<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549-1004
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE --- SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------ ------
Commission file number 1-977
-------
WESTINGHOUSE ELECTRIC CORPORATION
---------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 25-0877540
------------ ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
Westinghouse Building, 11 Stanwix Street, Pittsburgh, Pa. 15222-1384
--------------------------------------------------------------------
(Address of principal executive offices, zip code)
(412) 244-2000
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Common stock 421,597,801 shares outstanding at October 31, 1996
---------------------------------------------------------------
-1-
<PAGE> 2
WESTINGHOUSE ELECTRIC CORPORATION
INDEX
---------------------------------
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Income 3
Condensed Consolidated Balance Sheet 4
Condensed Consolidated Statement of Cash Flows 5
Notes to the Condensed Consolidated
Financial Statements 6-13
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 13-26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 27-28
Item 6. Exhibits and Reports on Form 8-K 28-30
SIGNATURE 31
</TABLE>
-2-
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WESTINGHOUSE ELECTRIC CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
------------------------------------------
(in millions except per share amounts) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales of products and services $ 2,040 $ 1,284 $ 6,220 $ 3,931
Costs of products and services (1,351) (912) (4,308) (2,788)
Restructuring, litigation and other
matters (notes 2, 3, and 10) - (116) (870) (122)
Marketing, administration, and
general expenses (605) (302) (1,844) (945)
------- ------- ------- -------
Operating profit (loss) 84 (46) (802) 76
Other income (expenses), net (note 4) 25 136 (114) 135
Interest expense (103) (43) (358) (138)
------- ------- ------- -------
Income (loss) from Continuing
Operations before income taxes
and minority interest in income
of consolidated subsidiaries 6 47 (1,274) 73
Income tax benefit (expense) (2) (19) 427 (24)
Minority interest in income of
consolidated subsidiaries (2) (1) (4) (6)
------- ------- ------- -------
Income (loss) from Continuing Operations 2 27 (851) 43
------- ------- ------- -------
Discontinued Operations, net of
income taxes (note 9):
Income (loss) from
Discontinued Operations - (3) (10) 55
Estimated net gain (loss) on disposal
of Discontinued Operations - (76) 1,018 (76)
------- ------ ------- -------
Income (loss)from Discontinued Operations - (79) 1,008 (21)
Extraordinary Item:
Loss on early extinguishment of debt
(note 5) (30) - (93) -
------- ------- ------- -------
Net income (loss) $ (28) $ (52) $ 64 $ 22
======= ======= ======= =======
Primary earnings (loss) per common share:
Continuing Operations $ - $ 0.04 $ (1.93) $ 0.02
Discontinued Operations - (0.19) 2.28 (0.05)
Extraordinary Item (0.06) - (0.21) -
------- ------- ------- -------
Primary earnings(loss) per common share $( 0.06) $ (0.15) $ 0.14 $ (0.03)
======= ======= ======= =======
Fully diluted earnings (loss) per common share:
Continuing Operations $ - $ 0.06 $ (1.93) $ 0.10
Discontinued Operations - (0.18) 2.28 (0.05)
Extraordinary Item (0.06) - (0.21) -
------- ------- ------- -------
Fully diluted earnings (loss) per
common share $ (0.06) $ (0.12) $ 0.14 $ 0.05
======= ======= ======= =======
Cash dividends per common share $ 0.05 $ 0.05 $ 0.15 $ 0.15
======= ======= ======= =======
</TABLE>
See Notes to the Condensed Consolidated Financial Statements
-3-
<PAGE> 4
WESTINGHOUSE ELECTRIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
------------------------------------
(in millions)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
ASSETS (unaudited)
- ------
<S> <C> <C>
Cash and cash equivalents $ 112 $ 196
Customer receivables 1,418 1,494
Inventories (note 6) 863 852
Uncompleted contracts costs over related billings 730 584
Program rights 419 301
Deferred income taxes 652 547
Prepaid and other current assets 300 261
------ -------
Total current assets 4,494 4,235
Plant and equipment, net 1,850 1,924
Intangible and other noncurrent assets (note 7) 8,782 8,827
Net assets of Discontinued Operations (note 9) 217 1,669
------- -------
Total assets $15,343 $16,655
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Short-term debt $ 514 $ 309
Current maturities of long-term debt 2 330
Accounts payable 629 829
Uncompleted contracts billings over related costs 442 322
Other current liabilities (note 8) 2,187 2,123
------- -------
Total current liabilities 3,774 3,913
Long-term debt 4,780 7,226
Other noncurrent liabilities (note 8) 5,063 3,997
------- -------
Total liabilities 13,617 15,136
------- -------
Contingent liabilities and commitments (note 10)
Minority interest in equity of consolidated
subsidiaries 13 11
Shareholders' equity (note 11):
Preferred stock, $1.00 par value (25 million
shares authorized):
Series A preferred (no shares issued) - -
Series C conversion preferred (4 million
shares issued) 4 4
Common stock, $1.00 par value (630 million
shares authorized, 426 million shares issued) 426 426
Capital in excess of par value 1,808 1,848
Common stock held in treasury (588) (720)
Minimum pension liability adjustment (1,050) (1,220)
Cumulative foreign currency translation
adjustments (2) (11)
Retained earnings 1,115 1,181
------- -------
Total shareholders' equity 1,713 1,508
------- -------
Total liabilities and shareholders' equity $15,343 $16,655
======= =======
</TABLE>
See Notes to the Condensed Consolidated Financial Statements
-4-
<PAGE> 5
WESTINGHOUSE ELECTRIC CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
(in millions) (unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1996 1995
---- ----
<S> <C> <C>
Cash used for operating activities
of Continuing Operations $ (567) $ (208)
Cash provided (used) for operating activities
of Discontinued Operations (312) 57
Cash flows from investing activities:
Business acquisitions (115) (84)
Business divestitures 3,652 643
Liquidation of assets of Discontinued Operations 83 329
Capital expenditures (146) (156)
Liquidations of trust investments - 305
Other - 7
------- -------
Cash provided by investing activities 3,474 1,044
------- -------
Cash flows from financing activities:
Bank revolver borrowings 14,337 1,065
Bank revolver repayments (11,662) (1,617)
Net change in other short-term debt (336) (73)
Repayments of other long-term debt (5,012) (234)
Treasury stock reissued 93 55
Dividends paid (98) (127)
Bank fees paid and other (12) (136)
------- -------
Cash used for financing activities (2,690) (1,067)
------- -------
Decrease in cash and cash equivalents (95) (174)
Cash and cash equivalents at beginning of period 226 344
------- -------
Cash and cash equivalents at end of period $ 131 $ 170
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid:
Continuing Operations $ 363 $ 134
Discontinued Operations 41 99
------- -------
Total interest paid $ 404 $ 233
======= =======
Income taxes paid $ 64 $ 58
======= =======
</TABLE>
See Notes to the Condensed Consolidated Financial Statements
-5-
<PAGE> 6
WESTINGHOUSE ELECTRIC CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------
1. GENERAL
The condensed consolidated financial statements include the accounts of
Westinghouse Electric Corporation (Westinghouse) and its subsidiary companies
(together, the Corporation) after elimination of intercompany accounts and
transactions.
When reading the financial information contained in this Quarterly Report,
reference should be made to the financial statements, schedules and notes
contained in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995 and the Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996. Certain amounts pertaining to the nine months
ended September 30, 1995 and the year ended December 31, 1995 have been
restated or reclassified for comparative purposes. Reference also should be
made to the Corporation's Current Reports on Form 8-K dated May 2, 1996 and
September 19, 1996 containing certain restated financial information.
In March 1996, the Corporation adopted a plan to exit its environmental
services line of business that was previously reported as part of the
Government & Environmental Services business segment in Continuing Operations.
As a result, financial information previously issued has been restated to give
effect to the classification of the environmental services business as a
Discontinued Operation in accordance with Accounting Principles Board Opinion
No. 30, "Reporting the Results of Operations--Reporting the Effects of Disposal
of a Segment of a Business and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions" (APB 30). See note 9 to the financial
statements. The Corporation previously classified as Discontinued Operations,
WCI Communities, Inc. (WCI), The Knoll Group (Knoll), the defense and
electronic systems business, the Distribution and Control Business Unit (DCBU),
Westinghouse Electric Supply Company (WESCO), and the financial services
business.
In the opinion of management, the Condensed Consolidated Financial Statements
include all material adjustments necessary to present fairly the Corporation's
financial position, results of operations and cash flows. Such adjustments are
of a normal recurring nature. The results for this interim period are not
necessarily indicative of results for the entire year or any other interim
period.
2. RESTRUCTURING, LITIGATION, AND OTHER MATTERS
During the first half of 1996, the Corporation took several actions to
streamline its businesses and recognize the financial impact of certain
matters. Certain of these actions resulted in the recognition of charges to
operating profit. Costs for new restructuring projects of $125 million were
recognized primarily for consolidation of facilities and the separation of
employees. A comprehensive review of the Corporation's environmental
remediation obligations resulted in a charge to operating profit of $175
million (see note 10). A charge of $486 million was recognized for pending
litigation matters. As discussed in note 3, impairment of $54 million was
recognized based on a modification of the projected recoverability of certain
long-lived assets. Other costs of $30 million recognized in the first quarter
generally relate to previously divested businesses.
During the first nine months of 1995, the Corporation took a charge of $77
million for restructuring actions. Also during this period, a charge of $45
million was recognized for the settlement of the Philippines litigation.
3. IMPAIRMENT OF LONG-LIVED ASSETS
During the first quarter of 1996, the Corporation adopted Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." SFAS No. 121
requires that long-lived assets, including related goodwill, be reviewed for
impairment and written down to their estimated fair value whenever events or
changes in circumstances indicate that the carrying value may not be
recoverable.
The adoption of SFAS No. 121 resulted in an impairment charge included in
operating profit of $54 million.
-6-
<PAGE> 7
4. OTHER INCOME AND EXPENSES, NET (in millions) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net gain (loss) on disposition of assets $ 12 $ 126 $ (138) $ 121
Miscellaneous, net 13 10 24 14
----- ----- ------ ------
Other income (expenses), net $ 25 $ 136 $ (114) $ 135
===== ===== ====== ======
</TABLE>
The net loss on disposition of assets for the nine months ended September 30,
1996, includes an estimated loss of $152 million resulting from a decision to
sell certain miscellaneous non-strategic assets and a third quarter gain of $12
million from the sale of an equity investment. The net gain for the nine months
ended September 30, 1995 includes third quarter gains of $115 million from the
sale of the Corporation's interest in MICROS Systems, Inc. and $13 million from
the sale of an equity investment.
5. EXTRAORDINARY ITEM
On March 1, 1996 and August 29, 1996, the Corporation extinguished prior to
maturity $3,565 million and $3,195 million of debt respectively, under the $7.5
billion credit facility. These repayments represent all outstanding borrowings
under this facility. As a result of the early extinguishment of debt and the
writeoff of related debt issue costs, the Corporation incurred an extraordinary
loss of $93 million, net of a tax benefit of $60 million for the nine months
ended September 30, 1996.
6. INVENTORIES (in millions)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(unaudited)
<S> <C> <C>
Raw materials $ 114 $ 88
Work in process 554 446
Finished goods 95 122
------- -------
763 656
Long-term contracts in process 1,043 1,002
Progress payments to subcontractors 48 21
Recoverable engineering and development costs 110 60
Less: Inventoried costs related to contracts
with progress billing terms (1,101) (887)
------- -------
Inventories, net $ 863 $ 852
======= =======
</TABLE>
7. INTANGIBLE AND OTHER NONCURRENT ASSETS (in millions)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(unaudited)
<S> <C> <C>
Deferred income taxes $ 1,187 $ 1,209
Goodwill 5,155 5,303
FCC licenses 1,225 1,242
Other intangible assets 157 162
Intangible pension asset 54 63
Deferred charges 202 353
Joint ventures and affiliates 92 70
Noncurrent receivables 378 172
Program rights 138 21
Other 194 232
------- -------
Total intangible and other noncurrent assets $ 8,782 $ 8,827
======= =======
</TABLE>
-7-
<PAGE> 8
8. OTHER CURRENT AND NONCURRENT LIABILITIES (in millions)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995*
------------------ -----------------
(unaudited)
<S> <C> <C>
Other current liabilities:
- -------------------------
Accrued employee compensation $ 269 $ 244
Income taxes currently payable 263 170
Liabilities for talent and program rights 280 254
Accrued product warranty 62 58
Accrued taxes, interest, and insurance 215 202
Accrued restructuring costs 113 153
Liability for asset dispositions 50 93
Accrued expenses 724 802
Environmental liabilities 47 47
Other 164 100
------- -------
Total other current liabilities $ 2,187 $ 2,123
======= =======
Other noncurrent liabilities:
- ----------------------------
Postretirement and postemployment benefits $ 1,307 $ 1,311
Pension liability 1,622 1,426
Accrued restructuring 92 8
Liability for asset dispositions 126 19
Liabilities for talent and program rights 51 47
Accrued expenses 836 661
Environmental liabilities 433 238
Other 596 287
------- -------
Total other noncurrent liabilities $ 5,063 $ 3,997
======= =======
</TABLE>
* Certain amounts have been reclassified for comparative purposes.
9. DISCONTINUED OPERATIONS
During the first quarter of 1996, the Corporation completed the sales of both
Knoll and the defense and electronic systems business. These sales resulted in
a combined after-tax gain of $1.2 billion. The net proceeds from these
transactions were used to repay a significant portion of the debt incurred to
finance the acquisition of CBS, all of which was classified as debt of
Continuing Operations.
In March 1996, the Corporation adopted a plan to exit its environmental
services line of business included in its former Government & Environmental
Services segment. The Corporation recorded an after-tax charge for the
estimated loss on disposal of $146 million.
During the third quarter of 1995, the Corporation exited its land development
business segment by selling WCI. The proceeds were used to repay debt of
Discontinued Operations.
In November 1992, the Corporation announced a plan that included exiting
Financial Services through the disposition of its $9 billion asset portfolios
and selling DCBU and WESCO. The Corporation has since completed the sales of
DCBU and WESCO and liquidated substantially all of Financial Services real
estate and corporate portfolios. The liquidation of Financial Services leasing
portfolio is expected to occur over a longer period of time in accordance with
its contractual terms.
-8-
<PAGE> 9
The operating results for Discontinued Operations for the nine months ended
September 30, 1996 and 1995 are grouped by measurement date as follows:
<TABLE>
<CAPTION>
Discontinued Operation Measurement Date
- --------------------------------------------------------------------------------
<S> <C>
Environmental Services March 1996
Defense and Electronic Systems December 1995
Knoll December 1995
WCI July 1995
Financial Services November 1992
</TABLE>
Operating results for a discontinued operation subsequent to its measurement
date are recorded directly to the liability for estimated loss on disposal.
OPERATING RESULTS OF DISCONTINUED OPERATIONS
(in millions) (unaudited)
For the nine months ended September 30, 1996
<TABLE>
<CAPTION>
Measurement Date
---------------------------------------
1996 1995 1992 Total
---- ---- ---- -----
<S> <C> <C> <C> <C>
Sales of products and services $ 173 $ 352 $ 19 $ 544
Loss before income taxes (15) (15)
Income tax benefit 5 5
Net loss prior to measurement date (10) (10)
Operating losses after measurement date
charged to liability for estimated
loss on disposal (58) (14) (13) (85)
</TABLE>
For the nine months ended September 30, 1995
<TABLE>
<CAPTION>
Measurement Date
---------------------------------------
1996 1995 1992 Total
---- ---- ---- -----
<S> <C> <C> <C> <C>
Sales of products and services $ 223 $2,295 $ 24 $2,542
Income (loss) before income taxes (16) 120 104
Income tax benefit (expense) 6 (55) (49)
Net income (loss) prior to measurement
date (10) 65 55
Operating losses after measurement date
charged to liability for estimated
loss on disposal (45) (45)
</TABLE>
-9-
<PAGE> 10
The assets and liabilities of Discontinued Operations have been separately
classified on the consolidated balance sheet as net assets of Discontinued
Operations. A summary of these assets and liabilities follows:
NET ASSETS OF DISCONTINUED OPERATIONS
<TABLE>
<CAPTION>
(in millions) September 30, 1996 December 31, 1995
------------------ -----------------
(unaudited)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 19 $ 30
Receivables 40 448
Inventories - 283
Portfolio investments 869 901
Other investments 166 212
Other assets 234 1,200
Deferred income taxes - 432
------ ------
Total assets -- Discontinued Operations 1,328 3,506
------ ------
LIABILITIES:
Short-term debt - 81
Current maturities of long-term debt 28 265
Liability for estimated loss on disposal 640 212
Long-term debt 365 157
Other liabilities 39 1,122
Deferred income taxes 39 -
------ ------
Total liabilities -- Discontinued Operations 1,111 1,837
------ ------
Net assets of Discontinued Operations $ 217 $1,669
====== ======
</TABLE>
Portfolio investments consist primarily of receivables related to the leasing
portfolio of Financial Services. Also included are real estate properties and
investments in leasing partnerships.
The leasing portfolio is expected to liquidate through 2015 in accordance with
contractual terms. Leasing receivables consist of direct financing and
leveraged leases. At September 30, 1996 and December 31, 1995, 83% and 84%,
respectively, related to aircraft and 17% and 16%, respectively, related to
cogeneration facilities.
Other investments include mortgage receivables and other notes or securities
acquired or retained in divestiture transactions. Other assets of Discontinued
Operations relate primarily to the environmental services businesses, which are
in the process of being divested.
10. CONTINGENT LIABILITIES AND COMMITMENTS
Litigation
- ----------
Steam Generators
The Corporation has been defending various lawsuits brought by utilities
claiming a substantial amount of damages in connection with alleged tube
degradation in steam generators sold by the Corporation as components of
nuclear steam supply systems. Since 1993, settlement agreements have been
entered resolving ten litigation claims. These agreements generally require the
Corporation to provide certain products and services at prices discounted at
varying rates. Two cases were resolved in favor of the Corporation after trial
or arbitration. One active steam generator lawsuit remains.
-10-
<PAGE> 11
The Corporation is also a party to five tolling agreements with utilities or
utility plant owners' groups which have asserted steam generator claims. The
tolling agreements delay initiation of any litigation for various specified
periods of time and permit the parties time to engage in discussion.
Securities Class Actions - Financial Services
The Corporation is defending derivative and class action lawsuits alleging
federal securities law and common law violations arising out of purported
misstatements or omissions contained in the Corporation's public filings
concerning the financial condition of the Corporation and certain of its former
subsidiaries in connection with charges to earnings of $975 million in 1990 and
$1,680 million in 1991 and a public offering of Westinghouse common stock in
1991. The court dismissed both the derivative claim and the class action claims
in their entirety. These dismissals were appealed. In July 1996, the United
States Court of Appeals for the Third Circuit (the Circuit Court) affirmed the
court's dismissal of the derivative claim. The Circuit Court also affirmed in
part and reversed in part the class action claims. Those portions of the class
action claims which were reversed have been remanded to the Western District of
Pennsylvania for further proceedings.
Asbestos
The Corporation is a defendant in numerous lawsuits claiming various
asbestos-related personal injuries, which allegedly occurred from use or
inclusion of asbestos in certain of the Corporation's products, generally in
the pre-1970 time period. Typically, these lawsuits are brought against
multiple defendants. The Corporation was neither a manufacturer nor a producer
of asbestos and is oftentimes dismissed from these lawsuits on the basis that
the Corporation has no relationship to the products in question or the claimant
did not have exposure to the Corporation's product. At September 30, 1996, the
Corporation had approximately 97,000 claims outstanding against it.
In court actions which have been resolved, the Corporation has prevailed in the
majority of the asbestos claims and has resolved others through settlement.
Furthermore, the Corporation has brought suit against certain of its insurance
carriers with respect to these asbestos claims. Under the terms of a settlement
agreement resulting from this suit, carriers that have agreed to the settlement
are now reimbursing the Corporation for a substantial portion of its current
costs and settlements associated with asbestos claims.
Litigation is inherently uncertain and always difficult to predict. Substantial
damages are sought in the steam generator claims, the securities class action
and certain groupings of asbestos claims and, although management believes a
significant adverse judgment is unlikely, any such judgment could have a
material adverse effect on the Corporation's results of operations for a
quarter or a year. However, based on its understanding and evaluation of the
relevant facts and circumstances, management believes that the Corporation has
meritorious defenses to the litigation described above and that the Corporation
has adequately provided for costs arising from potential settlement of these
matters when in the best interest of the Corporation. Management believes that
the litigation should not have a material adverse effect on the financial
condition of the Corporation.
Environmental Matters
- ---------------------
Compliance with federal, state, and local laws and regulations relating to the
discharge of pollutants into the environment, the disposal of hazardous wastes
and other related activities affecting the environment have had and will
continue to have an impact on the Corporation. It is difficult to estimate the
timing and ultimate costs to be incurred in the future due to uncertainties
about the status of laws, regulations and technology, the adequacy of
information available for individual sites, the extended time periods over
which site remediation occurs, and the identification of new sites. The
Corporation has, however, recognized an estimated liability, measured in
current dollars, for those sites where it is
-11-
<PAGE> 12
probable that a loss has been incurred and the amount of the loss can be
reasonably estimated. The Corporation recognizes changes in estimates as new
remediation requirements are defined or as more information becomes available.
With regard to remedial actions under federal and state Superfund laws, the
Corporation has been named a potentially responsible party (PRP) at numerous
sites located throughout the country. At many of these sites, the Corporation
is either not a responsible party or its site involvement is very limited or de
minimis. However, the Corporation may have varying degrees of cleanup
responsibilities at approximately 90 sites, including the sites located in
Bloomington, Indiana. The Corporation believes that any liability incurred for
cleanup at these sites will be satisfied over a number of years and, in many
cases, the costs will be shared with other responsible parties. These sites
include certain sites for which the Corporation, as part of an agreement for
sale, has retained obligations for remediation of environmental contamination
and for other Comprehensive Environmental Response Compensation and Liability
Act (CERCLA) issues.
In the second quarter of 1996, the Corporation and its external consultants
completed a study to evaluate the Corporation's environmental remediation
strategies. Based on the costs associated with the most probable alternative
remediation strategy for the above mentioned sites, including Bloomington, the
Corporation has an accrued liability of $480 million, including $175 million
that was recognized in the second quarter of 1996. Depending on the remediation
alternatives ultimately selected, the costs related to these sites could differ
from the amounts currently accrued. The accrued liability includes $355 million
for site investigation and remediation, and $125 million for post closure and
monitoring activities. Management anticipates that the majority of expenditures
for site investigation and remediation will occur during the next 5 - 10 years.
Expenditures for post closure and monitoring activities will be made over
periods up to 30 years.
Commitments -- Continuing Operations
- ------------------------------------
In the ordinary course of business, standby letters of credit and surety bonds
are issued on behalf of the Corporation related primarily to performance
obligations under contracts with customers.
The Corporation routinely enters into commitments to purchase the rights to
broadcast programs, including feature films and sporting events. These
contracts permit the broadcast of such properties for various periods ending no
later than April 2002. As of September 30, 1996, the Corporation was committed
to make payments totalling $3,555 million under such broadcasting contracts.
Commitments -- Discontinued Operations
- --------------------------------------
Financial Services commitments with off-balance-sheet credit risk represent
financing commitments to provide funds, including loan or investment
commitments, guarantees, standby letters of credit and standby commitments,
generally in exchange for fees. The remaining commitments have fixed expiration
dates from 1996 through 2002. At September 30, 1996, commitments totalled $40
million compared to $45 million at year-end 1995. Management expects these
commitments to expire unfunded or be funded with the resulting assets being
sold shortly after funding.
11. SHAREHOLDERS' EQUITY
As a result of the first quarter 1996 sale of the defense and electronic
systems business and the buyer's assumption of certain pension obligations, the
Corporation's unfunded accumulated benefit obligation was reduced by
approximately $400 million. This decrease in the unfunded pension liability
increased shareholders' equity by $170 million by reducing the amount of
minimum pension liability required to be recognized.
-12-
<PAGE> 13
The Corporation's Series C Conversion Preferred Stock will automatically
convert into 36,000,000 shares of common stock on June 1, 1997 unless called on
May 30, 1997 by the Corporation or converted at any time prior to June 1, 1997
by the holder. In accordance with prevalent practice at the time of sale, these
shares were treated as outstanding common stock for the calculation of earnings
per share. If the Series C Preferred had been treated as common stock
equivalents for the calculation of earnings per share, the Corporation's
primary earnings per share for the three months and nine months ended September
30, 1996 would have been a loss of 10 cents and income of 7 cents compared to
losses for the same periods last year of 19 cents and 13 cents. Fully diluted
earnings per share for those same periods would have been a loss of 10 cents
and income of 7 cents compared to losses for the same periods last year of 16
cents and 3 cents.
On June 20, 1996, the Corporation announced a definitive merger agreement with
Infinity Broadcasting Corporation (Infinity) under which Infinity shareholders
will receive 1.71 shares of Westinghouse common stock in exchange for each
share of Infinity stock. This transaction involves the issuance by the
Corporation of approximately 205 million additional shares assuming the
exercise of all existing Infinity options and warrants. The consummation of the
merger is contingent on certain regulatory reviews and various approvals,
including the Federal Communications Commission and certain shareholder actions
of both Westinghouse and Infinity. Separate meetings for the shareholders of
the companies are scheduled for December 10, 1996. Closing is likely to occur
before the end of 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
During the third quarter of 1996, the performance of the Corporation's radio
group continued to outpace the market. The group's outstanding results support
the Corporation's decision to focus on this core business and acquire Infinity
Broadcasting Corporation (Infinity). Following the second quarter 1996
announcement of a definitive merger agreement with Infinity, the Corporation
began pursuing all necessary reviews and approvals, including those of the
Federal Communications Commission and the shareholders of both companies. Upon
consummation of the merger, the Corporation will issue approximately 205 million
additional shares of common stock in exchange for all existing Infinity shares,
options, and warrants. Separate meetings of the shareholders of the companies
are scheduled for December 10, 1996. Closing is likely to occur by the end of
1996.
In August 1996, the Corporation completed a new $5.5 billion credit facility
with significantly more favorable terms to replace its $7.5 billion credit
facility. The repayment of the outstanding debt under the previous facility
resulted in a $30 million after-tax extraordinary loss from a non-cash writeoff
of deferred financing fees for the early extinguishment of debt.
Progress continued during the quarter in the assessment of legal, financial,
tax, and human resources issues associated with separating the media and
industrial businesses in light of the dramatic portfolio shift. An announcement
of the Corporation's strategy is expected in the fourth quarter of 1996.
The dramatic shift in the business portfolio and future direction of the
Corporation essentially began with the $5.4 billion acquisition of CBS, Inc.
(CBS) in November 1995. During the first quarter of 1996, the Corporation
completed the sales of its defense and electronic systems business and The
Knoll Group (Knoll), its office furnishings unit, and recorded a combined
after-tax gain of $1.2 billion. The cash proceeds from these divestitures,
which totalled nearly $3.6 billion, were used to repay ahead of schedule a
significant portion of the debt incurred to finance the CBS acquisition.
The Corporation further streamlined its businesses and recognized the financial
impact of legacies in the first quarter of 1996. Management adopted a plan to
exit its environmental services line of business resulting in the transfer of
the environmental services businesses to Discontinued Operations and the
recognition
-13-
<PAGE> 14
of an estimated loss on disposal. The Corporation recognized costs
associated with additional restructuring actions and outstanding litigation
matters. The Corporation also recognized impairment of assets that will
continue to be used in the business as well as certain assets that have been
identified for sale, and modified its application of contract accounting
principles. In the second quarter of 1996, the Corporation recognized
additional costs associated with its environmental remediation activities. The
special items included in the Corporation's results for the first nine months
of 1996 are summarized below:
SPECIAL ITEMS INCLUDED IN RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 (in millions except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Pre-Tax After-Tax Per-Share
Amount Amount Impact
Continuing Operations: ------- --------- ---------
<S> <C> <C> <C>
Operating Profit:
Restructuring $ (125)
Litigation matters (486)
Impairment of assets (54)
Environmental remediation activities (175)
Contract accounting adjustments (128)
Other (30)
------
Total impact on operating profit (998) $(663)
Other income and expense:
Loss on assets held for sale (152) (101)
------ -----
Total impact on Continuing Operations $(1,150) (764) $(1.73)
=======
Discontinued Operations:
Estimated loss on disposal of
environmental services business (146)
Gain on disposal of the defense and
electronic systems business and Knoll 1,164
-----
Net gain on disposal of businesses 1,018 2.30
Extraordinary Item:
Loss on early extinguishment of debt (93) (0.21)
----- ------
Net amount of special items $ 161 $ 0.36
===== ======
</TABLE>
The special items included in the Corporation's results for the first nine
months of 1995 are summarized below:
SPECIAL ITEMS INCLUDED IN RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995 (in millions except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Pre-Tax After-Tax Per-Share
Amount Amount Impact
Continuing Operations: ------- --------- ---------
<S> <C> <C> <C>
Operating Profit:
Restructuring $ (77)
Litigation matters (45)
------
Total impact on operating profit (122) $ (76)
Other income and expense:
Gain on the sale of an investment 115 66
------ -----
Total impact on Continuing Operations $ (7) (10) $ (0.03)
======
Discontinued Operations:
Estimated loss on disposal of WCI
Communities, Inc. (76) (0.19)
----- ------
Net amount of special items $ (86) $ (0.22)
===== =======
</TABLE>
-14-
<PAGE> 15
Net income for the third quarter of 1996 was a loss of $28 million, or $0.06
per share, compared to a loss of $52 million, or $0.15 per share for the 1995
third quarter. Income from Continuing Operations for the 1996 third quarter was
$2 million, or $0.00 per share, compared to $27 million, or $0.04 per share for
the 1995 third quarter. There were no special items in income from Continuing
Operations for the third quarter of 1996. Excluding the special items in the
1995 table above, the majority of which were recognized in the 1995 third
quarter, income from Continuing Operations was $33 million, or $0.06 per share
for the 1995 third quarter.
Net income for the nine months ended September 30, 1996 was $64 million, or
$0.14 per share, compared to $22 million, or a loss of $0.03 per share for the
1995 period. Continuing Operations reported a loss of $851 million for the
first nine months of 1996, compared to income of $43 million for the 1995
period. Excluding special items, Continuing Operations' loss was $87 million
for the first nine months of 1996, compared to income of $53 million for the
1995 period. On a per share basis, excluding special items, Continuing
Operations reported a loss of $0.20 per share compared to income of $0.05 per
share for the same period last year. The calculation of the per share amounts
for the 1995 period includes a reduction for dividends on the Series B
Preferred stock, which converted to common stock on September 1, 1995.
Interest expense was significantly higher in the 1996 periods reflecting the
cost of the debt that was incurred to finance the CBS acquisition. The
repayment of a significant portion of that debt in March 1996 with proceeds
from the sale of certain businesses reduced the magnitude of the increase in
interest costs. In addition, higher amortization of intangible assets,
principally FCC licenses and goodwill acquired with CBS, have and will continue
to impact earnings.
-15-
<PAGE> 16
RESULTS OF OPERATIONS
The following represents the segment results for the Corporation's
Continuing Operations for the three months and nine months ended September
30, 1996 and 1995.
<TABLE>
<CAPTION>
Segment Results ($ in millions)(unaudited)
------------------------------------------
Operating Profit
(Loss)
Sales of Products Operating Profit Excluding
& Services (Loss) Special Charges
----------------- ---------------- ----------------
Three Months Ended
September 30 1996 1995 1996 1995 1996 1995
- ------------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Broadcasting:
Television $ 169 $ 82 $ 47 $ 26 $ 47 $ 26
Network 550 - 24 - 24 -
Radio 136 42 42 12 42 12
Other Broadcasting 55 42 (31) 5 (31) 5
------ ------ ------ ------ ------ ------
Total Broadcasting 910 166 82 43 82 43
Power Systems:
Energy Systems 280 306 15 13 15 14
Power Generation 527 395 5 (23) 5 5
Other Power Systems (38) (34) (20) (61) (20) (16)
------ ------ ------ ------ ------ ------
Total Power Systems 769 667 - (71) - 3
Thermo King 237 271 46 45 46 45
Government Operations 27 38 18 25 18 25
Communications &
Information Systems 83 79 (6) - (6) 3
Corporate & Other 31 85 (56) (88) (56) (49)
Intersegment sales (17) (22) - - - -
------ ------ ------ ------ ------ ------
TOTAL $2,040 $1,284 $ 84 $ (46) $ 84 $ 70
====== ====== ====== ====== ====== ======
</TABLE>
-16-
<PAGE> 17
<TABLE>
<CAPTION>
Segment Results ($ in millions)(unaudited)
------------------------------------------
Operating Profit
(Loss)
Sales of Products Operating Profit Excluding
& Services (Loss) Special Charges
----------------- ---------------- -----------------
Nine Months Ended
September 30 1996 1995 1996 1995 1996 1995
- ----------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Broadcasting:
Television $ 583 $ 246 $ 191 $ 94 $ 191 $ 94
Network 1,997 - 111 - 111 -
Radio 402 135 109 35 109 35
Other Broadcasting 146 119 (135) 10 (94) 10
------ ------ ------ ------ ------ ------
Total Broadcasting 3,128 500 276 139 317 139
Power Systems:
Energy Systems 815 922 (9) 46 23 53
Power Generation* 1,269 1,157 (240) (67) (57) (39)
Other Power Systems (125) (99) (343) (92) (54) (47)
------ ------ ------ ------ ------ ------
Total Power Systems* 1,959 1,980 (592) (113) (88) (33)
Thermo King 759 828 137 136 137 136
Government Operations 78 99 49 59 49 59
Communications &
Information Systems 251 230 (48) 1 (7) 4
Corporate & Other 98 357 (624) (146) (212) (107)
Intersegment sales (53) (63) - - - -
------ ------ ------ ------ ------ ------
TOTAL* $6,220 $3,931 $ (802) $ 76 $ 196 $ 198
====== ====== ====== ====== ====== ======
</TABLE>
* First quarter 1996 sales were reduced by a $180 million one-time adjustment
to previous accounting for certain long-term contracts.
The Corporation's reported sales increased $756 million, or 59%, for the third
quarter of 1996 compared to the 1995 third quarter and $2,289 million, or 58%
for the first nine months of 1996 compared to the same period of 1995.
Adjusting for the impact of the CBS acquisition and excluding the effects of
the special one-time accounting adjustment at Power Generation, sales were flat
for the quarter and nine month periods. The improvements achieved by certain
businesses, including Power Generation and Broadcasting, were essentially
offset by the loss of sales from Energy Systems, Thermo King, and certain
miscellaneous businesses that were divested in 1995, including MICROS Systems,
Inc. (MICROS).
Generally, operating profits for many of the Corporation's major businesses
were consistent with the prior-year results. The radio group of the
Broadcasting segment reported very strong results for the third quarter and
first nine months of 1996 with operating profit up significantly over the 1995
periods. Although profits were flat for Power Systems for the third quarter of
1996 compared to the same quarter last year, reduced profitability for the
Power Systems segment for the nine months continued to reflect the difficult
market conditions under which these businesses are operating. Reduced
profitability in Government Operations due to lower revenues, timing of award
fees, and bid and proposal costs, as well as profit deterioration in the
wireless communications business of Communications and Information Systems
impacted operating profit for the quarter and first nine months of 1996. The
Corporation's continuing pension obligation for retired individuals who were
part of the defense and electronic systems business sold in March 1996
contributed, in part, to the decrease in operating profit for the quarter and
nine months.
-17-
<PAGE> 18
Broadcasting
Due to the acquisition of CBS in November 1995, the results for Broadcasting
for the third quarter and first nine months of 1996 include CBS financial data,
while the 1995 periods do not. Where appropriate, the discussion below provides
a comparison of the actual results for the third quarter and first nine months
of 1996 with the proforma combined Group W and CBS actual results for the third
quarter and first nine months of 1995.
Reported revenues for the television group reflect the ownership of 14
television stations during the third quarter of 1996 compared to eight stations
during the same period last year. For the first six months of 1996 and 1995,
revenues reflect the ownership of 15 stations and 5 stations, respectively. On
a proforma combined basis, revenues for the stations fell due to lower network
ratings and affiliation changes at certain stations. Operating profit on a
proforma basis also declined reflecting the lower revenues and affiliation
changes, although cost improvements at the stations helped lessen the impact.
On July 1, 1996, WPRI, the Providence, Rhode Island television station acquired
with CBS, was sold. No gain or loss was reported on this sale.
The network, on a proforma combined basis, experienced increased revenues of 2%
and 5%, respectively, for the third quarter and first nine months of 1996
compared to the same periods last year. Higher prices and increased syndication
revenues were the primary driving factors. Operating profit also increased as
the favorable effects of higher prices and increased syndication revenues
offset lower ratings and higher costs associated with coverage of the
presidential election, advertising and promotion for the new primetime season,
and affiliate compensation.
The reported results for the radio group included 39 radio stations for the
1996 periods, including two Chicago radio stations acquired January 2, 1996,
compared to 16 stations for the 1995 periods. On a proforma combined basis,
revenues grew approximately 14% for the third quarter and 11% for the first
nine months of 1996 compared to last year. Operating profit increased 83% and
54% for the same periods on the higher revenues coupled with benefits from cost
reduction programs.
Other Broadcasting includes operating results for Group W Satellite
Communications (GWSC) and Eyemark Entertainment, costs for the Broadcasting
group's headquarters, and amortization of all goodwill arising from the CBS
acquisition. Eyemark combines the activities of Group W Productions, and MAXAM,
a distribution and production company acquired in February 1996. For the first
nine months of 1996, Other Broadcasting also included a $41 million
restructuring charge for Group W's actions to obtain operational synergies
between CBS and Group W. The cost of the CBS actions was recognized on the CBS
opening balance sheet at the date of the acquisition. Revenues for GWSC showed
strong increases over the prior-year periods due to certain cable channel and
network services acquired from CBS coupled with improved advertising revenues.
Operating profit for GWSC for the third quarter of 1996 decreased compared to
the same period of 1995 due to expenditures for the startup of a new cable
program and the acquisition of a Spanish-language 24-hour news service,
TeleNoticias. Operating profit for GWSC for the nine months of 1996 increased
over the 1995 period due to the increased revenues and delayed marketing
expenditures, offset partially by the cable expenditures during the quarter.
While sales for production operations increased for the quarter and first nine
months of 1996 compared to the 1995 periods, operating losses also increased
for the same periods due to absorbing the MAXAM operations. Goodwill
amortization totalled $30 million for the third quarter and $90 million for the
first nine months of 1996.
For the entire Broadcasting group, earnings before interest, taxes,
depreciation, and amortization (EBITDA) totalled $149 million for the third
quarter of 1996 and, excluding a restructuring charge, $526 million for the
first nine months of 1996. On a proforma combined basis, EBITDA for the 1995
periods was $119 million and $429 million. EBITDA differs from operating cash
flows for the group primarily because it does not consider certain changes in
assets and liabilities from period to period and it includes the impact of
purchase price accounting adjustments related to programming rights of $44
million and $148 million for the third quarter and first nine months of 1996.
-18-
<PAGE> 19
Power Systems
Power Systems includes results for the Energy Systems and Power Generation
business units.
Energy Systems sales decreased for the third quarter and first nine months of
1996 compared to the same periods last year. Sales decreased $26 million for
the third quarter and $107 million for the first nine months of 1996. The
decrease in sales for the third quarter is primarily attributable to a decrease
in simulator sales, while the nine month period reflects lower simulator sales
as well as a reduced scope of outage services for utility customers. The
reduced scope of outage services performed this year generally results from
fewer major repair initiatives at power plants.
Operating profit for the third quarter increased slightly due to sales mix and
cost reductions. For the nine month period, operating profit declined sharply
due to the decreased revenues from the reduced scope of outage services.
Included in operating profit for the second quarter of 1996 is a charge of
$11 million for environmental remediation activities. As a result of ongoing
efforts to reduce costs, a restructuring charge of $21 million was recognized
in the first quarter of 1996. Restructuring charges of $6 million and $1
million were recorded in the second and third quarters of 1995, respectively.
Excluding these special items, operating profit for the third quarter and first
nine months of 1996 was $15 million and $23 million compared to $14 million and
$53 million in the same periods last year.
Power Generation's orders for the third quarter of 1996, although strong,
decreased $83 million compared to the prior-year period reflecting delays on
project and new apparatus orders. Orders for the first nine months of 1996
increased $167 million reflecting major international orders. Sales increased
$132 million compared to the third quarter of 1995 as a result of revenues from
previous orders for new apparatus and major projects.
The third quarter of 1995 included a charge of $28 million for restructuring.
Excluding this charge, operating profit for the third quarter of 1996 was flat
compared to the same period last year despite higher revenues due to a sales
mix change from the higher margin operating plant and service business to the
lower margin new apparatus business.
In light of changing market conditions and pricing pressures in the Power
Generation business, effective January 1, 1996, the business unit modified its
application of contract accounting principles to reflect a more conservative
approach. Accordingly, during the first quarter of 1996, a one-time accounting
adjustment was made to reduce sales by $180 million and operating profit by
$128 million. Application of the new approach is not expected to have a
material effect on any individual quarter's results. Also during the first
quarter, a $50 million restructuring charge, required primarily as a result of
a decision to close the Pensacola, Florida manufacturing facility, was
recognized. Excluding these special items, during the first nine months of
1996, sales increased $292 million and the operating loss increased $18 million
compared to the prior year. The favorable impact of the higher revenues was
more than offset by erosion of product margins and mix.
The operating loss for the third quarter of 1995 for Other Power Systems, which
primarily reflects discounts on prior litigation settlements, included a $45
million Philippines litigation settlement charge. Excluding this charge, the
operating loss for the third quarter of 1996 increased slightly compared to the
third quarter of 1995. A $289 million charge for litigation and other matters
was recognized in the first quarter of 1996. Excluding these charges, the
operating loss for the first nine months of 1996 increased slightly compared to
the same period of 1995.
Although a strong fall outage season is anticipated, Power System's
profitability for the year is likely to be below expectations due to the profit
shortfall in the first half. New equipment orders are expected to remain
strong.
-19-
<PAGE> 20
Thermo King
International orders for the third quarter of 1996 accounted for the increased
order level of $13 million compared to the 1995 third quarter, while orders for
the first nine months of 1996 decreased $47 million compared to the same period
last year. The order level for the first nine months of 1996 and revenues for
the third quarter and first nine months of 1996 declined compared to the same
periods in 1995 primarily as a result of a slowdown in the United States truck
and trailer market and reduced container volume. Operating profit for the same
periods remained flat, however, as higher margins on service parts sales,
factory productivity improvements, and other product cost improvements
mitigated the effects of the lower volume.
Government Operations
Sales for the third quarter and first nine months of 1996 decreased compared to
the same periods of 1995 primarily due to the loss of a Navy contract in late
1995. Operating profit declined for the same periods resulting from the lower
revenues, timing of fees from performance based indicators, increased bid and
proposal costs, and sales mix for the radioactive waste container business.
On August 6, 1996, the Corporation announced that a Westinghouse-led team had
been awarded a five-year contract for managing the Department of Energy's (DOE)
Savannah River Site. Also, on August 6, 1996, the DOE announced the award of
the former Westinghouse Hanford contract to Fluor Daniel Hanford, Inc. The
result of these two actions is not expected to impact operating profit for
1996, although the loss of the Hanford contract will unfavorably affect future
profits.
Communications & Information Systems
Sales increased 5% and 9% for the third quarter and first nine months of 1996
compared to the same periods last year due primarily to increased revenues in
the residential security and the communications systems business. Operating
profit, excluding a first quarter 1996 charge of $41 million for restructuring
and asset impairment and a third quarter 1995 restructuring charge of $3
million, was down slightly for the quarter and the first nine months compared
to last year. Additional strategic spending for sales branches, primarily
residential security, additional administrative costs, and profit deterioration
in wireless communications offset the higher volume.
Corporate & Other
Revenues declined in the third quarter and first nine months of 1996 compared
to last year as non-strategic businesses, including MICROS, were sold in the
second half of 1995. The operating loss for the first nine months of 1996
included $412 million for environmental remediation obligations related
primarily to businesses previously divested, restructuring, litigation
contingencies, and asset impairment. The operating loss for the third quarter
of 1995 included $39 million of restructuring charges. Corporate costs also
include costs associated with retiree pension obligations retained in certain
recent divestitures.
RESTRUCTURING AND OTHER ACTIONS
In recent years, the Corporation has restructured many businesses and its
corporate headquarters in an effort to reduce costs and remain competitive in
its markets. Restructuring activities primarily involve the separation of
employees, the closing of facilities, the termination of leases, and the
exiting of product lines. Costs for restructuring activities are limited to
incremental costs that directly result from the restructuring activities and
that provide no future benefit to the Corporation.
During the first quarter of 1996, management approved new restructuring
projects with costs totalling $125 million primarily for consolidation of
facilities and the separation of employees. As of September 30, 1996, $22
million had been expended on the 1996 programs, $14 million of which is cash.
Cash expenditures,
-20-
<PAGE> 21
which are primarily tied to announced facility consolidations, are estimated to
approximate $16 million for the remainder of 1996, $43 million for 1997, and
$33 million for 1998 and beyond.
In addition to the reserve established in the first quarter of 1996,
restructuring reserves were also established in each of the years 1993 through
1995. The employee separations included in the plans for the years 1993 and
1994 are complete. Remaining costs under those plans are essentially spent. The
employee separations included in the 1995 plan are 85% complete with the
remainder of separations to occur during 1996. Remaining total costs under this
plan of approximately $16 million represent cash expenditures, the majority of
which will occur in 1996. The CBS restructuring plan, which was adopted in
conjunction with the acquisition in 1995, is being implemented over the next
two years.
Annualized savings from the 1993, 1994, and 1995 restructuring programs other
than the CBS plan are estimated to total approximately $140 million; however,
competitive pressures causing price compression in certain of the Corporation's
markets have absorbed a significant portion of the savings achieved through
restructuring actions. Annualized savings from the 1996 plan, which generally
will not be realized in the near term, are estimated at $50 million.
The Corporation expects to continue to identify restructuring initiatives at
its business units and its Corporate headquarters in an ongoing effort to
reduce its overall cost structure and improve competitiveness. Studies are
currently underway at certain business units and at Corporate headquarters that
could result in the recognition of additional restructuring costs in the fourth
quarter of 1996.
DISCONTINUED OPERATIONS
The reshaping of the Corporation's portfolio of businesses has resulted in a
number of disposals of business segments in recent years. In November 1992, the
Corporation announced a plan that included exiting the financial services
business and selling both the Distribution and Control Business Unit (DCBU) and
Westinghouse Electric Supply Company (WESCO). The portfolio investments of
Financial Services have decreased from $8,967 million at year-end 1992, to $869
million at September 30, 1996, a decrease of $8,098 million. The remaining
assets, consisting primarily of the leasing portfolio, are expected to
liquidate through 2015 in accordance with their contractual terms. The
Corporation completed the sales of DCBU and WESCO in 1994. Under a July 1995
plan, the Corporation sold WCI Communities, Inc. (WCI), its land development
subsidiary, in 1995.
During the first quarter of 1996, the Corporation completed the sales of Knoll
and the defense and electronic systems business in accordance with a December
1995 plan and recognized a combined after-tax gain of $1,164 million. The
Corporation also adopted a plan to exit its environmental services line of
business and recorded a $146 million after-tax provision for the estimated loss
on disposal of these businesses. This estimate was based on management's
preliminary estimates of proceeds, results of operations through the disposal
date, and other relevant factors. The divestiture process is continuing
although performance of certain environmental services businesses in recent
periods is below expectations.
The liability for the estimated loss on the disposal of Discontinued
Operations, totalling $640 million at September 30, 1996, represents amounts
necessary to cover remaining costs and obligations associated with the 1992,
1995 and 1996 plans. Remaining costs include interest on debt, estimated credit
losses on the portfolio investments of financial services, and future
disposition costs and obligations relating to the environmental services
businesses, Knoll, the defense and electronic systems business, DCBU and WESCO.
These costs and related items include purchase price adjustments, transaction
costs, insurance liabilities, and potential environmental remediation costs.
Management believes that the total liability for the estimated loss on disposal
of Discontinued Operations is adequate. Any variances from estimates which may
occur for one component will be considered in conjunction with other components
in determining whether an adjustment of the total liability is necessary. The
adequacy of the liability is evaluated each quarter.
-21-
<PAGE> 22
The Corporation believes that the debt of Discontinued Operations at September
30, 1996 is supportable by the assets of Discontinued Operations and can be
repaid as the portfolio liquidates over its contractual terms.
OTHER INCOME AND EXPENSES
Other income and expenses generated income of $25 million in the third quarter
of 1996 and a loss of $114 million for the first nine months of 1996 compared
to income of $136 million and $135 million respectively, for the same periods
of 1995. During the third quarter of 1996, a gain of $12 million on the sale of
an equity investment was recognized. During the first quarter of 1996, a
comprehensive review was undertaken by the Corporation to identify for sale a
variety of non-strategic assets. A charge of $152 million was recognized at
that time for losses expected upon sale of those assets. During the third
quarter of 1995, gains of $115 million from the sale of the Corporation's
interest in MICROS and $13 million from the sale of an equity investment were
recognized.
INTEREST EXPENSE
Interest expense for Continuing Operations for the third quarter and first nine
months of 1996 was $103 million and $358 million, respectively, compared to $43
million and $138 million for the same periods of 1995. The increase in interest
expense is primarily a result of $5.4 billion of debt incurred for the
acquisition of CBS in the fourth quarter of 1995. The Corporation repaid $3,565
million of this debt in the first quarter of 1996 through proceeds from the
divestitures of Knoll and the defense and electronic systems business. This
decrease in debt was offset somewhat by additional borrowings in 1996 to cover
working capital requirements.
On August 29, 1996, the Corporation repaid $3,195 million of debt prior to its
maturity with borrowings under a new revolving credit facility with more
favorable interest rates (see Revolving Credit Facility).
INCOME TAXES
The Corporation's effective income tax rate for the third quarter and first
nine months of 1996 was tax expense of 34% and a benefit of 34%, respectively,
compared to tax expense of 40% and 32% for the same periods of 1995. Because of
the amortization of non-deductible goodwill for CBS and the impact of special
transactions, these rates can vary dramatically depending on the Corporation's
income or loss levels.
At September 30, 1996, the Corporation had recorded net deferred income tax
benefits totalling $1,800 million compared to $2,188 million at December 31,
1995. As a result of these net deferred income tax benefits, cash payments for
federal income taxes are minimal. Management believes that the Corporation will
have sufficient future taxable income to make it more likely than not that the
net deferred tax asset will be realized.
LIQUIDITY AND CAPITAL RESOURCES
Overview
The Corporation manages its liquidity as a consolidated enterprise without
regard to whether assets or debt are classified for balance sheet purposes as
part of Continuing Operations or Discontinued Operations. As a result, the
discussion below focuses on the Corporation's consolidated cash flows and
capital structure.
Late in 1995, the Corporation acquired CBS for $5.4 billion and financed the
entire purchase price with debt. In the first quarter of 1996, the Corporation
completed the sales of Knoll and the defense and electronic systems business
and repaid approximately 65% of the acquisition debt.
In an effort to continue to meet its liquidity needs, the Corporation has and
will continue to monetize non-strategic assets. In March 1996, the Corporation
adopted a plan to sell its environmental services businesses. The Corporation
also completed a comprehensive review and identified additional non-strategic
assets for sale. In total, sales of various non-strategic assets are expected
to generate cash proceeds of $300 million to $500 million.
-22-
<PAGE> 23
Operating activities of Continuing Operations required substantial cash
outflows in the first nine months of 1996. Over 60% of the cash outflows were
attributable to interest costs. Management continues to focus significant
attention on minimizing working capital requirements and improving cost
structures.
Management expects that it will have sufficient liquidity to meet ordinary
future business needs. Sources of liquidity generally available to the
Corporation include cash from operations, availability under its credit
facility, cash and cash equivalents, proceeds from sales of non-strategic
assets, borrowings from other sources, including funds from the capital
markets, and the issuance of additional capital stock.
Operating Activities
The following table provides a reconciliation of net income to cash used by
operating activities of Continuing Operations for the nine months ended
September 30, 1996 and 1995:
CASH FLOWS FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS
(in millions) (unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1996 1995
---- ----
<S> <C> <C>
Net income (loss) from Continuing Operations $ (851) $ 43
Adjustments to reconcile net income (loss) from
Continuing Operations to net cash used for
operating activities:
Depreciation and amortization 327 145
Losses (gains) on asset dispositions 138 (121)
Noncash restructuring charges 30 6
Other noncash provisions and accounting
adjustments 34 -
Changes in assets and liabilities, net of
effects of acquisitions and divestitures
of businesses:
Receivables, current and noncurrent 142 28
Inventories (141) 18
Progress payments net of costs on
uncompleted contracts (26) (272)
Accounts payable (203) (102)
Deferred and current income taxes (13) (67)
Program rights (141) -
Other assets and liabilities 137 114
------ ------
Cash used for operating activities
of Continuing Operations $ (567) $ (208)
====== ======
</TABLE>
The operating activities of Continuing Operations used $567 million of cash
during the first nine months of 1996, an increase of $359 million from the
amount used during the first nine months of 1995. Major factors contributing to
the additional use of cash were higher interest payments and certain
contractual prepayments for program rights and program development.
Interest payments for Continuing Operations during the first nine months of
1996 were $363 million compared to $134 million during the same period of 1995.
This increase in interest payments was primarily attributable to the higher
debt associated with the CBS acquisition.
During the first nine months of 1996, the Broadcasting business segment, in its
drive to improve CBS programming and ratings, successfully negotiated certain
long-term contracts requiring the Corporation to make prepayments for future
program rights and program development.
No contributions were made to the Corporation's pension plans during the first
nine months of 1996 compared to cash contributions of $79 million through
September 30, 1995. The Corporation's contribution level for 1996 is expected
to be $200 million to $250 million, which is consistent with the Corporation's
goal
-23-
<PAGE> 24
to fully fund its qualified plans over the next several years.
The operating activities of Discontinued Operations used $312 million of cash
during the first nine months of 1996 and generated $57 million of cash for the
same period of 1995. The increase in the use of cash during 1996 primarily
related to the divestiture costs of Knoll and the defense and electronic
systems business as well as the cash used in the operations of these businesses
through the date of their disposal and in the operations of the environmental
services business.
Future cash requirements of Discontinued Operations will consist primarily of
interest costs on debt, remaining costs associated with the completed
divestitures, and operating and disposal costs associated with the
Corporation's environmental services business.
Investing Activities
Investing activities provided $3.5 billion of cash during the first nine months
of 1996 compared to $1.0 billion of cash provided during the same period of
1995. In the first nine months of 1996, the Corporation completed the sales of
Knoll and its defense and electronic systems business, generating $3.6 billion
of cash. In addition, the sales of WPRI, a Providence, Rhode Island television
station acquired with CBS, and AdValue Media Technologies, Inc., a computerized
advertisement-tracking and communications services company, generated cash
proceeds of $80 million. Asset liquidations of Discontinued Operations
generated additional cash proceeds of $83 million. Investing activities in the
first nine months of 1996 included the purchase of two Chicago radio stations
and a Spanish-language 24-hour news service, TeleNoticias, as well as
investments in several joint ventures, primarily in China.
In the first nine months of 1995, the Corporation completed the sale of Aptus,
Inc., an environmental services subsidiary, and the transfer of its 75 percent
interest in the Westinghouse Motor Company. A significant portion of the
proceeds for these transactions consisted of notes. Also, asset liquidations of
Discontinued Operations generated cash proceeds of $329 million. The
Corporation purchased the Plant Services Division of Vectra Technologies, Inc.
a provider of chemical decontamination and cleaning services and made an
additional payment in connection with the 1994 acquisition of Norden Systems
during this time period. The Corporation also received cash proceeds of $305
million from the sale of investments held in two trusts established to fund
employee benefit plans and replaced the trust investments with Westinghouse
common stock.
Capital expenditures were $146 million for the first nine months of 1996, a
decrease of $10 million from the same period of 1995. Capital spending in 1996
is expected to be below the spending levels of 1995 primarily because of the
divestitures of Knoll and the defense and electronic systems business.
Financing Activities
Cash used by financing activities during the first nine months of 1996 totalled
$2.7 billion compared to cash used of $1.1 billion during the same period of
1995. The increase in the financing cash outflows was primarily attributable to
the early extinguishment of $5.0 billion of the term loans under the $7.5
billion credit facility and the repayment of borrowings under the previous
revolving credit facility, various medium term notes and debentures. Total debt
for the Corporation was $5.7 billion at September 30, 1996, a decrease of $2.7
billion from December 31, 1995.
Total borrowings under the Corporation's $5.5 billion revolving credit facility
were $3.0 billion at September 30, 1996 (see Revolving Credit Facility). These
borrowings carried a composite interest rate of 6.2% at September 30, 1996
which was based on the London Interbank Offer Rate (LIBOR), plus a margin based
on the Corporation's senior unsecured debt rating and leverage.
Dividends paid in the first nine months of 1996 included approximately $35
million for Series C preferred stock, with the remaining $63 million
representing common stock dividends. Dividends paid in the first nine months of
1995 included
-24-
<PAGE> 25
approximately $35 million for Series C preferred stock, $38 million for Series
B preferred shares, which converted to common shares in the third quarter of
1995, and approximately $54 million representing common stock dividends.
At September 30, 1996, the Corporation had a shelf registration statement for
debt securities with an unused amount of $400 million.
Revolving Credit Facility
On August 29, 1996, the Corporation completed a new bank credit agreement with
a total commitment of $5.5 billion. Of this commitment, $4.0 billion became
available on the closing date of the credit agreement. The balance will be
available on the closing date of the Infinity acquisition. The transaction was
structured as a revolving credit facility with a bullet maturity in five years.
It has more favorable terms than the previous seven year $7.5 billion facility,
including lower interest rates and the elimination of collateral, subsidiary
guarantees and mandatory prepayment provisions.
The unused capacity under the available portion of the revolving credit
facility equaled $1.0 billion as of September 30, 1996. Borrowing availability
under the revolver is subject to compliance with certain covenants,
representations and warranties, including a no material adverse change
provision with respect to the Corporation taken as a whole, restrictions on the
value of liens incurred, a maximum leverage ratio, minimum interest coverage
ratio, and minimum consolidated net worth. Certain of these covenants become
more restrictive over the term of the agreement. At September 30, 1996, the
Corporation was in compliance with these covenants.
Hedging Activities
The Corporation has entered into interest rate exchange agreements to manage
the interest rate risk associated with various debt instruments. No
transactions were speculative or leveraged. Given their nature, these
agreements have been accounted for as hedging transactions. The notional amount
of interest rate exchange agreements outstanding at September 30, 1996 was
$1,131 million, all of which was associated with long-term debt of Continuing
Operations. The average remaining maturity of interest rate exchange agreements
was six months at September 30, 1996.
The total notional amount outstanding at September 30, 1996 relates to interest
rate exchange agreements with rate and maturity characteristics set forth in
the table below:
CONTRACTUAL MATURITIES OF INTEREST RATE EXCHANGE AGREEMENTS
(in millions)(unaudited)
<TABLE>
<CAPTION>
Nine months ended September 30 Total 1996 1997 1998 1999 2000
----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Notional amount $1,131 $1,001 $ - $ 50 $ 55 $ 25
Wtd. avg. fixed rate paid 5.78% 5.37% - 8.73% 8.86% 9.36%
</TABLE>
Under the majority of the exchange agreements, the floating rate received is
based on 30-day LIBOR for the relevant periods indicated in the agreements.
This rate was 5.44% at the end of the quarter.
The Corporation's credit exposure under these agreements is limited to the cost
of replacing an agreement in the event of non-performance by its counterparty.
To minimize this risk, the Corporation has selected high credit quality
counterparties. As of September 30, 1996, the Corporation had no net credit
exposure under its interest rate exchange agreements.
For the nine months ended September 30, 1996, outstanding interest rate
exchange agreements resulted in a net increase in interest expense of
Continuing Operations of approximately $4 million with a de minimus impact on
the average borrowing rate.
-25-
<PAGE> 26
The Corporation continually monitors its economic exposure to changes in
foreign exchange rates and enters into foreign exchange forward or option
contracts to hedge its transaction exposure when appropriate. As a result, the
Corporation's unhedged foreign exchange exposure is not significant.
Furthermore, changes in foreign exchange rates whether favorable or unfavorable
are not expected to have a significant impact on the Corporation's financial
results or operating activities.
With respect to the Corporation's operations in highly inflationary and
unstable economies that are accounted for in accordance with SFAS No. 52,
"Foreign Currency Translation," the combined total sales for those operations
were less than 0.5% of the Corporation's sales for the first nine months of
1996.
OTHER MATTERS
Environmental Matters
Compliance with federal, state, and local laws and regulations relating to the
discharge of pollutants into the environment, the disposal of hazardous wastes
and other related activities affecting the environment have had and will
continue to have an impact on the Corporation. It is difficult to estimate the
timing and ultimate costs to be incurred in the future due to uncertainties
about the status of laws, regulations and technology, the adequacy of
information available for individual sites, the extended time periods over
which site remediation occurs, and the identification of new sites.
In the second quarter of 1996, the Corporation and its external consultants
completed a study to evaluate the Corporation's environmental remediation
strategies. Based on the costs associated with the most probable alternative
remediation strategy for each of its approximately 90 sites, including the
sites located in Bloomington, Indiana, the Corporation has an accrued liability
of $480 million. This amount includes $175 million that was recognized in the
second quarter of 1996. Depending on the remediation alternatives ultimately
selected, the costs related to these sites could differ from the amounts
currently accrued. The accrued liability, measured in current dollars, includes
$355 million for site investigation and remediation, and $125 million for post
closure and monitoring activities. Management anticipates that the majority of
expenditures for site investigation and remediation will occur during the next
5 - 10 years. Expenditures for post closure and monitoring activities will be
made over periods up to 30 years. The Corporation recognizes changes in
estimates as new remediation requirements are defined or as more information
becomes available.
