EXHIBIT 10(q)
March 22, 2001
Xxxxxxx X. Xxxxxxxx
c/o Viacom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxxx:
Viacom Inc. ("Viacom"), 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, agrees to
employ you and you agree to accept such employment upon the following terms and
conditions:
1. TERM. The term of your employment under this Agreement shall commence
on March 22, 2001 (the "Commencement Date") and, unless terminated by Viacom or
you pursuant to paragraph 8(a), (b) or (c), shall continue through and until the
day preceding the fifth anniversary of the Commencement Date (the "End Date").
The period from the Commencement Date through the End Date is referred to as the
"Term" notwithstanding any earlier termination of your employment for any
reason.
2. DUTIES. You agree to devote your entire business time, attention and
energies to the business of Viacom and its subsidiaries during your employment
with Viacom. On the Commencement Date, you will become Senior Executive Vice
President of Viacom and, commencing on May 1, 200l, you shall become Senior
Executive Vice President, Chief Financial Officer of Viacom, in both cases,
reporting directly and solely to the position of the President and Chief
Operating Officer of Viacom (the "COO") or, in the event that Xxx Xxxxxxxx is
not the COO, to the Chief Executive Officer (the "CEO") of Viacom, and you agree
to perform all duties reasonable and consistent with your respective offices as
the COO or the CEO (in the event that you are reporting to the CEO) may assign
to you from time to time. You will have such authority as is necessary for the
performance of your obligations hereunder. Your principal place of business
shall be Viacom's headquarters in the New York City metropolitan area.
3. COMPENSATION.
(a) SALARY. For all the services rendered by you in any capacity
under this Agreement, Viacom agrees to pay you One Million Dollars ($1,000,000)
a year in base salary ("Salary"), less applicable deductions and withholding
taxes, in accordance with Viacom's payroll practices as they may exist from time
to time.
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March 22, 2001
Page 2
(b) BONUS COMPENSATION. You also shall be entitled to receive
annual bonus compensation ("Bonus") during your employment with Viacom under
this Agreement, determined and payable as follows:
(i) Your Bonus for each calendar year during your employment with
Viacom under this Agreement will be determined in accordance
with the Viacom Senior Executive Short-Term Incentive Plan, as
the same may be amended from time to time (the "STIP").
(ii) Your target bonus ("Target Bonus") for each of those calendar
years shall be Two Million Five Hundred Thousand Dollars
($2,500,000). Your Bonus for calendar year 2001 will not be
prorated. Your Bonus may be prorated for the portion of the
2006 calendar year that you are employed under this Agreement.
(iii) Your Bonus for any calendar year shall be payable, less
applicable deductions and withholding taxes, by February 28th
of the following year.
(c) DEFERRED COMPENSATION. In addition to your Salary and Bonus,
you shall earn, in respect of calendar years 2002 through 2006, an additional
amount ("Deferred Compensation"), the payment of which (together with the return
thereon as provided in this paragraph 3(c)) shall be deferred until January of
the first calendar year following the year in which you cease to be an
"executive officer" of Viacom, as defined for purposes of the Securities
Exchange Act of 1934, as amended. The amount of Deferred Compensation for
calendar year 2002 shall be in an amount equal to no less than 7.5% of your
Salary for 2001. The amount of Deferred Compensation for calendar years 2003
through 2006 shall be subject to annual increases each January 1st, commencing
January 1, 2003, in an amount equal to no less than 7.5% of the sum of your
Salary and Deferred Compensation for the preceding year. The amount of Deferred
Compensation for calendar year 2006 shall be prorated for the period that you
are employed under this Agreement. Deferred Compensation shall be credited to a
bookkeeping account maintained by 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 excess 401(k) plan of Viacom (as such
plan may be amended from time to time) is determined (it being understood and
agreed that, if at any time during which the Deferred Compensation remains
payable, your excess 401(k) account balance 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)
account was notionally invested immediately prior to its distribution). Viacom's
obligation to pay the Deferred Compensation (including the return thereon
provided for in this paragraph 3(c)), shall be an unfunded obligation to be
satisfied from the general funds of Viacom.
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(d) STOCK OPTIONS.
(i) OPTION GRANT. You shall be awarded a grant under Viacom's 2000
Long-Term Management Incentive Plan (the "2000 LTMIP") of stock
options to purchase One Million (1,000,000) shares of Viacom's
Class B Common Stock, effective as of your Commencement Date,
with an exercise price equal to the closing price of a share of
the Class B Common Stock on the NYSE on your Commencement Date.
This grant shall vest in four equal installments on the first,
second, third and fourth anniversaries of the date of grant.
