AGREEMENT AND PLAN OF MERGER
Between
VIACOM INC.
and
CBS CORPORATION
Dated as of September 6, 1999
TABLE OF CONTENTS
Section Page
ARTICLE I
THE MERGER
1.01. The Merger............................................................2
1.02. Effective Time; Closing...............................................2
1.03. Effect of the Merger..................................................2
1.04. Certificate of Incorporation and By-Laws..............................2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
2.01. Conversion of Securities..............................................3
2.02. Exchange of Certificates..............................................4
2.03. Stock Transfer Books..................................................6
2.04. Stock Options and Other Stock Plans...................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CBS
3.01. Organization and Qualification; Subsidiaries..........................8
3.02. Certificate of Incorporation and By-Laws..............................8
3.03. Capitalization........................................................9
3.04. Authority Relative to Agreement.......................................9
3.05. No Conflict; Required Filings and Consents............................10
3.06. Permits and Licenses; Contracts.......................................11
3.07. SEC Filings; Financial Statements.....................................12
3.08. Absence of Certain Changes or Events..................................13
3.09. Absence of Litigation.................................................13
3.10. Employee Benefit Plans................................................13
3.11. Labor Matters.........................................................15
3.12. Environmental Matters.................................................15
3.13. Trademarks, Patents and Copyrights....................................16
3.14. Taxes.................................................................17
3.15. Tax Matters...........................................................17
3.16. Year 2000 Compliance..................................................17
3.17. Opinion of Financial Advisors.........................................18
3.18. Vote Required.........................................................18
3.19. Brokers...............................................................18
3.20. Pennsylvania Law......................................................18
3.21. Rights Agreement......................................................19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF VIACOM
4.01. Organization and Qualification; Subsidiaries..........................19
4.02. Certificate of Incorporation and By-Laws..............................20
4.03. Capitalization........................................................20
4.04. Authority Relative to Agreement.......................................21
4.05. No Conflict; Required Filings and Consents............................21
4.06. Permits and Licenses; Contracts.......................................22
4.07. SEC Filings; Financial Statements.....................................23
4.08. Absence of Certain Changes or Events..................................24
4.09. Absence of Litigation.................................................24
4.10. Employee Benefit Plans................................................24
4.11. Labor Matters.........................................................26
4.12. Environmental Matters.................................................26
4.13. Trademarks, Patents and Copyrights....................................27
4.14. Taxes.................................................................27
4.15. Tax Matters...........................................................28
4.16. Year 2000 Compliance..................................................28
4.17. Opinion of Financial Advisors.........................................28
4.18. Vote Required.........................................................29
4.19. Section 203 of Delaware Law...........................................29
4.20. Brokers...............................................................29
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
5.01. Conduct of Business by CBS Pending the Merger.........................29
5.02. Conduct of Business by Viacom Pending the Merger......................32
5.03. Other Actions.........................................................35
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01. Registration Statement; Joint Proxy Statement.........................35
6.02. Stockholders' Meetings................................................38
6.03. Appropriate Action; Consents; Filings.................................38
6.04. Access to Information; Confidentiality................................39
6.05. No Solicitation of Competing Transactions.............................40
6.06. Directors' and Officers' Indemnification and Insurance................41
6.07. Notification of Certain Matters.......................................42
6.08. Tax Treatment.........................................................42
6.09. Stock Exchange Listing................................................42
6.10. Public Announcements..................................................43
6.11. Viacom's Directors....................................................43
6.12. Rights Agreement......................................................43
6.13. Assumption of Debt and Leases.........................................43
6.14. Affiliates of CBS.....................................................44
6.15. Prior Service.........................................................44
6.16. Employee Matters......................................................44
ARTICLE VII
CONDITIONS TO THE MERGER
7.01. Conditions to the Obligations of Each Party...........................45
7.02. Conditions to the Obligations of Viacom...............................46
7.03. Conditions to the Obligations of CBS..................................46
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01. Termination...........................................................47
8.02. Effect of Termination.................................................48
8.03. Amendment.............................................................48
8.04. Waiver................................................................48
8.05. Expenses..............................................................49
ARTICLE IX
GENERAL PROVISIONS
9.01. Non-Survival of Representations, Warranties and Agreements............50
9.02. Notices...............................................................50
9.03. Interpretation, Certain Definitions...................................51
9.04. Severability..........................................................53
9.05. Entire Agreement; Assignment..........................................53
9.06. Parties in Interest...................................................53
9.07. Specific Performance..................................................53
9.08. Governing Law.........................................................54
9.09. Consent to Jurisdiction...............................................54
9.10. Counterparts..........................................................54
9.11. WAIVER OF JURY TRIAL..................................................54
EXHIBITS
Exhibit A-1 Restated Certificate of Incorporation
Exhibit A-2 By-laws
Exhibit 6.14. Form of CBS Affiliate Letter
Index of Defined Terms
Defined Term Location of Definition
affiliate.....................................................Section 9.03(a)
Agreement.....................................................Recitals
Articles of Merger............................................Section 1.02
Blockbuster...................................................Section 4.02
Blockbuster Options...........................................Section 4.03
beneficial owner..............................................Section 9.03(b)
Blue Sky Laws.................................................Section 3.05(b)
business day..................................................Section 9.03(c)
CBS...........................................................Recitals
CBS Alternative Transaction Fee...............................Section 8.05(b)
CBS Benefit Plans.............................................Section 3.10(a)
CBS Common Stock..............................................Section 2.01(a)
CBS Disclosure Schedule.......................................Article III
CBS FCC Licenses..............................................Section 3.06(c)
CBS Financial Advisor.........................................Section 3.17
CBS Indentures................................................Section 6.13(a)
CBS Licensed Facilities.......................................Section 3.06(c)
CBS Material Adverse Effect...................................Section 3.01
CBS Options...................................................Section 2.04(a)
CBS Permits...................................................Section 3.06(a)
CBS Preferred Stock...........................................Section 3.03
CBS Rights Agreement..........................................Section 3.03
CBS SEC Reports...............................................Section 3.07(a)
CBS Stock Option Plans........................................Section 2.04(a)
CBS Superior Proposal.........................................Section 6.05(c)
CBS Systems...................................................Section 3.16(b)
CBS Year 2000 Compliant.......................................Section 3.16(b)
CBS Year 2000 Plan............................................Section 3.16(a)
CERCLA........................................................Section 3.12(d)
Certificate of Merger.........................................Section 1.02
Certificates..................................................Section 2.02(b)
Closing.......................................................Section 1.02
Closing Date..................................................Section 1.02
Code..........................................................Recitals
Communications Act............................................Section 3.05(b)
Competing Transaction.........................................Section 6.05(b)
Confidentiality Agreement.....................................Section 6.04(c)
Continuing Employees..........................................Section 6.15
control.......................................................Section 9.03(d)
controlled by.................................................Section 9.03(d)
Delaware Law..................................................Recitals
Effective Time................................................Section 1.02
Environmental Laws............................................Section 3.12(d)
Environmental Permits.........................................Section 3.12(d)
Defined Term Location of Definition
ERISA...................................................Section 3.10(a)
Exchange Act............................................Section 2.04(c)
Exchange Agent..........................................Section 2.02(a)
Exchange Fund...........................................Section 2.02(a)
Exchange Ratio..........................................Section 2.01(a)
Expenses................................................Section 8.05(a)
FCC.....................................................Section 3.05(b)
Governmental Authority..................................Section 9.03(e)
Hazardous Materials.....................................Section 3.12(d)
HSR Act.................................................Section 3.05(b)
Infinity................................................Section 3.02
IRS.....................................................Section 3.10(a)
King World..............................................Section 3.03
knowledge...............................................Section 9.03(f)
Laws....................................................Section 3.05(a)
Merger..................................................Recitals
NYSE....................................................Section 3.03
Order...................................................Section 6.03(b)
Parent..................................................Recitals
Parent Stockholder Agreement............................Recitals
Parent Voting Agreements................................Recitals
Pending Transactions....................................Section 5.01
Pennsylvania Law........................................Recitals
person..................................................Section 9.03(g)
Proxy Statement.........................................Section 6.01(a)
Registration Statement..................................Section 6.01(a)
Representatives.........................................Section 6.04(a)
Rights..................................................Section 3.03
SEC.....................................................Article III
Securities Act..........................................Section 3.05(b)
Shares..................................................Section 2.01(a)
Split-off...............................................Section 5.02
Stockholders' Meeting...................................Section 6.02
subsidiaries............................................Section 9.03(h)
subsidiary..............................................Section 9.03(h)
Substituted Option......................................Section 2.04(a)
Surviving Corporation...................................Section 1.01
Tax.....................................................Section 3.14(a)
Taxes...................................................Section 3.14(a)
Terminating CBS Breach..................................Section 8.01(f)
Terminating Viacom Breach...............................Section 8.01(e)
under common control with...............................Section 9.03(d)
Defined Term Location of Definition
Viacom..................................................Recitals
Viacom Benefit Plans....................................Section 4.10(a)
Viacom Class A Common Stock.............................Recitals
Viacom Class B Common Stock.............................Recitals
Viacom Disclosure Schedule..............................Article IV
Viacom Employee Arrangements............................Section 6.16(a)
Viacom FCC Licenses.....................................Section 4.06(c)
Viacom Financial Advisor................................Section 4.17
Viacom Licensed Facilities..............................Section 4.06(c)
Viacom Material Adverse Effect..........................Section 4.01
Viacom Options..........................................Section 4.03
Viacom Permits..........................................Section 4.06(a)
Viacom Preferred Stock..................................Section 4.03
Viacom Proposals........................................Recitals
Viacom SEC Reports......................................Section 4.07(a)
Viacom Stock Option Plans...............................Section 4.03
Viacom Systems..........................................Section 4.16(b)
Viacom Year 2000 Compliant..............................Section 4.16(b)
Viacom Year 2000 Plan...................................Section 4.16(a)
AGREEMENT AND PLAN OF MERGER dated as of September 6, 1999 (this
"Agreement") between VIACOM INC., a Delaware corporation ("Viacom"), and CBS
CORPORATION, a Pennsylvania corporation ("CBS").
WHEREAS, the Boards of Directors of CBS and Viacom have determined
that it is in the best interests of their respective companies and
stockholders to combine their respective businesses in a "merger of equals"
transaction to be effected as set forth in this Agreement;
WHEREAS, the Board of Directors of CBS has (i) determined that the
merger of CBS with and into Viacom on the terms set forth in this Agreement
(the "Merger") pursuant to the General Corporation Law of the State of
Delaware ("Delaware Law") and the Business Corporation Law of the
Commonwealth of Pennsylvania ("Pennsylvania Law") is fair to CBS and the
holders of Shares (as defined in Section 2.01) and is in the best interests
of CBS and (ii) approved this Agreement, the Merger and the other
transactions contemplated hereby and has recommended that the shareholders
of CBS adopt this Agreement;
WHEREAS, the Board of Directors of Viacom has determined that the
Merger is fair to, and in the best interests of, Viacom and its stockholders
and has approved and determined to be advisable this Agreement, the Merger
and the other transactions contemplated hereby and has recommended that the
holders of the Class A Common Stock, par value $.01 per share, of Viacom
(the "Viacom Class A Common Stock") (i) approve the issuance of Class B
Common Stock, par value $.01 per share, of Viacom (the "Viacom Class B
Common Stock") in the Merger and (ii) approve the amendment to the Restated
Certificate of Incorporation as set forth in this Agreement, (iii) approve
the Merger and (iv) adopt this Agreement (together, the "Viacom Proposals");
WHEREAS, concurrently with the execution of this Agreement and as
an inducement to CBS to enter into this Agreement, National Amusements,
Inc., a Maryland corporation and the holder of a majority of the shares of
Class A Common Stock ("Parent"), and CBS have entered into (i) a Stockholder
Agreement (the "Parent Stockholder Agreement") pursuant to which Parent has
agreed, among other things, to cause the election of eight members of the
Board of Directors of Viacom designated by CBS for a period of three years
following the Merger and (ii) a Voting Agreement (together with the Parent
Stockholder Agreement, the "Parent Voting Agreements") pursuant to which
Parent has agreed, among other things, to vote its shares of Viacom Class A
Common Stock in favor of adoption of this Agreement and the other
transactions contemplated by this Agreement and to take certain other
actions in support of the Merger;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section
368(a) of the United States Internal Revenue Code of 1986, as amended (the
"Code");
WHEREAS, as an inducement to Viacom to enter into this Agreement,
concurrently with the execution and delivery of this Agreement, Xxx Xxxxxxxx
is entering into an employment agreement with Viacom, to be effective at the
Effective Time (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained and intending to be legally bound
hereby, Viacom and CBS hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in Article VII, and in accordance with Section 252 of
Delaware Law and Section 1921 of Pennsylvania Law, at the Effective Time CBS
shall be merged with and into Viacom. As a result of the Merger, the
separate corporate existence of CBS shall cease and Viacom shall be the
surviving corporation of the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time; Closing. The closing of the Merger
(the "Closing") shall take place on the first business day after the
satisfaction or, if permissible, waiver of the conditions set forth in
Article VII (such date, the "Closing Date"). On the Closing Date, the
parties hereto shall cause the Merger to be consummated by filing (a) a
certificate of merger (the "Certificate of Merger") with the Secretary of
State of the State of Delaware, in such form as is required by, and executed
and acknowledged in accordance with, Section 252 of Delaware Law and (b)
articles of merger (the "Articles of Merger") with the Department of State
of the Commonwealth of Pennsylvania, in such form as is required by, and
executed in accordance with, Section 1927 of Pennsylvania Law. The term
"Effective Time" means the date and time of the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware (or such later
time as may be agreed by the parties hereto and specified in the Certificate
of Merger). The Closing will be held at the offices of Shearman & Sterling,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place as the
parties may agree).
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law and Pennsylvania Law. Without limiting the generality of the
foregoing, at the Effective Time all the property, rights, privileges,
powers and franchises of CBS shall vest in the Surviving Corporation and all
debts, liabilities, obligations, restrictions, disabilities and duties of
CBS shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
SECTION 1.04. Certificate of Incorporation and By-Laws. (a) The
Restated Certificate of Incorporation of Viacom, as in effect immediately
prior to the Effective Time, shall be amended as of the Effective Time to be
and read in its entirety in the form set forth as Exhibit A-1 and, as so
amended, such Restated Certificate of Incorporation shall be the certificate
of incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
(b) The By-laws of Viacom, as in effect immediately prior to the
Effective Time, shall be amended as of the Effective Time so as to read in
their entirety in the form set forth as Exhibit A-2 and, as so amended, such
By-laws shall be the
by-laws of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Viacom, CBS or
the holders of any of the following securities:
(a) Each share of common stock, par value $1.00 per share, of
CBS ("CBS Common Stock"; all issued and outstanding shares of CBS
Common Stock being hereinafter collectively referred to as the
"Shares") issued and outstanding immediately prior to the Effective
Time (other than any Shares to be cancelled or converted pursuant to
Section 2.01(b)) shall be converted, subject to Section 2.02(e), into
the right to receive 1.085 shares (the "Exchange Ratio") of Viacom
Class B Common Stock.
(b) Each Share held in the treasury of CBS and each Share
owned by Viacom immediately prior to the Effective Time shall be
cancelled and extinguished without any conversion thereof and no
payment shall be made with respect thereto, and each Share owned by any
direct or indirect wholly owned subsidiary of Viacom or CBS (other than
Shares held by benefit plans or trusts (including Rabbi trusts))
immediately prior to the Effective Time shall be converted into the
right to receive a number of shares of Viacom Class B Common Stock
equal to the Exchange Ratio.
(c) If, prior to the Effective Time (and as permitted by
Sections 5.01 and/or 5.02), the outstanding Shares or shares of Viacom
Class B Common Stock shall have been increased, decreased, changed into
or exchanged for a different number or class of shares or securities as
a result of a reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, combination or exchange of
shares or other similar change in capitalization, then an appropriate
and proportionate adjustment shall be made to the Exchange Ratio.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. Viacom
shall deposit, or shall cause to be deposited, with such bank or trust
company designated by Viacom and reasonably acceptable to CBS (the "Exchange
Agent"), for the benefit of the holders of Shares, for exchange in
accordance with this Article II through the Exchange Agent, certificates
representing the shares of Viacom Class B Common Stock (such certificates
for shares of Viacom Class B Common Stock, together with any dividends or
distributions with respect thereto and any cash in lieu of fractional shares
of Viacom Class B Common Stock payable pursuant to Section 2.02(e), being
hereinafter referred to as the "Exchange Fund") issuable pursuant to Section
2.01 in exchange for outstanding Shares. The Exchange Agent shall, pursuant
to irrevocable instructions, deliver the Viacom Class B Common Stock
contemplated to be issued pursuant to Section 2.01 out of the Exchange Fund.
Except as contemplated by Section 2.02(f) hereof, the Exchange Fund shall
not be used for any other purpose.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time, Viacom shall cause the Exchange Agent to mail to each holder
of a certificate or certificates which immediately prior to the Effective
Time represented outstanding Shares (the "Certificates") (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent, and shall be in customary form)
and (ii) instructions for use in effecting the surrender of the Certificates
in exchange for certificates representing whole shares of Viacom Class B
Common Stock, together with any dividends or distribution with respect
thereto and any cash in lieu of fractional shares. Upon surrender to the
Exchange Agent of a Certificate for exchange and cancellation, together with
such letter of transmittal, duly executed, and such other documents as may
be required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate representing
that number of whole shares of Viacom Class B Common Stock which such holder
has the right to receive in respect of the Shares formerly represented by
such Certificate (after taking into account all Shares then held by such
holder), cash in lieu of fractional shares of Viacom Class B Common Stock to
which such holder is entitled pursuant to Section 2.02(e) and any dividends
or other distributions to which such holder is entitled pursuant to Section
2.02(c), and the Certificate so surrendered shall forthwith be cancelled. In
the event of a transfer of ownership of Shares that is not registered in the
transfer records of CBS, a certificate representing the proper number of
shares of Viacom Class B Common Stock may be issued to a transferee if the
Certificate representing such Shares is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer
and by evidence that any applicable stock transfer taxes have been paid.
Until surrendered as contemplated by this Section 2.02, each Certificate
shall be deemed at any time after the Effective Time to represent only the
right to receive upon such surrender the certificate representing shares of
Viacom Clss B Common Stock, cash in lieu of any fractional shares of Viacom
Class B Common Stock to which such holder is entitled pursuant to Section
2.02(e) and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.02(c).
(c) Distributions with Respect to Unexchanged Shares of Viacom
Class B Common Stock. No dividends or other distributions with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Viacom Class B Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall
be paid to any such holder pursuant to Section 2.02(e), until the holder of
such Certificate shall surrender such Certificate. Subject to the effect of
escheat, Tax (as defined in Section 3.14) or other applicable Laws (as
defined in Section 3.05), following surrender of any such Certificate, there
shall be paid to the record holder thereof, without interest, (i) promptly,
the amount of any cash payable with respect to a fractional share of Viacom
Class B Common Stock to which such holder is entitled pursuant to Section
2.02(e) and the amount of dividends or other distributions with a record
date after the Effective Time and theretofore paid with respect to such
whole shares of Viacom Class B Common Stock, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record
date after the Effective Time and a payment date occurring after surrender,
payable with respect to such whole shares of Viacom Class B Common Stock.
(d) No Further Rights in CBS Common Stock. All shares of Viacom
Class B Common Stock issued upon conversion of the Shares in accordance with
the
terms hereof (including any cash paid pursuant to Sections 2.02(c) or (e)) shall
be deemed to have been issued in full satisfaction of all rights pertaining to
such Shares.
(e) No Fractional Shares. No certificates or scrip representing
fractional shares of Viacom Class B Common Stock shall be issued upon the
surrender for exchange of Certificates, and such fractional share interests
will not entitle the owner thereof to vote or to any other rights of a
stockholder of Viacom. Each holder of a fractional share interest shall be
paid an amount in cash equal to the product obtained by multiplying (i) such
fractional share interest to which such holder (determined after taking into
account all fractional share interests then held by such holder) would
otherwise be entitled by (ii) the closing price for a share of Viacom Class
B Common Stock on the Consolidated Tape, Network A, as reported in The Wall
Street Journal (Northeast edition) or any other authoritative source on the
first trading day immediately following the Effective Time. From time to
time after the Effective Time, as promptly as practicable after the
determination of the amount of cash, if any, to be paid to any holders of
fractional share interests who have surrendered their Certificates to the
Exchange Agent, the Exchange Agent shall so notify Viacom, and Viacom shall
deposit such amount with the Exchange Agent and shall cause the Exchange
Agent to forward payments to such holder of fractional share interests
subject to and in accordance with the terms of Sections 2.02(b) and (c).
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of CBS Common Stock for six (6)
months after the Effective Time shall be delivered to Viacom, upon demand,
and any holders of CBS Common Stock who have not theretofore complied with
this Article II shall thereafter look only to Viacom for the shares of
Viacom Class B Common Stock, any cash in lieu of fractional shares of Viacom
Class B Common Stock to which they are entitled pursuant to Section 2.02(e)
and any dividends or other distributions with respect to Viacom Class B
Common Stock to which they are entitled pursuant to Section 2.02(c). Any
portion of the Exchange Fund remaining unclaimed by holders of Shares as of
a date which is immediately prior to such time as such amounts would
otherwise escheat to or become property of any government entity shall, to
the extent permitted by applicable Law, become the property of Viacom free
and clear of any claims or interest of any person previously entitled
thereto.
(g) No Liability. Neither Viacom nor CBS shall be liable to any
holder of Shares for any such Shares (or dividends or distributions with
respect hereto) or cash delivered to a public official pursuant to any
abandoned property, escheat or similar Law.
(h) Lost, Stolen or Destroyed Certificates. In the event that any
Certificate has been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by Viacom, the posting by such person
of a bond in such reasonable amount as Viacom may direct as indemnity
against any claim that may be made against it with respect to such
Certificate, Viacom will, in exchange for such lost, stolen or destroyed
Certificate, issue or cause to be issued the number of whole shares of
Viacom Common Stock and pay or cause to be paid the amounts deliverable in
respect thereof pursuant to Section 2.02(e) and 2.02(c).
(i) Withholding Rights. Viacom shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of
Shares such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code, or any provision of state, local or
foreign Tax Law. To the extent that amounts are so withheld by Viacom, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by Viacom.
SECTION 2.03. Stock Transfer Books. At the Effective Time, the
stock transfer books of CBS shall be closed and there shall be no further
registration of transfers of Shares thereafter on the records of CBS. From
and after the Effective Time, the holders of Certificates shall cease to
have any rights with respect to such Shares except as otherwise provided
herein or by any Laws. On or after the Effective Time, any Certificates
presented to the Exchange Agent or Viacom for any reason shall be converted
into shares of Viacom Class B Common Stock, any cash in lieu of fractional
shares of Viacom Class B Common Stock to which the holders thereof are
entitled pursuant to Section 2.02(e) and any dividends or other
distributions to which the holders thereof are entitled pursuant to Section
2.02(c).