Legal Matters
The Corporation is defending a number of lawsuits on various matters. See note
10 to the financial statements. In the first quarter of 1996, the Corporation
recognized $486 million of costs for potential settlements of outstanding
litigation matters.
Since 1993, the Corporation has entered into agreements to resolve ten
litigation claims in connection with alleged tube degradation in steam
generators sold by the Corporation as components for nuclear steam supply
systems. These agreements generally require the Corporation to provide certain
products and services at prices discounted at varying rates. The future impact
of these discounts on operating results will be incurred over the next 15 years
with the greatest impact occurring during the next nine years.
Litigation is inherently uncertain and always difficult to predict. Substantial
damages are sought in certain of the Corporation's pending cases and although
management believes a significant adverse judgment is unlikely, any such
judgment could have a material adverse effect on the Corporation's results of
operations for a quarter or a year. However, based on its understanding and
evaluation of the relevant facts and circumstances, management believes that
the Corporation has meritorious defenses to the litigation referenced in note
10 and that the Corporation has adequately provided for costs arising from
potential settlement of these matters when in the best interest of the
Corporation. Management believes that the litigation should not have a
material adverse effect on the financial condition of the Corporation.
-26-
<PAGE> 27
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
(a) In October 1990, Commonwealth Edison Company (Commonwealth Edison) filed a
lawsuit against the Corporation in the Circuit Court in Cook County, Illinois,
for an unspecified amount of damages, including treble and punitive damages,
based on the Corporation's supply of nuclear steam supply systems for
Commonwealth Edison's Zion, Byron, and Braidwood plants. On September 18, 1996,
the parties reached a settlement agreement resolving all claims asserted in
this matter.
(b) The Corporation is a defendant in numerous lawsuits claiming various
asbestos-related personal injuries, which allegedly occurred from use of
inclusion of asbestos in certain of the Corporation's products, generally in
the pre-1970 time period. Typically, these lawsuits are brought against
multiple defendants. The Corporation was neither a manufacturer nor a producer
of asbestos and is oftentimes dismissed from these lawsuits on the basis that
the Corporation has no relationship to the products in question or the claimant
did not have exposure to the Corporation's product. At September 30, 1996, the
Corporation had approximately 97,000 claims outstanding against it. In court
actions which have been resolved, the Corporation has prevailed in the majority
of the asbestos claims and has resolved others through settlement. Furthermore,
the Corporation has brought suit against certain of its insurance carriers with
respect to these asbestos claims. Under the terms of a settlement agreement
resulting from this suit, carriers which have agreed to the settlement are now
reimbursing the Corporation for a substantial portion of its current costs and
settlements associated with asbestos claims.
A number of the asbestos-related cases pending against the Corporation,
including those pending in Mississippi, Baltimore and West Virginia, are
consolidated cases. In large consolidated cases, the claims of a group of
plaintiffs are tried together, and oftentimes limited findings with respect to
common issues of fact and punitive damages are decided and applied to these
claims. However, for the Corporation to be liable for damages to any particular
claimant, that individual claimant must thereafter prove that he developed an
asbestos-related disease, that he was exposed to the Corporation's product, and
that this exposure was a substantial factor in the development of the disease.
(c) In August of 1993, the bankruptcy Trustee for the Bonneville Pacific
Corporation (Bonneville) sued over 70 defendants, including the Corporation, in
federal district court in Salt Lake City, Utah. The Trustee's claims against
the group of defendants, including the Corporation; Deloitte & Touche; Mayer,
Brown & Platt; Piper Jaffray, Inc.; and Kidder Peabody and Company, are
numerous, but consist primarily of common law fraud and aiding and abetting in
breaches of fiduciary duty on the part of former officers and directors of
Bonneville. There are also claims by the Trustee for the tort of conspiracy and
civil Racketeer Influenced and Corrupt Organization Act (RICO) violations. The
Corporation has filed numerous motions seeking dismissal of the claims and has
filed a denial of the allegations. The Corporation's involvement with
Bonneville consisted of four sale-leaseback transaction in co-generation
projects through its former subsidiary, Westinghouse Credit Corporation (WCC).
On October 6, 1994, the Trustee filed its preliminary damage calculation which
totalled $647 million against a group of defendants, including the Corporation,
on a theory of joint and several liability. The Trustee is also seeking treble
damages based upon the Trustee's position that a violation of civil RICO has
occurred. All claims against the Corporation have been dismissed with the
exception of the aiding and abetting breach of fiduciary duties. As a result of
the dismissal of all but one claim, the Corporation's potential exposure in
this case has been substantially reduced from the $647 million preliminary
damage calculation submitted by the Trustee. Trial is currently set for early
1997.
(d) The Corporation was one of several defendants in a fraudulent conveyance
action filed on August 16, 1994 by the unsecured creditors committee of
Phar-Mor, Inc. seeking return of the proceeds of an August 1991, Phar-Mor
tender offer in which the Corporation received about $30 million, and an
additional $20 million
-27-
<PAGE> 28
from the tender of Phar-Mor stock by the DeBartolo Family Limited Partnership
(DeBartolo) pursuant to the Corporation's loan to DeBartolo secured by
DeBartolo's Phar-Mor holdings. The fraudulent conveyance action was transferred
from bankruptcy court in Cleveland to the Western District of Pennsylvania and
consolidated with other Phar-Mor litigation. A defense motion for summary
judgment in the fraudulent conveyance action was granted in August 1995, and in
October 1996, the Third Circuit Court of Appeals affirmed the summary judgment
in favor of the Corporation.
Litigation is inherently uncertain and always difficult to predict. Substantial
damages are sought in items (b) through (c) above and although management
believes a significant adverse judgment is unlikely, any such judgment could
have a material adverse effect on the Corporation's results of operations for a
quarter or a year. However, based on its understanding and evaluation of the
relevant facts and circumstances, management believes that the Corporation has
meritorious defenses to the litigation described above, and management believes
that the litigation should not have a material adverse effect on the financial
condition of the Corporation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A) EXHIBITS
(3) ARTICLES OF INCORPORATION AND BYLAWS
(a) The Restated Articles of the Corporation, as amended to
January 8, 1996, are incorporated herein by reference to
Exhibit 3(a) to Form 10-K for the year ended December 31,
1995.
(b) The Bylaws of the Corporation, as amended to September 25,
1996, are incorporated herein by reference to Exhibit 4.2
to Registration Statement No. 333-13219 on Form S-4 filed
with the Securities and Exchange Commission on October 22,
1996.
(4) RIGHTS OF SECURITY HOLDERS
(a) Except as set forth below, there are no instruments with
respect to long-term debt of the Corporation that involve
securities authorized thereunder exceeding 10% of the total
assets of the Corporation and its subsidiaries on a
consolidated basis. The Corporation agrees to provide to
the Securities and Exchange Commission, upon request, a
copy of instruments defining the rights of holders of
long-term debt of the Corporation and its subsidiaries.
(1) Form of Senior Indenture, dated as of November 1,
1990, between the Corporation and Citibank, N.A. is
incorporated herein by reference to Exhibit 4.1 to the
Corporation's Registration Statement No.
33-41417.
(b) Rights Agreement is incorporated herein by reference to
Exhibit 1 to Form 8-A filed with the Securities and
Exchange Commission on January 9, 1996.
(10) MATERIAL CONTRACTS
(a*) The Annual Performance Plan, as amended November 1, 1996.
(b*) The 1993 Long-Term Incentive Plan, as amended November 1, 1996.
(c*) The 1984 Long-Term Incentive Plan, as amended November 1, 1996.
(d*) The Westinghouse Executive Pension Plan, as amended
September 25, 1996.
-28-
<PAGE> 29
(e*) The Deferred Compensation and Stock Plan for Directors, as
amended November 1, 1996.
(f*) The Advisory Director's Plan, as amended, dated April 30,
1996, is incorporated herein by reference to Exhibit 10(f)
to Form 10-Q for the quarter ended June 30, 1996.
(g) The Director's Charitable Giving Program, as amended, dated
April 30, 1996, is incorporated herein by reference to
Exhibit 10(g) to Form 10-Q for the quarter ended June 30,
1996.
(h*) The 1991 Long-Term Incentive Plan, as amended September 25,
1996.
(i*) Advisory Director's Plan Termination Fee Deferral Terms and
Conditions, dated April 30, 1996, is incorporated herein by
reference to Exhibit 10(i) to Form 10-Q for the quarter
ended June 30, 1996.
(j*) Employment Agreement between the Corporation and Michael H.
Jordan is hereby incorporated by reference to Exhibit 10 to
the Corporation's Form 8-K, dated September 1, 1993.
(k*) Employment Agreement between the Corporation and Fredric G.
Reynolds is incorporated herein by reference to Exhibit
10(j) to Form 10-K for the year ended December 31, 1994.
(l) $5.5 billion Credit Agreement among Westinghouse Electric
Corporation, the Lenders, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, the Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administrative Agent, dated
August 29, 1996.
(m*) Employment Agreement between CBS Inc. and Peter Lund, dated
as of November 28, 1995, is hereby incorporated by
reference to Exhibit 10(l) to Form 10-Q for the quarter
ended March 31, 1996.
(n*) Employment Agreement between the Corporation and F.J.
Harvey, dated as of April 30, 1996, is incorporated herein
by reference to Exhibit 10(n) to Form 10-Q for the quarter
ended June 30, 1996.
(o) Agreement and Plan of Merger, as amended, dated as of June
20, 1996, among the Corporation, R Acquisition Corp., and
Infinity Broadcasting Corporation is hereby incorporated by
reference to Annex I to Registration Statement No.
333-13219 on Form S-4 filed at the Securities and Exchange
Commission on October 22, 1996.
(p) Stockholder Agreement, as amended, dated as of June 20,
1996, among the Corporation and certain shareholders of
Infinity Broadcasting Corporation is hereby incorporated by
reference to Annex II to Registration Statement No.
333-13219 on Form S-4 filed at the Securities and Exchange
Commission on October 22, 1996.
* Identifies management contract or compensatory plan or arrangement
(11) Computation of Per Share Earnings
(12)(a) Computation of Ratio of Earnings to Fixed Charges
(12)(b) Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Dividends
(27) Financial Data Schedule
-29-
<PAGE> 30
B) REPORTS ON FORM 8-K:
A Current Report on Form 8-K (Items 5 and 7) dated August 6, 1996,
filing a press release concerning the Corporation's earnings for the
second quarter of 1996.
A Current Report on Form 8-K (Items 5 and 7) dated September 19, 1996,
filing the restated financial statements, notes to the financial
statements and management's discussion and analysis to the
Corporation's 1995 Annual Report.
-30-
<PAGE> 31
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 12th day of November 1996.
WESTINGHOUSE ELECTRIC CORPORATION
/s/ Carol V. Savage
---------------------------------
Vice President and
Chief Accounting Officer
-31-
<PAGE> 1
Exhibit (10)(a)
WESTINGHOUSE ELECTRIC CORPORATION
Annual Performance Plan
(as amended as of November 1, 1996)
PURPOSE: The Annual Performance Plan (the Plan) is intended to provide for an
annual performance payment to key employees of the Company and its subsidiaries
as an incentive to enhance the efficiency and profitability of operations.
ADMINISTRATION: The Plan will be administered by a committee appointed by the
Board of Directors of the Company (the Committee) consisting of at least two
directors who are "non-employee director" as defined by Rule 16b-3 as
promulgated under the Securities Exchange Act of 1934, as amended (the Exchange
Act), as such rule may be amended, or any successor rule. The Committee shall
have the right to delegate authority to take any action that may be taken by
the Committee under those sections of the Plan titled "Administration,"
"Eligibility," "Payment of Awards," or "Participants' Rights;" provided,
however, such delegation authority shall not extend to any action with respect
to persons who are required to file reports with respect to securities of the
Company pursuant to Section 16(a) of the Exchange Act. The Committee is
authorized to interpret the Plan and determine when, to whom, in what manner or
form, in what amount, over what period of time and under what terms, conditions
and limitations payments under the Plan will be made. Except as otherwise
noted herein, the Committee's determination will be conclusive and binding on
all parties. Payments to participants who are employees of subsidiaries of the
Company will be made by such subsidiaries pursuant to appropriate action by
their respective boards of directors. The Plan may be amended in whole or in
part or terminated at any time by the Board of Directors.
ELIGIBILITY: Participation in the Plan will be limited to key employees
selected by the Committee who are in a position to influence the results of
operations.
INCENTIVE FUND: Prior to the commencement of each fiscal year, and subject to
such restrictions as may be imposed by the Board of Directors, the Committee
will determine the basis for developing the incentive fund for the Plan for
that year. Such fund shall not exceed five percent of the consolidated net
income of the Company and its subsidiaries during such year, before deducting
income taxes and any provision for such additional compensation, plus any
unused incentive fund amounts carried forward from previous years. In
determining the amount of the fund, the Committee may exclude any part of any
item of unusual or nonrecurring income or loss not arising in the ordinary
course of business. If the full amount of the fund is not allocated in that
year, such portion of the balance as determined by the
-1-
<PAGE> 2
Committee may be carried forward and be available for payment in any subsequent
year or years.
PAYMENT OF AWARDS: The Committee will determine (i) when awards will be paid,
(ii) the amount of such awards, if any, (iii) whether such payments will be in
a lump sum or in installments, (iv) whether such payments will be made entirely
in cash, entirely in shares of common stock or other securities of the Company,
or in a combination thereof and (v) whether a portion or all of such payments
may be deferred and the yield, if any, to be paid by the Company on deferred
amounts. Such determinations will be subject to any terms and conditions that
the Committee may establish, including, without limitation, the method of
computing the ultimate payable value of deferred amounts, whether shares of
common stock or securities of the Company used for payments hereunder shall be
purchased on the open market, authorized but unissued, or held in the treasury,
the date on which or the period during which such shares or securities will be
valued and the method of such valuation. The Committee may establish or
authorize the establishment of procedures not inconsistent with the Plan under
which a recipient may designate a beneficiary or beneficiaries to receive an
award or payments due with respect to deferred amounts in the event of the
recipient's death.
PARTICIPANTS' RIGHTS: Participants shall not have guaranteed rights of
employment nor any entitlements under the Plan; however, if a participant's
employment terminates prior to the end of a year, the Committee may determine
the extent, if any, to which the participant may be granted an award under the
Plan for that year.
OTHER PLANS: The adoption of the Plan shall not preclude the adoption or
operation of other compensation or incentive plans by the Company, its
subsidiaries and affiliates.
NON-TRANSFERABILITY: No award or right under the Plan shall be transferable by
a participant otherwise than by will, by the applicable laws of descent and
distribution, or by transfer to a properly designated beneficiary in the event
of death, and any rights under the Plan shall be exercisable during the
participant's lifetime only by the participant, or by the participant's
guardian or legal representative.
CHANGE IN CONTROL: In the event of a Change in Control as defined herein, (a)
(i) to the extent not already vested, all benefits hereunder shall be vested
immediately, and (ii) awards as to a period of time less than a full year may
be made as the Committee may determine as of the date of such Change in Control
and then paid on such basis and in such form as the Committee may prescribe;
and (b) the value of all unpaid benefits and deferred amounts shall be paid in
cash to Pittsburgh National Bank the
-2-
<PAGE> 3
trustee for this Plan pursuant to a trust agreement dated November 24, 1987 or
otherwise on such terms as the Committee may prescribe or permit. For
purposes of this paragraph, the value of deferred amounts shall be the greater
value of (i) the cash amount equal to the face value of the putative
"debentures" (as heretofore and hereafter determined and defined by the
Committee) plus cash equal to accrued interest or (ii) the number of shares of
Common Stock into which the putative debentures are convertible (the value of
which shall be based upon the highest price of the Common Stock as reported by
the composite tape of the New York Stock Exchange during the thirty days
immediately preceding the Change in Control), plus cash equal to accrued
interest.
A Change in Control shall mean the occurrence of one or more of the
following events:
(a) there shall be consummated (i) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's Common Stock would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Company's Common Stock immediately prior to
the merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (ii) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company, or
(b) the shareholders of the Company shall approve of any plan or proposal for
the liquidation or dissolution of the Company, or (c) (i) any person (as such
term is defined in Section 13(d) of the Exchange Act), corporation or other
entity shall purchase any Common Stock of the Company (or securities
convertible into the Company's Common Stock) for cash, securities or any other
consideration pursuant to a tender offer or exchange offer, unless, prior to
the making of such purchase of Common Stock (or securities convertible into
Common Stock), the Board shall determine that the making of such purchase shall
not constitute a Change in Control, or (ii) any person (as such term is defined
in Section 13(d) of the Exchange Act), corporation or other entity (other than
the Company or any benefit plan sponsored by the Company or any of its
subsidiaries) shall become the "beneficial owner" (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing twenty percent or more of the combined voting power of
the Company's then outstanding securities ordinarily (and apart from any rights
accruing under special circumstances) having the right to vote in the election
of directors (calculated as provided in Rule 13d-3(d) in the case of rights to
acquire any such securities), unless, prior to such person so becoming such
beneficial owner, the Board shall determine that such person so becoming such
beneficial owner shall not constitute a Change in Control, or (d) at any time
during any period of two consecutive
-3-
<PAGE> 4
years, individuals who at the beginning of such period constituted the entire
Board shall cease for any reason to constitute at least a majority thereof,
unless the election or nomination for election of each new director during such
two-year period as approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such two-year
period.
-4-
<PAGE> 1
Exhibit (10)(b)
1993 LONG-TERM INCENTIVE PLAN
(as amended as of November 1, 1996)
ARTICLE I
GENERAL
1.1 PURPOSE
The purposes of the 1993 Long-Term Incentive Plan ("Plan") for key personnel
of Westinghouse Electric Corporation ("Corporation") and its Subsidiaries (the
Corporation and its Subsidiaries severally and collectively referred to in the
Plan as the "Company") are to foster and promote the long-term financial
success of the Company and materially increase stockholder value by (i)
attracting and retaining key personnel of outstanding ability, (ii)
strengthening the Company's capability to develop, maintain and direct a
competent management team, (iii) motivating key personnel, by means of
performance-related incentives, to achieve long-range performance goals, (iv)
providing incentive compensation opportunities competitive with those of other
major companies and (v) enabling key personnel to participate in the long-term
growth and financial success of the Company.
1.2 ADMINISTRATION
(a) The Plan shall be administered by a committee of the Board of
Directors of the Corporation ("Committee") which shall consist of two or more
members. Each member shall be a "non-employee director," as that term is defined
by Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as such rule may be amended, or any successor rule, and an
"outside director," as that term is defined by Section 162(m) of the Internal
Revenue Code of 1986, as amended. The members shall be appointed by the Board
of Directors, and any vacancy on the Committee shall be filled by the Board of
Directors.
The Committee shall keep minutes of its meetings and of any action taken
by it without a meeting. A majority of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present shall be the acts of the Committee. Any action that
may be taken at a meeting of the Committee may be taken without a meeting if a
consent or consents in writing setting forth the action so taken shall be
signed by all of the members of the Committee. The Committee shall make
appropriate reports to the Board of Directors concerning the operations of the
Plan.
(b) Subject to the limitations of the Plan, the Committee shall have the
sole and complete authority: (i) to select in accordance with Section 1.3
persons who shall participate in the
-1-
<PAGE> 2
Plan ("Participant" or "Participants") (including the right to delegate
authority to select as Participants persons who are not required to file reports
with respect to securities of the Company pursuant to Section 16(a) of the
Exchange Act ("Nonreporting Persons")); (ii) to make Awards and payments in such
forms and amounts as it shall determine (including the right to delegate
authority to make Awards to Nonreporting Persons within limits approved from
time to time by the Committee); (iii) to impose such limitations, restrictions
and conditions upon such Awards as the Committee, or, with respect to Awards to
Nonreporting Persons, the Committee's authorized delegates, shall deem
appropriate; (iv) to interpret the Plan and the terms of any document relating
to the Plan and to adopt, amend and rescind administrative guidelines and other
rules and regulations relating to the Plan; (v) to amend or cancel an existing
Award in whole or in part (including the right to delegate authority to amend or
cancel an existing Award to a Nonreporting Person in whole or in part within
limits approved from time to time by the Committee), except that the Committee
and its authorized delegates may not, unless otherwise provided in the Plan, or
unless the Participant affected thereby consents, take any action under this
clause that would adversely affect the rights of such Participant with respect
to the Award, and except that the Committee and its authorized delegates may not
take any action to amend any outstanding Option under the Plan in order to
decrease the Option Price under such Option or to cancel and replace any such
Option with an Option with a lower Option Price unless such action is approved
by the common stockholders of the Corporation; and (vi) to make all other
determinations and to take all other actions necessary or advisable for the
interpretation, implementation and administration of the Plan. The Committee's
determinations on matters within its authority shall be conclusive and binding
upon the Company and all other persons.
(c) The Committee shall act with respect to the Plan on behalf of the
Corporation and on behalf of any Subsidiary issuing stock under the Plan,
subject to appropriate action by the board of directors of any such Subsidiary.
All expenses associated with the Plan shall be borne by the Corporation subject
to such allocation to its Subsidiaries and operating units as it deems
appropriate.
1.3 SELECTION FOR PARTICIPATION
Participants selected by the Committee (or its authorized delegates) shall
be Eligible Persons, as defined below, who are key employees and have the
capacity to contribute to the success of the Company. "Eligible Persons" are
persons who are salaried employees of the Company ("Employee" or "Employees").
In making this selection and in determining the form and amount of Awards, the
Committee may give consideration to the functions and responsibilities of the
Eligible Person, his or her past, present
-2-
<PAGE> 3
and potential contributions to the Company and other factors deemed relevant by
the Committee.
1.4 TYPES OF AWARDS UNDER PLAN
Awards ("Awards") under the Plan may be in the form of any one or more of
the following: (i) Incentive Stock Options ("ISOs") and Non-statutory Stock
options ("NSOs") (Incentive Stock Options and Non-statutory Stock Options
severally and collectively referred to in the Plan as "Options"), as described
in Article II, (ii) Stock Appreciation Rights ("SARs") and Limited Stock
Appreciation Rights ("Limited Rights"), as described in Article III, (iii)
Performance Awards ("Performance Awards") as described in Article IV, and (iv)
Restricted Stock ("Restricted Stock") as described in Article V.
1.5 SHARES SUBJECT TO THE PLAN
Shares of stock issued under the Plan may be in whole or in part authorized
and unissued or treasury shares of the Corporation's common stock, par value
$1.00 ("Common Stock"), or "Formula Value Stock" as defined in Section 8.12(d)
(Common Stock and Formula Value Stock severally and collectively referred to in
the Plan as "Stock").
The maximum number of shares of Stock which may be issued for all purposes
under the Plan shall be 4,000,000 increased on January 1 of each calendar year
from and including 1994 to and including 2003 by a number of shares equal to one
percent (1%) of the number of shares of Stock outstanding on December 31 of the
preceding year. The maximum number of such shares which may be issued pursuant
to the exercise of ISOs shall be 1,000,000 increased on January 1 of each
calendar year from and including 1994 to and including 2003 by 1,000,000 shares.
The maximum number of such shares subject to options to purchase Stock, SARs and
Limited Rights under the Plan awarded to any one Participant in any one calendar
year may not exceed 3,500,000 shares plus unused share amounts that could have
been awarded to that Participant in previous calendar years.
Except as otherwise provided below, any shares of Stock subject to an
Option or other Award which is canceled or terminates without having been
exercised shall again be available for Awards under the Plan. Shares subject to
an option canceled upon the exercise of an SAR shall not again be available for
Awards under the Plan except to the extent the SAR is settled in cash. To the
extent that an Award is settled in cash, shares of Stock subject to that Award
shall again be available for Awards. Shares of Stock tendered by a Participant
or withheld by the Company to pay the exercise price of an Option or to satisfy
the tax withholding obligations of the exercise or vesting of an Award shall be
available again for Awards under the Plan, but
-3-
<PAGE> 4
only to Nonreporting Persons. Shares of Restricted Stock forfeited to the
Company in accordance with the Plan and the terms of the particular Award
shall be available again for Awards under the Plan unless the Participant has
received the benefits of ownership (within the applicable interpretation under
Rule 16b-3 under the Exchange Act), in which case such shares may only be
available for Awards to Nonreporting Persons.
No fractional shares shall be issued, and the Committee shall determine the
manner in which fractional share value shall be treated.
ARTICLE II
STOCK OPTIONS
2.1 AWARD OF STOCK OPTIONS
The Committee may, from time to time, subject to the provisions of the Plan
and such other terms and conditions as the Committee may prescribe, award to any
Participant ISOs and NSOs to purchase Stock.
The Committee may provide with respect to any option to purchase Stock
that, if the Participant, while an Eligible Person, exercises the option in
whole or in part using already-owned Stock, the Participant will, subject to
this Section 2.1 and such other terms and conditions as may be imposed by the
Committee, receive an additional option ("Reload Option"). The Reload Option
will be to purchase, at Fair Market Value as of the date the original option was
exercised, a number of shares of Stock equal to the number of whole shares used
by the Participant to exercise the original option. The Reload Option will be
exercisable only between the date of its grant and the date of expiration of the
original option.
A Reload Option shall be subject to such additional terms and conditions as
the Committee shall approve, which terms may provide that the Committee may
cancel the Participant's right to receive the Reload Option and that the Reload
Option will be granted only if the Committee has not canceled such right prior
to the exercise of the original option. Such terms may also provide that, upon
the exercise by a Participant of a Reload Option while an Eligible Person, an
additional Reload Option will be granted with respect to the number of whole
shares used to exercise the first Reload Option.
2.2 STOCK OPTION AGREEMENTS
The award of an option shall be evidenced by a signed written agreement
("Stock Option Agreement") containing such terms and conditions as the Committee
may from time to time determine.
-4-
<PAGE> 5
2.3 OPTION PRICE
The purchase price of Stock under each Option ("Option Price") shall be not
less than the Fair Market Value of such Stock on the date the Option is awarded.
2.4 EXERCISE AND TERM OF OPTIONS
(a) Except as otherwise provided in the Plan, Options shall become
exercisable at such time or times as the Committee may specify. The Committee
may at any time and from time to time accelerate the time at which all or any
part of the Option may be exercised.
(b) The Committee shall establish procedures governing the exercise of
options and shall require that notice of exercise be given. Stock purchased on
exercise of an option must be paid for as follows: (1) in cash or by check
(acceptable to the Company in accordance with guidelines established for this
purpose), bank draft or money order payable to the order of the Company or (2)
if so provided by the Committee (not later than the time of grant, in the case
of an ISO) (i) through the delivery of shares of Stock which are then
outstanding and which have a Fair Market Value on the date of exercise equal to
the exercise price, (ii) by delivery of an unconditional and irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds to
pay the exercise price, or (iii) by any combination of the permissible forms of
payment.
2.5 TERMINATION OF ELIGIBILITY
In the event the Participant is no longer an Eligible Person and ceased to
be such as a result of termination of service to the Company with the consent of
the Committee or as a result of his or her death, retirement or disability, each
of his or her outstanding Options shall be exercisable by the Participant (or
his or her legal representative or designated beneficiary), to the extent that
such Option was then exercisable, at any time prior to an expiration date
established by the Committee at the time of award, but in no event after such
expiration date. If the Participant ceases to be an Eligible Person for any
other reason, all of the Participant's then outstanding Options shall terminate
immediately.
-5-
<PAGE> 6
ARTICLE III
STOCK APPRECIATION RIGHTS AND LIMITED RIGHTS
3.1 AWARD OF STOCK APPRECIATION RIGHT
(a) An SAR is an Award entitling the recipient on exercise to receive an
amount, in cash or Stock or a combination thereof (such form to be determined by
the Committee), determined in whole or in part by reference to appreciation in
Stock value.
(b) In general, an SAR entitles the Participant to receive, with respect
to each share of Stock as to which the SAR is exercised, the excess of the
share's Fair Market Value on the date of exercise over its Fair Market Value on
the date the SAR was granted.
(c) SARs may be granted in tandem with options granted under the Plan
("Tandem SARS") or independently of Options ("Independent SARs"). An SAR
granted in tandem with an NSO may be granted either at or after the time the
option is granted. An SAR granted in tandem with an ISO may be granted only at
the time the option is granted.
(d) SARs awarded under the Plan shall be evidenced by either a Stock
Option Agreement (when SARs are granted in tandem with an Option) or a separate
agreement between the Company and the Participant.
(e) Except as otherwise provided herein, a Tandem SAR shall be exercisable
only at the same time and to the same extent and subject to the same conditions
as the option related thereto is exercisable, and the Committee may prescribe
additional conditions and limitations on the exercise of the SAR. The exercise
of a Tandem SAR shall cancel the related Option. Tandem SARs may be exercised
only when the Fair Market Value of Stock to which it relates exceeds the Option
Price.
(f) Except as otherwise provided herein, an Independent SAR will become
exercisable at such time or times, and on such conditions, as the Committee may
specify, and the Committee may at any time accelerate the time at which all or
any part of the SAR may be exercised.
The Committee may provide, under such terms and conditions as it may deem
appropriate, for the automatic grant of additional SARs upon the full or partial
exercise of an Independent SAR.
Any exercise of an Independent SAR must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by any other
documents required by the Committee.
-6-
<PAGE> 7
(g) Except as otherwise provided herein, all SARs shall automatically be
exercised on the last trading day prior to the expiration date established by
the Committee at the time of the award for the SAR, or, in the case of a Tandem
SAR, for the related Option, so long as exercise on such date will result in a
payment to the Participant.
(h) Unless otherwise provided by the Committee, no SAR shall become
exercisable or shall be automatically exercised for six months following the
date on which it was granted or the effective date of the Plan, whichever is
later.
(i) At the time of award of an SAR, the Committee may limit the amount of
the payment that may be made to a Participant upon the exercise of the SAR. The
Committee may further determine that, if the amount to be received by a
Participant in any year is limited pursuant to this provision, payment of all or
a portion of the amount that is unpaid as a result of the limitation may be made
to the Participant at a subsequent time. No such limitation shall require a
Participant to return to the Company any amount theretofore received by him or
her upon the exercise of an SAR.
(j) Payment of the amount to which a Participant is entitled upon the
exercise of an SAR shall be made in cash, Stock, or partly in cash and partly in
Stock, as the Committee shall determine. To the extent that payment is made in
Stock, the shares shall be valued at their Fair Market Value on the date of
exercise of the SAR.
(k) Each SAR shall expire on a date determined by the Committee or earlier
upon the occurrence of the first of the following: (i) in the case of a Tandem
SAR, termination of the related option, (ii) expiration of a period of six
months after the Participant's ceasing to be an Eligible Person as a result of
termination of service to the Company with the consent of the Committee or as a
result of his or her death, retirement or disability, or (iii) the Participant
ceasing to be an Eligible Person for any other reason.
3.2 LIMITED RIGHTS
(a) The Committee may award Limited Rights pursuant to the provisions of
this Section 3.2 to the holder of an Option to purchase Common Stock granted
under the Plan (a "Related Option") with respect to all or a portion of the
shares subject to the Related Option. A Limited Right may be exercised only
during the period beginning on the first day following a Change in Control, as
defined in Section 7.2 of the Plan, and ending on the thirtieth day following
such date. Each Limited Right shall be exercisable only to the same extent that
the Related Option is exercisable, and in no event after the termination of the
Related
-7-
<PAGE> 8
Option. In no event shall a Limited Right be exercised during the first six
months after the date of grant of the Limited Right or the effective date of
the Plan, whichever is later. Limited Rights shall be exercisable only when
the Fair Market Value (determined as of the date of exercise of the Limited
Rights) of each share of Common Stock with respect to which the Limited Rights
are to be exercised shall exceed the Option Price per share of Common Stock
subject to the Related option.
(b) Upon the exercise of Limited Rights, the Related Option shall be
considered to have been exercised to the extent of the number of shares of
Common Stock with respect to which such Limited Rights are exercised. Upon the
exercise or termination of the Related Option, the Limited Rights with respect
to such Related Option shall be considered to have been exercised or terminated
to the extent of the number of shares of Common Stock with respect to which the
Related Option was so exercised or terminated.
(c) The effective date of the grant of a Limited Right shall be the date
on which the Committee approves the grant of such Limited Right. Each grantee
of a Limited Right shall be notified promptly of the grant of the Limited Right
in such manner as the Committee shall prescribe.
(d) Upon the exercise of Limited Rights, the holder thereof shall receive
in cash an amount equal to the product computed by multiplying (i) the excess of
(a) the higher of (x) the Minimum Price Per Share (as hereinafter defined), or
(y) the highest reported closing sales price of a share of Common Stock on the
New York Stock Exchange at any time during the period beginning on the sixtieth
day prior to the date on which such Limited Rights are exercised and ending on
the date on which such Limited Rights are exercised, over (b) the Option Price
per share of Common Stock subject to the Related Option, by (ii) the number of
shares of Common Stock with respect to which such Limited Rights are being
exercised.
(e) For purposes of this Section 3.2, the term "Minimum Price Per Share"
shall mean the highest gross price (before brokerage commissions and soliciting
dealers' fees) paid or to be paid for a share of Common Stock (whether by way of
exchange, conversion, distribution upon liquidation or otherwise) in any Change
in Control which is in effect at any time during the period beginning on the
sixtieth day prior to the date on which such Limited Rights are exercised and
ending on the date on which such Limited Rights are exercised. For purposes of
this definition, if the consideration paid or to be paid in any such Change in
Control shall consist, in whole or in part, of consideration other than cash,
the Board shall take such action, as in its judgement it deems appropriate, to
establish the cash value of such consideration.
-8-
<PAGE> 9
ARTICLE IV
PERFORMANCE AWARDS
4.1 NATURE OF PERFORMANCE AWARDS
A Performance Award provides for the recipient to receive an amount in cash
or Stock or a combination thereof (such form to be determined by the Committee)
following the attainment of Performance Goals. Performance Goals may be related
to personal performance, corporate performance (including corporate stock
performance), departmental performance or any other category of performance
deemed by the Committee to be important to the success of the Company. The
Committee shall determine the Performance Goals, the period or periods during
which performance is to be measured and all other terms and conditions
applicable to the Award. Regardless of the degree to which Performance Goals
are attained, a Performance Award shall be paid only when, if and to the extent
that the Committee determines to make such payment.
4.2 OTHER AWARDS SUBJECT TO PERFORMANCE CONDITION
The Committee may, at the time any Award described in this Plan is granted,
impose the condition (in addition to any conditions specified or authorized in
the Plan) that Performance Goals be met prior to the Participant's realization
of any payment or benefit under the Award.
ARTICLE V
RESTRICTED STOCK
5.1 AWARD OF RESTRICTED STOCK
The Committee may award to any Participant shares of Stock subject to this
Article V and such other terms and conditions as the Committee may prescribe,
such Stock referred to herein as "Restricted Stock."
Each certificate for Restricted Stock shall be registered in the name of
the Participant and deposited by him or her, together with a stock power
endorsed in blank, with the Corporation.
5.2 RESTRICTED STOCK AGREEMENT
Shares of Restricted Stock awarded under the Plan shall be evidenced by a
signed written agreement containing such terms and conditions as the Committee
may determine.
5.3 RESTRICTION PERIOD
At the time of award, there shall be established for each Participant a
"Restriction Period" of such length as shall be
-9-
<PAGE> 10
determined by the Committee. The Restriction Period may be waived by the
Committee. Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as hereinafter provided, during the
Restriction Period. Subject to such restriction on transfer, the Participant
as owner of such shares of Restricted Stock shall have the rights of the
holder of such Restricted Stock, except that the Committee may provide at the
time of the Award that any dividends or other distributions paid on such Stock
during the Restriction Period shall be accumulated and held by the Company and
shall be subject to forfeiture under Section 5.4.
Upon the expiration or waiver by the Committee of the Restriction Period,
the Corporation shall redeliver to the Participant (or his or her legal
representative or designated beneficiary) the shares deposited pursuant to
Section 5.1.
5.4 TERMINATION OF ELIGIBILITY
In the event the Participant is no longer an Eligible Person and ceased to
be such as a result of termination of service to the Company with the consent of
the Committee, or as a result of his or her death, retirement or disability, the
restrictions imposed under this Article V shall lapse with respect to such
number of shares theretofore awarded to him or her as shall be determined by the
Committee. All other shares of Restricted Stock theretofore awarded to him or
her which are still subject to restrictions, along with any dividends or other
distributions thereon that have been accumulated and held by the Company, shall
be forfeited, and the Corporation shall have the right to complete the blank
stock power.
In the event the Participant ceases to be an Eligible Person for any other
reason, all shares of Restricted Stock theretofore awarded to him or her which
are still subject to restrictions, along with any dividend or other
distributions thereon that have been accumulated and held by the Company, shall
be forfeited, and the Corporation shall have the right to complete the blank
stock power.
ARTICLE VI
DEFERRAL OF PAYMENTS
6.1 DEFERRAL OF AMOUNTS
If the Committee makes a determination to designate Awards or, from time to
time, groups or types of Awards, eligible for deferral hereunder, a Participant
may, subject to such terms and conditions and within such limits as the
Committee may from time to time establish, elect to defer the receipt of amounts
due to him or her under the Plan. Amounts so deferred are referred to herein as
"Deferred Amounts." The Committee may also permit
-10-
<PAGE> 11
amounts now or hereafter deferred or available for deferral under any present
or future incentive compensation program or deferral arrangement of the
Company to be deemed Deferred Amounts and to become subject to the provisions
of this Article. Awards which are so deferred will be deemed to have been
awarded in cash and the cash deferred as Deferred Amounts.
The period between the date on which the Participant's Deferred Amount
would have been payable absent deferral and the final payment of such Deferred
Amount shall be referred to herein as the "Deferral Period."
6.2 INVESTMENT DURING DEFERRAL PERIOD
Unless otherwise determined by the Committee, and subject to such changes
as the Committee may determine, the Deferred Amount will be treated during the
Deferral Period as if it were invested in putative convertible debentures with a
fixed interest rate, compounded annually, for the entire Deferral Period. For
purposes of determining the value of the Deferred Amount at the time of payment,
each putative debenture will be deemed to be convertible into Common Stock at a
conversion rate computed by reference to the Fair Market Value of the Common
Stock on the last trading day prior to the regular January meeting of the Board
of Directors on or preceding the date of deferral. Payment of Deferred Amounts
may be made in cash, Stock, or partly in cash and partly in Stock, in the
Committee's sole discretion.
6.3 PARTICIPANT REPORTS
Annually, each Participant who has a Deferred Amount will receive a report
setting forth all of his or her then Deferred Amounts and the yield thereon to
date.
6.4 PAYMENT OF DEFERRED AMOUNTS
Payment of Deferred Amounts will be made at such time or times, and may be
in cash, Stock, or partly in cash and partly in Stock, as the Committee shall
from time to time determine. The limitations respecting the issuance of Stock
or other limitations on aggregate awards payable contained in the Annual
Performance Plan of the Corporation, Article XVI of the by-laws of the
Corporation, the 1974 Stock Option Plan, the 1979 Stock Option and Long-Term
Incentive Plan, the 1984 Long-Term Incentive Plan, the Plan and in any plan
hereafter adopted by the stockholders shall be limitations applicable to the
payment of any Deferred Amounts under this Article VI.
6.5 ALTERNATIVE VALUATION ELECTION
Unless otherwise determined by the Committee, a Participant may, at a time
established by the Committee, but prior to such
-11-
<PAGE> 12
Participant's ceasing to be an Eligible Person, elect to establish the
ultimate payable value of each Deferred Amount by reference to the Fair Market
Value of the Common Stock as of the day on which an alternate valuation
election is received by the corporation in accordance with procedures
established by the Committee.
Notwithstanding the establishment of the ultimate payable value resulting
from the alternate valuation election by the Participant, the yield will
continue as though no such election had been made and will continue to be
subject to the limitations set forth in Section 6.2, and Deferred Amounts and
the yield thereon will be paid as otherwise provided in this Article.
ARTICLE VII
CHANGES IN CONTROL
7.1 EFFECT OF CHANGE IN CONTROL
Notwithstanding any other provision of the Plan, upon the occurrence of a
Change in Control, as defined in Section 7.2: (i) all Options and, subject to
the exercise provisions of Section 3.2(a) of the Plan, Limited Rights, but not
SARS, outstanding and unexercised on the date of the Change in Control shall
become immediately exercisable; (ii) all Performance Awards shall be deemed to
have been earned on such basis as the Committee may prescribe and then paid on
such basis, at such time and in such form as the Committee may prescribe, or
deferred in accordance with the elections of Participants; (iii) all Restricted
Stock shall be deemed to be earned and the Restriction Period shall be deemed
expired on such terms and conditions as the Committee may determine; and (iv)
all amounts deferred under this Plan shall be paid to a trustee or otherwise on
such terms as the Committee may prescribe or permit.
7.2 DEFINITION OF CHANGE IN CONTROL
The term "Change in Control" means the occurrence of one or more of the
following events: (a) there shall be consummated (i) any consolidation or merger
of the Corporation in which the Corporation is not the continuing or surviving
corporation or pursuant to which shares of the Common Stock would be converted
into cash, securities or other property, other than a merger of the Corporation
in which the holders of Common Stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Corporation, or (b) the stockholders of
the Corporation shall approve any plan or proposal for the liquidation or
dissolution of the Corporation, or (c) (i) any person (as such term is defined
in Section 13(d)
-12-
<PAGE> 13
of the Exchange Act), corporation or other entity shall purchase any Common
Stock of the Corporation (or securities convertible into Common Stock) for
cash, securities or any other consideration pursuant to a tender offer or
exchange offer, unless, prior to the making of such purchase of Common Stock
(or securities convertible into Common Stock), the Board shall determine that
the making of such purchase shall not constitute a Change in Control, or (ii)
any person (as such term is defined in Section 13(d) of the Exchange Act),
corporation or other entity (other than the Corporation or any benefit plan
sponsored by the Corporation or any of its subsidiaries) shall be the
"beneficial owner" (as such term is defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation representing
twenty percent or more of the combined voting power of the Corporation's then
outstanding securities ordinarily (and apart from any rights accruing under
special circumstances) having the right to vote in the election of directors
(calculated as provided in Rule 13d-3(d) in the case of rights to acquire any
such securities), unless, prior to such person so becoming such beneficial
owner, the Board shall determine that such person so becoming such beneficial
owner shall not constitute a Change in Control, or (d) at any time during any
period of two consecutive years, individuals who at the beginning of such
period constituted the entire Board shall cease for any reason to constitute
at least a majority thereof, unless the election or nomination for election of
each new director during such two-year period was approved by a vote of at
least two-thirds of the directors then still in office who were directors at
the beginning of such two-year period.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-TRANSFERABILITY
No Option, SAR, Performance Award or share of Restricted Stock or Deferred
Amount under the Plan shall be transferable by the Participant other than by
will, by the applicable laws of descent and distribution, or by transfer to a
properly designated beneficiary in the event of death. All Awards and Deferred
Amounts shall be exercisable or received during the Participant's lifetime only
by such Participant or his or her legal representative. Any transfer contrary
to this Section 8.1 will nullify the option, SAR, Performance Award or share of
Restricted Stock, and any attempted transfer of a Deferred Amount contrary to
this Section 8.1 will be void and of no effect.
8.2 BENEFICIARIES
The Committee may establish or authorize the establishment of procedures
not inconsistent with Section 8.1 under which a Participant may designate a
beneficiary or beneficiaries to hold,
-13-
<PAGE> 14
exercise and/or receive amounts due under an Award or with respect to Deferred
Amounts in the event of the Participant's death.
8.3 ADJUSTMENTS UPON CHANGES IN STOCK
If there shall be any change in the Stock of the Company, through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
split up, dividend in kind or other change in the corporate structure or
distribution to the stockholders, appropriate adjustments may be made by the
Board of Directors of the Company (or if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation) in the aggregate number and kind of shares subject to the Plan, and
the number and kind of shares and the price per share subject to outstanding
Options or which may be issued under outstanding Performance Awards or Awards of
Restricted Stock. Appropriate adjustments may also be made by the Board of
Directors or the Committee in the terms of any Awards under the Plan to reflect
such changes and to modify any other terms of outstanding Awards on an equitable
basis, including modifications of performance targets and changes in the length
of Performance Periods.
8.4 CONDITIONS OF AWARDS
(a) The rights of a Participant with respect to any Award received under
this Plan shall be subject to the conditions that, until the Participant has
fully received all payments, transfers and other benefits under the Award, he or
she shall (i) not engage, either directly or indirectly, in any manner or
capacity as advisor, principal, agent, partner, officer, director, employee,
member of any association or otherwise, in any business or activity which is at
the time competitive with any business or activity conducted by the Company and
(ii) be available, unless he or she shall have died, at reasonable times for
consultations at the request of the Company's management with respect to phases
of the business with which he or she is or was actively connected during his or
her employment, but such consultations shall not (except in the case of a
Participant whose active service was outside the United States) be required to
be performed at any place or places outside of the United States of America or
during usual vacation periods or periods of illness or other incapacity. In the
event that either of the above conditions is not fulfilled, the Participant
shall forfeit all rights to any unexercised option or SAR, or any Performance
Award or Stock held which has not yet been determined by the Committee to be
payable or unrestricted (and any unpaid amounts equivalent to dividends or other
distributions or amounts equivalent to interest relating thereto) as of the date
of the breach of condition. Any determination by the Board of Directors of the
Corporation, which shall act upon the recommendation of the Chief Executive
Officer,
-14-
<PAGE> 15
that the Participant is, or has, engaged in a competitive business or activity
as aforesaid or has not been available for consultations as aforesaid shall be
conclusive.
(b) This Section 8.4 shall not apply to Limited Rights.
8.5 USE OF PROCEEDS
All cash proceeds from the exercise of options shall constitute general
funds of the Company.
8.6 TAX WITHHOLDING
The Company will withhold from any cash payment made pursuant to an Award
an amount sufficient to satisfy all federal, state and local withholding tax
requirements (the "withholding requirements").
In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock.
If and to the extent that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement. In the alternative, the Committee may, at
the time of grant of any such Award, require that the Company withhold from any
shares to be delivered Stock with a value calculated to satisfy applicable tax
withholding requirements.
If at the time an ISO is exercised the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of the Stock received upon exercise, the Committee may require as a
condition of exercise that the person exercising the ISO agree (i) to inform the
Company promptly of any disposition of Stock received upon exercise, and (ii) to
give such security as the Committee deems adequate to meet the potential
liability of the Company for the withholding requirements and to augment such
security from time to time in any amount reasonably deemed necessary by the
Committee to preserve the adequacy of such security.
8.7 NON-UNIFORM DETERMINATIONS
The Committee's determinations under the Plan, including without
limitation, (i) the determination of the Participants to receive Awards, (ii)
the form, amount, timing and payment of such Awards, (iii) the terms and
provisions of such Awards and
-15-
<PAGE> 16
(iv) the agreements evidencing the same, need not be uniform and may be made
by it selectively among Participants who receive, or who are eligible to
receive, Awards under the Plan, whether or not such Participants are similarly
situated.
8.8 LEAVES OF ABSENCE; TRANSFERS
The Committee shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan in respect to any leave of
absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Committee shall be entitled to determine (i)
whether or not any such leave of absence shall be treated as if the Participant
ceased to be an Employee and (ii) the impact, if any, of any such leave of
absence on Awards under the Plan. In the event a Participant transfers within
the Company, such Participant shall not be deemed to have ceased to be an
Employee for purposes of the Plan.
8.9 GENERAL RESTRICTION
(a) Each Award under the Plan shall be subject to the condition that, if
at any time the Committee shall determine that (i) the listing, registration or
qualification of shares of Stock upon any securities exchange or under any state
or federal law, (ii) the consent or approval of any government or regulatory
body or (iii) an agreement by the Participant with respect thereto, is necessary
or desirable, then such Award shall not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval or agreement
shall have been effected or obtained free from any conditions not acceptable to
the Committee.
(b) Shares of Common Stock for use under the provisions of this Plan shall
not be issued until they have been duly listed, upon official notice of
issuance, upon the New York Stock Exchange and such other exchanges, if any, as
the Board of Directors of the Corporation shall determine, and a registration
statement under the Securities Act of 1933 with respect to such shares shall
have become, and be, effective.
8.10 EFFECTIVE DATE
The Plan shall be effective on the date on which it is approved by the
common stockholders of the Corporation. Grants of Awards under the Plan may be
made prior to that date (but not before the date on which the Plan is adopted by
the Board of Directors), subject to such approval.
No Award may be granted under the Plan after May 25, 2003, but Awards
previously made may extend beyond that date and Reload Options and additional
Reload Options provided for with respect
-16-
<PAGE> 17
to original options outstanding prior to that date may continue unless the
Committee otherwise provides and subject to such additional terms and
conditions as the Committee may provide except that all Reload Options issued
after that date shall be NSOs, and the provisions of Article VI of the Plan
shall survive and remain effective as to all present and future Deferred
Amounts until such later date as the Committee or the Board of Directors shall
determine.
The adoption of the Plan shall not preclude the adoption by appropriate
means of any other stock option or other incentive plan for employees.
8.11 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN
The Board of Directors may at any time or times amend the Plan for any
purpose which may at the time be permitted by law, or may at any time suspend or
terminate the Plan as to any further grants of Awards.
8.12 CERTAIN DEFINITIONS
(a) Unless otherwise determined by the Committee, the terms "retirement"
and "disability" as used under the Plan shall be construed by reference to the
provisions of the Westinghouse Pension Plan or other similar plan or program of
the Company applicable to a Participant.
(b) The term "Fair Market Value" as it relates to Common Stock means the
mean of the high and low prices of the Common Stock as reported by the Composite
Tape of the New York Stock Exchange (or such successor reporting system as shall
be selected by the Committee) on the relevant date or, if no sale of the Common
Stock shall have been reported for that day, the average of such prices on the
next preceding day and the next following day for which there were reported
sales. The term "Fair Market Value" as it relates to Formula Value Stock shall
mean the value determined by the Committee.
(c) The term "Subsidiary" shall mean, unless the context otherwise
requires, any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the corporation if each of the corporations other
than the last corporation in such chain owns stock possessing at least 50% of
the voting power in one of the other corporations in such chain.
(d) "Formula Value Stock" means shares of a class or classes of stock the
value of which is derived from a formula established by the Committee which
reflects such financial measures as the Committee shall determine. Such shares
shall have such other characteristics as shall be determined at time of their
authorization.
-17-
<PAGE> 1
Exhibit (10)(c)
1984 LONG-TERM INCENTIVE PLAN
(as amended as of November 1, 1996)
ARTICLE I
GENERAL
1.1 PURPOSE:
The purpose of the 1984 Long-Term Incentive Plan (Plan) for key employees of
Westinghouse Electric Corporation (Corporation) and its Subsidiaries (the
Corporation, its operating units and its Subsidiaries severally and
collectively referred to hereinafter as the Company) are to foster and promote
the long-term financial success of the Company and materially increase
stockholder value by (i) attracting and retaining executives of outstanding
ability, (ii) strengthening the company's capability to develop, maintain and
direct a competent management team, (iii) motivating executives, by means of
performance-related incentives, to achieve long-range performance goals, (iv)
providing incentive compensation opportunities competitive with those of other
major companies and (v) enabling executives to participate in the long-term
growth and financial success of the Company.
1.2 ADMINISTRATION:
(a) The Plan shall be administered by a committee of the Board of Directors
(Committee) which shall consist of two or more members. Each member shall be a
"non-employee director," as that term is defined by Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
such rule may be amended, or any successor rule. The members shall be
appointed by the Board of Directors, and any vacancy on the Committee shall be
filled by the Board of Directors.
The Committee shall keep minutes of its meetings and of any action taken by
it without a meeting. A majority of the Committee shall constitute a quorum,
and the acts of a majority of the members present at any meeting at which a
quorum is present shall be the acts of the Committee. Any action that may be
taken at a meeting of the Committee may be taken without a meeting if a consent
or consents in writing setting forth the action so taken shall be signed by all
of the members of the Committee. The Committee shall make appropriate reports
to the Board of Directors concerning the operations of the Plan.
(b) Subject to the limitations of the Plan, the Committee shall have the
sole and complete authority: (i) to select from the regular, full-time salaried
employees of the Company who are exempt from the minimum wage and overtime
provisions of the Fair Labor Standards Act of 1938, as amended (Employee or
Employees), those who shall participate in the Plan (Participant or
Participants), (ii) to make awards in such forms and amounts as it
-1-
<PAGE> 2
shall determine, (iii) to impose such limitations, restrictions and conditions
upon such awards as it shall deem appropriate, (iv) to interpret the Plan and
to adopt, amend and rescind administrative guidelines and other rules and
regulations relating to the Plan and (v) to make all other determinations and
to take all other actions necessary or advisable for the implementation and
administration of the Plan. The Committee's determinations on matters within
its authority shall be conclusive and binding upon the Company and all other
persons.
(c) The Committee shall act on behalf of the Corporation as sponsor of the
Plan and on behalf of any Subsidiary issuing stock under the Plan, subject to
appropriate action by the board of directors of any such Subsidiary. All
expenses associated with the Plan shall be borne by the Corporation subject to
such allocation to its Subsidiaries and operating units as it deems
appropriate.
1.3 SELECTION FOR PARTICIPATION:
Participants shall be selected by the Committee from the employees who occupy
responsible managerial or professional positions and who have the capacity to
contribute to the success of the Company. In making this selection and in
determining the form and amount of awards, the Committee may give consideration
to the functions and responsibilities of the employee, his or her past, present
and potential contributions to the Company's profitability and sound growth,
the value of his or her services to the Company and other factors deemed
relevant by the Committee.
1.4 TYPES OF AWARDS UNDER PLAN:
Awards under the Plan may be in the form of any one or more of the following
(i) Incentive Stock Options (ISOs) and Non-statutory Stock Options (NSOs)
(options), Stock Appreciation Rights (SARs), as described in Article II, (ii)
Performance Units and Performance Shares (Performance Units or Performance
Shares) as described in Article III, (iii) Restricted Stock (Restricted Stock)
as described in Article IV and (iv) rights to purchase Convertible Debentures
(Debentures) as described in Article V.
1.5 SHARES SUBJECT TO THE PLAN:
Shares of stock issued under the Plan may be in whole or in part authorized
and unissued or treasury shares of the Corporation's common stock, par value
$1.00 (Common Stock), or Formula Value Stock, as defined in Section 7.7
(Formula Value Stock). The maximum number of shares of Common Stock and
Formula Value Stock which may be issued for all purposes under the Plan shall
be 13,200,000. Any shares of Stock that are used by a Participant as full or
partial payment to the Corporation of the purchase price of shares of Stock
acquired upon exercise of an
-2-
<PAGE> 3
option shall be made available for future awards under the Plan. Further, any
shares of Stock subject to an option which for any reason is cancelled
(excluding shares subject to an Option cancelled upon the exercise of a
related SAR) or terminated without having been exercised, or any shares of
Restricted Stock or Performance Shares which are forfeited, shall again be
available for awards under the Plan. Shares subject to an option cancelled
upon the exercise of an SAR shall not again be available for awards under the
Plan. No fractional shares shall be issued, and the Committee shall determine
the manner in which fractional share value shall be treated. Common Stock,
Putative Common Stock, Restricted Stock, and Formula Value Stock are
collectively referred to herein as "Stock".
ARTICLE II
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1 AWARD OF STOCK OPTIONS:
The Committee may, from time to time, subject to the provisions of the Plan
and such other terms and conditions as the Committee may prescribe, award to
any Participant ISOs and NSOs to purchase Common Stock or Formula Value Stock.
The Committee may, effective as of the date of exercise by a Participant of
all or part of an option using already-owned Common Stock, grant an additional
option (reload option) to purchase at the fair market value as of the date of
said exercise, the number of shares of Common Stock equal to the sum of the
number of whole shares used by the Participant in payment of the purchase
price. A reload option shall only be available during the period the
Participant is an employee of the Company. The reload option may be exercised
between the date of its grant and the date of expiration of the underlying
option to which the reload option relates. The reload option shall be
evidenced by an agreement containing such additional terms and conditions as
the Committee shall approve, which conditions may provide that upon the
exercise of any reload option, an additional reload option may be granted with
respect to the number of whole shares used to exercise the reload option.
2.2 STOCK OPTION AGREEMENTS:
The award of an Option shall be evidenced by a signed written agreement
(Stock option Agreement) containing such terms and conditions as the Committee
may from time to time determine.
2.3 OPTION PRICE:
Purchase price of Common Stock or Formula Value Stock under each Option
(Option Price) shall be not less than the Fair Market
-3-
<PAGE> 4
Value of the Common Stock or Formula Value Stock, as the case may be, on the
date the Option is awarded.
2.4 EXERCISE AND TERM OF OPTIONS:
(a) Unless otherwise provided by the Committee in the Stock Option Agreement
and subject to the limitations set forth in section 2.5, an option awarded
under the Plan shall become exercisable in whole or in part after the
commencement of the second year of its specified term and thereafter may be
exercised in whole or in part at any time before it terminates under the
provisions of the Plan.
(b) The Committee shall establish procedures governing the exercise of
options and shall require that notice of exercise be given. Stock purchased
upon exercise of an option must be paid for as follows: (1) in cash or by check
(acceptable to the Company in accordance with guidelines established for this
purpose), bank draft or money order payable to the order of the Company or (2)
if so provided by the Committee (not later than the time of grant, in the case
of an ISO) (i) through the delivery of shares of Stock which are then
outstanding and which have a Fair Market Value on the date of exercise equal to
the exercise price, (ii) by delivery of an unconditional and irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds to
pay the exercise price, or (iii) by any combination of the permissible forms of
payment. As soon as practicable after receipt of each notice and full payment,
the Company shall deliver to the Participant a certificate or certificates
representing the acquired shares of Common Stock or Formula Value Stock. The
exercise of an Option shall cancel any related SAR.
2.5 LIMITATIONS ON ISOS:
No Participant shall be awarded, in any one calendar year under this Plan and
under all plans of the Company, ISOs covering stock with an aggregate Fair
Market Value (determined as of the time the ISOs are granted) in excess of
$100,000 plus any "unused limit carryover" to such year for such Participant,
as provided in Section 422A of the Internal Revenue Code of 1954, as amended,
or such other limit as may be imposed by law in substitution thereof.
2.6 TERMINATION OF EMPLOYMENT:
In the event the Participant ceases to be an employee with the consent of the
Committee or upon his death, retirement or disability, each of his outstanding
Options shall be exercisable by the Participant (or his legal representative or
designated beneficiary), to the extent that such option was then exercisable,
at any time prior to an expiration date established by the Committee at the
time of award, but in no event after its respective expiration date. If the
Participant ceases to be an
-4-
<PAGE> 5
employee for any other reason, all of the Participant's then outstanding
options shall terminate immediately.
2.7 AWARD OF STOCK APPRECIATION RIGHTS:
(a) At any time prior to six months before an option's expiration date, the
Committee may award to the Participant an SAR related to the Option.
(b) The SAR shall represent the right to receive payment of a sum not to
exceed the amount, if any, by which the Fair Market Value of the Common Stock
or Formula Value Stock, as the case may be, on the date of exercise of the SAR
exceeds the Option Price.
(c) SARs awarded under the Plan shall be evidenced by either the Stock
option Agreement or a separate agreement between the Company and the
Participant.
(d) An SAR shall be exercisable only at the same time and to the same extent
and subject to the same conditions as the Option related thereto is
exercisable, except that (i) the Committee may prescribe additional conditions
and limitations on the exercise of any SAR and (ii) no SAR shall be exercisable
for six months after the date of award. The exercise of an SAR shall cancel
the related Option. SARs may be exercised only when the Fair Market Value of a
share of Common Stock or Formula Value Stock, as the case may be, exceeds the
Option Price.
(e) All SARs shall automatically be exercised on the last trading day prior
to the expiration of the related ISO or NSO, so long as the Fair Market Value
on such date exceeds the specified option Price.
(f) At the time of award of an SAR, the Committee may limit the amount of
the payment that may be made to a Participant upon the exercise of the SAR.
The Committee may further determine that, if the amount to be received by a
Participant in any year is limited pursuant to this provision, payment of all
or a portion of the amount reduced may be made to the Participant at a
subsequent time. No such limitation shall require a Participant to return to
the Company any amount theretofore received by him upon the exercise of an SAR.
(g) Payment of the amount to which a Participant is entitled upon the
exercise of an SAR shall be made in cash, Stock, or partly in cash and partly
in Stock, as the Committee shall determine. To the extent that payment is made
in Stock, the shares shall be valued at their Fair Market Value on the date of
exercise of the SAR.
(h) Each SAR shall expire on a date determined by the Committee at the time
of award, or earlier upon the occurrence of
-5-
<PAGE> 6
the first of the following: (i) termination of the related option, (ii)
expiration of a period of six months after the later of either (1) the
Participant ceasing to be an employee with the consent of the Committee or
upon his death, retirement or disability or (2) termination of the
Participant's service as a director of the corporation or (iii) the
Participant ceasing to be an employee for any other reason.
2.8 LIMITED STOCK APPRECIATION RIGHTS:
(a) The Committee may award limited stock appreciation rights (Limited
Rights) pursuant to the provisions of this paragraph to the holder of an Option
granted under the Plan (a related option) with respect to all or a portion of
the shares subject to the related option. A Limited Right may be exercised only
during the period beginning on the first day following a Change in Control, as
defined in Section 7.7(g) of the Plan, and ending on the thirtieth day following
such date. Each Limited Right shall be exercisable only to the same extent the
related option is exercisable, and in no event after the determination of the
related option. In no event shall a Limited Right be exercised during the first
six months after the date of grant of the Limited Right. Limited Rights shall
be exercisable only when the fair market value (determined as of the date of
exercise of the Limited Rights) of each share of Common Stock with respect to
which the Limited Rights are to be exercised shall exceed the option price per
share of Common Stock subject to the related option.
