EXHIBIT 10(i)
VIACOM INC.
1994 STOCK OPTION PLAN
FOR OUTSIDE
DIRECTORS
ARTICLE I
GENERAL
Section 1.1 Purpose.
The purpose of the Viacom Inc. 1994 Stock Option Plan for Outside Directors (the
"Plan") is to benefit and advance the interests of Viacom Inc., a Delaware
corporation (the "Company"), and its affiliates by obtaining and retaining the
services of qualified persons who are not employees of the Company or its
affiliates to serve as directors and to induce them to make a maximum
contribution to the success of the Company and its affiliates.
Section 1.2 Definitions.
As used in the Plan, the following terms shall have the following meanings:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Class B Common Stock" shall mean the shares of Class B Common Stock,
par value $0.01 per share, of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended,
including any successor law thereto.
(d) "Date of Grant" shall mean November 8, 1994, and each succeeding
August 1, commencing with August 1, 1995.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, including any successor law thereto.
(f) "Effective Date" of the Plan shall be November 8, 1994.
(g) "Fair Market Value" of a share of Class B Common Stock on a given date
shall be the average 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 Board 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 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 Class B Common Stock as furnished by a
professional marketmaker making a market in the Class B Common Stock
designated by the Board.
(h) "Grant" shall mean a grant of Stock Options under the Plan.
(i) "LTMIP" shall mean the Company's 1994 Long-Term Management Incentive
Plan and/or any successor to such Plan, as applicable.
(j) "Non-Qualified Stock Options" shall mean Stock Options which do not
meet the requirements of Section 422 of the Code.
(k) "Outside Director" shall mean any member of the Board of Directors of
the Company who is not an employee of the Company, Viacom
International Inc., Paramount Communications Inc., National
Amusements, Inc. or any of their respective affiliates. An individual
shall not be deemed an employee for purposes of the Plan unless such
individual receives compensation from either the Company or an
affiliate of the Company for services performed as an employee of the
Company or any of its affiliates.
(l) "Outstanding Stock Option" shall mean a Stock Option granted to an
Outside Director which has not yet been exercised and which has not
yet expired in accordance with its terms.
(m) "Stock Option" shall mean a contractual right granted to an Outside
Director under the Plan to purchase a share of Class B Common Stock at
such time and price, and subject to the terms and conditions, as are
set forth in the Plan.
(n) To "vest" a Stock Option held by an Outside Director shall mean to
render such Stock Option nonforfeitable.
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Section 1.3 Administration of the Plan.
The Plan shall be administered by the members of the Board who are not Outside
Directors. All questions of interpretation, administration and application of
the Plan shall be determined by the Board. The Board may authorize any officer
of the Company to execute and deliver a stock option certificate on behalf of
the Company to an Outside Director.
Section 1.4 Class B Common Stock Subject to the Plan.
The total number of shares of Class B Common Stock that shall be reserved for
distribution upon grant of Stock Options under the Plan shall be 200,000,
subject to adjustment pursuant to Section 4.2 hereof. The shares of Class B
Common Stock shall be made available from authorized but unissued Class B Common
Stock or from Class B Common Stock issued and held in the treasury of the
Company, as shall be determined by the Board. Exercise of Stock Options in any
manner shall result in a decrease in the number of shares of Class B Common
Stock which thereafter may be issued for purposes of this Section 1.4, by the
number of shares as to which the Stock Options are exercised. Shares of Class B
Common Stock with respect to which Stock Options expire, are cancelled without
being exercised or are otherwise terminated, may be regranted under the Plan.