SECTION 2.04. Stock Options and Other Stock Plans. (a) Prior to
the Effective Time, Viacom and CBS shall take such action as may be
necessary to cause each unexpired and unexercised option or warrant to
purchase Shares which are outstanding immediately prior to the Effective
Time (collectively, "CBS Options"), whether granted under CBS's stock option
plans set forth in Section 2.04 of the CBS Disclosure Schedule (as defined
below) or otherwise, to be automatically converted at the Effective Time
into an option or warrant (collectively, a "Substituted Option") to purchase
a number of shares of Viacom Class B Common Stock equal to the number of
Shares that could have been purchased (assuming full vesting) under such CBS
Option multiplied by the Exchange Ratio (rounded to the nearest whole number
of shares of Viacom Class B Common Stock) at a price per share of Viacom
Class B Common Stock equal to the per-share option exercise price specified
in the CBS Option divided by the Exchange Ratio (rounded down to the nearest
whole cent). Except as otherwise provided in this Agreement, such
Substituted Option shall otherwise be subject to the same terms and
conditions as such CBS Option (except that all vesting periods with respect
thereto shall, to the extent provided by the terms thereof, accelerate, and
be subject to any other rights which arise under the CBS Stock Option Plans
or the option agreements evidencing awards thereunder as a result of the
transactions contemplated by this Agreement). The date of grant of the
Substituted Option shall be the date on which the corresponding CBS Option
was granted. At the Effective Time, (i) all references in the related stock
option agreements to CBS shall be deemed to refer to Viacom and (ii) Viacom
shall assume all of CBS's obligations with respect to CBS Options as so
amended. As promptly as reasonably practicable after the Effective Time,
Viacom shall issue to each holder of an outstanding CBS Option a document
evidencing the foregoing assumption by Viacom. Employee and director
deferrals and director common stock equivalents and all other equity based
compensation that references CBS Common Stock will as of and after the
Effective Time, be deemed to refer to Viacom Class B Common Stock (as
adjusted to reflect the Exchange Ratio).
(b) In respect of each CBS Option assumed by Viacom, and the
shares of Viacom Class B Common Stock underlying such CBS Option, Viacom
shall, no later than one Business Day after the Effective Time, file and
keep current a Form S-8 or other appropriate registration statement for as
long as any Substituted Options remain outstanding.
(c) Prior to the Effective Time, Viacom and CBS shall take all
steps reasonably necessary to cause the transactions contemplated hereby and
any other dispositions of equity securities of CBS (including derivative
securities) or acquisitions of Viacom equity securities (including
derivative securities) in connection with this Agreement by each individual
who (a) is a director or officer of Viacom or (b) at the Effective Time,
will become a director or officer of Viacom, to be exempt under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CBS
Except as disclosed in the report on Form 10-K dated March 24,
1999 for the year ended December 31, 1998, the Reports on Form 10-K/A, Form
10-Q, Form 10-Q/A and Form 8-K since December 31, 1998 or the proxy
statement dated March 25, 1999, in each case in the form filed by CBS with
the United States Securities and Exchange Commission (the "SEC") or in a
separate disclosure schedule which has been delivered by CBS to Viacom prior
to the execution of this Agreement (the "CBS Disclosure Schedule") (each
section of which qualifies the correspondingly numbered representation and
warranty or covenant to the extent specified therein and such other
representations and warranties or covenants to the extent a matter in such
section is disclosed in such a way as to make its relevance to the
information called for by such other representation and warranty or covenant
readily apparent), CBS hereby represents and warrants to Viacom:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each
of CBS and its subsidiaries is a corporation or entity duly incorporated or
formed, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation and has the requisite corporate
power and authority and all necessary governmental approvals to own, lease
and operate its properties and to carry on its business as it is now being
conducted, except where the failure to have such power, authority and
governmental approvals would not have a CBS Material Adverse Effect (as
defined below). Each of CBS and its subsidiaries is duly qualified or
licensed as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed
and in good standing that would not have a CBS Material Adverse Effect. The
term "CBS Material Adverse Effect" means any change, effect or circumstance
that is or is reasonably likely to be materially adverse to the business,
results of operations or financial condition of CBS and its subsidiaries
taken as a whole, other than any change, effect or circumstance relating to
or resulting from (i) general changes in the media or entertainment
industries or the advertising markets, (ii) changes in general economic
conditions or securities markets in general or (iii) this Agreement or the
transactions contemplated hereby or the announcement thereof.
SECTION 3.02. Certificate of Incorporation and By-Laws. CBS has
made available to Viacom a complete and correct copy of the Articles of
Incorporation and the By-
laws, each as amended to date, of CBS and Infinity Broadcasting Corporation,
a Delaware corporation ("Infinity"). The Articles of Incorporation and
Bylaws (or equivalent organizational documents) of CBS and its subsidiaries
are in full force and effect. Except as would not have a CBS Material
Adverse Effect, none of CBS or its subsidiaries is in violation of any
provision of its Articles of Incorporation or Bylaws (or equivalent
organizational documents).
SECTION 3.03. Capitalization. The authorized capital stock of CBS
consists of 1,100,000,000 Shares and 25,000,000 shares of preferred stock,
par value $1.00 per share (the "CBS Preferred Stock"). As of August 31,
1999, (a) 705,119,425 Shares were issued and outstanding, all of which were
validly issued, fully paid and nonassessable, (b) 40,099,599 Shares were
held in the treasury of CBS, (c) 51,007,538 Shares were reserved for future
issuance pursuant to outstanding unexercised employee stock options granted
pursuant to the CBS stock option plans or otherwise and (d) 70,365,195
Shares were reserved for future issuance in connection with the merger of a
wholly owned subsidiary of CBS with and into King World Productions, Inc.
("King World") and 9,910,600 (or some equivalent amount of CBS Preferred
Stock, if appropriate), measured at the September 3, 1999 New York Stock
Exchange (the "NYSE") closing price, were reserved for future issuance in
connection with the acquisition from Xxxxxxx Entertainment Company of
television station KVTV, Dallas/Fort Worth, Texas. As of the date of this
Agreement, no shares of CBS Preferred Stock are outstanding. As of the date
of this Agreement, except for the issuance of Shares pursuant to the
exercise of CBS Options and options to purchase 5,850,555 shares of Class A
Common Stock, par value $0.01 per share, of Infinity, outstanding prior to
August 31, 1999, no shares of capital stock of CBS or any of its
subsidiaries have been issued since August 31, 1999. Except as set forth in
this Section 3.03, and except for the Series A participating preferred stock
purchase rights of CBS (the "Rights") issued pursuant to the Rights
Agreement, dated as of December 28, 1995, between CBS and First Chicago
Trust Company of New York (the "CBS Rights Agreement"), as of the date of
this Agreement there are no options, warrants or other rights, agreements
(including registration rights agreements), arrangements or commitments of
any character relating to the issued or unissued capital stock of CBS or any
of its subsidiaries or obligating CBS or any of its subsidiaries to issue or
sell any shares of capital stock of, or other equity interests in, CBS or
any of its subsidiaries. All shares of capital stock of CBS and its
subsidiaries subject to issuance as aforesaid, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and
nonassessable. As of the date of this Agreement, there are no outstanding
contractual material obligations of CBS or any subsidiary to repurchase,
redeem or otherwise acquire any shares of capital stock of CBS or any of its
subsidiaries or to provide material funds to, or make any material
investment (in the form of a loan capital contribution or otherwise) in, any
person.
SECTION 3.04. Authority Relative to Agreement. CBS has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Merger and the other
transactions contemplated hereby. The execution and delivery of this
Agreement by CBS and the consummation by CBS of the Merger and the other
transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action and no other corporate proceedings on the
part of CBS are necessary to authorize the execution and delivery of this
Agreement or to consummate the Merger and the other transactions
contemplated hereby (other than, with respect to the Merger, the adoption of
this Agreement by the affirmative vote of a majority of the votes cast by
all shareholders entitled to vote at the CBS Stockholders' Meeting (as
defined in Section 6.02) and the filing and recordation of
appropriate merger documents as required by Pennsylvania Law). This Agreement
has been duly and validly executed and delivered by CBS and, assuming the due
authorization, execution and delivery by Viacom, this Agreement constitutes a
legal, valid and binding obligation of CBS, enforceable against CBS in
accordance with its terms.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by CBS does not, and the
performance of this Agreement by CBS will not, (i) conflict with or violate
the Articles of Incorporation or By-laws of (A) CBS or Infinity or (B) any
of its other subsidiaries, (ii) assuming the consents, approvals,
authorizations and waivers specified in Section 3.05(b) have been received
and the waiting periods referred to therein have expired, and any condition
precedent to such consent, approval, authorization, or waiver has been
satisfied, conflict with or violate any domestic (federal, state or local)
or foreign law, rule, regulation, order, judgment or decree (collectively,
"Laws") applicable to CBS or any of its subsidiaries or by which any
property or asset of CBS or any of its subsidiaries is bound or affected or
(iii) result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give
to others any right of termination, amendment, acceleration, or cancellation
of, or result in the creation of a lien or other encumbrance on any property
or asset of CBS or any of its subsidiaries pursuant to, any note, bond,
mortgage, indenture or credit agreement, or, to CBS's knowledge as of the
date of this Agreement, any other contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which CBS or any of
its subsidiaries is a party or by which CBS or any of its subsidiaries or
any property or asset of CBS or any of its subsidiaries is bound or
affected, except, in the case of clauses (i)(B), (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other occurrences of the
type referred to above which would not have a CBS Material Adverse Effect or
would not prevent or materially delay the consummation of the Merger;
provided, however, that for purposes of this Section 3.05(a), the definition
of CBS Material Adverse Effect shall be read so as not to include clause
(iii) of the definition thereof.
(b) The execution and delivery of this Agreement by CBS do not,
and the performance of this Agreement by CBS will not, require any consent,
approval, authorization, waiver or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic, foreign or
supranational, except for applicable requirements of the Exchange Act, the
Securities Act of 1933, as amended (the "Securities Act"), state securities
or "blue sky" laws ("Blue Sky Laws"), the pre-merger notification
arrangements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the "HSR Act"), such
filings, approvals and waivers of the Federal Communications Commission or
any successor entity (the "FCC") as may be required under the Communications
Act of 1934, as amended, and the rules, regulations and of the FCC
thereunder (collectively, the "Communications Act"), applicable requirements
of the Investment Canada Act of 1985 and the Competition Act (Canada), any
other non-United States competition, antitrust and investment law, filing
and recordation of appropriate merger documents as required by Delaware Law
and Pennsylvania Law and the rules of the NYSE and except where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not have a CBS Material Adverse Effect or
would not prevent or materially delay the consummation of the Merger;
provided, however, that for
purposes of this Section 3.05(b), the definition of CBS Material Adverse Effect
shall be read so as not to include clause (iii) of the definition thereof.
SECTION 3.06. Permits and Licenses; Contracts. (a) Each of CBS and
its subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders necessary for CBS or any of its subsidiaries to own,
lease and operate the properties of CBS and its subsidiaries or to carry on
their business as it is now being conducted and contemplated to be conducted
(the "CBS Permits"), and no suspension or cancellation of any of the CBS
Permits is pending or, to the knowledge of CBS, threatened, except where the
failure to have, or the suspension or cancellation of, any of the CBS
Permits would not have a CBS Material Adverse Effect. None of CBS or any of
its subsidiaries is in conflict with, or in default or violation of, (i) any
Laws applicable to CBS or any of its subsidiaries or by which any property
or asset of CBS or any of its subsidiaries is bound or affected, (ii) any of
the CBS Permits or (iii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which CBS or any of its subsidiaries is a party or by which
CBS or any of its subsidiaries or any property or asset of CBS or any of its
subsidiaries is bound or affected, except for any such conflicts, defaults
or violations that would not have a CBS Material Adverse Effect.
(b) Except as would not have a CBS Material Adverse Effect, and to
the knowledge of CBS, except as would not have a material adverse effect on
the Surviving Corporation following the Effective Time, none of CBS or any
of its subsidiaries is a party to any contracts or agreements that limits
the ability of CBS or any of its subsidiaries or, after the Effective Time,
Viacom or any of its subsidiaries, to compete in any line of business or
with any person or engage in any business in any geographic area, in each
case except for competition in businesses that neither CBS nor Viacom are
currently engaged in or will reasonably foreseeably engage in.
(c) CBS and its subsidiaries have operated the radio and
television stations and associated facilities for which CBS or any of its
subsidiaries holds licenses from the FCC, in each case which are owned or
operated by CBS and its subsidiaries (the "CBS Licensed Facilities"), in
material compliance with the terms of the CBS Permits issued by the FCC to
CBS and its subsidiaries ("CBS FCC Licenses"), and in material compliance
with the Communications Act, and CBS and its subsidiaries have timely filed
or made all applications, reports and other disclosures required by the FCC
to be filed or made with respect to the CBS Licensed Facilities and have
timely paid all FCC regulatory fees with respect thereto, in each case
except as would not have a CBS Material Adverse Effect. As of the date
hereof, to CBS's knowledge, there is not now pending or threatened before
the FCC any material investigation, proceeding, notice of violation, order
of forfeiture or complaint against CBS or any of its subsidiaries, relating
to any of the CBS Licensed Facilities or FCC regulated services conducted by
CBS that, if adversely decided, would have a CBS Material Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements. (a) CBS and
Infinity have filed all forms, reports and documents required to be filed by
it with the SEC from December 31, 1996 to the date of this Agreement,
including: (i) Annual Reports on Form 10-K, (ii) Quarterly Reports on Form
10-Q and (iii) proxy statements relating to CBS's and Infinity's meetings of
shareholders (whether annual or special) (the forms, reports and other
documents referred to in clauses (i), (ii), (iii) and all other
forms, reports and other registration statements filed by CBS or Infinity with
the SEC as of the date of this Agreement, including all amendments and
supplements thereto filed with the SEC as of the date of this Agreement, above
being referred to herein, collectively, as the "CBS SEC Reports"). The CBS SEC
Reports, as well as all forms, reports and documents to be filed by CBS or
Infinity with the SEC after the date hereof and prior to the Effective Time, (i)
were or will be prepared in accordance with the requirements of the Securities
Act, and the Exchange Act, as the case may be, and the rules and regulations
thereunder, (ii) did not at the time they were filed, or will not at the time
they are filed, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, and (iii) did not at the time they were filed, or will not
at the time they are filed, omit any documents required to be filed as exhibits
thereto. No CBS subsidiary, except Infinity, is subject to the periodic
reporting requirements of the Exchange Act.
(b) Each of the financial statements (including, in each case, any
notes thereto) contained in the CBS SEC Reports and each of the financial
statements to be filed by CBS or Infinity with the SEC after the date hereof
and prior to the Effective Time was or will be prepared in accordance with
United States generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each fairly presented in all material
respects or will fairly present in all material respects the consolidated
financial position, results of operations and cash flows of CBS and its
subsidiaries as at the respective dates thereof and for the respective
periods indicated therein in accordance with generally accepted accounting
principles (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments which were not and are not expected to be
material).
(c) Except as and to the extent set forth in the CBS SEC Reports,
CBS and its subsidiaries do not have any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) other than
liabilities and obligations which, individually or in the aggregate, would
not have a CBS Material Adverse Effect.
(d) CBS has heretofore furnished to Viacom complete and correct
copies of all material amendments and modifications that have not been filed
by CBS or Infinity with the SEC to all agreements, documents and other
instruments that previously had been filed by CBS or Infinity with the SEC
and are currently in effect.
SECTION 3.08. Absence of Certain Changes or Events. (a) Since
December 31, 1998, except as disclosed in any CBS SEC Report or as
contemplated by this Agreement, there has not been any change, event or
circumstance which, when taken individually or together with all other
changes, events or circumstances, has had or would have a CBS Material
Adverse Effect, and (b) since December 31, 1998 to the date of this
Agreement, except as disclosed in any CBS SEC Report (i) each of CBS and its
subsidiaries has conducted its businesses only in the ordinary course and in
a manner consistent with past practice and (ii) there has not been (A) any
material change by CBS or any of its subsidiaries in its material accounting
policies, practices and procedures, (B) any entry by CBS or any of its
subsidiaries into any commitment or transaction material to CBS and its
subsidiaries taken as a whole other than in the ordinary course of business
consistent with past practice, (C) any declaration, setting aside or payment
of any dividend or distribution in respect of any capital stock of CBS or
any of its subsidiaries (other than cash dividends payable by any wholly
owned subsidiary to
another subsidiary or CBS), or (D) any increase in the compensation payable or
to become payable to any corporate officers or heads of divisions of CBS or any
of its subsidiaries, except in the ordinary course of business consistent with
past practice.
SECTION 3.09. Absence of Litigation. Except as disclosed in any
CBS SEC Report, there is no claim, action, proceeding or investigation
pending or, to the knowledge of CBS, threatened against CBS or any of its
subsidiaries, or any property or asset of CBS or any of its subsidiaries,
before any court, arbitrator or Governmental Authority, in each case except
as would not have a CBS Material Adverse Effect. As of the date of this
Agreement, none of CBS, any of its subsidiaries nor any property or asset of
CBS or any of its subsidiaries is subject to any order, writ, judgment,
injunction, decree, determination or award imposed by any court, arbitration
or Governmental Authority, in each case except as would not have a CBS
Material Adverse Effect.
SECTION 3.10. Employee Benefit Plans. (a) With respect to each
employee benefit plan, program, arrangement and contract (including, without
limitation, any "employee benefit plan", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
maintained or contributed to by CBS or any of its subsidiaries, or with
respect to which CBS or any of its subsidiaries could incur liability under
Section 4069 of ERISA, other than multiemployer plans within the meaning of
Section 3(37) of ERISA (the "CBS Benefit Plans"), CBS will provide to Viacom
within 15 days of the date of this Agreement a true and correct copy of (i)
the most recent annual report (Form 5500) filed with the Internal Revenue
Service (the "IRS"), (ii) such CBS Benefit Plan, (iii) each trust agreement
relating to such CBS Benefit Plan, (iv) the most recent summary plan
description for each CBS Benefit Plan for which a summary plan description
is required, (v) the most recent actuarial report or valuation relating to a
CBS Benefit Plan subject to Title IV of ERISA, if any, and (vi) the most
recent determination letter, if any, issued by the IRS with respect to any
CBS Benefit Plan qualified under Section 401(a) of the Code. CBS will,
promptly following the date of this Agreement, request a copy of each CBS
Benefit Plan that is a multiemployer plan within the meaning of Section
3(37) of ERISA from the trustees of such multiemployer plan and CBS shall
deliver such copy of the plan to Viacom promptly upon its receipt thereof.
(b) Each CBS Benefit Plan has been administered in accordance with
its terms, and in compliance with applicable laws, except as would not have
a CBS Material Adverse Effect. CBS and its subsidiaries have performed all
obligations required to be performed by them under, are not in any respect
in default under or in violation of, and have no knowledge of any default or
violation by any party to, any CBS Benefit Plans, except as would not have a
CBS Material Adverse Effect. With respect to the CBS Benefit Plans, no event
has occurred and, to the knowledge of CBS, there exists no condition or set
of circumstances, in connection with which CBS or any of its subsidiaries is
reasonably likely to be subject to any liability under the terms of such CBS
Benefit Plans, ERISA, the Code or any other applicable Law except as would
not, individually or in the aggregate, have a CBS Material Adverse Effect.
Neither CBS nor any of its subsidiaries has any actual or contingent
liability under Title IV of ERISA (other than the payment of premiums to the
Pension Benefit Guaranty Corporation), including, without limitation, any
liability in connection with (i) the termination or reorganization of any
employee benefit plan subject to Title IV of ERISA or (ii) the withdrawal
from any Multiemployer Plan or Multiple Employer Plan, and no fact or event
exists which is reasonably likely to give rise to any such liability, in
each case
except as would not, individually or in the aggregate, have a CBS Material
Adverse Effect.
(c) CBS has made available to Viacom: (i) copies of all employment
agreements with the top five most highly compensated executive officers of
CBS and its subsidiaries; (ii) copies of all material severance agreements,
programs and policies of CBS or any of its subsidiaries with or relating to
its or its subsidiaries' employees; and (iii) copies of all material plans,
programs, agreements and other arrangements of CBS or any of its
subsidiaries with or relating to its or its subsidiaries' employees which
contain change in control provisions. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any payment (including, without limitation, severance,
unemployment compensation, "golden parachute" or otherwise) becoming due to
any director, officer or employee of CBS or any of its subsidiaries from CBS
or any of its affiliates under any CBS Benefit Plan or otherwise, which
payment is material in relation to the compensation previously provided to
such individual (other than payments resulting from a change in
responsibilities or reporting obligations of individual employees), (ii)
materially increase any benefits otherwise payable under any CBS Benefit
Plan, which increase is material in relation to the benefits previously
provided or (iii) result in any acceleration of the time of payment or
vesting of any material benefits.
(d) Each CBS Benefit Plan that is intended to be qualified under
Section 401(a) of the Code or Section 401(k) of the Code has timely received
a favorable determination letter from the IRS covering all of the provisions
applicable to the Plan for which determination letters are currently
available that the CBS Benefit Plan is so qualified and each trust
established in connection with any CBS Benefit Plan which is intended to be
exempt from federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that it is so exempt, and no
fact or event has occurred since the date of such determination letter or
letters from the IRS which is reasonably likely to adversely affect the
qualified status of any such CBS Benefit Plan or the exempt status of any
such trust.
SECTION 3.11. Labor Matters. There is no labor dispute, strike or
work stoppage against CBS or any of its subsidiaries pending or, to the
knowledge of CBS, threatened which would reasonably be expected to interfere
with the respective business activities of CBS or any of its subsidiaries,
except for such disputes, strikes or work stoppages which would not have a
CBS Material Adverse Effect. There is no charge or complaint against CBS or
any of its subsidiaries by the National Labor Relations Board or any
comparable state agency pending or threatened in writing, except for such
charges or complaints (or related unfair labor practices) which would not
have a CBS Material Adverse Effect.
SECTION 3.12. Environmental Matters. Except as would not,
individually or in the aggregate, have a CBS Material Adverse Effect:
(a) CBS and its subsidiaries (i) are in compliance with all, and
are not subject to any asserted liability or, to CBS's knowledge, any
liability (including liability with respect to current or former
subsidiaries or operations), in each case with respect to any,
Environmental Laws (as defined below), (ii) hold or have applied for
all Environmental Permits (as defined below) and (iii) are in
compliance with their respective Environmental Permits;
(b) neither CBS nor any CBS subsidiary has received any written
notice, demand, letter, claim or request for information alleging that
CBS or any of its subsidiaries is or may be in violation of, or liable
under, any Environmental Law;
(c) neither CBS nor any of its subsidiaries (i) has entered into
or agreed to any consent decree or order or is subject to any judgment,
decree or judicial order relating to compliance with Environmental
Laws, Environmental Permits or the investigation, sampling, monitoring,
treatment, remediation, removal or cleanup of Hazardous Materials (as
defined below) and, to the knowledge of CBS, no investigation,
litigation or other proceeding is pending or threatened in writing with
respect thereto, or (ii) is an indemnitor in connection with any
threatened or asserted claim by any third-party indemnitee for any
liability under any Environmental Law or relating to any Hazardous
Materials; and
(d) none of the real property owned or leased by CBS or any of its
subsidiaries is listed or, to the knowledge of CBS, proposed for
listing on the "National Priorities List" under CERCLA, as updated
through the date hereof, or any similar state or foreign list of sites
requiring investigation or cleanup.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended as of the date
hereof.
