Document:

Exhibit 10(q)

 

Mr. Leslie Moonves

c/o CBS Corporation

51 West 52nd Street

New York, NY 10019

 

	
  Dear Mr. Moonves:

  	
  February 23,
  2010

  

 

CBS Corporation (“Employer” and, together with its
subsidiaries, the “Company”), having an address
at 51 West 52nd Street, New York, New York 10019, agrees to
continue to employ you and you agree to accept such continued employment upon
the following terms and conditions set forth in this agreement (this “Agreement”).  The parties hereto acknowledge and agree that
this Agreement supersedes your existing employment agreement between the
Employer and you dated as of October 15, 2007, and as amended by the
letter agreement between you and Employer, dated December 17, 2008 (the “Prior Agreement”).

 

1.                                    Term.  The term of your employment hereunder shall
commence on February 23, 2010 (the “Start Date”)
and shall end on the earliest of (i) February 22, 2015, (ii) the
date on which your employment is terminated by Employer or you pursuant to
paragraph 10 or (iii) the date of your death or the date of termination of
your employment by reason of incapacity (determined in accordance with
paragraph 9) (the “Employment Term”).  The period from the Start Date until
February 22, 2015, regardless of any earlier termination, shall
hereinafter be referred to as the “Original Employment Term.”

 

2.                                    Titles
and Authority.

 

(a)                               Officer
Positions and Reporting Lines. 
During the Employment Term, you will have the title of President and
Chief Executive Officer of Employer and will have the powers, responsibilities,
duties and authority customary for the chief executive officer of corporations
of the size, type and nature of the Company, including, without limitation,
those powers, responsibilities, duties and authority you had immediately prior
to the Start Date.  During the Employment
Term, you will report solely and directly to the Board of Directors of Employer
(the “Board”) and, for so long as
Sumner M. Redstone serves as Executive Chairman and Founder of Employer, to the
Executive Chairman and Founder.  During
the Employment Term, other than Sumner M. Redstone, while he holds the office
of Executive Chairman and Founder, you shall be the highest ranking executive
of the Company.  During the Employment
Term, your duties shall include all of your duties as of the Start Date,
including the public positioning of the Company, and you shall have the sole
authority to cause any Company business unit or operating division head, any
executive officer of Company and/or any other employee of 

 

 

Company, to report directly
to you or another executive officer of Employer, subject to any applicable
employment agreement now existing with such head or executive officer.

 

(b)                              Service
on the Board and with Subsidiaries. 
You currently serve as a member of the Board.  During the Employment Term, the Board will
nominate you for reelection to the Board at the expiration of each term of
office, and you agree to serve as a member of the Board for each period for
which you are so elected.  You shall,
subject to your election as such from time to time and subject to your
approval, and without additional compensation, serve during the Employment Term
in such additional offices of comparable or greater stature and responsibility
in the subsidiaries of Employer and as a member of any committee of the Board
or of the board of directors of any of Employer’s subsidiaries, to which you
may be elected, as approved by you, from time to time.

 

(c)                               Full-Time
Services and Other Activities. 
During the Employment Term, you agree to devote your entire business
time, attention and energies to the business of the Company, except for
vacations, illness or incapacity. 
However, nothing in this Agreement shall preclude you from serving as a
member of the board of directors of any charitable, educational, religious,
entertainment industry trade, public interest or public service organization,
in each instance not inconsistent with the business practices and policies of
the Company, or from devoting reasonable periods of time to the activities of
the aforementioned organizations or from managing your personal investments,
provided that such activities do not materially interfere with the performance
of your duties and responsibilities hereunder. 
Except for your service on (i) the Board, (ii) the board of directors
of Employer subsidiaries, (iii) the board of directors or similar
governing body of your family foundation and of any other entity all of the
beneficial interests of which are owned by you and/or members of your family or
(iv) the board of directors of an organization as permitted by the
immediately preceding sentence, you shall not serve on the board of directors
or similar governing body of any business company or other business entity,
excluding those on which you were already elected to serve as of the Start
Date, without the prior consent of the Nominating and Governance Committee of
Employer (or any successor to such committee).

 

(d)                              Location.  During the Employment Term, you shall render
your services under this Agreement from Employer’s executive offices in either
the New York metropolitan area or the Los Angeles metropolitan area, except for
services rendered during business trips as may be reasonably necessary.  You shall not be required to relocate outside
of either the New York metropolitan area or the Los Angeles metropolitan area.

 

3.                                    Cash
Compensation.

 

(a)                               Salary.  During the Employment Term, Employer shall
pay you a base salary at the annual rate of Three Million Five Hundred Thousand
Dollars ($3,500,000) per annum.  The
Compensation Committee of the Board (the “Compensation Committee”)
will review your salary at least annually and may increase 

 

 

(but not decrease,
including as it may be increased from time to time) the base salary.  The result of any such annual review shall be
reported to you by the Compensation Committee promptly after it occurs.  The amount of annual base salary actually
paid to you will be reduced to the extent you elect to defer such salary under
the terms of any deferred compensation or savings plan or arrangement
maintained or established by Employer. 
Your annual base salary payable hereunder, without reduction for any
amounts deferred as described in the preceding sentence, is referred to herein
as the “Salary.”  Employer shall pay the portion of the Salary
not deferred at your election in accordance with its generally applicable
payroll practices for senior executives of Employer, but not less frequently
than in equal monthly installments.  Your
Deferred Compensation, as defined in your prior employment agreement with the
Employer dated July 1, 2004, shall continue to 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
Employer’s Excess 401(k) Plan for Designated Senior Executives (as such
plan may be amended from time to time, the “Excess
401(k) Plan”) is determined (it being understood and agreed
that, if at any time during which the Deferred Compensation remains payable,
your account balance in the Excess 401(k) Plan 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) Plan account was notionally invested immediately prior to
its distribution).   Deferred
Compensation shall be paid to you in accordance with the terms of this
Agreement.  Employer’s obligation to pay
the Deferred Compensation (including the return thereon provided for in this
paragraph) shall be an unfunded obligation to be satisfied from the general
funds of Employer.

 

(b)                              Annual
Bonus Compensation.  In addition to
your Salary, during the Employment Term you shall be eligible to earn an annual
bonus for each whole or partial calendar year during the Employment Term,
determined and payable as follows (the “Bonus”):

 

(i)                                   Commencing
with your Bonus for the 2010 calendar year, your target bonus for each calendar
year during the Employment Term shall be $12,000,000, provided that the
Compensation Committee will review your target bonus at least annually and may
increase (but not decrease, including as it may be increased from time to time)
the target bonus.  The result of any such
annual review shall be reported to you by the Compensation Committee promptly
after it occurs.  Your target bonus, as
it may be so increased from time to time, is referred to herein as the “Target Bonus.”  As the actual amount payable to you as Bonus
will be dependent, among other things, upon the achievement of the performance
goal(s) referred to in paragraph 3(b)(ii), your actual Bonus may be less
than, greater than or equal to the Target Bonus.

 

(ii)                                A
portion of your Bonus (the “Company-Wide Performance
Bonus Portion”) for each calendar year during the Employment 

 

 

Term, beginning with 2010, will be based upon
achievement of one or more Company-wide performance goals (the “Company-Wide 
Performance Goal(s)”) established in good faith by the
Compensation Committee for such calendar year pursuant to,  and determined in accordance with, Employer’s
Senior Executive Short-Term Incentive Plan, as the same may be amended from
time to time (together with any successor plan, the “Senior
Executive STIP”); provided, however, that for the
partial calendar year in 2015, the applicable performance goal(s) shall be
adjusted to reflect budgeted Company performance for the shortened performance
period and the performance period shall end coincident with the end of the
Original Employment Term.  The
Company-Wide Performance Goal(s) shall satisfy the following requirements
(the “Incentive Goal Parameters”):

 

a.             The
Company-Wide Performance Goal(s) will be the same as the performance
goal(s) used to determine the amount of bonus payable to any other
executive of the Employer who participates in the Senior Executive STIP and who
has Company-wide responsibilities;

 

b.            The
Company-Wide Performance Goal(s) will be challenging, but reasonably
achievable; and

 

c.             For
each calendar year, the level of difficulty in achieving the Company-Wide Performance
Goal(s) for that calendar year will not be significantly more difficult
(as determined at the time such Company-Wide Performance Goal(s) are
established, taking into account all relevant facts and circumstances,
including the Company’s relative financial and stock performance, general
market conditions and market conditions affecting diversified media and
entertainment companies) than was the level of difficulty of achieving the
Company-Wide Performance Goal(s) applicable to the immediately preceding
calendar year.  For avoidance of doubt,
the fact that the target with respect to Company-Wide Performance
Goal(s) increases from one year to the following year shall not be
presumed, in and of itself, to mean that such Company-Wide Performance
Goal(s) for the calendar year are significantly more difficult to attain
than the Company-Wide Performance Goal(s) for the immediately preceding
calendar year.

 

You
shall have meaningful input with the Compensation Committee prior to the
determination of the Company-Wide Performance Goal(s) for each calendar
year, but the Compensation 

 

 

Committee
will have final power and authority concerning the establishment of such
goal(s).

 

(iii)                             With respect to the
Company-Wide Performance Bonus Portion:

 

·                If the Company achieves less than 80%
of the Company-Wide Performance Goal(s) for the calendar year (or portion
thereof), you shall not have a right to payment of any Bonus with respect to
the Company-Wide Performance Bonus Portion;

 

·                If the Company achieves 80% of the Company-Wide
Performance Goal(s) for the calendar year (or portion thereof), the
Company-Wide Performance Bonus Portion shall be an amount in U.S. Dollars of no
less than the product of (i) 0.8 multiplied by (ii) the product of
0.85 multiplied by the Target Bonus;

 

·                If the Company achieves 100% of the
Company-Wide Performance Goal(s) for the calendar year (or portion
thereof), the Company-Wide Performance Bonus Portion shall be an amount in U.S.
Dollars of no less than the product of (i) 1.0 multiplied by (ii) the
product of 0.85 multiplied by the Target Bonus; and

 

·                If the Company achieves 120% or more of
the Company-Wide Performance Goal(s) for the calendar year (or portion
thereof), the Company-Wide Performance Bonus Portion shall be an amount in U.S.
Dollars of no less than the product of (i) 1.2 multiplied by (ii) the
product of .85 multiplied by the Target Bonus;

 

·                For achievement at an intermediate
point between 80% and 100%, and between 100% and 120%, the Company-Wide
Performance Bonus Portion will be interpolated on a straight-line basis between
the respective Company-Wide Performance Bonus Portion delivered at such
percentages.

 

Notwithstanding
anything herein to the contrary, the Compensation Committee shall not be
precluded from authorizing the payment to you of a Bonus which exceeds the
Company-Wide Performance Bonus Portion determined under the above schedule,
including, without limitation, based on the terms and conditions of the Senior
Executive STIP.

 

(iv)                            In
addition to the Company-Wide Performance Bonus Portion, the remainder of your
Bonus shall be determined in the reasonable 

 

 

discretion of the Compensation Committee taking into
account all relevant factors, including individual and other performance goals.

 

(v)                               Your
Bonus for the 2010 calendar year shall not be subject to any proration
notwithstanding the Start Date of this Agreement.  For the partial year 2015, your annual Target
Bonus shall be prorated to reflect the shorter performance period.

 

(vi)                            Your
Bonus for any calendar year, including a Bonus for the last partial year of the
Employment Term, shall be payable during the period January 1st through February 28th of
the following calendar year.  For the
avoidance of doubt, it is understood that you will receive the Bonus that is
determined by the Compensation Committee for you for each calendar year in
which you were employed, even if you are not employed on February 28th of the following year or on the actual date on
which bonuses are paid for such year.

 

(vii)                         In the event that the current
Senior Executive STIP is amended or terminated, you will be given an
opportunity under the amended or successor plan to earn bonus compensation
equivalent to the amount that you could have earned under this paragraph 3(b),
but subject to the same limitations, and any such bonus and/or bonus plan shall
not modify the Incentive Goal Parameters.

 

4.                                    Long
Term Compensation.  In addition to
your Salary and Bonus, you shall receive the following grants of long-term
compensation under the CBS Corporation 2009 Long-Term Incentive Plan (together
with any successor plan, the “LTIP”):

 

(a)                               Stock
Option Grants.

 

(i)                                   You
shall receive an option under the LTIP to purchase Three Million (3,000,000)
shares of CBS Corporation Class B Common Stock, par value $0.001 per share
(the “Class B Common Stock”),
following the close of trading on the New York Stock Exchange on the third
trading day following the Company’s public announcement of the arrangements set
forth in this Agreement (the “2010 Option Grant Date”),
provided that you are employed by Employer on the 2010 Option Grant Date (the “2010 Option”).  The 2010 Option shall have a term of eight
(8) years and shall have an exercise price equal to the closing price of
one share of Class B Common Stock on the 2010 Option Grant Date.  The 2010 Option shall vest in four
(4) equal installments on each of the first, second, third and fourth
anniversaries of the 2010 Option Grant Date, provided that on each respective
vesting date, you remain employed with the Company, and subject to acceleration
and all 

 

 

other applicable provisions of this Agreement. Except
as otherwise provided herein, the terms and conditions set forth in an option
agreement evidencing the 2010 Option shall be no less favorable to you than the
terms and conditions generally applicable to other senior executives of
Employer.

 

(ii)                                On
the first anniversary of the 2010 Option Grant Date (or if the first
anniversary of the 2010 Option Grant Date is not a trading day, on the first
trading day after such first anniversary) (the “2011
Option Grant Date”), you shall receive an option under the LTIP
to purchase an additional Three Million (3,000,000) shares of Class B
Common Stock, provided that you are employed by Employer on the 2011 Option
Grant Date (the “2011 Option”); provided,
however, that the number of shares of Class B Common Stock subject
to the 2011 Option shall be increased to the extent that a greater number of
shares is required to deliver an Option Grant Date Value (as hereinafter
defined) that, when combined with the Option Grant Date Value of the 2010
Option, is equal to Forty Million Dollars ($40,000,000); provided, further,
that (a) in no event shall the number of shares of Class B Common
Stock subject to the 2011 Option exceed Four Million (4,000,000) shares of
Class B Common Stock, and (b) the Compensation Committee shall retain
the discretion to reduce the number of shares of Class B Common Stock
subject to the 2011 Option, but not below 3,000,000 shares, if the Compensation
Committee determines that Employer’s financial and stock performance during
calendar year 2010 is significantly worse than the financial and stock
performance relative to its diversified media and entertainment peer
companies.  The minimum and the maximum
number of shares to be granted under the 2011 Option shall be equitably
adjusted in the case of a stock split, spin-off, etc. in accordance with the
adjustment provisions of the LTIP.  The
Option Grant Date Values of the 2010 Option and 2011 Option shall be determined
as of their respective grant dates.  For
purposes of this Agreement, the “Option  Grant Date Value” of a stock option
shall equal the grant date fair value determined in accordance with the
Financial Accounting Standards Board’s Accounting Standards Codification (FASB
ASC) Topic 718, Compensation — Stock Compensation, employing the same
assumptions and methodologies that are applied for purposes of Employer’s
financial accounting statements.  The
2011 Option shall vest in four (4) equal installments, with the first
three installments vesting on each of the first, second and third anniversaries
of the 2011 Option Grant Date and the fourth installment vesting on the last
day of the Original Employment Term, provided that on each respective
vesting date, you remain employed with the Company, 

 

 

and subject to acceleration and all other applicable
provisions of this Agreement.  The 2011
Option shall have a term of eight (8) years and shall have an exercise
price equal to the closing price of one share of Class B Common Stock on
the 2011 Option Grant Date.  Except as
otherwise provided herein, the terms and conditions set forth in an option
agreement evidencing the 2011 Option shall be no less favorable to you than the
terms and conditions generally applicable to other senior executives of
Employer.

