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Exhibit 99.1
BLOCKBUSTER INVESTMENT PLAN
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Effective May 1, 1999
Including All Amendments Effective On Or Prior to July 1, 2000
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TABLE OF CONTENTS
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ARTICLE I PREAMBLE......................................................... 1
ARTICLE II DEFINITIONS..................................................... 2
2.1 Accounting Period.............................................. 2
2.2 Account(s)..................................................... 2
2.3 Actual Deferral Percentage..................................... 2
2.4 Affiliated Company............................................. 3
2.5 After-Tax Contributions........................................ 3
2.6 Annual Addition................................................ 3
2.7 Beneficiary.................................................... 3
2.8 BIP............................................................ 4
2.9 Blockbuster Stock.............................................. 4
2.10 Board.......................................................... 4
2.11 Break in Service............................................... 4
2.12 Committee...................................................... 4
2.13 Company........................................................ 4
2.14 Compensation................................................... 4
2.15 Contribution Percentage........................................ 4
2.16 Disability..................................................... 5
2.17 Earnings....................................................... 5
2.18 Employee....................................................... 6
2.19 Employer....................................................... 6
2.20 ERISA.......................................................... 6
2.21 Excess Aggregate Contributions................................. 6
2.22 Excess Salary Reduction Contributions.......................... 7
2.23 Former Participant............................................. 7
2.24 Fund........................................................... 7
2.25 Highly Compensated Participant................................. 8
2.26 Hour of Service................................................ 9
2.27 Leased Employee................................................ 9
2.28 Matchable Contributions........................................ 9
2.29 Matching Employer Contributions................................ 9
2.30 Merged Plan.................................................... 10
2.31 Parental Leave................................................. 10
2.32 Participant.................................................... 10
2.33 Payroll Period................................................. 10
2.34 Plan Year...................................................... 10
2.35 Predecessor Plan............................................... 10
2.36 Qualified Nonelective Contributions............................ 10
2.37 Rollover Contributions......................................... 11
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2.38 Salary Reduction Contributions................................... 11
2.39 Severance Date................................................... 11
2.40 Temporary Employee............................................... 11
2.41 Trust agreement.................................................. 11
2.42 Trustee.......................................................... 11
2.43 Unmatched Contributions.......................................... 11
2.44 Valuation Date................................................... 11
2.45 Viacom Stock..................................................... 11
2.46 VIP.............................................................. 11
2.47 Vesting Service.................................................. 11
2.48 Year of Eligibility Service...................................... 11
2.49 Year of Vesting Service.......................................... 11
ARTICLE III ELIGIBILITY FOR PARTICIPATION.................................. 12
3.1 Eligibility...................................................... 12
3.2 Method of Becoming a Participant................................. 13
3.3 Reemployed Participants.......................................... 13
3.4 Events Affecting Participation................................... 13
ARTICLE IV SERVICE......................................................... 14
4.1 Companies For Whom Credited...................................... 14
4.2 Year of Eligibility Service...................................... 14
4.3 Year of Vesting Service.......................................... 16
4.4 Additional Service Credit........................................ 17
ARTICLE V CONTRIBUTIONS.................................................... 18
5.1 Matchable Contributions.......................................... 18
5.2 Unmatched Contributions.......................................... 19
5.3 Election of Salary Reduction and After-Tax Contributions......... 19
5.4 Change in Amount or Form of Contributions........................ 19
5.5 Suspension of Contributions...................................... 19
5.6 Cessation of Contributions....................................... 20
5.7 Matching Employer Contributions.................................. 20
5.8 Remittance of Contributions to Trustee........................... 20
5.9 Remittance of Matching Employer Contributions to Trustee......... 20
5.10 Refund of Matching Employer Contributions........................ 20
5.11 Additional Employer Contributions................................ 21
5.12 Rollover Contributions........................................... 21
5.13 Limitation on Contributions...................................... 22
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ARTICLE VI PARTICIPANT ACCOUNTS................................................................................ 23
6.1 Valuation of Assets................................................................................ 23
6.2 Credits to Participant Accounts.................................................................... 23
6.3 Debits of Participant Accounts..................................................................... 23
6.4 Statement of Participant Accounts.................................................................. 23
ARTICLE VII INVESTMENT OF CONTRIBUTIONS........................................................................ 24
7.1 Investment of Salary Reduction Contributions and
After-Tax Contributions............................................................................ 24
7.2 Investment of Matching Employer Contributions...................................................... 24
7.3 Change in Investment Election for Current Contributions............................................ 24
7.4 Change in Investment Election for Prior Contributions.............................................. 24
7.5 Special Investment Elections....................................................................... 24
7.6 Fiduciary Responsibility for Investments........................................................... 24
ARTICLE VIII WITHDRAWALS DURING EMPLOYMENT..................................................................... 26
8.1 Withdrawals of Salary Reduction Contributions, After-Tax
Contributions, Matching Employer Contributions, Transferred
Amounts, and Rollover Contributions................................................................ 26
8.2 Withdrawal Procedures.............................................................................. 29
8.3 Funds to be Charged with Withdrawal................................................................ 30
8.4 Frequency of Withdrawals........................................................................... 30
ARTICLE IX PARTICIPANT LOANS.................................................................................. 31
9.1 Loan Subaccounts................................................................................... 31
9.2 Eligibility for Loans.............................................................................. 31
9.3 Availability of Loans.............................................................................. 31
9.4 Amount of Loan..................................................................................... 32
9.5 Terms of Loan...................................................................................... 32
9.6 Distribution and Repayment of Loan................................................................. 33
9.7 Events of Default and Action Upon Default.......................................................... 33
ARTICLE X VESTING AND TERMINATION OF EMPLOYMENT............................................................... 35
10.1 Matchable, Unmatched, Qualified Nonelective and
Rollover Contributions............................................................................. 35
10.2 Matching Employer Contributions.................................................................... 35
10.3 Forfeitures........................................................................................ 35
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ARTICLE XI PAYMENT OF BENEFITS OTHER THAN WITHDRAWALS................................................... 37
11.1 Forms of Payment............................................................................ 37
11.2 Modification or Revocation of Form of Payment Election...................................... 37
11.3 Stock Election.............................................................................. 37
11.4 Consent Requirements........................................................................ 38
11.5 Valuation and Payment Procedures for Lump Sum Payments...................................... 38
11.6 Valuation and Payment Procedures for Installment Payments................................... 39
11.7 Time of Payment and Minimum Distribution Requirements....................................... 40
11.8 Direct Rollover Distributions............................................................... 41
11.9 Distributions on Sales of Businesses or Transfers to
Non-Affiliated Companies.................................................................... 42
ARTICLE XII ADMINISTRATION OF THE BBIP.................................................................. 43
12.1 Appointment Of Committee.................................................................... 43
12.2 Organization And Operation Of The Committee --.............................................. 43
12.3 Expenses.................................................................................... 44
12.4 Duties, Powers and Responsibilities of the Retirement Committee............................. 44
12.5 Required Information........................................................................ 45
12.6 Indemnification............................................................................. 45
12.7 Claims And Appeal Procedure................................................................. 45
12.8 Liability of Committee Members.............................................................. 47
12.9 Reliance on Reports and Certificates........................................................ 47
12.10 Member's Own Participation.................................................................. 47
12.11 Fiduciary Indemnification................................................................... 47
12.12 Allocation of Responsibilities.............................................................. 47
12.13 Multiple Capacities......................................................................... 48
ARTICLE XIII AMENDMENT AND TERMINATION.................................................................. 49
13.1 Right to Amend or Terminate................................................................. 49
13.2 Distribution of Funds Upon Termination of the BIP........................................... 49
ARTICLE XIV GENERAL PROVISIONS.......................................................................... 50
14.1 Employment Relationships.................................................................... 50
14.2 Non-Alienation of Benefits.................................................................. 50
14.3 Qualified Domestic Relations Order.......................................................... 50
14.4 Exclusive Benefit of Employees.............................................................. 50
14.5 Merger, Consolidation or Transfer of Assets or Liabilities.................................. 50
14.6 Appointments of Trustee..................................................................... 50
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14.7 Discretion of the Board of Directors and the Committee....................................... 51
14.8 Voting Viacom Inc. and Blockbuster Inc. Common Stock......................................... 51
14.9 Payments to Minors and Incompetents.......................................................... 51
14.10 Employee's Records........................................................................... 51
14.11 Titles and Headings.......................................................................... 52
14.12 Use of Masculine and Feminine; Singular and Plural........................................... 52
14.13 Governing Law................................................................................ 52
ARTICLE XV NONDISCRIMINATION AND ANNUAL ADDITION
LIMITATIONS.................................................................................. 53
15.1 Limitation on Salary Reduction Contributions................................................. 53
15.2 Maximum Contribution Percentage.............................................................. 55
15.3 Limitation on Annual additions............................................................... 57
ARTICLE XVI TOP-HEAVY PLAN............................................................................... 60
16.1 General Rule................................................................................. 60
16.2 Top-Heavy Plan............................................................................... 60
16.3 Definitions.................................................................................. 60
16.4 Requirements Applicable if BIP is Top-Heavy.................................................. 61
ARTICLE XVII SIGNATURE................................................................................... 63
APPENDIX A SPECIAL PROVISIONS APPLICABLE TO CERTAIN
PARTICIPANTS................................................................................. 64
APPENDIX B DIVISIONS NOT INCLUDED IN BLOCKBUSTER INVESTMENT PLAN....................................... 65
APPENDIX C AFFILIATED COMPANIES DESIGNATED AS EMPLOYER UNDER
THE BLOCKBUSTER INVESTMENT PLAN AS OF MAY 1, 1999............................................ 66
APPENDIX D INVESTMENT FUNDS AS OF JULY 1, 2000.......................................................... 67
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ARTICLE I
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PREAMBLE
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1.1 Blockbuster Inc. (the "Company") and its participating subsidiaries
adopted the Blockbuster Investment Plan, which is effective May 1, 1999 for the
purpose of providing a convenient way for employees both to save for their
retirement.
1.2 Effective as of December 31, 1995, the Blockbuster Entertainment
Retirement and Savings Plan (the "Merged Plan"), and the assets and liabilities
thereunder, was merged into the Viacom Investment Plan (the "VIP"). All
provisions of the Merged Plan that were required to be protected under Section
411(d)(6) of the Internal Revenue Code of 1986, as amended, were protected in
the VIP.
1.3 Effective as of May 1, 1999, Viacom Inc. has elected to spin-off the
assets and liabilities attributable to those VIP Participants who were Employees
of Blockbuster Inc. and to transfer those assets and liabilities to the BIP. All
service credited to affected participants in the VIP shall be credited in the
BIP.
1.4 It is the intention of the Company that the Blockbuster Investment
Plan and Trust shall meet the requirements of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and of the Internal Revenue Code of
1986, as amended (the "Code") and shall continue to be qualified and exempt
under Sections 401(a) and 501(a) of the Code, and shall qualify under such
requirements as a profit sharing plan that includes a cash or deferred
arrangement within the meaning of Section 401(k) of the Code. This document
reflects all amendments to the Blockbuster Investment Plan effective on or
before July 1, 2000.
1.5 The rights of any Employee or former Employee whose employment
terminated prior to the effective date of any amendment and the rights of the
Beneficiary of such Employee or former Employee shall be governed by the terms
of the Plan (including any merged-in or predecessor plan) as in effect at the
time of such termination of employment, except in the event such Employee is
rehired and except as otherwise specifically provided herein, or as required by
law.
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ARTICLE II
DEFINITIONS
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2.1 "Accounting Period" shall mean the period of four or five consecutive
calendar weeks in a calendar month used by each Employer in the maintenance of
Participant and Employer Accounts.
2.2 "Account(s)" shall mean with respect to any Participant the accounts
maintained by the Committee or its designee with respect to which are allocated
Salary Reduction Contributions, After-Tax Contributions, Rollover Contributions,
Matching Employer Contributions, and any other contributions or direct transfers
made to the BIP on behalf of any Participant or Beneficiary. In addition, the
Committee shall allocate amounts and otherwise adjust each such Account in
accordance with Article VI.
2.3 "Actual Deferral Percentage" with respect to any group of actively
employed eligible Participants for a Plan Year shall mean the average of the
ratios (calculated separately for each Participant in the group) of:
(a) The amount of Salary Reduction Contributions authorized by the
Participant to be paid to the Trust for such Plan Year plus the amount of any
Qualified Nonelective Contributions made for the Plan Year, divided by
(b) The Participant's Compensation for such Plan Year.
Notwithstanding the foregoing, for purposes of this Paragraph,
"Compensation" for any year shall mean the total amount of wages paid by the
Employer to a Participant within the meaning of Section 3401(a) of the Code
(without regard to any rules under Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in Section
3401(a)(2)) and all other payments of compensation to a Participant by an
Employer (in the course of the Employer's trade or business) for which the
Employer is required to furnish the Participant a written statement under
Sections 6401(d), 6051(a)(3) and 6052 of the Code (a Form W-2), modified to
include all amounts currently not included in the Participant's gross income by
reason of Sections 125 and 402(e)(3) of the Code.
For purposes of determining Actual Deferral Percentages, any
Participant who is suspended from participation pursuant to Paragraphs 5.5 or
8.1(e) shall be treated as an eligible Participant. Actual Deferral Percentages
will be determined in accordance with all applicable requirements (including, to
the extent applicable, the family aggregation requirements) of Section 401(k) of
the Code and the regulations and other guidance thereunder.
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2.4 "Affiliated Company" shall mean any corporation or other entity that
is required to be aggregated with the Company pursuant to Sections 414(b), (c),
(m), or (o) of the Code but only to the extent so required.
2.5 "After-Tax Contributions" shall mean those contributions made by
Participants by means of payroll deduction in accordance with Paragraphs 5.2 and
5.3. After-Tax Contributions are included in each Participant's income for
Federal income and Social Security tax purposes and are subject to the
limitations of Article XV.
2.6 "Annual Addition" shall mean for any Plan Year, Salary Reduction
Contributions, Matching Employer Contributions, Qualified Nonelective
Contributions, additional Employer contributions pursuant to Paragraph 5.11
(which shall be treated as Annual Additions only to the extent and for the
limitation year required by regulations or other guidance issued pursuant to
Code Section 415), After-Tax Contributions, and forfeitures, if any, allocated
to a Participant's Accounts.
2.7 "Beneficiary" shall mean the person designated by the Participant to
receive any death benefits payable hereunder. Each Participant has the right,
from time to time, to change any designation of Beneficiary. A designation or
change of Beneficiary must be in writing on forms supplied by the Committee and
any change of Beneficiary will not become effective until such change of
Beneficiary is filed with the Committee whether or not the Participant is alive
at the time of such filing; provided, however, that any such change will not be
effective with respect to any payments made by the Trustee in accordance with
the Participant's last designation and prior to the time such change was
received by the Committee. Notwithstanding the above, in the case of any
Participant who is married on the date of his death, the Participant's spouse as
of his date of death shall be his Beneficiary unless she shall have consented to
a different Beneficiary on prescribed forms and before either a notary public or
an individual designated by the Committee. In the absence of an effective
designation or if a named Beneficiary shall have died, any death benefits
payable hereunder on behalf of the Participant shall be distributed to the first
of the following classes of successive preference beneficiaries:
(1) the Participant's surviving spouse;
(2) the Participant's surviving children;
(3) the Participant's surviving parents;
(4) the Participant's surviving brothers and sisters;
(5) the estate of the person last receiving benefits hereunder.
Any individual who is designated as an alternate payee in a qualified
domestic relations order (as defined in Section 414(p) of the Code) relating to
a Participant's benefits under this BIP shall be treated as a Beneficiary
hereunder, to the extent provided by such order.
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2.8 "BIP" shall mean the Blockbuster Investment Plan as described herein
and any amendment thereto.
2.9 "Blockbuster Stock" shall mean shares of common stock of Blockbuster
Inc.
2.10 "Board" shall mean the Board of Directors of the Company.
2.11 "Break in Service" shall mean a period of severance from service as
determined in accordance with Paragraph 4.2 and Paragraph 4.3.
2.12 "Committee" shall mean the persons appointed to the Retirement
Committee to administer the Plan or its designees, in accordance with Article
XII.
2.13 "Company" shall mean Blockbuster Inc., a Delaware Corporation.
