<PAGE>
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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, 1999
------------------
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 1-14599
----------------
INFINITY BROADCASTING CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-4030071
- ------------------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
40 WEST 57TH STREET, NEW YORK, NY 10019
--------------------------------------------------
(Address of principal executive offices, zip code)
(212) 314-9200
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by checkmark 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 / /
AT OCTOBER 31, 1999, 137,788,800 SHARES OF CLASS A COMMON STOCK AND 700,000,000
SHARES OF CLASS B COMMON STOCK WERE OUTSTANDING.
================================================================================
<PAGE>
INFINITY BROADCASTING CORPORATION
INDEX
---------------------------------
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Condensed Consolidated Statement of Earnings 3
Condensed Consolidated Balance Sheet 4
Condensed Consolidated Statement of Cash Flows 5
Notes to the Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 9
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURE 20
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INFINITY BROADCASTING CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(unaudited, in thousands except per-share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-----------------------------------------------------
1999 1998 1999 1998
==================================================================================================================
<S> <C> <C> <C> <C>
Total revenues $ 705,331 $ 609,966 $ 1,925,915 $ 1,507,011
Less agency commissions (86,615) (75,648) (236,191) (187,321)
- ------------------------------------------------------------------------------------------------------------------
Net revenues 618,716 534,318 1,689,724 1,319,690
- ------------------------------------------------------------------------------------------------------------------
Operating expenses excluding depreciation and amortization 332,733 301,731 958,882 767,507
Depreciation and amortization 72,992 71,310 219,530 177,249
Corporate expenses 4,498 4,275 14,118 13,145
- ------------------------------------------------------------------------------------------------------------------
Total operating expenses 410,223 377,316 1,192,530 957,901
- ------------------------------------------------------------------------------------------------------------------
Operating earnings 208,493 157,002 497,194 361,789
Interest income (expense), net 242 (17,278) (1,881) (22,038)
Other income, net 545 1,705 412 2,318
- ------------------------------------------------------------------------------------------------------------------
Earnings before income taxes and minority interest 209,280 141,429 495,725 342,069
Income taxes (97,743) (73,729) (236,956) (175,958)
Minority interest in income of consolidated subsidiaries (69) (439) (13) (531)
- ------------------------------------------------------------------------------------------------------------------
Net earnings $ 111,468 $ 67,261 $ 258,756 $ 165,580
==================================================================================================================
Basic and diluted earnings per common share $ 0.13 $ 0.10 $ 0.30 $ 0.24
==================================================================================================================
</TABLE>
See Notes to the Condensed Consolidated Financial Statements.
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<PAGE>
INFINITY BROADCASTING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands except per-share amounts)
<TABLE>
<CAPTION>
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1999 1998
===================================================================================================================
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 129,099 $ 497,701
Receivables (net of allowance for doubtful accounts
of $27,318 and $27,463, respectively) 504,651 460,966
Prepaid and other current assets 68,730 39,206
Deferred tax assets 29,527 19,641
- -------------------------------------------------------------------------------------------------------------------
Total current assets 732,007 1,017,514
Property and equipment, net 250,407 236,584
Goodwill, net 5,367,900 5,426,627
FCC licenses, net 3,670,457 3,683,988
Transit franchise agreements, net 237,980 248,555
Other assets 191,815 184,975
- -------------------------------------------------------------------------------------------------------------------
Total assets $ 10,450,566 $ 10,798,243
===================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses $ 236,655 $ 177,077
Accrued compensation 53,970 39,750
Accrued interest 5,796 12,113
Accrued income taxes 28,361 3,000
- -------------------------------------------------------------------------------------------------------------------
Total current liabilities 324,782 231,940
Long-term debt 248,238 523,960
Deferred taxes 1,153,365 1,156,244
Other noncurrent liabilities 60,060 28,072
- -------------------------------------------------------------------------------------------------------------------
Total liabilities 1,786,445 1,940,216
- -------------------------------------------------------------------------------------------------------------------
Contingent liabilities and commitments
- -------------------------------------------------------------------------------------------------------------------
Stockholders' equity:
Preferred stock, par value $0.01 (50,000 shares authorized, none issued) -- --
Class A common stock, par value $0.01 (2,000,000 shares
authorized, 155,250 shares issued) 1,553 1,553
Class B common stock, par value $0.01 (2,000,000 shares
authorized, 700,000 shares issued) 7,000 7,000
Capital in excess of par value 8,805,448 8,805,448
Accumulated earnings 302,782 44,026
Common stock held in treasury, at cost (452,662) --
- -------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 8,664,121 8,858,027
- -------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 10,450,566 $ 10,798,243
===================================================================================================================
</TABLE>
See Notes to the Condensed Consolidated Financial Statements.
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<PAGE>
INFINITY BROADCASTING CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999 1998
=====================================================================================================================
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 258,756 $ 165,580
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 219,530 177,249
Deferred taxes 7,010 2,920
Other noncash items (4,616) (4,033)
Changes in assets and liabilities, net of acquisitions and dispositions
Increase in accounts receivable (41,922) (12,373)
Increase in other assets (37,682) (4,305)
Increase (decrease) in accounts payable and accrued expenses 39,279 (5,820)
Increase (decrease) in accrued interest (6,317) 11,006
Increase in accrued income taxes 25,361 --
Decrease in other liabilities (1,855) (13,807)
- ---------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 457,544 316,417
- ---------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from dispositions 58,750 56,731
Business acquisitions (145,043) (1,434,634)
Capital expenditures (29,371) (19,793)
- ---------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (115,664) (1,397,696)
- ---------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Receipts from CBS, net -- 1,768,084
Purchase of treasury stock (438,716) --
Repayment of debt (271,766) (635,031)
- ---------------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) financing activities (710,482) 1,133,053
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (368,602) 51,774
Cash and cash equivalents at beginning of period 497,701 22,522
- ---------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 129,099 $ 74,296
=====================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 27,527 $ 16,714
Income taxes $ 205,206 $ 173,038
=====================================================================================================================
</TABLE>
See Notes to the Condensed Consolidated Financial Statements.
-5-
<PAGE>
INFINITY BROADCASTING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------
1. GENERAL
The condensed consolidated financial statements include the accounts of Infinity
Broadcasting Corporation and its subsidiary companies (together, the Company or
Infinity) after elimination of intercompany accounts and transactions. When
reading the financial information contained in this Quarterly Report, reference
should be made to the consolidated financial statements, schedule, and notes
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, as amended by Form 10-K/A, and the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999, as
amended by the respective Forms 10-Q/A. Certain previously reported amounts have
been reclassified to conform to the 1999 presentation.
The Company was incorporated in September 1998 to own and operate the radio and
outdoor advertising business of CBS Corporation (CBS). In December 1998, CBS
contributed to the Company, at book value, its radio and outdoor advertising
properties.
On May 27, 1999, the Company entered into an agreement to acquire Outdoor
Systems, Inc. (Outdoor Systems) for approximately $8.7 billion, which
includes the assumption of $1.8 billion of Outdoor Systems debt. Outdoor
Systems is one of the largest outdoor advertising companies in North America,
operating bulletin, poster, mall and transit advertising display faces in the
United States, Canada, and Mexico. The terms of the agreement call for each
Outdoor Systems common share to be exchanged for 1.25 shares of Infinity
Class A common stock. On November 4, 1999, the Outdoor Systems and Infinity
shareholders approved the transaction, which is expected to close during
November 1999, subject to certain closing conditions as set forth in the
merger agreement. This transaction will be accounted for by the purchase
method of accounting.
The condensed consolidated financial statements have been prepared assuming that
the Company existed as a stand-alone entity during all periods presented. Any
acquisitions of radio and outdoor properties by CBS have been presented as the
Company's transactions, and any consideration to effect these acquisitions has
been treated as a capital contribution by CBS to the Company. These acquisitions
include (a) the radio operations of CBS Inc. in November 1995, (b) Infinity
Media Corporation (formerly Infinity Broadcasting Corporation) and subsidiaries,
which includes TDI Worldwide, Inc. (TDI), (collectively, Old Infinity), on
December 31, 1996, and (c) the radio operations of CBS Radio, Inc. and
subsidiaries (formerly American Radio Systems Corporation) (American Radio) in
June 1998. The operating results for the acquired entities have been included in
the Company's Condensed Consolidated Statement of Earnings from their respective
dates of acquisition. See note 2 to the condensed consolidated financial
statements.
Certain prior period financial information included herein may not necessarily
reflect what the consolidated results of operations, financial position, changes
in stockholders' equity and cash flows of the Company would have been had the
Company been a separate, stand-alone entity during those prior periods
presented.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. On an ongoing basis,
management reviews its estimates, including those related to intangible assets,
program rights, contracts, allowance for doubtful accounts, income taxes and
litigation, based on currently available information. Changes in facts and
circumstances may result in revised estimates. In the opinion of management, the
condensed consolidated financial statements include all material adjustments
necessary to present fairly the Company'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.
-6-
<PAGE>
2. ACQUISITIONS
In June 1998, the Company acquired the radio broadcasting operations of American
Radio for $1.4 billion in cash plus the assumption of debt with a fair value of
approximately $1.3 billion. The acquisition was accounted for under the purchase
method. The excess consideration paid over the estimated fair value of net
assets acquired totaling approximately $0.8 billion was recorded as goodwill and
is being amortized on a straight-line basis over 40 years.
3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
(in thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1999 1998
==========================================================================================
<S> <C> <C>
Accounts payable $ 51,825 $ 41,685
Accrued transit franchise payments 33,660 25,562
Other 151,170 109,830
------------------------------------------------------------------------------------------
Total accounts payable and accrued expenses $ 236,655 $ 177,077
==========================================================================================
</TABLE>
4. RELATED PARTY TRANSACTIONS
In connection with the formation and capitalization of the Company discussed in
note 1, the Company entered into an intercompany agreement with CBS. The Company
utilizes certain executive and other services provided by CBS or its
subsidiaries. Certain officers of CBS serve as officers of the Company.
Additional services provided by CBS include, among others, certain financial and
administrative services. For the three and nine months ended September 30, 1999,
allocated expenses in the approximate amounts of $1.6 million and $5.1 million,
respectively, were included in the Condensed Consolidated Statement of Earnings
of the Company. During the same periods in 1998, allocated expenses totaled $2.4
million and $5.4 million, respectively.
5. EARNINGS PER COMMON SHARE
The Company adopted SFAS No. 128 "Earnings per Share" which requires the
disclosure of basic and diluted earnings per share and related computations as
follows:
COMPUTATION OF EARNINGS PER COMMON SHARE
(unaudited, in thousands except per-share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- ---------------------------
1999 1998 1999 1998
===================================================================================================================
<S> <C> <C> <C> <C>
Net earnings applicable to common stock $ 111,468 $ 67,261 $ 258,756 $ 165,580
- ----------------------------------------------------------------------------------------------------------------------
Average shares outstanding - basic 846,261 700,000 851,654 700,000
Diluted effect of stock option plans 202 -- 116 --
-------------------------------------------------------------------------------------------------------------------
Average shares outstanding - diluted 846,463 700,000 851,770 700,000
-------------------------------------------------------------------------------------------------------------------
Basic and diluted earnings per common share $ 0.13 $ 0.10 $ 0.30 $ 0.24
===================================================================================================================
</TABLE>
-7-
<PAGE>
6. SEGMENT INFORMATION
The Company's operations are aligned into two business segments, Radio and
Outdoor, which are consistent with the mediums through which the Company sells
its advertising and the Company's financial reporting structure.
