UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
SCHEDULE TO-C
Tender Offer Statement Under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
--------------
CBS CORPORATION
(Name of Subject Company (Issuer))
--------------
CBS CORPORATION
(Name of Filing Person-Issuer and Offeror)
Options to Purchase Class B Common Stock, Par Value $0.001 Per Share
(Title of Class of Securities)
124857202
(CUSIP Number of Class of Securities)
Louis J. Briskman
Executive Vice President and General Counsel
CBS Corporation
51 West 52nd Street
New York, New York 10019
(212) 975-4321
(Name, address and telephone number of
person authorized to receive notices
and communications on behalf of
filing person)
--------------
Copy to:
Linda E. Rappaport, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
(212) 848-4000
Calculation of Filing Fee
Transaction valuation Amount of filing fee
- --------------------------------- ------------------------------
Not applicable* Not applicable*
*A filing fee is not required in connection with this filing as it
relates solely to preliminary communications made before the
commencement of a tender offer.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not applicable
------------------------------
Form or Registration No.: Not applicable
----------------------------
Filing Party: Not applicable
----------------------------------------
Date Filed: Not applicable
------------------------------------------
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
================================================================================
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EXHIBIT INDEX
Exhibit
No.
- -------
99.1 Letter to U.S. Employees Holding Options, dated April 27, 2006.
99.2 Letter to International Employees Holding Options, dated April 27, 2006.
3
EXHIBIT 99.1
From: Tony Ambrosio
To: U.S. Employees Holding Options
Date: April 27, 2006
Re: Voluntary Exchange Offer
Recently you received an announcement from Leslie Moonves about the Voluntary
Exchange Offer ("VEO") that will give eligible employees the opportunity to
exchange their stock options for restricted shares in the new CBS Corporation.
The following information is provided to help you better understand the VEO and
how it works.
About the VEO and Program Participation
The VEO is expected to commence on May 3, 2006 and conclude on May 31, 2006 at
midnight EDT. The VEO will give eligible employees the opportunity to exchange
their employee stock options for restricted shares of CBS Corporation Class B
Common Stock. A stock option gives you the right to buy shares of stock at a set
price for a fixed period of time. A restricted share award, in contrast, gives
you the shares of stock outright after you have met the vesting requirements.
Also, dividends will accrue on restricted shares granted in the VEO until
vesting and will be paid in cash at the time of vesting.
For tax reasons, eligible employees who are not U.S. taxpayers will be offered
the opportunity to exchange stock options for restricted share units rather than
restricted shares in the VEO.
To be eligible to participate in the VEO, you must be an active full-time or
part-time employee of CBS Corporation or one of its majority-owned subsidiaries
as of the commencement of the VEO, remain continuously employed through the
expiration of the VEO, and hold outstanding, vested or unvested, stock options
granted prior to January 1, 2006.
You will have to make two decisions about your stock options:
1. Whether to exchange all out-of-the-money stock options (the exercise
price is the same as or higher than a reference price of CBS
Corporation Class B Common Stock set forth in the exchange offer
documents that will be sent to you) for restricted shares; and
2. Whether to exchange all in-the-money stock options (the exercise price
of the option is less than a reference price of CBS Corporation Class B
Common Stock set forth in the exchange offer documents that will be
sent to you) for restricted shares.
The reference price will be determined by calculating the average of the closing
prices of CBS Corporation Class B Common Stock on the New York Stock Exchange
for the five consecutive trading days ending on the fifth trading day preceding
the commencement of the VEO, which is expected to be April 26, 2006. Once
established, this reference price will remain applicable throughout the VEO,
regardless of any fluctuations in the CBS Corporation Class B Common Stock price
during the VEO. Regardless of whether the stock options are out-of-the-money or
in-the-money, each decision applies to all outstanding stock options within that
category.
If you choose not to participate in the VEO (or choose to exchange only as to
your out-of-the-
1
money or in-the-money stock options), the outstanding stock options you do not
exchange will remain outstanding and the current terms and conditions will
continue to apply.