 

(iii)                             During each of the
calendar years 2012, 2013 and 2014, the Compensation Committee will consider
granting to you additional stock options 
to purchase shares of CBS Corporation Class B Common Stock under
the LTIP as and when other senior members of the Company’s management team
reporting to you are considered for annual equity grants by the Compensation
Committee (any such discretionary option grant, a “Discretionary
Option Grant”); provided, however, that such
consideration by the Compensation Committee does not guarantee (and should not
be construed as a guarantee) that you will receive a Discretionary Option Grant
in any such calendar year.  The amount of
any such grant(s) will be determined by the Compensation Committee, in its
sole and reasonable discretion, with the objective and intent of creating
shareholder value by maintaining the long-term incentive for you with regard to
your existing and future equity holdings and equity-based awards that is
consistent with the projected level of incentive and value for you from such
equity holdings and equity-based awards that the Compensation Committee (with
input from its independent compensation consultant) originally intended to
establish, throughout the Employment Term. The Compensation Committee, when
considering whether it believes any such Discretionary Option Grant may be
appropriate, will take into account the Employer’s financial and stock
performance relative to its diversified media and entertainment peer companies,
and, in particular whether the Company’s financial and stock performance is
due, at least in part, to operating factors that have generally affected
companies in the industry in a similar fashion. 
Any Discretionary Option Grant shall be subject to the terms and
conditions set forth in the agreement evidencing such grant, which, except as
otherwise provided herein, shall be no less favorable to you than the terms and
conditions generally applicable to other senior executives of Employer, provided
that any such Discretionary Option Grant will provide for vesting in full not
later than the last day of the Original Employment Term (provided you remain
employed on such date), and subject to acceleration and all other applicable
provisions of this Agreement.

 

 

(b)                              Restricted
Stock Units.

 

(i)                                   Beginning
with the date of execution of this Agreement by both parties and automatically
on each of the first, second, third and fourth anniversaries thereafter during
the Employment Term (each an “RSU Grant Date”),
you shall receive an award of restricted stock units (the “RSUs”)
under the LTIP, provided that you are employed by Employer on the applicable
RSU Grant Date.  One-half of the RSUs
underlying each grant shall be subject to performance- and time-based vesting
conditions (“PRSUs”), and the other half
shall be subject only to time-based vesting conditions (the “TRSUs”), in each case determined as
of the RSU Grant Date.  The initial grant
of RSUs shall have a grant date value equal to Eight Million Dollars
($8,000,000), and each subsequent RSU grant thereafter shall have a grant date
value that is Five Hundred Thousand Dollars ($500,000) more than the grant date
value of the preceding grant (each, an “RSU Grant Date Value”).  The number of RSUs granted on any RSU Grant
Date (rounded down to a whole unit for any fractional unit) shall be determined
by dividing the RSU Grant Date Value by the closing price of one share of
Class B Common Stock on the RSU Grant Date.  The number of PRSUs granted on each RSU Grant
Date shall be referred to herein as the “Target PRSU Award.”  Each RSU shall correspond to one share of
Class B Common Stock.

 

(ii)                                TRSUs
granted pursuant to paragraph 4(b)(i) shall vest in three (3) equal
installments on each of the first, second and third anniversaries of the
applicable RSU Grant Date (or, if earlier, on the last day of the Original
Employment Term), provided that you are employed on each such vesting
date and subject to acceleration and all other applicable provisions of this
Agreement.

 

(iii)                             The Compensation Committee
shall establish a performance goal requirement with respect to each grant of
PRSUs made pursuant to paragraph 4(b)(i), which requirement shall be consistent
with the Incentive Goal Parameters described in paragraphs 3(b)(ii)b and 3(b)(ii)c,
that shall apply in respect of a performance period that shall end no later
than December 31st of the calendar year during which the RSU
Grant Date occurs.  The performance goal
established by the Compensation Committee for each grant of PRSUs shall be
based on a level of achievement against Employer’s budgeted Free Cash Flow (as
defined in the LTIP), as approved by the Board for each relevant calendar year,
provided that such goal shall be adjusted for any performance period
that is less than a full calendar year to reflect budgeted Company 

 

 

performance for the shortened performance period.  You shall have meaningful input with the
Compensation Committee prior to the determination of the performance goal
relating to the PRSUs for each performance period, but the Compensation
Committee will have final power and authority concerning the establishment of
such goal;  provided, however, that
if the Compensation Committee establishes a performance goal for PRSUs granted
to other senior executives of the Company, which is based on Employer’s
budgeted Free Cash Flow, the same performance goal shall be applicable to your
PRSU grant for such calendar year.

 

(iv)                            As
of the last day of each performance period, Employer’s actual Free Cash Flow
shall be measured against the performance goal established for such performance
period, after taking into account any permissible adjustments to such goal, and
the degree of achievement (expressed as a percentage) will be used to calculate
the number of shares that you will receive, in accordance with the following
schedule:

 

·                If the Company achieves less than 80%
of the performance goal for the performance period, the Target PRSU Award will
be forfeited;

 

·                If the Company achieves 80% of the
performance goal for the performance period, the number of shares to be
delivered under the award will be 80% of the Target PRSU Award;

 

·                If the Company achieves 100% of the
performance goal for the performance period, the number of shares to be
delivered under the award will be 100% of the Target PRSU Award; and

 

·                If the Company achieves 120% or more of
the performance goal for the performance period, the number of shares to be
delivered under the award will be 120% of the Target PRSU Award.

 

For
achievement at an intermediate point between 80% and 100%, and between 100% and
120%, the number of shares of Class B Common Stock to be delivered will be
interpolated on a straight-line basis between the respective numbers of shares
to be delivered at such percentages. 
Fractional shares will be aggregated and rounded to the next higher
whole share.

 

(v)                               The
number of PRSUs, determined pursuant to clause (iv) above, shall vest on
the later of (A) the first anniversary of the RSU Grant Date (or, in the
case of the 2014 grant of PRSUs, on the last day of

 

 

the Original Employment Term) or (B) the date the
Compensation Committee certifies that at least minimum threshold performance
has been achieved for the relevant calendar year, which certification shall
take place no later than seventy-four (74) days following the end of the
relevant calendar year (the “PRSU Vest Date”),
provided that you are employed on the applicable PRSU Vest Date (other
than with respect to a certification by the Compensation Committee after the
Original Employment Term, in which case you are not required to be employed)
and subject to acceleration and all other applicable provisions of this
Agreement.

 

(vi)                          RSUs
(both PRSUs and TRSUs) shall be payable only in shares of Class B Common
Stock.  The PRSUs and the TRSUs shall
also accrue dividend equivalents in accordance with the LTIP, provided
that in the case of PRSUs, dividend equivalents shall be accrued and paid only
with respect to the Target PRSU Award, unless actual performance results in
payment of a lesser number of shares of Class B Common Stock than under
the Target PRSU Award, in which case dividend equivalents shall be paid only
with respect to such lesser number. 
Subject to the terms and conditions set forth in this paragraph 4(b) or
as otherwise provided herein, the RSUs shall be subject to the terms and
conditions set forth in the agreement evidencing the grant of such RSUs.

 

(vii)                      Prior to the end of each calendar
year during the Employment Term, you will have an option to defer the
settlement of the RSUs that will be awarded during the following year.  You may elect to defer the settlement of such
RSUs as follows: for up to ten (10) years after the RSUs vest for
in-service distributions, and for up to three (3) years after your
Separation from Service (as defined in paragraph 10) with the Company for
post-termination distributions.  If a
timely election to defer is not made for any RSUs, shares delivered in
settlement of TRSUs shall be delivered within ten (10) business days
following the applicable vesting date, and shares delivered in settlement of
PRSUs shall be delivered during the period January 1st through March 15th of
the calendar year after the calendar year in which they are granted promptly
following the PRSU Vest Date. 
Notwithstanding any of the foregoing, to the extent required to comply
with Section 409A (as defined in paragraph 10), the settlement of each
deferred RSU will be deferred to the date determined in accordance with
paragraph 10(d)(v) if such date is later than the date on which settlement
would otherwise occur.

 

In the
event of a conflict between the terms and conditions set forth in this
paragraph 4 and the terms and conditions set forth in an agreement(s) or
plan(s) 

 

 

evidencing the grant of
the awards contemplated by paragraphs 4(a) and (b), the terms of this
Agreement shall control.

 

5.                                    Benefits.

 

(a)                               During
the Employment Term, you shall be entitled to participate in such life and
medical insurance, pension and other employee benefit plans as the Company may
have or establish from time to time and in which other Company executives with
corporate-wide responsibilities are eligible to participate.  The foregoing, however, shall not be
construed to require Employer or any of its subsidiaries to establish any such
plans or to prevent the modification or termination of such plans once
established, and no such action or failure thereof shall affect this Agreement;
provided that no such modification or termination shall be applicable to
you unless also equally applicable to all other Company executives with
corporate-wide responsibilities.  All
benefits you may be entitled to as an employee of Employer shall be based upon
your Salary and not upon any bonus compensation due, payable or paid to you
hereunder, except where the benefit plan expressly provides otherwise.  You shall be entitled to four (4) weeks
paid vacation during each calendar year during the Employment Term.

 

(b)                              Employer
shall provide you with life insurance during the Employment Term at Employer’s
cost, the beneficiary or beneficiaries of which life insurance shall be
designated by you or the assignee of such policy in accordance with the
following sentence.  Employer shall
determine the life insurance carrier and the coverage level to be provided on
an annual basis shall be the maximum amount of coverage that the Employer is
able to secure on your behalf (unless the intent of the parties is otherwise),
subject to the limitation that annual premium cost of such life insurance
coverage to Employer shall in no event exceed One Hundred Fifty Thousand
Dollars ($150,000); and provided, further, that the terms and
conditions under which the life insurance is provided, shall be no less
favorable than those currently in effect for you.  You shall have the right to assign the policy
for such life insurance to your spouse and/or issue or to a trust or trusts
primarily for the benefit of your spouse or issue.

 

(c)                               The
limitation on eligible compensation taken into account for purposes of
calculating your plan benefit under the CBS Retirement Excess Pension Plan (or
any other non-qualified supplemental retirement plan in which you actively
participate now or in the future) (each, a “SERP”)
shall be deemed to be an amount equal to your Salary; provided, however,
that if any such SERP is frozen as to future benefit accruals after your Start
Date, you shall be treated as continuing to accrue benefits as set forth in
this paragraph 5(c) under such SERP through the end of the Employment Term.

 

6.                                    Business
Expenses, Perquisites.  (a)   During the Employment Term, you shall be
reimbursed for such reasonable travel and other expenses incurred in the
performance of your duties hereunder on a basis no less favorable than that
provided by Employer to its senior executives other than Employer’s Executive
Chairman and Founder, but in any event on a basis consistent with that provided
to you, or agreed to be provided to you, immediately prior to the date of this
Agreement.

 

 

(b)                              Employer
shall pay all fees and expenses of your counsel and other fees and expenses
which you may incur in an effort to establish entitlement to compensation or
other benefits under this Agreement in accordance with paragraph 20.  During the Employment Term, you shall be
entitled to the use of a private plane in accordance with Employer policy on a
basis no less favorable than that provided by Employer to any of its senior
executives at your level or below (accompanied by your spouse, at your option
and, unless your spouse’s presence is required by the Company, at your cost)
but in any event no less favorable to you than had previously been provided to
you immediately prior to the date of this Agreement.  During the Employment Term, you also shall be
entitled to other perquisites, including provision for insurance of a car (the “Perquisites”), in accordance with
Employer policy on a basis no less favorable than that provided by Employer to
any of its senior executives other than Employer’s Executive Chairman and
Founder.

 

(c)                               Commencing
with the calendar year beginning January 1, 2007 (as previously agreed and
described in paragraph 6(c) of the Prior Agreement) and thereafter during
the Employment Term, Employer shall pay (either directly to the applicable New
York State and Local taxing authorities as tax withholdings or to you as a
reimbursement for New York State and Local taxes and fees, together with
interest or penalties thereon) in respect of any incremental New York State and
Local taxes and fees (net of Federal Tax benefit and subject to New York
Credits on California Resident Tax Returns), an amount that shall place you in
the same after-tax economic position that you would have enjoyed had you not
incurred such incremental New York State and Local taxes and fees resulting
from the time you provide services for Company in the State of New York or the
City of New York. All such claimed incremental New York State and Local taxes
and fees shall be reviewed and validated by the Compensation Committee and
Employer shall provide you with detailed support for its calculation for the
amount to be reimbursed to you or paid to the applicable taxing authority.  You shall promptly notify Employer of any New
York State or Local taxing authority’s assertion during an audit in respect of
any payment by Employer, related to the incremental New York State and Local
taxes and fees, on your behalf or reimbursement to you, but you shall be under
no obligation to defend against such claim by the New York State or Local
taxing authority unless Employer requests, in writing, that you undertake the
defense of such claim on behalf of Employer and at Employer’s sole
expense.  In such event, Employer may
elect to control the conduct to a final determination through counsel of its
own choosing and at its sole expense, of any audit, administrative or judicial
proceeding involving an asserted liability related to the incremental New York
State and Local taxes and fees and you shall not settle, compromise or concede
such incremental New York State and Local taxes and fees and shall cooperate
with Employer in each phase of the contest. 
No payments or reimbursement shall be made later than (i) the end
of the calendar year following the calendar year in which the taxes are
remitted to the taxing authority, or (ii) where as a result of the audit
or proceeding relating to taxes not previously remitted, the end of the
calendar year following the year in which the audit is completed or there is a
final and non-appealable settlement or other resolution of the proceeding.