(b) Upon the exercise of Limited Rights, the related option shall be
considered to have been exercised to the extent of the number of shares of
Common Stock with respect to which such Limited Rights are exercised, and shall
be considered to have been exercised to that extent for purposes of determining
the number of shares of Common Stock available for the grant of options under
the Plan. Upon the exercise or termination of the related option, the Limited
Rights with respect to such related option shall be considered to have been
exercised or terminated to the extent of the number of shares of Common Stock
with respect to which the related option was so exercised or terminated.
(c) Except as otherwise provided in Section 7.4, the provisions of the Plan
shall also be applicable to Limited Rights unless the context otherwise
requires. The effective date of the grant of a Limited Right shall be the date
on which the Committee approves the grant of such Limited Right. Each grantee
of a Limited Right shall be notified promptly of the grant of the Limited Right
in such manner as the Committee shall prescribe.
(d) Upon the exercise of Limited Rights, the holder thereof shall receive in
cash an amount equal to the product computed by multiplying (i) the excess of
(a) the higher of (x) the Minimum
-6-
<PAGE> 7
Price Per Share (as hereinafter defined), or (y) highest reported closing
sales price of a share of Common Stock on the New York Stock Exchange at any
time during the period beginning on the sixtieth day prior to the date on
which such Limited Rights are exercised and ending on the date on which such
Limited Rights are exercised, over (b) the option price per share of Common
Stock subject to the related option, by (ii) the number of shares of Common
Stock with respect to which such Limited Rights are being exercised.
(e) For purposes of this Section 2.8, the term "Minimum Price Per Share"
shall mean the highest gross price (before brokerage commissions and soliciting
dealers' fees) paid or to be paid for a share of Common Stock (whether by way
of exchange, conversion, distribution upon liquidation or otherwise) in any
Change in Control which is in effect at any time during the period beginning on
the sixtieth day prior to the date on which such Limited Rights are exercised
and ending on the date on which such Limited Rights are exercised. For
purposes of this definition, if the consideration paid or to be paid in any
such Change in Control shall consist, in whole or in part, of consideration
other than cash, the Board shall take such action, as in its judgement it deems
appropriate, to establish the cash value of such consideration.
ARTICLE III
PERFORMANCE SHARES AND UNITS
3.1 AWARD OF PERFORMANCE UNITS AND PERFORMANCE SHARES:
The Committee may award to any Participant Performance Shares and Performance
Units (Performance Award or Performance Awards). Each Performance Share shall
represent, as the Committee shall determine, one Share of the Stock. Each
Performance Unit shall represent the right of a Participant to receive an
amount equal to the value determined in the manner established by the Committee
at time of award, which value may, without limitation, be equal to the Fair
Market Value of one share of Stock.
3.2 PERFORMANCE UNIT AND PERFORMANCE SHARE AGREEMENTS:
Each Performance Award under the Plan shall be evidenced by a signed written
agreement containing such terms and conditions as the committee may determine.
3.3 ESTABLISHMENT OF PERFORMANCE ACCOUNTS:
At the time of award, the Company shall establish an account (Performance
Account) for each Participant. Performance Units and Performance Shares
awarded to a Participant shall be credited to the Participant's Performance
Account. Performance Shares in the form of Restricted Stock shall be
registered in the name of the
-7-
<PAGE> 8
Participant and deposited, together with a stock power endorsed in blank, with
the Corporation; at such time the Participant's Performance Account will be
credited.
3.4 PERFORMANCE PERIOD AND TARGETS:
(a) The performance period for each award of Performance Shares and
Performance Units shall be of such duration as the Committee shall establish at
the time of award (Performance Period). There may be more than one award in
existence at any one time, and Performance Periods may differ.
(b) At the time of each Performance Award, the Committee shall establish
superior and satisfactory performance targets to be achieved within the
Performance Period. The superior and satisfactory performance targets shall be
determined by the Committee using such measures of the performance of the
Company over the Performance Period as it shall select. Attainment of superior
performance target in respect of a Performance Period shall earn 100% of the
related Performance Award. Failure to meet the satisfactory performance target
will earn no Performance Award. Performance Awards will be earned as
determined by the Committee in respect of a Performance Period in relation to
the degree of attainment of performance between the superior and satisfactory
performance targets.
3.5 RIGHTS AND BENEFITS DURING PERFORMANCE PERIOD:
(a) The Committee may provide that amounts equivalent to dividends paid
shall be payable with respect to each Performance Share awarded, and that
amounts equivalent to interest at such rates as the Committee may determine
shall be payable with respect to amounts equivalent to dividends previously
credited to the Participant's Performance Account.
(b) The Committee may provide that amounts equivalent to interest at such
rates as the Committee may determine shall be payable with respect to
Performance Units.
(c) All amounts payable pursuant to this section shall be credited to the
Participant's Performance Account.
3.6 PAYMENT RESPECTING PERFORMANCE AWARDS:
(a) Performance Awards shall be earned to the extent that the terms and
conditions of the Plan are met. Notwithstanding the foregoing, Performance
Shares, Performance Units and any other amounts credited to the Participant's
Performance Account shall be payable to the Participant only when, if and to
the extent that the Committee determines to make such payment.
-8-
<PAGE> 9
(b) All payment determinations shall be made by the Committee during the
first four months following the end of the Performance Period. If such
determinations are not made during such four-month period, the Performance
Shares and Performance Units awarded in connection with that Performance Period
shall terminate and be canceled and related dividends or amounts equivalent to
dividends and any amounts equivalent to interest shall be forfeited.
(c) The Participant may, other than with respect to those Performance Shares
or Performance Units awarded in the form of Restricted Stock, elect, not later
than October 31 of the last year of the Performance Period applicable to such
Performance Shares or Performance Units, to defer any payment respecting an
award of Performance Shares or Performance units pursuant to Article VI hereof.
3.7 FORMS OF PAYMENT:
(a) Payment for Performance Shares and any related dividends, amounts
equivalent to dividends and amounts equivalent to interest may be made in a
lump sum or in installments, in cash, Stock, Debentures or in a combination
thereof as the Committee may determine. Performance Shares paid in the form of
Restricted Stock shall be redelivered to the Participant.
(b) Payment for Performance Units and any related amounts equivalent to
interest may be made in a lump sum or in installments, in cash, Stock,
Debentures or in a combination thereof as the Committee may determine.
3.8 TERMINATION OF EMPLOYMENT:
In the event the Participant ceases to be an employee before the end of any
Performance Period with the consent of the committee, or upon his death,
retirement or disability before the end of any Performance Period, the
Committee, taking into consideration the performance of such Participant and
the performance of the Company over the Performance Period, may authorize the
payment to such Participant (or his legal representative or designated
beneficiary) of all or a portion of the amount which would have been paid to
him had he continued as an employee to the end of the Performance Period. In
the event a Participant ceases to be an employee for any other reason, all
Performance Shares, Performance Units and all amounts credited to his
Performance Account shall be forfeited.
-9-
<PAGE> 10
ARTICLE IV
RESTRICTED STOCK
4.1 AWARD OF RESTRICTED STOCK:
The Committee may award to any Participant shares of Common Stock, Putative
Common Stock or Formula Value Stock subject to this Article IV and such other
terms and conditions as the Committee may prescribe, such shares being herein
called "Restricted Stock".
Each certificate for Restricted Stock shall be registered in the name of the
Participant and deposited by him, together with a stock power endorsed in
blank, with the Corporation.
4.2 RESTRICTED STOCK AGREEMENT:
Shares of Restricted Stock awarded under the Plan shall be evidenced by a
signed written agreement containing such terms and conditions as the Committee
may determine.
4.3 RESTRICTION PERIOD:
At the time of award there shall be established for each Participant a
"Restriction Period" of such length as shall be determined by the Committee.
Shares of Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered, except as hereinafter provided, during the Restriction
Period. Except for such restriction on transfer, the Participant as owner of
such shares of Restricted stock shall have all the rights of a holder of such
Restricted Stock.
At the expiration of the Restriction Period, the Corporation shall redeliver
to the Participant (or his legal representative or designated beneficiary) the
shares deposited pursuant to Section 4.1.
4.4 TERMINATION OF EMPLOYMENT:
In the event the Participant ceases to be an employee with the consent of the
Committee, or upon his death, retirement or disability, the restrictions
imposed under this Article IV shall lapse with respect to such number of shares
theretofore awarded to him as shall be determined by the Committee, but, in no
event less than a number equal to the product of (i) a fraction the numerator
of which is the number of completed months elapsed after the date of award of
the Restricted Stock to the Participant to the date of termination and the
denominator of which is the number of months in the Restriction Period and (ii)
the number of shares of Restricted Stock.
-10-
<PAGE> 11
In the event the Participant ceases to be an employee for any other reason,
all shares of Restricted Stock theretofore awarded to him which are still
subject to restrictions shall be forfeited and the Corporation shall have the
right to complete the blank stock power.
ARTICLE V
CONVERTIBLE DEBENTURES
5.1 AWARD OF RIGHTS TO PURCHASE CONVERTIBLE DEBENTURES:
The Committee may award to any Participant the right to purchase Convertible
Debentures on such terms and conditions as the Committee shall determine. The
purchase price per Debenture shall be its face amount, which shall equal its
Fair Market Value. The Participant shall retain the right to purchase
Debentures for such period as the Committee shall determine at the time of
award, but in no event for longer than four years from date of award.
5.2 CONVERTIBLE DEBENTURE AGREEMENTS:
The Debentures are to be issued pursuant to a signed written agreement and
any agreement supplemental thereto (collectively, a Convertible Debenture
Agreement) containing such terms and conditions as the Committee may determine.
The Debentures are to be issued in series; each series may be issued under a
separate Convertible Debenture Agreement, or two or more series may be issued
under a single Convertible Debenture Agreement.
The Convertible Debenture Agreement may provide that a Participant may pledge
Debentures as security to provide all or a part of the financing necessary to
purchase the Debentures upon providing the Company with written notice of the
pledge. The conversion privilege will not be exercisable during such times as
the Debenture is pledged, and at all other times shall be exercisable only by
the Participant (or his legal representative or designated beneficiary).
5.3 TERMS AND CONDITIONS OF THE DEBENTURES:
(a) Each Debenture will be due upon the earliest of (i) five years from the
date of issuance, (ii) such date as the Committee shall determine at time of
award or (iii) such date as the Company redeems a series of Debentures or
prepays an individual Debenture (Due Date). The Committee may extend the term
of a series for any period of time up to ten years without stockholder
approval, as shall be set forth in the Convertible Debenture Agreement for that
series. The Debentures shall be issued in denominations equal to fair market
value and will accrue interest, from the date of issuance, at the rate, which
may be fixed or variable, set by the Committee at the time of award.
-11-
<PAGE> 12
(b) Debentures will be convertible into fully paid and nonassessable shares
Of Common Stock or Formula Value Stock or such other type of securities, which
may immediately be convertible into Common Stock, as the Committee shall
determine at time of award, at any time after one year from the date of
issuance and to the extent the terms and conditions of the award and the Plan
are met, but in no event later than the Due Date. The conversion rate of a
Debenture shall be set by reference to the Fair Market Value of the Common
Stock or Formula Value Stock on the last trading day prior to the date of
issuance (and not thereafter adjusted).
5.4 TERMINATION OF EMPLOYMENT:
In the event the Participant ceases to be an employee with the consent of the
Committee, or upon his death, retirement or disability, the Participant (or his
legal representative or designated beneficiary) may convert all or a part of
the Debentures, to the extent such Debentures were then convertible, for such
period as the Committee shall determine at the time of award. In the event a
Debenture is not converted within the time allowed under this Section 5.4, the
Company may prepay the Debenture. In the event the Participant ceases to be an
employee for any other reason, all of the Participant's then outstanding
conversion rights shall terminate immediately.
ARTICLE VI
DEFERRAL OF PAYMENTS
6.1 ELECTION TO DEFER:
A Participant may elect, no later than October 31 of the last year of the
Performance Period, to defer all or a portion of his Performance Award within
deferral limits established by the Committee (Deferred Amount). The
Committee may permit amounts now or hereafter deferred or available for
deferral under any present or future incentive compensation program or deferral
arrangement of the Company to be deemed Deferred Amounts and to become subject
to the provisions of this Article.
All Deferred Amounts will be subject to such terms and conditions as the
Committee may from time to time establish.
6.2 DEFERRAL PERIOD:
The Participant may elect to receive payment of Deferred Amounts and any
yield thereon either before or after retirement in a lump sum or in
installments. Upon the death of a Participant, payment of any amounts
hereunder shall be made to the Participant's designated beneficiary or estate
(in the absence of a designated beneficiary) in the manner elected by the
Participant
-12-
<PAGE> 13
or (in the event the Participant made no election) in the manner determined by
the Committee.
The period between the date the Participant's Deferred Amount becomes payable
and the final payment of such Deferred Amount hereunder shall be known as the
"Deferral Period."
6.3 INVESTMENT DURING DEFERRAL PERIOD:
Unless otherwise determined by the Committee, the Deferral Amount will be
treated as if it had been invested in putative debentures. Each putative
debenture will be deemed to be convertible into Common Stock at a conversion
rate computed by reference to the Fair Market Value of the Common Stock on the
last trading day prior to the regular January meeting of the Board of
Directors. The yield to be paid by the Company on Deferred Amounts, whatever
the form of investment selected by the Committee, shall not exceed the higher
of (i) the market rate available from time to time on such investment or (ii)
the rate of return on equity of the Corporation or any relevant Subsidiary as
determined by the Committee.
6.4 PARTICIPANT REPORTS:
Annually, each Participant who has a Deferred Amount will receive a report
setting forth all then Deferred Amounts and the yield thereon to date.
6.5 PAYMENT OF DEFERRED AMOUNTS:
Unless otherwise agreed by the Company and the Participant, payment of
Deferred Amounts will be made at such time or times, and may be in cash, Stock,
or partly in cash and partly in Stock, as the Committee shall determine. The
limitations respecting the issuance of Stock or other limitations on aggregate
awards payable contained in Article XVI of the by-laws of the Corporation, in
the 1974 Stock Option Plan, 1979 Stock Option and Long-Term Incentive Plan, the
Plan and in any plan hereafter adopted by the stockholders shall be limitations
applicable to the payment of any Deferred Amounts under this Article VI.
6.6 ALTERNATE VALUATION ELECTION:
A Participant may, at a time established by the Committee but prior to such
Participant ceasing to be an Employee, elect to establish the ultimate payable
value of each Deferred Amount by reference to the Fair Market Value of the
Stock as of the day on which notice of the alternate valuation election is
received by the Corporation in accordance with the procedures established by
the Committee.
-13-
<PAGE> 14
Notwithstanding the establishment of the ultimate payable value resulting
from the alternate valuation election by the Participant, the yield will
continue as though no such election has been made and will continue to be
subject to the limitations set forth in Section 6.3, and Deferred Amounts and
the yield thereon will be paid as otherwise provided in this Article.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 NON-TRANSFERABILITY:
No Option, SAR, Performance Share, Performance Unit, share of Restricted
Stock or Debenture award under the Plan shall be transferable by the
Participant otherwise than by will or, if the Participant dies intestate, by
the applicable laws of descent and distribution, or by transfer to a properly
designated beneficiary in the event of death. All awards shall be exercisable
or received during the Participant's lifetime only by such Participant or his
legal representative. Any transfer contrary to this Section 7.1 will nullify
the Option, SAR, Performance Share, Performance Unit or share of Restricted
Stock and will nullify the conversion right of a Debenture.
7.2 BENEFICIARIES:
The Committee may establish or authorize the establishment of procedures not
inconsistent with Section 7.1 under which a Participant may designate a
beneficiary or beneficiaries to hold, exercise and/or receive amounts due under
an Option, SAR, Performance Share, Performance Unit, share of Restricted Stock
or Debenture award or with respect to Deferred Amounts under the Plan in the
event of the Participant's death.
7.3 ADJUSTMENTS UPON CHANGES IN STOCK:
If there shall be any change in the Stock of the Company, through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
spin-off, split up, dividend in kind or other change in the corporate structure
or distribution to the stockholders, appropriate adjustments may be made by the
Board of Directors of the Company (or if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation) in the aggregate number and kind of shares subject to the Plan,
and the number and kind of shares and the price per share subject to
outstanding Options or which may be issued under Outstanding Performance Shares
or awards of Restricted Stock. Appropriate adjustments may also be made by the
Board of Directors or the Committee in the terms of any awards under the Plan
to reflect such changes and to modify any other terms of outstanding awards on
an equitable basis, including
-14-
<PAGE> 15
modifications of performance targets and changes in the length of Performance
Periods.
7.4 CONDITIONS ON AWARDS:
In the event that the employment of a Participant holding any unexercised
Option or SAR, or any unearned right to purchase or conversion right under a
Debenture or unearned Performance Award or Stock shall terminate with the
consent of the Committee or by reason of retirement or disability, the rights
of such Participant to any such Option, SAR, Debenture, Performance Award or
Stock shall be subject to the conditions that until any such Option or SAR is
exercised, or any such conversion right, Purchase right, Performance Award or
Stock is earned, he shall (i) not engage, either directly or indirectly, in any
manner or capacity as advisor, principal, agent, partner, officer, director,
employee, member of any association or otherwise, in any business or activity
which is at the time competitive with any business or activity conducted by the
Company and (ii) be available, unless he shall have died, at reasonable times
for consultations at the request of the Company's management with respect to
phases of the business with which he was actively connected during his
employment, but such consultations shall not (except in the case of a
Participant whose active service was outside the United States) be required to
be performed at any place or places outside of the United States of America or
during usual vacation periods or periods of illness or other incapacity. In the
event that either of the above conditions is not fulfilled, the Participant
shall forfeit all rights to any unexercised Option or SAR, or any unearned
conversion right, purchase right, Performance Award or Stock held (and any
unpaid amounts equivalent to dividends or amounts equivalent to interest
relating thereto) as of the date of the breach of condition. Any determination
by the Board of Directors of the Corporation, which shall act upon the
recommendation of the Chairman, that the Participant is, or has, engaged in a
competitive business or activity as aforesaid or has not been available for
consultations as aforesaid shall be conclusive.
7.5 USE OF PROCEEDS:
All cash proceeds from the exercise of options or the sale of Debentures
shall constitute general funds of the Company.
7.6 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN:
(a) The Board of Directors may suspend or terminate the Plan or any portion
thereof at any time and may amend it from time to time in such respects as the
Board of Directors may deem advisable in order that any awards thereunder shall
conform to any change in applicable laws or regulations, or to permit the
Company or its employees to enjoy the benefits of any change in applicable
-15-
<PAGE> 16
laws or regulations, or in any other respect the Board of Directors may deem
to be in the best interests of the Company; provided, however, that no such
amendment shall, without stockholder approval, (i) except as provided in
Section 7.3, materially increase the number of shares of Stock which may be
issued under the Plan, (ii) materially modify the requirements as to
eligibility for participation in the Plan, (iii) materially increase the
benefits accruing to Participants under the Plan, (iv) make any other change
that would disqualify the Plan for purposes of the exemption provided by Rule
16b-3(d)(3), (v) reduce the Option Price below the Fair Market Value of the
Common Stock or Formula Value Stock on the day the Option is awarded, (vi)
permit the award of SARs other than in tandem with an Option, (vii) permit the
exercise of an SAR during the first six months of its term except as otherwise
provided herein, (viii) permit the exercise of an Option or SAR without
surrender of the correlative rights or (ix) extend the termination date of the
Plan. However, no such amendment, suspension or termination shall, unless the
Participant affected thereby consents, alter or impair any outstanding Option,
SAR, share of Stock, Performance Unit, Performance Share or Debenture in any
way that would adversely affect the rights of such Participant with respect to
such award.
(b) The Committee may and, with respect to awards of persons who are not
required to file reports with respect to securities of the Company pursuant to
Section 16(a) of the Exchange Act, may authorize its delegates, acting with
within limits approved from time to time by the Committee, to amend or modify
any outstanding Options, SARs, shares of Stock, Performance Units, Performance
Shares or Debentures, in any manner to the extent that the Committee would have
had the authority under the Plan to initially award such options, SARs, shares
of Stock, Performance Units, Performance Shares or Debentures, as so modified
or amended, including without limitation, to change the date or dates as of
which such Options or SARs may be exercised, the restrictions on shares of
Restricted Stock are removed or the Performance Units or Performance Shares are
determined and paid, or may cancel any outstanding award, except that the
Committee and its authorized delegates may not, unless the Participant affected
thereby consents, take any action pursuant to this Section 7.6(b) that would
adversely affect the rights of such Participant with respect to such award.
7.7 DEFINITIONS AND OTHER GENERAL PROVISIONS:
(a) The terms "retirement" and "disability" as used under the Plan shall be
construed by reference to the provisions of the Westinghouse Pension Plan or
other similar plan or program of the Company applicable to a Participant.
(b) The term "Fair Market Value" as it relates to Common Stock means the
mean of the high and low prices of the
-16-
<PAGE> 17
Corporation's Common Stock as reported by the Composite Tape of the New York
Stock Exchange (or such successor reporting system as shall be selected by the
Committee) on the relevant date or, if no sale of the Corporation's Common
Stock shall have been reported for that day, the average of such prices on the
next preceding day and the next following day for which there were reported
sales. The term "Fair Market Value" as it relates to Formula Value Stock and
Debentures shall mean the value determined by the Committee.
(c) The term "Subsidiary" shall mean, unless the context otherwise requires,
any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation if each of the corporations other
than the last corporation in such chain owns stock possessing at least 50% of
the voting power in one of the other corporations in such chain.
(d) The term "Formula Value Stock" means shares of a class or classes of
stock, the value of which is derived from a formula established by the
Committee which reflects such financial measures as the Committee shall
determine. Such Shares shall have such other characteristics as shall be
determined at time of their authorization.
(e) The adoption of the Plan shall not preclude the adoption by appropriate
means of any other stock option or other incentive plan for employees.
(f) Change in Control.
Notwithstanding any other provision of the Plan, upon the occurrence of a
Change in Control, as defined in Section 7.7(g), (i) all Options and Limited
Rights, but not SARs, outstanding and unexercised on the date of the Change in
Control shall become immediately exercisable; (ii) all Performance Shares and
Performance Units shall be deemed to have been earned on such basis as the
Committee may prescribe and then paid on such basis, at such time and in such
form as the Committee may prescribe, or deferred in accordance with the
elections of Participants; (iii) all Restricted Stock shall be deemed to be
earned and the restriction period shall be deemed expired on such terms and
conditions as the Committee may determine; (iv) all Convertible Debentures
shall be immediately convertible on such terms and conditions as the Committee
may determine; and (v) all amounts deferred under this Plan paid to a trustee
or otherwise on such terms as the Committee may prescribe or permit.
(g) The term "Change in Control" means the occurrence of one or more of the
following events:
(a) there shall be consummated (i) any consolidation or merger of the
Corporation in which the Corporation is not the continuing or surviving
corporation or pursuant to which shares of
-17-
<PAGE> 18
the Corporation's Common Stock would be converted into cash, securities or
other property, other than a merger of the Corporation in which the holders of
the Corporation's Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Corporation, or (b) the stockholders
of the Corporation shall approve any plan or proposal for the liquidation or
dissolution of the Corporation, or (c) (i) any person (as such term is defined
in Section 13(d) of the Exchange Act), corporation or other entity shall
purchase any Common Stock of the Corporation (or securities convertible into
the Corporation's Common Stock) for cash, securities or any other
consideration pursuant to a tender offer or exchange offer, unless, prior to
the making of such purchase of Common Stock (or securities convertible into
Common Stock), the Board shall determine that the making of such purchase
shall not constitute a Change in Control, or (ii) any person (as such term is
defined in Section 13(d) of the Exchange Act), corporation or other entity
(other than the Corporation or any benefit plan sponsored by the Corporation
or any of its subsidiaries) shall become the "beneficial owner" (as such term
is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing twenty percent or more of the
combined voting power of the Corporation's then outstanding securities
ordinarily (and apart from any rights accruing under special circumstances)
having the right to vote in the election of directors (calculated as provided
in Rule 13d-3(d)) in the case of rights to acquire any such securities,
unless, prior to such person so becoming such beneficial owner, the Board
shall determine that such person so becoming such beneficial owner shall not
constitute a Change in Control, or (d) at any time during any period of two
consecutive years, individuals who at the beginning of such period constituted
the entire Board shall cease for any reason to constitute at least a majority
thereof, unless the election or nomination for election of each new director
during such two-year period was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the beginning of such
two-year period.
7.8 NON-UNIFORM DETERMINATIONS:
The Committee's determinations under the Plan, including without limitation,
(i) the determination of the Participants to receive awards, (ii) the form,
amount and timing of such awards, (iii) the terms and provisions of such awards
and (iv) the agreements evidencing the same, need not be uniform and may be
made by it selectively among Participants who receive, or who are eligible to
receive, awards under the Plan, whether or not such Participants are similarly
situated.
-18-
<PAGE> 19
7.9 LEAVES OF ABSENCE; TRANSFERS:
The Committee shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan in respect to any leave
of absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Committee shall be entitled to determine (i)
whether or not any such leave of absence shall be treated as if the Participant
ceased to be an Employee and (ii) the impact, if any, of any such leave of
absence on awards under the Plan. In the event a Participant transfers within
the Company, such Participant shall not be deemed to have ceased to be an
Employee for purposes of the Plan.
7.10 GENERAL RESTRICTION:
(a) Each award under the Plan shall be subject to the condition that, if at
any time the Committee shall determine that (i) the listing, registration or
qualification of the shares of Common Stock or Formula Value Stock or the
Debentures subject or related thereto upon any securities exchange or under any
state or federal law, (ii) the consent or approval of any government or
regulatory body or (iii) an agreement by the Participant with respect thereto,
is necessary or desirable, then such award shall not be consummated in whole or
in part unless such listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free or any conditions not
acceptable to the Committee.
(b) Shares of Common Stock for use under the provisions of this Plan shall
not be issued until they have been duly listed, upon official notice of
issuance, upon the New York Stock Exchange and such other Exchanges, if any, as
the Board of Directors of the Corporation shall determine, and a registration
statement under the Securities Act of 1933 with respect to such shares shall
have become, and be, effective.
7.11 EFFECTIVE DATE:
The Plan shall be deemed effective as of January 1, 1984 and shall terminate
on December 31, 1993. Notwithstanding the foregoing, the provisions of Article
VI of the Plan shall survive and remain effective as to all present and future
Deferred Amounts until such date after December 31, 1993 as the Committee or
the Board of Directors shall determine.
-19-
<PAGE> 1
Exhibit (10)(d)
WESTINGHOUSE EXECUTIVE PENSION PLAN
As Amended and Restated
Effective September 25, 1996
<PAGE> 2
TABLE OF CONTENTS
PAGE
Section 1. Definitions 1
Section 2. Qualification for Benefits;
Mandatory Retirement 4
Section 3. Calculation of Executive Pension 4
Supplement
Section 4. Death in Active Service 5
Section 5. Payment of Benefits 6
Section 6. Plan Costs 7
Section 7. Conditions to Receipt of Executive 7
Pension Supplement
Section 8. Administration 7
Section 9. Modification or Termination 8
Section 10. Miscellaneous 8
Section 11. Creditors' Claims 9
Section 12. Change in Control 9
Section 13. Governing Law 11
Section 14. Severability 11
Section 15. Authority to Expand Benefits 12
Appendix A Executive Buy Back 13
Appendix B Rehired Executives 14
<PAGE> 3
WESTINGHOUSE EXECUTIVE PENSION PLAN
WHEREAS, Westinghouse Electric Corporation ("Westinghouse") established
the Westinghouse Executive Pension Plan (the "Plan") in order to provide
supplemental pension benefits for its eligible employees and their
beneficiaries; and
WHEREAS, the Plan has been established by Westinghouse primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees; and
WHEREAS, the Board of Directors of Westinghouse has determined to amend
the Plan in certain respects;
NOW, THEREFORE, the Plan is hereby amended and restated in its entirety,
effective as of September 25, 1996, as follows:
SECTION 1. DEFINITIONS
(a) ADMINISTRATIVE MANAGERS. Administrative Managers means the
persons or entities identified from time to time by the chief executive officer
of Westinghouse to serve as administrative managers for the Plan, the
Westinghouse Pension Plan and certain other plans, and to have authority with
respect to administration and all other fiduciary matters with respect to such
plans that are not within the authority of the Financial Managers.
(b) AVERAGE ANNUAL COMPENSATION. Average Annual Compensation means
the amount determined by multiplying 12 times the average of the five highest
of the Executive's December l monthly base salaries during the ten year period
immediately preceding the earliest of the Executive's date of death, the
Executive's actual retirement date or the Executive's Normal Retirement Date,
and adding to that product the average of the Executive's five highest annual
incentive compensation awards paid under the Westinghouse Annual Incentive
Programs or equivalent annual program or programs during the ten-year period
ending with the earliest of the year of the Executive's death, the year of the
Executive's actual retirement date or the year of the Executive's Normal
Retirement Date.
(c) BOARD. Board means the Board of Directors of Westinghouse.
(d) CREDITED SERVICE. Credited Service shall have the same meaning
as defined in the Westinghouse Pension Plan, provided for purposes of the Plan
it shall also include such service with a Designated Entity or Designated
Group; but it shall not include any "deemed" service which may be awarded under
a special retirement window or similar arrangements.
(e) DEFINED CONTRIBUTION PLAN. When used in the Plan, the term
"defined contribution plan" shall not include (1) the Westinghouse Savings
Program or any similar program of, or made available to employees of, an
Employer, a Designated Entity or a Designated Group or (2) any
-1-
<PAGE> 4
amount received pursuant to a cash or deferred arrangement (as that term is
defined in the Internal Revenue Code of 1986, as amended) maintained by, or
made available to employees of, Westinghouse, an Employer, a Designated Entity
or a Designated Group.
(f) DESIGNATED ENTITY. Designated Entity means an Affiliated Entity
or other entity that has been and is still designated by the Managers as
participating in the Plan.
(g) DESIGNATED GROUP. Designated Group means a group of employees
that has been and is still both defined and designated by the Managers as
participating in the Plan.
(h) EMPLOYER. Employer means a participating Employer under the
Westinghouse Pension Plan.
(i) EXECUTIVE. Executive means any Employee who is employed in a
corporate grade 40 or above position or a comparable position with
Westinghouse, an Employer, a Designated Entity or a Designated Group, or in a
position with Westinghouse, an Employer, a Designated Entity or a Designated
Group that is otherwise determined by the chief executive officer of
Westinghouse or the Managers to be eligible as an Executive position under the
Plan based upon the duties and responsibilities of the position, and the
Employee has been so notified in writing.
By participating in the Westinghouse Executive Pension Plan, an
Executive is also deemed to be a "bona fide executive" and/or "high
policymaking employee," as defined under the federal Age Discrimination in
Employment Act, as amended.
(j) EXECUTIVE BENEFIT SERVICE. Executive Benefit Service means the
Executive's total years of Eligibility Service if: (1) the Executive was
making the Maximum Contribution during each of those years; or (2) the
Executive (i) was making the Maximum Contribution during each of those years
after the date he or she first became an Executive and (ii) has complied with
the provisions of the Executive Buy Back process (as set forth in Appendix A of
the Plan) as to those years prior to his or her first becoming an Executive.
The Executive Benefit Service of an Executive who did not make the Maximum
Contribution during those years prior to the date he or she first became an
Executive and has not complied with the Executive Buy Back process will be
based solely on the period(s) of Eligibility Service during which he or she
made the Maximum Contribution.
(k) EXECUTIVE PENSION BASE. Executive Pension Base means the amount
determined by multiplying 1.47 percent times Average Annual Compensation times
the number of years of Executive Benefit Service accrued to the earliest of the
Executive's actual retirement date, the Executive's Normal Retirement Date or
the date of the Executive's death.
(l) EXECUTIVE PENSION SUPPLEMENT. Executive Pension Supplement
means the pension calculated pursuant to Sections 3 and 4 of this Plan. There
will be no Executive Pension Supplement payable if the Executive's Qualified
Plan Benefit equals or exceeds his or her Executive Pension Base.
-2-
<PAGE> 5
(m) FINANCIAL MANAGERS. Financial Managers means the persons or
entities identified from time to time by the chief executive officer of
Westinghouse to serve as financial managers for the Plan, the Westinghouse
Pension Plan and certain other plans, and to have authority with respect to
establishing investment policy, appointing, directing, providing guidelines to
and monitoring the performance of investment managers and trustees,
establishing funding and actuarial policies and practices, and managing the
funding, cost and financial aspects of such plans.
(n) MANAGERS. Managers means the Financial Managers and the
Administrative Managers.
(o) MAXIMUM CONTRIBUTION. Maximum Contribution means: (1) during
such time as the Employee was eligible to participate in the Westinghouse
Pension Plan, the Employee contributed the maximum amount the Employee was
permitted to contribute to the Westinghouse Pension Plan, and (2) during such
time as the Employee was employed by a Designated Entity or as part of a
Designated Group, the Employee (i) contributed the maximum amount the Employee
was permitted to contribute, if any, to that Designated Entity's or Designated
Group's defined benefit pension or defined contribution plan, if any, or to
such defined benefit pension or defined contribution plan as was made available
to employees of said Designated Entity or Designated Group, if any, and (ii)
paid Westinghouse an amount of each of his or her annual incentive compensation
awards based on the maximum Westinghouse Pension Plan contribution formula
applied to 50% of said awards.
(p) PLAN. Plan means the Westinghouse Executive Pension Plan.
(q) QUALIFIED PLAN BENEFIT. Qualified Plan Benefit means (1) the
annual amount of pension the Executive has accrued under the Westinghouse
Pension Plan and any applicable defined benefit pension plan of, or made
available to employees of, a Designated Entity or Designated Group based on
Credited Service accumulated up to the earlier of the Executive's actual
retirement date or death, (2) the amount the Executive is entitled to receive
on a life annuity basis for retirement under any applicable defined
contribution plan of, or made available to employees of, a Designated Entity or
Designated Group, and (3) in any case where service included in the Executive's
Eligibility Service also entitles that Executive to benefits under one or more
retirement plans (whether a defined benefit or defined contribution plan or
both) of another company, the amount the Executive is entitled to receive on a
life annuity basis for retirement from those plans; provided, the method of
benefit measurement, in the case of (2) and (3) above, shall be on the basis of
procedures determined by the Administrative Managers on a plan-by-plan basis.
The Qualified Plan Benefit does not include any early pension retirement
supplement or any amount received pursuant to a cash or deferred arrangement
(as that term is defined in the Internal Revenue Code of 1986, as amended)
maintained by Westinghouse, an Employer, a Designated Entity or a Designated
Group or any amount received pursuant to the Westinghouse Savings Program or
any similar program of, or made available to employees of, an Employer, a
Designated Entity or a Designated Group.
(r) RETIREMENT ELIGIBLE. Retirement Eligible means that the
Executive is accruing Eligibility Service and (i) has attained age 65 and
completed five or more years of Eligibility Service, (ii) has attained age 60
and completed 10 or more years of Eligibility Service, (iii) has attained age
58 and completed 30 or more years of Eligibility Service, or (iv) has satisfied
the
-3-
<PAGE> 6
requirements for an immediate pension under the Special Retirement Pension
provisions of the Westinghouse Pension Plan.
(s) WESTINGHOUSE. Westinghouse means Westinghouse Electric
Corporation.
(t) WESTINGHOUSE ANNUAL INCENTIVE PROGRAMS. Westinghouse Annual
Incentive Programs means the Westinghouse Annual Performance Plan, the
Westinghouse Annual Incentive Plan, and the former Westinghouse By-law XVI
Incentive Compensation Program.
(u) WESTINGHOUSE PENSION PLAN DEFINITIONS. Terms used in this Plan
which are defined in the Westinghouse Pension Plan, as amended, shall have the
same meanings unless otherwise expressly stated in this Plan.
SECTION 2. QUALIFICATION FOR BENEFITS; MANDATORY RETIREMENT
(a) QUALIFICATION FOR BENEFITS. Subject to Section 8 and other
applicable provisions hereof, if any, each Executive shall be entitled to the
benefits of this Plan on separation of service from Westinghouse, an Employer,
a Designated Entity or a Designated Group, provided that such Executive: (i)
has been employed in a position that meets the definition of Executive for five
or more continuous years immediately preceding the earlier of the Executive's
actual retirement date or the Executive's Normal Retirement Date; (ii) has made
the Maximum Contribution during each year of Eligibility Service from the date
he or she first became an Executive until the earliest of his or her date of
death, actual retirement date or Normal Retirement Date; (iii) is a participant
in the Westinghouse Pension Plan or in the defined benefit or defined
contribution plan of, or made available to employees of, a Designated Entity or
Designated Group, if any; and (iv) is Retirement Eligible on the date of
voluntary or involuntary separation of service from Westinghouse, an Employer,
a Designated Entity or a Designated Group or, in the case of a Surviving Spouse
benefit, satisfies the requirements for benefits under Section 4 of the Plan.
(b) MANDATORY RETIREMENT. Pursuant to this Plan, Westinghouse shall
be entitled, at its option, to retire any Executive who has attained sixty-five
years of age and who, for the two-year period immediately before his or her
retirement, has participated in this Plan, if such Executive is entitled to an
immediate nonforfeitable annual retirement benefit from a pension,
profit-sharing, savings or deferred compensation plan, or any combination of
such plans, of Westinghouse, an Employer or any Affiliated Entity, which
equals, in the aggregate, at least $44,000. The calculation of such $44,000
(or greater) amount shall be performed in a manner consistent with 29 U.S.C.A.
Section 631(c)(2).
SECTION 3. CALCULATION OF EXECUTIVE PENSION SUPPLEMENT
The Executive Pension Supplement for an Executive who meets the
qualifications of Section 2 of the Plan retiring on an Early, Normal or Special
Retirement Date shall be calculated as follows:
-4-
<PAGE> 7
(a) If the Executive (i) has attained age 60 and completed 10 or
more years of Eligibility Service, (ii) has attained age 65, or (iii) has
satisfied the eligibility requirements for an immediate pension under the
Special Retirement Pension provisions of the Westinghouse Pension Plan, the
Executive Pension Supplement is determined by subtracting the Executive's
Qualified Plan Benefit that would be payable if he or she elected a Life
Annuity Option (after any reduction for early retirement, if applicable) from
his or her Executive Pension Base.
(b) If the Executive has not met the requirements of Section 3(a)
above but has attained age 58 and completed 30 or more years of Eligibility
Service, the Executive Pension Supplement is determined by subtracting the
Executive's Qualified Plan Benefit that would be payable if he or she elected a
Life Annuity Option (before any reduction for retirement prior to age 60) from
his or her Executive Pension Base.
SECTION 4. DEATH IN ACTIVE SERVICE
(a) ELIGIBILITY FOR AN IMMEDIATE BENEFIT. If an Executive dies in
active service and, on his or her date of death, satisfies the requirements of
the Surviving Spouse Benefit for Death Before Retirement provisions of the
Westinghouse Pension Plan and satisfied the requirements of Section 2(a)(ii)
and (iii) at the time of death, a Surviving Spouse benefit shall also be
payable under this Plan if his or her Executive Pension Base exceeds his or her
Qualified Plan Benefit. The duration portion of the requirement of Section
2(i) of the Plan that the Executive be employed in a position that meets the
definition of Executive for five or more continuous years is waived in this
case.
The Surviving Spouse Benefit under this Section 4(a) shall be the
Executive Pension Supplement reduced in the same manner as though the benefit
were payable under the Westinghouse Pension Plan. For purposes of this
paragraph, the Executive Pension Supplement shall be calculated as follows:
(i) If the Executive had attained age 60 or if the Executive had
completed 30 years of Eligibility Service, the Executive Pension Supplement
would be calculated as described in Section 3(a);
(ii) If the Executive did not meet either of the requirements set
forth in subparagraph (i) above, the Executive Pension Supplement would be 80%
of the difference between the Executive Pension Base and the unreduced
Qualified Plan Benefit.
(b) ELIGIBILITY FOR A DEFERRED BENEFIT. If an Executive dies in
active service who does not satisfy the requirements of Section 4(a) above but
who satisfies the requirements of the Surviving Spouse Benefit for Certain
Vested Employees provisions of the Westinghouse Pension Plan and satisfied the
requirements of Section 2(a)(ii) and (iii) at the time of death, a Surviving
Spouse benefit shall also be payable under this Plan if his or her Executive
Pension Base exceeds his or her Qualified Plan Benefit. The duration portion
of the requirement of Section 2(a)(i) of the Plan that the Executive be
employed in a position that meets the definition of Executive for five or more
continuous years is waived in this case.
-5-
<PAGE> 8
The Surviving Spouse benefit under this Section 4(b) shall be the
Executive Pension Supplement reduced in the same manner as though the benefit
were payable under the Westinghouse Pension Plan. For purposes of this
paragraph, the Executive Pension Supplement shall be calculated by subtracting
the Executive's Qualified Plan Benefit (before any reductions) from his or her
Executive Pension Base.
SECTION 5. PAYMENT OF BENEFITS
No benefits shall be payable under this Plan to any Executive whose
employment terminates for any reason other than death prior to satisfying the
definition of Retirement Eligible hereunder.
The Executive Pension Supplement shall be paid in monthly installments,
each equal to 1/12th of the annual amount determined in Section 3 or 4,
whichever is applicable. If the Executive or Surviving Spouse is eligible for
Plan benefits, such payments shall commence at the same time as payments under
the Westinghouse Pension Plan, if any. If the Executive or Surviving Spouse is
eligible for Plan benefits and is receiving payments from a defined benefit or
defined contribution plan of, or made available to employees of, a Designated
Entity or Designated Group and not from the Westinghouse Pension Plan, payments
shall commence at the same time as payments under such Designated Entity or
Designated Group plan provided the requirements of Section 2(a)(iv) have been
met. The payments shall be payable for the life of the Executive or the
Executive's Surviving Spouse, as the case may be.
Unless the Financial Managers determine otherwise, the Executive may
elect that the Executive Pension Supplement determined in Section 3 be paid in
accordance with any of the optional forms of payment, other than as a lump sum,
then available under the Westinghouse Pension Plan, subject to the same
reductions or other provisions that apply to the elected form of payment under
the Westinghouse Pension Plan. Any election hereunder as to optional forms of
payment may be revoked prior to the effective date of such election, but may
not be revoked on or after the Executive's actual retirement date for any
reason. All elections hereunder become effective on the Executive's actual
retirement date.
Regardless of the form of payment elected by the Executive, after the
Executive retires and begins receiving an Executive Pension Supplement a
minimum of 60 times the monthly payment he or she would have received on a life
annuity basis is guaranteed hereunder.
Surviving Spouse benefits under this Plan will be paid in accordance
with the form of payment made for Surviving Spouse Benefits under the
Westinghouse Pension Plan. Once a Surviving Spouse Benefit determined under
Section 4(a) has commenced, a minimum of 60 times the monthly benefit payable
to the Surviving Spouse is guaranteed hereunder.
In the event that an Executive retires or otherwise ceases to be an
Employee of Westinghouse, an Employer, a Designated Entity or a Designated
Group and is later rehired by one of those entities, the additional provisions
set forth in Appendix B to the Plan will apply.
-6-
<PAGE> 9
SECTION 6. PLAN COSTS
Benefits payable under the Plan and any expenses in connection therewith
will be paid by Westinghouse to the extent they are not available to be paid
from any trust fund established by Westinghouse to help defray the costs of
providing Plan benefits.
SECTION 7. CONDITIONS TO RECEIPT OF EXECUTIVE PENSION SUPPLEMENT
Payments of benefits under this Plan to Executives are subject to the
condition that the recipient shall not engage directly or indirectly in any
business which is at the time competitive with any business or part thereof, or
activity then conducted by, Westinghouse, any of its subsidiaries or any other
corporation, partnership, joint venture or other entity of which Westinghouse
directly or indirectly holds a 10% or greater interest (together, the
"Company") in the area in which such business, or part thereof, or activity is
then being conducted by the Company, unless such condition is specifically
waived with respect to such recipient by the Westinghouse Board of Directors.
Breach of the condition contained in the preceding sentence shall be deemed to
occur immediately upon an Executive's engaging in competitive activity.
Payments suspended for breach of the condition shall not thereafter be resumed
whether or not the Executive terminates the competitive activity. A recipient
shall be deemed to be engaged in such a business indirectly if he or she is an
employee, officer, director, trustee, agent or partner of, or a consultant or
advisor to or for, a person, firm, corporation, association, trust or other
entity which is engaged in such a business or if he or she owns, directly or
indirectly, in excess of five percent of any such firm, corporation,
association, trust or other entity. The ongoing condition of this Section 7
shall not apply to an Executive age 65 or older.
SECTION 8. ADMINISTRATION
This Plan shall be administered by the Administrative Managers. The
Administrative Managers shall have the right to make reasonable rules from time
to time regarding the Plan; such rules shall be consistent with the policy
provided herein. The Administrative Managers shall have full and absolute
discretion and authority to control and manage the operation and administration
of the Plan, and to interpret and apply the terms of the Plan. This full and
absolute discretion and authority shall include the power to interpret,
construe and apply the provisions of the Plan, and any construction adopted by
the Administrative Managers in good faith shall be final and binding.
In accordance with the provisions of Section 503 of the Employee
Retirement Income Security Act of 1974, the Administrative Managers shall
provide a procedure for handling claims of participants or their beneficiaries
under this Plan. Such procedure shall be in accordance with regulations issued
by the Secretary of Labor and shall provide adequate written notice within a
reasonable period of time with respect to the denial of any such claim as well
as a reasonable opportunity for a full and fair review of any such denial.
The Board may authorize the establishment of one or more trusts and the
appointment of a trustee or trustees ("Trustee") to hold any and all assets of
the Plan in trust.
-7-
<PAGE> 10
SECTION 9. MODIFICATION OR TERMINATION
(a) Westinghouse reserves the right, at any time and from time to
time, without notice, to suspend or terminate the Plan or to amend, in whole or
in part, any and all provisions of the Plan, acting as follows:
(i) The Board may suspend the Plan, terminate the Plan, or adopt
Plan amendments that amend any and all provisions of the Plan in whole or in
part;
(ii) The Compensation Committee of the Board may adopt Plan
amendments that amend any and all provisions of the Plan in whole or in part;
(iii) The Managers may adopt Plan amendments that amend any and all
provisions of the Plan in whole or in part, provided that no amendments may be
adopted by the Managers that would materially change any Plan benefits or
materially increase the costs of the Plan; and
(iv) The Administrative Managers may adopt Plan amendments that
relate solely to the administration of the Plan and do not materially change
any Plan benefits or materially increase the costs of the Plan.
Any such change, termination or suspension shall be effective at such
time as is specified by the Board, the Compensation Committee, the Managers, or
the Administrative Managers, as applicable, or, if no such time is so
specified, upon the adoption thereof.
(b) Notwithstanding the above, no such change or termination may
adversely affect (i) the benefits of any Executive who retires prior to such
change or termination or (ii) the right of any then current Executive to
receive upon retirement (or to have a Surviving Spouse or beneficiary receive
upon the Executive's death), an Executive Pension Supplement, calculated as of
the effective date of such change or termination, under the Plan provided that
the Executive meets the following two conditions: (1) at the time of such
change or termination the Executive has vested pension benefits under the
Westinghouse Pension Plan and/or any applicable pension plan of a Designated
Entity or Designated Group, and (2) at the date of such change or termination
and at the date of actual retirement or death the Executive has occupied, for
the then required period next preceding such dates, a position that meets the
definition of Executive in Section 1(i) of this Plan as in effect at the date
of such change or termination.
SECTION 10. MISCELLANEOUS
(a) No Executive, former Executive or Surviving Spouse shall have
the right to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
otherwise subject to lien any of the benefits provided under this Plan. Such
rights may not be subject to the debts, contracts, liabilities, engagements or
torts of the Executive, former Executive or Surviving Spouse of an Executive.
(b) If, in the opinion of Westinghouse, a person to whom a benefit
is payable is unable to care for his or her affairs because of illness,
accident or any other reason, any payment due the
-8-
<PAGE> 11
person, unless prior claim therefore shall have been made by a duly qualified
guardian or other duly appointed and qualified representative of such person,
may be paid to some member of the person's family, or to some other party who,
in the opinion of Westinghouse, has incurred expense for such person. Any
such payment shall be a payment for the account of such person and shall be a
complete discharge of Westinghouse's liability under this Plan.
(c) Westinghouse, in adopting this Plan, shall not be held to create
or vest in any Executive or any other person any interest, pension or benefits
other than the benefits specifically provided herein, or to confer upon any
Executive the right to remain in the service of Westinghouse.
SECTION 11. CREDITORS' CLAIMS
Any assets purchased by Westinghouse to provide benefits under this Plan
shall at all times remain subject to the claims of general creditors of
Westinghouse and any Executive, former Executive or Surviving Spouse of an
Executive participating in the Plan has only an unsecured promise to pay
benefits from Westinghouse.
SECTION 12. CHANGE IN CONTROL
A. The term "Change in Control" means the occurrence of one or more
of the following events:
(a) there shall be consummated (i) any consolidation or merger of
Westinghouse in which Westinghouse is not the continuing or surviving
corporation or pursuant to which shares of Westinghouse's Common Stock would be
converted into cash, securities or other property, other than a merger of
Westinghouse in which the holders of Westinghouse's Common Stock immediately
prior to the merger have the same proportionate ownership of common stock of
the surviving corporation immediately after the merger, or (ii) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of Westinghouse, or
(b) the stockholders of Westinghouse shall approve any plan or proposal for the
liquidation or dissolution of Westinghouse, or (c) (i) any person (as such term
is defined in Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), corporation or other entity shall purchase any Common
Stock of Westinghouse (or securities convertible into Westinghouse Common
Stock) for cash, securities or any other consideration pursuant to a tender
offer or exchange offer, unless, prior to the making of such purchase of
Westinghouse Common Stock (or securities convertible into Westinghouse Common
Stock), the Board shall determine that the making of such purchase shall not
constitute a Change in Control, or (ii) any person (as such term is defined in
Section 13(d) of the Exchange Act), corporation or other entity (other than
Westinghouse or any benefit plan sponsored by Westinghouse or any of its
subsidiaries) shall become the "beneficial owner" (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
Westinghouse representing twenty percent or more of the combined voting power
of Westinghouse's then outstanding securities ordinarily (and apart from any
rights accruing under special circumstances) having the right to vote in the
election of directors (calculated as provided in Rule 13d-3(d) in the case of
rights to acquire any such securities), unless,
-9-
<PAGE> 12
prior to such person so becoming such beneficial owner, the Board of Directors
of Westinghouse shall determine that such person so becoming such beneficial
owner shall not constitute a Change in Control, or (d) at any time during any
period of two consecutive years, individuals who at the beginning of such
period constituted the entire Board of Directors of Westinghouse shall cease
for any reason to constitute at least a majority thereof, unless the election
or the nomination for election of each new director during such two-year
period was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such two-year period.
B. Notwithstanding any other provision of this Plan, upon a Change
in Control, as defined above, the following shall apply: (i) all Executives
shall be deemed vested; (ii) an amount sufficient to fund all unpaid benefits
and any Surviving Spouse Benefits payable under this Plan, shall be paid
immediately by Westinghouse to the Trustee pursuant to a trust agreement for
the Westinghouse Executive Pension Plan Trust for payment of such benefits at
the earliest date available in accordance with the provisions hereof and on
such other terms as a committee composed of the Chief Executive Officer, the
Chief Financial Officer and the Chief Legal Officer of Westinghouse, shall deem
appropriate (including a direction to the Trustee to pay immediately all
benefits on a present value basis and/or such other terms as they may deem
appropriate). Notwithstanding this funding, Westinghouse shall be obligated to
pay benefits to Executives and to Surviving Spouses of Executives to the extent
such funding proves to be insufficient. To the extent such funding proves to
be more than sufficient, the excess shall revert to Westinghouse.
Upon a Change in Control, for any Executive in the Plan who is
involuntarily separated and who is not then eligible for a Normal or Special
Retirement Pension under the Westinghouse Pension Plan, such separation shall
be deemed to be a separation due to a Permanent Job Separation, and the Special
Retirement Pension provisions under the Westinghouse Pension Plan shall be used
for purposes of determining eligibility and payment of benefits to such
Executive under the Plan.
The present value of benefits payable by the Trustee shall be calculated
for specific groups of Executives at the time of the Change in Control as
follows:
a. The present value of the benefits payable from this Plan to
Executives who have retired at the time of the Change in Control
(as well as benefits payable from this Plan to any Surviving
Spouse of an Executive) shall be calculated by using the PBGC
immediate discount rate established and in effect for the
beginning of the calendar year in which the Change in Control
occurs.
b. The present value of the benefits payable from this Plan to
Executives who are eligible to retire under the terms of this
Plan at the time of the Change in Control shall be calculated by
using the PBGC immediate discount rates established and in
effect at the beginning of the calendar year in which the Change
in Control occurs, assuming a pension which is immediately
payable at the time of the Change in Control.
-10-
<PAGE> 13
c. The present value of the benefits payable from this Plan to
Executives who have completed at least thirty (30) years of
service with Westinghouse, an Employer, a Designated Entity or a
Designated Group but have not yet attained age 58 at the time of
the Change in Control shall be calculated by using the PBGC
deferred discount rates established and in effect for the
beginning of the calendar year in which the Change in Control
occurs, assuming a pension which is payable at age 58.
d. The present value of benefits payable from this Plan to
Executives who have completed at least ten (10) years of service
with Westinghouse, an Employer, a Designated Entity or a
Designated Group but less than thirty (30) years of service at
the time of the Change in Control, but have not yet attained age
60 at the time of the Change in Control, shall be calculated by
using the PBGC deferred discount rates established and in effect
for the beginning of the calendar year in which the Change in
Control occurs, assuming a pension which is payable at age 60.
e. The present value of benefits payable from this Plan to
Executives who have completed less than ten (10) years of
service with Westinghouse, an Employer, a Designated Entity or a
Designated Group at the time of the Change in Control shall be
calculated by using the PBGC deferred discount rates established
and in effect for the beginning of the calendar year in which
the Change in Control occurs, assuming a pension which is
payable at age 65.
In calculating the benefit payable to each Executive, any offset for the
Westinghouse Pension Plan or other qualified plan in which the Executive
participates, shall be based upon the last official pension file data
available, adjusted to the date of any Change in Control by assuming that the
most recent salary reflected in the pension file remains constant.
Notwithstanding any provision of this Plan, at any time following a
Change in Control, this Plan may not be (a) amended such that future benefits
would be reduced, (b) suspended or (c) terminated (i) as to the further accrual
of benefits, and (ii) as to the payment of benefits, at any time prior to the
last payment, determined in accordance with the provisions of this Plan, to
each Executive, former Executive receiving benefits under the Plan, or eligible
spouse.
SECTION 13. GOVERNING LAW
To the extent not preempted by federal law, the law of the Commonwealth
of Pennsylvania shall govern the construction and administration of the Plan.
SECTION 14. SEVERABILITY
If any provision of this Plan or the application thereof to any
circumstance or person is held to be invalid by a court of competent
jurisdiction, the remainder of the Plan and the application of such provision
to other circumstances or persons shall not be affected thereby.
-11-
<PAGE> 14
SECTION 15. AUTHORITY TO EXPAND BENEFITS
The Board or the Compensation Committee of the Board may, from time to
time and without notice, by resolution of the Board or of the Compensation
Committee of the Board, authorize the payment of benefits or expand the
benefits otherwise payable or to be payable hereunder to any one or more
individuals. The Board and the Compensation Committee shall each have the
right to delegate authority to take any action that they may take under this
Section 15 of the Plan within such limits as they each may approve from time to
time.
-12-
<PAGE> 15
APPENDIX A
EXECUTIVE BUY BACK
The Executive Buy Back process permits newly eligible Executives to "buy
back" past years of Executive Benefit Service under the Plan for periods of
time during which they did not make the Maximum Contribution.
If an Employee did not make the Maximum Contribution during each of the
years of his or her Eligibility Service prior to the time he or she first
became an Executive, the Employee will be permitted to pay an amount equal to
the Maximum Contributions that would have been payable during the ten years
prior to the date he or she first became an Executive (or such lesser period
from the later of January 1, 1985 or the date the Employee was employed by
Westinghouse, an Employer, a Designated Entity or a Designated Group) plus
compounded interest on that amount in order to "buy back" his or her
non-contributory years of service.
Upon qualifying as an Executive, an Executive will be offered an
Executive Buy Back opportunity at the time he or she first becomes an
Executive. The actual terms of the Executive Buy Back will be determined from
time to time by the Administrative Managers. This election will be offered one
time to the Executive and his or her decision whether or not to "buy back" will
be irrevocable.
Executive Buy Back payments will be made to Westinghouse and will not be
deposited into the Westinghouse Pension Plan Trust. Any Executive Buy Back
payments made by the Executive will not increase the Executive's Qualified Plan
Benefit.
If, at some point, an Employee is no longer an Executive or otherwise
becomes ineligible to receive an Executive Pension Supplement, any Executive
Buy Back payments the Employee has made (including any interest the Employee
paid) plus any other amount as defined in Section 1(o)(2)(ii) in the definition
of Maximum Contribution paid by the Employee to Westinghouse will be refunded,
with interest, at such time as the Employee meets one of the following
criteria: termination or retirement from Westinghouse, an Employer, a
Designated Entity or a Designated Group; or death; provided, however, no refund
shall be made if the Employee is an eligible Executive, whether or not the
amount of his or her Executive Pension Supplement exceeds zero. All interest
rates will be determined at the discretion of Westinghouse.
-13-
<PAGE> 16
APPENDIX B
REHIRED EXECUTIVES
SECTION 1. RETIRED EXECUTIVES REHIRED AS EXECUTIVES
If an Executive who retired from Westinghouse, an Employer, a Designated
Entity or a Designated Group and who received or is receiving an Executive
Pension Supplement as a lump sum or on a monthly basis is rehired in an
Executive position by Westinghouse, an Employer, a Designated Entity or a
Designated Group, the following provisions apply:
(a) For an Executive who elected a monthly Executive Pension
Supplement, the Plan will:
(i) suspend all Executive Pension Supplement payments; and
(ii) if, but only if, the Executive is Retirement Eligible
at the time of subsequent actual retirement:
(1) restore previous years of Eligibility Service
and Executive Benefit Service accrued prior to
the Executive's retirement; and
(2) recalculate the Executive's Executive Pension
Supplement in accordance with the Plan at his
or her subsequent actual retirement date as
long as the Executive then meets all Plan
benefit qualification requirements.
The Executive, having previously met the five years of continuous
service as an Executive requirement prior to his or her first retirement, need
not again meet that requirement. The Executive's Average Annual Compensation
will be computed without regard to the break in service, using zero for any
periods during which the Executive was a retiree.
In addition, if the Executive elected to take a lump sum Qualified Plan
Benefit with respect to his or her initial retirement, then in any subsequent
calculation of the Executive's Executive Pension Supplement, the Executive's
Executive Pension Base will be reduced by both the Executive's Qualified Plan
Benefit received at the time of the initial retirement and the Executive's
Qualified Plan Benefit accrued from the date of rehire through the date of his
or her subsequent retirement.
(b) For an Executive who elected a lump sum Executive Pension
Supplement and who is Retirement Eligible at the time of subsequent actual
retirement, the Plan will:
-14-
<PAGE> 17
(i) restore previous years of Eligibility Service but not
previous years of Executive Benefit Service; and
(ii) calculate the Executive's additional Executive Pension
Supplement at his or her subsequent actual retirement
date on the basis of years of service after the rehire
in accordance with the Plan as long as the Executive
then meets all Plan benefit qualification requirements.
As under Section 1(a) of this Appendix B, the Executive, having
previously met the five years of continuous service as an Executive requirement
prior to his or her first retirement, need not again meet that requirement.
The Executive's Average Annual Compensation will be computed without regard to
the break in service, using zero for any periods during which the Executive was
a retiree.
In addition, if the Executive elected a monthly Qualified Plan Benefit
with respect to his or her initial retirement, then the Executive's Qualified
Plan Benefit accrued from the date of rehire through the subsequent date of
actual retirement will be subtracted from the Executive's Executive Pension
Base in calculating the Executive's additional Executive Pension Supplement at
his or her subsequent retirement.
Section 2. Former Executives with Vested Pensions Rehired as Executives
If the employment of an Executive of Westinghouse, an Employer, a
Designated Entity or a Designated Group who was eligible only for a vested
pension under the relevant qualified defined benefit or defined contribution
plan, if any, was terminated and the Executive is rehired by Westinghouse, an
Employer, a Designated Entity or a Designated Group, the following provisions
apply:
(i) restore previous years of Eligibility Service and
Executive Benefit Service accrued prior to the
Executive's termination of employment;
(ii) the Executive must meet the five years of continuous
service as an Executive requirement prior to a
subsequent actual retirement counting only years of
service after the rehire; and
(iii) only base salary and incentive awards earned after the
rehire will be used in computing Average Annual
Compensation.
In addition, if the Executive elected to take his or her Vested Pension
as a lump sum, in any calculation of an Executive Pension Supplement at actual
retirement the Executive's Executive Pension Base will be reduced by both the
Executive's Qualified Plan Benefit at the time of the initial termination of
employment and the Executive's Qualified Plan Benefit accrued from the date of
rehire through the date of actual retirement.
