================================================================================
The following items
were the subject of a
Form 12b-25 and included
herein: Part III, Items
10, 11, 12 and 13.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
-----------------
FORM 10-K/A
AMENDMENT NO. 2
(Mark One)
/ / Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
OR
/ X / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from May 1, 1993 to March 31, 1994 (1)
Commission file number 1-5404
PARAMOUNT COMMUNICATIONS INC.
(Exact name of registrant as specified in its charter)
Delaware 74-1330475
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
15 Columbus Circle, New York, New York 10023-7780
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 212-373-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
7% Subordinated Debentures, Series A due 2003 ]
7% Subordinated Debentures, Series B due 2003 ] New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes / X / . No / / .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / X /
The registrant became a wholly owned subsidiary of Viacom Inc. on July 7,
1994.
_______________________________
(1) The registrant has changed its fiscal year end from April 30 to March
31. This transition report is for the eleven months ended March 31, 1994.
================================================================================
<PAGE>
PARAMOUNT COMMUNICATIONS INC.
The registrant hereby amends the cover page and adds the following items to its
Transition Report on Form 10-K for the eleven months ended March 31, 1994, as
set forth in the pages attached hereto:
Item 10. Directors and Executive Officers of the Registrant.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Item 13. Certain Relationships and Related Transactions.
<PAGE>
Part III
Item 10. Directors and Executive Officers of the Registrant.
On March 11, 1994, Viacom Inc. ("Viacom") completed its purchase of a
majority of the outstanding common stock of the Company. On July 7, 1994, a
wholly owned subsidiary of Viacom merged with and into the Company (the
"Merger") and as a result, Viacom now owns 100% of the outstanding capital stock
of the Company. The Directors of the Company are now the same as the Directors
of Viacom. The names, business experience for the past five years and ages* of
all Directors of the Company are listed below:
George S. Abrams, 62, associated with Winer & Abrams, a law firm
located in Boston, Massachusetts, for more than five years. Mr. Abrams has been
a director of Viacom and Viacom International since 1987 and became a director
of Paramount in 1994 and National Amusements, Inc. ("NAI") in 1992. He is the
former General Counsel and Staff Director of the United States Senate Judiciary
Committee on Refugees. Mr. Abrams is also a member of the Boards of Trustees
and Visiting Committees of a number of art museums, art-related organizations
and educational institutions.
Frank J. Biondi, Jr., 49, President, Chief Executive Officer of Viacom
and Viacom International since July 1987 and Paramount since March 1994. Mr.
Biondi has been a director of Viacom and Viacom International since 1987 and
became a director of Paramount in 1994. From November 1986 to July 1987, Mr.
Biondi was Chairman, Chief Executive Officer of Coca-Cola Television and, from
1985, Executive Vice President of the Entertainment Business Sector of The Coca-
Cola Company. Mr. Biondi joined Home Box Office in 1978 and held various
positions there until his appointment as President, Chief Executive Officer in
1983. In 1984, he was elected to the additional position of Chairman and
continued to serve in such capacities until October 1984. Mr. Biondi recently
became a director of Maybelline, Inc.
Philippe P. Dauman, 40, Executive Vice President, General Counsel,
Chief Administrative Officer and Secretary of Viacom, Viacom International and
Paramount since March 1994. Mr. Dauman has been a director of Viacom and Viacom
International since 1987 and became a director of Paramount in 1994 and NAI in
1992. From February 1993 to March 1994, Mr. Dauman served as Senior Vice
President, General Counsel and Secretary of Viacom and Viacom International.
Prior to that, Mr. Dauman was a partner in the law firm of Shearman & Sterling
in New York, which he joined in 1978.
William C. Ferguson, 63, Chairman of the Board and Chief Executive
Officer of NYNEX since October 1989. Mr. Ferguson has been a director of Viacom
and Viacom International since 1993 and became a director of Paramount in 1994.
He served as Vice Chairman of the Board of NYNEX from 1987 to 1989 and as
President and Chief Executive Officer from June to September 1989. He has
served as a director of NYNEX since 1987. He is also a director of CPC
International, Inc. and General Re Corporation.
