<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CBS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
* No fee required
<PAGE> 2
[CBS LOGO]
CBS CORPORATION
NOTICE OF 1998 ANNUAL MEETING
AND PROXY STATEMENT
MAY 6, 1998
<PAGE> 3
DEAR FELLOW SHAREHOLDER:
It is my pleasure to invite you to attend CBS Corporation's 1998 Annual
Meeting of Shareholders. The meeting will be held at the Sheraton New York
Hotel, located at 811 Seventh Avenue (at 52nd Street), New York, New York, on
Wednesday, May 6, 1998, beginning at 10:30 a.m., local time. The accompanying
Notice of Annual Meeting and Proxy Statement describes the business to be
transacted at the meeting.
During the meeting, I will report to you on the Company's progress during
1997. We will then take action on the items described in the proxy statement.
You are urged to read the accompanying proxy statement for a discussion of the
matters to be voted on at the meeting. At the meeting, you will have an
opportunity to comment on the matters to be voted on and to ask questions.
It is important that your shares be represented at the meeting, regardless
of the number of shares you own. Whether or not you plan to attend, please
complete, sign, date and return your proxy card as soon as possible. Your vote
is important to the Board of Directors. Thank you for your time and attention to
the accompanying proxy statement.
I look forward to seeing you at the meeting.
Sincerely,
/s/ MICHAEL H. JORDAN
- -------------------------
Michael H. Jordan
Chairman of the Board and
Chief Executive Officer
<PAGE> 4
CBS CORPORATION
NOTICE OF ANNUAL MEETING
The 1998 Annual Meeting of Shareholders of CBS Corporation will be held at
the Sheraton New York Hotel, located at 811 Seventh Avenue (at 52nd Street), New
York, New York, on Wednesday, May 6, 1998, beginning at 10:30 a.m., local time.
The purposes of the meeting are to consider and act upon:
(1) the election of 12 directors, each for a term of one year;
(2) the election of KPMG Peat Marwick LLP as independent auditors for 1998;
(3) the approval of the CBS Corporation 1998 Executive Annual Incentive
Plan;
(4) if properly presented, the shareholder proposals contained herein; and
(5) such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on February 27,
1998, as the record date for determining those shareholders who are entitled to
receive notice of and to vote at the meeting and any adjournment thereof.
The vote of each shareholder is important. To obtain the maximum
representation at the meeting, we urge you to complete, sign, date and return
your proxy card as promptly as possible. In this way, if you are unable to
attend, your shares can nevertheless be voted at the meeting. This will not
prevent you from voting your shares in person if you are present at the meeting.
A return envelope is enclosed for your convenience. Your proxy may be revoked by
delivering a later-dated and signed proxy or written notice of revocation to the
Secretary of the Company prior to the time voting is declared closed, or by
attending the meeting and voting your shares in person.
YOUR COOPERATION IS APPRECIATED SINCE A MAJORITY OF THE OUTSTANDING SHARES
OF COMMON STOCK MUST BE REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE
A QUORUM FOR PURPOSES OF CONDUCTING BUSINESS AT THE MEETING.
IF YOU PLAN TO ATTEND THE MEETING, PLEASE KEEP THE ADMISSION TICKET THAT IS
ATTACHED TO THE PROXY CARD ACCOMPANYING THIS NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT, AND ALSO CHECK THE APPROPRIATE BOX ON YOUR PROXY CARD. SHAREHOLDERS
WHO OWN SHARES THROUGH BANKS OR BROKERS AND WHO PLAN TO ATTEND MUST SEND WRITTEN
NOTIFICATION, ALONG WITH PROOF OF OWNERSHIP (SUCH AS A BANK OR BROKERAGE FIRM
ACCOUNT STATEMENT), TO THE SECRETARY'S OFFICE, 51 WEST 52ND STREET, NEW YORK,
NEW YORK 10019, OR MUST BRING SUCH INFORMATION TO THE MEETING. THE NAMES OF
THOSE SHAREHOLDERS INDICATING THAT THEY PLAN TO ATTEND WILL BE PLACED ON AN
ADMISSION LIST HELD AT THE REGISTRATION DESK AT THE ENTRANCE TO THE MEETING.
On Behalf of the Board of Directors,
/s/ ANGELINE C. STRAKA
- ----------------------
Angeline C. Straka
Vice President, Secretary and Associate General Counsel
New York, New York
March 25, 1998
2
<PAGE> 5
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Election of Directors ............................................................................4
The Board of Directors and Its Committees.........................................................11
Director Compensation.............................................................................12
Transactions Involving Directors and Executive Officers...........................................14
Security Ownership................................................................................14
Executive Compensation ...........................................................................17
Option Grants..................................................................................19
Option Exercises and Fiscal Year-End Values....................................................21
Pension Benefits...............................................................................21
Compensation and Severance Arrangements........................................................25
Compensation Committee Report on Executive Compensation........................................27
Compensation Committee Interlocks and Insider Participation....................................32
Shareholder Return Performance Presentation.......................................................33
Election of Independent Auditors..................................................................34
Proposal to Approve the CBS Corporation 1998 Executive Annual Incentive Plan......................34
Shareholder Proposals.............................................................................38
Link Compensation to Financial and Social Issues...............................................38
Change the Annual Meeting Date.................................................................41
Reporting of Soft Dollar Contributions.........................................................42
Stop Expansion into China and Begin No New Operations in China.................................44
Voting Information................................................................................46
Shareholder Proposal Submissions for 1999 Annual Meeting of Shareholders..........................47
Solicitation of Proxies ..........................................................................47
Exhibit A: CBS Corporation 1998 Executive Annual Incentive Plan...................................48
</TABLE>
3
<PAGE> 6
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1998
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of CBS Corporation(1) ("CBS" or the "Company") of proxies
for the 1998 Annual Meeting of Shareholders to be held on Wednesday, May 6,
1998, and all adjournments thereof. This proxy statement and the accompanying
proxy card are first being sent to shareholders on or about March 25, 1998. Only
holders of record of common stock at the close of business on February 27, 1998,
are entitled to receive notice of and to vote at the meeting. On that date,
715,550,090 shares of common stock were outstanding, each of which entitles the
holder to one vote on each matter to come before the meeting.
The bylaws of the Company provide that proxies, ballots and voting
tabulations that identify individual shareholders will be kept confidential
except as may be necessary to meet applicable legal requirements. Information
that identifies individual shareholders is available for examination only by the
judge of election and persons associated with an independent third-party
tabulator.
The principal executive offices of the Company are at 51 West 52nd Street,
New York, New York 10019.
1. ELECTION OF DIRECTORS
(Item 1 on proxy card)
At the 1998 Annual Meeting of Shareholders, 12 directors are to be elected
to hold office until the 1999 Annual Meeting of Shareholders in accordance with
the Company's bylaws. The Board of Directors proposes for election Robert E.
Cawthorn, George H. Conrades, Martin C. Dickinson, William H. Gray III, Michael
H. Jordan, Mel Karmazin, Jan Leschly, David T. McLaughlin, Richard R. Pivirotto,
Raymond W. Smith, Paula Stern and Robert D. Walter, all of whom are now
directors of the Company. Two current directors of the Company, Frank C.
Carlucci and David K. P. Li, are not standing for re-election at the 1998 Annual
Meeting. The Board wishes to thank members Carlucci and Li for their dedication
and service to the Company. As a result of the decision of Mr. Carlucci and Dr.
Li not to stand for re-election, the Board has determined to reduce the size of
the Board, effective at the annual meeting, to 12 members.
Information about the nominees is set forth on pages 5 through 10.
- -------------
1 Prior to December 1, 1997, the name of the Company was Westinghouse
Electric Corporation.
4
<PAGE> 7
The persons named in the enclosed proxy card (Messrs. Jordan, Karmazin and
Briskman) have advised that, unless a contrary direction is indicated on the
proxy card, they intend to vote for the election of the proposed nominees. They
have also advised that in the event any of the 12 nominees are not available for
election, they will vote for the election of such substitute nominee or
nominees, if any, as the Board may propose. Alternatively, in such
circumstances, the Board may reduce the number of directors in accordance with
the bylaws of the Company.
NOMINEES PROPOSED BY THE BOARD OF DIRECTORS
- -------------------------------------------
[PHOTO] ROBERT E. CAWTHORN, 62
Chairman Emeritus
Rhone-Poulenc Rorer Inc. (pharmaceuticals)
Collegeville, Pennsylvania
Managing Director, Global Health Care Partners
DLJ Merchant Banking Partners, L.P. (merchant banking)
Bala Cynwyd, Pennsylvania
Mr. Cawthorn was chief executive officer of Rhone-Poulenc Rorer Inc. from 1985
to 1995 and chairman from 1986 to 1996. Upon his retirement as chairman in May
1996, Mr. Cawthorn was elected chairman emeritus of Rhone-Poulenc Rorer Inc. In
January 1997, Mr. Cawthorn joined DLJ Merchant Banking Partners, L.P. as
managing director, Global Health Care Partners. Mr. Cawthorn is a director of
Sun Company and the Vanguard Group of Investment Companies. Mr. Cawthorn was
first elected to the Board in 1995.
[PHOTO] GEORGE H. CONRADES, 59
Executive Vice President
GTE Corporation (high technology)
President
GTE Internetworking (high technology)
Cambridge, Massachusetts
Mr. Conrades joined International Business Machines (IBM) in 1961 and held a
number of management positions in the United States and Asia. At the time of his
retirement from IBM in 1992, he was senior vice president, corporate marketing
and services. In 1992, he became a partner in Conrades/Reilly Associates, a
business consulting company. In 1994, he was named president and chief executive
officer of BBN Corporation, a provider of Internet
5
<PAGE> 8
services, products and application solutions and, in 1995, was appointed
chairman of the board. In 1997, in connection with GTE Corporation's acquisition
of BBN Corporation, Mr. Conrades joined GTE Corporation as executive vice
president and as president of its new data organization, GTE Internetworking.
Mr. Conrades is a director of Cubist Pharmaceuticals, Inc. and Concentra Managed
Care, Inc. Mr. Conrades was first elected to the Board in 1994.
[PHOTO] MARTIN C. DICKINSON, 62
Retired Senior Vice President
Scripps Bank (banking)
La Jolla, California
Mr. Dickinson joined Scripps Bank in La Jolla, California in 1988. From 1991
until his retirement in 1996, he was senior vice president and senior credit
officer of Scripps Bank. Prior to joining Scripps Bank, Mr. Dickinson was senior
vice president for La Jolla Bank & Trust. Mr. Dickinson is a director of Scripps
Bank, Gaylord Entertainment Company and the Oklahoma Publishing Company. He was
named to the Board in December 1997, effective upon completion of regulatory
reviews. These reviews were completed in early March 1998.
[PHOTO] WILLIAM H. GRAY III, 56
President and Chief Executive Officer
The College Fund/UNCF (higher education assistance)
Fairfax, Virginia
Mr. Gray has been president and chief executive officer of The College Fund/UNCF
since 1991. From 1979 until 1991, he was a member of the United States House of
Representatives and served as house majority whip. Mr. Gray is a director of The
College Fund/UNCF, Warner-Lambert Company, The Prudential Insurance Company of
America, Union Pacific Corporation, MBIA, Inc., Rockwell International
Corporation, Electronic Data Systems Corporation and The Chase Manhattan Bank,
N.A. Mr. Gray was first elected to the Board in 1991.
6
<PAGE> 9
[PHOTO] MICHAEL H. JORDAN, 61
Chairman and Chief Executive Officer
CBS Corporation
New York, New York
Mr. Jordan was elected chairman and chief executive officer of CBS (then
Westinghouse Electric Corporation) and a member of its Board in 1993. From 1974
to 1992, Mr. Jordan held various management positions with PepsiCo, Inc., a
beverage, snack food and restaurant company, retiring as chairman of the PepsiCo
International Foods and Beverages Division in 1992. From 1992 until June 1993,
he was a partner with Clayton, Dubilier & Rice, Inc., a private investment firm.
Mr. Jordan is a director of Dell Computer Corporation, The College Fund/UNCF and
Aetna Inc. He also serves as a member of President Clinton's Export Council and,
in May 1996, was elected chairman of the U.S.-Japan Business Council. He is also
a member of the Board of Trustees for the Museum of Television and Radio.
[PHOTO] MEL KARMAZIN, 54
Chairman and Chief Executive Officer
CBS Station Group
CBS Corporation
New York, New York
Mr. Karmazin joined CBS (then Westinghouse Electric Corporation) in December
1996 as chairman and chief executive officer of CBS Radio. In May 1997, he also
assumed responsibility for CBS' owned television stations and became chairman
and chief executive officer of the CBS Station Group. Prior to joining the
Company, he was president and chief executive officer of Infinity Broadcasting
Corporation, a radio broadcasting company, from 1981 until its acquisition by
the Company in December 1996. Mr. Karmazin is a director of Westwood One and a
member of the Board of Trustees for the Museum of Television and Radio. Mr.
Karmazin was first elected to the Board in 1997.
7
<PAGE> 10
[PHOTO] JAN LESCHLY, 57
Chief Executive
SmithKline Beecham (healthcare)
Philadelphia, Pennsylvania
Mr. Leschly joined SmithKline Beecham as chairman of its Worldwide
Pharmaceutical business in 1990 and became chief executive in April 1994. Prior
to joining SmithKline Beecham, he served as president and chief operating
officer of Squibb Corporation, a pharmaceutical company. Mr. Leschly is a
director of SmithKline Beecham and American Express. Mr. Leschly was elected to
the Board in January 1998.
[PHOTO] DAVID T. MCLAUGHLIN, 65
Chairman and Chief Executive Officer
Orion Safety Products (consumer safety products)
Easton, Maryland
Mr. McLaughlin became chairman and chief executive officer of Orion Safety
Products (formerly Standard Fusee Corporation) in 1988. From 1987 to 1988, Mr.
McLaughlin served as chairman of The Aspen Institute and was appointed president
and chief executive officer in 1988. Upon his retirement from The Aspen
Institute in 1997, he was named president emeritus. From 1970 to 1981, Mr.
McLaughlin served in various management positions at The Toro Company, being
named chairman and chief executive officer in 1977. From 1981 to 1987, he was
president of Dartmouth College. In addition to Orion Safety Products, Mr.
McLaughlin is a director of Atlantic Richfield Company, PartnerRe Services, Ltd.
and Atlas Air Inc. Mr. McLaughlin was first elected to the Board in 1979.
8
<PAGE> 11
[PHOTO] RICHARD R. PIVIROTTO, 67
President
Richard R. Pivirotto Co., Inc. (management consulting)
Greenwich, Connecticut
Mr. Pivirotto is president of Richard R. Pivirotto Co., Inc., a management
consulting firm. Mr. Pivirotto served as chairman of Associated Dry Goods
Corporation from 1976 until his retirement in 1981. He continued to serve on the
board of Associated Dry Goods until its acquisition by May Department Stores in
1986. Mr. Pivirotto is a director of General American Investors Company, Inc.,
The Gillette Company, New York Life Insurance Company, Immunomedics, Inc. and
The Greenwich Bank & Trust Company. He is also a trustee emeritus of Princeton
University, a trustee of the General Theological Seminary, and a trustee and
past chairman of the Greenwich Hospital Association. Mr. Pivirotto was first
elected to the Board in 1973.