2.14 "Compensation" shall mean a Participant's base pay for services
rendered to the Employer paid during a Payroll Period, including all pre-tax
elective contributions made on behalf of a Participant either to a "qualified
cash or deferred arrangement" (as defined under Section 401(k) of the Code and
applicable regulations) or a "cafeteria plan" (as defined under Code Section 125
and applicable regulations) maintained by an Employer, plus all overtime pay,
annual cash bonuses under the Company's or Viacom's Short Term Incentive Plan or
certain other comparable annual cash bonus plans sponsored by the Company or an
Employer, commissions, hazard pay and shift differential pay, but excluding (i)
deferred compensation (ii) additional compensation of every other kind,
including cash bonuses under a Company Long Term Performance Plan, if any. For
Participants who are eligible for the Company's Excess Investment Plan,
Compensation shall exclude cash bonuses under Company's or Viacom's Short Term
Incentive Plan and certain other comparable annual cash bonus plans sponsored by
the Company or an Employer. The total amount of a Participant's Compensation
taken into account for any Plan Year shall not exceed $170,000, or the otherwise
applicable annual compensation limitation in effect under Section 401(a)(17)
limitation of the Code, as adjusted by the Internal Revenue Service for
increases in the cost of living in accordance with Section 401(a)(17) of the
Code and the regulations and other guidance issued thereunder. If any Plan Year
consists of fewer than twelve months, the Section 401(a)(17) limitation will be
multiplied by a fraction, the numerator of which is the number of months in the
Plan Year, and the denominator of which is twelve. In the case of an Employee
who begins, resumes, or ceases to be eligible to make contributions during a
Plan Year, the amount of Compensation included in the Actual Deferral Percentage
and Contribution Percentage is the amount of Compensation received by the
Participant during the entire Plan Year.
2.15 "Contribution Percentage" with respect to any specified group of
actively employed eligible Participants for a Plan Year shall mean the average
of the ratios (calculated separately for each Participant in the group) of:
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(a) the amount of Matching Employer Contributions and After-Tax
Contributions, plus the amount of any Salary Reduction Contributions
recharacterized pursuant to Paragraph 15.1(c) or 15.3(c), Salary Reduction
Contributions treated as Matching Employer Contributions pursuant to Paragraph
15.2(c) or 15.4(c), and any Qualified Nonelective Contributions or additional
Matching Employer Contributions made pursuant to Paragraph 15.2(c) or 15.4(c),
paid to the Trust Fund on behalf of each such Participant for such Plan Year, to
(b) the Participant's Compensation for such Plan Year.
Notwithstanding the foregoing, (i) for purposes of this
Paragraph, "Compensation" for any year shall mean the total amount of wages paid
by the Employer to a Participant within the meaning of Section 3401(a) of the
Code (without regard to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed (such as the exception for agricultural labor in
Section 3401(a)(2)) and all other payments of compensation to a Participant by
an Employer (in the course of the Employer's trade or business) for which the
Employer is required to furnish the Participant a written statement under
Sections 6401(d), 6051(a)(3) and 6052 of the Code (a Form W-2), modified to
include all amounts currently not included in the Participant's gross income by
reason of Sections 125 and 402(e)(3) of the Code.
For purposes of determining Contribution Percentages, any Participant
who is suspended from participation pursuant to Paragraphs 5.5 or 8.1(e) shall
be treated as an eligible Participant. Contribution Percentages will be
determined in accordance with the applicable requirements (including, to the
extent applicable, the family aggregation requirements) of Section 401(m) of the
Code and the regulations and other guidance issued thereunder.
2.16 "Disability" shall mean a permanent and total disability that
qualifies an Employee for benefits under the provisions of the Company's Long
Term Disability Plan. The determination of whether a Participant has incurred a
Disability for purposes of this BIP shall be made by the Retirement Committee or
its delegate.
2.17 "Earnings" shall mean the total amount of wages paid by the Employer
to a Participant within the meaning of Section 3401(a) of the Code (without
regard to any rules under Section 3401(a) that limit the remuneration included
in wages based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Section 3401(a)(2))
and all other payments of compensation to a Participant by an Employer (in the
course of the Employer's trade or business) for which the Employer is required
to furnish the Participant a written statement under Sections 6401(d),
6051(a)(3) and 6052 of the Code (a Form W-2).
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2.18 "Employee" shall mean an employee of the Company or an Affiliated
Company. A "Full Time Employee" means any Employee who is classified in the
Employer's employment records as a full-time Employee. A "Part-Time Employee"
means any Employee who is classified in the Employer's employment records as a
part-time Employee. Notwithstanding the foregoing, the term "Employee" shall
exclude Leased Employees covered by a plan described in Section 414(n)(5) of the
Code.
2.19 (a) "Employer" shall include the Company and any Affiliated Company
participating in the Plan as provided in Section 2.17(b). When used in reference
to Matching Employer Contributions for a Participant, the term "Employer" will
refer to the Employer employing such Participant. When used in reference to the
collective obligations of all Employers in the group, the obligation of each
Employer will be proportionate to the contributions of or on behalf of its
Participants to the BIP.
(b) If any company is now or becomes an Affiliated Company of an
Employer, including the Company, the Retirement Committee may include the
employees of that company in the membership of the Plan upon appropriate action
by that company necessary to adopt the Plan. In that event, or if any persons
become Employees of an Employer as the result of the merger or consolidations or
as the result of the acquisition of all or part of the assets or business of
another company, the Retirement Committee shall determine to what extent, if
any, credit and benefits shall be granted for previous service with the
subsidiary, associated or other company, but subject to the continued
qualifications of the Trust for the Plan as tax-exempt under the Code. The
Retirement Committee may exclude the employees of any division of an Employer
from membership in the Plan upon appropriate action by the Employer.
2.20 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and regulations issued pursuant to said Act.
2.21 "Excess Aggregate Contributions" shall mean with respect to each
Highly Compensated Participant, the amount equal to the total Matching Employer
Contributions made on his behalf and his After-Tax Contributions (including
Salary Reduction Contributions which are recharacterized pursuant to Paragraph
15.1(c) or 15.3(c)) determined prior to the application of the leveling
procedure described below minus the product of the Participant's Contribution
Percentage, determined after the application of the leveling procedure described
below, multiplied by the Participant's Compensation, as determined for purposes
of Paragraph 2.13. Under the leveling procedure, the Contribution Percentage of
the Highly Compensated Participant with the highest such percentage is reduced
to the extent required to enable the limitations of Paragraph 15.2(a) or 15.4(a)
to be satisfied, or, if it results in a lower reduction, to the extent required
to cause such Participant's Contribution Percentage to equal that of the Highly
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Compensated Participant with the next highest Contribution Percentage. This
leveling procedure is repeated until the limitations of Paragraph 15.2(a) or
15.4(a) are satisfied. In no case shall the amount of Excess Aggregate
Contributions with respect to any Highly Compensated Participant exceed the
After-Tax Contributions and Matching Employer Contributions made on behalf of
such Participant in any Plan Year.
2.22 "Excess Salary Reduction Contributions" shall mean with respect to
each Highly Compensated Participant, the amount equal to total Salary Reduction
Contributions on behalf of the Participant (determined after the application of
Paragraph 15.1(b) or 15.3(b) and prior to the application of the leveling
procedure described in that section) plus any Qualified Nonelective
Contributions made pursuant to Paragraph 15.1(d) or 15.3(d) minus the product of
the Participant's Actual Deferral Percentage (determined after application of
Paragraph 15.1(b) or 15.3(b) and after the leveling procedure described below)
multiplied by the Participant's Compensation, as determined under Paragraph 2.3.
In accordance with the regulations issued under Section 401(k) of the Code,
Excess Salary Reduction Contributions shall be determined by a leveling
procedure under which the Actual Deferral Percentage of the Highly Compensated
Participant with the highest such percentage shall be reduced to the extent
required to enable the limitation of Paragraph 15.1(a) or 15.3(a) to be
satisfied, or, if it results in a lower reduction, to the extent required to
cause such Highly Compensated Participant's Actual Deferral Percentage to equal
the Actual Deferral Percentage of the Highly Compensated Participant with the
next highest Actual Deferral Percentage. This leveling procedure shall be
repeated until the limitations of Paragraph 15.1(a) or 15.3(a) are satisfied.
2.23 "Former Participant" shall mean a person whose active participation in
the BIP shall have terminated by reason of death, Disability, retirement,
transfer to an Affiliated Company or other affiliated entity that is not an
Employer, termination of employment, or any other reason, but who still has a
participating interest in the BIP.
2.24 "Fund" shall mean the Trust Fund held by the Trustee in accordance
with the Trust Agreement and, effective May 1, 1999, will consist of separate
Funds as herein described. The Company or the appropriate Named Fiduciary shall
have the authority, consistent with the terms of the Trust Agreement, to appoint
a designated investment manager (as defined in ERISA Section 3(38)), who shall
have the authority to invest and manage all or any part of the assets of the
Funds. To the extent the Trustee is directed by the Committee or a designated
investment manager, the Trustee may invest and reinvest in collective investment
funds (as authorized by ERISA and any related governmental regulations and
rulings) maintained by the Trustee for the investment of assets of employee
benefit plans qualified under Section 401(a) and exempt under Section 501(a) of
the Code whereupon the instrument or instruments establishing such collective
investment funds, as amended from time to time, shall constitute a part of this
BIP with respect to any assets of the BIP which are invested in such funds.
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The Funds described herein also include amounts transferred from the
VIP, which upon such transfer, were invested among the Funds as directed by each
affected Participant.
The Named Fiduciary shall have the authority to determine the specific
investment funds that comprise the Funds. Effective July 1, 2000, the Funds
described herein shall include the Funds listed on Appendix D.
2.25 "Highly Compensated Participant" shall include those Employees who
meet the definition of "Highly Compensated Employee" as determined under Section
414(q) of the Code and the regulations issued thereunder, as set forth herein.
The term "Highly Compensated Employee" includes "Highly Compensated Active
Employees" and "Highly Compensated Former Employees" and shall be determined as
follows:
(a) "Highly Compensated Active Employee" means an Employee described
in Code Section 414(q) and the regulations thereunder, who performs services for
the Company or an Affiliated Company during the Plan Year and is in one or more
of the following groups:
(1) Employees who at any time during the Determination Year or
the Look-Back Year were owners (as defined in Code Section 318) of
more than five percent of the outstanding stock of the Company or an
Affiliated Company, or stock possessing more than five percent of the
total combined voting power of all stock of the Company and its
Affiliated Companies.
(2) Employees who received Compensation during the Look-Back
Year in excess of $80,000 (adjusted for increases in the cost of
living at the same time and in the same manner permitted under Code
Section 415(d)).
The determination of "Highly Compensated Active Employee" may be
made by the Company or an Affiliated Company on the basis of the "Top-
Paid Group" election or the substantiation guidelines in accordance
with such regulations, notices or other guidance issued under Code
Section 414(q).
(b) The "Top-Paid Group" for any Determination Year or Look-Back Year
shall include all Employees who are in the top twenty percent (20%) of all
Employees on the basis of Compensation. For purposes of determining the
number of employees in the "Top-Paid Group," the following Employees are
disregarded:
(1) Employees who have not completed six months of service by
the end of the year;
(2) Employees who normally work less than 17 1/2 hours per week
for the year;
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(3) Employees who normally work during less than six months
during any year;
(4) Employees who have not attained age 21 by the end of such
year; and
(5) Employees who are nonresident aliens receiving no United
States source income within the meaning of Sections
861(a)(3) and 911(d)(2) of the Code.
(c) A "Highly Compensated Former Employee" means an Employee who
separated from service prior to the Determination Year, who performed no
services for an Employer during the Determination Year, and who was a Highly
Compensated Active Employee for either such Employee's separation year or any
Determination Year ending on or after the Employee's 55th birthday.
(d) For purposes of determining Highly Compensated Employees,
"Compensation" for a Determination Year or a Look-Back Year shall be determined
in the same manner as "Earnings" in Paragraph 2.15 of the BIP, increased by pre-
tax amounts described in Sections 125 and 402(e)(3) of the Code under plans
maintained by the Company or similar amounts under plans maintained by an
Affiliated Company.
(e) Notwithstanding the foregoing, the determination of Highly
Compensated Participants may be made under the calendar year calculation
election under the regulations issued pursuant to Code Section 414(q). In
accordance with such election, if it is made by the Committee or its designee,
each Look-Back Year calculation shall be based on the calendar year ending
within the applicable Determination Year. Such election shall apply to all other
plans maintained by an Affiliated Company. The Committee or its designee may
elect to apply the calendar year election for any Plan Year. Further, the
Committee or its designee may elect to apply such other rules for determining
Highly Compensated Employees, including substantiation guidelines, as issued
pursuant to Code Section 414(q).
2.26 "Hour of Service" shall mean each hour credited under Paragraph 4.2.
2.27 "Leased Employee" shall mean any person as defined in Section
414(n)(2) of the Code.
2.28 "Matchable Contributions" shall mean a Participant's Salary Reduction
Contributions which are made pursuant to Paragraphs 5.1 and 5.3, with respect to
which Matching Employer Contributions are made.
2.29 "Matching Employer Contributions" shall mean contributions made by
each Employer in accordance with Paragraph 5.7 and which are subject to the
limitations of Article XV.
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2.30 "Merged Plan" shall mean the Blockbuster Entertainment Retirement and
Savings Plan which was merged into the VIP effective December 31, 1995. Special
provisions applicable to Participants who were participants in the Merged Plan
and the VIP are set forth in Appendix A.
2.31 "Parental Leave" shall mean, for purposes of determining Vesting
Service under Paragraph 4.3, a period in which the Employee is absent from work
immediately following her active employment because of the Employee's pregnancy,
the birth of the Employee's child or the placement of a child with the Employee
in connection with the adoption of that child by the Employee, or for purposes
of caring for that child for a period beginning immediately following that birth
or placement. Parental Leave shall include such periods of leave described in
the Family and Medical Leave Act of 1993 solely to the extent required
thereunder.
2.32 "Participant" shall mean an Employee who meets the eligibility
requirements set forth in Article III herein and who has on file with the
Company an authorization to withhold or reduce part of his Compensation as a
periodic contribution to the BIP. Such term shall, if the context shall permit,
include a Former Participant.
2.33 "Payroll Period" shall mean the regular period (whether weekly or
biweekly or semimonthly or otherwise) on which Compensation payments are based.
2.34 "Plan Year" shall mean (i) for the initial Plan Year, the eight month
period beginning on May 1, 1999 and ending on December 31, 1999, and (ii) for
each subsequent Plan Year, the twelve-month period which begins on each January
1.
2.35 "Predecessor Plan " shall mean the Viacom Investment Plan.
2.36 "Qualified Nonelective Contributions" shall mean contributions that
are made pursuant to Paragraphs 15.1(d), 15.2(c), 15.3(d) and 15.4(c), meet the
requirements of Section 401(m)(4)(C) of the Code and the regulations issued
thereunder, and which are designated as a Qualified Nonelective Contribution for
purposes of satisfying the limitations of Paragraphs 15.1(a), 15.2(a), 15.3(a)
or 15.4(a). Qualified Nonelective Contributions shall be nonforfeitable when
made and are distributable only in accordance with the distribution and
withdrawal provisions that are applicable to Salary Reduction Contributions
under the BIP; provided, however, that Qualified Nonelective Contributions may
not be withdrawn on account of financial hardship. If any Qualified Nonelective
Contributions are made, the Company shall keep such records as necessary to
reflect the amount of such contributions made for purposes of satisfying the
limitations of Paragraphs 15.1(a), 15.2(a), 15.3(a) or 15.4(a). Qualified
Nonelective Contributions may be taken into account for purposes of the
limitations in Paragraphs 15.1(a), 15.2(a), 15.3(a) or 15.4(a) only if the
nondiscrimination and plan aggregation conditions described in Treasury
Regulation sections 1.401(m)-1(b)(5) and 1.401(k)-1(b)(5) and any other guidance
issued thereunder are satisfied.
10
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2.37 "Rollover Contributions" shall mean contributions made by
Participants in accordance with Paragraph 5.12.
2.38 "Salary Reduction Contributions" shall mean pre-tax elective
contributions within the meaning of Section 401(k) of the Code and the
regulations thereunder made by Participants in accordance with Paragraph 5.3.
Salary Reduction Contributions are subject to the limitations of Article XV.
2.39 "Severance Date" shall mean the date upon which service is severed as
determined under Paragraphs 4.2 and 4.3.
2.40 "Temporary Employee" shall mean an employee of the Company or an
Affiliated Company who is employed for a limited period of time not to exceed
twelve months in duration and to work no more than 1000 hours in such period of
employment.
2.41 "Trust Agreement" shall mean the trust agreement by and among the
Employers and the Trustee, dated as of May 1, 1999, as the same may at any time
and from time to time be amended.
2.42 "Trustee" shall mean the Trustee acting under the Trust Agreement.