SEGMENT RESULTS OF OPERATIONS
(unaudited, in thousands)
<TABLE>
<CAPTION>
REVENUE OPERATING EARNINGS EBITDA
-------------------------- ------------------------ -----------------------
THREE MONTHS ENDED SEPTEMBER 30, 1999 1998 1999 1998 1999 1998
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Radio $ 476,790 $ 419,151 $ 178,865 $ 133,794 $ 245,410 $ 201,009
Outdoor 141,926 115,167 29,628 23,208 36,620 29,008
------------------------------------------------------------------------------------------------------------------
Total Out-of-Home $ 618,716 $ 534,318 $ 208,493 $ 157,002 $ 282,030 $ 230,017
==================================================================================================================
<CAPTION>
REVENUE OPERATING EARNINGS EBITDA
-------------------------- ------------------------ -----------------------
NINE MONTHS ENDED SEPTEMBER 30, 1999 1998 1999 1998 1999 1998
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Radio $1,304,373 $1,005,931 $ 431,398 $ 309,342 $ 630,810 $ 471,589
Outdoor 385,351 313,759 65,796 52,447 86,326 69,767
------------------------------------------------------------------------------------------------------------------
Total Out-of-Home $1,689,724 $1,319,690 $ 497,194 $ 361,789 $ 717,136 $ 541,356
==================================================================================================================
</TABLE>
Management believes that earnings before interest, taxes, minority interest,
depreciation and amortization (EBITDA) is an appropriate measure for evaluating
the operating performance of the Company's business. EBITDA eliminates the
effect of depreciation and amortization of tangible and intangible assets, most
of which were acquired in acquisitions accounted for under the purchase method
of accounting, including CBS Inc.'s radio operations, Old Infinity and American
Radio. The exclusion of amortization expense eliminates variations in results
among stations or other entities caused by the timing of acquisitions. More
recent acquisitions reflect higher amortization expense due to increasing prices
associated with out-of-home properties. However, EBITDA should be considered in
addition to, not as a substitute for, operating earnings, net earnings, cash
flows and other measures of financial performance reported in accordance with
generally accepted accounting principles. As EBITDA is not a measure of
performance calculated in accordance with generally accepted accounting
principles, this measure may not be comparable to similarly titled measures
employed by other companies.
Net revenues of $51 million and $142 million for the three and nine months ended
September 30, 1999, respectively, were derived from the Company's foreign
operations, compared to $43 million and $117 million for the corresponding
periods of 1998.
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Infinity Broadcasting Corporation (Infinity or the Company) was formed in
September 1998 as a wholly-owned subsidiary of CBS Corporation (CBS) to own and
operate its radio and outdoor advertising segment. The radio broadcasting
properties and TDI Worldwide, Inc. (TDI), one of the largest outdoor advertising
companies in the United States, comprise the Company's out-of-home media
business focusing on providing advertising to targeted demographic audiences
outside the consumer's home.
In December 1998, the Company completed an initial public offering of
155,250,000 shares of its Class A common stock, generating net proceeds of $3.0
billion. Following the stock offering, CBS owned 81.8% of the Company's equity
and 95.8% of the voting power.
On May 27, 1999, the Company entered into an agreement to acquire Outdoor
Systems, Inc. (Outdoor Systems) for approximately $8.7 billion, which includes
the assumption of $1.8 billion of Outdoor Systems debt. Outdoor Systems is one
of the largest outdoor advertising companies in North America, operating
bulletin, poster, mall and transit advertising display faces in the United
States, Canada, and Mexico. The terms of the agreement call for each Outdoor
Systems common share to be exchanged for 1.25 shares of Infinity Class A common
stock. On November 4, 1999, the Outdoor Systems and Infinity shareholders
approved the transaction, which is expected to close during November 1999,
subject to certain closing conditions as set forth in the merger agreement. This
transaction will be accounted for by the purchase method of accounting.
During the second and third quarters of 1999, CBS Corporation closed on a number
of strategic investments focused on growing its Internet-based operations. CBS
received an equity interest in these Internet companies, in exchange for future
advertising and promotional time on CBS's and Infinity's properties. During the
fourth quarter of 1999, Infinity expects to enter into a definitive agreement
with CBS regarding Infinity's economic interest in certain CBS Internet
investments.
The condensed consolidated financial statements have been prepared assuming that
the Company existed as a stand-alone entity during all periods presented. Any
acquisitions of radio or outdoor advertising properties by CBS have been
presented as the Company's transactions, and any consideration to effect these
acquisitions has been treated as a capital contribution by CBS to the Company.
These acquisitions include (a) the November 1995 acquisition of the radio
operations of CBS Inc. for $1.2 billion of cash, (b) the December 31, 1996
acquisition of Infinity Media Corporation (formerly known as Infinity
Broadcasting Corporation) and subsidiaries, which includes TDI (collectively,
Old Infinity), for $4.7 billion, consisting of $3.8 billion of CBS's common
stock and $0.9 billion of debt that was repaid immediately prior to the
acquisition, and (c) the June 1998 acquisition of the radio operations of CBS
Radio, Inc. and subsidiaries (formerly American Radio Systems Corporation)
(American Radio) for $1.4 billion of cash plus the assumption of debt with a
fair value of approximately $1.3 billion. See note 2 to the condensed
consolidated financial statements.
The Condensed Consolidated Statement of Earnings and Condensed Consolidated
Statement of Cash Flows for the three and nine months ended September 30, 1998
are not necessarily indicative of the results of operations and cash flows that
would have resulted had the Company actually operated as a separate, stand-alone
entity.
RESULTS OF OPERATIONS
The Company's operations are aligned into two business segments, Radio and
Outdoor, which are consistent with the mediums through which the Company sells
its advertising and the Company's financial reporting structure.
USE OF EBITDA
Management believes that earnings before interest, taxes, minority interest,
depreciation and amortization (EBITDA) is an appropriate measure for evaluating
the operating performance of the Company's business. EBITDA eliminates the
effect of depreciation and amortization of tangible and intangible assets, most
of which were acquired in acquisitions accounted for under the purchase method
of accounting, including CBS Inc.'s radio operations, Old Infinity and American
Radio. The exclusion of amortization expense eliminates variations in results
among stations
-9-
<PAGE>
or other entities caused by the timing of acquisitions. More recent acquisitions
reflect higher amortization expense due to increasing prices associated with
out-of-home properties. However, EBITDA should be considered in addition to, not
as a substitute for, operating earnings, net earnings, cash flows and other
measures of financial performance reported in accordance with generally accepted
accounting principles. As EBITDA is not a measure of performance calculated in
accordance with generally accepted accounting principles, this measure may not
be comparable to similarly titled measures employed by other companies.
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998
The Company's net revenues for the three months ended September 30, 1999 were
$619 million compared to $534 million for the three months ended September 30,
1998, an increase of approximately 16%. Radio net revenues for the three months
ended September 30, 1999 were $477 million compared to $419 million for the
three months ended September 30, 1998, an increase of approximately 14%. This
increase was due primarily to higher advertising rates at the Company's radio
stations. Outdoor net revenues for the three months ended September 30, 1999
were $142 million compared to $115 million for the three months ended September
30, 1998, an increase of approximately 23%. Driving this increase was the strong
performance of TDI, the Company's outdoor advertising business, and the February
1999 acquisition of Alrecon, the outdoor subsidiary of the Dutch national rail
company.
The Company's operating expenses excluding depreciation and amortization expense
for the three months ended September 30, 1999 were $333 million compared to $302
million for the three months ended September 30, 1998, an increase of
approximately 10%. Radio operating expenses for the three months ended September
30, 1999 were $228 million compared to $215 million for the three months ended
September 30, 1998, an increase of approximately 6%. Outdoor operating expenses
for the three months ended September 30, 1999 were $105 million compared to $87
million for the three months ended September 30, 1998, an increase of
approximately 22%. These increases were primarily attributable to the higher
revenues generated by Radio and Outdoor. Operating expenses did not increase in
the same proportion as the increase in revenues because a substantial portion of
the Company's costs are fixed.
The Company's depreciation and amortization expense for the three months ended
September 30, 1999 was $73 million compared to $71 million for the three months
ended September 30, 1998, an increase of approximately 2%. Radio depreciation
and amortization expense remained flat at approximately $66 million for the
three months ended September 30, 1999 and 1998. Outdoor depreciation and
amortization expense for the three months ended September 30, 1999 was $7
million compared to $5 million for the three months ended September 30, 1998.
The increase primarily represents additional depreciation and amortization
expense resulting from the February 1999 acquisition of Alrecon.
The Company's operating earnings for the three months ended September 30, 1999
were $208 million compared to $157 million for the three months ended September
30, 1998, an increase of approximately 33%. Radio operating earnings for the
three months ended September 30, 1999 were $179 million compared to $134 million
for the three months ended September 30, 1998, an increase of approximately 34%.
Outdoor operating earnings for the three months ended September 30, 1999 were
$29 million compared to $23 million for the three months ended September 30,
1998, an increase of approximately 28%. These increases were primarily
attributable to the higher revenues of Radio and Outdoor.
The Company's EBITDA for the three months ended September 30, 1999 was $282
million compared to $230 million for the three months ended September 30, 1998,
an increase of approximately 23%. Radio EBITDA for the three months ended
September 30, 1999 was $245 million compared to $201 million for the three
months ended September 30, 1998, an increase of approximately 22%. Outdoor
EBITDA for the three months ended September 30, 1999 was $37 million compared to
$29 million for the three months ended September 30, 1998, an increase of
approximately 26%. These increases were primarily attributable to the higher
revenues generated by Radio and Outdoor.
Income taxes for the three months ended September 30, 1999 were $98 million
compared to $74 million for the three months ended September 30, 1998. The
effective tax rate was 47% for the three months ended September 30, 1999
compared to 52% for the three months ended September 30, 1998. The Company's
effective tax rate exceeds the federal statutory rate primarily because of the
non-deductible goodwill amortization resulting from recent business
acquisitions. The decrease in the effective tax rate is due to the Company's
higher operating earnings.
-10-
<PAGE>
Net earnings for the three months ended September 30, 1999 totaled $111 million
compared to $67 million for the three months ended September 30, 1998, an
increase of 66%.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998
Certain discussions below provide a comparison of actual results with pro forma
results. For the nine months ended September 30, 1999 and 1998 comparisons, pro
forma results were determined as if the acquisition of American Radio and
related station divestitures and exchanges, as well as TDI's acquisition of
Alrecon, had occurred on January 1, 1998.