 

 

(d)                             Employer
shall pay or reimburse you (promptly following your submission of reasonably
documented expenses) for the cost of constructing a dedicated work area in your
home for you to be able to screen and evaluate television and film programming
material and perform other work activities, subject to a maximum contribution
of Two Hundred Thousand Dollars ($200,000). 
Additionally, Employer agrees to equip such work area to your
specifications, provided that the equipment to be supplied by Employer
shall have a maximum value equal to Three Hundred Thousand Dollars ($300,000).  Given the expected depreciation and the
associated cost of removal, you shall be entitled to keep any such equipment
following the end of the Employment Term.

 

7.                                    Competitive
Assessment.  Notwithstanding the
foregoing paragraphs 3 through 6, if, in connection with the annual review of
your Salary and Target Bonus, it is determined that your annualized target
compensation package (consisting of Salary, Target Bonus and target long-term
incentives, without regard to any deferrals) is, in the aggregate, less than
that of other chief executive officer(s) of comparably-sized diversified
media and entertainment companies (to be determined by the Compensation
Committee with input from its independent compensation consultant), the
Compensation Committee will consider an increase to your annual target
compensation package, taking into account the financial and stock performance
of Employer relative to other diversified media and entertainment peer
companies and, in particular, to the comparably-sized diversified media and
entertainment companies that have chief executive officers whose annualized
target compensation exceeds yours.

 

8.                                    Exclusive
Employment, Etc.

 

(a)                               Non-Competition.  You agree that your employment hereunder is
on an exclusive basis, and that during the period (the “Non-Compete
Period”) beginning on the Start Date and ending on the first
anniversary of the end of the Employment Term (provided, however,
that if you remain employed and are being paid on Company’s payroll through the
end of the Original Employment Term, the Non-Compete Period will end on the
last day of the Original Employment Term), other than as permitted by paragraph
2(c), you will not engage in any other business activity which is in conflict
with your duties and obligations (including your commitment of time)
hereunder.  You agree that during the
Non-Compete Period you shall not, directly or indirectly, engage in or
participate as an owner, partner, holder or beneficiary of stock, stock options
or other equity interest, officer, employee, director, manager, partner or
agent of, or consultant for, any company or business competing with the
Company; provided, however, that nothing herein shall prevent you
from participating in any investment activities specifically allowed under
paragraph 2(c) and 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.

 

(b)                              No
Solicitation of Employees.  You agree
that during the Employment Term and for the period provided below after the
termination of your employment for any reason, you will not employ any
Restricted Employee (as defined 

 

 

below), or in any way
induce or attempt to induce any Restricted Employee to leave the employment of
Employer or any of its affiliates.  You
agree that you will not take the actions described in the preceding sentence (i) with
respect to any Restricted Employee at the level of Vice President or above for
one (1) year after the termination of your employment for any reason, and (ii) with
respect to any Restricted Employee at the level of director for six (6) months
after the termination of your employment for any reason.  “Restricted Employee”
refers to any person employed by Employer or any of its subsidiaries or their
respective predecessors or previously employed by Employer or any of its
subsidiaries or their respective predecessors (unless at such time such person
has not been employed by Employer and/or any of its subsidiaries or their respective
predecessors for at least six (6) months).

 

(c)                               Confidential
Information.  You agree that, during
the Employment Term or at any time thereafter, you will not use for your own
purposes, or disclose to or for the benefit of any third party, any trade
secret, proprietary or non-public information relating to the Company (“Confidential Information”) (except
as may be required by law but only after prior notice to Employer (to the
extent not prohibited by law) or in the performance of your duties hereunder
consistent with the Company’s policies) and you will comply with any and all
confidentiality obligations of the Company to a third party which you know or
should know about, whether under agreement or otherwise.  Confidential Information shall include,
without limitation, trade secrets; inventions (whether or not patentable);
technology and business processes; business, product or marketing plans; sales
and other forecasts; financial information; client lists or other intellectual
property; information relating to compensation and benefits; public information
that becomes proprietary as a result of Employer’s compilation of that
information for use in its business; documents (including any electronic
record, videotapes or audiotapes); and oral communications incorporating
Confidential Information. 
Notwithstanding the foregoing, Confidential Information shall be deemed
not to include information which (i) is or becomes generally available to
the public other than as a result of a disclosure by you in violation of this
Agreement or by any other person who directly or indirectly receives such
information from you or at your direction in violation of this Agreement, or (ii) is
or becomes available to you on a non-confidential basis from a source which is
entitled to disclose it to you.

 

(d)                             Employer
Ownership.  The results and proceeds
of your services to the Company, whether or not created during the Employment
Term, including, without limitation, any works of authorship resulting from
your services and any works in progress resulting from such services, shall be
works-made-for-hire and Employer shall be deemed the sole owner throughout the
universe of any and all rights of every nature in such works, with the right to
use, license or dispose of the works in perpetuity in any manner Employer
determines in its sole discretion without any further payment to you, whether
such rights and means of use are now known or hereafter defined or
discovered.  If, for any reason, any of
the results and proceeds of your services to the Company 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 Employer under this paragraph 8(d), then you hereby
irrevocably 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, and Employer shall have the sole right to use, license or
dispose of the work in perpetuity throughout the universe in any manner
Employer determines in its sole discretion without any further payment to you,
whether such rights and means of use are now known or hereafter defined or
discovered.  Upon request by Employer,
whether or not during the Employment Term, you shall do any and all things (at
Employer’s expense) which Employer may reasonably deem useful or desirable to
establish or document Employer’s rights in the results and proceeds of your
services to the Company, including, without limitation, the execution of
appropriate copyright, trademark and/or patent applications, assignments or
similar documents.  You hereby
irrevocably designate the General Counsel, Secretary or any Assistant Secretary
of Employer as your attorney-in-fact with the power to take such action and
execute such documents on your behalf. 
To the extent you have any rights in such results and proceeds that
cannot be assigned as described above, you unconditionally and irrevocably
waive the enforcement of such rights. 
This paragraph 8(d) is subject to, and does not limit, restrict, or
constitute any waiver by Employer of any rights of ownership to which Employer
may be entitled by operation of law by virtue of Employer or any of its
affiliates or predecessors being your employer.

 

(e)                               Litigation.  You agree that during the Employment Term and
for a one-year period thereafter and, if longer, during the pendency of any
litigation or other proceeding, (i) you shall not communicate with anyone
(other than your attorneys and tax advisors and except to the extent required
by law or necessary in the performance of your duties hereunder) with respect
to the facts or subject matter of any pending or potential litigation, or
regulatory or administrative proceeding involving Employer or any of its
affiliates or predecessors, other than any litigation or other proceeding in
which you are a party-in-opposition, without giving prior notice to Employer or
Employer’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 so notify
Employer’s counsel unless you are prohibited from doing so under applicable
law.  You agree to cooperate, in a
reasonable and appropriate manner, with Employer and its attorneys, both during
and after the termination of your employment or services, in connection with
any litigation or other proceeding arising out of or relating to matters in
which you were involved prior to the termination of your employment or services
to the extent Employer pays all reasonable expenses you incur in connection
with such cooperation (including, without limitation, the fees and expenses of
your counsel) and to the extent such cooperation does not unreasonably
interfere with your personal or professional schedule.

 

(f)                                No
Right to Write Books, Articles, Etc. 
During the Employment Term and for two (2) years thereafter but not
beyond the end of the Original Employment Term, except in the course of the
performance of your duties and responsibilities or otherwise as authorized by
the Board, you shall not prepare (other than personal notes and/or a diary) or
assist any person or entity in the preparation of any books, articles, radio
broadcasts, electronic communications, television or motion picture productions
or 

 

 

other creations,
concerning Employer or any of its affiliates or predecessors or any of their
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 Employer shall remain the
exclusive property of Employer and shall remain in Employer’s exclusive
possession at the conclusion of your Employment Term.  In the event of the termination of your
employment or services for any reason, Employer reserves the right, to the
extent permitted by law and in addition to any other remedy Employer may have,
to deduct from any monies otherwise payable to you the following: (i) all
undisputed amounts you may owe, pursuant to a legally enforceable agreement, to
Employer or any of its affiliates or predecessors at the time of or subsequent
to the termination of your employment or services with Employer; and (ii) the
value of Employer property which you are required to return and which you
retain in your possession after the termination of your employment or services
with Employer following Employer’s written request for same and your failure to
return same.  In the event that the law
of any state or other jurisdiction requires the consent of any employee for
such deductions, this Agreement shall serve as such consent.  Notwithstanding anything in this paragraph 8(g) to
the contrary, Employer will not exercise such right to deduct from any monies
otherwise payable to you to the extent such offset would result in a violation
of Section 409A.

 

(h)                              Non-Disparagement.  You and, to the extent set forth in the next
sentence, Employer agree that each party shall not, during the Employment Term
and for one (1) year thereafter, criticize, ridicule or make any statement
which disparages or is derogatory of the other party in any non-public
communication with any customer, client or member of the investment community
or media or in any public communication. 
Employer’s obligations under the preceding sentence shall be limited to
communications by its senior corporate executives having the rank of Senior
Vice President or above (“Specified Executives”),
and it is agreed and understood that any such communication by any Specified
Executive (or by any executive at the behest of a Specified Executive) shall be
deemed to be a breach of this paragraph 8(h) by Employer.  Notwithstanding the foregoing, neither you
nor Employer shall be prohibited from making statements in response to
statements by the other party (or in your case, with respect to any Specified
Executives) that criticize or ridicule or are disparaging or derogatory, provided
that the responsive statements do not criticize or ridicule and are not
disparaging or derogatory.

 

(i)                                  Injunctive
Relief, Etc.  Employer 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 8(a) through 8(h) will
result in irreparable damage to Employer, and, accordingly, Employer may obtain
injunctive and other equitable relief for any breach or threatened breach of
such paragraphs, in addition to any other remedies available to Employer.  You and Employer agree that the restrictions
and remedies contained in paragraphs 8(a) through 8(h) are reasonable
and that it is your intention and the intention of Employer that such
restrictions and remedies 

 

 

shall be enforceable to
the fullest extent permissible by law. 
If it is found by a court of competent jurisdiction that any such
restriction or remedy is unenforceable but would be enforceable if some part
thereof were deleted or the period or area of application reduced, then such
restriction or remedy shall apply with such modification as shall be necessary
to make it enforceable.

 

(j)                                  Survival.  Your obligations under paragraphs 8(a) through
8(h) and Employer’s obligations under paragraph 8(h) shall remain in
full force and effect for the entire period provided therein (and only for such
period, subject, however, to the provisions of paragraph 12(h)),
notwithstanding the termination of your employment pursuant to paragraph 10
hereof or otherwise, or the expiration of the Original Employment Term.

 

9.                                    Incapacity.  In the event you become totally medically
disabled and you will not be able to substantially perform your duties for at
least six (6) consecutive months or a total of 180 days during any 270 day
period, the Board, at any time after such disability has continued for 60
consecutive days, may determine, provided such determination is made while the
disability is still in effect, that Employer requires such duties and
responsibilities be performed by another executive.  In the event that you become “disabled” within the meaning of such
term under Employer’s Short-Term Disability (STD) and its Long-Term Disability
(LTD) program, you will first receive benefits under the STD program for the
first 26 weeks of absence in accordance with such program, which will be equal
to your Salary, and the amount of such benefits will offset any Salary that
otherwise would be paid to you pursuant to this Agreement.  Thereafter, you will be eligible to receive
benefits under the LTD program in accordance with its terms.  For purposes of this Agreement, you will be
considered to have experienced a termination of employment with Employer as of
the date you first become eligible to receive benefits under the LTD program,
or, if you do not become eligible to receive benefits under the LTD program, on
the date following the sixth consecutive month in which you have not been able
to substantially perform your duties hereunder (“Disability
Termination Date”), and until that time you shall be treated for
all purposes of this Agreement as an active employee of Employer.  Upon your Disability Termination Date, your
benefits will be the following in accordance with the payment provisions set
forth in paragraph 10(d)(iii) and subject to the provisions of paragraph
10(d)(v):

 

(i)                                  Employer
will pay your Accrued Compensation and Benefits (as defined below in paragraph
10(d)(ii));

 

(ii)                              Employer
will pay you a prorated Bonus for the year of your termination of employment
based on your Target Bonus and the number of calendar days of such year elapsed
through the date of your termination of employment;

 

(iii)                          all of your outstanding
unvested Employer stock options will vest, and all such options and all of your
outstanding options that have previously vested will remain exercisable for the
greater of three 

 

 

years
and the period provided for under the terms of the applicable award agreement,
but in no event beyond their normal expiration date;

 

(iv)                          all
of your unvested and outstanding restricted stock and/or restricted stock units
and any other type of equity awards that are then unvested and outstanding, in
each case, as of the date on which the Employment Term ends shall vest and be
settled within ten (10) business days after your termination date; and

 

(v)                              Employer
will continue to pay the same premium amounts it was paying at the time of your
termination in connection with providing you with life insurance coverage as
set forth in paragraph 5(b).  Such
payments of premiums will continue until the end of the Original Employment
Term or, if earlier, the date on which you become eligible for at least as much
insurance coverage as the coverage that was in effect at the time of your
termination, from a third party employer at such employer’s expense; provided,
however, that Employer may decrease the amount of premiums it pays
towards life insurance coverage it provides you so long as the amount of such
coverage that it continues to provide, combined with the amount of such
coverage provided to you from a third party employer at such employer’s
expense, aggregates at least the amount of coverage that was in effect for you
at the time of your termination as a result of Employer’s obligations as set
forth in paragraph 5(b).

 

10.                            Termination.  For purposes of this paragraph 10, no payment
that would otherwise be made and no benefit that would otherwise be provided
upon a termination of employment will be made or provided unless and until such
termination of employment is also a Separation from Service.  A “Separation from Service”
shall be deemed to have occurred on the date on which the level of bona fide
services reasonably anticipated to be performed by you is 45% or less of the
average level of bona fide services performed by you during the immediately
preceding 36-month period.

