CONFORMED COPY
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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, made as of August 1, 1994 (the
"Effective Date"), by and between Viacom Inc., a Delaware
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corporation (herein referred to as the "Company"), and Frank J.
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Biondi, Jr. (herein referred to as the "Executive").
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W I T N E S S E T H:
WHEREAS, the Executive currently serves as President
and Chief Executive Officer of the Company, of Viacom
International Inc., a Delaware corporation ("Viacom") and of
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Paramount Communications Inc., a Delaware corporation
("Paramount"), pursuant to the terms of an employment agreement,
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dated as of August 1, 1987, between Viacom and the Executive (the
"Original Employment Agreement"); and
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WHEREAS, the Company and the Executive both desire to
enter into this Agreement, which will supersede in its entirety
the Original Employment Agreement and will set forth the terms
and conditions under which the Executive will continue to serve
as President and Chief Executive Officer of the Company;
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, the parties hereto hereby agree as
follows:
1. Employment; Position and Duties; Exclusive
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Services.
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(a) Employment. The Company agrees to employ the
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Executive, and the Executive agrees to be employed by the
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Company, for the Term provided in Section 2 below and upon the
other terms and conditions hereinafter provided.
(b) Position and Duties. During the Term, the
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Executive (i) agrees to serve as the President and Chief
Executive Officer of the Company and to perform such reasonable
duties as may be delineated in the By-Laws of the Company and as
may be assigned to him from time to time by the Board of
Directors of the Company (the "Board"), (ii) shall also serve as
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the President and Chief Executive Officer of Viacom and of
Paramount, (iii) shall report, as President and Chief Executive
Officer of the Company, only to the Board or to the Chairman of
the Board and, as President and Chief Executive Officer of Viacom
and of Paramount, only to the respective Boards of Directors of
Viacom and Paramount or to the Chairmen of such Boards of
Directors, (iv) shall serve as a member of the Board and the
Boards of Directors of Viacom and Paramount, (v) shall be given
such authority as is appropriate to carry out the duties
described above, it being understood that, in his capacities as
President and Chief Executive Officer of the Company, Viacom and
Paramount his duties will be consistent in scope, prestige and
authority with the duties of President and Chief Executive
Officer of the Company, Viacom and Paramount as demonstrated by
the Company's, Viacom's and Paramount's' existing practices as of
the effective date of this Agreement, and (vi) agrees to serve,
if elected, at no additional compensation (if the other officers
or directors (other than non-employee directors) of the Company
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also serve at no additional compensation) in the position of
officer or director of any subsidiary or affiliate of the
Company; provided, however, that such position shall be of no
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less status relative to such subsidiary or affiliate as the
position that the Executive holds pursuant to clause (i) of this
Section 1(b) is relative to the Company, Viacom and Paramount.
(c) Exclusive Services. During the Term, and except
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for illness or incapacity, the Executive shall devote all of his
business time, attention, skill and efforts exclusively to the
business and affairs of the Company and its subsidiaries and
affiliates, shall not be engaged in any other business activity,
and shall perform and discharge well and faithfully the duties
which may be assigned to him from time to time by the Board;
provided, however, that nothing in this Agreement shall preclude
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the Executive from devoting time during reasonable periods
required for:
(i) serving, in accordance with the Company's policies
and with the prior approval of the Board, as a director or
member of a committee of any company or organization
involving no actual or potential conflict of interest with
the Company or any of its subsidiaries or affiliates,
(ii) delivering lectures and fulfilling speaking
engagements,
(iii) engaging in charitable and community
activities, and
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(iv) investing his personal assets in a Passive
Investment (as hereinafter defined) in such form and in such
manner as will not violate Section 9 below; and
provided, further, that the Executive shall be permitted to
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fulfill the obligations associated with his pre-existing
investment in a condominium at the Gardner Tennis Ranch. For
purposes of this Agreement, a "Passive Investment" shall mean an
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investment in a business or entity which does not require the
Executive to render any services in the operations or affairs of
such business or entity and which does not materially adversely
affect or interfere with the performance of the Executive's
duties and obligations to the Company or any of its subsidiaries
or affiliates.
(d) Relocation. The Company shall not relocate the
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Executive's principal place of business outside of New York City
without the written consent of the Executive.
2. Term of Agreement.
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The term of employment under this Agreement shall
initially be the six-year period commencing on the Effective Date
and ending on July 31, 2000, and shall be automatically extended
without further action by either party for a successive or
successive one-year period or periods, unless written notice of
either party's intention to terminate this Agreement has been
given to the other party at least six months prior to the
expiration of the Term (including any one-year extension
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thereof). As used in this Agreement, (i) the "Initial Term"
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shall mean the period commencing on the Effective Date and ending
on July 31, 2000, (ii) the "Term" shall mean the Initial Term
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plus any extensions thereof as provided in this Section 2, and
(iii) a "Contract Year" shall mean the twelve-month period during
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the Term beginning on each August 1 and ending on the following
July 31.
3. Salary and Annual Bonus.
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The Executive's cash compensation for all services to
be rendered by him in any capacity hereunder shall consist of
base salary as provided in Section 3(a), bonus compensation as
provided in Section 3(b) and deferred compensation as provided in
Section 4.
(a) Salary. The Executive shall be paid base salary
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(the "Salary") at the rate of $990,000 per annum. The Salary
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shall be payable in accordance with the customary payroll
practices for executives of the Company.
(b) Annual Bonus.
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(i) General Terms. For each calendar year included in
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whole or in part within the Term, the Executive shall be eligible
to earn an annual cash bonus (a "Bonus") based upon the
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achievement by the Company and its subsidiaries of performance
targets established by the Compensation Committee of the Board
(the "Compensation Committee") in accordance with the Company's
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Senior Executive Short-Term Incentive Plan and any successor plan
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thereto (collectively, the "STIP"). The performance goals on the
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basis of which the Executive's bonus shall be determined shall be
no less favorable to the Executive than the goals used to
determine the bonus of any other executive of the Company whose
annual bonus is based in whole or in part on corporate
performance and who participates in the STIP, and the
Compensation Committee shall establish objective criteria to be
used to determine the extent to which such performance goals have
been met. The Bonus, if any, payable to the Executive in respect
of each calendar year will be paid at the same time that bonuses
are paid to other participants in the STIP.
(ii) Amount of Target Bonus. For each calendar year
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included in whole or in part within the Term, there shall be a
target Bonus (a "Target Bonus") for the Executive, the amount of
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which shall be determined as provided in this Section 3(b)(ii).
For calendar year 1994, the Target Bonus will equal 2.25 times
$1,169,000 (i.e., a Target Bonus of $2,630,250); for each
calendar year after 1994, the Target Bonus will equal 110% of the
Target Bonus for the preceding year, provided, however, that the
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Target Bonus for the calendar year in which the Term ends will be
determined by multiplying 110% of the Target Bonus for the
preceding calendar year by a fraction the numerator of which
shall equal the number of days in such calendar year in which the
Term ends up to and including the last day of the Term and the
denominator of which shall equal 365.
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(iii) Determination of the Bonus Amount. The
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amount of the actual Bonus for any calendar year to be paid to
the Executive will be based upon the performance of the Company
and its subsidiaries against the goals established by the
Compensation Committee pursuant to the STIP as follows: (W) if
such performance is at a level of 80% or less, no Bonus will be
payable; (X) if such performance is at a level of 100%, the
Bonus will equal the Target Bonus; (Y) if such performance is
at a level of 120% or more, the Bonus will equal two times the
Target Bonus; and (Z) if such performance is at a level greater
than 80% but less than 120% (but is not equal to 100%), the Bonus
will be an amount between zero and two times the Target Bonus, as
determined on the basis of criteria which shall be established by
the Compensation Committee and shall be no less favorable to the
Executive than the criteria used to determine the amount of bonus
payable to any other executive of the Company whose annual bonus
is based in whole or in part on corporate performance and who
participates in the STIP.
4. Deferred Compensation.
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In addition to the Salary provided for in Section 3(a)
and his Bonus, if any, provided for in Section 3(b), the
Executive shall earn in respect of each Contract Year an
additional amount (the "Deferred Compensation") the payment of
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which (together with the return thereon as provided in this
Section 4) shall be deferred until January of the first calendar
year following the year in which the Executive ceases to be an
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executive officer of the Company for purposes of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The
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amount of Deferred Compensation for the Contract Year beginning
on the Effective Date and ending on July 31, 1995 shall be
$179,000; for each subsequent Contract Year, the amount of
Deferred Compensation shall be the excess of (X) 110% of the
aggregate amount of the Salary and Deferred Compensation earned
during the immediately preceding Contract Year over (Y) $990,000
(e.g. the Deferred Compensation for the Contract Year ending on
July 31, 1996 shall be ((110% x ($990,000 + $179,000) - $990,000)
= $295,900). Deferred Compensation shall be credited to a
bookkeeping account maintained by the Company on behalf of the
Executive, the balance of which account shall periodically be
credited (or debited) with deemed positive (or negative) return
calculated in the same manner, and at the same times, as the
deemed return on the Executive's account under the excess 401(k)
plan of Viacom (as such plan may be amended from time to time) is
determined. The Company's obligation to pay the Deferred
Compensation (including the return thereon provided for in this
Section 4) shall be an unfunded obligation to be satisfied from
the general funds of the Company and shall otherwise be subject
to the provisions of Section 10 of this Agreement.