"Environmental Laws" means any applicable federal, state, local or
foreign statute, law, ordinance, regulation, rule, code, treaty, writ
or order and any enforceable judicial or administrative interpretation
thereof, including any judicial or administrative order, consent
decree, judgment, stipulation, injunction, permit, authorization,
policy, opinion, or agency requirement, in each case having the force
and effect of law, relating to the pollution, protection, investigation
or restoration of the environment, health and safety or natural
resources, including those relating to the use, handling, presence,
transportation, treatment, storage, disposal, release, threatened
release or discharge of Hazardous Materials or noise, odor, wetlands,
pollution, contamination or any injury or threat of injury to persons
or property or to the siting, construction, operation, closure and
post-closure care of waste disposal, handling and transfer facilities.
"Environmental Permits" means any permit, approval, identification
number, license and other authorization required under any
Environmental Law.
"Hazardous Materials" means (i) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (ii) any
chemical, material or other substance defined or regulated as toxic or
hazardous or as a pollutant or contaminant or waste under any
Environmental Law.
SECTION 3.13. Trademarks, Patents and Copyrights. Except as would
not have a CBS Material Adverse Effect, CBS and its subsidiaries own, or
possess adequate licenses or other valid rights to use, all material
patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, copyrights, service marks, service xxxx rights, trade secrets,
applications to register, and registrations for, the
foregoing trademarks, know-how and other proprietary rights and information used
in connection with the business of CBS and its subsidiaries as currently
conducted, and no assertion or claim has been made in writing challenging the
validity of any of the foregoing which would have a CBS Material Adverse Effect.
To the knowledge of CBS, the conduct of the business of CBS and its subsidiaries
as currently conducted does not conflict in any way with any patent, patent
right, license, trademark, trademark right, trade name, trade name right,
service xxxx or copyright of any third party, except for such conflicts which
would not have a CBS Material Adverse Effect.
SECTION 3.14. Taxes. (a) For purposes of this Agreement, "Tax" or
"Taxes" means any and all taxes, fees, levies, duties, tariffs, imposts, and
other charges of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto)
imposed by any governmental or taxing authority including, without
limitation: taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital
stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value added, or
gains taxes; license, registration and documentation fees; and customs'
duties, tariffs, and similar charges.
(b) Except as would not have a CBS Material Adverse Effect: (i)
each of CBS and each of its subsidiaries has timely filed all federal,
state, local and foreign tax returns and reports (including extensions)
required to be filed by it and has paid and discharged all Taxes shown as
due thereon and has paid all of such other Taxes as are due, other than such
payments as are being contested in good faith by appropriate proceedings;
(ii) neither the IRS nor any other taxing authority or agency, domestic or
foreign, is now asserting or, to the knowledge of CBS after due inquiry,
threatening to assert against CBS or any of its subsidiaries any deficiency
or claim for Taxes; (iii) no waiver of any statute of limitations with
respect to, or any extension of a period for the assessment of, any Tax has
been granted by CBS or any of its subsidiaries; (iv) the accruals and
reserves for Taxes reflected in the CBS 1998 Balance Sheet and the most
recent quarterly financial statements are adequate to cover all Taxes
accruable through the date thereof in accordance with generally accepted
accounting principles; (v) no election under Section 341(f) of the Code has
been made by CBS or any of its subsidiaries; (vi) CBS and each of its
subsidiaries has withheld or collected and paid over to the appropriate
governmental authorities or is properly holding for such payment all Taxes
required by law to be withheld or collected; (vii) there are no liens for
Taxes upon the assets of CBS or any of its subsidiaries, other than liens
for Taxes that are being contested in good faith by appropriate proceedings
and (viii) CBS has not constituted a "distributing corporation" (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code in the two
years prior to the date of this Agreement.
SECTION 3.15. Tax Matters. None of CBS or any of its affiliates
has taken or agreed to take any action that would prevent the Merger from
constituting a transaction qualifying under Section 368(a) of the Code. None
of CBS or any of its affiliates or agents is aware of any agreement, plan or
other circumstance that would prevent the Merger from qualifying under
Section 368(a) of the Code, that could prevent them from providing
representations required in Sections 7.02(c) or 7.03(c), or that could
prevent the opinions described in such Sections from being given and to the
knowledge of CBS, the Merger will so qualify.
SECTION 3.16. Year 2000 Compliance. (a) CBS has adopted a plan
that it believes will cause CBS Systems (as defined below) to be CBS Year
2000 Compliant (as defined below) (such plan, as it may be amended, modified
or supplemented from time to time being, the "CBS Year 2000 Plan") in all
material respects. CBS has taken, and between the date of this Agreement and
the Effective Time will continue to take, all reasonable steps to implement
the CBS Year 2000 Plan with respect to the CBS Systems. Notwithstanding
anything in this Section 3.16 to the contrary, CBS does not represent or
warrant that CBS Systems (or any other operations, systems, equipment or
software of CBS or its subsidiaries or any of their respective affiliates)
are or will be CBS Year 2000 Compliant at or prior to the Effective Time,
regardless of whether the CBS Year 2000 Plan has or has not been implemented
or complied with.
(b) For purposes of this Section 3.16, (i) "CBS Systems" shall
mean all computer, hardware, software, systems, and equipment (including
embedded microcontrollers in non-computer equipment) embedded within or
required to operate the current products of CBS and its subsidiaries, and/or
material to or necessary for CBS and its subsidiaries to carry on their
respective businesses as currently conducted; and (ii) "CBS Year 2000
Compliant" means that CBS Systems will (A) manage, accept, process, store
and output data involving dates reasonably expected to be encountered in the
foreseeable future and (B) accurately process date data from, into and
between the 20th and 21st centuries and each date during the years 1999 and
2000.
SECTION 3.17. Opinion of Financial Advisors. CBS has received the
written opinion of Evercore Group Inc. (the "CBS Financial Advisor") on or
prior to the date of this Agreement, to the effect that, as of the date of
such opinion, the Exchange Ratio is fair to the shareholders of CBS from a
financial point of view, and CBS will deliver a copy of such opinion to
Viacom promptly after the date of this Agreement.
SECTION 3.18. Vote Required. The affirmative vote of a majority of
the votes cast by all shareholders entitled to vote at the CBS Stockholders'
Meeting is the only vote of the holders of any class or series of capital
stock of CBS necessary to adopt this Agreement.
SECTION 3.19. Brokers. No broker, finder or investment banker
(other than the CBS Financial Advisor) is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger based upon
arrangements made by or on behalf of CBS.
SECTION 3.20. Pennsylvania Law. Pursuant to its By-laws, CBS has
opted out of anti-takeover provisions contained in the Pennsylvania Law
relating to (i) "control share acquisitions" (Sections 2561 through 2568 of
the Pennsylvania Law) and (ii) disgorgement of profits by certain
controlling shareholders following attempts to acquire control (Sections
2571 through 2576 of the Pennsylvania Law). Section 2538 of the Pennsylvania
Law relating to "interested shareholder transactions" and Sections 2551
through 2556 of the Pennsylvania Law relating to "business combinations with
interested shareholders" are not applicable to this Agreement or the
transactions contemplated hereby.
SECTION 3.21. Rights Agreement. As of the date of this Agreement,
the copy of the Rights Agreement, including all amendments and exhibits
thereto, that is set
forth as an exhibit to CBS's Form 8-K, filed with the SEC on January 9, 1996, is
a complete and correct copy thereof. Neither the execution of this Agreement nor
the consummation of the Merger will (A) cause the Rights issued pursuant to the
Rights Agreement to become exercisable, (B) cause Viacom to become an Acquiring
Person or a Principal Party (as each term is defined in the Rights Agreement) or
(C) give rise to a Distribution Date (as such term is defined in the Rights
Agreement).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF VIACOM
Except as disclosed in the report on Form 10-K dated March 31,
1999 for the year ended December 31, 1998, the reports on Form 10-Q and Form
8-K since December 31, 1998 or the proxy statement dated April 16, 1999, in
each case in the form filed by Viacom with the SEC or in a separate
disclosure schedule which has been delivered by Viacom to CBS prior to the
execution of this Agreement (the "Viacom Disclosure Schedule") (each section
of which qualifies the correspondingly numbered representation and warranty
or covenant to the extent specified therein and such other representations
and warranties or covenants to the extent a matter in such section is
disclosed in such a way as to make its relevance to the information called
for by such other representation and warranty or covenant readily apparent),
Viacom hereby represents and warrants to CBS that:
SECTION 4.01. Organization and Qualification; Subsidiaries. Each
of Viacom and its subsidiaries is a corporation or entity duly incorporated
or formed, validly existing and in good standing, under the laws of its
jurisdiction of incorporation or formation, and has the requisite corporate
power and authority and all necessary governmental approvals to own, lease
and operate its properties and to carry on its business as it is now being
conducted, except where the failure to have such power, authority and
governmental approvals would not have a Viacom Material Adverse Effect (as
defined below). Each of Viacom and its subsidiaries is duly qualified or
licensed as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed
and in good standing that would not have a Viacom Material Adverse Effect.
The term "Viacom Material Adverse Effect" means any change, effect or
circumstance that is or is reasonably likely to be materially adverse to the
business, results of operations or financial condition of Viacom and its
subsidiaries taken as a whole, other than any change, effect or circumstance
relating to or resulting from (i) general changes in the media or
entertainment industries or the advertising markets, (ii) changes in general
economic conditions or securities markets in general or (iii) this Agreement
or the transactions contemplated hereby or the announcement thereof.
SECTION 4.02. Certificate of Incorporation and By-Laws. Viacom has
made available to CBS a complete and correct copy of the Certificate of
Incorporation and the By-laws, each as amended to date, of Viacom and
Blockbuster Corporation ("Blockbuster"). The Certificates of Incorporation
and By-laws (or equivalent organizational documents) of Viacom and its
subsidiaries are in full force and effect. Except as would not have a Viacom
Material Adverse Effect, none of Viacom or its
subsidiaries is in violation of any provision of its Certificate of
Incorporation or By-laws (or equivalent organizational documents).
SECTION 4.03. Capitalization. The authorized capital stock of
Viacom consists of 500,000,000 shares of Viacom Class A Common Stock,
3,000,000,000 shares of Viacom Class B Common Stock and 200,000,000 shares
of Preferred Stock, par value $.01 per share, of Viacom ("Viacom Preferred
Stock"). As of September 3, 1999 (a) 139,923,921 shares of Viacom Class A
Common Stock and 605,085,135 shares of Viacom Class B Common Stock were
issued and outstanding, all of which were validly issued, fully paid and
nonassessable, (b) 1,356,400 shares of Viacom Class A Common Stock and
47,101,300 shares of Viacom B Common Stock were held in the treasury of
Viacom, (c) no shares of Viacom Class A Common Stock or Viacom Class B
Common Stock were held by subsidiaries of Viacom and (d) as of September 3,
1999, approximately 1,898,946 shares of Viacom Class B Common Stock were
reserved for future issuance pursuant to stock options or stock incentive
rights (collectively "Viacom Options") granted pursuant to Viacom's stock
option plans and arrangements (the "Viacom Stock Option Plans"). As of
September 3, 1999, no shares of Viacom Preferred Stock were issued and
outstanding. As of the date of this Agreement, except for the issuance of
Viacom Class B Common Stock pursuant to the exercise of Viacom Options and
options to purchase 11,600,000 shares of Class A Common Stock, par value
$.01 per share, of Blockbuster (the "Blockbuster Options") outstanding prior
to September 3, no shares of capital stock of Viacom or any of its
subsidiaries have been issued since September 3, 1999. Except as set forth
in this Section 4.03, as of the date of this Agreement, there are no
options, warrants or other rights, agreements (including registration rights
agreements), arrangements or commitments of any character relating to the
issued or unissued capital stock of Viacom or any of its subsidiaries or
obligating Viacom or any of its subsidiaries to issue or sell any shares of
capital stock of, or other equity interests in, Viacom or any of its
subsidiaries. All shares of capital stock of Viacom and its subsidiaries
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be
duly authorized, validly issued, fully paid and nonassessable. As of the
date of this Agreement, there are no outstanding contractual material
obligations of Viacom or any subsidiary to repurchase, redeem or otherwise
acquire any shares of capital stock of Viacom or any of its subsidiaries or
to provide material funds to, or make any material investment (in the form
of a loan capital contribution or otherwise) in, any person. The Stockholder
(as defined in the Parent Voting Agreements) is the holder of a majority of
the issued and outstanding shares of Viacom Class A Common Stock.
SECTION 4.04. Authority Relative to Agreement. Viacom has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Merger and the other
transactions contemplated hereby. The execution and delivery of this
Agreement by Viacom and the consummation by Viacom of the Merger and the
other transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action and no other corporate proceedings on the
part of Viacom are necessary to authorize the execution and delivery of this
Agreement or to consummate the Merger and the other transactions
contemplated hereby (other than, with respect to the Merger, the approval of
the Viacom Proposals by the holders of a majority of the then outstanding
shares of Viacom Class A Common Stock and the filing and recordation of
appropriate merger documents as required by Delaware Law and Pennsylvania
Law). This Agreement has been duly and validly executed and delivered by
Viacom and, assuming the due authorization,
execution and delivery by CBS, this Agreement constitutes a legal, valid and
binding obligation of Viacom, enforceable against Viacom in accordance with its
terms.
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Viacom does not, and the
performance of this Agreement by Viacom and the performance by Parent of the
Parent Voting Agreements will not, (i) conflict with or violate the
Certificate of Incorporation or Bylaws (or similar organization documents)
of (A) Viacom or Blockbuster or (B) any of its other subsidiaries, (ii)
assuming the consents, approvals and authorizations specified in Section
4.05(b) have been received and the waiting periods referred to therein have
expired, and any condition precedent to such consent, approval,
authorization, or waiver has been satisfied, conflict with or violate any
Law applicable to Viacom or any of its subsidiaries or by which any property
or asset of Viacom or any of its subsidiaries is bound or affected or (iii)
result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any right of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or other encumbrance on any property or
asset of Viacom or any of its subsidiaries pursuant to, any note, bond,
mortgage, indenture or credit agreement, or, to Viacom's knowledge as of the
date of this Agreement, any other, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Viacom or any
of its subsidiaries is a party or by which Viacom or any of its subsidiaries
or any property or asset of Viacom or any of its subsidiaries is bound or
affected, except, in the case of clauses (i)(B), (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other occurrences of the
type referred to above which would not have a Viacom Material Adverse Effect
or would not prevent or materially delay the consummation of the Merger;
provided, however, that for purposes of this Section 4.05(a), the definition
of Viacom Material Adverse Effect shall be read so as not to include clause
(iii) of the definition thereof.
(b) The execution and delivery of this Agreement by Viacom do not,
the performance of this Agreement by Viacom and the performance by Parent of
the Parent Voting Agreements will not, require any consent, approval,
authorization, waiver or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic, foreign or supranational,
except for applicable requirements of the Exchange Act, the Securities Act,
Blue Sky Laws, the HSR Act, such filings, approvals and waivers as may be
required by the Communications Act, applicable requirements of the
Investment Canada Act of 1985 and the Competition Act (Canada), any other
non-United States competition, antitrust and investment law, filing and
recordation of appropriate merger documents as required by Delaware Law and
Pennsylvania Law and the rules of the NYSE and except where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not have a Viacom Material Adverse Effect or
would not prevent or materially delay the consummation of the Merger;
provided, however, that for purposes of this Section 4.05(b), the definition
of Viacom Material Adverse Effect shall be read so as not to include clause
(iii) of the definition thereof.
SECTION 4.06. Permits and Licenses; Contracts. (a) Each of Viacom
and its subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions,
consents, certificates, approvals and orders necessary for Viacom or any of
its subsidiaries to own, lease and operate the properties of Viacom and its
subsidiaries or to carry on their business as it is now being conducted
and contemplated to be conducted (the "Viacom Permits"), and no suspension or
cancellation of any of the Viacom Permits is pending or, to the knowledge of
Viacom, threatened, except where the failure to have, or the suspension or
cancellation of, any of the Viacom Permits would not have a Viacom Material
Adverse Effect. None of Viacom or any of its subsidiaries is in conflict with,
or in default or violation of (i) any Laws applicable to Viacom or any of its
subsidiaries or by which any property or asset of Viacom or any of its
subsidiaries is bound or affected, (ii) any of the Viacom Permits, or (iii) any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Viacom or any of its
subsidiaries is a party or by which Viacom or any of its subsidiaries or any
property or asset of Viacom or any of its subsidiaries is bound or affected,
except for any such conflicts, defaults or violations that would not have a
Viacom Material Adverse Effect.
(b) Except as would not have a Viacom Material Adverse Effect, and
to the knowledge of Viacom, except as would not have a material adverse
effect on the Surviving Corporation following the Effective Time, none of
Viacom or any of its subsidiaries is a party to any contracts or agreements
that limits the ability of Viacom or any of its subsidiaries to compete in
any line of business or with any person or engage in any business in any
geographic area, in each case except for competition in businesses that
neither CBS nor Viacom are currently engaged in or will reasonably
foreseeably engage in.
(c) Viacom and its subsidiaries have operated the radio and
television stations and associated facilities for which Viacom or any of its
subsidiaries holds licenses from the FCC, in each case which are owned or
operated by Viacom and its subsidiaries (the "Viacom Licensed Facilities"),
in material compliance with the terms of the Viacom Permits issued by the
FCC to Viacom and its subsidiaries ("Viacom FCC Licenses"), and in material
compliance with the Communications Act, and Viacom and its subsidiaries have
timely filed or made all applications, reports and other disclosures
required by the FCC to be filed or made with respect to the Viacom Licensed
Facilities and have timely paid all FCC regulatory fees with respect
thereto, in each case except as would not have a Viacom Material Adverse
Effect. As of the date hereof, to Viacom's knowledge, there is not now
pending or threatened before the FCC any material investigation, proceeding,
notice of violation, order of forfeiture or complaint against Viacom or any
of its subsidiaries, relating to any of the Viacom Licensed Facilities or
FCC regulated services conducted by CBS that, if adversely decided, would
have a Viacom Material Adverse Effect.
SECTION 4.07. SEC Filings; Financial Statements. (a) Viacom and
Blockbuster have filed all forms, reports and documents required to be filed
by it with the SEC from December 31, 1996 to the date of this Agreement,
including: (i) Annual Reports on Form 10-K, (ii) Quarterly Reports on Form
10-Q and (iii) proxy statements relating to Viacom's and Blockbuster's
meetings of stockholders (whether annual or special) (the forms, reports and
other documents referred to in clauses (i), (ii), (iii) and all other forms,
reports and other registration statements filed by Viacom or Blockbuster
with the SEC as of the date of this Agreement, including all amendments and
supplements thereto filed with the SEC as of the date of this Agreement,
above being referred to herein, collectively, as the "Viacom SEC Reports").
The Viacom SEC Reports, as well as all forms, reports and documents to be
filed by Viacom or Blockbuster with the SEC after the date hereof and prior
to the Effective Time, (i) were or will be prepared in accordance with the
requirements of the Securities Act, and the
Exchange Act, as the case may be, and the rules and regulations thereunder,
(ii) did not at the time they were filed, or will not at the time they are
filed, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading, and (iii) did not at the time they were
filed, or will not at the time they are filed, omit any documents required
to be filed as exhibits thereto. No Viacom subsidiary, except Blockbuster,
is subject to the periodic reporting requirements of the Exchange Act.
(b) Each of the financial statements (including, in each case, any
notes thereto) contained in the Viacom SEC Reports and each of the financial
statements to be filed by Viacom or Blockbuster with the SEC after the date
hereof and prior to the Effective Time was or will be prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each fairly presented in all material
respects or will fairly present in all material respects the consolidated
financial position, results of operations and cash flows of Viacom and its
subsidiaries as at the respective dates thereof and for the respective
periods indicated therein in accordance with generally accepted accounting
principles (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments which were not and are not expected to be
material).
(c) Except as and to the extent set forth in the Viacom SEC
Reports, Viacom and its subsidiaries do not have any liability or obligation
of any nature (whether accrued, absolute, contingent or otherwise) other
than liabilities and obligations which, individually or in the aggregate,
would not have a Viacom Material Adverse Effect.
(d) Viacom has heretofore furnished to CBS complete and correct
copies of all material amendments and modifications that have not been filed
by Viacom or Blockbuster with the SEC to all agreements, documents and other
instruments that previously had been filed by Viacom or Blockbuster with the
SEC and are currently in effect.
SECTION 4.08. Absence of Certain Changes or Events. (a) Since
December 31, 1998, except as disclosed in any Viacom SEC Report or as
contemplated by this Agreement, there has not been any change, event or
circumstance which, when taken individually or together with all other
changes, events or circumstances, has had or would have a Viacom Material
Adverse Effect, and (b) since December 31, 1998 to the date of this
Agreement, except as disclosed in any Viacom SEC Reports (i) each of Viacom
and its subsidiaries has conducted its businesses only in the ordinary
course and in a manner consistent with past practice and (ii) there has not
been (A) any material change by Viacom or any of its subsidiaries in its
material accounting policies, practices and procedures, (B) any entry by
Viacom or any of its subsidiaries into any commitment or transaction
material to Viacom and its subsidiaries taken as a whole other than in the
ordinary course of business consistent with past practice, (C) any
declaration, setting aside or payment of any dividend or distribution in
respect of any capital stock of Viacom or any of its subsidiaries (other
than cash dividends payable by any wholly owned subsidiary to another
subsidiary or Viacom), or (D) any increase in the compensation payable or to
become payable to any corporate officers or heads of divisions of Viacom or
any of its subsidiaries, except in the ordinary course of business
consistent with past practice.
SECTION 4.09. Absence of Litigation. Except as disclosed in any
Viacom SEC Report, there is no claim, action, proceeding or investigation
pending or, to the knowledge of Viacom, threatened against Viacom or any of
its subsidiaries, or any property or asset of Viacom or any of its
subsidiaries, before any court, arbitrator or Governmental Authority, in
each case except as would not have a Viacom Material Adverse Effect. As of
the date of this Agreement, none of Viacom, any of its subsidiaries nor any
property or asset of Viacom or any of its subsidiaries is subject to any
order, writ, judgment, injunction, decree, determination or award imposed by
any court, arbitration or Governmental Authority, in each case except as
would not have a Viacom Material Adverse Effect.