[PHOTO] RAYMOND W. SMITH, 60
Chairman and Chief Executive Officer
Bell Atlantic Corporation (telecommunications)
New York, New York
Mr. Smith has been the chairman and chief executive officer of Bell Atlantic
Corporation since 1989. Prior to that, he was president and vice chairman. He
joined the Bell System in 1959. Mr. Smith is a director of Bell Atlantic
Corporation, US Airways Group, Inc. and First Union Corp. In 1995, he was
appointed to the President's Committee on the Arts and Humanities. In 1996, he
became a member of the National Education Association's CEO Forum on Education
and Technology and a member of the board of trustees of Greater Washington
Educational Telecommunications Association, Inc. Mr. Smith was first elected to
the Board in 1997.
9
<PAGE> 12
[PHOTO] PAULA STERN, 52
President
The Stern Group, Inc. (economic analysis and trade
advisory services)
Washington, D.C.
Since 1988, Dr. Stern has been president of The Stern Group, Inc., a
Washington-based trade and international economic advisory firm. From 1972 to
1988, Dr. Stern held various positions with the United States government,
including commissioner and then chairwoman of the U.S. International Trade
Commission. She is a director of Avon Products, Inc., Harcourt General and
Wal-Mart Stores, Inc. Dr. Stern was first elected to the Board in 1992.
[PHOTO] ROBERT D. WALTER, 52
Chairman and Chief Executive Officer
Cardinal Health, Inc. (wholesale pharmaceutical
distributor)
Dublin, Ohio
Mr. Walter is the founder, chairman and chief executive officer of Cardinal
Health, Inc. Since 1970, through internal growth and acquisitions, he has built
Cardinal into one of the country's leading healthcare service providers with
annual sales in 1997 of approximately $11 billion. Mr. Walter is a director of
Cardinal Health, Inc., Banc One Corporation and Karrington Health, Inc. Mr.
Walter was first elected to the Board in 1994.
10
<PAGE> 13
The Board of Directors and its Committees
In 1997, there were 15 meetings of the Board. Each director attended at
least 82% of all meetings of the Board and its committees on which the director
served, except Dr. Li, who attended 60% of such meetings. Consistent with CBS'
long-standing practice and its bylaws, a majority of the members of the Board
are independent as defined in the Company's bylaws. At the present time, there
are 14 members of the Board.
CBS has four standing Board committees: the Audit Review Committee, the
Committee on Environment and Health, the Compensation Committee and the
Nominating and Governance Committee. All the members of these committees are
independent directors.
The Audit Review Committee assists the Board in fulfilling its
responsibilities concerning the Company's accounting and financial reporting
practices and the ethical conduct of the Company and its employees. This
committee makes recommendations to the Board regarding the selection, retention
or termination of the Company's independent auditors and reviews the
professional services, proposed fees and independence of such auditors. This
committee also reviews with management and the independent auditors both the
controls established to protect the integrity of the quarterly reporting process
and the Company's annual financial statements. Mr. Pivirotto is chair of this
committee, and directors Carlucci, Cawthorn, Gray and Stern are members. This
committee held three meetings in 1997.
The Committee on Environment and Health oversees the Company's environment
and health policies. This committee reviews with management the Company's
policies and plans concerning activities that affect the environment, reviews
health and safety issues, and reviews the Company's compliance with laws and
regulations relating to health and safety and environmental matters. Dr. Stern
is chair of this committee, and directors Carlucci, Cawthorn and Li are members.
This committee held one meeting in 1997.
The Compensation Committee assists the Board in establishing appropriate
compensation and benefits for the Company's directors and key employees. This
committee's general responsibilities include advising the Board on compensation
matters, evaluating and approving the compensation of the chief executive
officer and the other executive officers, reporting to the shareholders on
executive compensation, and evaluating new and existing executive compensation
and benefit programs. This committee also reviews and makes recommendations
concerning outside director compensation and administers annual incentives for
key employees and the Company's long-term incentive plans. Mr. Conrades is chair
of this committee, and directors Li, McLaughlin, Pivirotto, Smith and Walter are
members. This committee held nine meetings in 1997.
The Nominating and Governance Committee makes recommendations to the Board
concerning the recruitment and selection of the chief executive officer and
Board candidates. This committee also reviews the Company's position on all
significant corporate governance issues and recommends changes to the Board as
appropriate. In addition, this committee assesses the performance of the Board,
reviews the size and composition of the Board and its committees, and makes
appropriate recommendations. Mr. McLaughlin is chair of this committee, and
directors Conrades, Gray, Pivirotto and Walter are members. This committee held
four meetings in 1997.
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Any shareholder desiring to recommend a Board candidate for consideration
by the Nominating and Governance Committee should furnish to the Secretary a
resume of the experience and qualifications of the proposed nominee and a
written statement signed by the proposed nominee consenting to be nominated to
the Board and to serve if elected. Any shareholder wishing to appear at the 1999
Annual Meeting of Shareholders to nominate a candidate must, pursuant to the
Company's bylaws, send a notice to the Secretary at the principal executive
offices of CBS on or before February 4, 1999, setting forth the information
required by the Company's bylaws. A candidate for director should be highly
experienced, have knowledge and a background that will be useful to the Company,
and the ability to exercise sound business judgment. The candidate must also be
willing and able to commit the time and effort needed to be an effective
director.
In 1994, the Board adopted guidelines identifying its policies with respect
to significant corporate governance matters. These guidelines include a
statement of the mission of the Board of Directors and the structure by which it
will operate. They also outline responsibilities of the Board in such areas as
the selection and evaluation of the chairman and the chief executive officer and
assessment of Board performance. If you would like to have a copy of these
guidelines, please contact the Secretary's Office, and a copy will be sent to
you.
DIRECTOR COMPENSATION
1997 COMPENSATION
Directors who are employees of the Company are not compensated for service
on the Board. During 1997, non-employee directors received an annual director's
fee of $60,000 paid as follows: $30,000 in cash; $15,000 in restricted shares of
the Company's common stock; and $15,000 in stock options. The annual director's
fee is subject to forfeiture on a pro rata basis in the event a 75% attendance
requirement is not met. The stock-based portion of the annual director's fee has
a mandatory holding period, and the exercise price on one-third of the stock
options is set at 125% of the fair market value of the common stock on the grant
date, with the remainder set at 100% of such market value. Committee chairs,
upon election in April 1997, received a committee chair's fee of $5,000 paid in
restricted shares of common stock. Non-employee directors may also receive a
$1,200 per diem fee in cash for special services outside the scope of normal
Board and committee activities. Mr. Cawthorn received per diem fees during 1997
of $6,000 for such special services, all of which was deferred. Non-employee
directors were able to defer all or a portion of their cash fees. For 1997
deferrals, the deferred amount is treated as if it were invested in putative
convertible debentures with a fixed interest rate, compounded annually, equal to
the 10-year U.S. Treasury Bond rate for the week preceding the regular January
1997 Board meeting. Each debenture is deemed to have a face value of $100 and is
deemed to be convertible into shares of CBS common stock at a conversion rate
determined by dividing $100 by the mean of the high and low prices of CBS common
stock as reported on the composite tape of the New York Stock Exchange ("NYSE")
on the last trading day preceding the regular January 1998 Board meeting. At the
time a deferred installment is paid, the director receives the greater value of
(i) the cash amount equal to the face value of such debentures due for such
installment, plus cash equal to accrued interest on such installment, or (ii)
shares of common stock equaling the number of shares into which the
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debentures due for such installment are convertible at the above conversion
rate, plus cash equal to accrued interest on such installment. In the event of a
change in control of the Company, the value of the debentures is paid to a
trustee or otherwise on such terms as the Compensation Committee may prescribe
or permit. Upon termination of service as a director, deferred amounts will be
paid out in five annual installments.
In April 1996, the Board terminated the Advisory Director's Plan (a plan
that provided post-retirement payments to non-employee directors who retired at
age 70 with at least five years of board service), and provided for a
termination payment to the then current non-employee directors with at least one
year of Board service (directors Carlucci, Cawthorn, Conrades, Gray, McLaughlin,
Pivirotto, Stern and Walter). The termination payment was based on the present
value of the 1995 annual retainer amount of $22,000 for the number of years of
Board service (up to 10 years) at the plan termination date. All of these
amounts were deferred, on terms substantially the same as other 1997 director
deferrals, and will be paid in cash installments after the director leaves the
Board.
Also in April 1996, the Board terminated the Director's Charitable Giving
Program as to any director who did not have at least one full year of service at
the end of July 1996. Directors Carlucci, Cawthorn, Conrades, Gray, Jordan, Li,
McLaughlin, Pivirotto, Stern and Walter continue to participate in this program.
Under this program, upon the death of an eligible director, the Company will
make a donation of $500,000 to a single qualifying charitable or other
non-profit organization, or a donation of $250,000 to each of two such
organizations, selected by that director. The donations are funded with the
proceeds of life insurance maintained on the directors. Individual directors
derive no financial benefit from this program since all charitable deductions
accrue solely to the Company. In the event of a change in control of the
Company, donations may be made as of the date of such change in control and paid
on such basis and in such form as the committee administering this program may
prescribe.
The Company provides each non-employee director with accidental death and
dismemberment insurance in the principal amount of $500,000. Benefits will be
paid under this insurance if a covered event occurs while the director is on CBS
business. The total annual cost to the Company of this insurance for all
non-employee directors in 1997 was approximately $9,000.
The Company also maintains a gift matching program for directors. Under
this program, the Company will match personal contributions made to eligible
charitable or educational institutions. The maximum match per year is $2,000 to
eligible colleges or universities and $1,000 to eligible charitable
organizations.
1998 COMPENSATION
In December 1997, the Compensation Committee recommended and the Board
approved changes to director compensation for 1998. Non-employee directors will
receive an annual director's fee of $80,000 paid as follows: $30,000 in cash;
$25,000 in restricted stock; and $25,000 in stock options. The exercise price
for the options is the fair market value of the common stock on the date of
grant. For compensation earned in 1998 and thereafter, director deferrals will
receive only interest at the one-year U.S. Treasury Bill rate or such other rate
as the Compensation Committee may determine, reset every January. All other
elements of director compensation, as described above, remained the same.
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TRANSACTIONS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
During 1997, the Company and its subsidiaries engaged in various purchase
and sale transactions with unaffiliated corporations with which certain of the
non-employee directors are associated. Such transactions were made in the
ordinary course of business at competitive prices and terms and are not
considered material.
SECURITY OWNERSHIP
The following table sets forth the number of shares of common stock
beneficially owned as of January 5, 1998 (except as otherwise noted) by each
director, by each of the executive officers named below in the Summary
Compensation Table under "Executive Compensation" (the "named executive
officers") and by the directors and executive officers of the Company as a group
as reported by each such person. Each person has sole voting and investment
power over the shares reported except as noted. No other equity securities of
the Company or its subsidiaries were beneficially owned, directly or indirectly,
by any director, named executive officer or other executive officer on
January 5, 1998, or on such other date as noted below.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name Beneficial Ownership of Class
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
L. J. Briskman 495,383 shares (1) *
F. C. Carlucci 28,440 shares (2)(3)(4)(5)(6) *
R. E. Cawthorn 22,085 shares (3)(4)(5) *
G. H. Conrades 29,155 shares (2)(3)(4)(5) *
M. C. Dickinson 2,352,464 shares(6)(7)(9) *
W. H. Gray III 17,681 shares(2)(3)(4)(5) *
M. H. Jordan 1,906,368 shares(1) *
M. Karmazin 10,847,739 shares(1) 1.5%
J. Leschly 17,858 shares(5) *
D. K. P. Li 12,693 shares(3)(4)(5) *
P. A. Lund 500,333 shares(1) *
D. T. McLaughlin 40,467 shares(2)(3)(4)(5)(6) *
L. Moonves 221,208 shares(1)(7) *
R. R. Pivirotto 23,670 shares(2)(3)(4)(5) *
F. G. Reynolds 655,873 shares(1)(7) *
R. W. Smith 3,562 shares(4)(5) *
P. Stern 19,038 shares(2)(3)(4)(5) *
R. D. Walter 66,886 shares(2)(3)(4)(5) *
All directors and all executive officers as a group 17,634,203 shares(1)(2)(3)(4)(5)(6)(7)(8) 2.5%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------
* Represents less than 1% of the Company's outstanding common stock.
14
<PAGE> 17
(1) Includes the following shares not owned by the indicated executive officers
on January 5, 1998, but with respect to which they had the right to acquire
beneficial ownership within 60 calendar days through the exercise of stock
options or warrants: Briskman 493,290; Jordan 1,844,195; Karmazin
9,762,519; Lund 500,000; Moonves 210,000; and Reynolds 637,500.
(2) Includes the following common stock equivalents owned by the indicated
directors under the Company's Deferred Compensation and Stock Plan for
Directors: Carlucci 2,492; Conrades 418; Gray 1,518; McLaughlin 3,203;
Pivirotto 3,203; Stern 1,181; and Walter 103.
(3) The indicated directors have deferred all or part of their cash
compensation. As a result of these deferrals, at a future date, these
directors will be entitled to receive the following number of shares, which
are reflected in the table, or cash for all or part thereof: Carlucci
14,758; Cawthorn 3,323; Conrades 6,663; Gray 6,501; Li 1,642; McLaughlin
21,446; Pivirotto 9,993; Stern 6,533; and Walter 3,021.
(4) Includes the following shares not owned by the indicated directors on
January 5, 1998, but with respect to which they had the right to acquire
ownership within 60 calendar days through the exercise of stock options:
Carlucci 6,366; Cawthorn 6,366; Conrades 7,116; Gray 6,366; Li 3,519;
McLaughlin 7,116; Pivirotto 7,116; Smith 1,896; Stern 6,366; and Walter
6,366.
(5) Includes 286 restricted shares granted to each of Mr. Carlucci and Dr. Li
and 858 restricted shares granted to each of the other indicated
non-employee directors after January 5, 1998, as part of their 1998
director compensation.
(6) Includes 3,000 shares over which Mr. Carlucci shares voting and investment
power; 2,179,548 and 242 shares held in separate trusts for which Mr.
Dickinson is co-trustee; and 2,944 shares owned by Mr. McLaughlin in his
Keogh Plan.
(7) The following shares, which are included in the Security Ownership Chart
for the indicated officer or director, are owned by family members: 2,101
shares, Mr. Dickinson; 500 shares, Mr. Moonves; and 110 shares, Mr.
Reynolds.
(8) Includes 13,873,797 shares not owned by directors and executive officers on
January 5, 1998, but with respect to which they had the right to acquire
beneficial ownership within 60 calendar days through the exercise of stock
options or warrants.