2.43 "Unmatched Contributions" shall mean Salary Reduction Contributions
and After-Tax Contributions made by Participants in accordance with Paragraphs
5.2 and 5.3, with respect to which Matching Employer Contributions are not made.
2.44 "Valuation Date" shall mean, effective May 1, 1999, any day on which
the New York Stock Exchange or any successor to its business is open for
trading, or such other date as may be designated by the Committee.
2.45 "Viacom Stock" shall mean Class B of common stock of Viacom Inc., a
Delaware corporation.
2.46 "VIP" shall mean the Viacom Investment Plan
2.47 "Vesting Service" shall mean an Employee's service, as determined
under Paragraph 4.3.
2.48 "Year of Eligibility Service" shall mean the period of Service as
defined in Paragraph 4.2 which is used in determining an Employees' eligibility
to participate in the BIP.
2.49 "Year of Vesting Service" shall mean the period of Service, as
defined in Paragraph 4.3, which is used in determining an Employee's
nonforfeitable right to Matching Employer Contributions.
11
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ARTICLE III
-----------
ELIGIBILITY FOR PARTICIPATION
-----------------------------
3.1 Eligibility:
-----------
(a) Each Employee in the employ of an Employer on April 30, 1999 who
was a Participant in the VIP shall automatically continue to be a Participant in
the BIP as of May 1, 1999.
(b)(i) Each other Full-Time Employee of an Employer will be eligible
to become a Participant on the first day of the month in which he attains age 21
and completes one Year of Eligibility Service, provided that he is employed by
an Employer at such time and he satisfies the requirements of Paragraph 3.2.
(ii) Each other Part-Time Employee of an Employer will be eligible to
become a Participant on the first day of the month following the month in which
she attains age 21 and completes one Year of Eligibility Service, provided that
he is employed by an Employer at such time and he satisfies the requirements of
Paragraph 3.2
(c) Notwithstanding the foregoing, the following persons are not
eligible to participate under the BIP: (i) Temporary Employees; (ii) Employees
who work for a Blockbuster Company that does not adopt the BIP; (iii) any
Employee who is a non-resident alien of the United States for federal tax
purposes; (iv) any Employee included in a group determined by the Board not to
be eligible for participation in the BIP; (v) any Employee included in a
classification of hourly employees whose terms and conditions of employment are
subject to the provisions of a collective bargaining agreement, unless the terms
of the collective bargaining agreement provide for eligibility for participation
in the BIP; (vi) any Employee of a foreign Employer who is a United States
citizen, unless specifically determined by the Company to be eligible for
participation in the BIP; (vii) a Leased Employee; (viii) any Employee who is a
United States citizen who does not receive payment for services directly from
the Company's United States based payroll, employees of employment agencies
which are not an Affiliated Company, persons who perform services for the
Company but who are not Company employees and persons whose services are
rendered pursuant to written arrangements which expressly recite that the
service provider is not eligible for participation in the Plan, including
persons who qualify as "leased employees" under the Internal Revenue Service
rules and (ix) any Employee of an Affiliated Company that is not an Employer.
(d) The preceding notwithstanding, any Full-Time Employee or Part-Time
Employee who has satisfied the applicable service requirements prior to
commencing employment with the Employer by reason of prior service credited
under Paragraph 4.1 will be eligible to become a Participant on the first day of
his employment with the Employer.
12
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3.2 Method of Becoming a Participant: An eligible Employee may become a
--------------------------------
Participant (or resume participation in accordance with Paragraph 5.5) by making
written, telephonic or electronic application to participate in the BIP under
the appropriate procedures prescribed by the Committee. An Employee's
participation will become effective as soon as is administratively practical
following the date such election is received by the Committee.
3.3 Reemployed Participants: An Employee who was a Participant in the
-----------------------
BIP or who satisfied the requirements of Paragraph 3.1 but did not enroll under
Paragraph 3.2 and whose employment with an Employer has terminated but who
subsequently is reemployed shall again become a Participant or eligible to
become a Participant on the first date on which he is reemployed by an Employer,
satisfies the requirements of Paragraph 3.2 and, if such Employee is a Part-Time
Employee completes an Hour of Service. A Part-Time Employee, who did not satisfy
the requirements of Paragraph 3.1 and whose employment with an Employer has
terminated shall, after a one-year Break in Service, be treated as a newly-hired
Employee upon his reemployment by an Employer. A Part-Time Employee who did not
satisfy the requirements of Paragraph 3.1 and whose employment with an Employer
has terminated shall, if he is rehired before the end of a one-year Break in
Service, be eligible to become a Participant in accordance with Paragraphs 3.1
and 3.2, with his Hours of Service being measured from his original date of
hire. If a Full-Time Employee's Eligibility Service is severed prior to the
completion of a Year of Eligibility Service, his period of Eligibility Service
prior to severance shall be aggregated with his period of Eligibility Service
subsequent to reemployment. If a Full-Time Employee's Eligibility Service is
severed prior to the completion of a Year of Eligibility Service but he is
reemployed within the 12 consecutive month period commencing on his Severance
Date, the period of severance shall constitute Eligibility Service. In all such
cases, Vesting Service for periods after reemployment shall be determined in
accordance with the provisions of the Plan in effect during such reemployment.
3.4 Events Affecting Participation. If a Participant is transferred to
------------------------------
employment with an Affiliated Company, or any other business affiliated with the
Company, that is not participating in the BIP, or is transferred to a
classification of employment with the Company or an Affiliated Company that
makes him ineligible to participate under Paragraph 3.1(c), his active
participation under the BIP shall be suspended. During the period of his
employment in such ineligible position, he shall not be eligible to have
allocated to his account any contributions made under Paragraphs 5.1, 5.2, or
5.7.
13
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ARTICLE IV
----------
SERVICE
-------
4.1 Companies For Whom Credited. Except as otherwise provided, Service
----------------------------
with respect to any Employee shall mean periods of employment with the Company,
an Affiliated Company (on or after the date of affiliation unless determined
otherwise by the Committee), and any predecessor corporation of an Employer, or
a corporation merged, consolidated or liquidated into the Employer or a
predecessor of the Employer, or a corporation, substantially all of the assets
of which have been acquired by the Employer, if the Employer maintains a plan of
such a predecessor corporation or corporation whose assets were acquired. If the
Employer does not maintain a plan maintained by such a predecessor, periods of
employment with such a predecessor shall be credited as Service only to the
extent required under regulations prescribed by the Secretary of the Treasury
pursuant to Section 414(a)(2) of the Code.
In all events, periods recognized in the VIP on behalf of a
Participant shall be recognized as Eligibility Service and as Vesting Service,
as appropriate, under the BIP on behalf of such Participant and in no event will
a Participant be credited with less Eligibility Service or Vesting Service under
the BIP than the service with which the Participant was credited under the terms
of the VIP on April 30, 1999.
4.2 Year of Eligibility Service:
---------------------------
(a) Full-Time Employees: A Full-Time Employee's Eligibility Service
shall be measured in years and days (with each consecutive 365 days of Service
being equivalent to one Year of Eligibility Service) from the date on which
employment commences with the Company or an Affiliated Company (including
periods of employment credited pursuant to Paragraph 4.1) to the Employee's
Severance Date. Except as may be provided in Paragraph 4.1 or Appendix A, for
Employees who were employed by the Company or an Affiliated Company prior to May
1, 1999, Eligibility Service shall be equal to the sum of (1) the Employee's
Eligibility Service as of April 30, 1999, credited under the provisions of the
VIP as then in effect, plus (2) the Employee's Eligibility Service under this
Paragraph 4.2(a), determined as if the Employee's date of hire were May 1, 1999.
Eligibility Service shall include, by way of illustration but not by way of
limitation, the following periods:
(i) Any leave of absence from employment which is authorized by
the Company, by an Affiliated Company or predecessor, or other employer
described in Paragraph 4.1; and
(ii) Any period of military service in the Armed Forces of the
United States required to be credited by law; provided, however, that the
Employee returns to the employment of the Company, Affiliated Company or
predecessor or other employer
14
<PAGE>
described in Paragraph 4.1 within the period his or her reemployment rights are
protected by law.
Fractional years shall be disregarded; provided, however, that all
Years of Eligibility Service prior to and subsequent to any period of severance
shall be aggregated. Notwithstanding the foregoing, if an Employee's service is
severed but he is reemployed within the 12 consecutive month period commencing
on his Severance Date, the period of severance shall constitute Eligibility
Service.
A Full-Time Employee's "Severance Date" means the earlier of the date
on which he resigns, retires, is discharged or dies, or the first anniversary of
the date on which he is first absent from service, with or without pay, for any
other reason such as vacation, sickness, disability, or leave of absence;
provided, however, that if a Full-Time Employee is absent beyond such first
anniversary date by reason of Parental Leave, his Severance Date shall be the
second anniversary of the first date of such absence. The twelve-month period
beginning on the first anniversary of the first date of such absence and ending
on the second anniversary of such absence shall be a year of absence and shall
not be credited to the Full-Time Employee as a Year of Vesting Service nor as a
period of severance under the BIP. A one-year period of severance shall occur if
a Full-Time Employee's employment is severed and the Full-Time Employee is not
reemployed within the 12 consecutive month period commencing on his Severance
Date.
(b) Part-Time Employees: A Part-Time Employee shall complete a Year
of Eligibility Service if he completes at least 1,000 Hours of Service during
the twelve consecutive month period beginning with the date the Part-Time
commences employment or re-employment with the Company or an Affiliated Company
or during the Plan Year commencing within such twelve-month period or any Plan
Year thereafter. No Eligibility Service is counted for any computation period in
which an Employee completes less than 1,000 Hours of Service. For purposes of
applying Paragraph 3.3 to any Part-Time Employee, a one-year Break in Service
shall occur if such Employee completes less than 501 Hours of Service in any
computation period. An "Hour of Service" means, with respect to any applicable
computation period, the number of hours recorded on the Employee's time sheets
or other records used by the Employer to record an Employee's time for which he
is directly or indirectly compensated by an Employer or the number of hours for
which the Employee is directly or indirectly compensated by an Affiliated
Company, an other affiliated entity or a Predecessor Company if such Predecessor
Company maintained a qualified plan which is continued by an Employer, but only
if such service with an Affiliated or Predecessor Company or other affiliated
entity otherwise meets the requirements of this section and only to the extent
the Board of Directors by resolution specifically so determines, consistent with
regulations adopted by the Secretary of the Treasury; provided that seven hours
shall be credited for each calendar day which
15
<PAGE>
is a scheduled workday for the Employer, Affiliated Company, Predecessor Company
or other affiliated entity, up to a total of 501 Hours of Service on account of
any single continuous period during which the Employee performs no duties and
for which the Employee is on:
(i) an unpaid leave approved by the Employer, including a personal
leave of absence, vacation leave, sick leave or disability leave approved by the
Employer, provided he returns to Employment upon the expiration of such leave,
(ii) unpaid jury duty, or
(iii) unpaid military leave of absence in the Armed Forces of the
United States arising from a compulsory military service law or a declared
national emergency and as may be approved by the Board, provided the Employee
returns to the employment of the Employer within 90 days (or such longer period
as may be provided by law for the protection of re-employment rights) after his
discharge or release from active military duty.
The term Hour of Service shall also include each hour for which
back pay, irrespective of mitigation of damages, has been awarded or agreed by
an Employer. Such Hours of Service shall be credited to the Employee for the
Plan Year or Years to which the award pertains.
Hours of Service as defined above shall be computed and
credited in accordance with paragraphs (b) and (c) of section 2530.200b-2 of the
Department of Labor Regulations.
4.3 Year of Vesting Service:
-----------------------
A Full-Time or Part-Time Employee's Vesting Service shall be measured
in years and days (with each consecutive 365 days of Service being equivalent to
one Year of Vesting Service) from the date on which employment commences with
the Company or an Affiliated Company (including periods of employment credited
pursuant to Paragraph 4.1) to the Employee's Severance Date. Except as provided
in Paragraph 4.1 or Appendix A, for Employees who were employed by the Company
or an Affiliated Company prior to May 1, 1999, Vesting Service shall be equal to
the sum of (1) the Employee's Vesting Service as of April 30, 1999, credited
under the provisions of the VIP as then in effect, plus (2) the Employee's
Vesting Service under this Paragraph 4.2(a), determined as if the Employee's
date of hire were May 1, 1999. Vesting Service shall include, by way of
illustration but not by way of limitation, the following periods:
(a) Any leave of absence from employment which is authorized by the
Company, by an Affiliated Company or predecessor, or other employer described in
Paragraph 4.1; and
16
<PAGE>
(b) Any period of military service in the Armed Forces of the United
States required to be credited by law; provided, however, that the Employee
returns to the employment of the Company, Affiliated Company or predecessor or
other employer described in Paragraph 4.1 within the period his or her
reemployment rights are protected by law.
Fractional years shall be disregarded; provided, however, that all
Years of Vesting Service prior to and subsequent to any period of severance
shall be aggregated. Notwithstanding the foregoing, if an Employee's Vesting
Service is severed but he is reemployed within the 12 consecutive month period
commencing on his Severance Date, the period of severance shall constitute
Vesting Service.
An Employee's "Severance Date" means the earlier of the date on which
he resigns, retires, is discharged or dies, or the first anniversary of the date
on which he is first absent from service, with or without pay, for any other
reason such as vacation, sickness, disability, or leave of absence; provided,
however, that if an Employee is absent beyond such first anniversary date by
reason of Parental Leave, his Severance Date shall be the second anniversary of
the first date of such absence. The twelve-month period beginning on the first
anniversary of the first date of such absence and ending on the second
anniversary of such absence shall be a year of absence and shall not be credited
to the Employee as a Year of Vesting Service nor as a period of severance under
the BIP. A one-year period of severance shall occur if an Employee's employment
is severed and the Employee is not reemployed within the 12 consecutive month
period commencing on his Severance Date.
4.4 Additional Service Credit:
-------------------------
The Committee, in its sole discretion, may provide additional credit
for purposes of determining Eligibility Service or Vesting Service, for periods
not required to be credited under this Article IV.
17
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ARTICLE V
---------
CONTRIBUTIONS
-------------
5.1 Matchable Contributions:
-----------------------
(a) A Participant's Matchable Contributions shall mean those
contributions made by his Employer as Salary Reduction Contributions (including
any Salary Reduction Contributions which are recharacterized pursuant to
Paragraph 15.1(c)), which may be in an amount equal to a stated whole
percentage, as indicated in 5.1(b) below, of his Compensation, subject to
Paragraph 5.14.
(b) The amount of a Participant's Salary Reduction Contribution that
is eligible to be Matchable Contributions, as a stated whole percentage of
Compensation, is determined as a percentage of Prior Year Base Pay (as defined
in subparagraph (c)) according to the following:
Prior Year Base Pay Matchable Contribution
------------------- ----------------------
Up to $65,000 1% to 6%
More than $65,000 1% to 5%
(c) Solely for purposes of 5.1(b) above, a Participant's Prior Year
Base Pay shall be determined as follows:
(i) For Employees who become Participants on or prior to September 1
of a Plan Year, including the initial Plan Year:
(A) for the initial Plan Year of participation, the
Participant's annual rate of base pay as of September 1 of the preceding Plan
Year, or if later, the date the Participant first became an Employee of an
Employer.
(B) For each subsequent Plan Year, the Participant's annual
rate of base pay as of September 1 of the preceding Plan Year.
(ii) For Employees who become Participants on or after September 1 of
a Plan Year, including the initial Plan Year:
(A) For the initial Plan Year of participation, the
Participant's annual rate of base pay as of the date the Participant became an
Employee of an Employer or, if later, September 1 of the preceding Plan Year.
(B) For each subsequent Plan Year, the Participants' annual
rate of base pay as of September 1 of the preceding Plan Year.
18
<PAGE>
5.2 Unmatched Contributions: A Participant's Unmatched Contributions
-----------------------
shall mean (i) those contributions in excess of Matchable Contributions made by
his Employer as Salary Reduction Contributions, that may be in an amount equal
to a stated whole percentage that, when added to such Matchable Contributions,
does not exceed 15% of his Compensation, and (ii) those contributions made by
the Employee as After-Tax Contributions, that may be in an amount equal to a
stated whole percentage from 1% to 15%, inclusively, of his Compensation.
Notwithstanding the foregoing, in no event shall the contributions made under
this Paragraph 5.2(i) and 5.2(ii), when added to the Participant's Matchable
Contributions made under Paragraph 5.1, exceed 15% of the Participant's
Compensation, subject to Paragraph 5.14.