SECTION 4.10. Employee Benefit Plans. (a) With respect to each
employee benefit plan, program, arrangement and contract (including, without
limitation, any "employee benefit plan", as defined in Section 3(3) of
ERISA), maintained or contributed to by Viacom or any of its subsidiaries,
or with respect to which Viacom or any of its subsidiaries could incur
liability under Section 4069 of ERISA, other than multiemployer plans within
the meaning of Section 3(37) of ERISA (the "Viacom Benefit Plans"), Viacom
will provide to CBS within 15 days of this Agreement a true and correct copy
of (i) the most recent annual report (Form 5500) filed with the IRS, (ii)
such Viacom Benefit Plan, (iii) each trust agreement relating to such Viacom
Benefit Plan, (iv) the most recent summary plan description for each Viacom
Benefit Plan for which a summary plan description is required, (v) the most
recent actuarial report or valuation relating to a Viacom Benefit Plan
subject to Title IV of ERISA, if any, and (vi) the most recent determination
letter, if any, issued by the IRS with respect to any Viacom Benefit Plan
qualified under Section 401(a) of the Code. Viacom will promptly following
the date of this Agreement request a copy of each Viacom Benefit Plan that
is a multiemployer plan within the meaning of Section 3(37) of ERISA from
the trustees of such multiemployer plan and Viacom shall deliver such copy
of the plan to CBS promptly upon its receipt thereof.
(b) Each Viacom Benefit Plan has been administered in accordance
with its terms, and in compliance with applicable laws, except as would not
have a Viacom Material Adverse Effect. Viacom and its subsidiaries have
performed all obligations required to be performed by them under, are not in
any respect in default under or in violation of, and have no knowledge of
any default or violation by any party to, any Viacom Benefit Plans, except
as would not have a Viacom Material Adverse Effect. With respect to the
Viacom Benefit Plans, no event has occurred and, to the knowledge of Viacom,
there exists no condition or set of circumstances, in connection with which
Viacom or any of its subsidiaries is reasonably likely to be subject to any
liability under the terms of such Viacom Benefit Plans, ERISA, the Code or
any other applicable Law except as would not have a Viacom Material Adverse
Effect. Neither Viacom nor any of its subsidiaries has any actual or
contingent liability under Title IV of ERISA (other than the payment of
premiums to the Pension Benefit Guaranty Corporation) except as would not
have a Viacom Material Adverse Effect. Neither Viacom nor any of its
subsidiaries has any actual or contingent liability under Title IV of ERISA
(other than the payment of premiums to the Pension Benefit Guaranty
Corporation), including, without limitation, any liability in connection
with (i) the termination or reorganization of any employee benefit plan
subject to Title IV of ERISA or (ii) the withdrawal from any Multiemployer
Plan or Multiple Employer Plan, and no fact or event exists which is
reasonably likely to give rise to any such liability, except as would not,
individually or in the aggregate, have a Viacom Material Adverse Effect.
(c) Viacom has made available to CBS (i) copies of all employment
agreements with the top five most highly compensated executive officers of
Viacom or any of its subsidiaries; (ii) copies of all material severance
agreements, programs and policies of Viacom or any of its subsidiaries with
or relating to its or its subsidiaries' employees; and (iii) copies of all
material plans, programs, agreements and other arrangements of Viacom or any
of its subsidiaries with or relating to its or its subsidiaries' employees
which contain change in control provisions. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) result in any payment (including, without
limitation, severance, unemployment compensation, "golden parachute" or
otherwise) becoming due to any director, officer or employee of Viacom or
any of its subsidiaries from Viacom or any of its affiliates under any
Viacom Benefit Plan or otherwise, which payment is material in relation to
the compensation previously provided to such individual (other than payments
resulting from a change in responsibilities or reporting obligations of
individual employees), (ii) materially increase any benefits otherwise
payable under any Viacom Benefit Plan, which increase is material in
relation to the benefits previously provided or (iii) result in any
acceleration of the time of payment or vesting of any material benefits.
(d) Each Viacom Benefit Plan that is intended to be qualified
under Section 401(a) of the Code or Section 401(k) of the Code has timely
received a favorable determination letter from the IRS covering all of the
provisions applicable to the Plan for which determination letters are
currently available that the Viacom Benefit Plan is so qualified and each
trust established in connection with any Viacom Benefit Plan which is
intended to be exempt from federal income taxation under Section 501(a) of
the Code has received a determination letter from the IRS that it is so
exempt, and no fact or event has occurred since the date of such
determination letter or letters from the IRS which is reasonably likely to
adversely affect the qualified status of any such Viacom Benefit Plan or the
exempt status of any such trust.
SECTION 4.11. Labor Matters. There is no labor dispute, strike or
work stoppage against Viacom or any of its subsidiaries pending or, to the
knowledge of Viacom, threatened which would reasonably be expected to
interfere with the respective business activities of Viacom or any of its
subsidiaries, except for such disputes, strikes or work stoppages which
would not have a Viacom Material Adverse Effect. There is no charge or
complaint against Viacom or any of its subsidiaries by the National Labor
Relations Board or any comparable state agency pending or threatened in
writing, except for such charges or complaints (or related unfair labor
practices) which would not have a Viacom Material Adverse Effect.
SECTION 4.12. Environmental Matters. Except as would not,
individually or in the aggregate, have a Viacom Material Adverse Effect:
(a) Viacom and its subsidiaries (i) are in compliance with all,
and are not subject to any asserted liability or, to Viacom's
knowledge, any liability (including liability with respect to current
or former subsidiaries or operations), in each case with respect to
any, Environmental Laws (as defined below), (ii) hold or have applied
for all Environmental Permits (as defined below) and (iii) are in
compliance with their respective Environmental Permits;
(b) neither Viacom nor any Viacom subsidiary has received any
written notice, demand, letter, claim or request for information
alleging that Viacom or any of its subsidiaries is or may be in
violation of, or liable under, any Environmental Law;
(c) neither Viacom nor any of its subsidiaries (i) has entered
into or agreed to any consent decree or order or is subject to any
judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation,
sampling, monitoring, treatment, remediation, removal or cleanup of
Hazardous Materials (as defined below) and, to the knowledge of Viacom,
no investigation, litigation or other proceeding is pending or
threatened in writing with respect thereto, or (ii) is an indemnitor in
connection with any threatened or asserted claim by any third-party
indemnitee for any liability under any Environmental Law or relating to
any Hazardous Materials; and
(d) none of the real property owned or leased by Viacom or any of
its subsidiaries is listed or, to the knowledge of Viacom, proposed for
listing on the "National Priorities List" under CERCLA, as updated
through the date hereof, or any similar state or foreign list of sites
requiring investigation or cleanup.
SECTION 4.13. Trademarks, Patents and Copyrights. Except as would
not have a Viacom Material Adverse Effect, Viacom and its subsidiaries own,
or possess adequate licenses or other valid rights to use, all material
patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, copyrights, service marks, service xxxx rights, trade secrets,
applications to register, and registrations for, the foregoing trademarks,
service marks, know-how and other proprietary rights and information used in
connection with the business of Viacom and its subsidiaries as currently
conducted, and no assertion or claim has been made in writing challenging
the validity of any of the foregoing which would have a Viacom Material
Adverse Effect. To the knowledge of Viacom, the conduct of the business of
Viacom and its subsidiaries as currently conducted does not conflict in any
way with any patent, patent right, license, trademark, trademark right,
trade name, trade name right, service xxxx or copyright of any third party,
except for such conflicts which would not have a Viacom Material Adverse
Effect.
SECTION 4.14. Taxes. Except as would not have a Viacom Material
Adverse Effect, (a) each of Viacom and each of its subsidiaries has timely
filed all federal, state, local and foreign tax returns and reports
(including extensions) required to be filed by it and has paid and
discharged all Taxes shown as due thereon and has paid all of such other
Taxes as are due, other than such payments as are being contested in good
faith by appropriate proceedings, (b) neither the IRS nor any other taxing
authority or agency, domestic or foreign, is now asserting or, to the
knowledge of Viacom after due inquiry, threatening to assert against Viacom
or any of its subsidiaries any deficiency or claim for Taxes, (c) no waiver
of any statute of limitations with respect to, or any extension of a period
for the assessment of, any Tax has been granted by Viacom or any of its
subsidiaries, (d) the accruals and reserves for Taxes reflected in the
Viacom 1998 Balance Sheet and the most recent quarterly financial statements
are adequate to cover all Taxes accruable through the date thereof in
accordance with generally accepted accounting principles, (e) no election
under Section 341(f) of the Code has been made by Viacom or any of its
subsidiaries, (f) Viacom and each of its subsidiaries has withheld or
collected and paid over to the appropriate governmental authorities or is
properly holding
for such payment all Taxes required by law to be withheld or collected, (g)
there are no liens for Taxes upon the assets of Viacom or any of its
subsidiaries, other than liens for Taxes that are being contested in good
faith by appropriate proceedings and (h) Viacom has not constituted a
"distributing corporation" (within the meaning of Section 355(a)(1)(A) of
the Code) in a distribution of stock qualifying for tax-free treatment under
Section 355 of the Code in the two years prior to the date of this
Agreement.
SECTION 4.15. Tax Matters. None of Viacom or any of its affiliates
has taken or agreed to take any action that would prevent the Merger from
constituting a transaction qualifying under Section 368(a) of the Code. None
of Viacom or any of its affiliates or agents is aware of any agreement, plan
or other circumstance that would prevent the Merger from qualifying under
Section 368(a) of the Code, that could prevent them from providing
representations required in Sections 7.02(c) or 7.03(c), or that could
prevent the opinions described in such Sections from being given and to the
knowledge of Viacom the Merger will so qualify.
SECTION 4.16. Year 2000 Compliance. (a) Viacom has adopted a plan
that it believes will cause Viacom Systems (as defined below) to be Viacom
Year 2000 Compliant (as defined below) (such plan, as it may be amended,
modified or supplemented from time to time being, the "Viacom Year 2000
Plan") in all material respects. Viacom has taken, and between the date of
this Agreement and the Effective Time will continue to take, all reasonable
steps to implement the Viacom Year 2000 Plan with respect to the Viacom
Systems. Notwithstanding anything in this Section 4.16 to the contrary,
Viacom does not represent or warrant that Viacom Systems (or any other
operations, systems, equipment or software of Viacom or its subsidiaries or
any of their respective affiliates) are or will be Viacom Year 2000
Compliant at or prior to the Effective Time, regardless of whether the
Viacom Year 2000 Plan has or has not been implemented or complied with.
(b) For purposes of this Section 4.16, (i) "Viacom Systems" shall
mean all computer, hardware, software, systems, and equipment (including
embedded microcontrollers in non-computer equipment) embedded within or
required to operate the current products of Viacom and its subsidiaries,
and/or material to or necessary for Viacom and its subsidiaries to carry on
their respective businesses as currently conducted; and (ii) "Viacom Year
2000 Compliant" means that Viacom Systems will (A) manage, accept, process,
store and output data involving dates reasonably expected to be encountered
in the foreseeable future and (B) accurately process date data from, into
and between the 20th and 21st centuries and each date during the years 1999
and 2000.
SECTION 4.17. Opinion of Financial Advisors. Viacom has received
the written opinion of Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. (the "Viacom
Financial Advisor") on or prior to the date of this Agreement, to the effect
that, as of the date of such opinion, the Exchange Ratio is fair to the
stockholders of Viacom, from a financial point of view, and Viacom will
deliver a copy of such opinion to CBS promptly after the date of this
Agreement.
SECTION 4.18. Vote Required. The affirmative vote of the holders
of a majority of the outstanding Viacom Class A Common Stock is the only
vote of the holders of any class or series of capital stock of Viacom
necessary to approve the transactions contemplated by this Agreement.
SECTION 4.19. Section 203 of Delaware Law. The Board of Directors
of Viacom has approved this Agreement and such Viacom approval is sufficient
to render inapplicable to this Agreement, the Parent Voting Agreements and
the transactions contemplated hereby and thereby the provisions of Section
203 of Delaware Law.
SECTION 4.20. Brokers. No broker, finder or investment banker
(other than the Viacom Financial Advisor) is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger based upon
arrangements made by or on behalf of Viacom.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by CBS Pending the Merger. CBS
covenants and agrees that, between the date of this Agreement and the
Effective Time, except (w) as contemplated by this Agreement or as set forth
in Section 5.01 of the CBS Disclosure Schedule, (x) as Viacom shall
otherwise agree in advance in writing, which agreement shall not be
unreasonably withheld or delayed, (y) for actions taken in connection with
the consummation of the acquisitions of King World, Outdoor Systems, Inc.
and Xxxxxxx Entertainment Company (the "Pending Transactions") on
substantially the same terms that have heretofore been agreed between such
parties or on such other terms and conditions which would not be reasonably
likely to have an impact that is both material and detrimental to Circle and
its subsidiaries, taken as a whole, unless Viacom shall have consented
thereto, such consent not to be unreasonably withheld or delayed, and (z)
for the exercise of options, warrants and similar securities which would
otherwise expire prior to the Effective Time, or the exercise of any put
rights, call rights, rights of first refusal and other similar rights, in
each case under agreements in existence on the date of this Agreement and
otherwise in accordance with the terms of this Agreement, the business of
CBS and its subsidiaries shall be conducted only in, and CBS and its
subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; and CBS and its
subsidiaries shall use their reasonable best efforts to preserve
substantially intact CBS's business organization, to keep available the
services of the current officers, employees and consultants of CBS and its
subsidiaries (provided that the foregoing covenant to use reasonable best
efforts shall not require CBS to offer retention bonuses to such
individuals) and to preserve the current relationships of CBS and its
subsidiaries with customers, distributors, dealers, suppliers and other
persons with which CBS and its subsidiaries have significant business
relations. By way of amplification and not limitation, between the date of
this Agreement and the Effective Time, CBS will not do, and will not permit
any of its subsidiaries to do, directly or indirectly, any of the following
except in compliance with the exceptions listed above:
(a) amend or otherwise change the Articles of Incorporation or
By-laws of CBS or any CBS subsidiary other than Infinity if such
amendment or change would have a CBS Material Adverse Effect;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i)
any shares of its or its subsidiaries' capital stock, or any options,
warrants, convertible securities or
other rights of any kind to acquire any shares of its or its
subsidiaries' capital stock or any other ownership interest (including
any phantom interest), of CBS or any of its subsidiaries (except (A)
for the issuance of Shares issuable pursuant to CBS Options or shares
of Infinity common stock pursuant to Infinity stock options outstanding
on the date hereof, (B) for the issuance of options, and other stock
grants of CBS or Shares which do not provide for accelerated vesting in
connection with the Merger and the other transactions contemplated by
this Agreement (except as permitted under any severance arrangement
established by CBS in accordance with Section 6.16 hereof or with
respect to 1,200,000 options to be issued to two senior executives of
Kingworld upon its acquisition by CBS), (x) to purchase a maximum of
5,000,000 Shares, (y) to purchase a maximum of 17,200,000 Shares as set
forth in Section 5.01 of the CBS Disclosure Schedule and (z) to
purchase a maximum of 12,500,000 shares of Infinity common stock as set
forth in Section 5.01 of the CBS Disclosure Schedule, in each case in
the ordinary course of business consistent with past practice and
allocated to persons who are officers, employees, directors,
independent contractors and production company writers and talent of
CBS or Infinity, as applicable, or any of their respective subsidiaries
(including past practice of any such subsidiary before its acquisition
by CBS) and (C) the issuance of shares of CBS and Infinity stock in
connection with the Pending Transactions) or (ii) any assets material
to CBS and its subsidiaries, taken as a whole, except for sales in the
ordinary course of business and in a manner consistent with past
practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its or its subsidiaries' capital stock other than
cash dividends payable by any wholly owned CBS subsidiary to another
CBS subsidiary or CBS and other than dividends made or paid by
Infinity, so long as the aggregate amount of such dividends paid by
Infinity shall not exceed $500,000,000;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its or its
subsidiaries' capital stock;
(e) (i) except in connection with the Pending Transactions and in
connection with acquisitions which individually do not exceed
$200,000,000 and in the aggregate do not exceed $1,000,000,000 (A)
acquire (including by merger, consolidation, or acquisition of stock or
assets), or otherwise make any investment in, any corporation,
partnership, limited liability company, other business organization or
any division thereof, or any material amount of assets; or (B) incur
any indebtedness for borrowed money, issue any debt securities, assume,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person, agree to amend or
otherwise modify in any manner any agreement or instrument pursuant to
which CBS has incurred indebtedness, or make any loans or advances,
except in the ordinary course of business and consistent with past
practice, except the refinancing of existing indebtedness, borrowings
under commercial paper programs in the ordinary course of business or
borrowings under existing bank lines of credit in the ordinary course
of business, (ii) enter into any material contract, agreement or
transaction, other than (X) in the ordinary course of business, and (Y)
which would not be reasonably likely to prevent or materially delay the
consummation of the Merger, (iii) authorize any capital expenditures
which are, in the aggregate,
in excess of the amounts currently budgeted for the fiscal year 1999
(including the applicable 1999 capital expenditures of the companies
subject to the Pending Transactions) and, with respect to fiscal year
2000, 10% in excess of such amount, in each case for CBS and its
subsidiaries taken as a whole or (iv) enter into or amend any contract,
agreement, commitment or arrangement which would require CBS to take
any action prohibited by this subsection (e) and will, or will cause
Infinity to, not amend in any material respect, or waive any material
right or condition under or relating to the definitive agreements
relating to the Pending Transactions, in each case except for any such
amendment or waiver the impact of which would not be reasonably likely
to be both material and detrimental to CBS and its subsidiaries, taken
as a whole;
(f) increase the compensation payable or to become payable to its
executive officers or employees, except as set forth in Section 6.16 or
as required by Law or by the terms of any collective bargaining
agreement or other agreement currently in effect between CBS or any
subsidiary of CBS and any executive officer or employee thereof and
except for increases in the ordinary course of business in accordance
with past practices, or grant any severance or termination pay to, or
enter into any employment or severance agreement with, any director or
executive officer of it or any of its subsidiaries, or establish,
adopt, enter into or amend in any material respect or take action to
accelerate any rights or benefits under any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, executive officer or
employee, provided that this clause shall not prevent any CBS
subsidiary from (i) entering into employment contracts with newly-hired
or promoted executive officers, or from making severance payments, on
terms substantially consistent with the contractual arrangements
currently existing at such subsidiary or (ii) providing for the payment
of severance to executive officers or employees on terms substantially
consistent with the past practices of such subsidiary (including past
practice preceding such subsidiaries' acquisition by CBS);
(g) change in any material respect (except as required by the SEC
or changes in United States generally accepted accounting principles
which become effective after the date of this Agreement) any accounting
policies, practices or procedures;
(h) make any tax election that, individually or in the aggregate,
would have a CBS Material Adverse Effect or settle or compromise any
material Tax liability; or
(i) enter into any contract, agreement, lease, license, permit,
franchise or other instrument or obligation which if in existence and
known to CBS prior to the date of this Agreement would have resulted in
a breach of Section 3.05, except to the extent the conflict, violation,
breach, default or occurrence of the type referred to therein giving
rise to such breach would not have a CBS Material Adverse Effect;
provided, that Infinity shall not be prohibited from taking any action under
this Section 5.01 which the Board of Directors of Infinity determines is
required to be taken
in the exercise of the Board's fiduciary duties to the stockholders of
Infinity (other than CBS).
SECTION 5.02. Conduct of Business by Viacom Pending the Merger.
Viacom covenants and agrees that, between the date of this Agreement and the
Effective Time, except (w) as contemplated by this Agreement or as set forth
in Schedule 5.02 of the Viacom Disclosure Schedule, (x) as CBS shall
otherwise agree in advance in writing, which agreement shall not be
unreasonably withheld or delayed (y) for the exercise of options, warrants
and similar securities which would otherwise expire prior to the Effective
Time, or the exercise of any put rights, call rights, rights of first
refusal and other similar rights, in each case under agreements in existence
on the date of this Agreement and otherwise in accordance with the terms of
this Agreement and (z) an exchange offer of Blockbuster shares owned by
Viacom for shares of Viacom Class B Common Stock owned by the stockholders
of Viacom (the "Split-off") in accordance with the procedures set forth in
Section 5.02 of the Viacom Disclosure Schedule, the business of Viacom and
its subsidiaries shall be conducted only in, and Viacom and its subsidiaries
shall not take any action except in, the ordinary course of business and in
a manner consistent with past practice; and Viacom and its subsidiaries
shall use their reasonable best efforts to preserve substantially intact
Viacom's business organization, to keep available the services of the
current officers, employees and consultants of Viacom and its subsidiaries
(provided that the foregoing covenant to use reasonable best efforts shall
not require Viacom to offer retention bonuses to such individuals) and to
preserve the current relationships of Viacom and its subsidiaries with
customers, distributors, suppliers and other persons with which Viacom and
its subsidiaries have significant business relations. By way of
amplification and not limitation, between the date of this Agreement and the
Effective Time, Viacom will not do, and will not permit any of its
subsidiaries to do, directly or indirectly, any of the following except in
compliance with the exceptions listed above:
(a) amend or otherwise change the Certificate of Incorporation or
By-laws of Viacom or Blockbuster, or any other Viacom subsidiary if
such amendment or change would have a Viacom Material Adverse Effect;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i)
any shares of its or its subsidiaries' capital stock, or any options,
warrants, convertible securities or other rights of any kind to acquire
any shares of its or its subsidiaries' capital stock or any other
ownership interest (including any phantom interest), of Viacom or any
of its subsidiaries (except (A) for the issuance of Shares issuable
pursuant to Viacom Options outstanding on the date hereof and (B) for
the issuance of options, which do not provide for accelerated vesting
or other consequences in connection with the Merger and the other
transactions contemplated by this Agreement, to purchase a maximum of
6,000,000 shares of Viacom Class B Common Stock in the ordinary course
of business consistent with past practice and allocated to persons who
are officers, employees, directors, independent contractors and
production company writers and talent of Viacom or any of its
subsidiaries on a basis substantially consistent with past practice),
or (ii) any assets material to Viacom and its subsidiaries, taken as a
whole, except for sales in the ordinary course of business and in a
manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its or its subsidiaries' capital stock other than
cash dividends payable by any wholly owned Viacom subsidiary to another
Viacom subsidiary or Viacom, other than dividends made or paid by
Blockbuster, so long as the aggregate amount of such dividends paid by
Blockbuster shall not exceed $50,000,000;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its or its
subsidiaries' capital stock;
(e) (i) except in connection with acquisitions which individually
do not exceed $200,000,000 and in the aggregate do not exceed
$1,000,000,000 (A) acquire (including by merger, consolidation, or
acquisition of stock or assets), or otherwise make any investment in,
any corporation, partnership, limited liability company, other business
organization or any division thereof, or any material amount of assets;
or (B) incur any indebtedness for borrowed money, issue any debt
securities, assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person,
agree to amend or otherwise modify in any manner any agreement or
instrument pursuant to which Viacom has incurred indebtedness, or make
any loans or advances, except in the ordinary course of business and
consistent with past practice, except the refinancing of existing
indebtedness, borrowings under commercial paper programs in the
ordinary course of business or borrowings under existing bank lines of
credit in the ordinary course of business, (ii) enter into any
contract, agreement or transaction, other than (X) in the ordinary
course of business, consistent with past practice and (Y) which would
not be reasonably likely to prevent or materially delay the
consummation of the Merger, (iii) authorize any capital expenditures
which are, in the aggregate, in excess of the amount currently budgeted
therefor (and previously disclosed to CBS) for the fiscal year ending
December 31, 1999, and, with respect to fiscal year December 31, 2000,
10% in excess of such amount, in each case for Viacom and its
subsidiaries taken as a whole or (iv) enter into or amend any contract,
agreement, commitment or arrangement which would require Viacom to take
any action prohibited by this subsection (e);
(f) increase the compensation payable or to become payable to its
executive officers or employees, except as required by Law or by the
terms of any collective bargaining agreement or other agreement
currently in effect between Viacom or any subsidiary of Viacom and any
executive officer or employee thereof and except for increases in the
ordinary course of business in accordance with past practices, or grant
any severance or termination pay to, or enter into any employment or
severance agreement with, any director or executive officer of it or
any of its subsidiaries, or establish, adopt, enter into or amend in
any material respect or take action to accelerate any rights or
benefits under any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the
benefit of any director, executive officer or employee, provided that
this clause shall not prevent any Viacom subsidiary from (i) entering
into employment contracts with newly-hired or promoted executive
officers on terms substantially consistent with the contractual
arrangements currently existing at such subsidiary
or (ii) providing for the payment of severance to executive officers or
employees on terms substantially consistent with the past practices of
such subsidiary;
(g) change in any material respect (except as required by the SEC
or changes in United States generally accepted accounting principles
which become effective after the date of this Agreement) any accounting
policies, practices or procedures;
(h) make any tax election that, individually or in the aggregate,
would have a Viacom Material Adverse Effect or settle or compromise any
material Tax liability; or
(i) enter into any contract, agreement, lease, license, permit,
franchise or other instrument or obligation which if in existence and
known to Viacom prior to the date of this Agreement would have resulted
in a breach of Section 4.05, except to the extent the conflict,
violation breach, default or occurrence of the type referred to therein
giving rise to such breach would not have a Viacom Material Adverse
Effect;
provided, that Blockbuster shall not be prohibited from taking any action under
this Section 5.02 which the Board of Directors of Blockbuster determines is
required to be taken in the exercise of the Board's fiduciary duties to the
stockholders of Blockbuster (other than Viacom).
