Employment Agreement - Westinghouse Electric Corp. and Mel Karmazin
AGREEMENT made as of the 20th day of June, 1996 by and between Westinghouse
Electric Corporation ("Westinghouse") and Mel Karmazin ("Executive").
WITNESSETH:
Upon the consummation of the Agreement and Plan of Merger dated as of
the date hereof among Westinghouse, R Acquisition Corp. and Infinity
Broadcasting Corporation ("Infinity") (the "Merger"), and pursuant to the terms
thereof, Executive shall be employed as Chairman and Chief Executive Officer,
Westinghouse/CBS Radio Group. Executive will report only to the highest
executive officer of Westinghouse (currently Michael H. Jordan) and the Board
of Directors of Westinghouse ("the Board").
Subject to the supervision of the Board, Executive will be responsible
for and have full authority to manage all owned and operated radio stations and
other radio-related activities of the Westinghouse/CBS Radio Group, such as the
CBS Radio Networks, radio sales representatives, and administrative functions.
All entities which conduct activities or operations described below and which
are owned, operated or controlled in whole or part by Westinghouse or in which
Westinghouse has a direct or indirect interest will be treated as if they were
part of the Westinghouse/CBS Radio Group and the presidents or other
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chief executive officers, as applicable, of such entities will report solely to
Executive. Without limitation, the foregoing shall apply to any such domestic
United States entity, regardless of where it conducts business and any foreign
entity which conducts business in the United States, which Westinghouse owns,
operates, controls or in which it acquires a direct or indirect interest
following the date hereof, and which is engaged, directly or indirectly, in any
activity or operation which Infinity operated or controlled or in which it or
any entity related to it had an interest on the date of consummation of the
Merger. Such activities and operations include, or are deemed to include,
without limitation, the following, anywhere throughout the world: (A) radio
broadcast operations and activities; (B) ownership, management and/or operation
of radio stations; (C) development, production, co-production, financing,
distribution and exploitation of audio works and any elements thereof and
derivatives therefrom; (D) the ownership, management and/or operation of radio
stations and/or radio networks; and (E) commercial tie-ups and merchandising.
Executive's authority shall include the right to hire and fire all persons
employed by the Westinghouse/CBS Radio Group and to approve any and all
employment and similar agreements relating to such persons
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in accordance with CBS and Westinghouse personnel policies and practices,
including the Westinghouse Compensation Committee Charter. All officers,
employees and other personnel of the Westinghouse/CBS Radio Group shall report
only to Executive either directly or through such channels as Executive in his
discretion shall specify. Executive shall have full authority to manage the
Westinghouse/CBS Radio Group, including its personnel, business and operations
in accordance with applicable policies and procedures, including those of the
Board.
Executive will be employed for a four-year term commencing on the
effective time of the Merger (the "Effective Time"), at a starting annual
salary of $925,000. Thereafter, Executive's salary shall be subject to merit
review and annual increase (but not decrease) at the sole discretion of the
Compensation Committee of the Board ("Compensation Committee").
Executive shall have the opportunity to receive an annual incentive
bonus payment for each year of the term of this Agreement based on performance
of the Westinghouse/CBS Radio Group. The target amount of the annual incentive
bonus for each full calendar year during the employment term will be
$1,500,000, with a range of $900,000 to $2,625,000. No amount shall be payable
under this paragraph for any such
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year unless the minimum performance standards determined by the Compensation
Committee for any such year have been met. The full amount of the annual
incentive bonus payments provided in this paragraph may be deferred in
accordance with the terms of the Westinghouse Deferred Incentive Compensation
Program as in effect from time to time.
Promptly following the Effective Time, Executive shall be granted
500,000 options to acquire Westinghouse common stock, with an exercise price
equal to the fair market value of a share on the date of grant, and otherwise
containing customary terms, representing a one-time only grant of options for
the four-year term of this Agreement. 250,000 of the options shall vest one
year from the date of grant, and the remaining 250,000 options shall vest two
years from the date of grant. All previously granted unvested options shall
vest effective (i) on the date of Executive's death, (ii) upon the occurrence
of a change in control of Westinghouse/CBS Radio Group, or upon the date that
Executive's employment is terminated without cause or for disability.
Westinghouse has expressed its intention to effect certain internal
reorganizations and restructurings. For purposes of determining whether a
change in control has occurred under clause (ii) of the second preceding
sentence, as long as Westinghouse Electric Corporation or an affiliate
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owns or controls at least 50% of the radio assets of the Westinghouse/CBS Radio
Group, as such entity is constituted from time to time, no change of control
shall be deemed to have occurred under this Agreement.
Benefits and perquisites shall be consistent with those of
Westinghouse executives at Executive's level of authority and responsibility.
Executive may be terminated for cause on the same terms and conditions
as set forth in Executive's most recent employment agreement with Infinity. In
the event of any termination by Westinghouse of Executive's employment without
cause, or any other breach of this Agreement by Westinghouse, Westinghouse
shall pay Executive immediately a lump sum cash payment equal to the
compensation (including annual incentive compensation) that would otherwise
have been paid to Executive, for the remainder of the term and such payment
shall be Executive's exclusive remedy.
Westinghouse shall own all right, title and interest in perpetuity to
the result of Executive's services and all artistic materials and intellectual
properties which are, in whole or in part, created, developed or produced by
Executive during the term of this Agreement and which are suggested by or
related to Executive's employment hereunder or any activities to which
Executive is assigned, and
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Executive shall not have or claim to have any right, title or interest therein
of any kind or nature. Nothing in the preceding sentence is intended to
constitute a waiver of Westinghouse's or CBS' conflict of interest policies.
Executive agrees to devote all customary business time and attention
to the affairs of Westinghouse/CBS Radio Group except during vacation periods
and reasonable periods of illness or other incapacity consistent with the
practices of Westinghouse for executives in comparable positions, and agrees
that his services shall be completely exclusive to Westinghouse/CBS Radio Group
during the term hereof.
Executive acknowledges that he has been furnished a copy of the
Westinghouse policy concerning conflicts of interest ("Conflicts Policy").
Executive further acknowledges that he has read and fully understands all the
requirements thereof, and acknowledges that at all times during the Employment
Period he shall perform his services hereunder in full compliance with the
Conflicts Policy and with any revisions thereof or additions thereto.
To the fullest extent permitted by the laws of the State of New York,
Westinghouse/CBS Radio Group shall protect, indemnify and hold harmless
Executive and any entity claiming under or through him from and against any
claim, loss, liability, judgment and expense (including
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reasonable attorneys' fees) arising from or relating to Executive's employment
by Westinghouse/CBS Radio Group.
This Agreement contains the entire understanding of the parties with
respect to the subject matter thereof, supersedes any and all prior agreements
of the parties with respect to the subject matter thereof, and cannot be
changed or extended except by a writing signed by both parties hereto. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective legal representatives, executors, heirs, administrators,
successors and assigns. This Agreement and all matters and issues collateral
thereto (other than benefits under a plan or option agreement, which shall be
subject to the laws specified therein) shall be governed by the laws of the
State of New York applicable to contracts performed entirely therein. If any
provision of this Agreement, as applied to either party or to any circumstance,
shall be adjudged by a court to be void or unenforceable, the same shall in no
way affect any other provision of this Agreement or the validity or
enforceability thereof.
It is understood that at the Effective Time the existing employment
agreements and all ancillary agreements related thereto between Executive and
Infinity are terminated.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
June 20, 1996.
Westinghouse Electric Corporation
By /s/ FREDRIC G. REYNOLDS
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/s/ MEL KARMAZIN
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Mel Karmazin