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5. Stock Options.
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(a) Grant of Stock Options. The Compensation
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Committee has granted to the Executive options to purchase
1,000,000 shares of the Company's Class B Common Stock (the
"Options"), such Options having the terms and conditions set
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forth in the form of Stock Option Agreement attached hereto as
Attachment A. The Executive acknowledges that he shall have no
contractual entitlement pursuant to this Agreement to any further
grants of stock options prior to the end of the Initial Term, it
being understood that the Company may, in its sole discretion,
grant additional stock options to the Executive during the
Initial Term.
(b) Amendment to 1994 Plan. The Options have been
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granted to the Executive pursuant to the Company's 1994 Long-Term
Management Incentive Plan (the "1994 Plan"). No later than the
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first annual meeting of stockholders of the Company to be held
after the Effective Date, the Company will amend the 1994 Plan to
permit the provisions set forth below, the Company will submit
such amendment to the Plan for the approval of the stockholders
of the Company at such meeting of stockholders, and the Company
will amend the terms of the Option in the manner set forth on
Attachment B:
- In the event of termination of the Executive's
employment for Cause or voluntary termination other
than for Good Reason during the Term, vested Options
shall remain exercisable for 15 days; all unvested
Options shall lapse on the date of termination.
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- In the event of termination of the Executive's
employment without Cause or voluntary termination for
Good Reason during the Term, the Options (all of which
will have vested upon termination of employment) shall
remain exercisable for the longer of six months
following the date of termination or two years from
date of grant.
- In the event of a failure to renew this Agreement upon
expiration of the Initial Term or any one-year renewal
thereof, the Options shall remain exercisable for six
months after the date of termination.
- In the event of termination of the Executive's
employment due to death or disability, the Options
(all of which will have vested upon termination of
employment) shall remain exercisable for two years
after such date.
If the Executive's employment is terminated by the Company other
than for Cause (as defined below in Section 8) or by reason of
death or Permanent Disability (as defined below in Section 8), or
if the Executive resigns from his employment for Good Reason (as
defined below in Section 8), in either case prior to the annual
meeting of stockholders referred to above, the Company will take
appropriate action to put the Executive in the same economic
position he would have been in if his employment had continued
through the date of such meeting and the foregoing such
amendments had been approved.
6. Pension and Welfare Benefits.
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During the Term, the Executive will participate in all
pension and welfare plans, programs and benefits that are
applicable to executives of the Company and/or Viacom. The
benefits provided to the Executive during the Term, when taken as
a whole, shall be no less favorable than the benefits which, when
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taken as a whole, are provided to any other executive of the
Company, other than the Chairman of the Board. In addition,
during the Term, the Executive shall be reimbursed by the Company
for 100 percent (on an after-tax basis) of the medical and dental
expenses incurred by himself, his wife and his children during
the Term that are not covered by such plans, programs or
benefits. During the five-year period commencing on the date of
any termination or resignation of the Executive's employment
hereunder (other than a termination or resignation set forth in
Section 8(a) hereof), the Executive shall also be entitled to
reimbursement for 100 percent (on an after-tax basis) of the
medical and dental expenses (to the extent not received under the
plans, programs or benefits provided in this Section 6 or by the
plans, programs or benefits otherwise applicable to the Executive
by virtue of the employment of the Executive by a subsequent
employer or otherwise) incurred by himself, his wife and his
children which relate to a medical or dental condition which was
identified during the Term prior to such termination or
resignation. The Company shall reimburse the expenses described
in the previous two sentences as promptly as practicable after
receipt from the Executive of such reasonable documentation as
the Company may require evidencing such expenses, and the
Executive agrees to provide to the Company notice of all amounts
received as benefits under any other medical or dental
arrangements. During the Term, the Executive shall also be
entitled to all additional perquisites which the Company provides
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to its executives (other than those perquisites, if any, provided
solely to the Chairman of the Board).
7. Other Benefits.
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(a) Travel and Business-related Expenses. During the
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Term, the Executive shall be reimbursed in accordance with the
policies of the Company for traveling and other expenses
(including, without limitation, the expense of first class travel
and accommodations) incurred in the performance of the business
of the Company.
(b) Personal Secretary. The Executive shall be
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entitled to employ a person of the Executive's choice as his
personal secretary.
(c) Parking. The Company will provide the Executive
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with parking facilities to the extent available near the
executive offices of the Company.
(d) Term Life Insurance. During the Term the Company
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shall maintain and pay the premiums of a term life insurance
policy in a face amount of $5,000,000 on the life of the
Executive, the beneficiary of which policy shall be designated by
the Executive. The Executive shall have the right to assign such
policy to his spouse, his issue or a trust or trusts primarily
for the benefit of any of the foregoing.
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8. Termination of Employment.
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(a) Termination for Cause, Resignation Without Good
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Reason.
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(i) If the Executive's employment is terminated by the
Company for Cause (as defined below in this Section) or if the
Executive resigns from his employment without Good Reason (as
defined below in this Section), prior to the expiration of the
Term, the Executive shall be entitled to receive: (X) the Salary
provided for in Section 3(a) and Deferred Compensation provided
for in Section 4, in each case as accrued through the date of
such resignation or termination; (Y) any Bonus earned but not yet
paid in respect of any calendar year preceding the year in which
such termination or resignation occurs; and (Z) a prorated Bonus
for the calendar year in which such termination or resignation
occurs equal to the Executive's Target Bonus for such year
multiplied by a fraction, the numerator of which shall equal the
number of days in such calendar year in which the Executive was
in the employ of the Company up to and including the date of such
termination or resignation and the denominator of which shall
equal 365. The Executive shall not accrue or otherwise be
eligible to receive Salary payments or Deferred Compensation or
to participate in any plans, programs or benefits described in
Section 6 hereof with respect to periods after the date of such
termination or resignation, and shall not be eligible to receive
any Bonus in respect of any calendar year following the year in
which such termination or resignation occurs. Any Bonus in
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respect of a year prior to the year in which such termination or
resignation occurs, and the prorated Bonus described in this
Section 8(a)(i) for the year in which such termination or
resignation occurs, shall be payable at such time and in such
manner as provided for in Section 3(b) hereof.
The Executive shall have no right under this Agreement
or otherwise to receive any other compensation, or to participate
in any other plan, arrangement or benefit, with respect to future
periods after such termination or resignation of employment
(except to the extent provided for under the terms of any such
plan, arrangement or benefit).
(ii) Termination for "Cause" shall mean termination by
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action of the Board because of: (A) a felony conviction of the
Executive or the perpetration by the Executive of a serious
dishonest act against the Company or any of its affiliates or
subsidiaries; or (B) any willful misconduct by the Executive that
is materially injurious to the financial condition or business
reputation of the Company or any of its affiliates or
subsidiaries, provided, however, that no event or circumstance
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shall be considered to constitute Cause within the meaning of
this clause (B) unless the Executive has been given written
notice of the events or circumstances constituting Cause and had
failed to effect a cure thereof within 30 calendar days following
the giving of such notice.
(iii) Resignation for "Good Reason" shall mean the
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resignation of the Executive after (A) the Company, without the
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express written consent of the Executive, materially breaches
this Agreement; (B) the Executive notifies the Company in writing
of the nature of such material breach; and (C) the Company does
not correct such material breach within 30 calendar days after
its receipt of such notice.
(iv) The date of termination of employment by the
Company pursuant to this Section 8(a) shall be the date specified
in a written notice of termination from the Company to the
Executive, which, in the case of a proposed termination to which
the 30-day cure period provided for in subsection (ii) above
applies shall be no less than 31 days after the delivery of such
notice to the Executive. The date of a resignation by the
Executive pursuant to this Section 8(a) shall be the date
specified in the written notice of resignation from the Executive
to the Company or, if no date is specified therein, ten business
days after receipt by the Company of the written notice of
resignation from the Executive.
(b) Termination Without Cause, Resignation for Good
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Reason.
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(i) If the Executive's employment is terminated by the
Company without Cause or if the Executive should resign for Good
Reason, prior to the expiration of the Term, he shall be entitled
to receive: (X) the Salary provided for in Section 3(a) and
Deferred Compensation provided for in Section 4, in each case as
accrued through the date of such resignation or termination and
continuing for the shorter of three years from the date of such
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termination or resignation and the remainder of the then-
effective Term (such shorter period being referred to as the
"Continuation Period"), with the amount of Deferred Compensation
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for any year included in whole or in part within the Continuation
Period determined in the manner provided for in Section 4 as
though the Executive had remained employed; (Y) any Bonus earned
but not yet paid in respect of any calendar year preceding the
year in which such termination or resignation occurs; and (Z) a
Bonus for the calendar year in which such termination or
resignation occurs equal to the Executive's Target Bonus for such
year and a Bonus for each subsequent year included in whole or in
part within the Continuation Period equal to the Target Bonus
that would have applied to each such year pursuant to Section
3(b) had the Executive remained employed, provided, however, that
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the amount of such Bonus payable in respect of any partial
calendar year at the conclusion of the Continuation Period shall
be prorated and shall equal the Executive's Target Bonus for such
year determined in accordance with Section 3(b) multiplied by a
fraction, the numerator of which shall equal the number of days
in such calendar year up to and including the last day of the
Continuation Period and the denominator of which shall equal the
lesser of 365 or the number of days in such final calendar year
up to and including the last day of the Term.