H. Wayne Huizenga, 56, Chairman of the Board and Chief Executive
Officer of Blockbuster since April 1987. Mr. Huizenga has been a director of
Viacom and Viacom International since 1993 and became a director of Paramount in
1994. He served as President of Blockbuster from April 1987 until June 1988.
He is a co-founder of Waste Management, Inc. (now WMX Technologies, Inc.), a
waste disposal and collection company, where he served in various capacities,
including President, Chief Operating Officer and a director, until May 1984.
From May 1984 to the present, Mr. Huizenga has been an investor in other
businesses and is the sole stockholder and Chairman of the Board of Huizenga
Holdings, Inc., a holding and management company with various business
interests. In connection with these business interests, Mr. Huizenga has been
<PAGE>
actively involved in strategic planning for, and executive management of, these
businesses. He also has a majority ownership interest in Florida Marlins
Baseball, Ltd., a Major League Baseball sports franchise, owns the Florida
Panthers Hockey Club, Ltd., a National Hockey League sports franchise, owns the
Miami Dolphins, Ltd. ("Miami Dolphins"), a National Football League sports
franchise, and owns Joe Robbie Stadium in South Florida. He is Chairman of the
Board of Directors of Spelling Entertainment Group Inc. He is also a director
of Discovery Zone.
Ken Miller, 51, Vice Chairman of C.S. First Boston since June 1994.
Mr. Miller has been a director of Viacom and Viacom International since 1987 and
became a director of Paramount in 1994. He was President and Chief Executive
Officer of The Lodestar Group, an investment firm from 1988 to June 1994 and
Vice Chairman of Merrill Lynch Capital Markets during 1987 and a Managing
Director of Merrill Lynch Capital Markets for more than the preceding five
years. He is Chairman of the Board of Directors of Kinder-Care Learning
Centers, Inc.
Brent D. Redstone, 44, Assistant District Attorney for Suffolk County,
Massachusetts from 1976 to October 1991, serving from 1988 through 1991 on the
Homicide Unit responsible for the investigation and trial of homicide cases.
Mr. Redstone has been a director of Viacom and Viacom International since 1991
and became a director of Paramount in 1994 and NAI in 1992. Mr. Redstone is the
son of Sumner Redstone.
Sumner M. Redstone, 71, Chairman of the Board of Viacom and Viacom
International since June 1987 and Paramount since April 1994. He has been a
director of Viacom and Viacom International since 1986 and became a director of
Paramount in April 1994. Mr. Redstone served as President of Viacom from its
formation until June 1987. He has served as Chairman of the Board of NAI since
1986 and President, Chief Executive Officer of NAI since 1967. Mr. Redstone is
the former Chairman of the Board of the National Association of Theater Owners
and is currently a member of its Executive Committee. During the Carter
Administration, Mr. Redstone was appointed a member of the Presidential Advisory
Committee on the Arts for the John F. Kennedy Center for the Performing Arts
and, in 1984, he was appointed a Director of the Kennedy Presidential Library
Foundation. Mr. Redstone has recently accepted a visiting professorship at
Brandeis University. Since 1982, Mr. Redstone has been a member of the faculty
of Boston University Law School, where he has lectured in entertainment law.
Mr. Redstone graduated from Harvard University in 1944 and received an LL.B.
from Harvard University School of Law in 1947. Upon graduation, Mr. Redstone
served as Law Secretary with the United States Court of Appeals, and then as a
Special Assistant to the United States Attorney General.
Frederic V. Salerno, 51, Vice Chairman - Finance and Business
Development of NYNEX since March 1, 1994. Mr. Salerno has been a director of
Viacom and Viacom International since 1994 and became a director of Paramount in
1994. He was Vice Chairman of the Board of NYNEX and President of the Worldwide
Services Group from 1991 to 1994 and President and Chief Executive Officer of
New York Telephone Company from 1987 to 1991. He also serves as a director of
NYNEX, The Bear Stearns Companies Inc. and Avnet, Inc.
William Schwartz, 61, Vice President for Academic Affairs (the chief
academic officer) of Yeshiva University since 1992 and University Professor of
Law at Yeshiva University and the Cardozo School of Law since 1991. Mr.