 

(a)                               Termination
for Cause.  Employer may, at its
option, terminate your employment for Cause (as defined below). For purposes of
this Agreement, termination of your employment for “Cause”
shall mean termination of your employment due to any of the following:

 

(i)                                  your
engaging or participating in intentional acts of material fraud against the
Company;

 

(ii)                              your
willful misfeasance having a material adverse effect on the Company (except in
the event of your incapacity as set forth in paragraph 9);

 

 

(iii)                          your conviction of a felony;

 

(iv)                          your
willful unauthorized disclosure of trade secret or other confidential material
information of the Company;

 

(v)                              your
terminating your employment without Good Reason (as defined below) other than
for death or incapacity pursuant to paragraph 9 (it being understood that your
terminating your employment during the Original Employment Term without Good
Reason prior to the end of the Original Employment Term shall constitute
Cause);

 

(vi)                          your
willful and material violation of any policy of the Company that is generally
applicable to all employees or all officers of the Company including, but not
limited to, policies concerning insider trading or sexual harassment,
Supplemental Code of Ethics for Senior Financial Officers, and Employer’s
Business Conduct Statement;

 

(vii)                      your willful failure to cooperate
fully with a bona fide Company internal investigation or an investigation of
the Company by regulatory or law enforcement authorities whether or not related
to your employment with the Company (an “Investigation”),
after being instructed by the Board to cooperate or your willful destruction of
or knowing and intentional failure to preserve documents of other material
known by you to be relevant to any Investigation; or

 

(viii)                  your willful and material breach of
any of your material obligations hereunder.

 

For
purposes of the foregoing definition, an act or omission shall be considered “willful”
if done, or omitted to be done, by you with knowledge and intent.  Anything herein to the contrary
notwithstanding, Board will give you written notice, not more than thirty (30)
calendar days after the occurrence of the event constituting Cause comes to the
attention of another “executive officer” of Employer (as defined by the rules and
regulations of the Securities Exchange Commission for purposes of the
Securities Exchange Act of 1934, as amended), prior to terminating this
Agreement for the cause set forth in clauses (i), (ii) (iv), (vi), (vii) and
(viii) above.  Such notice shall set
forth the nature of any alleged misfeasance in reasonable detail and the
conduct required to cure such misfeasance. 
Except for a breach which cannot by its nature be cured, you shall have
thirty (30) calendar days from your receipt of such notice within which to cure
and within which period Employer cannot terminate this Agreement for the stated
reasons, and, if so cured, after which period Employer cannot terminate your
employment under this Agreement for the stated reasons.  For purposes of this Agreement, no such
purported

 

 

termination of your
employment for Cause set forth in clauses (i), (ii), (iv), (vi), (vii) and
(viii) above shall be effective without such notice.

 

(b)          Good Reason
Termination.  Upon written notice to
Employer, you may terminate your employment hereunder for “Good Reason” at any
time during the Original Employment Term not more than thirty (30) calendar
days after you become aware of the occurrence of the event constituting Good
Reason; provided, however, that in the case of a Material Event
described in clause (vii)(B) which relates to a Material Event described
in clause (y) of the last sentence of this paragraph 10(b), such written
notice must be provided not earlier than sixty (60) days, and not more than one
hundred twenty (120) days, following the occurrence of such Material
Event.  Such notice shall state an
effective date no earlier than thirty (30) calendar days after the date it is
given. Employer shall have thirty (30) calendar days from the giving of such notice
within which to cure and within which period you cannot terminate your
employment under this Agreement for the stated reasons and, if so cured, after
which you cannot terminate your employment under this Agreement for the stated
reasons; provided, however, that this sentence shall not apply
with respect to events which by their nature cannot be cured.  “Good Reason”
shall mean, without your prior written consent, other than in connection with
the termination of your employment for Cause (as defined above) or incapacity
(as set forth in paragraph 9) or as a result of your death:

 

(i)           your
removal from or any failure to re-elect you as President and Chief Executive
Officer of Employer;

 

(ii)          your
removal from or failure to be elected or reelected to the Board at any annual
meeting of shareholders of the Company at which your term as director is
scheduled to expire;

 

(iii)         the assignment to you by Employer of duties
inconsistent with the usual and customary duties associated with a chief
executive officer of a publicly traded company comparable to Employer;

 

(iv)         the
diminution or withdrawal of a meaningful portion of your authority or
responsibilities as set forth in paragraph 2;

 

(v)          (A) a
reduction in your Salary, Target Bonus or your other compensation levels, in
each case as the same may be increased from time to time during the Employment
Term; (B) the Compensation Committee’s establishing Company-Wide
Performance Goal(s) that fail to satisfy the Incentive Goal Parameters (as
defined in paragraph 3(b)(ii)); (C) payment of a Bonus that is less than
the Company-Wide Performance Bonus Portion payable in accordance with the
provisions of Section 3(b)(iii) above; or (D) a breach of
paragraph 6(c) relating to tax payments in respect of your services to be
performed in New York City;

 

 

(vi)         Employer’s
requiring you to be based anywhere other than the New York or Los Angeles
metropolitan area, except for required travel on the Company’s business;

 

(vii)       termination by you of your employment, (A) during
the 30-day period following the twelve-month anniversary of the date on which
there occurs a Material Event described in clause (x) below, or (B) after
the 90-day period following the occurrence of a Material Event described in
clause (y) below, in either case based on your good faith determination that
the occurrence of the Material Event has adversely affected your ability to
perform your CEO duties effectively such that your ability to contribute to the
further creation of shareholder value is inhibited; provided, however,
that in the case of a Material Event described in clause (y) below, you
shall provide written notice to the Chair of the Compensation Committee not
later than the date you provide written notice of termination explaining the
rationale for why such Material Event adversely affects your ability to perform
your CEO duties effectively; or

 

(viii)      any other material breach by Employer of its
material obligations hereunder, including but not limited to a breach of
paragraph 2.

 

For
purposes of clause (vii) above, a Material Event shall have occurred (x) on the date on which a majority of the independent
directors of the Board ceases to consist of (1) those individuals who,
immediately prior to the date on which Sumner M. Redstone ceases to hold the
position of Employer’s Executive Chairman and Founder, constitute the
independent directors of the Board (the “Original Independent
Directors”) and (2) those successor independent directors
who are elected or appointed to the Board, either by a vote of the Board or by
action of the shareholders of the Employer pursuant to a recommendation by the
Board, as a result of the death or voluntary retirement or resignation of an
Original Independent Director (or any such successor), including a voluntary
determination by such Original Independent Director (or such successor) not to
stand for re-election; or (y) upon
the appointment of a non-Executive Chairman other than Sumner M. Redstone or
yourself.

 

(c)          Termination without
Cause. Employer may terminate your employment without Cause at any time
during the Original Employment Term by written notice to you.

 

(d)          Termination
Payments, Etc.

 

(i)          Termination for Cause.  In the event that Employer terminates your
employment for Cause, Employer shall promptly pay and provide you with Limited
Accrued Compensation and Benefits.  For

 

 

purposes of this Agreement, “Limited  Accrued Compensation and Benefits”
shall consist of: (w) reimbursement of any unpaid business expenses to
which you are entitled to reimbursement pursuant to paragraph 6(a) that
were incurred prior to the effective date of your termination (the “Termination Date”); (x) your
Salary through the Termination Date (as such date is determined in accordance
with paragraph 10(a) or 10(b), as applicable); (y) any Bonus with
respect to any completed calendar year that is determined by the Compensation
Committee for you for each calendar year in which you were employed but has not
yet been paid; and (z) all other vested compensation and benefits to which
you are entitled as of the Termination Date under the terms and conditions
applicable to such compensation and benefits, including vested stock options,
restricted shares, restricted stock units, the Deferred Salary (if any, as
defined in paragraph 3(a) of the Prior Agreement) and Deferred
Compensation.  The cash portion of each
of your Limited Accrued Compensation and Benefits shall be paid in a lump sum
within 30 days after the Termination Date.

 

(ii)          Termination
without Cause or Resignation with Good Reason.  In the event that Employer terminates your
employment without Cause, or if you resign your employment for Good Reason, you
shall be entitled to receive the following:

 

a.            Employer
will pay and provide your Limited Accrued Compensation and Benefits, plus
any unpaid amounts to which you are entitled to reimbursement pursuant to
paragraphs 6(b), 6(c) and 6(d) that were incurred prior to your
Termination Date (except that in the case of paragraph 6(d), “incurred prior to
your Termination Date” shall mean incurred or in the process of being incurred
prior to your Termination Date) (the “Accrued Compensation and
Benefits”);

 

b.            Employer
will pay you a Bonus for the calendar year in which you terminate employment,
such Bonus to be determined based on actual performance pursuant to the
performance goal(s) described in paragraph 3(b)(i) hereof, and then
prorated based on the number of calendar days of such year elapsed through the
date of your termination of employment (the “Pro-Rata
Bonus”);

 

c.            Employer
will pay you a cash severance amount (the “Severance Payment”)
equal to three (3) times the sum of: (A) your Salary in effect at the
time of termination (or, if your Salary has been reduced in violation of this 

 

 

Agreement,
your highest Salary during the Employment Term); and (B) the average of
the annual Bonuses payable to you (whether or not actually paid) with respect
to the last three completed calendar years prior to the Termination Date;

 

d.            All of
your outstanding unvested Employer stock options will vest, and all such
options and all of your outstanding Employer stock options that have previously
vested will remain exercisable for the greater of the period provided in
accordance with the provisions of grant, or for three (3) years from the
end of Employment Term, but not beyond their normal expiration date;

 

e.            All of
your unvested and outstanding restricted stock and/or restricted stock units
and any other type of equity awards that are then unvested and outstanding, in
each case, as of the date on which the Employment Term ends shall vest and be
settled within ten (10) business days after your Termination Date; provided,
however, that in the event and limited to the extent that compliance
with the performance-based compensation exception is required in order to
ensure the deductibility of any such award under Section 162(m) of
the Internal Revenue Code of 1986, as amended (the “Code”),
such award shall vest if and to the extent the Compensation Committee certifies
that a level of the performance goal(s) relating to such award has been
met for the calendar year of termination, and, to the extent applicable, shall
be settled within ten (10) business days thereafter;

 

f.             You
shall be provided, without charge to you, in either New York or Los Angeles at
your election, suitable and appropriate office facilities (at a location within
such city to be determined by Employer) and a personal secretary (who may be
your choice of one of your personal secretaries providing services to you
during the Employment Term, to be compensated at the same compensation and
benefits cost to Employer in effect immediately prior to your termination),
until the conclusion of the Original Employment Term, or earlier upon your
death, provided that nothing in this paragraph shall create any rights
that are duplicative with any rights set forth in any other paragraph of this
Agreement;

 

 

g.            Employer
will continue to pay the same premium amounts it was paying at the time of your
termination in connection with providing you with life insurance coverage as
set forth in paragraph 5(b). Such payments of premiums will continue until the
end of the Original Employment Term (without regard to any earlier termination
of the Employment Term) or, if earlier, the date on which you become eligible
for at least as much insurance coverage as the coverage that was in effect at
the time of your termination, from a third party employer at such employer’s
expense; provided, however, that Employer may decrease the amount
of premiums it pays towards life insurance coverage it provides you so long as
the amount of such coverage that it continues to provide, combined with the
amount of such coverage provided to you from a third party employer at such
employer’s expense, aggregates at least the amount of coverage that was in
effect for you at the time of your termination as a result of Employer’s
obligations as set forth in paragraph 5(b);

 

h.            You and
your eligible dependents shall be entitled to continued participation at your
sole cost, in all medical, dental and hospitalization benefit plans or programs
(the “Health and Welfare Benefits”)
in which you and/or they were participating on the date of the termination of
your employment until the earlier of (A) 36 months following termination
of your employment and (B) the date, or dates, you receive equivalent
coverage and benefits under the plans and programs of a subsequent employer
(the “Continuation Period”); but
only to the extent that you make a payment to Employer in an amount equal to
the monthly premium payments (both the employee and employer portion) required
to maintain such coverage for a similarly situated active employee (and such
employee’s dependants) of Employer on or before the first day of each calendar
month commencing with the first calendar month following the Termination Date
and Employer shall reimburse you (on a tax-grossed up basis) for the amount of
such premiums, if any, in excess of any employee contributions necessary to
maintain such coverage for the Continuation Period; provided, however,
that, in the event Employer is unable to provide you with the Health and
Welfare Benefits during the Continuation Period under the terms of the
applicable Employer plan(s), Employer shall obtain comparable coverage for you
and your dependants at no additional cost to you (including on a tax-grossed
basis, 

 

 

if
applicable) during the Continuation Period. The period of continuation coverage
to which you are entitled under Section 4980B(f) of the Code shall
run concurrently with the Continuation Period; and

 

i.             For
purposes of calculating your plan benefit under any SERP, you shall be credited
with additional age and service credit equal to the lesser of (i) three (3) years
or (ii) the period elapsed from the Termination Date to the end of the
Original Employment Term (the “SERP Credit”).

 

(iii)         Timing of Payments and Settlement.  Subject to paragraphs 10(d)(iv) and (v),
the cash portion of each of your Accrued Compensation and Benefits and 50% of
the Severance Payment shall be paid in a lump sum within 30 days after the
Termination Date and the remaining 50% of the Severance Payment will be paid in
accordance with the Company’s regular payroll practices, in equal installments,
over a period of 36 months, beginning with the first payroll period following
the Termination Date.  Notwithstanding
the foregoing, if, on the Termination Date, you are not considered a “specified
employee” (within the meaning of Section 409A (or any successor
provisions) of the Code and the rules and regulations promulgated
thereunder (“Section 409A”)), then
the references to “Termination Date” in the preceding sentence shall be deemed
to refer to the first business day following the expiration of the 60-day
period described in paragraph 10(d)(iv) below.  Payment of the Pro-Rata Bonus will be made in
accordance with paragraph 3(b)(vi) hereof. 
Any incremental plan benefits resulting from Employer’s application of
the SERP Credit will be paid at the same time and in the same form as your plan
benefits are scheduled to be paid under the terms of the SERP.

 

Anything
in this Agreement to the contrary notwithstanding, your entitlement to any
portion of the Severance Payment that has not yet been paid and your right to
receive future payments and benefits (including payments under paragraph 12,
office and secretarial services) will cease if you materially breach any of the
provisions set forth in paragraph 8(a), 8(b), 8(c) (but only with respect
to a material breach involving strategic business or financial information) or
8(h) and after notice by Employer of such breach you fail to cure such
breach within thirty (30) days following your receipt of such notice, assuming
such breach is capable of cure.  In the
case of your material breach of any of the other provisions of paragraph 8,
then in addition to any other rights or remedies Employer has under this
Agreement or otherwise, 

 

 

nothing
in this Agreement shall prevent Employer from seeking monetary damages and/or
equitable relief in court.  You may
request from Employer at any time its view on whether a proposed activity or
investment by you will breach the Non-Compete Covenant described in paragraph 8(a) and/or
the Non-Solicit Covenant described in paragraph 8(b) by giving Employer
written notice of the details of such activity or investment, and Employer will
respond to your inquiry within ten (10) business days of its receipt of
such notice.  Employer’s view as conveyed
to you that the proposed activity or investment will not breach the applicable
provisions of paragraph 8(a) and/or 8(b) shall be binding on it to
the extent that the activity or investment does not exceed what was described
in the notice.  Your giving notice shall
not be deemed an admission by you that the proposed activity or investment
would violate the applicable provisions of paragraph 8(a) and/or
8(b).  Employer’s failure to respond with
its view within ten (10) business days of its receipt of notice shall not
constitute or be construed as an acknowledgment by Employer that the proposed
activity or investment will not breach the provisions of paragraph 8(a) and/or
8(b), but such failure shall create an irrebuttable presumption that any breach
arising from such activity or investment is capable of cure.  For the avoidance of doubt, nothing in this
paragraph 10(d)(iii), including the requirement that Employer give you a notice
of a breach of paragraph 8(a) and/or 8(b), shall preclude Employer from
seeking an immediate injunction or other equitable relief for any breach or
threatened breach of provisions of paragraph 8.

