CONFORMED COPY
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STOCKHOLDER AGREEMENT
By
NATIONAL AMUSEMENTS, INC.
(Stockholder)
and
CBS CORPORATION
Dated as of September 6, 1999
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STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT, dated as of September 6, 1999 (this
"Agreement"), by NATIONAL AMUSEMENTS, INC., a Maryland corporation (the
"Stockholder"), to and for the benefit of CBS CORPORATION, a Pennsylvania
corporation ("CBS"), and its assigns by operation of law.
WHEREAS, as of the date hereof, the Stockholder owns of record and
beneficially 93,658,988 shares of Class A Common Stock (the "Viacom Class A
Common Stock"; such shares, together with any shares of Viacom Class A Common
Stock and any other shares of voting stock of Viacom (together with the Viacom
Class A Common Stock, the "Voting Stock") acquired by the Stockholder during the
Specified Period (as defined in Section 1 of this Agreement) being collectively
referred to herein as the "Stockholder's Shares"), par value $.01 per share, of
VIACOM INC., a Delaware corporation ("Viacom");
WHEREAS, concurrently with the execution of this Agreement, CBS and
Viacom are entering into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"; capitalized terms used and not otherwise defined
herein shall have the respective meanings assigned to them in the Merger
Agreement), pursuant to which, upon the terms and subject to the conditions
thereof, CBS will be merged with and into Viacom (the "Merger"); and
WHEREAS, as a condition to the willingness of Viacom and CBS to enter
into the Merger Agreement, CBS has requested the Stockholder to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the following
terms shall have the following meanings:
(a) "CBS Directors" shall mean (i) eight (8) of those directors
serving as members of the Board of Directors of CBS on the date of this
Agreement (or any Independent Directors elected or appointed prior to the
Effective Time to serve as a CBS Director) who are designated as such by the
Board of Directors of CBS prior to the Effective Time and (ii) any Replacement
CBS Director.
(b) "Independent Director" shall mean a disinterested, independent
person (determined in accordance with customary standards for independent
directors applicable to U.S. public companies).
(c) "Replacement CBS Director" shall mean a person qualifying as an
Independent Director and designated by a majority of the CBS Directors remaining
on the Board of Directors of Viacom to fill a seat on the Board of Directors of
Viacom vacated by a CBS Director or such a seat with respect to which a CBS
Director does not seek reelection.
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(d) "Specified Independent Directors" shall mean the directors of
Viacom first elected after 1993 and who are not management of Viacom or the
Stockholder (together with any replacements of such persons).
(e) "Specified Period" shall mean the period of three years commencing
at the Effective Time.
Section 2. Covenants of the Stockholder.
(a) The Stockholder shall cause to be nominated and elected each CBS
Director, including any Replacement CBS Director, so that there are eight CBS
Directors on the Board of Directors of Viacom at all times;
(b) the Stockholder shall take all action necessary to ensure that any
seat on the Board of Directors of Viacom vacated by a CBS Director or such a
seat with respect to which a CBS Director elects not to seek reelection is
filled by a Replacement CBS Director immediately following the designation of
such person as such and notice thereof to the Stockholder;
(c) the Stockholder shall take all action necessary to ensure that no
CBS Director is removed as a director of Viacom unless such removal is for cause
and is approved by at least 14 members of the Board of Directors of Viacom;
(d) in the event that any Specified Independent Director shall resign,
vacate his directorship, fail to stand as a director, fail to be elected as a
director, or otherwise be removed as or for any reason cease to be a director of
Viacom, the Stockholder shall take all necessary action to cause such Specified
Independent Director to be replaced by an Independent Director; provided that
any such replacement Specified Independent Director shall be the chief executive
officer, chief operating officer or chief financial officer or former chief
executive officer of a Fortune 500 company or a non-U.S. public company of
comparable size;
(e) unless approved by a vote of at least 14 members of the Board of
Directors of Viacom, the Stockholder shall not take any action to amend, modify
or repeal Article XIII of the Restated Certificate of Incorporation of Viacom
(in the form attached as Exhibit A-1 of the Merger Agreement) or Article VIII of
the By-laws of Viacom (in the form attached as Exhibit A-2 of the Merger
Agreement), or otherwise vote in favor of or take any action or fail to take any
action which would have the effect of eliminating, limiting, restricting,