-15-
<PAGE> 18
SECTION 3. RETIRED EXECUTIVES REHIRED IN NON-EXECUTIVE POSITIONS
If an Executive who retired from Westinghouse, an Employer, a Designated
Entity or a Designated Group and who received or is receiving an Executive
Pension Supplement as a lump sum or on a monthly basis is rehired by
Westinghouse, an Employer, a Designated Entity or a Designated Group in a
non-Executive position, the following provisions apply:
(a) For a former Executive who elected a monthly Executive Pension
Supplement, the Plan will:
(i) suspend all Executive Pension Supplement payments; and
(ii) if, but only if, the former Executive is still
Retirement Eligible at time of subsequent actual
retirement, recommence Executive Pension Supplement
payments at the time of the Executive's subsequent
actual retirement without recalculation of amount.
At subsequent actual retirement, the former Executive may re-select any
form of payment of his or her Executive Pension Supplement then permitted under
the Plan.
(b) For a former Executive who elected to take his or her Executive
Pension Supplement as a lump sum, no further benefits will be paid by the Plan.
-16-
<PAGE> 1
Exhibit (10)(e)
DEFERRED COMPENSATION AND STOCK PLAN
FOR DIRECTORS
(AS AMENDED AS OF NOVEMBER 1, 1996)
SECTION 1. INTRODUCTION
1.1 Establishment. Westinghouse Electric Corporation, a Pennsylvania
corporation (the "Company"), has established the Deferred Compensation and
Stock Plan for Directors as amended as of April 24, 1996 (the "Plan") for those
directors of the Company who are neither officers nor employees of the Company.
The Plan provides, among other things, for the payment of specified portions of
the Annual Director's Fee in the form of Stock Options and Restricted Stock and
for the payment of the Annual Committee Chair's Fee in the form of Restricted
Stock, and the opportunity for the Directors to defer receipt of all or a part
of their cash compensation. Unless otherwise provided for herein, the term
Company includes Westinghouse Electric Corporation and its subsidiaries.
1.2 Purposes. The purposes of the Plan are to encourage the Directors to
own shares of the Company's stock and thereby to align their interests more
closely with the interests of the other shareholders of the Company, to
encourage the highest level of Director performance, and to provide a financial
incentive that will help attract and retain the most qualified Directors.
SECTION 2. DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth
below:
(a) "ANNUAL COMMITTEE CHAIR'S FEE" means the annual amount
established from time to time by the Board as the annual fee to be paid to
Directors for their services as chairs of standing committees of the Board.
(b) "ANNUAL DIRECTOR'S FEE" means the annual amount (which
may be prorated for a Director serving less than a full calendar year, as in
the case of a Director who will be retiring or not standing for reelection at
the annual meeting of shareholders or a Director joining the Board after the
beginning of the year) established from time to time by the Board as the annual
fee to be paid to Directors for their services as directors.
-1-
<PAGE> 2
(c) "ATTENDANCE PERCENTAGE" for a Director with respect to a
particular Grant Year means the percentage of the aggregate of all meetings of
the Board and committees of which the Director was a member held during the
Grant Year (or, for Directors who are elected after the beginning of the Grant
Year, Directors who retire at the annual meeting of shareholders (as described
in the Company's By-laws) held during the Grant Year, Directors who do not
stand for reelection at the annual meeting of shareholders held during the
Grant Year, or Directors who die during the Grant Year, the aggregate of all
such meetings held for the portion of the Grant Year during which the Director
served as a director), excluding any meeting not attended because of illness,
which were attended by the Director. In the event that a Director ceases to be
a director at any time during the Grant Year for any reason other than
retirement at the annual meeting of shareholders, not standing for reelection
at the annual meeting of shareholders, or death, all meetings held during the
Grant Year of the Board and committees of which he was a member at the time of
termination of service will continue to be included as meetings when
calculating the Attendance Percentage.
(d) "BOARD" means the Board of Directors of the Company.
(e) "CASH ACCOUNT" means the account established by the Company in
respect of each Director pursuant to Section 6.3 hereof and to which deferred
cash compensation has been or will be credited pursuant to the Plan.
(f) "CAUSE" means any act of (a) fraud or intentional
misrepresentation or (b) embezzlement, misappropriation or conversion of assets
or opportunities of the Company or any of its direct or indirect majority-owned
subsidiaries.
(g) "CHANGE IN CONTROL" shall have the meaning assigned to it in
Section 9.2 hereof.
(h) "COMMITTEE" means the Compensation Committee of the Board or any
successor established by the Board.
(i) "COMMON STOCK EQUIVALENT" means a hypothetical share of Stock
which shall have a value on any date equal to the mean of the high and low
prices of the Stock as reported by the composite tape of the New York Stock
Exchange on that date, except as otherwise provided under Section 9.1.
(j) "COMMON STOCK EQUIVALENT AWARD" means an award of Common Stock
Equivalents granted to a Director pursuant to
-2-
<PAGE> 3
Section 5 of the Plan prior to its amendment as of April 26, 1995.
(k) "DEBENTURE" means a hypothetical debenture of the Company that
has a face value of $100, bears interest at a rate equal to the ten-year U.S.
Treasury Bond rate (prior to January 1, 1995, the seven-year U.S. Treasury Bond
rate) in effect the week prior to the regular January meeting of the Board (or,
if no such meeting is held, the week prior to the first trading day of the New
York Stock Exchange in February) in the year in respect of which deferred
amounts are earned, and is convertible into Stock at a conversion rate
determined by dividing $100 by the mean of the high and low prices of the Stock
as reported by the composite tape of the New York Stock Exchange on the date
the Debenture is credited to the Deferred Debenture Account pursuant to Section
6.3 hereof.
(l) "DEFERRED DEBENTURE ACCOUNT" means the account established by
the Company in respect of each Director pursuant to Section 6.3 hereof and to
which has been or will be credited Debentures and other amounts pursuant to the
Plan.
(m) "DEFERRED STOCK ACCOUNT" means the account established by the
Company in respect of each Director pursuant to Section 5.2 hereof and to which
has been or will be credited Common Stock Equivalents pursuant to the Plan.
(n) "DIRECTOR" means a member of the Board who is neither an officer
nor an employee of the Company. For purposes of the Plan, an employee is an
individual whose wages are subject to the withholding of federal income tax
under Section 3401 of the Internal Revenue Code, and an officer is an
individual elected or appointed by the Board or chosen in such other manner as
may be prescribed in the By-laws of the Company to serve as such.
(o) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time.
(p) "FAIR MARKET VALUE" means the mean of the high and low prices of
the Stock as reported by the composite tape of the New York Stock Exchange (or
such successor reporting system as shall be selected by the Committee) on the
relevant date or, if no sale of the Stock shall have been reported for that
day, the average of such prices on the next preceding day and the next
following day for which there were reported sales.
-3-
<PAGE> 4
(q) "GRANT DATE" means, as to a Stock Option Award, the date of
grant pursuant to Section 7.1 and as to a Restricted Stock Award, the date of
grant pursuant to Section 8.1.
(r) "GRANT YEAR" means, as to a particular award, the calendar year
in which the award was granted.
(s) "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended from time to time.
(t) "RESTRICTED STOCK" means shares of Stock awarded to a Director
pursuant to Section 8 and subject to certain restrictions in accordance with
the Plan.
(u) "RESTRICTED STOCK AWARD" means an award of shares of Restricted
Stock granted to a Director pursuant to Section 8 of the Plan.
(v) "STOCK" means the common stock, $1.00 par value, of the Company.
(w) "STOCK OPTION" means a non-statutory stock option to purchase
shares of Stock for a purchase price per share equal to the Exercise Price (as
defined in Section 7.2(a)) in accordance with the provisions of the Plan.
(x) "STOCK OPTION AWARD" means an award of Stock Options granted to
a Director pursuant to Section 7 of the Plan.
(y) "STOCK OPTION VALUE" means the value of a Stock Option for one
share of Stock on the relevant date as determined by an outside firm selected
by the Company.
2.2 Gender and Number. Except when otherwise indicated by the context, the
masculine gender shall also include the feminine gender, and the definition of
any term herein in the singular shall also include the plural.
SECTION 3. PLAN ADMINISTRATION
(a) The Plan shall be administered by the Committee. The members of
the Committee shall be members of the Board appointed by the Board, and any
vacancy on the Committee shall be filled by the Board.
The Committee shall keep minutes of its meetings and of any action taken
by it without a meeting. A majority of the Committee shall constitute a quorum,
and the acts of a majority of the members present at any meeting at which a
quorum is present shall be the acts of the Committee. Any action that may be
taken at a meeting of the Committee may be taken without a
-4-
<PAGE> 5
meeting if a consent or consents in writing setting forth the action so taken
shall be signed by all of the members of the Committee. The Committee shall
make appropriate reports to the Board concerning the operations of the Plan.
(b) Subject to the limitations of the Plan, the Committee shall have
the sole and complete authority: (i) to impose such limitations, restrictions
and conditions upon such awards as it shall deem appropriate; (ii) to interpret
the Plan and to adopt, amend and rescind administrative guidelines and other
rules and regulations relating to the Plan; and (iii) to make all other
determinations and to take all other actions necessary or advisable for the
implementation and administration of the Plan. Notwithstanding the foregoing,
the Committee shall have no authority, discretion or power to select the
Directors who will receive awards pursuant to the Plan, determine the awards to
be granted pursuant to the Plan, the number of shares of Stock to be issued
thereunder or the price thereof or the time at which such awards are to be
granted, establish the duration and nature of awards or alter any other terms
or conditions specified in the Plan, except in the sense of administering the
Plan subject to the provisions of the Plan. The Committee's determinations on
matters within its authority shall be conclusive and binding upon the Company
and all other persons.
(c) The Company shall be the sponsor of the Plan. All expenses
associated with the Plan shall be borne by the Company.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. 600,000 shares of Stock are authorized for issuance
under the Plan in accordance with the provisions of the Plan, subject to
adjustment and substitution as set forth in this Section 4. This authorization
may be increased from time to time by approval of the Board and, if such
approval is required, by the shareholders of the Company. The Company shall at
all times during the term of the Plan retain as authorized and unissued Stock
at least the number of shares from time to time required under the provisions
of the Plan, or otherwise assure itself of its ability to perform its
obligations hereunder.
4.2 Other Shares of Stock. Any shares of Stock that are subject to a
Common Stock Equivalent Award, a Stock Option Award, a Restricted Stock Award
or a Debenture and which are forfeited, any shares of Stock that for any other
reason are not issued to a Director, and any shares of Stock tendered by a
Director to pay the Exercise Price of a Stock Option shall automatically become
available again for use under the Plan if Rule 16b-3 under the Exchange Act, as
such rule may be amended, or any successor rule,
-5-
<PAGE> 6
and interpretations thereof by the Securities and Exchange Commission or its
staff permit such share replenishment.
4.3 Adjustments Upon Changes in Stock. If there shall be any change in the
Stock of the Company, through merger, consolidation, division, share exchange,
combination, reorganization, recapitalization, stock dividend, stock split,
spinoff, split up, dividend in kind or other change in the corporate structure
or distribution to the shareholders, appropriate adjustments may be made by the
Committee (or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) in the
aggregate number and kind of shares subject to the Plan, and the number and
kind of shares which may be issued under the Plan. Appropriate adjustments may
also be made by the Committee in the terms of any awards or Debentures under
the Plan to reflect such changes and to modify any other terms of outstanding
awards on an equitable basis as the Committee in its discretion determines.
SECTION 5. COMMON STOCK EQUIVALENT AWARDS
5.1 Grants of Common Stock Equivalent Awards. Common Stock Equivalents
equal to a fixed number of shares of Stock were granted automatically to
Directors on a formula basis under Section 5.1 of the Plan prior to its
amendment as of April 26, 1995. All Common Stock Equivalents granted pursuant
to Section 5.1 prior to its amendment as of April 26, 1995 shall be subject to
adjustment as provided in Section 4.3.
5.2 Deferred Stock Account. A Deferred Stock Account has been established
for each Director elected prior to the annual meeting of shareholders held in
1995. The Deferred Stock Account shall consist of compensation in the form of
Common Stock Equivalents which have been awarded to the Director hereunder by
the Company plus Common Stock Equivalents credited to the Deferred Stock
Account in respect of dividends and other distributions on the Stock pursuant
to Sections 5.3 and 5.4.
5.3 Hypothetical Investment. Compensation awarded hereunder in the form of
Common Stock Equivalents is assumed to be a hypothetical investment in shares
of Stock, and will be subject to adjustment to reflect stock dividends, splits
and reclassifications and as otherwise set forth in Section 4.3.
5.4 Hypothetical Dividends. Dividends and other distributions on Common
Stock Equivalents shall be deemed to have been paid as if such Common Stock
Equivalents were actual shares of Stock issued and outstanding on the
respective record or distribution dates. Common Stock Equivalents shall be
credited to the Deferred Stock Account in respect of cash dividends and any
other securities or property issued on the Stock in
-6-
<PAGE> 7
connection with reclassifications, spinoffs and the like on the basis of the
value of the dividend or other asset distributed and the value of the Common
Stock Equivalents on the date of the announcement of the dividend or asset
distribution, all at the same time and in the same amount as dividends or other
distributions are paid or issued on the Stock. Such Common Stock Equivalents
shall be subject to adjustment as provided in Section 4.3. Fractional shares
shall be credited to a Director's Deferred Stock Account cumulatively but the
balance of shares of Common Stock Equivalents in a Director's Deferred Stock
Account shall be rounded to the next highest whole share for any payment to
such Director pursuant to Section 5.6.
5.5 Statement of Account. A statement will be sent to each Director as to
the balance of his Deferred Stock Account at least once each calendar year.
5.6 Payment of Deferred Stock. Upon termination of services as a Director,
the balance of the Director's Deferred Stock Account shall be paid to such
Director in Stock in January of the year following the year of termination of
services as a director on the basis of one share of Stock for each Common Stock
Equivalent in such Director's Deferred Stock Account.
5.7 Payments to a Deceased Director's Estate. In the event of a
Director's death before the balance of his Deferred Stock Account is fully paid
to him, payment of the balance of the Director's Deferred Stock Account shall
then be made to the beneficiary designated by the Director pursuant to Section
5.8, or to his estate in the absence of such a beneficiary designation, in the
time and manner selected by the Committee. The Committee may take into account
the application of any duly appointed administrator or executor of a Director's
estate and direct that the balance of the Director's Deferred Stock Account be
paid to his estate in the manner requested by such application.
5.8 Designation of Beneficiary. A Director may designate a beneficiary in
a form approved by the Committee.
SECTION 6. DEFERRAL OF COMPENSATION
6.1 Amount of Deferral. A Director may elect to defer receipt of all or a
specified portion of the cash compensation otherwise payable to the Director
for services rendered to the Company as a director.
6.2 Manner of Electing Deferral. A Director shall make elections permitted
hereunder by giving written notice to the Company in a form approved by the
Committee. The notice shall include: (i) the percentage of cash compensation to
be deferred;
-7-
<PAGE> 8
which amount must be stated in whole increments of five percent; and (ii) the
time as of which deferral is to commence.
6.3 Accounts. A Cash Account and a Deferred Debenture Account has been or
shall be established for each Director electing to defer hereunder. Each Cash
Account shall be credited with the amounts deferred on the date such
compensation is otherwise payable and shall be debited with the amount of any
such compensation forfeited in accordance with applicable Board policy. Such
deferred amounts shall accrue interest from time to time at a rate equal to the
ten-year U.S. Treasury Bond rate (prior to January 1, 1995, the seven-year U.S.
Treasury Bond rate) in effect the week prior to the regular January meeting of
the Board (or, if no such meeting is held, the week prior to the first trading
day of the New York Stock Exchange in February) in the year in respect of which
such deferred amounts are earned until the last trading day of the New York
Stock Exchange prior to the regular January meeting of the Board (or, if no
such meeting is held, until the first trading day of February) in the year
following the year in respect of which deferred amounts are earned, at which
time such deferred amounts, including interest, shall be invested in Debentures
and credited to the Deferred Debenture Account. Deferred amounts shall be
credited to the Deferred Debenture Account only in $100 amounts. Fractional
amounts of $100 shall remain in the Cash Account and continue to accrue
interest.
6.4 Time for Electing Deferral. Any election to (i) defer cash
compensation, (ii) alter the portion of such amounts deferred, or (iii) revoke
an election to defer such amounts, must be made no later than six months prior
to the time such compensation is earned by the Director or, if permitted by the
rules under Section 16 of the Exchange Act, no later than six months prior to
the time such deferred compensation is invested in Debentures and credited to
the Deferred Debenture Account pursuant to Section 6.3. An election to commence
a deferral may be made at any time in accordance with the procedures set forth
in Section 6.2. Any election so made shall remain in effect beginning six
months from the date of election until the Director ceases to be a director or
six months from the date the Director elects in writing to change his election.
6.5 Payment of Deferred Amounts. Payments from a Deferred Debenture
Account shall be made in five consecutive annual installments beginning in the
January following the Director's termination of service. Payments from a
Deferred Debenture Account shall consist of accumulated interest on the
Debentures (which amount shall only be payable in cash) plus the greater value
of (i) the face value of the Debentures or (ii) the shares of Stock into which
the Debentures are convertible. In
-8-
<PAGE> 9
the event the value of the payment is determined by the amount referred to in
clause (i), payment shall be made in cash. In the event such value is
determined by clause (ii), such payment shall be made in Stock, other than the
value of fractional shares which will be paid in cash.
6.6 Payments to a Deceased Director's Estate. In the event of a
Director's death before the balance of his Cash Account or Deferred Debenture
Account is fully paid to him, payment of the balance of the Cash Account or
Deferred Debenture Account shall then be made to the beneficiary designated by
the Director pursuant to Section 6.7, or to his estate in the absence of such
beneficiary designation, in the time and manner selected by the Committee. The
Committee may take into account the application of any duly appointed
administrator or executor of a Director's estate and direct that the balance of
the Director's Cash Account or Deferred Debenture Account be paid to his estate
in the manner requested by such application.
6.7 Designation of Beneficiary. A Director may designate a beneficiary
in a form approved by the Committee.
SECTION 7. STOCK OPTION AWARDS
7.1 Grants of Stock Option Awards.
(a) Stock Options for a fixed number of shares of Stock were granted
automatically to Directors on a formula basis under Section 7.1(a) of the Plan
prior to its amendment as of April 24, 1996.
(b) Prior to the amendment of the Plan as of April 24, 1996, Stock
Options for a fixed number of shares of Stock were granted automatically on a
formula basis under Section 7.1(b) of the Plan to Directors serving as chairs
of standing committees of the Board.
(c) Beginning with the calendar year 1996, each Director will
receive one-fourth of the value of his Annual Director's Fee in the form of a
Stock Option Award. Such Stock Options shall be granted automatically each year
on the last Wednesday in January of such year to each Director in office on
such Grant Date. If a person is elected to the Board at any time after the last
Wednesday in January of a given calendar year (beginning with 1996) but before
the end of that calendar year, whether by action of the shareholders of the
Company or the Board, such person upon becoming a Director shall be granted
automatically one-fourth of the value of his Annual Director's Fee for that
calendar year in the form of a Stock Option Award on the last Wednesday of the
calendar month in which such person becomes a Director (or in the next
following calendar month if such election occurs after the last Wednesday of
the month). The
-9-
<PAGE> 10
total number of shares of Stock subject to any such Stock Option Award will be
the number of shares determined by dividing the amount of the Annual Director's
Fee to be paid in the form of a Stock Option Award by the Stock Option Value on
the Grant Date, rounded up to the nearest whole share.
(d) All Stock Options granted pursuant to Section 7.1 (whether
before or after amendment of the Plan as of April 24, 1996) shall be subject to
adjustment as provided in Section 4.3.
7.2 Terms and Conditions of Stock Options. Stock Options
granted under the Plan shall be subject to the following terms and conditions:
(a) EXERCISE PRICE. The purchase price per share at which a Stock
Option may be exercised ("Exercise Price") shall be determined as follows: on
any Grant Date, (1) Stock Options for two-thirds of the option shares granted
on the Grant Date shall have an Exercise Price per share equal to 100% of Fair
Market Value on the Grant Date, and (2) Stock Options for the remaining
one-third of the option shares granted on the Grant Date shall have an Exercise
Price per share equal to 125% of Fair Market Value on the Grant Date.
(b) EXERCISABILITY. Subject to the terms and conditions of the Plan
and of the agreement referred to in Section 7.2(j), a Stock Option may be
exercised in whole or in part upon notice of exercise to the Company, (1) as to
any Stock Option granted on or prior to January 1, 1996, commencing on the
first day after the Grant Date and until it terminates, and (2) as to any Stock
Option granted after January 1, 1996 that vests as provided in Section 7.2(c),
commencing on January 1 of the calendar year next following the Grant Year.
During a Director's lifetime, a Stock Option may be exercised only by the
Director or the Director's guardian or legal representative.
(c) VESTING OF STOCK OPTION AWARDS. Stock Options granted on or
prior to January 1, 1996 vest immediately on grant. Stock Options granted after
January 1, 1996 will vest on January 1 of the calendar year next following the
Grant Year (the "Option Vesting Date") if the Director has an Attendance
Percentage of at least seventy-five percent (75%) for the Grant Year. In the
event that a Director has an Attendance Percentage of less than seventy-five
percent (75%) for a Grant Year, Stock Options granted in that Grant Year for a
number of shares equal to the Director's Attendance Percentage for that year
multiplied by the total number of option shares granted for that year (rounded
up to the nearest whole share) will vest on the Option Vesting Date, and Stock
Options granted in that Grant Year as to
-10-
<PAGE> 11
the remaining option shares will be forfeited and will terminate as of the
Option Vesting Date. Notwithstanding anything to the contrary herein, (1) in
the event that a director is removed from office for Cause, all outstanding
Stock Options will be forfeited immediately as of the time the grantee is so
removed from office, and (2) upon the occurrence of a Change in Control, all
outstanding Stock Options will vest and become immediately exercisable.
(d) MANDATORY HOLDING OF STOCK. Except as otherwise provided in
Section 7.5 or Section 10, any Stock acquired on exercise of a Stock Option
must be held by the grantee for a minimum of (1) three years from the date of
exercise, (2) two years from the date the grantee ceases to be a director of
the Company, or (3) until the occurrence of a Change in Control, whichever
first occurs (the "Option Shares Holding Period").
(e) OPTION TERM. The term of a Stock Option (the "Option Term")
shall be the period of (1) ten years from its Grant Date, or (2) until the
Option Vesting Date for a Stock Option that does not vest as provided in
Section 7.2(c), or (3) until the time the Stock Option is forfeited as provided
in Section 7.2(c)(1) in the event a director is removed from office for Cause,
or (4) until the date the Stock Option ceases to be exercisable as provided in
Section 7.2(h), whichever is earlier.
(f) PAYMENT OF EXERCISE PRICE. Stock purchased on exercise of a
Stock Option must be paid for as follows: (1) in cash or by check (acceptable
to the Company), bank draft or money order payable to the order of the Company,
(2) through the delivery of shares of Stock which are then outstanding and
which have a Fair Market Value on the date of exercise equal to the Exercise
Price per share multiplied by the number of shares as to which the Stock Option
is being exercised (the "Aggregate Exercise Price"); (3) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to
the Company sufficient funds to pay the Aggregate Exercise Price, or (4) by a
combination of the permissible forms of payment; provided, however, that any
portion of the Exercise Price representing a fraction of a share must be paid
in cash and no share of Stock held for less than six months may be delivered in
payment of the Aggregate Exercise Price.
(g) RIGHTS AS A SHAREHOLDER. The holder of a Stock Option will not
have any of the rights of a shareholder with respect to any shares of Stock
subject to the Stock Option until such shares are issued by the Company
following the exercise of the Stock Option.
-11-
<PAGE> 12
(h) TERMINATION OF ELIGIBILITY. If a grantee ceases to be a Director
for any reason, any outstanding Stock Options shall be exercisable according to
the following provisions:
(1) If a grantee ceases to be a director for any reason other than
removal for Cause or death, any outstanding Stock Options held by such grantee
which are vested or which thereafter vest shall be exercisable by the grantee
in accordance with their terms at any time prior to the expiration of the
Option Term;
(2) If a grantee is removed from office as a director of the Company
for Cause, any outstanding vested Stock Options held by such grantee shall be
exercisable by the grantee in accordance with their terms at any time prior to
the earlier of (a) the time the grantee is so removed from office and (b) the
expiration of the Option Term; and
(3) Following the death of a grantee while a director or after the
grantee ceased to be a director for any reason other than removal for Cause,
any Stock Options that are outstanding and exercisable by such grantee at the
time of death or which thereafter vest shall be exercisable in accordance with
their terms by the person or persons entitled to do so under the grantee's
will, by a properly designated beneficiary in the event of death, or by the
person or persons entitled to do so under the applicable laws of descent and
distribution at any time prior to the earlier of (a) the expiration of the
Option Term and (b) two years after the date of death.
(i) TERMINATION OF STOCK OPTION. A Stock Option shall terminate on
the earlier of (1) exercise of the Stock Option in accordance with the terms of
the Plan, and (2) expiration of the Option Term as specified in Sections 7.2(e)
and 7.2(h).
(j) STOCK OPTION AGREEMENT. All Stock Options will be confirmed by
an agreement, or an amendment thereto, which shall be executed on behalf of the
Company by the Chief Executive Officer, the President or any Vice President and
by the grantee.
(k) GENERAL RESTRICTIONS.
(1) The obligation of the Company to issue Stock pursuant to Stock
Options under the Plan shall be subject to the condition that, if at any time
the Company shall determine that (a) the listing, registration or qualification
of shares of Stock upon any securities exchange or under any state or federal
law, or (b) the consent or approval of any government or regulatory body is
necessary or desirable, then such Stock shall not be issued unless such
listing, registration, qualification, consent
-12-
<PAGE> 13
or approval shall have been effected or obtained free from any conditions not
acceptable to the Company.
(2) Shares of Stock for use under the provisions of this Section 7
shall not be issued until they have been duly listed, upon official notice of
issuance, upon the New York Stock Exchange and such other exchanges, if any, as
the Board shall determine, and a registration statement under the Securities
Act of 1933 with respect to such shares shall have become, and be, effective.
Subject to the foregoing provisions of this Section 7.2 and the other
provisions of the Plan, any Stock Option granted under the Plan shall be
subject to such restrictions and other terms and conditions, if any, as shall
be determined by the Committee, in its discretion, and set forth in the
agreement referred to in Section 7.2(j), or an amendment thereto; provided,
however, that in no event shall the Committee or the Board have any power or
authority which would cause transactions pursuant to the Plan to cease to be
exempt from the provisions of Section 16(b) of the Exchange Act pursuant to
Rule 16b-3, as such rule may be amended, or any successor rule.
7.3 Annual Statement. A statement will be sent to each Director
as to the status of his Stock Options at least once each calendar year.
7.4 Designation of a Beneficiary. A Director may designate a
beneficiary to hold and exercise outstanding Stock Options in accordance with
the Plan in the event of the Director's death.
7.5 Holding Period Applicable to a Deceased Grantee's Estate. As long
as at least six months have elapsed since the Grant Date, a properly designated
beneficiary, or a person holding a Stock Option under a deceased grantee's will
or under the applicable laws of descent or distribution, exercising a Stock
Option in accordance with Section 7.2(h) will not be subject to the Holding
Period with respect to shares of Stock received on exercise of a Stock Option.
SECTION 8. RESTRICTED STOCK AWARDS.
8.1 Grants of Restricted Stock Awards.
(a) Beginning with the calendar year 1996, each Director
will receive one-fourth of the value of his Annual Director's Fee in the form
of a Restricted Stock Award. Such Restricted Stock shall be granted
automatically each year to each Director in office on such Grant Date. If a
person is elected to the Board at any time after the last Wednesday in January
of a given calendar year (beginning with 1996) but before the end of
-13-
<PAGE> 14
that calendar year, whether by action of the shareholders of the Company or the
Board, such person upon becoming a Director shall be granted automatically
one-fourth of the value of his Annual Director's Fee for that calendar year in
the form of a Restricted Stock Award on the last Wednesday in the calendar
month in which such person becomes a Director (or in the next following
calendar month if said election occurs after the last Wednesday of the month).
(b) Beginning with the calendar year 1996, each Director who is the
chair of a standing committee of the Board will receive the full value of his
Annual Committee Chair's Fee in the form of a Restricted Stock Award. Such
Restricted Stock shall be granted automatically each year immediately following
the annual meeting of shareholders and the organization meeting of the Board
related to such annual meeting of shareholders, beginning with the annual
meeting of shareholders and related organization meeting held in 1996, to each
Director who is elected at such organization meeting to serve as the chair of a
standing committee of the Board.
(c) The total number of shares of Stock representing any such
Restricted Stock Award will be the number of shares determined by dividing the
amount of the Annual Director's Fee or the Annual Committee Chair's Fee, as the
case may be, to be paid in the form of a Restricted Stock Award by the Fair
Market Value of a share of Stock on the Grant Date, rounded up to the nearest
whole share.
(d) Restricted Stock granted pursuant to Section 8.1 shall be
subject to adjustment as provided in Section 4.3.
8.2 Terms and Conditions of Restricted Stock. Restricted Stock
granted under the Plan shall be subject to the following terms and conditions:
(a) RESTRICTION PERIOD. Restricted Stock will be subject to a
Restriction Period ("Restriction Period") beginning on the Grant Date and
continuing through December 31 of the Grant Year.
(b) VESTING.
(1) Except as set forth in Section 8.2(b)(3), a Director's right to
ownership in shares of Restricted Stock granted to a Director pursuant to
Section 8.1(a) will vest on the January 1 immediately following the expiration
of the Restriction Period for such shares (the "Restricted Stock Vesting Date")
if the Director has an Attendance Percentage of at least seventy-five
-14-
<PAGE> 15
percent (75%) for the Grant Year. In the event that a Director has an
Attendance Percentage of less than seventy-five percent (75%) for a Grant Year,
a number of shares of Restricted Stock equal to the Director's Attendance
Percentage for the Grant Year multiplied by the total number of shares of
Restricted Stock granted pursuant to Section 8.1(a) during the Grant Year
(rounded up to the nearest whole share) will vest on the Restricted Stock
Vesting Date and the remaining shares of Restricted Stock granted pursuant to
Section 8.1(a) during the Grant Year will be forfeited as of the Restricted
Stock Vesting Date.
(2) Except as set forth in Section 8.2(b)(3) below, a Director's
right to ownership in shares of Restricted Stock granted to a committee chair
pursuant to Section 8.1(b) will vest on the Restricted Stock Vesting Date.
(3) Notwithstanding anything to the contrary herein, (i) in the
event that a director is removed from office for Cause prior to the Restricted
Stock Vesting Date, all of said Director's shares of Restricted Stock that have
not yet vested will be forfeited immediately as of the time the grantee is so
removed from office and the Company will have the right to complete the blank
stock power described below with respect to such shares, and (ii) upon the
occurrence of a Change in Control, all shares of Restricted Stock that have not
yet vested will immediately vest.
(c) ISSUANCE OF SHARES. On the Grant Date, a certificate
representing the shares of Restricted Stock will be registered in the
Director's name and deposited by the Director, together with a stock power
endorsed in blank, with the Company. Subject to the transfer restrictions set
forth in Section 8.2(d) and to the last sentence of this Section 8.2(c), the
Director as owner of shares of Restricted Stock will have the rights of the
holder of such Restricted Stock during the Restriction Period. Following
expiration of the Restriction Period, on the Restricted Stock Vesting Date,
vested shares of Restricted Stock will be redelivered by the Company to the
Director and non-vested shares of Restricted Stock will be forfeited and the
Company will have the right to complete the blank stock power with respect to
such shares. For shares of Restricted Stock granted prior to the effective date
of the Plan as set forth in Section 14, no certificate will be issued, such
shares will not be issued and outstanding, and the Director will not have any
of the rights of an owner of the shares until such effective date has occurred.
(d) TRANSFER RESTRICTIONS; MANDATORY HOLDING OF STOCK. Except as
otherwise provided in Section 8.5 or Section 10, shares of Restricted Stock are
not transferable during the Restriction Period. Once the Restriction Period
lapses and shares vest, except as otherwise provided in Section 8.5 or Section
10, shares acquired as a Restricted Stock Award
-15-
<PAGE> 16
must be held by the grantee for a minimum of: (1) three years from the Grant
Date, (2) two years from the date the grantee ceases to be a director of the
Company, or (3) until the occurrence of a Change of Control, whichever first
occurs (the "Restricted Shares Holding Period").
(e) RESTRICTED STOCK AGREEMENT. All Restricted Stock Awards will be
confirmed by an agreement, or an amendment thereto, which will be executed on
behalf of the Company by the Chief Executive Officer, the President or any Vice
President and by the grantee.
(f) GENERAL RESTRICTION.
(1) The obligation of the Company to issue shares of Restricted
Stock under the Plan shall be subject to the condition that, if at any time the
Committee shall determine that (a) the listing, registration or qualification
of shares of Restricted Stock upon any securities exchange or under any state
or federal law, or (b) the consent or approval of any government or regulatory
body is necessary or desirable, then such Restricted Stock shall not be issued
unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free from any conditions not acceptable to the
Company.
(2) Shares of Stock for use under the provisions of this Section 8
shall not be issued until they have been duly listed, upon official notice of
issuance, upon the New York Stock Exchange and such other exchanges, if any, as
the Board shall determine, and a registration statement under the Securities
Act of 1933 with respect to such shares shall have become, and be, effective.
Subject to the foregoing provisions of this Section 8.2 and the
other provisions of the Plan, any shares of Restricted Stock granted under the
Plan shall be subject to such restrictions and other terms and conditions, if
any, as shall be determined by the Committee, in its discretion, and set forth
in the agreement referred to in Section 8.2(e), or an amendment thereto;
provided, however, that in no event shall the Committee or the Board have any
power or authority which would cause transactions pursuant to the Plan to cease
to be exempt from the provisions of Section 16(b) of the Exchange Act under
Rule 16b-3, as such rule may be amended, or any successor rule.
8.3 Annual Statement. A statement will be sent to each Director as
to the status of his Restricted Stock at least once each calendar year.
-16-
<PAGE> 17
8.4 Designation of a Beneficiary. A Director may designate a
beneficiary to hold shares of Restricted Stock in accordance with the Plan in
the event of the Director's death.
8.5 Holding Period Applicable to a Deceased Grantee's Estate. As
long as at least six months have elapsed since the Grant Date, a properly
designated beneficiary, or a person holding shares of Restricted Stock under a
deceased grantee's will or under the applicable laws of descent or
distribution, will not be subject to the Restricted Shares Holding Period with
respect to such shares of Restricted Stock.
SECTION 9. CHANGE IN CONTROL
9.1 Settlement of Compensation. In the event of a Change in Control
of the Company as defined herein, (a) to the extent not already vested, all
Stock Option Awards, Restricted Stock Awards and other benefits hereunder shall
be vested immediately; and (b) the value of all unpaid benefits and deferred
amounts shall be paid in cash to PNC Bank, National Association, the trustee
pursuant to a trust agreement dated as of June 22, 1995, as amended from time
to time, or any successor trustee, or otherwise on such terms as the Committee
may prescribe or permit. For purposes of this Section 9.1, the value of
deferred amounts shall be equal to the sum of (i) the value of all Common Stock
Equivalent Awards then held in such Director's Deferred Stock Account (the
value of which shall be based upon the highest price of the Stock as reported
by the composite tape of the New York Stock Exchange during the 30 days
immediately preceding the Change in Control), (ii) the value of the Director's
Cash Account, and (iii) the greater value of (x) the cash amount equal to the
face value of the Debentures plus cash equal to accrued interest or (y) the
number of shares of Stock into which the Debentures are convertible (the value
of which shall be based upon the highest price of the Stock as reported by the
composite tape of the New York Stock Exchange during the 30 days immediately
preceding the Change in Control), plus cash equal to accrued interest.
9.2 Definition of Change in Control. A Change in Control shall mean
the occurrence of one or more of the following events:
(a) there shall be consummated (i) any consolidation or merger of
the Company in which the Company is not the continuing or surviving corporation
or pursuant to which shares of the Company's Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
the holders of the Company's Stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series
-17-
<PAGE> 18
of related transactions) of all, or substantially all, of the assets of
the Company; or
(b) the shareholders of the Company shall approve of any plan or
proposal for the liquidation or dissolution of the Company, or
(c) (i) any person (as such term is defined in Section 13(d) of the
Exchange Act), corporation or other entity shall purchase any Stock of the
Company (or securities convertible into the Company's Stock) for cash,
securities or any other consideration pursuant to a tender offer or exchange
offer, unless, prior to the making of such purchase of Stock (or securities
convertible into Stock), the Board shall determine that the making of such
purchase shall not constitute a Change in Control, or (ii) any person (as such
term is defined in Section 13(d) of the Exchange Act), corporation or other
entity (other than the Company or any benefit plan sponsored by the Company or
any of its subsidiaries) shall become the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing twenty percent or more of the combined
voting power of the Company's then outstanding securities ordinarily (and apart
from any rights accruing under special circumstances) having the right to vote
in the election of directors (calculated as provided in Rule 13d-3(d) in the
case of rights to acquire any such securities), unless, prior to such person so
becoming such beneficial owner, the Board shall determine that such person so
becoming such beneficial owner shall not constitute a Change in Control, or
(d) at any time during any period of two consecutive years,
individuals who at the beginning of such period constituted the entire Board
shall cease for any reason to constitute at least a majority thereof, unless
the election or nomination for election of each new director during such
two-year period is approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such two-year
period.
SECTION 10. ASSIGNABILITY
The right to receive payments or distributions hereunder (including
any "derivative security" issued pursuant to the Plan, as such term is defined
by the rules promulgated under Section 16 of the Exchange Act), any shares of
Restricted Stock granted hereunder during the Restriction Period, and any Stock
Options granted hereunder shall not be transferable or assignable by a Director
other than by will, by the laws of descent and distribution, to a properly
designated beneficiary in the event of death, or pursuant to a domestic
relations order as defined by Section 414(p)(1)(B) of the Internal Revenue Code
or the rules thereunder that satisfies Section 414(p)(1)(A) of the Internal
Revenue Code or the rules thereunder. In addition, Stock acquired on exercise
of a Stock Option shall not be transferable prior to the end of the applicable
Option Shares Holding Period,
-18-
<PAGE> 19
if any, set forth in Sections 7.2(d) and 7.5, and Stock acquired as Restricted
Stock shall not be transferable prior to the end of the applicable Restricted
Shares Holding Period, if any, set forth in Sections 8.2(d) and 8.5, in either
case other than by will, by transfer to a properly designated beneficiary in
the event of death, by the applicable laws of descent and distribution or
pursuant to a domestic relations order as defined by Section 414(p)(1)(B) of
the Internal Revenue Code or the rules thereunder that satisfies Section
414(p)(1)(A) of the Internal Revenue Code or the rules thereunder.
SECTION 11. RETENTION; WITHHOLDING OF TAX
11.1 Retention. Nothing contained in the Plan or in any Stock Option
Award or Restricted Stock Award granted under the Plan shall interfere with or
limit in any way the right of the Company to remove any Director from the Board
pursuant to the Restated Articles of Incorporation and the By-laws of the
Company, nor confer upon any Director any right to continue in the service of
the Company.
11.2 Withholding of Tax. To the extent required by applicable law
and regulation, each Director must arrange with the Company for the payment of
any federal, state or local income or other tax applicable to any payment or
any delivery of Stock hereunder before the Company shall be required to make
such payment or issue (or, in the case of Restricted Stock, deliver) such
shares under the Plan.
SECTION 12. PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend
or modify the Plan, provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
shareholders if shareholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements and provided further, that,
unless otherwise permitted by the rules under Section 16 of the Exchange Act,
no amendment or modification shall be made more than once every six months that
would change the amount, price, or timing of the Common Stock Equivalent
Awards, Stock Option Awards or Restricted Stock Awards hereunder, other than to
comport with changes in the Internal Revenue Code, the Employment Retirement
Income Security Act of 1974, as amended, or the rules promulgated thereunder.
SECTION 13. REQUIREMENTS OF LAW
13.1 Federal Securities Law Requirements. Implementation and
interpretations of, transactions pursuant to, the Plan shall be subject to all
conditions required under Rule 16b-3, as such rule may be amended, or any
successor rule, to qualify such transactions for any exemption from the
provisions of Section 16(b) of the Exchange Act available under that rule, or
any successor rule.
-19-
<PAGE> 20
13.2 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania.
SECTION 14. EFFECTIVE DATE OF AMENDMENT.
This Plan shall be effective on the date on which the amendment to
the Deferred Compensation and Stock Plan for Directors is approved by the
common shareholders of the Company. Automatic grants of Stock Options and
Restricted Stock to Directors for Annual Director's Fees will begin on January
31, 1996 but are subject to such shareholder approval, and, in the case of
Restricted Stock Awards, said shares shall not be issued and outstanding until
such approval is obtained. In the event that the amendment is not so approved,
the Deferred Compensation and Stock Plan for Directors as in effect prior to
the amendment shall remain in full force and effect, and the automatic grants
made on January 31, 1996 shall be null and void.
This Plan shall not preclude the adoption by appropriate means of
any other compensation or deferral plan for directors.
-20-
<PAGE> 1
Exhibit (10)(h)
1991 LONG-TERM INCENTIVE PLAN
(as amended as of September 25, 1996)
ARTICLE I
GENERAL
1.1 PURPOSE
The purposes of the 1991 Long-Term Incentive Plan ("Plan") for
eligible employees of Westinghouse Electric Corporation ("Corporation") and its
Subsidiaries (the Corporation and its Subsidiaries severally and collectively
referred to in the Plan as the "Company") are to foster and promote the
long-term financial success of the Company and materially increase stockholder
value by (i) attracting and retaining employees of outstanding ability, (ii)
strengthening the Company's capability to develop, maintain and direct a high
performance team, (iii) motivating employees, by means of performance-related
incentives, to achieve long-range performance goals, (iv) providing incentive
compensation opportunities competitive with those of other major companies and
(v) enabling employees to participate in the long-term growth and financial
success of the Company.
1.2 ADMINISTRATION
(a) The Plan shall be administered by a committee of the Board of
Directors of the Corporation ("Committee") which shall consist of two or more
members. The members shall be appointed by the Board of Directors, and any
vacancy on the Committee shall be filled by the Board of Directors.
The Committee shall keep minutes of its meetings and of any action taken
by it without a meeting. A majority of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present shall be the acts of the Committee. Any action that
may be taken at a meeting of the Committee may be taken without a meeting if a
consent or consents in writing setting forth the action so taken shall be
signed by all of the members of the Committee. The Committee shall make
appropriate reports to the Board of Directors concerning the operations of the
Plan.
(b) Subject to the limitations of the Plan, the Committee shall have the
sole and complete authority: (i) to select in accordance with Section 1.3
persons who shall participate in the Plan ("Participant" or "Participants")
(including the right to delegate authority to select Participants); (ii) to
make Awards and payments in such forms and amounts as it shall determine,
including the right to delegate authority to make Awards within limits approved
by the Committee; (iii) to impose such limitations, restrictions, terms and
conditions upon such Awards
-1-
<PAGE> 2
as the Committee or its authorized delegates shall deem appropriate; (iv) to
interpret the Plan and the terms of any document relating to the Plan and to
adopt, amend and rescind administrative guidelines and other rules and
regulations relating to the Plan; (v) to amend or cancel an existing Award in
whole or in part (including the right to delegate authority to amend or cancel
an existing Award in whole or in part within limits approved from time to time
by the Committee), except that the Committee and its authorized delegates may
not, unless otherwise provided in the Plan, or unless the Participant affected
thereby consents, take any action under this clause that would adversely
affect the rights of such Participant with respect to the Award, and except
that the Committee and its authorized delegates may not take any action to
amend any outstanding Option under the Plan in order to decrease the Option
Price under such Option or to cancel and replace any such Option with an
Option with a lower Option Price; and (vi) to make all other determinations
and to take all other actions necessary or advisable for the interpretation,
implementation and administration of the Plan. The Committee's determinations
on matters within its authority shall be conclusive and binding upon the
Company and all other persons.
(c) The Committee shall act with respect to the Plan on behalf of the
Corporation and on behalf of any Subsidiary issuing stock under the Plan,
subject to appropriate action by the board of directors of any such Subsidiary.
All expenses associated with the Plan shall be borne by the Corporation subject
to such allocation to its Subsidiaries and operating units as it deems
appropriate.
1.3 SELECTION FOR PARTICIPATION
Participants selected by the Committee or its authorized delegates
shall be Eligible Persons as defined below. "Eligible Persons" are persons who
are employees of the Company ("Employee" or "Employees") or, in the event of
death while an Employee, his or her estate. In making this selection and in
determining the form and amount of Awards, the Committee may give consideration
to the functions and responsibilities of the Eligible Person, his or her past,
present and potential contributions to the Company and other factors deemed
relevant by the Committee.
1.4 TYPES OF AWARDS UNDER PLAN
Awards ("Awards") under the Plan may be in the form of any one or more
of the following: (i) Non-statutory Stock Options ("NSOs" or "Options"), as
described in Article II, (ii) Stock Appreciation Rights ("SARs") and Limited
Stock Appreciation Rights ("Limited Rights"), as described in Article III,
(iii) Performance Awards ("Performance Awards") as described in Article IV, and
(iv) Restricted Stock ("Restricted Stock") as described in Article V.
-2-
<PAGE> 3
1.5 SHARES SUBJECT TO THE PLAN
Shares of stock issued under the Plan may be in whole or in part
authorized and unissued or treasury shares of the Corporation's common stock,
par value $1.00 ("Common Stock"), or "Formula Value Stock" as defined in
Section 8.12(d) (Common Stock and Formula Value Stock severally and
collectively referred to in the Plan as "Stock").
The maximum number of shares of Stock which may be issued for all
purposes under the Plan shall be 21,500,000.
Except as otherwise provided below, any shares of Stock subject to an
Option or other Award which is canceled or terminates without having been
exercised shall again be available for Awards under the Plan. Shares subject
to an option canceled upon the exercise of an SAR shall not again be available
for Awards under the Plan except to the extent the SAR is settled in cash. To
the extent that an Award is settled in cash, shares of Stock subject to that
Award shall again be available for Awards. Shares of Stock tendered by a
Participant or withheld by the Company to pay the exercise price of an Option
or to satisfy the tax withholding obligations of the exercise or vesting of an
Award shall be available again for Awards under the Plan. Shares of Restricted
Stock forfeited to the Company in accordance with the Plan and the terms of the
particular Award shall be available again for Awards under the Plan.
No fractional shares shall be issued, and the Committee shall
determine the manner in which fractional share value shall be treated.
ARTICLE II
STOCK OPTIONS
2.1 AWARD OF STOCK OPTIONS
The Committee may, from time to time, subject to the provisions of the
Plan and such other terms and conditions as the Committee may prescribe, award
to any Participant Options to purchase Stock.
The Committee may provide with respect to any option to purchase Stock
that, if the Participant, while an Eligible Person, exercises the option in
whole or in part using already-owned Stock, the Participant will, subject to
this Section 2.1 and such other terms and conditions as may be imposed by the
Committee, receive an additional option ("Reload Option"). The Reload Option
will be to purchase, at Fair Market Value as of the date the original option
was exercised, a number of shares of
-3-
<PAGE> 4
Stock equal to the number of whole shares used by the Participant to exercise
the original option. The Reload Option will be exercisable only between the
date of its grant and the date of expiration of the original option.
A Reload Option shall be subject to such additional terms and
conditions as the Committee shall approve, which terms may provide that the
Committee may cancel the Participant's right to receive the Reload Option and
that the Reload Option will be granted only if the Committee has not canceled
such right prior to the exercise of the original option. Such terms may also
provide that, upon the exercise by a Participant of a Reload Option while an
Eligible Person, an additional Reload Option will be granted with respect to
the number of whole shares used to exercise the first Reload Option.
2.2 STOCK OPTION AGREEMENTS
The award of an option shall be evidenced by a written agreement
("Stock Option Agreement") in such form and containing such terms and
conditions as the Committee may from time to time determine.
2.3 OPTION PRICE
The purchase price of Stock under each Option ("Option Price") shall
be not less than the Fair Market Value of such Stock on the date the Option is
awarded.
2.4 EXERCISE AND TERM OF OPTIONS
(a) Except as otherwise provided in the Plan, Options shall become
exercisable at such time or times as the Committee may specify. The Committee
may at any time and from time to time accelerate the time at which all or any
part of the Option may be exercised.
(b) The Committee shall establish procedures governing the exercise of
options and shall require that notice of exercise be given. Stock purchased on
exercise of an option must be paid for as follows: (1) in cash or by check
(acceptable to the Company in accordance with guidelines established for this
purpose), bank draft or money order payable to the order of the Company or (2)
if so provided by the Committee (i) through the delivery of shares of Stock
which are then outstanding and which have a Fair Market Value on the date of
exercise equal to the exercise price, (ii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (iii) by any combination of the
permissible forms of payment.
2.5 TERMINATION OF ELIGIBILITY
In the event the Participant is no longer an Eligible Person and
ceased to be such as a result of termination of service to
-4-
<PAGE> 5
the Company with the consent of the Committee or as a result of his or her
death, retirement or disability, each of his or her outstanding Options shall
be exercisable by the Participant (or his or her legal representative or
designated beneficiary), to the extent that such Option was then exercisable,
at any time prior to an expiration date established by the Committee at the
time of award, but in no event after such expiration date. In the event an
Award is made to the estate of a person who died while an Employee, each
outstanding Option held by such estate shall be exercisable by the estate (or
the distributee of said estate) at any time prior to an expiration date
established by the Committee at the time of award. If the Participant ceases
to be an Eligible Person for any other reason, all of the Participant's then
outstanding Options shall terminate immediately.
ARTICLE III
STOCK APPRECIATION RIGHTS AND LIMITED RIGHTS
3.1 AWARD OF STOCK APPRECIATION RIGHT
(a) An SAR is an Award entitling the recipient on exercise to receive an
amount, in cash or Stock or a combination thereof (such form to be determined
by the Committee), determined in whole or in part by reference to appreciation
in Stock value.
(b) In general, an SAR entitles the Participant to receive, with respect
to each share of Stock as to which the SAR is exercised, the excess of the
share's Fair Market Value on the date of exercise over its Fair Market Value on
the date the SAR was granted.
(c) SARs may be granted in tandem with options granted under the Plan
("Tandem SARS") or independently of Options ("Independent SARs"). An SAR
granted in tandem with an NSO may be granted either at or after the time the
option is granted.
(d) SARs awarded under the Plan shall be evidenced by either a Stock
Option Agreement (when SARs are granted in tandem with an Option) or a separate
agreement between the Company and the Participant.
(e) Except as otherwise provided herein, a Tandem SAR shall be exercisable
only at the same time and to the same extent and subject to the same conditions
as the option related thereto is exercisable, and the Committee may prescribe
additional conditions and limitations on the exercise of the SAR. The exercise
of a Tandem SAR shall cancel the related Option. Tandem SARs may be exercised
only when the Fair Market Value of Stock to which it relates exceeds the Option
Price.
-5-
<PAGE> 6
(f) Except as otherwise provided herein, an Independent SAR will become
exercisable at such time or times, and on such conditions, as the Committee may
specify, and the Committee may at any time accelerate the time at which all or
any part of the SAR may be exercised.
The Committee may provide, under such terms and conditions as it may
deem appropriate, for the automatic grant of additional SARs upon the full or
partial exercise of an Independent SAR.
Any exercise of an Independent SAR must be in writing, signed by the
proper person and delivered or mailed to the Company, accompanied by any other
documents required by the Committee.
(g) Except as otherwise provided herein, all SARs shall automatically be
exercised on the last trading day prior to the expiration date established by
the Committee at the time of the award for the SAR, or, in the case of a Tandem
SAR, for the related Option, so long as exercise on such date will result in a
payment to the Participant.
(h) Unless otherwise provided by the Committee, no SAR shall become
exercisable or shall be automatically exercised for six months following the
date on which it was granted.
(i) At the time of award of an SAR, the Committee may limit the amount of
the payment that may be made to a Participant upon the exercise of the SAR.
The Committee may further determine that, if the amount to be received by a
Participant in any year is limited pursuant to this provision, payment of all
or a portion of the amount that is unpaid as a result of the limitation may be
made to the Participant at a subsequent time. No such limitation shall require
a Participant to return to the Company any amount theretofore received by him
or her upon the exercise of an SAR.
(j) Payment of the amount to which a Participant is entitled upon the
exercise of an SAR shall be made in cash, Stock, or partly in cash and partly
in Stock, as the Committee shall determine. To the extent that payment is made
in Stock, the shares shall be valued at their Fair Market Value on the date of
exercise of the SAR.
(k) Each SAR shall expire on a date determined by the Committee or earlier
upon the occurrence of the first of the following: (i) in the case of a Tandem
SAR, termination of the related option, (ii) expiration of a period of six
months after the Participant's ceasing to be an Eligible Person as a result of
termination of service to the Company with the consent of the Committee or as a
result of his or her death, retirement or
-6-
<PAGE> 7
disability, or (iii) the Participant ceasing to be an Eligible Person for any
other reason.
3.2 LIMITED RIGHTS
(a) The Committee may award Limited Rights pursuant to the provisions of
this Section 3.2 to the holder of an Option to purchase Common Stock granted
under the Plan (a "Related Option") with respect to all or a portion of the
shares subject to the Related Option. A Limited Right may be exercised only
during the period beginning on the first day following a Change in Control, as
defined in Section 7.2 of the Plan, and ending on the thirtieth day following
such date. Each Limited Right shall be exercisable only to the same extent
that the Related Option is exercisable, and in no event after the termination
of the Related Option. In no event shall a Limited Right be exercised during
the first six months after the date of grant of the Limited Right. Limited
Rights shall be exercisable only when the Fair Market Value (determined as of
the date of exercise of the Limited Rights) of each share of Common Stock with
respect to which the Limited Rights are to be exercised shall exceed the Option
Price per share of Common Stock subject to the Related option.
(b) Upon the exercise of Limited Rights, the Related Option shall be
considered to have been exercised to the extent of the number of shares of
Common Stock with respect to which such Limited Rights are exercised. Upon the
exercise or termination of the Related Option, the Limited Rights with respect
to such Related Option shall be considered to have been exercised or terminated
to the extent of the number of shares of Common Stock with respect to which the
Related Option was so exercised or terminated.
(c) The effective date of the grant of a Limited Right shall be the date
on which the Committee approves the grant of such Limited Right. Each grantee
of a Limited Right shall be notified promptly of the grant of the Limited Right
in such manner as the Committee shall prescribe.
(d) Upon the exercise of Limited Rights, the holder thereof shall receive
in cash an amount equal to the product computed by multiplying (i) the excess
of (a) the higher of (x) the Minimum Price Per Share (as hereinafter defined),
or (y) the highest reported closing sales price of a share of Common Stock on
the New York Stock Exchange at any time during the period beginning on the
sixtieth day prior to the date on which such Limited Rights are exercised and
ending on the date on which such Limited Rights are exercised, over (b) the
Option Price per share of Common Stock subject to the Related Option, by (ii)
the number of shares of Common Stock with respect to which such Limited Rights
are being exercised.
-7-
<PAGE> 8
(e) For purposes of this Section 3.2, the term "Minimum Price Per Share"
shall mean the highest gross price (before brokerage commissions and soliciting
dealers' fees) paid or to be paid for a share of Common Stock (whether by way
of exchange, conversion, distribution upon liquidation or otherwise) in any
Change in Control which is in effect at any time during the period beginning on
the sixtieth day prior to the date on which such Limited Rights are exercised
and ending on the date on which such Limited Rights are exercised. For
purposes of this definition, if the consideration paid or to be paid in any
such Change in Control shall consist, in whole or in part, of consideration
other than cash, the Board shall take such action, as in its judgement it deems
appropriate, to establish the cash value of such consideration.
ARTICLE IV
PERFORMANCE AWARDS
4.1 NATURE OF PERFORMANCE AWARDS
A Performance Award provides for the recipient to receive an amount in
cash or Stock or a combination thereof (such form to be determined by the
Committee) following the attainment of Performance Goals. Performance Goals
may be related to personal performance, corporate performance (including
corporate stock performance), departmental performance or any other category of
performance deemed by the Committee to be important to the success of the
Company. The Committee shall determine the Performance Goals, the period or
periods during which performance is to be measured and all other terms and
conditions applicable to the Award. Regardless of the degree to which
Performance Goals are attained, a Performance Award shall be paid only when, if
and to the extent that the Committee determines to make such payment.
4.2 OTHER AWARDS SUBJECT TO PERFORMANCE CONDITION
The Committee may, at the time any Award described in this Plan is
granted, impose the condition (in addition to any conditions specified or
authorized in the Plan) that Performance Goals be met prior to the
Participant's realization of any payment or benefit under the Award.
ARTICLE V
RESTRICTED STOCK
5.1 AWARD OF RESTRICTED STOCK
The Committee may award to any Participant shares of Stock subject to
this Article V and such other terms and conditions as the Committee may
prescribe, such Stock referred to herein as "Restricted Stock."
-8-
<PAGE> 9
Each certificate for Restricted Stock shall be registered in the name
of the Participant and deposited by him or her, together with a stock power
endorsed in blank, with the Corporation.
5.2 RESTRICTED STOCK AGREEMENT
Shares of Restricted Stock awarded under the Plan shall be evidenced
by a written agreement in such form and containing such terms and conditions as
the Committee may determine.
5.3 RESTRICTION PERIOD
At the time of award, there shall be established for each Participant
a "Restriction Period" of such length as shall be determined by the Committee.
The Restriction Period may be waived by the Committee. Shares of Restricted
Stock may not be sold, assigned, transferred, pledged or otherwise encumbered,
except as hereinafter provided, during the Restriction Period. Subject to such
restriction on transfer, the Participant as owner of such shares of Restricted
Stock shall have the rights of the holder of such Restricted Stock, except that
the Committee may provide at the time of the Award that any dividends or other
distributions paid on such Stock during the Restriction Period shall be
accumulated and held by the Company and shall be subject to forfeiture under
Section 5.4.
Upon the expiration or waiver by the Committee of the Restriction
Period, the Corporation shall redeliver to the Participant (or his or her legal
representative or designated beneficiary) the shares deposited pursuant to
Section 5.1.
5.4 TERMINATION OF ELIGIBILITY
In the event the Participant is no longer an Eligible Person and
ceased to be such as a result of termination of service to the Company with the
consent of the Committee, or as a result of his or her death, retirement or
disability, the restrictions imposed under this Article V shall lapse with
respect to such number of shares theretofore awarded to him or her as shall be
determined by the Committee. All other shares of Restricted Stock theretofore
awarded to him or her which are still subject to restrictions, along with any
dividends or other distributions thereon that have been accumulated and held by
the Company, shall be forfeited, and the Corporation shall have the right to
complete the blank stock power.
In the event the Participant ceases to be an Eligible Person for any
other reason, all shares of Restricted Stock theretofore awarded to him or her
which are still subject to restrictions, along with any dividend or other
distributions thereon that have been accumulated and held by the Company, shall
be forfeited, and the Corporation shall have the right to complete the blank
stock power.
-9-
<PAGE> 10
ARTICLE VI
DEFERRAL OF PAYMENTS
6.1 DEFERRAL OF AMOUNTS
If the Committee makes a determination to designate Awards or, from
time to time, groups or types of Awards, eligible for deferral hereunder, a
Participant may, subject to such terms and conditions and within such limits as
the Committee may from time to time establish, elect to defer the receipt of
amounts due to him or her under the Plan. Amounts so deferred are referred to
herein as "Deferred Amounts." The Committee may also permit amounts now or
hereafter deferred or available for deferral under any present or future
incentive compensation program or deferral arrangement of the Company to be
deemed Deferred Amounts and to become subject to the provisions of this
Article. Awards which are so deferred will be deemed to have been awarded in
cash and the cash deferred as Deferred Amounts.
The period between the date on which the Participant's Deferred Amount
would have been payable absent deferral and the final payment of such Deferred
Amount shall be referred to herein as the "Deferral Period."
6.2 INVESTMENT DURING DEFERRAL PERIOD
Unless otherwise determined by the Committee, and subject to such
changes as the Committee may determine, the Deferred Amount will be treated
during the Deferral Period as if it were invested in putative convertible
debentures with a fixed interest rate, compounded annually, for the entire
Deferral Period. For purposes of determining the value of the Deferred Amount
at the time of payment, each putative debenture will be deemed to be
convertible into Common Stock at a conversion rate computed by reference to the
Fair Market Value of the Common Stock on the last trading day prior to the
regular January meeting of the Board of Directors on or preceding the date of
deferral. Payment of Deferred Amounts may be made in cash, Stock, or partly in
cash and partly in Stock, in the Committee's sole discretion.
6.3 PARTICIPANT REPORTS
Annually, each Participant who has a Deferred Amount will receive a
report setting forth all of his or her then Deferred Amounts and the yield
thereon to date.
6.4 PAYMENT OF DEFERRED AMOUNTS
Payment of Deferred Amounts will be made at such time or times, and
may be in cash, Stock, or partly in cash and partly in Stock, as the Committee
shall from time to time determine. The limitations respecting the issuance of
Stock or other limitations on aggregate awards payable contained in the Annual
Performance Plan of the Corporation, Article XVI of the by-laws of the
Corporation, the 1974 Stock Option Plan, the 1979 Stock Option
-10-
<PAGE> 11
and Long-Term Incentive Plan, the 1984 Long-Term Incentive Plan, the Plan and
in any plan hereafter adopted by the stockholders shall be limitations
applicable to the payment of any Deferred Amounts under this Article VI.
6.5 ALTERNATIVE VALUATION ELECTION
Unless otherwise determined by the Committee, a Participant may, at a
time established by the Committee, but prior to such Participant's ceasing to
be an Eligible Person, elect to establish the ultimate payable value of each
Deferred Amount by reference to the Fair Market Value of the Common Stock as of
the day on which an alternate valuation election is received by the corporation
in accordance with procedures established by the Committee.