During the Continuation Period, (X) Salary payments to
the Executive shall be payable in accordance with the payroll
practices of the Company, (Y) Deferred Compensation attributable
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to the Contract Year in which the termination or resignation of
the Executive's employment occurs and to prior Contract Years
shall be payable prior to January 31 of the calendar year
following such termination or resignation, and Deferred
Compensation attributable to subsequent Contract Years shall be
payable within 30 days after the end of the relevant Contract
Year, and (Z) Bonus payments shall be made in respect of each
calendar year at the same time that bonuses are paid to
participants in the STIP.
The Executive shall also be entitled to continued
participation in the medical, dental and insurance plans and
arrangements described in Section 6 as follows: (i) with respect
to pre-existing conditions identified during the Term as
provided in the fourth sentence of said Section 6 hereof, for the
five-year period described in such sentence; and (ii) with
respect to all other matters, until the earlier to occur of (A)
the conclusion of the Continuation Period or (B) such time as the
Executive is covered by comparable medical, dental or insurance
plans of a subsequent employer. In addition, and notwithstanding
any life insurance benefits that may be provided by a subsequent
employer, the life insurance policy provided for in Section 7(d)
will be maintained during the Continuation Period and the Company
will continue to pay the premiums thereon during such Period.
(ii) Except as may be provided under the terms of any
applicable grants to the Executive, under any plan or arrangement
in which the Executive participates or except as may be otherwise
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required by applicable law, including, without limitation, the
provisions of Section 4980B(f) of the Internal Revenue Code of
1986, as amended (the "Code"), the Executive shall have no right
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under this Agreement or any other agreement to receive any other
compensation, or to participate in any other plan, arrangement or
benefit, with respect to future periods after such termination or
resignation of employment. In the event of a termination or
resignation pursuant to this Section 8(b): (A) the Executive
shall have no duty of mitigation with respect to amounts payable
to him pursuant to this Section 8(b) or other benefits to which
he is entitled pursuant hereto, and (B) subject to the specific
provisions concerning medical, dental and insurance plans set
forth in subsection (i) above, no amounts payable to the
Executive pursuant to this Section 8(b), or other benefits to
which he is entitled pursuant hereto, will be offset or reduced
by any compensation, payments or benefits he may receive from a
subsequent employer. Notwithstanding anything to the contrary in
this Agreement, the right of the Executive to receive payments
provided for in this Section 8(b) shall be subject to Section 9
of this Agreement.
(iii) The date of termination of employment by the
Company pursuant to this Section 8(b) shall be the date specified
in the written notice of termination from the Company to the
Executive or, if no date is specified therein, ten business days
after receipt by the Executive of the written notice of
termination from the Company. The date of a resignation by the
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Executive pursuant to this Section 8(b) shall be the date
specified in the written notice of resignation from the Executive
to the Company or, if no date is specified therein, ten business
days after receipt by the Company of the written notice of
resignation from the Executive.
(c) Death. If the Executive's employment hereunder
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terminates by reason of death prior to expiration of the Term,
the Executive's beneficiary (or if no such beneficiary is
designated, his estate) shall be entitled to receive: (X) the
Salary provided for in Section 3(a) and Deferred Compensation
provided for in Section 4, in each case as accrued through the
date of the Executive's death and continuing for the shorter of
two years from the date of death and the remainder of the then-
effective Term (such shorter period being referred to as the
"Post-Death Continuation Period"), with the amount of Deferred
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Compensation for any year included in whole or in part within the
Post-Death Continuation Period determined in the manner provided
for in Section 4 as though the Executive had remained employed;
(Y) any Bonus earned but not yet paid in respect of any calendar
year preceding the year in which the Executive's death occurs;
and (Z) a Bonus for the calendar year in which the Executive's
death occurs equal to the Executive's Target Bonus for such year
and a Bonus for each subsequent year included in whole or in part
within the Post-Death Continuation Period equal to the Target
Bonus that would have applied to each such year pursuant to
Section 3(b) had the Executive remained employed, provided,
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however, that the amount of such Bonus payable in respect of any
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partial calendar year at the conclusion of the Post-Death
Continuation Period shall be prorated and shall equal the
Executive's Target Bonus for such year determined in accordance
with Section 3(b) multiplied by a fraction, the numerator of
which shall equal the number of days in such calendar year up to
and including the last day of the Post-Death Continuation Period
and the denominator of which shall equal the lesser of 365 or the
number of days in such final calendar year up to and including
the last day of the Term. Payment of Salary during the Post-
Death Continuation Period shall be made in accordance with the
payroll practices of the Company at such time; amounts of
Deferred Compensation earned prior to the date of death or
attributable to the year in which death occurs shall be paid
prior to January 31 of the year following the year in which death
occurs, and additional amounts of Deferred Compensation payable
during the Post-Death Continuation Period pursuant to this
Section 8(c) shall be considered to accrue proportionately over
time and shall be paid concurrently with payments of Salary
provided for herein; Bonus payments provided for in this Section
8(c) shall be made at such time and in such manner as is provided
in Section 3(b). As used in this Section, the term "beneficiary"
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includes both the singular and the plural of such term, as may be
appropriate.
In lieu of the payment schedule provided for in the
preceding paragraph, the Executive's beneficiary (or if no such
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beneficiary is designated, his estate) may elect, by written
notice to the Company not more than 90 days following the date of
the Executive's death, to receive all amounts provided for in the
preceding paragraph that have not theretofore been paid in a
single lump sum equal to the present value of all such payments.
For purposes of the previous sentence, present value shall be
calculated on the basis of the applicable short-term federal
interest rate (applicable to loans with monthly compounding) as
determined pursuant to Section 1274(d) of the Code for the month
in which death occurs.
(d) Permanent Disability. If, as a result of the
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Executive's Permanent Disability (as defined below in this
Section), the Executive shall have been absent from the full-time
performance of his duties for a period of 6 consecutive months,
then the Company shall be entitled to terminate his employment.
In the event of such termination, the Executive, his conservator
or guardian, as the case may be, shall be entitled to receive:
(X) the Salary provided for in Section 3(a) and Deferred
Compensation provided for in Section 4, in each case as accrued
through the date of the Executive's termination of employment and
continuing for the shorter of two years from the date of such
termination and the remainder of the then-effective Term (such
shorter period being referred to as the "Disability Continuation
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Period"), with the amount of Deferred Compensation for any year
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included in whole or in part within the Disability Continuation
Period determined in the manner provided for in Section 4 as
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though the Executive had remained employed;; (Y) any Bonus
earned but not yet paid in respect of any calendar year preceding
the year in which the Executive's termination of employment
occurs; and (Z) a Bonus for the calendar year in which the
Executive's termination of employment occurs equal to the
Executive's Target Bonus for such year and a Bonus for each
subsequent year included in whole or in part within the
Disability Continuation Period equal to the Target Bonus that
would have applied to each such year pursuant to Section 3(b) had
the Executive remained employed, provided, however, that the
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amount of such Bonus payable in respect of any partial calendar
year at the conclusion of the Disability Continuation Period
shall be prorated and shall equal the Executive's Target Bonus
for such year determined in accordance with Section 3(b)
multiplied by a fraction, the numerator of which shall equal the
number of days in such calendar year up to and including the last
day of the Disability Continuation Period and the denominator of
which shall equal the lesser of 365 or the number of days in such
final calendar year up to and including the last day of the Term.
Payments of Salary during the Disability Continuation Period
shall be made in accordance with the payroll practices of the
Company at such time; amounts of Deferred Compensation earned
prior to the date of termination of employment or attributable to
the year in which termination of employment occurs shall be paid
prior to January 31 of the year following the year in which
termination of employment occurs, and additional amounts of
23
Deferred Compensation payable during the Disability Continuation
Period pursuant to this Section 8(d) shall be considered to
accrue proportionately over time and shall be paid concurrently
with payments of Salary provided for herein; Bonus payments
provided for in this Section 8(d) shall be made at such time and
in such manner as is provided in Section 3(b). Notwithstanding
anything to the contrary in this Section 8(d), the payments
provided for herein during the Disability Continuation Period
shall be reduced by the amount of any benefits payable to the
Executive or his conservator or guardian, as the case may be,
during such period under any disability or other welfare benefits
plan or program of the Company or any of its subsidiaries in
respect of the Executive's Permanent Disability. For purposes of
this Agreement, "Permanent Disability" shall be defined in the
--------------------
same manner as such term or a similar term is defined in the
long-term disability policy maintained by the Company for the
Executive and in effect on the date of the Executive's
termination of employment with the Company, but in no event shall
such definition be any less favorable to the Executive than the
definition in the long-term disability policy maintained by the
Company for the Executive and in effect on the Effective Date.
24
9. No Competing Employment; Passive Investments; No
------------------------------------------------
Interference; Confidentiality; Remedies.
