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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
|X| 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 Participant Statement Letter, dated May 2, 2006.
99.2 Guide to Reading the Participation Statement.
99.3 Form of Participant Statement.
99.4 Letter to Employees Holding Options, dated May 2, 2006.
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May 2, 2006
You are eligible to participate in the Voluntary Exchange Offer (VEO), an offer
that will give you the opportunity to exchange your eligible stock options for
restricted shares, or restricted share units (RSUs) in the case of employees who
are not U.S. taxpayers, in the new CBS Corporation. Deciding whether to
participate in the VEO is an important decision for you and your family. To help
guide you through the decision-making process, general information about the VEO
is included below. A Participant Statement that contains a complete listing of
all your stock option grants that are eligible for exchange through the VEO, a
Guide to Reading the Participant Statement and a Workshop Schedule are also
included in this package. These materials, along with education and assistance
available through Ernst & Young LLP, will help ensure you are equipped with the
information you need to make an educated and informed choice about the VEO.
About the VEO
The VEO is scheduled to commence on May 3, 2006 and is expected to conclude at
midnight EDT on May 31, 2006. The VEO applies to stock option awards granted
prior to January 1, 2006. If you choose to participate in the VEO you will be
able to exchange your stock options for restricted shares or RSUs of CBS
Corporation Class B Common Stock which are subject to new vesting periods. The
type of consideration that you are eligible to receive in the VEO is dependent
upon your tax status. If you are subject to U.S. income tax you are only
eligible to receive restricted shares in the VEO and if you are not subject to
U.S. income tax you are only eligible to receive RSUs.
The number of restricted shares or RSUs 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 enclosed Participant Statement. The
attributed value of your stock options was determined using a commonly-used
stock option pricing model, the Black-Scholes valuation method. The reference
price was 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. The reference price was set on April 26, 2006 based on
the scheduled commencement of the VEO on May 3, 2006. The reference price of CBS
Corporation Class B Common Stock is $24.9340.
All stock options listed on your Participant Statement have been identified as
either "out-of-the-money" or "in-the-money." For purposes of the VEO, stock
options are out-of-the-money if the grant price is the same as or higher than
the reference price of CBS Corporation Class B Common Stock listed in your
Participant Statement. Stock options are in-the-money if the grant price is
lower than the reference price of CBS Corporation Class B Common Stock listed in
your Participant Statement.
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The price of CBS Corporation Class B Common Stock fluctuates from day-to-day and
even within the course of the same day. Therefore, it is possible that the price
of CBS Corporation Class B Common Stock at any given time would be higher or
lower than the reference price indicated on your Participant Statement and may
impact whether a particular stock option grant is technically out-of-the-money
or in-the-money. However, this reference price will not change throughout the
VEO, regardless of any fluctuations in the CBS Corporation Class B Common Stock
price during the VEO. Therefore, your out-of-the-money and in-the-money grants
will be as set forth on your Participant Statement.
Making Your Decision
You have two choices to make about your eligible stock options:
1. Whether to exchange all or none of your out-of-the-money stock options, and
2. Whether to exchange all or none of your in-the-money stock options.
Regardless of whether the stock options are out-of-the-money or in-the-money,
each decision applies to all outstanding stock option grants within that
category.
If you choose not to participate in the VEO, your outstanding options will
remain outstanding and the current terms and conditions will apply.
Education & Assistance
CBS has engaged Ernst & Young to offer education and assistance tools. Ernst &
Young is hosting information sessions to provide education about the VEO and
related financial concepts. Telephonic and Web-based streaming video sessions
will also be available. Your spouse or partner and financial planner are welcome
to participate in telephonic and Web-based streaming video workshops. A complete
schedule of workshop dates and locations is included in this package.
Ernst & Young will also offer personal assistance through the VEO Information
Line to discuss your individual situation. You must call the VEO Information
Line to enroll in a workshop, speak with an Ernst & Young representative or
schedule an appointment. To reach the VEO Information Line, call toll-free at
(800) 259-3638 or (201) 872-5800 from an international location. The VEO
Information Line is available from 9:00 a.m. EDT to 8:00 p.m. EDT, Monday
through Friday, during the offer period.
Smith Barney Account Access
Smith Barney's website at www.benefitaccess.com is the source for all CBS
employee stock option grant information and documentation. To view your grant
history, you may use the website or speak with a Smith Barney Customer Service
Representative by calling (877) 203-7047 toll-free or (212) 615-7081
internationally. After the close of the offer period, any elections made through
the VEO will be reflected in your Smith Barney account.