Schwartz has been a director of Viacom and Viacom International since 1987 and
became a director of Paramount in 1994. He has been of Counsel to Cadwalader,
Wickersham & Taft since 1988. Mr. Schwartz was Dean of the Boston University
School of Law from 1980 to 1988, a professor of law at Boston University from
1955 to 1991 and Director of the Feder Center for Estate Planning at Boston
University School of Law from 1988 to 1991. He has served as Chairman of the
Board of Directors of UST Corporation since 1993. He previously served as Vice
Chairman of UST Corporation since 1985 and has been a director of UST
<PAGE>
Corporation for more than five years. Mr. Schwartz is a trustee of several
educational and charitable organizations and an honorary member of the National
College of Probate Judges. He served as Chairman of the Boston Mayor's Special
Commission on Police Procedures and was formerly a member of the Legal Advisory
Board of the NYSE.
The executive officers of the Company are now the same as the
executive officers of Viacom. The names, business experience for the past five
years and ages* of all such executive officers (who are not Directors) are
listed below:
Raymond A. Boyce, 58, Senior Vice President, Corporate Relations of
Viacom, Viacom International and Paramount. Mr. Boyce assumed his present
position with Viacom and Viacom International in 1988 and with Paramount in July
1994. Prior to that, he served as Vice President, Public Relations of the
Entertainment Business Sector of The Coca-Cola Company from 1982 to 1987. In
1979, Mr. Boyce joined Columbia Pictures Industries, Inc. and served first as
Director, Corporate Communications and later as Vice President, Corporate
Communications until The Coca-Cola Company's acquisition of Columbia Pictures
Industries, Inc. in 1982.
Vaughn A. Clarke, 41, Senior Vice President, Treasurer of Viacom,
Viacom International and Paramount. Mr. Clarke assumed his present position in
July 1994. From April 1993 to July 1994, he served as Vice President, Treasurer
of Viacom and Viacom International. Prior to that, he spent 12 years at Gannett
Co., Inc., where he held various management positions, most recently as
Assistant Treasurer.
Thomas E. Dooley, 37, Executive Vice President, Finance, Corporate
Development and Communications of Viacom, Viacom International and Paramount.
Mr. Dooley was elected to his present position in March 1994. From July 1992 to
March 1994, he served as Senior Vice President, Corporate Development of Viacom
and Viacom International. From August 1993 to March 1994, he also served as
President, Interactive Television of Viacom International. Prior to that, he
served as Vice President, Treasurer of Viacom and Viacom International since
1987. In December 1990, he was named Vice President, Finance of Viacom and
Viacom International. Mr. Dooley joined Viacom International in 1980 in the
corporate finance area and held various positions in the corporate and
divisional finance areas, including Director of Business Analysis from 1985 to
1986.
Michael D. Fricklas, 34, Senior Vice President, Deputy General Counsel
of Viacom, Viacom International and Paramount. Mr. Fricklas was elected to his
present position with Viacom and Viacom International in March 1994 and with
Paramount in April 1994. From July 1993 to March 1994, he served as Vice
President, Deputy General Counsel of Viacom and Viacom International. He served
as Vice President, General Counsel and Secretary of Minorco (U.S.A.) Inc. from
1990 to 1993. Prior to that, Mr. Fricklas was an attorney in private practice
at the law firm of Shearman & Sterling.
Rudolph L. Hertlein, 54, Senior Vice President of Viacom, Viacom
International and Paramount. Mr. Hertlein assumed his present position in July
1994. Prior to that, he served as Senior Vice President and Controller of
Paramount from September 1993 to July 1994 and as Senior Vice President,
Internal Audit and Special Projects from September 1992 to September 1993 and,
before that, as Vice President, Internal Audit and Special Projects.
Edward D. Horowitz, 46, Senior Vice President, Technology of Viacom,
Viacom International and Paramount. Chairman, Chief Executive Officer of New
Media and Interactive Television since March 1994. He was elected to his
<PAGE>
present position with Viacom and Viacom International in March 1994 and with
Paramount in July 1994. Mr. Horowitz became Senior Vice President of Viacom
and Viacom International in April 1989 and served as Chairman, Chief Executive
Officer of Viacom Broadcasting from July 1992 to March 1994.
Kevin C. Lavan, 42, Senior Vice President, Controller and Chief
Accounting Officer of Viacom, Viacom International and Paramount. Mr. Lavan was
elected to his present position in July 1994. Mr. Lavan was elected Vice
President of Viacom and Viacom International in May 1989. He was elected
Controller, Chief Accounting Officer of Viacom and Viacom International in
December 1987. In December 1990, he assumed the added responsibilities of
oversight of tax matters. From 1991 to 1992, he also served as Senior Vice
President, Chief Financial Officer of Viacom Pictures. Mr. Lavan joined Viacom
International in 1984 as Assistant Controller.