SECTION 5.03. Other Actions. Except as required by Law, CBS and
Viacom shall not, and shall not permit any of their respective subsidiaries
to, take any action that would, or that is reasonably likely to, result in
any of the conditions to the Merger set forth in Article VII not being
satisfied.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement; Joint Proxy Statement. (a)
As promptly as practicable after the execution of this Agreement, (i) Viacom
and CBS shall cooperate in preparing and each shall cause to be filed with
the SEC a joint proxy statement (together with any amendments thereof or
supplements thereto, the "Proxy Statement") relating to the meetings of
Viacom's and CBS's stockholders to be held to consider approval and adoption
of this Agreement and the Viacom Proposals and (ii) Viacom shall prepare and
file with the SEC a registration statement on Form S-4 (together with all
amendments thereto, the "Registration Statement") in which the Proxy
Statement shall be included as a prospectus, in connection with the
registration under the Securities Act of the shares of Viacom Class B Common
Stock to be issued to the shareholders of CBS pursuant to the Merger. Each
of Viacom and CBS shall use its reasonable best efforts to cause the
Registration Statement to become effective as promptly as practicable, and,
prior to the effective date of the Registration Statement, Viacom shall use
reasonable best efforts to take all or any action required under any
applicable federal or state securities Laws in connection with the issuance
of shares of Viacom Class B Common Stock pursuant to the Merger. Each of
Viacom and CBS shall furnish all information concerning it as may reasonably
be requested by the other party in
connection with such actions and the preparation of the Registration
Statement and Proxy Statement. As promptly as practicable after the
Registration Statement shall have become effective, each of Viacom and CBS
shall mail the Proxy Statement to its stockholders and to its shareholders,
respectively. Each of Viacom and CBS shall also promptly file, use
reasonable best efforts to cause to become effective as promptly as
practicable and, if required, mail to its stockholders and shareholders,
respectively, any amendment to the Registration Statement or Proxy Statement
which may become necessary after the date the Registration Statement is
declared effective.
(b) (i) The Proxy Statement shall include the recommendation of
the Board of Directors of Viacom to the stockholders of Viacom in favor of
approval of the Viacom Proposals; provided, however, that the Board of
Directors of Viacom may take or disclose to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or make any
disclosure required under applicable Law and may, prior to the date of its
Stockholders' Meeting, withdraw, modify, or change any such recommendation
to the extent that the Board of Directors of Viacom determines in good faith
that such withdrawal, modification or change is required in order to comply
with its fiduciary duties to Viacom's stockholders under applicable Law
after receiving advice from independent legal counsel (who may be Viacom's
regularly engaged outside legal counsel).
(ii) The Proxy Statement shall include the recommendation of the
Board of Directors of CBS to the shareholders of CBS in favor of adoption of
this Agreement; provided, however, that the Board of Directors of CBS may
take or disclose to its shareholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or make any disclosure required
under applicable Law and may, prior to the date of its Stockholders'
Meeting, withdraw, modify, or change any such recommendation to the extent
that the Board of Directors of CBS determines in good faith that such
withdrawal, modification or change is required in order to comply with its
fiduciary duties under applicable Law after receiving advice from
independent legal counsel (who may be CBS's regularly engaged outside legal
counsel).
(c) Notwithstanding any withdrawal, modification or change in any
approval or recommendation of the Board of Directors of CBS or Viacom, as
the case may be, each of CBS and Viacom agree to hold their respective
Stockholders Meeting in accordance with the time period specified in Section
6.02.
(d) No amendment or supplement to the Proxy Statement or the
Registration Statement will be made by Viacom or CBS without the approval of
the other party, which shall not be unreasonably withheld or delayed. Each
of Viacom and CBS will advise the other, promptly after it receives notice
thereof, of the time when the Registration Statement has become effective or
any supplement or amendment has been filed, the issuance of any stop order,
the suspension of the qualification of the Viacom Class B Common Stock
issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Proxy Statement
or the Registration Statement or comments thereon and responses thereto or
requests by the SEC for additional information.
(e) The information supplied by CBS for inclusion in the
Registration Statement and the Proxy Statement (including by incorporation
by reference) shall not, at (i) the time the Registration Statement is
declared effective, (ii) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed
to the stockholders and shareholders of Viacom and CBS, respectively, (iii)
the time of each of the Stockholders' Meetings (as hereinafter defined), and
(iv) the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading. If at any time prior
to the Effective Time any event or circumstance relating to CBS or any of
its subsidiaries, or their respective officers or directors, should be
discovered by CBS which, pursuant to the Securities Act or Exchange Act,
should be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, CBS shall promptly inform Viacom. All
documents that CBS is responsible for filing with the SEC in connection with
the Merger will comply as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act.
(f) The information supplied by Viacom for inclusion in the
Registration Statement and the Proxy Statement (including by incorporation
by reference) shall not, at (i) the time the Registration Statement is
declared effective, (ii) the time the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to the stockholders of Viacom
and the shareholders of CBS, (iii) the time of each of the Stockholders'
Meetings, and (iv) the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
If at any time prior to the Effective Time any event or circumstance
relating to Viacom or any of its subsidiaries, or their respective officers
or directors, should be discovered by Viacom which, pursuant to the
Securities Act or Exchange Act, should be set forth in an amendment or a
supplement to the Registration Statement or Proxy Statement, Viacom shall
promptly inform CBS. All documents that Viacom is responsible for filing
with the SEC in connection with the Merger will comply as to form in all
material respects with the applicable requirements of the Securities Act and
the Exchange Act.
(g) Viacom and CBS each hereby (i) consents to the use of its name
and, on behalf of its subsidiaries and affiliates, the names of such
subsidiaries and affiliates and to the inclusion of financial statements and
business information relating to such party and its subsidiaries and
affiliates (in each case, to the extent required by applicable securities
laws) in any registration statement or proxy statement prepared by Viacom,
CBS or any person or entity with which Viacom or CBS, consistent with their
obligations under this Agreement, has entered into, or may prior to the
Effective Time enter into, a definitive acquisition agreement, (ii) agrees
to use its reasonable best efforts to obtain the written consent of any
person or entity retained by it which may be required to be named (as an
expert or otherwise) in such registration statement or proxy statement;
provided, that such party shall not be required to make any material payment
to such person or entity in connection with such party's efforts to obtain
any such consent, and (iii) agrees to cooperate, and agrees to use its
reasonable best efforts to cause its subsidiaries and affiliates to
cooperate, with any legal counsel, investment banker, accountant or other
agent or representative retained by any of the parties specified in clause
(i) in connection with the preparation of any and all information required,
as determined after consultation with each party's counsel, to be disclosed
by applicable securities laws in any such registration statement or proxy
statement.
(h) CBS and Viacom will use their best efforts to complete the pro
forma financial statements with respect to the Merger, in a form suitable
for filing in connection
with a registration statement under the Securities Act, as soon as possible, and
in any event within 10 days after the execution of this Agreement.
(i) CBS shall consult with Viacom, and provide Viacom reasonable
opportunity to review and comment on, and CBS and Viacom will use their
respective reasonable best efforts to agree on, CBS's and Infinity's
accounting for the Pending Transactions.
SECTION 6.02. Stockholders' Meetings. Each of Viacom and CBS shall
call and hold a meeting of its stockholders or shareholders, respectively
(collectively, the "Stockholders' Meetings"), as promptly as practicable for
the purpose of voting upon, in the case of Viacom, the Viacom Proposals,
and, in the case of CBS, the adoption of this Agreement, and CBS and Viacom
shall hold the Stockholders' Meeting as soon as practicable after the date
on which the Registration Statement becomes effective and will use
reasonable best efforts to hold the Stockholders' Meetings on the same day.
Each of Viacom and CBS shall use its reasonable best efforts to solicit from
its stockholders proxies in favor of the adoption of this Agreement, in the
case of CBS, and the Viacom Proposals, in the case of Viacom, and shall take
all other action necessary or advisable to secure the vote of its
stockholders and shareholders, respectively, required by the NYSE,
Pennsylvania Law or Delaware Law, as applicable, to obtain such approvals;
provided, however, that Viacom or CBS, as applicable, shall not be obligated
to solicit proxies in favor of the adoption of this Agreement, in the case
of CBS, or in favor of the Viacom Proposals, in the case of Viacom, at its
Stockholders' Meeting to the extent that the Board of Directors of Viacom or
CBS, as applicable, determines in good faith that such failure to solicit
proxies is required in order to comply with its fiduciary duties under
applicable Law after receiving advice to such effect from independent legal
counsel (who may be such party's regularly engaged outside legal counsel);
provided, further, however, that notwithstanding anything to the contrary in
the foregoing, each of CBS and Viacom shall hold its Stockholders Meeting in
accordance with the time periods specified in the first sentence of this
Section 6.02.
SECTION 6.03. Appropriate Action; Consents; Filings. (a) Each of
the parties hereto shall (i) make promptly its respective filings, and
thereafter make any other required submissions under the HSR Act with
respect to the transactions contemplated herein and (ii) make promptly
filings with or applications to the FCC with respect to the transactions
contemplated herein. The parties hereto will use their respective best
efforts, and will take all actions necessary, to consummate and make
effective the transactions contemplated herein and to cause the conditions
to the Merger set forth in Article VII to be satisfied, (including using
best efforts, and taking all actions necessary, to obtain all licenses,
permits, consents, approvals, authorizations, waivers, qualifications and
orders of Governmental Authorities as are necessary for the consummation of
the transactions contemplated herein), and will do so in a manner designed
to obtain such regulatory clearance and the satisfaction of such conditions
as expeditiously as possible.
(b) CBS and Viacom each agree to take promptly any and all steps
necessary to avoid or eliminate each and every impediment and obtain all
consents or waivers under any antitrust, competition or communications or
broadcast Law that may be asserted by any U.S. federal, state and local and
non-United States antitrust or competition authority, or by the FCC or
similar authority, so as to enable the parties to close the transactions
contemplated by this Agreement as expeditiously as possible, including
committing to or effecting, by consent decree, hold separate orders, trust,
or
otherwise, the sale or disposition of such of its assets or businesses as
are required to be divested in order to obtain the consent of the FCC to or
avoid the entry of, or to effect the dissolution of, any decree, order,
judgment, injunction, temporary restraining order or other order in any suit
or proceeding, that would otherwise have the effect of preventing or
materially delaying the consummation of the Merger and the other
transactions contemplated by this Agreement. In addition, each of CBS and
Viacom agree to take promptly any and all steps necessary to obtain any
consent or to vacate or lift any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority (each, an "Order") relating to antitrust or communications or
broadcast matters that would have the effect of making any of the
transactions contemplated by this Agreement illegal or otherwise prohibiting
or materially delaying their consummation. The parties will expeditiously
agree on a complete plan for compliance with applicable FCC ownership
requirements for inclusion in the FCC filings and will expeditiously make
such filings (including such agreed plan) with the FCC following the date of
this Agreement.
(c) Each of Viacom and CBS shall give (or shall cause its
respective subsidiaries to give) any notices to third parties, and Viacom
and CBS shall use, and cause each of its subsidiaries to use, its reasonable
best efforts to obtain any third party consents, necessary, proper or
advisable to consummate the Merger. Each of the parties hereto will furnish
to the other such necessary information and reasonable assistance as the
other may request in connection with the preparation of any required
governmental filings or submissions and will cooperate in responding to any
inquiry from a Governmental Authority, including immediately informing the
other party of such inquiry, consulting in advance before making any
presentations or submissions to a Governmental Authority, and supplying each
other with copies of all material correspondence, filings or communications
between either party and any Governmental Authority with respect to this
Agreement.
SECTION 6.04. Access to Information; Confidentiality. (a) From the
date hereof to the Effective Time, to the extent permitted by applicable Law
and contracts, Viacom will provide to CBS (and its officers, directors,
employees, accountants, consultants, legal counsel, agents and other
representatives, collectively, "Representatives") access to all information
and documents which CBS may reasonably request regarding the business,
assets, liabilities, employees and other aspects of Viacom.
(b) From the date hereof to the Effective Time, to the extent
permitted by applicable Law and contracts, CBS will provide to Viacom and
its Representatives access to all information and documents which Viacom may
reasonably request regarding the business, assets, liabilities, employees
and other aspects of CBS.
(c) The parties shall comply with, and shall cause their
respective Representatives to comply with all of their respective
obligations under the Confidentiality Agreement dated August 27, 1999 (the
"Confidentiality Agreement") between CBS and Viacom.
(d) No investigation pursuant to this Section 6.04 shall affect
any representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
SECTION 6.05. No Solicitation of Competing Transactions. (a) CBS
shall not, directly or indirectly, through any officer, director, agent or
otherwise, initiate, solicit or knowingly encourage (including by way of
furnishing non-public information), or take any other action knowingly to
facilitate, any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Competing Transaction (as defined
below), or enter into or maintain or continue discussions or negotiate with
any person or entity in furtherance of such inquiries or to obtain a
Competing Transaction, or agree to or endorse any Competing Transaction, or
authorize any of the officers, directors or employees of CBS or any
investment banker, financial advisor, attorney, accountant or other agent or
representative of CBS to take any such action, and CBS shall notify Viacom
as promptly as practicable of all of the relevant material details relating
to all inquiries and proposals which CBS or any such officer, director,
employee, investment banker, financial advisor, attorney, accountant or
other agent or representative may receive relating to any of such matters,
provided, however, that prior to the adoption of this Agreement by the
shareholders of CBS, nothing contained in this Section 6.05 shall prohibit
the Board of Directors of CBS from (i) furnishing information to, or
entering into and engaging in discussions or negotiations with, any person
that makes a bona fide unsolicited written proposal that the Board of
Directors of CBS determines in good faith, after consultation with CBS's
financial advisors and independent legal counsel, can be reasonably expected
to result in a CBS Superior Proposal; provided, that prior to furnishing
such information to, or entering into discussions or negotiations with, such
person, CBS (1) provides notice to Viacom to the effect that it is
furnishing information to, or entering into discussions or negotiations
with, such person and provides in any such notice to Viacom in reasonable
detail the identity of the person making such proposal and the material
terms and conditions of such proposal, (2) provides Viacom with all
information regarding CBS provided or to be provided to such person which
Viacom has not previously been provided, and provided, further that CBS
shall keep Viacom informed, on a prompt basis, of the status and material
terms of any such proposal and the status of any such discussions and
negotiations and (3) receives from such person or entity an executed
confidentiality agreement containing customary terms (which need not contain
"standstill" or similar provisions), (ii) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer
or making any disclosure required under applicable Law or (iii) failing to
make or withdrawing or modifying its recommendation referred to in Section
6.01 following the making of a CBS Superior Proposal if, solely in the case
of this clause (iii), the Board of Directors of CBS, after consultation with
and based upon the advice of independent legal counsel, determines in good
faith that such action is necessary for the Board of Directors of CBS to
comply with its fiduciary duties under applicable law.
(b) For purposes of this Agreement, "Competing Transaction" shall
mean any of the following involving CBS: (i) any merger, consolidation,
share exchange, business combination, issuance or purchase of securities or
other similar transaction other than transactions specifically permitted
pursuant to Section 5.01 of this Agreement; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of the assets of CBS in a
single transaction or series of related transactions; (iii) any tender offer
or exchange offer for CBS securities or the filing of a registration
statement under the Securities Act in connection with any such exchange
offer; in the case of clauses (i), (ii) or (iii) above, which transaction
would result in a third party (or its shareholders) acquiring more than 35%
of the voting power of the Shares then outstanding or more than 35% of the
assets of CBS and its subsidiaries, taken as a whole; or (iv) any public
announcement of an agreement, proposal, plan or intention to do any of the
foregoing, either during the effectiveness of this Agreement or at any time
thereafter.
(c) For purposes of this Agreement, a "CBS Superior Proposal"
means any proposal made by a third party which would result in such party
(or in the case of a parent-to-parent merger, its stockholders) acquiring,
directly or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, share exchange, business combination, share
purchase, asset purchase, recapitalization, liquidation, dissolution, joint
venture or similar transaction, more than 50% of the voting power of the
Shares then outstanding or all or substantially all the assets of CBS and
its subsidiaries, taken as a whole, for consideration which the Board of
Directors of CBS determines in its good faith judgment to be more favorable
to CBS's shareholders than the Merger.
SECTION 6.06. Directors' and Officers' Indemnification and
Insurance. (a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the Certificate of Incorporation and By-laws of Viacom on the date
of this Agreement, which provisions shall not be amended, repealed or
otherwise modified after the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at any time prior
to the Effective Time were directors or officers of CBS in respect of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), unless
such modification is required by law.
(b) The Surviving Corporation shall maintain in effect for six
years from the Effective Time directors' and officers' liability insurance
covering those persons who are currently covered by CBS's directors' and
officers' liability insurance policy on terms comparable to such existing
insurance coverage; provided, however, that in no event shall the Surviving
Corporation be required to expend pursuant to this Section 6.06 more than an
amount per year equal to 300% of current annual premiums paid by CBS for
such insurance and; provided, further that if the annual premiums exceed
such amount, Viacom shall be obligated to obtain a policy with the greatest
coverage available for an annual cost not exceeding such amount.
(c) This Section 6.06 shall survive the consummation of the
Merger, is intended to benefit each indemnified party, shall be binding,
jointly and severally, on all successors and assigns of the Surviving
Corporation, and shall be enforceable by the indemnified parties and their
successors.
SECTION 6.07. Notification of Certain Matters. CBS shall give
prompt notice to Viacom, and Viacom shall give prompt notice to CBS, of (i)
the occurrence, or nonoccurrence, of any event the occurrence, or
nonoccurrence, of which would be likely to cause (x) any representation or
warranty contained in this Agreement to be untrue or inaccurate or (y) any
covenant, condition or agreement contained in this Agreement not to be
complied with or satisfied and (ii) any failure of CBS or Viacom, as the
case may be, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; provided, however, that
the delivery of any notice pursuant to this Section 6.07 shall not limit or
otherwise affect the remedies available hereunder to the party receiving
such notice.
SECTION 6.08. Tax Treatment. (a) The Agreement is intended to
constitute a "plan of reorganization" within the meaning of Section
1.368-2(g) of the income tax regulations promulgated under the Code.
(b) Between the date of this Agreement and the Effective Time,
neither CBS nor Viacom nor their affiliates shall directly or indirectly
take any action that could prevent the Merger from qualifying as a
reorganization under Section 368(a) of the Code, that could prevent each of
them from providing representations required from them in Sections 7.02(c)
or 7.03(c), or that could prevent the opinions described in such Sections
from being provided. Each of them shall use all reasonable efforts to cause
the opinions described in such Sections to be provided, and to cause similar
opinions to be provided at the date of filing of the Registration Statement.
(c) Neither CBS nor Viacom shall (without the consent of the
other) take any action, except as specifically contemplated by this
Agreement, that could adversely affect the intended tax treatment of the
Pending Transactions.
SECTION 6.09. Stock Exchange Listing. Viacom shall as promptly as
reasonably practicable prepare and submit to NYSE a listing application
covering the shares of Viacom Class B Common Stock to be issued in the
Merger and the shares of Viacom Class B Common Stock underlying the CBS
Options outstanding immediately prior to the Effective Time and shall use
its best efforts to cause such shares to be approved for listing on the NYSE
prior to the Effective Time.
SECTION 6.10. Public Announcements. Viacom and CBS shall consult
with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement and shall not issue any
such press release or make any such public statement without the prior
consent of the other (which consent shall not be unreasonably withheld or
delayed), except as may be required by Law or any listing agreement with the
NYSE to which Viacom or CBS is a party. The parties have agreed on the text
of a joint press release by which Viacom and CBS will announce the execution
of this Agreement.
SECTION 6.11. Viacom's Directors. The Board of Directors of Viacom
shall take all such action as may be necessary to cause the number of
directors on the Board of Directors of Viacom to be increased to eighteen as
of the Effective Time and to cause to be appointed to the Board of Directors
of Viacom as of the Effective Time eight designees of CBS, one of whom shall
be Xxx Xxxxxxxx (unless Xxx Xxxxxxxx shall no longer be available to serve
in such capacity) and the other seven of whom shall consist of CBS directors
designated in writing by CBS to Viacom prior to the mailing of the Proxy
Statement as set forth in Exhibit A-1 hereto.
SECTION 6.12. Rights Agreement. The Board of Directors of CBS
shall take such action as is necessary to render the Rights inapplicable to
the Merger and the other transactions contemplated by this Agreement.
SECTION 6.13. Assumption of Debt and Leases. (a) With respect to
debt issued by CBS under indentures qualified under the Trust Indenture Act
of 1939, and any other debt of CBS the terms of which require Viacom to
assume such debt in order to avoid default thereunder (collectively, the
"CBS Indentures"), Viacom shall execute and deliver to the trustees or other
representatives in accordance with the terms
of the respective CBS Indentures, Supplemental Indentures, in form
satisfactory to the respective trustees or other representatives, expressly
assuming the obligations of CBS with respect to the due and punctual payment
of the principal of (and premium, if any) and interest, if any, on all debt
securities issued by CBS under the respective Indentures and the due and
punctual performance of all the terms, covenants and conditions of the
respective CBS Indentures to be kept or performed by CBS and shall deliver
such Supplemental Indentures to the respective trustees or other
representatives under the CBS Indentures.