5.3 Election of Salary Reduction and After-Tax Contributions: Subject to
--------------------------------------------------------
Paragraphs 5.1 and 5.2, each Participant may authorize through written,
telephonic or electronic instructions (pursuant to procedures prescribed by the
Committee) his Employer to contribute Salary Reduction Contributions to the BIP
on his behalf by payroll deduction, for each Payroll Period within an Accounting
Period, which shall be designated as Matchable Contributions to the extent of
the first 5% or 6%, whichever is applicable of his Compensation and which shall
be designated as Unmatched Contributions to the extent such amounts exceed 5% or
6%, whichever is applicable, of his Compensation for such Plan Year. Each
Participant may, in addition to Salary Reduction Contributions, make an election
(pursuant to procedures prescribed by the Committee) to contribute After-Tax
Contributions to the BIP by means of payroll deduction for each Payroll Period
in an Accounting Period. Such elections will be effective for the first Payroll
Period next following the date the election is received by the Committee.
5.4 Change in Amount or Form of Contributions: The percentage of
-----------------------------------------
Compensation designated by the Participant as his Salary Reduction Contributions
or After-Tax Contributions will continue in effect, notwithstanding any change
in his Compensation, until he elects to change such percentage. A Participant,
by making an election in the manner approved by the Committee (including changes
made by telephonic instruction as prescribed by the Committee) may change the
foregoing percentages at any time in the Plan Year, subject to the limitations
herein. Any such change, including a complete suspension, will become effective
as of the first Payroll Period practicable following the date such election is
processed, and provided, further, that if a Participant's Salary Reduction
Contributions or After-Tax contributions are reduced in accordance with
Paragraph 15.1(b) or 15.2(b), such a reduction will become effective as of the
first Payroll Period practicable which begins after the date such reduction is
determined by the Committee.
5.5 Suspension of Contributions: If a Participant elects to suspend his
---------------------------
or her Matchable Contributions to the BIP in accordance with Paragraph 5.4, all
Matching Employer Contributions to the Participant's Account will also be
suspended.
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5.6 Cessation of Contributions: After-Tax Contributions and Salary
--------------------------
Reduction Contributions of a Participant will cease to be effective with the
Payroll Period that ends immediately prior to or coincident with:
(a) the Participant's transfer to an Affiliated Company which is not
an Employer or such other entity with which the Employer has an affiliation and
that is designated by the Committee in its discretion, in which case the
Participant's contributions shall be involuntarily suspended for the duration of
his employment with such Affiliated Company or entity; if such an employee again
becomes an eligible Employee and elects to become a Participant, he must follow
the procedure outlined in Paragraph 3.2.
(b) the Participant's termination of employment for any reason
including retirement, death or Disability.
(c) the Participant's withdrawal of amounts pursuant to Paragraph
8.1(e), but only to the extent required by such Paragraph.
5.7 Matching Employer Contributions: During each Accounting Period, and
-------------------------------
subject to Paragraph 5.14, each Employer will contribute an amount equal to 50%
of the Matchable Contributions to the BIP made during such Accounting Period on
behalf of a Participant of such Employer. Such contributions shall not be
limited by the current or accumulated profits of the Employers. In accordance
with Paragraph 15.2(c) and 15.4(c), additional Matching Employer Contributions
may be made in order to comply with the requirements of Paragraph 15.1(a) or
15.2(a).
5.8 Remittance of Contributions to Trustee: Amounts deducted from
--------------------------------------
payroll as After-Tax Contributions and Salary Reduction Contributions will be
remitted to the Trustee as soon as such contributions can reasonably be
segregated from the Employer's general assets but no later than the last day
required by the Code and ERISA. Such amounts shall be credited to the Accounts
of the respective Participants in accordance with such Participants' investment
elections.
5.9 Remittance of Matching Employer Contributions to Trustee: Matching
--------------------------------------------------------
Employer Contributions will be made in cash or in Stock, as determined by the
Board, and as may be permitted by the terms of the Trust Agreement. Amounts
contributed by the Employer will be remitted to the Trustee as soon as
practicable after the end of a Payroll Period and the Trustee shall purchase
Stock with the amounts so paid to it, and credit such amounts to the Viacom
Stock Fund, and when applicable, to the Blockbuster Inc. Stock Fund. The
Committee shall credit such Stock to the Accounts of the respective Participants
whose contributions are so paid to the Trustee.
5.10 Refund of Matching Employer Contributions: All Matching Employer
-----------------------------------------
Contributions are hereby conditioned on them being allowed as a deduction for
federal income tax purposes by the Employer. A Matching Employer Contribution
shall be, as determined by the Committee, refunded to the Employer, used to
reduce future Matching Employer Contributions or used to defray administrative
expenses, if such contribution:
20
<PAGE>
(a) was made by a mistake of fact; or
(b) was made conditioned upon the contribution being allowed as a
deduction for federal income tax purposes and such deduction is disallowed,
including any advance determination of disallowance pursuant to any guidance
issued by the Internal Revenue Service.
The permissible refund under (a) must be made within one year from the date
the contribution was made to the BIP, and under (b) must be made within one year
from the date of disallowance of the tax deduction.
5.11 Additional Employer Contributions: If, with respect to any Plan
---------------------------------
Year, any Participant's Account is not credited with the amounts of Matchable
Contributions, Unmatched Contributions, Matching Employer Contributions,
Qualified Nonelective Contributions, if any, or earnings on any such
contributions to which such Participant is entitled under the BIP, or if an
error is made with respect to the investment of the assets of the Fund which
error results in an error in the amount credited to a Participant's Account, and
such failure is due to administrative error in determining or allocating the
proper amount of such contributions or earnings, the Employer may make
additional contributions to the Account of any affected Participant to place the
affected Participant's Account in the position that would have existed if the
error had not been made.
5.12 Rollover Contributions:
----------------------
(a) A Participant may, with the approval of the Committee, make a
Rollover Contribution. An Employee of an Employer who has not completed the
eligibility requirements in Article III of the BIP may participate in the BIP
solely for purposes of the rollover contribution provisions hereunder. The
Trustee shall credit the amount of any Rollover Contribution to the
Participant's Account, in accordance with the Participant's designation, as of
the date the Rollover Contribution is made.
(b) The term Rollover Contribution means the contribution of an
"eligible rollover distribution" to the Trustee by the Employee on or before the
sixtieth (60th) day immediately following the day the contributing Employee
receives the "eligible rollover distribution" or a contribution of an "eligible
rollover distribution" to the Trustee by the Employee or the trustee of another
"eligible retirement plan" (as defined in Section 402(c)(8)(B) of the Code) in
the form of a direct transfer under Section 401(a)(31) of the Code.
(c) The term "eligible rollover distribution" means:
(i) part or all of a distribution to the Employee from an
individual retirement account or individual retirement annuity (as defined in
Section 408 of the Code) maintained for the benefit of the Employee making the
Rollover Contribution,
21
<PAGE>
the funds of which are solely attributable to an eligible rollover distribution
from an employee plan and trust described in Section 401(a) of the Code which is
exempt from tax under Section 501(a) of the Code, (a "conduit IRA"); or
(ii) part or all of the amount (other than nondeductible
employee contributions) received by such Employee or distributed directly to
this BIP on such Employee's behalf from an employee plan and trust described in
Code Section 401(a) which is exempt from tax under Code Section 501(a).
In all events, such amount shall constitute an "eligible rollover
distribution" only if such amount qualifies as such under Code Section 402(c)
and the regulations and other guidance thereunder and is a distribution of all
or any portion of the balance to the credit of the Employee from the
distributing plan or conduit IRA other than any distribution: (1) that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or for a
specified period of ten years or more; (2) to the extent such distribution is
required under Code Section 401(a)(9); (3) to the extent such distribution is
not includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities); or (4) that is
made to a non-spouse beneficiary.
(d) Once accepted by the Trust, an amount rolled over pursuant to
this Paragraph 5.12 shall be credited to the Participant's Accounts, and
invested in the Funds (other than the Viacom Inc. Stock Fund) in accordance with
the Participant's directions for such amounts. Thereafter, such rolled over
amounts shall be administered and invested in accordance with Articles VI and
VII and subject to the distribution provisions set forth in Articles VIII, X and
XI. The limitations of Article XV shall not apply to Rollover Contributions. All
Rollover Contributions shall be made in cash and shall be fully vested. No
Matching Employer Contributions shall be made with respect to Rollover
Contributions.
5.13 Limitation on Contributions: Notwithstanding any other provisions of
---------------------------
the BIP to the contrary, in no event may the contributions made to the BIP by or
on behalf of any Participant in any Plan Year exceed the percentage elected
under Paragraphs 5.1 and 5.2, and the percentage determined under Paragraph 5.7,
multiplied by the Participant's Compensation not in excess of the annual
compensation limitation in effect under Section 401(a)(17) of the Code, as
adjusted by the Internal Revenue Service for increases in the cost of living in
accordance with Section 401(a)(17) of the Code and the regulations and other
guidance issued thereunder.
22
<PAGE>
ARTICLE VI
----------
PARTICIPANT ACCOUNTS
--------------------
6.1 Valuation of Assets: As of each Valuation Date, the Trustee will
-------------------
determine the total fair market value of all assets then held by it in each
Fund. Notwithstanding any other provision of the BIP, to the extent that
Participants' Accounts are invested in mutual funds or other assets for which
daily pricing is available ("Daily Pricing Media"), all amounts contributed to
the Fund will be invested at the time of the actual receipt by the Daily Pricing
Media, and the balance of each Account shall reflect the results of such daily
pricing from the time of actual receipt until the time of distribution.
Investment elections and changes pursuant to Article VII shall be effective upon
receipt by the Daily Pricing Media. The provisions of Paragraphs 6.2 and 6.3
shall apply only to the extent, if any, that assets of the Fund are not invested
in Daily Pricing Media.
6.2 Credits to Participant Accounts: Each Participant's Account will be
-------------------------------
credited with all contributions made by him or on his behalf as well as amounts
transferred to the BIP on his behalf. Except as provided in Paragraph 6.1, the
Accounts of each Participant will also be credited, as of each Valuation Date,
with the Participant's share of the net investment income and any realized and
unrealized capital gains of the Funds that occurred since the last Valuation
Date. Such Participant's share of such income will be that portion of the total
net investment income and capital gains of each such Fund which bears the same
ratio to such total as the balance of his Participant Accounts attributable to
each such Fund on the preceding Valuation Date bears to the aggregate of the
balances of all Participant Accounts attributable to each such Fund as of the
preceding Valuation Date.
6.3 Debits of Participant Accounts: The Accounts of each Participant
------------------------------
will be debited with the amount of any withdrawal made by him pursuant to
Article VIII, and with the amount of any distribution made to him or on his
behalf pursuant to Articles X and XI. The Accounts of each such Participant will
also be debited, as of each Valuation Date, with the Participant's share of any
realized and unrealized losses, including capital losses, of the Funds that
occurred since the last Valuation Date. The Participant's share of any realized
and unrealized losses, including capital losses, will be that portion of the
total realized and unrealized losses of each such Fund which bear the same ratio
to such total as the balance of his Participant Account attributable to each
such Fund on the preceding Valuation Date bears to the aggregate of the balances
of all Participant Accounts attributable to each such Fund as of the preceding
Valuation Date.
6.4 Statement of Participant Accounts: As soon as practicable after the
---------------------------------
completion of a Plan Year or as often as the Committee shall direct, an
individual statement will be issued to each Participant showing the value of his
Accounts in the Funds, and the outstanding balance due his Loan Subaccount.
23
<PAGE>
ARTICLE VII
-----------
INVESTMENT OF CONTRIBUTIONS
---------------------------
7.1 Investment of Salary Reduction Contributions and After-Tax
----------------------------------------------------------
Contributions: Each Participant will direct, at the time he elects to become a
-------------
Participant under the BIP, that his Salary Reduction Contributions, his After-
Tax Contributions, and his Rollover Contributions, if any, be invested in
multiples of 5% in any of the Funds. After a Participant's initial investment of
Rollover Contributions, such amounts shall be treated as Salary Reduction
Contributions for investment purposes.
7.2 Investment of Matching Employer Contributions: Matching Employer
---------------------------------------------
Contributions will be invested (i) prior to July 1, 2000,in the Viacom Inc.
Stock Fund, and (ii) on or after July 1, 2000, in the Blockbuster Inc. Stock
Fund.
7.3 Change in Investment Election for Current Contributions: Any change
-------------------------------------------------------
in the Participant's initial investment election under Paragraph 7.1 as to his
future Salary Reduction Contributions and After-Tax Contributions shall be made
in such manner as determined by the Committee (including changes made by
telephonic or electronic instructions under terms prescribed by the Committee)
and within the limits of Paragraph 7.1, and shall be effective as soon as
administratively practicable following the date on which the new election is
received by the Trustee.
7.4 Change in Investment Election for Prior Contributions: A Participant
-----------------------------------------------------
may change his investment election as to his prior Salary Reduction
Contributions and After-Tax Contributions, in such manner as determined by the
Committee (including changes made by telephonic or electronic instructions under
terms prescribed by the Committee), to be effective as soon as administratively
practicable following the date on which the new election is processed.
Notwithstanding any other provision of this Plan to the contrary, and in
accordance with procedures approved by the Committee, effective July 1, 2000,
Participants shall be permitted to reinvest any Matching Employer Contributions
invested in the Viacom Inc. Stock Fund in the Blockbuster Inc. Stock Fund.
7.5 Special Investment Elections: The Committee may authorize
----------------------------
Participants to change their investment elections at times other than those
specified in Paragraphs 7.3 and 7.4 if the Committee, in its discretion, deems
such changes necessary or desirable. In the event the Committee authorizes such
changes, it shall prescribe non-discriminatory rules with respect to the timing
and effect of such elections.
7.6 Fiduciary Responsibility for Investments: The BIP is intended to
----------------------------------------
constitute a plan described in ERISA Section 404(c). To the extent permitted
under ERISA, the Trustee, Committee, and all other BIP fiduciaries are relieved
of liability for any losses that are the direct and necessary result of all
investment instructions given by a Participant or
24
<PAGE>
Beneficiary. The Committee and, in accordance with any appropriate direction
from the Committee, the Trustee or their designees shall provide information to
Participants consistent with ERISA Section 404(c) and the regulations and other
guidance issued thereunder.
25
<PAGE>
ARTICLE VIII
------------
WITHDRAWALS DURING EMPLOYMENT
-----------------------------
8.1 Withdrawals of Salary Reduction Contributions, After-Tax
--------------------------------------------------------
Contributions, Matching Employer Contributions, Transferred Amounts, and
------------------------------------------------------------------------
Rollover Contributions:
----------------------
A Participant who has not terminated employment may elect to withdraw
amounts attributable to Salary Reduction Contributions, After-Tax Contributions,
Matching Employer Contributions, Rollover Contributions and certain amounts
transferred to the BIP, including amounts transferred into the BIP from the
Merged Plan, and earnings thereon, less the amount of any outstanding loan, in
accordance with the provisions of this Article VIII, and according to the order
in which subparagraphs (a) through (e) are presented, as the amounts described
in each successive subparagraph are exhausted. The minimum amount for any single
withdrawal, other than a withdrawal of Salary Reduction Contributions on account
of financial hardship, is $500.
(a) Withdrawals of After-Tax Contributions:
--------------------------------------
A Participant may elect once each Plan Year to withdraw up to 100% of
his Account attributable to After-Tax Contributions (but excluding any
Salary Reduction Contributions which are recharacterized as After-Tax
Contributions pursuant to Paragraph 15.1(c) or 15.2(c)) and the earnings
thereon. Any such withdrawals shall be made in the following order, as the
amounts described in each successive subparagraph are exhausted:
(i) An amount equal to all or part of the Participant's
before-1987 After-Tax Contributions to the extent required to exhaust
such amounts; provided, however, that if the value of all amounts
attributable to After-Tax Contributions plus earnings thereon is less
than the net amount of before-1987 After-Tax Contributions, no more
than such value may be withdrawn.
(ii) An amount equal to all or part of the Participant's
post-1986 After-Tax Contributions, and a pro rata portion of the
earnings on such after-1986 After-Tax Contributions to the extent
required to exhaust such amounts, but no more than the current value
of all After-Tax Contributions in the event such value is less than
the net amount of such post-1986 After-Tax Contributions.
(iii) An amount equal to all or part of the earnings on the
Participant's before-1987 After-Tax Contributions to the extent
required to exhaust such amounts.
26
<PAGE>
(b) Withdrawals of Transferred Amounts or Rollover Contributions:
------------------------------------------------------------
(i) A Participant who has had amounts credited to his or
her account attributable to the Viacom Employee Stock Ownership Plan
may elect once a Plan Year to withdraw such amounts and the earnings
thereon.
