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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 16, 2006
CBS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-09553 04-2949533
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification Number)
incorporation)
51 West 52nd Street, New York, New York 10019
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (212) 975-4321
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|X| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Section 1 Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
In order to accommodate the Voluntary Exchange Offer described in Item 8.01 of
this Report, the 2004 Long-Term Management Incentive Plan (the "LTMIP") of CBS
Corporation (the "Company") has been amended, subject to the approval of the
Company's stockholders. The amendments have the following effects:
o The general prohibition in the LTMIP on option exchange offers will not
apply to the Voluntary Exchange Offer (which will be conducted for the
benefit of employees based in the U.S.) or any similar exchange offer
conducted for the benefit of employees based outside the U.S. The LTMIP
will continue to prohibit any other option exchange offer.
o Restricted shares of CBS Corporation Class B Common Stock issued
pursuant to the Voluntary Exchange Offer will not count against (i) the
total number of shares of CBS Corporation Class B Common Stock that may
be issued under the LTMIP or (ii) the plan sub-limit for restricted
shares and similar awards.
o In connection with the Voluntary Exchange Offer, the Compensation
Committee may waive the general LTMIP requirement that restricted
shares whose vesting is contingent solely on continued employment may
not fully vest in less than three years.
o Shares of CBS Corporation Class B Common Stock subject to stock options
tendered and cancelled in connection with the Voluntary Exchange Offer
shall not be added back to the LTMIP share limits and thus shall not be
available for future awards.
The foregoing amendments will be submitted for the approval of the Company's
stockholders at the annual meeting of stockholders to be held on May 25, 2006.
NAIRI, Inc., a wholly owned subsidiary of National Amusements, Inc. which owns
approximately 71% of the voting power of the Company's common stock, has
indicated that it will vote its shares in favor of the amendments to the LTMIP
at the Company's annual meeting of stockholders.
Section 8 Other Events
Item 8.01 Other Events.
The Compensation Committee of the Board of Directors of the Company has approved
a program (the "Voluntary Exchange Offer") under which the Company is authorized
to offer its current employees based in the United States the voluntary
opportunity to tender all of their employee stock options to purchase CBS
Corporation Class B Common Stock in exchange for restricted shares of CBS
Corporation Class B Common Stock having a value equal to 75% of the fair value
of the options tendered (i.e., a 25% discount will be applied). All stock
options eligible for the Voluntary Exchange Offer were awarded prior to the
separation of former Viacom Inc. into the Company and new Viacom Inc., which
became effective on December 31, 2005. As described
in the Company's Form S-4 Registration Statement filed with the Securities and
Exchange Commission on November 23, 2005, the board of directors of former
Viacom Inc., upon the recommendation of its compensation committee, had in 2005
indicated its support for a voluntary exchange offer to be effected following
the separation, leaving the final decision with the post-separation Board of
Directors of the Company.
The Voluntary Exchange Offer is intended to accomplish a number of important
corporate objectives. First, by reintroducing vesting restrictions where today
the vast majority of options are fully vested, the Company expects to
significantly improve the retentive effects of its long-term incentives to
ensure the continuity of its employees. Second, by providing long-term
incentives in the form of restricted shares, the Company hopes to reinforce the
"ownership culture" among its employees and more closely align employees'
interests with those of the Company's stockholders. Finally, the Company expects
that, upon completion, the Voluntary Exchange Offer should reduce the overhang
and potential dilution associated with its long-term incentive plans.
Employees who participate in the Voluntary Exchange Offer will make separate
tendering decisions with respect to their stock options that are
out-of-the-money and those that are in-the money; an employee stock option will
be considered either out-of-the-money or in-the-money depending on whether the
exercise price of the option is greater than or less than, respectively, a
market value of CBS Corporation Class B Common Stock which will be determined at
about the time the Voluntary Exchange Offer commences and communicated in the
offer materials. Employees who tender any of their out-of-the-money stock
options will be required to tender all such options; similarly, employees who
tender any of their in-the-money stock options will be required to tender all
such options. Restricted shares issued in the Voluntary Exchange Offer will be
awarded under the LTMIP, assuming that the Company's stockholders approve the
amendments described in Item 1.01 of this Report. The restricted shares will
generally vest in equal 50% installments on the second and third anniversaries
of the date of grant (assuming the employee remains employed by the Company or
one of its subsidiaries until the applicable vesting date), except that
restricted shares awarded to certain of the Company's senior executives will
vest only if a performance criteria for the 2006 fiscal year is satisfied as
well. A holder of eligible employee stock options who elects to participate in
the Voluntary Exchange Offer will be entitled to receive a number of restricted
shares that have, in the aggregate, a fair value equal to only 75% of the
aggregate fair value that the Company attributed to the holder's tendered stock
options using the Black-Scholes option valuation method. Restricted shares will
be considered to have a fair value equal to the average of the closing prices of
CBS Corporation Class B Common Stock on the New York Stock Exchange for the five
consecutive trading days ending on the fifth trading day preceding commencement
of the Voluntary Exchange Offer.
The Company has not fixed a commencement date for the Voluntary Exchange Offer
but intends to commence the Voluntary Exchange Offer as promptly as practicable.
In order to accommodate the Voluntary Exchange Offer, the LTMIP has been
amended, subject to the approval of the Company's stockholders, as described in
Item 1.01 of this Report.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CBS CORPORATION
(Registrant)
By: /s/ Louis J. Briskman
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Name: Louis J. Briskman
Title: Executive Vice President and
General Counsel
Date: March 17, 2006