The Company's net revenues for the nine months ended September 30, 1999 were
$1,690 million compared to $1,320 million for the nine months ended September
30, 1998, an increase of approximately 28%. Radio net revenues for the nine
months ended September 30, 1999 were $1,304 million compared to $1,006
million for the nine months ended September 30, 1998, an increase of
approximately 30%. Driving this increase was the continued strong performance
of the stations and the inclusion of the operations of American Radio in the
Company's results subsequent to its June 1998 acquisition. Outdoor net
revenues for the nine months ended September 30, 1999 were $386 million
compared to $314 million for the nine months ended September 30, 1998, an
increase of approximately 23%. Driving this increase was the strong
performance of the Company's outdoor advertising business and the February
1999 acquisition of Alrecon. On a pro forma basis, the Company's net revenues
for the nine months ended September 30, 1999 compared to the nine months
ended September 30, 1998 increased approximately 16%.
The Company's operating expenses excluding depreciation and amortization expense
for the nine months ended September 30, 1999 were $959 million compared to $768
million for the nine months ended September 30, 1998, an increase of
approximately 25%. Radio operating expenses for the nine months ended September
30, 1999 were $660 million compared to $523 million for the nine months ended
September 30, 1998, an increase of approximately 26%. Outdoor operating expenses
for the nine months ended September 30, 1999 were $299 million compared to $245
million for the nine months ended September 30, 1998, an increase of
approximately 22%. These increases were primarily attributable to the higher
revenues generated by Radio and Outdoor, as well as Radio's June 1998
acquisition of American Radio. On a pro forma basis, the Company's operating
expenses for the nine months ended September 30, 1999 compared to the nine
months ended September 30, 1998 increased approximately 11%. Operating expenses
on a pro forma basis did not increase in the same proportion as the increase in
revenues because a substantial portion of the Company's costs are fixed.
The Company's depreciation and amortization expense for the nine months ended
September 30, 1999 was $220 million compared to $177 million for the nine months
ended September 30, 1998, an increase of approximately 24%. Radio depreciation
and amortization expense for the nine months ended September 30, 1999 was $199
million compared to $160 million for the nine months ended September 30, 1998,
an increase of approximately 24%. The increase primarily represents additional
depreciation and amortization expense resulting from the June 1998 acquisition
of American Radio. Outdoor depreciation and amortization expense for the nine
months ended September 30, 1999 was $21 million compared to $17 million for the
nine months ended September 30, 1998, an increase of approximately 23%. The
increase primarily represents additional depreciation and amortization expense
resulting from the February 1999 acquisition of Alrecon.
The Company's operating earnings for the nine months ended September 30, 1999
were $497 million compared to $362 million for the nine months ended September
30, 1998, an increase of approximately 37%. Radio operating earnings for the
nine months ended September 30, 1999 were $431 million compared to $309 million
for the nine months ended September 30, 1998, an increase of approximately 39%.
Outdoor operating earnings for the nine months ended September 30, 1998 were $66
million compared to $53 million for the nine months ended September 30, 1998, an
increase of approximately 25%. These increases were primarily attributable to
the higher revenues of Radio and Outdoor, as well as Radio's June 1998
acquisition of American Radio. On a pro forma basis, the Company's operating
earnings for the nine months ended September 30, 1999 compared to the nine
months ended September 30, 1998 increased approximately 35%.
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The Company's EBITDA for the nine months ended September 30, 1999 was $717
million compared to $541 million for the nine months ended September 30,
1998, an increase of approximately 32%. Radio EBITDA for the nine months
ended September 30, 1999 was $631 million compared to $471 million for the
nine months ended September 30, 1998, an increase of approximately 34%.
Outdoor EBITDA for the nine months ended September 30, 1999 was $86 million
compared to $70 million for the nine months ended September 30, 1998, an
increase of approximately 24%. On a pro forma basis, the Company's EBITDA for
the nine months ended September 30, 1999 compared to the nine months ended
September 30, 1998 increased approximately 23%.
Income taxes for the nine months ended September 30, 1999 were $237 million
compared to $176 million for the nine months ended September 30, 1998. The
effective tax rate was 48% for the nine months ended September 30, 1999 compared
to 51% for the nine months ended September 30, 1998. The Company's effective tax
rate exceeds the federal statutory rate primarily because of the non-deductible
goodwill amortization resulting from recent business acquisitions. The decrease
in the effective tax rate is due to the Company's higher operating earnings.
Net earnings for the nine months ended September 30, 1999 totaled $259 million
compared to $166 million for the nine months ended September 30, 1998, an
increase of approximately 56%.
SEASONALITY
Seasonal revenue fluctuations are common in the out-of-home media industry. The
Company's revenue is typically lowest in the first quarter and highest in the
second and fourth quarters.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operations generate cash substantially in excess of that required
for recurring operations and capital expenditures. At September 30, 1999, the
Company's cash and cash equivalents totaled $129 million. Management expects
that because of the Company's strong cash position, it will have sufficient
liquidity to meet its future business needs. Sources of liquidity generally
available to the Company include cash from operations, cash and cash
equivalents, borrowings, and issuances of equity securities.
OPERATING ACTIVITIES
The Company's operating activities provided $458 million of cash during the
first nine months of 1999 compared to $316 million during the first nine months
of 1998. The increase relates primarily to the improved operating results during
the first nine months of 1999. Subsequent to the Company's initial public
offering in December 1998, income taxes are paid pursuant to the terms of the
tax sharing agreement between the Company and CBS.
INVESTING ACTIVITIES
The Company's investing activities used cash of $116 million during the first
nine months of 1999 compared to $1,398 million during the first nine months of
1998. Cash used during the first nine months of 1999 related primarily to the
net impact of acquisitions, dispositions, and capital expenditures. In June
1998, the Corporation completed the acquisition of the radio broadcasting
operations of American Radio for $1.4 billion in cash plus the assumption of
debt with fair value of approximately $1.3 billion.
During the first quarter of 1999, the Company acquired Alrecon, the outdoor
subsidiary of the Dutch national rail company, for $34 million in cash. On April
30, 1999, the Company acquired two radio stations in Tampa, Florida and one in
Cleveland, Ohio from Clear Channel Communications for $123 million in cash. In
August 1999, the Company acquired Spark Services, Inc. from Cendent Corporation
for approximately $35 million in cash. These acquisitions were funded by a
combination of cash on hand and cash held in an acquisition trust.
The Company's capital expenditures totaled $29 million for the first nine months
of 1999 compared to $20 million for the first nine months of 1998. The Company's
business does not require substantial investment of capital. The increase in
capital expenditures during the first nine months of 1999 was due primarily to
the incremental expenditures incurred on the American Radio stations, which were
acquired in June 1998.
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FINANCING ACTIVITIES
Cash used for financing activities totaled $710 million during the first nine
months of 1999 compared to $1,133 million provided during the first nine months
of 1998. Cash used for financing activities during the first nine months of 1999
related to the Company's repayment of outstanding debt and the repurchase of its
common stock. Cash provided by financing activities during the first nine months
of 1998 reflects contributions from CBS for the American Radio acquisition,
offset by cash earnings generated by the Company and debt repurchases.
On June 17, 1999, the Company announced that its board of directors had
authorized the purchase of up to $500 million of its class A common stock. As of
October 31, 1999, 17.5 million shares were repurchased at a cost of
approximately $479 million.
Effective November 2, 1999, the Company has the ability to borrow up to $1.5
billion under CBS's revolving credit agreement, which expires on August 29,
2001. The Company had no borrowings outstanding under this facility at September
30, 1999. CBS is in the process of amending its credit agreement to allocate
$1.5 billion of the facility to the Company for its exclusive use.
The Company does not anticipate paying any dividends on its common stock in the
near term.
YEAR 2000
The Year 2000 issue is the result of the development of computer programs and
computer chips using two digits rather than four digits to define the applicable
year. Computer programs and/or equipment with time-sensitive software or
computer chips may recognize the date using "00" as the year 1900 rather than
the year 2000. This could result in a system failure or miscalculations causing
disruptions to business operations.
To address the Year 2000 issue, the Company has undertaken efforts to identify,
modify or replace, and test systems that may not be Year 2000 compliant. The
Company estimates its cost to achieve Year 2000 compliance to be approximately
$5 million, substantially all of which has been incurred to date. CBS has
incurred additional costs of approximately $2 million on behalf of the Company
to ensure compliance of the management information systems infrastructure.
Approximately 60% of the total expenditures relate to the replacement of
existing systems. The Company has funded these costs through its cash flows from
operations. Such costs are expensed as incurred.
The Company's centrally managed critical systems are currently Year 2000
compliant or will be replaced by Year 2000 compliant applications early in the
fourth quarter of 1999. The Company has implemented Year 2000 procedures and
guidelines for individual radio stations, and 98% of high-risk radio assets have
been remediated and tested. The Company believes it is substantially Year 2000
compliant at the end of the third quarter and expects to test all radio systems
and reach full compliance early in the fourth quarter of 1999.
The Year 2000 effort also includes communication with all significant third
party suppliers and customers to determine the extent to which the Company's
systems are vulnerable to those parties' failure to reach Year 2000 compliance.
There can be no guarantee that the Company's third party suppliers or customers
will be Year 2000 compliant on a timely basis and that failure to achieve
compliance would not have a material adverse impact on the Company's business
operations.
Although the Company believes that it will complete its Year 2000 effort and
will be compliant on time, there can be no assurances that this will occur. The
Company has developed contingency plans to ensure continued business operations
in case of Year 2000 related disruptions. The Company has set up a center to
monitor performance, identify and prioritize issues, and communicate with its
senior management team throughout the most critical crossover period. The
Company also believes that, based on its current plan of identifying and
scheduling the required personnel and its ability to secure additional equipment
necessary to meet mission-critical business processes, it will be adequately
prepared for contingency measures, if needed.
The Company believes that it is difficult to fully assess the risks of the Year
2000 problem due to numerous uncertainties surrounding the issue. Management
believes that primary risks are external to the Company and relate to the Year
2000 readiness of its suppliers and customers. The inability of the Company or
its suppliers and customers to adequately address the Year 2000 issues on a
timely basis could result in a material financial risk,
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including loss of revenue, substantial unanticipated costs and service
interruptions. Accordingly, the Company has been, and will continue to, devote
the resources it concludes are appropriate to address all significant Year 2000
issues in a timely manner.
REGULATORY MATTERS
CBS has received, in the past, numerous permanent and temporary conditional
waivers to permit ownership of a television station and numerous radio stations
in the same market. The temporary waivers were subject to the outcome of pending
rulemaking proceedings focusing upon the possible relaxation of the Federal
Communications Commission (FCC) rule restricting common ownership in the same
market of radio and television stations (formerly known as the "one-to-a-market"
rule).
Recently, the FCC issued its Report and Order with respect to this pending
rulemaking. The Order adopts a radio/television cross-ownership rule, which
allows a single party to own in a market (a) up to two television stations (if
permitted by the FCC's television duopoly rule) and up to six radio stations or
(b) one television station and seven radio stations, in both instances under
certain circumstances.