(ii) ADDITIONAL GRANTS. In addition, during your employment under
this Agreement, you shall be eligible to receive additional
grants of stock options in the discretion of the Viacom Board
of Directors or a committee of the Board.
4. BENEFITS; BUSINESS EXPENSES.
(a) BENEFITS. You shall participate in such medical, dental,
long-term disability insurance, 401(k), pension and other plans as Viacom may
have or establish from time to time and in which Viacom senior executives are
eligible to participate, subject to the eligibility provisions of such plans.
This provision, however, shall not be construed to either require Viacom to
establish any welfare, compensation or long-term incentive plans, or to prevent
the modification or termination of any plan once established, and no action or
inaction with respect to any plan shall affect this Agreement. You shall be
entitled to four (4) weeks vacation per year to be taken in accordance with
Viacom policy.
(b) LIFE INSURANCE. You will be covered under Viacom's group term
life policy in the amount of Five Million Dollars ($5,000,000). Viacom will
maintain such policy in effect for the entire Term even if your employment is
terminated pursuant to paragraph 8(b) or 8(c) of this Agreement or if you become
disabled and receive benefits under Viacom's LTD policy (as defined in
paragraph 7). If this Agreement is not extended or renewed at the end of the
Term, you can convert such policy at your expense to an individual policy.
(c) CAR ALLOWANCE AND INSURANCE. During your employment under this
Agreement, you shall receive a car allowance in an amount equal to the amount
provided to the other senior executives of Viacom who report to the COO and car
insurance for one vehicle.
(d) BUSINESS EXPENSES. During your employment under this Agreement,
Viacom shall reimburse you for such reasonable travel and other expenses
incurred in the performance of your duties as are customarily reimbursed to
Viacom executives at comparable levels.
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5. EXCISE TAXES. Notwithstanding anything herein to the contrary, if
it is determined by Viacom, or by the Internal Revenue Service (the "IRS")
pursuant to an IRS audit of your federal income tax return(s) (an "Audit"), that
any payment or benefit provided to you under this Agreement would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any interest or penalties with respect to such excise tax (such
excise tax, together with any interest or penalties thereon, is herein referred
to as the "Excise Tax"), then Viacom shall pay (either directly to the IRS as
tax withholdings or to you as a reimbursement of any amount of taxes, interest
and penalties paid by you to the IRS) both the Excise Tax and an additional cash
payment (a "Gross-Up Payment") in an amount that will place you in the same
after-tax economic position that you would have enjoyed if the payment or
benefit had not been subject to the Excise Tax. The amount of the Gross-Up
Payment shall be calculated by Viacom's regular independent auditors based on
the amount of the Excise Tax paid by Viacom as determined by Viacom or the IRS.
If the amount of the Excise Tax determined by the IRS is greater than an amount
previously determined by Viacom, Viacom's auditors shall recalculate the amount
of the Gross-Up Payment. You shall promptly notify Viacom of any IRS assertion
during an Audit that an Excise Tax is due with respect to any payment or
benefit, but you shall be under no obligation to defend against such claim by
the IRS unless Viacom requests, in writing, that the you undertake the defense
of such IRS claim on behalf of Viacom and at Viacom's sole expense. In such
event, Viacom may elect to control the conduct to a final determination through
counsel of it own choosing and at its sole expense, of any audit, administrative
or judicial proceeding involving an asserted liability relating to the Excise
Tax, and you shall not settle, compromise or concede such asserted Excise Tax
and shall cooperate with Viacom in each phase of any contest.
6. NON-COMPETITION, CONFIDENTIAL INFORMATION, ETC.
(a) NON-COMPETITION. You agree that your employment with Viacom is
on an exclusive basis and that, while you are employed by Viacom, you will not
engage in any other business activity which is in conflict with your duties and
obligations (including your commitment of time) under this Agreement. You agree
that, during the Non-Compete Period (as defined below), you shall not directly
or indirectly engage in or participate as an owner, partner, stockholder,
officer, employee, director, agent of or consultant for any business competitive
with any business of Viacom, without the written consent of Viacom; PROVIDED,
HOWEVER, that this provision shall not prevent you from investing as less than a
one (1%) percent stockholder in the securities of any company listed on a
national securities exchange or quoted on an automated quotation system. The
Non-Compete Period shall cover the entire Term; PROVIDED, HOWEVER, that, if your
employment terminates before the end of the Term, the Non-Compete Period shall
terminate, if earlier, (i) one year after you terminate your employment for Good
Reason or Viacom terminates your employment without Cause, or on such earlier
date as you may make the election under paragraph 6(j) (which relates to your
ability to terminate your obligations under this paragraph 6(a) in exchange for
waiving your right to certain compensation and benefits); or (ii) eighteen (18)
months after Viacom terminates your employment for Cause or you resign without
Good Reason. (Defined terms used without definitions in the preceding sentence
have the meanings provided in paragraphs 8(a) and (b).)
