental Pension Calculation. Your annual Supplemental Pension
Payment will be the larger of the two amounts calculated pursuant to Section
3(c)(1) and 3(c)(2) below, respectively, and will, in either case, be paid to
you net of the aggregate of any payments or other benefits you actually receive
under any CBS Company executive pension and/or executive retirement plans apart
from the Agreement (expressed as an annual amount calculated on the basis of a
single life annuity commencing on your Termination Date):
(1) an annual amount equal to your base amount (determined by
multiplying (x) 1.47%, times (y) your Section 3(c) Average Annual
Compensation, times (z) your number of years of Section 3(c) Credited
Service (including any fraction of a whole year)) minus your Section
3(c) Qualified Plan Benefit; and
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(2) the aggregate annual supplemental pension amount (expressed as a
single life annuity) that would be payable to you under the terms of
all CBS Company executive pension and/or other executive retirement
plans that you are eligible to participate in as in effect on your
Termination Date as if you had met all of the
requirements/qualifications for benefits under said plans on your
Termination Date.
(d) Form of Payment of Supplemental Pension.
(1) The Supplemental Pension amount calculation pursuant to Section
3(b)(1) or 3(c)(1) is expressed as a single life annuity. However, if you are
receiving Supplemental Pension Payments pursuant to Section 3(b)(1) or 3(c)(1),
you may elect instead to receive your Supplemental Pension in accordance with
any one of the optional forms of payment available with respect to your Section
3(b) or 3(c) Qualified Plan Benefit, as applicable (other than as a lump sum),
subject to the same reductions or other provisions that would have applied with
respect to such form of payment had you elected such form of payment with
respect to your Section 3(b) or 3(c) Qualified Plan Benefit, as applicable. Such
payments will be made in monthly installments, each equal to one-twelfth
(1/12th) of the annual amount determined for the form of payment you select.
Regardless of the form of payment you elect, once you begin to receive
a Supplemental Pension calculated pursuant to Section 3(b)(1) or 3(c)(1), a
minimum of sixty (60) times the monthly payment you would have received on a
single life annuity basis (the "Guaranteed Amount") will be guaranteed as
follows. If you elected a single life annuity payment option and die before
receiving monthly payments which in the aggregate at least equal the Guaranteed
Amount, then an amount equal to the Guaranteed Amount less the aggregate of the
monthly Supplemental Pension Payments you received will be paid in a lump sum to
your properly designated beneficiary, or, if none, to your estate or otherwise
pursuant to the laws of descent and distribution. If you elected a survivor
annuity and both you and your spouse or other joint annuitant die before the two
of you have received monthly payments which in the aggregate at least equal the
Guaranteed Amount, then an amount equal to the Guaranteed Amount less the
aggregate of the monthly Supplemental Pension Payments you and your spouse or
other joint annuitant received will be paid in a lump sum to (i) your properly
designated beneficiary, or, if none, to your estate or otherwise pursuant to the
laws of descent and distribution, if your spouse or other joint annuitant
predeceases you, or (ii) your spouse's or other joint annuitant's properly
designated beneficiary, or, if none, to their estate or otherwise pursuant to
the laws of descent and distribution, if you die first.
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A properly designated beneficiary is one that is so designated on a
form to be supplied to you or your surviving spouse or other joint annuitant by
the Company on request, which form is properly executed and delivered to the
Company.
(2) If your Supplemental Pension is calculated pursuant to Section
3(b)(2) or 3(c)(2), you may elect to receive your Supplemental Pension in any
form then available under the applicable CBS Company plan or plans, subject to
any reductions or other provisions that would apply to your elected form of
payment under such CBS Company plan(s).
(3) The form of payment must be elected prior to commencement of
payment of your Supplemental Pension.
(e) Death in Active Service: Surviving Spouse Payments. In the event
that, after the Effective Date, you die while an employee of any CBS Company and
leave a surviving spouse, your spouse will receive Supplemental Pension Payments
pursuant to the Agreement in the amount of 55% of the single life annuity amount
that would have been calculated pursuant to Section 3(c) if your employment had
Terminated on the date of your death, such payments to be made to your surviving
spouse net of the aggregate of any payments or other benefits your surviving
spouse actually receives as a surviving spouse under any CBS Company executive
pension and/or executive retirement plan(s) apart from the Agreement (expressed
as an annual amount calculated on the basis of a single life annuity for your
spouse commencing on the date of your death). In calculating the amount of the
Supplemental Pension you would have received pursuant to Section 3(c) had your
employment Terminated on the date of your death, the aggregate of the amounts
that your surviving spouse is entitled to receive under all CBS Company pension
plans as your surviving spouse (expressed as an annual amount calculated on the
basis of a single life annuity for your spouse commencing on your Termination
Date) will be substituted for the amounts you would have been entitled to
receive under such plans.