avoiding or otherwise modifying the effect of any provision contained therein
(e.g., by creating a holding company structure if the certificate of
incorporation or similar document of such holding company does not contain
equivalent provisions). Without limiting the generality of the foregoing, the
Stockholder further agrees to take all necessary action to ensure that such
provisions shall be applicable to (i) any successor to Viacom as the result of a
merger, consolidation or other business combination, whether or not Viacom is
the surviving corporation in such transaction, or otherwise and (ii) any
corporation or other entity with respect to which Viacom or its successor is or
becomes a direct or indirect subsidiary, and the Stockholder shall take all
necessary action to ensure that Viacom shall not be a party to any transaction
which would not comply with the provisions of this paragraph (e) unless such
transaction is approved by a vote of at least 14 members of the Board of
Directors of Viacom;
(f) the Stockholder shall take all necessary action, including without
limitation by voting and/or holding the Stockholder's Shares, to ensure that the
Stockholder or transferees
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thereof (in accordance with Section 4 of this Agreement) owns, beneficially and
of record, on an outstanding and fully diluted basis, a majority of the shares
of Voting Stock, at all times (and refrain from taking any action that would
have the opposite result); and
(g) each of the CBS Directors are intended third-party beneficiaries
of this Agreement and shall have the right to enforce the provisions of this
Agreement.
Section 3. No Inconsistent Agreements. The Stockholder hereby
covenants and agrees that the Stockholder shall not enter into any voting
agreement or grant a proxy or power of attorney with respect to the
Stockholder's Shares which is inconsistent with this Agreement.
Section 4. Transfer of Stockholder's Shares. The Stockholder hereby
covenants and agrees that the Stockholder shall not transfer record or
beneficial ownership of any of the Stockholder's Shares unless the transferee
unconditionally agrees in writing to be bound by the terms and conditions of
this Agreement.
Section 5. Representations and Warranties of Stockholder. The
Stockholder hereby represents and warrants to CBS as follows:
(a) Authority Relative to This Agreement. The Stockholder has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Stockholder and the consummation by the Stockholder of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of the Stockholder, and no other corporate proceedings on the
part of the Stockholder are necessary to authorize this Agreement or to
consummate such transactions. This Agreement has been duly and validly
executed and delivered by the Stockholder and, assuming the due
authorization, execution and delivery by CBS, constitutes a legal, valid
and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms.
(b) No Conflict. (i) The execution and delivery of this Agreement by
the Stockholder do not, and the performance of this Agreement by the
Stockholder shall not, (A) conflict with or violate the Certificate of
Incorporation or By-laws or equivalent organizational documents of the
Stockholder, (B) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Stockholder or by which the
Stockholder's Shares are bound or affected or (C) result in any breach of
or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancelation of or result in the
creation of a lien or encumbrance on any of the Stockholder's Shares
pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to
which the Stockholder is a party or by which the Stockholder or the
Stockholder's Shares are bound or affected, except, in the case of clauses
(B) and (C), for any such conflicts, violations, breaches, defaults or
other occurrences which would not prevent or delay the performance by the
Stockholder of its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Stockholder
do not, and the performance of this Agreement by the Stockholder shall not,
require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental
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Entity except for applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended, and except where the failure to obtain
such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay the performance by the
Stockholder of its obligations under this Agreement.
(c) Title to the Shares. As of the date hereof, the Stockholder is the
record and beneficial owner of 93,658,988 shares of Viacom Class A Common
Stock. The Stockholder's Shares are all the voting securities of Viacom
owned, either of record or beneficially, by the Stockholder. The
Stockholder's Shares are owned free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Stockholders voting rights, charges and other
encumbrances of any nature whatsoever. The Stockholder has the sole right
to vote and transfer the Stockholder's Shares, and the Stockholder has not
appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Stockholder's Shares.