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March 22, 2001
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(b) CONFIDENTIAL INFORMATION. You agree that, during the Term or at
any time thereafter, (i) you shall not use for any purpose other than the duly
authorized business of Viacom, or disclose to any third party, any information
relating to Viacom or any of its affiliated companies which is proprietary to
Viacom or any of its affiliated companies ("Confidential Information"),
including any trade secret or any written (including in any electronic form) or
oral communication incorporating Confidential Information in any way (except as
may be required by law or in the performance of your duties under this Agreement
consistent with Viacom's policies); and (ii) you will comply with any and all
confidentiality obligations of Viacom to a third party, whether arising under a
written agreement or otherwise. Information shall not be deemed Confidential
Information which (x) is or becomes generally available to the public other than
as a result of a disclosure by you or at your direction or by any other person
who directly or indirectly receives such information from you, or (y) is or
becomes available to you on a non-confidential basis from a source which is
entitled to disclose it to you.
(c) NO EMPLOYEE SOLICITATION. You agree that, during the Term and
for one (1) year thereafter, you shall not, directly or indirectly, engage,
employ or solicit the employment or consulting services of any person who is
then or has been within six (6) months prior to the time of such action, an
employee of Viacom or any of its affiliated companies, or agree to do so.
(d) VIACOM OWNERSHIP. The results and proceeds of your services
under this Agreement, including, without limitation, any works of authorship
resulting from your services during your employment with Viacom and/or any of
its affiliated companies and any works in progress resulting from such services,
shall be works-made-for-hire and Viacom shall be deemed the sole owner
throughout the universe of any and all rights of every nature in such works,
whether such rights are now known or hereafter defined or discovered, with the
right to use the works in perpetuity in any manner Viacom determines in its sole
discretion without any further payment to you. If, for any reason, any of such
results and proceeds are not legally deemed a work-made-for-hire and/or there
are any rights in such results and proceeds which do not accrue to Viacom under
the preceding sentence, then you hereby irrevocably assign and agree to assign
any and all of your right, title and interest thereto, including, without
limitation, any and all copyrights, patents, trade secrets, trademarks and/or
other rights of every nature in the work, whether now known or hereafter defined
or discovered, and Viacom shall have the right to use the work in perpetuity
throughout the universe in any manner Viacom determines in its sole discretion
without any further payment to you. You shall, as may be requested by Viacom
from time to time, do any and all things which Viacom may deem useful or
desirable to establish or document Viacom's rights in any such results and
proceeds, including, without limitation, the execution of appropriate copyright,
trademark and/or patent applications, assignments or similar documents and, if
you are unavailable or unwilling to execute such documents, you hereby
irrevocably designate the CEO or his designee as your attorney-in-fact with the
power to execute such documents on your behalf. To the extent you have any
rights in the results and proceeds of
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your services under this Agreement that cannot be assigned as described above,
you unconditionally and irrevocably waive the enforcement of such rights. This
paragraph 6(d) is subject to, and does not limit, restrict, or constitute a
waiver by Viacom or any of its affiliated companies of any ownership rights to
which Viacom or any of its affiliated companies may be entitled by operation of
law by virtue of being your employer.
(e) LITIGATION. You agree that, during the Term, for one (1) year
thereafter and, if longer, during the pendancy of any litigation or other
proceeding, (i) you shall not communicate with anyone (other than your own
attorneys and tax advisors), except to the extent necessary in the performance
of your duties under this Agreement, with respect to the facts or subject matter
of any pending or potential litigation, or regulatory or administrative
proceeding involving Viacom or any of Viacom's affiliated companies, other than
any litigation or other proceeding in which you are a party-in-opposition,
without giving prior notice to Viacom or Viacom's counsel; and (ii) in the event
that any other party attempts to obtain information or documents from you with
respect to matters possibly related to such litigation or other proceeding, you
shall promptly notify Viacom's counsel before providing such information or
documents.
(f) NO RIGHT TO GIVE INTERVIEWS OR WRITE BOOKS, ARTICLES, ETC.
During the Term, except as authorized by Viacom, you shall not (i) give any
interviews or speeches, or (ii) prepare or assist any person or entity in the
preparation of any books, articles, television or motion picture productions or
other creations, in either case, concerning Viacom or any of its affiliated
companies or any of their respective officers, directors, agents, employees,
suppliers or customers.