 

(iv)         Full
Discharge of Company Obligations; Release. 
The payments and other benefits provided for in paragraph 10(d)(ii) (and,
as applicable, paragraph 12(g)(iii)) are in lieu of any severance or income
continuation or protection under any plan Employer or any of its subsidiaries
that may now or hereafter exist.  The
payments and benefits to be provided pursuant to paragraph 10(d)(ii) (and,
as applicable, paragraph 12(g)(iii)) shall constitute liquidated damages, and
shall be deemed to satisfy and be in full and final settlement of all
obligations of Employer to you under this Agreement.  You acknowledge and agree that such amounts
are fair and reasonable, and your sole and exclusive remedy, in lieu of all
other remedies at law or in equity, with respect to the termination of your
employment hereunder.  Employer’s obligation
to make the Severance Payment and provide the other benefits provided for in
paragraph 10(d)(ii) other than the Accrued Compensation and Benefits shall
be conditioned on your execution of a release (the “Release”)
(with all periods for revocation set forth therein having expired) in form and
substance substantially 

 

 

identical
to that set forth in Schedule A within 60 days following your
termination of employment (the “Release Condition”).  The Release shall not be effective unless and
until Employer executes the Release.  If
the maximum period in which the Release may be revoked ends in the calendar
year following the calendar year in which you incur a Separation from Service,
the Release Condition shall be deemed not to have been satisfied until the
later of (i) the first business day in the year following the year in
which you incur a Separation from Service or (ii) the date that the
Release Condition is satisfied (without regard to this sentence).  For avoidance of doubt, the execution or non-execution
by Employer of the Release shall not affect whether or not the Release
Condition has been satisfied.

 

(v)          Section 409A
Delay.  Notwithstanding any
provisions of paragraphs 4, 9, 10 and 12 to the contrary, if you are a “specified
employee” (within the meaning of Section 409A) at the time of your
Separation from Service, and if any portion of the payments or benefits to be
received by you under paragraphs 4, 9, 10 and 12 upon your Separation from
Service would be considered deferred compensation under Section 409A, then
the following provisions shall apply to each such portion.

 

a.            Each
portion of such payments and benefits that would otherwise be payable pursuant
to paragraphs 4, 9, 10 and 12 during the six-month period immediately following
your Separation from Service (the “Delayed Period”)
shall instead be paid or made available on the earlier of (i) the first
business day of the seventh month following the date you incur a Separation
from Service or (ii) your death (the applicable date, the “Permissible Payment Date”).

 

b.            Employer
shall reimburse you for the reasonable after-tax cost of any benefits,
contemplated by paragraphs 9, 10 and 12, incurred by you in independently
obtaining (or otherwise paying amounts to Employer to obtain) such benefits
during the Delayed Period, with such reimbursement to be paid to you by
Employer on the Permissible Payment Date.

 

c.            With
respect to any amount of expenses eligible for reimbursement under paragraphs
9, 10 and 12, such expenses shall be reimbursed by Employer within 60 calendar
days (or, if applicable, on the Permissible Payment Date) following the date on
which Employer receives the applicable invoice from you (and approves such
invoice) 

 

 

but in
no event later than December 31st of
the calendar year following the calendar year in which you incur the related
expenses, or in the case of payment contemplated by paragraph 10(v)(e), December 31st of the calendar year following the calendar
year in which the applicable taxes are remitted.

 

d.            Any
payments delayed under paragraphs 9, 10 and 12 (other than the delayed
settlement of equity-based awards subject to Section 409A) as a result of
the application of Section 409A shall accrue interest at Employer’s
highest borrowing rate in effect on the Separation from Service and such
interest shall be paid at the same time as the underlying delayed payment.

 

e.            Excise
Taxes.  Notwithstanding anything
herein to the contrary, in the event that it is determined by Employer, or by
the Internal Revenue Service (the “IRS”)
pursuant to an IRS audit (an “Audit”) of
your federal income tax return(s), that any payment or benefit provided to you
hereunder or otherwise, would be subject to the excise tax imposed by Section 4999
of the Code, 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 Employer
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 “Tax Neutralization 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.  Employer will consult with its
outside tax counsel at its expense, to the extent it reasonably deems
appropriate, in making determinations pursuant to the preceding sentence.  The amount of the Tax Neutralization Payment
shall be calculated by Employer’s regular independent auditors based on the
amount of the Excise Tax paid by Employer as determined by Employer or the
IRS.  If the amount of the Excise Tax
determined by the IRS is greater than an amount previously determined by
Employer, Employer’s auditors shall recalculate the amount of the Tax
Neutralization Payment.  Employer’s
auditors shall provide you with detailed support for its calculations.  Employer shall be responsible for the fees
and expenses incurred by its auditors in making these calculations.  You shall promptly notify Employer 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 Employer requests, in writing, that you undertake the defense
of such IRS claim on behalf of Employer and at Employer’s sole expense.  In such event, Employer may elect to control
the conduct to a final determination through counsel of its 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 Employer
in each phase of any contest.

 

f.             Each
payment under this Agreement shall be considered a “separate payment” and not
of a series of payments for purposes of Section 409A.

 

(vi)         Reimbursement;
In-Kind Benefits. In no event shall the reimbursements or in-kind benefits
to be provided by Employer under this Agreement in one taxable year affect the
amount of reimbursements or in-kind benefits to be provided in any other
taxable year, nor shall your right to reimbursement or in-kind benefits be
subject to liquidation or exchange for another benefit.  In addition, in no event shall any such
reimbursements be paid later than the last day of the calendar year following
the calendar year in which the related expense was incurred.

 

11.         Death.  If you die during the Employment Term, your
beneficiary or estate shall be entitled to receive the following:

 

(i)           Employer
will pay your Accrued Compensation and Benefits through the date of your death;

 

(ii)          Employer
will pay a prorated Bonus for the year of your death based on your Target Bonus
and the number of calendar days elapsed during the year through the date of
your death (the date of such payment for purposes of Section 409A shall be
the date of your death, and such payment shall be made not later than February 28th of the calendar year following the calendar
year in which your death occurs);

 

(iii)         all of your outstanding unvested Employer
stock options will vest;

 

 

(iv)                          all
such options and all of your outstanding options that have previously vested
will remain exercisable for the period provided for under the terms of the
applicable award agreement; and

 

(v)                              all
of your unvested and outstanding restricted stock and/or restricted stock units
and any other type of equity award will vest and be settled within ten (10) business
days after the date of your death.

 

12.                            Senior
Advisor or Producer.

 

(a)                               Continuation
as Advisor/Producer; Term.  Upon the
earlier of (i) the end of the Employment Term as a result of the
termination of your employment pursuant to paragraph 10(b) or 10(c), or (ii) the
expiration of the Original Employment Term (provided you remained employed and
are being paid on Employer’s payroll through the end of the Original Employment
Term and there has not occurred a renewal of the Employment Term), unless you
elect otherwise by providing written notice to Employer, your employment shall
continue in a different capacity as a Senior Advisor/Producer (an “Advisor/Producer”) to the Company
for a period of three years (the “Advisor/Producer Period”),
subject to earlier termination of the Advisor/Producer Period in accordance
with this paragraph 12. The Advisor/Producer Period may be terminated by (i) you
at any time upon fourteen (14) days’ prior written notice to Employer, (ii) Employer
for Cause, as determined in accordance with paragraph 10(a), but without regard
to clause (v) of such definition, or (iii) by Employer for any other
reason.  The termination of the
Advisor/Producer Period pursuant to clauses (i) or (ii) in the
preceding sentence is hereinafter referred to as a “Non-Qualifying
Termination.”  The date on
which the Advisor/Producer Period commences is hereinafter referred to as the “Commencement Date.”

 

(b)                              Advisory
Services to be Provided During Advisor/Producer Period.  During the Advisor/Producer Period, you shall
provide such advisory services concerning the business, affairs and management
of Employer and its subsidiaries as may be reasonably requested by the Chairman
or the Chief Executive Officer of Employer (the “Advisory
Services”), but you shall not be required to devote more than
five (5) days (up to eight (8) hours per day) each month to such
services which shall be performed at a time and place mutually convenient to
you and Employer.  You may accept other
employment during the Advisor/Producer Period with any charitable, religious or
entertainment industry trade, public interest or public service organization
and you may provide services to third parties (including serving as a member of
the board of directors of any such party and any entity on which you have
already been elected to serve during the Employment Term), provided that
such services or the entity to whom you are providing such services is not in
competition with Employer or any of its subsidiaries (“Permitted
Services”).  Any
compensation or fees earned by you from Permitted Services shall not reduce the
compensation payable by Employer under paragraphs 10(d) or 12.

 

 

(c)                               Producer
Services to be Performed during the Advisor/Producer Period.  During the Advisor/Producer Period, you shall
not be required to provide any services as a Producer unless and until you
notify Employer that you desire to provide services as a Producer and you and
Employer (or an appropriate subsidiary of Employer) reach agreement on the
terms of a production agreement (the “Producer Services”).  Any such production agreement shall be
negotiated in good faith, shall contain provisions relating to television and
film production, and shall contain substantive provisions similar to comparable
agreements entered into by the Company or any of its subsidiaries with a
producer during the 36-month period commencing prior to the Start Date and
shall recognize your experience in the industry, your skills and understanding
of the Company; therefore, a production agreement shall include, without
limitation, comparable guarantees, producer fees, contingent compensation,
license fees, overhead and commitments.

 

Whether
or not a production agreement has been entered into, you acknowledge and agree
that, during the period in which you serve in the capacity as an
Advisor/Producer to the Company and for a one-year period thereafter, but in no
event beyond the Advisor/Producer Period, you shall be required to submit to
Employer (or an appropriate subsidiary of Employer), on an exclusive First Look
(as defined herein) basis, all Projects (as defined herein) for Employer’s
consideration for potential acquisition, development, production and/or
distribution by Employer.  As used
herein, “First Look” means that a
Project shall be submitted in writing solely and exclusively to an individual
specifically designated by Employer for such purpose (your “Project Contact”) before it is submitted
by you or on your behalf to any other person or entity; and “Project” means any idea, concept,
story or other literary work intended by you or on your behalf for initial
exploitation via any means of audio-visual exhibition, including, without
limitation, television, motion-picture or theatrical exhibition.  Employer shall notify you of the name and
contact information of your Project Contact as promptly as practicable
following the Commencement Date, provided, however, that Employer
shall have the right to change your Project Contact from time to time with
reasonable prior written notice to you. 
Employer shall have thirty (30) days following your submission of a
Project in which to notify you of its acceptance or rejection of the Project
(reducible to fifteen (15) days if you notify Employer at the time of
submission that such Project is a “hot property”).  In the event Employer rejects the Project (or
fails to notify you of its acceptance of such Project in writing during the
foregoing consideration period), you shall be free to submit the Project to any
other person or entity and enter into any agreement or arrangement with respect
thereto, with no further obligation to Employer whatsoever with respect thereto
(whether legal, financial or otherwise), except as otherwise provided below,
and without such submission to another person or entity being a violation of
the First Look obligation, provided, however, that in the event
of a material change in a material element of the Project (e.g.,
a material change in the development and/or production budget or a change in
any key performer, producer, director or writer attached to the Project) prior
to you entering into an agreement or arrangement with a third party with
respect to such Project or such Project otherwise being set up with a third
party, Employer shall be entitled to an additional First Look at the Project on
the terms and conditions set forth herein and you shall re-submit the Project
to Employer.   In the 

 

 

event Employer accepts
the Project by notifying you in writing during the consideration period, you
shall negotiate exclusively and in good faith with Employer with respect
thereto for a period of thirty (30) days (the “Negotiation
Period”).  If no agreement
is reached by the end of the Negotiation Period or if Employer is otherwise
unable to acquire any necessary third party rights with respect to such Project
during the Negotiation Period, you may negotiate with third parties and/or
enter into any agreement with third parties with respect to the Project, but
you may not enter into any agreement with any third party on terms equally or
less favorable to you than those last offered by you to Employer without first
offering to Employer, by written notice specifying the name of such third party
(if you are not otherwise prohibited from disclosing), the same terms and
conditions of such agreement (the “Third Party Agreement”).  Employer will have ten (10) days after
Employer’s receipt of said offer to accept or reject all of the terms and
conditions of the Third Party Agreement by notifying you in writing within such
ten day period (with failure to so notify you within such period being deemed a
rejection by Employer).  Notwithstanding
anything to the contrary contained herein, the non-competition provisions set
forth herein shall not apply with respect to any agreement, arrangement, or
services provided by you (or any of your affiliates) with respect to any
Project which Employer has rejected or not accepted pursuant to the foregoing.

 

(d)                             Level
of Services.  Notwithstanding
paragraphs 12(a), (b) and (c), it is the intent of the parties, and the
parties hereby acknowledge, that for so long as the Advisor/Producer Period
remains in effect, the level of bona fide services reasonably anticipated to be
performed by you shall remain 45% or less of the average level of bona fide
services performed by you during the 36-month period ending on the last day of
the Employment Term and, therefore, that your continuing to provide services as
an Advisor/Producer following the expiration of the Employment Term shall not
prevent you from being considered to have incurred a Separation from Service as
of your Termination Date.