---------------------------------------
(a) No Competing Employment. For so long as the
-----------------------
Executive is employed by the Company or any of its affiliates and
subsidiaries, and for the lesser of (X) one year following his
termination of employment (for any reason) and (Y) the remainder
of the Term (such period of employment and such shorter period
following termination thereof being referred to hereinafter as
the "Restricted Period"), the Executive shall not, unless he
-----------------
receives after the Effective Date the prior written consent of
the Board, directly or indirectly, whether as owner, consultant,
employee, partner, venturer, agent, through stock ownership,
investment of capital, lending of money or property, rendering of
services, or otherwise, compete with the Company or any of its
affiliates or subsidiaries in any business in which any of them
is engaged during the Term hereunder or at the time of the
termination of the Executive's employment hereunder (such
businesses are hereinafter referred to as the "Business"), or
--------
assist, become interested in or be connected with any
corporation, firm, partnership, joint venture, sole
proprietorship or other entity which so competes with the
Business. The restrictions imposed by this paragraph shall not
apply to any geographic area in which the Company or its
affiliates and subsidiaries are not engaged in the Business at
the time of termination.
25
(b) Restrictions on Passive Investments. Any other
-----------------------------------
provision in this Agreement to the contrary notwithstanding,
during the Restricted Period the Executive shall not make a
Passive Investment which results in the Executive beneficially
owning, within the meaning of Section 13(d) of the Exchange Act,
(i) a greater than five percent interest in any class of
securities of any company or business entity which has any class
of securities listed on a national securities exchange or quoted
on the automated quotation system of the National Association of
Securities Dealers, Inc. (a "Public Company") and which does not
--------------
engage in the media business, (ii) a greater than two percent
interest in any class of securities of a Public Company which
engages in the media business or (iii) any interest in a company
or business entity which is not a Public Company and which
engages in the media business, unless, in the case of clauses
(i), (ii) and (iii) above, the Executive shall have received the
prior written approval for such investment from the Chairman of
the Board. Nothing in this Section 9(b) shall be construed as
prohibiting the Executive from making any Passive Investment in
any company or business entity which is not a Public Company and
which does not engage in the media business; provided, however,
-------- -------
that nothing contained in this Section 9(b) shall be construed to
permit the Executive to undertake any investment which would
result in a violation of the provisions of Section 1(c) of this
Agreement. For purposes of this Agreement, (i) the phrase
"engage(s) in the media business" shall refer not only to the
26
activities of such Public Company or such other company or
business entity, as the case may be, but shall also refer to the
activities of any subsidiary, affiliate or joint venture thereof
and (ii) the term "business entity" shall include, without
limitation, individuals, sole proprietorships, partnerships and
corporations.
(c) No Interference. For so long as the Executive is
---------------
employed by the Company or any of its affiliates or subsidiaries
and for two years following his termination of employment (for
any reason), the Executive shall not, directly or indirectly,
whether for his own account or for the account of any other
individual, partnership, firm, corporation or other business
organization or entity (other than the Company), intentionally
solicit, endeavor to entice away from the Company or any of its
affiliates or subsidiaries, hire, employ, engage or otherwise
interfere with the relationship of the Company or any of its
affiliates or subsidiaries with any Restricted Employee, as
hereinafter defined, nor shall the Executive participate in the
efforts of any individual, partnership, firm, corporation or
other business corporation or entity for which he provides
services, by which he is employed, or in which he invests, to do
so. For purposes of this Section 9(c), a "Restricted Employee"
-------------------
shall mean any person who is both (i) an officer of the Company
or any of its affiliates or subsidiaries (or employed by the
Company or any of its affiliates or subsidiaries in a position
with duties and responsibilities substantially equivalent to
27
those of an officer, whether or not such person has the title of
an officer of any such company) and (ii) a party to (or within
the one year prior to the date of determination has been party
to) an employment or similar contract with the Company or any of
its affiliates or subsidiaries.
(d) Confidential Information. The Executive
------------------------
recognizes that the services to be performed by him hereunder are
special, unique and extraordinary and that, by reason of his
employment hereunder, he may acquire confidential information and
trade secrets concerning the operations of the Company and its
affiliates and subsidiaries. Accordingly, the Executive agrees
that he will not, except with the prior written consent of the
Board or as may be required by law, directly or indirectly,
disclose during the Term or any time thereafter any secret or
confidential information that he has learned by reason of his
association with the Company or use any such information to the
detriment of the Company so long as such confidential information
or trade secrets have not been disclosed or are not otherwise in
the public domain.
(e) Remedies; Survival of Agreement. In the event
-------------------------------
that the Executive materially breaches any of the covenants set
forth in this Section 9 and fails to cure such breach to the
reasonable satisfaction of the Company within 10 business days
after receipt of written notice thereof to the Executive, any
obligation of the Company to make any payment to the Executive
pursuant to this Agreement, including without limitation any
28
payments pursuant to Section 8(b) (other than payments of Salary,
Deferred Compensation or Bonus earned prior to the date of such
breach), shall be cancelled. In addition, the Executive
acknowledges that a breach of any of the covenants contained in
this Section 9 may result in material irreparable injury to the
Company or its affiliates or subsidiaries for which there is no
adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of
such a breach or threat thereof, the Company shall be entitled,
in addition to any other rights or remedies it may have, to seek
an injunction enjoining or restraining the Executive from any
violation or threatened violation of this Section 9. The
Executive's agreement as set forth in this Section shall survive
the termination of the Executive's employment under this
Agreement.
10. Source of Payments.
------------------
All payments provided under this Agreement, other than
payments made pursuant to a benefit plan which may provide
otherwise, shall be paid in cash from the general funds of the
Company, and no special or separate fund shall be established,
and no other segregation of assets made, to assure payment. The
Executive shall have no right, title, or interest whatever in or
to any investments which the Company may make to aid the Company
in meeting its obligations hereunder. Nothing contained in this
Agreement, and no action taken pursuant to its provisions, shall
29
create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Company and the Executive or
any other person. To the extent that any person acquires a right
to receive payments from the Company hereunder, such right shall
be no greater than the right of an unsecured creditor of the
Company.
11. Tax Withholding.
---------------
Payments to the Executive of all compensation
contemplated under this Agreement shall be subject to all
applicable legal requirements with respect to the withholding of
taxes.
12. Nonassignability; Binding Agreement.
-----------------------------------
Except as provided in Section 7(d), neither this
Agreement nor any right, duty, obligation or interest hereunder
shall be assignable or delegable by the Executive without the
Company's prior written consent; provided, however, that nothing
-------- -------
in this Section shall preclude the Executive from designating any
of his beneficiaries to receive any benefits payable hereunder
upon his death or disability, or his executors, administrators,
or other legal representatives, from assigning any rights
hereunder to the person or persons entitled thereto. This
Agreement shall be binding upon, and inure to the benefit of, the
parties hereto, any successors to or assigns of the Company and
the Executive's heirs and the personal representatives of the
Executive's estate. The Company will not consolidate with or
30
merge into, or sell all or substantially all of its assets to,
another corporation, partnership or other entity, unless such
other corporation, partnership or entity shall assume this
Agreement, and upon such assumption the Executive and the
successor corporation, partnership or other entity shall become
obligated to perform all of the terms and conditions set forth
herein.
13. Amendment; Waiver.
-----------------
This Agreement may not be modified, amended or waived
in any manner except by an instrument in writing signed by the
parties hereto. The waiver by either party of compliance with
any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any provision of this
Agreement, or of any subsequent breach by such party of a
provision of this Agreement.
14. Notices.
-------
Any notice hereunder by either party to the other shall
be given in writing by personal delivery, telex, telecopy or
certified mail, return receipt requested, to the applicable
address set forth below:
(i) To the Company: Viacom Inc.
1515 Broadway
New York, New York 10036
Attn.: (i) Chairman of the Board and
(ii) Executive Vice President, General
Counsel and Chief Administrative
Officer
31
With a copy to:Stephen R. Volk, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
(ii) To the Executive:Frank J. Biondi, Jr.
Viacom Inc.
1515 Broadway
New York, New York 10036
With a copy to:Arthur L. Liman, Esq.
Paul, Weiss, Wharton, Rifkind & Garrison
1285 Avenue of the Americas
New York, New York 10019
(or such other address as may from time to time be designated by
notice by any party hereto for such purpose). Notice shall be
deemed given, if by personal delivery, on the date of such
delivery or, if by telex or telecopy, on the business day
following receipt of answerback or telecopy confirmation or, if
by certified mail, on the date shown on the applicable return
receipt.
15. New York Law.
------------
This Agreement is to be governed by and interpreted in
accordance with the laws of the State of New York, without giving
effect to the choice-of-law provisions thereof. If, under such
law, any portion of this Agreement is at any time deemed to be in
conflict with any applicable statute, rule, regulation or
ordinance, such portion shall be deemed to be modified or altered
to conform thereto or, if that is not possible, to be omitted
from this Agreement, and the invalidity of any such portion shall
32
not affect the force, effect and validity of the remaining
portion hereof.
16. Supersedes Previous Agreements.
------------------------------
This Agreement, and the Stock Option Agreement the form
of which is attached hereto as Attachment A, constitute the
entire understanding between the Company and the Executive
relating to employment of the Executive by the Company and its
subsidiaries and affiliates and supersede and cancel all prior
written and oral agreements and understandings with respect to
the subject matter of this Agreement including, without
limitation, the Original Employment Agreement. Notwithstanding
the preceding sentence, this Agreement is not intended, and shall
not be construed, to affect the Executive's rights in any
compensation or benefits that have been granted or accrued prior
to the Effective Date.