Surviving spouse Supplemental Pension Payments pursuant to Section 3(e)
will commence in the second month after your death and continue for the life of
your surviving spouse and will be payable in monthly installments, each equal to
one-twelfth (1/2th) of the annual amount determined as set forth in the
immediately preceding paragraph. An additional payment will be made with the
first monthly payment equal to the regular monthly payment amount, as payments
commence in the second month after your death rather than the first such month.
Once your surviving spouse begins receiving Supplemental Pension Payments
pursuant to Section 3(e), a minimum of sixty (60) payments will be guaranteed.
In the event that your surviving spouse dies before she has received at least
sixty (60) of such payments, then an amount equal to sixty (60) such payments
less the aggregate of the monthly Supplemental Pension Payments your surviving
spouse received will be paid in a lump sum to your spouse's properly designated
beneficiary, or, if none, to her estate or otherwise pursuant to the laws of
descent and distribution.
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A properly designated beneficiary is one that is so designated on a
form to be supplied to your surviving spouse by the Company on request, which
form is properly executed and delivered to the Company.
(f) No Actuarial Reduction for Early Commencement. There will be no
actuarial reduction for commencement of Supplemental Pension Payments at the
time specified in the Agreement rather than at any later time.
(g) Supplemental Pension Payments, whether calculated pursuant to
Section 3(b), 3(c) or 3(e), will be provided solely pursuant to the terms of the
Agreement and not pursuant to any CBS Company plan or program, including,
without limitation, the Westinghouse Executive Pension Plan.
(h) In no event will the value of any stock options or any 401(k) plan
benefits be considered in any way when determining the amount of any payments to
be made pursuant to Section 3.
4. Certain Welfare Benefits
(a) Upon Termination after the Effective Date, subject to Section 4(c)
below, you will be eligible for continued participation in all CBS Company
health care, dental, vision care and life insurance programs in which you are
participating on your Termination Date as such programs are in effect from time
to time, and at employee contribution levels for the coverage selected that are
applicable to senior-level executives from time to time, until the earlier of
(1) the date on which you attain age 55 or (2) the date on which you receive, or
are eligible to receive, comparable or greater benefits under the plans and
programs of a subsequent employer (such comparability to be determined by the
Company on the basis of aggregate welfare benefits).
(b) Further, subject to Section 4(c) below, after Termination and after
you attain the age of 55, you will be eligible to participate in such Company
retiree welfare benefits, if any, as may be in effect from time to time, and at
the retiree contribution levels for the coverage selected, as if you were a
Company retiree until the earlier of (1) the date on which you attain age 65 or
(2) the date on which you receive, or are eligible to receive, comparable or
greater benefits under the plans and programs of a subsequent employer (such
comparability to be determined by the Company on the basis of aggregate welfare
benefits).
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(c) In the event that you are precluded from so continuing your
participation in these CBS Company employee benefit plans or programs or are
precluded from participating in such Company retiree programs, in either case by
the terms of such plans or programs, then, at the election of the Company, the
Company will either (1) provide you with an equivalent benefit, (2) reimburse
you for the cost of obtaining an equivalent benefit (based on the lowest
available cost), or (3) pay you a lump sum amount as determined by a reputable
consultant in the employee benefits area selected by the Company as a reasonable
estimate of the amount that would be sufficient, on a present value basis using
such actuarial assumptions as such consultant deems appropriate, for you to
obtain such benefits, less your applicable contribution level as set forth in
Section 4(a) and/or 4(b) above.
5. Stock Option Benefits
If, at any time after the Effective Date, your employment is
Terminated, then notwithstanding the terms of any of your Company stock option
agreement(s) that may be to the contrary, any Company stock options you may have
that are outstanding on your Termination Date ("Stock Options") will not
automatically terminate when you cease to be an employee of the Company and/or
its Subsidiaries upon your Termination. Such of your Stock Options, if any, as
are not yet exercisable as of your Termination Date will become exercisable
("vest") by you beginning on their normal vesting date(s) (i.e., the date(s) on
which the Stock Options would have vested had you still been an employee) as
long as they do not terminate earlier for some reason other than termination of
employment. Those Stock Options, once vested, together with your then
outstanding Stock Options, if any, that are vested and have not yet been
exercised at the time of your Termination, will be exercisable by you in
accordance with their terms as set forth in your Company stock option
agreement(s) as modified hereby.