Notwithstanding the establishment of the ultimate payable value
resulting from the alternate valuation election by the Participant, the yield
will continue as though no such election had been made and will continue to be
subject to the limitations set forth in Section 6.2, and Deferred Amounts and
the yield thereon will be paid as otherwise provided in this Article.
ARTICLE VII
CHANGES IN CONTROL
7.1 EFFECT OF CHANGE IN CONTROL
Notwithstanding any other provision of the Plan, upon the occurrence
of a Change in Control, as defined in Section 7.2: (i) all Options and, subject
to the exercise provisions of Section 3.2(a) of the Plan, Limited Rights, but
not SARS, outstanding and unexercised on the date of the Change in Control
shall become immediately exercisable; (ii) all Performance Awards shall be
deemed to have been earned on such basis as the Committee may prescribe and
then paid on such basis, at such time and in such form as the Committee may
prescribe, or deferred in accordance with the elections of Participants; (iii)
all Restricted Stock shall be deemed to be earned and the Restriction Period
shall be deemed expired on such terms and conditions as the Committee may
determine; and (iv) all amounts deferred under this Plan shall be paid to a
trustee or otherwise on such terms as the Committee may prescribe or permit.
7.2 DEFINITION OF CHANGE IN CONTROL
The term "Change in Control" means the occurrence of one or more of
the following events: (a) there shall be consummated (i) any consolidation or
merger of the Corporation in which the Corporation is not the continuing or
surviving corporation or pursuant to which shares of the Common Stock would be
converted into cash, securities or other property, other than a merger of the
Corporation in which the holders of Common Stock immediately prior to the
merger have the same proportionate ownership of
-11-
<PAGE> 12
common stock of the surviving corporation immediately after the merger, or
(ii) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
the Corporation, or (b) the stockholders of the Corporation shall approve any
plan or proposal for the liquidation or dissolution of the Corporation, or (c)
(i) any person (as such term is defined in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), corporation or other
entity shall purchase any Common Stock of the Corporation (or securities
convertible into Common Stock) for cash, securities or any other consideration
pursuant to a tender offer or exchange offer, unless, prior to the making of
such purchase of Common Stock (or securities convertible into Common Stock),
the Board shall determine that the making of such purchase shall not
constitute a Change in Control, or (ii) any person (as such term is defined in
Section 13(d) of the Exchange Act), corporation or other entity (other than
the Corporation or any benefit plan sponsored by the Corporation or any of its
subsidiaries) shall be the "beneficial owner" (as such term is defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing twenty percent or more of the combined voting power
of the Corporation's then outstanding securities ordinarily (and apart from
any rights accruing under special circumstances) having the right to vote in
the election of directors (calculated as provided in Rule 13d-3(d) in the case
of rights to acquire any such securities), unless, prior to such person so
becoming such beneficial owner, the Board shall determine that such person so
becoming such beneficial owner shall not constitute a Change in Control, or
(d) at any time during any period of two consecutive years, individuals who at
the beginning of such period constituted the entire Board shall cease for any
reason to constitute at least a majority thereof, unless the election or
nomination for election of each new director during such two-year period was
approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of such two-year period.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-TRANSFERABILITY
No Option, SAR, Performance Award or share of Restricted Stock or
Deferred Amount under the Plan shall be transferable by the Participant other
than by will, by the applicable laws of descent and distribution, or by
transfer to a properly designated beneficiary in the event of death. All
Awards and Deferred Amounts shall be exercisable or received during the
Participant's lifetime only by such Participant or his or her legal
representative. Any transfer contrary to this Section 8.1 will nullify the
option, SAR, Performance Award or share of Restricted
-12-
<PAGE> 13
Stock, and any attempted transfer of a Deferred Amount contrary to this
Section 8.1 will be void and of no effect.
8.2 BENEFICIARIES
The Committee may establish or authorize the establishment of
procedures not inconsistent with Section 8.1 under which a Participant may
designate a beneficiary or beneficiaries to hold, exercise and/or receive
amounts due under an Award or with respect to Deferred Amounts in the event of
the Participant's death.
8.3 ADJUSTMENTS UPON CHANGES IN STOCK
If there shall be any change in the Stock of the Company, through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, split up, dividend in kind or other change in the corporate structure or
distribution to the stockholders, appropriate adjustments may be made by the
Board of Directors of the Company (or if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation) in the aggregate number and kind of shares subject to the Plan,
and the number and kind of shares and the price per share subject to
outstanding Options or which may be issued under outstanding Performance Awards
or Awards of Restricted Stock. Appropriate adjustments may also be made by the
Board of Directors or the Committee in the terms of any Awards under the Plan
to reflect such changes and to modify any other terms of outstanding Awards on
an equitable basis, including modifications of performance targets and changes
in the length of Performance Periods.
8.4 CONDITIONS OF AWARDS
(a) The rights of a Participant with respect to any Award received under
this Plan shall be subject to the conditions that, until the Participant has
fully received all payments, transfers and other benefits under the Award, he
or she shall (i) not engage, either directly or indirectly, in any manner or
capacity as advisor, principal, agent, partner, officer, director, employee,
member of any association or otherwise, in any business or activity which is at
the time competitive with any business or activity conducted by the Company and
(ii) be available, unless he or she shall have died, at reasonable times for
consultations at the request of the Company's management with respect to phases
of the business with which he or she is or was actively connected during his or
her employment, but such consultations shall not (except in the case of a
Participant whose active service was outside the United States) be required to
be performed at any place or places outside of the United States of America or
during usual vacation periods or periods of illness or other incapacity. In
the event that either of the above conditions is not fulfilled, the Participant
shall forfeit all rights to any unexercised option or SAR, or any Performance
Award or Stock held
-13-
<PAGE> 14
which has not yet been determined by the Committee to be payable or
unrestricted (and any unpaid amounts equivalent to dividends or other
distributions or amounts equivalent to interest relating thereto) as of the
date of the breach of condition. Any determination by the Board of Directors
of the Corporation, which shall act upon the recommendation of the Chief
Executive Officer, that the Participant is, or has, engaged in a competitive
business or activity as aforesaid or has not been available for consultations
as aforesaid shall be conclusive.
(b) This Section 8.4 shall not apply to Limited Rights.
8.5 USE OF PROCEEDS
All cash proceeds from the exercise of options shall constitute
general funds of the Company.
8.6 TAX WITHHOLDING
The Company will withhold from any cash payment made pursuant to an
Award an amount sufficient to satisfy all federal, state and local withholding
tax requirements (the "withholding requirements").
In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock.
If and to the extent that such withholding is required, the Committee may
permit the Participant or such other person to elect at such time and in such
manner as the Committee provides to have the Company hold back from the shares
to be delivered, or to deliver to the Company, Stock having a value calculated
to satisfy the withholding requirement. In the alternative, the Committee may,
at the time of grant of any such Award, require that the Company withhold from
any shares to be delivered Stock with a value calculated to satisfy applicable
tax withholding requirements.
8.7 NON-UNIFORM DETERMINATIONS
The Committee's determinations under the Plan, including without
limitation, (i) the determination of the Participants to receive Awards, (ii)
the form, amount, timing and payment of such Awards, (iii) the terms and
provisions of such Awards and (iv) the agreements evidencing the same, need not
be uniform and may be made by it selectively among Participants who receive, or
who are eligible to receive, Awards under the Plan, whether or not such
Participants are similarly situated.
8.8 LEAVES OF ABSENCE; TRANSFERS
The Committee shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the
-14-
<PAGE> 15
Plan in respect to any leave of absence from the Company granted to a
Participant. Without limiting the generality of the foregoing, the Committee
shall be entitled to determine (i) whether or not any such leave of absence
shall be treated as if the Participant ceased to be an Employee and (ii) the
impact, if any, of any such leave of absence on Awards under the Plan. In the
event a Participant transfers within the Company, such Participant shall not
be deemed to have ceased to be an Employee for purposes of the Plan.
8.9 GENERAL RESTRICTION
(a) Each Award under the Plan shall be subject to the condition that, if
at any time the Committee shall determine that (i) the listing, registration or
qualification of shares of Stock upon any securities exchange or under any
state or federal law, (ii) the consent or approval of any government or
regulatory body or (iii) an agreement by the Participant with respect thereto,
is necessary or desirable, then such Award shall not be consummated in whole or
in part unless such listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free from any conditions not
acceptable to the Committee.
(b) Shares of Common Stock for use under the provisions of this Plan shall
not be issued until they have been duly listed, upon official notice of
issuance, upon the New York Stock Exchange and such other exchanges, if any, as
the Board of Directors of the Corporation shall determine, and a registration
statement under the Securities Act of 1933 with respect to such shares shall
have become, and be, effective.
8.10 EFFECTIVE DATE
The Plan shall be deemed effective as of December 4, 1991.
No Award may be granted under the Plan after the Plan is terminated
pursuant to Section 8.11, but Awards previously made may extend beyond that
date and Reload Options and additional Reload Options provided for with respect
to original options outstanding prior to that date may continue unless the
Committee otherwise provides and subject to such additional terms and
conditions as the Committee may provide, and the provisions of Article VI of
the Plan shall survive and remain effective as to all present and future
Deferred Amounts until such later date as the Committee or the Board of
Directors shall determine.
The adoption of the Plan shall not preclude the adoption by
appropriate means of any other stock option or other incentive plan for
employees.
-15-
<PAGE> 16
8.11 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN
The Board of Directors may at any time or times amend the Plan for any
purpose which may at the time be permitted by law, or may at any time suspend
or terminate the Plan as to any further grants of Awards.
8.12 CERTAIN DEFINITIONS
(a) Unless otherwise determined by the Committee, the terms "retirement"
and "disability" as used under the Plan shall be construed by reference to the
provisions of the Westinghouse Pension Plan or other similar plan or program of
the Company applicable to a Participant.
(b) The term "Fair Market Value" as it relates to Common Stock means the
mean of the high and low prices of the Common Stock as reported by the
Composite Tape of the New York Stock Exchange (or such successor reporting
system as shall be selected by the Committee) on the relevant date or, if no
sale of the Common Stock shall have been reported for that day, the average of
such prices on the next preceding day and the next following day for which
there were reported sales. The term "Fair Market Value" as it relates to
Formula Value Stock shall mean the value determined by the Committee.
(c) The term "Subsidiary" shall mean, unless the context otherwise
requires, any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the corporation if each of the corporations other
than the last corporation in such chain owns stock possessing at least 50% of
the voting power in one of the other corporations in such chain.
(d) "Formula Value Stock" means shares of a class or classes of stock the
value of which is derived from a formula established by the Committee which
reflects such financial measures as the Committee shall determine. Such shares
shall have such other characteristics as shall be determined at time of their
authorization.
-16-
<PAGE> 1
Exhibit 10(l)
EXECUTION COPY
________________________________________________________________________________
$5,500,000,000
CREDIT AGREEMENT
among
WESTINGHOUSE ELECTRIC CORPORATION,
as Borrower
THE LENDERS NAMED HEREIN,
NATIONSBANK, N.A. and THE TORONTO-DOMINION BANK,
as Syndication Agents
THE CHASE MANHATTAN BANK,
as Documentation Agent
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
Dated as of August 29, 1996
________________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I.
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE II.
THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.1. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.2. Revolving Credit Loans; Competitive Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.3. Competitive Bid Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.4. Revolving Credit Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.5. Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.6. Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.7. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.8. Conversion and Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.9. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.10. Interest on Loans; Eurodollar Tranches; Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.11. Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.12. Alternate Rate of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.13. Termination and Optional Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.14. Optional Prepayments of Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.15. Reserve Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.16. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.17. Pro Rata Treatment; Funding Matters; Evidence of Debt . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.18. Sharing of Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.19. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.20. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.21. Termination or Assignment of Commitments Under Certain Circumstances . . . . . . . . . . . . . . . . . 36
ARTICLE III.
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . 37
SECTION 3.1. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.2. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.4. No Breach, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.5. Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.6. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.7. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.9. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 3.10. Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.11. Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.12. Material Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.13. No Material Misstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.14. Ownership of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.15. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.16. FCC Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IV.
CONDITIONS OF EFFECTIVENESS AND LENDING . . . . . . . . . . . . . . . . . 40
SECTION 4.1. Initial Credit Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.2. All Credit Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE V.
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.1. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.2. Corporate Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.3. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.4. Prohibition of Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.5. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.6. Limitation on Subsidiary Indebtedness; Termination of Existing Infinity Credit Agreement . . . . . . . 48
SECTION 5.7. Consolidated Leverage Ratio, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.8. Consolidated Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.9. Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.10. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.11. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.12. Limitation on Negative Pledge Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VI.
EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VII.
THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VIII.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.2. Survival of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.3. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.4. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.5. Expenses; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.6. Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.7. APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 8.8. Waivers; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.9. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.10. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.11. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.13. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.14. Jurisdiction; Consent to Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.15. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
- iii -
<PAGE> 5
EXHIBITS
Exhibit A Administrative Questionnaire
Exhibit B-1 Form of Competitive Bid Request
Exhibit B-2 Form of Notice of Competitive Bid Request
Exhibit B-3 Form of Competitive Bid
Exhibit B-4 Form of Revolving Credit Borrowing Request
Exhibit B-5 Form of Swingline Borrowing Request
Exhibit B-6 Form of Notice of Designated Letter of Credit
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Confidentiality Agreement
Exhibit E-1 Form of Opinion of General Counsel
Exhibit E-2 Form of Opinion of Assistant/Associate General Counsel
Exhibit E-3 Form of Opinion of Simpson Thacher & Bartlett
Exhibit F Form of Closing Certificate
Exhibit G Form of Issuing Lender Agreement
SCHEDULES
Schedule 1.1 Commitments; Addresses for Notices
Schedule 3.12 Material Subsidiaries
Schedule 5.5(n) Certain CBS Assets
Schedule 5.6 Existing CBS Indebtedness
- iv -
<PAGE> 6
CREDIT AGREEMENT entered into as of August 29, 1996, among WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation ("Westinghouse"); the lenders
whose names appear on the signature pages hereto or who subsequently become
parties hereto as provided herein (the "Lenders"); NATIONSBANK, N.A.
("NationsBank") and THE TORONTO-DOMINION BANK ("Toronto Dominion"), as
syndication agents for the Lenders (in such capacity, the "Syndication
Agents"); THE CHASE MANHATTAN BANK, a New York banking corporation ("Chase"),
as documentation agent for the Lenders; and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, a New York banking corporation ("Morgan"), as administrative agent
for the Lenders.
W I T N E S S E T H :
WHEREAS, Westinghouse has requested the Lenders to provide extensions of
credit pursuant to this Agreement to be used to refinance indebtedness under
the Existing Westinghouse Credit Agreement (as herein defined), to pay fees and
expenses relating to the Infinity Merger (as herein defined), to refinance
certain indebtedness of Infinity (as herein defined) and for general corporate
purposes, which extensions of credit shall enable Westinghouse to (a) borrow
loans on a revolving credit basis on and after the Closing Date (as herein
defined) and prior to the Revolving Credit Maturity Date (as herein defined),
(b) request the issuance of Letters of Credit (as herein defined) and (c)
invite the Lenders to bid on an uncommitted basis on short-term borrowings by
Westinghouse, in an aggregate principal amount for all such extensions of
credit not in excess of $5,500,000,000; and
WHEREAS, the Lenders are willing to extend credit to Westinghouse on the
terms and subject to the conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, Westinghouse, the Lenders and the Agents (as herein defined)
hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR Loan" shall mean (a) any Revolving Credit Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II and (b) any ABR Swingline Loan.
"ABR Revolving Credit Loan" shall mean any Revolving Credit Loan which is an
ABR Loan.
"ABR Swingline Exposures" shall mean at any time the aggregate principal
amount at such time of the outstanding ABR Swingline Loans. The ABR Swingline
Exposure of any Lender at any time shall mean its Revolving Credit Percentage
of the aggregate ABR Swingline Exposures at such time.
<PAGE> 7
2
"ABR Swingline Loan" shall have the meaning assigned to such term in Section
2.6(a).
"Absolute Rate Loan" shall mean any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal rounded to
no more than four decimal places) specified by the Lender making such Loan in
its Competitive Bid.
"Adjusted Applicable Commitment Fee Rate" shall mean, at any time, 50% of
the Applicable Commitment Fee Rate then in effect.
"Administrative Agent" shall mean Morgan, together with its affiliates, as
an arranger of the Commitments and as the administrative agent for the Lenders
under this Agreement, and any successor thereto pursuant to Article VII.
"Administrative Agent Fee Letter" shall mean the Fee Letter with respect to
this Agreement between Westinghouse and the Administrative Agent, as amended,
supplemented or otherwise modified from time to time.
"Administrative Agent's Fees" shall have the meaning assigned to such term
in Section 2.9(c).
"Administrative Questionnaire" shall mean an Administrative Questionnaire in
the form of Exhibit A hereto.
"Affiliate" shall mean, as to Westinghouse, any Person which directly or
indirectly controls, is under common control with or is controlled by
Westinghouse. As used in this definition, "control" (including, with
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), provided
that, in any event, any Person which owns directly or indirectly 10% or more of
the securities having ordinary voting power for the election of directors or
other governing body of a corporation or 10% or more of the partnership or
other ownership interests of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person. Notwithstanding the foregoing, (a) no individual shall be deemed to be
an Affiliate of Westinghouse solely by reason of his or her being an officer,
director or employee of Westinghouse or any of its Subsidiaries, (b)
Westinghouse and its Subsidiaries shall not be deemed to be Affiliates of each
other and (c) no Person of which Westinghouse or any of its Subsidiaries
acquires or has acquired control in connection with or as a consequence of any
debt or equity financing provided to such Person in the ordinary course of
business of WFSI, any of its Subsidiaries, Financial Services or WCI shall be
deemed an Affiliate of Westinghouse.
"Agents" shall mean the collective reference to the Administrative Agent,
the Documentation Agent and the Syndication Agents.
"Aggregate LC Exposure" shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit outstanding at such time and
(b) the aggregate amount which has been drawn under Letters of Credit but for
which the applicable Issuing Lender or the Lenders, as the case may be, have
not been reimbursed by Westinghouse at such time.
"Agreement" shall mean this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
<PAGE> 8
3
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall
mean the rate of interest per annum publicly announced from time to time by the
Lender serving as the Administrative Agent as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as effective; and
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for the day of such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the Alternate Base Rate shall
be the Prime Rate until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"Applicable Commitment Fee Rate" shall mean the "Applicable Commitment Fee
Rate" determined in accordance with the Pricing Grid set forth in Annex I
hereto.
"Applicable Eurodollar Margin" shall mean the "Applicable Eurodollar Margin"
determined in accordance with the Pricing Grid set forth in Annex I hereto.
"Applicable LC Fee Rate" shall mean (a) with respect to Financial Letters of
Credit, the "Applicable Financial LC Fee Rate" determined in accordance with
the Pricing Grid set forth in Annex I hereto and (b) with respect to
Non-Financial Letters of Credit, the "Applicable Non-Financial LC Fee Rate"
determined in accordance with the Pricing Grid set forth in Annex I hereto.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent, in
the form of Exhibit C.
"Base Commitment" shall mean, with respect to each Lender, a portion of such
Lender's Commitment equal to such Lender's Revolving Credit Percentage of an
amount equal to (a) $4,000,000,000 minus (b) the aggregate amount of optional
reductions in the Base Commitments (if any) made pursuant to Section 2.13.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City; provided, however, that, when used in connection
with a Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in Dollar deposits in the London
interbank market.
"Capital Lease Obligations" of any Person shall mean the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real
<PAGE> 9
4
or personal property, or a combination thereof, which obligations are required
to be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"Capital Stock" shall mean any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"CBS" shall mean CBS Inc., a New York corporation.
"Change of Control" shall mean that any person or group of persons (within
the meaning of Sections 13 and 14 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the SEC relating
to such sections) shall have acquired beneficial ownership (within the meaning
of Rules 13d-3 and 13d-5 promulgated by the SEC pursuant to the Exchange Act)
of 30% or more of the outstanding shares of voting stock of Westinghouse.
"Chase" shall have the meaning assigned to such term in the preamble to this
Agreement.
"Closing Certificate" shall mean a certificate, substantially in the form of
Exhibit F, delivered by Westinghouse pursuant to Section 4.1(b).
"Closing Date" shall have the meaning assigned to such term in Section 4.1.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean, with respect to each Lender, the commitment of such
Lender to make Revolving Credit Loans pursuant to Section 2.1, to make or
refund ABR Swingline Loans pursuant to Section 2.6 and to issue or participate
in Letters of Credit pursuant to Section 2.7, as set forth on Schedule 1.1, as
such Lender's Commitment may be permanently terminated or reduced from time to
time pursuant to Section 2.13 or changed pursuant to Section 8.4.
"Commitment Fee Calculation Amount" shall mean, as to any Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Utilizable
Commitment over (b) the sum of (i) the aggregate principal amount of all
Revolving Credit Loans made by such Lender then outstanding, (ii) such Lender's
LC Exposure at such time and (iii) in the case of each Swingline Lender, the
aggregate principal amount of all Swingline Loans made by such Swingline Lender
then outstanding.
"Commitment Fees" shall mean all fees payable pursuant to Section 2.9(a).
"Communications Act" shall mean the Communications Act of 1934, as amended.
"Competitive Bid" shall mean an offer to make a Competitive Loan pursuant to
Section 2.3.
<PAGE> 10
5
"Competitive Bid Rate" shall mean, as to any Competitive Bid made pursuant
to Section 2.3(b), (a) in the case of a Eurodollar Competitive Loan, the
Margin, and (b) in the case of an Absolute Rate Loan, the fixed rate of
interest offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to Section 2.3
in the form of Exhibit B-1.
"Competitive Loan" shall mean a Loan from a Lender to Westinghouse pursuant
to the bidding procedure described in Section 2.3. Each Competitive Loan shall
be a Eurodollar Competitive Loan or an Absolute Rate Loan.
"Compliance Certificate" shall have the meaning assigned to such term in
Section 5.1.
"Confidential Information" shall have the meaning assigned to such term in
Section 8.15(a).
"Confidential Information Memorandum" shall mean the Information Memorandum
dated August 1996 and furnished to the Lenders.
"Confidentiality Agreement" shall mean a confidentiality agreement
substantially in the form of Exhibit D, with such changes as Westinghouse may
approve.
"Consolidated Coverage Ratio" shall mean, for any period, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"Consolidated EBITDA" shall mean, with respect to Westinghouse and its
Consolidated Subsidiaries for any period, Consolidated Net Income for such
period (less any items of non-cash income of Westinghouse and its Consolidated
Subsidiaries included in such Consolidated Net Income) plus, to the extent
deducted in computing such Consolidated Net Income, (a) Consolidated Interest
Expense, (b) provision for Federal, state and local income taxes, (c)
depreciation and amortization expense (including write-offs and write-downs of
amortizable and depreciable items but excluding amortization relating to
programming rights) and (d) other non-cash items (including (i) provisions for
losses and additions to valuation allowances, (ii) provisions for
restructuring, litigation and environmental reserves and losses on the
Disposition of businesses and (iii) pension settlement charges, but excluding
non-cash items attributable to non-Wholly Owned Subsidiaries to the extent the
effect of including such items would be to include in Consolidated EBITDA
amounts excluded from Consolidated Net Income pursuant to clause (III) of the
definition thereof) and minus cash payments made during such period in respect
of non-cash charges taken during any previous period (excluding (x) cash
payments in respect of non-cash charges taken prior to the Closing Date and (y)
up to $100,000,000 of cash payments made on or prior to June 30, 1997 in
respect of employee separation costs which relate to restructuring charges
taken on or prior to March 31, 1997).
"Consolidated Interest Expense" shall mean, for any period, the gross
interest expense of Westinghouse and its Consolidated Subsidiaries (excluding
the amortization of deferred financing charges and the gross interest expense
of the Discontinued Operations) for such period, computed and consolidated in
accordance with GAAP.
"Consolidated Leverage Ratio" shall mean, as of the last day of any period,
the ratio of Consolidated Total Funded Indebtedness at such date to
Consolidated EBITDA for such period.
<PAGE> 11
6
"Consolidated Net Income" shall mean, with respect to Westinghouse and its
Consolidated Subsidiaries for any period, the aggregate net income (or net
deficit) of such Persons (excluding that related to the Discontinued
Operations) minus gains on the sale of assets (other than (a) gains on sales of
inventory sold in the ordinary course of business and (b) gains on sales of
other assets if such gains are less than $10,000,000 individually and less than
$50,000,000 in the aggregate during such period) and extraordinary gains,
computed and consolidated in accordance with GAAP; provided, that, except as
otherwise provided in Section 1.2(c), there shall be excluded from the
foregoing calculation (I) the income of any other Person accrued prior to the
date it becomes a Consolidated Subsidiary of Westinghouse or is merged into or
consolidated with Westinghouse or any of its Consolidated Subsidiaries, (II)
the income of any other Person (other than a Consolidated Subsidiary of
Westinghouse) in which Westinghouse or any of its Consolidated Subsidiaries has
an ownership interest, except to the extent that any such income is actually
received by Westinghouse or such Consolidated Subsidiary in the form of
dividends or similar distributions, (III) the Undistributed Income of any
Consolidated Subsidiary (other than a Wholly Owned Subsidiary), except to the
extent of Westinghouse's direct or indirect percentage equity interest in such
Consolidated Subsidiary, and (IV) the Undistributed Income of any Subsidiary (a
"Limited Subsidiary") to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary. For the purposes of this definition, income
shall be treated as "Undistributed Income" unless it has been distributed to
Westinghouse or a Wholly Owned Consolidated Subsidiary of Westinghouse which is
not a Limited Subsidiary.
"Consolidated Net Worth" shall mean the total shareholders' equity of
Westinghouse and its Consolidated Subsidiaries determined without giving effect
to any changes in such total shareholders' equity resulting from (a) changes in
pension liabilities after the Net Worth Commencement Date pursuant to SFAS 87
and SFAS 88, (b) non-cash losses on the Disposition of businesses after the Net
Worth Commencement Date, (c) changes made in accordance with GAAP to the
amortization periods of separately identified intangible assets and goodwill
attributable to the acquisition of CBS or Infinity, as the case may be, from
the 40-year amortization utilized in the projections contained in the
Confidential Information Memorandum or (d) provisions for restructuring
reserves (but not environmental or litigation reserves) established after the
Net Worth Commencement Date and not exceeding $100,000,000 in the aggregate,
net of cash payments made in respect of such reserves, all net of tax effect
and computed and consolidated in accordance with GAAP.
"Consolidated Subsidiary" shall mean, as to any Person, each Subsidiary of
such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be consolidated with the financial
statements of such Person in accordance with GAAP.
"Consolidated Total Funded Indebtedness" shall mean, with respect to
Westinghouse and its Consolidated Subsidiaries at any date, the sum at such
date of (a) all Indebtedness for Borrowed Money (including commercial paper and
unpaid reimbursement obligations in respect of drawn letters of credit but
otherwise excluding letters of credit), (b) all indebtedness for the deferred
purchase price of Property or services (other than trade accounts payable and
accruals in the ordinary course of business), (c) all Capital Lease
Obligations, (d) the amount of any Indebtedness for Borrowed Money secured by
receivables sold by Westinghouse and its Consolidated Subsidiaries pursuant to
a program established for the purpose of financing such receivables, and (e)
all Guarantees of indebtedness of the type referred to in any of clauses (a)
through (d) above (other than Guarantees of any such indebtedness of
Westinghouse and its Consolidated Subsidiaries); provided, that in no event
shall indebtedness attributable to Discontinued Operations be included in
Consolidated Total Funded Indebtedness.
<PAGE> 12
7
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit hereunder (including the designation of a Designated Letter of
Credit as a "Letter of Credit" hereunder). It is understood that conversions
and continuations pursuant to Section 2.8 do not constitute "Credit Events".
"Debt Rating" shall mean the rating applicable to Westinghouse's senior,
unsecured, non-credit-enhanced long-term indebtedness for borrowed money, as
assigned by either Rating Agency.
"Default" shall mean any event or condition which upon notice, lapse of time
or both would constitute an Event of Default.
"Designated Letters of Credit" shall mean each letter of credit issued by an
Issuing Lender that (a) is not a Letter of Credit hereunder at the time of its
issuance and (b) is designated on or after the Closing Date by Westinghouse,
with the consent of such Issuing Lender, as a "Letter of Credit" hereunder by
written notice to the Administrative Agent in the form of Exhibit B-6.
"Discontinued Operations" shall mean the discontinued operations of
Westinghouse and its Subsidiaries as set forth in the 1996 First Quarter
Financial Statements.
"Disposition" shall mean, with respect to any Property, any sale, lease,
assignment, conveyance, transfer or other disposition thereof; and the terms
"Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agent" shall mean Chase, together with its affiliates, as an
arranger of the Commitments and as the documentation agent for the Lenders
under this Agreement.
"Dollars" or "$" shall mean lawful money of the United States of America.
"Environmental Laws" shall mean any and all Federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment, including, without limitation, ambient air, surface water, ground
water or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean, with respect to Westinghouse, any trade or
business (whether or not incorporated) that is a member of a group of which
Westinghouse is a member and which is treated as a single employer under
Section 414 of the Code.
"Eurodollar Competitive Loan" shall mean any Competitive Loan which is a
Eurodollar Loan.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Eurodollar Rate.
<PAGE> 13
8
"Eurodollar Rate" shall mean, with respect to an Interest Period pertaining
to any Eurodollar Loan, the rate of interest determined on the basis of the
rate for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Page 3750 of
the Telerate Screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period. In the event that such rate does not
appear on Page 3750 of the Telerate Screen (or otherwise on the Telerate
Service), the "Eurodollar Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be agreed
upon by the Administrative Agent and Westinghouse or, in the absence of such
agreement, the "Eurodollar Rate" shall instead be the interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the average of
the rates at which Dollar deposits approximately equal in principal amount to
(a) in the case of a Eurodollar Tranche, the portion of such Eurodollar Tranche
of the Lender serving as Administrative Agent and (b) in the case of a
Eurodollar Competitive Loan, a principal amount that would have been the
portion of such Loan of the Lender serving as the Administrative Agent had such
Loan been a Eurodollar Revolving Credit Loan, and for a maturity comparable to
such Interest Period, are offered by the principal London offices of the
Reference Banks (or, if any Reference Bank does not at the time maintain a
London office, the principal London office of any affiliate of such Reference
Bank) for immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Eurodollar Revolving Credit Loan" shall mean any Revolving Credit Loan
which is a Eurodollar Loan.
"Eurodollar Tranche" shall mean the collective reference to Eurodollar
Revolving Credit Loans made by the Lenders, the then current Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether or not such Loans shall originally have been made on the same
day).
"Event of Default" shall have the meaning assigned to such term in Article
VI, provided that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"Exchange Act Report" shall have the meaning assigned to such term in
Section 3.3.
"Excluded Indebtedness" shall mean (a) Indebtedness of any Person which is
acquired by Westinghouse or any of its Subsidiaries after the Closing Date,
which Indebtedness was outstanding prior to the date of acquisition of such
Person and was not created in anticipation thereof, (b) any Indebtedness owing
by Westinghouse or any of its Subsidiaries to Westinghouse or any of its
Subsidiaries (including any intercompany Indebtedness created by the
declaration of a note payable dividend by any Subsidiary to Westinghouse or any
of its other Subsidiaries) and (c) Specified Section 5.5(o) Indebtedness.
"Existing Infinity Credit Agreement" shall mean the Third Amended and
Restated Credit Agreement dated as of June 13, 1996 among Infinity, the lenders
party thereto and Chase, as administrative agent, together with the Loan
Documents referred to therein.
"Existing Westinghouse Credit Agreement" shall mean the Revolving Credit
Agreement dated as of September 12, 1995 among Westinghouse, the lenders party
thereto, Morgan, as documentation agent, and Chase, as administrative agent.
<PAGE> 14
9
"Facility Exposure" shall mean, with respect to any Lender, the sum of (a)
the Outstanding Revolving Extensions of Credit of such Lender, (b) the
aggregate outstanding principal amount of any Competitive Loans made by such
Lender and (c) in the case of a Swingline Lender, the aggregate outstanding
principal amount of any Quoted Swingline Loans made by such Swingline Lender.
"FCC" shall mean the Federal Communications Commission.
"FCC Licenses" shall mean, with respect to Westinghouse or any of its
Subsidiaries, any radio, television or other license, permit, certificate of
compliance or authorization issued by the FCC and required for the operation of
its respective radio and television broadcast stations.
"Federal Funds Effective Rate" shall have the meaning assigned to such term
in the definition of "Alternate Base Rate".
"Fees" shall mean the Commitment Fees, the Administrative Agent's Fees, the
Issuing Lender Fees and the LC Fees.
"Financial Covenants" shall have the meaning assigned to such term in
Section 1.2(b).
"Financial Letter of Credit" shall mean any Letter of Credit that, as
determined by the Administrative Agent, (a) supports a financial obligation and
(b) qualifies for the 100% credit conversion factor under the applicable Bank
for International Settlements guidelines.
"Financial Officer" of any corporation shall mean its chief financial
officer, its Vice President and Treasurer or its Vice President and Chief
Accounting Officer or, in each case, any comparable officer or any Person
designated by any such officer.
"Financial Services" shall mean those operations designated as the Financial
Services portion of Discontinued Operations in the 1996 First Quarter Financial
Statements.
"Foreign Currency" shall mean any currency other than Dollars which is
readily convertible by the relevant Issuing Lender into Dollars.
"Foreign Exchange Rate" shall mean, with respect to any Foreign Currency on
a particular date, the rate at which such Foreign Currency may be exchanged
into Dollars, determined by reference to the selling rate in respect of such
Foreign Currency published in the "Wall Street Journal" on the relevant date of
determination. In the event that such rate is not, or ceases to be, so
published by the "Wall Street Journal", the "Foreign Exchange Rate" with
respect to such Foreign Currency shall be determined by reference to such other
publicly available source for determining exchange rates as may be agreed upon
by the Administrative Agent and Westinghouse or, in the absence of such
agreement, such "Foreign Exchange Rate" shall instead be the Administrative
Agent's spot rate of exchange in the interbank market where its foreign
currency exchange operations in respect of such Foreign Currency are then being
conducted, at or about 12:00 noon, local time, at such date for the purchase of
Dollars with such Foreign Currency, for delivery two banking days later.
"FSC" shall mean a subsidiary of Westinghouse or any of its Subsidiaries
which is a FSC as defined in Section 922 of the Code, or in any successor
provision, and which is used solely for the purpose of a single lease project
or lease transaction or related lease projects or lease transactions and is not
related to Property predominantly manufactured by Westinghouse or any of its
Subsidiaries.
<PAGE> 15
10
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis (but subject to changes approved by Westinghouse's independent
public accountants).
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantee" of or by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or entered into with the purpose of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including any obligation of
such Person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (b) to purchase Property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that
the term "Guarantee" shall not include endorsements for collection or deposit,
in either case in the ordinary course of business.
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to Property or assets purchased by such Person,
(e) all obligations of such Person issued or assumed as the deferred purchase
price of Property or services, (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on Property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person and (i) all obligations of such Person as an account
party in respect of outstanding letters of credit (whether or not drawn) and
bankers' acceptances; provided, however, that Indebtedness shall not include
(i) trade accounts payable arising in the ordinary course of business, (ii)
deferred compensation, (iii) any Indebtedness of such Person (other than any
such Person that is a FSC) to the extent (A) such Indebtedness does not appear
on the financial statements of such Person, (B) such Indebtedness is recourse
only to certain assets of such Person and (C) the assets to which such
Indebtedness is recourse only appear on the financial statements of such Person
net of such Indebtedness or (iv) obligations (not constituting obligations for
borrowed money) specifically with respect to the production, distribution and
acquisition of television and other programming rights or talent; and provided
further that the amount of any Indebtedness described in clause (f) above shall
be the lower of the amount of the obligation or the fair market value of the
collateral securing such obligation. The Indebtedness of any Person shall
include the Indebtedness of any partnership in which such Person is a general
partner, which Indebtedness is recourse to such general partner.
"Indebtedness for Borrowed Money" shall mean Indebtedness of the type
described in clause (a) or (b) of the definition of "Indebtedness" and any
Guarantee thereof.
"Infinity" shall mean Infinity Broadcasting Corporation, a Delaware
corporation.
"Infinity Merger" shall mean the merger of Infinity with and into a
Subsidiary of Westinghouse.
<PAGE> 16
11
"Infinity Merger Agreement" shall mean the Agreement and Plan of Merger,
dated as of June 20, 1996, among Westinghouse, R Acquisition Corp. and
Infinity, as amended, supplemented or otherwise modified from time to time.
"Infinity Merger Date" shall mean the date of consummation of the Infinity
Merger.
"Information" shall have the meaning assigned to such term in Section 3.13.
"Intellectual Property" shall mean the collective reference to patents,
trademarks (registered or unregistered), trade names, service marks, assumed
names, copyrights, technology, know-how and processes.
"Interest Payment Date" shall mean (a) with respect to any Eurodollar Loan
or Absolute Rate Loan, the last day of the Interest Period applicable thereto
and, in the case of a Eurodollar Loan with an Interest Period of more than
three months' duration or an Absolute Rate Loan with an Interest Period of more
than 90 days' duration, each day that would have been an Interest Payment Date
for such Loan had successive Interest Periods of three months' duration or 90
days' duration, as the case may be, been applicable to such Loan and, in
addition, the date of any conversion of any Eurodollar Revolving Credit Loan to
an ABR Loan, the date of repayment or prepayment of any Eurodollar Loan and the
applicable Maturity Date; (b) with respect to any ABR Loan (other than an ABR
Swingline Loan which is not an Unrefunded Swingline Loan), the last day of each
March, June, September and December and the applicable Maturity Date; (c) with
respect to any ABR Swingline Loan (other than an Unrefunded Swingline Loan),
the earlier of (i) the day that is five Business Days after such Loan is made
and (ii) the Revolving Credit Maturity Date and (d) with respect to any Quoted
Swingline Loan, the date established as such by Westinghouse and the relevant
Swingline Lender prior to the making thereof (but in any event no later than
the Revolving Credit Maturity Date).
"Interest Period" shall mean (a) as to any Eurodollar Loan, the period
commencing on the borrowing date or conversion date of such Loan, or on the
last day of the immediately preceding Interest Period applicable to such Loan,
as the case may be, and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3 or 6 months or (subject, in the case of Revolving Credit
Loans, to the prior consent of each Lender) 9 or 12 months thereafter, as
Westinghouse may elect, and (b) as to any Absolute Rate Loan, the period
commencing on the date of such Loan and ending on the date specified in the
Competitive Bids in which the offer to make such Absolute Rate Loan was
extended, which shall not be later than 180 days after the date of such Loan;
provided, however, that (i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of Eurodollar Loans only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii)
notwithstanding anything to the contrary herein, Westinghouse may not select an
Interest Period which would end after the Maturity Date applicable to the
relevant Loan. Interest shall accrue from and including that first day of an
Interest Period to but excluding the last day of such Interest Period.
"Interim Certificate" shall have the meaning assigned to such term in Annex
I hereto.
"Issuing Lender" shall mean any Lender designated as an Issuing Lender in an
Issuing Lender Agreement executed by such Lender, Westinghouse and the
Administrative Agent.
<PAGE> 17
12
"Issuing Lender Agreement" shall mean an agreement, substantially in the
form of Exhibit G, executed by a Lender, Westinghouse, and the Administrative
Agent pursuant to which such Lender agrees to become an Issuing Lender
hereunder.
"Issuing Lender Fees" shall mean, as to any Issuing Lender, the fees set
forth in the applicable Issuing Lender Agreement.
"LC Disbursement" shall mean any payment or disbursement made by an Issuing
Lender under or pursuant to a Letter of Credit.
"LC Exposure" shall mean, as to each Lender, such Lender's Revolving Credit
Percentage of the Aggregate LC Exposure.
"LC Fee" shall have the meaning assigned such term in Section 2.9(b).
"Lenders" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Letters of Credit" shall mean letters of credit or bank guarantees issued
by an Issuing Lender for the account of Westinghouse pursuant to Section 2.7
(including any Designated Letters of Credit).
"Leveraged Spin-Off Indebtedness" shall mean Indebtedness incurred by a
Subsidiary (either previously existing or newly formed) for the purpose of
financing a cash dividend or other cash distribution made, directly or
indirectly, to Westinghouse, so long as (a) concurrently with or immediately
after the incurrence of such Indebtedness and the making of such dividend or
distribution, all of the common stock of such Subsidiary is distributed to the
common shareholders of Westinghouse and (b) the assets of the Subsidiary which
is the subject of such transaction are comprised entirely of assets included
within those businesses of Westinghouse and its Subsidiaries identified in a
written notice from Westinghouse delivered to the Lenders prior to the Closing
Date.
"Lien" shall mean, with respect to any asset or Property, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset or Property and (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement relating
to such asset or Property.
"Loan" shall mean any loan made by a Lender hereunder.
"Margin" shall mean, as to any Eurodollar Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal rounded to
no more than four places) to be added to or subtracted from the Eurodollar Rate
in order to determine the interest rate applicable to such Loan, as specified
in the Competitive Bid relating to such Loan.
"Margin Stock" shall have the meaning assigned to such term under Regulation
U.
"Material Acquisition" shall mean any acquisition of Property or series of
related acquisitions of Property (including by way of merger) which (a)
constitutes assets comprising all or substantially all of an operating unit of
a business or constitutes all or substantially all of the common stock of a
Person and (b) involves the payment of consideration by Westinghouse and its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash consideration consisting of notes
<PAGE> 18
13
or other debt securities and valued at fair market value in the case of other
non-cash consideration) in excess of $50,000,000.
"Material Adverse Effect" shall mean (a) a material adverse effect on the
Property, business, results of operations or financial condition of
Westinghouse and its Subsidiaries taken as a whole or (b) material impairment
of the ability of Westinghouse to perform any of its obligations under this
Agreement.
"Material Disposition" shall mean any Disposition of Property or series of
related Dispositions of Property which yields gross proceeds to Westinghouse or
any of its Subsidiaries (valued at the initial principal amount thereof in the
case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess
of $50,000,000.
"Material Subsidiary" shall mean any Subsidiary of Westinghouse except for
Subsidiaries which in the aggregate would not constitute a significant
subsidiary under Regulation S-X of the SEC.
"Maturity Date" shall mean (a) in the case of the Revolving Credit Loans and
the ABR Swingline Loans, the Revolving Credit Maturity Date, (b) in the case of
the Quoted Swingline Loans, the date established as such by Westinghouse and
the relevant Swingline Lender prior to the making thereof (but in any event no
later than the Revolving Credit Maturity Date) and (c) in the case of
Competitive Loans, the last day of the Interest Period applicable thereto, as
specified in the related Competitive Bid Request.
"Moody's" shall mean Moody's Investors Service, Inc.
"Morgan" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
3(37) of ERISA to which contributions have been made by Westinghouse or any
ERISA Affiliate of Westinghouse and which is covered by Title IV of ERISA.
"NationsBank" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Net Worth Commencement Date" shall have the meaning assigned to such term
in Section 5.9.
"1996 First Quarter Financial Statements" shall mean the unaudited
consolidated financial statements of Westinghouse and its subsidiaries as of
and for the fiscal quarter ended March 31, 1996 as set forth in the Quarterly
Report on Form 10-Q of Westinghouse.
"Non-Financial Letter of Credit" shall mean any Letter of Credit that is not
a Financial Letter of Credit.
"Non-U.S. Person" shall have the meaning assigned to such term in Section
2.20(f).
<PAGE> 19
14
"Outstanding Revolving Extensions of Credit" shall mean, as to any Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Credit Loans made by such Lender then outstanding, (b) such
Lender's LC Exposure at such time and (c) such Lender's ABR Swingline Exposure
at such time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, or any successor thereto.
"Person" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability company or other
entity, or any government or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan as defined in Section
3(2) of ERISA (other than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Code and which is maintained for
employees of Westinghouse or any ERISA Affiliate.
"Prime Rate" shall have the meaning assigned to such term in the definition
of "Alternate Base Rate".
"Pro Forma Period" shall have the meaning assigned to such term in Section
1.2(c).
"Projections" shall have the meaning assigned to such term in Section 3.13.
"Property" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
"Quoted Swingline Loans" shall have the meaning assigned to such term in
Section 2.6(a).
"Quoted Swingline Rate" shall have the meaning assigned to such term in
Section 2.6(a).
"Rating Agencies" shall mean S&P and Moody's.
"Reference Banks" shall mean Chase, Morgan, NationsBank and Toronto
Dominion.
"Register" shall have the meaning assigned to such term in Section 8.4(d).
"Regulation D" shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation G" shall mean Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Required Lenders" shall mean, at any time, Lenders whose respective Total
Facility Percentages aggregate not less than 51%.
<PAGE> 20
15
"Responsible Officer" of any corporation shall mean any executive officer or
Financial Officer of such corporation and any other officer or similar official
thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement (or, in the case of matters relating
to ERISA, any officer responsible for the administration of the pension funds
of such corporation).
"Revolving Credit Borrowing Request" shall mean a request made pursuant to
Section 2.4 in the form of Exhibit B-4.
"Revolving Credit Loans" shall mean the revolving loans made by the Lenders
to Westinghouse pursuant to Section 2.4. Each Revolving Credit Loan shall be a
Eurodollar Loan or an ABR Loan.
"Revolving Credit Maturity Date" shall mean the fifth anniversary of the
Closing Date.
"Revolving Credit Percentage" of any Lender at any time shall mean the
percentage of the aggregate Commitments (or, following any termination of all
the Commitments, the Commitments most recently in effect) represented by such
Lender's Commitment (or, following any such termination, the Commitment of such
Lender most recently in effect).
"Sale/Leaseback" shall mean any lease, whether an operating lease or a
capital lease, whereby Westinghouse or any of its Subsidiaries, directly or
indirectly, becomes or remains liable as lessee or as guarantor or other
surety, of any Property whether now owned or hereafter acquired, (a) that
Westinghouse or any of its Subsidiaries, as the case may be, has sold or
transferred or is to sell or transfer to any other Person (other than
Westinghouse or any of its Subsidiaries), or (b) that is acquired by any other
Person, as part of a financing transaction to which Westinghouse or any of its
Subsidiaries is a party, in contemplation of leasing such Property to
Westinghouse or any of its Subsidiaries, as the case may be.
"Sale/Leaseback Attributable Debt" shall mean, for any Sale/Leaseback, the
present value (discounted at the rate of interest implicit in such
Sale/Leaseback, determined in accordance with GAAP or, in the event that such
rate of interest is not reasonably determinable, discounted at the interest
rate applicable to an ABR Revolving Credit Loan on the date of the commencement
of such transaction), as of the date on which the amount thereof is to be
determined, of the obligation of the lessee for net rental payments during the
remaining term of such Sale/Leaseback (including any period for which such
Sale/Leaseback may, at the option of the lessor, be extended). In the case of
any master lease agreement, each fixed or capital asset subject thereto (or any
related group of such assets for which the lease terms commence at the same
time) shall be deemed to be the subject of a separate Sale/Leaseback, and, to
the extent that any fixed or capital asset is the subject of a Sale/Leaseback
and then of another, the Sale/Leaseback Attributable Debt will be deemed to be
incurred only under the first such Sale/Leaseback. For the purposes of Section
5.5(o), the Sale/Leaseback Attributable Debt of any Subsidiary of Westinghouse
which is not a Wholly Owned Subsidiary shall be deemed to be the amount
determined in accordance with the foregoing provisions of this definition
multiplied by Westinghouse's direct or indirect percentage common equity
interest in such Subsidiary at the date of determination.
"S&P" shall mean Standard & Poor's Ratings Services.
"SEC" shall mean the Securities and Exchange Commission.
<PAGE> 21
16
"Specified Section 5.5(o) Indebtedness" shall have the meaning assigned to
such term in Section 5.5(o).
"Subsidiary" shall mean, for any Person (the "Parent"), any corporation,
partnership or other entity of which shares of Voting Capital Stock sufficient
to elect a majority of the board of directors or other Persons performing
similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening
of any contingency) are at the time directly or indirectly owned or controlled
by the Parent or one or more of its Subsidiaries or by the Parent and one or
more of its Subsidiaries; provided, however, that (a) no Person of which
Westinghouse or any of its Subsidiaries acquires or has acquired control in
connection with or as a consequence of any debt or equity financing provided to
such Person in the ordinary course of the business of WFSI, any of its
Subsidiaries, Financial Services or WCI shall be deemed a Subsidiary of
Westinghouse and (b) for purposes of paragraph (d) of Article VI, no Person
which is a FSC shall be deemed a Subsidiary of Westinghouse. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of Westinghouse.
"Swingline Commitment" shall mean, with respect to any Swingline Lender, the
commitment of such Lender to make ABR Swingline Loans pursuant to Section 2.6,
as designated in accordance with Section 2.6(g).
"Swingline Lender" shall mean any Lender designated by Westinghouse as a
"Swingline Lender" pursuant to Section 2.6(g).
"Swingline Loans" shall mean the collective reference to the ABR Swingline
Loans and the Quoted Swingline Loans.
"Swingline Percentage" of any Swingline Lender at any time shall mean the
percentage of the aggregate Swingline Commitments represented by such Swingline
Lender's Swingline Commitment.
"Syndication Agents" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Test Period" shall have the meaning assigned to such term in Section
1.2(c).
"Toronto Dominion" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Total Base Commitment" shall mean at any time the aggregate amount of the
Base Commitments in effect at such time.
"Total Facility Exposure" shall mean at any time the aggregate amount of the
Facility Exposures at such time.
"Total Facility Percentage" shall mean, as to any Lender at any time, the
quotient (expressed as a percentage) of (a) such Lender's Commitment (or (x)
for the purposes of acceleration of the Loans pursuant to clause (II) of
Article VI or (y) if the Commitments have terminated, such Lender's Facility
Exposure) and (b) the aggregate of all Lenders' Commitments (or (x) for the
<PAGE> 22
17
purposes of acceleration of the Loans pursuant to clause (II) of Article VI or
(y) if the Commitments have terminated, the Total Facility Exposure).
"Total Utilizable Commitment" shall mean at any time the aggregate amount of
the Utilizable Commitments in effect at such time.
"Transferee" shall mean any assignee or participant described in Section
8.4(b) or (f).
"Type" when used in respect of any Loan, shall refer to the Rate by
reference to which interest on such Loan is determined. For purposes hereof,
"Rate" shall mean the Eurodollar Rate, the Alternate Base Rate, the Quoted
Swingline Rate and the rate paid on Absolute Rate Loans.
"Unrefunded Swingline Loans" shall have the meaning assigned to such term in
Section 2.6(d).
"U.S. Person" shall mean a citizen, national or resident of the United
States of America, or an entity organized in or under the laws of the United
States of America.
"Utilizable Commitment" shall mean, at any time, with respect to each
Lender, (a) prior to the Infinity Merger Date, such Lender's Base Commitment
then in effect and (b) on and after the Infinity Merger Date, such Lender's
Commitment then in effect.
"Voting Capital Stock" shall mean securities or other ownership interests of
a corporation, partnership or other entity having by the terms thereof ordinary
voting power to vote in the election of the board of directors or other Persons
performing similar functions of such corporation, partnership or other entity
(without regard to the occurrence of any contingency).
"Westinghouse" shall have the meaning assigned to such term in the preamble
to this Agreement.
"WCI" shall mean WCI Communities, Inc., a Delaware corporation, and its
Wholly Owned Subsidiaries.
"WFSI" shall mean Westinghouse Financial Services, Inc., a Delaware
corporation that was merged into Westinghouse on May 5, 1993.
"Wholly Owned Subsidiary" shall mean any Subsidiary of which all shares of
Voting Capital Stock (other than, in the case of a corporation, directors'
qualifying shares) are owned directly or indirectly by the Parent (as defined
in the definition of "Subsidiary").
SECTION 1.2. Terms Generally. (a) The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall, except where the context otherwise requires, be deemed to be
followed by the phrase "without limitation". All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require.
(b) Except as otherwise expressly provided herein, all terms of an
accounting nature shall be construed in accordance with GAAP as in effect from
time to time; provided, however, that,
<PAGE> 23
18
for purposes of determining compliance with the covenants set forth in Sections
5.7, 5.8 and 5.9 (such Sections being referred to as the "Financial
Covenants"), except as otherwise set forth in the Financial Covenants and the
definitions related thereto, such terms shall be construed in accordance with
GAAP as in effect on March 31, 1996, applied on a basis consistent with the
application used in preparing the 1996 First Quarter Financial Statements.
(c) For the purposes of calculating Consolidated EBITDA and Consolidated
Interest Expense for any period (a "Test Period"), (i) if at any time from the
period (a "Pro Forma Period") commencing on the second day of such Test Period
and ending on the date which is ten days prior to the date of delivery of the
Compliance Certificate or Interim Certificate, as the case may be, in respect
of such Test Period (or, in the case of any pro forma calculation made pursuant
hereto in respect of a particular transaction, ending on the date such
transaction is consummated after giving effect thereto), Westinghouse or any
Subsidiary shall have made any Material Disposition, the Consolidated EBITDA
for such Test Period shall be reduced by an amount equal to the Consolidated
EBITDA (if positive) attributable to the Property which is the subject of such
Material Disposition for such Test Period or increased by an amount equal to
the Consolidated EBITDA (if negative) attributable thereto for such Test
Period, and Consolidated Interest Expense for such Test Period shall be reduced
by an amount equal to the Consolidated Interest Expense for such Test Period
attributable to any Indebtedness of Westinghouse or any Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to Westinghouse and
its Subsidiaries in connection with such Material Disposition (or, if the
Capital Stock of any Subsidiary is sold, the Consolidated Interest Expense for
such Test Period directly attributable to the Indebtedness of such Subsidiary
to the extent Westinghouse and its continuing Subsidiaries are no longer liable
for such Indebtedness after such Disposition); (ii) if during such Pro Forma
Period Westinghouse or any Subsidiary shall have made a Material Acquisition,
Consolidated EBITDA and Consolidated Interest Expense for such Test Period
shall be calculated after giving pro forma effect thereto (including the
incurrence or assumption of any Indebtedness in connection therewith) as if
such Material Acquisition (and the incurrence or assumption of any such
Indebtedness) occurred on the first day of such Test Period; and (iii) if
during such Pro Forma Period any Person that subsequently became a Subsidiary
or was merged with or into Westinghouse or any Subsidiary since the beginning
of such Pro Forma Period shall have entered into any disposition or acquisition
transaction that would have required an adjustment pursuant to clause (i) or
(ii) above if made by Westinghouse or a Subsidiary during such Pro Forma
Period, Consolidated EBITDA and Consolidated Interest Expense for such Test
Period shall be calculated after giving pro forma effect thereto as if such
transaction occurred on the first day of such Test Period. For the purposes of
this paragraph, whenever pro forma effect is to be given to a Material
Disposition or Material Acquisition, the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness discharged or incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a Financial Officer of
Westinghouse. If any Indebtedness bears a floating rate of interest and the
incurrence or assumption thereof is being given pro forma effect, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on
the last day of the relevant Pro Forma Period had been the applicable rate for
the entire relevant Test Period (taking into account any interest rate
protection agreement applicable to such Indebtedness if such interest rate
protection agreement has a remaining term in excess of 12 months).
(d) For the purposes of the Financial Covenants, (i) the Discontinued
Operations shall be disregarded and (ii) the businesses classified as
Discontinued Operations shall be limited to those businesses treated as such in
the 1996 First Quarter Financial Statements and the accounting treatment of
Discontinued Operations shall be consistent with the accounting treatment
thereof in such financial statements.
<PAGE> 24
19
ARTICLE II.
THE CREDITS
SECTION 2.1. Commitments. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Revolving Credit Loans to
Westinghouse, at any time and from time to time on and after the Closing Date
and until the earlier of (a) the Business Day immediately preceding the
Revolving Credit Maturity Date and (b) the termination of the Commitment of
such Lender, in an aggregate principal amount at any time outstanding not to
exceed such Lender's Utilizable Commitment. Westinghouse may borrow, prepay
and reborrow Revolving Credit Loans on and after the Closing Date and prior to
the Revolving Credit Maturity Date, subject to the terms, conditions and
limitations set forth herein.
SECTION 2.2. Revolving Credit Loans; Competitive Loans. (a) Each
Revolving Credit Loan shall be made to Westinghouse by the Lenders ratably in
accordance with their respective Commitments. Each Competitive Loan shall be
made to Westinghouse by the Lender whose Competitive Bid therefor is accepted,
and in the amount so accepted, in accordance with the procedures set forth in
Section 2.3. The Revolving Credit Loans or Competitive Loans shall be made in
minimum amounts equal to (i) in the case of Competitive Loans, $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, (ii) in the case of
Eurodollar Revolving Credit Loans, $50,000,000 or an integral multiple of
$5,000,000 in excess thereof, and (iii) in the case of ABR Revolving Credit
Loans, $25,000,000 or an integral multiple of $5,000,000 in excess thereof (or
an aggregate principal amount equal to the remaining balance of the available
Total Utilizable Commitments).
(b) Each Lender shall make each Loan (other than a Swingline Loan, as to
which this Section 2.2 shall not apply) to be made by it on the proposed date
thereof by wire transfer of immediately available funds to the Administrative
Agent in New York, New York, not later than 12:00 noon, New York City time (or,
in connection with an ABR Loan to be made on the same day on which a notice is
submitted, 12:30 p.m., New York City time) and the Administrative Agent shall
by 3:00 p.m., New York City time, credit the amounts so received to the general
deposit account of Westinghouse with the Administrative Agent.
SECTION 2.3. Competitive Bid Procedure. (a) In order to request
Competitive Bids, Westinghouse shall hand deliver or telecopy to the
Administrative Agent a duly completed Competitive Bid Request in the form of
Exhibit B-1, to be received by the Administrative Agent (i) in the case of a
Eurodollar Competitive Loan, not later than 10:00 a.m., New York City time,
four Business Days before a proposed Competitive Loan and (ii) in the case of
an Absolute Rate Loan, not later than 10:00 a.m., New York City time, one
Business Day before a proposed Competitive Loan. A Competitive Bid Request
that does not conform substantially to the format of Exhibit B-1 may be
rejected in the Administrative Agent's discretion (exercised in good faith),
and the Administrative Agent shall promptly notify Westinghouse of such
rejection by telephone, confirmed by telecopier. Such request shall in each
case refer to this Agreement and specify (x) whether the Competitive Loan then
being requested is to be a Eurodollar Competitive Loan or an Absolute Rate
Loan, (y) the date of such Loan (which shall be a Business Day) and the
aggregate principal amount thereof which shall be in a minimum principal amount
of $5,000,000 and in an integral multiple of $1,000,000, and (z) the Interest
Period with respect thereto (which may not end after the Revolving Credit
Maturity Date). Promptly after its receipt of a Competitive Bid Request that
is not rejected as aforesaid (and in any event by 5:00 p.m., New York City
time, on the date of such receipt if such receipt occurs by the time specified
in the first sentence of this paragraph), the Administrative Agent shall invite
by telecopier (in the form set forth in Exhibit B-2) the Lenders to bid, on the
terms and conditions of this Agreement, to make Competitive Loans pursuant to
such Competitive Bid Request.
<PAGE> 25
20
(b) Each Lender may, in its sole discretion, make one or more Competitive
Bids to Westinghouse responsive to a Competitive Bid Request. Each Competitive
Bid must be received by the Administrative Agent by telecopier, in the form of
Exhibit B-3, (i) in the case of a Eurodollar Competitive Loan, not later than
9:30 a.m., New York City time, three Business Days before a proposed
Competitive Loan and (ii) in the case of an Absolute Rate Loan, not later than
9:30 a.m., New York City time, on the day of a proposed Competitive Loan.
Multiple Competitive Bids will be accepted by the Administrative Agent.
Competitive Bids that do not conform substantially to the format of Exhibit B-3
may be rejected by the Administrative Agent after conferring with, and upon the
instruction of, Westinghouse, and the Administrative Agent shall notify the
Lender making such nonconforming Competitive Bid of such rejection as soon as
practicable. Each Competitive Bid shall refer to this Agreement and specify
(x) the principal amount (which shall be in a minimum principal amount of
$5,000,000 and in an integral multiple of $1,000,000 and which may equal the
entire principal amount of the Competitive Loan requested by Westinghouse) of
the Competitive Loan or Loans that the applicable Lender is willing to make to
Westinghouse, (y) the Competitive Bid Rate or Rates at which such Lender is
prepared to make the Competitive Loan or Loans and (z) the Interest Period and
the last day thereof. A Competitive Bid submitted pursuant to this paragraph
(b) shall be irrevocable (subject to the satisfaction of the conditions to
borrowing set forth in Article IV).
(c) The Administrative Agent shall promptly (and in any event by 10:15
a.m., New York City time, on the date on which such Competitive Bids shall have
been made) notify Westinghouse by telecopier of all the Competitive Bids made,
the Competitive Bid Rate and the principal amount of each Competitive Loan in
respect of which a Competitive Bid was made and the identity of the Lender that
made each Competitive Bid. The Administrative Agent shall send a copy of all
Competitive Bids to Westinghouse for its records as soon as practicable after
completion of the bidding process set forth in this Section 2.3.