(9) The information set forth in the Security Ownership Chart for Mr. Dickinson
is as of March 4, 1998.
15
<PAGE> 18
Except as set forth below, CBS does not know of any person who beneficially
owns more than 5% of the Company's common stock.
<TABLE>
<CAPTION>
Shares of
Name and Address Common Stock Percent
Beneficial Owner Beneficially Owned of Class
---------------- ------------------ --------
<S> <C> <C>
FMR Corp.
82 Devonshire Street 52,857,427 7.7%*
Boston, MA 02109
Putnam Investments, Inc. 36,110,930 5.0%*
One Post Office Square
Boston, MA 02109
Janus Capital Corporation 36,535,480 5.1%*
100 Fillmore Street
Denver, CO 80206-4923
</TABLE>
*These percentages are based on the number of shares of common stock of the
Company outstanding as of December 31, 1997.
16
<PAGE> 19
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
for services to the Company and its subsidiaries in 1995, 1996 and 1997 of the
chief executive officer, each of the other four most highly compensated
executive officers of the Company at the end of 1997 and one additional person
who would have been among the four most highly compensated executive officers
but for the fact that he ceased active employment before year-end.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
All Other
Annual Compensation Long-Term Compensation Compensation
--------------------------------------------- ------------------------------ -------------
Awards Payouts
------ -------
Name and Other Restricted Securities
Principal Annual Stock Underlying LTIP
Position Year Salary Bonus Compensation Award(s) Options(2) Payouts
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
M. H. Jordan ...... 1997 $1,000,000 $2,000,000(1) $57,795(3) 0 0 0 $110,309(4)
Chairman & Chief...... 1996 $1,000,000 $1,000,000 N/A $272,813 1,100,000 0 $19,702
Executive Officer..... 1995 $1,000,000 $1,500,000 N/A 0 360,000 0 $18,610
L. Moonves ...... 1997 $2,596,153 $1,557,692(1) N/A 0 870,000 0 $18,000(4)
President, ...... 1996 $2,500,000 $1,500,000 N/A 0 80,000 0 $19,500
CBS Television ...... 1995 $92,147(5) $55,288(5) N/A 0 50,000 0 0
M. Karmazin ...... 1997 $925,000 $3,000,000(1) N/A 0 500,000 0 0
Chairman & Chief...... 1996 N/A N/A N/A N/A N/A N/A N/A
Executive Officer, ... 1995 N/A N/A N/A N/A N/A N/A N/A
CBS Station Group
F. G. Reynolds ...... 1997 $585,516 $1,000,000(1) N/A 0 0 0 $71,003(4)
Executive VP ...... 1996 $421,670 $750,000 N/A 0 550,000 0 $301,942
& Chief Financial..... 1995 $379,162 $650,000 N/A 0 160,000 0 $6,613
Officer
L. J. Briskman ...... 1997 $346,648 $350,000(1) N/A 0 200,000 0 $4,800(4)
Senior VP ...... 1996 $308,496 $320,000 N/A 0 60,000 0 $7,938
& General Counsel..... 1995 $290,829 $225,000 N/A 0 60,000 0 $7,722
P. A. Lund ...... 1997 $1,043,269 0 N/A 0 0 0 $7,509,793(4)
Former President ..... 1996 $1,694,231 $1,000,000 N/A 0 0 0 $69,427
& CEO, CBS TV ...... 1995 $104,952(5) $29,167(5) N/A 0 500,000 0 0
& Cable Group
</TABLE>
17
<PAGE> 20
(1) Represents incentive compensation awarded for 1997. For 1997, 100% of
Messrs. Jordan's and Reynolds' bonuses were subject to mandatory deferral.
The bonus amount is held in a deferral account and credited annually with
interest at the rate determined by the Compensation Committee for that year
or, if higher, with appreciation at a rate equal to the increase, if any,
in the Company's stock price over the price at the same time the previous
year, and will be paid beginning in the January following termination of
service in one, five,10 or 15 annual installments, as the officer elects
prior to termination of service. The other named executive officers may
elect to defer up to 100% of their annual incentive award, to be paid
either (i) in one installment in any future year not later than the year of
normal retirement, or (ii) in one installment or annual installments after
termination of service. Amounts deferred by the other named executive
officers are credited with interest based on the one-year U.S. Treasury
Bill rate (or such other rate as determined by the Compensation Committee),
reset every January. In the event of a change in control of the Company,
the value of any unpaid deferred amounts are paid to a trustee or otherwise
on such terms as the Compensation Committee may prescribe or permit.
(2) Represents grants of standard non-qualified stock options. The standard
non-qualified stock grants in 1997 were 0; 870,000; 500,000; 0; 200,000;
and 0 for Messrs. Jordan, Moonves, Karmazin, Reynolds, Briskman, and Lund,
respectively.
(3) The amount shown in this column consists of (i) an $8,000 annual perquisite
allowance and (ii) $49,795 for non-business use of the corporate aircraft,
for which Mr. Jordan received imputed income.
(4) The amounts shown in this column consist of: (i) contributions by the
Company to the savings program account for the named executive officer;
(ii) under the terms of his employment agreement, Mr. Moonves receives
$18,000 annually to offset benefits he was receiving from his former
employer; (iii) moving and relocation allowance of $86,130 for Mr. Jordan
and relocation allowance of $63,750 for Mr. Reynolds; (iv) $16,379 and
$2,453 of interest earned during 1997 on deferred amounts of long-term
incentive compensation for Messrs. Jordan and Reynolds, respectively; and
(v) $7,503,393 paid to Mr. Lund under the terms of his employment agreement
upon his leaving the Company.
(5) The amounts shown for salary and bonus for 1995 represent the amounts paid
to Messrs. Moonves and Lund following the acquisition of CBS Broadcasting
Inc. (formerly CBS Inc.) by the Company in late 1995.
18
<PAGE> 21
OPTION GRANTS
The following table shows grants in 1997 of stock options to the named
executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% of Total
Options
Granted to
Employees Exercise Grant Date
Options in Fiscal or Base Expiration Present Value(2)
Name Granted(1) Year Price Date Per Share Total
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M. H. Jordan ........ 0(3) 0.0% -- -- -- --
L. Moonves ........ 290,000 2.3% $24.31 7/27/07 $11.57 $3,355,300
........ 500,000 3.9% $21.75 6/16/07 $11.57 $5,785,000
........ 80,000 0.6% $18.56 1/28/07 $8.57 $685,600
M. Karmazin ........ 500,000 3.9% $18.56 1/28/07 $8.57 $4,285,000
F. G. Reynolds ........ 0(3) 0.0% -- -- -- --
L. J. Briskman ........ 200,000 1.6% $18.56 1/28/07 $8.57 $1,714,000
P. A. Lund ........ 0 0.0% -- -- -- --
</TABLE>
(1) Except for options granted to Mr. Moonves on June 17, 1997, and July 28,
1997, all stock options were granted to the named executive officers on
January 29, 1997. All stock options were granted in tandem with limited
rights. Options have a term of ten years from the date of grant or such
lesser term as may be determined by the Compensation Committee. The
exercise price under each option may not be less than the fair market value
of the Company's common stock on the option grant date. Except in the event
of a change in control of the Company, generally an option is exercisable
in whole or in part after the commencement of the second year of its term
and until the option terminates; however, the 290,000 stock option grant to
Mr. Moonves becomes exercisable in thirds, beginning after the commencement
of the second year. Limited rights are exercisable only in the event of a
change in control of the Company and during the 30 days immediately
19
<PAGE> 22
following such change and only when the fair market value on the exercise
date exceeds the exercise price. When a limited right is exercised, the
employee is entitled to receive in cash the difference between the exercise
price of the related option and the greater of (i) the highest closing
sales price of the common stock on the NYSE during the 60 days prior to
exercise, or (ii) the highest price paid for the common stock in the change
in control transaction during such period. Reload options are granted to
employees at the time of an exercise of a stock option through a Stock Swap
(payment of the exercise price by surrender of previously owned shares of
common stock), unless the Compensation Committee cancels the reload feature
before such exercise. The reload option is granted for the number of shares
the employee tenders to pay the exercise price of the related option.
(2) These values were derived using the following common assumptions: stock
price volatility .3023; dividend yield 1.08%; interest rate 6.3785%; reload
premium 10%; and for each option, its full term and exercise price. There
were no adjustments made for non-transferability or risk of forfeiture. The
values and assumptions were based on the Black-Scholes option pricing
model. The actual value, if any, that an executive officer may realize from
his or her stock options (assuming that they are exercised) will depend
solely on the gain in stock price over the exercise price when the shares
are sold.
(3) In July 1996, Messrs. Jordan and Reynolds each received a multi-year,
premium-priced, non-qualified stock option grant for 850,000 and 450,000,
respectively. These options vest one-third each year over a three-year
period. Because of this multi-year grant, Messrs. Jordan and Reynolds did
not receive an option grant in 1997.
20
<PAGE> 23
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides information as to stock options to purchase
the Company's common stock exercised during 1997 by the named executive
officers; the unexercised options to purchase the Company's common stock
(including options granted in 1997 and prior years) owned by the named
executive officers; and the value of options held by them at year-end.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year-End Options at Fiscal Year-End(1)
Shares Acquired Value ----------------------------- -----------------------------
Name On Exercise Realized Exercisable Unexercisable(2) Exercisable Unexercisable(2)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M. H. Jordan ........ 0 0 1,844,195 566,667 $20,693,324 $4,745,156
L. Moonves ........ 0 0 130,000 870,000 $1,434,694 $5,900,981
M. Karmazin ........ 0 0 9,262,519 750,000 $235,138,415 $7,601,600
F. G. Reynolds ........ 0 0 637,500 300,000 $8,343,204 $2,512,140
L. J. Briskman ........ 0 0 293,290 200,000 $3,789,320 $2,106,260
P. A. Lund ........ 0 0 500,000 -- $6,171,900 --
</TABLE>
(1) Based on the closing price of the Company's common stock as reported on the
NYSE composite tape on December 31, 1997 ($29.0938).
(2) These options are unexercisable because they have not vested under their
terms.
PENSION BENEFITS
During 1997, each of the named executive officers, except Messrs. Karmazin,
Moonves and Lund, participated in the Westinghouse Pension Plan (the "Pension
Plan"), which is a defined benefit plan. Messrs. Moonves and Lund participated
in the CBS Pension Plan (the "CBS Pension Plan"), which is discussed on pages 23
to 25. Mr. Karmazin has a vested benefit under an Infinity Broadcasting
Corporation ("Infinity") pension plan. At the time of CBS' acquisition of
Infinity, the Infinity pension plan was frozen and as a result, Mr. Karmazin is
no longer accruing any additional benefits under the plan.
The Pension Plan is designed to provide retirement income related to an
employee's salary and years of active service. The cost of the Pension Plan is
paid by both Company and employee contributions. All Company
21
<PAGE> 24
contributions are actuarially determined. The Company's contributions to the
Pension Plan with respect to the individuals named in the summary compensation
table cannot readily be calculated separately or individually by the actuaries
for the Pension Plan.
In addition to the benefits provided by the Pension Plan, the Westinghouse
Executive Pension Plan (the "Executive Pension Plan") provides for supplemental
pension payments to a group of executives, including Messrs. Jordan, Reynolds
and Briskman. In accordance with the terms of the Executive Pension Plan, upon
retirement, such individuals who have at least five continuous years of service
as an executive immediately prior to retirement, meet the retirement eligibility
requirements of the Executive Pension Plan, and contribute to the Pension Plan
are entitled to receive supplemental payments under the Executive Pension Plan.
Such payments, when added to their pensions under the Pension Plan, result in a
total annual pension equal to 1.47% for each year of credited service multiplied
by their average annual compensation as defined by the Executive Pension Plan.
Average annual compensation is equal to the sum of the average of the five
highest annualized December base salaries and the average of the five highest
annual incentive awards, each in the last 10 years of employment. In the event
of retirement prior to age 60, the total annual pension will be reduced by an
amount equal to the reduction in the benefits payable under the Pension Plan.
Participants become vested in the event of a change in control of the Company
and benefits under the Executive Pension Plan may be paid on a present value or
other basis.
For purposes of illustration, the following table indicates the approximate
amounts of annual retirement income that would be payable at the present time
under various assumptions as to average annual compensation and years of service
to employees who participate in the Pension Plan and are eligible for
supplemental payments pursuant to the Executive Pension Plan.
WESTINGHOUSE PENSION PLAN TABLE
<TABLE>
<CAPTION>
Five-year
average annual Estimated annual pension for
compensation specified years of credited service
including ------------------------------------------------------------------------------------
incentive award 15 20 25 30 35 40
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 22,050 $ 29,400 $ 36,750 $ 44,100 $ 51,450 $ 58,800
300,000 66,150 88,200 110,250 132,300 154,350 176,400
500,000 110,250 147,000 183,750 220,500 257,250 294,000
700,000 154,350 205,800 257,250 308,700 360,150 411,600
900,000 198,450 264,600 330,750 396,900 463,050 529,200
1,100,000 242,550 323,400 404,250 485,100 565,950 646,800
1,500,000 330,750 441,000 551,250 661,500 771,750 882,000
2,000,000 441,000 588,000 735,000 882,000 1,029,000 1,176,000
2,500,000 551,250 735,000 918,750 1,102,500 1,286,250 1,470,000
3,000,000 661,500 882,000 1,102,500 1,323,000 1,543,500 1,764,000
3,500,000 771,750 1,029,000 1,286,250 1,543,500 1,800,750 2,058,000
</TABLE>
22
<PAGE> 25
The amounts presented in the above table are based upon straight life
annuity amounts and are not subject to any reduction for Social Security
benefits or other offset amounts. As of December 31, 1997, Messrs. Jordan,
Reynolds and Briskman had the following credited full years of service under the
Pension Plan, respectively: four years; three years; and 24 years.
Messrs. Moonves and Lund participated in the CBS Pension Plan, which is a
defined benefit plan. The CBS Pension Plan is designed to provide retirement
income related to an employee's salary and years of active service. The cost of
the CBS Pension Plan is paid entirely by CBS Broadcasting Inc. In addition to
the benefits provided by the CBS Pension Plan, Messrs. Moonves and Lund
participated in an unfunded plan that provides for the payment of benefits in
excess of amounts permitted to be paid by tax-qualified benefit plans under
Internal Revenue Service ("IRS") regulations (the "Unfunded Plan"), as well as
CBS's Supplemental Executive Retirement Plan ("SERP"). The SERP is an unfunded
plan that provides for recognition for pension purposes of 50% (100% in the case
of Mr. Lund) of annual bonus amounts paid under certain annual bonus plans (for
purposes of the SERP, such bonus plans are defined as "SERP Bonus Plans").