Once your Company Stock Options vest, they will be exercisable by you
at any time prior to the time when the option term(s) expire (or such earlier
time as may be provided in the relevant Company long-term incentive plan in the
event that you fail to comply with any condition or conditions that may be set
forth in such plan).
If, after the Effective Date, you should die either while an employee
of any CBS Company or after your Termination Date but in either case before your
Company Stock Options cease to be exercisable by you as set forth above, any
nonvested Stock Options outstanding on the date of your death will vest
immediately, and those Stock Options, together with your then outstanding Stock
Options that are vested and have not yet been exercised at the time of your
death, will be exercisable (but only to the extent that the Stock Options would
have been exercisable by you) by a properly designated beneficiary
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or by your estate until the earlier of (1) the time when they would have ceased
to be exercisable by you had you not died, and (2) two years after the date of
your death; provided, however, that if the terms of any Stock Options
outstanding on the date of your death provide for a longer exercise period than
two years after the date of your death, that longer exercise period will apply
to those options.
Any reload feature of your Company Stock Options which may have been
available prior to your Termination will cease to be available effective as of
your Termination.
If your employment with the Company and/or its Subsidiaries is
terminated for Cause, all of your Company stock options will be canceled upon
such termination.
All of your Company Stock Options are subject to the terms of your
Company stock option agreement(s), as modified hereby. You should note that
under certain of your Company Stock Option agreement(s), those Stock Options are
also subject to early termination in the event that you fail to comply with
certain conditions regarding competition and availability for consultation.
In the event that, for any reason, your Company Stock Options cannot be
modified so as to give effect to the provisions of the Agreement, whether
because of the terms of the plan or plans pursuant to which they are granted or
otherwise, then you (or your properly designated beneficiary or your estate, as
applicable) will be granted replacement options, upon surrender of such Company
Stock Options, such that the replacement options will provide the stock option
benefits intended to be provided pursuant to the Agreement.
6. Home Sale Payment
If (a) your employment is Terminated after the Effective Date and prior
to the third anniversary of the Effective Date and (b) within the twenty-four
(24) month period after your Termination you relocate your primary residence out
of the New York, New York commuting area (or you change your primary residence
in the New York, New York commuting area to another residence in the New York,
New York commuting area with a price lower than your Cost (as defined below)),
then you will be entitled to receive the payment set forth in the following
paragraph.
In the event that, after putting and maintaining such residence in
marketable condition and after using reasonable efforts to sell such residence
for a period of at least sixty (60) days, you are unable to sell your primary
residence in the New York, New York commuting area at a price which, after
payment of brokerage fees, would be at least
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equal to the price at which you purchased such residence plus the cost of any
capital improvements which you have made to such residence (together, the
"Cost"), the Company will purchase said residence from you for an amount equal
to said Cost (less any amount you receive from a new employer as a housing
benefit related to the Cost) upon reasonable substantiation of said Cost and of
your selling efforts.
In order to receive this home sale payment, you must (1) notify the
Company within the 24 month period after such Termination that you are
relocating or changing your primary residence as set forth in the first
paragraph of Section 6 above and that you have initiated the 60 day sale process
described in the second paragraph of Section 6 above and (2) present to the
Company, no later than ninety (90) days after the date of such notice, your
request that the Company purchase said residence from you, together with
reasonable substantiation of your Cost and of your selling efforts.
7. Certain Limitations
(a) In the event that the payments and other benefits conferred
pursuant to the Agreement, taken together with all other payments made and other
benefits provided to you, would result in any of such payments or other benefits
being deemed an "excess parachute payment" pursuant to Section 280G of the
Internal Revenue Code of 1986, as amended, or other similar provision, then the
financial counseling and welfare benefits, if any, conferred under Section 2(b)
and Section 4, respectively, will be reduced to the maximum amount which, if
paid, would not result in any of such payments or other benefits being deemed an
"excess parachute payment."