(b) Viacom shall, promptly upon the reasonable request of CBS,
provide CBS with a letter which states that Viacom agrees that, as the
Surviving Corporation in the Merger, as of and following the Effective Time,
it will succeed to, honor, and satisfy all obligations and liabilities of
CBS.
SECTION 6.14. Affiliates of CBS. CBS represents and warrants to
Viacom that prior to the date of the CBS Stockholders' Meeting CBS will
deliver to Viacom a letter identifying all persons who may be deemed
affiliates of CBS under Rule 145 of the Securities Act, including, without
limitation, all directors and executive officers of CBS, and CBS represents
and warrants to Viacom that CBS has advised the persons identified in such
letter of the resale restrictions imposed by applicable securities laws. CBS
shall use its reasonable best efforts to obtain from each person identified
in such letter a written agreement, substantially in the form of Exhibit
6.14. CBS shall use its reasonable best efforts to obtain as soon as
practicable from any person who may be deemed to have become an affiliate of
CBS after CBS's delivery of the letter referred to above and prior to the
Effective Time, a written agreement substantially in the form of Exhibit
6.14.
SECTION 6.15. Prior Service. With respect to any medical and
dental benefits provided to Continuing Employees as of or following the
Effective Time under Viacom's benefit plans, Viacom agrees that it will
waive waiting periods and pre-existing condition requirements under such
plans (to the extent waived under CBS's plans), and will give Continuing
Employees credit for any co-payments and deductibles actually paid by such
employees under CBS's medical and dental plans during the calendar year in
which the Effective Time occurs. In addition, service with CBS shall be
recognized for all purposes under Viacom's compensation and benefit plans,
programs, policies and arrangements, except where crediting such service
would result in a duplication of benefits. Without limiting the generality
of the foregoing, Viacom shall honor all vacation, personal and sick days
accrued by Continuing Employees under CBS's plans, policies, programs and
arrangements immediately prior to the Effective Time.
SECTION 6.16. Employee Matters. (a) Viacom may establish retention
and severance arrangements for its officers or employees consistent with the
terms and conditions set forth in Section 6.16 of the Viacom Disclosure
Schedule (the "Viacom Employee Arrangements").
(b) CBS may establish retention and severance and similar
compensation arrangements for its officers and employees; provided that the
aggregate amount expended pursuant to such arrangements does not materially
exceed the estimated value of the Viacom Employee Arrangements.
(c) Each of CBS and Viacom shall consult with the other on the
design and implementation of the retention arrangements and the allocations
of the payments thereunder.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party. The
obligations of CBS and Viacom to consummate the Merger are subject to the
satisfaction or waiver of the following conditions:
(a) (i) this Agreement shall have been adopted by the affirmative
vote of a majority of the votes cast by all shareholders entitled to
vote at the CBS Stockholders' Meeting in accordance with Pennsylvania
Law and CBS's Articles of Incorporation and (ii) the Viacom Proposals
shall have been approved by the affirmative vote of the holders of a
majority of the Viacom Class A Common Stock;
(b) any applicable waiting period under the HSR Act relating to
the Merger shall have expired or been terminated;
(c) no Governmental Authority or court of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any Law,
rule, regulation, executive order or Order which is then in effect and
has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger;
(d) the Registration Statement shall have been declared effective,
and no stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the SEC;
(e) (i) all authorizations, consents, waivers, orders or approvals
for the Merger required to be obtained and all conditions precedent to
such authorizations, consents, waivers, orders or approvals shall have
been satisfied, and all filings, notices or declarations required to be
made, by Viacom and CBS prior to the consummation of the Merger and the
transactions contemplated hereunder, shall have been obtained from, and
made with, the FCC and competition and antitrust Governmental
Authorities in Canada and either the European Union or the United
Kingdom, as applicable, and (ii) all other authorizations, consents,
waivers, orders or approvals for the Merger required to be obtained,
and all other filings, notices or declarations required to be made, by
Viacom and CBS prior to the consummation of the Merger and the
transactions contemplated hereunder, shall have been obtained from, and
made with, all required Governmental Entities, except for such
authorizations, consents, waivers, orders, approvals, filings, notices
or declarations the failure to obtain or make which would not have a
material adverse effect, at or after the Effective Time, on the
business, results of operations or financial condition of CBS and its
subsidiaries and Viacom and its subsidiaries, collectively taken as a
whole; and
(f) the shares of Viacom Class B Common Stock issuable to CBS's
shareholders in the Merger and to holders of CBS Options outstanding
immediately prior to the Effective Time shall have been authorized for
listing on the NYSE, subject to official notice of issuance.
SECTION 7.02. Conditions to the Obligations of Viacom. The
obligations of Viacom to consummate the Merger are subject to the
satisfaction or waiver of the following further conditions:
(a) each of the representations and warranties of CBS contained in
this Agreement shall be true and correct as of the Effective Time as
though made on and as of the Effective Time (except to the extent
expressly made as of an earlier date, in which case as of such date),
except where the failure to be so true and correct would not have,
individually or in the aggregate, a CBS Material Adverse Effect, and
Viacom shall have received a certificate of an officer of CBS to such
effect;
(b) CBS shall have performed or complied in all material respects
with all material agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Effective
Time, and Viacom shall have received a certificate of an officer of CBS
to that effect; and
(c) Viacom shall have received the opinion of Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, in form and substance reasonably
satisfactory to Viacom, to the effect that the Merger will be treated
for federal income tax purposes as a reorganization qualifying under
the provisions of section 368(a) of the Code, and Viacom and CBS will
each be a party to the reorganization within the meaning of Section
368(b) of the Code. In rendering such opinion, counsel may require and
rely upon representations contained in certificates of officers of CBS
and Viacom.
SECTION 7.03. Conditions to the Obligations of CBS. The
obligations of CBS to consummate the Merger are subject to the satisfaction
or waiver of the following further conditions:
(a) each of the representations and warranties of Viacom contained
in this Agreement shall be true and correct as of the Effective Time as
though made on and as of the Effective Time (except to the extent
expressly made as of an earlier date, in which case as of such date),
except where failure to be so true and correct would not have,
individually or in the aggregate, a Viacom Material Adverse Effect, and
CBS shall have received a certificate of an officer of Viacom to such
effect;
(b) Viacom shall have performed or complied in all material
respects with all material agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time, and CBS shall have received a certificate of an officer
of Viacom to that effect; and
(c) CBS shall have received the opinion of Cravath, Swaine &
Xxxxx, in form and substance reasonably satisfactory to CBS, to the
effect that the Merger will be treated for federal income tax purposes
as a reorganization qualifying under the provisions of section 368(a)
of the Code, and Viacom and CBS will
each be a party to such reorganization within the meaning of Section
368(b) of the Code. In rendering such opinion, counsel may require and
rely upon representations contained in certificates of officers of
Viacom and CBS.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of this Agreement, as
follows:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of Viacom and CBS;
(b) by either Viacom or CBS, if the Effective Time shall not have
occurred on or before August 31, 2000; provided, however, that the
right to terminate this Agreement under this Section 8.01(b) shall not
be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of
the Effective Time to occur by such time;
(c) by CBS upon delivery to Viacom of written notice that a
Competing Proposal constitutes a CBS Superior Proposal; provided,
however, that such termination pursuant to this subsection (c) shall
not be effective until two business days have elapsed following
delivery to Viacom of such written notice (which written notice will
inform Viacom of the material terms and conditions of the CBS Superior
Proposal); provided, further, however, that such termination under this
subsection (c) shall not be effective until CBS has made payment to
Viacom of the amounts required to be paid pursuant to Section 8.05;
(d) by either CBS or Viacom, if this Agreement shall fail to
receive the requisite vote for adoption at the CBS Stockholders'
Meeting;
(e) by CBS, upon a breach of any representation, warranty,
covenant or agreement on the part of Viacom set forth in this
Agreement, or if any representation or warranty of Viacom shall have
become untrue, in either case such that the conditions set forth in
Section 7.03(a) or (b) are not capable of being satisfied on or before
August 31, 2000 (a "Terminating Viacom Breach");
(f) by Viacom, upon breach of any representation, warranty,
covenant or agreement on the part of CBS set forth in this Agreement,
or if any representation or warranty of CBS shall have become untrue,
in either case such that the conditions set forth in Sections 7.02(a)
or (b) are not capable of being satisfied on or before August 31, 2000
("Terminating CBS Breach"); or
(g) by either Viacom or CBS, if any Governmental Authority shall
have issued an Order or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such Order or other action shall have become final
and nonappealable.
SECTION 8.02. Effect of Termination. Subject to Section 8.05
hereof, in the event of termination of this Agreement pursuant to Section
8.01, this Agreement shall forthwith become void, there shall be no
liability under this Agreement on the part of Viacom or CBS or any of their
respective officers or directors and all rights and obligations of each
party hereto shall cease; provided, however, that nothing herein shall
relieve any party from liability for the willful breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that,
after the approval and adoption of this Agreement by either the stockholders
of Viacom or shareholders of CBS, there shall not be any amendment that by
Law requires further approval by the stockholders of Viacom or shareholders
of CBS without the further approval of such stockholders or such
shareholders. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any obligation
or other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) subject to the proviso of Section 8.03, waive
compliance with any agreement or condition contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
SECTION 8.05. Expenses. (a) Except as set forth in this Section
8.05, all Expenses (as defined below) incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid
by the party incurring such expenses, whether or not the Merger or any other
transaction is consummated, except that CBS and Viacom each shall pay
one-half of all Expenses relating to (i) printing, filing and mailing the
Registration Statement and the Proxy Statement and all SEC and other
regulatory filing fees incurred in connection with the Registration
Statement and the Proxy Statement, (ii) any filing with the FCC or similar
authority and (iii) any filing with antitrust authorities. "Expenses" as
used in this Agreement shall include all reasonable out-of-pocket expenses
(including all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates)
incurred by a party or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and performance of this
Agreement, the preparation, printing, filing and mailing of the Registration
Statement and the Proxy Statement, the solicitation of stockholder and
shareholder approvals, the filing of any required notices under the HSR Act
or other similar regulations and all other matters related to the closing of
the Merger and the other transactions contemplated by this Agreement.
(b) CBS agrees that:
(i) if CBS shall terminate this Agreement pursuant to Section
8.01(c); or
(ii) if (A) Viacom or CBS shall terminate this Agreement
pursuant to Section 8.01(d) due to the failure of CBS's
shareholders to approve this Agreement, (B) at or prior to the
time of such failure to so approve this
Agreement a Competing Transaction with respect to CBS shall have
been made public and (C) within twelve months after such
termination (i) a Competing Transaction is consummated or (ii) a
binding agreement to enter into a Competing Transaction is entered
into by CBS (solely for purposes of this Section 8.05(b)(ii), the
term "Competing Transaction" shall have the meaning assigned to
such term in Section 6.05(b) except that references to "35%" in
the definition of "Competing Transaction" in Section 6.05(b) shall
be deemed to be references to 50%),
then CBS shall pay to Viacom an amount equal to $1,000,000,000 (the "CBS
Alternative Transaction Fee").
(c) Each of CBS and Viacom agrees that the agreements contained in
Section 8.05(b) are an integral part of the transactions contemplated by
this Agreement.
(d) All payments to Viacom under this Section 8.05 shall be made
by wire transfer of immediately available funds to an account designated by
Viacom.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
and any certificate delivered pursuant hereto by any person shall terminate
at the Effective Time or upon the termination of this Agreement pursuant to
Section 8.01, as the case may be, except that this Section 9.01 shall not
limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time or after termination of
this Agreement.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications hereunder 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 9.02):
if to Viacom:
Viacom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Senior Vice President,
General Counsel
with a copy 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.
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 9.03. Interpretation, Certain Definitions. When a
reference is made in this Agreement to an Article, Section or Exhibit, such
reference shall be to an Article or Section of, or an Exhibit to, this
Agreement unless otherwise indicated. The table of contents and headings for
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall
be deemed to be followed by the words "without limitation". The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as to
the feminine and neuter genders of such term. Any statute defined or
referred to herein or in any agreement or instrument that is referred to
herein means such statute as from time to time amended, modified or
supplemented, including (in the case of statutes) by succession of
comparable successor statutes. References to a person are also its permitted
successors and assigns.
For purposes of this Agreement, the term:
(a) "affiliate" of a specified person means a person who directly
or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person;
(b) "beneficial owner" with respect to any shares means a person
who shall be deemed to be the beneficial owner of such shares (i) which
such person or any of its affiliates or associates (as such term is
defined in Rule 12b-2 promulgated under the Exchange Act) beneficially
owns, directly or indirectly, (ii) which such person or any of its
affiliates or associates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or subject only
to the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of consideration rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding or (iii) which
are beneficially owned, directly or indirectly, by any other persons
with whom such person or any of its affiliates or associates or any
person with whom such person or any of its affiliates or associates has
any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any such shares;
(c) "business day" means any day on which the principal offices of
the SEC in Washington, D.C. are open to accept filings, or, in the case
of determining a date when any payment is due, any day on which banks
are not required or authorized to close in the City of New York;
(d) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise;
(e) "Governmental Authority" means any United States (federal,
state or local) or foreign government, or governmental, regulatory or
administrative authority, agency or commission;
(f) "knowledge" means the actual knowledge of the following
officers and employees of CBS and Viacom, without benefit of an
independent investigation of any matter, as to (i) CBS: Xxx Xxxxxxxx,
Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxx and Xxxxxx Xxxxxxxxx, and (ii) Viacom:
Xxxxxx Xxxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxx Xxxxx and Xxxxx Xxxxxx;
(g) "person" means an individual, corporation, limited liability
company, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in Section
13(d)(3) of the Exchange Act), trust, association or entity or
government, political subdivision, agency or instrumentality of a
government; and
(h) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which
such person (either above or through or together with any other
subsidiary), owns, directly or indirectly,
more than 50% of the stock or other equity interests, the holders of
which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity.
SECTION 9.04. 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 the Merger 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 Merger be consummated as
originally contemplated to the fullest extent possible.
SECTION 9.05. Entire Agreement; Assignment. This Agreement
(including the Exhibits, the CBS Disclosure Schedule and the Viacom
Disclosure Schedule which are hereby incorporated herein and made a part
hereof for all purposes as if fully set forth herein), the Parent Voting
Agreements and the Confidentiality Agreement constitutes 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. The parties agree to comply with all covenants and agreements set
forth on the CBS Disclosure Schedule and the Viacom Disclosure Schedule as
if such covenants and agreements were fully set forth in this Agreement.
This Agreement shall not be assigned by operation of law or otherwise.
SECTION 9.06. Parties in Interest. 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, other than Article II and Section 6.06 (which
are intended to be for the benefit of the persons covered thereby and may be
enforced by such persons).
SECTION 9.07. 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 9.08. Governing Law. This Agreement shall be governed by,
and construed in accordance with the laws of the State of Delaware, except
for such provisions where Pennsylvania Law is mandatorily applicable, which
provisions shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania.
SECTION 9.09. Consent to Jurisdiction. (a) Each of Viacom 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 Viacom and CBS
hereby irrevocably agrees that all claims in respect to such action or
proceeding may be heard and determined exclusively in any
Delaware state or federal court. Each of Viacom and CBS 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 Viacom and CBS 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 9.09 shall affect the right
of any party to serve legal process in any other manner permitted by law.
SECTION 9.10. 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 9.11. WAIVER OF JURY TRIAL. EACH OF VIACOM AND CBS 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 VIACOM OR CBS IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Viacom and CBS have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
VIACOM INC.
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman & Chief
Executive Officer
CBS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President,
Chief Financial Officer
EXHIBIT A-1
TO THE MERGER AGREEMENT
RESTATED CERTIFICATE OF INCORPORATION
OF
VIACOM INC.
(Originally incorporated on November 10, 1986 under the name Arsenal Holdings,
Inc.)
ARTICLE I
NAME
The name of this Corporation is Viacom Inc.
ARTICLE II
REGISTERED OFFICE AND AGENT FOR SERVICE
The registered office of the Corporation in the State of Delaware is
located at 0000 Xxxxxx Xxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of New Castle. The
name and address of the Corporation's registered agent for service of process
in Delaware is:
Corporation Service Company
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
ARTICLE III
CORPORATE PURPOSES
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
the State of Delaware.
ARTICLE IV
CAPITAL STOCK
(1) Shares, Classes and Series Authorized.
(a) The total number of shares of all classes of capital stock which
the Corporation shall have authority to issue is 3,700,000,000 shares.
The classes and the aggregate number of shares of stock of each class
which the Corporation shall have authority to issue are as follows:
(i) 500,000,000 shares of Class A Common Stock, $0.01 par value
("Class A Common Stock").
(ii) 3,000,000,000 shares of Class B Common Stock, $0.01 par
value ("Class B Common Stock").
(iii) 200,000,000 shares of Preferred Stock, $0.01 par value
("Preferred Stock").
(b) The number of authorized shares of Class B Common Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) from time to time by the affirmative vote of the holders of
a majority of the stock of the Corporation entitled to vote.
(2) Powers and Rights of the Class A Common Stock and the Class B Common
Stock.
Except as otherwise expressly provided in this Restated Certificate of
Incorporation, all issued and outstanding shares of Class A Common Stock and
Class B Common Stock shall be identical and shall entitle the holders thereof
to the same rights and privileges.
A. Voting Rights and Powers. Except as otherwise provided in this
Restated Certificate of Incorporation or required by law, with respect to
all matters upon which stockholders are entitled to vote, the holders of
the outstanding shares of Class A Common Stock shall vote together with
the holders of any other outstanding shares of capital stock of the
Corporation entitled to vote, without regard to class, and every holder
of outstanding shares of Class A Common Stock shall be entitled to cast
thereon one vote in person or by proxy for each share of Class A Common
Stock standing in his name. The holders of shares of Class A Common Stock
shall have the relevant class voting rights set forth in Article IX.
Except as otherwise required by law, the holders of outstanding shares of
Class B Common Stock shall not be entitled to any votes upon any
questions presented to stockholders of the Corporation, including but not
limited to, whether to increase or decrease (but not below the number of
shares then outstanding) the number of authorized shares of Class B
Common Stock.
B. Dividends. Subject to the rights and preferences of the Preferred
Stock set forth in this Article IV and in any resolution or resolutions
providing for the issuance of such stock as set forth in Section (3) of
this Article IV, the holders of Class A Common Stock and Class B Common
Stock shall be entitled to receive ratably such dividends as may from
time to time be declared by the Board of Directors out of funds legally
available therefor.
2
C. Distribution of Assets Upon Liquidation. In the event the
Corporation shall be liquidated, dissolved or wound up, whether
voluntarily or involuntarily, after there shall have been paid or set
aside for the holders of all shares of the Preferred Stock then
outstanding the full preferential amounts to which they are entitled
under the resolutions authorizing the issuance of such Preferred Stock,
the net assets of the Corporation remaining thereafter shall be divided
ratably among the holders of Class A Common Stock and Class B Common
Stock.
D. Split, Subdivision or Combination. If the Corporation shall in
any manner split, subdivide or combine the outstanding shares of Class A
Common Stock or Class B Common Stock, the outstanding shares of the other
class of Common Stock shall be proportionally split, subdivided or
combined in the same manner and on the same basis as the outstanding
shares of the other class of Common Stock have been split, subdivided or
combined.
E. Conversion. So long as there are 10,000 shares of Class A Common
Stock outstanding, each record holder of shares of Class A Common Stock
or Class B Common Stock may convert any or all of such shares into an
equal number of shares of Class B Common Stock by surrendering the
certificates for such shares, accompanied by payment of documentary,
stamp or similar issue or transfer taxes, if any, along with a written
notice by such record holder to the Corporation stating that such record
holder desires to convert such shares into the same number of shares of
Class B Common Stock and requesting that the Corporation issue all of
such Class B Common Stock to the persons named therein, setting forth the
number of shares of Class B Common Stock to be issued to each such person
and the denominations in which the certificates therefor are to be
issued.
(3) Powers and Rights of the Preferred Stock.
Subject to Article XIII of this Restated Certificate of Incorporation,
the Preferred Stock may be issued from time to time in one or more series,
with such distinctive serial designations as may be stated or expressed in the
resolution or resolutions providing for the issue of such stock adopted from
time to time by the Board of Directors; and in such resolution or resolutions
providing for the issuance of shares of each particular series, the Board of
Directors is also expressly authorized to fix; the right to vote, if any; the
consideration for which the shares of such series are to be issued; the number
of shares constituting such series, which number may be increased (except as
otherwise fixed by
3
the Board of Directors) or decreased (but not below the number of shares
thereof then outstanding) from time to time by action of the Board of
Directors; the rate of dividends upon which and the times at which dividends
on shares of such series shall be payable and the preference, if any, which
such dividends shall have relative to dividends on shares of any other class
or classes or any other series of stock of the Corporation; whether such
dividends shall be cumulative or noncumulative, and, if cumulative, the date
or dates from which dividends on shares of such series shall be cumulative;
the rights, if any, which the holders of shares of such series shall have in
the event of any voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding up of the affairs of
the Corporation; the rights, if any, which the holders of shares of such
series shall have to convert such shares into or exchange such shares for
shares of any other class or classes or any other series of stock of the
Corporation or for any debt securities of the Corporation and the terms and
conditions, including, without limitation, price and rate of exchange, of such
conversion or exchange, whether shares of such series shall be subject to
redemption, and the redemption price or prices and other terms of redemption,
if any, for shares of such series including, without limitation, a redemption
price or prices payable in shares of Class A Common Stock or Class B Common
Stock; the terms and amounts of any sinking fund for the purchase or
redemption of shares of such series; and any and all other powers, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof pertaining to shares of
such series permitted by law.
(4) Issuance of Class A Common Stock, Class B Common Stock and Preferred
Stock.
Subject to Article XIII of this Restated Certificate of Incorporation,
the Board of Directors of the Corporation may from time to time authorize by
resolution the issuance of any or all shares of Class A Common Stock, Class B
Common Stock and Preferred Stock herein authorized in accordance with the
terms and conditions set forth in this Restated Certificate of Incorporation
for such purposes, in such amounts, to such persons, corporations, or
entities, for such consideration, and in the case of the Preferred Stock, in
one or more series, all as the Board of Directors in its discretion may
determine and without any vote or other action by any of the stockholders of
the Corporation, except as otherwise required by law.
