Exhibit 10.3
Viacom Inc.
2004 Long-Term Management Incentive Plan
Stock Option Certificate
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NAME:
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NUMBER OF SHARES:
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EXERCISE PRICE:
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DATE OF GRANT:
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EXPIRATION DATE:
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VIACOM INC.
This certifies that Viacom Inc., a Delaware
corporation (the "Company"), has granted to the
employee named above (the "Participant"), on the date
indicated above (the "Date of Grant"), non-qualified
stock options (the "Stock Options") to purchase the
number of shares of the Class B Common Stock, par
value $0.01 per share, of the Company ("Class B
Common Stock") indicated above, for a purchase price
per share equal to the price (the "Exercise Price")
shown above, under the Company's 2004 Long-Term
Management Incentive Plan, as amended from time to
time (the "Plan"), all on the terms and conditions to
this stock option certificate attached hereto as part
hereof (the "Terms and Conditions").
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William A. Roskin
Executive Vice President,
Human Resources and
Development
Viacom Inc.
2004 Long-Term Management Incentive Plan
Terms and Conditions to the Stock Option Certificate
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ARTICLE I
TERMS OF STOCK OPTIONS
Section 1.1 Grant of Stock Options. The Stock Options have been awarded
to the Participant subject to the terms and conditions contained in (A) the
certificate for the [Insert Date of Grant] grant of Stock Options provided
simultaneously on-line or attached hereto (the "Stock Option Certificate") and
the Terms and Conditions contained herein (collectively, the "Certificate") and
(B) the Plan, the terms of which are hereby incorporated by reference. A copy of
the Plan is being provided simultaneously on-line or attached hereto.
Capitalized terms that are not otherwise defined herein have the meanings
assigned to them in the Stock Option Certificate or the Plan. The Stock Options
are not intended to be, or qualify as, "Incentive Stock Options" within the
meaning of Section 422 of the Code.
Section 1.2 Terms of Stock Options.
(a) Vesting. The Stock Options shall be exercisable only to the extent
the Participant is vested therein. The Stock Options shall vest in four
installments of an equal whole number of Stock Options on each of the first,
second, third and fourth anniversary of the Date of Grant (any remaining Stock
Options shall vest on whichever of the preceding vesting dates shall be
determined by the Company in accordance with its customary procedures).
(b) Option Period. Except as provided in Section 1.2(c) hereof, the
period during which the Stock Options may be exercised shall expire on the
eighth anniversary of the Date of Grant (the "Expiration Date").
(c) Exercise in the Event of Termination of Employment, Retirement,
Permanent Disability or Death.
(i) Termination other than for Cause, or due to Retirement,
Permanent Disability or Death. Except as otherwise provided
in this Section 1.2 or as otherwise determined by the
Committee, in the event of the Participant's termination of
employment other than a Termination for Cause or due to the
Participant's Retirement, Permanent Disability or death, the
Participant's Outstanding Stock Options can be exercised in
accordance with the following provisions:
(A) if the Participant ceases to be an employee of the
Company or any of its Subsidiaries by reason of the
voluntary termination by the Participant or the
termination by the Company or any of its Subsidiaries
other than a Termination for Cause, his or her
Outstanding Stock Options may be exercised to the
extent then exercisable until the earlier of six
months after the date of such termination or the
Expiration Date;
(B) if the Participant ceases to be an employee of the
Company or any of its Subsidiaries by reason of the
Participant's Retirement, the Participant may
exercise his or her Outstanding Stock Options to the
extent exercisable on the date of Retirement until
the earlier of the third anniversary of such date or
the Expiration Date;
(C) if the Permanent Disability of the Participant
occurs, his or her Outstanding Stock Options may be
exercised to the extent exercisable upon the date of
the onset of such Permanent Disability until the
earlier of the third anniversary of such date or the
Expiration Date; and
(D) if a Participant dies during a period during which
his or her Stock Options could have been exercised by
him or her, his or her Outstanding Stock Options may
be exercised to the extent exercisable at the date of
death by the person who acquired the right to
exercise such Stock Options by will or the laws of
descent and distribution or permitted transfer until
the earlier of the second anniversary of the date of
death or the Expiration Date.