(b) In the event that after reduction pursuant to Section 7(a) above,
if any, the payments and other benefits conferred pursuant to the Agreement
would still, when taken together with all other payments made and other benefits
provided to you, result in any of such payments or other benefits being deemed
an "excess parachute payment" pursuant to Section 280G of the Internal Revenue
Code of 1986, as amended, or other similar provision, then the Company will
compare the following two tentative amounts:
(1) the total of (x) all other payments and other benefits to be made
to you, plus (y) the payments and other benefits conferred pursuant to
the Agreement reduced to the maximum amount which, if paid, would not
result in any of such payments or other benefits being deemed an
"excess parachute payment;" and
(2) the total of all payments and other benefits to be made to you,
including those conferred pursuant to the Agreement, less the amount of
tax which would be incurred by you on all such payments and other
benefits under Section 4999(a) of the Internal Revenue Code of 1986, as
amended.
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If the tentative amount calculated as set forth in Section 7(b)(2)
above is less than the tentative amount calculated as set forth in Section
7(b)(1) above, then the payments and other benefits conferred pursuant to the
Agreement will be reduced to the maximum amount which, if paid, would not result
in any of such payments or other benefits being deemed an "excess parachute
payment."
If, however, the tentative amount calculated as set forth in Section
7(b)(2) above is greater than the tentative amount calculated as set forth in
Section 7(b)(1) above, then the payments and other benefits conferred pursuant
to the Agreement will not be subject to reduction pursuant to the provisions of
this Section 7(b).
(c) In the event that the payments or other benefits to be received
under the Agreement are reduced by reason of Section 7(b), then in determining
the priority of the payments and other benefits to be provided hereunder, the
Company will: (i) first vest all of the stock options possible under the terms
of Section 5, and only then (ii) provide for Supplemental Pension Payments as
set forth in Section 3(b) or 3(c), as applicable, and only then (iii) pay any
Separation Pay to be paid pursuant to Section 2(a), and only then (iv) provide
for any home sale payment pursuant to the terms of Section 6, in each case to
the extent possible within the limits imposed by Section 7(b).
8. Certain Conditions
(a) Payments under the Agreement will be made less all applicable tax
withholdings and deductions authorized by you.
(b) You acknowledge and agree that the consideration provided by the
Company to you under the Agreement, including without limitation payments or
other benefits to be made or provided by the Company to you pursuant to Sections
2, 3(b) or 3(c), 4, 5, 6 and/or 9, if any, is greater than and in addition to
anything of value that you otherwise would be entitled to receive from the
Company, and that the obligations assumed by you under the Agreement and in the
Release are given and undertaken in consideration of, and are adequately
supported by, the payments to be made and/or other payments to be provided to
you by the Company under and pursuant to the Agreement.
(c) In addition to compliance with the terms and provisions of any
applicable plans or programs, as they may be modified hereby, pursuant to which
any of such payments and/or other payments are provided, payment of any of the
amounts and the providing of any of the other payments referred to or set forth
in Sections 2, 3(b) or 3(c), 4, 5 and/or 6 is also subject to the following:
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(i) your granting the CBS Companies and any Spin-off Companies a
general release (the "Release") substantially in the form
attached to the Agreement (with such changes, if any, as may
be appropriate in light of any intervening changes in law to
provide the CBS Companies and any Spin-off Companies with the
same level of protection as provided in the form attached);
(ii) your not revoking the Release within the period provided
therein; and
(iii) your complying with all of your other obligations as set forth
in the Agreement and in the Release.
No payment will be made, or other payment provided, by the Company
pursuant to Sections 2, 3(b) or 3(c), 4, 5 and/or 6 until the conditions set
forth in Section 8(c)(i) and (ii) above have been met.
(d) Payments and other payments provided in accordance with Section 9
will be subject to your complying with all of your obligations as set forth in
the Agreement. However, notwithstanding anything in the Agreement to the
contrary, payments and other payments provided in accordance with Section 9(c)
and/or 9(d) will not be subject to the conditions set forth in Section 8(c)(i)
and (ii) above or to the portion of Section 8(c)(iii) above relating to a
Release.
9. Successors and Assigns
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly, in a form
acceptable to you, and to perform the Agreement.