(g) RETURN OF PROPERTY. All documents, data, recordings, or other
property, whether tangible or intangible, including all information stored in
electronic form, obtained or prepared by or for you and utilized by you in the
course of your employment with Viacom or any of its affiliated companies shall
remain the exclusive property of Viacom. In the event of the termination of your
employment for any reason, Viacom reserves the right, to the extent permitted by
law and in addition to any other remedy Viacom may have, to deduct from any
monies otherwise payable to you the following: (i) all amounts you may owe to
Viacom or any of its affiliated companies at the time of or subsequent to the
termination of your employment with Viacom; and (ii) the value of the Viacom
property which you retain in your possession after the termination of your
employment with Viacom. In the event that the law of any state or other
jurisdiction requires the consent of an employee for such deductions, this
Agreement shall serve as such consent.
(h) NON-DISPARAGEMENT. You agree that, during the Term and for one
year thereafter, you shall not, in any communications with the press or other
media or any customer, client or supplier of Viacom or any of its affiliated
companies, criticize, ridicule or make any statement which disparages or is
derogatory of Viacom or any of its affiliated companies or any
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March 22, 2001
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of their respective directors or senior officers, and Viacom agrees that its
senior officers, including the Chairmen of its divisions, shall not, for the
same period of time, criticize, ridicule or make any statements which disparage
or are derogatory of you.
(i) INJUNCTIVE RELIEF. Viacom has entered into this Agreement in
order to obtain the benefit of your unique skills, talent, and experience. You
acknowledge and agree that any violation of paragraphs 6(a) through (h) of this
Agreement will result in irreparable damage to Viacom, and, accordingly, Viacom
may obtain injunctive and other equitable relief for any breach or threatened
breach of such paragraphs, in addition to any other remedies available to
Viacom.
(j) SURVIVAL; MODIFICATION OF TERMS. Your obligations under
paragraphs 6(a) through (i) shall remain in full force and effect for the entire
period provided therein notwithstanding the termination of your employment under
this Agreement for any reason or the expiration of the Term; PROVIDED, HOWEVER,
that your obligations under paragraph 6(a) (but not under any other provision of
this Agreement) shall cease if you terminate your employment for Good Reason or
Viacom terminates your employment without Cause and you notify Viacom in writing
that you have elected to waive your right to receive, or to continue to receive,
termination payments and benefits under paragraphs 8(d)(i) through (vii),
paragraph 8(d)(ix) and/or 8(e). You and Viacom agree that the restrictions and
remedies contained in paragraphs 6(a) through (i) are reasonable and that it is
your intention and the intention of Viacom that such restrictions and remedies
shall be enforceable to the fullest extent permissible by law. If a court of
competent jurisdiction shall find that any such restriction or remedy is
unenforceable but would be enforceable if some part were deleted or the period
or area of application reduced, then such restriction or remedy shall apply with
the modification necessary to make it enforceable.
7. DISABILITY. In the event that you become "disabled" within the
meaning of such term under Viacom's Short-Term Disability ("STD") program and
its Long-Term Disability ("LTD") program during the Term (such condition is
referred to as a "Disability"), you will receive compensation under the STD
program in accordance with its terms. Thereafter, you will be eligible to
receive benefits under the LTD program in accordance with its terms. If you have
not returned to work by December 31st of a calendar year during the Term, you
will receive bonus compensation for the calendar year(s) during the Term in
which you receive compensation under the STD program, determined as follows:
(i) for the portion of the calendar year from January 1st until the
date on which you first receive compensation under the STD
program, bonus compensation shall be determined in accordance
with the STIP (i.e., based upon Viacom's achievement of its
goals and Viacom's good faith estimate of your achievement of
your personal goals) and prorated for such period;
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(ii) for any subsequent portion of that calendar year and any
portion of the following calendar year in which you receive
compensation under the STD program, bonus compensation shall be
in an amount equal to your Target Bonus and prorated for such
period(s); and
(iii) prorated Deferred Compensation for the calendar year in which
such benefits commence and Deferred Compensation attributable
to prior calendar years, payable, together with the return
thereon as provided in paragraph 3(c), prior to January 31 of
the calendar year following the calendar year in which such
benefits commence.
Bonus compensation under this paragraph 7 shall be paid, less applicable
deductions and withholding taxes, by February 28th of the year(s) following the
year as to which such bonus compensation is payable. You will not receive bonus
compensation for any portion of the calendar year(s) during the Term while you
receive benefits under the LTD program. For the periods that you receive
compensation and benefits under the STD and LTD programs, such compensation and
benefits and the bonus compensation provided under this paragraph 7 are in lieu
of Salary and Bonus under paragraphs 3(a) and (b). The stock options granted to
you under the LTMIP (as defined in paragraph 8(d)(viii)) which are exercisable
on or prior to the date on which benefits commence under the LTD program,
together with all LTMIP stock options that would have vested and become
exercisable on or before the last day of the Term (which options shall become
immediately vested and exercisable), shall be exercisable until the third
anniversary of the date on which such benefits commence or, if earlier, the
expiration date of the stock options.