17. Counterparts.
------------
This Agreement may be executed by either of the parties
hereto in counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one
and the same instrument.
18. Guarantee.
---------
Simultaneously with the execution of this Agreement,
Viacom and Paramount will each execute a guarantee, in form
previously agreed upon between the Company and the Executive,
33
pursuant to which Viacom and Paramount will jointly and severally
guarantee certain obligations of the Company under this
Agreement, on the terms and conditions set forth in such
guarantee.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement this 19th day of September, 1994, effective as of
the day and year first set forth above.
VIACOM INC.
By: /s/ Sumner M. Redstone
--------------------------------
Title: Chairman
/s/ Frank J. Biondi, Jr.
-----------------------------------------
Frank J. Biondi, Jr.
ATTACHMENT A
Agreement Under the
Viacom Inc.
1994 Long-Term Management Incentive Plan
----------------------------------------
AGREEMENT, dated as of August 18, 1994, by and between
VIACOM INC., a Delaware corporation (the "Company"), and FRANK J.
-------
BIONDI, JR. (the "Participant"), with respect to a grant of stock
-----------
options under the Company's 1994 Long-Term Management Incentive
Plan (the "Plan").
----
This Agreement, together with the agreements delivered
under the Plan in connection with any subsequent grant of stock
options under the Plan and a memorandum with respect to the Plan
that will be distributed prior to the date on which the first
increment of stock options under this grant vests, will
constitute the prospectus covering the shares of the Company's
Class B Common Stock, par value $0.01 per share (the "Class B
-------
Common Stock"), subject to the Plan. The Participant can receive
------------
additional copies of his or her Plan agreements and the
memorandum upon request to the Administrator, Long-Term Incentive
Plans, Viacom International Inc., 1515 Broadway, New York, New
York 10036.
WITNESSETH:
WHEREAS, the Participant is entering into an Employment
Agreement, dated as of August 1, 1994 (the "Employment
----------
Agreement"), with the Company pursuant to which the Participant
---------
will continue to serve, on the terms and conditions set forth in
the Employment Agreement, in his current capacities as President
and Chief Executive Officer of the Company (all capitalized terms
used in this Agreement without definition to have the meanings
ascribed to such terms in the Employment Agreement); and
WHEREAS, the Company desires to reward the Participant,
in accordance with the terms hereof, for the Participant's
contributions to the financial success of the Company, and to
provide incentives to the Participant to continue to contribute
to such success in the future, by awarding the Participant stock
options to purchase shares of Class B Common Stock;
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as
follows:
2
ARTICLE I
TERMS OF STOCK OPTIONS
Section 1.1 Grant of Stock Options. Subject to the
----------------------
terms and conditions contained herein and in the Plan, the terms
of which are hereby incorporated by reference, the Company hereby
awards to the Participant, effective August 18, 1994 (the "Date
----
of Grant"), a grant of one million (1,000,000) stock options to
--------
purchase shares of Class B Common Stock at the exercise prices
(the "Exercise Prices") indicated below:
---------------
Number of Stock Options Exercise Price
----------------------- --------------
600,000 $ 35.75 (the "A Options")
---------
200,000 $ 40.4375 (the "B Options")
---------
200,000 $ 52.125 (the "C Options")
---------
The A Options, the B Options and the C Options are referred to
herein collectively as the "Stock Options".
-------------
In accordance with the terms of the Employment
Agreement, the Executive acknowledges that he shall have no
contractual entitlement pursuant to the Employment Agreement to
any further grants of stock options prior to the end of the
Initial Term, it being understood that the Company may, in its
sole discretion, grant additional stock options to the Executive
during the Initial Term. The Stock Options granted hereunder are
not intended to be, or qualify as, "Incentive Stock Options"
---
within the meaning of Section 422A 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 A
Options, the B Options and the C Options shall have the same
vesting schedule and, subject to accelerated vesting under the
circumstances described in Section 2.2, shall vest in equal 20%
increments on July 31, 1996, July 31, 1997, July 31 1998, July
31, 1999 and July 31, 2000, provided, however, that if the
-------- -------
Executive's employment is terminated by the Company without
Cause, if the Executive resigns from his employment for Good
Reason, or if the Executive's employment with the Company
terminates by reason of death or Permanent Disability, then in
any such case all Outstanding Stock Options shall be considered
vested and exercisable as of the date of such termination or
resignation of employment.
(b) Option Period. Except as provided in Section
-------------
1.2(c) hereof, the period during which the Stock Options may be
3
exercised shall expire on the tenth anniversary of the Date of
Grant (the "Expiration Date").
---------------
(c) Exercise in the Event of Termination of
---------------------------------------
Employment, Retirement, Death or Permanent Disability.
-----------------------------------------------------
(i) Termination other than for Cause, Retirement,
---------------------------------------------
Death or Permanent Disability. In the event that (A) the
-----------------------------
Participant ceases to be an employee of the Company or any
of its subsidiaries by reason of the voluntary termination
by the Participant, the termination by the Company or any of
its subsidiaries other than for Cause or the Participant's
Retirement, his Outstanding Stock Options may be exercised
to the extent then exercisable until the earlier of three
months after the date of such termination or Retirement or
the Expiration Date, (B) the Participant dies during a
period during which his Stock Options could have been
exercised by him, his Outstanding Stock Options (all of
which, pursuant to Section 1.2(a), will have become
exercisable as of the date of death) may be exercised by the
person who acquired the right to exercise such Stock Options
by will or the laws of descent and distribution until the
earlier of one year after such death (or such longer period
as may be determined by the Committee, in its discretion,
prior to the expiration of such one-year period) or the
Expiration Date, and (C) the employment of the Participant
terminated by reason of Permanent Disability, the
Participant may exercise his Outstanding Stock Options (all
of which, pursuant to Section 1.2(a), will have become
exercisable upon such termination of employment) until the
earlier of one year after such date or the Expiration Date.
Upon the occurrence of an event described in clause (A) 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.
(ii) Termination for Cause. If the Participant's
---------------------
employment with the Company or any of its subsidiaries ends
because of a Termination for Cause, all Outstanding Stock
Options, whether or not then vested, shall terminate
effective as of the date of such termination.
4
Section 1.3 Exercise of Stock Options.
-------------------------
(a) Whole or Partial Exercise. Subject to the
-------------------------
restrictions of Section 1.2(b) hereof, the Participant (or such
other person as may be authorized to exercise any Outstanding
Stock Options pursuant to Section 1.2(b)(iv)) may exercise all
vested Stock Options granted hereunder at one time or in
installments of 100 Stock Options (or in the whole number of
-----
unexpired Stock Options in which the Participant is vested, if
such number is less than 100) by written notice to the
Administrator, Long-Term Incentive Plans, Viacom International
Inc., 1515 Broadway, New York, New York 10036. Subject to the
preceding sentence, the Participant (or such other person) may
exercise A Options, B Options or C Options or any combination
thereof. Such notice shall (i) state the number of full Stock
Options being exercised, (ii) be signed 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)(iv)
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,
and (iii) be accompanied by full payment as set forth in Section
1.3(b) hereof.
(b) Payment of Aggregate Option Price. The written
---------------------------------
notice of exercise described above must be accompanied by full
payment of the aggregate Exercise Price which shall be determined
by multiplying the number of Stock Options being exercised by the
relevant Exercise Price. Such Exercise Price shall be paid in
cash (e.g., personal bank check, certified check or official bank
check), in shares of Class B Common Stock, or in a combination of
cash and shares of Class B Common Stock; shares of Class B
Common Stock tendered in payment of all or a portion of such
Exercise Price shall be considered to have a value equal to the
Fair Market Value of such shares determined as of the day
preceding the date of tender. In addition, 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 and local
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.
5
ARTICLE II
EFFECT OF CERTAIN CORPORATE CHANGES
AND CHANGES IN CONTROL
Section 2.1 Effect of Reorganization. In the event
------------------------
that (i) the Company is merged or consolidated with another
corporation, (ii) one person becomes the beneficial owner of more
than fifty percent (50%) of the issued and outstanding equity
securities of the Company (for purposes of this Section 2.1, the
terms "person" and "beneficial owner" shall have the meanings
assigned to them in Section 13(d) of the Exchange Act), (iii) all
or substantially all of the assets of the Company are acquired by
another corporation, person or entity (each such event in (i),
(ii) or (iii) or any other similar event or series of events
which results in an event described in (i), (ii) or (iii), being
hereinafter referred to as a "Reorganization Event") or (iv) the
--------------------
Board shall propose that the Company enter into a Reorganization
Event, then the Compensation Committee shall take one of the
following actions, the choice of which being in its sole
discretion (or other action with the agreement of the
Participant): (i) cause the surviving entity or new owner, as
the case may be, to agree to adopt the Plan and this Agreement
and to continue in effect their respective terms as such terms
were in effect as of the date of the Reorganization Event, except
that equitable adjustments shall be made, if appropriate, to
reflect the value of the Class B Common Stock subject to such
Stock Options immediately prior to and following the occurrence
of the Reorganization Event; (ii) cause the surviving entity or
new owner, as the case may be, to grant new stock options (the
"Substitute Options"), in substitution for the unexercised Stock
------------------
Options as of the date of the Reorganization Event; provided,
--------
however, that such Substitute Options shall have a value, as of
-------
the date of such Reorganization Event, equal to the value of such
unexercised Stock Options as of such date; (iii) provide for the
payment upon termination or cancellation of Outstanding Stock
Options of an amount in cash or securities equal to the excess,
if any, of the Fair Market Value of the Class B Common Stock
subject to such Stock Options at the time of such termination or
cancellation over the aggregate exercise price of such Stock
Options; or (iv) advance the dates upon which all Outstanding
Stock Options vest.