 

(e)                               Compensation
and Benefits.  During the
Advisor/Producer Period you shall receive a salary at the rate of Three Million
Dollars ($3,000,000) per annum (the “Advisory Fees”),
which, for the avoidance of doubt, is in addition to any compensation and/or
fees payable to you with respect to any Producer Services.  In addition, during the Advisor/Producer
Period, subject to the provisions of the applicable plans or programs,
including provisions relating to eligibility to participate:

 

(i)                                  the
provisions of paragraphs 5(a), 5(b), 6(a), 6(b) but only with respect to
Perquisites and consistent with Employer policies during the Advisor/Producer
Period, and 6(c) shall continue to apply, other than the right to vacation
accruals contemplated by paragraph 5(a) (collectively referred to as the “Additional Compensation and Benefits”).  In the event Employer is unable to provide
you with the Additional Compensation and Benefits due to your ineligibility to
participate in the applicable Employer plans or programs during the
Advisor/Producer Period, Employer shall obtain, during the Advisor/Producer
Period, comparable coverage for you and your 

 

 

dependants
with the same contribution that would be required if you were an active
employee covered under Employer’s plan; and

 

(ii)                              your
equity awards, including without limitation stock options, restricted stock,
restricted stock units or any other form of equity awards you may have been
granted prior to the date you became an Advisor/Producer, to the extent not
already vested or paid out, shall continue to vest or be paid out or
exercisable, as the case may be, on their original schedule.

 

Additionally,
during the Advisor/Producer Period, you shall be provided with: (x) in either New York or Los Angeles at your election,
suitable and appropriate office facilities (at a location within such city to
be determined by Employer), (y) a
personal secretary (who may be your choice of one of your personal secretaries
providing services to you during the Employment Term, to be compensated at the
same compensation and benefits cost to Employer in effect immediately prior to
commencement of the Advisor/Producer Period) and (z) use
of aircraft owned or leased by the Company, as determined appropriate by the
Company taking into account your travel plans, number of passengers and similar
considerations, for up to a total of 50 hours per year (collectively, the “Additional Benefits”).

 

In no
event shall the reimbursements or in-kind benefits to be provided by Employer
in one taxable year affect the amount of reimbursements or in-kind benefits to
be provided in any other taxable year, nor shall your right to reimbursement or
in-kind benefits be subject to liquidation or exchange for another
benefit.  In addition, in no event shall
any such reimbursements be paid later than the last day of the calendar year
following the calendar year in which the related expense was incurred

 

(f)                                Equity
Awards.  In consideration of your
covenants set forth in paragraph 12(h) and in order to retain your
exclusive services (other than in connection with Permitted Services) during
the periods described in paragraph 12, Employer agrees that upon the
Commencement Date (or if the Commencement Date is not a trading day, on the
first trading day after the Commencement Date) (the “Additional
RSU Grant Date”), you will automatically be granted restricted
stock units having a value equal to Nine Million Dollars ($9,000,000) (the “Additional RSUs”).  The number of Additional RSUs granted on the
Additional RSU Grant Date (rounded down to a whole unit for any fractional
unit) shall be determined by dividing the value specified in the preceding
sentence by the closing price of one share of Class B Common Stock on the
Additional RSU Grant Date.  Each
Additional RSU shall correspond to one share of Class B Common Stock.  The Additional RSUs shall vest in three (3) equal
installments, with the first two installments vesting on first and second
anniversaries of the Commencement Date, respectively, and the third installment
vesting on the calendar day immediately preceding the third anniversary of the
Commencement Date, subject to earlier acceleration or cancellations as provided
in paragraph 12(g).

 

 

(g)                              Consequences
of Termination.  Subject to any
compensation and benefits to which you are entitled pursuant to the terms of a
production agreement with the Company:

 

(i)                                  Upon
a Non-Qualifying Termination, Employer shall have no further obligations to you
under the terms of this Agreement other than to promptly pay and provide you
with Accrued Advisory Compensation and Benefits.  For purposes of this Agreement, “Accrued Advisory Compensation and Benefits”
shall consist of: (A) reimbursement of any unpaid business expenses to
which you are entitled to reimbursement pursuant to paragraph 6 (and this
paragraph 12) that were incurred prior to the effective date of the termination
of the Advisor/Producer Period (such date, the “Advisory
Termination Date”), (B) your Advisory Fees through the
Advisory Termination Date, and (C) all other vested compensation and
benefits to which you are entitled to as of the Advisory Termination Date under
the terms and conditions applicable to such compensation and benefits.  All of your then unvested Additional RSUs
shall be cancelled upon the occurrence of a Non-Qualifying Termination.

 

(ii)                              Upon
a termination of the Advisor/Producer Period due to death or disability (as
determined in accordance with your long-term disability plan coverage in effect
during the Advisor/Producer Period), (A) the Additional RSUs shall become
fully vested; (B) in the case of your termination due to disability, the
provisions of paragraph 5(b) shall continue to apply for the duration of
the original Advisor/Producer Period; and (C) you shall be entitled to the
Accrued Advisory Compensation and Benefits.

 

(iii)                          Upon a termination of the
Advisor/Producer Period for any reason other than set forth in clauses 12(g)(i) and
(ii) above, (A) the Additional RSUs shall become fully vested; (B) Employer
shall continue to provide you with the Additional Compensation and Benefits,
the Advisory Fees and the Additional Benefits, in each case, for the duration
of the original Advisor/Producer Period; and (C) you shall be entitled to
the Accrued Advisory Compensation and Benefits.

 

(h)                              Exclusive
Services, Etc.  The parties hereby
agree that (i) provisions of paragraph 8 are hereby incorporated by reference
into this paragraph 12 and shall continue to apply during the Advisor/Producer
Period (other than with respect to any Project which Employer has rejected or
not accepted pursuant to the First Look), and any period set forth in the
provisions of paragraph 8 that survives any termination of employment or the
Employment Term shall survive for the same duration following termination of
the Advisor/Producer Period, and (ii) the provisions of paragraph 8(a), 

 

 

8(b) and 8(f) that
would otherwise terminate upon the expiration of the Original Employment Term
shall continue to apply following the expiration of the Original Employment
Term during the Advisor/Producer Period, and shall remain in effect as follows:
(x) with respect to paragraphs 8(a) and 8(b), until the first
anniversary of the termination of the Advisor/Producer Period, unless such
Advisor/Producer Period terminates as a result of the expiration of the
original Advisor/Producer Period (in which case the provisions of paragraphs 8(a) and
8(b) shall end on the last day of the original Advisor/Producer Period),
and (y) with respect to paragraph 8(f), until the second anniversary of
the termination of the Advisor/Producer Period, unless such Advisor/Producer
Period terminates as a result of the expiration of the original
Advisor/Producer Period (in which case the provisions of paragraph 8(f) shall
end on the last day of the original Advisor/Producer Period).

 

(i)                                  Notwithstanding
anything in paragraph 12(g)(iii) to the contrary, Employer’s obligation to
make the payments and provide the benefits set forth in paragraph 12(g)(iii),
other than the Accrued Advisory Compensation and Benefits, shall be conditioned
on your execution of a release (the “Advisor Release”)
(with all periods for revocation set forth therein having expired) in form and
substance substantially identical to that set forth in Schedule A within
60 days following the termination of the Advisor/Producer Period (the “Advisor Release Condition”).  The Advisor Release shall not be effective
unless and until Employer executes the Advisor Release.  If the maximum period in which the Advisor
Release may be revoked ends in the year following the year in which the
Advisor/Producer Period ends, then the Advisor Release Condition shall be
deemed not to have been satisfied until the later of (i) the first
business day in the year following the year in which the Advisor/Producer
Period ends, or (ii) the date on which the Advisor Release Condition is
satisfied (without regard to this sentence). 
For the avoidance of doubt, the execution or non-execution by Employer
of the Advisor Release shall not affect whether or not the Advisor Release
Condition has been satisfied.

 

(j)                                  Nothing
in this paragraph 12 shall create any rights that are duplicative with any
rights set forth in any other paragraph of this Agreement.

 

13.                            No
Mitigation.  You shall not be
required to mitigate the amount of any payment or benefit provided for in this
Agreement by seeking other employment or otherwise, nor shall any reduction be
made for any other compensation that you earn from a subsequent employer
(including self-employment).

 

14.                            Section 317
and 507 of the Federal Communications Act. 
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 Employer for the inclusion of any
matter as part of any film, television program or other production produced,
distributed and/or developed by Employer and/or any of Employer’s affiliates.

 

15.                            Equal
Opportunity Employer; Employer Business Conduct Statement.  You acknowledge that Employer is an equal
opportunity employer. You agree that you 

 

 

will comply with Employer
policies regarding employment practices and with applicable federal, state and
local laws prohibiting discrimination on the basis of race, color, creed,
national origin, age, sex or disability. In addition, you agree that you will
comply with Employer’s Supplemental Code of Ethics for Senior Financial
Officers and Employer’s Business Conduct Statement.

 

16.                            Indemnification.

 

(a)                               If
you are made a party, are threatened to be made a party to, or otherwise
receive any other legal process in, any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a “Proceeding”),
by reason of the fact that you are or were a director, officer or employee of
Employer or are or were serving at the request of Employer as a director,
officer, member, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether or not the basis of such Proceeding is your alleged
action in an official capacity while serving as director, officer, member,
employee or agent, Employer shall indemnify you and hold you harmless to the
fullest extent permitted or authorized by Employer’s certificate of
incorporation and bylaws or, if greater, by the laws of the State of Delaware,
against all cost, expense, liability and loss (including without limitation,
attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement and any cost and fees incurred in enforcing
your rights to indemnification or contribution) reasonably incurred or suffered
by you in connection therewith, and such indemnification shall continue even
though you have ceased to be a director, member, employee or agent of Employer
or other entity and shall inure to the benefit of your heirs, executors and
administrators.  Employer shall advance
to you all reasonable costs and expenses that you incur in connection with a
Proceeding within twenty (20) days after its receipt of a written request for
such advance.  Such request shall include
an undertaking by you to repay the amount of such advance if it shall
ultimately be determined that you are not entitled to be indemnified against
such costs and expenses.

 

(b)                              Neither
the failure of Employer (including its board of directors, independent legal
counsel or stockholders) to have made a determination that indemnification of
you is proper because you have met the applicable standard of conduct, nor a
determination by Employer (including its board of directors, independent legal
counsel or stockholders) that you have not met such applicable standard of
conduct, shall create a presumption or inference that you have not met the
applicable standard of conduct.

 

(c)                               To
the extent that Employer maintains officers’ and directors’ liability
insurance, you will be covered under such policy subject to the exclusions and
limitations set forth therein.

 

(d)                             The
provisions of this Section 16 shall survive the expiration or termination
of your employment and/or this Agreement.

 

 

17.                            Notices.  All notices required to be given hereunder shall
be given in writing, by personal delivery or by mail at the respective
addresses of the parties hereto set forth above, or at such other address as
may be designated in writing by either party, and in the case of Employer, to
the attention of the General Counsel of Employer. Any notice given by mail
shall be deemed to have been given three days following such mailing. Copies of
all notices to you shall be given to Grubman Indursky & Shire, P.C.,
Carnegie Hall Tower, 152 W. 57th Street, New York, NY 10019, Attention: Allen
J. Grubman, Esq.

 

18.                            Assignment
and Successors.  This is an Agreement
for the performance of personal services by you and may not be assigned by you
or Employer except that Employer may assign this agreement to any affiliate of
Employer or any successor in interest to Employer, provided such
assignee assumes all of the obligations of Employer hereunder.

 

19.                            New
York Law.  This Agreement and all
matters or issues collateral thereto shall be governed by the laws of the State
of New York, without giving effect to the conflicts of laws principles thereof
or to those of any other jurisdiction which, in either case, could cause the
application of the laws of any jurisdiction other than the State of New York.

 

20.                            Disputes.  Any disputes between the parties to this
Agreement shall be settled by arbitration in New York, New York under the
auspices of the American Arbitration Association, before a panel of three (3) arbitrators,
in accordance with the National Rules for the Resolution of Employment
Disputes promulgated by the Association. Each party shall select an arbitrator
and the two (2) arbitrators shall select a third and these three
arbitrators shall form the panel. The decision in such arbitration shall be
final and conclusive on the parties and judgment upon such decision may be
entered into in any court having jurisdiction thereof. Costs of the arbitration
or litigation, including, without limitation, reasonable attorneys’ fees and
expenses of both parties, shall be borne by Employer if you prevail on at least
one of the material issues that is the subject of the arbitration. If you do
not so prevail, you and Employer shall equally share costs of the arbitration
or litigation other than attorneys’ fees, and each of you and Employer shall
bear its own attorneys’ fees and expenses. Nothing herein shall prevent
Employer from seeking equitable relief in court as provided for in paragraph 8(i) or
shall prevent either party from seeking equitable relief in court in aid of
arbitration under applicable law.

 

21.                            No
Implied Contract.  Nothing contained
in this Agreement shall be construed to impose any obligation on Employer 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 this Agreement.

 

 

22.                            Entire
Understanding; Amendments.  This
Agreement contains the entire understanding of the parties hereto relating to
the subject matter herein contained, and supersedes the Prior Agreement, provided,
however, that no provision in this Agreement shall be construed to
adversely affect any of your rights with respect to equity awards granted on or
prior to the Start Date pursuant to the terms of the Prior Agreement.  This Agreement can be amended only by a
writing signed by both parties hereto.

 

23.                            Waivers.  Waiver by either you or by Employer of any
breach or default by the other party of any of the terms of this Agreement
shall not operate as a waiver of any other breach or default, whether similar
to or different from the breach or default waived. No waiver of any provision
of this Agreement shall be implied from any course of dealing between the
parties hereto or from any failure by either party hereto to assert its or his
rights hereunder on any occasion or series of occasions.

 

24.                            Void
Provisions.  If any provision of this
Agreement, as applied to either party or to any circumstances, shall be
adjudged by a court to be void or unenforceable, the same shall be deemed
stricken from this Agreement and shall in no way affect any other provision of
this Agreement or the validity or enforceability of this Agreement.

 

25.                            Deductions
and Withholdings, Payment of Deferred Compensation.  All amounts payable under this Agreement
shall be paid less deductions and income and payroll tax withholdings as may be
required under applicable law and any benefits and perquisites provided to you
under this Agreement shall be taxable to you as may be required under
applicable law.

 

26.                            Section 409A.  To the extent applicable, it is intended that
the compensation arrangements under this Agreement be in full compliance with Section 409A.  This Agreement shall be construed in a manner
to give effect to such intention.  In no
event whatsoever (including, but not limited to as a result of this paragraph
26 or otherwise) shall Employer or any of its subsidiaries or affiliates be
liable for any tax, interest or penalties that may be imposed on you under Section 409A.  Neither Employer nor any of its subsidiaries
or affiliates has any obligation to indemnify or otherwise hold you harmless from
any or all such taxes, interest or penalties, or liability for any damages
related thereto.  You acknowledge that
you have been advised to obtain independent legal, tax or other counsel in
connection with Section 409A.