8. TERMINATION.
(a) TERMINATION FOR CAUSE. Viacom may, at its option, terminate
your employment under this Agreement forthwith for Cause and thereafter shall
have no further obligations under this Agreement, including, without limitation,
any obligation to pay Salary or Bonus or provide benefit except as provided in
the final sentence of this paragraph 8(a). Cause shall mean: (i) embezzlement,
fraud or other conduct which would constitute a felony; (ii) conviction of a
felony; (iii) willful unauthorized disclosure of Confidential Information;
(iv) your material breach of this Agreement; or (v) your failure (except in the
event of your Disability) or refusal to substantially perform your material
obligations under this Agreement. Viacom will give you written notice prior to
terminating your employment pursuant to (iv) or (v) of this paragraph 8(a),
setting forth the nature of any alleged failure, breach or refusal in reasonable
detail and the conduct required to cure. Except for a failure, breach or refusal
which, by its nature, cannot reasonably be expected to be cured, you shall have
ten (10) business days from the giving of such notice within which to cure any
failure, breach or refusal under (iv) or (v) of this paragraph 8(a); PROVIDED,
HOWEVER, that, if Viacom reasonably expects irreparable injury from a delay of
ten (10) business days, Viacom may give you notice of such shorter period within
which to cure as is reasonable under the circumstances. In the event that your
employment is
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terminated by Viacom for Cause pursuant to this paragraph 8(a) or you resign
without Good Reason, you shall be entitled to receive (i) any unpaid Salary
through your termination or resignation date, and (ii) prorated Deferred
Compensation for the calendar year in which the termination or resignation
occurs, and Deferred Compensation attributable to prior calendar years payable,
together with the return thereon as provided in paragraph 3(c), prior to
January 31 of the following calendar year.
(b) GOOD REASON TERMINATION. You may terminate your employment
under this Agreement for Good Reason at any time during the Term by written
notice to Viacom no more than thirty (30) days after the occurrence of the event
constituting Good Reason. Such notice shall state an effective date no earlier
than thirty (30) business days after the date it is given. Viacom shall have ten
(10) business days from the giving of such notice within which to cure and, in
the event of such cure, your notice shall be of no further force or effect. Good
Reason shall mean without your consent (other than in connection with the
termination or suspension of your employment or duties for Cause or in
connection with your Disability):
(i) the assignment to you by Viacom of duties substantially
inconsistent with your positions, duties, responsibilities,
titles or offices, the withdrawal of a material part of your
responsibilities or a change in your reporting relationship, as
set forth in paragraph 2;
(ii) a reduction by Viacom in your Salary, Target Bonus or Deferred
Compensation as in effect at the date hereof or as the same may
be increased from time to time during the Term;
(iii) Viacom's requiring you to be based anywhere other than the New
York City metropolitan area, except for required travel on
Viacom's business to any extent substantially consistent with
business travel obligations of other senior executives of
Viacom; or
(iv) the material breach by Viacom of its material obligations
hereunder.
(c) TERMINATION WITHOUT CAUSE. Viacom may terminate your employment
under this Agreement without Cause at any time during the Term by written notice
to you.