Henry J. Leingang, 45, Senior Vice President, Chief Information
Officer of Viacom, Viacom International and Paramount. Mr. Leingang was elected
to his present position with Viacom and Viacom International in May 1993 and
with Paramount in July 1994. Prior to that, he served as Vice President, Chief
Information Officer when he joined Viacom in 1990. Mr. Leingang was Vice
President, Information Services of the Trian Group (formerly Triangle
Industries) from 1984 to 1990.
William A. Roskin, 52, Senior Vice President, Human Resources and
Administration of Viacom, Viacom International and Paramount. Mr. Roskin was
elected to his present position with Viacom and Viacom International in July
1992 and with Paramount in July 1994. Prior to that, he served as Vice
President, Human Resources and Administration of Viacom and Viacom International
from April 1988 to July 1992.
George S. Smith, Jr., 45, Senior Vice President, Chief Financial
Officer of Viacom, Viacom International and Paramount. Mr. Smith was elected to
his present position with Viacom and Viacom International in November 1987 and
with Paramount in April 1994.
Mark M. Weinstein, 52, Senior Vice President, Government Affairs of
Viacom, Viacom International and Paramount. Mr. Weinstein was elected to his
present position with Viacom and Viacom International in February 1993 and with
Paramount in July 1994. Prior to that, Mr. Weinstein served as Senior Vice
President, General Counsel and Secretary of Viacom and Viacom International from
1987 to February 1993.
__________
*As of August 8, 1994
The term of office of all directors is until the next annual meeting
and the term of office of all officers is for one year and until their
successors are chosen and qualify.
<PAGE>
Item 11. Executive Compensation.
<TABLE>
Summary Compensation Table
--------------------------
<CAPTION>
Long Term Compensation
----------------------------------------------------
Awards
Annual Compensation ------ Payouts
------------------- Restricted -------
Year Stock LTIP All Other
Name and Principle Position or Period Salary Bonus(c) Awards($)(d) Options(#) Payouts(e) Compensation(f)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank J. Biondi, Jr. 11-mos ended 3/31/94 0 0 0 0 0 0
President and
Chief Executive Officer(a)
Martin S. Davis 11-mos ended 3/31/94 $874,522 $ 750,000 0 0 $233,900 $11,159,851
former Chairman of the Board 6-mos ended 4/30/93 471,096 750,000 0 0 233,900 21,652
and Chief Executive Officer(b) 1992 950,000 2,695,600 0 0 904,400 21,310
Stanley R. Jaffe 11-mos ended 3/31/94 $699,617 $ 600,000 0 0 $187,100 $9,284,632
former President and 6-mos ended 4/30/93 376,877 600,000 0 0 187,100 8,016
Chief Operating Officer(b) 1992 760,000 2,156,500 0 0 723,500 25,461
Donald Oresman 11-mos ended 3/31/94 $598,357 $175,000 0 0 $ 98,650 $2,131,445
former Executive VP and 6-mos ended 4/30/93 322,329 175,000 0 0 98,650 11,016
General Counsel(b) 1992 650,000 403,000 0 0 255,500 17,501
Earl H. Doppelt 11-mos ended 3/31/94 $230,137 $57,750 0 0 $28,900 $11,353
former Senior VP and 6-mos ended 4/30/93 117,899 57,750 0 0 28,900 8,016
Deputy General Counsel(b) 1992 234,117 84,100 0 10,000 85,500 11,080
Rudolph L. Hertlein 11-mos ended 3/31/94 $207,124 $57,750 0 0 $32,050 $10,702
Senior VP 6-mos ended 4/30/93 106,613 57,570 0 0 32,050 7,591
1992 203,612 81,700 0 15,000 73,100 9,820
Lawrence E. Levinson 11-mos ended 3/31/94 $253,151 $50,000 0 0 $34,050 $11,526
Senior Washington Counsel(b) 6-mos ended 4/30/93 126,575 50,000 0 0 34,050 8,016
1992 262,836 86,500 0 0 93,900 11,066
Jerry Sherman 11-mos ended 3/31/94 $253,151 $48,150 0 0 $29,400 $1,184,586
former Senior VP(b) 6-mos ended 4/30/93 122,029 48,150 0 0 29,400 8,016
1992 247,533 86,500 0 37,500 86,100 11,066
<FN>
- ----------------
(a) Mr. Biondi was elected President and CEO of the Company on March 18, 1994, after the Company was a majority owned subsidiary
of Viacom. As President and CEO of Viacom, he receives compensation for his services to Viacom but no separate compensation
for his positions with the Company.