ARTICLE II
GRANTS OF STOCK OPTIONS
Each person who is an Outside Director on the Effective Date shall be granted an
award of Non-Qualified Stock Options to purchase 1,500 shares of Class B Common
Stock at an option price per share equal to the Fair Market Value of a share of
Class B Common Stock on such date (the "Date of Grant" of such Stock Options),
on the terms and conditions set forth in the Plan. In addition, in recognition
of their long years of dedicated service to the Company as Outside Directors and
their role in helping to steer the Company through its spectacular growth and
development, each person who is an Outside Director on the Effective Date and
who was an Outside Director in July 1987 shall be granted an award of Non-
Qualified Stock Options to purchase 10,000 shares of Class B Common Stock at an
option price per share equal to the Fair Market Value of a share of Class B
Common Stock on the Effective Date (the "Date of Grant" of such Stock Options"),
on the terms and conditions set forth in the Plan. Thereafter, on August 1,
1995 and each of the second through ninth anniversaries thereof, each person who
is an Outside Director on such date shall be granted an additional award of Non-
Qualified Stock Options to purchase 1,500 shares of Class B Common Stock,
effective as of such date (the "Date of Grant" of such Stock Options), at an
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option price per share equal to the Fair Market Value of a share of Class B
Common Stock on the Date of Grant, on the terms and conditions set forth in the
Plan. The exercise price of the Stock Options granted under the Plan shall be
subject to adjustment in accordance with the provisions of Section 4.2 of the
Plan. The terms and conditions of a Grant of Stock Options shall be set forth
in an option certificate which shall be delivered to the Outside Director
reasonably promptly following the Date of Grant of such Stock Options.
ARTICLE III
TERMS AND CONDITIONS OF STOCK OPTIONS
Section 3.1 Exercise of Stock Options.
(a) Exercisability. Stock Options shall be exercisable only to the extent
the Outside Director is vested therein. Each Grant of Stock Options
under the Plan shall vest on the first anniversary of the Date of
Grant of such Stock Options.
(b) Option Period.
(i) Earliest Exercise Date. No Stock Option granted under the
Plan shall be exercisable until six months after the Date of
Grant thereof.
(ii) Latest Exercise Date. No Stock Option granted under the
Plan shall be exercisable after the tenth anniversary of the
Date of Grant thereof.
(iii) Registration Restrictions. Any attempt to exercise a Stock
Option or to transfer any share issued upon exercise of a
Stock Option by any Outside Director shall be void and of no
effect, unless and until (A) a registration statement under
the Securities Act of 1933, as amended, has been duly filed
and declared effective pertaining to the shares of Class B
Common Stock subject to such Stock Option have been duly
qualified under applicable Federal or state securities or
blue sky laws or (B) the Board, in its sole discretion,
determines, or the Outside Director, upon the request of the
Board, provides an opinion of counsel satisfactory to the
Board, that such registration or qualification is not
required as a result of the availability of any exemption
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from registration or qualification under such laws. Without
limiting the foregoing, if at any time the Board shall
determine, in its sole discretion, that the listing,
registration or qualification of the shares of Class B Common
Stock under any Federal or state law or on any securities
exchange or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of,
or in connection with, delivery or purchase of such shares
pursuant to the exercise of a Stock Option, such Stock Option
shall not be exercised in whole or in part unless and until
such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any
conditions not acceptable to the Board.
(c) Exercise in the Event of Termination of Services.
(i) Termination other than for Death or Permanent Disability. If
the services of an Outside Director as a Director of the
Company terminate for any reason other than for death or
permanent disability, the Outside Director may exercise any
Outstanding Stock Options only within one year after the
termination date, but only to the extent such Outstanding
Stock Options were vested on the date of such Outside
Director's termination. Upon a termination described in this
Section 3.1(c)(i), the Outside Director shall relinquish all
rights with respect to Stock Options that are not vested as
of such termination date.
(ii) Death. If an Outside Director dies within a period during
which his Stock Options could have been exercised by him, his
Outstanding Stock Options may be exercised only within one
year after his death, but only to the extent such Outstanding
Stock Options were vested on the date of death, by any person
who acquired the right to exercise such Stock Options by will
or the laws of descent and distribution. All rights with
respect to Outstanding Stock Options that are not vested on
the date of death will be relinquished.
(iii) Permanent Disability. If the services of an Outside Director
as a Director of the Company terminate by reason of permanent
disability, he may exercise his Outstanding Stock Options
only within one year after the termination of his services,
but only to the extent such Outstanding Stock Options were
vested when his services terminated. Upon a termination
described in this Section 3.1(c)(iii), the Outside Director
shall relinquish all rights with respect to Stock Options
that are not vested as of such termination date.
