Exhibit 10.2
[VIACOM LETTERHEAD]
June 14, 2005
Xxxxxx Xxxxxxx
c/o Viacom Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Mr. Xxxxxxx:
Reference is made to your employment agreement with Viacom Inc. ("Viacom"
or the "Company"), dated July 1, 2004 (your "Employment Agreement"). This letter
expresses our agreement concerning the assignment of your Employment Agreement
to CBSCO (as defined below) on the following terms:
1. Viacom has announced that its Board of Directors has approved the
separation of the Company into two separate businesses (the
"Business Separation"). The date on which CBSCO becomes a
separate, publicly-held company is referred to herein as the
"Effective Date".
2. You agree that, notwithstanding any other provision of your
Employment Agreement but subject to the provisions contained
herein, Viacom will assign your Employment Agreement to the
publicly held parent corporation ("CBSCO") if different from
Viacom, that acquires, at a minimum, the assets (including
associated contract and intellectual property rights) of (i) CBS,
CBS Enterprises, the Viacom Station Group, UPN, Infinity Radio
and Viacom Outdoor, (ii) the worldwide television operations of
Paramount Pictures Corporation (including Spelling Productions
Inc.), including, but not limited to, all network and syndicated
broadcast and cable television production and distribution
activities now performed by the television operations of
Paramount Pictures Corporation (collectively, the "Paramount
Television Operations"), (iii) any other business units managed
by you on July 1, 2004, and (iv) Showtime Networks, Simon &
Xxxxxxxx and Paramount Parks; and CBSCO will unconditionally
assume all obligations under your Employment Agreement. Upon such
assignment and assumption, CBSCO will be responsible for all
obligations of Viacom under your Employment Agreement and Viacom
will be released from all obligations under your
Xxxxxx Xxxxxxx
June 14, 2005
Page 2
Employment Agreement. You agree that such assignment shall not
constitute a breach of your Employment Agreement or provide you
with "Good Reason" to terminate your employment pursuant to
paragraph 8(b) of your Employment Agreement.
3. In the event of an assignment of your Employment Agreement in
accordance with the terms and conditions contained herein, it is
further agreed that each reference to Viacom in your Employment
Agreement will, as of the Effective Date, refer to CBSCO and that
your Employment Agreement will, as of the Effective Date, be
deemed to be amended as follows:
A. Paragraph 8(b) of your Employment Agreement will be amended to
replace clauses (v) through (ix) and the last paragraph of
paragraph 8(b) with the following:
"(v) your removal from or any failure to re-elect you as
the sole President and Chief Operating Officer of
CBSCO (if you commenced serving in that position as
of the Effective Date) or, if you are the Chief
Executive Officer of CBSCO, as the sole Chief
Executive Officer of CBSCO;
(vi) the failure to appoint you as the sole Chief
Executive Officer of CBSCO on the earlier to occur
of: (A) the date on which Xxxxxx Xxxxxxxx resigns
from the position of Chief Executive Officer (or
ceases to hold such position for any reason); and (B)
December 31, 2007;
(vii) a change in reporting such that you do not report
solely and directly to Xxxxxx Xxxxxxxx in his
capacity as the Chairman and Chief Executive Officer
of CBSCO or to CBSCO's Board of Directors before
December 31, 2007 or, if earlier, the date on which
Xxxxxx Xxxxxxxx resigns from the position of Chief
Executive Officer of CBSCO (or ceases to hold such
position for any reason), and, thereafter, a change
in reporting such as you do not report to the
Chairman of CBSCO or to CBSCO's Board of Directors;
or
(viii) any other material breach by CBSCO of its material
obligations hereunder.