(d) TERMINATION PAYMENTS/BENEFITS. In the event that your
employment terminates under paragraph 8(b) or (c), you shall thereafter receive,
less applicable withholding taxes:
(i) your Salary, as in effect on the date on which your employment
terminates, until the end of the Term, paid in accordance with
Viacom's then effective payroll practices;
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(ii) bonus compensation for the calendar year in which such
termination occurs, payable by February 28th of the following
year, determined as follows:
(x) for the portion of the calendar year from January 1st
until the date of the termination, bonus compensation
shall be determined in accordance with the STIP (i.e.,
based on Viacom's achievement of its goals and Viacom's
good faith estimate of your achievement of your personal
goals) and prorated for such period; and
(y) for the remaining portion of such calendar year during
the Term, bonus compensation shall be in an amount equal
to your Target Bonus and prorated for such period;
(iii) bonus compensation for each subsequent calendar year or portion
thereof during the Term, in an amount equal to your Target
Bonus, prorated for any partial calendar year and payable by
February 28th of the following year;
(iv) Deferred Compensation for the 2002 through 2006 calendar years
as set forth in paragraph 3(c); Deferred Compensation
attributable to the calendar year in which the termination
occurs and to prior calendar years shall be payable, together
with the return thereon as provided in paragraph 3(c), prior to
January 31 of the calendar year following such termination; and
Deferred Compensation attributable to subsequent calendar years
shall be payable, together with the return thereon as provided
in paragraph 3(c), prior to January 31, of each such following
year;
(v) your car allowance and insurance until the end of the Term,
paid in accordance with Viacom's then effective payroll
practices;
(vi) medical and dental insurance coverage provided under COBRA at
no cost to you (except as hereafter described) pursuant to
Viacom's then-current benefit plans until the end of the Term
or, if earlier, the date on which you become eligible for
medical and dental coverage from a third party; PROVIDED, that,
during the period that Viacom provides you with this coverage,
an amount equal to the applicable COBRA premiums (or such other
amounts as may be required by law) will be included in your
income for tax purposes to the extent required by law and
Viacom may withhold taxes from your compensation for this
purpose; and PROVIDED, FURTHER, that you may elect to continue
your medical and dental insurance coverage under COBRA at your
own expense for the balance, if any, of the period required by
law;
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(vii) life insurance coverage until the end of the Term as set forth
in paragraph 4(b);
(viii) the following with respect to any stock options granted to you
under the 2000 LTMIP and any predecessor or successor plans
("LTMIP"):
(x) all LTMIP stock options that have not vested and become
exercisable on the date of such termination but that
would have vested on or before the end of the Term shall
vest on the date of termination; such LTMIP stock options
shall remain exercisable for one (1) year after such date
or, if earlier, until their expiration date; and
(y) all outstanding LTMIP stock options that have previously
vested and become exercisable by the date of such
termination shall remain exercisable for one (1) year
after such date or, if earlier, until their expiration
date; and
(ix) the provision of an appropriate office and secretarial
assistance for one (1) year after the termination of your
employment.
You shall be required to mitigate the amount of any payment provided for in (i)
through (v) of this paragraph 8(d) by seeking other employment, and the amount
of such payments shall be reduced by any compensation earned by you from any
source, including, without limitation, salary, sign-on or annual bonus
compensation, consulting fees, commission payments, car allowance and, in the
event you receive long-term compensation with a present value, as reasonably
determined by Viacom, greater than you would likely have received from Viacom
during a comparable period (based on historical grants of long-term compensation
during your service with Viacom and Viacom's practices with respect to your
position, and prorating the value of such long-term compensation over the term
of service required to vest therein), in each case as reasonably determined by
Viacom, the amount of such excess; PROVIDED, that mitigation shall not be
required, and no reduction for other compensation shall be made, for eighteen
(18) months after the termination of your employment or, if less, the balance of
the Term.
(e) NON-RENEWAL NOTICE/PAYMENTS. If Viacom elects not to extend or
renew this Agreement at the end of the Term, you shall receive the following:
(i) If (x) Viacom notifies you less than eighteen (18) months
before the end of the Term that it has elected not to extend or
renew this Agreement (such notice is referred to as a
"Non-Renewal Notice"), or (y) your employment terminates under
paragraph 8(b) or (c) during the final eighteen (18) months of
the Term, you shall continue to receive, after your employment
terminates, your then-current Salary for the balance of the
eighteen (18) months from the date on which the Non-Renewal
Notice is given or your employment terminates, whichever is
earlier.
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Page 12
(ii) If Viacom does not give you a Non-Renewal Notice by the end of
the Term and you remain employed through that date but have not
entered into a new contractual relationship with Viacom or any
of its affiliated companies, and Viacom thereafter terminates
your employment without Cause, you shall continue to receive
your then-current Salary for the balance, if any, of the
eighteen (18) months after the expiration of the Term.
Notwithstanding the foregoing, you shall not receive Salary under this
paragraph 8(e) with respect to any period for which you receive Salary under
paragraph 8(d)(i). Payments under this paragraph 8(e) shall be made, less
applicable withholding taxes, in accordance with Viacom's then effective payroll
practices. You shall be required to mitigate the amount of any payment under
this paragraph 8(e) by seeking other employment, and the amount of any such
payment shall be reduced by any compensation earned by you from any source,
including, without limitation, salary, sign-on or annual bonus compensation,
consulting fees, commission payments, car allowance and, in the event you
receive long-term compensation with a present value, as reasonably determined by
Viacom, greater than you would likely have received from Viacom during a
comparable period (based on historical grants of long-term compensation during
your service with Viacom and Viacom's practices with respect to your position,
and prorating the value of such long-term compensation over the term of service
required to vest therein), in each case as reasonably determined by Viacom, the
amount of such excess; PROVIDED, that mitigation shall not be required for
twelve (12) months after the termination of your employment (although deduction
will be made for all compensation earned during this period and any subsequent
period during which payments are made pursuant to this paragraph 8(e)).
