Employment Agreement - CBS Broadcasting inc. and Leslie Moonves
[CBS Letterhead]
As of July 5, 1999
Mr. Leslie Moonves
Los Angeles, CA 90049
Re: STAFF EMPLOYMENT AGREEMENT
Dear Mr. Moonves:
Reference is hereby made to the Agreement dated as of May 17, 1995, as amended
as of June 29, 1995, October 16, 1995 and January 20, 1998 (collectively the
"Agreement") between you and us, in connection with your services for CBS.
You and we have agreed, and do hereby agree, to amend the Agreement as follows,
effective as of July 5, 1999:
1. Subparagraph 1(a) of the Agreement shall be amended by extending the
"Employment Term", as defined in the Agreement, so that it shall continue
through and end on July 16, 2004 (in lieu of July 16, 2000, as previously
provided for in the Agreement). Each Contract Year of the Term, as hereby
extended, shall commence July 17 and continue through July 16 of the applicable
Contract Year. Said subparagraph is further amended by deleting any reference
therein to the "CBS Committee."
2. Subparagraph 1(b) of the Agreement is hereby deleted and, in lieu
thereof, is replaced with the following:
"(b) Executive shall report directly and only to the person who is Chief
Executive Officer of CBS Corporation (currently, Mel Karmazin)."
3. Subparagraph 1(c) of the Agreement is hereby amended by modifying the
last proviso of the first sentence of that subparagraph to provide as follows:
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Mr. Leslie Moonves
As of July 5, 1999
Page 2
"And, in addition to such authority and responsibility to run CED, Executive
shall, beginning July 9, 1999, have full authority and responsibility to run
the CBS Television Network (the "Network"), the CBS Television Stations (the
"Stations"), and all related operations of the Network and the Stations,
including full authority and responsibility for CBS Enterprises and all of
its units, CBS Productions and King World, all in accordance with CBS
policies and practices."
4. The current subparagraph 1(d) of the Agreement is hereby deleted and, in
lieu thereof, is replaced with the following:
"So long as this Agreement is not terminated pursuant to paragraph 7 below
and Executive is rendering services hereunder, Executive shall provide
executive services to CBS in the manner determined by the person who is
Chief Executive Officer of CBS Corporation (currently, Mel Karmazin)."
5. Subparagraph 2(a) of the Agreement is hereby amended to provide that,
commencing July 5, 1999, and continuing through the remainder of the fourth
Contract Year (i.e., through July 16, 1999) and thereafter through each of the
remaining Contract Years (i.e., through the end of the Term), the base salary
payable to Executive shall be $3,000,000 per annum.
6. Subparagraph 2(b) of the Agreement (which shall hereinafter be
subparagraph 2(b)(i)) is hereby amended to provide that the bonus payment
payable to Executive pursuant to the Agreement shall be increased to $2,500,000
per annum in each remaining Contract Year of the Employment Term, commencing
with the fifth Contract Year (i.e., the Contract Year commencing July 17, 1999).
The remainder of subparagraph 2(b), with respect to any bonus payments, shall
remain unchanged.
7. The Agreement is hereby amended by adding the following subparagraph
2(b)(ii) (which together with subparagraph 2(b)(i) shall collectively be
referred to as subparagraph 2(b)):
"In addition to the base salary and bonus payments payable pursuant to
subparagraphs 2(a) and 2(b)(i) of the Agreement, CBS hereby agrees that the
"Committee" as defined under the
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Mr. Leslie Moonves
As of July 5, 1999
Page 3
CBS Corporation 1998 Executive Annual Incentive Plan (the "Plan") will
establish an annual incentive award opportunity for Executive under the Plan
for each Contract Year, at a target amount of $2,000,000, based on
achievement of financial and other goals as determined by the Compensation
Committee of the CBS Board of Directors."
8. Paragraph 3 of the Agreement is hereby amended to provide that Executive
acknowledges that CBS has recently made changes in the pension plans for the
various business units of CBS, and that he shall participate in any such pension
plans in accordance with the provisions of the plans as they have been modified
and as they may be further modified during the Term (with the understanding that
he shall be eligible to participate in and receive benefits under any plan
offered by CBS, other than those that are offered exclusively to a particular
business unit or units). Executive shall be eligible to participate in the CBS
Fund the Future Plan, in accordance with the provisions of that Plan as it may
be modified from time to time. CBS agrees to provide to such person as may be
designated by Executive a description of all pension plans applicable to
Executive, including a description of all modifications, deletions and/or
additions to the plans since the inception of Executive's employment with CBS
and including all pertinent information relating to the Fund the Future Plan.
