Viacom (VIAB) Settles Dispute with National Amusements; To Create Expanded Board, Dauman to Resign as CEO

August 22, 2016 6:33 AM EDT

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Over the weekend, Viacom Inc. (NASDAQ: VIAB) announced an agreement with National Amusements Inc. (NAI), members of the Redstone family and related parties, settling all disputes among them. Under the terms of the settlement, which have been unanimously approved by the Boards of Directors of Viacom and NAI, all lawsuits among them will be terminated, and Viacom will create an expanded Board of Directors to include the five Viacom directors elected in June by NAI.

As part of the settlement Philippe Dauman will resign immediately as President and Chief Executive Officer of Viacom and will be succeeded by Thomas Dooley, who will serve as Interim President and CEO through September 30, 2016, the end of Viacom’s fiscal year, by which time the Board, working with Mr. Dooley, will make a decision on succession plans. Mr. Dooley has been Chief Operating Officer of Viacom since 2010. He joined the company in 1980.

Mr. Dooley will work closely with the new Board to develop a financial and strategic plan to position Viacom for future success.

Mr. Dauman will remain as Non-Executive Chairman of the Board of Viacom through September 13, 2016. The new Board will then select a successor for Chairman. Sumner Redstone will remain Chairman Emeritus and Shari Redstone will remain Non-Executive Vice Chair. Once Mr. Dauman departs, the Board will consist of 15 directors.

The five new Viacom Board members elected by NAI are Kenneth Lerer, Thomas May, Judith McHale, Ron Nelson and Nicole Seligman. Ms. Seligman will head the Governance and Nominating Committee, Mr. Nelson will head the Audit Committee and Ms. McHale will head the Compensation Committee. The five new directors elected to the Viacom Board will comprise a majority of each committee.

In his remaining time as Non-Executive Chairman, Mr. Dauman will have the opportunity to present a proposal on the previously announced exploration of a potential sale of a minority equity stake in Viacom’s Paramount Pictures film unit, for consideration by the expanded Viacom Board. A provision adopted in June by NAI remaining in effect would require unanimous agreement by the Board for the completion of the sale of an interest in Paramount.

Mr. Dauman said, “I care deeply for Viacom, which has been an important part of my life since I joined Sumner in the acquisition of the Company 30 years ago. I believe this agreement will give the Company and its employees the best opportunity to continue a smooth evolution into the future. I will do my utmost to ensure an effective Board and management transition in my remaining time as Non-Executive Chairman.”

He continued, “It has been a privilege to lead Viacom and have the rare opportunity to work side by side with so many friends and colleagues to build great brands and implement successful initiatives in the U.S. and around the world. Most of all, I am proud of our people, our culture and our inclusive values.”

Ms. Redstone, President of NAI, said, “We thank Philippe for his many years of dedicated service and the important role he has played at Viacom. We also welcome the new Board members who join us today. By strengthening Viacom’s governance and leadership, these changes will enable the Company to embark swiftly on a strategy that strengthens its position as an industry leader. Viacom has extraordinary assets and people, and we look forward to taking the necessary steps to realize the Company’s full potential to the benefit of all stockholders.”

Mr. Dooley said, “With the resolution of these issues, I am looking forward to working closely with the Board to develop a strategy to position Viacom for growth and success. I have very much enjoyed partnering with Philippe over many years and am grateful for the opportunities that have been presented to me by the Redstone family. We share a strong commitment to Viacom’s future and to guiding the Company through an orderly and successful transition.”

Frederic Salerno, a Viacom Director, said, “I am pleased to have worked with Philippe, Tom, Shari and other directors to arrive at this settlement and transition plan, which we believe serves the best interest of all Viacom stockholders. With this agreement, we believe the Company will be well-positioned to move forward.”

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