The applicable benefit payable under the CBS Pension Plan and the Unfunded
Plan is the sum of: 1.3% of Final Average Compensation up to the Social Security
covered compensation base times years of credited service (not to exceed 35)
plus 1.7% of Final Average Compensation in excess of the Social Security covered
compensation base times years of service (not to exceed 35). Benefits under the
CBS Pension Plan vest after a participant completes five years of service (as
defined). Final Average Compensation is the average of the participant's highest
five consecutive years of earnings out of the last 10 years of service. Earnings
include only regular compensation (i.e., the amount shown in the Salary column
in the summary compensation table) and exclude overtime, bonuses, deferred
compensation and additional compensation of any kind.
The SERP benefit is based on 50% (100% in the case of Mr. Lund) of annual
bonus payments under one of the SERP Bonus Plans. SERP Average Compensation is
50% (100% in the case of Mr. Lund) of the average of the participant's highest
bonuses paid for five consecutive years out of the last 10 years of continuous
service. To determine the SERP annual benefit, SERP Average Compensation is
multiplied by 1.7%, and the resulting product is multiplied by years of service
(not to exceed 35). SERP benefits are payable only to "retirement-eligible"
participants, i.e., employees designated to participate in SERP and each of
whom, upon termination of employment, has attained age 55 with not less than 10
years of service (as defined).
For purposes of illustration, the following tables show the estimated
amounts of annual retirement income that would be payable at the present time
under various assumptions as to compensation and years of service to employees
who participate in the CBS Pension Plan, the Unfunded Plan and the SERP.
23
<PAGE> 26
CBS PENSION PLAN AND UNFUNDED PLAN TABLE
<TABLE>
<CAPTION>
Estimated annual pension for specified years of credited service
CBS Pension Plan
and Unfunded Plan ------------------------------------------------------------------------------
(Base Salary) 5 10 15 20 25 30 35
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 $ 24,948 $ 49,897 $ 74,845 $ 99,794 $124,742 $149,691 $174,639
400,000 33,448 66,897 100,345 133,794 167,242 200,691 234,139
500,000 41,948 83,897 125,845 167,794 209,742 251,691 293,639
600,000 50,448 100,897 151,345 201,794 252,242 302,691 353,139
700,000 58,948 117,897 176,845 235,794 294,742 353,691 412,639
800,000 67,448 134,897 202,345 269,794 337,242 404,691 472,139
900,000 75,948 151,897 227,845 303,794 379,742 455,691 531,639
1,000,000 84,448 168,897 253,345 337,794 422,242 506,691 591,139
1,100,000 92,948 185,897 278,845 371,794 464,742 557,691 650,639
1,200,000 101,448 202,897 304,345 405,794 507,242 608,691 710,139
1,300,000 109,948 219,897 329,845 439,794 549,742 659,691 769,639
1,400,000 118,448 236,897 355,345 473,794 592,242 710,691 829,139
1,500,000 126,948 253,897 380,845 507,794 634,742 761,691 888,639
</TABLE>
CBS SERP TABLE
<TABLE>
<CAPTION>
50% of the average of five highest Estimated annual pension for specified years
consecutive bonuses received of credited service from supplemental executive
retirement plan
--------------------------------------------------------------------
10 15 20 25 30 35
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 67,500 $11,475 $ 17,213 $ 22,950 $ 28,688 $ 34,425 $ 40,163
96,000 16,320 24,480 32,640 40,800 48,960 57,120
120,000 20,400 30,600 40,800 51,000 61,200 71,400
144,000 24,480 36,720 48,960 61,200 73,440 85,680
168,000 28,560 42,840 57,120 71,400 85,680 99,960
192,000 32,640 48,960 65,280 81,600 97,920 114,240
270,000 45,900 68,850 91,800 114,750 137,700 160,650
300,000 51,000 76,500 102,000 127,500 153,000 178,500
330,000 56,100 84,150 112,200 140,250 168,300 196,350
360,000 61,200 91,800 122,400 153,000 183,600 214,200
390,000 66,300 99,450 132,600 165,750 198,900 232,050
420,000 71,400 107,100 142,800 178,500 214,200 249,900
450,000 76,500 114,750 153,000 191,250 229,500 267,750
</TABLE>
24
<PAGE> 27
The amounts presented in the above tables are based upon straight life
annuity amounts and are not subject to any reduction for Social Security
benefits or other offset amounts. As of December 31, 1997, Mr. Moonves had two
credited full years of service under the CBS Pension Plan, the Unfunded Plan and
the SERP. At the time of his leaving the Company, Mr. Lund had 15 credited full
years of service under the above-mentioned plans.
COMPENSATION AND SEVERANCE ARRANGEMENTS
MICHAEL H. JORDAN
In June 1993, the Company retained the services of Michael H. Jordan as
chairman and chief executive officer of the Company. Under the executory
provisions of Mr. Jordan's employment agreement, he participates in the
Executive Pension Plan. The employment agreement modifies the Executive Pension
Plan requirement that he complete five years of continuous service as an
executive immediately prior to retirement and provides that there will be no
actuarial reduction for commencement of supplemental pension benefits prior to
age 65. Such benefits are contingent upon Mr. Jordan's contribution of the
maximum possible amounts to the Pension Plan during his employment.
Mr. Jordan's employment agreement extends until he attains age 65 or until
terminated in accordance with the terms of the agreement, whichever is earlier.
In the event of termination by the Company without cause, Mr. Jordan is entitled
to a lump-sum payment equal to two times his highest base salary plus the
greater of (i) the sum of his two most recent actual annual incentive awards or
(ii) two times his highest annual incentive target award opportunity. He would
also receive prorated incentive payments and other specified benefits.
LESLIE MOONVES
As of May 17, 1995, CBS Broadcasting Inc. (formerly CBS Inc.), prior to
being acquired by the Company in late 1995, retained the services of Leslie
Moonves as President, CBS Entertainment Division, for a five-year term ending
December 4, 2000. The Company and Mr. Moonves entered into an amendment to the
1995 agreement in connection with Mr. Moonves' promotion to the position of
President, CBS Television and his assumption of additional responsibilities in
mid-1997.
Mr. Moonves' employment agreement provides for an annual base salary of
$2,500,000 and annual bonus payments of $1,500,000 for each year of the
contract. He also receives a monthly payment of $1,500 to offset certain
benefits from his former employer that he lost when he was retained by CBS
Broadcasting Inc. (CBS Broadcasting).
Under the agreement, in the event that CBS Broadcasting terminates Mr.
Moonves for incapacity, CBS Broadcasting will continue to pay Mr. Moonves his
base salary and bonus (less the maximum amount that may be insured under the CBS
Broadcasting Long-Term Disability Plan) for the remainder of the employment
term. If
25
<PAGE> 28
CBS Broadcasting terminates Mr. Moonves' employment for a reason other than
cause or incapacity, or if Mr. Moonves elects to terminate the contract for good
reason as defined in the contract (which includes removal from his title or
position and certain changes in his reporting responsibilities, authority and
functions), Mr. Moonves will be entitled to continue to receive his base salary
and bonus payments for the remainder of the employment term in lieu of any other
severance benefits. In the event of a change of control of CBS Broadcasting
during the period Mr. Moonves is rendering service under the employment
agreement, Mr. Moonves is entitled to receive a change of control payment that
varies in amount depending on the remaining term of the employment agreement and
the change of control consideration.
In connection with the amendment to his employment contract and assumption
of additional responsibilities in mid-1997, Mr. Moonves received grants of stock
options for 500,000 shares of Company common stock at an exercise price of
$21.75, exercisable after one year, and for 290,000 shares of Company common
stock at an exercise price of $24.31, becoming exercisable in increments over
three years. In the event that CBS Broadcasting terminates Mr. Moonves'
employment for a reason other than cause or incapacity, or if Mr. Moonves elects
to terminate the contract for good reason as defined in the contract, these
options will vest as of their normal vesting dates and will then be exercisable
until the earlier of three years from his separation date or the expiration of
the option term.
MEL KARMAZIN
In June 1996, the Company and Mel Karmazin entered into an employment
agreement that became effective at the time of the acquisition of Infinity
Broadcasting Corporation ("Infinity") by the Company. The employment agreement
is for a term of four years commencing at the effective time of the acquisition
(December 31, 1996) and provides for a starting annual base salary of $925,000,
subject to merit review and annual increases (but not decreases) at the sole
discretion of the Compensation Committee. The employment agreement further
provides that Mr. Karmazin will have the opportunity to receive
performance-based annual incentive bonuses with a target award opportunity of
$1,500,000 and to defer payment of any such bonuses under the Company's deferral
program as in effect from time to time. Mr. Karmazin also received a stock
option grant pursuant to the agreement on the acquisition date for 500,000
shares of Company common stock, with the options generally becoming exercisable
after the first and second anniversaries of the grant date.
The employment agreement provides that Mr. Karmazin's employment is
terminable for cause upon the occurrence of any (i) action involving willful
malfeasance or gross misconduct in connection with such employment having a
material adverse effect on the Company, (ii) substantial and continuing refusal
to perform ordinary duties of a chief executive officer or (iii) felony
conviction.
In the event Mr. Karmazin's employment is terminated without cause or the
Company otherwise breaches the employment agreement, the Company would be
obligated to pay to Mr. Karmazin a lump-sum payment equal to the compensation,
including annual incentive compensation, that otherwise would have been paid to
Mr. Karmazin for the remainder of the term of the employment agreement.
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<PAGE> 29
FREDRIC G. REYNOLDS
Early in 1994, the Company retained the services of Fredric G. Reynolds as
executive vice president and chief financial officer of the Company. Under the
executory provisions of his compensation arrangement, in the event of
termination by the Company without cause, Mr. Reynolds is entitled to receive
each month after termination, for a period of 12 months, an amount equal to his
then applicable monthly base salary, which will be in lieu of any other salary
continuation programs.
PETER A. LUND
CBS Broadcasting and Peter A. Lund entered into a four-year employment
agreement as of November 28, 1995, in connection with the acquisition of CBS
Broadcasting by the Company. Mr. Lund's employment agreement provided for a base
salary of $1,700,000; $1,950,000; $2,200,000 and $2,450,000, respectively, over
the four contract years of the agreement. In addition to his base salary, Mr.
Lund was guaranteed a bonus of $1,000,000 for 1996 and no less than $600,000 in
each other contract year.
Mr. Lund left CBS Broadcasting effective July 1, 1997, and as provided
under the terms of his employment agreement received a lump-sum payment of
$7,503,393, which equaled the balance of all remaining unpaid salary and
guaranteed bonus amounts through the end of the contract term. His previously
unexercised stock options also became exercisable as of his resignation date,
and his stock options will remain exercisable for two years after such date.
OTHER COMPENSATION
The Board has determined that employees receiving payments pursuant to
provisions of certain compensation or other employee benefit plans relating to a
change in control of the Company should not be adversely affected by any tax
imposed on such payments by reason of Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), and has authorized and directed the Company in
such event to make additional payments in an amount sufficient to satisfy any
such tax liability.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company has
furnished the following report on executive compensation for 1997.
The Compensation Committee, which is composed entirely of outside
independent directors, reviews, evaluates and approves the design and
implementation of the Company's compensation system for executive officers. The
Compensation Committee also determines the form and amount of compensation for
the chief executive and other executive officers. For purposes of making
compensation determinations, the Compensation Committee evaluates the
competitiveness of the Company's executive compensation and evaluates individual
and Company performance.
27
<PAGE> 30
During 1997, the Compensation Committee retained the services of various
compensation consulting firms to provide advice to the Committee from time to
time on executive compensation matters.
THE CBS EXECUTIVE COMPENSATION PROGRAM
The CBS executive compensation program is a performance and rewards
compensation system consisting of base salaries and incentives (annual and
long-term) that pays executives for the achievement of levels of performance
designed to increase the shareholder value of the Company. The system also
enables the Company to hire, retain and motivate high-quality executives who
meet the immediate business challenges and improve the long-term performance of
the Company, and is designed to pay base salaries and provide total compensation
opportunities which are competitive as measured against industry norms.
The Compensation Committee reviews and evaluates competitive data for
purposes of establishing base salary and annual incentive opportunities and for
making long-term incentive grants, using information from a variety of sources.
These sources include information supplied by consultants, various industry
surveys, and information obtained from the Company's own experience. For
example, for purposes of measuring competitive base salary and annual incentive
opportunities, the Compensation Committee uses, among other sources, the Towers
Perrin entertainment and industrial surveys, and a manufacturing industry survey
prepared by Management Compensation Services, a division of Hewitt Associates,
for executives as appropriate. For purposes of measuring competitive long-term
incentive opportunities, the Compensation Committee uses, among other sources,
surveys conducted by Frederic W. Cook & Co., Inc. and Towers Perrin.
The individual performance of each executive officer is annually reviewed
and evaluated. Individual contributions are evaluated on the basis of
comparative, organization-wide assessments of contributions.
BASE SALARIES
Executive officers are assigned a compensation range for base salaries
which takes into consideration the level of responsibility involved, the
knowledge and skill required, and competitive levels. Each year, the executive's
performance is evaluated and any base salary adjustment is based on an
evaluation of the individual's performance and contribution and on competitive
data. The chief executive officer makes recommendations with respect to salary
adjustments for all executive officers. These recommendations are reviewed by
the Compensation Committee and approved with any modifications the Committee
deems appropriate.
ANNUAL INCENTIVES
The Compensation Committee administers various incentive plans under which
annual incentive compensation may be paid to key employees of the Company. Under
these plans, early in 1997, the Compensation Committee approved competitive
annual incentive award opportunities for individual executive officers. The
Compensation Committee established a range of 1997 financial objectives for the
entire Company and for each individual business
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<PAGE> 31
unit and established other key performance indicators as appropriate. The
various performance measures included such items as earnings before interest,
taxes, depreciation and amortization ("EBITDA"), earnings before interest and
taxes ("EBIT"), and free cash flow. Actual annual incentive awards for 1997 for
individual executive officers were based on a combination of the financial
performance of the Company and/or the relevant business unit, other key
performance indicators (such as effective implementation of new strategy and
accomplishment of major portfolio changes), and individual performance.
The year 1997 generally reflects strong performance by the Company's
executive officers. For example, during the year, the Company redefined its plan
to separate its industrial and media businesses; realized excellent value in the
divestiture of its Thermo King unit; entered into a definitive agreement for the
sale of its Power Generation business; acquired two major cable networks, The
Nashville Network (TNN) and Country Music Television (CMT); and entered into a
definitive agreement to acquire the radio broadcasting operations of American
Radio Systems Corporation ("American Radio Systems"). The Company's radio group
recorded record results, with revenues and EBITDA outpacing the industry;
network revenues and certain network indicators showed solid improvement; the
television stations rebounded dramatically in the second half of the year;
TNN/CMT made a significant contribution to earnings in the fourth quarter; and
the Thermo King unit had a strong financial performance through the date of its
sale in October 1997. The Company also continued to focus and strengthen its
businesses through restructuring actions, including the exiting of various
product lines and closure of facilities. While 1997 performance by the Company's
executive officers was generally strong, to the extent that certain performance
goals were not fully achieved, this was taken into account by the Compensation
Committee when considering annual incentive awards.