(ii) A Participant who has made Rollover Contributions to
the BIP may elect once each Plan Year to withdraw up to 100% of such
Rollover Contributions and earnings thereon.
(c) Withdrawals of Matching Employer Contributions:
----------------------------------------------
(i) A Participant who has participated in the VIP or the
BIP for at least 5 years may elect once each Plan Year to withdraw up
to 100% of his Matching Employer Contributions and the earnings
thereon.
(ii) A Participant who has participated in the VIP or the
BIP for less than 5 years may elect once each Plan Year to withdraw
up to 100% of the Matching Employer Contributions to the extent
vested pursuant to Paragraph 10.2 which were remitted to the Trustee
at least 2 years previously, and the earnings thereon.
(iii) In addition to the withdrawals permitted pursuant to
subparagraphs (i) and (ii) above, a Participant may elect once each
Plan Year to withdraw up to 100% of the vested portion of his
Matching Employer Contributions to the extent necessary to satisfy a
financial hardship, as defined in Paragraph 8.1(e); provided that no
suspension of Salary Reduction and After-Tax Contributions in
Paragraph 8.1(e) shall apply.
(iv) If a Participant who is less than 100% vested in his
or her Matching Employer Contributions receives a withdrawal of
Matching Employer Contributions pursuant to this Paragraph 8.1(c),
then until such time as the Participant incurs a period of five
consecutive one year Breaks in Service or receives a distribution of
his or her entire vested Account Balance after termination of
employment, the vested portion of the Participant's Account Balance
at any point in time following the withdrawal shall be equal to the
amount determined under the formula P (AB+D) - D, where P is the
Participant's vested percentage at such time, AB is the Participant's
Account Balance at such time, and D is the amount of all withdrawals
of Matching Employer Contributions previously received by the
Participant.
27
<PAGE>
(d) Withdrawals of Salary Reduction Contributions after attainment of age
---------------------------------------------------------------------
59 1/2:
------
A Participant who has attained age 59 1/2 may elect once each Plan
Year to withdraw up to 100% of the Salary Reduction Contributions made to
the BIP on his behalf (including recharacterized Salary Reduction
Contributions and Qualified Nonelective Contributions treated as Salary
Reduction Contributions, if any), and the earnings thereon.
(e) Withdrawals of Salary Reduction Contributions on account of financial
---------------------------------------------------------------------
hardship:
--------
Upon submission of satisfactory evidence by a Participant of a
financial hardship, as defined in this Paragraph, the Committee may direct
distribution of part or all of the value of such Participant's Salary
Reduction Contributions, and earnings thereon, but only to the extent
required to relieve such financial hardship, taking into account such
additional amounts necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result from the distribution.
No such withdrawal shall be permitted unless the Participant has previously
or concurrently withdrawn all amounts otherwise available to him under this
Paragraph 8.1. In no event may the Committee direct that such a withdrawal
be made to the extent the financial hardship may be relieved from other
resources that are reasonably available to the Participant.
A Participant shall be deemed to have no other resources reasonably
available if: (i) the Participant has obtained all withdrawals and
distributions currently available to the Participant under the BIP and all
other qualified defined contribution plans maintained by the Company or an
Affiliated Company; (ii) the Participant has obtained all nontaxable loans
reasonably available under the BIP and all other qualified defined
contribution plans maintained by the Company or an Affiliated Company, to
the extent taking such loan would alleviate the immediate and heavy
financial need and only to the extent any required repayment of such loan
would not itself cause an immediate and heavy financial need; (iii) the
Participant agrees to cease all Salary Reduction Contributions and After-
Tax Contributions under the BIP as well as all similar contributions to all
other qualified defined contribution and non-qualified deferred
compensation plans maintained by the Company or an Affiliated Company for a
period of at least twelve months from the date of the hardship withdrawal,
and (iv) the amount of pre-tax elective contributions under all qualified
defined contribution plans maintained by the Company or an Affiliated
Company for the year following the year of the withdrawal are limited in
accordance with regulations issued under Section 401(k) of the Code.
28
<PAGE>
For purposes of this Paragraph 8.1(e), the term "financial hardship" shall
be determined in accordance with regulations (and any other rulings,
notices, or documents of general applicability) issued pursuant to Section
401(k) of the Code and, to the extent permitted by such authorities, shall
be limited to any financial need arising from:
(1) medical expenses (as defined in Section 213(d) of the Code
previously incurred by the Participant or a Participant's spouse or
dependent or expenses necessary for these persons to obtain medical care
(as defined in Section 213(d) of the Code) which, in either case, are not
covered by insurance,
(2) expenses relating to the payment of tuition and related
educational fees, including room and board, for the next twelve months of
post-secondary education of a Participant, his spouse or dependent,
(3) expenses directly relating to the purchase (excluding mortgage
payments) of a primary residence for the Participant,
(4) expenses relating to the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of
the Participant's principal residence, or
There is no minimum withdrawal available under the Paragraph 8.1(e).
Hardship withdrawals shall be paid in a single cash payment and on a pro-
rata basis for the Funds (other than the Viacom Inc. Stock Fund or the
Blockbuster Inc. Stock Fund) in which the Participant's Account is
invested. For any withdrawal under this Paragraph 8.1(e), the portion of
the Participant's Account attributable to Salary Reduction Contributions
that is available for withdrawal shall not exceed the lesser of: (i) the
value of such Salary Reduction Contributions as of December 31, 1988
(taking into account earnings and losses attributable to such amounts),
plus the total amount of the Participant's Salary Reduction Contributions
that are made after December 31, 1988, or (ii) the value of all Salary
Reduction Contributions (taking into account earnings and losses
attributable to such amounts).
8.2 Withdrawal Procedures: A Participant, by filing a written request in
---------------------
accordance with such rules as required by the Committee, may elect to withdraw
amounts pursuant to Paragraph 8.1. Such withdrawals shall be subject to the
following:
(a) All requests for withdrawals shall be reviewed by the Committee
or its designee. Each approved withdrawal application shall be forwarded by the
Committee to the Trustee as soon as practicable after Committee approval.
Withdrawals shall be paid as soon as practicable after the Valuation Date on
which proper payment instructions are received by the Trustee, based on the
amount specified in the Participant's request
29
<PAGE>
and the amount available for withdrawal in the Participant's Accounts. Earnings
and losses will not be credited on the amounts to be withdrawn after the
applicable Valuation Date.
(b) All withdrawals shall be paid in a cash lump sum.
(c) Notwithstanding anything herein to the contrary, and in the
absence of express approval by the Committee, no withdrawal may be made by a
Participant during the period in which the Committee is making a determination
of whether a domestic relations order affecting the Participant's Account is a
qualified domestic relations order, within the meaning of Section 414(p) of the
Code. Further, if the Committee is in receipt of a qualified domestic relations
order with respect to any Participant's Account, it may prohibit such
Participant from making a withdrawal until the alternate payee's rights under
such order are satisfied.
8.3 Funds to be Charged with Withdrawal: Distributions will be made out
-----------------------------------
of the Participant's interest in each of the Funds in proportion to the
Participant's interest in these Funds. Notwithstanding the foregoing,
withdrawals of Matching Employer Contributions shall be charged to the Viacom
Inc. Stock Fund or, if appropriate, the Blockbuster Inc. Stock Fund, and shall
be paid in a cash lump sum.
8.4 Frequency of Withdrawals: Except in the case of a financial hardship
------------------------
withdrawal under Paragraph 8.1(e) and a withdrawal of Matching Employer
Contributions under Paragraph 8.1(c) on account of financial hardship, each
Participant may elect only one withdrawal from the BIP in any Plan Year. A
Participant may elect to withdraw amounts on account of a financial hardship
under Paragraph 8.1(e) and a withdrawal of Matching Employer Contributions under
Paragraph 8.1(c) on account of financial hardship at any time during the Plan
Year.
30
<PAGE>
ARTICLE IX
----------
PARTICIPANT LOANS
-----------------
9.1 Loan Subaccounts: Loans from the BIP may be made to all Participants
----------------
and Beneficiaries who are "parties in interest" within the meaning of ERISA
Section 3(14), and to Employees who have made Rollover Contributions to the BIP
but who have not met the age and service eligibility requirements of Article
III. Such individuals are referred to herein as "Eligible Borrowers." Within
each Eligible Borrower's Account, there shall be maintained a Loan Subaccount
solely for the purpose of effecting loans from the Eligible Borrower's Account
to the Eligible Borrower.
9.2 Eligibility for Loans:
---------------------
Only one loan under the BIP may be outstanding at any time for each
Eligible Borrower. After a loan is repaid in full, an Eligible Borrower may not
obtain another loan for a period of one month from the date of repayment. If, on
May 1, 1999, an Eligible Borrower has a loan outstanding as a result of his or
her participation in the VIP, such Eligible Borrower may not obtain a loan from
the BIP until all such prior loans are repaid in full.
9.3 Availability of Loans:
---------------------
(a) Application for a loan must be made to the Committee or its
delegate in the manner prescribed by the Committee. The decisions by Committee
representatives on loan applications shall be made on a reasonably equivalent,
uniform and nondiscriminatory basis and within a reasonable period after each
loan application is received. Notwithstanding the foregoing, the Committee
representatives may apply different terms and conditions for loans to Eligible
Borrowers who are not actively employed by an Employer, or for whom payroll
deduction is not available, based on economic and other differences affecting
the individuals' ability to repay any loan.
(b) Notwithstanding anything herein to the contrary, and in the
absence of express approval by the Committee, no loan shall be made to an
Eligible Borrower during a period in which the Committee is making a
determination of whether a domestic relations order affecting the Eligible
Borrower's Accounts is a qualified domestic relations order, within the meaning
of Section 414(p) of the Code. Further, if the Committee is in receipt of a
qualified domestic relations order with respect to any Eligible Borrower's
account, it may prohibit such Eligible Borrower from obtaining a loan until the
alternate payee's rights under such order are satisfied.
31
<PAGE>
9.4 Amount of Loan:
--------------
A BIP loan shall be derived from the Eligible Borrower's vested
interest in his Accounts, determined as of the Valuation Date on which the
Trustee receives proper loan disbursement instructions which shall be forwarded
to the Trustee by the Committee or its designee as soon as practicable after its
review and approval of the loan application. Loans shall be made in increments
of $100, rounded down to the nearest $100. The minimum loan available is $500.
The maximum loan available is the lesser of 50% of the Eligible Borrower's
vested interest in his Accounts or $50,000 (determined by aggregating loans from
all qualified defined contribution plans of the Company or Affiliated Company),
reduced by the highest aggregate outstanding balance of all plan loans from all
defined contribution plans of the Company or any Affiliated Company to such
Eligible Borrower during the twelve-month period ending on the day before the
loan is made.
9.5 Terms of Loan:
-------------
(a) A loan shall be secured by a lien on the Eligible Borrower's
interest in the BIP, to the maximum extent permitted by the relevant provisions
of the Code, ERISA, and any regulations or other guidance issued thereunder.
(b) The interest rate on a loan shall be established by the
Committee or its duly authorized delegate on the date that the loan is approved
by a Committee representative and shall be equal to 1% above the annual prime
commercial rate as published in the Wall Street Journal on the first day of the
calendar quarter during which such loan application is approved.
(c) Subject to Paragraph 9.6, the principal amount and interest on a
loan shall be repaid no less frequently than quarterly by level payroll
deductions during each Payroll Period in which the loan is outstanding. Unless
the loan is used within a reasonable time for the purpose of acquiring the
principal residence of the Eligible Borrower, the Eligible Borrower may elect a
repayment term of any number of months from 12 to 60 months from the date of the
first Payroll Period practicable coincident with or next following the
distribution of the loan from the BIP. If the loan is to be used within a
reasonable time for the purpose of acquiring the principal residence of the
Eligible Borrower, the Eligible Borrower may elect a repayment term of any
number of months from 12 to 300 months from the date of the first Payroll Period
practicable coincident with or next following the distribution of the loan from
the BIP.
(d) Each loan shall be evidenced by a promissory note, evidencing
the Eligible Borrower's obligation to repay the borrowed amount to the BIP, in
such form and with such provisions consistent with this Article IX as is
acceptable to the Trustee. All promissory notes shall be deposited with the
Trustee.
32
<PAGE>
(e) Under the terms of the loan agreement, a Committee
representative may determine a loan to be in default, and may take such actions
upon default, in accordance with Paragraph 9.7.
(f) If an Eligible Borrower is transferred from employment with an
Employer to employment with an Affiliated Company or another entity affiliated
with the Employer as the Committee in its discretion may determine, he shall not
be treated as having terminated employment and the Committee shall make
arrangements for the loan to be repaid in accordance with the loan agreement.
For this purpose, the Committee may, but is not required to, authorize the
transfer of the loan to a qualified plan maintained by such Affiliated Company.
In the absence of such arrangements, the loan shall be deemed to be in default,
and shall be subject to the provisions of Paragraph 9.7.
9.6 Distribution and Repayment of Loan:
----------------------------------
(a) The loan proceeds shall be transferred to the Eligible
Borrower's Loan Subaccount by the Trustee and shall be derived from the Eligible
Borrower's interest in the Funds on a pro rata basis. Amounts transferred to
such Subaccount shall reflect the value of the Eligible Borrower's interest as
of the Valuation Date on which such transfer shall occur. The loan proceeds
shall be distributed from the Loan Subaccount to the Eligible Borrower on the
same day as they are received by the Loan Subaccount.
(b) Repayments of BIP loans shall be made to the Eligible Borrower's
Loan Subaccount. Such repayments shall be immediately transferred from the Loan
Subaccount and credited to the Eligible Borrower's Accounts and invested in the
Funds in the same proportions as his current contributions are invested, as soon
as practicable after they are received by the Loan Subaccount. After a loan has
been outstanding for six consecutive months, Eligible Borrowers may prepay the
entire amount due under the loan at any time without penalty. Notwithstanding
the foregoing, a loan may provide that no payments will be made for the duration
of a calendar year in which an Eligible Borrower is on leave without pay;
provided that if an Eligible Borrower commences such a leave during the last
quarter of a year, the loan may provide that payments need not recommence until
the end of the calendar year after the year in which the leave occurs.
9.7 Events of Default and Action Upon Default:
-----------------------------------------
(a) In the event that an Eligible Borrower does not repay the
principal with respect to a BIP loan at such times as are required by the terms
of the loan, such loan shall be in default and the unpaid balance of the loan,
together with interest thereon shall become due and payable. Further, upon an
Eligible Borrower's termination of employment (including by reason of
retirement, disability, death or the sale of the business at which such
individual is employed, whether or not the sale is a distributable event under
Code Section 401(k) and the regulations thereunder), such loan shall be in
33
<PAGE>
default. If, before a loan is repaid in full, a distribution is required to be
made from the BIP to an Alternate Payee under a qualified domestic relations
order (as defined in Section 414(p) of the Code and Section 206(d) of ERISA) and
the amount of such distribution exceeds the value of the Eligible Borrower's
interest in the BIP less the amount of such outstanding loan, the unpaid balance
thereon, shall become immediately due and payable. The Trustee shall satisfy the
indebtedness to the BIP before making any payments to the Eligible Borrower or
any alternate payee. In addition to the foregoing, the loan agreement may
include such other events of default as the Committee shall determine are
necessary or desirable.
(b) Upon the default of any Eligible Borrower, the Committee or its
designate in its discretion, may direct the Trustee to take such action as the
Committee or its designate may reasonably determine to be necessary in order to
preclude the loss of principal and interest, including:
(i) demand repayment of the outstanding amount on the loan
(including principal and accrued interest) or, if the loan is not repaid or if
other repayment arrangements are not established:
(ii) cause a foreclosure of the loan to occur by distributing
the promissory note to the Eligible Borrower or otherwise reducing the Eligible
Borrower's Account by the value of the loan. For these purposes, such loan shall
be deemed to have a fair market value equal to its face value reduced by any
payments made thereon by the Eligible Borrower. In the event of any default, the
Eligible Borrower's prior request for a loan shall be treated as the Eligible
Borrower's consent to an immediate distribution of the promissory note
representing a distribution of the unpaid balance of any such loan. The loan
agreement shall include such provisions as are necessary to reflect such
consent. In all events, however, to the extent a loan is secured by Salary
Reduction Contributions, no foreclosure on the Eligible Borrower's loan shall be
made until the earliest time Salary Reduction Contributions may be distributed
without violating any provisions of Code Section 401(k) and the regulations
issued thereunder.