If you have not yet registered to access your Smith Barney account online,
please go to www.benefitaccess.com and request a Welcome Kit. You will receive
two separate mailings at your address of record within 10 business days that are
needed to activate your account. The first is the Welcome Kit that contains a
Temporary Internet User Name, Trading PIN, and
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information about and instructions to use the website. The second mailing is a
Temporary Internet Password. It takes 10 business days to receive the
information you need to activate your account online. If you have not registered
for an account, CBS strongly recommends that you do so immediately.
If you have already registered for an account and received your Welcome Kit with
Temporary Internet User Name, Trading PIN and Temporary Internet Password, you
may activate your account online at www.benefitaccess.com. You may also request
your user name and password at the site if you have forgotten this information.
If you have additional questions about establishing or maintaining a Smith
Barney account or would like to exercise stock options via the phone, please
contact a Smith Barney Customer Service representative at (877) 203-7047.
Blackout Period
At the close of the offer period, which is expected to be at midnight EDT 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 you will not be
able to complete any stock option transactions through Smith Barney. All
employees will be affected by the blackout regardless of whether they were
eligible to participate in the VEO program.
Please be sure to review all VEO communications and attend a workshop session to
understand the VEO and its impact to you so that you can make an informed
decision. All communications about the VEO, including workshop materials, are
posted at http://HR.CBS.com.
Legal Notices
The underlying plan for the Voluntary Exchange Offer is subject to shareholder
approval. The Voluntary Exchange Offer will be governed by the actual terms and
conditions which will be set forth in the Offer to Exchange provided to you at
the commencement of the offer.
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.
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Guide to Reading the Participant Statement
Enclosed in this package is your Participant Statement which contains
information regarding your individual stock options for exchange through the
Voluntary Exchange Offer (VEO). The Participant Statement contains valuable
information that should help you make an informed decision about the VEO and
whether to participate. The key to reading and interpreting your Participant
Statement is understanding how stock options are categorized and the definition
of terms. Each of the major field headings on the Participant Statement that
contain your specific information are defined below and will guide you as you
read your statement.
Before you begin it is important to be aware of what stock option grants are
included in your Participant Statement. The VEO only applies to stock option
awards granted prior to January 1, 2006 (outstanding RSU grants are not eligible
for exchange through the VEO). Therefore, you may have stock option or RSU
awards that are not reflected in your statement because they are not eligible to
be exchanged through the VEO.
Statement Organization
At the top of the Participant Statement are your name, home address, employee ID
number and division. Please review this information carefully as it was used to
populate your Participant Statement. If this information is incorrect, please
contact your local HR representative immediately.
Optionee Grants: Out-of-the-Money and In-the-Money
The Participant Statement lists all eligible out-of-the-money and in-the-money
option grants separately because you have two decisions to make:
1. Whether to exchange all or none of your out-of-the-money stock
options, and
2. Whether to exchange all or none of your in-the-money stock options.
For purposes of the VEO, stock option grants are being categorized as being
out-of-the-money or in-the-money based on the reference price established for
the CBS Corporation Class B Common Stock which is defined below.
The price of CBS Corporation Class B Common Stock fluctuates from day-to-day and
even within the course of the same day. Therefore, it is possible that the price
of CBS Corporation Class B Common Stock at any given time would be higher or
lower than the reference price indicated on your Participant Statement and may
impact whether a particular stock option grant is technically out-of-the-money
or in-the-money. However, this reference price will not change throughout the
VEO, regardless of any fluctuations in the CBS Corporation Class B Common Stock
price during the VEO. Therefore, your out-of-the-money and in-the-money grants
will be as set forth on your Participant Statement.
Because the fluctuating share price could affect your decision to exchange
eligible out-of-the-money or in-the-money stock option grants, you may wish to
discuss its effect on the value of
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your stock options with an Ernst & Young representative through the VEO
Information Line. Additionally, you may also choose to exercise all or part of
the exercisable portion of any stock option grant during the offer period and
elect to exchange the remaining portion through the VEO. You can reach the VEO
Information Line by calling toll-free at (800) 259-3638 or (201) 872-5800 from
an international location.
Statement Fields
Grant Date
- ----------
The date the stock option was granted.
Grant Expiration
- ----------------
Subject to the terms and conditions of the grant, the last day the stock option
can be exercised.
Grant Type
- ----------
There are different types of stock option awards:
o NQ - Nonqualified stock options
o ISO - Incentive stock options
Grant Price
- -----------
The market price at which the stock option was granted.
Options Exercisable
- -------------------
The number of stock options that have vested and can be exercised.
Options Unexercisable
- ---------------------
The number of outstanding stock options that have not vested and are not yet
available for exercise due to vesting or holding requirements. The date these
options will become exercisable is included.
