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