(f) TERMINATION OF BENEFITS. Notwithstanding anything in this
Agreement to the contrary (except as otherwise provided in paragraph 8(d) with
respect to medical and dental benefits and life insurance), participation in all
Viacom benefit plans and programs (including, without limitation, vacation
accrual, the Viacom Investment Plan, the Viacom Pension Plan and the related
excess plans, LTD, car insurance and accidental death and dismemberment and
business travel and accident insurance) will terminate upon the termination of
your employment except to the extent otherwise expressly provided in such plans
or programs and subject to any vested rights you may have under the terms of
such plans or programs. The foregoing shall not apply to the LTMIP and, after
the termination of your employment, your rights under the LTMIP shall be
governed by the terms of the LTMIP option agreements and the applicable LTMIP
plans together with paragraph 8(d)(viii).
(g) RESIGNATION FROM OFFICIAL POSITIONS. If your employment with
Viacom terminates for any reason, you shall be deemed to have resigned at that
time from any and all officer or director positions that you may have held with
Viacom or any of its affiliated companies and all board seats or other positions
in other entities you held on behalf of Viacom. If, for any reason, this
paragraph 8(g) is deemed insufficient to effectuate such resignation, you agree
to execute, upon the request of Viacom, any documents or instruments which
Viacom may deem necessary or desirable to effectuate such resignation or
resignations, and you hereby
Xxxxxxx X. Xxxxxxxx
March 22, 2001
Page 13
authorize the Secretary and any Assistant Secretary of Viacom to execute any
such documents or instruments as your attorney-in-fact.
9. DEATH. In the event of your death prior to the end of the Term while
actively employed, your beneficiary or estate shall receive (i) your Salary up
to the date on which the death occurs; (ii) any Bonus earned in the prior year
but not yet paid; and (iii) bonus compensation for the calendar year in which
the death occurs, determined in accordance with the STIP (i.e., based upon
Viacom's achievement of its goals and Viacom's good faith estimate of your
achievement of your personal goals) and pro-rated for the portion of the year
through the date of death, payable, less applicable deductions and withholding
taxes, by February 28th of the following year. In the event of your death after
the termination of your employment while you are entitled to receive
compensation under paragraph 8(d) or (e), your beneficiary or estate shall
receive (x) any Salary payable under paragraph 8(d)(i) or 8(e) up to the date on
which the death occurs; (y) any bonus compensation earned under
paragraph 8(d)(ii) or (iii) with respect to the prior year but not yet paid; and
(Z) any bonus compensation for the calendar year in which the death occurs,
determined in accordance with paragraph 8(d)(ii) or (iii) and pro-rated for the
portion of the year through the date of death, payable, less applicable
deductions and withholding taxes, by February 28th of the following year. In
addition, your beneficiary or estate shall receive prorated Deferred
Compensation for the calendar year in which the death occurs and Deferred
Compensation attributable to prior calendar years payable, together with the
return thereon as provided in paragraph 3(c), prior to January 31 of the
following calendar year. Your beneficiary or estate or permitted transferee
shall also be entitled to exercise LTMIP stock options which are exercisable on
or prior to your death, together with all LTMIP stock options that would have
vested and become exercisable on or prior to the last day of the Term but for
your death (which options shall immediately become vested and exercisable),
until the second anniversary of the date of death or, if earlier, the expiration
date of the stock options.
10. NO ACCEPTANCE OF PAYMENTS. You represent that you have not accepted
or given nor will you accept or give, directly or indirectly, any money,
services or other valuable consideration from or to anyone other than Viacom for
the inclusion of any matter as part of any film, television program or other
production produced, distributed and/or developed by Viacom and/or any of its
affiliated companies.
11. EQUAL OPPORTUNITY EMPLOYER; EMPLOYEE STATEMENT OF BUSINESS CONDUCT.
You recognize that Viacom is an equal opportunity employer. You agree that you
will comply with Viacom policies regarding employment practices and with
applicable federal, state and local laws prohibiting discrimination on the basis
of race, color, sex, religion, national origin, citizenship, age, marital
status, sexual orientation, disability or veteran status. In addition, you agree
that you will comply with the Viacom Employee Statement of Business Conduct.
