EXHIBIT 10.1
[VIACOM LETTERHEAD]
As of January 31, 2005
Xxxxxxx X. Xxxxxxxx
c/o Viacom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
Dear Xxxxxxx:
This letter expresses our understanding concerning your departure from your
position with Viacom Inc. ("Viacom" or the "Company"). Reference is made to your
employment agreement with Viacom, dated March 22, 2001 (your "Employment
Agreement"). Defined terms used without definitions in this letter agreement
will have the meanings provided in your Employment Agreement.
1. Resignation from Executive Position. You will resign from your position
as Senior Executive Vice President, Chief Financial Officer of Viacom
for Good Reason on the date on which your successor is retained or such
earlier date as shall be requested by the Company but not later than
June 30, 2005 (the earlier of such dates being your "Resignation
Date").
2. Contractual Payments, Benefits and Perquisites. After your Resignation
Date, you will receive the contractual payments, benefits and
perquisites due upon a termination of employment for Good Reason under
your Employment Agreement, as amended by the provisions of this letter
agreement, as set forth below.
o Salary for the period from your Resignation Date through December
31, 2005 will be paid in accordance with Viacom's payroll
practices. Salary for the period from January 1, 2006 through the
one year anniversary of your Resignation Date will be paid to you
in a lump sum on or before December 31, 2005. Salary for the
period from the one year anniversary of your Resignation Date
through July 31, 2006 will be paid to you in a lump sum on or
before December 31, 2005 but will be remitted to your attorneys,
Xxxxxxx Xxxx & Xxxxx LLP, to be held in escrow in accordance with
the attached escrow agreement (the "Escrow Agreement").
o Payment of Deferred Compensation for the period from January 1,
2005 through your Resignation Date and for prior years (together
with the return thereon as provided in paragraph 3(c) in your
Employment Agreement) will be paid, as provided in your Employment
Agreement, by January 31, 2006. Deferred Compensation for the
period from your Resignation Date through December 31, 2005 will
be deferred in accordance with paragraph 3(c) of your Employment
Agreement and paid (together with the return
Xxxxxxx X. Xxxxxxxx
As of January 31, 2005
Page 2
thereon as provided in paragraph 3(c) in your Employment
Agreement) on or before December 31, 2005. Payment of Deferred
Compensation for the period from January 1, 2006 through the one
year anniversary of your Resignation Date will be paid to you in a
lump sum on or before December 31, 2005. Deferred Compensation for
the period from the one year anniversary of your Resignation Date
through July 31, 2006 will be paid to you in a lump sum on or
before December 31, 2005 but will be remitted to your attorneys,
Xxxxxxx Xxxx & Xxxxx LLP, to be held in escrow in accordance with
the Escrow Agreement.
o Car allowance for the period from your Resignation Date through
December 31, 2005 will be paid in accordance with Xxxxxx's payroll
practices. Car allowance for the period from January 1, 2006
through March 21, 2006 will be paid to you in a lump sum on or
before December 31, 2005. You will receive car insurance for the
period from your Resignation Date through December 31, 2005.
o Bonus compensation for the period from January 1, 2005 through the
later of April 30, 2005 or your Resignation Date will be pro-rated
and payable at the annual rate of $5.5 million. Bonus compensation
for the period from the later of April 30, 2005 or your
Resignation Date through March 21, 2006 will be pro-rated and
payable at your annual Target Bonus rate of $2.5 million. Bonus
compensation for the entire period from January 1, 2005 through
March 21, 2006 will be paid to you in a lump sum on or before
December 31, 2005.
o You will receive continued coverage under Viacom's group term life
insurance policy in the amount of $5 million (convertible to an
individual policy at your own expense thereafter) through December
31, 2005.
o You will receive coverage under Viacom's medical and dental
insurance under COBRA during the period from your Resignation
Date, as provided in paragraph 8(d)(vi) in your Employment
Agreement, through December 31, 2005 (with a right to continue at
your own expense thereafter in accordance with COBRA).
o You are entitled to have provided to you an appropriate office and
secretarial assistance during the period beginning on your
Resignation Date and ending on December 31, 2005 or, if earlier,
the date on which you obtain other employment. The secretarial
assistance will be provided by your current assistant, Xxxxx
Xxxxx, provided she has not terminated her employment with the
Company.
You will not be required to mitigate compensation paid pursuant to
this paragraph 2 except that Salary and Deferred Compensation payable
for the period from the one year anniversary of your Resignation Date
through July 31, 2006 will be subject to mitigation as provided in
paragraph 8(e) in your Employment Agreement.
Xxxxxxx X. Xxxxxxxx
As of January 31, 2005
Page 3
3. Stock Options. All unvested LTMIP stock options will vest and become
exercisable in accordance with their terms on your Resignation Date,
and you will have one year after the end of your employment term
(specifically, until March 21, 2007) to exercise outstanding stock
options (but not, in any case, beyond the options' expiration date).
4. Restrictive Covenants. Your non-competition obligations under
paragraph 6(a) in your Employment Agreement will terminate on your
Resignation Date. Your obligations under paragraphs 6(b) through 6(h)
in your Employment Agreement, and Viacom's obligations under paragraph
6(h), will remain in effect for the periods of time provided in such
paragraphs after your termination of employment. Viacom may enforce
those obligations through injunctive relief as provided in paragraph
6(i) in your Employment Agreement. Viacom hereby waives the
application of paragraph 6(c) in your Employment Agreement (relating
to non-solicitation of employees) to your current assistant, Xxxxx
Xxxxx.