(d) Westinghouse may in its sole and absolute discretion, subject only to
the provisions of this paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. Westinghouse shall notify the
Administrative Agent by telephone, confirmed by telecopier in such form as may
be agreed upon by Westinghouse and the Administrative Agent, whether and to
what extent it has decided to accept or reject any of or all the Competitive
Bids referred to in paragraph (c) above, (x) in the case of a Eurodollar
Competitive Loan, not later than 11:00 a.m., New York City time, three Business
Days before a proposed Competitive Loan, and (y) in the case of an Absolute
Rate Loan, not later than 11:00 a.m., New York City time, on the day of a
proposed Competitive Loan; provided, however, that (i) the failure by
Westinghouse to give such notice shall be deemed to be a rejection of all the
Competitive Bids referred to in paragraph (c) above, (ii) Westinghouse shall
not accept a Competitive Bid made at a particular Competitive Bid Rate if it
has decided to reject a Competitive Bid made at a lower Competitive Bid Rate,
(iii) the aggregate amount of the Competitive Bids accepted by Westinghouse
shall not exceed the principal amount specified in the Competitive Bid Request
(but may be less than that requested), (iv) if Westinghouse shall accept a
Competitive Bid or Competitive Bids made at a particular Competitive Bid Rate
but the amount of such Competitive Bid or Competitive Bids shall cause the
total amount of Competitive Bids to be accepted by it to exceed the amount
specified in the Competitive Bid Request, then Westinghouse shall accept a
portion of such Competitive Bid or Competitive Bids in an amount equal to the
amount specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted with respect to such Competitive Bid Request, which
acceptance, in the case of multiple Competitive Bids at such Competitive Bid
Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid at such Competitive Bid Rate, and (v) except pursuant to clause
(iv) above no Competitive Bid shall be accepted for a Competitive Loan unless
such Competitive Loan is in a minimum principal amount of $5,000,000 and an
integral amount multiple of $1,000,000; provided, further, however, that if a
Competitive Loan must be in an amount less than $5,000,000 because of the
<PAGE> 26
21
provisions of clause (iv) above, such Competitive Loan may be for a minimum of
$1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner which shall be in the
discretion of Westinghouse. A notice given by Westinghouse pursuant to this
paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender
whether or not its Competitive Bid has been accepted (and if so, in what amount
and at what Competitive Bid Rate) by telecopy sent by the Administrative Agent,
and each successful bidder will thereupon become bound, subject to the other
applicable conditions hereof, to make the Competitive Loan in respect of which
its Competitive Bid has been accepted.
(f) A Competitive Bid Request shall not be made within five Business Days
after the date of any previous Competitive Bid Request, unless Westinghouse and
the Administrative Agent shall mutually agree otherwise.
(g) If the Lender which is the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such Competitive
Bid directly to Westinghouse one quarter of an hour earlier than the latest time
at which the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) above.
(h) All notices required by this Section 2.3 shall be given in accordance
with Section 8.1.
(i) Westinghouse shall not have the right to prepay any Competitive Loan
without the consent of the affected Lender or Lenders.
SECTION 2.4. Revolving Credit Borrowing Procedure. In order to request a
Revolving Credit Loan, Westinghouse shall hand deliver or telecopy to the
Administrative Agent a Revolving Credit Borrowing Request in the form of
Exhibit B-4 (a) in the case of a Eurodollar Revolving Credit Loan, not later
than 11:00 a.m., New York City time, three Business Days before a proposed
borrowing and (b) in the case of an ABR Revolving Credit Loan, not later than
11:00 a.m., New York City time, on the day of a proposed borrowing. Such
notice shall be irrevocable and shall in each case specify (i) whether the
Revolving Credit Loan then being requested is to be a Eurodollar Revolving
Credit Loan or an ABR Revolving Credit Loan, (ii) the date of such Revolving
Credit Loan (which shall be a Business Day) and the amount thereof; and (iii)
in the case of a Eurodollar Revolving Credit Loan, the Interest Period with
respect thereto. The Administrative Agent shall promptly advise the Lenders of
any notice given pursuant to this Section 2.4 and of each Lender's portion of
the requested Loan.
SECTION 2.5. Repayment of Loans. Westinghouse shall repay all outstanding
Revolving Credit Loans and all outstanding ABR Swingline Loans on the Revolving
Credit Maturity Date (or such earlier date on which the Commitments shall
terminate in accordance herewith). Westinghouse shall repay Quoted Swingline
Loans and Competitive Loans on the Maturity Date applicable thereto. Each Loan
shall bear interest from and including the date thereof on the outstanding
principal balance thereof as set forth in Section 2.10.
SECTION 2.6. Swingline Loans. (a) Subject to the terms and conditions
hereof and relying upon the representations and warranties herein set forth,
each Swingline Lender agrees, severally and not jointly, at any time and from
time to time on and after the Closing Date and until the
<PAGE> 27
22
earlier of the Business Day immediately preceding the Revolving Credit Maturity
Date and the termination of the Swingline Commitment of such Swingline Lender,
(i) to make available to Westinghouse Swingline Loans ("Quoted Swingline
Loans") on the basis of quoted interest rates (each, a "Quoted Swingline Rate")
furnished by such Swingline Lender from time to time in its discretion to
Westinghouse (through the Administrative Agent) and accepted by Westinghouse in
its discretion and (ii) to make Swingline Loans ("ABR Swingline Loans") to
Westinghouse bearing interest at a rate equal to the Alternate Base Rate in an
aggregate principal amount (in the case of this clause (ii)) not to exceed such
Swingline Lender's Swingline Commitment. The aggregate outstanding principal
amount of the Quoted Swingline Loans of any Swingline Lender, when added to the
aggregate outstanding principal amount of the ABR Swingline Loans of such
Swingline Lender, may exceed such Swingline Lender's Swingline Commitment,
provided, that in no event shall the aggregate outstanding principal amount of
the Swingline Loans exceed the aggregate Swingline Commitments then in effect.
Each Quoted Swingline Loan shall be made only by the Swingline Lender
furnishing the relevant Quoted Swingline Rate. Each ABR Swingline Loan shall
be made by the Swingline Lenders ratably in accordance with their respective
Swingline Percentages. The Swingline Loans shall be made in a minimum
aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000
in excess thereof (or an aggregate principal amount equal to the remaining
balance of the available Swingline Commitments). Each Swingline Lender shall
make the portion of each Swingline Loan to be made by it available to
Westinghouse by means of a credit to the general deposit account of
Westinghouse with the Administrative Agent or a wire transfer, at the expense
of Westinghouse, to an account designated in writing by Westinghouse, in each
case by 3:30 p.m., New York City time, on the date such Swingline Loan is
requested to be made pursuant to paragraph (b) below, in immediately available
funds. Westinghouse may borrow, prepay and reborrow Swingline Loans on or
after the Closing Date and prior to the Revolving Credit Maturity Date (or such
earlier date on which the Commitments shall terminate in accordance herewith)
on the terms and subject to the conditions and limitations set forth herein.
(b) Westinghouse shall give the Administrative Agent telephonic, written or
telecopy notice substantially in the form of Exhibit B-5 (in the case of
telephonic notice, such notice shall be promptly confirmed by telecopy) no
later than 2:30 p.m., New York City time (or, in the case of a proposed Quoted
Swingline Loan, 12:00 noon, New York City time), on the day of a proposed
Swingline Loan. Such notice shall be delivered on a Business Day, shall be
irrevocable (subject, in the case of Quoted Swingline Loans, to receipt by
Westinghouse of Quoted Swingline Rates acceptable to it) and shall refer to
this Agreement and shall specify the requested date (which shall be a Business
Day) and amount of such Swingline Loan. The Administrative Agent shall
promptly advise the Swingline Lenders of any notice received from Westinghouse
pursuant to this paragraph (b). In the event that Westinghouse accepts a
Quoted Swingline Rate in respect of a proposed Quoted Swingline Loan, it shall
notify the Administrative Agent (which shall in turn notify the relevant
Swingline Lender) of such acceptance no later than 2:30 p.m., New York City
time, on the relevant borrowing date.
(c) In the event that any ABR Swingline Loan shall be outstanding for more
than five Business Days, the Administrative Agent shall, on behalf of
Westinghouse (which hereby irrevocably directs and authorizes the
Administrative Agent to act on its behalf), request each Lender, including the
Swingline Lenders, to make an ABR Revolving Credit Loan in an amount equal to
such Lender's Revolving Credit Percentage of the principal amount of such ABR
Swingline Loan. Each Lender will make the proceeds of its Revolving Credit
Loan available to the Administrative Agent for the account of the Swingline
Lenders at the office of the Administrative Agent prior to 12:00 Noon, New York
City time, in funds immediately available on the Business Day next succeeding
the date such notice is given. The proceeds of such Revolving Credit Loans
shall be immediately applied to repay the ABR Swingline Loans.
<PAGE> 28
23
(d) If, for any reason, Revolving Credit Loans may not be (as determined by
the Administrative Agent in its sole discretion), or are not, made pursuant to
Section 2.6(c) to repay ABR Swingline Loans as required by said Section, then,
effective on the date such Revolving Credit Loans would otherwise have been
made, each Lender severally, unconditionally and irrevocably agrees that it
shall purchase an undivided participating interest in such ABR Swingline Loans
("Unrefunded Swingline Loans") in an amount equal to the amount of the
Revolving Credit Loan which otherwise would have been made by such Lender
pursuant to Section 2.6(c), which purchase shall be funded by the time such
Revolving Credit Loan would have been required to be made pursuant to Section
2.6(c). In the event that the Lenders purchase undivided participating
interests pursuant to the first sentence of this paragraph (d), each Lender
shall immediately transfer to the Administrative Agent, for the account of the
Swingline Lenders, in immediately available funds, the amount of its
participation. Any Lender holding a participation in an Unrefunded Swingline
Loan may exercise any and all rights of banker's lien, setoff or counterclaim
with respect to any and all moneys owing by Westinghouse to such Lender by
reason thereof as fully as if such Lender had made a Loan directly to
Westinghouse in the amount of such participation.
(e) Whenever, at any time after any Swingline Lender has received from any
Lender such Lender's participating interest in an ABR Swingline Loan, such
Swingline Lender receives any payment on account thereof, such Swingline Lender
will promptly distribute to such Lender its participating interest in such
amount (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
received by such Swingline Lender is required to be returned, such Lender will
return to such Swingline Lender any portion thereof previously distributed by
such Swingline Lender to it.
(f) Notwithstanding anything to the contrary in this Agreement, each
Lender's obligation to make the Revolving Credit Loans referred to in Section
2.6(c) and to purchase and fund participating interests pursuant to Section
2.6(d) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Lender or Westinghouse may have
against any Swingline Lender, Westinghouse or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the conditions specified in Article
IV; (iii) any adverse change in the condition (financial or otherwise) of
Westinghouse or any of its Subsidiaries; (iv) any breach of this Agreement by
Westinghouse or any Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
(g) Upon written or telecopy notice to the Swingline Lenders and to the
Administrative Agent, Westinghouse may at any time terminate, from time to time
in part reduce, or from time to time (with the approval of the relevant
Swingline Lender) increase, the Swingline Commitment of any Swingline Lender.
At any time when there shall be fewer than ten Swingline Lenders, Westinghouse
may appoint from among the Lenders a new Swingline Lender, subject to the prior
consent of such new Swingline Lender and prior notice to the Administrative
Agent, so long as at no time shall there be more than ten Swingline Lenders.
Notwithstanding anything to the contrary in this Agreement, (i) if any ABR
Swingline Loans shall be outstanding at the time of any termination, reduction,
increase or appointment pursuant to the preceding two sentences, Westinghouse
shall on the date thereof prepay or borrow ABR Swingline Loans to the extent
necessary to ensure that at all times the outstanding ABR Swingline Loans held
by the Swingline Lenders shall be pro rata according to the respective
Swingline Commitments of the Swingline Lenders and (ii) in no event may the
aggregate Swingline Commitments exceed $600,000,000. On the date of any
termination or reduction of the Swingline Commitments pursuant to this
paragraph (g), Westinghouse shall pay or prepay so much of the Swingline Loans
as shall be necessary in order that, after giving effect to such termination
<PAGE> 29
24
or reduction, (i) the aggregate outstanding principal amount of the ABR
Swingline Loans of any Swingline Lender will not exceed the Swingline
Commitment of such Swingline Lender and (ii) the aggregate outstanding
principal amount of all Swingline Loans will not exceed the aggregate Swingline
Commitments.
(h) Westinghouse may prepay any Swingline Loan in whole or in part at any
time without premium or penalty; provided that Westinghouse shall have given
the Administrative Agent written or telecopy notice (or telephone notice
promptly confirmed in writing or by telecopy) of such prepayment not later than
10:30 a.m., New York City time, on the Business Day designated by Westinghouse
for such prepayment; and provided further that each partial payment shall be in
an amount that is an integral multiple of $1,000,000. Each notice of
prepayment under this paragraph (h) shall specify the prepayment date and the
principal amount of each Swingline Loan (or portion thereof) to be prepaid,
shall be irrevocable and shall commit Westinghouse to prepay such Swingline
Loan (or portion thereof) by the amount stated therein on the date stated
therein. All prepayments under this paragraph (h) shall be accompanied by
accrued interest on the principal amount being prepaid to the date of payment.
Each payment of principal of or interest on ABR Swingline Loans shall be
allocated, as between the Swingline Lenders, pro rata in accordance with their
respective Swingline Percentages.
SECTION 2.7. Letters of Credit. (a) Subject to the terms and conditions
hereof and relying upon the representations and warranties herein set forth,
each Issuing Lender agrees, at any time and from time to time on or after the
Closing Date until the earlier of (i) the tenth Business Day preceding the
Revolving Credit Maturity Date and (ii) the termination of the Commitments in
accordance with the terms hereof, to issue and deliver or to extend the expiry
of Letters of Credit for the account of Westinghouse in an aggregate
outstanding undrawn amount which does not exceed the maximum amount specified
in the applicable Issuing Lender Agreement; provided that in no event shall the
Aggregate LC Exposure exceed $1,500,000,000 at any time. Each Letter of Credit
(i) shall be in a form approved in writing by Westinghouse and the applicable
Issuing Lender and (ii) shall permit drawings upon the presentation of such
documents as shall be specified by Westinghouse in the applicable notice
delivered pursuant to paragraph (c) below. The Lenders agree that, subject to
compliance with the conditions precedent set forth in Section 4.2, any
Designated Letter of Credit may be designated as a Letter of Credit hereunder
from time to time on or after the Closing Date pursuant to the procedures
specified in the definition of "Designated Letters of Credit".
(b) Each Letter of Credit shall by its terms expire not later than the
fifth Business Day preceding the Revolving Credit Maturity Date. Any Letter of
Credit may provide for the renewal thereof for additional periods (which shall
in no event extend beyond the date referred to in the preceding sentence).
Each Letter of Credit shall by its terms provide for payment of drawings in
Dollars or in a Foreign Currency, provided that a Letter of Credit denominated
in a Foreign Currency may not be issued if, after giving effect thereto, the
Dollar equivalent of the aggregate face amount of all Letters of Credit
denominated in Foreign Currencies then outstanding would exceed $300,000,000,
as determined by the Administrative Agent.
(c) Westinghouse shall give the applicable Issuing Lender and the
Administrative Agent written or telecopy notice not later than 10:00 a.m., New
York City time, five Business Days (or such shorter period as shall be
acceptable to such Issuing Lender) prior to any proposed issuance of a Letter
of Credit. Each such notice shall refer to this Agreement and shall specify
(i) the date on which such Letter of Credit is to be issued (which shall be a
Business Day) and the face amount of such Letter of Credit, (ii) the name and
address of the beneficiary, (iii) whether such Letter of Credit is a Financial
Letter of Credit or a Non-Financial Letter of Credit (subject to confirmation
of such
<PAGE> 30
25
status by the Administrative Agent), (iv) whether such Letter of Credit shall
permit a single drawing or multiple drawings, (v) the form of the documents
required to be presented at the time of any drawing (together with the exact
wording of such documents or copies thereof), (vi) the expiry date of such
Letter of Credit (which shall conform to the provisions of paragraph (b) above)
and (vii) if such Letter of Credit is to be in a Foreign Currency, the relevant
Foreign Currency. The Administrative Agent shall give to each Lender prompt
written or telecopy advice of the issuance of any Letter of Credit. Each
determination by the Administrative Agent as to whether or not a Letter of
Credit constitutes a Financial Letter of Credit shall be conclusive and binding
upon Westinghouse and the Lenders.
(d) By the issuance of a Letter of Credit and without any further action on
the part of the applicable Issuing Lender or the Lenders in respect thereof,
the applicable Issuing Lender hereby grants to each Lender, and each Lender
hereby acquires from such Issuing Lender, a participation in such Letter of
Credit equal to such Lender's Revolving Credit Percentage at the time of any
drawing thereunder of the face amount of such Letter of Credit, effective upon
the issuance of such Letter of Credit. In addition, the applicable Issuing
Lender hereby grants to each Lender, and each Lender hereby acquires from such
Issuing Lender, a participation in each Designated Letter of Credit equal to
such Lender's Revolving Credit Percentage at the time of any drawing thereunder
of the face amount of such Designated Letter of Credit, effective on the date
such Designated Letter of Credit is designated as a Letter of Credit hereunder.
In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of each Issuing Lender, in accordance with paragraph (f) below,
such Lender's Revolving Credit Percentage of each unreimbursed LC Disbursement
made by such Issuing Lender; provided, however, that the Lenders shall not be
obligated to make any such payment with respect to any payment or disbursement
made under any Letter of Credit to the extent resulting from the gross
negligence or wilful misconduct of such Issuing Lender.
(e) Each Lender acknowledges and agrees that its acquisition of
participations pursuant to paragraph (d) above in respect of Letters of Credit
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Lender or Westinghouse may have
against any Issuing Lender, Westinghouse or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the conditions specified in Article
IV; (iii) any adverse change in the condition (financial or otherwise) of
Westinghouse or any of its Subsidiaries; (iv) any breach of this Agreement by
Westinghouse or any Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
(f) On the date on which it shall have ascertained that any documents
presented under a Letter of Credit appear to be in conformity with the terms
and conditions of such Letter of Credit, the applicable Issuing Lender shall
give written or telecopy notice to Westinghouse and the Administrative Agent of
the amount of the drawing and the date on which payment thereon has been or
will be made. If the applicable Issuing Lender shall not have received from
Westinghouse the payment required pursuant to paragraph (g) below by 12:00
noon, New York City time, two Business Days after the date on which payment of
a draft presented under any Letter of Credit has been made, such Issuing Lender
shall so notify the Administrative Agent, which shall in turn promptly notify
each Lender, specifying in the notice to each Lender such Lender's Revolving
Credit Percentage of such LC Disbursement. Each Lender shall pay to the
Administrative Agent, not later than 2:00 p.m., New York City time, on such
second Business Day, such Lender's Revolving Credit Percentage of such LC
Disbursement (which obligation shall be expressed in Dollars only), which the
Administrative Agent shall promptly pay to the applicable Issuing Lender. The
Administrative Agent will promptly remit to each Lender such Lender's Revolving
Credit Percentage of any amounts subsequently received by the Administrative
Agent from Westinghouse in respect of such LC Disbursement; provided that (i)
<PAGE> 31
26
amounts so received for the account of any Lender prior to payment by such
Lender of amounts required to be paid by it hereunder in respect of any LC
Disbursement and (ii) amounts representing interest at the rate provided in
paragraph (g) below on any LC Disbursement for the period prior to the payment
by such Lender of such amounts shall in each case be remitted to the applicable
Issuing Lender.
(g) If an Issuing Lender shall pay any draft presented under a Letter of
Credit, Westinghouse shall pay to such Issuing Lender an amount equal to the
amount of such draft before 12:00 noon, New York City time, on the second
Business Day immediately following the date of payment of such draft, together
with interest (if any) on such amount at a rate per annum equal to the interest
rate in effect for ABR Loans (or, in the case of Foreign Currency-denominated
Letters of Credit, the rate which would reasonably and customarily be charged
by such Issuing Lender on outstanding loans denominated in the relevant Foreign
Currency) from (and including) the date of payment of such draft to (but
excluding) the date on which either Westinghouse shall have repaid, or the
Lenders shall have refunded, such draft in full (which interest shall be
payable on such second Business Day and from time to time thereafter on demand
until either Westinghouse shall have repaid, or the Lenders shall have
refunded, such draft in full). In the event that such drawing shall be
refunded by the Lenders as provided in Section 2.7(f), Westinghouse shall pay
to the Administrative Agent, for the account of the Lenders, quarterly on the
last day of each March, June, September and December, interest on the amount so
refunded at a rate per annum equal to the interest rate in effect for ABR Loans
from (and including) the date of such refunding to (but excluding) the date on
which the amount so refunded by the Lenders shall have been paid in full in
Dollars by Westinghouse. Each payment made to an Issuing Lender by
Westinghouse pursuant to this paragraph shall be made at such Issuing Lender's
address for notices specified herein in lawful money of (x) the United States
of America (in the case of payments made on Dollar-denominated Letters of
Credit) or (y) the applicable foreign jurisdiction (in the case of payments on
Foreign Currency-denominated Letters of Credit) and in immediately available
funds. The obligation of Westinghouse to pay the amounts referred to above in
this paragraph (g) (and the obligations of the Lenders under paragraphs (d) and
(f) above) shall be absolute, unconditional and irrevocable and shall be
satisfied strictly in accordance with their terms irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or any
Issuing Lender Agreement or of the obligations of Westinghouse under this
Agreement or any Issuing Lender Agreement;
(ii) the existence of any claim, setoff, defense or other right which
Westinghouse or any other Person may at any time have against the beneficiary
under any Letter of Credit, the Agents, any Issuing Lender or any Lender
(other than the defense of payment in accordance with the terms of this
Agreement or a defense based on the gross negligence or wilful misconduct of
the applicable Issuing Lender) or any other Person in connection with this
Agreement or any other transaction;
(iii) any draft or other document presented under a Letter of Credit proving
to be forged, fraudulent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect; provided that payment by the
applicable Issuing Lender under such Letter of Credit against presentation of
such draft or document shall not have constituted gross negligence or wilful
misconduct;
(iv) payment by the applicable Issuing Lender under a Letter of Credit
against presentation of a draft or other document which does not comply in
any immaterial respect
<PAGE> 32
27
with the terms of such Letter of Credit; provided that such payment shall not
have constituted gross negligence or wilful misconduct; or
(v) any other circumstance or event whatsoever, whether or not similar to
any of the foregoing; provided that such other circumstance or event shall
not have been the result of gross negligence or wilful misconduct of the
applicable Issuing Lender.
It is understood that in making any payment under a Letter of Credit (x)
such Issuing Lender's exclusive reliance on the documents presented to it under
such Letter of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Letter of Credit,
whether or not the amount due to the beneficiary thereof equals the amount of
such draft and whether or not any document presented pursuant to such Letter of
Credit proves to be forged, fraudulent or invalid in any respect, if such
document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever, and (y) any noncompliance in any
immaterial respect of the documents presented under a Letter of Credit with the
terms thereof shall, in either case, not, in and of itself, be deemed wilful
misconduct or gross negligence of such Issuing Lender.
(h) (i) Notwithstanding anything to the contrary contained in this
Agreement, for purposes of calculating any LC Fee or Commitment Fee payable in
respect of any Business Day, the Administrative Agent shall convert the amount
available to be drawn under any Letter of Credit denominated in Foreign
Currency into an amount of Dollars based upon the relevant Foreign Exchange
Rate in effect for such day. If on any date the Administrative Agent shall
notify Westinghouse that, by virtue of any change in the Foreign Exchange Rate
of any Foreign Currency in which a Letter of Credit is denominated, the Total
Facility Exposure shall exceed the Total Utilizable Commitment then in effect,
then, within three Business Days after the date of such notice, Westinghouse
shall prepay the Revolving Credit Loans and/or the Swingline Loans to the
extent necessary to eliminate such excess. Each Issuing Lender which has
issued a Letter of Credit denominated in a Foreign Currency agrees to notify
the Administrative Agent of the average daily outstanding amount thereof for
any period in respect of which LC Fees or Commitment Fees are payable and, upon
request by the Administrative Agent, for any other date or period. For all
purposes of this Agreement, determinations by the Administrative Agent of the
Dollar equivalent of any amount expressed in a Foreign Currency shall be made
on the basis of Foreign Exchange Rates reset monthly (or on such other periodic
basis as shall be selected by the Administrative Agent in its sole discretion)
and shall in each case be conclusive absent manifest error.
(ii) Notwithstanding anything to the contrary contained in this Section
2.7, prior to demanding any reimbursement from the Lenders pursuant to Section
2.7(f) in respect of any Letter of Credit denominated in a Foreign Currency,
the relevant Issuing Lender shall convert Westinghouse's obligation under
Section 2.7(g) to reimburse such Issuing Lender in such Foreign Currency into
an obligation to reimburse such Issuing Lender (and, in turn, the Lenders) in
Dollars. The amount of any such converted obligation shall be computed based
upon the relevant Foreign Exchange Rate (as quoted by the Administrative Agent
to such Issuing Lender) in effect for the day on which such conversion occurs.
SECTION 2.8. Conversion and Continuation Options. (a) Westinghouse may
elect from time to time to convert Eurodollar Revolving Credit Loans (or,
subject to Section 2.10(f), a portion thereof) to ABR Revolving Credit Loans on
the last day of an Interest Period with respect thereto by giving the
Administrative Agent prior irrevocable notice of such election. Westinghouse
may elect from time to time to convert ABR Revolving Credit Loans (subject to
Section 2.10(f)) to
<PAGE> 33
28
Eurodollar Revolving Credit Loans by giving the Administrative Agent at least
three Business Days' prior irrevocable notice of such election. Any such
notice of conversion to Eurodollar Revolving Credit Loans shall specify the
length of the initial Interest Period therefor. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Lender thereof. All
or any part of outstanding Eurodollar Revolving Credit Loans and ABR Revolving
Credit Loans may be converted as provided herein, provided that no Revolving
Credit Loan may be converted into a Eurodollar Revolving Credit Loan when any
Event of Default has occurred and is continuing and the Administrative Agent
has or the Required Lenders have determined in its or their sole discretion not
to permit such a conversion.
(b) Any Eurodollar Revolving Credit Loans (or, subject to Section 2.10(f),
a portion thereof) may be continued as such upon the expiration of the then
current Interest Period with respect thereto by Westinghouse giving irrevocable
notice to the Administrative Agent, not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto, of the
length of the next Interest Period to be applicable to such Revolving Credit
Loans, provided that no Eurodollar Revolving Credit Loan may be continued as
such when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such a continuation, and provided, further,
that if Westinghouse shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Eurodollar Revolving Credit Loans shall be automatically
converted to ABR Revolving Credit Loans on the last day of such then expiring
Interest Period. Upon receipt of any notice from Westinghouse pursuant to this
Section 2.8(b), the Administrative Agent shall promptly notify each Lender
thereof.
SECTION 2.9. Fees. (a) Westinghouse agrees to pay to the Administrative
Agent for the account of each Lender a Commitment Fee for the period from and
including the date hereof to the Revolving Credit Maturity Date (or such
earlier date on which the Commitments shall terminate in accordance herewith),
computed at a per annum rate equal to the Applicable Commitment Fee Rate on the
average daily Commitment Fee Calculation Amount in respect of such Lender
during the period for which payment is made. In addition, Westinghouse agrees
to pay to the Administrative Agent for the account of each Lender a
supplemental Commitment Fee for the period from and including the date hereof
to the Infinity Merger Date (or such earlier date on which the Commitments
shall terminate in accordance herewith), computed at a per annum rate equal to
the Adjusted Applicable Commitment Fee Rate on the excess of such Lender's
Commitment over such Lender's Base Commitment. All Commitment Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days and shall be payable quarterly in arrears on the last day of each March,
June, September and December, on the Revolving Credit Maturity Date or such
earlier date on which the Commitments shall be terminated, commencing on the
first of such dates to occur after the date hereof.
(b) Westinghouse agrees to pay each Lender, through the Administrative
Agent, on the last day of each March, June, September and December and on the
Revolving Credit Maturity Date or the date on which the Commitment of such
Lender shall be terminated as provided herein and all Letters of Credit issued
hereunder shall have expired, a letter of credit fee (an "LC Fee") computed at
a per annum rate equal to the Applicable LC Fee Rate on such Lender's Revolving
Credit Percentage of the average daily undrawn amount of the Financial Letters
of Credit or Non-Financial Letters of Credit, as the case may be, outstanding
during the preceding quarter (or shorter period commencing with the date hereof
or ending with the Revolving Credit Maturity Date or the date on which the
Commitment of such Lender shall have been terminated and all Letters of Credit
issued hereunder
<PAGE> 34
29
shall have expired). All LC Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days.
(c) Westinghouse agrees to pay to the Administrative Agent, for its own
account, the administrative agent's fees ("Administrative Agent's Fees")
provided for in the Administrative Agent Fee Letter at the times provided
therein.
(d) Westinghouse agrees to pay to each Issuing Lender, through the
Administrative Agent, for its own account, the applicable Issuing Lender Fees.
(e) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the relevant Lenders or to the Issuing Lenders. Once paid, none of the
Fees shall be refundable under any circumstances (other than corrections of
errors in payment).
SECTION 2.10. Interest on Loans; Eurodollar Tranches; Etc. (a) Subject to
the provisions of Section 2.11, Eurodollar Loans shall bear interest (computed
on the basis of the actual number of days elapsed over a year of 360 days) at a
rate per annum equal to (i) in the case of each Eurodollar Revolving Credit
Loan, the Eurodollar Rate for the Interest Period in effect for such Loan plus
the Applicable Eurodollar Margin and (ii) in the case of each Eurodollar
Competitive Loan, the Eurodollar Rate for the Interest Period in effect for
such Loan plus the Margin offered by the Lender making such Loan and accepted
by Westinghouse pursuant to Section 2.3. The Eurodollar Rate for each Interest
Period shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error. The Administrative Agent shall
promptly advise Westinghouse and each Lender of such determination.
(b) Subject to the provisions of Section 2.11, ABR Loans shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 365 or 366 days, as the case may be, when determined by reference to
the Prime Rate and over a year of 360 days at all other times) at a rate per
annum equal to the Alternate Base Rate. The Alternate Base Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
(c) Subject to the provisions of Section 2.11, Quoted Swingline Loans shall
bear interest (computed on the basis of the actual number of days elapsed over
a year of 360 days) at a rate per annum equal to the relevant Quoted Swingline
Rate.
(d) Subject to the provisions of Section 2.11, each Absolute Rate Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Lender making such Loan and accepted by Westinghouse
pursuant to Section 2.3.
(e) Interest on each Loan shall be payable on each applicable Interest
Payment Date.
(f) Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations, repayments and prepayments of
Eurodollar Revolving Credit Loans hereunder and all selections of Interest
Periods hereunder in respect of Eurodollar Revolving Credit Loans shall be in
such amounts and shall be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of the Eurodollar Revolving
Credit Loans comprising each Eurodollar Tranche shall be equal to $50,000,000
or a whole multiple of $5,000,000 in excess thereof. In no event shall there
be more than 12 Eurodollar Tranches outstanding at any time.
<PAGE> 35
30
(g) If no election as to the Type of Revolving Credit Loan is specified in
any notice of borrowing with respect thereto, then the requested Loan shall be
an ABR Loan. If no Interest Period with respect to a Eurodollar Revolving
Credit Loan is specified in any notice of borrowing, conversion or
continuation, then Westinghouse shall be deemed to have selected an Interest
Period of one month's duration.
SECTION 2.11. Default Interest. (a) If all or a portion of the principal
amount of any Loan shall not be paid when due (whether at the stated maturity,
by acceleration or otherwise), all outstanding Loans (whether or not overdue)
shall bear interest at a rate per annum which is equal to the rate that would
otherwise be applicable thereto pursuant to the provisions of Section 2.10 plus
2% and (b) if all or a portion of any LC Disbursement, any interest payable on
any Loan or LC Disbursement or any Fee or other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal
to the rate otherwise applicable to ABR Loans pursuant to Section 2.10(b) plus
2%, in each case, with respect to clauses (a) and (b) above, from the date of
such non-payment until such amount is paid in full (as well after as before
judgment).
SECTION 2.12. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan (i) the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon
Westinghouse) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or (ii) the Required Lenders shall have determined
and shall have notified the Administrative Agent that the Eurodollar Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining Eurodollar Loans during such Interest Period,
the Administrative Agent shall, as soon as practicable thereafter, give written
or telecopy notice of such determination to Westinghouse and the Lenders. In
the event of any such determination, until the Administrative Agent shall have
advised Westinghouse and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any request by Westinghouse for a Eurodollar
Competitive Loan pursuant to Section 2.3 to be made after such determination
shall be of no force and effect and shall be denied by the Administrative
Agent, (ii) any request by Westinghouse for a Eurodollar Revolving Credit Loan
pursuant to Section 2.4 to be made after such determination shall be deemed to
be a request for an ABR Loan and (iii) any request by Westinghouse for
conversion into or a continuation of a Eurodollar Revolving Credit Loan
pursuant to Section 2.8 to be made after such determination shall have no force
and effect (in the case of a requested conversion) or shall be deemed to be a
request for a conversion into an ABR Loan (in the case of a requested
continuation). Also, in the event of any such determination, Westinghouse
shall be entitled, in its sole discretion, if the requested Loan has not been
made, to cancel its acceptance of the Competitive Bids or to cancel its
Competitive Bid Request relating thereto. Each determination by the
Administrative Agent or the Required Lenders hereunder shall be conclusive
absent manifest error.
SECTION 2.13. Termination and Optional Reduction of Commitments. Upon at
least three Business Days' prior irrevocable written or telecopy notice to the
Administrative Agent, Westinghouse may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments;
provided, however, that (a) any such notice delivered prior to the Infinity
Merger Date shall specify whether or not such reduction is to be applied to the
Base Commitments; (b) each partial reduction of the Commitments shall be in a
minimum principal amount of $10,000,000 and in integral multiples of $1,000,000
in excess thereof and (c) no such termination or reduction shall be made if,
after giving effect thereto and to any prepayments of the Loans made on the
effective date thereof, (i) the Outstanding Revolving Extensions of Credit of
any Lender would
<PAGE> 36
31
exceed such Lender's Utilizable Commitment then in effect or (ii) the Total
Facility Exposure would exceed the Total Utilizable Commitment then in effect.
The Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.13. Except as otherwise provided in Section 2.21,
each reduction in the Commitments hereunder shall be made ratably among the
Lenders in accordance with their respective Commitments. Westinghouse agrees
to pay to the Administrative Agent for the account of the Lenders, on the date
of termination or reduction of the Commitments, the Commitment Fees on the
amount of the Commitments so terminated or reduced accrued through the date of
such termination or reduction.
SECTION 2.14. Optional Prepayments of Revolving Credit Loans. Westinghouse
may at any time and from time to time prepay the Revolving Credit Loans, in
whole or in part, without premium or penalty, upon giving irrevocable written
or telecopy notice (or telephone notice promptly confirmed by written or
telecopy notice) to the Administrative Agent: (i) before 10:00 a.m., New York
City time, three Business Days prior to prepayment, in the case of Eurodollar
Revolving Credit Loans, and (ii) before 10:00 a.m., New York City time, one
Business Day prior to prepayment, in the case of ABR Revolving Credit Loans.
Such notice shall specify the date and amount of prepayment and whether the
prepayment is of Eurodollar Revolving Credit Loans, ABR Revolving Credit Loans
or a combination thereof, and, if of a combination thereof, the amount
allocable to each. If a Eurodollar Revolving Credit Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, Westinghouse
shall also pay any amounts owing pursuant to Section 2.16. Upon receipt of any
such notice the Administrative Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with (except in the case of
ABR Revolving Credit Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Revolving Credit Loans shall be in an
aggregate principal amount of $10,000,000 or a whole multiple of $1,000,000 in
excess thereof.
SECTION 2.15. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation (including any change in the reserve
percentages provided for in Regulation D) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof shall change the basis of taxation of
payments to any Lender of the principal of or interest on any Eurodollar Loan
or Absolute Rate Loan made by such Lender (other than changes in respect of
taxes imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office (or in which it holds any Eurodollar
Loan or Absolute Rate Loan) or by any political subdivision or taxing authority
therein and other than taxes that would not have been imposed but for the
failure of such Lender to comply with applicable certification, information,
documentation or other reporting requirements), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of or deposits with or for the account of such Lender, or shall impose on such
Lender or the London interbank market any other condition affecting this
Agreement or any Eurodollar Loan or Absolute Rate Loan made by such Lender, and
the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining any Eurodollar Loan or Absolute Rate Loan or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) in respect of any Eurodollar Loan or
Absolute Rate Loan by an amount deemed by such Lender to be material, then
Westinghouse agrees to pay to such Lender as provided in paragraph (c) below
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered. Notwithstanding the
foregoing, no Lender shall be entitled to request compensation under this
paragraph with respect to any Competitive Loan if the change giving rise to
such request shall, or in good faith should, have been taken into account in
formulating the Competitive Bid pursuant to which such Competitive Loan shall
have been made.
<PAGE> 37
32
(b) If any Lender or any Issuing Lender shall have determined that the
adoption after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any law, rule, regulation or
guideline regarding capital adequacy or in the interpretation or administration
of any of the foregoing by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or any lending office of such Lender) or Issuing
Lender or any Lender's or Issuing Lender's holding company with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's or Issuing Lender's
capital or on the capital of such Lender's or Issuing Lender's holding company,
if any, as a consequence of this Agreement or the Loans made by such Lender or
the LC Exposure of such Lender or Letters of Credit issued by such Issuing
Lender pursuant hereto to a level below that which such Lender or Issuing
Lender or such Lender's or Issuing Lender's holding company could have achieved
but for such applicability, adoption, change or compliance (taking into
consideration such Lender's or Issuing Lender's policies and the policies of
such Lender's or Issuing Lender's holding company with respect to capital
adequacy) by an amount deemed by such Lender or Issuing Lender to be material,
then from time to time Westinghouse agrees to pay to such Lender or Issuing
Lender as provided in paragraph (c) below such additional amount or amounts as
will compensate such Lender or Issuing Lender or such Lender's or Issuing
Lender's holding company for any such reduction suffered.
(c) A certificate of each Lender or Issuing Lender setting forth such
amount or amounts as shall be necessary to compensate such Lender or Issuing
Lender as specified in paragraph (a) or (b) above, as the case may be, and the
basis therefor in reasonable detail shall be delivered to Westinghouse and
shall be conclusive absent manifest error. Westinghouse shall pay each Lender
or Issuing Lender the amount shown as due on any such certificate within 30
days after its receipt of the same. Upon the receipt of any such certificate,
Westinghouse shall be entitled, in its sole discretion, if any requested Loan
has not been made, to cancel its acceptance of the relevant Competitive Bids or
to cancel the Competitive Bid Request relating thereto, subject to Section
2.16.
(d) Except as provided in this paragraph, failure on the part of any Lender
to demand compensation for any increased costs or reduction in amounts received
or receivable or reduction in return on capital with respect to any period
shall not constitute a waiver of such Lender's right to demand compensation
with respect to any other period. The protection of this Section 2.15 shall be
available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed so long as it
shall be customary for Lenders affected thereby to comply therewith. No Lender
shall be entitled to compensation under this Section 2.15 for any costs
incurred or reductions suffered with respect to any date unless it shall have
notified Westinghouse that it will demand compensation for such costs or
reductions under paragraph (c) above not more than 90 days after the later of
(i) such date and (ii) the date on which it shall have become aware of such
costs or reductions. Notwithstanding any other provision of this Section 2.15,
no Lender shall demand compensation for any increased cost or reduction
referred to above if it shall not at the time be the general policy or practice
of such Lender to demand such compensation in similar circumstances under
comparable provisions of other credit agreements, if any. In the event
Westinghouse shall reimburse any Lender pursuant to this Section 2.15 for any
cost and such Lender shall subsequently receive a refund in respect thereof,
such Lender shall so notify Westinghouse and, upon its request, will pay to
Westinghouse the portion of such refund which such Lender shall determine in
good faith to be allocable to the cost so reimbursed. The covenants contained
in this Section 2.15 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
<PAGE> 38
33
SECTION 2.16. Indemnity. Westinghouse agrees to indemnify each Lender
against any loss or expense described below which such Lender may sustain or
incur as a consequence of (a) any failure by Westinghouse to fulfill on the
date of any borrowing hereunder the applicable conditions set forth in Article
IV, (b) any failure by Westinghouse to borrow, continue or convert any Loan
hereunder after irrevocable notice of such borrowing, continuation or
conversion has been given or deemed given or Competitive Bids have been
accepted pursuant to Article II or (c) any payment, prepayment or conversion of
a Eurodollar Loan or Absolute Rate Loan required by any other provision of this
Agreement or otherwise made or deemed made, whatever the circumstances may be
that give rise to such payment, prepayment or conversion, or any transfer of
any such Loan pursuant to Section 2.21 or 8.4(b), on a date other than the last
day of the Interest Period applicable thereto. The loss or expense for which
such Lender shall be indemnified under this Section 2.16 shall be equal to the
excess, if any, as reasonably determined by such Lender, of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, converted or not
borrowed, continued or converted (assumed to be the Eurodollar Rate in the case
of Eurodollar Loans) for the period from the date of such payment, prepayment,
conversion or failure to borrow, continue or convert to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, continue
or convert, the Interest Period for such Loan which would have commenced on the
date of such failure) over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such Lender in reemploying
the funds so paid, prepaid, converted or not borrowed, continued or converted
for such period or Interest Period, as the case may be; provided, however, that
such amount shall not include any loss of a Lender's margin or spread over its
cost of obtaining funds as described above. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.16 shall be delivered to Westinghouse and shall be
conclusive absent manifest error. This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 2.17. Pro Rata Treatment; Funding Matters; Evidence of Debt. (a)
Except as required under Section 2.21, each payment or prepayment of principal
of any Revolving Credit Loan, each payment of interest on the Revolving Credit
Loans, each payment of the Commitment Fees pursuant to Section 2.9(a)(i), each
payment of LC Fees, and each reduction of the Commitments, shall be allocated
pro rata among the Lenders in accordance with their respective Commitments (or,
if such Commitments shall have expired or been terminated, in accordance with
the respective principal amounts of their outstanding Revolving Credit Loans).
Each Lender agrees that in computing such Lender's portion of any Loan to be
made hereunder, the Administrative Agent may, in its discretion, round such
Lender's percentage of such Loan to the next higher or lower whole Dollar
amount.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the relevant borrowing date that such Lender will not make
available to the Administrative Agent such Lender's portion of a borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such borrowing in
accordance with this Agreement and the Administrative Agent may, in reliance
upon such assumption, make available to Westinghouse on such date a
corresponding amount. If and to the extent that such Lender shall not have
made such portion available to the Administrative Agent, each of such Lender
and Westinghouse agrees to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to Westinghouse until the date such
amount is repaid to the Administrative Agent at (i) in the case of
Westinghouse, the interest rate applicable at the time to the relevant Loan and
(ii) in the case of such Lender, the Federal Funds Effective Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Lender's Loan as part of such borrowing for the
purposes
<PAGE> 39
34
of this Agreement; provided that such repayment shall not release such Lender
from any liability it may have to Westinghouse for the failure to make such
Loan at the time required herein.
(c) The failure of any Lender to make any Loan shall not in itself relieve
any other Lender of its obligation to lend hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other
Lender to make any Loan required to be made by such other Lender).
(d) Each Lender may at its option make any Eurodollar Loan by causing any
domestic or foreign branch or affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of
Westinghouse to repay such Loan in accordance with the terms of this Agreement.
(e) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness to such Lender resulting from
each Loan made by it from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this
Agreement. The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type of each Loan and
each Interest Period, if any, applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from
Westinghouse to each Lender hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder from Westinghouse and each Lender's share
thereof. The entries made in the accounts maintained pursuant to this
paragraph (e) shall, to the extent permitted by applicable law, be prima facie
evidence of the existence and amounts of the obligations therein recorded;
provided, however, that the failure of any Lender or the Administrative Agent
to maintain such accounts or any error therein shall not in any manner affect
the obligations of Westinghouse to repay the Loans in accordance with their
terms.
SECTION 2.18. Sharing of Setoffs. Except to the extent that this Agreement
provides for payments to be allocated to Revolving Credit Loans, Swingline
Loans or Competitive Loans, as the case may be, each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against Westinghouse, or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means
(other than pursuant to any provision of this Agreement), obtain payment
(voluntary or involuntary) in respect of any category of its Loans or such
Lender's Revolving Credit Percentage of any LC Disbursement as a result of
which the unpaid principal portion of such Loans or the unpaid portion of such
Lender's Revolving Credit Percentage of the LC Disbursements shall be
proportionately less than the unpaid principal portion of such Loans or the
unpaid portion of the Revolving Credit Percentage of the LC Disbursements of
any other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in such Loans or the Revolving Credit
Percentage of the LC Disbursements of such other Lender, so that the aggregate
unpaid principal amount of such Loans and participations in such Loans held by
each Lender or the Revolving Credit Percentage of LC Disbursements and
participations in LC Disbursements held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all such Loans or LC
Disbursements then outstanding as the principal amount of such Loans or the
Revolving Credit Percentage of LC Disbursements of each Lender prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
principal amount of all such Loans or LC Disbursements outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that, if any such purchase or purchases or adjustments shall
be made pursuant to this Section
<PAGE> 40
35
2.18 and the payment giving rise thereto shall thereafter be recovered, such
purchase or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment restored without
interest. Any Lender holding a participation in a Loan or LC Disbursement
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or counterclaim with respect to any and all moneys owing by
Westinghouse to such Lender by reason thereof as fully as if such Lender had
made a Loan directly to Westinghouse or issued a Letter of Credit for the
account of Westinghouse in the amount of such participation.
SECTION 2.19. Payments. (a) Except as otherwise expressly provided
herein, Westinghouse shall make each payment (including principal of or
interest on any Loan or any Fees or other amounts) hereunder not later than
12:00 noon, New York City time, on the date when due in Dollars to the
Administrative Agent at its offices at 60 Wall Street, New York, New York, in
immediately available funds.
(b) Whenever any payment (including principal of or interest on any Loan or
any Fees or other amounts) hereunder shall become due, or otherwise would
occur, on a day that is not a Business Day, such payment may be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by Westinghouse hereunder
to or for the benefit of a Non-U.S. Person shall be made, in accordance with
Section 2.19, free and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto imposed by or on behalf of the United States
or any political subdivision thereof, excluding taxes imposed on (or measured
by) such Non-U.S. Person's net income or net receipts, franchise taxes, taxes
on doing business or taxes imposed on capital or net worth (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If Westinghouse shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder to a Non-U.S. Person, (i) the sum payable shall be increased by the
amount necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.20) such
Non-U.S. Person shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) Westinghouse shall make such deductions
and (iii) Westinghouse shall pay the full amount deducted to the relevant
taxing authority or other Governmental Authority in accordance with applicable
law.
(b) Westinghouse agrees to pay and reimburse on demand all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
Governmental Authority in respect of this Agreement, any of the Loans or the
Letters of Credit (all such taxes, assessments or charges hereinafter referred
to as "Other Taxes").
(c) Westinghouse will indemnify each Lender (or Transferee) and the
Administrative Agent for the full amount of Taxes and Other Taxes (including
any Taxes or Other Taxes imposed by the applicable jurisdiction on amounts
payable under this Section 2.20) paid by such Lender (or Transferee) or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date such Lender (or
Transferee) or the Administrative Agent, as the case may be, makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by Westinghouse in respect of any payment to a Non-U.S. Person,
Westinghouse will furnish to the
<PAGE> 41
36
Administrative Agent, at its address referred to in Section 8.1 for delivery to
such Non-U.S. Person, the original or a certified copy of a receipt (if
available) evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.20 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder and of all other amounts payable hereunder.
(f) Each Lender (or Transferee) that is not a citizen or resident of the
United States of America, a corporation, partnership or other entity created or
organized in or under the laws of the United States of America, or any estate
or trust that is subject to federal income taxation regardless of the source of
its income (a "Non-U.S. Person") shall deliver to Westinghouse and the
Administrative Agent (or, in the case of a participant, to the Lender from
which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form 1001 or Form 4224, or, in the case of a
Non-U.S. Person claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8, or any subsequent versions thereof or successors thereto
(and, if such Non-U.S. Person delivers a Form W-8, an annual certificate
representing that such Non-U.S. Person is not a "bank" for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of Westinghouse and is not a controlled
foreign corporation related to Westinghouse (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such Non-U.S.
Person claiming complete exemption from U.S. federal withholding tax on all
payments by Westinghouse under this Agreement. Such forms shall be delivered
by each Non-U.S. Person promptly after it becomes a party to this Agreement
(or, in the case of any participant, promptly after the date such participant
purchases the related participation). In addition, each Non-U.S. Person shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Person. Each Non-U.S. Person shall
promptly notify Westinghouse at any time it determines that it is no longer in
a position to provide any previously delivered certificate to Westinghouse (or
any other form of certification adopted by the U.S. taxing authorities for such
purpose). Unless Westinghouse and the Administrative Agent (or, in the case of
a participant, the Lender from which the related participation shall have been
purchased) have received forms or other documents satisfactory to them
indicating that payments hereunder are not subject to United States withholding
tax, Westinghouse or the Administrative Agent shall withhold taxes from such
payments at the applicable statutory rate in the case of payments of interest
to or for any Lender (or Transferee) that is a Non-U.S. Person.
Notwithstanding any other provision of this Section 2.20(f), a Non-U.S. Person
shall not be required to deliver any form pursuant to this Section 2.20(f) that
such Non-U.S. Person is not legally able to deliver by reason of the adoption
of any law, rule or regulation, or any change in any law, rule or regulation or
in the interpretation thereof, in each case occurring after the date such
Non-U.S. Person becomes a Lender (or Transferee).
(g) Westinghouse shall not be required to pay any additional amounts to any
Non-U.S. Person in respect of United States withholding tax pursuant to
paragraph (a) above (i) if the obligation to pay such additional amounts would
not have arisen but for a failure by such Non-U.S. Person to comply with the
provisions of paragraph (f) above or (ii) in the case of a Transferee, to the
extent such additional amounts exceed the additional amounts that would have
been payable had no transfer or assignment to such Transferee occurred;
provided, however, that Westinghouse shall be required to pay those amounts to
any Lender (or Transferee) that it was required to pay hereunder prior to the
failure of such Lender (or Transferee) to comply with the provisions of such
paragraph (f).
SECTION 2.21. Termination or Assignment of Commitments Under Certain
Circumstances. (a) Any Lender (or Transferee) claiming any additional amounts
payable pursuant to Section 2.15 or Section 2.20 shall use reasonable efforts
(consistent with legal and regulatory
<PAGE> 42
37
restrictions) to file any certificate or document requested by Westinghouse or
to change the jurisdiction of its applicable lending office if the making of
such a filing or change would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue and would not, in the sole
determination of such Lender (or Transferee), be otherwise disadvantageous to
such Lender (or Transferee).
(b) In the event that (x) any Lender shall have delivered a notice or
certificate pursuant to Section 2.15, (y) Westinghouse shall be required to
make additional payments to any Lender under Section 2.20, or (z) any Lender (a
"Non-Consenting Lender") shall withhold its consent to any amendment described
in clause (i) or (ii) of Section 8.8(b) as to which consents have been obtained
from Lenders having Total Facility Percentages aggregating at least 90%,
Westinghouse shall have the right, at its own expense, upon notice to such
Lender (or Lenders) and the Administrative Agent, (i) to terminate the
Commitments of such Lender (except in the case of clause (z) above) or (ii) to
require such Lender (or, in the case of clause (z) above, each Non-Consenting
Lender) to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 8.4) all its interests, rights and
obligations under this Agreement to one or more other financial institutions
acceptable to the Administrative Agent (which approval shall not be
unreasonably withheld) which shall assume such obligations; provided that (w)
in the case of any replacement of Non-Consenting Lenders, each assignee shall
have consented to the relevant amendment, (x) no such termination or assignment
shall conflict with any law, rule or regulation or order of any Governmental
Authority, (y) Westinghouse or the assignee (or assignees), as the case may be,
shall pay to each affected Lender in immediately available funds on the date of
such termination or assignment the principal of and interest accrued to the
date of payment on the Loans made by it hereunder and all other amounts accrued
for its account or owed to it hereunder and (z) Westinghouse may not terminate
Commitments representing more than 10% of the original aggregate Commitments
pursuant to this paragraph (b).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Westinghouse represents and warrants to each of the Lenders that:
SECTION 3.1. Corporate Existence. Each of Westinghouse and each Material
Subsidiary: (a) is a corporation, partnership or other entity duly organized
and validly existing under the laws of the jurisdiction of its organization;
(b) has all requisite corporate or other power, and has all material
governmental licenses, authorizations, consents and approvals, necessary to own
its assets and carry on its business as now being or as proposed to be
conducted, except where the failure to have any of the foregoing would not
result in a Material Adverse Effect; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would result in a
Material Adverse Effect.
SECTION 3.2. Financial Condition. (a) Each of (i) the consolidated
balance sheet of Westinghouse and its Consolidated Subsidiaries as at December
31, 1995, and the related consolidated statements of income and cash flows of
Westinghouse and its Consolidated Subsidiaries for the fiscal year ended on
such date, with the opinion thereon of Price Waterhouse LLP, and (ii) the
consolidated balance sheets of Westinghouse and its Consolidated Subsidiaries
as at March 31, 1996 and as at June 30, 1996, and the related consolidated
statements of income and cash flows of Westinghouse and its Consolidated
Subsidiaries for the fiscal quarters ended on such dates, all certified by a
Financial Officer of Westinghouse, heretofore furnished to each of the Lenders,
fairly present the consolidated
<PAGE> 43
38
financial condition of Westinghouse and its Consolidated Subsidiaries as at
such dates and the consolidated results of their operations for the fiscal year
or fiscal quarter ended on such dates in accordance with GAAP (subject, in the
case of the statements referred to in clause (ii) above, to year-end audit
adjustments). Neither Westinghouse nor any of its Material Subsidiaries had on
such dates any known material contingent liability, except as referred to or
reflected or provided for in the Exchange Act Report or in such balance sheets
(or the notes thereto) as at such dates.
(b) There has been no material adverse change in the consolidated financial
condition, operations, assets, business or prospects taken as a whole of
Westinghouse and its Consolidated Subsidiaries from that set forth in the
consolidated financial statements of Westinghouse for the fiscal year ended
December 31, 1995 referred to in Section 3.2(a) (it being agreed, however, that
none of (i) the reduction by any rating agency of any rating assigned to
Indebtedness of Westinghouse, (ii) non-cash provisions for loan losses and
additions to valuation allowances, (iii) any change in GAAP or compliance
therewith and (iv) any legal or arbitral proceedings which have been disclosed
in the Exchange Act Report, whether threatened, pending, resulting in a
judgment or otherwise, prior to the time a final judgment for the payment of
money shall have been recorded against Westinghouse or any Material Subsidiary
by any Governmental Authority having jurisdiction, and the judgment is non-
appealable (or the time for appeal has expired) and all stays of execution have
expired or been lifted shall, in and of itself, constitute such a material
adverse change).
SECTION 3.3. Litigation. Except as disclosed to the Lenders in the
Exchange Act Report filed prior to the Closing Date or otherwise disclosed in
writing to the Lenders prior to the Closing Date, there are no legal or
arbitral proceedings, or any proceedings by or before any Governmental
Authority, pending or (to the knowledge of Westinghouse) threatened against
Westinghouse or any of its Material Subsidiaries which have resulted in a
Material Adverse Effect (it being agreed that any legal or arbitral proceedings
which have been disclosed in the Exchange Act Report, whether threatened,
pending, resulting in a judgment or otherwise, prior to the time a final
judgment for the payment of money shall have been recorded against Westinghouse
or any Material Subsidiary by any Governmental Authority having jurisdiction,
and the judgment is non-appealable (or the time for appeal has expired) and all
stays of execution have expired or been lifted shall not, in and of itself, be
deemed to result in a Material Adverse Effect). The "Exchange Act Report"
shall mean, collectively, the Annual Report of each of Westinghouse and
Infinity on Form 10-K for the year ended December 31, 1995, each Report on Form
8-K of each of Westinghouse and Infinity filed subsequent to December 31, 1995
and delivered to the Lenders prior to the date hereof, and the Reports of
Westinghouse and Infinity on Form 10-Q for the quarters ended March 31, 1996
and June 30, 1996.
SECTION 3.4. No Breach, etc. None of the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated and
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the charter or By-laws (or other
equivalent organizational documents) of Westinghouse, or any applicable law or
regulation, or any order, writ, injunction or decree of any Governmental
Authority, or any material agreement or instrument to which Westinghouse or any
of its Material Subsidiaries is a party or by which any of them is bound or to
which any of them is subject, or constitute a default under any such agreement
or instrument, or result in the creation or imposition of any Lien upon any of
the revenues or assets of Westinghouse or any of its Material Subsidiaries
pursuant to the terms of any such agreement or instrument. Neither
Westinghouse nor any of its Material Subsidiaries is in default under or with
respect to any of its material contractual obligations in any respect which
would have a Material Adverse Effect.
SECTION 3.5. Corporate Action. Westinghouse has all necessary corporate
power and authority to execute, deliver and perform its obligations under this
Agreement; the execution,
<PAGE> 44
39
delivery and performance by Westinghouse of this Agreement have been duly
authorized by all necessary corporate action on its part; and this Agreement
has been duly and validly executed and delivered by Westinghouse and
constitutes a legal, valid and binding obligation of Westinghouse, enforceable
in accordance with its terms except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
similar laws of general applicability affecting the enforcement of creditors'
rights and (b) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 3.6. Approvals. No authorizations, approvals or consents of, and
no filings or registrations with, any Governmental Authority are necessary for
the execution, delivery or performance by Westinghouse of this Agreement or for
the validity or enforceability hereof.
SECTION 3.7. ERISA. Westinghouse and, to the best of its knowledge, its
ERISA Affiliates have fulfilled their respective obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and are in
compliance in all material respects with the currently applicable provisions of
ERISA and the Code except where any failure or non-compliance would not result
in a Material Adverse Effect.
SECTION 3.8. Taxes. As of the Closing Date, United States Federal income
tax returns of Westinghouse and its Material Subsidiaries have been examined
and closed through the fiscal year of Westinghouse ended December 31, 1989.
Westinghouse and its Material Subsidiaries have filed all United States Federal
income tax returns and all other material tax returns which are required to be
filed by them and have paid all taxes shown as due on such returns or pursuant
to any assessment received by Westinghouse or any of its Material Subsidiaries,
except those being contested and reserved against in accordance with Section
5.2.
SECTION 3.9. Investment Company Act. Westinghouse is not an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 3.10. Public Utility Holding Company Act. Westinghouse is not
subject to regulation as a "holding company", subject to regulation as an
"affiliate" of a "holding company", or subject to regulation as a "subsidiary
company" of a "holding company", under the Public Utility Holding Company Act
of 1935, as amended.
SECTION 3.11. Hazardous Materials. Westinghouse and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization has not resulted in a Material
Adverse Effect. Westinghouse and each of its Subsidiaries are in compliance
with the terms and conditions of all such permits, licenses and authorizations,
and are also in compliance with other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply
would not result in a Material Adverse Effect.
SECTION 3.12. Material Subsidiaries. Set forth in Schedule 3.12 is a
complete and correct list, as of the Closing Date, of all Material
Subsidiaries.
SECTION 3.13. No Material Misstatements. No written information, report,
financial statement, exhibit or schedule (the "Information") furnished by or on
behalf of Westinghouse to the
<PAGE> 45
40
Administrative Agent or any Lender in connection with the syndication of the
Commitments or the negotiation of this Agreement or included in this Agreement
or delivered pursuant hereto contained as of the time it was furnished any
material misstatement of fact or omitted as of such time to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading;
provided that the foregoing representation and warranty is made only to the
best of Westinghouse's knowledge in the case of Information relating to
Infinity and its Subsidiaries furnished prior to the Infinity Merger Date
(which knowledge, until the Infinity Merger Date, will be principally based
upon public disclosure by Infinity); and provided, further, that with respect
to Information consisting of statements, estimates and projections regarding
the future performance of Westinghouse, Infinity and their respective
Subsidiaries ("Projections"), no representation or warranty is made other than
that such Projections have been prepared in good faith utilizing due and
careful consideration and the best information available to Westinghouse at the
time of preparation thereof.
SECTION 3.14. Ownership of Property. Each of Westinghouse and each of its
Material Subsidiaries has good record and marketable title in fee simple to, or
a valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other Property, except to the extent that
the failure to have such title would not result in a Material Adverse Effect.
SECTION 3.15. Intellectual Property. Each of Westinghouse and each of
its Material Subsidiaries maintains, and is in compliance in all material
respects with, appropriate policies and procedures for establishing and
protecting their respective rights in Intellectual Property. Except as, in the
aggregate, would not result in a Material Adverse Effect, (a) each of
Westinghouse and each of its Material Subsidiaries owns, or is licensed to use,
all Intellectual Property necessary for the conduct of their respective
businesses; (b) no claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does Westinghouse know of
any valid basis for any such claim; and (c) to the best knowledge of
Westinghouse, the use of the Intellectual Property by Westinghouse and its
Material Subsidiaries does not infringe on the rights of any Person.
SECTION 3.16. FCC Matters. Except as, in the aggregate, would not result
in a Material Adverse Effect: (a) Westinghouse and each of its Material
Subsidiaries have all the FCC Licenses necessary for the conduct of their
respective businesses; (b) Westinghouse and each of its Material Subsidiaries
are in substantial compliance with the Communications Act and with the rules
and regulations thereunder; (c) neither Westinghouse nor any of its Material
Subsidiaries is a party to, or has any knowledge of, any pending investigation,
notice of violation, order or complaint issued with respect to it by or before
the FCC; and (d) Westinghouse and its Material Subsidiaries have no reason to
believe that any FCC License will not be renewed in the ordinary course of
business.
ARTICLE IV.
CONDITIONS OF EFFECTIVENESS AND LENDING
The obligations of the Lenders to make Loans and the obligations of the
Issuing Lenders to issue Letters of Credit hereunder are subject to the
satisfaction of the conditions set forth below.
<PAGE> 46
41
SECTION 4.1. Initial Credit Event. The obligation of each Lender to make
its initial Loan is subject to the satisfaction of the following conditions
(the date on which all of such conditions shall have been satisfied, the
"Closing Date"):
(a) Credit Agreement. The Administrative Agent shall have received this
Agreement, executed and delivered by a duly authorized officer of
Westinghouse.