Under the Report and Order, CBS is to submit within sixty days of the Order a
showing as to its compliance or non-compliance with the revised rule in those
markets where it currently has temporary, conditional waivers. CBS
anticipates being able to demonstrate compliance in all markets other than
Los Angeles, Chicago and Dallas-Fort Worth, in each of which the Company has
attributable interests in eight radio stations and CBS has interest in one
television station, and in Washington, D.C./Baltimore, where CBS and the
Company have attributable interests in one television station and eleven
radio stations. As to those four markets, the Report and Order provides that
the FCC will continue the temporary waivers until 2004, at which time the FCC
will review its radio/television cross-ownership rule, and CBS and the
Company will have an opportunity to demonstrate that the continued ownership
of radio stations in these markets in excess of the limits set by the rules
would serve the public interest.
In connection with the merger of Viacom Inc. (Viacom) and CBS, which was
announced on September 7, 1999, FCC approval will be requested on November
16, 1999 for the transfer of control to Viacom of the television licenses
held by CBS and the radio licenses currently held by the Company. The
combined company will be required to divest some of its broadcasting assets
in order to obtain such FCC approval. In particular, the combined company
would not be permitted to continue the temporary conditional waivers of the
radio/television cross-ownership rule until 2004, and the addition of certain
Viacom television stations will obligate the combined company to divest
additional radio stations. In total, subject to clarification of the
radio/television cross-ownership rule as it applies to circumstances in which
radio stations are located in a separate Designated Market Area (DMA) from a
commonly-owned television station, which is the case in Washington,
D.C./Baltimore and Sacramento, the combined company may be required to divest
as many as ten radio stations (Los Angeles (1), Chicago (1), Dallas (2),
Washington, D.C./Baltimore (4) and Sacramento (2)) in order to comply with
the radio/television cross-ownership rule.
In order to consummate the Viacom/CBS merger on an orderly and timely basis,
Viacom and CBS may request deferred enforcement of FCC rules or seek other
regulatory relief.
INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including "Management's Discussion and
Analysis of Financial Condition and Results of Operations," contains both
historical and forward-looking statements. All statements other than statements
of historical fact are, or may be deemed to be, forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements are not based on historical facts but rather reflect
the Company's current expectations concerning future results and events. The
words "believes," "expects," "intends," "plans," "anticipates," "likely,"
"will," and similar expressions identify such forward-looking statements. These
forward-looking statements are subject to risks, uncertainties, and other
factors, some of which are beyond the Company's control, that could cause actual
results to differ materially from those forecast or anticipated in such
forward-looking statements.
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Such risks, uncertainties, and factors include, but are not limited to, the
impact of changes in national, regional and local economics; successful
integration of any acquired properties; the Company's ability to develop and/or
acquire radio on-air talent and programming and to attract and retain
advertisers; the impact of significant competition from other radio stations and
programming alternatives such as broadcast television, newspapers, magazines,
cable television, the Internet, direct mail, and the impact of new technologies;
changes in FCC regulations; increased governmental regulation of the location,
size or content of outdoor advertising; and such other competitive and business
risks as from time to time may be detailed in the Company's Securities and
Exchange Commission reports.
Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect management's view only as of the date of this Report on
Form 10-Q. The forward-looking statements included in this document are made
only as of the date of this document and the Company does not have any
obligation under Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, to publicly
update any forward-looking statements to reflect subsequent events or
circumstances.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings arising in the ordinary
course of business. In the opinion of management of the Company, however, there
are no legal proceedings pending against the Company likely to have a material
adverse effect on the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A) EXHIBITS
3. CERTIFICATE OF INCORPORATION AND BY-LAWS.
3.1 Restated Certificate of Incorporation of the Company as of December 14,
1998 is incorporated by reference to Exhibit 3.1 to the report on Form
10-Q for the quarter ended June 30, 1999.
3.2 Restated By-Laws of the Company as of December 14, 1998 are incorporated
by reference to Exhibit 3.2 to the report on Form 10-Q for the quarter
ended June 30, 1999.
10. MATERIAL CONTRACTS.
10.1 Stock and Asset Transfer Agreement, dated December 2, 1998, between CBS
Broadcasting Inc. and the Company is incorporated by reference to Exhibit
10.1 to the Company's Registration Statement No. 333-63727 on Form S-1,
Amendment No. 4, filed with the Securities and Exchange Commission on
December 4, 1998.
10.2 Stock and Transfer Agreement, dated December 3, 1998, between CBS
Corporation and the Company is incorporated by reference to Exhibit 10.2
to the Company's Registration Statement No. 333-63727 on Form S-1,
Amendment No. 4, filed with the Securities and Exchange Commission on
December 4, 1998.
10.3 Intercompany Agreement between CBS Corporation and the Company is
incorporated by reference to Exhibit 10(x) to the report on Form 10-K of
CBS Corporation for the year ended December 31, 1998.
10.4 Tax Sharing Agreement between CBS Corporation and the Company is
incorporated by reference to Exhibit 10(y) to the report on Form 10-K of
CBS Corporation for the year ended December 31, 1998.
10.5 $4.0 billion Credit Agreement among CBS 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, dated August
29, 1996, is incorporated herein by reference to Exhibit 10(1) to the
report on Form 10-Q of CBS Corporation for the quarter ended September 30,
1996.
10.6 First Amendment, dated January 29, 1997, to the CBS Corporation Credit
Agreement, dated August 29, 1996, among CBS 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, is
incorporated herein by reference to Exhibit 10(p) to the report on Form
10-Q of CBS Corporation for the quarter ended March 31, 1997.
10.7 Second Amendment, dated March 21, 1997, to the CBS Corporation Credit
Agreement, dated August 29, 1996, as amended by the First Amendment
thereto dated January 29, 1997, among CBS Corporation, the Subsidiary
Borrowers parties thereto, 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, is incorporated herein by reference to Exhibit
10(q) to the report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.8 Third Amendment, dated March 3, 1998, to the CBS Corporation Credit
Agreement, dated August 29, 1996, as amended by the First Amendment
thereto dated January 29, 1997, as amended by the Second Amendment thereto
dated March 21, 1997 among CBS Corporation, the Subsidiary Borrowers
parties thereto, 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, is incorporated herein by reference to Exhibit 10(x)
to the report on Form 10-Q of CBS Corporation for the quarter ended March
31, 1998.
10.9 Fourth Amendment, dated February 26, 1999, to the CBS Corporation Credit
Agreement, dated August 29, 1996, as amended by the First, Second, and
Third Amendments, dated January 29, 1997, March 21, 1997 and March 3,
1999, respectively, among CBS Corporation, the Subsidiary Borrowers
parties thereto, the Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The
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Chase Manhattan Bank as Documentation Agent, and Morgan Guaranty Trust
Company of New York as Administrative Agent.
10.10 Management Agreement, dated March 30, 1999, between the Company and
Westwood One, Inc., is incorporated herein by reference to Exhibit 10.17
to the report on Form 8-K of Westwood One, Inc., filed with the
Securities and Exchange Commission on June 4, 1999.
10.11 Amended and Restated Representation Agreement, dated March 30, 1999,
between the Company and Westwood One, Inc., is incorporated herein by
reference to Exhibit 10.18 to the report on Form 8-K of Westwood One,
Inc., filed with the Securities and Exchange Commission on June 4, 1999.
10.12* Employment Agreement, entered into on June 20, 1996 and effective
December 1996, between CBS Corporation and Mel Karmazin, is incorporated
herein by reference to Exhibit 10(s) to the report on Form 10-Q of CBS
Corporation for the quarter ended March 31, 1997.
10.13* Employment Agreement entered into on May 22, 1996, effective November
28, 1995 and amended January 29, 1997, between CBS Broadcasting Inc. and
Daniel Mason, is incorporated by reference to Exhibit 10.13 to the
Company's Registration Statement No. 333-63727 on Form S-1, Amendment
No. 4, filed with the Securities and Exchange Commission on December 4,
1998.
10.14* Restated Employment Agreement, dated December 1, 1998, between TDI
Worldwide, Inc. and William Apfelbaum, is incorporated by reference to
Exhibit 10.14 to the Company's Registration Statement No. 333-63727 on
Form S-1, Amendment No. 4, filed with the Securities and Exchange
Commission on December 4, 1998.
10.15* The CBS Corporation 1991 Long-Term Incentive Plan, as amended to July
28, 1999.
10.16* The CBS Corporation 1993 Long-Term Incentive Plan, as amended to July
28, 1999.
10.17* 1998 Long-Term Incentive Plan of the Company, as amended to April 1,
1999.
10.18* Executive Annual Incentive Plan of the Company is incorporated by
reference to Exhibit 10.18 to the Company's Registration Statement No.
333-63727 on Form S-1, Amendment No. 4, filed with the Securities and
Exchange Commission on December 4, 1998.
10.19* The CBS Corporation Annual Performance Plan, as amended to July 28,
1999.
10.20* The Westinghouse Executive Pension Plan, as amended to July 28, 1999.
10.21* The CBS Corporation 1998 Executive Annual Incentive Plan is incorporated
herein by reference to Exhibit A to the Proxy Statement of CBS
Corporation filed March 25, 1998.
10.22 Form of Trademark License Agreement between CBS Worldwide Inc. and the
Company is incorporated by reference to Exhibit 10.24 to the Company's
Registration Statement No. 333-63727 on Form S-1, Amendment No. 4, filed
with the Securities and Exchange Commission on December 4, 1998.
10.23 Form of Trademark License Agreement between CBS Broadcasting Inc. and
the Company is incorporated by reference to Exhibit 10.25 to the
Company's Registration Statement No. 333-63727 on Form S-1, Amendment
No. 4, filed with the Securities and Exchange Commission on December 4,
1998.
10.24 Form of Trademark License Agreement between CBS Corporation and the
Company is incorporated by reference to Exhibit 10.26 to the Company's
Registration Statement No. 333-63727 on Form S-1, Amendment No. 4, filed
with the Securities and Exchange Commission on December 4, 1998.
10.25* The Infinity Broadcasting Corporation Stock Plan for Directors is
incorporated by reference to Exhibit 10.25 to Form 10-K for the year
ended December 31, 1998.
10.26 Agreement and Plan of Merger, dated May 27, 1999, among the Company,
Burma Acquisition Corp. and Outdoor Systems, Inc., is incorporated
herein by reference to Exhibit 99.1 to the report on Form 8-K of Outdoor
Systems, Inc., filed with the Securities and Exchange Commission on June
3, 1999.
10.27 Amendment No.1, dated June 16, 1999, to the Agreement and Plan of
Merger, dated May 27, 1999, among the Company, Burma Acquisition Corp.
and Outdoor Systems, Inc., is incorporated herein by reference to
Exhibit 99.2 to the Company's report on Form 8-K, filed with the
Securities and Exchange Commission on June 25, 1999.
10.28 Stockholders Agreement, dated May 27, 1999, among the Company, William
S. Levine, Arturo R. Moreno, Carole D. Moreno, Levine Investments
Limited Partnership and BRN Properties Limited Partnership, is
incorporated herein by reference to Exhibit 99.2 to the report on Form
8-K of Outdoor Systems, Inc., filed with the Securities and Exchange
Commission on June 3, 1999.