Notwithstanding the provisions of the preceding
sentence, in the event that the effect of the provisions
contained therein should become a material impediment, either
from a financial point of view or otherwise, to the consummation
of a proposed Reorganization Event, the Compensation Committee
may take such action as it deems equitable and appropriate to
provide the Participant with a benefit equivalent to that which
he would have been entitled had such event not occurred.
Further, for the purposes of the first sentence of this Section
6
2.1, no event or series of events involving National Amusements,
Inc., the Company or any of their respective subsidiaries or
affiliates shall be deemed to be a Reorganization Event unless
such event or series of events results in there being no class of
equity securities of the Company which is publicly traded. Any
action taken by the Compensation Committee may be made
conditional upon the consummation of the applicable
Reorganization Event. Further, in the event that a division or
subsidiary of the Company is acquired by another corporation,
person, or entity, the Company is reorganized, dissolved or
liquidated, an event or series of events involving a corporate
restructuring not described in the first sentence of this Section
2.1 occurs, or the Board shall propose that the Company enter
into any such transaction, event or series of events, then the
Committee will take such action as it, in its sole discretion,
deems equitable or appropriate to provide the Participant with a
benefit equivalent to that which he would have been entitled to
had such event not occurred.
Section 2.2 Acceleration of Vesting in the Event of
---------------------------------------
Certain Tender Offers. In addition to the provisions of Section
---------------------
2.1, and notwithstanding anything in Section 2.1 to the contrary,
if National Amusements, Inc. ("NAI") has reduced or agreed to
---
reduce its ownership of shares and/or other securities of the
Company to less than a majority of the combined voting power of
all shares and other securities of the Company entitled to vote
in the election of directors, then all of the Outstanding Stock
Options shall vest and become exercisable on the fifth business
day preceding the scheduled expiration of any tender offer for at
least 50% of the outstanding shares of Class B Common Stock if
such tender offer constitutes part of a bona fide transaction, or
---------
series of transactions, the consequence of which would be the
acquisition, by a person or entity not affiliated with NAI, of
shares and/or other securities representing in the aggregate a
majority of the combined voting power of all shares and other
securities of the Company entitled to vote in the election of
directors.
Section 2.3 Dilution and Other Adjustments. In the
------------------------------
event of a stock dividend or split, issuance or repurchase of
stock or securities convertible into or exchangeable for shares
of stock, grants of options, warrants or rights (other than
pursuant to the Plan) to purchase stock, recapitalization,
combination, exchange or similar change affecting the Class B
Common Stock, the Compensation Committee shall, in its sole
discretion, make any or all of the following adjustments to
provide the Participant with a benefit equivalent to that which
he would have been entitled had such event not occurred: (i)
adjust the number of shares of Class B Common Stock subject to
the Stock Options granted to the Participant, (ii) adjust the
7
Exercise Price of the shares of Class B Common Stock subject to
such Stock Options, and (iii) make any other adjustments, or take
such action, if any, as the Compensation Committee, in its sole
discretion, deems appropriate. Such adjustments shall be
conclusive and binding for all purposes. In the event of a
change in the Class B Common Stock which is limited to a change
in the designation thereof to "Capital Stock" or other similar
designation, or to a change in the par value thereof, or from par
value to no par value, without increase or decrease in the number
of issued shares, the shares resulting from any such change shall
be deemed to be Class B Common Stock within the meaning of this
Agreement and the Plan.
ARTICLE III
DEFINITIONS
In addition to terms heretofore defined in this
Agreement and terms the definition of which is incorporated by
reference to the Employment Agreement, as used herein the
following terms shall have the following meanings:
(a) "Fair Market Value" of a share of Class B Common
-----------------
Stock on a given date shall be the closing price of a share of
Class B Common Stock on the American Stock Exchange or such other
national securities exchange as may be designated by the
Compensation Committee or, in the event that the Class B Common
Stock is not listed for trading on a national securities exchange
but is quoted on an automated quotation system, the average
closing bid price per share of the Class B Common Stock on such
automated quotation system or, in the event that the Class B
Common Stock is not quoted on any such system, the average of the
closing bid prices per share of the Class B Common Stock as
furnished by a professional marketmaker making a market in the
Class B Common Stock designated by the Compensation Committee.
(b) "Outstanding Stock Option" shall mean a Stock
------------------------
Option granted to the Participant which has not yet been
exercised and which has not yet expired in accordance with its
terms.
(c) "Termination for Cause" shall mean a termination
---------------------
of the Executive's employment with the Company or any of its
subsidiaries by reason of "Cause", as such term is defined in the
Employment Agreement.
(d) To "vest" a Stock Option held by the Participant
----
shall mean to render such Stock Option nonforfeitable, except as
otherwise provided in this Agreement.
8
ARTICLE IV
MISCELLANEOUS
Section 4.1 No Rights of Continued Employment.
---------------------------------
Neither this Agreement, the Plan nor any action taken in
accordance with such documents shall be construed as giving the
Participant any right to be retained by the Company or any of its
subsidiaries, it being understood and acknowledged that the terms
of the Participant's employment with the Company are governed by
the Employment Agreement.
Section 4.2 Restrictions on Transfer. The rights of
------------------------
the Participant with respect to the Stock Options shall not be
transferable to the Participant otherwise than by will or the
laws of descent and distribution.
Section 4.3 Tax Withholding. As a condition to the
---------------
exercise of the Stock Options, the Participant shall make a
payment (or an arrangement acceptable to the Company for the
withholding of such payment) sufficient to satisfy the combined
Federal, state and local withholding tax obligations which arise
in connection with the exercise of such Stock Options.
Section 4.4 Stockholder Rights. The grant of Stock
------------------
Options under this Agreement shall not entitle the Participant to
any rights of a holder of shares of Class B Common Stock, except
upon the delivery of shares certificates to the Participant upon
exercise of a Stock Option.
Section 4.5 No Restriction on Right of Company to
-------------------------------------
Effect Corporate Changes. This Agreement shall not affect in any
------------------------
way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalization,
reorganization 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 Amendment. Other than as provided in
---------
Article II hereof, this Agreement may not be modified, amended or
waived in any manner except by an instrument in writing signed by
9
both parties hereto. The waiver by either party of compliance
with any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any other provision of
this Agreement, or of any subsequent breach by such party of a
provision of this Agreement.
Section 4.7 Notices. Every notice or other
-------
communication relating to this Agreement shall be in writing, and
shall be mailed to or delivered to the party for whom it is
intended at such address as may from time to time be designated
by such party in a notice mailed or delivered to the other party
as herein provided. If no such address has been specified by the
Participant, such notices or communications shall be sent to the
Participant's address as specified in the records of the Company.
Section 4.8 Headings. The headings of sections and
--------
subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the
provisions of this Agreement.
Section 4.9 Receipt of Copy of Plan. By executing
-----------------------
this Agreement, the Participant acknowledges receipt of a copy of
the Plan.
Section 4.10 Governing Law. This Agreement and all
-------------
rights hereunder shall be construed in accordance with and
governed by the laws of the State of Delaware.
VIACOM INC.
By:
----------------------------
Senior Vice President
Human Resources and
Administration
-------------------------------
Participant
ATTACHMENT B
Form of Amendment to Stock Option Agreement
-------------------------------------------
AMENDMENT NO. [1], dated as of __________, [1995], to
the Agreement, dated as of August 18, 1994 (the "Stock Option
------------
Agreement"), by and between VIACOM INC., a Delaware corporation
---------
(the "Company"), and FRANK J. BIONDI, JR. (the "Participant"),
------- -----------
with respect to a grant of stock options under the Company's 1994
Long-Term Management Incentive Plan (the "Plan") is hereby
----
amended as follows:
1. Section 1(c) of the Stock Option Agreement is
amended in its entirety to read as follows:
"(c) Exercise in the Event of Termination of Employment,
---------------------------------------------------
Death or Permanent Disability.
-----------------------------
(i) Termination for Cause, Resignation without Good
-----------------------------------------------
Reason. If the Executive's employment is terminated by the
------
Company for Cause or if the Executive resigns from his
employment without Good Reason, his Outstanding Stock
Options may be exercised to the extent exercisable as of the
date of such termination or resignation until the earlier of
(A) 15 days after the date of such termination or
resignation and (B) the Expiration Date. All Stock Options
that have not become exercisable as of the date of such
termination or resignation of employment will be forfeited
and all rights with respect thereto will be relinquished by
the Participant without any consideration being paid
therefor.