(b) Closing Certificate. The Administrative Agent shall have received a
Closing Certificate, substantially in the form of Exhibit F, of Westinghouse,
with appropriate insertions and attachments.
(c) Existing Westinghouse Credit Agreement. The commitments under the
Existing Westinghouse Credit Agreement, and the Guarantee Agreement and Stock
Pledge Agreement referred to therein, shall have been permanently terminated
and all loans and other obligations under or in connection therewith shall
have been paid in full or shall be paid in full with the proceeds of the
initial Loans hereunder. Without affecting any terms of the Existing
Westinghouse Credit Agreement which expressly survive the termination
thereof, each Lender party to the Existing Westinghouse Credit Agreement
hereby waives any requirement of advance notice of such termination, or of
prepayment of the loans, contained in the Existing Westinghouse Credit
Agreement and hereby agrees that the Existing Westinghouse Credit Agreement
and the commitments thereunder shall terminate simultaneously with the making
of the Loans on the Closing Date.
(d) Financial Statements. The Administrative Agent shall have received,
with a copy for each Lender, each of the financial statements referred to in
Section 3.2(a).
(e) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions (with a copy for each Lender):
(i) the executed legal opinion of Louis J. Briskman, Senior Vice
President and General Counsel of Westinghouse, dated the Closing Date and
addressed to the Administrative Agent and the Lenders, substantially in the
form of Exhibit E-1;
(ii) the executed legal opinion of an Assistant General Counsel or
Associate General Counsel of Westinghouse licensed to practice law in the
State of New York, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, substantially in the form of Exhibit
E-2; and
(iii) the executed legal opinion of Simpson Thacher & Bartlett, counsel
to the Agents, dated the Closing Date and addressed to the Administrative
Agent and the Lenders, substantially in the form of Exhibit E-3.
SECTION 4.2. All Credit Events. The obligation of each Lender to make each
Loan, and the obligation of each Issuing Lender to issue each Letter of Credit,
are subject to the satisfaction of the following conditions.
(a) The Administrative Agent shall have received a request for, or notice
of, such Credit Event if and as required by Section 2.3, 2.4, 2.6 or 2.7, as
applicable.
<PAGE> 47
42
(b) Each of the representations and warranties made by Westinghouse in
Article III, or in any certificate delivered pursuant hereto, shall be true
and correct in all material respects on and as of the date of such Credit
Event with the same effect as though made on and as of such date, except to
the extent such representations and warranties expressly relate to an earlier
date in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date.
(c) At the time of and immediately after giving effect to such Credit Event
no Default or Event of Default shall have occurred and be continuing.
(d) After giving effect to such Credit Event, (i) the Outstanding Revolving
Extensions of Credit of each Lender shall not exceed such Lender's Utilizable
Commitment then in effect and (ii) the Total Facility Exposure shall not
exceed the Total Utilizable Commitment then in effect.
Each Credit Event shall be deemed to constitute a representation and warranty
by Westinghouse on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 4.2.
ARTICLE V.
COVENANTS
Westinghouse covenants and agrees with each Lender that, as long as the
Commitments shall be in effect or the principal of or interest on any Loan
shall be unpaid, or there shall be any Aggregate LC Exposure, unless the
Required Lenders shall otherwise consent in writing:
SECTION 5.1. Financial Statements. Westinghouse shall deliver to each of
the Lenders:
(a) within 55 days after the end of each of the first three quarterly
fiscal periods of each fiscal year of Westinghouse, consolidated statements
of income and cash flows of Westinghouse and its Consolidated Subsidiaries
for such period and for the period from the beginning of the respective
fiscal year to the end of such period, and the related consolidated balance
sheet as at the end of such period, setting forth in each case in comparative
form the corresponding consolidated figures for the corresponding period in
the preceding fiscal year, accompanied by a certificate of a Financial
Officer of Westinghouse which certificate shall state that such financial
statements fairly present the consolidated financial condition and results of
operations of Westinghouse and its Consolidated Subsidiaries in accordance
with GAAP as at the end of, and for, such period, subject to normal year-end
audit adjustments (provided that the requirement herein for the furnishing of
such quarterly financial statements may be fulfilled by providing to the
Lenders the report of Westinghouse to the SEC on Form 10-Q for the applicable
quarterly period, accompanied by the officer's certificate described in the
last sentence of this Section 5.1);
(b) within 105 days after the end of each fiscal year of Westinghouse,
consolidated statements of income and cash flows of Westinghouse and its
Consolidated Subsidiaries for such year and the related consolidated balance
sheet as at the end of such year, setting forth in comparative form the
corresponding consolidated figures for the preceding fiscal year, and
accompanied by an opinion thereon (unqualified as to the scope of the audit)
of independent certified public accountants of recognized national standing,
which opinion shall state that such
<PAGE> 48
43
consolidated financial statements fairly present the consolidated financial
condition and results of operations of Westinghouse and its Consolidated
Subsidiaries as at the end of, and for, such fiscal year (provided that the
requirement herein for the furnishing of annual financial statements may be
fulfilled by providing to the Lenders the report of Westinghouse to the SEC
on Form 10-K for the applicable fiscal year);
(c) promptly upon their becoming publicly available, copies of all
registration statements and regular periodic reports (including without
limitation any and all reports on Form 8-K), if any, which Westinghouse or
any of its Subsidiaries shall have filed with the SEC or any national
securities exchange;
(d) promptly upon the mailing thereof to the shareholders of Westinghouse
generally, copies of all financial statements, reports and proxy statements
so mailed;
(e) within 30 days after a Responsible Officer of Westinghouse knows or has
reason to believe that any of the events or conditions specified below with
respect to any Plan or Multiemployer Plan have occurred or exist which would
reasonably be expected to result in a Material Adverse Effect, a statement
signed by a senior financial officer of Westinghouse setting forth details
respecting such event or condition and the action, if any, which Westinghouse
or its ERISA Affiliate proposes to take with respect thereto (and a copy of
any report or notice required to be filed with or given to PBGC by
Westinghouse or an ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA and the
regulations issued thereunder, with respect to a Plan, as to which PBGC has
not by regulation waived the requirement of Section 4043(a) of ERISA that it
be notified within 30 days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA shall be a reportable event regardless of the issuance
of any waiver in accordance with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by Westinghouse or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by PBGC with respect to
such Multiemployer Plan;
(iv) the complete or partial withdrawal by Westinghouse or any ERISA
Affiliate under Section 4201 or 4204 of ERISA from a Multiemployer Plan, or
the receipt by Westinghouse or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any Multiemployer
Plan against Westinghouse or any ERISA Affiliate to enforce Section 515 of
ERISA, which proceeding is not dismissed within 30 days; and
<PAGE> 49
44
(vi) a failure to make a required installment or other payment with
respect to a Plan (within the meaning of Section 412(n) of the Code), in
which case the notice required hereunder shall be provided within 10 days
after the due date for filing notice of such failure with the PBGC;
(f) promptly after a Responsible Officer of Westinghouse knows or has
reason to believe that any Default or Event of Default has occurred, a notice
of such Default or Event of Default describing it in reasonable detail and,
together with such notice or as soon thereafter as possible, a description of
the action that Westinghouse has taken and proposes to take with respect
thereto;
(g) promptly after a Responsible Officer of Westinghouse knows that any
change has occurred in Westinghouse's Debt Rating by either Rating Agency, a
notice describing such change; and
(h) promptly from time to time such other information regarding the
financial condition, operations or business of Westinghouse or any of its
Subsidiaries (including, without limitation, any Plan or Multiemployer Plan
and any reports or other information required to be filed under ERISA) as any
Lender through the Administrative Agent may reasonably request.
Westinghouse will furnish to the Administrative Agent and each Lender, at the
time it furnishes each set of financial statements pursuant to paragraph (a) or
(b) above, a certificate (which may be a copy in the case of each Lender) of a
Financial Officer of Westinghouse (a "Compliance Certificate") (i) to the
effect that no Default or Event of Default has occurred and is continuing (or,
if any Default or Event of Default has occurred and is continuing, describing
it in reasonable detail and describing the action that Westinghouse has taken
and proposes to take with respect thereto), and (ii) setting forth in
reasonable detail the computations (including any pro forma calculations as
described in Section 1.2(c)) necessary to determine whether Westinghouse is in
compliance with the Financial Covenants as of the end of the respective
quarterly fiscal period or fiscal year.
SECTION 5.2. Corporate Existence, Etc. Westinghouse will, and will cause
each of its Material Subsidiaries to, preserve and maintain its legal existence
and all of its material rights, privileges and franchises (provided that (a)
nothing in this Section 5.2 shall prohibit any transaction expressly permitted
under Section 5.4 and (b) Westinghouse or such Material Subsidiary shall not be
required to preserve or maintain any such right, privilege or franchise if the
Board of Directors of Westinghouse or such Material Subsidiary, as the case may
be, shall determine that the preservation or maintenance thereof is no longer
desirable in the conduct of the business of Westinghouse or such Material
Subsidiary, as the case may be); comply with the requirements of all applicable
laws, rules, regulations and orders of Governmental Authorities (including,
without limitation, all Environmental Laws) and with all contractual
obligations if failure to comply with such requirements or obligations would
reasonably be expected to result in a Material Adverse Effect; pay and
discharge all material taxes, assessments, governmental charges, levies or
other obligations of whatever nature imposed on it or on its income or profits
or on any of its Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge, levy or other obligation the
payment of which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained; maintain all its Property
used or useful in its business in good working order and condition, ordinary
wear and tear excepted, all as in the judgment of Westinghouse or such Material
Subsidiary may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times (provided
that Westinghouse or such Material Subsidiary shall not be required to maintain
any such Property if the failure to maintain any such Property is, in
<PAGE> 50
45
the judgment of Westinghouse or such Material Subsidiary, desirable in the
conduct of the business of Westinghouse or such Material Subsidiary); keep
proper books of records and accounts in which entries that are full, true and
correct in all material respects shall be made in conformity with GAAP; and
permit representatives of any Lender, during normal business hours upon
reasonable advance notice, to inspect any of its books and records and to
discuss its business and affairs with its Financial Officers or their
designees, all to the extent reasonably requested by such Lender.
SECTION 5.3. Insurance. Westinghouse will, and will cause each of its
Material Subsidiaries to, keep insured by financially sound and reputable
insurers all Property of a character usually insured by corporations engaged in
the same or similar business and similarly situated against loss or damage of
the kinds and in the amounts consistent with prudent business practice and
carry such other insurance as is consistent with prudent business practice (it
being understood that self-insurance shall be permitted to the extent
consistent with prudent business practice).
SECTION 5.4. Prohibition of Fundamental Changes. Westinghouse will not,
and will not permit any of its Material Subsidiaries to (i) enter into any
transaction of merger, consolidation, liquidation or dissolution or (ii)
Dispose of, in one transaction or a series of related transactions, all or a
substantial part (determined by reference to Westinghouse and its Subsidiaries
taken as a whole) of its business or Property, whether now owned or hereafter
acquired (excluding (x) financings by way of sales of receivables or inventory,
(y) inventory or other Property Disposed of in the ordinary course of business
and (z) obsolete or worn-out Property, tools or equipments no longer used or
useful in its business). Notwithstanding the foregoing provisions of this
Section 5.4:
(a) any Subsidiary of Westinghouse may be merged or consolidated with or
into: (i) Westinghouse if Westinghouse shall be the continuing or surviving
corporation or (ii) any other such Subsidiary; provided that if any such
transaction shall be between a Subsidiary and a Wholly Owned Subsidiary, such
Wholly Owned Subsidiary shall be the continuing or surviving corporation;
(b) any Subsidiary of Westinghouse may distribute, dividend or Dispose of
any of or all its Property (upon voluntary liquidation or otherwise) to
Westinghouse or a Wholly Owned Subsidiary of Westinghouse;
(c) Westinghouse may merge or consolidate with or into any other Person if
(i) either (x) Westinghouse is the continuing or surviving corporation or (y)
the corporation formed by such consolidation or into which Westinghouse is
merged shall be a corporation organized under the laws of the United States
of America, any State thereof or the District of Columbia and shall expressly
assume the obligations of Westinghouse hereunder pursuant to a written
agreement and shall have delivered to the Administrative Agent such agreement
and a certificate of a Responsible Officer and an opinion of counsel to the
effect that such merger or consolidation complies with this Section 5.4(c),
and (ii) after giving effect thereto and to any repayment of Loans to be made
upon consummation thereof (it being expressly understood that no repayment of
Loans is required solely by virtue thereof), no Default or Event of Default
shall have occurred and be continuing;
(d) any Subsidiary of Westinghouse may merge or consolidate with or into
any other Person if, after giving effect thereto and to any repayment of
Loans to be made upon the consummation thereof (it being expressly understood
that no repayment of Loans is required solely by virtue thereof), no Default
or Event of Default shall have occurred and be continuing; and
<PAGE> 51
46
(e) Westinghouse or any Subsidiary of Westinghouse may Dispose of its
Property if, after giving effect thereto and to any repayment of Loans to be
made upon the consummation thereof (it being expressly understood that no
repayment of Loans is required solely by virtue thereof), no Default or Event
of Default shall have occurred and be continuing.
SECTION 5.5. Limitation on Liens. Westinghouse will not, and will not
permit any of its Material Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its Property, or enter into any Sale/Leaseback with
respect to any such Property, whether now owned or hereafter acquired; provided
that the foregoing restrictions shall not apply to:
(a) Liens imposed by any Governmental Authority for taxes, assessments or
charges not yet due and payable or which are being contested in good faith
and by appropriate proceedings if adequate reserves with respect thereto are
maintained;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
architects' or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or which are being
contested in good faith and by appropriate proceedings;
(c) Liens securing judgments or to perfect an appeal of any order or decree
but only to the extent, for an amount and for a period not resulting in an
Event of Default under paragraph (h) of Article VI;
(d) pledges or deposits under worker's compensation, unemployment insurance
and other social security legislation;
(e) pledges or deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations to secure
surety, appeal or performance bonds and contractual and other obligations of
a like nature incurred in the ordinary course of business and not involving
the borrowing of money;
(f) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business and encumbrances consisting of
zoning restrictions, easements, licenses, restrictions on the use of Property
or minor imperfections in title thereto and Liens under leases and subleases
which, in the aggregate, are not material in amount, and which do not
interfere in any material respects with the ordinary conduct of the business
of Westinghouse and its Subsidiaries taken as a whole;
(g) Liens on Property of any Subsidiary of Westinghouse or of any Person
which is or was merged with or into Westinghouse or any Subsidiary thereof,
provided that such Liens are or were in existence at the time such Person
becomes or became a Subsidiary of Westinghouse or such Person merged with or
into Westinghouse or any Subsidiary thereof, as the case may be, were not
created in anticipation thereof other than to finance the purchase thereof
and are not spread to cover any Property other than the Property covered at
the time of the relevant transaction;
(h) Liens upon real and/or personal property acquired (by purchase,
construction, foreclosure, deed in lieu of foreclosure or otherwise) by
Westinghouse or any of its Subsidiaries, each of which Liens either (A)
existed on such Property before the time of its acquisition and was not
created in anticipation thereof or (B) was created solely for the purpose of
securing Indebtedness representing, or incurred to finance, refinance or
refund, all
<PAGE> 52
47
or a part of the cost (including the cost of construction) of such Property
or improvements thereon; provided that no such Lien shall extend to or cover
any Property of Westinghouse or such Subsidiary other than the respective
Property so acquired and improvements thereon;
(i) mortgages on Property securing indebtedness in favor of the United
States of America or any state thereof or any department, agency or
instrumentality or political subdivision of the United States of America or
any state thereof, incurred for the purpose of financing all or any part of
the purchase price or the cost of construction of the Property subject to
such mortgages (including without limitation such debt secured by such
mortgages in connection with pollution control, industrial revenue or similar
financings) or incurred to secure progress, advance or other payments
pursuant to any contract or provision of any statute;
(j) Liens securing Indebtedness owed to Westinghouse or to any Wholly Owned
Subsidiary of Westinghouse;
(k) Liens (i) upon the receivables and inventory of Westinghouse or any of
its Subsidiaries to secure Indebtedness resulting from financings of such
receivables and inventory in an aggregate amount not greater than
$800,000,000 less the aggregate amount of Indebtedness that is secured
pursuant to clause (ii) below, provided that the terms of such Indebtedness
do not provide for any recourse to Westinghouse or any Material Subsidiary
(except to the extent of breaches of representations and warranties of
Westinghouse or any of its Subsidiaries in connection with such financings
and other recourse customary in connection with "off-balance sheet"
financings) and (ii) upon the Property of Westinghouse to secure Indebtedness
of Westinghouse in an aggregate amount not greater than $250,000,000;
(l) Sale/Leasebacks consummated prior to the Closing Date;
(m) any Sale/Leaseback of CBS's headquarters building located at 51 West
52nd Street in New York City;
(n) any Sale/Leaseback of assets of CBS owned on the Closing Date and
listed on Schedule 5.5(n);
(o) additional Liens upon real and/or personal property, and additional
Sale/Leasebacks, provided that the sum of (i) the aggregate principal amount
of the obligations secured by such Liens (other than Indebtedness as defined
in clause (f) of the definition thereof which has not been assumed by
Westinghouse or any of its Subsidiaries and where the Lien relates to
Property acquired by Westinghouse or any of its Subsidiaries in satisfaction,
in whole or in part, of indebtedness to Westinghouse or any of its
Subsidiaries, in the ordinary course of business (any such Indebtedness,
"Specified Section 5.5(o) Indebtedness")) and (ii) the aggregate
Sale/Leaseback Attributable Debt with respect to such Sale/Leasebacks shall
not exceed $250,000,000 at any one time outstanding;
(p) any extension, renewal or replacement of the foregoing; provided,
however, that, except to the extent otherwise permitted by this Section 5.5
(including Section 5.5(o)), the Liens permitted under this paragraph shall
not be spread to cover any additional Indebtedness or Property (other than a
substitution of like Property or improvements on such Property or other
Property of equivalent value); and
<PAGE> 53
48
(q) Liens upon real and/or personal property owned at the date hereof by WCI
or LW Real Estate Investments, L.P.
SECTION 5.6. Limitation on Subsidiary Indebtedness; Termination of Existing
Infinity Credit Agreement. (a) Westinghouse will not permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Indebtedness
(which includes, for the purposes of this Section 5.6(a), any preferred stock),
except (i) Indebtedness of CBS outstanding on the Closing Date and in the
approximate amounts set forth on Schedule 5.6 (but not any refinancing,
refunding or other replacement thereof), (ii) Excluded Indebtedness, (iii)
Leveraged Spin-Off Indebtedness and (iv) other Indebtedness in an aggregate
principal amount not to exceed $300,000,000 at any one time outstanding.
(b) On the Infinity Merger Date, Westinghouse shall cause to be permanently
terminated the commitments under the Existing Infinity Credit Agreement and
shall cause to be repaid all Indebtedness outstanding thereunder or under the
Loan Documents referred to therein. Without affecting any terms of the
Existing Infinity Credit Agreement which expressly survive the termination
thereof, each Lender party to the Existing Infinity Credit Agreement hereby
waives any requirement of advance notice of such termination, or of prepayment
of the loans, contained in the Existing Infinity Credit Agreement and hereby
agrees that the Existing Infinity Credit Agreement and the commitments
thereunder shall automatically terminate on the Infinity Merger Date.
SECTION 5.7. Consolidated Leverage Ratio, etc. (a) Westinghouse will not
permit the Consolidated Leverage Ratio at the end of any period of four
consecutive fiscal quarters ending during any period set forth below to be
greater than the ratio set forth below opposite such period:
Period Ratio
------ -----
12/31/96 - 9/30/97 6.00 to 1
12/31/97 - 3/31/98 5.00 to 1
6/30/98 - 9/30/98 4.25 to 1
12/31/98 - 9/30/99 3.50 to 1
12/31/99 and thereafter 3.00 to 1
; provided, that the ratio set forth above applicable to the Test Periods
ending June 30, 1997 and September 30, 1997, as the case may be, shall be
reduced from 6.00 to 1 to 5.75 to 1 in the event that the Infinity Merger Date
shall have occurred on or prior to the last day of the Pro Forma Period
relating to the Compliance Certificate delivered in respect of the fiscal
quarter ending on such date.
(b) Westinghouse will not permit Consolidated Total Funded Indebtedness to
exceed $5,750,000,000 as at September 30, 1996.
<PAGE> 54
49
SECTION 5.8. Consolidated Coverage Ratio. Westinghouse will not permit the
Consolidated Coverage Ratio for any period of four consecutive fiscal quarters
ending during any period set forth below to be less than the ratio set forth
below opposite such period:
Period Ratio
------ -----
9/30/96 - 3/31/97 1.75 to 1
6/30/97 - 9/30/97 2.00 to 1
12/31/97 - 9/30/98 2.50 to 1
12/31/98 and thereafter 3.00 to 1
; provided, that the ratio set forth above applicable to the Test Periods
ending December 31, 1996 and March 31, 1997, as the case may be, shall be
increased from 1.75 to 1 to 2.00 to 1 in the event that the Infinity Merger
Date shall have occurred on or prior to the last day of the Pro Forma Period
relating to the Compliance Certificate delivered in respect of the fiscal year
or fiscal quarter ending on such date.
SECTION 5.9. Minimum Consolidated Net Worth. Westinghouse will not permit
Consolidated Net Worth on the last day of any fiscal quarter ending after the
Closing Date to be less than the sum of (a) 75% of Consolidated Net Worth on
June 30, 1996 (the "Net Worth Commencement Date"), (b) 50% of cumulative
Consolidated Net Income for each fiscal quarter of Westinghouse occurring after
the Net Worth Commencement Date for which Consolidated Net Income is positive
and (c) 100% of the amount by which total shareholders' equity of Westinghouse
and its Consolidated Subsidiaries increases as a result of the Infinity Merger,
including, without limitation, as a result of the issuance of Capital Stock of
Westinghouse in connection with the Infinity Merger or as a result of pooling
of interests accounting for the Infinity Merger; provided that, in the case of
warrants, options and similar deferred issuances of common stock, the increase
pursuant to this clause (c) attributable thereto shall not occur until common
stock is issued in connection with the exercise thereof.
SECTION 5.10. Use of Proceeds. Westinghouse will use the proceeds of the
Loans and will use the Letters of Credit hereunder solely to refinance the
indebtedness of Westinghouse under the Existing Credit Agreement, to pay fees
and expenses relating to the Infinity Merger, to refinance certain indebtedness
of Infinity and for general corporate purposes (in each case in compliance with
all applicable legal and regulatory requirements, including, without
limitation, Regulations G and U and the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, and the regulations
thereunder), provided that neither any Agent nor any Lender shall have any
responsibility as to the use of any of such proceeds.
SECTION 5.11. Transactions with Affiliates. Westinghouse will not, and
will not permit any of its Material Subsidiaries to, directly or indirectly
enter into any material transaction with any Affiliate of Westinghouse except
on terms at least as favorable to Westinghouse or such Subsidiary as it could
obtain on an arm's-length basis.
SECTION 5.12. Limitation on Negative Pledge Clauses. Westinghouse will
not, and will not permit any of its Material Subsidiaries to, enter into any
contractual obligation (a "Lien Restriction") in connection with the incurrence
of Indebtedness for Borrowed Money which, with respect to any material asset of
Westinghouse or any of its Material Subsidiaries, would prohibit Westinghouse
or such Material Subsidiary from granting a Lien on such asset as collateral
security for the obligations of Westinghouse hereunder or, as applicable, a
Guarantee of such obligations by such Material Subsidiary (collectively,
"Credit Obligations"), except (a) Lien Restrictions with respect to
<PAGE> 55
50
any asset encumbered by a Lien permitted by Section 5.5, (b) Lien Restrictions
with respect to any asset (or any proceeds thereof) which are comparable to
Lien Restrictions affecting such asset on the Closing Date, (c) Lien
Restrictions included in the documentation governing the terms of any
Indebtedness of any Person which is acquired by Westinghouse or any of its
Material Subsidiaries after the Closing Date, which Indebtedness was
outstanding prior to the date of acquisition of such Person and was not created
in anticipation thereof and (d) Lien Restrictions in connection with
securitizations or other transactions involving sales of receivables affecting
only such receivables. It is understood that an "equal and ratable" clause
shall not be deemed to constitute a Lien Restriction so long as such clause
would permit the obligations entitled to the benefit of such clause and the
applicable Credit Obligations to be secured by Liens on the relevant assets on
a pari passu basis.
ARTICLE VI.
EVENTS OF DEFAULT.
In case of the happening of any of the following events ("Events of
Default"):
(a) (i) Westinghouse shall default in the payment when due of any principal
of any Loan or (ii) Westinghouse shall default in the payment when due of any
interest on any Loan, any reimbursement obligation in respect of any LC
Disbursement, any Fee or any other amount payable by it hereunder and, in the
case of this clause (ii), such default shall continue unremedied for a period
of five Business Days;
(b) any representation, warranty or certification made or deemed made
herein (or in any modification or supplement hereto) by Westinghouse, or any
certificate furnished to any Lender or the Administrative Agent pursuant to
the provisions hereof, shall prove to have been false or misleading in any
material respect as of the time made, deemed made or furnished;
(c) (i) Westinghouse shall default in the performance of any of its
obligations under Section 5.1(f), Section 5.4, Section 5.5, Sections 5.7
through 5.10 (inclusive) or Section 5.12 or (ii) Westinghouse shall default
in the performance of any of its other obligations under this Agreement and,
in the case of this clause (ii), such default shall continue unremedied for a
period of 15 days after notice thereof to Westinghouse by the Administrative
Agent or the Required Lenders (through the Administrative Agent);
(d) Westinghouse or any of its Subsidiaries shall (i) fail to pay at
maturity any Indebtedness (other than Indebtedness as defined in subsection
(f) of the definition thereof which has not been assumed by Westinghouse or
any of its Subsidiaries and where the Lien relates to Property acquired by
Westinghouse or any of its Subsidiaries in satisfaction, in whole or in part,
of indebtedness to Westinghouse or any of its Subsidiaries, in the ordinary
course of business of WFSI, any of its Subsidiaries, Financial Services or
WCI) in an aggregate amount in excess of $100,000,000, or (ii) fail to make
any payment (whether of principal, interest or otherwise), regardless of
amount, due in respect of, or fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or instrument
evidencing or governing, any such Indebtedness in excess of $100,000,000 if
the effect of any failure referred to in this clause (ii) (x) is to cause, or
to permit the holder or holders of such Indebtedness or a trustee on its or
their behalf to cause, such Indebtedness to become due prior to its stated
maturity or (y) has caused such Indebtedness to become due prior to its
stated maturity (it being agreed that for purposes of this paragraph (d) only
(other than subclause (ii)(x) of this paragraph (d)), the term "Indebtedness"
shall include obligations
<PAGE> 56
51
under any interest rate protection agreement, foreign currency exchange
agreement or other interest or exchange rate hedging agreement and that the
amount of any Person's obligations under any such agreement shall be the net
amount that such Person could be required to pay as a result of a termination
thereof by reason of a default thereunder);
(e) Westinghouse or any of its Material Subsidiaries shall admit in writing
its inability, or be generally unable, to pay its debts as such debts become
due;
(f) Westinghouse or any of its Material Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
trustee or liquidator of itself or of all or a substantial part of its
Property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Bankruptcy Code (as now or
hereafter in effect), (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it
in an involuntary case under the Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing;
(g) a proceeding or a case shall be commenced, without the application or
consent of Westinghouse or any of its Material Subsidiaries, in any court of
competent jurisdiction, seeking (i) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of Westinghouse or such Material Subsidiary or of all or any substantial
part of its assets or (iii) similar relief in respect of Westinghouse or such
Material Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or more days; or an order
for relief against Westinghouse or such Material Subsidiary shall be entered
in an involuntary case under the Bankruptcy Code;
(h) a final judgment or judgments for the payment of money in excess of
$100,000,000 in the aggregate shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against
Westinghouse and/or any of its Material Subsidiaries and the same shall not
be paid or discharged (or provision shall not be made for such discharge), or
a stay of execution thereof shall not be procured, within 60 days from the
date of the date of entry thereof and Westinghouse or the relevant Material
Subsidiary shall not, within said period of 60 days, or such longer period
during which execution of the same shall have been stayed, appeal therefrom
and cause the execution thereof to be stayed during such appeal;
(i) an event or condition specified in Section 5.1(e) shall occur or exist
with respect to any Plan or Multiemployer Plan and, as a result of such event
or condition, together with all other such events or conditions, Westinghouse
or any ERISA Affiliate shall incur or in the good faith opinion of the
Required Lenders shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the foregoing) which would
constitute, in the good faith determination of the Required Lenders, a
Material Adverse Effect; or
(j) a Change of Control shall have occurred or, with respect to any period
of 25 consecutive calendar months (whether commencing before or after the
date of this Agreement), individuals who were directors of Westinghouse on
the first day of such period or who were
<PAGE> 57
52
nominated by such directors (or by directors in a direct chain of directors
so nominated) shall no longer occupy a majority of the seats (other than
vacant seats) on the Board of Directors of Westinghouse (excluding by reason
of the death or retirement of any director);
then and in every such event (other than an event with respect to Westinghouse
described in paragraph (f) or (g) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to Westinghouse, take any or all of the
following actions, at the same or different times: (I) terminate forthwith the
Commitments, (II) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared
to be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of Westinghouse accrued hereunder, shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by
Westinghouse, anything contained herein to the contrary notwithstanding, and
(III) require that Westinghouse deposit cash with the Administrative Agent, in
an amount equal to the Aggregate LC Exposure, as collateral security for the
repayment of any future LC Disbursements; and in any event with respect to
Westinghouse described in paragraph (f) or (g) above, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of Westinghouse accrued hereunder, shall automatically become
due and payable and Westinghouse shall be required to deposit cash with the
Administrative Agent, in an amount equal to the Aggregate LC Exposure, as
collateral security for the repayment of any future drawings under the Letters
of Credit, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by Westinghouse, anything
contained herein to the contrary notwithstanding.
ARTICLE VII.
THE AGENTS
In order to expedite the transactions contemplated by this Agreement, each
Agent is hereby appointed to act as Agent on behalf of the Lenders. Each of
the Lenders and the Issuing Lenders hereby irrevocably authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are specifically delegated to the Administrative Agent by the terms
and provisions hereof, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized by
the Lenders and the Issuing Lenders, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders all payments of principal of
and interest on the Loans and the LC Disbursements and all other amounts due to
the Lenders and Issuing Lenders hereunder, and promptly to distribute to each
Lender and Issuing Lender its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to Westinghouse of any Event of
Default specified in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender and Issuing Lender copies of all notices, financial
statements and other materials delivered by Westinghouse pursuant to this
Agreement as received by the Administrative Agent.
Neither any Agent nor any of its directors, officers, employees or agents
shall be liable as such for any action taken or omitted by any of them except
for its or his own gross negligence or wilful misconduct, or be responsible for
any statement, warranty or representation herein or the contents of any
document delivered in connection herewith, or be required to ascertain or to
make any inquiry concerning the performance or observance by Westinghouse of
any of the terms, conditions, covenants or agreements contained in this
Agreement. The Agents shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement
<PAGE> 58
53
or other instruments or agreements. The Administrative Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders (or, when expressly
required hereby, all the Lenders) and, except as otherwise specifically
provided herein, such instructions and any action or inaction pursuant thereto
shall be binding on all the Lenders and the Issuing Lenders. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper Person or
Persons. Neither the Agents nor any of their directors, officers, employees or
agents shall have any responsibility to Westinghouse on account of the failure
of or delay in performance or breach by any Lender or Issuing Lender of any of
its obligations hereunder or to any Lender or Issuing Lender on account of the
failure of or delay in performance or breach by any other Agent, any other
Lender or Issuing Lender or Westinghouse of any of their respective obligations
hereunder or in connection herewith. The Administrative Agent may execute any
and all duties hereunder by or through agents or employees and shall be
entitled to rely upon the advice of legal counsel selected by it with respect
to all matters arising hereunder and shall not be liable for any action taken
or suffered in good faith by it in accordance with the advice of such counsel.
The Lenders and the Issuing Lenders hereby acknowledge that the
Administrative Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this Agreement unless
it shall be requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Lenders and Westinghouse. Upon any such
resignation, the Required Lenders shall have the right to appoint from the
Lenders a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint from the
Lenders a successor Administrative Agent which shall be a bank with an office
in New York, New York, having a combined capital and surplus of at least
$500,000,000 or an affiliate of any such bank, which successor shall be
acceptable to Westinghouse (such acceptance not to be unreasonably withheld).
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's resignation hereunder,
the provisions of this Article and Section 8.5 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
With respect to the Loans made by them and their LC Exposure hereunder, the
Agents in their individual capacity and not as Agents shall have the same
rights and powers as any other Lender and may exercise the same as though they
were not Agents, and the Agents and their affiliates may accept deposits from,
lend money to and generally engage in any kind of business with Westinghouse or
any of its Subsidiaries or any Affiliate thereof as if they were not Agents.
Each Lender and Issuing Lender agrees (i) to reimburse the Administrative
Agent in the amount of its pro rata share (based on its Total Facility
Percentage or, after the date on which the Loans shall have been paid in full,
based on its Total Facility Percentage immediately prior to such date) of any
reasonable, out-of-pocket expenses incurred for the benefit of the Lenders or
the Issuing Lenders by the Administrative Agent, including reasonable counsel
fees and compensation of agents and employees paid for services rendered on
behalf of the Lenders or the Issuing Lenders, which shall
<PAGE> 59
54
not have been reimbursed by or on behalf of Westinghouse and (ii) to indemnify
and hold harmless the Administrative Agent and any of its directors, officers,
employees or agents, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against it in its
capacity as Administrative Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by it under this Agreement, to the
extent the same shall not have been reimbursed by or on behalf of Westinghouse,
provided that no Lender or Issuing Lender shall be liable to the Administrative
Agent or any such director, officer, employee or agent for any portion of such
liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or wilful misconduct of the Administrative Agent or any of its
directors, officers, employees or agents.
Each Lender and Issuing Lender acknowledges that it has, independently and
without reliance upon the Agents or any other Lender or Issuing Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
Issuing Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender or Issuing Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any related agreement or any document furnished
hereunder or thereunder.
Neither the Documentation Agent nor either Syndication Agent shall have any
duties or responsibilities hereunder in its capacity as such.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Notices. Notices and other communications provided for herein
shall be in writing (or, where permitted to be made by telephone, shall be
confirmed promptly in writing) and shall be delivered by hand or overnight
courier service, mailed or sent by telecopier as follows:
(a) if to Westinghouse, to it at Westinghouse Building, 11 Stanwix Street,
Pittsburgh, Pennsylvania 15222, Attention of Vice President and Treasurer
(Telecopy No. (412) 642-4797), with a copy to General Counsel (Telecopy No.
(412) 642-5224);
(b) if to the Administrative Agent, to it at 60 Wall Street, New York, New
York 10260, Attention of Laura Reim (Telecopy No. (212) 648- 5336);
(c) if to any Issuing Lender, to it at the address for notices specified in
the applicable Issuing Lender Agreement; and
(d) if to a Lender, to it at its address (or telecopy number) set forth in
Schedule 1.1 or in the Assignment and Acceptance pursuant to which such
Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service, sent by
telecopy or, if permitted by the terms hereof and if promptly
<PAGE> 60
55
confirmed in writing, by telephone, or on the date five Business Days after
dispatch by registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 8.1 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 8.1.
SECTION 8.2. Survival of Agreement. All representations and warranties
made hereunder and in any certificate delivered pursuant hereto or in
connection herewith shall be considered to have been relied upon by the Agents
and the Lenders and shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder,
regardless of any investigation made by the Agents or the Lenders or on their
behalf.
SECTION 8.3. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of Westinghouse, each Agent and each Lender and their
respective successors and assigns, except that Westinghouse shall not have the
right to assign its rights or obligations hereunder or any interest herein
without the prior consent of all the Lenders.
SECTION 8.4. Successors and Assigns. (a) Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party, and all covenants, promises and
agreements by or on behalf of Westinghouse, either Agent or any Lender that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment or Swingline Commitment and the Loans at the time
owing to it); provided, however, that (i) except in the case of an assignment
to a Lender or an affiliate of such Lender (other than if at the time of such
assignment, such Lender or affiliate would be entitled to require Westinghouse
to pay greater amounts under Section 2.20(a) than if no such assignment had
occurred, in which case such assignment shall be subject to the consent
requirement of this clause (i)), Westinghouse and the Administrative Agent must
give their prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) (x) except in the case of assignments of
Competitive Loans or assignments to any Person that is a Lender prior to giving
effect to such assignment, the amount of the aggregate Commitments and/or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $25,000,000 and (y) the
amount of the aggregate Commitments and/or Loans retained by any assigning
Lender (determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent) shall not be less
than $25,000,000, unless (in the case of clause (x) or (y) above) the assigning
Lender's Commitment and Loans (other than any Competitive Loans) are being
reduced to $0 pursuant to such assignment, (iii) the assignor and assignee
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500 and (iv)
the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire. Upon acceptance and recording pursuant
to Section 8.4(e), from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five Business
Days after the execution thereof (or any lesser period to which the
Administrative Agent and Westinghouse may agree), (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement and (B) the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto (but shall continue
<PAGE> 61
56
to be entitled to the benefits of Sections 2.15, 2.16, 2.20 and 8.5, as well as
to any Fees accrued for its account hereunder and not yet paid)).
Notwithstanding the foregoing, any Lender or Issuing Lender assigning its
rights and obligations under this Agreement may maintain any Competitive Loans
or Letters of Credit made or issued by it outstanding at such time, and in such
case shall retain its rights hereunder in respect of any Loans or Letters of
Credit so maintained until such Loans or Letters of Credit have been repaid or
terminated in accordance with this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, (ii)
except as set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other instrument or document furnished pursuant hereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto or the financial condition of Westinghouse or any of its Subsidiaries or
the performance or observance by Westinghouse or any of its Subsidiaries of any
of its obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to Sections
3.2 and 5.1 and such other documents and information as it has deemed
appropriate to make it own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Agent or Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as agent of
Westinghouse, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall
be conclusive in the absence of manifest error and Westinghouse, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by Westinghouse and any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of Westinghouse and the
Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to Westinghouse.
<PAGE> 62
57
(f) Each Lender may without the consent of Westinghouse or the Agents sell
participations to one or more banks or other financial institutions in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it); provided, however, that
(i) such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (ii) the participating banks or other entities
shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.15, 2.16 and 2.20 to the same extent as if they were Lenders
(provided that additional amounts payable to any Lender pursuant to Section
2.20 shall be determined as if such Lender had not sold any such
participations) and (iv) Westinghouse, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of Westinghouse relating to
the Loans and the Letters of Credit and to approve any amendment, modification
or waiver of any provision of this Agreement (other than amendments,
modifications or waivers decreasing any fees payable hereunder or the amount of
principal of or the rate at which interest is payable on the Loans or LC
Disbursements, extending any scheduled principal payment date or date fixed for
the payment of interest on the Loans or LC Disbursements or of LC Fees or
Commitment Fees or increasing the amount of or extending the Commitments, in
each case to the extent the relevant participant is directly affected thereby).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.4, disclose to the assignee or participant or proposed assignee or
participant any information relating to Westinghouse furnished to such Lender
by or on behalf of Westinghouse; provided that, prior to any such disclosure of
information designated by Westinghouse as confidential, each such assignee or
participant or proposed assignee or participant shall execute a Confidentiality
Agreement whereby such assignee or participant shall agree (subject to the
exceptions set forth therein) to preserve the confidentiality of such
confidential information. A copy of each such Confidentiality Agreement
executed by an assignee shall be promptly furnished to Westinghouse. It is
understood that confidential information relating to Westinghouse would not
ordinarily be provided in connection with assignments or participations of
Competitive Loans.
(h) Notwithstanding the limitations set forth in paragraph (b) above, (i)
any Lender may at any time assign or pledge all or any portion of its rights
under this Agreement to a Federal Reserve Bank and (ii) any Lender which is a
"fund" may at any time assign or pledge all or any portion of its rights under
this Agreement to secure such Lender's indebtedness, in each case without the
prior written consent of Westinghouse or the Administrative Agent; provided
that each such assignment shall be made in accordance with applicable law and
no such assignment shall release a Lender from any of its obligations
hereunder. In order to facilitate any such assignment, Westinghouse shall, at
the request of the assigning Lender, duly execute and deliver to the assigning
Lender a registered promissory note or notes evidencing the Loans made to
Westinghouse by the assigning Lender hereunder.
(i) Westinghouse shall not assign or delegate any of its rights or duties
hereunder without the prior consent of all the Lenders.
SECTION 8.5. Expenses; Indemnity. (a) Westinghouse agrees to pay all
reasonable out-of-pocket expenses incurred by the Agents in connection with the
preparation, negotiation, execution and delivery of this Agreement or in
connection with any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions hereby contemplated shall be
consummated) or incurred by any Agent, any Lender or any Issuing Lender in
connection with the
<PAGE> 63
58
enforcement or protection of the rights of the Agents, the Lenders or the
Issuing Lenders under this Agreement or in connection with the Loans made or
the Letters of Credit issued hereunder, including, without limitation, the
reasonable fees, charges and disbursements of Simpson Thacher & Bartlett,
counsel for the Agents, and, in connection with any such enforcement or
protection, the reasonable fees, charges and disbursements of any other counsel
for any Agent, Lender or Issuing Lender.
(b) Westinghouse agrees to indemnify and hold harmless each Agent, each
Lender, each Issuing Lender and each of their respective directors, officers,
employees, affiliates and agents (each, an "Indemnified Person") against, and
to reimburse each Indemnified Person, upon its demand, for, any losses, claims,
damages, liabilities or other expenses ("Losses") to which such Indemnified
Person becomes subject insofar as such Losses arise out of or in any way relate
to or result from (i) the execution or delivery of this Agreement, any Letter
of Credit or any agreement or instrument contemplated hereby (and any amendment
hereto or thereto), the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby or (ii) the use (or proposed use)
of the proceeds of the Loans or other extensions of credit hereunder,
including, without limitation, Losses consisting of reasonable legal or other
expenses incurred in connection with investigating, defending or participating
in any legal proceeding relating to any of the foregoing (whether or not such
Indemnified Person is a party thereto); provided that the foregoing will not
apply to any Losses to the extent they are found by a final decision of a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Person.
(c) The provisions of this Section 8.5 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement,
the consummation of the transactions contemplated hereby, the repayment of any
of the Loans, the invalidity or unenforceability of any term or provision of
this Agreement or any investigation made by or on behalf of any Agent or
Lender. All amounts under this Section 8.5 shall be payable on written demand
therefor.
SECTION 8.6. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Agent and each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Agent
or Lender to or for the credit or the account of Westinghouse against any of
and all the obligations of Westinghouse now or hereafter existing under this
Agreement or the Administrative Agent Fee Letter held by such Agent or Lender
which shall be due and payable. The rights of each Agent and each Lender under
this Section 8.6 are in addition to other rights and remedies (including other
rights of setoff) which such Agent or Lender may have.
SECTION 8.7. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICTS OF LAW
PROVISIONS AND PRINCIPLES OF SUCH STATE.
SECTION 8.8. Waivers; Amendment. (a) No failure or delay of any Agent,
any Issuing Lender or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Agents, the Issuing Lenders and the Lenders hereunder are cumulative and are
not exclusive of any rights or remedies
<PAGE> 64
59
which they would otherwise have. No waiver of any provision of this Agreement
or consent to any departure by Westinghouse from any such provision shall in
any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on
Westinghouse in any case shall entitle Westinghouse to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement in writing entered into by
Westinghouse and the Required Lenders; provided, however, that no such
agreement shall (i) reduce the amount or extend the scheduled date of maturity
of any Loan or of any installment thereof, or reduce the stated amount of any
LC Disbursement, interest or fee payable hereunder or extend the scheduled date
of any payment thereof or increase the amount or extend the expiration date of
any Commitment of any Lender, in each case without the prior written consent of
each Lender directly affected thereby; (ii) amend, modify or waive any
provision of this Section 8.8(b), or reduce the percentage specified in the
definition of "Required Lenders", or consent to the assignment or transfer by
Westinghouse of any of its rights and obligations under this Agreement, in each
case without the prior written consent of all the Lenders; or (iii) amend,
modify or waive any provision of Article VII without the prior written consent
of each Agent affected thereby; provided, further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Swingline Lenders or the Issuing Lenders hereunder in such capacity
without the prior written consent of the Administrative Agent, each Swingline
Lender directly affected thereby or each Issuing Lender directly affected
thereby, as the case may be.
SECTION 8.9. Entire Agreement. This Agreement (together with the Issuing
Lender Agreements) constitutes the entire contract between the parties relative
to the subject matter hereof. Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement. Nothing
in this Agreement, expressed or implied, is intended to confer upon any party
other than the parties hereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
SECTION 8.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 8.10.
SECTION 8.11. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 8.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which constitute an original but all of which when taken
together shall constitute but one contract, and shall become effective as
provided in Section 8.3.
<PAGE> 65
60
SECTION 8.13. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 8.14. Jurisdiction; Consent to Service of Process. (a)
Westinghouse hereby irrevocably and unconditionally submits, for itself and its
Property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any Agent or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
against Westinghouse or its Properties in the courts of any jurisdiction.
(b) Westinghouse hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 8.1. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 8.15. Confidentiality. (a) Each Lender agrees to keep
confidential and not to disclose (and to cause its affiliates, officers,
directors, employees, agents and representatives to keep confidential and not
to disclose) and, at the request of Westinghouse (except as provided below or
if such Lender is required to retain any Confidential Information (as defined
below) pursuant to customary internal or banking practices, bank regulations or
applicable law), promptly to return to Westinghouse or destroy the Confidential
Information and all copies thereof, extracts therefrom and analyses or other
materials based thereon, except that such Lender shall be permitted to disclose
Confidential Information (i) to such of its officers, directors, employees,
agents, affiliates and representatives as need to know such Confidential
Information in connection with such Lender's participation in this Agreement,
each of whom shall be informed by such Lender of the confidential nature of the
Confidential Information and shall agree to be bound by the terms of this
Section 8.15; (ii) to the extent required by applicable laws and regulations or
by any subpoena or similar legal process or requested by any Governmental
Authority or agency having jurisdiction over such Lender; provided, however,
that, except in the case of disclosure to bank regulators or examiners in
accordance with customary banking practices, written notice of each instance in
which Confidential Information is required or requested to be disclosed shall
be furnished to Westinghouse not less than 30 days prior to the expected date
of such disclosure or, if 30 days' notice is not practicable under the
circumstances, as promptly as practicable under the circumstances; (iii) to the
extent such Confidential Information (A) is or becomes publicly available other
than as a result of a breach of this Agreement, (B) becomes available to such
Lender on a non-confidential basis from a source other than a party to this
Agreement or any other party known to such Lender to be bound by an agreement
containing a provision similar to this Section 8.15 or (C) was available to
such Lender on a non-confidential basis prior to this disclosure to such Lender
by a party to this Agreement or any other party known to such
<PAGE> 66
61
Lender to be bound by an agreement containing a provision similar to this
Section 8.15; (iv) as permitted by Section 8.4(g); or (v) to the extent
Westinghouse shall have consented to such disclosure in writing. As used in
this Section 8.15, "Confidential Information" shall mean any materials,
documents or information furnished by or on behalf of Westinghouse in
connection with this Agreement designated by or on behalf of Westinghouse as
confidential.
(b) Each Lender (i) agrees that, except to the extent the conditions
referred to in subclause (A), (B) or (C) of clause (iii) of paragraph (a) above
have been met and as provided in paragraph (c) below, (A) it will use the
Confidential Information only in connection with its participation in this
Agreement and (B) it will not use the Confidential Information in connection
with any other matter or in a manner prohibited by any law, including, without
limitation, the securities laws of the United States and (ii) understands that
breach of this Section 8.15 might seriously prejudice the interest of
Westinghouse and that Westinghouse is entitled to equitable relief, including
an injunction, in the event of such breach.
<PAGE> 67
62
(c) Notwithstanding anything to the contrary contained in this Section
8.15, each Agent and each Lender shall be entitled to retain all Confidential
Information for so long as it remains an Agent or a Lender to use solely for
the purposes of servicing the credit and protecting its rights hereunder.
IN WITNESS WHEREOF, Westinghouse, the Agents and the Lenders have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.
WESTINGHOUSE ELECTRIC CORPORATION
By /s/ ???????? ???????????
------------------------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as a Lender and as Administrative Agent
By /s/ DOUGLAS A. CRUING????
------------------------------------------
Name: Douglas A. Cruing???
Title: Vice President
THE CHASE MANHATTAN BANK, as a Lender and as
Documentation Agent
By /s/ KAREN M. SHARF
------------------------------------------
Name: Karen M. Sharf
Title: Vice President
NATIONSBANK, N.A., as a Lender and as a
Syndication Agent
By /s/ JENNIFER OLSON BISHOP
------------------------------------------
Name: Jennifer Olson Bishop
Title: Vice President
THE TORONTO-DOMINION BANK, as a Lender and as
a Syndication Agent
By /s/ NEVA NESBITT
------------------------------------------
Name: Neva Nesbitt
Title: Mgr. Cr Admin.
<PAGE> 68
63
BANKERS TRUST COMPANY, as a Lender and
as a Managing Agent
By /s/ GINA S. THOMPSON
------------------------------------------
Name: Gina S. Thompson
Title: Vice President
THE BANK OF NEW YORK, as a Lender and
as a Managing Agent
By /s/ BRENDAN T. NEDZI
------------------------------------------
Name: Brendan T. Nedzi
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD., as a Lender
and as a Managing Agent
By /s/ M. R. MARRON
------------------------------------------
Name: M. R. Marron
Title: Vice President
CITIBANK, N.A., as a Lender and as a
Managing Agent
By /s/ ANDREW R. SRIUBAS
------------------------------------------
Name: Andrew R. Sriubas
Title: Citibank, N.A. Attorney-in-Fact
THE DAI-ICHI KANGYO BANK, LTD., as a Lender
and as a Managing Agent
By /s/ ANDREAS PANTELI
------------------------------------------
Name: Andreas Panteli
Title: Vice President
DEUTSCHE BANK AG NEW YORK BRANCH AND/OR CAYMAN
ISLANDS BRANCH, as a Lender and as a Managing Agent
By /s/ BELINDA J. WHEELER /s/ JEAN M. HANNIGAN
-----------------------------------------------
Name: Belinda J. Wheeler Jean M. Hannigan
Title: Assistant Vice President Vice President
<PAGE> 69
64
THE FUJI BANK, LIMITED, NEW YORK BRANCH,
as a Lender and as a Managing Agent
By /s/ MASANOBU KOBAYASHI
------------------------------------------
Name: Masanobu Kobayashi
Title: Vice President and Manager
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
NEW YORK BRANCH, as a Lender and as a
Managing Agent
By /s/ ROBERT W. RAMAGE, JR.
------------------------------------------
Name: Robert W. Ramage, Jr.
Title: Senior Vice President
MELLON BANK, N.A., as a Lender and as a
Managing Agent
By /s/ CHARLES H. STAUB
------------------------------------------
Name: Charles H. Staub
Title: First Vice President
PNC BANK, NATIONAL ASSOCIATION, as a Lender
and as a Managing Agent
By /s/ WILLIAM V. ARMITAGE
------------------------------------------
Name: William V. Armitage
Title: Vice President
ROYAL BANK OF CANADA, as a Lender and as
a Managing Agent
By /s/ MOLLY DRENNAN
------------------------------------------
Name: Molly Drennan
Title: Senior Manager Corporate Banking
SANWA BANK LIMITED, as a Lender and as
a Managing Agent
By /s/ JEAN-MICHEL FATOVIC
------------------------------------------
Name: Jean-Michel Fatovic
Title: Vice President
<PAGE> 70
65
SOCIETE GENERALE, NEW YORK BRANCH,
as a Lender and as a Managing Agent
By /s/ RUSSELL S. GORMAN
------------------------------------------
Name: Russell S. Gorman
Title: Vice President
THE SUMITOMO BANK, LIMITED, as a Lender
and as a Managing Agent
By /s/ YOSHINORI KAWAMURA
------------------------------------------
Name: Yoshinori Kawamura
Title: Joint General Manager
ABN AMRO BANK N.V., as a Lender and
as a Co-Agent
By: ABN AMRO NORTH AMERICA, INC., as agent
By /s/ KATHRYN C. TOTH / J. M. JANOVSKY
------------------------------------------
Name: Kathryn C. Toth / J. M. Janovsky
Title: Group V.P. / Group V.P.
THE ASAHI BANK, LTD., as a Lender and
as a Co-Agent
By /s/ JUNICHI YAMADA
------------------------------------------
Name: Junichi Yamada
Title: Senior Deputy General Manager
BANK OF MONTREAL, as a Lender and
as a Co-Agent
By /s/ KAREN KLAPPER
------------------------------------------
Name: Karen Klapper
Title: Director
BARCLAYS BANK PLC, as a Lender and
as a Co-Agent
By /s/ JAMES K. DOWNEY
------------------------------------------
Name: James K. Downey
Title: Associate Director
<PAGE> 71
66
THE FIRST NATIONAL BANK OF CHICAGO,
as a Lender and as a Co-Agent
By /s/ MICHAEL P. KING
------------------------------------------
Name: Michael P. King
Title: Corporate Banking Officer
LTCB TRUST COMPANY, as a Lender and
as a Co-Agent
By /s/ MASANORI SHOJI
------------------------------------------
Name: Masanori Shoji
Title: Senior Vice President
THE MITSUBISHI TRUST AND BANKING CORPORATION,
as a Lender and as a Co-Agent
By /s/ PATRICIA LORET DE MOLA
------------------------------------------
Name: Patricia Loret de Mola
Title: Senior Vice President
THE MITSUI TRUST & BANKING COMPANY, LTD.,
as a Lender and as a Co-Agent
By /s/ WILLIAM W. HUNTER
------------------------------------------
Name: Mr. William W. Hunter
Title: Vice President
THE SAKURA BANK, LTD., as a Lender and
as a Co-Agent
By /s/ YOSHIKAZU NAGURA
------------------------------------------
Name: Yoshikazu Nagura
Title: Vice President & Manager
THE TOKAI BANK, LIMITED, as a Lender and
as a Co-Agent
By /s/ STUART M. SCHULMAN
------------------------------------------
Name: Stuart M. Schulman
Title: Senior Vice President
<PAGE> 72
67
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as a Lender and as a Co-Agent
By /s/ CYNTHIA M. NIESEN
------------------------------------------
Name: Cynthia M. Niesen
Title:
By /s/ SALVATORE BATTINELLI
------------------------------------------
Name: Salvatore Battinelli
Title: Vice President Credit Department
THE YASUDA TRUST AND BANKING CO., LTD.,
as a Lender and as a Co-Agent
By /s/ NORIO MIYASHITA
------------------------------------------
Name: Norio Miyashita
Title: Vice President & Manager
ARAB BANK PLC
By /s/ ???????? ?????????
------------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By /s/ M. D. SMITH
------------------------------------------
Name: M. D. Smith
Title: Agent
BANQUE PARIBAS
By /s/ MARY T. FINNEGAN
------------------------------------------
Name: Mary T. Finnegan
Title: Group Vice President
By /s/ EILEEN M. BURKE
------------------------------------------
Name: Eileen M. Burke
Title: Vice President
BAYERISCHE VEREINSBANK AG
By /s/ ED C. BENNETT
------------------------------------------
Name: Ed C. Bennett
Title: Vice President
By /s/ PETER WINNER
------------------------------------------
Name: Peter Winner
Title: Assistant Vice President
<PAGE> 73
68
CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ DAVID BOUHL
------------------------------------------
Name: David Bouhl, F.V.P
Title: Head of Corporate Banking Chicago
CIBC INC.
By /s/ LORI J. C. GRANBERG
------------------------------------------
Name: Lori J. C. Granberg
Title: Director, CIBC Wood Gundy
Securities Corp., as Agent
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By /s/ BRIAN O'LEARY / SEAN MOUNIER
------------------------------------------
Name: Brian O'Leary / Sean Mounier
Title: Vice President First Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ ???????? ?????????
------------------------------------------
Name: ???????? ?????????
Title: First Vice President
By
------------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By /s/ KENITH J. KEELER
------------------------------------------
Name: Kenith J. Keeler
Title: Vice President
NIPPON CREDIT BANK, LTD.
By /s/ CLIFFORD ABRAMSKY
------------------------------------------
Name: Clifford Abramsky
Title: Senior Manager
<PAGE> 74
69
THE NORINCHUKIN BANK
By /s/ TAKESHI AKIMOTO
------------------------------------------
Name: Takeshi Akimoto
Title: General Manager
THE ROYAL BANK OF SCOTLAND plc
By /s/ DEREK BONNAR
------------------------------------------
Name: Derek Bonnar
Title: Vice President
THE SUMITOMO TRUST & BANKING CO., LTD.
By /s/ SURAJ P. BHATIA
------------------------------------------
Name: Suraj P. Bhatia
Title: Senior Vice President
Manager, Corporate Finance Dept.
THE TOYO TRUST & BANKING CO., LTD.
By /s/ TAKAO SHIDA
------------------------------------------
Name: Takao Shida
Title: D.J.M.
<PAGE> 75
ANNEX I TO
CREDIT AGREEMENT
PRICING GRID
The Applicable Eurodollar Margin, the Applicable LC Commission Rate and the
Applicable Commitment Fee Rate shall be determined in accordance with this
Pricing Grid based upon the Debt Ratings established by the Rating Agencies,
provided that in the event that the Debt Ratings shall correspond to different
Categories, the lower-numbered Category (with Category 1 being the
lowest-numbered Category) shall apply.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Applicable Applicable Applicable Applicable
Eurodollar Financial Non-Financial Commitment
Category Debt Rating Margin LC Fee Rate LC Fee Rate Fee Rate
- -------------------------------------------------------------------------------------------------------------
S&P Moody's
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
1 A- or higher A3 or higher 0.250% 0.250% 0.125% 0.075%
- -------------------------------------------------------------------------------------------------------------
2 BBB+ Baa1 0.300% 0.300% 0.150% 0.100%
- -------------------------------------------------------------------------------------------------------------
3 BBB Baa2 0.375% 0.375% 0.1875% 0.125%
- -------------------------------------------------------------------------------------------------------------
4 BBB- Baa3 0.450% 0.450% 0.225% 0.175%
- -------------------------------------------------------------------------------------------------------------
5 BB+ Ba1 0.625% 0.625% 0.3125% 0.250%
- -------------------------------------------------------------------------------------------------------------
6 BB Ba2 0.875% 0.875% 0.4375% 0.300%
- -------------------------------------------------------------------------------------------------------------
7 below BB below Ba2 1.000% 1.000% 0.500% 0.375%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
For the purposes of determinations pursuant to this Pricing Grid, (a) the
Applicable Eurodollar Margin, Applicable Financial LC Fee Rate and Applicable
Non-Financial LC Fee Rate set forth above for each Category shall be increased
by the Leverage Margin (as defined below), if applicable; (b) if either Rating
Agency shall not have in effect a Debt Rating (other than because such Rating
Agency shall no longer be in the business of rating corporate debt
obligations), then such Rating Agency will be deemed to have established a Debt
Rating of below BB or below Ba2, as applicable; (c) if any rating established
or deemed to have been established by either Rating Agency shall be changed
(other than as a result of a change in the rating system of such Rating
Agency), such change shall be effective as of the date on which it is first
announced by such Rating Agency; (d) any change in the Applicable Eurodollar
Margin, the Applicable Financial LC Fee Rate, the Applicable Non-Financial LC
Fee Rate or the Applicable Commitment Fee Rate resulting from a change in the
Debt Rating shall apply during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date of
the next such change; and (e) if the rating system of either Rating Agency
shall change, or if either Rating Agency shall cease to be in the business of
rating corporate debt obligations, amendments shall be negotiated in good faith
(and shall be effective upon approval by Westinghouse and the Required Lenders)
to the references to specific ratings in this Pricing Grid to reflect such
changed rating system or the unavailability of ratings from such Rating Agency.
As used in this Pricing Grid, "Leverage Margin" shall mean a per annum rate,
applicable at any time when the Consolidated Leverage Ratio shall be greater
than 5.5 to 1 (determined as provided below), equal to 0.125% (in the case of
the Applicable Eurodollar Margin and the Applicable Financial LC Fee Rate) or
0.0625% (in the case of the Applicable Non-Financial LC Fee Rate). For the
purposes of this definition, the applicability of the Leverage Margin shall be
determined (a) as at the end of each of the first three quarterly periods of
each fiscal year of
<PAGE> 76
2
Westinghouse and as at the end of each fiscal year of Westinghouse (but in any
event not later than the 55th day after the end of each of the first three
quarterly periods of each fiscal year or the 105th day after the end of each
fiscal year, as the case may be), based on the Compliance Certificate delivered
in respect thereof (a "Required Calculation"), and (b) at the option of
Westinghouse, as at the end of any fiscal month of Westinghouse, based on a
certificate (an "Interim Certificate") of a Financial Officer of Westinghouse
delivered to the Administrative Agent setting forth in reasonable detail the
computations necessary to determine the Consolidated Leverage Ratio for the
period of twelve consecutive fiscal months ending on the last day of such
fiscal month (an "Interim Calculation"). The imposition or elimination, as the
case may be, of the Leverage Margin shall become effective on the date on which
the relevant Compliance Certificate or Interim Certificate, as the case may be,
is delivered to the Administrative Agent and such imposition or elimination
shall remain in effect until the next determination to be made pursuant to this
paragraph, provided, that (a) until the first such certificate is delivered
after the Closing Date, the Leverage Margin shall be deemed to be applicable
and (b) if any Compliance Certificate is not delivered within the time periods
specified above, then, for the period from and including the date on which such
Compliance Certificate is required to be delivered to but not including the
date on which such Compliance Certificate is delivered, the Leverage Margin
shall be deemed to be applicable. In the event that the Leverage Margin is
eliminated on the basis of an Interim Calculation and the Consolidated Leverage
Ratio determined in connection with the next Required Calculation shall be
greater than 5.5 to 1, then Westinghouse shall be required to pay, on the date
such Required Calculation is made, to the Administrative Agent for the ratable
benefit of the Lenders, an amount equal to the aggregate amount of the
additional interest in respect of Eurodollar Loans and the additional LC Fees
in respect of Letters of Credit that Westinghouse would have been required to
pay, during the period from the date of such Interim Calculation through the
date of such Required Calculation, if such Interim Calculation had not been
made.