Executive has designated George Savitsky (Executive's business manager) as the
person to whom such information should be sent.
9. Paragraph 6 of the Agreement is hereby amended to provide that Executive
acknowledges that he has been furnished with a copy of the CBS Corporate
Directive on Personal Conflicts of Interest, dated June 1, 1999 ("Conflicts
Policy"), and that all references to "Conflicts Policy" in paragraph 6 shall
hereinafter be deemed to refer to the CBS Corporate Directive on Personal
Conflicts of Interest, dated June 1, 1999. All references in said paragraph 6 to
the "CBS Policy Summary" shall be deleted.
10. Paragraph 7 of the Agreement is hereby amended by deleting, in the
second and third grammatical paragraphs of said paragraph 7, the references to
paragraph 11 of the Agreement. Said paragraph 7 is further amended to reflect
that the insurance obtained by CBS to cover Executive shall provide coverage of
$10,000,000, on terms and conditions currently in effect, during the Employment
Term, as herein amended.
11. Paragraph 11 of the Agreement is hereby deleted in full, and will
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Mr. Leslie Moonves
As of July 5, 1999
Page 4
hereinafter have no further force or effect whatsoever.
12. Paragraph 15 of the Agreement is hereby amended by deleting, in the
second sentence of said paragraph, the reference to "Peter Keegan, Executive
Vice President and Chief Financial Officer," and, in lieu thereof, inserting
"Frederic G. Reynolds, Executive Vice President and Chief Financial Officer" and
by deleting the reference to "Ellen Oran Kaden, Executive Vice President,
General Counsel and Secretary," and, in lieu thereof, inserting "Louis J.
Briskman, Executive Vice President and General Counsel". The remainder of said
paragraph (including said second sentence) shall remain unchanged.
13. Paragraph 16 of the Agreement is hereby amended by adding the following
and additional grammatical paragraphs at the end of said paragraph 16:
"Executive hereby acknowledges that on or about January 27, 1999, he was
granted non-qualified stock options to purchase an aggregate of 250,000
shares of common stock of CBS Corporation under the Plan, as defined above
in this paragraph 16. Such stock option grant is reflected in and governed
by a stock option agreement executed by CBS Corporation and Executive, whose
terms shall be amended to be consistent with the terms of the stock option
agreement referred to in the grammatical paragraph immediately below."
"In addition to the foregoing, CBS has granted to Executive non-qualified
stock options to purchase an aggregate of 1,000,000 shares of common stock
of CBS Corporation under the Plan. Such option for 1,000,000 shares shall
have an exercise price per share of $41.6875, the fair market value (as
defined in the Plan) of the CBS Corporation common stock on the grant date
for said options (June 14, 1999). Thirty-three and one-third percent of such
options (i.e., 333,333 shares of such options) shall vest at the end of each
of the next following two years, commencing on June 15, 2000, with the final
one-third (i.e., 333,334 shares) vesting on June 15, 2002. The options will
expire on June 13, 2009. Such stock option grant shall be reflected in and
governed by a stock option agreement, whose terms shall be consistent with
the terms of the stock option agreements applicable to the prior grants by
CBS to Executive of 500,000 options on June 17, 1997 and 290,000 options on
July 28, 1997, to be executed by CBS Corporation and provided to Executive
upon his execution of this agreement."
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Mr. Leslie Moonves
As of July 5, 1999
Page 5
14. Paragraph 17 of the Amendment is hereby amended to acknowledge that CBS
no longer owns or leases airplanes. CBS has nevertheless agreed that it shall
provide chartered airplanes for Executive's use, consistent with prior practice.
15. The Agreement shall be further amended to provide that whenever any
notice is sent to Executive, a copy shall also be sent to Del, Shaw, Blye &
Moonves, 2029 Century Park East, Suite 33910, Los Angeles, CA 90067, Attention:
Ernest Del, Esq.
Except as expressly provided hereinabove in this amendatory letter agreement,
all of the other terms and conditions of the Agreement, as amended (including by
the Amendment) shall remain unchanged and are hereby in all respects ratified
and confirmed.
Please indicate your agreement to the foregoing by signing in the space provided
below and delivering a copy of this amendatory letter agreement, bearing your
signature, to Anthony Ambrosio at CBS.
Very truly yours,
CBS Broadcasting Inc.
By /s/ Mel Karmazin
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Accepted and Agreed:
/s/ Leslie Moonves
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Leslie Moonves
26951