After reviewing the relevant financial and other key performance indicators
and individual performance, the chief executive officer made recommendations
with respect to incentive awards. These recommendations were reviewed with and,
to the extent determined appropriate, approved by the Compensation Committee.
Approved annual incentives were awarded in cash, subject to mandatory deferral
for certain executives on terms established by the Committee, and otherwise
subject to deferral at the executive's election under the programs described on
page 18.
LONG-TERM INCENTIVES
Long-term incentives are a significant component of total compensation. For
a number of years, the Compensation Committee has awarded long-term incentives
to executive officers in the form of stock options as part of the Company's
performance-based incentive compensation, thus rewarding the officers when
shareholder value increases. The Committee believes that using stock options as
an incentive serves to promote a sense of ownership and to further align the
interests of the Company's executive officers with those of its shareholders,
for the options have value only as the Company's stock price increases.
29
<PAGE> 32
For 1997, the Compensation Committee again granted long-term incentive
opportunities to executive officers in the form of non-qualified stock option
grants. The level of option grants to executives for 1997 was based on the
above-referenced competitive data for the executive's level of responsibility
and on individual performance. The number of shares currently owned, directly
and through various deferral arrangements by an executive, was not a factor in
determining the final grant level. All stock option grants to executive officers
in 1997 had an exercise price per share equal to the fair market value of the
Company's common stock on the grant date.
In addition to an annual long-term incentive grant in January 1997, the
Compensation Committee approved further stock option grants to Mr. Moonves in
the summer of 1997 as he assumed significant additional responsibilities within
the Company's media business. The Compensation Committee determined that it was
more appropriate to address this increase in responsibilities with stock option
grants rather than with additional cash compensation in order to further align
Mr. Moonves' interests with those of the Company's shareholders.
COMPENSATION ARRANGEMENTS
From time to time, the Company enters into employment contracts or other
compensation arrangements with executive officers when appropriate for
competitive or other business reasons. In these cases, compensation for the
executives is paid in accordance with their contracts. Contractual compensation
arrangements with individual executive officers named in the Summary
Compensation Table are summarized on pages 25 to 27.
1997 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Individual Performance and Contribution. Total compensation for Michael H.
Jordan, the chairman and chief executive officer of the Company, is based on a
variety of factors as discussed below. A significant factor which was taken into
account by the Compensation Committee, however, was the full Board's detailed
evaluation of Mr. Jordan's performance as chief executive officer and his
significant contribution to the Company and its shareholders in 1997.
Mr. Jordan's total compensation reflects the Board's positive evaluation of
his effective leadership of the Company during the past year, the substantial
increase in shareholder value over the past 12 months and Mr. Jordan's
significant strategic accomplishments. During 1997, Mr. Jordan took significant
action to sharpen the Company's focus as a media company while aligning his
management organization to provide the Company with an effective leadership
team. The strong 1997 performance of the media business was a major
accomplishment. The radio group recorded record results, outpacing the industry
with double-digit growth in revenues and EBITDA; the CBS Television Network
showed improvement in key areas as the year progressed; CBS Television Stations
improved their performance over 1996, with momentum building in the second half;
the addition of The Nashville Network (TNN) and Country Music Television (CMT)
in the fall of 1997 significantly advanced the Company's cable strategy; and the
Company took steps to expand the fast-growing CBS Radio Group into new markets
with the announcement of the pending acquisition of the radio broadcasting
operations of American Radio Systems. On the industrial side, the sale of the
Thermo King unit realized excellent value for the Company; and the corporate
30
<PAGE> 33
strategy to separate the Company's remaining industrial businesses was redefined
with the announcement of an agreement to sell the Power Generation business.
Overall, the Company is emerging as a pure media company, consisting of a
high-growth, high-cash flow television/radio station group, a cable network and
a resurgent CBS Television Network. This strategic redirection has been
reflected in the significant improvement in shareholder value during the course
of the year.
Base Salary. The Compensation Committee reviewed Mr. Jordan's annual base
salary of $1,000,000. After consideration, the Compensation Committee determined
that this base salary should remain unchanged for 1997.
Annual Incentive. As an annual incentive for 1997, the Compensation
Committee awarded Mr. Jordan a bonus of $2,000,000 based on the factors
discussed above. All of this bonus was deferred on terms established by the
Committee.
Long-term Incentive. Mr. Jordan did not receive a long-term incentive grant
during 1997 as he received a premium-priced, multi-year option grant during 1996
in addition to an annual long-term incentive grant of stock options for that
year.
POLICY ON DEDUCTIBILITY OF COMPENSATION
It is the Compensation Committee's policy to establish measurable,
quantifiable performance targets in connection with incentive plans as part of
the Company's performance and rewards compensation system for executive
officers. For example, in the case of stock options, the options only have value
as the Company's stock price increases. In the case of annual incentives, the
Compensation Committee establishes financial and non-financial performance
measures for that year's incentives that are designed to increase the
shareholder value of the Company.
Under the federal tax laws, beginning in 1994, compensation for certain
individual executive officers ("covered executives") is not deductible to the
extent that the officer's compensation for that year exceeds $1,000,000, after
excluding qualifying performance-based compensation that meets certain specified
criteria. The Compensation Committee believes, based on information currently
available, that the stock options granted by the Company to its executive
officers will qualify for exclusion. The Compensation Committee has reviewed and
will continue to review tax consequences as well as other relevant
considerations when making compensation decisions. The Compensation Committee
generally has required the deferral of compensation that would exceed the
$1,000,000 limit. However, the Compensation Committee has excluded certain media
operations executive officers from this requirement, given the structure of
executive compensation in the media and entertainment industry and certain
pre-existing compensation arrangements. For 1998, the Compensation Committee
intends to administer the Company's new 1998 Executive Annual Incentive Plan in
such a way that, if the plan is approved by the Company's shareholders at the
1998 Annual Meeting, annual incentives for covered executives (other than those
individuals who receive their bonuses under pre-existing compensation
arrangements) will qualify for exclusion.
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<PAGE> 34
COMPENSATION COMMITTEE
George H. Conrades, Chair
David K. P. Li
David T. McLaughlin
Richard R. Pivirotto
Raymond W. Smith
Robert D. Walter
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, Messrs. Conrades, Li, McLaughlin, Pivirotto and Walter served
as members of the Compensation Committee, with Mr. Smith joining the Committee
in April 1997. All members of the Compensation Committee were independent
outside directors. During 1997, no Compensation Committee interlocks or insider
participation existed.
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SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the total returns (assuming
reinvestment of dividends) of the Company's common stock, the Standard & Poor's
500 Index ("S&P 500(R)"), and the Standard & Poor's Entertainment Index ("S&P(R)
Entertainment"). The graph assumes $100 invested on December 31, 1992, in CBS
common stock and in each of the indices.
COMPARISON OF FIVE-YEAR TOTAL RETURN*
CBS COMMON, S&P 500(R) AND S&P(R) ENTERTAINMENT
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
CBS Corporation 100 109 96 130 159 238
S&P 500(R) 100 110 112 153 189 252
S&P(R) Entertainment 100 116 110 132 134 196
</TABLE>
* Assumes that the value of the investment in CBS common stock and in each
index was $100 on December 31, 1992, and that all dividends were
reinvested.
The total percentage return for the CBS common stock for the period from
January 1, 1997, to December 31, 1997, was approximately 49.7%. This compares
with the total percentage return for such period of the S&P(R) Entertainment,
which was approximately 33.3%, and the S&P 500(R), which was approximately
46.3%. These percentages assume that all dividends were reinvested.
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<PAGE> 36
2. ELECTION OF INDEPENDENT AUDITORS
(Item 2 on proxy card)
Independent auditors are to be elected to audit and express an opinion on
the Company's financial statements for 1998. The Audit Review Committee of the
Board has the responsibility to recommend to the Board annually, and at other
appropriate times, the selection, retention or termination of the Company's
independent auditors. The Audit Review Committee has nominated KPMG Peat Marwick
LLP ("KPMG"), and this firm has advised the Company that it is willing to serve.
The Board has approved this nomination. If KPMG is not elected, or if elected
and it should subsequently decline to serve, or if its engagement by the Company
is terminated, the Board, in conjunction with the Audit Review Committee, will
appoint other independent auditors.
A representative of KPMG will be present at the 1998 Annual Meeting of
Shareholders and will have an opportunity to make a statement. He or she will
also respond to any appropriate questions.
The persons named in the enclosed proxy card (Messrs. Jordan, Karmazin and
Briskman) have advised that they intend to vote for the election of KPMG unless
a contrary direction is indicated on the proxy card.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF KPMG AS INDEPENDENT AUDITORS.
The affirmative vote of a majority of the votes cast by the shareholders is
required for passage.
3. PROPOSAL TO APPROVE THE CBS CORPORATION 1998 EXECUTIVE ANNUAL INCENTIVE PLAN
(Item 3 on proxy card)
Under Section 162(m) of the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder (together, "Section 162(m)"),
compensation paid to certain executive officers ("covered employees") in excess
of $1 million is not deductible by the Company unless such compensation is
performance-based, as defined by Section 162(m), and certain other requirements
are met. The Company stock options are granted to executive officers under a
shareholder-approved plan that complies with the requirements of Section 162(m)
regarding performance-based compensation. The Board of Directors has now
approved the 1998 Executive Annual Incentive Plan (the "Plan"), subject to
shareholder approval, so that the award of annual incentives to covered
employees may also be structured so as to comply with the requirements of
Section 162(m). If the Plan is not approved by the shareholders, the
Compensation Committee will consider whether it is appropriate to take any
alternate action or actions that would allow the Company to award annual
incentives to covered employees that are fully deductible by the Company under
the Internal Revenue Code.
Because executive officers (who may also be members of the Board) are
eligible to be designated as participants and to receive awards under the Plan,
each of them has an interest in the adoption of this proposal.
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<PAGE> 37
SUMMARY
The following is a general description of the principal features of the
Plan. It is qualified in its entirety by reference to the complete text of the
Plan, which is attached to the proxy statement as Exhibit A and is incorporated
herein by reference.
Term. The Plan is effective as of January 1, 1998, provided that it is
approved by the shareholders of the Company. The Plan has no fixed expiration
date. However, because the Committee will have discretion under the Plan to fix
performance goals annually, current applicable law requires that the Plan be
submitted to shareholders for approval every five years in order to continue to
permit payment of incentives that qualify as performance-based compensation
under Section 162(m).
Administration. The Plan will be administered by a committee ("Committee")
of at least two outside directors (as defined under Section 162(m)). The
Committee will have the exclusive authority to interpret, administer, and make
determinations under the Plan, including the exclusive authority to select
participants and approve incentive awards under the Plan.
Participants. Participation in the Plan is limited to key executives of the
Company and/or its subsidiaries who are designated by the Committee as
participants for a given performance period (a calendar year or other period
designated by the Committee). Approximately 60 executives are currently eligible
to be selected by the Committee. It is anticipated, however, that participants
will generally be executive officers of the Company who could potentially be
"covered employees" within the meaning of Section 162(m) and who do not receive
annual incentives pursuant to individual agreements (currently, fewer than 10
individuals).
Awards. Under the Plan, the Committee will establish one or more objective
performance goals for each year (or other performance period), based on one or
more of the following criteria as applied to the relevant business unit or units
or to the Company as a whole, or to any combination thereof: earnings before
interest, taxes, depreciation and amortization ("EBITDA"); earnings before
interest and taxes ("EBIT"); free cash flow; network ratings; earnings per
share; and stock price. The Committee will also establish target and maximum
incentive award opportunities for the performance period for each participant
and will establish the objective formula or standard that the Committee will use
to determine the amount of incentive compensation that may be payable, to the
extent that the performance goals are achieved. Appropriate adjustments may be
made by the Committee in the foregoing to reflect the impact of acquisitions,
divestitures, changes in accounting standards, or unusual or extraordinary
events. The maximum amount that any one participant can be awarded under the
Plan for any given performance period is $6 million (with an adjustment based on
increases in the consumer price index).
After the close of the performance period, the Committee will determine the
extent to which the performance goal or goals have been achieved and incentive
compensation that may be payable. The Committee then has discretion to approve
awards as it deems appropriate up to these amounts: That is, the Committee may
exercise its discretion to reduce, but not to increase, the incentive award or
awards that would be payable on the basis of the level of performance achieved.
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<PAGE> 38
Form of Payment; Shares of Stock. Once the Committee has determined the
amounts of any incentive awards, the Committee also determines the form of
payment. Incentive awards can be paid in cash, in stock options for or stock
appreciation rights related to stock of the Company ("Stock Options" and "Stock
Appreciation Rights"), in other securities of the Company (including but not
limited to derivative securities), or in any other form that the Committee may
determine, or in any combination of such forms, and can be paid in one or more
installments and/or on a deferred basis or on such other basis as the Committee
may determine ("deferrals"), all as and on such terms and conditions as are set
forth in the Plan and otherwise as the Committee determines.
The maximum number of shares of stock of the Company ("Stock") that can be
issued under the Plan is 7,000,000. The maximum number of such shares of Stock
subject to Stock Options and Stock Appreciation Rights that may be granted to
any one participant under the Plan in any one performance period is 600,000.
As of March 12, 1998, the closing price of the Company's common stock as
reported on the NYSE composite tape was $31.25.
Payment in Stock Options or Stock Appreciation Rights. If the Committee
decides that all or a portion of an incentive award will be paid in Stock
Options or Stock Appreciation Rights, the number of Stock Options or Stock
Appreciation Rights granted will be determined by dividing the amount of the
award to be paid in the form of a grant of Stock Options or Stock Appreciation
Rights by the value, as determined by the Committee, of a Stock Option or Stock
Appreciation Right, as the case may be, for one share of Stock on the relevant
date.
Stock Options or Stock Appreciation Rights granted under the Plan will be
evidenced by a written agreement containing such terms and conditions as are set
forth in the Plan and otherwise as the Committee from time to time determines.
The exercise or reference price, however, will not be less than the fair market
value of the Stock on the Stock Option or Stock Appreciation Right grant date.
Stock Appreciation Rights may be granted in tandem with or independent of Stock
Options. Stock Appreciation Rights are only exercisable when the fair market
value of the Stock exceeds the reference price of the Stock Appreciation Right.
Federal Income Tax Consequences - Stock Options and Stock Appreciation
Rights. Under the provisions of the Code and regulations promulgated thereunder,
the federal income taxation of Stock Options and Stock Appreciation Rights
granted under the Plan is generally as follows:
Stock Options. No taxable income will be recognized by a participant upon
the granting of a Stock Option. Upon the exercise of a Stock Option, however,
the participant will generally recognize taxable compensation income in the year
of exercise in an amount equal to the difference between the exercise price and
the fair market value of the shares on the date of exercise. The participant's
tax basis in the shares will be the sum of the exercise price plus any income
recognized upon exercise. At the time of any subsequent sale or other
disposition of the shares, the participant will generally realize capital gain
(or loss) equal to the difference between the amount received for the shares and
the participant's tax basis in such shares.