34
<PAGE>
ARTICLE X
---------
VESTING AND TERMINATION OF EMPLOYMENT
-------------------------------------
10.1 Matchable, Unmatched, Qualified Nonelective and Rollover
--------------------------------------------------------
Contributions: A Participant shall be fully vested at all times in the portion
-------------
of his Account attributable to Matchable Contributions, Unmatched Contributions,
Qualified Nonelective Contributions, and Rollover Contributions.
10.2 Matching Employer Contributions:
-------------------------------
(a) Each Participant shall become vested in Matching Employer
Contributions in accordance with the following schedule:
Years of Completed Vested
Vesting Service Percentage
--------------- ----------
Less Than 1 0%
1 - 2 20%
2 - 3 40%
3 - 4 60%
4 - 5 80%
5 or more 100%
(b) Notwithstanding the foregoing, a Participant shall become fully
vested in Matching Employer Contributions if such Participant attains age 65 or
incurs a Disability while actively employed or terminates employment due to
normal, early, or postponed retirement (determined under the terms of any tax-
qualified defined benefit plan maintained by the Employer), death, or
Disability.
10.3 Forfeitures:
-----------
(a) Termination of Employment and Distribution Made. If a
-----------------------------------------------
Participant terminates employment prior to the date on which he is fully vested
in his Account and receives a distribution of such Account, the non-vested
portion of his Account shall be forfeited and used as soon as practicable after
any Accounting Period (but not later than as of the last day of the Plan Year in
which the forfeiture occurs) to reduce future Matching Employer Contributions,
to defray administrative expenses of the BIP, to correct an error made in
allocating amounts to Participant's Accounts or resolve any claim filed under
the BIP in accordance with Paragraph 12.6, and to restore Participants' Accounts
in accordance with Paragraph 10.3(b).
35
<PAGE>
(b) Restoration of Account Balance. If an amount of a Participant's
------------------------------
Account has been forfeited in accordance with Paragraph (a) above, that amount
shall be subsequently restored to his Account provided (i) he is reemployed by
an Employer before he has a period of five consecutive one-year Breaks in
Service, and (ii) he repays to the BIP within five (5) years of his reemployment
a cash lump sum payment equal to the full amount distributed to him from the BIP
on account of his termination of employment. Any amounts to be restored by an
Employer to a Participant's Account shall be taken first from any forfeitures
which have not as yet been applied against Matching Employer Contributions or
administrative expenses and if any amounts remain to be restored, the Employer
shall make a special contribution equal to those amounts.
(c) Termination of Employment and No Distribution Made. If (i) a
--------------------------------------------------
Participant terminates employment prior to the date on which he is fully vested
in his Accounts, (ii) the total value of his vested interest in his Accounts in
this Plan exceeds $5,000, (iii) he does not consent to receive a distribution of
such Accounts, and (iv) he is not reemployed by an Employer before the end of
five consecutive one-year Breaks in Service, the non-vested portion of his
Accounts shall be forfeited as of the close of the fifth one year Break in
Service and used, not later than as of the last day of the Plan Year in which
the forfeiture occurs, to reduce future Matching Employer Contributions, to
defray administrative expenses of the BIP, and to restore Participants' Accounts
in accordance with Paragraph 10.3(b).
(d) Lost Participants or Beneficiaries. If a Participant or
----------------------------------
Beneficiary cannot be located by reasonable efforts of the Committee within a
reasonable period of time after the latest date such benefits are otherwise
payable under the BIP, the amount in such Participant's Accounts shall be
forfeited and used, not later than as of the last day of the Plan Year in which
the forfeiture occurs, to reduce future Matching Employer Contributions, to
defray administrative expenses of the BIP, and to restore Participants' Accounts
in accordance with Paragraph 10.3(b). Such forfeited amount shall be restored
(without earnings) if, at any time, the Participant or Beneficiary who was
entitled to receive such benefit when it first became payable shall, after
furnishing proof of their identity and right to make such claim to the
Committee, file a written request for such benefit with the Committee.
36
<PAGE>
ARTICLE XI
----------
PAYMENT OF BENEFITS OTHER THAN WITHDRAWALS
------------------------------------------
11.1 Forms of Payment: Upon a Participant's termination of employment for
----------------
any reason or Disability, he (or, in the event of his death, his Beneficiary)
shall be entitled to receive a distribution of his vested interest in his
Accounts in accordance with the provisions of this Article XI. Subject to
Paragraphs 11.3, 11.4, 11.7, and, in the case of distributions on account of
Disability, 11.8, any Participant may, not more than ninety days before the date
an amount is to be paid from the BIP, file with the Committee an election to
have his benefit paid to him (or, in the event of his death, to his Beneficiary)
in accordance with the options described in sections (a) and (b) of this
Paragraph 11.1:
(a) In such manner of annual installments, not in excess of twenty,
as such Participant shall so elect, and, in the event of his death prior to the
receipt of all such installments, the balance of such installments to his
Beneficiary; provided however, that payments shall not extend over a period
exceeding the period over which payments may be made pursuant to Section
401(a)(9) of the Code and the regulations and other guidance thereunder; and
provided, further, that the Beneficiary may elect, as soon as practicable after
the Participant's death, to have the balance of the Participant's benefit paid
to the Beneficiary in a single payment.
(b) In a single payment.
Notwithstanding the foregoing, upon the death of a Participant who
has not designated a form of payment for his Beneficiary, payment shall be made
to his Beneficiary in the form of a single sum cash payment.
11.2 Modification or Revocation of Form of Payment Election: A
------------------------------------------------------
Participant may, not more than ninety days before an amount is to be paid from
the BIP, modify or revoke any form of payment specified in Paragraph 11.1
theretofore made by him. Notwithstanding anything in this Plan to the contrary,
a Former Participant who elected to receive his or her BIP distribution in the
form of installment payments, and whose installment payments have commenced, may
not modify or revoke his or her decision to receive such installment payments.
11.3 Stock Election: If the total value of a Former Participant's
--------------
Accounts in this Plan exceeds $5,000, such a Former Participant may, not less
than thirty days before the date his entire interest in the BIP is to be paid or
commence to be paid, or such other date that the Committee approves, file with
the Committee an election to have that portion of his benefit consisting of the
value of the Stock and cash credited to his Account and invested in the Viacom
Inc. Stock Fund and, if applicable, invested in the Blockbuster Inc. Stock Fund,
paid to him (or, in the event of his death, to his Beneficiary), to the extent
possible, in shares of Stock (in lieu of cash). Any such Participant may also,
not less than thirty days before the date his entire interest in the BIP is to
be paid or commence to be paid, revoke any such election theretofore made by
him.
37
<PAGE>
11.4 Consent Requirements: If the value of a Former Participant's
--------------------
Accounts in this Plan does not exceed $5,000, such amount shall be paid to him
(or, in the event of his death, to his Beneficiary) in a single cash payment as
soon as practicable thereafter. If the value of such a Former Participant's
Accounts in this Plan, is greater than $5,000, payment of the value of such a
Participant's Accounts, determined in accordance with Paragraph 11.5, shall be
made in the form of payment elected by the Participant as soon as practicable
after the earliest of: (a) the Participant's attainment of age sixty-five (65)
if he terminates employment before attaining age sixty-five (65); (b) the
Participant's death; (c) the date as of which the recipient consents to a
distribution (which distribution may not be scheduled to commence (i) earlier
than 30 days after the Participant receives information regarding such
distribution and (ii) later than ninety days after such Participant elects to
receive the distribution); or (d) the date required by Paragraph 11.7.
Notwithstanding the foregoing, distribution of a Participant's account under the
Plan may occur prior to thirty (30) days after the Participant receives
information regarding such distribution, provided (i) the Committee or its
delegate informs the Participant that he has a right to a period of at least
thirty (30) days after receiving the information to consider the decision of
whether to receive an immediate distribution; and (ii) the Participant, after
receiving the information, affirmatively elects to receive an immediate
distribution.
Notwithstanding anything herein to the contrary, in no event may a Former
Participant elect to receive a payment of his Accounts in any form of payment
other than those specified in Paragraph 11.1. All distributions under this
Article XI shall be made by the Trustee only after the Trustee receives approval
for such distribution from the Committee or its designee. The Participant must
submit to the Committee such election and distribution forms as required by the
Committee. The Committee shall review such forms and, upon approval of the
distribution request, forward payment instructions to the Trustee as soon as
practicable thereafter.
11.5 Valuation and Payment Procedures for Lump Sum Payments:
------------------------------------------------------
(a) No Stock Election in Effect: If a Former Participant shall have
---------------------------
elected to receive payment in the form of a single sum cash payment, or if
payments are to be made to a Former Participant's Beneficiary in the form of a
single sum cash payment, the Former Participant's Accounts shall be valued as of
the Valuation Date on which proper payment instructions are received by the
Trustee and such amount shall be paid to the Former Participant or Beneficiary
in cash as soon as practicable thereafter. To the extent amounts in such Former
Participant's Account are credited to the Viacom Inc. Stock Fund or the
Blockbuster Inc. Stock Fund on such Former Participant's behalf, the shares of
Stock held in such Fund and credited to such Former Participant's Account shall
be sold as soon as practicable after the applicable Valuation Date and the
proceeds of such sale shall be distributed as a part of such single sum
distribution.
38
<PAGE>
(b) Stock Election in Effect: If a Former Participant shall have
------------------------
elected to receive payment in the form of a single sum payment, or if payments
are to be made to a Former Participant's Beneficiary in the form of a single sum
payment, and such Former Participant shall have made a Stock election in
accordance with Paragraph 11.3, the Former Participant's Accounts shall be
valued as of the Valuation Date on which proper payment instructions are
received by the Trustee. To the extent amounts in such Former Participant's
Accounts are credited to the Viacom Stock Fund or the Blockbuster Inc. Stock
Fund on such Former Participant's behalf, such Former Participant, or his
Beneficiary, shall receive a distribution as soon as practicable after the
applicable Valuation Date of the entire number of whole shares of Stock in his
Accounts credited to the Viacom Stock Fund or the Blockbuster Inc. Stock Fund,
plus cash for any remaining amounts credited to the Viacom Stock Fund or the
Blockbuster Inc. Stock Fund on behalf of such Former Participant as of the
applicable Valuation Date. The remainder of the Former Participant's Accounts
shall be distributed to the Former Participant or Beneficiary in a single cash
sum as soon as practicable after the applicable Valuation Date.
11.6 Valuation and Payment Procedures for Installment Payments: If a
---------------------------------------------------------
Former Participant shall have elected to receive payment in the form of
installment payments, the Former Participant's Accounts shall be valued as of
the Valuation Date proper on which payment instructions are received by the
Trustee. Such Accounts shall continue to be valued as of the Valuation Date on
which each subsequent installment payment is to be made. Such Accounts shall
continue to be so valued to and including the Valuation Date as of which such
Former Participant's benefit shall have been paid in full if installment
payments continue or to and including the Valuation Date coincident with the
date the Trustee is notified of such Former Participant's death if such
Participant's Beneficiary elects to have the remaining installments paid in a
single payment, as the case may be. Notwithstanding anything herein to the
contrary, the amount distributed for each installment shall be paid
proportionately from the specific investment Funds in which the Former
Participant's Accounts are invested.
(a) No Stock Election in Effect: If a Stock election of such Former
---------------------------
Participant shall not be in effect:
(i) Such Former Participant's interest in the Funds, including
the value of the Stock and cash then credited to the Viacom Stock Fund or the
Blockbuster Inc. Stock Fund on such Former Participant's behalf shall be
determined as of the applicable Valuation Date.
(ii) An installment payment shall be paid to such Former
Participant or his Beneficiary, as the case may be, in an amount equal to that
fraction of the respective amounts determined pursuant to the provisions of
Subsection (i) of this Subparagraph, the numerator of which shall be one and the
denominator of which shall be the total number of installments remaining to be
paid in the form of payment to such Former Participant or Beneficiary.
39
<PAGE>
(iii) If such Former Participant shall die prior to the payment
of his benefit in full and a single sum cash distribution is to be made to such
Former Participant's Beneficiary, such distribution shall be made in accordance
with Paragraph 11.5(a), determined as of the Valuation Date proper payment
instructions are received by the Trustee.
(b) Stock Election in Effect: If a Stock election of such Former
------------------------
Participant shall be in effect:
(i) The calculation of the amount of the installment payments
shall be made in accordance with the provisions of the preceding subparagraph
(a), provided that such Former Participant or his Beneficiary, as the case may
be, shall receive as a part of each installment payment the number of whole
shares of Stock, equal to the product of the fraction determined pursuant to the
provisions of Subsection (ii) of the preceding Subparagraph (a) multiplied by
the number of shares of Stock credited to the Viacom Stock Fund or the
Blockbuster Inc. Stock Fund in the Account of such Former Participant as of the
applicable Valuation Date.
(ii) If such Former Participant shall die prior to the payment
of his benefit in full and a single sum distribution is to be made to such
Former Participant's Beneficiary, such distribution shall be made in accordance
with Paragraph 11.5(b), determined as of the Valuation Date proper payment
instructions are received by the Trustee.
11.7 Time of Payment and Minimum Distribution Requirements: Unless the
-----------------------------------------------------
Participant elects otherwise, the payment of the value of a Participant's vested
Accounts under the BIP shall be payable not later than the sixtieth day after
the latest of the close of the Plan Year in which he:
(a) attains age 65,
(b) completes 10 years of participation under the BIP or
(c) incurs a termination of employment.
Notwithstanding the foregoing, with respect to distributions made to
Participants who attain(ed) age 70 1/2 prior to January 1, 1997, the benefits of
each Participant shall be distributed or shall commence to be distributed, in
accordance with Section 401(a)(9) of the Code and the regulations issued
thereunder, not later than the April 1 following the end of the calendar year in
which the Participant attains age seventy and one-half (70 1/2), regardless of
whether his employment with the Company is terminated as of such date provided,
however, if a Participant is not a five percent (5%) owner (as defined in
Section 416(i)(1)(B) of the Code) and shall have attained age seventy and one-
half (70 1/2) before January 1, 1988, the benefits of any such Participant shall
be distributed or shall commence to be distributed not later than the April 1
following the calendar year in which he terminates employment; provided further,
that if a
40
<PAGE>
Participant attains age 70 1/2 on or after January 1, 1996 but prior to January
1, 1997, such Participant may elect, in accordance with procedures established
by the Committee or its delegate, to commence distributions in accordance with
the following paragraph. Any such minimum distributions shall be calculated in
accordance with Code Section 401(a)(9) and the regulations and other guidance
issued thereunder, and in the form of annual payments over the life expectancy
of the Participant which life expectancy will not be recalculated.
With respect to (i) Participants who attain age 70 1/2 on or after
January 1, 1997 and (ii) Participants who are eligible and elect to defer their
distributions in accordance with this Paragraph, the benefits of any Participant
shall be distributed or shall commence to be distributed in accordance with Code
Section 401(a)(9) and the regulations and other guidance issued thereunder not
later than the April 1 following the close of the calendar year in which the
Participant terminates employment.
Notwithstanding anything in this Article XI to the contrary, the
payment of any benefit hereunder, in accordance with Section 401(a)(9) of the
Code, generally shall be paid or commence to be paid not later than one year
after the date of the Participant's death (or such later date as allowed by
regulations issued by the Internal Revenue Service), or in the case of payments
to a Participant's spouse, the date on which the Participant would have attained
age seventy and one-half (70 1/2), if later. Further, such payments shall be
distributed within a five year period following the Participant's death unless
payable over the life of the Beneficiary or a period not extending beyond the
life expectancy of such Beneficiary.
11.8 Direct Rollover Distributions:
-----------------------------
(a) At the written request of a Participant, a surviving spouse of a
Participant, or a spouse or former spouse of a Participant that is an alternate
payee under a qualified domestic relations order as defined in Section 414(p) of
the Code, (referred to as the "distributee") and upon receipt of the written
direction of the Committee or its designee, the Trustee shall effectuate a
direct rollover distribution of the amount requested by the distributee, in
accordance with Section 401(a)(31) of the Code, to an eligible retirement plan
(as defined in Section 402(c)(8)(B) of the Code). Such amount may constitute all
or any whole percent of any distribution from the BIP otherwise to be made to
the distributee, provided that such distribution constitutes an "eligible
rollover distribution" as defined in Section 402(c) of the Code and the
regulations and other guidance issued thereunder. All direct rollover
distributions shall be made in accordance with the following Subparagraphs
11.8(b) through 11.8(h).
(b) A distributee may elect to have a direct rollover distribution
apportioned among no more than two eligible retirement plans.