10.29 Amendment No.1, dated July 15, 1999, to the Stockholders Agreement,
dated May 27, 1999, among the Company and the stockholders named in the
agreement, is incorporated herein by reference to Exhibit 2.4 to the
Company's Registration Statement No. 333-88363 on Form S-4, filed with
the Securities and Exchange Commission on October 4, 1999.
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10.30 Voting Agreement, dated May 27, 1999, between CBS Broadcasting Inc. and
Outdoor Systems, Inc., is incorporated herein by reference to Exhibit
99.3 to the report on Form 8-K of Outdoor Systems, Inc., filed with the
Securities and Exchange Commission on June 3, 1999.
27. FINANCIAL DATA SCHEDULE.
27.1 Financial Data Schedule.
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* Identifies management contract or compensatory plan or arrangement.
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B) REPORTS ON FORM 8-K
A Current Report on Form 8-K (Item 5), filed with the Securities and Exchange
Commission on September 13, 1999, announcing that Bruce S. Gordon was elected as
a member of the Company's board of directors.
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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 1999.
INFINITY BROADCASTING CORPORATION
By: /s/ FARID SULEMAN
--------------------------------------
FARID SULEMAN
EXECUTIVE VICE PRESIDENT, CHIEF
FINANCIAL OFFICER AND TREASURER
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INFINITY
EXHIBIT 10.15
CBS CORPORATION
1991 LONG-TERM INCENTIVE PLAN
(as amended as of July 28, 1999)
ARTICLE I
GENERAL
1.1 PURPOSE
The purposes of the 1991 Long-Term Incentive Plan ("Plan") for eligible
employees of CBS Corporation (formerly known as 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 will be administered by a committee of the Board of
Directors of the Corporation ("Committee") which will consist of two or more
members. The members will be appointed by the Board of Directors, and any
vacancy on the Committee will be filled by the Board of Directors or in a manner
authorized by the Board.
The Committee will keep minutes of its meetings and of any action taken
by it without a meeting. A majority of the Committee will constitute a quorum,
and the acts of a majority of the members present at any meeting at which a
quorum is present will 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 is signed by all of the
members of the Committee. The Committee will make appropriate reports to the
Board of Directors concerning the operations of the Plan.
(b) Subject to the limitations of the Plan, the Committee will have the
sole and complete authority: (i) to select in accordance with Section 1.3
persons who will participate in the Plan ("Participant" or "Participants")
(including the right to delegate authority to select
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Participants); (ii) to make Awards and payments in such forms and amounts as it
may 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 as the Committee or its
authorized delegates deems 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 will be conclusive and binding
upon the Company and all other persons.
(c) The Committee will 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 will 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 must
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. Eligible Persons will also include
independent contractors of the Company as to an Award if the person is an
independent contractor at the time the Award is granted. 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.
1.5 SHARES SUBJECT TO THE PLAN
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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 will be 30,500,000, plus such additional shares as the
Board of Directors or the Committee may, from time to time, authorize by a
resolution or resolutions duly adopted by said Board of Directors or Committee.
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 will again be available for Awards under the Plan. Shares subject to
an option canceled upon the exercise of an SAR will 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
will 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 will 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
will be available again for Awards under the Plan.
No fractional shares will be issued, and the Committee will determine
the manner in which fractional share value will 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 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.
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A Reload Option will be subject to such additional terms and conditions
as the Committee may 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 will 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") will not
be 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 will 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 will establish procedures governing the exercise of
options and will 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
Unless the Committee provides otherwise: (a) 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 will 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; (b)
in the event an Award is made to the estate of a person who
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died while an Employee, each outstanding Option held by such estate will 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; and (c)
if the Participant ceases to be an Eligible Person for any other reason, all of
the Participant's then outstanding Options will 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, unless otherwise provided by the Committee 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 will be evidenced by either a Stock
Option Agreement (when SARs are granted in tandem with an Option) or a separate
written agreement between the Company and the Participant in such form and
containing such terms and conditions as the Committee may from time to time
determine.
(e) Except as otherwise provided herein or by the Committee, a Tandem
SAR will 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 will 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.
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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 or by the Committee, all SARs
will 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 will become
exercisable or will 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 will 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 will be made in cash, Stock, or partly in cash and partly in
Stock, as the Committee may determine. To the extent that payment is made in
Stock, the shares will be valued at their Fair Market Value on the date of
exercise of the SAR.
(k) Unless otherwise provided by the Committee, each SAR will 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 will 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 may a Limited Right be exercised during the first
six months after the date of grant of the Limited Right. Limited Rights will be
exercisable only when the Fair Market Value (determined
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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 exceeds the Option
Price per share of Common Stock subject to the Related option.
(b) Upon the exercise of Limited Rights, the Related Option will 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 will 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 will be the date
on which the Committee approves the grant of such Limited Right. Each grantee of
a Limited Right will be notified promptly of the grant of the Limited Right in
such manner as the Committee prescribes.
(d) Upon the exercise of Limited Rights, the holder thereof will
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" will 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 will consist, in whole or in part, of
consideration other than cash, the Board will take such action, as in its
judgment 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
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category of performance deemed by the Committee to be important to the success
of the Company. The Committee will 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 will 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 will 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 will 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 will be established for each Participant a
"Restriction Period" of such length as the Committee determines. 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 will
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 will be
accumulated and held by the Company and will be subject to forfeiture under
Section 5.4.
Upon the expiration or waiver by the Committee of the Restriction
Period, the
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Corporation will 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
Unless otherwise determined by the Committee, 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 will lapse with respect to such number of the shares
previously awarded to him or her as may be determined by the Committee. All
other shares of Restricted Stock previously 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, will be forfeited,
and the Corporation will have the right to complete the blank stock power.
Unless otherwise determined by the Committee, in the event the
Participant ceases to be an Eligible Person for any other reason, all shares of
Restricted Stock previously 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, will be forfeited, and the Corporation
will 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 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 will 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
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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 from
time to time determines. 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 will 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
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(a) PRE-JULY 28, 1999 AWARDS AND DEFERRALS. With respect to Awards made
or granted pursuant to the Plan prior to July 28, 1999 and with respect to
amounts deferred under the Plan prior to July 28, 1999, notwithstanding any
other provision of the Plan, upon the occurrence of a Change in Control, as
defined in Section 7.2: (i) if so provided in the respective Stock Option
Agreements, as they may be amended from time to time, 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 will
become immediately exercisable; (ii) all Performance Awards will 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 will be deemed to be earned and the Restriction Period will be deemed
expired on such terms and conditions as the Committee may determine; and (iv)
all amounts deferred under this Plan will be paid to a trustee or otherwise on
such terms as the Committee may prescribe or permit.
(b) POST-JULY 28, 1999 AWARDS AND DEFERRALS. With respect to Awards
made or granted pursuant to the Plan on or after July 28, 1999 and with respect
to amounts deferred under the Plan on or after July 28, 1999, the occurrence of
a Change in Control, as defined in Section 7.2, will have no effect on such
outstanding Awards and deferrals pursuant to the Plan (i) unless, with respect
to an Option or a Limited Right, otherwise provided in the applicable Stock
Option Agreement, as it may be amended from time to time, or (ii) unless the
Committee or the Board determines otherwise.
7.2 DEFINITION OF CHANGE IN CONTROL
Unless otherwise provided in an agreement or other document governing
the respective Award or Deferred Amount, as it may be amended from time to time,
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) 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
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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, Limited Right, SAR, Performance Award or share of Restricted
Stock or Deferred Amount under the Plan will be transferable other than by will,
by the applicable laws of descent and distribution, or, if permitted by the
Company, by transfer to a properly designated beneficiary in the event of death.
All Awards and Deferred Amounts will 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, Limited Right, 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, but need not, 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 is 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
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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) Unless the Committee determines otherwise, either by waiving the
condition(s) or by limiting or otherwise amending the condition(s) with respect
to any specified Award or group of Awards, the rights of a Participant with
respect to any Award received under this Plan will be subject to the conditions
that, until the Participant has fully received all payments, transfers and other
benefits under the Award, he or she will (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 has
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 will 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 applicable
(or is applicable as modified by the Committee) and is not fulfilled, the
Participant will 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 will 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 or, if the Committee has modified such condition(s)
with respect to the Participant's Award, that the Participant has not complied
with such condition(s) as modified by the Committee will be conclusive.
(b) This Section 8.4 will not apply to Limited Rights.
8.5 USE OF PROCEEDS
All cash proceeds from the exercise of options will 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 statutory federal, state and local
withholding tax requirements (the "withholding requirements").
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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
statutory 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 statutory 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 statutory 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 will be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan with respect to any leave
of absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Committee will be entitled to determine (i)
whether or not any such leave of absence will 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 will 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 will be subject to the condition that, if
at any time the Committee determines 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 will not be consummated in whole or in part unless
such listing, registration, qualification, consent, approval or agreement has
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
will not be issued until they have been duly listed, upon official notice of
issuance, upon the New York
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Stock Exchange and such other exchanges, if any, as the Board of Directors of
the Corporation determines, and a registration statement under the Securities
Act of 1933 with respect to such shares has become, and is, effective.
8.10 EFFECTIVE DATE
The Plan will 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 will
survive and remain effective as to all present and future Deferred Amounts until
such later date as the Committee or the Board of Directors may determine.
The adoption of the Plan will not preclude the adoption by appropriate
means of any other stock option or other incentive plan for employees and/or
independent contractors.
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 will 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 average 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 the Committee may select) on the relevant date or, if no sale of the
Common Stock has 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 will
mean the value determined by the Committee.
(c) Unless otherwise determined by the Committee, the term "Subsidiary"
will 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 more than 50% of the voting power
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in one of the other corporations in such chain.
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(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 may determine. Such shares
will have such other characteristics as may be determined at time of their
authorization.
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INFINITY
EXHIBIT 10.16
CBS CORPORATION
1993 LONG-TERM INCENTIVE PLAN
(as amended as of July 28, 1999)
ARTICLE I
GENERAL
1.1 PURPOSE
The purposes of the 1993 Long-Term Incentive Plan ("Plan") for key
personnel of CBS Corporation (formerly known as 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 will be administered by a committee of the Board of
Directors of the Corporation ("Committee") which will consist of two or more
members. Each member will 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 will be appointed by the Board of
Directors, and any vacancy on the Committee will be filled by the Board of
Directors or in a manner authorized by the Board.
The Committee will keep minutes of its meetings and of any action taken
by it without a meeting. A majority of the Committee will constitute a quorum,
and the acts of a majority of the members present at any meeting at which a
quorum is present will 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 is signed by all of the
members of the Committee. The Committee will make appropriate reports to the
Board of Directors concerning the operations of the Plan.
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(b) Subject to the limitations of the Plan, the Committee will have the
sole and complete authority: (i) to select in accordance with Section 1.3
persons who will participate in the 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 may 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, deems 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 will be conclusive and binding upon the Company and all other persons.
(c) The Committee will 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 will 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)
must 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 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
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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 will 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 will 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 will again be available for Awards under the Plan. Shares subject to
an option canceled upon the exercise of an SAR will 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
will 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 will be
available again for Awards under the Plan, but only to Nonreporting Persons.