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<PAGE> 39
If previously owned shares are used to exercise a Stock Option, no
additional income results unless property other than the shares subject to the
Stock Option, including money, is received by the participant in the exchange.
Assuming no gain or loss is recognized, the participant's tax basis and holding
period of the previously owned shares will be carried over to the equivalent
number of shares received on exercise. Any additional shares received upon
exercise will result in the participant recognizing taxable compensation equal
to the fair market value of the shares on the date of exercise. The tax basis of
the additional shares will be equal, in the aggregate, to the taxable
compensation recognized by the participant plus any cash paid. The holding
period will begin on the day after the tax basis of the shares is determined.
Stock Appreciation Rights. No taxable income will be recognized by a
participant upon the granting of a Stock Appreciation Right. Upon exercise of a
Stock Appreciation Right, the amount of compensation will be equal to the cash
received and the fair market value (as of the date of exercise) of any shares
issued to the participant in lieu of cash.
Tax Rates Applicable to Capital Gains. As discussed above, the amount of
any gain recognized upon the sale of shares acquired pursuant to the exercise of
a Stock Option or Stock Appreciation Right will generally be capital gain for
federal income tax purposes. Different tax rates apply to capital gains as
opposed to ordinary income. The Taxpayer Relief Act of 1997 lowered the maximum
tax rate on net capital gains (i.e., the excess of net long-term capital gains
over net short-term capital losses) from 28 percent to 20 percent for gains
recognized after July 28, 1997, for certain property held for more than 18
months. For certain property acquired (or treated as acquired pursuant to
election) after December 31, 2000, and held for more than 5 years, the maximum
tax rate on net capital gains is further reduced to 18 percent. For purposes of
determining whether property has been acquired after December 31, 2000, the
holding period of property acquired pursuant to the exercise of a Stock Option
(or other right or obligation to acquire property) includes the period such
Stock Option (or other right or obligation) is held.
CBS Tax Deduction. The Company will be entitled to a deduction for federal
income tax purposes at the same time the participant recognizes ordinary income
under the rules described above. Under Section 162(m) of the Code, there is a
one million dollar cap on the amount of compensation paid to certain executives
("covered employees") that may be deducted by the Company. However, excluded
from the one million dollar deduction limitation are certain shareholder
approved performance-based compensation plans, provided certain conditions are
met. Tax deductions resulting from the exercise by participants of Stock Options
or Stock Appreciation Rights granted by the Committee under the Plan are
intended to qualify for the exclusion.
The foregoing is a summary only and applies only to U.S. federal income
taxes. The law on which the above discussion is based is subject to change at
any time.
Other Provisions. In the event of a change in control, as defined and
determined by the Committee, the Committee may deem all or part of any incentive
award opportunities to have been earned and/or may waive or modify all or any
part of any restrictions or conditions, all on such basis as the Committee
determines, and incentive awards and outstanding derivative securities and
deferrals may then be paid and Stock Options, Stock
37
<PAGE> 40
Appreciation Rights and other derivative securities may then be modified, all on
such basis, at such time, in such form, and subject to such terms and conditions
as the Committee may prescribe. During a participant's lifetime, payments or
distributions under the Plan may be received only by the participant or his or
her legal representative. Shares of restricted Stock during the applicable
restriction period, Stock Options, Stock Appreciation Rights, other derivative
securities, rights to receive deferral payments and any other rights or benefits
under the Plan are not transferable or assignable other than certain limited
transfers on the participant's death, provided that the Committee, in its sole
discretion, may permit the transfer of Stock Options (including any tandem Stock
Appreciation Rights) to a limited class of permissible transferees (mainly the
participant's immediate family). The shares available under the Plan and the
terms of incentive award opportunities, Stock Options, Stock Appreciation
Rights, other derivative securities and deferrals are subject to adjustment to
reflect certain changes in the Company's Stock. The Plan also provides for tax
withholdings and for non-uniform determinations by the Committee, and also
permits the Committee to accelerate the time at which all or any part of Stock
Options, Stock Appreciation Rights and/or other derivative securities may be
exercised or the time when all or any part of deferrals and/or derivative
securities will be paid and permits the Company and its subsidiaries to
compensate any key executives and/or employees under separate bonus or incentive
plans or other compensation arrangements outside of the Plan.
The Board of Directors or the Committee can amend the Plan from time to
time; however, certain amendments to the material terms of the Plan would
require shareholder approval for purposes of qualifying payments under the Plan
under Section 162(m) of the Code. The Plan can be terminated or suspended at any
time by the Board of Directors or the Committee.
The persons named in the enclosed proxy card (Messrs. Jordan, Karmazin, and
Briskman) have advised that they intend to vote to approve the Plan unless a
contrary direction is indicated on the proxy card.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
THE CBS CORPORATION 1998 EXECUTIVE ANNUAL INCENTIVE PLAN.
The affirmative vote of a majority of the votes cast by the shareholders is
required for approval of the Plan.
4. SHAREHOLDER PROPOSAL: LINK COMPENSATION TO FINANCIAL AND SOCIAL ISSUES
(Item 4 on proxy card)
CBS has been advised that the Sisters of the Blessed Sacrament, the
beneficial owner of 100 shares of common stock, located at 1663 Bristol Pike,
Bensalem, Pennsylvania 19020-8502, will submit the following proposal at the
meeting:
SUPPORTING STATEMENT
We believe both social and financial criteria should be factors in fixing
compensation packages for top corporate officers. Public scrutiny on
compensation is reaching a new intensity - not just for the Chief Executive
Officer, but
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for all executives. Too often top executives receive considerable increases in
compensation packages, even when corporate financial performance is mediocre or
poor and stockholders watch dividends slip and stock prices drop.
In 1995 Pearl Meyer and Partners Incorporated reported that CEO
compensation at large corporations leaped 23 percent - to an average $4.37
million. That is $2,100 an hour, or 183 times the average workers 1995 hourly
earnings of $11.46. In 1992 CEOs averaged 157 times as much compensation as the
average worker. This ratio has more than quadrupled since the mid 1980s when it
was only 42 times that of the average worker.
Japanese corporations pay gaps between executives and workers are eight
times smaller than the U.S. gap. The widening pay gap may make U.S. business
less competitive if it breeds cynicism and resentment and subverts the
creativity and cooperation necessary to build effective cooperation between
executive and employees.
Shareholders need to be vigilant in challenging executive pay packages that
reward bad social or financial corporate performance. Should top officers pay
for a given year be reduced if the company suffers from poor corporate
citizenship that harms our corporate image, costly fines, protracted
litigations, loss of government contracts, or significant loss of market share
on their watch? Should CEO compensation be affected if there are consumer
boycotts or public relations problems like the company's association with what
American Indian people and minority groups call racially offensive images?
Should a pattern of discrimination or sexual harassment be grounds for a
decreased compensation package? Conversely should excellence on the social
issues which benefit society be a positive factor?
We believe these questions deserve the careful scrutiny of our Board of
Directors and Compensation Committee. Companies including Bristol-Myers, Eastman
Kodak, IBM, Procter and Gamble, and Westinghouse have reported to shareholders
on how they integrate these factors into their compensation packages.
Therefore it be resolved: Shareholders request the board institute a
special Executive Compensation Review, and prepare a report available to
shareholders four months after our annual shareholder meeting with the results
of the Review and recommended changes in practice. The review shall cover pay,
benefits, perks, stock options and special arrangements in the compensation
packages for all the company's top officers. We recommend that the committee
study and report on the following in its review:
1. Ways to link executive compensation more closely to financial
performance with proposed criteria and formulae.
2. Ways to link compensation to social corporate performance (e.g.,
incentives given for meeting or surpassing certain social and
performance standards).
3. Comparison of compensation packages for company officers with lowest
paid in employees in the U.S. and around the world.
4. Whether there should be a ceiling on top executives' salaries to prevent
our company from paying excessive compensation.
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THE RECOMMENDATION OF THE BOARD OF DIRECTORS
This proposal requests that the Board establish a special review and
prepare a report to shareholders on executive compensation. The Board believes
that adoption of this Proposal is unnecessary because the Company's proxy
statement already reports in detail on most of the essential elements of
executive compensation that the Proposal seeks to address. The proxy statement
provides detailed information regarding the annual compensation, benefits,
perks, stock options, pension benefits and employment agreements, if any, for
the Company's named executive officers. In addition, the proxy statement
contains the Compensation Committee Report on Executive Compensation. This
report discusses the Company's executive compensation program. As stated in this
report, each year the Compensation Committee establishes the criteria upon which
an executive's total compensation (i.e., base salary, annual incentive and
long-term incentive grants) will be determined. These criteria are designed to
link executive compensation to the achievement of the Company's objectives. The
Compensation Committee Report contained in this proxy statement sets out in
detail the bases for 1997 executive compensation.
The Company's compensation system is designed to enable the Company to
hire, retain and motivate high-quality executives who meet the immediate
business challenges and improve the long-term performance of the Company. The
system provides incentives that reward executives for the achievement of levels
of performance that increase shareholder value. In making compensation
decisions, the Compensation Committee evaluates the competitiveness of the
Company's executive compensation and evaluates individual and Company
performance. Company policies and positions that exist with respect to various
social issues (for example, environmental matters, nondiscrimination policies
and guidelines regarding legal and ethical conduct) are taken into account by
the Chairman and Chief Executive Officer as he completes individual performance
reviews of the Company's executive officers.
The Board does not believe that further studies or reports, as required in
the Proposal, would produce any significantly different information than that
already contained in the proxy statement and in the Compensation Committee
Report. The Board also believes that the proxy process, with its detailed
requirements regarding compensation matters, already provides the best
opportunity for shareholders of the Company to be informed on executive
compensation matters.
Finally, for decades the Company has taken seriously its commitment to
civic and social matters. This commitment, addressed through the Westinghouse
Foundation, the CBS Foundation and by the Company directly, has taken the form
of grants, employee volunteerism and collaborative efforts on a local, national
and international level.
The persons named in the enclosed proxy card (Messrs. Jordan, Karmazin and
Briskman) have advised that they intend to vote against the proposed resolution
unless a contrary direction is indicated on the proxy card.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE
PROPOSED RESOLUTION.
The affirmative vote of a majority of the votes cast by the shareholders on
this proposal is required for passage.
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5. SHAREHOLDER PROPOSAL: CHANGE THE ANNUAL MEETING DATE
(Item 5 on proxy card)
CBS has been advised that Evelyn Y. Davis, the beneficial owner of 500
shares of common stock, located at 2600 Virginia Avenue, N.W. Suite 215,
Washington, D.C. 20037, will submit the following proposal at the meeting:
Resolved: That the stockholders of Westinghouse/CBS (or if the Company has
split) the stockholders of CBS (new and Westinghouse (NEW)) recommend that the
Board take the necessary steps to change the annual meeting to the first
Wednesday in June.
SUPPORTING STATEMENT
Westinghouse(2)/CBS has been meeting on dates where many, many other
corporations met including a principal competitor General Electric/NBC.
Old CBS met on a more acceptable, less-crowded date.
Independent non-employee stockholders should be encouraged to be able to
attend more annual meetings, and NOT on dates where many, many other
corporations also meet.
If you agree, please mark your proxy for this proposal.
THE RECOMMENDATION OF THE BOARD OF DIRECTORS
The Proposal recommends that the Board change the date of the Company's
Annual Meeting of Shareholders to the first Wednesday in June. The Proponent
requests this change because she believes an annual meeting in June would be
less likely to conflict with the annual meetings of other corporations. The
Company has more than 300,000 shareholders, and it would be impossible to find
an annual meeting date that suits the needs of all of its shareholders. Any date
the Company sets will be convenient for some shareholders and inconvenient for
others. The Company believes that it is important to hold an annual meeting
within a reasonable period of time after completion and distribution of its
annual report to allow shareholders the opportunity to comment on the Company's
performance in a timely manner. The Company has selected a meeting date that it
believes meets the needs of its shareholders, its directors and the Company.
The persons named in the enclosed proxy card (Messrs. Jordan, Karmazin and
Briskman) have advised that they intend to vote against the proposed resolution
unless a contrary direction is indicated on the proxy card.
- --------------
(2) The shareholder proposals were submitted prior to the name change of the
Company on December 1, 1997. Any reference to "Westinghouse" in the
shareholder proposals should be considered a reference to "CBS."
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THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE
PROPOSED RESOLUTION.
The affirmative vote of a majority of the votes cast by the shareholders on
this proposal is required for passage.
6. SHAREHOLDER PROPOSAL: REPORTING OF SOFT DOLLAR CONTRIBUTIONS
(Item 6 on proxy card)
CBS has been advised that Bartlett Naylor, the beneficial owner of 275
shares of common stock, located at 1255 N. Buchanan, Arlington, Virginia 22205,
will submit the following proposal at the meeting:
Resolved: That the shareholders of Westinghouse urge the Board of Directors
to establish corporate political contribution guidelines and reporting
provisions that include the following features:
1. Contribution Guidelines: The Board of Directors would present written
contribution guidelines in the Company's annual report and Form 10-K
that clearly define the issues and interests that the Company is seeking
to promote with its "soft dollar" political contributions; and
2. Contribution Reporting: Comprehensive political contribution reporting
would be provided in the Company's annual report and Form 10-K
documenting all the entities that were the recipients of the Company's
political "soft dollar" contributions during the previous twelve month
period.
SUPPORTING STATEMENT
Westinghouse's interest in good government relations may stem from our
company's considerable dependence on government contracts and regulatory
approvals.
The company proxy, for example, informs us that board member Frank Carlucci
once served in a number of government positions that may help Westinghouse
secure those government projects. Such background apparently outweighs the fact
that Carlucci serves on nearly three times the maximum number of boards
recommended by the National Association of Corporate Directors, and is already
presumably fully engaged by a full-time day job.
Indeed, Westinghouse pays Carlucci additional fees to advantage his
government expertise, although some observers assert such a practice compromises
his ability to oversee the management team that pays him this fee.
But whether or not shareholders may view Carlucci or other directors as
overextended or conflicted, such information is readily available in the
company's shareholder reports.
Not so with all of Westinghouse's political contributions.
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There has been a significant increase in the amount of money injected into
the political election process in the form of "soft dollar" contributions from
private sector contributors ("Soft dollar" contributions are those financial
contributions given by individuals or institutions to national and state
political parties for "party building" purposes.)
The direct contribution of corporate assets, held in the collective
interests of all corporate shareholders, into the political election process
without written contribution guidelines or contribution reporting to
shareholders, I believe, is inappropriate.
I urge you to vote YES on this proposal.