12. INDEMNIFICATION. Viacom hereby agrees that it shall indemnify and
hold you harmless to the maximum extent permitted by law. Neither the
determination of Viacom, its Board of Directors, independent legal counsel or
stockholders that you are not entitled to indemnification or the failure of any
or all of them to make any determination regarding such entitlement shall create
any presumption or inference that you have not met the applicable
Xxxxxxx X. Xxxxxxxx
March 22, 2001
Page 14
standard of conduct. If you have any knowledge of any actual or threatened
action, suit or proceeding, whether civil, criminal, administrative or
investigative, as to which you may request indemnity under this provision (a
"Proceeding"), you will give Viacom prompt written notice thereof; PROVIDED,
that the failure to give such notice shall not affect your right to
indemnification. Viacom shall be entitled to assume the defense of any
Proceeding and you will use reasonable efforts to cooperate with such defense.
To the extent that you in good faith determine that there is an actual or
potential conflict of interest between Viacom and you in connection with the
defense of a Proceeding, you shall so notify Viacom and shall be entitled to
separate representation by counsel selected by you (provided that Viacom may
reasonably object to the selection of counsel within five (5) business days
after notification thereof) which counsel shall cooperate, and coordinate the
defense, with Viacom's counsel and minimize the expense of such separate
representation to the extent consistent with your separate defense. Viacom shall
not be liable for any settlement of any Proceeding effected without its prior
written consent. You shall be entitled to advancement of expenses incurred by
you in defending any Proceeding upon receipt of an undertaking by you or on your
behalf to repay such amount if it shall ultimately be determined that you are
not entitled to be indemnified by Viacom. The provisions of this paragraph 12
shall remain available to you for conduct that occurred while you were employed
by Viacom even if the Proceeding should commence after the termination of such
employment.
13. NOTICES. All notices under this Agreement must be given in writing,
by personal delivery or by mail, at the parties' respective addresses shown on
this Agreement (or any other address designated in writing by either party),
with a copy, in the case of Viacom, to the attention of the General Counsel of
Viacom and with a copy, in your case, to Xxxx X. Xxxxxxxx, Xxxxxxx Xxxx & Xxxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any notice given by mail shall
be deemed to have been given three (3) days following such mailing.
14. ASSIGNMENT. This is an Agreement for the performance of personal
services by you and may not be assigned by you or Viacom except that Viacom may
assign this Agreement to any affiliated company of or any successor in interest
to Viacom.
15. NEW YORK LAW, ETC. YOU ACKNOWLEDGE THAT THIS AGREEMENT HAS BEEN
EXECUTED, IN WHOLE OR IN PART, IN NEW YORK, AND YOUR EMPLOYMENT DUTIES ARE
PRIMARILY PERFORMED IN NEW YORK. ACCORDINGLY, YOU AGREE THAT THIS AGREEMENT AND
ALL MATTERS OR ISSUES ARISING OUT OF OR RELATING TO YOUR VIACOM EMPLOYMENT SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED
INTO AND PERFORMED ENTIRELY THEREIN. ANY ACTION TO ENFORCE THIS AGREEMENT SHALL
BE BROUGHT SOLELY IN THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF NEW
YORK, BOROUGH OF MANHATTAN.
16. NO IMPLIED CONTRACT. Nothing contained in this Agreement shall be
construed to impose any obligation on Viacom or you to renew this Agreement or
any portion thereof. The parties intend to be bound only upon execution of a
written agreement and no negotiation, exchange of draft or partial performance
shall be deemed to imply an agreement. Neither the continuation of employment
nor any other conduct shall be deemed to imply a continuing agreement upon the
expiration of the Term.
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March 22, 2001
Page 15
17. ENTIRE UNDERSTANDING. This Agreement contains the entire
understanding of the parties hereto relating to the subject matter contained in
this Agreement, and can be changed only by a writing signed by both parties.
18. VOID PROVISIONS. If any provision of this Agreement, as applied to
either party or to any circumstances, shall be found by a court of competent
jurisdiction to be unenforceable but would be enforceable if some part were
deleted or the period or area of application were reduced, then such provision
shall apply with the modification necessary to make it enforceable, and shall in
no way affect any other provision of this Agreement or the validity or
enforceability of this Agreement.
19. SUPERSEDES PRIOR AGREEMENTS. With respect to the period covered by
the Term, this Agreement supersedes and cancels all prior agreements relating to
your employment by Viacom or any of its affiliated companies.
If the foregoing correctly sets forth our understanding, please sign, date
and return all three (3) copies of this Agreement to the undersigned for
execution on behalf of Viacom; after this Agreement has been executed by Viacom
and a fully-executed copy returned to you, it shall constitute a binding
agreement between us.
Very truly yours,
VIACOM INC.
By: /s/Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President,
Human Resources and
Administration
ACCEPTED AND AGREED:
/s/Xxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxx
Dated: March 22, 2001
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