Shares of Restricted Stock forfeited to the Company in accordance with the Plan
and the terms of the particular Award will 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 will be issued, and the Committee will determine
the manner in which fractional share value will be treated.
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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 will be subject to such additional terms and conditions
as the Committee may 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 will 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") will not
be 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 will 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 will establish procedures governing the exercise of
options and
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will 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
Unless the Committee provides otherwise: (a) 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 (whether held by the Participant or, if the Option is an NSO
that has been transferred to a Permissible Transferee (as defined in Section
8.12) in accordance with Section 8.1, by that Permissible Transferee) will be
exercisable by the Participant (or his or her legal representative or designated
beneficiary) or Permissible Transferee, as the case may be, 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; and (b) if the Participant ceases to be an Eligible Person for
any other reason, all of the Participant's then outstanding Options (whether
held by the Participant or, if the Option is an NSO that has been transferred to
a Permissible Transferee in accordance with Section 8.1, by that Permissible
Transferee) will 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, unless otherwise provided by the Committee 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.
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(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 will be evidenced by either a Stock
Option Agreement (when SARs are granted in tandem with an Option) or a separate
written agreement between the Company and the Participant in such form and
containing such terms and conditions as the Committee may from time to time
determine.
(e) Except as otherwise provided herein or by the Committee, a Tandem
SAR will 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 will 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.
(g) Except as otherwise provided herein or by the Committee, all SARs
will 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 will become
exercisable or will 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 will
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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 will be made in cash, Stock, or partly in cash and partly in
Stock, as the Committee may determine. To the extent that payment is made in
Stock, the shares will be valued at their Fair Market Value on the date of
exercise of the SAR.
(k) Unless otherwise provided by the Committee, each SAR will 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 will 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 may 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 will 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 exceeds the Option Price per share of Common Stock subject to the
Related option.
(b) Upon the exercise of Limited Rights, the Related Option will 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 will 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 will be the date
on which the Committee approves the grant of such Limited Right. Each grantee of
a Limited Right will be notified promptly of the grant of the Limited Right in
such manner as the Committee prescribes.
(d) Upon the exercise of Limited Rights, the holder thereof will
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
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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" will 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 will consist, in whole or in part, of
consideration other than cash, the Board will 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 will 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 will 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.
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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 will 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 will 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 will be established for each Participant a
"Restriction Period" of such length as the Committee determines. 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 will
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 will be
accumulated and held by the Company and will be subject to forfeiture under
Section 5.4.
Upon the expiration or waiver by the Committee of the Restriction
Period, the Corporation will 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
Unless otherwise determined by the Committee, 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 will lapse with respect to such number of the shares
previously awarded to him or her as may be determined by the Committee. All
other shares of Restricted Stock previously 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
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Company, will be forfeited, and the Corporation will have the right to complete
the blank stock power.
Unless otherwise determined by the Committee, in the event the
Participant ceases to be an Eligible Person for any other reason, all shares of
Restricted Stock previously 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, will be forfeited, and the Corporation
will 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 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 will 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
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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 from
time to time determines. 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 will 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
(a) PRE-JULY 28, 1999 AWARDS AND DEFERRALS. With respect to Awards made
or granted pursuant to the Plan prior to July 28, 1999 and with respect to
amounts deferred under the Plan prior to July 28, 1999, notwithstanding any
other provision of the Plan, upon the occurrence of a Change in Control, as
defined in Section 7.2: (i) if so provided in the respective Stock Option
Agreements, as they may be amended from time to time, 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 will
become immediately exercisable; (ii) all Performance Awards will 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 will be deemed to be earned and the Restriction Period will be deemed
expired on such terms and conditions as the Committee may determine; and (iv)
all amounts deferred under this Plan will be
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paid to a trustee or otherwise on such terms as the Committee may prescribe or
permit.
(b) POST-JULY 28, 1999 AWARDS AND DEFERRALS. With respect to Awards
made or granted pursuant to the Plan on or after July 28, 1999 and with respect
to amounts deferred under the Plan on or after July 28, 1999, the occurrence of
a Change in Control, as defined in Section 7.2, will have no effect on such
outstanding Awards and deferrals pursuant to the Plan (i) unless, with respect
to an Option or a Limited Right, otherwise provided in the applicable Stock
Option Agreement, as it may be amended from time to time, or (ii) unless the
Committee or the Board determines otherwise.
7.2 DEFINITION OF CHANGE IN CONTROL
Unless otherwise provided in an agreement or other document governing
the respective Award or Deferred Amount, as it may be amended from time to time,
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) 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.
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ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-TRANSFERABILITY
No Option, Limited Right, SAR, Performance Award or share of Restricted
Stock or Deferred Amount under the Plan will be transferable other than by will,
by the applicable laws of descent and distribution, or, if permitted by the
Company, by transfer to a properly designated beneficiary in the event of death;
PROVIDED, HOWEVER, that the Committee may, in its sole discretion, permit the
transfer of an NSO Option (including any Tandem SARs or Limited Rights) by a
Participant to a Permissible Transferee (as defined in Section 8.12) subject to
such terms and conditions as the Committee may, from time to time, determine.
All Awards and Deferred Amounts will be exercisable or received during the
Participant's lifetime only by such Participant or his or her legal
representative or, in the case of an NSO Option (including any Tandem SARs or
Limited Rights) that has been transferred to a Permissible Transferee in
accordance with this Section 8.1, by that Permissible Transferee. Any transfer
contrary to this Section 8.1 will nullify the option, Limited Right, 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, but need not, 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 is 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.
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8.4 CONDITIONS OF AWARDS
(a) Unless the Committee determines otherwise, either by waiving the
condition(s) or by limiting or otherwise amending the condition(s) with respect
to any specified Award or group of Awards, the rights of a Participant with
respect to any Award received under this Plan will be subject to the conditions
that, until the Participant has fully received all payments, transfers and other
benefits under the Award, he or she will (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 has
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 will 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 applicable
(or is applicable as modified by the Committee) and is not fulfilled, the
Participant will 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 will 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 or, if the Committee has modified such condition(s)
with respect to the Participant's Award, that the Participant has not complied
with such condition(s) as modified by the Committee will be conclusive.
(b) This Section 8.4 will not apply to Limited Rights.
8.5 USE OF PROCEEDS
All cash proceeds from the exercise of options will 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 statutory 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
statutory withholding requirements, or make other arrangements
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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 statutory 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 statutory tax withholding requirements.
If at the time an ISO is exercised the Committee determines that the
Company could be liable for statutory 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 statutory 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 (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 will be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan with respect to any leave
of absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Committee will be entitled to determine (i)
whether or not any such leave of absence will 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 will not be deemed to have ceased to be an
Employee for purposes of the Plan.
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8.9 GENERAL RESTRICTION
(a) Each Award under the Plan will be subject to the condition that, if
at any time the Committee determines 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 will not be consummated in whole or in part unless
such listing, registration, qualification, consent, approval or agreement has
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
will 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 determines, and a registration
statement under the Securities Act of 1933 with respect to such shares has
become, and is, effective.
8.10 EFFECTIVE DATE
The Plan will 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 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 will be NSOs, and the provisions of
Article VI of the Plan will survive and remain effective as to all present and
future Deferred Amounts until such later date as the Committee or the Board of
Directors may determine.
The adoption of the Plan will 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.
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8.12 CERTAIN DEFINITIONS
(a) Unless otherwise determined by the Committee, the terms
"retirement" and "disability" as used under the Plan will 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 average 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 the Committee may select) on the relevant date or, if no sale of the
Common Stock has 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 will
mean the value determined by the Committee.
(c) Unless otherwise determined by the Committee, the term "Subsidiary"
will 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 more than 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 may determine. Such shares
will have such other characteristics as may be determined at time of their
authorization.
(e) "Permissible Transferee" means any of the following: (1) a member
of the Participant's Immediate Family; (2) a trust solely for the benefit of the
Participant and/or the Participant's Immediate Family; and (3) a partnership or
limited liability company whose only partners or members, as the case may be,
are the Participant and/or Permissible Transferees of the Participant as
otherwise identified in this definition. "Immediate Family" has the meaning set
forth in Rule 16a-1(e) under the Exchange Act, as such rule may be amended from
time to time, or any successor rule.
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INFINITY
EXHIBIT 10.17
INFINITY BROADCASTING CORPORATION
1998 LONG-TERM INCENTIVE PLAN
(as amended as of April 1, 1999)
ARTICLE I
GENERAL
1.1 PURPOSE
The purposes of the 1998 Long-Term Incentive Plan, as amended from time
to time (the "Plan"), for key personnel of Infinity Broadcasting 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 will be administered by a committee of the Board of
Directors of the Corporation ("Committee") which will consist of two or more
members. Each member will 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 will be appointed by the Board of
Directors, and any vacancy on the Committee will be filled by the Board of
Directors or in a manner authorized by the Board.
(b) Subject to the limitations of the Plan, the Committee will have the
sole and complete authority: (i) to select in accordance with Section 1.3
persons who will participate in the 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 may determine
(including the right to delegate authority to make Awards to
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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, deems 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, unless otherwise
provided in the Plan, take any action to amend any outstanding Option under the
Plan in order to decrease the Option Price under such Option; 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 will be conclusive
and binding upon the Company and all other persons.
(c) The Committee will 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 will 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)
must be Eligible Persons, as defined below, who are key personnel and have the
capacity to contribute to the success of the Company. "Eligible Persons" are
persons who are officers or salaried employees of the Company or its parent or
subsidiary corporations. Eligible Persons will also include independent
contractors of the Company as to an Award if the person is an independent
contractor at the time the Award is granted. 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) 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
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Rights"), as described in Article II; (iii) Performance Awards ("Performance
Awards") as described in Article IV; and (iv) Restricted Stock ("Restricted
Stock") and Restricted Units ("Restricted Units"), each 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 Class A Common
Stock, par value $0.01 per share ("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 (including but not limited to shares issued pursuant to
the exercise of ISOs) will be 15,000,000. 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 any shares having
been issued pursuant thereto having been exercised will again be available for
Awards under the Plan. Shares subject to an option canceled upon the exercise of
an SAR will 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 will 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 will 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 will be available again for Awards
under the Plan.
No fractional shares will be issued, and the Committee will determine
the manner in which fractional share value will 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.
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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 will be subject to such additional terms and conditions
as the Committee may 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 will 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. The Committee may also at any time
and from time to time provide for the deferral of delivery of any shares for
which the option may be exercisable until a specified date or dates and subject
to terms and conditions determined by the Committee.
2.3 OPTION PRICE
The purchase price of Stock under each Option ("Option Price") will not
be 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 will 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 will establish procedures governing the exercise of
options and will 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
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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
Unless the Committee provides otherwise: (a) 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 (whether held by the Participant or, if the Option is an NSO
that has been transferred to a Permissible Transferee (as defined in Section
8.12) in accordance with Section 8.1, by that Permissible Transferee) will be
exercisable by the Participant (or his or her legal representative or designated
beneficiary) or Permissible Transferee, as the case may be, 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; and (b) unless the Committee provides otherwise, if the
Participant ceases to be an Eligible Person for any other reason, all of the
Participant's then outstanding Options (whether held by the Participant or, if
the Option is an NSO that has been transferred to a Permissible Transferee in
accordance with Section 8.1, by that Permissible Transferee) will 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. An SAR granted in tandem with an ISO may be granted only at the time
the Option is granted.