THE RECOMMENDATION OF THE BOARD OF DIRECTORS
The Company, from time to time, makes so-called "soft dollar" contributions
to political parties. For purposes of the Company's response, the Company agrees
with the Proponent that "soft dollar" contributions are those contributions
given to national and state political parties for party-building purposes. At
the national party level, recipients of such "soft dollar" contributions are
required to file reports with the Federal Election Commission ("FEC") setting
forth, among other things, the amount of the contribution as well as the source
of the contribution. The vast majority of the Company's "soft dollar"
contributions are made to national parties. Most states also have reporting
requirements. Reports of contributions made to national parties are available to
the public and can be reviewed at FEC headquarters or accessed on internet
sites. The Company's contributions are made in accordance with procedures
established by the Company to ensure that the contribution is made in accordance
with applicable national and state laws.
The Company also sponsors a political action committee ("PAC") through
which eligible employees, on a strictly voluntary basis, can contribute to
candidates and political parties. The Company's PAC contributions are a matter
of public record. The Company's PAC fully complies with applicable laws and
regulations, and its receipts and expenditures are a matter of public record.
Accordingly, both PAC and the Company's national party "soft dollar"
contributions are subject to reporting requirements and publicly disclosed.
Also, given the limited amount of "soft dollar" contributions (less than
$250,000 in 1997) made by the Company and the fact that substantially all of
these contributions are already subject to reporting requirements, the Board
does not believe that adoption of this Proposal is warranted.
With respect to the comments in the Proposal relating to fees paid to Mr.
Carlucci, the Company would like to point out that these comments are inaccurate
and without any factual basis. Mr. Carlucci receives the same amount of
compensation paid to all other outside directors, which is disclosed in this
proxy statement. Also disclosed in the proxy statement are fees paid to outside
directors for special services to the Board. Mr. Carlucci has never received any
such fees.
The persons named in the enclosed proxy card (Messrs. Jordan, Karmazin and
Briskman) have advised that they intend to vote against the proposed resolution
unless a contrary direction is indicated on the proxy card.
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THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE
PROPOSED RESOLUTION.
The affirmative vote of a majority of the votes cast by the shareholders on
this proposal is required for passage.
7. SHAREHOLDER PROPOSAL: STOP EXPANSION INTO CHINA AND BEGIN NO NEW OPERATIONS
IN CHINA
(Item 7 on proxy card)
CBS has been advised that the Province of St. Joseph of the Capuchin Order,
the beneficial owners of 100 shares of common stock, located at 1015 North Ninth
Street, Milwaukee, Wisconsin 53233, and the Glenmary Home Missioners, the
beneficial owners of 100 shares of common stock, located at P.O. Box 465618,
Cincinnati, Ohio 45246-5618, will jointly submit the following proposal at the
meeting:
Whereas China has been listed by the U.S. Government as in serious
violation of basic human rights.
After much contentious debate about China's human rights violations and
allegations that it has passed nuclear technology to rogue states, President
Clinton agreed to lift a 12 year old ban on the sale of nuclear technology to
China. The move, which has fostered protests in Congress, requires Mr. Clinton
to certify that China has ceased supplying technology that could be used for
nuclear weapons development to Iran and other countries.
In exchange for Beijing's "clear assurances" that it would abandon its
nuclear cooperation program with Iran, Mr. Clinton opened the door for U.S.
companies like Westinghouse to compete for the building of such facilities with
bids. However, at the same time, Congressional critics question the nature of
such assurances.
Resolved that our Company begin no new operations in China and stop any
further expansion into China unless and until it can ensure shareholders that
basic human rights and legal criteria are being fulfilled in China. Specifically
these criteria shall include, but not be limited to:
1. Certification that Westinghouse, for its part, has established
procedures to keep the Chinese from transferring nuclear technology to
any country.
2. Certification that any nuclear power plants identified with our Company
in China meet standards established in the U.S.A. and/or the EEC.
3. Certification that, at least on all company premises and with all
Company workers, basic human rights are being realized. In this, we
recommend the company use those standards being promoted by Human Rights
Watch.
The shareholders shall be given these assurances each year in the annual
report.
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SUPPORTING STATEMENT
As shareholders concerned about realizing good dividends, we realize China
holds enormous potential profits for Westinghouse. Indeed, Business Week
estimates that the Company will "get a third of its sales from nuclear energy,
where sales have been declining for the last decade." It also has declared that
"China represents a badly needed growth opportunity for Westinghouse. It may
even be the key to survival for the $3.2 billion industrial group." (09/08/97)
However, we believe human, social and environmental criteria need to be
balanced with fiscal concerns in a way that will not find the company gaining a
market at the expense of its soul.
In a New York Times piece, A. M. Rosenthal stated, "The Chinese Communists
are creating a system in which controlled capitalism and tyranny work
together ... But if American businesses do not care that their country and
company help finance torture cells, what can an individual do about it? Use the
stockholder's right to demand a rights code for every U.S. business investing in
China."
If you agree and want to be assured that our nuclear energy secrets are not
being communicated to potential enemies who may use that information for
destructive purposes and that anyone working for our Company anywhere in the
world, including China, should be assured of basic human rights, please vote
"yes" for this resolution.
THE RECOMMENDATION OF THE BOARD OF DIRECTORS
CBS recognizes the importance, from both an ethical and business point of
view, of operating its business in accordance with all applicable U.S. and
foreign laws and ensuring that the rights of its employees are respected.
Because the Company has been and intends to continue adhering to those laws and
standards in reference to China, it believes the Company is already fulfilling
the criteria outlined in the Proposal and therefore opposes the Proposal.
The Company has a policy in place regarding the export and re-export of
nuclear equipment. In addition, the Company operates all of its businesses in
compliance with all applicable U.S. and foreign laws. In the case of its nuclear
business, the Company obtains the necessary assurances that any nuclear
technology transferred to a foreign country will not be re-transferred except in
compliance with U.S. laws.
With regard to safety standards for nuclear plants, the Company designs its
nuclear plants to meet current safety requirements prescribed by the U.S.
Nuclear Regulatory Commission, the governmental agency that sets safety
standards in the United States for nuclear plants. While a plant supplied by the
Company in a particular country may be modified, the basic design meets U.S.
safety standards.
The Company leases a few offices, provides services to customers and
participates in joint ventures, but does not own any property in China. We can
assure our shareholders that the Company affords basic human rights to all
persons it employs in China. Our most significant operations in China are joint
ventures with Chinese partners.
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The joint venture locations are owned or managed by local Chinese management and
are primarily controlled by our Chinese joint venture partners.
In some respects, the Company believes that the human rights issues raised
in this proposal are best dealt with at a government-to-government level. When
President Clinton met with Chinese President Jiang Zemin in October 1997, human
rights issues were an important topic in their discussions. At the end of their
discussions, President Clinton was sufficiently satisfied to indicate that he
intended to begin the process of certifying China so U.S. companies would be
permitted to sell nuclear technology to China.
Finally, while we do not want to minimize the importance of this Proposal,
those businesses that account for substantially all of our operations in China
are expected to be sold by the end of 1998. In fact, the Company has reached an
agreement to sell its Power Generation business unit to a subsidiary of Siemens
A.G. This transaction is expected to close by the end of the third quarter of
1998.
The persons named in the enclosed proxy card (Messrs. Jordan, Karmazin and
Briskman) have advised that they intend to vote against the proposed resolution
unless a contrary direction is indicated on the proxy card.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE
PROPOSED RESOLUTION.
The affirmative vote of a majority of the votes cast by the shareholders on
this proposal is required for passage.
VOTING INFORMATION
Under Pennsylvania law and the Company's Restated Articles of Incorporation
and bylaws, the presence of a quorum is required to transact business at the
1998 Annual Meeting of Shareholders. A quorum is defined as the presence, either
in person or by proxy, of a majority of the votes that all shareholders are
entitled to cast at the meeting. Abstentions, votes withheld from director
nominees and broker-dealer non-votes will be counted for purposes of determining
a quorum.
Assuming the presence of a quorum, (i) the 12 nominees for director
receiving the highest number of votes will be elected directors and (ii) the
affirmative vote of a majority of the votes cast by the shareholders is required
for the election of independent auditors, adoption of the 1998 Executive Annual
Incentive Plan and adoption of the shareholder proposals.
Abstentions and broker-dealer non-votes are not counted in determining the
numbers of votes cast in connection with the election of independent auditors,
adoption of the 1998 Executive Annual Incentive Plan or adoption of
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the shareholder proposals. While abstentions and broker-dealer non-votes are not
cast and therefore do not count either for or against the election of
independent auditors, adoption of the 1998 Executive Annual Incentive Plan or
adoption of the shareholder proposals, they do have the practical effect of
reducing the number of affirmative votes required to achieve majority in each of
these matters.
SHAREHOLDER PROPOSAL SUBMISSIONS FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
To be considered for inclusion in the proxy materials relating to the 1999
Annual Meeting of Shareholders, shareholder proposals must be received at the
principal executive offices of CBS on or before November 25, 1998.
SOLICITATION OF PROXIES
This solicitation of proxies is made on behalf of the Board of Directors of
the Company. Solicitation will be by mail, except for any personal solicitation
made orally or in writing by or under the direction of directors, officers or
employees of CBS. The cost of solicitation, including the cost of any such
personal solicitation, will be paid by the Company. CBS may request persons such
as brokers, nominees and fiduciaries holding stock in their names to forward
proxy materials to the beneficial owners, and it will reimburse such persons for
their reasonable expenses incurred in doing so. In addition, CBS has retained
Georgeson & Company Inc., Wall Street Plaza, New York, New York 10005, for a fee
of $12,000 plus incidental and related expenses, to assist in providing proxy
materials to brokers, nominees, fiduciaries and individuals (other than officers
of the Company) holding sizable amounts of stock and in soliciting proxies from
them.
A shareholder giving a proxy has the power to revoke the proxy by
delivering a later-dated and signed proxy or written notice of revocation to the
Secretary prior to the time voting is declared closed or by attending the
meeting and voting in person. All proxies will be voted if properly signed,
received by the Secretary prior to the time voting is declared closed and not
revoked prior to that time.
As of the time of preparation of this proxy statement, the Board knows of
no matter, other than those described in the foregoing paragraphs, that will be
presented at the 1998 Annual Meeting of Shareholders. However, if any other
matters properly come before the meeting or any adjournment thereof, the person
or persons voting the proxies will vote them in accordance with their best
judgment.
March 25, 1998
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EXHIBIT A
CBS CORPORATION
1998 EXECUTIVE ANNUAL INCENTIVE PLAN
SECTION 1. PURPOSE
1.1 The purpose of the CBS Corporation 1998 Executive Annual Incentive
Plan is to provide competitive annual or other incentive opportunities that
foster and promote the financial success of the Company by: (a) aiding the
Company in attracting and retaining key executives of outstanding ability; (b)
strengthening the Company's capability to develop, maintain and direct a
competent management team; and (c) motivating key executives who are in a
position to contribute materially to the success of the Company to achieve
measurable performance goals. The Plan is intended to permit the Company to pay
annual incentives to Participants who are Covered Employees that qualify as
performance-based compensation for purposes of Section 162(m) of the Internal
Revenue Code and that are fully deductible by the Company under the Code.
1.2 Certain terms used in the Plan are defined in Section 10.
SECTION 2. EFFECTIVE DATE
2.1 The Plan is effective as of January 1, 1998, subject to approval of
the Plan by the shareholders of the Company at the Company's 1998 Annual Meeting
of Shareholders.
SECTION 3. ELIGIBILITY; SELECTION FOR PARTICIPATION
3.1 Participation in the Plan will be limited to key executives of the
Company and/or its subsidiaries who are designated by the Committee as
Participants for a given Performance Period. In making this designation, the
Committee may give consideration to the functions and responsibilities of the
executive, his or her past, present and potential contributions to the Company,
and other factors deemed relevant by the Committee.
SECTION 4. AWARDS
4.1 The Committee may award incentives to Participants with respect to
Performance Periods, subject to the terms and conditions set forth in the Plan.
4.2 The Committee will establish one or more objective performance
goals for a given Performance Period. Such performance goal or goals will be
based on one or more of the following business criteria as applied to the
relevant business unit or units, to the Company as a whole, or to any
combination thereof: earnings before interest, taxes, depreciation and
amortization ("EBITDA"); earnings before interest and taxes ("EBIT"); free cash
flow; network ratings; earnings per share; and stock price.
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4.3 The Committee will also establish target and maximum incentive
award opportunity amounts for each Participant for the given Performance Period
and the objective formula or standard that will be used by the Committee to
determine the amount of incentive compensation that may be payable to such
Participant under the Plan if and to the extent that the established performance
goal or goals are achieved; provided, however, that in no event may the maximum
incentive award opportunity or the maximum incentive award for any one
Participant for any Performance Period exceed the amount of six million dollars
($6,000,000). This maximum amount will be adjusted annually to reflect increases
in the Consumer Price Index-U published by the Bureau of Labor Statistics, or
any successor to such index, for each twelve-month period commencing January 1.
4.4 After the close of the Performance Period, the Committee will
determine the extent to which the preestablished performance goal or goals for
that Performance Period have been achieved and the extent to which incentive
compensation for each Participant would be payable based on such performance and
the preestablished formula or method. Regardless of the degree to which a
performance goal or goals are achieved, incentive awards under the Plan will be
paid only when and if the Committee, in its sole discretion, determines to
approve the award or awards. The Committee, in its sole discretion, may reduce
(but may not increase) the amount which would otherwise be payable as incentive
compensation based on the extent to which the preestablished performance goal or
goals have been achieved and the preestablished formula or method, in which case
the Participant will receive only the reduced amount as an incentive award,
which may be zero, even if the performance goal or goals were achieved.
4.5 Appropriate adjustments may be made by the Committee in performance
goals, target and maximum incentive award opportunities, formulas or standards,
and/or in the measurement of the extent of achievement of performance goals to
reflect the impact of acquisitions, divestitures, changes in accounting
standards, or unusual or extraordinary events.
SECTION 5. FORM OF PAYMENT; SHARES OF STOCK
5.1 The Committee will also determine the time, form and manner of
payment of any incentive awards it may approve for payment under the Plan.
Incentive awards may be paid in cash, in Stock Options, in Stock Appreciation
Rights, in other Derivative Securities, in other securities of the Company, or
in any other form that the Committee may determine, or in any combination of
such forms, and may be paid in one or more installments and/or on a deferred
basis or on such other basis as the Committee may determine ("deferrals"), all
on such terms and conditions as are set forth in the Plan and otherwise as the
Committee may from time to time determine.
5.2 The maximum number of shares of Stock that may be issued for all
purposes under the Plan is seven million (7,000,000); and the maximum number of
such shares of Stock subject to Stock Options and Stock Appreciation Rights
granted to any one Participant under the Plan in any one Performance Period is
six hundred thousand (600,000); in each case subject to adjustment and
substitution as set forth in this Section 5.
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5.3 Shares of Stock issued under the Plan may be in whole or in part
authorized and unissued or treasury shares of Stock. No fractional shares will
be issued, and the Committee will determine the manner in which fractional share
value will be treated.