(b) Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession will be a breach of the
Agreement. Upon any such breach of the Agreement by the Company, in addition to
any other remedies which may be available to you (including but not limited to
equitable remedies), you will be entitled to receive payments and other benefits
from the Company pursuant to the Agreement as if your employment with the
Company had been Terminated on the date on which any such succession becomes
effective (the "Succession Effective Date"). The provisions of this Section 9(b)
will be implemented as set forth in Section 9(c) with respect to stock options
and as set forth in Section 9(d) with respect to payments and other benefits
pursuant to the Agreement.
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(c) For the purpose of implementing Section 9(b), any Company stock
options that you may have that are outstanding immediately prior to the time
such succession becomes effective (the "Succession Effective Time") will, if
they are not already exercisable, become exercisable by you beginning
immediately prior to the Succession Effective Time, and those stock options,
together with your Company stock options that were already exercisable, will
remain exercisable in accordance with their terms as modified by Section 5.
Further, in the event that any adjustments favorable to the employee-holder are
made to any Company stock options with respect to or in connection with such
succession (including but not limited to the conversion of such stock options
to, or replacement of such stock options with, stock options of such successor),
your Company stock options will be treated in the same manner as those of the
employee or employees who receive the adjustments most favorable to the
employee(s).
(d) Further, for the purpose of implementing your entitlement to
receive payments and other benefits from the Company pursuant to the Agreement
as set forth in Section 9(b), except as otherwise provided in Section 9(c) with
respect to your Company stock options, you will be deemed to be entitled to all
of such payments and other payments from the Company immediately prior to the
Succession Effective Time; and notwithstanding anything in the Agreement to the
contrary, upon written demand by you to the Chief Executive Officer of the
Company, at your sole discretion, the Company will deliver such payments and
other benefits to you immediately prior to the Succession Effective Time in the
form of a lump sum, cash payment in immediately available funds consisting of
the following:
(i) an amount equal to your Separation Pay pursuant to Section 2(a), if
the Succession Effective Date is on or before the Section 2 Final
Anniversary Date;
(ii) the amount of $5,000 in lieu of financial counseling benefits
pursuant to Section 2(b), if the Succession Effective Date is on or
before the Section 2 Final Anniversary Date;
(iii) an amount equal to the actuarial equivalent on a lump sum basis
(determined in accordance with Section 9(e)) of the Supplemental
Pension Payments which you would otherwise be entitled to receive
pursuant to Section 3(b) or 3(c), as applicable, on a single life
annuity basis if your employment with the Company had been Terminated
on the Succession Effective Date;
(iv) an amount equal to the lump sum amount determined in accordance
with Section 4(c)(3) in lieu of any welfare benefits pursuant to
Section 4; and
(v) an amount equal to (a) your Cost (as defined in Section 6), minus
(b) the
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fair market value of your primary residence in the New York, New York
commuting area immediately prior to the Succession Effective Time, as
determined by two real estate appraisers selected by you at the
Company's expense.
(e) For purposes of Section 9(d)(iii), the actuarial equivalent of your
Supplemental Pension Payments on a lump sum basis will be determined based on
(i) your age on the Succession Effective Date, (ii) the prevailing Internal
Revenue Commissioner's standard table (described in Section 807(d)(5)(A) (or its
successor provision) of the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute or statutes (the "Internal Revenue Code"), and
without regard to any other subparagraph of such Internal Revenue Code Section
807(d)(5)(A)) used to determine reserves for group annuity contracts issued on
the Succession Effective Date that is prescribed by the Internal Revenue
Commissioner in guidance published in the Internal Revenue Bulletin, and (iii)
the rate of interest equal to the annual interest rate on 30-year Treasury
securities as specified by the Internal Revenue Commissioner for the first full
month preceding the calendar month in which the Succession Effective Date
occurs.
(f) For purposes of Section 9(d)(iii), there will be no actuarial
reduction applied for the early deemed commencement of your Supplemental Pension
Payments at the Succession Effective Date rather than at any later time prior to
determining the actuarial equivalent of such payments on a lump sum basis in
accordance with Section 9(e).
(g) In no event will the value of any stock options or any 401(k) plan
benefits be considered in any way when determining the amount of any payments to
be made pursuant to Section 9(d)(iii).
10. General
(a) By your signature accepting the Agreement you resign, effective as
of the Termination Date, from any and all offices and positions with CBS
Corporation and any of its Subsidiaries or affiliates to which you have been
elected or appointed and from all administrative, fiduciary or other positions
you may hold with respect to arrangements or plans for, of or relating to, CBS
Corporation or any of its Subsidiaries or affiliates.