 

27.                            Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

 

28.                            Headings.  The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement. Unless otherwise
expressly provided for in this Agreement, the word “including” or any variation
thereof means “including, without limitation” and shall not be construed to
limit any general statement that it follows to the specific or similar items or
matters immediately following it.

 

 

[signature page to
follow]

 

 

If the foregoing
correctly sets forth our understanding, please sign, date and return all four (4) copies
of this Agreement and return it to the undersigned for execution on behalf of
Employer; after this Agreement has been executed by Employer and a fully
executed copy returned to you, it shall constitute a binding agreement between
us.

 

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  CBS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Anthony G.
  Ambrosio

  
	
   

  	
  Name:

  	
  Anthony G.
  Ambrosio

  
	
   

  	
  Title:

  	
  Executive Vice
  President, Human Resources & Administration

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND
  AGREED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Leslie
  Moonves

  	
   

  	
   

  
	
  Name: Leslie
  Moonves

  	
   

  
	
  February 23,
  2010

  	
   

  
				

 

 

SCHEDULE
A

 

Form of
Release

 

GENERAL
RELEASE

 

WHEREAS,
Leslie Moonves (hereinafter referred to as the “Executive”)
and CBS Corporation (hereinafter referred to as “Employer”)
are parties to an Employment Agreement, dated February [•], 2010
(the “Employment Agreement”), which
provided for the Executive’s employment with Employer on the terms and
conditions specified therein; and

 

WHEREAS,
pursuant to paragraph [10(d)] [12] of the Employment Agreement, the Executive
has agreed to execute a release of the type and nature set forth herein as a
condition to his entitlement to certain payments and benefits upon his
termination of employment with Employer; and

 

NOW,
THEREFORE, in consideration of the premises and mutual promises herein contained
and for other good and valuable consideration received or to be received by the
Executive in accordance with the terms of the Employment Agreement, it is
agreed as follows:

 

1.         (a) Excluding enforcement of the
covenants, promises and/or rights reserved herein, the Executive hereby
irrevocably and unconditionally releases, acquits and forever discharges
Employer and each of Employer’s owners, stockholders, predecessors, successors,
assigns, directors, officers, employees, divisions, subsidiaries, affiliates
(and directors, officers and employees of such companies, divisions,
subsidiaries and affiliates) and all persons acting by, through, under or in
concert with any of them (collectively “Releasees”),
or any of them, from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorneys’ fees and costs actually incurred) of any nature whatsoever, known or
unknown, suspected or unsuspected, including, but not limited to, rights
arising out of alleged violations of any contracts, express or implied, any
covenant of good faith and fair dealing, express or implied, or any tort or any
legal restrictions on Employer’s right to terminate employees, or any Federal,
state or other governmental statute, regulation or ordinance, including,
without limitation, Title VII of the Civil Rights Act of 1964, as amended, the
Federal Age Discrimination In Employment Act of 1967 (“ADEA”), as amended, the
Employee Retirement Income Security Act (“ERISA”), as amended, the Civil Rights
Act of 1991, as amended, the Rehabilitation Act of 1973, as amended, the Older
Workers Benefit Protection Act (“OWBPA”), as amended, the Worker Adjustment
Retraining and Notification Act (“WARN”), as amended, the Fair Labor Standards
Act (“FLSA”), as amended, the Occupational Safety and Health Act of 1970 (“OSHA”),
the New York State Human Rights Law, as amended, the New York Labor Act, as
amended, the New York Equal Pay Law, as amended, the New York Civil Rights Law,
as amended, the New York Rights of Persons With Disabilities Law, as amended,
and the New York 

 

 

Equal Rights Law, as
amended, that the Executive now has, or has ever had, or ever shall have,
against each or any of the Releasees, by reason of any and all acts, omissions,
events, circumstances or facts existing or occurring up through the date of the
Executive’s execution hereof that directly or indirectly arise out of, relate
to, or are connected with, the Executive’s services to, or employment by
Employer (any of the foregoing being a “Claim” or,
collectively, the “Claims”); provided, however,
that this release shall not apply to any of the obligations of Employer or any
other Releasee under the Employment Agreement, or under any agreements, plans,
contracts, documents or programs described or referenced in the Employment
Agreement; and provided, further, that this release shall not
apply to any rights the Executive may have to obtain contribution or indemnity
against Employer or any other Releasee pursuant to contract, Employer’s
certificate of incorporation and by-laws or otherwise.

 

(b)        Excluding enforcement of the covenants,
promises and/or rights reserved herein, the Employer hereby irrevocably and
unconditionally releases, acquits and forever discharges Executive from any and
all charges, complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorneys’ fees and costs
actually incurred) of any nature whatsoever, that the Employer now has, or has
ever had, or ever shall have, against Executive, by reason of any and all acts,
omissions, events, circumstances or facts existing or occurring through the
date of Employer execution of this release that directly or indirectly arise
out of, relate to, or are connected with, the Executive’s services to, or
employment by Employer; provided, however, that this release
shall not apply to any of the continuing obligations of Executive under the
Employment Agreement, or under any agreements, plans, contracts, documents or
programs described or referenced in the Employment Agreement; and provided,
further, that this release shall not apply to any rights Employer may
have to obtain contribution or indemnity against Executive pursuant to contract
or otherwise.

 

2.         The Executive expressly waives and
relinquishes all rights and benefits afforded by California Civil Code Section 1542
and does so understanding and acknowledging the significance of such specific
waiver of Section 1542.  Section 1542
states as follows:

 

“A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

Thus, notwithstanding the
provisions of Section 1542, and for the purpose of implementing a full and
complete release and discharge of the Releasees, the Executive expressly
acknowledges that this Agreement is intended to include in its effect, without
limitation, all Claims that the Executive does not know or suspect to exist in
the Executive’s favor at the time of execution hereof, and that this Agreement
contemplates the extinguishment of any such Claim or Claims.

 

 

3.         The Executive understands that he has
been given a period of twenty-one (21) days to review and consider this General
Release before signing it pursuant to the Age Discrimination In Employment Act
of 1967, as amended.  The Executive
further understands that he may use as much of this 21–day period as the
Executive wishes prior to signing.

 

4.         The Executive acknowledges and
represents that he understands that he may revoke the release set forth in
paragraph 1, including, the waiver of his rights under the Age Discrimination
in Employment Act of 1967, as amended, effectuated in this Agreement within
seven (7) days of signing this Agreement. Revocation can be made by
delivering a written notice of revocation to Executive Vice President &
General Counsel, CBS Corporation, 51 West 52nd Street, New York, New York 10019.  For this revocation to be effective, written
notice must be received by the General Counsel no later than the close of
business on the seventh day after the Executive signs this Agreement.  If the Executive revokes the release set
forth in paragraph 1, Employer shall have no obligations to the Executive under
paragraph [10(d)] [12] of the Employment Agreement.

 

5.         The Executive and Employer respectively
represent and acknowledge that in executing this Agreement neither of them is
relying upon, and has not relied upon, any representation or statement not set
forth herein made by any of the agents, representatives or attorneys of the
Releasees with regard to the subject matter, basis or effect of this Agreement
or otherwise.

 

6.         This Agreement shall not in any way be
construed as an admission by any of the Releasees that any Releasee has acted
wrongfully or that the Executive has any rights whatsoever against any of the
Releasees except as specifically set forth herein, and each of the Releasees
specifically disclaims any liability to any party for any wrongful acts.

 

7.         It is the desire and intent of the
parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under law.  Should
there be any conflict between any provision hereof and any present or future
law, such law shall prevail, but the provisions affected thereby shall be
curtailed and limited only to the extent necessary to bring them within the
requirements of law, and the remaining provisions of this Agreement shall
remain in full force and effect and be fully valid and enforceable.

 

8.         The Executive represents and agrees (a) that
the Executive has to the extent he desires discussed all aspects of this
Agreement with his attorney, (b) that the Executive has carefully read and
fully understands all of the provisions of this Agreement, and (c) that
the Executive is voluntarily entering into this Agreement.

 

9.         This General Release shall be governed
by, and construed in accordance with, the laws of the State of New York,
without giving effect to the conflicts of laws principles thereof or to those
of any other jurisdiction which, in either case, could cause 

 

 

the application of the
laws of any jurisdiction other than the State of New York.  This General Release is binding on the
successors and assigns of, and sets forth the entire agreement between, the
parties hereto; fully supersedes any and all prior agreements or understandings
between the parties hereto pertaining to the subject matter hereof; and may not
be changed except by explicit written agreement to that effect subscribed by
the parties hereto.

 

 

PLEASE
READ CAREFULLY. THIS GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

 

 

This
General Release is executed by the Executive and Employer as of the               
day of                    
, 20      .

 

 

	
   

  	
   

  
	
   

  	
  Leslie Moonves

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CBS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:Exhibit
10.26

 

UNITED
STATIONERS SUPPLY CO.

 

AMENDED
AND RESTATED DEFERRED COMPENSATION PLAN

 

(Effective
as of January 1, 2009)

 

ARTICLE
I.  Purpose

 

The
purpose of the Plan is to assist a select group of key management in their
financial and retirement planning by providing a means for the deferral of a
portion of their current compensation. 
It is anticipated that this will aid in attracting and retaining the key
management required for the continued growth and profitability of United
Stationers Inc. and its subsidiaries. 
This Plan is an amendment and restatement as of January 1, 2009 (“Effective
Date”) of the United Stationers Supply Co. Deferred Compensation Plan in effect
prior to the Effective Date.  The Plan is
not intended to qualify under section 401(a) of the Internal Revenue Code
of 1986, as amended (“Code”), or to be subject to Part 2, 3 or 4 of
Subtitle B of Title I of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”).  It is intended
that the provisions of the Plan conform to the requirements of section 409A of
the Code and the Plan will be interpreted in all respects in accordance with
such requirements.  Any references in the
Plan to section 409A of the Code include references to applicable guidance
issued thereunder.

 

ARTICLE
II.  Participation

 

1.                                       Eligibility. 
All exempt employees classified as Grade 1, 2, 3, 4 or 5 of United
Stationers Supply Co. or any other direct or indirect subsidiary of United
Stationers Inc. permitted to participate in the Plan by the Committee (as
hereafter defined) (“Company”) are eligible to participate in the Plan.

 

2.                                       Election to Defer.

 

(a)                                  Each Participant may elect to defer any
portion of future compensation, either base salary or cash bonus, or both (and
in no event will any deferral election be given effect with respect to a stock
option or stock appreciation right), (“Deferred Amount”) by filing with the
Committee (or its delegate) a properly completed Deferred Amount Form(s) (“Deferral
Election Form”) stating the percentage of base salary and/or percentage of cash
bonus to be deferred.  Subject to the
following two sentences, the election to defer base salary and/or cash bonus
must be submitted no later than the last day of the designated election period
that ends on or prior to December 31 of the calendar year immediately
preceding the calendar year to which the election applies. However, for the
period commencing on the Effective Date, the Participant must make the election
or reelect with respect to amounts deferred under the Plan prior to the
Effective Date.  For the first year in
which the employee becomes eligible, the Participant must make the election
within 30 days after the date the employee becomes eligible.  A new Deferral Election Form must be
submitted each year.  For any year the
Company may establish minimum or maximum deferral amounts.

 

(b)                                 If a Participant receives a hardship
withdrawal from a qualified retirement plan of the Company or any other Related
Company and, as a result of such withdrawal, is precluded by the terms of the
qualified retirement plan from making deferrals under the Plan, then the
Participant’s deferral election shall be cancelled and any future deferral
elections by such Participant shall be subject to the provisions of
subparagraph (a) immediately above. 
The term “Related Company” means any corporation or trade or business
during any period which it is, along with United Stationers, Inc., a
member of a controlled group of trades or businesses, as described in section
414(b) and 414(c), respectively, of the Code; provided, however that
whether a corporation, trade or business is a Related Company shall be
determined by substituting “more than 50 

 

1

 

percent” for “at
least 80 percent” where applicable with respect to sections 414(b) and
414(c).

 

3.                                       Deferred Accounts.

 

(a)                                  The Company shall establish an unfunded
notional deferred account (“Account”) for each Participant.  Such Account shall be credited with the
amount of compensation deferred and reduced by each payment.

 

(b)                                 Prior to the Effective Date for Accounts
as of the Effective Date and with each Deferral Election Form executed by
a Participant on or after the Effective Date, each Participant shall elect an
investment preference for purposes of calculating a rate of return on the
Participant’s Account, in accordance with procedures established by the
committee administering the Plan as set forth in Article IV (“Committee”).  Within the month of December to be
effective as of January 1st of the following calendar year or at such
other time or times determined by the Committee, each Participant may change
the Participant’s election of an investment preference for purposes of
calculating a rate of return on the Participant’s Account, in accordance with procedures
established by the Committee.  Unless
determined otherwise by the Committee, the investment preferences among which
the Participant may elect shall be the investment funds under the United
Stationers 401(k) Savings Plan (“401(k) Savings Plan”).  The investment preference selected by the
Participant shall remain in effect until a new investment election is filed in
accordance with procedures established by the Committee, provided such
procedures comply with section 409A of the Code.  Unless otherwise determined appropriate by
the Committee, the investment preference selected by the Participant shall be
the investment fund (“Investment Fund”) used as a measure for determining a
rate of return for the Participant’s Account.

 

As of the last day of each
calendar quarter or such shorter applicable period or such date as determined
by the Committee, each Account shall be credited or debited with a rate of
return which reflects the earnings, gains and losses equal to the amount the
Account would have earned, gained or lost if actually invested in the
applicable Investment Funds.  For
purposes of determining such rate of return, the Committee shall establish such
procedures as it deems appropriate.  The
Committee may at any time or from time to time change or otherwise modify the
basis or the method of calculating and crediting such rate of return.

 

Separate accounting shall
apply with respect to each Deferred Amount.

 

4.                                       Company Liability. 
The rights granted to the Participant or any beneficiary shall be solely
those of a general unsecured creditor. 
The Plan constitutes a mere promise by the Company to make benefit
payments in the future.  The Company
shall not be required to fund or otherwise segregate assets to be used for
payment of benefits under the Plan.  The
Company may maintain a trust (“Trust”) to hold assets to be used for payment of
benefits under the Plan and may make investments in amounts equal or unequal to
amounts payable hereunder but the Company shall not be under any obligation to
establish a Trust or make such investments and the assets of any such Trust and
such investments shall remain an asset of the Company subject to the claims of
the Company’s general creditors.  Any
payments by the Trust to a Participant of benefits under the Plan shall be
considered payments by the Company and shall discharge the Company of any
liability under the Plan for such payments. 
The Plan, and any action taken pursuant to it, are not to be construed
as creating a fiduciary relationship of any kind.