Determining Restricted Share Awards and Vesting Schedule
If you choose to participate in the VEO you will be able to exchange your stock
options for restricted shares of CBS Corporation Class B Common Stock which are
subject to new vesting periods. The number of restricted shares that you will be
entitled to receive in the VEO will be calculated by dividing (i) 75 percent of
the attributed value of options that you properly tender by (ii) the reference
price for CBS Corporation Class B Common Stock set forth in the exchange offer
documents that will be sent to you. The attributed value of your stock options
will be determined using a commonly-used option pricing model, the Black-Scholes
valuation method. The restricted shares will vest in two 50 percent installments
on the second and third anniversaries of the date of grant. Even if your
eligible options are already vested, the restricted shares will be subject to
the new vesting requirements.
Blackout Period
At the close of the offer, which is expected to be at midnight on May 31, 2006,
a blackout period will be implemented so that tenders made through the VEO can
be processed and reconciled. During the blackout period all current and former
CBS employees will be unable to complete any stock option transactions through
Smith Barney. All current and former employees will be affected by the blackout
regardless of whether they were eligible to participate in the VEO program.
Additional information about the blackout period will be communicated shortly.
The blackout period will not affect transactions in the CBS stock fund of the
401(k) plan.
Tools, Resources and Support
We recognize that the decisions you make about the VEO are important to you and
your family and we want to provide you with all the necessary tools and
resources you need to make an informed decision. At the start of the offer
period, a Participant Statement will be mailed to all eligible employees and
include a complete listing of their out-of-the-money and/or in-the-money stock
options that can be exchanged for restricted shares through the VEO program.
Your Participant Statement will be mailed to your address on record with Human
Resources along with other program communications that will assist in the
decision-making process. Additional communications about the VEO will be
disseminated through e-mail, desk dropped, posted to CBS intranet sites and
mailed to homes throughout the offer period.
We have also engaged Ernst & Young LLP to offer education and assistance to you
as you consider your decision as to whether to participate in the VEO. Ernst &
Young will offer information sessions to provide education about the VEO and
related financial concepts. Starting May 5, 2006 these sessions will be made
available on http://HR.CBS.com and IKE at https://ike.cbsradio.com. Your spouse
or partner and financial planner are welcome to participate in telephonic and
web-based streaming video workshops.
Workshop Dates and Locations
- ----------------------------
o Baltimore - May 8
o Boston - May 8
o Chicago - May 15
2
o Dallas - May 8
o Denver - May 12
o Detroit - May 12
o Ft. Lauderdale - May 18
o Los Angeles - May 15, 16, 22 and 23
o Miami - May 17
o New York City - May 5, 10, 11 and 19
o Philadelphia - May 4
o Pittsburgh - May 15
o San Francisco/San Jose - May 18
Teleconference Schedule
- -----------------------
o Live telephonic sessions will be hosted May 5, 9, 10, 16, 17 and 19
VEO Information Line
- --------------------
Ernst & Young will also offer personal assistance through the VEO Information
Line. By calling the VEO Information Line, you will be able to schedule an
appointment with an Ernst & Young representative to discuss your individual
situation and enroll in a workshop session. Ernst & Young will have copies of
all Participant Statements as a reference for the discussion. If you have not
received your Participant Statement by May 10, 2006, please call the VEO
Information Line.
The VEO Information Line will be available beginning April 27, 2006 from 9:00
a.m. EDT to 8:00 p.m. EDT, Monday through Friday for workshop enrollment and to
schedule an appointment with an Ernst & Young representative during the offer
period. To reach the VEO Information Line, call toll-free at (800) 259-3638 or
(201) 872-5800 from a non-U.S. location.
No action is required to decline participation in the VEO.
Partnering For Success
You can help make this program a success by taking the time to understand the
VEO, reviewing your Participant Statement, Offer to Exchange document and other
program communications, and participating in the financial education sessions.
This will help ensure you make an educated decision about your outstanding stock
option awards.
Legal Notices
The underlying plan for the Voluntary Exchange Offer is subject to shareholder
approval. This program will be governed by the actual terms and conditions which
will be set forth in the offering document provided to you at the commencement
of the offer. For more information on the program, please review our Form 8-K
filed with the Securities and Exchange Commission on March 17, 2006, which can
be accessed on our website, www.cbscorporation.com.