5.4 Any shares of Stock that are issued pursuant to the Plan and are
subsequently forfeited, any shares of Stock subject to a Stock Option, Stock
Appreciation Right and/or other Derivative Security which is canceled or
terminates without any shares having been issued pursuant thereto, any shares of
Stock tendered by a Participant to pay the Exercise Price of a Stock Option or
other Derivative Security, and any shares of Stock tendered or withheld to
satisfy withholding tax requirements will automatically become available again
for use under the Plan; provided, however, this Section 5.4 will apply only to
the 7,000,000 share limit set forth in Section 5.2 (as adjusted in accordance
with the Plan).
5.5 If there is any change in the Stock of the Company, through merger,
consolidation, division, share exchange, combination, reorganization,
recapitalization, stock dividend, stock split, spin-off, split-up, dividend in
kind or other change in the corporate structure or distribution to the
shareholders, appropriate adjustments may be made by the Committee (or if the
Company is not the surviving corporation in any such transaction, the board of
directors (or a committee thereof consisting solely of Outside Directors) of the
surviving corporation) in the aggregate number and kind of shares subject to the
Plan, and the number and kind of shares and the price per share subject to
outstanding Stock Options, Stock Appreciation Rights and other Derivative
Securities or which may be issued under outstanding deferrals. Appropriate
adjustments may also be made by the Committee in the terms of any incentive
award opportunities under the Plan to reflect such changes and to modify any of
the terms of any outstanding Stock Options, Stock Appreciation Rights or other
Derivative Securities or deferrals.
SECTION 6. PAYMENT IN STOCK OPTIONS OR STOCK APPRECIATION RIGHTS
6.1 General. The Committee may, from time to time, subject to the
provisions of the Plan and such other terms and conditions as the Committee may
prescribe, determine that an incentive award or a portion of an incentive award
will be paid in the form of Stock Options or Stock Appreciation Rights. Stock
Appreciation Rights may be granted in tandem with Stock Options or independently
of Stock Options. The number of Stock Options or Stock Appreciation Rights will
be determined by dividing the amount of the incentive award to be paid in the
form of Stock Options or Stock Appreciation Rights by the value, as determined
by the Committee, of a Stock Option or Stock Appreciation Right, as the case may
be, for one share of Stock on the relevant date.
6.2 Stock Option/Stock Appreciation Right Agreement. All Stock Options
and all Stock Appreciation Rights will be evidenced by a signed written
agreement, with any amendments thereto, containing such terms and conditions as
are set forth in the Plan and otherwise as the Committee may from time to time
determine. Stock Appreciation Rights granted in tandem with Stock Options will
be evidenced by the Stock Option agreement. The Committee may also at any time
and from time to time provide for the deferral of delivery of any shares and/or
cash for which the Stock Option or Stock Appreciation Right may be exercisable
until a date or dates and subject to terms and conditions determined by the
Committee.
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6.3 Exercise Price. The purchase price per share of Stock under each
Stock Option and the reference price per share of the Stock to which a Stock
Appreciation Right relates (in either case, "Exercise Price") will not be less
than the Fair Market Value of such Stock on the date the Stock Option is
granted. A Stock Appreciation Right may be exercised only when the Fair Market
Value of the Stock to which it relates exceeds the Exercise Price.
6.4 Rights as a Shareholder. The holder of a Stock Option, Stock
Appreciation Right or other Derivative Security will not have any of the rights
of a shareholder with respect to any shares of Stock that may be subject or
relate thereto unless and until such shares are issued by the Company following
its exercise or otherwise.
SECTION 7. ADMINISTRATION
7.1 The Plan will be administered by the Committee. Subject to the
terms of the Plan, the Committee will have the sole and complete authority: (a)
to designate Participants, to approve incentive awards, to determine the time,
form and manner of payment of any incentive awards it may approve, and to impose
such limitations, restrictions and conditions thereon as the Committee deems
appropriate; (b) to interpret the Plan and the terms of any document relating to
the Plan and to adopt, amend and rescind administrative guidelines and other
rules and regulations relating to the Plan; (c) to accelerate the time at which
all or any part of Stock Options, Stock Appreciation Rights and/or other
Derivative Securities may be exercised or the time when all or any part of
deferrals and/or Derivative Securities will be paid; (d) to otherwise amend or
cancel incentive award opportunities, Stock Options, Stock Appreciation Rights
or other Derivative Securities or deferrals under the Plan in whole or in part,
except that the Committee may not, unless otherwise provided in the Plan or
unless the Participant affected thereby consents, take any action under this
clause that would adversely affect the rights of such Participant with respect
to outstanding Stock Options, Stock Appreciation Rights or other Derivative
Securities or deferrals under the Plan, and except that the Committee may not,
unless otherwise provided in the Plan, take any action to amend any outstanding
Stock Option or Stock Appreciation Right under the Plan in order to decrease the
Exercise Price of such Stock Option or Stock Appreciation Right; and (e) to make
all other determinations and to take all other actions necessary or advisable
for the interpretation, implementation and administration of the Plan.
7.2 The Committee's determinations on matters within its authority will
be conclusive and binding upon the Company and all other persons unless and
until the Committee determines otherwise.
SECTION 8. GENERAL PROVISIONS
8.1 No Right to Awards or to Employment. No employee or other person
will have any claim or right to be designated as a Participant or to receive an
incentive award under the Plan. Participation in the Plan will not be construed
as a right to employment or other relationship(s) with the Company, and the
Company retains the right to terminate the employment or other relationship(s)
of an individual with the Company for any reason, with or without cause.
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8.2 Assignability. During a Participant's lifetime, payments or
distributions under the Plan may be received only by the Participant or his or
her legal representative. Shares of restricted Stock during the applicable
restriction period, Stock Options, Stock Appreciation Rights, other Derivative
Securities, rights to deferral payments and any other rights or benefits under
the Plan will not be transferable or assignable by a Participant other than by
will, by the applicable laws of descent and distribution, or by transfer to a
Properly Designated Beneficiary in the event of death; provided, however, that
the Committee may, in its sole discretion, permit the transfer of Stock Options
(including any tandem Stock Appreciation Rights) by a Participant to Permissible
Transferees, subject to such terms and conditions as the Committee may
determine. Any transfer or assignment contrary to these provisions will be null
and void.
8.3 Tax Withholding. The Company will collect, through withholdings or
otherwise, an amount sufficient to satisfy all applicable federal, state and
local withholding tax requirements with respect to payments made pursuant to the
Plan.
8.4 Non-Uniform Determinations. The Committee's determinations under
the Plan, including without limitation, (a) the selection of Participants, (b)
the form, amount, timing and payment of incentive awards, (c) the terms and
provisions of incentive awards and the payment thereof, and (d) any agreements
evidencing the same, need not be uniform and may be made by it selectively among
Participants who receive, or who are eligible to receive, incentive awards,
whether or not such Participants are similarly situated.
8.5 Designation of Beneficiaries. The Committee may establish or
authorize the establishment of procedures not inconsistent with Section 8.2
under which a Participant may designate a beneficiary or beneficiaries in the
event of the Participant's death.
8.6 Non-Funded Plan. The Company will not be required to establish any
special or separate fund or to segregate any assets for purposes of the Plan.
8.7 Other Plans or Compensation Arrangements. Nothing contained in the
Plan will be deemed to limit or restrict the right of the Company and its
subsidiaries to compensate any of their key executives and/or employees in whole
or in part under separate bonus or incentive plans or other compensation
arrangements.
8.8 Governing Law. The Plan and all agreements or other documents
relating to the Plan will be construed in accordance with and governed by the
laws of the Commonwealth of Pennsylvania, without regard to the principles of
conflict of laws.
SECTION 9. CHANGE IN CONTROL
9.1 Effect of Change in Control. Upon the determination of the
Committee that a change in control has occurred for purposes of the Plan, the
Committee may deem all or any part of any incentive award opportunity to have
been earned on such basis as the Committee may determine, and incentive awards
and outstanding Derivative Securities and deferrals may then be paid and Stock
Options, Stock Appreciation Rights and other Derivative
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Securities may then be modified, and all or any part of any restrictions or
conditions may be waived or modified, all on such basis, at such time (which
may, in the case of incentive awards, be prior to the end of the Performance
Period), in such form and subject to such terms and conditions as the Committee
may prescribe.
SECTION 10. CERTAIN DEFINITIONS
10.1 Definitions. The following terms or phrases will have the meanings
set forth below.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" or "Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended from time to time, or any successor statute or statutes.
Reference to any specific Code section will include any successor section.
(c) "Committee" means the Compensation Committee of the Board (or a
subcommittee thereof) or any successor committee (or a subcommittee thereof)
established by the Board; provided, however, the Committee must consist of at
least two members and each member of the Committee must be an Outside Director.
(d) "Company" means CBS Corporation, a Pennsylvania corporation, and
any successor thereto.
(e) "Covered Employee" means a person who is a covered employee within
the meaning of Section 162(m) of the Code and regulations promulgated
thereunder.
(f) "Derivative Security" means a derivative security with respect to
an equity security of the Company, where "derivative security" has the meaning
set forth in Rule 16a-1(c) under the Exchange Act, as such rule may be amended
from time to time, or any successor rule.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(h) "Exercise Price" has the meaning assigned to it in Section 6.3.
(i) "Fair Market Value" means the mean of the high and low prices of
the Stock as reported by the Composite Tape of the New York Stock Exchange (or
such successor reporting system as may be selected by the Committee) on the
relevant date or, if no sale of the Stock has been reported for that day, the
average of such prices on the next preceding day and the next following day for
which there were reported sales.
(j) "Immediate Family" has the meaning set forth in Rule 16a-1(e) under
the Exchange Act, as such rule may be amended from time to time, or any
successor rule.
(k) "Outside Director" means an outside director as that term is
defined by Section 162(m) of the Code and regulations promulgated thereunder.
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(l) "Participant" means a key executive of the Company and/or its
subsidiaries who is designated by the Committee as a Plan participant for a
given Performance Period in accordance with Section 3.1.
(m) "Performance Period" means a calendar year or other fiscal year of
the Company or other longer or shorter period designated by the Committee with
respect to which incentive awards may be paid.
(n) "Permissible Transferee" means any of the following: (1) a member
of the Participant's Immediate Family; (2) a trust solely for the benefit of the
Participant and/or the Participant's Immediate Family; and (3) a partnership or
limited liability company whose only partners or members, as the case may be,
are the Participant and/or Permissible Transferees as otherwise identified in
this definition.
(o) "Plan" means the Company's 1998 Executive Annual Incentive Plan, as
amended from time to time.
(p) "Properly Designated Beneficiary" means a beneficiary or
beneficiaries designated by a Participant pursuant to Section 8.5 in the event
of the Participant's death.
(q) "Stock" means the common stock and any other equity stock of the
Company.
(r) "Stock Appreciation Right" means a right to receive, on exercise,
an amount, in cash or Stock or a combination thereof (such form to be determined
by the Committee), determined by reference to appreciation in Stock value.
(s) "Stock Option" means a non-statutory stock option (that is, a Stock
Option which is not an incentive stock option as defined in Section 422(b) of
the Code) to purchase shares of Stock for the purchase price set forth in the
relevant Stock Option Agreement, all in accordance with the terms of the Plan.
10.2 Sections; Number. Except where otherwise indicated by the context,
references to sections will mean the Sections of the Plan and the definition of
any term herein in the singular will also include the plural. Section or
subsection headings are inserted for convenience only. Such headings will not
affect the meaning of any of the provisions of the Plan and will not be deemed a
part of the Plan.
SECTION 11. AMENDMENT, SUSPENSION AND/OR TERMINATION OF PLAN
11.1 The Board of Directors or the Committee may at any time and from
time to time amend the Plan, in whole or in part, for any purpose, or may at any
time or from time to time suspend or terminate the Plan.
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[CBS LOGO]
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ADMISSION TICKET
1998 ANNUAL MEETING
OF
SHAREHOLDERS
OF
CBS CORPORATION
MAY 6, 1998
10:30 A.M.
SHERATON NEW YORK HOTEL
811 SEVENTH AVENUE (AT 52ND STREET)
NEW YORK, NEW YORK
DETACH PROXY CARD HERE
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3 AND AGAINST ITEMS 4, 5, 6 AND 7.
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1. Election of Directors. (see reverse)
FOR [ ] WITHHOLD [ ] FOR ALL WITH [ ]
ALL FROM ALL EXCEPTIONS
BELOW
Exceptions
-------------------------------------------------------
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s)
mark the exceptions box and write the name(s) on the space provided above.
2. The Election of Independent Auditors. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
3. Approve the CBS [ ] [ ] [ ] 6. Shareholder Proposal: [ ] [ ] [ ]
Corporation 1998 Reporting of Soft Dollar
Executive Annual Contributions.
Incentive Plan.
4. Shareholder Proposal: [ ] [ ] [ ] 7. Shareholder Proposal: [ ] [ ] [ ]
Link Compensation to Stop Expansion into
Financial and Social China and Begin No New
Issues. Operations in China.
5. Shareholder Proposal: [ ] [ ] [ ] -------------------------------------------------------------
Change the Annual If you receive more than one Annual Report at
Meeting Date. the address set forth on this proxy and have no
need for the extra copy, please check the box at [ ]
the right. This will not affect the distribution
of proxy statements or any other mailings.
To change your address please mark [ ]
The shares represented by this Proxy Card will be voted as this box and correct on reverse side.
specified above, but if no specification is made they will
be voted FOR items 1, 2 and 3 and AGAINST items 4, 5, 6 and 7 If you plan to attend the Annual Meeting [ ]
and at the discretion of the proxies on any other matter that please check this box.
may properly come before the meeting.
NOTE: Please sign exactly as name appears hereon. Joint owners, group each
sign. When signing as attorney, executor, administrator, trustee, or
guardian, give full title as such.
--------------------------------------------------------------------------
Signature or Share Owner(s)
--------------------------------------------------------------------------
Signature or Share Owner(s)
Dated: , 1998
------------------------------------------------------------
PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE. VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. [ X ]
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DETACH PROXY CARD HERE
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS, MAY 6, 1998
(See Proxy Statement for discussion of items.)
The undersigned hereby appoints Michael H. Jordan, Mel Karmazin and Louis J.
Briskman, and each of them, jointly and severally, as proxies, with power of
substitution, to vote all shares of CBS Corporation common stock which the
undersigned is entitled to vote on all matters which may properly come before
the 1998 Annual Meeting of Shareholders of CBS Corporation, or any adjournment
thereof.
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ELECTION OF DIRECTORS, NOMINEES: (change of address)
Robert E. Cawthorn, George H. Conrades,
Martin C. Dickinson, William H. Gray III, ------------------------------------------
Michael H. Jordan, Mel Karmazin, Jan
Leschly, David T. McLaughlin, Richard R. ------------------------------------------
Pivirotto, Raymond W. Smith, Paula Stern
and Robert D. Walter. ------------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.
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You are encouraged to specify your choices by marking the appropriate boxes on
the reverse side. The proxies cannot vote your shares unless you sign and
return this proxy card.
CBS CORPORATION
P.O. BOX 11004
NEW YORK, N.Y. 10203-0004
SEE REVERSE
SIDE