 

2

 

ARTICLE
III.  Payment of Deferred Amounts

 

1.                                       Time and Method of Payment.

 

(a)                                  Subject to the provisions of paragraphs 2 and
3 of this Article III, the following provisions of this paragraph 1, and
the other terms and conditions of the Plan, payment of a Participant’s Account
balance, determined as of the close of business on the Payment Date (as defined
below) shall be made (or shall begin to be distributed) to the Participant with
respect to the applicable permitted Payment Events (as defined below) and in
the permitted Payment Methods, each as elected by the Participant in his or her
first deferral election under the Plan (or, with respect to any person who was
a Participant in the Plan immediately prior to the Effective Date, as elected
in the Deferral Election Form on file with respect to the Participant on December 31,
2008) and simultaneously with the filing of subsequent Deferral Election
Forms.  For purposes of the Plan, with
respect to each Deferred Amount:

 

(i)                                     permissible “Payment Methods” are (A) a
lump sum payment or (B) a series of periodic installments (if monthly
installments, to be not less than 12 nor more than 120 or, if annual
installments, to be not more than 10); and

 

(ii)                                  permissible “Payment Events” are (A) occurrence
of the date specified by the Participant, (B) the Participant’s death, (C) termination
of the Participant’s employment with the Company and all Related Companies by
reason of the Participant’s incurrence of a Disability, (D) a Change of
Control of United Stationers, Inc., or (E) termination of the
Participant’s employment with the Company and all Related Companies for any
reason other than the Participant’s death or Disability.

 

The
Participant may elect to receive payment upon the earliest to occur of one or
more of the permissible Payment Events as selected by the Participant in his or
her Deferral Election Form and the Participant’s payment election shall
designate the calendar year in which payments shall commence or such other
manner and pursuant to such other procedures as the Committee may prescribe,
provided such other manner and procedures comply with section 409A of the
Code.  The “Payment Date” with respect to
a Deferred Amount (as adjusted for deemed earnings and losses in accordance
with paragraph 3 of Article II) shall be the date on which payment is made
in full (in the case of an election to receive a single lump sum payment) or
the date on which payment commences (in the case of an election to receive
periodic installment payments).  If a
Participant elects a lump sum payment, the Payment Date for such lump sum
payment will be January 15 of the calendar year selected by the
Participant.  If a Participant elects
periodic installment payments, the Payment Date for the initial installment
payment will be January 15 of the calendar year selected by the
Participant.  If a Participant fails to
submit a payment election setting forth a Payment Event, Payment Date and/or a
Payment Method with a Deferral Election Form and the Participant
previously completed a payment election specifying a Payment Event, Payment
Date and a Payment Method, the Committee shall deem the most recently completed
payment election of the Participant to apply to such subsequent deferral
election or use such other procedures for determining payment as it may
prescribe, provided such other procedures and payment method and timing comply
with section 409A of the Code.  If no Payment Event is specified in any
deferral election of a Participant, the Participant shall be deemed to have
elected the Payment Event set forth in subparagraph (a)(ii)(E) above.  If no Payment Method is specified in any
deferral election of a Participant, the Participant shall be deemed to have
elected a lump sum as the Payment Method and the Payment Date shall be January 15
of the calendar year next following the calendar year in which the Participant’s
termination occurs.  For purposes of
section 409A of the Code, a series of installment payments shall be treated as
one payment.

 

3

 

(b)                                 With respect to periodic installment
payments, the amount of each installment paid under this paragraph 1 of Article III will equal the result of dividing the
applicable portion of the Participant’s Account (e.g.,
the applicable Deferred Amount as adjusted for deemed earnings and losses,
determined as of the last day of the calendar month before the date on which
such payment is made) by the number of installments remaining immediately
before the payment.

 

(c)                                  For purposes of the Plan, a Participant
shall not be considered to have incurred a Disability unless the disability
satisfies the provisions of Treas. Reg. §1.409A-3(i)(4).

 

(d)                                 “Change of
Control” shall have the same meaning as under the United Stationers, Inc.
2004 Long-Term Incentive Plan (“LTIP”); provided, however, that a change of
control event that otherwise is a Change of Control under the LTIP shall be a
Change of Control for purposes of the Plan only if such event also satisfies
the requirements of Treas. Reg. §1.409A-3(i)(5).

 

2.                                       Changes
to Time and Method of Payment.  From and after the Effective Date, a
Participant may change the Payment Event, Payment Date and/or Payment Method of
any Deferred Amount (including any Payment Event, Payment Date or Payment
Method established pursuant to a deemed election pursuant to paragraph 1 above
of this Article III) once during his or her period of participation in the
Plan after the Effective Date by filing an election with the Committee.  Notwithstanding any other provision of the
Plan to the contrary, any such election to change the Payment Event, Payment
Date and/or Payment Method (a) shall not be effective until the date that
is 12 months following the date on which it is filed with the Committee and (b) shall
be effective only if it is filed with the Committee at least 12 months prior to
the date on which payments are otherwise to be made (or begin) under the Plan (i.e., the date on which the first payment of the Participant’s
Account is otherwise scheduled to begin pursuant to paragraph 1 above of this Article III).  If a Participant files an effective change to
the Payment Event, Payment Date and/or Payment Method pursuant to this
paragraph 2 of Article III, payment of the applicable portions of the Participant’s
Account balance shall be made in accordance with the new payment election and
such payments shall be made (or shall commence) as soon as practicable (but in
no event more than 30 days) after the date which is the fifth anniversary of
the date on which payment was to commence under the Participant’s prior
deferral election (the “Deferred Commencement Date”).  The amount of each distribution that is
payable on or after the Deferred Commencement Date shall be determined in
accordance with paragraph 1 above of this Article III by substituting the
Deferred Commencement Date for the Payment Date in such paragraph 1.

 

3.                                       Accelerated and Alternative Payments. 
Notwithstanding any election of a Payment Event, Payment Date or Payment
Method by a Participant, an accelerated payment (or alternative payment, as the
case may be) shall be made to the Participant or his or her beneficiary (as
designated under paragraph 4) in the case of the earliest to occur of the
Participant’s death, termination of employment with the Company and all Related
Companies by reason of the Participant’s Disability, other voluntary or
involuntary termination of employment with the Company and all Related
Companies, a Change of Control of United Stationers, Inc., or in the event
of an unforeseeable emergency.

 

(a)                                  In the case of the Participant’s
voluntary or involuntary termination of employment with the Company and all
Related Companies other than by reason of death or Disability prior to
receiving the full balance of his or her Account, the remaining balance shall
be paid to the Participant in accordance with the Payment Method the
Participant had elected with respect to termination of employment, provided
that the addition of such different Payment Method is subject to Treas. Reg. §1.409A-2(b) (subsequent
deferral elections) and Treas. Reg. §1.409A-3(j) (accelerated payments),
or, if the Participant did not elect a Payment Method with respect to
termination of employment, in one lump sum.

 

4

 

(b)                                 Unless the date of the Participant’s
death or termination by reason of Disability is the earliest Payment Event
selected by the Participant in accordance with subparagraph 1(a)(ii) of
this Article III and the Participant elected periodic installments as his
or her Payment Method upon death or termination by reason of Disability, in the
case of the Participant’s death or termination by reason of Disability prior to
receiving the full balance of his or her Account, the remaining balance shall
be paid to the Participant, if living, or to the Participant’s beneficiary if
not, in one lump sum as soon as reasonably practicable (but in no event more
than 30 days) after determination by the Committee that death has occurred or
after the Participant’s termination of employment with the Company and all
Related Companies by reason of Disability. 
If no beneficiary has been designated, or none survives, the payment
will be to the Participant’s estate.  If
a beneficiary survives, but is legally disabled, the payment may be to any
person deemed by the Committee to have incurred expenses for such beneficiary
unless a prior claim has been made by a duly appointed guardian or legal
representative.

 

(d)                                 If the Participant elected Change of
Control as a Payment Event pursuant to subparagraph 1(a)(ii) of this Article III
and a Change of Control occurs prior to receiving the full balance of his or
her Account, the remaining balance shall be paid to the Participant in
accordance with the Payment Method the Participant had elected with respect to
Change of Control, provided that the addition of such different Payment Method
is subject to Treas. Reg. §1.409A-2(b) (subsequent deferral elections) and
Treas. Reg. §1.409A-3(j) (accelerated payments).  If the Participant did not elect Change of
Control as a Payment Event and a Change of Control occurs prior to receiving
the full balance of his or her Account, the remaining balance shall be paid to
the Participant in one lump sum as soon as reasonably practicable (but in no
event more than 30 days) after the Change of Control occurs.  If the Participant’s death, Disability, or
other termination of employment occurs on the date of a Change of Control, the
provisions of this subparagraph (d) shall be controlling such that Change
of Control shall be deemed to be the applicable Payment Event.

 

(e)                                  An unforeseeable emergency for purpose of
the Plan is an unanticipated emergency caused by an event beyond the control of
the Participant or the Participant’s beneficiary that would  result in severe financial hardship if
withdrawal is not permitted.  In the case
of a financial emergency the Participant may apply to the Committee in writing
for an accelerated payment.  Only that
portion of the Account necessary to meet the emergency, as determined by the
Committee, shall be paid.  The applicant
must supply all information necessary to make such a determination.  Notwithstanding anything in this paragraph (e) to
the contrary, an unforeseeable emergency shall not be considered to exist for
purposes of the Plan unless the financial emergency of the Participant
satisfies the requirements of Treas. Reg. §1.409A-3(i)(3).

 

4.                                       Designation of Beneficiary. 
Each Participant shall have the continuing right to designate a
beneficiary.  A Beneficiary Designation Form may
be submitted to the Committee (or its delegate) at any time.  A change in beneficiary may be made by
submitting a revised Beneficiary Designation Form to the Committee.  Consent of any person previously named is not
required.

 

ARTICLE
IV.  Administration

 

The
Plan shall be administered by the members of the United Stationers Supply Co.
Administrative Committee or such other committee appointed to administer the
Plan by the Human Resources Committee of the Board of Directors of United
Stationers Inc.  The Committee may adopt
such rules for carrying out the provisions and purposes of the Plan, as it
deems advisable.  The Committee’s
interpretations and determinations of any question arising under the Plan or
any such rule shall be conclusive if not inconsistent with the provision
and purposes of the Plan.  No member of
the Committee shall be liable for any action taken or omitted in connection
with the Plan unless attributable to his or her 

 

5

 

own willful
misconduct or lack of good faith.  The
Committee may permit elections under the Plan to be made electronically and
references to Election Forms may mean records of electronic election forms.

 

ARTICLE
V.  Miscellaneous

 

1.                                       Transferability. 
The rights and interests of the Participants under the Plan may not be
transferred, assigned, pledged or encumbered except by will or by the laws of
descent and distribution.

 

2.                                       Binding Effect. 
The plan shall bind and inure to the benefit of the Company, its affiliates
and its successors by merger, consolidation, purchase or otherwise and the
Participant and his or her heirs and legal representatives.

 

3.                                       Status.  The Plan does
not confer upon the Participant any legal right to any specific amount of
compensation, or to continue in the employ of the Company, nor does it restrict
the right of the Participant to terminate his or her service.  Nothing in this Plan shall interfere with or
limit in any way the right of the Company to terminate or change a Participant’s
employment at any time nor confer upon any Participant any right to any
benefits not specifically provided by the Plan.

 

4.                                       Withholding. 
The Company shall deduct from any amounts being deferred or any payment
any amount required by law to be withheld.

 

5.                                       Other Compensation. 
The adoption of this Plan shall in no way be construed as limiting the
power of the Board to adopt any other compensation arrangements it deems
desirable.

 

6.                                       Special 409A Rules.

 

(a)                                  Notwithstanding any other provision of
the Plan to the contrary, if any payment hereunder is subject to section 409A
of the Code, if such payment is to be paid on account of the Participant’s
separation from service and if the Participant is a specified employee (within
the meaning of section 409A(a)(2)(B) of the Code), such payment shall be
delayed until the first day of the seventh month following the Participant’s
separation from service (or, if later, the date on which such payment is
otherwise to be paid under the Plan). 
Any payment which is to be made as of the first day of the seventh month
following separation from service shall be made no later than 30 days after
such date.

 

(b)                                 References in the Plan to the Participant’s termination of employment
(including references to the Participant’s employment termination, and to the
Participant terminating employment, a Participant’s separation from service,
and other similar reference) shall mean, respectively, the Participant ceasing
to be employed by the Company and all Related Companies, subject to the following:

 

(i)                                     The employment relationship will be
deemed to have ended at the time the Participant and the applicable company
reasonably anticipate that a level of bona fide services the Participant would
perform for the Company and Related Companies after such date would permanently
decrease to no more than 20% of the average level of bona fide services
performed over the immediately preceding 36 month period (or the full period of
service to the Company and Related Companies if the Participant has performed
services for the Company and Related Companies for less than 36 months).  In the absence of an expectation that the
Participant will perform at the above-described level, the date of termination
of employment will not be delayed solely by reason of the Participant
continuing to be on the Company’s and Related Companies’ payroll after such
date.

 

6

 

(ii)                                  The employment relationship will be
treated as continuing intact while the Participant is on a bona fide leave of
absence (determined in accordance with Treas. Reg. §409A-1(h)).

 

(iii)                               The determination of a Participant’s
termination of employment by reason of a sale of assets, sale of stock,
spin-off, or other similar transaction of the Company or a Related Company will
be made in accordance with Treas. Reg. §1.409A-1(h).

 

7.                                       Entire Plan. 
The Plan and the forms mentioned herein constitute the entire agreement
between the Company and the Participant with respect hereto.

 

8.                                       Modification and Termination. 
The Board of Directors of United Stationers Supply Co. (“Board”) at any
time, subject to the requirements of section 409A of the Code,  may amend, modify, suspend, reinstate or
terminate this Plan in whole or in part or with respect to any Participants,
provided that such action shall not adversely affect the rights of any
Participants with respect to the amounts already deferred hereunder.

 

9.                                       Governing Law. 
This Plan shall be governed by the laws of the State of Illinois.  It is intended that the Plan complies with
the provisions of the Code and Treasury Regulations in effect at the time of
its adoption.  If such laws are later
construed in such way as to make this Plan void, or its deferral benefits no
longer available, then the Plan will be given effect in such manner as will
best carry out the purposes and intentions of the parties.

 

10.                                 Notices.  Any notice in
connection with the Plan shall be in written and delivered in person or by
registered or certified mail, return receipt requested. Date of delivery will
be the date personally delivered or the date on the return receipt, if
correctly addressed.

 

11.                                 Effective Date and Term. 
The Plan as amended and restated as of the Effective Date shall continue
until terminated by the Board.

 

7

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