Options Eligible for Exchange
- -----------------------------
For both out-of-the-money and in-the-money stock option grants, the total number
of stock options by grant that are available to be exchanged through the VEO.
Black-Scholes Value
- -------------------
The Black-Scholes valuation method is a commonly-used stock option pricing
model. It uses assumptions including expected life, volatility, the risk-free
rate and the dividend yield. The formula was applied to each out-of-the-money
and in-the-money option grant to determine the Black-Scholes value for each
stock option.
Total Value Eligible for Exchange
- ---------------------------------
This is the Black-Scholes value multiplied by the number of stock options
eligible for exchange for each grant.
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Exchange Rate
- -------------
Through the VEO, participants can elect to receive a number of restricted shares
or RSUs equal to 75 percent of the Total Value Eligible for Exchange of tendered
stock options.
Total Value Post Exchange
- -------------------------
The Total Value Post Exchange is the value equal to the Total Value Eligible for
Exchange multiplied by the Exchange Rate.
Reference Price
- ---------------
The Reference Price is 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. The Reference Price was set on April 26, 2006, based on the scheduled
commencement of the VEO on May 3, 2006. The Reference Price for CBS Corporation
Class B Common Stock is $24.9340.
Number of Restricted Shares*
- ----------------------------
The total number of restricted shares you will receive in exchange for a stock
option grant if you elect to participate in the VEO. If the number results in a
fraction, the total number is trunctuated.
Number of RSUs*
- ---------------
The total number of RSUs you will receive in exchange for a stock option grant
if you elect to participate in the VEO. If the number results in a fraction, the
total number is trunctuated.
* For tax reasons, employees who are not U.S. taxpayers will be offered the
opportunity to exchange stock options for RSUs rather than restricted shares in
the VEO.
Legal Notices
The underlying plan for the Voluntary Exchange Offer is subject to shareholder
approval. The Voluntary Exchange Offer will be governed by the actual terms and
conditions which will be set forth in the Offer to Exchange provided to you at
the commencement of the offer.
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.
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[US TAX PAYERS]
CBS Corporation Voluntary Exchange Program
Participant Statement as of 4/28/2006
FORM OF PARTICIPANT STATEMENT
NAME
ADDRESS
ID#:
DIVISION:
From: Tony Ambrosio
To: Employees Holding Options
Date: May 2, 2006
Re: Smith Barney Account Information
Recently you received information about the Voluntary Exchange Offer (VEO), an
offer that will give eligible employees the opportunity to exchange their
eligible options for restricted shares, or restricted share units (RSUs) in the
case of employees who are not U.S. taxpayers, in the new CBS Corporation. To
view your stock option history or exercise stock options online, you will need a
registered and activated Smith Barney account. Smith Barney's website at
www.benefitaccess.com is the source for all employee stock option grant
information and documentation. To view your grant history you may use the
website or speak with a Smith Barney Customer Service Representative by calling
(877) 203-7047 toll-free or (212) 615-7081 from a non-U.S. location.
If you have not yet registered for a Smith Barney account:
o Go to www.benefitaccess.com
o Click on the Registration tab
o Enter the Company Stock Symbol: CBS
o Enter your Social Security Number and the first three letters of your first
name
You will receive two separate mailings at your address of record within 10
business days that are needed to activate your account. The first is a Welcome
Kit that contains a Temporary Internet User Name, Trading PIN, and information
about and instructions to use the website. The second mailing is a Temporary
Internet Password. It takes 10 business days to receive the information you need
to activate your account online.
If you have already registered for an account and received your Welcome Kit, to
activate your account online:
o Go to www.benefitaccess.com
o Click on the First Time Users tab
o Enter your User Name and Password and click on Logon to Benefit Access
o Follow the logon instructions
If you have forgotten your user name and password:
o Go to www.benefitaccess.com
o Click on the Forgot User Name/Password tab
o Choose Stock Options and click Continue
o Enter the Company Stock Symbol: CBS
o Step 1: Enter your Social Security Number and the first three letters of your
first name
o Step 2: Choose the logon information you have forgotten and click Continue
o Follow screen instructions
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If you have any questions about establishing or maintaining a Smith Barney
account or would like to exercise a stock option via the phone, please call the
Smith Barney Customer Service department at (877) 203-7047 or (212) 615-7081.
Legal Notices
The underlying plan for the Voluntary Exchange Offer is subject to shareholder
approval. The Voluntary Exchange Offer will be governed by the actual terms and
conditions which will be set forth in the Offer to Exchange provided to you at
the commencement of the offer.
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.