Section 6. Effectiveness; Termination. This Agreement shall become
effective as of the date of this Agreement, provided that the Stockholder shall
have no obligation under Section 2(a), (b), (c) and (e) until the commencement
of the Specified Period. This Agreement shall terminate at the close of business
on the final day of the Specified Period.
Section 7. Notices. All notices, requests, claims, demand and other
communications under this Agreement shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in Person, by facsimile, by courier service or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 7):
if to Stockholder
National Amusements, Inc.
000 Xxx Xxxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
with copies to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxx O'X. Xxxxxx, Esq. and
Xxxxxxx X. Xxxx, Esq.
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if to CBS:
CBS Corporation
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Executive Vice President
and General Counsel
with copies to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx, Esq. and
Xxxxx X. Xxxxxxx, Esq.
Section 8. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement be consummated as originally
contemplated to the fullest extent possible.
Section 9. Entire Agreement; Assignment. This Agreement and the Merger
Agreement constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
either of the parties hereto without the prior written consent of the other
party hereto, except that CBS may assign, its rights, interests and obligations
under this Agreement to Viacom by operation of law. Any purported assignment in
violation of this Section 9 shall be void.
Section 10. Parties in Interest; Certain Events. This Agreement shall
be binding upon and inure solely to the benefit of each party hereto, and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement except as set forth in Section 2(g). The
Stockholder agrees that this Agreement and the obligations hereunder shall
attach to the Stockholder's Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of the Stockholder's Shares shall
pass, whether by operation of law or otherwise, including the Stockholder's
heirs, guardians, administrators or successors. In the event of any stock split,
stock dividend, merger, reorganization, recapitalization or other change in the
capital structure of Viacom affecting the capital stock of Viacom, or the
acquisition of additional shares of Viacom Class A Common Stock or other voting
securities of Viacom by the Stockholder, the
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number of Stockholder's Shares shall be adjusted appropriately and this
Agreement and the obligations hereunder shall attach to any additional shares of
Viacom Class A Common Stock or other voting securities of Viacom issued to or
acquired by the Stockholder.
Section 11. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
Section 12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to any principles of conflicts of laws of such State.
Section 13. Consent to Jurisdiction. (a) Each of the Stockholder and
CBS hereby irrevocably submits to the exclusive jurisdiction of the courts of
the State of Delaware and to the jurisdiction of the United States District
Court for the State of Delaware, for the purpose of any action or proceeding
arising out of or relating to this Agreement and each of CBS and the Stockholder
hereby irrevocably agrees that all claims in respect to such action or
proceeding shall be heard and determined exclusively in any Delaware state or
federal court. Each of CBS and the Stockholder agrees that a final judgment in
any action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of CBS and the Stockholder irrevocably consents to the
service of the summons and complaint and any other process in any other action
or proceeding relating to the transactions contemplated by this Agreement, on
behalf of itself or its property, by personal delivery of copies of such process
to such party. Nothing in this Section 13 shall affect the right of any party to
serve legal process in any other manner permitted by law.
Section 14. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 15. Amendments. This Agreement may be amended or modified, and
the terms and conditions hereof may be waived, only (i) by a written instrument
signed by the parties hereto or, in the case of a waiver, by each party waiving
compliance and (ii) after the Effective Time if any such amendment or waiver is
concurred in by at least 14 members of the Board of Directors of Viacom.
Section 16. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
Section 17. WAIVER OF JURY TRIAL. EACH OF CBS AND THE STOCKHOLDER
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF CBS AND THE STOCKHOLDER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
NATIONAL AMUSEMENTS, INC.,
by /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman, President
& Chief Executive Officer
CBS CORPORATION,
by /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:Executive Vice President,
Chief Financial Officer
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