Notwithstanding anything to the contrary in this Agreement,
CBSCO may sell or otherwise dispose of any New Business Unit
(as defined below); provided, that the aggregate revenues of
all New Business Units sold or otherwise disposed of within
any six (6) month period during the
Xxxxxx Xxxxxxx
June 14, 2005
Page 3
Employment Term do not constitute more than 50% of the
aggregate revenues of the New Business Units at such time,
based on the CBSCO's most recent quarterly financial
statements. In making the calculation described in the proviso
in the preceding sentence, CBSCO may include, on a pro forma
basis, the revenues of any Potential New Business Unit (as
defined below); provided, that, if CBSCO formally abandons
(or it receives notification that the other party has formally
abandoned) the negotiations relating to CBSCO's acquisition of
a Potential New Business Unit whose revenues were included in
the calculation referred to in the preceding sentence, CBSCO
will promptly notify you of such abandonment and you can, by
written notice to CBSCO within thirty (30) business days after
CBSCO's notification to you, require the calculation to be
made as of the date of such notification without including the
revenues of such company. A "New Business Unit" shall mean any
business unit of CBSCO including any business unit acquired
after the Effective Date but excluding (i) any business unit
which was a business unit managed by you prior to the date
that you entered into this Agreement, and (ii) the Paramount
Television Operations (as defined in paragraph 2 above). A
"Potential New Business Unit" shall mean any business unit for
which CBSCO is actively negotiating the acquisition under
authorization from the CBSCO Board of Directors. "Effective
Date" shall have the meaning set forth in that certain letter
agreement dated June 14, 2005 between the parties to this
Agreement. It is agreed that any sale of a New Business Unit
by CBSCO shall be made only after the Board of Directors of
CBSCO has meaningfully consulted with you regarding such
transaction."
B. Paragraph 8(g) of your Employment Agreement will be deleted in
its entirety.
4. Your outstanding stock options will be adjusted (a) in the same
manner as other outstanding stock options held by employees of
CBSCO are adjusted in connection with the Business Separation,
and (b) in a manner that the Compensation Committee of the Viacom
Board of Directors determines in good faith would eliminate any
reduction in the value of your outstanding stock options that
might otherwise be caused by the Business Separation.
5. A. The number of restricted share units to be awarded to you
after the Business Separation will be determined by (a)
multiplying the closing price of a share of Viacom Class B
Common Stock on the last trading day on the New York Stock
Exchange before the Effective Date by 115,000, and (b)
dividing this amount by the closing price of a share of Class
B Common Stock of CBSCO on the Effective Date or, if the
Effective Date is not a trading date, on the first trading day
after the Effective Date, on the principal stock exchange on
which the stock of CBSCO is traded.
Xxxxxx Xxxxxxx
June 14, 2005
Page 4
B. Your Employment Agreement provides that your next grant of
restricted share units will be awarded during the first
calendar quarter of 2006. It would be desirable for your next
grant of restricted share units to be awarded by CBSCO.
Accordingly, you agree that, if the Business Separation occurs
after the end of the first calendar quarter of 2006 but before
the end of the second calendar quarter of 2006, your next
award of restricted share units could be granted during the
second calendar quarter of 2006; if the Business Separation
has not occurred by the end of the second calendar quarter of
2006, you will receive your next award of restricted share
units from Viacom by the end of the second calendar quarter of
2006 and it is expected that such restricted share units will
be adjusted by the Compensation Committee in the same manner
that the restricted share units to be awarded to you after the
Business Separation are adjusted pursuant to paragraph A
above. It is acknowledged and agreed that the foregoing will
in no way delay the vesting of such restricted share units, as
provided for in your Employment Agreement.
6. Subject to obtaining required approvals of the Board of Directors
and the stockholders of CBSCO, any adjustment or change to, or
adoption of a new, Senior Executive STIP will preserve the
potential maximum bonus that could be paid under the current
Senior Executive STIP.
7. It is our current expectation that CBSCO will adopt benefits
plans, retirement plans and other similar plans in order to
provide you with benefits comparable to the benefits currently
available to you; adoption of such plans would, among other
things, be subject to obtaining required approvals of the Board
of Directors and stockholders of CBSCO. The foregoing shall in no
way limit any specific benefits provided to you pursuant to your
Employment Agreement.
8. Except as expressly provided for herein, your Employment
Agreement will not be modified and will continue in full force
and effect in accordance with its terms and nothing contained
herein will in any way preclude you from disputing any actions
taken by the Company in violation of this letter agreement or
your Employment Agreement. In addition, this letter agreement
will not be deemed to be a waiver of any term or condition of
your Employment Agreement except as expressly provided for
herein.
Xxxxxx Xxxxxxx
June 14, 2005
Page 5
Please sign, date and return all four (4) copies of this letter agreement
to the undersigned for execution on behalf of Viacom; after this letter
agreement has been executed by Xxxxxx and a fully executed copy returned to you,
it will constitute a binding amendment to your Employment Agreement.
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/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Dated: June 14, 2005
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