3
CBS Corporation ("CBS") has not commenced the Voluntary Exchange Offer to which
this communication pertains. Holders of CBS stock options are strongly advised
to read the Offer to Exchange that will be filed on Schedule TO (Tender Offer)
and other documents related to the Voluntary Exchange Offer to be filed with the
Securities and Exchange Commission when they become available because they will
contain important information. Holders of CBS stock options may obtain copies of
these documents for free, when available, at the Securities and Exchange
Commission website at www.sec.gov or from CBS's Human Resources department.
4
EXHIBIT 99.2
From: Tony Ambrosio
To: International Employees Holding Options
Date: April 27, 2006
Re: Voluntary Exchange Offer
A Voluntary Exchange Offer ("VEO") is being offered in the United States that
will give eligible employees the opportunity to exchange their eligible stock
options for restricted shares in the new CBS Corporation. I'm pleased to
announce that we are making this offer available to eligible employees outside
of the United States so that they may also have the opportunity to participate
in the VEO. For tax reasons, employees who are not U.S. taxpayers will be
offered the opportunity to exchange stock options for restricted share units
("RSUs") of CBS Corporation Class B Common Stock in the VEO rather than
restricted shares.
The following information is provided to help you better understand the VEO and
how it works.
About the VEO and Program Participation
The VEO is expected to commence on May 3, 2006 and conclude on May 31, 2006 at
midnight EDT. The VEO will give eligible employees the opportunity to exchange
their employee stock options for RSUs or restricted shares of CBS Corporation
Class B Common Stock. A stock option gives you the right to buy shares of stock
at a set price for a fixed period of time. By contrast, a grant of restricted
shares gives you the shares of stock outright after you have met the vesting
requirements and a grant of RSUs gives you the right to receive the shares of
stock outright after you have met the vesting requirements (RSUs differ
principally from restricted shares in that holders of RSUs are not deemed to be
stockholders of the underlying CBS Corporation Class B Common Stock until the
RSUs vest and the underlying shares are actually delivered). Also, dividends
will accrue on restricted shares granted in the VEO until vesting and will be
paid in cash at the time of vesting; similarly dividend equivalents will accrue
on the RSUs granted in the VEO until vesting and will be paid in cash at the
time of vesting.
To be eligible to participate in the VEO, you must be an active full-time or
part-time employee of CBS Corporation or one of its majority-owned subsidiaries
as of the commencement of the VEO, remain continuously employed through the
expiration of the VEO, and hold outstanding, vested or unvested, stock options
granted prior to January 1, 2006.
You will have to make two decisions about your stock options:
1. Whether to exchange all out-of-the-money stock options (the exercise
price is the same as or higher than a reference price of CBS
Corporation Class B Common Stock set forth in the exchange offer
documents that will be sent to you) for RSUs or restricted shares; and
2. Whether to exchange all in-the-money stock options (the exercise price
of the option is less than a reference price of CBS Corporation Class B
Common Stock set forth in the exchange offer documents that will be
sent to you) for RSUs or restricted shares.
The reference price will be determined by calculating the average of the closing
prices of CBS Corporation Class B Common Stock on the New York Stock Exchange
for the five consecutive
1
trading days ending on the fifth trading day preceding the commencement of the
VEO, which is expected to be April 26, 2006. Once established, this reference
price will remain applicable throughout the VEO, regardless of any fluctuations
in the CBS Corporation Class B Common Stock price during the VEO. Regardless of
whether the stock options are out-of-the-money or in-the-money, each decision
applies to all outstanding stock options within that category.
If you choose not to participate in the VEO (or choose to exchange only as to
your out-of-the-money or in-the-money stock options), the outstanding stock
options you do not exchange will remain outstanding and the current terms and
conditions will continue to apply.