(ii) Termination Without Cause, Resignation for Good
-----------------------------------------------
Reason. If the Executive's employment is terminated by the
------
Company without Cause or if the Executive resigns from his
employment for Good Reason, then the Outstanding Stock
Options (all of which, pursuant to Section 1.2, shall be
considered vested and exercisable as of the date of such
termination or resignation of employment) shall remain
exercisable until the later of (A) six months following the
date of such termination or resignation of employment and
(B) the second anniversary of the Date of Grant, provided,
--------
however, that in no event shall any Outstanding Stock
-------
Options remain exercisable following the Expiration Date.
(iii) Non-Renewal. If the Executive's employment
-----------
with the Company terminates at the end of the Initial Term,
or at the end of any one-year extension thereof, as a result
of the giving of notice by the Company or the Executive of
its or his intention to terminate the Employment Agreement
2
at the end of the then-effective Term, the Outstanding Stock
Options (all of which will have become exercisable by the
end of the Initial Term) shall remain exercisable until six
months following the date of the termination of the
Executive's employment, provided, however, that in no event
-------- -------
shall any Outstanding Stock Options remain exercisable
following the Expiration Date.
(iv) Death, Permanent Disability. If the Executive's
---------------------------
employment with the Company terminates by reason of Death or
Permanent Disability, then the Outstanding Stock Options
(all of which, pursuant to Section 1.2, shall be considered
vested and exercisable as of the date of such termination of
the Executive's employment) shall remain exercisable until
the second anniversary of the date of such termination of
employment (or such longer period as may be determined by
the Committee, in its discretion, prior to the expiration of
such two-year period), provided, however, that in no event
-------- -------
shall any Outstanding Stock Options remain exercisable
following the Expiration Date. Following the Executive's
death, Outstanding Stock Options may be exercised during the
period provided for in this Section 1.2(c)(iv) by the person
who acquires the right to exercise such Stock Options by
will or the laws of descent and distribution; following
termination of the Executive's employment due to Permanent
Disability, Outstanding Stock Options may be exercised
during the period provided for in this Section 1.2(c)(iv) by
the Executive or his conservator or guardian, as the case
may be."
2. General. Except as amended hereby, the Stock
-------
Option Agreement shall remain in full force and effect in
accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment No. [1] effective as of the day and year first set
forth above.
VIACOM INC.
By:____________________
Title:____________________
Frank J. Biondi, Jr.
Agreement Under the
Viacom Inc.
1994 Long-Term Management Incentive Plan
----------------------------------------
AGREEMENT, dated as of August 18, 1994, by and between
VIACOM INC., a Delaware corporation (the "Company"), and FRANK J.
-------
BIONDI, JR. (the "Participant"), with respect to a grant of stock
-----------
options under the Company's 1994 Long-Term Management Incentive
Plan (the "Plan").
----
This Agreement, together with the agreements delivered
under the Plan in connection with any subsequent grant of stock
options under the Plan and a memorandum with respect to the Plan
that will be distributed prior to the date on which the first
increment of stock options under this grant vests, will
constitute the prospectus covering the shares of the Company's
Class B Common Stock, par value $0.01 per share (the "Class B
-------
Common Stock"), subject to the Plan. The Participant can receive
------------
additional copies of his or her Plan agreements and the
memorandum upon request to the Administrator, Long-Term Incentive
Plans, Viacom International Inc., 1515 Broadway, New York, New
York 10036.
WITNESSETH:
WHEREAS, the Participant is entering into an Employment
Agreement, dated as of August 1, 1994 (the "Employment
----------
Agreement"), with the Company pursuant to which the Participant
---------
will continue to serve, on the terms and conditions set forth in
the Employment Agreement, in his current capacities as President
and Chief Executive Officer of the Company (all capitalized terms
used in this Agreement without definition to have the meanings
ascribed to such terms in the Employment Agreement); and
WHEREAS, the Company desires to reward the Participant,
in accordance with the terms hereof, for the Participant's
contributions to the financial success of the Company, and to
provide incentives to the Participant to continue to contribute
to such success in the future, by awarding the Participant stock
options to purchase shares of Class B Common Stock;
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as
follows:
2
ARTICLE I
TERMS OF STOCK OPTIONS
Section 1.1 Grant of Stock Options. Subject to the
----------------------
terms and conditions contained herein and in the Plan, the terms
of which are hereby incorporated by reference, the Company hereby
awards to the Participant, effective August 18, 1994 (the "Date
----
of Grant"), a grant of one million (1,000,000) stock options to
--------
purchase shares of Class B Common Stock at the exercise prices
(the "Exercise Prices") indicated below:
---------------
Number of Stock Options Exercise Price
----------------------- --------------
600,000 $ 35.75 (the "A Options")
---------
200,000 $ 40.4375 (the "B Options")
---------
200,000 $ 52.125 (the "C Options")
---------
The A Options, the B Options and the C Options are referred to
herein collectively as the "Stock Options".
-------------
In accordance with the terms of the Employment
Agreement, the Executive acknowledges that he shall have no
contractual entitlement pursuant to the Employment Agreement to
any further grants of stock options prior to the end of the
Initial Term, it being understood that the Company may, in its
sole discretion, grant additional stock options to the Executive
during the Initial Term. The Stock Options granted hereunder are
not intended to be, or qualify as, "Incentive Stock Options"
---
within the meaning of Section 422A 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 A
Options, the B Options and the C Options shall have the same
vesting schedule and, subject to accelerated vesting under the
circumstances described in Section 2.2, shall vest in equal 20%
increments on July 31, 1996, July 31, 1997, July 31 1998, July
31, 1999 and July 31, 2000, provided, however, that if the
-------- -------
Executive's employment is terminated by the Company without
Cause, if the Executive resigns from his employment for Good
Reason, or if the Executive's employment with the Company
terminates by reason of death or Permanent Disability, then in
any such case all Outstanding Stock Options shall be considered
vested and exercisable as of the date of such termination or
resignation of employment.
(b) Option Period. Except as provided in Section
-------------
1.2(c) hereof, the period during which the Stock Options may be
3
exercised shall expire on the tenth anniversary of the Date of
Grant (the "Expiration Date").
---------------
(c) Exercise in the Event of Termination of
---------------------------------------
Employment, Retirement, Death or Permanent Disability.
-----------------------------------------------------
(i) Termination other than for Cause, Retirement,
---------------------------------------------
Death or Permanent Disability. In the event that (A) the
-----------------------------
Participant ceases to be an employee of the Company or any
of its subsidiaries by reason of the voluntary termination
by the Participant, the termination by the Company or any of
its subsidiaries other than for Cause or the Participant's
Retirement, his Outstanding Stock Options may be exercised
to the extent then exercisable until the earlier of three
months after the date of such termination or Retirement or
the Expiration Date, (B) the Participant dies during a
period during which his Stock Options could have been
exercised by him, his Outstanding Stock Options (all of
which, pursuant to Section 1.2(a), will have become
exercisable as of the date of death) may be exercised by the
person who acquired the right to exercise such Stock Options
by will or the laws of descent and distribution until the
earlier of one year after such death (or such longer period
as may be determined by the Committee, in its discretion,
prior to the expiration of such one-year period) or the
Expiration Date, and (C) the employment of the Participant
terminated by reason of Permanent Disability, the
Participant may exercise his Outstanding Stock Options (all
of which, pursuant to Section 1.2(a), will have become
exercisable upon such termination of employment) until the
earlier of one year after such date or the Expiration Date.
Upon the occurrence of an event described in clause (A) 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.
(ii) Termination for Cause. If the Participant's
---------------------
employment with the Company or any of its subsidiaries ends
because of a Termination for Cause, all Outstanding Stock
Options, whether or not then vested, shall terminate
effective as of the date of such termination.
4
Section 1.3 Exercise of Stock Options.
-------------------------
(a) Whole or Partial Exercise. Subject to the
-------------------------
restrictions of Section 1.2(b) hereof, the Participant (or such
other person as may be authorized to exercise any Outstanding
Stock Options pursuant to Section 1.2(b)(iv)) may exercise all
vested Stock Options granted hereunder at one time or in
installments of 100 Stock Options (or in the whole number of
-----
unexpired Stock Options in which the Participant is vested, if
such number is less than 100) by written notice to the
Administrator, Long-Term Incentive Plans, Viacom International
Inc., 1515 Broadway, New York, New York 10036. Subject to the
preceding sentence, the Participant (or such other person) may
exercise A Options, B Options or C Options or any combination
thereof. Such notice shall (i) state the number of full Stock
Options being exercised, (ii) be signed 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)(iv)
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,
and (iii) be accompanied by full payment as set forth in Section
1.3(b) hereof.
(b) Payment of Aggregate Option Price. The written
---------------------------------
notice of exercise described above must be accompanied by full
payment of the aggregate Exercise Price which shall be determined
by multiplying the number of Stock Options being exercised by the
relevant Exercise Price. Such Exercise Price shall be paid in
cash (e.g., personal bank check, certified check or official bank
check), in shares of Class B Common Stock, or in a combination of
cash and shares of Class B Common Stock; shares of Class B
Common Stock tendered in payment of all or a portion of such
Exercise Price shall be considered to have a value equal to the
Fair Market Value of such shares determined as of the day
preceding the date of tender. In addition, 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 and local
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.