(b) Executive officer status with the Company terminated as follows: Messrs. Davis, Jaffe and Oresman on March 18, 1994;
Mr. Doppelt on May 20, 1994; Mr. Levinson on May 31, 1994; Mr. Sherman on May 16, 1994.
(c) Awards under the Annual and Long-Term Performance Plans were granted in December 1993 with respect to the twelve-month period
ended October 31, 1993. For purposes of inclusion in the above table, one half of each award has been allocated for the six
months ended April 30, 1993 and one half of each award has been allocated for the six months ended October 31, 1993. No awards
were granted for the five months ended March 31, 1994.
(d) No shares of Common Stock owned by the listed executives were subject to restrictions at March 31, 1994.
(e) Awards are payable 50% in shares of Common Stock and 50% in cash.
(f) The following amounts are included in the above table. Contributions made under the Employees' Savings Plan in the eleven
months ended March 31, 1994 were: Mr. Davis $4,500; Mr. Jaffe $9,432; Mr. Oresman $9,398; Mr. Doppelt $6,636; Mr. Hertlein
$6,214; Mr. Levinson $6,809; Mr. Sherman $6,809. Contributions made under the ESOP in the eleven months ended March 31, 1994
were: Mr. Davis $4,717; Mr. Jaffe $4,717; Mr. Oresman $4,717; Mr. Doppelt $4,717; Mr. Hertlein $4,488; Mr. Levinson $4,717;
Mr. Sherman $4,717. Amounts paid towards financial counseling in the eleven months ended March 31, 1994 were: Mr. Davis
$10,000; Mr. Oresman $12,543. Aggregate amounts to be paid through the term of the executive's employment agreement in
connection with termination of employment, as further described under "Employment/Termination Matters" below: Mr. Davis
$11,140,634; Mr. Oresman $2,104,787; Mr. Jaffe $9,270,483; and Mr. Sherman $1,173,060.
</TABLE>
<PAGE>
<TABLE>
Aggregate Option Exercises During the Eleven Months Ended
March 31, 1994 and Option Values at March 31, 1994
---------------------------------------------------------
<CAPTION>
Number of Unexercised Value of Unexercised In-the-Money
options at March 31, 1994(#) options at March 31, 1994($)
Shares Acquired Value --------------------------------------------------------------------
Name on Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank J. Biondi, Jr. N/A N/A 0 0 0 0
Martin S. Davis 150,000 $6,768,750 0 0 0 0
Stanley R. Jaffe 233,332 $8,254,120 0 0 0 0
Donald Oresman 400,000 $19,042,249 0 0 0 0
Earl H. Doppelt 20,075 $730,591 0 10,000 0 0
Rudolph L. Hertlein 16,750 $625,719 0 15,000 0 0
Lawrence E. Levinson 38,950 $1,898,419 0 0 0 0
Jerry Sherman 33,000 $1,277,694 0 22,500 0 0
</TABLE>
<TABLE>
Long-Term Incentive Plan Awards
-------------------------------
<CAPTION>
Estimated Future Payments
under Non-Stock Price Based Plans
---------------------------------
Performance or Other Period
Name Until Maturation or Payment(b) Target(b)
---- ------------------------------ ---------
<S> <C> <C> <C>
Frank J. Biondi, Jr.(a) N/A N/A
Martin S. Davis(a) N/A N/A
Stanley R. Jaffe(a) N/A N/A
Donald Oresman(a) N/A N/A
Earl H. Doppelt(a) N/A N/A
Rudolph L. Hertlein 4 years $57,800
Lawrence E. Levinson 4 years $68,100
Jerry Sherman(a) N/A N/A
<FN>
- ----------------
(a) The arrangements with Messrs. Davis, Jaffe, Oresman and Sherman, described under "Employment/Termination Matters"
below, are in lieu of any future payments under this Plan. Mr. Doppelt resigned May 20, 1994 and will receive no future payments
under this Plan. Mr. Biondi does not participate in this Plan.