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(d) SARs awarded under the Plan will be evidenced by either a Stock
Option Agreement (when SARs are granted in tandem with an Option) or a separate
written agreement between the Company and the Participant in such form and
containing such terms and conditions as the Committee may from time to time
determine.
(e) Except as otherwise provided herein, a Tandem SAR will 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 will 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.
(g) Except as otherwise provided herein, all SARs will 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 will become
exercisable or will 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 will 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 will be made in cash, Stock, or partly in cash and partly in
Stock, as the Committee may determine. To the extent that payment is made in
Stock, the shares will
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be valued at their Fair Market Value on the date of exercise of the SAR. The
Committee may also at any time and from time to time provide for the deferral of
delivery of any shares and/or cash for which the SAR may be exercisable until a
specified date or dates and subject to terms and conditions determined by the
Committee.
(k) Unless otherwise determined by the Committee, each SAR will expire
on a date determined by the Committee or, unless otherwise determined by the
Committee, 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 Article VII of the Plan, and ending on the thirtieth day following
such date. Each Limited Right will be exercisable only to the same extent that
the Related Option is exercisable, and in no event after the termination of the
Related Option. Limited Rights will 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 exceeds the Option Price per share of Common Stock subject to the
Related option.
(b) Upon the exercise of Limited Rights, the Related Option will 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 will 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 will be the date
on which the Committee approves the grant of such Limited Right. Each grantee of
a Limited Right will be notified promptly of the grant of the Limited Right in
such manner as the Committee prescribes.
(d) Upon the exercise of Limited Rights, the holder thereof will
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
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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" will 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 will consist, in whole or in part, of
consideration other than cash, the Board will take such action, as in its
judgment 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 or may be related to the occurrence of any triggering event or events
that the Committee may deem appropriate. The Committee will determine the
Performance Goals, the period or periods during which performance is to be
measured or otherwise determined and all other terms and conditions applicable
to the Award. Regardless of the degree to which Performance Goals are attained,
a Performance Award will 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 AND RESTRICTED UNITS
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5.1 AWARDS OF RESTRICTED STOCK AND RESTRICTED UNITS
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 will 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.
The Committee may also award to any Participant Restricted Units
subject to this Article V and such other terms and conditions as the Committee
may prescribe. For purposes hereof, a "Restricted Unit" will mean any award of a
contractual right granted under this Article V to receive Stock (or, at the
discretion of the Committee, cash in an amount based on the Fair Market Value of
the Stock, or a combination of Stock and cash) which would become vested and
nonforfeitable, in whole or in part, upon the completion of such period of
service as may be determined by the Committee.
5.2 RESTRICTED STOCK/RESTRICTED UNIT AGREEMENT
Awards of Restricted Stock and Restricted Units under the Plan will be
evidenced by a written agreement in such form and containing such terms and
conditions as the Committee may determine.
5.3 RESTRICTION PERIOD; DIVIDEND EQUIVALENTS
At the time of award of Restricted Stock or Restricted Units, there
will be established for each Participant a "Restriction Period" of such length
as the Committee determines. The Restriction Period may be waived by the
Committee. Shares of Restricted Stock and Restricted Units may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as hereinafter
provided.
Subject to such restrictions on transfer, the Participant as owner of
such shares of Restricted Stock will 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 with respect to such Stock during
the Restriction Period will be accumulated and held by the Company and will be
subject to the same forfeiture provisions and the same restrictions on transfer
as apply to the shares of Restricted Stock with respect to which they were paid.
Upon the expiration or waiver by the Committee of the Restriction
Period and the satisfaction (as determined by the Committee) of any other
conditions determined by the Committee, restrictions applicable to the
Restricted Stock or Restricted Units will lapse and the Corporation will, in the
case of Restricted Stock, redeliver to the Participant (or his or her legal
representative or designated beneficiary) the shares deposited pursuant to
Section 5.1 free and clear of all restrictions except as may be imposed by law
and, in the
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case of Restricted Units, will pay out such units as provided in the Restricted
Unit Agreement.
5.4 TERMINATION OF ELIGIBILITY
Unless otherwise determined by the Committee, 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 will lapse with respect to such number of the shares of
Restricted Stock and with respect to such number of Restricted Units previously
awarded to him or her as may be determined by the Committee. All other shares of
Restricted Stock and Restricted Units previously 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, will be forfeited,
and in the case of Restricted Stock, the Corporation will have the right to
complete the blank stock power.
Unless otherwise determined by the Committee, in the event the
Participant ceases to be an Eligible Person for any other reason, all shares of
Restricted Stock and all Restricted Units previously awarded to him or her which
are still subject to restrictions, along with any dividend or other
distributions on Restricted Stock that have been accumulated and held by the
Company, will be forfeited, and, in the case of Restricted Stock, the
Corporation will have the right to complete the blank stock power.
5.5 DIVIDEND EQUIVALENTS
The Committee will determine whether and to what extent, if any, to
credit to the account of, or to pay currently to, each recipient of Restricted
Units, an amount equal to any dividends or other distributions paid during the
Restriction Period with respect to the corresponding number of shares of Stock
covered thereby ("Dividend Equivalent"). To the extent provided by the Committee
at or after the date of grant, any Dividend Equivalents with respect to cash
dividends on the Stock credited to a Participant's account will be deemed to
have been invested in shares of Stock on the record date established for the
related dividend and, accordingly, a number of additional Restricted Units shall
be credited to such Participant's account equal to the greatest whole number
which may be obtained by dividing (x) the value of such Dividend Equivalent on
the record date by (y) the Fair Market Value of a share of Stock on such date.
ARTICLE VI
DEFERRAL OF PAYMENTS
6.1 DEFERRAL OF AMOUNTS
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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 will be referred to herein as the "Deferral Period."
6.2 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.
6.3 PAYMENT OF DEFERRED AMOUNTS
Payment of Deferred Amounts will be made on such terms and conditions
as the Committee may determine and 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 in
its sole discretion may from time to time determine.
ARTICLE VII
CHANGES IN CONTROL
7.1 EFFECT OF CHANGE IN CONTROL
Upon the determination of the Committee that a change in control has
occurred for purposes of the Plan (a "Change in Control"), then, notwithstanding
any other provision of the Plan: (i) if so provided in the respective Stock
Option Agreements, as they may be amended from time to time, 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 will become immediately exercisable; (ii) all Performance Awards will 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 may be deferred in accordance with the elections of Participants;
(iii) all Restricted Stock and all Restricted Units will be deemed to be earned
and the Restriction Period will be deemed expired on such terms and conditions
as
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the Committee may determine; and (iv) all amounts deferred under this Plan will
be paid to a trustee or otherwise on such terms as the Committee determines.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-TRANSFERABILITY
No Option, Limited Right, SAR, Performance Award, Restricted Unit or
share of Restricted Stock or Deferred Amount under the Plan will be transferable
other than by will, by the applicable laws of descent and distribution, or, if
permitted by the Company, by transfer to a properly designated beneficiary in
the event of death; provided, however, that the Committee may, in its sole
discretion, permit the transfer of an NSO Option (including any Tandem SARs or
Limited Rights) by a Participant to a Permissible Transferee (as defined in
Section 8.12) subject to such terms and conditions as the Committee may, from
time to time, determine. All Awards and Deferred Amounts will be exercisable or
received during the Participant's lifetime only by such Participant or his or
her legal representative or, in the case of an NSO Option (including any Tandem
SARs or Limited Rights) that has been transferred to a Permissible Transferee in
accordance with this Section 8.1, by that Permissible Transferee. Any transfer
contrary to this Section 8.1 will nullify the option, Limited Right, SAR,
Performance Award, Restricted Unit 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, but need not, 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 is 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
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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) Unless the Committee determines otherwise, either by waiving the
condition(s) or by limiting or otherwise amending the condition(s) with respect
to any specified Award or group of Awards, the rights of a Participant with
respect to any Award received under this Plan will be subject to the conditions
that, until the Participant has fully received all payments, transfers and other
benefits under the Award, he or she will (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 has
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 the time he or she was an officer, employee or
independent contractor, but such consultations will 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 applicable (or is applicable as
modified by the Committee) and is not fulfilled, the Participant will 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 will 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
or, if the Committee has modified such condition(s) with respect to the
Participant's Award, that the Participant has not complied with such
condition(s) as modified by the Committee will be conclusive.
(b) This Section 8.4 will not apply to Limited Rights.
8.5 USE OF PROCEEDS
All cash proceeds from the exercise of Options will constitute general
funds of the Company.
8.6 TAX WITHHOLDING
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The Company will collect, through withholding or otherwise, an amount
sufficient to satisfy any applicable statutory federal, state and local
withholding tax requirements (the "withholding requirements") with respect to
payments made pursuant to the Plan.
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 any
applicable statutory 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 statutory 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 any applicable statutory tax withholding requirements.
If at the time an ISO is exercised the Committee determines that the
Company could be liable for statutory 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 statutory 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 (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 will be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan with respect to any leave
of absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Committee will be entitled to determine (i)
whether or not any such leave of absence will be treated as if the Participant
ceased to be an Eligible Person and (ii) the impact, if any, of any such leave
of absence on Awards under the Plan. In the
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event a Participant transfers within the Company, such Participant will not be
deemed to have ceased to be an Eligible Person for purposes of the Plan.
8.9 GENERAL RESTRICTION
(a) Each Award under the Plan will be subject to the condition that, if
at any time the Committee determines 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 will not be consummated in whole or in part unless
such listing, registration, qualification, consent, approval or agreement has
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
will 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 determines, and a registration
statement under the Securities Act of 1933 with respect to such shares has
become, and is, effective.
8.10 EFFECTIVE DATE
The Plan will be effective on December 7, 1998.
No Award may be granted under the Plan after December 6, 2008, 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 except that all Reload Options issued after that date will be NSOs,
and the provisions of Article VI of the Plan will survive and remain effective
as to all present and future Deferred Amounts until such later date as the
Committee or the Board of Directors may determine.
The adoption of the Plan will not preclude the adoption by appropriate
means of any other stock option or other incentive plan for officers or
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
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(a) The terms "retirement" and "disability" as used under the Plan will
have the meanings determined from time to time by the Committee.
(b) The term "Fair Market Value" as it relates to Common Stock means
the average 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 the Committee may select) on the relevant date or, if no sale of the
Common Stock has 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 will
mean the value determined by the Committee.
(c) Unless otherwise determined by the Committee, the term "Subsidiary"
will 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 more than 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 may determine. Such shares
will have such other characteristics as may be determined at time of their
authorization.