Except as otherwise provided in this Section 1.2 or as
otherwise determined by the Committee, upon the occurrence
of an event described in clauses (A), (B), (C) or (D) of
this Section 1.2(c)(i), all rights with respect to Stock
Options that are not vested as of such event will be
relinquished. A "termination of employment" occurs, for
purposes of the Stock Options, when a Participant is no
longer an employee of the Company or any of its
Subsidiaries. Unless the Committee determines otherwise,
the employment of a Participant who works for a Subsidiary
shall terminate, for purposes of the Stock Options, on the
date on which the Participant's employing company ceases to
be a Subsidiary.
(ii) Termination for Cause. If the Participant's employment with
the Company or any of its Subsidiaries ends due to a
Termination for Cause then, unless the Committee in its
discretion determines otherwise, all Outstanding Stock
Options, whether or not then vested, shall terminate
effective as of the date of such termination.
(iii) Exercise Periods following Termination of Employment,
Retirement, Permanent Disability or Death. For the purposes
of determining the dates on which Stock Options may be
exercised following a termination of employment or
Retirement, Permanent Disability or death, the day
following the date of termination of employment or
Retirement, Permanent Disability or death shall be the
first day of the exercise period and the Stock Options may
be exercised up to and including the last business day
falling within the exercise period. Thus, if the last day
of the exercise period is not a business day, then the last
date the Stock Options may be exercised is the last
business day preceding the end of the exercise period.
Section 1.3 Exercise of Stock Options.
(a) Whole or Partial Exercise. The Participant may exercise all vested
Outstanding Stock Options granted hereunder in whole at one time or in part in
increments of 100 Stock Options (or in the entire number of Outstanding Stock
Options in which the Participant is vested, if such number is less than 100) by
notice to the Administrator, Long-Term Incentive Plans, Viacom Inc., 1515
Broadway, New York, New York 10036, or to such agent(s) for the Company
("Agent") as the Company may from time to time specify, in such manner and at
such address as may be specified from time to time by the Company. Such notice
shall (i) state the number of whole Stock Options being exercised, and (ii) be
signed (or otherwise authorized in a manner acceptable to the Company) by the
person or persons so exercising the Stock Options and, in the event the Stock
Options are being exercised (pursuant to Section 1.2(c)(i) hereof) by any person
or persons other than the Participant accompanied by proof satisfactory to the
Company's counsel of the right of such person or persons to exercise the Stock
Options.
Information concerning any Agent and its address may be obtained by contacting
the Administrator, Long-Term Incentive Plans.
(b) Payment of Aggregate Option Price. Full payment of the aggregate
Exercise Price (which shall be determined by multiplying the number of Stock
Options being exercised by the Exercise Price as set forth on the Stock Option
Certificate) shall be made on or before the settlement date for the shares of
Class B Common Stock issued pursuant to the exercise of the Stock Options.
Unless otherwise provided by the Committee, such Exercise Price shall be paid in
cash (e.g. personal bank check, certified check or official bank check). In
accordance with the rules and procedures established by the Committee for this
purpose, the Stock Options may be exercised through a "cashless exercise"
procedure, approved by the Committee, involving a broker or dealer, that affords
the Participant the opportunity to sell immediately some or all of the shares
underlying the exercised portion of the Stock Options in order to generate
sufficient cash to pay the Exercise Price of the Stock Options. In addition, if
the Company so permits, the Exercise Price may be paid in whole or in part using
a net share settlement procedure or through the withholding of shares subject to
the Stock Options with a value equal to the Exercise Price. In accordance with
Section 4.3 hereof, the Participant shall make an arrangement acceptable to the
Company to pay to the Company an amount sufficient to satisfy the combined
federal, state, local or other withholding tax obligations which arise in
connection with the exercise of such Stock Options.
(c) Issuance of Share Certificates. Upon satisfaction of the conditions
set forth in Section 1.3(b) hereof, the Company shall deliver (or cause to be
delivered) a certificate or certificates for the shares of Class B Common Stock
issued pursuant to the exercise of the Stock Options to the Participant.
(d) Outstanding Stock Options. The number of shares of Class B Common
Stock subject to the Stock Options that is set forth on the Stock Option
Certificate may not reflect the number of Outstanding Stock Options due to Stock
Option exercises or adjustments pursuant to Article II.