5. 2004 Bonus Compensation. You will receive bonus compensation for 2004
in the amount of $5.5 million, payable by February 10, 2005 (or such
later date which is eight days after you execute this letter agreement
and the general release attached hereto).
6. Disability. In the event of your Disability prior to your
Resignation Date, you will be entitled to payment of all amounts due
under this letter agreement through the date of Disability.
Thereafter, you will be entitled to receive compensation and benefits
as provided in paragraph 7 in your Employment Agreement except as set
forth below with respect to your LTMIP stock options. In the event
that you recover and are no longer "disabled" within the meaning of
Viacom's STD and LTD programs before December 31, 2005, your
employment will be terminated and you will thereafter receive the
compensation, benefits and perquisites provided in this letter
agreement for the balance of the period for which such compensation,
benefits and perquisites are provided. In the event that you receive
benefits under the LTD program, all unvested LTMIP stock options will
immediately vest and, together with all outstanding LTMIP stock
options that had already vested, will be exercisable until the third
anniversary of the date on which LTD benefits commence.
7. Death. In the event of your death prior to December 31, 2005, your
beneficiary or estate will be entitled to the following:
o payment of Salary, Deferred Compensation, car allowance and bonus
compensation due or payable under this letter agreement with
respect to the period through the date of death;
o the proceeds available under the Company provided life insurance
in accordance with its terms; and
o continued coverage under COBRA at their expense under Viacom's
medical and dental insurance plans for the balance of the period
required by law.
In the event of your death before your Resignation Date, all unvested
LTMIP stock options will immediately vest and, together with all
outstanding LTMIP stock options that had already vested, will be
exercisable until the second anniversary of the date of death. Except
as
Xxxxxxx X. Xxxxxxxx
As of January 31, 2005
Page 4
provided in this paragraph 7, Viacom will not have any further
obligation to provide compensation, benefits or perquisites after the
date of death; the foregoing is without prejudice to the right of your
beneficiary or estate to have all rights expressly provided to them
under all other Viacom benefit plans and programs.
8. Amendment to Employment Agreement. Your Employment Agreement will be
amended as provided in this letter agreement. Except as so amended, all
other terms and conditions in your Employment Agreement will remain the
same and your Employment Agreement, as amended by this letter
agreement, will remain in full force and effect and Viacom and you will
have the rights and obligations set forth in your Employment Agreement.
9. Miscellaneous. For the avoidance of doubt, it is agreed that until the
Resignation Date you shall continue to receive all compensation,
benefits and perquisites provided under your Employment Agreement. If
your Resignation Date occurs before June 30, 2005, Viacom will provide
you with ten days' prior notice before you are required to vacate your
current office space. In consideration of your resignation for Good
Reason and the terms of this letter agreement, a written notice of
Xxxxxx's intention to not renew the Term of your Employment Agreement
is waived. All amounts payable, and benefits and perquisites provided,
under this letter agreement and your Employment Agreement will be made
less applicable deductions and subject to applicable withholdings as
may be required by applicable law. The payments and benefits to be
provided by Viacom pursuant to this letter agreement and your
Employment Agreement constitute liquidated damages and will be deemed
to satisfy and be in full and final settlement of all obligations of
Viacom to you under this letter agreement, your Employment Agreement
and under any Viacom severance or income continuation plan. This letter
agreement and your Employment Agreement contain the entire
understanding of the parties hereto relating to the subject matter
contained herein. Notwithstanding anything in this letter agreement to
the contrary, the provisions of paragraph 8(f) in your Employment
Agreement shall apply and, except as otherwise specifically provided in
this letter agreement, your participation in all Viacom benefit plans
and programs shall terminate on your Resignation Date (including,
without limitation, Viacom's 401(k) and pension plans and LTD) and you
shall continue to have all rights expressly provided in all Viacom
benefit plans and programs and subject to any vested rights you may
have under the terms of such plans or programs. The foregoing does not
apply to your LTMIP stock options which shall be governed by paragraph
3 above and, in the event of your Disability or death, paragraphs 6 and
7 above, and the provisions of the LTMIP and the certificates for such
stock option awards.
Xxxxxxx X. Xxxxxxxx
As of January 31, 2005
Page 5
If the foregoing correctly sets forth our understanding, please sign, date and
return all four copies of this letter agreement to the undersigned for execution
on behalf of Viacom. After (i) this letter agreement has been executed by Xxxxxx
and a fully executed copy returned to you, (ii) Viacom, you and your attorneys,
Xxxxxxx Xxxx & Xxxxx LLP, have executed the Escrow Agreement, and (iii) you have
executed and delivered to Viacom a general release (other than for claims under
this letter agreement, or rights under any and all Viacom benefit plans and
programs in accordance with the terms of such plans or programs) on the attached
form (and not revoked the release within seven days), this letter agreement will
constitute a binding amendment to your Employment Agreement and a binding
agreement between us.
Very truly yours,
VIACOM INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President,
Human Resources and
Administration
ACCEPTED AND AGREED:
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxx
Dated: /s/ 2/8/05
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