41
<PAGE>
(c) Direct rollover distributions shall be made, in accordance with
such forms and procedures as may be established by the Committee or its designee
and to the extent any such distribution is to be made in shares of Stock
otherwise distributable under the BIP to the distributee, such shares shall be
registered in a manner necessary to effectuate a direct rollover under Section
401(a)(31) of the Code.
(d) No amounts of After-Tax Contributions may be distributed to an
eligible retirement plan through a direct rollover distribution.
(e) No direct rollover distribution shall be made unless the
distributee furnishes the Committee or its designee with such information as the
Committee or its designee shall require and deems to be sufficient.
(f) A distributee may elect to divide an eligible rollover
distribution into two components, with one portion paid as a direct rollover
distribution and the remainder paid to the distributee, provided that such
division of payments shall be permitted only if the amount of the direct
rollover distribution is at least equal to $500.
(g) No direct rollover distributions shall be permitted unless the
amount of the distribution exceeds $200.
(h) Direct rollover distributions shall be treated as all other
distributions under the BIP and shall not be treated as a direct trustee-to-
trustee transfer of assets and liabilities.
11.9 Distributions on Sales of Businesses or Transfers to Non-Affiliated
-------------------------------------------------------------------
Companies: In the absence of an express written determination to the contrary
---------
by the Committee, for the sole purpose of determining a Participant's
entitlement to a distribution under this Plan, a termination of employment shall
not be deemed to have occurred upon a business disposition by the Company or an
Affiliated Company of a trade or business or the sale by the Company or an
Affiliated Company of its interest in a subsidiary, with respect to a
Participant who is employed by such trade or business or subsidiary and who
continues in the employ of (i) the employer which acquires the assets of such
trade or business or acquires the interest of such subsidiary or (ii) any other
entity related to such employer. Further, any Employee of the Company or any
Affiliated Company who transfers to employment with a corporation or entity
which is at that time at least 50% owned by the Company or an Affiliated Company
shall not be deemed to have incurred a termination of employment due to such
transfer.
42
<PAGE>
ARTICLE XII
-----------
ADMINISTRATION OF THE BIP
-------------------------
12.1 Appointment Of Committee --
------------------------
(a) The Company shall be the "sponsor" of the Plan as that term is
defined in ERISA. The Board of Directors of the Company shall initially appoint
the Committee, having the administrative responsibilities described below. The
proper officers of the Company may at any time remove or replace any members of
the Committee. The Committee shall administer the Plan and shall serve as a
Named Fiduciary of the Plan within the meaning of Section 402(a)(2) of ERISA.
(b) If no members of the Committee are in office, the Company shall
be deemed the Committee.
12.2 Organization And Operation Of The Committee --
-------------------------------------------
(a) The Committee shall endeavor to act, in carrying out its duties
and responsibilities in the interest of the Participants and Beneficiaries, with
the care, skill, prudence and diligence under the prevailing circumstances that
a prudent man, acting in a like capacity and familiar with such matters, would
use in the conduct of an enterprise of like character and aims.
(b) A majority of the members of the Committee at any time in office
shall constitute a quorum for the transaction of business. All resolutions or
other actions taken by the Committee shall be by vote of a majority of those
present at a meeting of the Committee; or without a meeting, by instrument in
writing signed by a majority of members of the Committee.
If there are two or more Committee members, no member shall act upon
any question pertaining solely to himself, and the other member or members shall
alone make any determination required by the Plan in respect thereof.
(c) The Committee may authorize any one or more of its members, or
members of a separate administrative subcommittee it may form, to execute any
routine administrative document on behalf of the Committee.
(d) The Committee, may in addition to the execution of
administrative documents, delegate specific duties and powers to one or more of
its members or to a separate administrative subcommittee it may form. Such
delegation shall remain in effect until rescinded in writing by the Committee.
The members of persons so designated shall be solely liable, jointly and
severally, for their acts or omissions with respect to such delegated
responsibilities.
43
<PAGE>
(e) The Committee shall be empowered to employ a Secretary and such
assistants as may be required in the administration of the Plan.
(f) The Committee shall endeavor not to engage directly or
indirectly in any prohibited transaction, as set forth in ERISA.
12.3 Expenses: All expenses that shall arise in connection with the
--------
administration of the BIP, including but not limited to the compensation of the
Trustee, administrative expenses, other expenses associated with the purchase
and sale of Stock in the Viacom Inc. Stock Fund, and the Blockbuster Inc. Stock
Fund other proper charges and disbursements of the Trustee, and compensation and
other expenses and charges of any enrolled actuary, accountant, counsel,
specialist or other person who shall be employed by the Committee in connection
with the administration of the BIP will be paid from forfeitures pursuant to
Paragraphs 10.3, 15.1(e) and 15.2(e) and to the extent expenses remain they
shall be paid proportionately by each Employer. Brokerage fees, transfer taxes
and other expenses attending the investment or reinvestment of BIP assets
(including investment management fees) allocated to the Funds (other than the
Viacom Inc. Stock Fund and the Blockbuster Inc. Stock Fund) may be paid out of
the respective Funds, when permissible under applicable law.
12.4 Duties, Powers and Responsibilities of the Retirement Committee: The
---------------------------------------------------------------
Committee, except for such investment and other responsibilities vested in the
Trustee or investment manager or investment committee of the Board of Directors,
shall have the specific powers granted to it herein and shall have such other
powers as may be necessary in order to enable it to administer the Plan,
including, but not limited to, the full discretionary authority and
responsibility for administering the Plan in accordance with its provisions and
under applicable law. The duties, powers and responsibilities of the Committee
shall include, but shall not be limited to, the following:
(a) To appoint such accountants, consultants, administrators,
counsel, or such other persons it deems necessary for the administration of the
Plan.
Members of the Committee shall not be precluded from serving the
Committee in one or more of such individual capacities.
(b) To determine all benefits and to resolve all questions arising
from the administration, interpretation, and application of Plan provisions,
either by general rules or by particular decisions, so as not to discriminate
against any person and so as to treat all persons in similar circumstances in a
uniform manner.
(c) To advise the Trustee with respect to all benefits which become
payable under the Plan and to direct the Trustee as to the manner in which such
benefits are to be paid.
44
<PAGE>
(d) To adopt such forms and regulations it deems advisable for the
administration of the Plan and the conduct of its affairs.
(e) To take such steps as it considers necessary and appropriate to
remedy any inequity resulting from incorrect information received or
communicated or as a consequence of administrative error.
(f) To assure that its members, the Trustee and every other person
who handles funds or other property of the Plan are bonded as required by law.
(g) To settle or compromise any claims or debts arising from the
operation of the Plan and to defend any claims in any legal or administrative
proceeding.
12.5 Required Information:
--------------------
Each Employer of Participants and Beneficiaries entitled to benefits shall
furnish to the Retirement Committee any information or proof requested by the
Retirement Committee and required for the proper administration of the BIP.
Failure on the part of any Participant or Beneficiary to comply with such
request shall be sufficient grounds for the delay in payment of benefits under
the BIP until the requested information or proof is received.
12.6 Indemnification:
---------------
The Company agrees to indemnify and hold the Retirement Committee and any
administrative subcommittee formed by the Retirement Committee harmless against
liability incurred in the administration of the Plan.
12.7 Claims And Appeal Procedure:
---------------------------
(a) Any request or claim for Plan benefits must be made in writing
and shall be deemed to be filed by a Participant or Beneficiary when a written
request is made by the claimant or the claimant's authorized representative
which is reasonably calculated to bring the claim to the attention of the
Committee.
(b) The Committee or its delegate shall grant or deny claims for
benefits under the Plan with respect to Participants or their Beneficiaries and
authorize disbursements according to this Plan. The Committee shall provide
notice in writing to any Participant or Beneficiary where a claim for benefits
under the Plan has been denied in whole or in part. Such notice shall be made
within 90 days of the receipt by the Committee of the Participant's or
Beneficiary's claim or, if special circumstances require, and the Participant or
Beneficiary is so notified in writing, within 180 days of the receipt by the
Committee of the Participant's or Beneficiary's claim. The notice shall be
written in a manner calculated to be understood by the claimant and shall:
45
<PAGE>
(i) set forth the specific reasons for the denial of benefits;
(ii) contain specific references to Plan provisions relative to the
denial;
(iii) describe any material and information, if any, necessary for
the claim for benefits to be allowed, which had been requested, but not received
by the Committee; and
(iv) advise the Participant or Beneficiary that any appeal of the
Committee's adverse determination must be made in writing to the Committee,
within 60 days after receipt of the initial denial notification, setting forth
the facts upon which the appeal is based.
(c) If notice of the denial of a claim is not furnished within the
time periods set forth above, the claim shall be deemed denied and the claimant
shall be permitted to proceed to the review procedures set forth below. If the
Participant or Beneficiary fails to appeal the Committee's denial of benefits in
writing and within 60 days after receipt by the claimant of written notification
of denial of the claim (or within 60 days after a deemed denial of the claim),
the Committee's determination shall become final and conclusive.
(d) The Committee shall serve as the final review committee, under
the Plan and ERISA, for the review of all appeals by Participants or
Beneficiaries whose initial claims for benefits have been denied, in whole or in
part. Any Participant or Beneficiary whose claim for benefits has been denied,
in whole or in part, may (and must for the purpose of seeking any further review
of a decision or determining any entitlement to a benefit under the Plan),
within 60 days after receipt of notice of denial, submit a written request for
review of the decision denying the claim.
(e) If the Participant or Beneficiary appeals the Committee's denial
of benefits in a timely fashion, the Committee shall re-examine all issues
relevant to the original denial of benefits. Any such claimant, or his or her
duly authorized representative may review any pertinent documents, as determined
by the Committee, and submit in writing any issues or comments to be addressed
on appeal.
(f) The Committee shall advise the Participant or Beneficiary and
such individual's representative of its decision which shall be written in a
manner calculated to be understood by the claimant, and include specific
references to the pertinent Plan provisions on which the decision is based. Such
response shall be made within 60 days of receipt of the written appeal, unless
special circumstances require an extension of such 60 day period for not more
than an additional 60 days. Where such extension is necessary, the claimant
shall be given written notice of the delay. If the decision on review is not
furnished within the time set forth above, the claim shall be deemed denied on
review.
46
<PAGE>
(g) Any participant whose claim for benefits has been denied shall
have such further rights of review as are provided in ERISA (S) 503, and the
Committee shall retain such right, authority and discretion as is provided in or
not expressly limited by ERISA (S) 503.
(h) The Committee shall be the final review committee under the
Plan, with the authority to determine conclusively for all parties any and all
questions arising from the administration of the Plan, and shall have sole and
complete discretionary authority and control to manage the operation and
administration of the Plan, including, but not limited to, the determination of
all questions relating to eligibility for participation and benefits,
interpretation of all Plan provisions, determination of the amount and kind of
benefits payable to any participant, spouse or beneficiary, and construction of
disputed or doubtful terms. Such decisions shall be conclusive and binding on
all parties and not subject to further review.
12.8 Liability of Committee Members: Each member of the Committee shall
------------------------------
be liable for any act of omission or commission as such only to the extent
required by ERISA.
12.9 Reliance on Reports and Certificates: The Committee will be entitled
------------------------------------
to rely conclusively upon all tables, valuations, certificates, opinions and
reports furnished by any Trustee, accountant, controller, counsel or other
person who is employed or engaged for such purposes.
12.10 Member's Own Participation: No member of the Committee may act,
--------------------------
vote or otherwise influence a decision of the Committee specifically relating to
his own participation under the BIP.
12.11 Fiduciary Indemnification: Notwithstanding any other provision of
-------------------------
this BIP, the Board may, to the extent permitted by law, provide for
indemnification by the Company of any fiduciary for any liability incurred in
his capacity as such fiduciary.
12.12 Allocation of Responsibilities: The Company may allocate
------------------------------
responsibilities for the operation and administration of the Plan consistent
with the Plan's terms, including allocation of responsibilities to the Committee
and the Employers. The Company and other named fiduciaries may delegate any of
their responsibilities hereunder by designating in writing other persons to
carry out their respective responsibilities (other than trustee responsibilities
the delegation of which may be limited by law) under the Plan, and may employ
persons to advise them with regard to any such responsibilities. Specifically,
and not by way of limitation of the foregoing provision of this Paragraph 12.11,
the Company may delegate or allocate, as applicable, to another fiduciary or
named fiduciary the responsibility to appoint, retain and terminate trustees and
investment managers and to define the authorities and responsibilities of each.
The
47
<PAGE>
provisions of this Paragraph 12.11 shall apply to the responsibilities of the
Company or any other named fiduciary under the Plan, relating to any trusts
associated with the Plan, including any group, commingled, common or master
trust associated with the Plan and with respect to which the Company or any
other named fiduciary under the Plan has responsibilities.
12.13 Multiple Capacities: Any person or group of persons may serve in
-------------------
more than one fiduciary capacity with respect to the Plan (including service
both as a trustee and as an administrator).
48
<PAGE>
ARTICLE XIII
------------
AMENDMENT AND TERMINATION
-------------------------
13.1 Right to Amend or Terminate: The Committee reserves the right to
---------------------------
modify, alter or amend this Plan or any Trust Agreement thereunder from time to
time to any extent that they may deem advisable including, but without limiting
the generality of the foregoing, any amendment deemed necessary to ensure the
continued qualification of the Plan under Section 401 of the Code. Each
Employer reserves the right, by action of its Board of Directors, to terminate
the BIP with respect to their Participants herein. The Company reserves the
right to execute any amendment deemed necessary or appropriate to terminate the
Trust. No such amendment(s) shall increase the duties or responsibilities of
the Trustee without its consent thereto in writing. No such amendment(s) shall
have any retroactive effect so as to deprive any Participant of any benefit
already accrued (including the timing and form of any option benefits), except
that any amendment may be made retroactive which is necessary to bring the Plan
into conformity with government regulations or policies in order to qualify or
maintain qualification of the Plan under the appropriate section of the Code.
No such amendment(s) shall have the effect of revesting in the Employers the
whole or any part of the principal or income for purposes other than for the
exclusive benefit of the Participants, their Spouses, their Contingent
Annuitants or Beneficiaries at any time prior to the satisfaction of all the
liabilities under the Plan with respect to such persons. Any amendment of the
Plan shall be made by:
(a) the adoption of a resolution by the Board of amending the Plan,
or
(b) the adoption of a resolution by the Committee amending the
Plan.
If any amendment changes the vesting provisions of Article X, any
Participant with at least three years of Vesting Service may elect, by filing a
written request with the Committee within sixty days after he has received
notice of such amendment, to have his vested interest computer under the
provisions of Article X as in effect immediately prior to such amendment.
13.2 Distribution of Funds Upon Termination of the BIP: In the event of,
-------------------------------------------------
and upon, an Employer's termination of the BIP or permanent discontinuance of
contributions other than by reason of being merged into, or consolidated with,
another Employer, whether or not the Trust shall also terminate concurrently
therewith, the Trustee shall, as of and as promptly as shall be practicable
after the Valuation Date next succeeding whichever shall occur first of (i) such
Participant ceasing to be an Employee of an Employer or another Affiliated
Company and (ii) the earliest date allowed by the Internal Revenue Service for
distribution of benefits following the termination of the BIP, pay or distribute
to such Participant (or his Beneficiary) in the manner provided in Article XI
hereof the benefits to which he is (or they are) entitled.
49
<PAGE>
ARTICLE XIV
-----------
GENERAL PROVISIONS
------------------
14.1 Employment Relationships: Nothing contained herein will be deemed
------------------------
to give any Employee the right to be retained in the service of an Employer or
to interfere with the rights of an Employer to discharge any Employee at any
time.
14.2 Non-Alienation of Benefits: Subject to Paragraph 14.3, and subject
--------------------------
to and in accordance with applicable law, no benefit payable under the BIP will
be subject in any manner to anticipation, assignment, attachment, garnishment,
or pledge, and any attempt to anticipate, assign, attach, garnish or pledge the
same will be void, and no such benefits will be in any manner liable for or
subject to the debts, liabilities, engagements, or torts of any Participant.
14.3 Qualified Domestic Relations Order: Notwithstanding any other
----------------------------------
provisions of the BIP, in the event that a qualified domestic relations order
(as defined in Section 414(p) of the Code and Section 206(d)(3) of ERISA) is
received by the Committee, benefits shall be payable in accordance with such
order and with Section 414(p) of the Code and Section 206(d)(3) of ERISA. The
amount payable to the Participant and to any other person other than the payee
entitled to benefits under the order, shall be adjusted accordingly. Benefits
payable under a qualified domestic relations order may be paid prior to the
"earliest retirement age" as such term is defined in the Code and ERISA. The
Committee shall establish reasonable procedures for determining the qualified
status of any domestic relations order and for administering distributions under
any such order.