4
ARTICLE V
DIRECTORS
(1) Power of the Board of Directors. Subject to Article XIII of this
Restated Certificate of Incorporation, the property and business of the
Corporation shall be controlled and managed by or under the direction of its
Board of Directors. In furtherance, and not in limitation of the powers
conferred by the laws of the State of Delaware, the Board of Directors is
expressly authorized, subject in all cases to Article XIII of this Restated
Certificate of Incorporation:
(a) To make, alter, amend or repeal the By-Laws of the Corporation;
provided that no By-Laws hereafter adopted shall invalidate any prior act
of the Directors that would have been valid if such By-Laws had not been
adopted;
(b) To determine the rights, powers, duties, rules and procedures
that affect the power of the Board of Directors to manage and direct the
property, business and affairs of the Corporation, including, without
limitation, the power to designate and empower committees of the Board of
Directors, to elect, appoint and empower the officers and other agents of
the Corporation, and to determine the time and place of, and the notice
requirements for Board meetings, as well as the manner of taking Board
action; and
(c) To exercise all such powers and do all such acts as may be
exercised by the Corporation, subject to the provisions of the laws of
the State of Delaware, this Restated Certificate of Incorporation, and
the By-Laws of the Corporation.
(2) Number and Qualifications of Directors. The number of directors
constituting the entire Board of Directors shall be fixed from time to time by
resolution of the Board of Directors but shall not be less than three nor more
than twenty. Directors shall be elected to hold office for a term of one year.
As used in this Restated Certificate of Incorporation, the term "entire Board
of Directors" means the total number of Directors fixed in the manner provided
in this Article V Section (2) and in the By-Laws.
5
ARTICLE VI
INDEMNIFICATION OF DIRECTORS,
OFFICERS AND OTHERS
(1) Action Not By or on Behalf of Corporation. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or
in the right of the Corporation) by reason of the fact that he is or was a
Director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent
(including, without limitation, a trustee) of another corporation,
partnership, joint venture, trust or other enterprise, against judgments,
fines, amounts paid in settlement and expenses (including, without limitation,
attorneys' fees), actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) Action By or on Behalf of Corporation. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a Director, officer, employee or agent of the Corporation, or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
or other enterprise against expenses (including, without limitation,
attorneys' fees) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the
6
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability and in view of
all of the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
(3) Successful Defense. To the extent that a present or former Director,
officer, employee or agent of the Corporation has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to
in Section 1 or 2 of this Article VI, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including, without
limitation, attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(4) Determination of Right to Indemnification in Certain Circumstances.
Any indemnification under Section 1 or 2 of this Article VI (unless ordered by
a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the present or former
Director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 or 2 of this
Article IV. Such determination shall be made, with respect to a person who is
a Director or officer at the time of such determination, (1) by a majority
vote of the Directors who are not parties to such action, suit or proceeding,
even though less than a quorum, or (2) by a committee of such Directors
designated by a majority vote of such Directors, even though less than a
quorum, or (3) if there are no such Directors, or if such Directors so direct,
by independent legal counsel in a written opinion, or (4) by the stockholders
of the Corporation entitled to vote thereon.
(5) Advance Payment of Expenses.
(a) Expenses (including attorneys' fees) incurred by a Director or
officer in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Director or officer, to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified
by the Corporation as authorized in this Article.
(b) Expenses (including attorneys' fees) incurred by any other employee
or agent in defending any civil, criminal, administrative or investigative
action, suit or
7
proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding upon such terms and conditions, if any, as
the Corporation deems appropriate.
(6) Not Exclusive. The indemnification and advancement of expenses
provided by, or granted pursuant to, the other sections of this Article VI
shall not be deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any statute,
by-law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. Without limiting the foregoing,
the Corporation is authorized to enter into an agreement with any Director,
officer, employee or agent of the Corporation providing indemnification for
such person against expenses, including, without limitation, attorneys' fees,
judgments, fines and amounts paid in settlement that result from any
threatened, pending or completed action, suit, or proceeding, whether civil,
criminal, administrative or investigative, including, without limitation, any
action by or in the right of the Corporation, that arises by reason of the
fact that such person is or was a Director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, to the full extent allowed by law,
except that no such agreement shall provide for indemnification for any
actions that constitute fraud, actual dishonesty or willful misconduct.
(7) Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a Director, officer, employee or agent of
the Corporation, or is or was serving as the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article VI.
(8) Certain Definitions. For the purposes of this Article VI, (A) any
Director, officer, employee or agent of the Corporation who shall serve as a
director, officer, employee or agent of any other corporation, joint venture,
trust or other enterprise of which the Corporation, directly or indirectly, is
or was a stockholder or creditor, or in which the Corporation is or was in any
way interested, or
8
(B) any director, officer, employee or agent of any subsidiary corporation,
joint venture, trust or other enterprise wholly owned by the Corporation,
shall be deemed to be serving as such director, officer, employee or agent at
the request of the Corporation, unless the Board of Directors of the
Corporation shall determine otherwise. In all other instances where any person
shall serve as a director, officer, employee or agent of another corporation,
joint venture, trust or other enterprise of which the Corporation is or was a
stockholder or creditor, or in which it is or was otherwise interested, if it
is not otherwise established that such person is or was serving as such
director, officer, employee or agent at the request of the Corporation, the
Board of Directors of the Corporation may determine whether such service is or
was at the request of the Corporation, and it shall not be necessary to show
any actual or prior request for such service. For purposes of this Article VI,
references to a corporation include all constituent corporations absorbed in a
consolidation or merger as well as the resulting or surviving corporation so
that any person who is or was a director, officer, employee or agent of such a
constituent corporation or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, joint venture, trust or other enterprise shall stand in the same
position under the provisions of this Article VI with respect to the resulting
or surviving corporation as he would if he had served the resulting or
surviving corporation in the same capacity. For purposes of this Article VI,
references to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director, officer, employee
or agent of the Corporation which imposes duties on, or involves services by,
such director, officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries, and a person who acted in good faith
and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Article VI.
(9) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VI shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
9
ARTICLE VII
DIRECTOR LIABILITY TO THE CORPORATION
(a) A Director's liability to the Corporation for breach of duty to the
Corporation or its stockholders shall be limited to the fullest extent
permitted by Delaware law as now in effect or hereafter amended. In particular
no Director of the Corporation shall be liable to the Corporation or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Delaware General Corporation Law, as
the same exists or hereafter may be amended, or (iv) for any transaction from
which the Director derived an improper personal benefit.
(b) Any repeal or modification of the foregoing paragraph (a) by the
stockholders of the Corporation entitled to vote thereon shall not adversely
affect any right or protection of a director of the Corporation existing at
the time of such repeal or modification.
(c) If the General Corporation Law of the State of Delaware is amended to
authorize corporate action further eliminating or limiting the liability of
directors, then a director of the Corporation, in addition to the
circumstances in which he is not now liable, shall be free of liability to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended.
ARTICLE VIII
RESERVATION OF RIGHT TO AMEND
CERTIFICATE OF INCORPORATION
Subject to Article XIII of this Restated Certificate of Incorporation,
the Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Restated Certificate of Incorporation in the
manner now or hereafter prescribed by law, and all the provisions of this
Restated Certificate of Incorporation and all rights and powers conferred in
this Restated Certificate of Incorporation on stockholders, directors and
officers are subject to this reserved power.
Each reference in the Restated Certificate of Incorporation to "the
Restated Certificate of Incorporation", "hereunder",
10
"hereof", or words of like import and each reference to the Restated
Certificate of Incorporation set forth in any amendment to the Restated
Certificate of Incorporation shall mean and be a reference to the Restated
Certificate of Incorporation as supplemented and amended through such
amendment to the Restated Certificate of Incorporation.
ARTICLE IX
VOTING RIGHTS
(1) Class A Common Stock. In addition to any other approval required by
law or by this Restated Certificate of Incorporation, the affirmative vote of
a majority of the then outstanding shares of Class A Common Stock, voted
separately as a class, shall be necessary to approve any consolidation of the
Corporation with another corporation, any merger of the Corporation into
another corporation or any merger of any other corporation into the
Corporation pursuant to which shares of Common Stock are converted into or
exchanged for any securities or any other consideration.
(2) Preferred Stock. Subject to Article XIII of this Restated Certificate
of Incorporation, in addition to any other approval required by law or by this
Restated Certificate of Incorporation, each particular series of any class of
Preferred Stock shall have such right to vote, if any, as shall be fixed in
the resolution or resolutions, adopted by the Board of Directors, providing
for the issuance of shares of such particular series.
ARTICLE X
STOCK OWNERSHIP
AND THE FEDERAL COMMUNICATIONS LAWS
(1) Requests for Information. So long as the Corporation or any of its
subsidiaries holds any authorization from the Federal Communications
Commission (or any successor thereto), if the Corporation has reason to
believe that the ownership, or proposed ownership, of shares of capital stock
of the Corporation by any stockholder or any person presenting any shares of
capital stock of the Corporation for transfer into his name (a "Proposed
Transferee") may be inconsistent with, or in violation of, any provision of
the Federal Communications Laws (as hereinafter defined), such stockholder or
Proposed Transferee, upon request of the Corporation, shall furnish promptly
to the Corporation such information (including, without limitation,
information with respect to citizenship, other ownership interests and
affiliations) as the Corporation shall reasonably request to determine whether
11
the ownership of, or the exercise of any rights with respect to, shares of
capital stock of the Corporation by such stockholder or Proposed Transferee is
inconsistent with, or in violation of, the Federal Communications Laws. For
purposes of this Article X, the term "Federal Communications Laws" shall mean
any law of the United States now or hereafter in effect (and any regulation
thereunder) pertaining to the ownership of, or the exercise of the rights of
ownership with respect to, capital stock of corporations holding, directly or
indirectly, Federal Communications Commissions authorizations, including,
without limitation, the Communications Act of 1934, as amended (the
"Communications Act"), and regulations thereunder pertaining to the ownership,
or the exercise of the rights of ownership, of capital stock of corporations
holding, directly or indirectly, Federal Communications Commission
authorizations, by (i) aliens, as defined in or under the Communications Act,
as it may be amended from time to time, (ii) persons and entities having
interests in television or radio stations, daily newspapers and cable
television systems or (iii) persons or entities, unilaterally or otherwise,
seeking direct or indirect control of the Corporation, as construed under the
Communications Act, without having obtained any requisite prior Federal
regulatory approval to such control.
(2) Denial of Rights, Refusal to Transfer. If any stockholder or Proposed
Transferee from whom information is requested should fail to respond to such
request pursuant to Section (1) of this Article or the Corporation shall
conclude that the ownership of, or the exercise of any rights of ownership
with respect to, shares of capital stock of the Corporation, by such
stockholder or Proposed Transferee, could result in any inconsistency with, or
violation of, the Federal Communications Laws, the Corporation may refuse to
permit the transfer of shares of capital stock of the Corporation to such
Proposed Transferee, or may suspend those rights of stock ownership the
exercise of which would result in any inconsistency with, or violation of, the
Federal Communications Laws, such refusal of transfer or suspension to remain
in effect until the requested information has been received and the
Corporation has determined that such transfer, or the exercise of such
suspended rights, as the case may be, is permissible under the Federal
Communications Laws, and the Corporation may exercise any and all appropriate
remedies, at law or in equity, in any court of competent jurisdiction, against
any such stockholder or Proposed Transferee, with a view towards obtaining
such information or preventing or curing any situation which would cause any
inconsistency with, or violation of, any provision of the Federal
Communications Laws.
12
(3) Legends. The Corporation may note on the certificates of its capital
stock that the shares represented by such certificates are subject to the
restrictions set forth in this Article.
(4) Certain Definitions. For purposes of this Article, the word "person"
shall include not only natural persons but partnerships, associations,
corporations, joint ventures and other entities, and the word "regulation"
shall include not only regulations but rules, published policies and published
controlling interpretations by an administrative agency or body empowered to
administer a statutory provision of the Federal Communications Laws.
ARTICLE XI
TRANSACTIONS WITH DIRECTORS AND OFFICERS
No contract or transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the
director or officer is present at or participates in the meeting of the board
or committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose if (a) the material
facts as to his relationship or interest and as to the contract or transaction
are disclosed or are known to the Board of Directors or the committee, and the
Board of Directors or the committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum, or
(b) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of such stockholders, or (c) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified by the Board of Directors, a committee thereof, or the
stockholders entitled to vote thereon. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
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ARTICLE XII
COMPROMISE AND REORGANIZATION
Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions
of Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
Corporation under the provisions of Section 279 of Title 8 of the Delaware
Code order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agrees to any compromise or arrangement and
to any reorganization of the Corporation as a consequence of such compromise
or arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may
be, and also on this Corporation.
ARTICLE XIII
GOVERNANCE OF THE CORPORATION
DURING SPECIFIED PERIOD
(1) Definitions. As used in this Article XIII, the following terms shall
have the following meanings:
(a) "CBS" shall mean CBS Corporation, a Pennsylvania corporation,
immediately prior to the Effective Time.
(b) "CBS Directors" shall mean (i) eight (8) of those directors
serving as members of the Board of Directors of CBS on September 6, 1999 (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 (as
defined in Section 2(b) of this Article XIII).
14
(c) "CEO" shall mean the Chief Executive Officer.
(d) "COO" shall mean the President and Chief Operating Officer.
(e) "Effective Time" shall mean the time of filing of the
Certificate of Merger to which this Certificate of Incorporation is attached.
(f) "Independent Director" shall mean a disinterested, independent
person (determined in accordance with customary standards for independent
directors applicable to U.S. public companies).
(g) "NAI" shall mean National Amusements, Inc., a Maryland
corporation, and its successors or assigns.
(h) "Specified Independent Directors" shall mean the directors of
the Corporation first elected after 1993 and who are not management of the
Corporation or NAI (together with any replacements of such persons).
(i) "Specified Period" shall mean the period of three years
commencing at the Effective Time.
(j) "Stockholder Agreement" shall mean the Stockholder Agreement
dated as of September 6, 1999, by and between NAI and CBS, relating to
Corporation governance matters.
(k) "Viacom Directors" shall mean the ten (10) directors of the
Corporation serving as the Board of Directors of the Corporation immediately
prior to the Effective Time (including the Specified Independent Directors).
(2) Directors.
(a) Effective immediately at the Effective Time, the Board of
Directors shall consist of eighteen (18) directors. The number of directors
may be fixed by resolution of the Board from time to time, provided, however,
that the size of the Board of Directors may not be changed during the
Specified Period without the approval of at least fourteen (14) directors. At
the Effective Time, ten (10) directors shall be Viacom Directors and eight (8)
directors shall be CBS Directors.
(b) Until the expiration of the Specified Period, the Board of
Directors (subject to the fiduciary duties of the directors) shall take all
action necessary to ensure that any seat on the Board of Directors held by (i)
a CBS Director
15
which becomes vacant is filled promptly by a person qualifying as an
Independent Director and designated to fill such seat by a majority of the CBS
Directors remaining on the Board of Directors (a "Replacement CBS Director")
and (ii) a Specified Independent Director which becomes vacant is filled
promptly by an Independent Director who is 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.
(c) During the Specified Period, all committees of the Board of
Directors (other than the Compensation Committee and the Officers Nominating
Committee) shall have such number of CBS Directors as equals the total number
of members of the Committee multiplied by a fraction, the numerator of which
is eight (8) and the denominator of which is eighteen (18), rounded to the
closest whole number; provided that in no event shall any committee have (x)
fewer than one (1) CBS Director or (y) less than a majority of Viacom
Directors.
(d) During the Specified Period, the Board of Directors shall not
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 the provisions set forth in this Article XIII (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).
(3) Chairman and Chief Executive Officer.
(a) At the Effective Time, Xxxxxx Xxxxxxxx shall remain the Chairman
and CEO. In the event that Xxxxxx Xxxxxxxx is not the CEO at the Effective
Time or ceases to be the CEO at any time during the Specified Period, then Xxx
Xxxxxxxx, if he is COO at such time, shall succeed to the position of CEO for
the remainder of the Specified Period. During any such period of succession,
Xxx Xxxxxxxx shall continue to exercise the powers, rights, functions and
responsibilities of the COO in addition to exercising those of the CEO.
(b) The Chairman shall chair all meetings of the Board of Directors
and stockholders at which he is present.
(c) The CEO shall be responsible, in consultation with the COO, for
corporate policy and strategy and the COO shall consult on all major decisions
with, and shall report directly to, the CEO, during the Specified Period;
provided, however, that the CEO shall not exercise any powers, rights,
functions or responsibilities of the COO unless Xxx Xxxxxxxx is the CEO.
16
(4) President and Chief Operating Officer.
(a) At the Effective Time, the President and Chief Operating Officer
of the Corporation shall be Xxx Xxxxxxxx. During the Specified Period, Xxx
Xxxxxxxx may not be terminated or demoted from the position of COO (or, in the
event that Xxxxxx Xxxxxxxx is not the CEO, from the position of CEO) and no
COO Functions (as defined below) may be changed without the affirmative vote
of at least fourteen (14) directors.
(b) Subject to the requirement that the COO consult with the CEO on
all major decisions, the powers, rights, functions and responsibilities of the
COO (collectively, the "COO Functions") shall include, without limitation, the
following:
(i) supervising, coordinating and managing the Corporation's
business, operations, activities, operating expenses and capital
allocation;
(ii) matters relating to officers (other than the Chairman, CEO and
COO) and employees, including, without limitation, hiring (subject to (A)
the specific Board of Directors authority described below with respect to
the CFO, the General Counsel and the Controller and (B) Section 5 below),
terminating, changing positions and allocating responsibilities of such
officers and employees; and
(iii) substantially all of the powers, rights, functions and
responsibilities typically exercised by a chief operating officer.
All officers (other than the Chairman, CEO and COO) will report, directly
or indirectly, to the COO (this reporting relationship will be deemed a COO
Function).
(c) In the event that Xxx Xxxxxxxx is not COO or CEO, the Board may
terminate the COO's employment, eliminate the COO position and the Officers
Nominating Committee and reallocate the COO Functions without regard to the
other provisions of this Article XVIII.
(5) Officers Nominating Committee; Compensation Committee.
(a) Subject to the powers of the Compensation Committee set forth
below, during the Specified Period, all powers of the Board of Directors,
including, without limitation, the right to hire, elect, terminate, change
positions, allocate responsibilities or determine non-equity compensation,
with respect to officers and employees, shall be exercised, subject
17
to clauses (b) and (c) below, by, and delegated to, the Officers Nominating
Committee of the Board of Directors. The Officers Nominating Committee shall
consist solely of the member of the Board of Directors who is the COO, except
that in the event Xxx Xxxxxxxx succeeds to the position of CEO, the sole
member of the Officers Nominating Committee shall be the member of the Board
of Directors who is the CEO.
(b) The Officers Nominating Committee shall have no powers with
respect to the Chairman, CEO and COO, and shall not have the power to fill the
positions of Chief Financial Officer, Controller or General Counsel of the
Corporation without the approval of the Board of Directors; provided that this
provision shall in no way affect the other powers and authorities of the
Officers Nominating Committee with respect to the Chief Financial Officer,
Controller and General Counsel positions, including, without limitation, the
power to terminate employment of persons holding such positions.
(c) The Compensation Committee shall not be required to, or have any
power to, approve the annual compensation of (i) any employee if the total
value of such employee's annual cash compensation (assuming for this purpose
that the actual bonus of each officer and employee is equal to his or her
target bonus) is less than $1 million or (ii) talent (as such term is commonly
used in the media or entertainment industries), in each such case which power
shall be delegated to the Officers Nominating Committee. The annual
compensation of all other officers and employees and any equity or
equity-based compensation of any officer or employee must be approved by the
Compensation Committee.
(d) The Compensation Committee shall consist of three CBS Directors
who are Independent Directors and three non-CBS Directors, two of whom will be
the Specified Independent Directors and the other of whom will be an
Independent Director.
(e) Any decision or determination of the Officers Nominating
Committee may be reversed or overridden by (and only by) the affirmative vote
of at least fourteen (14) directors.
(6) Stockholder Agreement.
The Stockholder Agreement may not be amended, and no provision
thereof may be modified or waived, except with the approval of at least
fourteen (14) directors.
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(7) Issuance of Voting Stock.
During the Specified Period, in addition to any other approval
required by law or by this Restated Certificate of Incorporation, the
Corporation may not issue (i) additional shares of Class A Common Stock or
(ii) any shares of Preferred Stock or any other class or series of stock or
securities, in each case with, or convertible into or exchangeable or
exercisable for stock or other securities with, the right to vote on any
matter on which stockholders are entitled to vote if the result would be that
parties bound by the Stockholder Agreement could fail to own at least a
majority of the outstanding shares of voting stock of the Corporation.
(8) Voting
During the Specified Period, except for those actions set forth on
Annex I to this Restated Certificate of Incorporation, which shall require the
approval of the Board of Directors, all action by the Board of Directors shall
require the affirmative vote of at least fourteen (14) directors. At all
meetings of the Board of Directors a majority of the full Board of Directors
shall constitute a quorum for the transaction of business and the act of a
majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or this Restated Certificate of
Incorporation. If a quorum shall not be present at any meeting of the Board of
Directors, the Directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
(9) Amendment.
Until the expiration of the Specified Period the provisions of any
Article of this Restated Certificate which refer to this Article XIII, the
provisions of this Article XIII, and the provisions of Article VIII of the
by-laws of the Corporation, may not be amended, altered, repealed or waived in
any respect without the approval of at least fourteen (14) directors.
(10) Successors.
During the Specified Period, the provisions of this Article XIII
shall be applicable to (i) any successor to the Corporation as the result of a
merger, consolidation or other business combination, whether or not the
Corporation is the surviving company in such transaction, or otherwise and
(ii) any corporation or other entity with respect to which the
19
Corporation or its successor is or becomes a direct or indirect subsidiary,
the Board of Directors shall not permit the Corporation to be a party to any
transaction which would not comply with the foregoing without the approval of
at least fourteen (14) directors.
(11) Subsidiaries.
The Board of Directors shall have the right, following consultation
with the COO or, if Xxx Xxxxxxxx is the CEO, the CEO, with respect to any
public company which is a subsidiary of the Corporation, to take such steps as
the Board of Directors reasonably determines are necessary to implement
corporate governance arrangements applicable to such subsidiary in a manner as
consistent as practicable with the provisions contained in this Restated
Certificate of Incorporation; provided that any such steps shall not vest in
the Board of Directors greater power or provide the COO with fewer rights than
those provided for in this Restated Certificate of Incorporation.