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Section 3.2 Payment of Purchase Price Upon Exercise.
Every share of Class B Common Stock purchased through the exercise of a Stock
Option shall be paid for in full at the time of exercise in cash (e.g. personal
bank check, certified check or official bank check).
ARTICLE IV
EFFECT OF CERTAIN CORPORATE CHANGES AND
CHANGES IN CONTROL
Section 4.1 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 voting equity securities of the
Company (for purposes of this Section 4.1, 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 all the Outstanding Stock Options under the
Plan shall be immediately exercisable as of the date of such Reorganization
Event. For the purposes of this Section 4.1, no event or series of events
involving National Amusements, Inc., the Company or any of their affiliates
shall be deemed to be a Reorganization Event unless such event or series or
events results in there being no class of equity securities of the Company (or
the successor of the Company) which is publicly traded.
Section 4.2 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, as the case may be, in order to provide each Outside Director with
a benefit equivalent to that which he would have been entitled had such event
not occurred, the Outstanding Stock Options under the Plan shall be adjusted in
the same manner as the Outstanding Stock Options (as such term is defined in the
LTMIP) under the LTMIP shall be adjusted. 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 the Plan.
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ARTICLE V
MISCELLANEOUS
Section 5.1 Restriction on Transfer.
Except to the extent permitted by the rules under Section 16b-3 of the Exchange
Act, the rights of an Outside Director with respect to Stock Options shall not
be transferable by the Outside Director to whom such Stock Options are granted,
otherwise than by will or the laws of descent and distribution.
Section 5.2 Stockholder Rights.
No Grant of Stock Options under the Plan shall entitle an Outside Director to
any rights of a holder of shares of Class B Common Stock, except upon the
delivery of share certificates to an Outside Director upon exercise of a Stock
Option.
Section 5.3 No Restriction on Right of Company to Effect
Corporate Changes.
The Plan 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.
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Section 5.4 No Right to Reelection.
Nothing in the Plan shall be deemed to create any obligation on the part of the
Board to nominate any of its members for reelection by the Company's
stockholders, nor confer upon any Outside Director the right to remain a member
of the Board for any period of time, or at any particular rate of compensation.
ARTICLE VI
AMENDMENT AND TERMINATION
The Board may at any time and from time to time, alter, amend, suspend or
terminate the Plan in whole or in part; provided, however, that in no event may
the provisions of the Plan respecting eligibility to participate or the timing
or amount of grants be amended more frequently than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or any rules or regulations thereunder; and
provided, further, that any amendment which under the requirements of applicable
law must be approved by the stockholders of the Company shall not be effective
unless and until such stockholder approval has been obtained in compliance with
such law; and provided, further, that any amendment that must be approved by the
stockholders of the Company in order to maintain the continued qualification of
the Plan under Rule 16b-3(c)(2)(ii) under the Exchange Act shall not be
effective unless and until such stockholder approval has been obtained in
compliance with such rule. No termination or amendment of the Plan may, without
the consent of an Outside Director to whom a Grant has been made, adversely
affect the rights of such Director in the Stock Options covered by such Grant.
Unless previously terminated pursuant to this Article VI, the Plan shall
terminate on the tenth anniversary of the Effective Date, and no further Grants
may be awarded hereunder after such date.
ARTICLE VII
INTERPRETATION
Section 7.1 Governmental Regulations.
The Plan, and all Grants hereunder, shall be subject to all applicable rules and
regulations of governmental or other authorities.
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Section 7.2 Headings.
The headings of sections and subsections herein are included solely for the
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan.
Section 7.3 Governing Law.
The Plan and all rights hereunder shall be construed in accordance with and
governed by the laws of the State of Delaware.
ARTICLE VIII
EFFECTIVE DATE AND STOCKHOLDER APPROVAL
The Effective Date of the Plan shall be November 8, 1994 and stockholder
approval shall be sought at the first annual meeting of stockholders following
such date. In the event that stockholder approval is not obtained on or before
the date of such annual meeting, the Plan and all Grants hereunder shall be void
ab initio and of no effect. No Stock Option shall be exercisable until the date
of such stockholder approval.
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