(b) Prior to the Merger, under the Company's Long Term Performance Plan, a target award opportunity for each year
of the normal four-year performance cycle was determined at the beginning of that year by the Compensation Committee for each
participant. Payment was dependent upon the achievement by the Company of an operating income target for each year of the
four-year cycle, which was set at the beginning of each year by the Compensation Committee, as well as upon the participant's
individual performance. Subsequent to the Merger, the Company has not yet determined the form in which the Plan may be continued,
and no determination has been made as to whether or how the awards under the Plan will be made for any future performance cycle.
Accordingly, the amount included under the "Target" column above represents the actual payment to the participant under the Plan's
four-year cycle ended October 31, 1993. The final awards under the Plan are determined by the Compensation Committee in its sole
discretion.
</TABLE>
<PAGE>
<TABLE>
Pension Plan
------------
<CAPTION>
Years of Benefit Service
----------------------------------------------------------------------------------------------
Average
Annual Covered
Compensation 10 15 20 25 30 35
------------ -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$200,000.00 $38,300.00 $57,400.00 $76,600.00 $85,700.00 $94,800.00 $104,000.00
$1,000,000.00 $198,300.00 $297,400.00 $396,600.00 $445,700.00 $494,800.00 $544,000.00
$2,000,000.00 $398,300.00 $597,400.00 $796,600.00 $895,700.00 $994,800.00 $1,094,000.00
$2,500,000.00 $498,300.00 $747,400.00 $996,600.00 $1,120,700.00 $1,244,800.00 $1,369,000.00
$3,000,000.00 $598,300.00 $897,400.00 $1,196,600.00 $1,345,700.00 $1,494,800.00 $1,644,000.00
$4,000,000.00 $798,300.00 $1,197,400.00 $1,596,600.00 $1,795,700.00 $1,994,800.00 $2,194,000.00
$5,000,000.00 $998,300.00 $1,497,400.00 $1,996,600.00 $2,245,700.00 $2,494,800.00 $2,744,000.00
</TABLE>
Under the Paramount Communications Retirement Plan and the
Supplemental Executive Retirement Plan ("SERP") for certain key executives, an
eligible employee will receive a benefit at retirement that is based upon the
employee's number of years of benefit service and average pensionable
compensation (salary plus annual bonus) during, in the case of the Retirement
Plan, the highest five consecutive years of the employee's final 10 years of
service, and, in the case of the SERP, the highest five twelve-month periods out
of the final 10 twelve-month periods, reduced by certain social security
benefits. The benefits under the SERP are not subject to the Internal Revenue
Code provisions that limit benefits under the Retirement Plan. For a single
employee, the benefits are straight-life annuity amounts. As of March 31, 1994,
the years of benefit service (giving effect to minimum years of service under
the SERP) that have been credited are: Mr. Davis-36.2; Mr. Biondi-0; Mr. Jaffe-
10; Mr. Oresman-10.4; Mr. Doppelt-10.10; Mr. Hertlein-18.9; Mr. Levinson-25.2;
and Mr. Sherman-14.11. The foregoing table illustrates, for representative
average annual pensionable compensation and years of benefit service
classifications, the annual retirement benefit payable to employees under the
Plans upon retirement in 1994 at age 65, based on the straight-life annuity form
of benefit and social security benefits in effect at March 31, 1994. Messrs.
Doppelt and Hertlein do not participate in the SERP and consequently, the
amounts set forth in the above table would be reduced for them pursuant to IRS
regulations.