20
ANNEX I
TO VIACOM INC. RESTATED
CERTIFICATE OF INCORPORATION
The provisions of this Annex I shall form a part of, and be incorporated
in all respects in, the Restated Certificate of Incorporation to which this
Annex I is attached. The following actions shall require the approval of a
majority of the directors:
A. Acquisitions, Divestitures, Joint Ventures, Guarantees
o Any acquisition, equity investment or joint venture (each an
"Acquisition") by the Corporation or any of its subsidiaries for more
than $25 million.
o Any divestiture or other sale of assets (each a "Divestiture") (not
in the ordinary course) by the Corporation or any of its subsidiaries
for more than $25 million (based on purchase price or net book value
of assets).
o Any real estate purchase, sale or lease by the Corporation or any of
its subsidiaries for more than $25 million.
o Any guarantee by the Corporation or any of its subsidiaries of an
obligation of a third party where the obligation guaranteed is more
than $25 million.
o Notwithstanding the above, any Acquisition or Divestiture
by the Corporation or any of its subsidiaries of
(a) internet or internet related businesses for more than
$25 million but less than $100 million, with the value
thereof represented by multi-year commitments for
advertising, promotion and content licensing, is
excluded, so long as the aggregate of such Acquisitions
or Divestitures, in each case, does not exceed $550
million and (b) radio or outdoor advertising businesses
for more than $25 million but less than $100 million, is
excluded, so long as the aggregate of such Acquisitions
or Divestitures, in each case, does not exceed $300
million; provided that (i) any Divestiture of shares of
a publicly traded internet or internet related business
with a value of up to $75 million is excluded and shall
not be included in the calculation of any of the
threshold amounts set forth above, (ii) Board approval
may be secured (but is not required) for any transaction
of more than $25 million but less than $100 million where
the regular meeting schedule of the Board so permits (and
shall not otherwise be required), (iii) the Board will be
provided with information about and a status report on
such transactions completed without Board approval and
(iv) this limit of authority will be reviewed in 12
months from the Effective Time (as defined in
Article XIII of the Restated Certificate) and may be
amended only with the approval of 14 members of the Board
of Directors.
o Any contract of the Corporation or any of its subsidiaries not in the
ordinary course with a value in excess of $25 million.
o Notwithstanding the above, any of the foregoing transactions that is
approved by the Board shall not be included in the calculation of any
of the threshold amounts set forth above.
B. Employee Matters
o Employee benefit plans (at the Corporation or a
subsidiary): (a) creating a new plan, (b) suspending or
terminating an existing plan, (c) any amendment that
materially increases cost to the Corporation or
subsidiary
o Entering into any modifications or amendments to the employment
agreements with the CEO or the COO.
C. General
o The Annual Report on Form 10-K
o Proxy statement and notice of meeting (including annual or special
meeting date, location, record date for voting)
o Any issuance of Corporation stock, or options, warrants or other
similar rights (including stock appreciation rights) or debt or other
securities convertible into or exchangeable for Corporation stock
o Any issuance of debt unless such debt is short term and is within the
spending limits of the annual operating budget or is replacing
existing debt
o Annual capital expenditure and annual operating budgets and
individual capital expenditure transactions in excess of $25 million
for the Corporation or any of its subsidiaries
o Any Corporation or subsidiary pays a dividend or
repurchases stock from a third party
o Review and approve any action or transaction where Board action is
required by law (other than ss. 141(a) of the Delaware General
Corporation Law) or by the terms of the transaction (in all cases
other than as specifically set forth in the Restated Certificate of
Incorporation)
o Review and approve Board minutes
o Subject to Article XIII of the Restated Certificate of Incorporation,
determine Board administration, including number of directors,
meeting schedule, nominees, committees, director compensation, D&O
insurance authorization, internal investigations and retention of
advisors in connection therewith, and decisions regarding
indemnification of individuals
o Subject to Article XIII of the Restated Certificate of
Incorporation, amendments to the Restated Certificate of
Incorporation and by-laws of the Corporation
o Commencement and settlement of major litigation
2
o Selection of independent auditors
o All matters on which the Corporation Board of Directors
has historically taken action other than (1) matters
relating to the subject matters addressed in this Annex I
and not requiring approval of the Board of Directors
hereunder and (2) those matters delegated to the COO,
including all of the COO Functions (as defined in
Article XIII of this Restated Certificate of
Incorporation).
3
EXHIBIT A-2
TO THE MERGER AGREEMENT
VIACOM INC.
AMENDED AND RESTATED
B Y - L A W S
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The Corporation may also have offices at such other
places both within and without the state of Delaware as the board of directors
may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Meetings of stockholders may be held at such time and
place, within or without the State of Delaware, as shall be stated in the
notice of the meeting or in a duly executed waiver of notice thereof. The
annual meeting of stockholders may be held at such place, within or without
the State of Delaware, as shall be designated by the board of directors and
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
2
Section 2. The annual meeting of stockholders for the purpose of
electing directors and for the transaction of such other business as may
properly come before the meeting shall be held at such date and hour as shall
be determined by the board of directors or, in the absence of such
determination, on the third Thursday of the ninth month after the month end
most nearly coinciding with the close of the fiscal year of the Corporation.
Section 3. Written notice of the annual meeting stating the place,
date and hour of the meeting shall be given to each stockholder entitled to
vote at such meeting not less than ten nor more than sixty days before the
date of the meeting.
Section 4. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice
3
of the meeting, or, if not so specified, at the place where the meeting is to
be held. The list shall also be produced and kept open at the time and place
of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Restated
Certificate of Incorporation, may be called by the affirmative vote of a
majority of the board of directors, the Chairman of the Board, the Chief
Executive Officer, the Vice Chairman of the Board or the President and Chief
Operating Officer and shall be called by the Chairman of the Board, the Chief
Executive Officer, the Vice Chairman of the Board, the President and Chief
Operating Officer or Secretary at the request in writing of the holders of
record of at least 50.1% of the aggregate voting power of all outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of Directors, acting together as a single class. Such request shall
state the purpose or purposes of the proposed meeting.
Section 6. Written notice of a special meeting stating the place,
date and hour of the meeting and the purpose or purposes for which the meeting
is called, shall be given not less than ten nor more than sixty days before
4
the date of the meeting to each stockholder of record entitled to vote at such
meeting.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the aggregate voting power
of the shares of the capital stock issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
at all meetings of the stockholders for the transaction of business except as
otherwise provided by statute or by the Restated Certificate of Incorporation.
If, however, such quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have the power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted at the meeting as originally notified. If the adjournment
is for more than thirty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
5
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the aggregate voting power of the shares of the
capital stock having voting power present in person or represented by proxy
shall decide any question brought before such meeting, unless the question is
one upon which, by provision of applicable law or of the Restated Certificate
of Incorporation, a different vote is required in which case such express
provision shall govern and control the decision of such question.
Section 10. At every meeting of the stockholders, each stockholder
shall be entitled to vote, in person or by proxy executed in writing by the
stockholder or his duly authorized attorney-in-fact, each share of the capital
stock having voting power held by such stockholder in accordance with the
provisions of the Restated Certificate of Incorporation and, if applicable,
the certificate of designations relating thereto, but no proxy shall be voted
or acted upon after three years from its date, unless the proxy provides for a
longer period.
Section 11. Any action required to be taken at any annual or special
meeting of stockholders of the Corporation, or any action which may be taken
at any annual or special meeting of such stockholders, may be taken
6
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by stockholders
representing not less than the minimum number of votes that would be necessary
to authorize or take such actions at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of such
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing. The Secretary shall
file such consents with the minutes of the meetings of the stockholders.
Section 12. At all meetings of stockholders, the chairman of the
meeting shall have absolute authority over matters of procedure, and there
shall be no appeal from the ruling of the chairman.
Section 13. Attendance of a stockholder, in person or by proxy, at
any meeting shall constitute a waiver of notice of such meeting, except where
the stockholder, in person or by proxy, attends a meeting for the express
purpose of objecting to the transaction of any business because the meeting is
not lawfully called or convened.
7
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the entire
Board of Directors shall be fixed as set forth in Article XIII of the Restated
Certificate of Incorporation, and shall not be less than three nor more than
eighteen. Directors shall have such qualifications as may be prescribed by
these by-laws. Directors need not be stockholders. If required by regulations
of the Federal Communications Commission, each director shall be a citizen of
the United States of America.
Section 2. Subject to the rights of the holders of any series of
Preferred Stock or any other class of capital stock of the corporation then
outstanding (other than the Common Stock), and subject to Article XIII of the
Restated Certificate of Incorporation, vacancies in the board of directors for
any reason, including by reason of an increase in the authorized number of
directors, shall, if occurring prior to the expiration of the term of office
in which the vacancy occurs, be filled by a majority of the directors then in
office, though less than a quorum, or by a sole remaining director, and the
directors so chosen shall hold office until the next annual meeting of
stockholders of the Corporation or until their successors are duly elected and
shall qualify, unless sooner displaced. Subject to
8
Article XIII of the Restated Certificate of Incorporation, if there are no
directors in office, then an election of directors may be held in the manner
provided by statute.
Section 3. The property and business of the Corporation shall be
controlled and managed in accordance with the terms of the Restated
Certificate of Incorporation by its board of directors which may, subject to
Article XIII of the Restated Certificate of Incorporation, exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute or by the Restated Certificate of Incorporation or by these by-laws
directed or required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the Corporation, or any
committees thereof, may hold meetings, both regular and special, either within
or without the State of Delaware.
Section 5. A regular annual meeting of the board of directors,
including newly elected directors, shall be held immediately after each annual
meeting of stockholders at the place of such stockholders' meeting, and no
notice of such meeting to the directors shall be necessary in order legally to
constitute the meeting, provided a quorum shall be present. If such meeting is
held at any other time or
9
place, notice thereof must be given or waived as hereinafter provided for
special meetings of the board of directors.
Section 6. Additional regular meetings of the board of directors
shall be held on such dates and at such times and at such places as shall from
time to time be determined by the board of directors.
Section 7. The Chairman of the Board, the Chief Executive Officer,
Vice Chairman of the Board or the President and Chief Operating Officer of the
Corporation and the Secretary may call a special meeting of the board of
directors at any time by giving notice, specifying the business to be
transacted at and the purpose or purposes of the meeting, to each member of
the board at least twenty-four (24) hours before the time appointed.
Section 8. At all meetings of the board a majority of the full board
of directors shall constitute a quorum for the transaction of business and the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the board of directors, except as may be otherwise
specifically provided by statute, the Restated Certificate of Incorporation or
these by-laws. If a quorum shall not be present at any meeting of the board of
directors, the directors present thereat may adjourn the meeting from time to
time, without
10
notice other than announcement at the meeting, until a quorum shall be
present.
Section 9. Any action required or permitted to be taken at any
meeting of the board of directors or of any committee thereof may be taken
without a meeting if all members of the board or committee, as the case may
be, consent thereto in writing, setting forth the action so taken, and the
writing or writings are filed with the minutes of proceedings of the board or
committee.
Section 10. Unless otherwise restricted by the Restated Certificate
of Incorporation or these by-laws, members of the board of directors, or any
committee thereof, may participate in a meeting of the board of directors, or
any committee, by means of conference telephone or similar communications
equipment whereby all persons participating in the meeting can hear each
other, and such participation in a meeting shall constitute presence in person
at the meeting.
COMMITTEES OF DIRECTORS
Section 11. Designation of Committees. Subject to Article XIII of
the Restated Certificate of Incorporation, the board of directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, each committee to consist of one or more of
11
the directors of the Corporation. Subject to Article XIII of the Restated
Certificate of Incorporation, the board of directors may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee.
Section 12. Vacancies. Subject to Article XIII of the Restated
Certificate of Incorporation, in the absence or disqualification of a member
of a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member.
Section 13. Powers. Subject to Article XIII of the Restated
Certificate of Incorporation, any such committee, to the extent provided in
the resolution of the board of directors, shall have and may exercise all the
powers and authority of the board of directors to the extent provided by
Section 141(c) of the General Corporation Law of the State of Delaware as it
exists now or may hereafter be amended.
Section 14. Each committee of the board of directors shall keep
regular minutes of its meetings and report the same to the board of directors
when required.
12
COMPENSATION OF DIRECTORS
Subject to Article XIII of the Restated Certificate of
Incorporation:
Section 15. Unless otherwise restricted by the Restated Certificate
of Incorporation or these by-laws, the board of directors shall have the
authority to fix the compensation of directors. All directors may be paid
their expenses, if any, of attendance at each meeting of the board of
directors, and directors who are not full-time employees of the Corporation
may be paid a fixed sum for attendance at each meeting of the board of
directors and/or a stated salary as director. No such payment shall preclude
any director from serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be
allowed like compensation and expenses for attending committee meetings.
REMOVAL OF DIRECTORS
Subject to Article XIII of the Restated Certificate of
Incorporation:
Section 16. Subject to the rights of the holders of any series of
Preferred Stock or any other class of capital stock of the Corporation (other
than the Common Stock) then outstanding, (a) any director, or the entire
13
board of directors, may be removed from office at any time prior to the
expiration of his term of office, with or without cause, only by the
affirmative vote of the holders of record of outstanding shares representing
at least a majority of all of the aggregate voting power of outstanding shares
of capital stock of the Corporation then entitled to vote generally in the
election of directors, voting together as a single class at a special meeting
of stockholders called expressly for that purpose; provided that, any director
may be removed from office by the affirmative vote of a majority of the entire
board of directors, at any time prior to the expiration of his term of office,
as provided by law, in the event a director fails to meet the qualifications
stated in these by-laws for election as a director or in the event such
director is in breach of any agreement between such director and the
Corporation relating to such director's service as a director or employee of
the Corporation.
INDEMNIFICATION OF DIRECTORS
Section 17. The Corporation shall have the right to indemnify
directors, officers and agents of the Corporation to the fullest extent
permitted by the General Corporation Law of Delaware and by the Restated
Certificate of Incorporation, as both may be amended from time to time.
14
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of applicable law or of
the Restated Certificate of Incorporation or of these by-laws, notice is
required to be given to any director or stockholder, it shall be construed to
mean written or printed notice given either personally or by mail or wire
addressed to such director or stockholder, at his address as it appears on the
records of the Corporation, with postage or other charges thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail or at the appropriate office for
transmission by wire. Notice to directors may also be given by telephone.
Section 2. Whenever any notice is required to be given under the
provisions of applicable law or of the Restated Certificate of Incorporation
or of these by-laws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
Section 3. Attendance at a meeting shall constitute a waiver of
notice except where a director or shareholder attends a meeting for the
express purpose of
15
objecting to the transaction of any business because the meeting is not
lawfully called or convened.
Section 4. Neither the business to be transacted at, nor the purpose
of, any regular meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
ARTICLE V
OFFICERS
Subject to Article XIII of the Restated Certificate of
Incorporation:
Section 1. The officers of the Corporation shall be elected by the
board of directors at its first meeting after each annual meeting of the
stockholders and shall be a President and Chief Operating Officer, a Treasurer
and a Secretary. The board of directors may also elect a Chairman of the
Board, a Chief Executive Officer, one or more Vice Chairmen of the Board and
Vice Presidents and one or more Assistant Treasurers and Assistant
Secretaries. Any number of offices may be held by the same person, except that
the offices of President and Chief Operating Officer and Secretary shall not
be held by the same person. Vice Presidents may be given distinctive
designations such as Executive Vice President or Senior Vice President. Every
officer shall be a citizen of the United States of America.
16
Section 2. The board of directors may elect such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board of directors.
Section 3. The officers of the Corporation shall hold office until
their successors are elected or appointed and qualify or until their earlier
resignation or removal. Any officer elected or appointed by the board of
directors may be removed at any time with or without cause by the affirmative
vote of a majority of the whole board of directors. Any vacancy occurring in
any office of the Corporation shall be filled by the board of directors.
CHAIRMAN OF THE BOARD
Section 4. The Chairman of the Board, if any shall be elected, shall
preside at all meetings of the board of directors and the stockholders and
shall have such other powers and perform such other duties as may from time to
time be assigned to him by the board of directors.
VICE CHAIRMAN OF THE BOARD
Section 5. The Vice Chairman of the Board, if any shall be elected,
or if there be more than one, the Vice Chairmen of the Board in order of their
election, shall, in
17
the absence of the Chairman of the Board, or in the case the Chairman of the
Board shall resign, retire, become deceased or otherwise cease or be unable to
act, perform the duties and exercise the powers of the Chairman of the Board.
In addition, the Vice Chairman of the Board shall have such other powers and
perform such other duties as may from time to time be assigned to him by the
board of directors.
THE CHIEF EXECUTIVE OFFICER
Section 6. The Chief Executive Officer shall be responsible, in
consultation with the President and Chief Operating Officer, for corporate
policy and strategy. The President and Chief Operating Officer shall consult
on all major decisions with, and shall report directly to, the Chief Executive
Officer; provided, however, that the Chief Executive Officer shall not
exercise any powers, rights, functions or responsibilities of the President
and Chief Operating Officer unless Xxx Xxxxxxxx is the Chief Executive
Officer.
THE PRESIDENT AND CHIEF OPERATING OFFICER
Section 7. Subject to Article XIII of the Restated Certificate of
Incorporation and to the requirement that the President and Chief Operating
Officer consult with the Chief Executive Officer on all major decisions, the
18
President and Chief Operating Officer shall be responsible for:
(i) supervising, coordinating and managing the Corporation's
business, operations and activities, operating expenses and capital
allocation;
(ii) matters relating to officers (other than the Chairman, the
Chief Executive Officer and the President and Chief Operating
Officer) and employees, including, without limitation, hiring,
terminating, changing positions and allocation of responsibilities
of such officers and employees;
(iii) substantially all of the powers, rights, functions and
responsibilities typically exercised by a chief operating officer;
and
(iv) all officers (other than the Chairman, the Chief Executive
Officer and the President and Chief Operating Officer) will report,
directly or indirectly, to the President and Chief Operating
Officer.
THE VICE-PRESIDENTS
Section 8. The Vice-Presidents shall have such powers and perform
such duties as may from time to time be assigned to them by the board of
directors or the President and Chief Operating Officer.
19
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The Secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings
of the meetings of the Corporation and of the board of directors in a book to
be kept for that purpose and shall perform like duties for the standing
committees of the board of directors when required. He shall give, or cause to
be given, notice of all meetings of the stockholders and special meetings of
the board of directors, and shall perform such other duties as may be
prescribed by the board of directors or the President and Chief Operating
Officer, under whose supervision he shall be. He shall have custody of the
corporate seal of the Corporation and he, or an Assistant Secretary, shall
have authority to affix the same to any instrument requiring it and when so
affixed, it may be attested by his signature or by the signature of such
Assistant Secretary. The board of directors may give general authority to any
other officer to affix the seal of the Corporation and to attest the affixing
by his signature.
Section 10. The Assistant Secretary, if any shall be elected, or if
there be more than one, the Assistant
20
Secretaries in the order determined by the board of directors (or if there be
no such determination, then in the order of their election), shall, in the
absence of the Secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the Secretary and shall have
such other powers and perform such other duties as may from time to time be
assigned to them by the board of directors or the President and Chief
Operating Officer.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The Treasurer, under the supervision of the President
and Chief Operating Officer, shall have charge of the corporate funds and
securities and shall keep or cause to be kept full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositaries as may be designated by or at the
direction of the board of directors.
Section 12. The Treasurer shall disburse or cause to be disbursed
the funds of the Corporation as may be ordered by or at the direction of the
President and Chief Operating Officer or the board of directors, taking proper
vouchers for such disbursements, and subject to the
21
supervision of the President and Chief Operating Officer, shall render to the
board of directors, when they or either of them so require, an account of his
transactions as Treasurer and of the financial condition of the Corporation.
Section 13. If required by the board of directors, the Treasurer
shall give the Corporation a bond in such sum and with such surety or sureties
as shall be satisfactory to the board of directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
Section 14. The Assistant Treasurer, if any shall be elected, or if
there shall be more than one, the Assistant Treasurers in the order determined
by the board of directors (or if there be no such determination, then in the
order of their election), shall, in the absence of the Treasurer or in the
event of his inability or refusal to act, perform the duties and exercise the
powers of the Treasurer and shall have such other powers and perform such
other duties as may from time to time be assigned to them by the board of
directors.
22
Section 15. In addition to the corporate officers elected by the
board of directors pursuant to this Article V, the President and Chief
Operating Officer may, from time to time, appoint one or more other persons as
appointed officers who shall not be deemed to be corporate officers, but may,
respectively, be designated with such titles as the President and Chief
Operating Officer may deem appropriate. The President and Chief Operating
Officer may prescribe the powers to be exercised and the duties to be
performed by each such appointed officer, may designate the term for which
each such appointment is made, and may, from time to time, terminate any or
all of such appointments. Such appointments and termination of appointments
shall be reported to the board of directors.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of shares of capital stock in the
Corporation shall be entitled to have a certificate sealed with the seal of
the Corporation and signed by, or in the name of the Corporation by, the
Chairman of the Board, the Chief Executive Officer, Vice Chairman of the Board
or the President and Chief Operating Officer and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the
Corporation, certifying the number of shares owned by him in the
23
Corporation. If the Corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in section 202 of the General Corporation Law of Delaware,
in lieu of the foregoing requirements, there may be set forth on the face or
back of the certificate which the Corporation shall issue to represent such
class or series of stock, a statement that the Corporation will furnish
without charge to each stockholder who so requests the designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.
Section 2. Any or all of the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar
24
before such certificate is issued, it may be issued by the Corporation with
the same effect as if he were such officer, transfer agent or registrar at the
date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of capital stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such
manner as it shall require and/or to give the Corporation a bond in such sum
as it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen
or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the Corporation or the transfer agent
of the Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of
25
succession, assignation or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 5. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution, or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the board of directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meetings, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
26
REGISTERED STOCKHOLDERS
Section 6. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the Corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property or in shares of the capital
stock, subject to the provisions of any statute, the Restated Certificate of
Incorporation and these by-laws.
Section 2. Before payment of any dividend, there may be set aside
out of any funds of the Corporation
27
available for dividends such sum or sums as the directors from time to time,
in their absolute discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the Corporation, or for such other purposes as the directors
shall think conducive to the interest of the Corporation, and the directors
may modify or abolish any such reserve in the manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by
vote of the stockholders, a full and clear statement of the business and
condition of the Corporation.
CHECKS
Section 4. All checks or demands for money of the Corporation shall
be signed by such officer or officers or such other person or persons as the
board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the Corporation shall be as specified
by the board of directors.
28
SEAL
Section 6. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its organization and the words "Corporate
Seal, Delaware". The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced or otherwise.
CONTRACTS
Section 7. An Officer of the Corporation may sign any note, bond, or
mortgage of the Corporation in furtherance of the Corporation's ordinary
business and in order to implement any action authorized by these by-laws.
ARTICLE VIII
RESTATED CERTIFICATE OF INCORPORATION
In addition to all other provisions of the Restated Certificate of
Incorporation, and notwithstanding that these by-laws may contain any
provision contrary thereto, these by-laws shall be subject in all respects to
Article XIII of the Restated Certificate of Incorporation.
ARTICLE IX
AMENDMENTS
In furtherance of and not in limitation of the powers conferred by
statute, the board of directors of the
29
Corporation from time to time may make, amend, alter, change or repeal the
by-laws of the Corporation; provided, that any by-laws made, amended, altered,
changed or repealed by the board of directors or the stockholders of the
Corporation may be amended, altered, changed or repealed, and that any by-laws
may be made, by the stockholders of the Corporation. Notwithstanding any other
provisions of the Restated Certificate of Incorporation of the Corporation or
these by-laws (and notwithstanding the fact that a lesser percentage may be
specified by law, the Restated Certificate of Incorporation or these by-laws),
the affirmative vote of not less than a majority of the aggregate voting power
of all outstanding shares of capital stock of the Corporation then entitled to
vote generally in this election of Directors, voting together as a single
class, shall be required for the stockholders of the Corporation to amend,
alter, change, repeal or adopt any by-laws of the Corporation.