ARTICLE II
EFFECT OF CERTAIN CORPORATE CHANGES
In the event of a merger, consolidation, stock split, reverse stock
split, dividend, distribution, combination, reclassification, reorganization,
split-up, spin-off or recapitalization that changes the character or amount of
the Class B Common Stock or any other changes in the corporate structure, equity
securities or capital structure of the Company, the Committee shall make such
adjustments, if any, to the number of shares and kind of securities subject to
the Stock Options, and the Exercise Price of the Stock Options, in each case, as
it deems appropriate. The Committee may, in its sole discretion, also make such
other adjustments as it deems appropriate in order to preserve the benefits or
potential benefits intended to be made available hereunder. Such determinations
by the Committee shall be conclusive and binding on all persons for all
purposes.
ARTICLE III
DEFINITIONS
As used herein, the following terms shall have the following meanings:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Certificate" shall mean the Stock Option Certificate, together
with the Terms and Conditions contained herein.
(c) "Class B Common Stock" shall mean shares of Class B Common Stock,
par value $0.01 per share, of the Company.
(d) "Code" shall mean the U.S. Internal Revenue Code of l986, as
amended, including any successor law thereto and the rules and regulations
promulgated thereunder.
(e) "Committee" shall mean the Compensation Committee of the Board (or
such other Committee(s) as may be appointed or designated by the Board to
administer the Plan.)
(f) "Company" shall mean Viacom Inc., a Delaware corporation.
(g) "Date of Grant" shall be the date set forth on the Stock Option
Certificate.
(h) "Expiration Date" shall be the date set forth on the Stock Option
Certificate and in Section 1.2(b) hereof.
(i) "Exercise Price" shall be the amount set forth on the Stock Option
Certificate, which amount shall be equal to the Fair Market Value of a share of
Class B Common Stock on the Date of Grant.
(j) "Fair Market Value" of a share of Class B Common Stock on a given
date shall be the 4:00 p.m. (New York time) closing price on such date on the
New York Stock Exchange or other principal stock exchange on which the Class B
Common Stock is then listed, as reported by The Wall Street Journal (Northeast
edition) or as reported by any other authoritative source selected by the
Company.
(k) "Outstanding Stock Option" shall mean a Stock Option granted to the
Participant which has not yet been exercised and which has not yet expired or
been terminated in accordance with its terms.
(l) "Participant" shall mean the employee named on the Stock Option
Certificate.
(m) "Permanent Disability" shall have the same meaning as such term or
a similar term has in the long-term disability policy maintained by the Company
or a Subsidiary thereof for the Participant and that is in effect on the date of
the onset of the Participant's Permanent Disability, unless the Committee
determines otherwise.
(n) "Plan" shall mean the Viacom Inc. 2004 Long-Term Management
Incentive Plan, as amended from time to time.
(o) "Retirement" shall mean the resignation or termination of
employment after attainment of an age and years of service required for payment
of an immediate pension pursuant to the terms of any qualified defined benefit
retirement plan maintained by the Company or a Subsidiary in which the
Participant participates; provided, however, that no resignation or termination
prior to a Participant's 60th birthday shall be deemed a retirement unless the
Committee so determines in its sole discretion; and provided, further, that the
resignation or termination of employment other than a Termination for Cause
after attainment of age 60 shall be deemed a retirement if the Participant does
not participate in a qualified defined benefit retirement plan maintained by the
Company or a Subsidiary.
(p) "Stock Option" shall mean the contractual right granted to the
Participant to purchase shares of Class B Common Stock at such time and price,
and subject to such other terms and conditions, as set forth in the Certificate
and the Plan.
(q) "Stock Option Certificate" shall have the meaning set forth in
Section 1.1 hereof.
(r) "Subsidiary" shall mean a corporation (or a partnership or other
enterprise) in which the Company owns or controls, directly or indirectly, more
than 50% of the outstanding shares of stock normally entitled to vote for the
election of directors (or comparable equity participation and voting power).