Determining RSU/Restricted Share Awards and Vesting Schedule
If you choose to participate in the VEO you will be able to exchange your stock
options for RSUs or restricted shares of CBS Corporation Class B Common Stock
which are subject to new vesting periods. The number of RSUs or restricted
shares that you will be entitled to receive in the VEO will be calculated by
dividing (i) 75 percent of the attributed value of options that you properly
tender by (ii) the reference price for CBS Corporation Class B Common Stock set
forth in the exchange offer documents that will be sent to you. The attributed
value of your stock options will be determined using a commonly-used option
pricing model, the Black-Scholes valuation method. The RSUs will vest in two 50
percent installments on the second and third anniversaries of the date of grant.
Even if your eligible options are already vested, the RSUs and restricted shares
will be subject to the new vesting requirements.
Blackout Period
At the close of the offer, which is expected to be at midnight on May 31, 2006,
a blackout period will be implemented so that tenders made through the VEO can
be processed and reconciled. During the blackout period all current and former
CBS employees will be unable to complete any stock option transactions through
Smith Barney. All current and former employees will be affected by the blackout
regardless of whether they were eligible to participate in the VEO program.
Additional information about the blackout period will be communicated shortly.
The blackout period will not affect transactions in the CBS stock fund of the
401(k) plan.
Tools, Resources and Support
We recognize that the decisions you make about the VEO are important to you and
your family and we want to provide you with all the necessary tools and
resources you need to make an informed decision. At the start of the offer
period, a Participant Statement will be mailed to all eligible employees and
include a complete listing of their out-of-the-money and/or in-the-money stock
options that can be exchanged for RSUs or restricted shares, as applicable,
through the VEO program. Your Participant Statement will be mailed to your
address on record with Human Resources along with other program communications
that will assist in the decision-making process. Additional communications about
the VEO will be disseminated through e-mail, desk dropped, posted to CBS
intranet sites and mailed to homes throughout the offer period.
We have also engaged Ernst & Young LLP to offer education and assistance to you
as you consider your decision as to whether to participate in the VEO. Ernst &
Young will offer information sessions to provide education about the VEO and
related financial concepts. A live workshop will be hosted in Canada on May 18,
2006 and a teleconference for European
2
employees will be offered on May 16, 2006 at 3:00 p.m. GMT. Your spouse or
partner and financial planner are welcome to participate in the telephonic
workshop.
VEO Information Line
Ernst & Young will also offer personal assistance through the VEO Information
Line. By calling the VEO Information Line, you will be able to schedule an
appointment with an Ernst & Young representative to discuss your individual
situation and enroll in a workshop session. Ernst & Young will have copies of
all Participant Statements as a reference for the discussion. If you have not
received your Participant Statement by May 10, 2006, please call the VEO
Information Line.
The VEO Information Line will be available beginning April 27, 2006 from 9:00
a.m. EDT to 8:00 p.m. EDT, Monday through Friday for workshop enrollment and to
schedule an appointment with an Ernst & Young representative during the offer
period. To reach the VEO Information Line, call toll-free at (800) 259-3638 or
(201) 872-5800 from a non-U.S. location.
No action is required to decline participation in the VEO.
Partnering For Success
You can help make this program a success by taking the time to understand the
VEO, reviewing your Participant Statement, Offer to Exchange document and other
program communications, and participating in the financial education sessions.
This will help ensure you make an educated decision about your outstanding stock
option awards.
Legal Notices
The underlying plan for the Voluntary Exchange Offer is subject to shareholder
approval. This program will be governed by the actual terms and conditions which
will be set forth in the offering document provided to you at the commencement
of the offer. For more information on the program, please review our Form 8-K
filed with the Securities and Exchange Commission on March 17, 2006, which can
be accessed on our website, www.cbscorporation.com.
CBS Corporation ("CBS") has not commenced the Voluntary Exchange Offer to which
this communication pertains. Holders of CBS stock options are strongly advised
to read the Offer to Exchange that will be filed on Schedule TO (Tender Offer)
and other documents related to the Voluntary Exchange Offer to be filed with the
Securities and Exchange Commission when they become available because they will
contain important information. Holders of CBS stock options may obtain copies of
these documents for free, when available, at the Securities and Exchange
Commission website at www.sec.gov or from CBS's Human Resources department.
3