(b) You acknowledge and agree that the separation payment set forth in
the Agreement is the only severance/separation or salary continuation payment
that you will receive from the CBS Company(ies), and that you will be waiving
any retention incentive payments and any other separation/severance or salary
continuation payments that you
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Page 16
might otherwise be entitled to receive from CBS Corporation or its Subsidiaries
or affiliates, including but not limited to separation payments under any and
all CBS Company plans or programs or otherwise.
(c) Certain Definitions. These terms or phrases will have the following
meanings when used in the Agreement.
(i) "Cause" will mean either of the following on your part: (1) being
convicted in a court of law of (i) a felony or (ii) any lesser crime or
offense than a felony which has caused demonstrable and serious injury
to the Company and involves the property of the Company or any of its
Subsidiaries: or (2) being guilty of willful gross neglect of duties or
other willful grave misconduct in carrying out your duties with the CBS
Companies; provided, however, that no act or failure to act will be
deemed "Cause" if done, or omitted to be done, in good faith with a
reasonable belief that the action or inaction was in the best interests
of the Company.
(ii) "CBS Company" will mean the Company or any Subsidiary of the
Company or any Parent of the Company.
(iii) "Company" will mean CBS Corporation and any successor to its
business and/or assets as described in Section 9 which assumes and
agrees to perform the Agreement, by operation of law or otherwise.
(iv) "Effective Date" will mean the effective date of the Agreement as
set forth in Section 12.
(v) "Good Reason" will mean: (1) the occurrence without your express
written consent of any of the following, when considered on the basis
of a comparison to your overall job situation immediately prior to such
event: (a) a material change or reduction in your title or the scope of
your responsibilities and duties, a change in your reporting
relationship such that you report to someone other than the Chairman or
the Chief Executive Officer of the Company, or a substantial reduction
in your authority with respect to policy decisions or financial
approvals; provided, however, that a change that increases the scope of
your responsibilities and duties or results in your having a more
senior title will not itself be considered such a change; (b) requiring
you to be based at any location that is different from the location
where the most senior executives officers of the Company are based; or
(c) except in each case as part of an across-the-board reduction
applicable to all senior-level executives of the Company and its major
Subsidiaries that is proportionate as applied to you, (i) a reduction
in your base salary; (ii) a reduction in your target annual or
long-term incentive award
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Page 17
opportunity; or (iii) the termination or material reduction of your
participation in otherwise applicable executive benefit plans or
programs; or (2) the failure by the Company or any of its Subsidiaries
to make any payments or provide any other benefits to you when due and
such default by the Company and/or its Subsidiaries continues
unremedied for a period of 15 days after notice of such default is
given by you to the Chief Executive Officer of the Company.
(vi) "Parent of the Company" will mean any corporation that owns stock
possessing at least 50% of the voting power of the Company, either
directly or through one or more of its Subsidiaries.
(vii) "Release" will have the meaning set forth in Section 8(c)(i).
(viii) "Section" will refer to a section of the Agreement unless
otherwise indicated.
(ix) "Section 2 Final Anniversary Date" will have the meaning set forth
in Section 1(a).
(x) "Section 3(b) Average Annual Compensation" will mean the amount
equal to the sum of: (x) 12 times the amount equal to the average of
the five highest numbers out of the following 10 numbers: the first
eight numbers, respectively, being the numbers equal to your respective
monthly base salaries on the eight consecutive December 1sts which
immediately precede your Termination Date, and the ninth and tenth
numbers each being the number equal to one-twelfth (1/12th) of the
number which equals the amount of your Termination Date Annual Base
Salary; and (y) the amount equal to the average of the five highest
numbers out of the following 10 numbers: the first eight numbers,
respectively, being your annual incentive compensation awards, if any,
paid under the Company's annual incentive program(s) during the eight
year period immediately preceding your Termination Date, and the ninth
and tenth numbers each being the number equal to the amount of your
Termination Date Annual Incentive; provided, however, if your base
salary is reduced during the 12 month period immediately preceding your
Termination Date, then for purposes of calculating your Section 3(b)
Average Annual Compensation, the most recent December 1 monthly base
salary number and the most recent annual incentive compensation award
number in the eight year period immediately preceding your Termination
Date will be replaced by the same number that is used for the ninth and
tenth numbers in such series, if higher.
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(xi) "Section 3(b) Credited Service" will mean the period from your
first day of service as an employee of the Company to the second
anniversary of your Termination Date.