<PAGE> 77
Schedule 1.1 to the
Credit Agreement
COMMITMENTS; ADDRESSES FOR NOTICES
<TABLE>
<CAPTION>
===============================================================================
LENDER NAME AND ADDRESS REVOLVING CREDIT COMMITMENT
- -------------------------------------------------------------------------------
<S> <C>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK $265,000,000.00
60 Wall Street
New York, NY 10260
Attn: Laura Reim
Tel. No.: (212) 648-6793
Fax No.: (212) 648-5336
- -------------------------------------------------------------------------------
THE CHASE MANHATTAN BANK $265,000,000.00
270 Park Avenue
New York, NY 10017
Attn: Karen M. Sharf
Tel. No.: (212) 270-5659
Fax No.: (212) 270-5120
- -------------------------------------------------------------------------------
NATIONSBANK, N.A. $265,000,000.00
901 Main Street, 64th Floor
Dallas, TX 75202-3714
Attn: Jennifer Olson Bishop
Tel. No.: (214) 508-0976
Fax No.: (214) 508-9390
- -------------------------------------------------------------------------------
THE TORONTO-DOMINION BANK $265,000,000.00
70 West Madison Street
Chicago, Illinois 60602
Attn: Philip R. deRoziere
Tel. No.: (312) 977-2103
Fax No.: (312) 782-6337
- -------------------------------------------------------------------------------
BANKERS TRUST COMPANY $175,000,000.00
One Bankers Trust Plaza
30th Floor
New York, NY 10006
Attn: Gina Thompson
Tel. No.: (212) 250-7356
Fax No.: (212) 250-7218
===============================================================================
</TABLE>
<PAGE> 78
2
<TABLE>
<CAPTION>
===============================================================================
LENDER NAME AND ADDRESS REVOLVING CREDIT COMMITMENT
- -------------------------------------------------------------------------------
<S> <C>
THE BANK OF NEW YORK $175,000,000.00
One Wall Street
16th Floor
New York, NY 10286
Attn: Brendan T. Nedzi
Tel. No.: (212) 635-8691
Fax No.: (212) 635-8595
- -------------------------------------------------------------------------------
BANK OF TOKYO-MITSUBISHI, LTD. $175,000,000.00
1251 Avenue of the Americas
New York, NY 10019-1104
Attn: Mark R. Marron
Tel. No.: (212) 782-4337
Fax No.: (212) 782-6440
- -------------------------------------------------------------------------------
CITIBANK, N.A. $175,000,000.00
399 Park Avenue
New York, NY 10043
Attn: Andy Sriubas
Tel. No.: (212) 559-5601
Fax No.: (212) 793-7460
- -------------------------------------------------------------------------------
THE DAI-ICHI KANGYO BANK, LTD. $175,000,000.00
One World Trade Center
Suite 4911
New York, NY 10048
Attn: Melinda Araki
Tel. No.: (212) 432-8800
Fax No.: (212) 524-0579
- -------------------------------------------------------------------------------
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH $175,000,000.00
31 West 52nd Street
New York, NY 10019
Attn: Rolf-Peter Mikolayczyk
Tel. No.: (212) 474-8237
Fax No.: (212) 474-8212
- -------------------------------------------------------------------------------
THE FUJI BANK, LIMITED, NEW YORK BRANCH $215,000,000.00
Two World Trade Center
New York, NY 10048
Attn: Masa Kobayashi
Tel. No.: (212) 898-2085
Fax No.: (212) 912-0516
===============================================================================
</TABLE>
<PAGE> 79
3
<TABLE>
<CAPTION>
===============================================================================
LENDER NAME AND ADDRESS REVOLVING CREDIT COMMITMENT
- -------------------------------------------------------------------------------
<S> <C>
THE INDUSTRIAL BANK OF JAPAN, LTD. $175,000,000.00
245 Park Avenue
New York, NY 10167
Attn: John V. Veltri
Tel. No.: (212) 309-6718
Fax No.: (212) 856-9450
- -------------------------------------------------------------------------------
MELLON BANK, N.A. $175,000,000.00
One Mellon Bank Center
Room 4530
Pittsburgh, PA 15258-0001
Attn: Charles H. Staub
Tel. No.: (412) 234-1068
Fax No.: (412) 234-1914
- -------------------------------------------------------------------------------
PNC BANK, NATIONAL ASSOCIATION $175,000,000.00
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
Attn: Bill Armitage
Tel. No.: (412) 768-1444
Fax No.: (412) 762-6484
- -------------------------------------------------------------------------------
ROYAL BANK OF CANADA $175,000,000.00
One North Franklin Street
Suite 700
Chicago, IL 60606
Attn: Molly Drennan
Tel. No.: (312) 551-1615
Fax No.: (312) 551-0805
- -------------------------------------------------------------------------------
THE SANWA BANK LIMITED $175,000,000.00
55 East 52nd Street
New York, NY 10055
Attn: Stephen Small
Tel. No.: (212) 339-6201
Fax No.: (212) 754-1304
- -------------------------------------------------------------------------------
SOCIETE GENERALE $175,000,000.00
1221 Avenue of the Americas
New York, NY 10020
Attn: Bruce Drossman
Tel. No.: (212) 278-6848
Fax No.: (212) 278-7430
===============================================================================
</TABLE>
<PAGE> 80
4
<TABLE>
<CAPTION>
===============================================================================
LENDER NAME AND ADDRESS REVOLVING CREDIT COMMITMENT
- -------------------------------------------------------------------------------
<S> <C>
THE SUMITOMO BANK, LIMITED $175,000,000.00
277 Park Avenue
New York, NY 10172
Attn: Leo E. Pagarigan
Tel. No.: (212) 224-4116
Fax No.: (212) 224-5188
- -------------------------------------------------------------------------------
ABN AMRO BANK N.V. $100,000,000.00
One PPG Place
Suite 2950
Pittsburgh, PA 15222-5401
Attn: James Janofsky
Tel. No.: (412) 566-2269
Fax No.: (412) 566-2266
- -------------------------------------------------------------------------------
THE ASAHI BANK, LTD. $100,000,000.00
One World Trade Center
Suite 6011
New York, NY 10048-0476
Attn: Wit Derby
Tel. No.: (212) 912-7038
Fax No.: (212) 432-1135
- -------------------------------------------------------------------------------
BANK OF MONTREAL $100,000,000.00
430 Park Avenue
New York, NY 10022
Attn: Ola Anderson
Tel. No.: (212) 605-1453
Fax No.: (212) 605-1648
- -------------------------------------------------------------------------------
BARCLAYS BANK PLC $100,000,000.00
388 Market Street
Suite 1700
San Francisco, CA 94111
Attn: James Downey
Tel. No.: (415) 765-4711
Fax No.: (415) 765-4760
===============================================================================
</TABLE>
<PAGE> 81
5
<TABLE>
<CAPTION>
===============================================================================
LENDER NAME AND ADDRESS REVOLVING CREDIT COMMITMENT
- -------------------------------------------------------------------------------
<S> <C>
THE FIRST NATIONAL BANK OF CHICAGO $100,000,000.00
1301 East 9th Street
Suite 2150
Cleveland, OH 44114
Attn: Marguerite Canestraro
Tel. No.: (216) 781-0255
Fax No.: (216) 221-2945
- -------------------------------------------------------------------------------
LTCB TRUST COMPANY $100,000,000.00
165 Broadway
New York, NY 10006
Attn: Yuichi Onuki
Tel. No.: (212) 335-4520
Fax No.: (212) 608-2371
- -------------------------------------------------------------------------------
THE MITSUBISHI TRUST AND BANKING CORPORATION $100,000,000.00
520 Madison Avenue
26th Floor
New York, NY 10022
Attn: Beatrice Kossodo
Tel. No.: (212) 891-8363
Fax No.: (212) 644-6825 or 593-4691
- -------------------------------------------------------------------------------
THE MITSUI TRUST & BANKING COMPANY, LIMITED, $100,000,000.00
NEW YORK BRANCH
One World Financial Center
200 Liberty Street, 21st Floor
New York, NY 10281
Attn: William W. Hunter
Tel. No.: (212) 341-0382
Fax No.: (212) 945-4170 or 4171
- -------------------------------------------------------------------------------
THE SAKURA BANK, LTD. $100,000,000.00
277 Park Avenue
New York, NY 10172
Attn: Stephen Chan
Tel. No.: (212) 756-6774
Fax No.: (212) 888-7651
===============================================================================
</TABLE>
<PAGE> 82
6
<TABLE>
<CAPTION>
===============================================================================
LENDER NAME AND ADDRESS REVOLVING CREDIT COMMITMENT
- -------------------------------------------------------------------------------
<S> <C>
THE TOKAI BANK, LTD., NEW YORK BRANCH $100,000,000.00
55 East 52nd Street
New York, NY 10055
Attn: Stuart M. Schulman
Tel. No.: (212) 339-1117
Fax No.: (212) 754-2171
- -------------------------------------------------------------------------------
WESTDEUTSCHE LANDESBANK GIROZENTRALE $100,000,000.00
1211 Avenue of the Americas
New York, NY 10036
Attn: Cynthia M. Niesen
Tel. No.: (212) 852-6158
Fax No.: (212) 852-6307
- -------------------------------------------------------------------------------
THE YASUDA TRUST AND BANKING CO., LTD., NEW YORK $150,000,000.00
BRANCH
666 Fifth Avenue
Suite 801
New York, NY 10103
Attn: Rohn Laudenschlager
Tel. No.: (212) 373-5755
Fax No.: (212) 373-5797
- -------------------------------------------------------------------------------
ARAB BANK PLC $50,000,000.00
520 Madison Avenue
New York, NY 10022-4237
Attn: Khanh Vuong
Tel. No.: (212) 715-9700
Fax No.: (212) 593-4632
- -------------------------------------------------------------------------------
THE BANK OF NOVA SCOTIA $50,000,000.00
181 West Madison Street
Suite 3700
Chicago, IL 60602
Attn: Michael Manick
Tel. No.: (312) 201-4061
Fax No.: (312) 201-4108
- -------------------------------------------------------------------------------
BANQUE PARIBAS $50,000,000.00
The Equitable Tower
787 Seventh Avenue
New York, NY 10019
Attn: Mary Finnegan
Tel. No.: (212) 841-2551
Fax No.: (212) 841-2333
===============================================================================
</TABLE>
<PAGE> 83
7
<TABLE>
<CAPTION>
===============================================================================
LENDER NAME AND ADDRESS REVOLVING CREDIT COMMITMENT
- -------------------------------------------------------------------------------
<S> <C>
BAYERISCHE VEREINSBANK AG $50,000,000.00
333 West Wacker Drive
Suite 680
Chicago, IL 60606
Attn: Ed Bennett
Tel. No.: (312) 368-3305
Fax No.: (312) 368-8615
- -------------------------------------------------------------------------------
CAISSE NATIONALE DE CREDIT AGRICOLE $50,000,000.00
55 East Monroe Street
Chicago, IL 60603-5702
Attn: Roger Weis
Tel. No.: (312) 917-7440
Fax No.: (312) 372-3724
- -------------------------------------------------------------------------------
CIBC $50,000,000.00
425 Lexington Avenue
8th Floor
New York, NY 10017
Attn: Lorain Granberg
Tel. No.: (212) 856-3630
Fax No.: (212) 856-3558
- -------------------------------------------------------------------------------
COMPAGNIE FINANCIERE DE CIC ET DE $50,000,000.00
L'UNION EUROPEENNE
520 Madison Avenue
37th Floor
New York, NY 10022
Attn: Brian O'Leary
Tel. No.: (212) 715-4422
Fax No.: (212) 715-4535
- -------------------------------------------------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH $50,000,000.00
1301 Avenue of the Americas
New York, NY 10019-6022
Attn: Nicholas Chapin
Tel. No.: (212) 261-7317
Fax No.: (212) 459-3179
- -------------------------------------------------------------------------------
KEYBANK NATIONAL ASSOCIATION $50,000,000.00
127 Public Square, M/C OH-01-27-0602
Cleveland, OH 44144-1306
Attn: Kenneth Keeler
Tel. No.: (216) 689-5789
Fax No.: (216) 689-4666
===============================================================================
</TABLE>
<PAGE> 84
8
<TABLE>
<CAPTION>
===============================================================================
LENDER NAME AND ADDRESS REVOLVING CREDIT COMMITMENT
- -------------------------------------------------------------------------------
<S> <C>
THE NIPPON CREDIT BANK, LTD., NEW YORK BRANCH $50,000,000.00
245 Park Avenue,
30th Floor
New York, NY 10167
Attn: Nancy Acevedo
Tel. No.: (212) 984-1320
Fax No.: (212 490-3895
- -------------------------------------------------------------------------------
THE NORINCHUKIN BANK, NEW YORK BRANCH $50,000,000.00
245 Park Avenue
29th Floor
New York, NY 10167-0104
Attn: Maizie Tang
Tel. No.: (212) 697-1717
Fax No.: (212) 697-5754
- -------------------------------------------------------------------------------
ROYAL BANK OF SCOTLAND PLC $50,000,000.00
88 Pine Street
26th Floor
New York, NY 10005
Attn: Karen Stefancic
Tel. No.: (212) 269-3390
Fax No.: (212) 480-0791
- -------------------------------------------------------------------------------
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK $50,000,000.00
BRANCH
527 Madison Avenue
New York, NY 10022
Attn: Robin Schreiber or Fumio Kaji
Tel. No.: (212) 326-0781 or (212) 326-0797
Fax No.: (212) 418-4848
- -------------------------------------------------------------------------------
THE TOYO TRUST & BANKING CO., LTD. $50,000,000.00
666 Fifth Avenue
33rd Floor
New York, NY 10103-3395
Attn: Howard Tulley Mott
Tel. No.: (212) 307-3418
Fax No.: (212) 307-3498
===============================================================================
</TABLE>
<PAGE> 85
Schedule 3.4 to the
Credit Agreement
CONSENTS, ETC.
<PAGE> 86
Schedule 3.13 to the
Credit Agreement
MATERIAL SUBSIDIARIES
<PAGE> 87
Schedule 5.6(n) to the
Credit Agreement
CERTAIN CBS ASSETS
<PAGE> 88
Schedule 5.7 to the
Credit Agreement
EXISTING INDEBTEDNESS
<PAGE> 89
SCHEDULE 3.12
MATERIAL SUBSIDIARIES
INCORPORATED VOTING POWER
UNDER OWNED BY
NAME LAWS OF IMMEDIATE PARENT
---- ------- ----------------
CBS Inc. New York 100%
Thermo King Corporation Delaware 100%
Westinghouse Canada, Inc. Canada 100%
Westinghouse CBS Holdings Delaware 100%
Company, Inc.
Westinghouse Hanford Delaware 100%
Company
Westinghouse Holdings Delaware 100%
Corporation
Westinghouse de Puerto Delaware 100%
Rico, Inc.
Westinghouse Electric S.A. Switzerland 100%
Westinghouse International Delaware 100%
Technology Corporation
Westinghouse World Delaware 100%
Investment Corporation
Westinghouse Foreign Sales Barbados 100%
Corporation
Westinghouse Industry Delaware 100%
Products International
Company
Westinghouse Savannah River Delaware 100%
Company, Inc.
<PAGE> 90
SCHEDULE 5.5(n)
CBS REAL ESTATE PROPERTIES
Ed Sullivan Theater and adjacent 13 story office building
1697 Broadway
New York, NY
CBS Studio Center and TV City
Los Angeles, California
CBS Data Center
425 Meadowlands Parkway
Secaucus, New Jersey
CBS Broadcast Center
Between 56th/57th Street and
10th/11th Avenues
New York, NY
<PAGE> 91
SCHEDULE 5.6
EXISTING CBS INDEBTEDNESS
A. 7 5/8% Notes due 2002 ($150 million)
B. 7 3/4% Notes due 1999 ($125 million)
C. 7 1/8% Notes due 2023 ($97 million)
D. 8 7/8% Notes due 2022 ($92 million)
E. KUTV Revolving Credit Agreement ($26 million)
F. KUTV 6% Subordinated Note ($11 million)
<PAGE> 92
Exhibit A to the
Credit Agreement
WESTINGHOUSE ELECTRIC CORPORATION
ADMINISTRATIVE QUESTIONNAIRE
Please provide the following details:
I. A) FULL LEGAL BANK NAME:
-------------------------
B) FULL LEGAL DOMESTIC LENDING OFFICE NAME AND ADDRESS:
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
FAX NUMBER:
-------------------------------------------------------
TELEX NUMBER:
-----------------------------------------------------
C) FULL LEGAL EURODOLLAR LENDING OFFICE NAME AND ADDRESS:
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
FAX NUMBER:
-------------------------------------------------------
TELEX NUMBER:
-----------------------------------------------------
D) FULL LEGAL COMPETITIVE LOAN LENDING OFFICE NAME AND ADDRESS:
------------------------------------------------------------------
------------------------------------------------------------------
FAX NUMBER:
-------------------------------------------------------
TELEX NUMBER:
-----------------------------------------------------
Please fax your completed questionnaire to Julia Travers and Barbara McCarnan
at J.P. Morgan fax (212) 648-5232 and (312) 634-1091 respectively.
<PAGE> 93
2
II. A) WHERE EXECUTION COPIES SHOULD BE SENT FOR SIGNATURE(S):
ADDRESS:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
ATTN:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
B) WHERE CONFORMED (FINAL) COPIES SHOULD BE SENT:
ADDRESS:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
ATTN:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
C) FOR BUSINESS AND/OR CREDIT MATTERS:
CONTACT NAME/DEPT:
------------------------------------------------
TELEPHONE NUMBER:
-------------------------------------------------
FAX NUMBER:
-------------------------------------------------------
D) FOR ADMINISTRATIVE/OPERATIONS MATTERS:
CONTACT NAME/DEPT:
------------------------------------------------
TELEPHONE NUMBER:
-------------------------------------------------
FAX NUMBER:
-------------------------------------------------------
<PAGE> 94
3
E) FOR COMPETITIVE BID REQUESTS:
CONTACT NAME/DEPT:
------------------------------------------------
TELEPHONE NUMBER:
-------------------------------------------------
FAX NUMBER:
-------------------------------------------------------
F) PAYMENT INSTRUCTIONS (PLEASE SPECIFY WHERE FUNDS, I.E.
INTEREST, FEES, LOAN REPAYMENTS SHOULD BE WIRED):
BANK NAME:
--------------------------------------------------------
ABA, CHIPS #:
-----------------------------------------------------
ACCOUNT #:
--------------------------------------------------------
CREDIT TO (IF APPLICABLE):
----------------------------------------
REFERENCE:
--------------------------------------------------------
ATTENTION:
--------------------------------------------------------
G) FOR LETTER OF CREDIT ADMINISTRATIVE MATTERS:
CONTACT NAME/DEPT:
------------------------------------------------
TELEPHONE NUMBER:
-------------------------------------------------
FAX NUMBER:
-------------------------------------------------------
H) PAYMENT INSTRUCTIONS: (PLEASE SPECIFY WHERE LETTER OF
CREDIT COMMISSION FEES SHOULD BE WIRED):
BANK NAME:
--------------------------------------------------------
ABA, CHIPS #:
-----------------------------------------------------
ACCOUNT #:
--------------------------------------------------------
CREDIT TO (IF APPLICABLE):
----------------------------------------
REFERENCE:
--------------------------------------------------------
ATTENTION:
--------------------------------------------------------
<PAGE> 95
Exhibit B-1 to the
Credit Agreement
FORM OF COMPETITIVE BID REQUEST
Morgan Guaranty Trust Company of New York,
as Administrative Agent for the Lenders referred to below,
60 Wall Street
New York, NY 10260
Attention:
[Date]
Dear Sirs:
The undersigned, Westinghouse Electric Corporation
("Westinghouse"), refers to the Credit Agreement dated as of August 29, 1996
(as it may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Westinghouse, the Lenders party
thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as Syndication
Agents, The Chase Manhattan Bank, as Documentation Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent. Terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. Westinghouse hereby gives you notice pursuant to Section 2.3
of the Credit Agreement that it requests a Competitive Loan under the Credit
Agreement, and in that connection sets forth below the terms on which such
Competitive Loan is requested to be made:
(A) Date of Competitive Loan (which is a Business Day)
(B) Principal Amount of Competitive Loan 1
(C) Interest rate basis 2
- --------
1 Not less than $5,000,000 (and in integral multiples of $1,000,000).
2 Eurodollar Competitive Loan or Absolute Rate Loan.
<PAGE> 96
2
(D) Interest Period and the last day thereof 3
Upon acceptance of any or all of the Loans offered by the
Lenders in response to this request, Westinghouse shall be deemed to have
represented and warranted that the conditions specified in Section 4.2(b) and
(c) of the Credit Agreement have been satisfied.
Very truly yours,
WESTINGHOUSE ELECTRIC CORPORATION
By:
---------------------------
Name:
Title:
- --------
3 Which shall be subject to the definition of "Interest Period" and end
not later than the Revolving Credit Maturity Date.
<PAGE> 97
Exhibit B-2 to the
Credit Agreement
FORM OF NOTICE OF COMPETITIVE BID REQUEST
To: [Name of Lender]
Re: Invitation for Competitive Bids to Westinghouse Electric
Corporation ("Westinghouse")
Pursuant to Section 2.3 of the Credit Agreement dated as of
August 29, 1996 (as it may be amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"; terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement) among Westinghouse Electric Corporation, the Lenders party
thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as Syndication
Agents, The Chase Manhattan Bank, as Documentation Agent, and the undersigned,
as Administrative Agent, we are pleased on behalf of Westinghouse to invite you
to submit Competitive Bids to Westinghouse for the following proposed
Competitive Loans:
Date of Borrowing: ____________________
Principal Amount
$
Such Competitive Bids should offer a [Margin] [a fixed rate
of interest]. [The applicable base rate is the Eurodollar Rate.]
Please respond to this invitation by no later than 9:30 A.M.
(New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By
---------------------------
Authorized Officer
<PAGE> 98
Exhibit B-3 to the
Credit Agreement
FORM OF COMPETITIVE BID
Morgan Guaranty Trust Company of New York,
as Administrative Agent for the Lenders referred to below
60 Wall Street
New York, NY 10260
Attention:
[Date]
Dear Sirs:
The undersigned, [Name of Lender], refers to the Credit
Agreement dated as of August 29, 1996 (as it may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Westinghouse Electric Corporation ("Westinghouse"), the Lenders party
thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as Syndication
Agents, The Chase Manhattan Bank, as Documentation Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent. Terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. The undersigned hereby makes a Competitive Bid pursuant to
Section 2.3(b) of the Credit Agreement, in response to the Competitive Bid
Request made by Westinghouse on ___________ __, ____, and in that connection
sets forth below the terms on which such Competitive Bid is made:
(A) Principal Amount 1
(B) Competitive Bid Rate[s] 2
(C) Interest Period and last day thereof
- --------
1 Not less than $5,000,000 or greater than the requested Competitive
Loan and in integral multiples of $1,000,000. Multiple Competitive
Bids will be accepted by the Administrative Agent.
2 i.e., Eurodollar Rate + or - ___%, in the case of Eurodollar
Competitive Loans or ___%, in the case of Absolute Rate Loans.
<PAGE> 99
2
The undersigned hereby confirms that it is prepared, subject
to the conditions set forth in the Credit Agreement, to extend credit to
Westinghouse on the requested date of the Competitive Loan upon acceptance by
Westinghouse of this Competitive Bid in accordance with Section 2.3(d) of the
Credit Agreement.
Very truly yours,
[NAME OF LENDER]
By:
---------------------------
Name:
Title:
<PAGE> 100
Exhibit B-4 to the
Credit Agreement
FORM OF REVOLVING CREDIT BORROWING REQUEST
Morgan Guaranty Trust Company of New York,
as Administrative Agent for the Lenders referred to below
60 Wall Street
New York, NY 10260
Attention:
[Date]
Dear Sirs:
The undersigned, Westinghouse Electric Corporation
("Westinghouse"), refers to the Credit Agreement dated as of August 29, 1996
(as it may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Westinghouse, the Lenders party
thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as Syndication
Agents, The Chase Manhattan Bank, as Documentation Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent. Terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. Westinghouse hereby gives you notice pursuant to Section 2.4
of the Credit Agreement that it requests a Revolving Credit Loan under the
Credit Agreement, and in that connection sets forth below the terms on which
such Revolving Credit Loan is requested to be made:
(A) Date of Revolving Credit Loan (which is a Business
Day)
(B) Principal Amount of Revolving Credit Loan 1
(C) Interest rate basis 2
- --------
1 Not less than $50,000,000 in the case of Eurodollar Revolving Credit
Loans and not less than $25,000,000 in the case of ABR Revolving
Credit Loans (and, in each case, in integral multiples of $5,000,000).
2 Eurodollar Revolving Credit Loan or ABR Revolving Credit Loan.
<PAGE> 101
2
(D) Interest Period and the last day thereof 3
Upon acceptance of any or all of the Loans made by the
Lenders in response to this request, Westinghouse shall be deemed to have
represented and warranted that the conditions specified in Section 4.2(b) and
(c) of the Credit Agreement have been satisfied.
Very truly yours,
WESTINGHOUSE ELECTRIC CORPORATION
By:
---------------------------
Name:
Title:
- --------
3 Applicable to Eurodollar Revolving Credit Loans only, which shall be
subject to the definition of "Interest Period" and end not later than
the Revolving Credit Maturity Date.
<PAGE> 102
Exhibit B-5 to the
Credit Agreement
FORM OF SWINGLINE BORROWING REQUEST
Morgan Guaranty Trust Company of New York,
as Administrative Agent for the Lenders referred to below
60 Wall Street
New York, NY 10260
Attention:
[Date]
Dear Sirs:
The undersigned, Westinghouse Electric Corporation
("Westinghouse"), refers to the Credit Agreement dated as of August 29, 1996
(as it may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Westinghouse, the Lenders party
thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as Syndication
Agents, The Chase Manhattan Bank, as Documentation Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent. Terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. Westinghouse hereby gives you notice pursuant to Section 2.6
of the Credit Agreement that it requests a Swingline Loan under the Credit
Agreement, and in that connection sets forth below the terms on which such
Swingline Loan is requested to be made:
(A) Date of Swingline Loan (which is a Business Day)
(B) Principal Amount of Swingline Loan 1
(C) Interest rate basis 2
- --------
1 Not less than $5,000,000 (and in integral multiples of $1,000,000).
2 ABR Swingline Loan or Quoted Swingline Loan.
<PAGE> 103
2
Upon acceptance of any or all of the Loans made by the
Swingline Lenders in response to this request, Westinghouse shall be deemed to
have represented and warranted that the conditions specified in Section 4.2(b)
and (c) of the Credit Agreement have been satisfied.
Very truly yours,
WESTINGHOUSE ELECTRIC CORPORATION
By:
---------------------------
Name:
Title:
<PAGE> 104
Exhibit B-6 to the
Credit Agreement
FORM OF NOTICE OF DESIGNATED LETTER OF CREDIT
Morgan Guaranty Trust Company of New York,
as Administrative Agent for the Lenders
referred to below
60 Wall Street
New York, NY 10260
Attention:
[Date]
Dear Sirs:
The undersigned, Westinghouse Electric Corporation
("Westinghouse"), refers to the Credit Agreement dated as of August 29, 1996
(as it may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Westinghouse, the Lenders party
thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as Syndication
Agents, The Chase Manhattan Bank, as Documentation Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent. Terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. Westinghouse hereby gives you notice pursuant to Section
2.7(a) of the Credit Agreement that the letter of credit(1) described below is
hereby designated a Letter of Credit under the Credit Agreement:
Issuing Lender:
Beneficiary:
Face Amount:
Expiration Date: 2
Type: 3
- --------
1 Such letter of credit shall have been issued by an Issuing Lender and
shall not have been a Letter of Credit under the Credit Agreement at
the time of its issuance.
2 To be not later than the fifth Business Day preceding the Revolving
Credit Maturity Date.
3 Identify as Financial Letter of Credit or Non-Financial Letter of
Credit (subject to confirmation by the Administrative Agent).
<PAGE> 105
2
As of the date hereof, Westinghouse shall be deemed to have
represented and warranted that the conditions specified in Section 4.2(b) and
(c) of the Credit Agreement have been satisfied.
Very truly yours,
WESTINGHOUSE ELECTRIC CORPORATION
By:
---------------------------
Name:
Title:
Consented to:
[ISSUING LENDER]
By:
------------------------
Name:
Title:
<PAGE> 106
Exhibit C to the
Credit Agreement
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of August 29,
1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Westinghouse Electric Corporation ("Westinghouse"),
the Lenders parties thereto, NationsBank, N.A. and The Toronto-Dominion Bank,
as syndication agents, The Chase Manhattan Bank, as documentation agent, and
Morgan Guaranty Trust Company of New York, as administrative agent (in such
capacity, the "Administrative Agent"). Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.
The Assignor named on Schedule 1 (the "Assignor") and the Assignee
named on Schedule 1 (the "Assignee") agree as follows:
The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), an interest as specified in Schedule 1 (the
"Assigned Interest") in and to the Assignor's rights and obligations under the
Credit Agreement with respect to the facility described on Schedule 1 (the
"Assigned Facility"), in a principal amount for the Assigned Facility as set
forth on Schedule 1.
The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other instrument or
document furnished pursuant thereto or with respect to the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto, other
than that the Assignor has not created any adverse claim upon the Assigned
Interest and that such Assigned Interest is free and clear of any such adverse
claim; and (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Westinghouse or any
of its Subsidiaries or the performance or observance by Westinghouse of any of
its obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.
The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the most
recent financial statements referred to in Sections 3.2 and 5.1 thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(c) agrees that it will, independently and without reliance upon the Assignor,
the Administrative Agent or any other Lender or Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion
<PAGE> 107
2
under the Credit Agreement and any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are incidental thereto; and (e)
agrees that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender including,
(i) if it is organized under the laws of a jurisdiction outside the United
States, its obligation pursuant to Section 2.20(f) of the Credit Agreement and
(ii) if it is not already a Lender, its obligation to deliver (x) an
Administrative Questionnaire pursuant to Section 8.4(e) of the Credit Agreement
and (y) a Confidentiality Agreement pursuant to Section 8.4(g) of the Credit
Agreement.
The effective date of this Assignment and Acceptance shall be as
specified on Schedule 1 (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
acceptance by it and recording by the Administrative Agent pursuant to Section
8.4(d) of the Credit Agreement, effective as of the Effective Date (which shall
not, unless otherwise agreed to by the Administrative Agent, be earlier than
five Business Days after the execution hereof).
Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.
From and after the Effective Date, (a) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and shall be
bound by the provisions thereof and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement (other than any such
rights which expressly survive the termination thereof).
This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
<PAGE> 108
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT, DATED AS OF AUGUST 29, 1996
AMONG
WESTINGHOUSE ELECTRIC CORPORATION, THE LENDERS PARTIES THERETO,
NATIONSBANK, N.A. AND THE TORONTO-DOMINION BANK, AS SYNDICATION AGENTS,
THE CHASE MANHATTAN BANK, AS DOCUMENTATION AGENT, AND
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, AS ADMINISTRATIVE AGENT
(IN SUCH CAPACITY, THE "ADMINISTRATIVE AGENT")
===============================================================================
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
<TABLE>
<CAPTION>
Principal Commitment Percentage Assigned
Facility Assigned Amount Assigned (if applicable)
- ------------------------------ --------------------------- --------------------------------------------------
<S> <C> <C>
$______________ __._______________%
</TABLE>
The terms set forth above and in the Assignment and Acceptance to which this
Schedule 1 is attached are hereby agreed to:
[Consented to and]* Accepted for the
Recordation in the Register:
, as Assignor MORGAN GUARANTY TRUST COMPANY OF
- ------------------
NEW YORK, as Administrative Agent
By: By:
------------------------- -----------------------
Name: Name:
Title: Title:
[Consented to]:*/
, as Assignee WESTINGHOUSE ELECTRIC CORPORATION
- ------------------
By: By:
------------------------- -----------------------
Name: Name:
Title: Title:
- --------
* To be completed only if consents are required under Section 8.4(b).
<PAGE> 109
Exhibit D to the
Credit Agreement
FORM OF CONFIDENTIALITY AGREEMENT
_______________, 199_
Westinghouse Electric Corporation
Westinghouse Building
11 Stanwix Street
Pittsburgh, Pennsylvania 15222
Attention of Vice President and Treasurer
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of August
29, 1996 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Westinghouse
Electric Corporation, a Pennsylvania corporation ("Westinghouse"), the Lenders
parties thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as
Syndication Agents, The Chase Manhattan Bank, as Documentation Agent, and
Morgan Guaranty Trust Company of New York, as Administrative Agent. Terms used
but not defined herein have the meanings assigned to them in the Credit
Agreement.
In connection with the proposed purchase by us of an
assignment or participation pursuant to Section 8.4 of the Credit Agreement, we
may receive information furnished by or on behalf of Westinghouse and
designated by or on behalf of Westinghouse as confidential (the "Information").
We understand that improper use or disclosure of the
Information might violate applicable Federal and state securities laws
(including Rule 10b-5 under the Securities Exchange Act of 1934, as amended)
and seriously prejudice the interests of Westinghouse and that Westinghouse is
entitled to rely on the promises made herein and to equitable relief, including
an injunction, in the event of our breach. Accordingly, we agree to keep
confidential and not to disclose (and to cause our affiliates, officers,
directors, employees, agents and representatives to keep confidential and not
to disclose) and, at your request (except as provided below or if such Lender
is required to retain any Information pursuant to customary internal or banking
practices, bank regulations or applicable law), promptly to return to you or
destroy the Information and all copies thereof, extracts therefrom and analyses
or other materials based thereon, except that we shall be permitted to disclose
Information: (i) to such of our officers, directors, employees, agents,
affiliates and representatives as need to know such Information in connection
with the proposed assignment or participation referred to above, each of whom
shall be informed by us of the confidential nature of the Information and shall
agree to be bound by the terms of this Confidentiality
<PAGE> 110
2
Agreement; (ii) to the extent required by applicable laws and regulations or by
any subpoena or similar legal process or requested by any governmental
authority or agency having jurisdiction over us; provided, however, that,
except in the case of disclosure to bank regulators or examiners in accordance
with customary banking practices, written notice of each instance in which
Information is required or requested to be disclosed shall be furnished to you
not less than 30 days prior to the expected date of such disclosure or, if 30
days' notice is not practicable under the circumstances, as promptly as
practicable under the circumstances; (iii) to the extent such Information (A)
is or becomes publicly available other than as a result of a breach of the
Credit Agreement or this Confidentiality Agreement, (B) becomes available to us
on a non-confidential basis from a source other than a party to the Credit
Agreement or any other party known to us to be bound by an agreement similar to
this Confidentiality Agreement or (C) was available to us on a non-confidential
basis prior to its disclosure to us by a party to the Credit Agreement or any
other party bound by an agreement similar to this Confidentiality Agreement; or
(iv) to the extent Westinghouse shall have consented to such disclosure in
writing.
We further agree that, except to the extent the conditions
referred to in subclause (A), (B) or (C) of clause (iii) above have been met
and as provided in the last paragraph of this letter, (a) we will use the
Information only in connection with our possible participation in the Credit
Agreement and (b) we will not use the Information in connection with any other
matter or in a manner prohibited by any law, including, without limitation, the
securities laws of the United States.
Notwithstanding anything to the contrary contained above, if
we shall purchase an assignment of or a participation in the rights of any
Lender under the Credit Agreement, we shall be entitled to retain all
Information and to use it in servicing the credit and in protecting our rights
with regard thereto.
Name of Recipient:
By:
Title:
Institution:
Date:
<PAGE> 111
Exhibit E-1 to the
Credit Agreement
FORM OF OPINION OF GENERAL COUNSEL
August 29, 1996
Morgan Guaranty Trust Company of New York,
as Administrative Agent
The Chase Manhattan Bank,
as Documentation Agent
NationsBank, N.A. and The Toronto-Dominion Bank,
as Syndication Agents
And each of the Lenders parties to
the Credit Agreement referred to below
Gentlemen:
I am Senior Vice President and General Counsel of Westinghouse
Electric Corporation, a Pennsylvania corporation ("Westinghouse"), and in such
capacity have represented Westinghouse in connection with the Credit Agreement,
dated as of August 29, 1996 (the "Credit Agreement"), among Westinghouse, the
Lenders parties thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as
syndication agents, The Chase Manhattan Bank, as documentation agent, and
Morgan Guaranty Trust Company of New York, as administrative agent.
The opinions expressed below are furnished to you pursuant to Section
4.1(e)(i) of the Credit Agreement. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.
In arriving at the opinions expressed below,
(a) I have examined, either personally or indirectly through lawyers
who report to me or through other counsel, and relied on the executed originals
of, the Credit Agreement; and
(b) I have examined, either personally or indirectly through lawyers
who report to me or through other counsel, such corporate documents and records
of Westinghouse and such other instruments and certificates of public
officials, officers and representatives of
<PAGE> 112
-2- August __, 1996
Westinghouse and other Persons as I have deemed necessary or appropriate for
the purposes of this opinion.
In arriving at the opinions expressed below, I have made such
investigations of law, in each case as I have deemed appropriate as a basis for
such opinions.
In rendering the opinions expressed below, I have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted to me as originals, (b) the genuineness of all
signatures on all documents that I examined (other than those of Westinghouse)
and (c) the conformity to authentic originals of documents submitted to me as
certified, conformed or photostatic copies.
When my opinions expressed below are stated "to the best of my
knowledge," I have made reasonable and diligent investigation of the subject
matters of such opinions and have no reason to believe that there exist any
facts or other information that would render such opinions incomplete or
incorrect.
Based upon and subject to the foregoing, I am of the opinion that:
1. Westinghouse (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged and (c) to the best of my knowledge,
is duly qualified as a foreign corporation and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except to the extent that
the failure to be so qualified could not, in the aggregate, have a Material
Adverse Effect.
2. Westinghouse has the corporate power and authority, and the legal
right, to make, deliver and perform its obligations under the Credit Agreement
and to obtain extensions of credit under the Credit Agreement. Westinghouse has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Credit Agreement and the borrowings and other extensions of
credit on the terms and conditions of the Credit Agreement. No consent or
authorization of, approval by, notice to, filing with or other act by or in
respect of any Governmental Authority or any other Person is required in
connection with the extensions of credit under the Credit Agreement or with the
execution, delivery, performance, validity or enforceability of the Credit
Agreement.
3. The Credit Agreement has been duly executed and delivered on behalf
of Westinghouse.
4. The execution and delivery of the Credit Agreement, the performance
by Westinghouse of its obligations thereunder, the consummation of the
transactions contemplated thereby, the compliance by Westinghouse with any of
the provisions thereof, the
<PAGE> 113
-3- August __, 1996
borrowings and other extensions of credit under the Credit Agreement and the
use of proceeds thereof, all as provided therein, (a) will not violate, or
constitute a default under (i) any requirement of law (including, without
limitation, Regulations G, T and U), (ii) any indenture or other material
contractual obligation of Westinghouse or of any of its Subsidiaries, or (iii)
the certificate of incorporation, bylaws and other organizational documents of
Westinghouse or of any of its Subsidiaries and (b) will not result in, or
require, the creation or imposition of any Lien pursuant to any indenture or
material contractual obligation referred to in clause (a)(ii) above (including,
without limitation, pursuant to any "equal and ratable" provision contained
therein) on any of the properties or revenues of Westinghouse or any of its
Subsidiaries.
5. Except as disclosed to the Lenders in the Exchange Act Report filed
prior to the Closing Date or otherwise disclosed in writing to the Lenders
prior to the Closing Date, to the best of my knowledge, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or threatened by or against Westinghouse or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to the Credit Agreement or (b) which if adversely determined would have
a Material Adverse Effect.
6. Westinghouse is not (a) an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended, or (b) a "holding company" as defined in, or
otherwise subject to regulation under, the Public Utility Holding Company Act
of 1935.
I am a member of the bar of the Commonwealth of Pennsylvania and I
express no opinion as to the laws of any jurisdiction other than the laws of
the Commonwealth of Pennsylvania and the Federal laws of the United States of
America.
Very truly yours,
<PAGE> 114
Exhibit E-2 to the
Credit Agreement
FORM OF OPINION OF ASSISTANT/ASSOCIATE GENERAL COUNSEL
August 29, 1996
Morgan Guaranty Trust Company of New York,
as Administrative Agent
The Chase Manhattan Bank,
as Documentation Agent
NationsBank, N.A. and The Toronto-Dominion Bank,
as Syndication Agents
And each of the Lenders parties to
the Credit Agreement referred to below
Gentlemen:
I am [Assistant][Associate] General Counsel of Westinghouse Electric
Corporation, a Pennsylvania corporation ("Westinghouse"), and in such capacity
have represented Westinghouse in connection with the Credit Agreement, dated as
of August 29, 1996 (the "Credit Agreement"), among Westinghouse, the Lenders
parties thereto, NationsBank, N.A. and The Toronto-Dominion Bank, as
syndication agents, The Chase Manhattan Bank, as documentation agent, and
Morgan Guaranty Trust Company of New York, as administrative agent.
The opinions expressed below are furnished to you pursuant to Section
4.1(e)(ii) of the Credit Agreement. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.
In arriving at the opinions expressed below,
(a) I have examined, and relied on the executed originals, of the
Credit Agreement;
and
(b) I have examined, either personally or indirectly through lawyers
who report to me or through other counsel, such corporate documents and records
of Westinghouse and such other instruments and certificates of public
officials, officers and representatives of
<PAGE> 115
-2- August __, 1996
Westinghouse and other Persons as I have deemed necessary or appropriate for
the purposes of this opinion.
In arriving at the opinions expressed below, I have made such
investigations of law, in each case as I have deemed appropriate as a basis for
such opinions.
In rendering the opinions expressed below, I have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted to me as originals, (b) the genuineness of all
signatures on all documents that I examined (other than those of Westinghouse)
and (c) the conformity to authentic originals of documents submitted to me as
certified, conformed or photostatic copies.
Based upon and subject to the foregoing, I am of the opinion that:
(1) Assuming the due authorization, execution and delivery of
the Credit Agreement by each party thereto other than Westinghouse, the Credit
Agreement constitutes the legal, valid and binding obligation of Westinghouse,
enforceable against Westinghouse in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
receivership, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that no opinion is expressed with respect to Section 2.18
of the Credit Agreement insofar as it provides that a Lender purchasing a
participation from another Lender may exercise set-off rights with respect to
such participation.
(2) The execution and delivery of the Credit Agreement by
Westinghouse, the consummation of the transactions contemplated thereby and
compliance by Westinghouse with any of the provisions thereof will not conflict
with, constitute a default under or violate any New York law or regulation.
(3) No consent, approval, waiver, license or authorization or
other action by or filing with any New York governmental authority is required
in connection with the execution and delivery by Westinghouse of the Credit
Agreement or the consummation by Westinghouse of the transactions contemplated
thereby.
I am a member of the bar of the State of New York and I
express no opinion as to the laws of any jurisdiction other than the laws of
the State of New York.
The opinions expressed herein are based on states of facts
and law as they exist on the date hereof.
I have used due care in preparing this opinion. Nevertheless,
nothing contained herein shall create any obligation or right to look to me
individually for any claim, liability,
<PAGE> 116
-3- August __, 1996
damage, loss or expense whatsoever whether arising in contract, in tort
(including negligence and strict liability) or otherwise in connection with
this opinion, with the Credit Agreement or otherwise in connection with the
transactions contemplated therein.
This opinion is solely for the use of the Agents and the
Lenders in connection with the transactions contemplated by the Credit
Agreement and may not be relied upon by any other person or used for any other
purpose.
Very truly yours,
<PAGE> 117
Exhibit E-3 to the
Credit Agreement
FORM OF OPINION OF SIMPSON THACHER & BARTLETT
August 29, 1996
Morgan Guaranty Trust Company of New York,
as Administrative Agent
The Chase Manhattan Bank,
as Documentation Agent
NationsBank, N.A. and The Toronto-Dominion Bank,
as Syndication Agents
And each of the Lenders listed on Schedule I hereto
Re: Credit Agreement, dated as of August 29, 1996 (the
"Credit Agreement"), among Westinghouse Electric
Corporation, a Pennsylvania corporation
("Westinghouse"), the Lenders parties thereto,
NationsBank, N.A. and The Toronto-Dominion Bank, as
Syndication Agents, The Chase Manhattan Bank, as
Documentation Agent, and Morgan Guaranty Trust Company
of New York, as Administrative Agent (together with the
Syndication Agents and the Documentation Agent, the
"Agents").
Ladies and Gentlemen:
We have acted as special counsel to the Agents in connection
with the execution and delivery of the Credit Agreement.
This opinion is delivered to you pursuant to Section 4.1(e)(iii)
of the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
In arriving at the opinion expressed below, we have examined (a)
counterparts of the Credit Agreement, signed by Westinghouse and the Agents and
(b) such documents as we have deemed necessary or appropriate for the purposes
of this opinion.
In such examination, we have assumed the genuineness of all
signatures, the authenticity, regularity and completeness of all documents
submitted to us as originals, the completeness of all documents submitted to us
as certified, conformed or photostatic copies and the conformity of such
documents to the original documents.
<PAGE> 118
-2- August __, 1996
We have also assumed that the Credit Agreement has been duly
authorized, executed and delivered by Westinghouse; that Westinghouse is duly
incorporated and validly existing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to execute, deliver and
perform its obligations under the Credit Agreement; that Westinghouse is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended; that the execution, delivery and performance by Westinghouse of the
Credit Agreement have been duly authorized by all necessary corporate action on
the part of Westinghouse, do not contravene the certificate of incorporation,
by-laws or similar organizational documents of Westinghouse, do not violate, or
require any consent not obtained under, any applicable law or regulation or any
order, writ, injunction or decree of any court or other Governmental Authority
binding upon Westinghouse and do not violate, or require any consent not
obtained under, any contractual obligation applicable to or binding upon
Westinghouse; and that the Credit Agreement constitutes a valid and legally
binding obligation of the Agents and the Lenders.
Based upon the foregoing, and subject to the qualifications and
comments set forth below, we are of the opinion that, insofar as the law of the
State of New York is concerned, the Credit Agreement constitutes a valid and
legally binding obligation of Westinghouse, enforceable against Westinghouse in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing, except that we express no
opinion as to (a) any indemnification obligations of Westinghouse under the
Credit Agreement to the extent such obligations might be deemed to be
inconsistent with public policy; (b) any provision of the Credit Agreement that
purports to establish an evidentiary standard for determinations by the Lenders
or either Agent; and (c) any setoff right contained in Section 2.18 of the
Credit Agreement authorizing any Lender to set off and apply deposits at any
time held, and any other indebtedness at any time owing, by such Lender to or
for the account of any party against any participation transferred to or by
such Lender.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State
of New York.
This opinion has been rendered solely for your benefit in
connection with the Credit Agreement and the transactions contemplated thereby,
may not be relied upon by you for any other purpose, or relied upon by any
other person, firm or corporation without our prior written consent, and may
not be furnished to any other person, firm or corporation other than any
assignee or participant under the Credit Agreement or any bank examiner or
other regulatory authority without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE> 119
Exhibit F to the
Credit Agreement
FORM OF CLOSING CERTIFICATE
WESTINGHOUSE ELECTRIC CORPORATION
Pursuant to Section 4.1(b) of the Credit Agreement dated as of
August 29, 1996 (the "Credit Agreement"; terms defined therein being used
herein as therein defined), among Westinghouse Electric Corporation
("Westinghouse"), the Lenders parties thereto, NationsBank, N.A. and The
Toronto-Dominion Bank, as Syndication Agents, The Chase Manhattan Bank, as
Documentation Agent, and Morgan Guaranty Trust Company of New York, as
Administrative Agent, the undersigned ___________________ of Westinghouse
hereby certifies as follows:
(1) The representations and warranties of Westinghouse set forth
in the Credit Agreement or which are contained in any certificate
furnished by or on behalf of Westinghouse pursuant to or in connection
with the Credit Agreement are true and correct in all material respects
on and as of the date hereof with the same effect as if made on the
date hereof except for representations and warranties expressly stated
to relate to a specific earlier date, in which case such
representations and warranties were true and correct in all material
respects as of such earlier date;
(2) No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to the Loans to
be made on the date hereof and/or the issuance of any Letters of Credit
to be issued on the date hereof;
(3) ___________ is and at all times since ___ __, 199_ has been,
the duly elected and qualified [Assistant] Secretary of Westinghouse
and the signature set forth for such officer below is such officer's
true and genuine signature;
and the undersigned [Assistant] Secretary of Westinghouse certifies as follows:
(4) There are no liquidation or dissolution proceedings pending
or to my knowledge threatened against Westinghouse, nor has any other
event occurred adversely affecting or threatening the continued
corporate existence of Westinghouse after the date hereof;
(5) Westinghouse is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
organization;
(6) Attached hereto as Annex 1 is a correct and complete copy of
resolutions duly adopted by the Board of Directors of Westinghouse on
_____________ __, 199_ authorizing (i) the execution, delivery and
performance of the Credit Agreement and (ii) the transactions
contemplated by the Credit Agreement; such resolutions have not in any
way been amended, modified, revoked or rescinded and have been in full
force and
<PAGE> 120
2
effect since their adoption to and including the date hereof and are
now in full force and effect; such resolutions are the only corporate
proceedings of Westinghouse now in force relating to or affecting the
matters referred to therein; attached hereto as Annex 2 is a correct
and complete copy of the By-Laws of Westinghouse as in effect at all
times since __________ __, 199_ to and including the date hereof, and
such By-Laws have not been amended, repealed, modified or restated; and
attached hereto as Annex 3 is a correct and complete copy of the
Certificate of Incorporation of Westinghouse as in effect at all times
since _________ __, 199_ to and including the date hereof, and such
Certificate of Incorporation has not been amended, repealed, modified
or restated;
(7) The following Persons are now duly elected and qualified
officers of Westinghouse holding the offices indicated next to their
respective names below, and the signatures appearing opposite their
respective names below are the true and genuine signatures of such
officers, and each of such officers is duly authorized to execute and
deliver, on behalf of Westinghouse, the Credit Agreement and any
certificate or other document to be delivered by Westinghouse pursuant
to the Credit Agreement:
Name Office Signature
- ------------------- -------------------- -----------------------
- ------------------- -------------------- -----------------------
- ------------------- -------------------- -----------------------
- ------------------- -------------------- -----------------------
<PAGE> 121
3
IN WITNESS WHEREOF, the undersigned have hereunto set our names
as of the date set forth below.
By: By:
----------------------- -----------------------------
Name: Name:
Title: Title: [Assistant] Secretary
Date: August 29, 1996
<PAGE> 122
Annex 1
Resolutions
<PAGE> 123
Annex 2
By-Laws
<PAGE> 124
Annex 3
Certificate of Incorporation
<PAGE> 125
Exhibit G to the
Credit Agreement
FORM OF ISSUING LENDER AGREEMENT
ISSUING LENDER AGREEMENT dated as of _________________, ____,
among WESTINGHOUSE ELECTRIC CORPORATION, a Pennsylvania corporation
("Westinghouse"), [NAME OF ISSUING LENDER], as Issuing Lender (in such capacity,
the "Issuing Lender"), and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
administrative agent (in such capacity, the "Administrative Agent") for the
lenders (the "Lenders") parties to the Credit Agreement dated as of August 29,
1996 (as amended, supplemented or otherwise modified, from time to time, the
"Credit Agreement"), among Westinghouse, the Lenders, NationsBank, N.A. and The
Toronto-Dominion Bank, as syndication agents, The Chase Manhattan Bank, as
documentation agent, and the Administrative Agent.
The parties hereto have entered into this Issuing Lender
Agreement in connection with the Credit Agreement. Terms used herein and not
otherwise defined herein shall have the meanings given to them in the Credit
Agreement.
SECTION 1. Designation as Issuing Lender. The Issuing Lender is
hereby designated as an "Issuing Lender" as contemplated by the Credit
Agreement and the Issuing Lender agrees, subject to the terms and conditions
set forth herein and in the Credit Agreement, to become an Issuing Lender under
the Credit Agreement pursuant to which the Issuing Lender agrees to issue and
deliver or to extend the expiry of Letters of Credit [and act as Issuing Lender
with respect to Designated Letters of Credit specified on Schedule 1 hereto, in
each case] for the account of Westinghouse in an aggregate undrawn amount at
any one time outstanding which does not exceed [$____________].
SECTION 2. Letters of Credit. On the terms and conditions set
forth in the Credit Agreement and relying upon the representations and
warranties set forth in the Credit Agreement, the Issuing Lender agrees, at any
time and from time to time, in accordance with the provisions of Section 2.7 of
the Credit Agreement, to issue Letters of Credit pursuant to the procedures set
forth in Section 2.7 of the Credit Agreement. The Issuing Lender agrees that it
shall comply with the obligations applicable to an Issuing Lender under the
Credit Agreement, including the obligation to give written or telecopy notice
to Westinghouse and the Administrative Agent of the matters specified in
Section 2.7(f) of the Credit Agreement.
SECTION 3. Obligation to Repay. Westinghouse agrees to pay to
the Administrative Agent all amounts required to pay all drafts presented under
Letters of Credit in accordance with the provisions of Section 2.7(g) of the
Credit Agreement.
SECTION 4. Payment of Fees. Westinghouse agrees to pay to the
Issuing Lender the Issuing Lender Fees agreed to from time to time between
Westinghouse and the Issuing Lender.
<PAGE> 126
2
SECTION 5. Documentary Credit Practices. Westinghouse agrees
that, except as otherwise expressly agreed to in writing by the Issuing Lender
and Westinghouse prior to the Issuing Lender's issuance of any Letter of
Credit, to the extent applicable, the terms of the Uniform Customs and Practice
for Documentary Credits, 1993 revision, International Chamber of Commerce
Publication No. 500, and all subsequent amendments and revisions thereto are
incorporated herein by reference and shall be deemed a part hereof and shall
apply to the Letters of Credit and to this Agreement.
SECTION 6. Obligations Absolute. As and to the extent set forth
in Section 2.7(g) of the Credit Agreement, the obligation of Westinghouse to
pay the amounts referred to above in Sections 3 and 4 shall be absolute,
unconditional and irrevocable and shall be satisfied strictly in accordance
with the terms of the Credit Agreement and this Agreement.
SECTION 7. Notices. All communications and notices hereunder
shall be given as provided in Section 8.1 of the Credit Agreement.
SECTION 8. Binding Agreement; Assignments. This Agreement and
the terms, covenants and conditions hereof shall bind and inure to the benefit
of the parties hereto and their respective successors and assigns, except that
Westinghouse and the Issuing Lender shall not be permitted to assign this
Agreement or any interest herein without the prior written consent of the other
parties to this Agreement.
SECTION 9. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICTS OF LAW
PROVISIONS AND PRINCIPLES OF SUCH STATE.
SECTION 10. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.
SECTION 11. Interpretation. To the extent that the terms and
conditions of this Agreement conflict with the terms and conditions of the
Credit Agreement, the terms and conditions of the Credit Agreement shall
control.
<PAGE> 127
3
IN WITNESS WHEREOF, the parties hereto have duly executed this
Issuing Lender Agreement as of the day and year first above written.
WESTINGHOUSE ELECTRIC [NAME OF ISSUING LENDER],
CORPORATION as Issuing Lender
By: By:
----------------------- -----------------------------
Name: Name:
Title: Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
By:
-----------------------
Name:
Title:
<PAGE> 1
EXHIBIT (11) COMPUTATION OF PER SHARE EARNINGS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
EQUIVALENT SHARES:
Average shares outstanding 401,055,603 368,308,232 399,229,558 361,991,462
Additional Shares due to:
Stock options 7,236,866 4,613,807 6,750,057 4,525,983
Series C Preferred Shares 36,000,000 36,000,000 36,000,000 36,000,000
----------- ----------- ----------- -----------
Total equivalent shares -
primary 444,292,469 408,922,039 441,979,615 402,517,445
=========== =========== =========== ===========
Additional Series B shares under
"if converted" assumption -- 24,667,500 -- 29,601,000
Other potentially issuable
shares 69,193 97,754 318,301 137,941
----------- ----------- ----------- -----------
Total equivalent shares -
fully diluted 444,361,662 433,687,293 442,297,916 432,256,386
=========== =========== =========== ===========
ADJUSTED EARNINGS
(in millions):
Income (loss) from Continuing
Operations $ 2 $ 27 $ (851) $ 43
Less: Series B preferred
stock dividends -- 9 -- 34
------- ------- --------- ---------
Adjusted income (loss) from
Continuing Operations $ 2 $ 18 $ (851) $ 9
Income (loss) from Discontinued
Operations -- (79) 1,008 (21)
Extraordinary Item (30) -- (93) --
------- ------- -------- --------
Adjusted net income (loss) $ (28) $ (61) $ 64 $ (12)
======= ======= ========= ========
PRIMARY EARNINGS (LOSS) PER SHARE
From Continuing Operations $ - $ 0.04 $ (1.93) $ 0.02
From Discontinued Operations - (0.19) 2.28 (0.05)
From Extraordinary Item (0.06) - (0.21) -
------- ------- --------- --------
Primary earnings (loss)
per share (a) $ (0.06) $ (0.15) $ 0.14 $ (0.03)
======= ======= ========= ========
FULLY DILUTED EARNINGS (LOSS)
PER SHARE
From Continuing Operations $ - $ 0.06 $ (1.93) $ 0.10
From Discontinued Operations - (0.18) 2.28 (0.05)
From Extraordinary Item (0.06) - (0.21) -
------- ------- --------- --------
Fully diluted earnings (loss)
per share (a) $ (0.06) $ (0.12) $ 0.14 $ 0.05
======= ======= ========= ========
</TABLE>
(a) For earnings per share using an alternative treatment for the Series C
Preferred Shares, see note 11 to the condensed consolidated financial
statements included in Part I of this report.
-32-
<PAGE> 1
EXHIBIT (12)(a) COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in millions) (unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30 December 31
----------------- -----------
1996 1995 1995
---- ---- ----
<S> <C> <C> <C>
Income (loss) before income taxes
and minority interest $(1,274) $ 73 $ 13
Less: Equity in income (loss) of
50 percent or less owned affiliates 6 (1) 2
Add: Fixed charges excluding capitalized
interest 378 153 259
------- ------- ------
Earnings as adjusted $ (902) $ 227 $ 270
======= ======= ======
Fixed charges:
Interest expense $ 358 $ 138 $ 237
Rental expense 20 15 22
Capitalized interest - - -
------- ------- ------
Total fixed charges $ 378 $ 153 $ 259
======= ======= ======
Ratio of earnings to fixed charges (a) 1.48x 1.04x
======= ======= ======
</TABLE>
(a) Additional income before income taxes and minority interest of $1,280
million would be necessary to attain a ratio of earnings to fixed charges
of 1.00x for the nine months ended September 30, 1996.
-33-
<PAGE> 1
EXHIBIT (12)(b) COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(in millions) (unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30 December 31
----------------- -----------
1996 1995 1995
---- ---- ----
<S> <C> <C> <C>
Income (loss) before income taxes
and minority interest $(1,274) $ 73 $ 13
Less: Equity in income (loss) of
50 percent or less owned affiliates 6 (1) 2
Add: Fixed charges excluding capitalized
interest 431 254 383
------- ------ ------
Earnings as adjusted $ (849) $ 328 $ 394
======= ====== ======
Combined fixed charges and preferred dividends:
Interest expense $ 358 $ 138 $ 237
Rental expense 20 15 22
Capitalized interest -- -- --
Pre-tax earnings required to cover
preferred dividend requirements (a) 53 101 124
------- ------ ------
Total combined fixed charges and
preferred dividends $ 431 $ 254 $ 383
======= ====== ======
Ratio of earnings to combined fixed charges
and preferred dividends (b) 1.29x 1.03x
======= ====== ======
</TABLE>
(a) Dividend requirement divided by 100% minus effective income tax rate.
(b) Additional income before income taxes and minority interest of $1,280
million would be necessary to attain a ratio of earnings to combined
fixed charges and preferred dividends of 1.00x for the nine months ended
September 30, 1996.
-34-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 112
<SECURITIES> 0
<RECEIVABLES> 1,462
<ALLOWANCES> 44
<INVENTORY> 863
<CURRENT-ASSETS> 4,494
<PP&E> 3,523
<DEPRECIATION> 1,673
<TOTAL-ASSETS> 15,343
<CURRENT-LIABILITIES> 3,774
<BONDS> 4,780
4
0
<COMMON> 426
<OTHER-SE> 1,283
<TOTAL-LIABILITY-AND-EQUITY> 15,343
<SALES> 6,220
<TOTAL-REVENUES> 6,220
<CGS> 4,308
<TOTAL-COSTS> 4,308
<OTHER-EXPENSES> 2,714
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 358
<INCOME-PRETAX> (1,274)
<INCOME-TAX> (427)
<INCOME-CONTINUING> (851)
<DISCONTINUED> 1,008
<EXTRAORDINARY> (93)
<CHANGES> 0
<NET-INCOME> 64
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