<PAGE>
Employment/Termination Matters
Mr. Hertlein's agreement, expiring September 10, 1995, provides for a
salary of $225,000. If his employment is terminated other than for cause he is
entitled to receive (i) salary for the longer of the remainder of the agreement
or 12 months after the date of such termination and (ii) a "norm" bonus under
the Corporation's bonus plans. On disability or death, he or his estate will
receive his salary for the shorter of the remainder of the term or six months
(in the event of disability) and one year (in the event of death). In the event
of a change of control, (a) the employment term is extended for a period of
three years, (b) if he is terminated other than for cause or he terminates his
employment for Good Reason, he is entitled to receive annually for the remainder
of the term his highest salary and the average of his most recent three bonuses
and (c) in the event of his disability or death, he or his estate will receive
his salary for the remainder of the term. Good Reason includes diminution in
authority, reduction in compensation or failing to increase compensation
commensurate with other senior officers, change of location or adverse
modification of bonus, benefit plans or fringe benefits. Mr. Levinson's
employment agreement, expiring November 30, 1994, provides for a salary of
$275,000. At the end of the term Mr. Levinson is eligible for a severance
payment of not less than 26 weeks of his base salary.
In connection with the Merger, Messrs. Davis and Oresman resigned from
the Company and retired. Pursuant to their employment agreements with the
Company, Mr. Davis will receive, commencing March 22, 1994 until February 22,
1997, payments of $317,322 per month, and Mr. Oresman will receive, commencing
March 22, 1994 until December 12, 1995, payments of $101,633 per month. In
connection with the Merger, Mr. Jaffe's employment was terminated. Pursuant to
his employment agreement with the Company, Mr. Jaffe will receive, commencing
April 15, 1994 until February 22, 1997, payments of $240,523 per month. Mr.
Jaffe also will receive a pro-rata bonus of $968,635 and the Company will pay
the cost of medical, dental and life insurance coverage through February 22,
1997. Mr. Jaffe will receive $32,063 to cover the estimated cost of taxes
related to these benefits. In connection with the Merger, Mr. Sherman retired.
Pursuant to his employment agreement with the Company, Mr. Sherman will
receive, commencing May 17, 1994 until March 27, 1997, payments equal to
$275,000 per year. Mr. Sherman also will receive a pro-rata bonus of $85,762
and a payment of $300,000 on March 27, 1997.
The Annual Performance Plan and Long-Term Performance Plan provide for
termination of the plans on a change of control if the Chief Executive Officer
certifies that a change of control has occurred. On termination, participants
will receive, with respect to each performance period which has commenced prior
to such termination date, an amount of cash determined as if the participants
had completed each performance period. Performance for periods not completed
will be based upon actual performance or, if not available, business plan
forecasts. Under the Annual Plan, for any period for which performance targets
are not available, the award is based on a percentage of the participant's
salary. Under the Long-Term Plan, the Corporation's performance for any period
for which goals or business plan forecasts are not available will be based on
the average of the amounts so determined for such prior period. Subsequent to
the Merger, the Company has not yet determined the form in which either of these
Plans may be continued.
Director's Compensation
As a wholly owned subsidiary of Viacom Inc., the Company's Board of
Directors is the same as that of Viacom. The Directors who are not employees
receive compensation for their service on Viacom's Board, but no separate
compensation as Directors of the Company. Directors who are employees receive
no compensation for their service as Board members.
Compensation Committee Interlocks and Insider Participation
Prior to March 15, 1994, the Compensation Committee members were Mr.
Samuel Silberman, Miss Grace Fippinger, Mr. Lawrence Small and Mr. George
Weissman. Mr. Silberman was Chairman of the Board of Consolidated Cigar
Corporation when the Company acquired it in 1968. In 1969, Mr. Silberman
retired from that position. The Company sold Consolidated Cigar in 1983. The
Company's Compensation Committee now consists of Messrs. Abrams, Ferguson,
Huizenga, Miller, Brent Redstone, Sumner Redstone, Salerno and Schwartz, who are
the members of Viacom's Compensation Committee.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Viacom Inc., 1515 Broadway, New York, New York 10036, owns 100% of the
outstanding capital stock of the Company.
Item 13. Certain Relationships and Related Transactions.
The Company became a majority owned subsidiary of Viacom in March,
1994, after which the Company and Viacom began to integrate their operations and
entered into various transactions in the ordinary course of business consistent
with the Company's status as an operating subsidiary. On the Merger, the
Company became a wholly owned subsidiary of Viacom.
<PAGE>
PARAMOUNT COMMUNICATIONS INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
PARAMOUNT COMMUNICATIONS INC.
Date: August 12, 1994 By: /s/ Philippe P. Dauman
-------------------------
Philippe P. Dauman
Executive Vice President,
General Counsel and
Chief Administrative Officer