(xii) "Section 3(b) Qualified Plan Benefit" will mean the aggregate of
the amounts that you are entitled to receive under all CBS Company
defined benefit pension plans and defined contribution pension plans in
which you participate or have participated prior to your Termination
Date in each case expressed as an annual amount calculated on the basis
of a single life annuity commencing on the second anniversary of your
Termination Date, whether or not you could or do actually obtain
payment of those benefits in that form.
(xiii) "Section 3(c) Average Annual Compensation" will mean the amount
equal to the sum of: (x) 12 times the amount equal to the average of
the five highest of the ten respective numbers which are equal to your
respective monthly base salaries on the ten consecutive December 1sts
which immediately precede your Termination Date; and (y) the amount
equal to the average of the five highest of the ten numbers equal to
your annual incentive compensation awards, if any, paid under the
Company's annual incentive program(s) during the ten year period
immediately preceding your Termination Date; provided, however, if your
base salary is reduced during the 12 month period immediately preceding
your Termination Date, then for purposes of calculating your Section
3(c) Average Annual Compensation, the most recent December 1 monthly
base salary number and the most recent annual incentive compensation
award number in the ten year period immediately preceding your
Termination Date will, in each case, be replaced by the following, if
higher: in the case of the December 1 monthly base salary, the number
equal to 1/12th of the number equal to your Termination Date Annual
Base Salary; and in the case of the annual incentive compensation award
number, the amount of your Termination Date Annual Incentive.
(xiv) "Section 3(c) Credited Service" will mean the period from your
first day of service as an employee of the Company to your Termination
Date.
(xv) "Section 3(c) Qualified Plan Benefit" will mean the aggregate of
the amounts that you are entitled to receive under all CBS Company
defined benefit pension plans and defined contribution pension plans in
which you participate or have participated prior to your Termination
Date, in each case expressed as an annual amount calculated on the
basis of a single life annuity commencing on your Termination Date
whether or not you could or do actually obtain payment of those
benefits in that form.
(xvi) "Separation Pay" will mean the payment set forth in Section 2(a).
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(xvii) "Spin-off Companies" will mean any company or companies that the
Company may spin off to its shareholders, together with such spin-off
company's subsidiaries, affiliates, and their respective successors and
assigns.
(xviii) "Subsidiary" will mean, unless the context otherwise requires,
any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations
other than the last corporation in such chain owns stock possessing at
least 50% of the voting power in one of the other corporations in such
chain.
(xix) "Supplemental Pension Payment(s)" will mean the payment(s) set
forth in Section 3.
(xx) "Termination" (or your employment being "Terminated") will mean
that you are no longer an employee of the Company and ceased to be so
employed either because (1) your employment with the Company is
terminated by the Company (other than by reason of your death or for
Cause) or (2) you terminate your employment with the Company for Good
Reason or (3) for purposes of the payments and other benefits set forth
in Sections 3 and 5 only, you terminate your employment with the
Company for any reason (other than for Good Reason, which is dealt with
in Section 10(c)(xx)(2)) on or after the earlier of (i) your 58th
birthday and (ii) the earliest date on which you qualify for retirement
under a CBS Company pension plan in which you then participate.
Your ability to terminate your employment with the Company for
Good Reason will not be affected by any inability on your part to
perform your regular duties with the CBS Companies due in whole or in
part to any physical or mental infirmity.
(xxi) "Termination Date" will mean the date on which your employment is
Terminated and you are no longer an employee of the Company.
(xxii) "Termination Date Annual Incentive" will have the meaning set
forth in Section 2(a)(1)(y).
(xxiii) "Termination Date Annual Base Salary" will have the meaning set
forth in Section 2(a)(1)(x).
(d) Nothing in the Agreement will operate or be construed as a contract
or assurance of or a right to continued employment with the Company or any of
its affiliates, or will interfere in any way with the right of the Company or
any of its affiliates to terminate your employment at any time for any reason,
with or without Cause.
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11. Other agreements, obligations and understandings
(a) Payments pursuant to the Agreement are not eligible for deferral
under any Company Deferred Incentive Compensation Program. Payment of any
incentive compensation awards that you may have deferred in the past under the
terms of a Company Deferred Incentive Compensation Program that have not yet
been paid as of your Termination Date will be made to you in accordance with the
terms of that program as in effect from time to time, beginning in the January
following your Termination Date. You should contact Xx. Xxxxxxx Xxxxx at AYCO
(0-000-000-0000) prior to your Termination Date to make any necessary elections
regarding the payment of any deferral account or accounts you may have.