(e) "Permissible Transferee" means any of the following: (1) a member
of the Participant's Immediate Family; (2) a trust solely for the benefit of the
Participant and/or the Participant's Immediate Family; and (3) a partnership or
limited liability company whose only partners or members, as the case may be,
are the Participant and/or Permissible Transferees of the Participant as
otherwise identified in this definition. "Immediate Family" has the meaning set
forth in Rule l6a-1(e) under the Exchange Act, as such rule may be amended from
time to time, or any successor rule.
8.13 Governing Law.
The Plan and all agreements or other documents relating to the Plan
will be construed in accordance with and governed by the laws of the State of
Delaware, without regard to the principles of conflict of laws.
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INFINITY
EXHIBIT 10.19
CBS CORPORATION
ANNUAL PERFORMANCE PLAN
(AS AMENDED AS OF JULY 28, 1999)
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 Committee may be carried forward and be available
for payment in any subsequent year or years.
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<PAGE>
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) with respect to any awards approved by the Committee and made prior to July
28, 1999 pursuant to the Plan, to the extent not already vested, all benefits
hereunder with respect to such awards 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) with respect to
any awards approved by the Committee and made prior to July 28, 1999 pursuant to
the Plan, the value of all unpaid benefits and deferred amounts with respect to
such awards shall be paid in cash to Pittsburgh National Bank, the trustee for
this Plan, or a successor trustee, pursuant to a trust agreement between the
Company and the trustee, 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
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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 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.
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INFINITY
EXHIBIT 10.20
WESTINGHOUSE EXECUTIVE PENSION PLAN
As Amended and Restated
Effective July 28, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 1. Definitions 1
Section 2. Qualification for Benefits; Mandatory Retirement 4
Section 3. Calculation of Executive Pension Supplement 4
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 Pension Supplement 7
Section 8. Administration 7
Section 9. Modification or Termination 8
Section 10. Miscellaneous 8
Section 11. Creditors' Claims 9
Section 12. Governing Law 9
Section 13. Severability 9
Section 14. Authority to Expand Benefits 9
Appendix A Executive Buy Back 10
Appendix B Rehired Executives 11
Appendix C Amendment to the Westinghouse Executive
Pension Plan for the Sale of PGBU 14
Appendix D Amendment to the Westinghouse Executive
Pension Plan for the Sale of ESBU 15
</TABLE>
<PAGE>
WESTINGHOUSE EXECUTIVE PENSION PLAN
(As amended and restated as of July 28, 1999)
WHEREAS, Westinghouse Electric Corporation, now CBS 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 July 28, 1999, 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. In the case of an Eligible Affected Employee, the Executive's
Effective Termination Date will be substituted for "actual retirement date" in
determining Average Annual Compensation.
(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 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.
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(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; or, in the case of an Eligible Affected
Employee, the Executive's Effective Termination Date. Also, in the case of an
Eligible Affected Employee, in the event that benefits commence under this Plan
prior to age 65, then the Executive Pension Base will be actuarially reduced by
the same percentage that the Executive's benefit under the Westinghouse Pension
Plan would be actuarially reduced for life annuity benefits commencing at the
time.
(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.
(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.
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(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. In the case of an Eligible Affected Employee, the Executive's Effective
Termination Date will be substituted for "actual retirement date" in determining
his or her Qualified Plan Benefit.
(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, (iv) after March 31, 1999, for Executives
who are participants in the CBS Combined Pension Plan on such date, has attained
age 55 and completed 10 or more years of Eligibility Service, or (v) has
satisfied the 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.
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(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.
Notwithstanding the preceding paragraph, each Executive who is
a participant in the CBS Combined Pension Plan on March 31, 1999, and who, on
March 31, 1999, satisfies the qualification requirements under (ii) above (by
treating March 31, 1999 as the actual retirement date) and under (iii) above,
shall be vested in his or her Executive Pension Supplement, and need not
thereafter satisfy the qualification requirements under (i) and (iv) above to
receive such vested Executive Pension Supplement.
(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
(a) 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:
(1) 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.
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(2) If the Executive has not met the requirements of Section
3(a)(1) above but has attained age 58 and completed 30 or more years of
Eligibility Service (or with respect to Executives who are participants in the
CBS Combined Pension Plan on March 31, 1999, have attained age 55 and completed
10 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.
(b) The Executive Pension Supplement for an Executive who meets the
qualifications of Section 2 of the Plan who terminates from employment before
his or her Early, Normal or Special Retirement Date shall be calculated as
follows: the Executive Pension Supplement is determined by subtracting the
Executive's Qualified Plan Benefit that would be payable (determined without
regard to whether the Executive is vested in his or her Qualified Plan Benefit)
if he or she elected a Life Annuity Option (before any reductions for retirement
prior to age 65) from his or her Executive Pension Base.
(c) Notwithstanding Sections 3(a) and 3(b) above, no Employee shall be
eligible to accrue any Executive Pension Supplement after March 31, 1999 unless
such Employee had accrued an Executive Pension Supplement as of March 31, 1999.
In addition, no Executive who is a participant in the CBS Combined Pension Plan
on March 31, 1999 shall be eligible to accrue any additional Executive Pension
Supplement after March 31, 1999, unless such Executive (i) is age 55 or older on
March 31, 1999, or (ii) has 70 or more "points" (as defined in the CBS Cash
Balance Plan Document component of the CBS Combined Pension Plan) on March 31,
1999.
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
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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.
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
Except for Executives who are participants in the CBS Combined Pension
Plan on March 31, 1999, 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. With respect to
Executives who are Participants in the CBS Combined Pension Plan on March 31,
1999, no benefits shall be payable under this Plan prior to the later of the
Executive's termination of employment or attainment of age 55.
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; provided that, if the Executive or Surviving Spouse is a participant in the
CBS Combined Pension Plan on March 31, 1999, payments need not commence at the
same time as payments under such CBS Combined Pension Plan. 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 (or, for participants in the
CBS Combined Pension Plan on March 31, 1999, the CBS Combined Pension Plan),
subject to the same reductions or other provisions that apply to the elected
form of payment under the Westinghouse Pension Plan (or, for participants in the
CBS Combined Pension Plan on March 31, 1999, the CBS Combined 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 earlier
of the Executive's actual retirement date or commencement date for any reason.
All elections hereunder become effective on the earlier of the Executive's
actual retirement date or commencement 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
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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.
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.
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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.
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 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
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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. 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 13. 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.
SECTION 14. 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 14 of the
Plan within such limits as they each may approve from time to time.
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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.
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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:
(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.
-11-
<PAGE>
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.
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
-12-
<PAGE>
(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.
-13-
<PAGE>
APPENDIX C
AMENDMENT TO THE WESTINGHOUSE EXECUTIVE
PENSION PLAN FOR THE SALE OF PGBU
Effective as of the Closing Date of the sale by CBS Corporation
(formerly Westinghouse Electric Corporation) of its Power Generation Business
("PGBU" or "Business") to Siemens Power Generation Corporation (the
"Purchaser"), the Westinghouse Executive Pension Plan (the "Plan") retains
liability, if any, for benefits earned to the Closing Date with respect to
employees of PGBU who transfer to the Purchaser and are described as "Business
Employees" in Section 5.5(a)(i) of the Asset Purchase Agreement between CBS
Corporation and the Purchaser dated November 14, 1997, as amended (the
"Agreement") and are, pursuant to the Agreement, deemed to be employees of the
Purchaser as of the Closing Date (hereinafter known as "PGBU Employees") subject
to the following conditions:
(1) The Plan shall recognize and credit the period of employment with
the Purchaser or its Affiliates on and after the Closing Date
solely for purposes of calculating eligibility for the payment of
benefits; provided that the Plan shall not recognize and credit
any period of employment with the Business after the Purchaser and
its Affiliates have sold or divested the Business, or a portion
thereof (whether by asset or stock sale, merger or spin-off (each
a "Disposition")) with respect to the PGBU Employees who are
transferred or terminated in connection with such Disposition.
(2) The executive pension plan established by the Purchaser pursuant
to Section 5.5(h)(i) of the Agreement (the "Purchaser Executive
Plan") shall be solely responsible for (and the Plan shall not
provide for):
(a) any benefit that becomes payable with respect to PGBU
Employees retiring after the Closing Date that is the result
of any reduction in force, mass layoff, or plant closing by
the Purchaser or its Affiliates (that is, if the benefit
would not be payable absent such an event); or
(b) any other early retirement subsidy or supplement that is not
described in (1) above.
(3) Average Annual Compensation and Executive Benefit Service under
the Plan with respect to PGBU Employees will be determined and
frozen as of August 31, 1998, and service by PGBU Employees for
Siemens Power Generation Corporation from August 19, 1998 through
August 31, 1998 shall be treated as Executive Benefit Service for
purposes of the Plan.
(4) The Purchaser and its Affiliates (but not any successor to the
Purchaser and its Affiliates as owner of the Business or any part
thereof) will be considered a Designated Entity solely for
purposes of determining eligibility for payment (including
suspension of payment) of benefits.
-14-
<PAGE>
APPENDIX D
AMENDMENT TO THE WESTINGHOUSE EXECUTIVE
PENSION PLAN FOR THE SALE OF ESBU
Effective April 1, 1999, as a result of the sale of CBS Corporation's
Energy Systems Business ("ESBU") to WGNH Acquisition, LLC (the "Purchaser"), the
Westinghouse Executive Pension Plan (the "Plan") retains liability, if any, for
benefits earned to April 1, 1999 with respect to employees of ESBU who transfer
to the Purchaser and are described as "Business Employees" in Section 5.5(a)(i)
of the Asset Purchase Agreement between CBS Corporation and the Purchaser Dated
as of June 25, 1998, as amended (the "Agreement") and are, pursuant to the
Agreement, deemed to be employees of the Purchaser as of April 1, 1999
(hereinafter known as "ESBU Employees") subject to the following conditions:
(1) The Plan shall recognize and credit the period of employment with
the Purchaser or its Affiliates on and after April 1, 1999 solely
for purposes of calculating eligibility for the payment of
benefits; provided that the Plan shall not recognize and credit
any period of employment with the Business after the Purchaser and
its Affiliates have sold or divested the Business, or a portion
thereof (whether by asset or stock sale, merger or spin-off (each
a "Disposition")) with respect to the ESBU Employees who are
transferred or terminated in connection with such Disposition.
(2) The executive pension plan established by the Purchaser (or, if
none, Purchaser) pursuant to Section 5.5(h)(i) of the Agreement
(the "Purchaser Executive Plan") shall be solely responsible for
(and the Plan shall not provide for):
(a) any benefit that becomes payable with respect to ESBU
Employees retiring after April 1, 1999 that is the result of
any reduction in force, mass layoff, or plant closing by the
Purchaser or its Affiliates (that is, if the benefit would
not be payable absent such an event); or
(b) any other early retirement subsidy or supplement that is not
described in (1) above.
(3) Average Annual Compensation and Executive Benefit Service under
the Plan with respect to ESBU Employees will be determined and
frozen as of April 1, 1999.
(4) The Purchaser and its Affiliates (but not any successor to the
Purchaser and its Affiliates as owner of the Business or any part
thereof) will be considered a Designated Entity solely for
purposes of determining eligibility for payment (including
suspension of payment) of benefits.
-15-
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