5
ARTICLE II
EFFECT OF CERTAIN CORPORATE CHANGES
AND CHANGES IN CONTROL
Section 2.1 Effect of Reorganization. In the event
------------------------
that (i) the Company is merged or consolidated with another
corporation, (ii) one person becomes the beneficial owner of more
than fifty percent (50%) of the issued and outstanding equity
securities of the Company (for purposes of this Section 2.1, the
terms "person" and "beneficial owner" shall have the meanings
assigned to them in Section 13(d) of the Exchange Act), (iii) all
or substantially all of the assets of the Company are acquired by
another corporation, person or entity (each such event in (i),
(ii) or (iii) or any other similar event or series of events
which results in an event described in (i), (ii) or (iii), being
hereinafter referred to as a "Reorganization Event") or (iv) the
--------------------
Board shall propose that the Company enter into a Reorganization
Event, then the Compensation Committee shall take one of the
following actions, the choice of which being in its sole
discretion (or other action with the agreement of the
Participant): (i) cause the surviving entity or new owner, as
the case may be, to agree to adopt the Plan and this Agreement
and to continue in effect their respective terms as such terms
were in effect as of the date of the Reorganization Event, except
that equitable adjustments shall be made, if appropriate, to
reflect the value of the Class B Common Stock subject to such
Stock Options immediately prior to and following the occurrence
of the Reorganization Event; (ii) cause the surviving entity or
new owner, as the case may be, to grant new stock options (the
"Substitute Options"), in substitution for the unexercised Stock
------------------
Options as of the date of the Reorganization Event; provided,
--------
however, that such Substitute Options shall have a value, as of
-------
the date of such Reorganization Event, equal to the value of such
unexercised Stock Options as of such date; (iii) provide for the
payment upon termination or cancellation of Outstanding Stock
Options of an amount in cash or securities equal to the excess,
if any, of the Fair Market Value of the Class B Common Stock
subject to such Stock Options at the time of such termination or
cancellation over the aggregate exercise price of such Stock
Options; or (iv) advance the dates upon which all Outstanding
Stock Options vest.
Notwithstanding the provisions of the preceding
sentence, in the event that the effect of the provisions
contained therein should become a material impediment, either
from a financial point of view or otherwise, to the consummation
of a proposed Reorganization Event, the Compensation Committee
may take such action as it deems equitable and appropriate to
provide the Participant with a benefit equivalent to that which
he would have been entitled had such event not occurred.
Further, for the purposes of the first sentence of this Section
6
2.1, no event or series of events involving National Amusements,
Inc., the Company or any of their respective subsidiaries or
affiliates shall be deemed to be a Reorganization Event unless
such event or series of events results in there being no class of
equity securities of the Company which is publicly traded. Any
action taken by the Compensation Committee may be made
conditional upon the consummation of the applicable
Reorganization Event. Further, in the event that a division or
subsidiary of the Company is acquired by another corporation,
person, or entity, the Company is reorganized, dissolved or
liquidated, an event or series of events involving a corporate
restructuring not described in the first sentence of this Section
2.1 occurs, or the Board shall propose that the Company enter
into any such transaction, event or series of events, then the
Committee will take such action as it, in its sole discretion,
deems equitable or appropriate to provide the Participant with a
benefit equivalent to that which he would have been entitled to
had such event not occurred.
Section 2.2 Acceleration of Vesting in the Event of
---------------------------------------
Certain Tender Offers. In addition to the provisions of Section
---------------------
2.1, and notwithstanding anything in Section 2.1 to the contrary,
if National Amusements, Inc. ("NAI") has reduced or agreed to
---
reduce its ownership of shares and/or other securities of the
Company to less than a majority of the combined voting power of
all shares and other securities of the Company entitled to vote
in the election of directors, then all of the Outstanding Stock
Options shall vest and become exercisable on the fifth business
day preceding the scheduled expiration of any tender offer for at
least 50% of the outstanding shares of Class B Common Stock if
such tender offer constitutes part of a bona fide transaction, or
---------
series of transactions, the consequence of which would be the
acquisition, by a person or entity not affiliated with NAI, of
shares and/or other securities representing in the aggregate a
majority of the combined voting power of all shares and other
securities of the Company entitled to vote in the election of
directors.
Section 2.3 Dilution and Other Adjustments. In the
------------------------------
event of a stock dividend or split, issuance or repurchase of
stock or securities convertible into or exchangeable for shares
of stock, grants of options, warrants or rights (other than
pursuant to the Plan) to purchase stock, recapitalization,
combination, exchange or similar change affecting the Class B
Common Stock, the Compensation Committee shall, in its sole
discretion, make any or all of the following adjustments to
provide the Participant with a benefit equivalent to that which
he would have been entitled had such event not occurred: (i)
adjust the number of shares of Class B Common Stock subject to
the Stock Options granted to the Participant, (ii) adjust the
7
Exercise Price of the shares of Class B Common Stock subject to
such Stock Options, and (iii) make any other adjustments, or take
such action, if any, as the Compensation Committee, in its sole
discretion, deems appropriate. Such adjustments shall be
conclusive and binding for all purposes. In the event of a
change in the Class B Common Stock which is limited to a change
in the designation thereof to "Capital Stock" or other similar
designation, or to a change in the par value thereof, or from par
value to no par value, without increase or decrease in the number
of issued shares, the shares resulting from any such change shall
be deemed to be Class B Common Stock within the meaning of this
Agreement and the Plan.
ARTICLE III
DEFINITIONS
In addition to terms heretofore defined in this
Agreement and terms the definition of which is incorporated by
reference to the Employment Agreement, as used herein the
following terms shall have the following meanings:
(a) "Fair Market Value" of a share of Class B Common
-----------------
Stock on a given date shall be the closing price of a share of
Class B Common Stock on the American Stock Exchange or such other
national securities exchange as may be designated by the
Compensation Committee or, in the event that the Class B Common
Stock is not listed for trading on a national securities exchange
but is quoted on an automated quotation system, the average
closing bid price per share of the Class B Common Stock on such
automated quotation system or, in the event that the Class B
Common Stock is not quoted on any such system, the average of the
closing bid prices per share of the Class B Common Stock as
furnished by a professional marketmaker making a market in the
Class B Common Stock designated by the Compensation Committee.
(b) "Outstanding Stock Option" shall mean a Stock
------------------------
Option granted to the Participant which has not yet been
exercised and which has not yet expired in accordance with its
terms.
(c) "Termination for Cause" shall mean a termination
---------------------
of the Executive's employment with the Company or any of its
subsidiaries by reason of "Cause", as such term is defined in the
Employment Agreement.
(d) To "vest" a Stock Option held by the Participant
----
shall mean to render such Stock Option nonforfeitable, except as
otherwise provided in this Agreement.
8
ARTICLE IV
MISCELLANEOUS
Section 4.1 No Rights of Continued Employment.
---------------------------------
Neither this Agreement, the Plan nor any action taken in
accordance with such documents shall be construed as giving the
Participant any right to be retained by the Company or any of its
subsidiaries, it being understood and acknowledged that the terms
of the Participant's employment with the Company are governed by
the Employment Agreement.
Section 4.2 Restrictions on Transfer. The rights of
------------------------
the Participant with respect to the Stock Options shall not be
transferable to the Participant otherwise than by will or the
laws of descent and distribution.
Section 4.3 Tax Withholding. As a condition to the
---------------
exercise of the Stock Options, the Participant shall make a
payment (or an arrangement acceptable to the Company for the
withholding of such payment) sufficient to satisfy the combined
Federal, state and local withholding tax obligations which arise
in connection with the exercise of such Stock Options.
Section 4.4 Stockholder Rights. The grant of Stock
------------------
Options under this Agreement shall not entitle the Participant to
any rights of a holder of shares of Class B Common Stock, except
upon the delivery of shares certificates to the Participant upon
exercise of a Stock Option.
Section 4.5 No Restriction on Right of Company to
-------------------------------------
Effect Corporate Changes. This Agreement shall not affect in any
------------------------
way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalization,
reorganization 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 Amendment. Other than as provided in
---------
Article II hereof, this Agreement may not be modified, amended or
waived in any manner except by an instrument in writing signed by
9
both parties hereto. The waiver by either party of compliance
with any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any other provision of
this Agreement, or of any subsequent breach by such party of a
provision of this Agreement.
Section 4.7 Notices. Every notice or other
-------
communication relating to this Agreement shall be in writing, and
shall be mailed to or delivered to the party for whom it is
intended at such address as may from time to time be designated
by such party in a notice mailed or delivered to the other party
as herein provided. If no such address has been specified by the
Participant, such notices or communications shall be sent to the
Participant's address as specified in the records of the Company.
Section 4.8 Headings. The headings of sections and
--------
subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the
provisions of this Agreement.
Section 4.9 Receipt of Copy of Plan. By executing
-----------------------
this Agreement, the Participant acknowledges receipt of a copy of
the Plan.
Section 4.10 Governing Law. This Agreement and all
-------------
rights hereunder shall be construed in accordance with and
governed by the laws of the State of Delaware.
VIACOM INC.
By: /s/ William Roskin
----------------------------
Senior Vice President
Human Resources and
Administration
/s/ Frank J. Biondi, Jr.
-------------------------------
Participant