(b) Receipt of any and all payments and other benefits pursuant to the
Agreement will be subject to the limitations and conditions set forth in Section
1(a). Breach of the Agreement and/or the Release, where applicable, will be
deemed to have occurred and payments and other benefits will be suspended
immediately upon your failure to comply with any of such obligations. Payments
and other benefits suspended for breach of any of your obligations will not
thereafter be resumed unless the Company determines that no breach has occurred,
whether or not you terminate the activity or activities which resulted in such
breach.
(c) If you should breach the Agreement, nothing stated in the Agreement
will be construed as prohibiting the CBS Companies and/or the Spin-off Companies
from pursuing all judicial legal and equitable rights and remedies available to
them, including but not limited to equitable relief and the recovery of all
other legal relief, such as lost profits, attorneys' fees, and compensatory
damages, from you.
If the Company should breach any of its obligations to you pursuant to
Section 9, nothing stated in the Agreement will be construed as prohibiting you
from pursuing all judicial legal and equitable rights and remedies available to
them, including but not limited to equitable relief and the recovery of all
other legal relief, such as attorneys' fees and compensatory damages, from the
Company.
(d) If for any reason any provision of the Agreement is held to be
invalid, illegal or unenforceable, such provision will be deemed modified to the
minimum extent necessary to make such provision consistent with applicable law
and the remaining provisions of the Agreement will not be affected and will
remain in full force and effect.
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(e) Except as otherwise provided in the Agreement, your participation
in and rights under any employee benefit plans (as defined in the Employee
Retirement Income Security Act of 1974, as amended (ERISA)), any incentive or
deferral plans of the Company, and any stock option plans of the Company will be
governed by the terms and provisions of such plans.
(f) The Agreement will be binding upon and inure to the benefit of you
and the Company, its successors and assigns; provided, however, that the Company
will require its successors and assigns to expressly assume, agree to perform,
and perform the Agreement in the same manner and to the same extent that the
Company would be required to perform the Agreement if no such succession and
assignment had taken place. Your rights hereunder may not be transferred or
assigned in any way (whether by operation of law or otherwise) and your duties
hereunder may not be delegated without the prior written consent of the Company.
(g) The Agreement is made and entered into in the State of New York,
and will in all respects be interpreted, enforced and governed by and under the
law of the State of New York without reference to principles of conflict of
laws. The Agreement, together with the Release, your Employee Intellectual
Property Agreement with the Company and your Company stock option agreement(s),
if any, supersedes and replaces all prior commitments, negotiations,
representations, agreements and understandings made to or with you, whether oral
or written, with respect to the subject matter hereof. The Agreement may be
amended, modified or waived only by a written agreement executed by both of the
parties hereto. No waiver of any provision of the Agreement at any one time will
be deemed a waiver of such provision at any subsequent time. The headings of the
Sections and subsections of the Agreement are inserted for convenience only.
Such headings will not affect the meaning of any of the provisions of the
Agreement and will not be deemed a part of the Agreement.
12. Conditions to Effectiveness
Upon execution by both you and CBS Corporation, the Agreement will be
effective as of March 2, 1999 (the "Effective Date").
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If the Agreement is acceptable to you, please sign the original copy of
the Agreement and return it to me at CBS Corporation. You should keep a copy of
the Agreement for your records. By signing and returning the unmodified original
copy of the Agreement, you acknowledge that you understand and accept the terms
and conditions set forth above.
Sincerely,
CBS CORPORATION
By: /s/ Xxxxx X. XxXxxxxxxx
---------------------------
Xxxxx X. XxXxxxxxxx
Chairman
cc: X.X. Xxxxxx Date: April 15, 1999
X. Xxxxxxxxxx -------------------------
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ACCEPTANCE
I acknowledge that I have read, understand and agree with and to the
terms and conditions stated in the foregoing Agreement. By my signature I
acknowledge that the consideration set forth in the Agreement is adequate
compensation for all of my agreements contained herein and in the Release, that
I have had the opportunity to consult with counsel of my own choosing regarding
the Agreement, and that in signing the Agreement, I intend to be legally bound
by it.
/s/ Xxxxx X. Xxxxxxxx April 8, 1999
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Xxxxx X. Xxxxxxxx Date