(s) "Termination for Cause" shall mean a termination of employment with
the Company or any of its Subsidiaries which, as determined by the Committee, is
by reason of (i) "cause" as such term or a similar term is defined in any
employment agreement that is in effect and applicable to the Participant, or
(ii) if there is no such employment agreement or if such employment agreement
contains no such term, unless the Committee determines otherwise, the
Participant's: (A) dishonesty; (B) conviction of embezzlement, fraud or other
conduct which would constitute a felony; (C) willful unauthorized disclosure of
confidential information; (D) failure, neglect of or refusal to substantially
perform the duties of the Participant's employment; or (E) any other act or
omission which is a material breach of the Company's policies regarding
employment practices or the applicable federal, state and local laws prohibiting
discrimination or which is materially injurious to the financial condition or
business reputation of the Company or any Subsidiary thereof.
ARTICLE IV
MISCELLANEOUS
Section 4.1 No Rights to Awards or Continued Employment. Neither the
Certificate, the Plan nor any action taken in accordance with such documents
shall confer upon the Participant any right to be employed by or to continue in
the employment of the Company or any Subsidiary, nor to be entitled to any
remuneration or benefits not set forth in the Plan or the Certificate, including
the right to receive any future awards under the Plan or any other plan of the
Company or any Subsidiary or interfere with or limit the right of the Company or
any Subsidiary to modify the terms of or terminate the Participant's employment
at any time for any reason.
Section 4.2 Restriction on Transfer. The rights of the Participant with
respect to the Stock Options shall be exercisable during the Participant's
lifetime only by the Participant and shall not be transferable by the
Participant to whom the Stock Options are granted, except by will or the laws of
descent and distribution; provided, that the Committee may permit other
transferability, subject to any conditions and limitations that it may, in its
sole discretion, impose.
Section 4.3 Taxes. As a condition to the exercise of the Stock Options,
the Participant shall make a payment in cash equal to the amount of any federal,
state, local and/or other taxes owed as a result of such exercise. In accordance
with the rules and procedures established by the Committee for this purpose, the
Participant may satisfy such withholding obligations through a "cashless
exercise" procedure as described in Section 1.3(b). In addition, if the Company
so permits, the Participant may satisfy such withholding obligations through a
net share settlement procedure or the withholding of shares subject to the
applicable Stock Options.
Section 4.4 Stockholder Rights. The grant of Stock Options under the
Certificate shall not entitle the Participant or a Participant's estate or any
permitted transferee to any rights of a holder of shares of Class B Common
Stock, other than when and until the Participant, the Participant's estate or
the permitted transferee is registered on the books and records of the Company
as a stockholder and share certificates are delivered to such party upon
exercise of the Stock Options.
Section 4.5 No Restriction on Right of Company to Effect Corporate
Changes. Neither the Plan nor the Certificate shall affect in any way the right
or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of stock or of options, warrants or rights to purchase
stock or of bonds, debentures, preferred or prior preference stocks whose rights
are superior to or affect the Class B Common Stock or the rights thereof or
which are convertible into or exchangeable for Class B Common Stock, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
Section 4.6 Interpretation. In the event of any conflict between the
provisions of the Certificate (including the definitions set forth herein) and
those of the Plan, the provisions of the Plan will control. Additionally, in the
event of a conflict or ambiguity between the provisions of the Certificate and
the provisions of any employment agreement that is in effect and applicable to
the Participant with respect to the Stock Options, the provisions of such
employment agreement shall be deemed controlling to the extent such provisions
are consistent with the provisions of the Plan and are more favorable to the
Participant than the provisions of the Certificate.
Section 4.7 Breach of Covenants. In the event that the Committee makes
a good faith determination that the Participant committed a material breach of
the restrictive covenants relating to non-competition, no solicitation of
employees, confidential information or proprietary property in any employment or
other agreement applicable to the Participant during the one year period after
termination of the Participant's employment with the Company or a Subsidiary for
any reason, the Participant will be required to return any "gain" (as defined
below) realized on the Stock Options during the one year period prior to such
breach or at any time after such breach occurs. In addition, if the Committee
makes such determination, the Participant's Outstanding Stock Options will be
terminated. The "gain" on the Stock Options shall mean the difference between
the Fair Market Value on the date of exercise and the Exercise Price.
Section 4.8 Governmental Regulations. The Stock Options shall be
subject to all applicable rules and regulations of governmental or other
authorities.
Section 4.9 Headings. The headings of articles and sections herein are
included solely for convenience of reference and shall not affect the meaning of
any of the provisions of the Certificate.
Section 4.10 Governing Law. The Certificate and all rights hereunder
shall be construed in accordance with and governed by the laws of the State of
Delaware.