14.4 Exclusive Benefit of Employees: No part of the corpus or income of
------------------------------
the Fund will be used for, or diverted to, purposes other than the exclusive
benefit of Participants and their Beneficiaries.
14.5 Merger, Consolidation or Transfer of Assets or Liabilities: There
----------------------------------------------------------
will be no merger or consolidation with, or transfer of any assets or
liabilities to any other plan, unless each Participant will be entitled to
receive a benefit immediately after such merger, consolidation, or transfer as
if this BIP were then terminated which is equal to the benefit he would have
been entitled to immediately before such merger, consolidation, or transfer as
if this BIP had been terminated.
14.6 Appointments of Trustee: The Trustee as a fiduciary under the BIP
-----------------------
is appointed by the appropriate Named Fiduciary, with such powers as to
investment, reinvestment, control and disbursement of the Fund as are set forth
in the Trust Agreement, as modified from time to time. The appropriate Named
Fiduciary may remove the Trustee at any time on the notice required by the terms
of such Trust Agreement, and upon such removal or upon the resignation of any
such Trustee the Board will designate a successor Trustee.
50
<PAGE>
14.7 Discretion of the Board of Directors and the Committee: All
------------------------------------------------------
consents of the board of directors of each of the Employers and all consents of
the Committee herein provided for may be granted or withheld in the sole and
absolute discretion of said board of directors or of the Committee, as the case
may be, and, if granted, may be granted on such terms and conditions as said
board of directors or the Committee, as the case may be, in its sole and
absolute discretion shall determine. All determinations hereunder made by the
board of directors of any of the Employers and all such determinations made by
the Committee shall likewise be made in the sole and absolute discretion of said
board of directors or the Committee, as the case may be. Neither the board of
directors of any of the Employers nor the Committee, in granting or withholding
such consents, or in making such determinations, or in taking any other actions
in connection with the administration of the BIP and the Trust, shall
discriminate in favor of Highly Compensated Participants.
14.8 Voting Viacom Inc. and Blockbuster Inc. Common Stock: A Participant
----------------------------------------------------
may vote at each annual meeting and at each special meeting of the Company the
shares of Viacom Stock and Blockbuster Stock with voting rights at the time
represented in his Accounts and attributable to Matching Employer Contributions
and earnings thereon. The Company shall provide the Trustee, on a timely basis,
with all materials necessary to permit the Trustee to solicit participants'
voting instructions and to vote shares. The Trustee shall cause to be provided
to each Participant a copy of the proxy solicitation material for each such
meeting together with a request for the Participant's confidential instructions
as to how such shares are to be voted at such meeting. Upon receipt of such
instructions, the Trustee shall vote all such shares as instructed. The Trustee
shall vote shares for which it has not received voting instructions in
proportion to those shares for which it receives instructions.
14.9 Payments to Minors and Incompetents: If a Participant or
-----------------------------------
Beneficiary entitled to receive any benefits hereunder is a minor or is deemed
by the Committee or is adjudged to be legally incapable of giving valid receipt
and discharge for such benefits, they will be paid to such persons as the
Committee might designate or to the duly appointed guardian.
14.10 Employee's Records: Each of the Employers and the Plan
------------------
Administrator shall respectively keep such records, and each of the Employers
and the Plan Administrator shall each reasonably give notice to the other of
such information, as shall be proper, necessary or desirable to effectuate the
purposes of the BIP and the Trust Agreement, including, without in any manner
limiting the foregoing, records and information with respect to the employment
date, date of participation in the BIP and Compensation of Employees, elections
by Participants and their Beneficiaries and consents granted and determinations
made under BIP and the Trust Agreement. Neither any of the Employers nor the
Plan Administrator shall be required to duplicate any records kept by the other.
Each Participant shall cooperate with the Plan Administrator to administer the
BIP in the manner herein and in the Trust Agreement provided.
51
<PAGE>
14.11 Titles and Headings: The titles to sections and headings or
-------------------
paragraphs of this BIP are for convenience of reference and, in case of any
conflict, the text of the BIP, rather than such titles and headings, shall
control.
14.12 Use of Masculine and Feminine; Singular and Plural: Wherever used
--------------------------------------------------
herein, the masculine gender will include the feminine gender and the singular
will include the plural, unless the context indicates otherwise.
14.13 Governing Law: To the extent that Texas law has not been preempted
-------------
by the provisions of ERISA, the provisions of the BIP will be construed in
accordance with the laws of the State of Texas.
52
<PAGE>
ARTICLE XV
----------
NONDISCRIMINATION AND ANNUAL ADDITION LIMITATIONS
-------------------------------------------------
15.1 Limitation on Salary Reduction Contributions:
---------------------------------------------
(a) Notwithstanding anything herein to the contrary, in no
event shall the Salary Reduction Contributions made on behalf of Highly
Compensated Participants with respect to any Plan Year result in an Actual
Deferral Percentage for such group of Highly Compensated Participants which
exceeds the greater of:
(i) an amount equal to 125% of the Actual Deferral
Percentage for the preceding Plan Year for all Participants other than Highly
Compensated Participants; or
(ii) an amount equal to the sum of the Actual Deferral
Percentage for the preceding Plan Year for all Participants other than Highly
Compensated Participants and 2%, provided that such amount does not exceed 200%
of the Actual Deferral Percentage for the preceding Plan Year for all
Participants other than Highly Compensated Participants.
(iii) Notwithstanding the foregoing, the Committee may
elect to determine the permissible Actual Deferral Percentage for Highly
Compensated Participants on the basis of the Actual Deferral Percentage of the
group Participants other than Highly Compensated Participants for the current
Plan Year rather than the preceding Plan Year, in accordance with such
regulations, notices or other guidance issued under Section 401(k) of the Code.
(b) The Committee shall be authorized to implement rules
authorizing or requiring reductions in the Salary Reduction Contributions that
may be made on behalf of Highly Compensated Participants during the Plan Year
(prior to any contributions to the Trust) so that the limitations of Paragraph
15.1(a) are satisfied.
(c) In addition to the reductions set forth in Subparagraph
(b), if the limitations under Paragraph 15.1(a) are exceeded in any Plan Year,
the Committee may, in accordance with regulations issued under Code Section
401(k)(3), authorize or require the recharacterization of Excess Salary
Reduction Contributions as After-Tax Contributions so that the limitations in
that Plan Year are not exceeded.
(d) To the extent such Salary Reduction Contributions exceeding
the limitations under Paragraph 15.1(a) are not recharacterized, an Employer
may, in the discretion of the Board of Directors, make Qualified Nonelective
Contributions to the Accounts of Participants who are not Highly Compensated
Participants.
53
<PAGE>
(e) To the extent the limitations under Paragraph 15.2(a)
continue to be exceeded following such recharacterization or making of Qualified
Nonelective Contributions, if any, the Excess Salary Reduction Contributions
made on behalf of Highly Compensated Participants with respect to a Plan Year
and income allocable thereto shall then be distributed to such Highly
Compensated Participants as soon as practicable after the end of such Plan Year,
but no later than twelve months after the close of such Plan Year. The amount of
Excess Salary Reduction Contributions to be distributed to each Participant
shall be determined as follows:
Once the leveling procedure described in Paragraph 2.20 has been
completed, the total dollar amount of Excess Salary Reductions shall be
determined. This amount shall be distributed in accordance with a leveling
procedure under which the dollar amount of Salary Reduction Contributions of the
Highly Compensated Participant with the highest dollar amount of Salary
Reduction Contributions shall be reduced to the extent required to distribute
the total amount of Excess Salary Reduction Contributions or, if it results in a
lower reduction, to the extent required to cause such Highly Compensated
Participant's dollar amount of Salary Reduction Contributions to equal the
dollar amount of Salary Reduction Contributions of the Highly Compensated
Participant with the next highest dollar amount of Salary Reduction
Contributions. This distribution procedure shall be repeated until all Excess
Salary Reduction Contributions have been distributed. The amount of income
allocable to Excess Salary Reduction Contributions shall be determined in
accordance with the provisions of Article VI. The amount of Excess Salary
Reduction Contributions distributed to any Participant under this Subparagraph
for any Plan Year shall be reduced by any excess deferrals previously
distributed to such Participant pursuant to Paragraph 15.1(g), if any for such
Plan Year.
(f) The Committee may utilize any combination of the methods
described in the foregoing Subparagraphs (b), (c), (d) and (e) to assure that
the limitations of Paragraph 15.1(a) are satisfied.
(g) Notwithstanding the limitations of Paragraph 15.1(a), in no
event may the amount of Salary Reduction Contributions to the BIP, in addition
to all such salary reduction contributions under all other cash or deferred
arrangements (as defined in Code Section 401(k)) maintained by the Company or an
Affiliated Company in which a Participant participates, exceed $10,500 for 2000
(adjusted for increases in the cost-of-living under Code Section 402(g)) in any
calendar year. If such salary reduction amounts exceed $10,500 (as adjusted),
all such amounts in excess of $10,500 (as adjusted) and any income or losses
allocable to such excess amounts shall be distributed to the Participant no
later than the April 15 following the calendar year in which the excess
occurred. If a Participant participates in another cash or deferred arrangement
in any calendar year which is not maintained by the Company or an Affiliated
Company, and his total Salary Reduction Contributions under the BIP and such
other plan exceed $10,500 (as adjusted) in a calendar year, he may request to
receive a distribution of the amount of the excess deferral (a deferral in
excess of $10,500 (as
54
<PAGE>
adjusted)) that is attributable to Salary Reduction Contributions in the BIP
together with earnings thereon, notwithstanding any limitations on distributions
contained in the BIP. Such distribution shall be made by the April 15 following
the Plan Year of the Salary Reduction Contribution provided that the Participant
notifies the Committee of the amount of the excess deferral that is attributable
to a Salary Reduction Contribution to the VIP and requests such a distribution.
The Participant's notice must be received by the Committee no later than the
March 1 following the Plan Year of the excess deferral. In the absence of such
notice, the amount of such excess deferral attributable to Salary Reduction
Contributions to the BIP shall be subject to all limitations on withdrawals and
distributions in the BIP. The amount of excess deferrals that may be
distributed under this Subparagraph (g) with respect to any Participant for any
Plan Year shall be reduced by the amount of any Excess Salary Reduction
Contributions previously distributed pursuant to Paragraph 15.1(e), if any, for
such Plan Year.
15.2 Maximum Contribution Percentage:
-------------------------------
(a) Notwithstanding anything herein to the contrary, in no
event may Matching Employer Contributions and After-Tax Contributions (including
Salary Reduction Contributions which are recharacterized pursuant to Paragraph
15.1(c), if any) made on behalf of all Highly Compensated Participants with
respect to any Plan Year result in a Contribution Percentage for such group of
Employees which exceeds the greater of (1) or (2) below, where:
(1) is an amount equal to 125% of the Contribution
Percentage for the preceding Plan Year for all Participants in the BIP other
than Highly Compensated Participants; and
(2) is an amount equal to the sum of the Contribution
Percentage for the preceding Plan Year for all Participants in the BIP other
than Highly Compensated Participants and 2%, provided that such amount does not
exceed 200% of the Contribution Percentage for the preceding Plan Year for all
Participants other than Highly Compensated Participants.
Notwithstanding the foregoing, the Committee may elect
to determine the permissible Contribution Percentage for Highly Compensated
Participants on the basis of the Contribution Percentage of the group
Participants other than Highly Compensated Participants for the current Plan
Year rather than the preceding Plan Year, in accordance with such regulations,
notices or other guidance issued under Section 401(k) of the Code.
(b) The Committee shall be authorized to implement rules
authorizing or requiring reductions in the After-Tax Contributions that may be
made by Highly Compensated Participants during the Plan Year (prior to any
contributions to the Trust) so that the limitations of Paragraph 15.2(a) are
satisfied.
55
<PAGE>
(c) Notwithstanding any reductions pursuant to Subparagraph
(b), if the limitations under Paragraph 15.2(a) are exceeded, an Employer may,
in the discretion of the Board of Directors, make additional contributions to
the Participant's Accounts of Participants who are not Highly Compensated
Employees, which additional contributions shall either be Qualified Nonelective
Contributions or additional Matching Employer Contributions under Paragraph 5.7
of the BIP. In addition, in accordance with regulations issued under Section
401(m) of the Code, the Committee may elect to treat amounts attributable to
Salary Reduction Contributions as such additional Matching Employer
Contributions solely for the purposes of satisfying the limitations of Paragraph
15.2(a).
(d) If the limitations under Paragraph 15.2(a) continue to
be exceeded following such Qualified Nonelective Contributions or additional
Matching Employer Contributions, if any, the Excess Aggregate Contributions made
with respect to Highly Compensated Participants with respect to such Plan Year,
and any income attributable thereto, shall be distributed to Highly Compensated
Participants in an amount equal to each such Participant's After-Tax
Contributions (including recharacterized Salary Reduction Contributions). Once
the leveling procedure described in Paragraph 2.19 has been completed, the total
dollar amount of Excess Aggregate Contributions shall be determined. This amount
shall be distributed in accordance with a leveling procedure under which the
dollar amount of After-Tax Contributions of the Highly Compensated Participant
with the highest dollar amount of After-Tax Contributions shall be reduced to
the extent required to distribute the total amount of Excess Aggregate
Contributions or, if it results in a lower reduction, to the extent required to
cause such Highly Compensated Participant's dollar amount of After-Tax
Contributions to equal the dollar amount of After-Tax Contributions of the
Highly Compensated Participant with the next highest dollar amount of After-Tax
Contributions. This distribution procedure shall be repeated until all Excess
Aggregate Contributions have been distributed or, if earlier, all After-Tax
Contributions have been distributed.
(e) If the limitations under Paragraph 15.2(a) continue to
be exceeded following the distributions described in Subparagraph (d), the
Matching Employer Contributions made on behalf of Highly Compensated
Participants which are not vested pursuant to Paragraph 10.2 shall be forfeited
to the extent of any remaining Excess Aggregate Contributions made on behalf of
Highly Compensated Participants with respect to such Plan Year, and any income
allocable thereto. Such forfeitures shall be utilized to reduce future Matching
Employer Contributions, to defray administrative expenses of the BIP, and to
restore Participants' Accounts in accordance with Paragraph 10.3(b).
(f) If the limitations under Paragraph 15.2(a) continue to
be exceeded following the distribution of After-Tax Contributions or the
allocation of the forfeitures, if any, described above, the remaining Excess
Aggregate Contributions made on behalf of Highly Compensated Participants with
respect to such Plan Year, and any income attributable thereto, shall be
distributed to Highly Compensated Participants.
56
<PAGE>
(g) All Excess Aggregate Contributions and any income
allocable thereto shall be forfeited or distributed, as described above, as soon
as practicable after the close of the Plan Year, but no later than twelve months
after the close of the Plan Year in which they occur. The amount of income
allocable to Excess Aggregate Contributions shall be determined in accordance
with the regulations issued under Section 401(m) of the Code. The Committee is
authorized to implement rules under which it may utilize any combination of the
methods described in the foregoing Subparagraphs (b), (c), (d), (e), and (f) to
assure that the limitations of Paragraph 15.2(a) are satisfied.
(h) Notwithstanding anything to the contrary in Paragraphs
15.1or 15.2, Salary Reduction Contributions, After-Tax Contributions, and
Matching Employer Contributions may not be made to this BIP in violation of the
rules prohibiting multiple use of the alternative limitation described in
Sections 401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the Code and the
provisions of Treasury Regulation section 1.401(m)-2(b) and any further guidance
issued thereunder. If such multiple use occurs, the Contribution Percentages for
all Highly Compensated Participants (determined after applying the foregoing
provisions of Paragraphs 15.1) shall be reduced in accordance with Treasury
Regulation section 1.401(m)-2(c) and any further guidance issued thereunder in
order to prevent such multiple use of the alternative limitation.
(i) Notwithstanding anything in the BIP to the contrary, if
the rate of Matching Employer Contributions (determined after application of the
corrective mechanisms described in Paragraph 15.2 and the foregoing provisions
of Paragraph 15.3) discriminates in favor of Highly Compensated Participants,
the Matching Employer Contribution attributable to any Excess Salary Reduction
Contribution, Excess Aggregate Contributions, or excess deferral (as described
in Paragraph 15.1(g)) of each affected Highly Compensated Participant shall be
forfeited so that the rate of Matching Employer Contributions is
nondiscriminatory. Any such forfeitures shall be made no later than the end of
the Plan Year following the Plan Year for which the contribution was made.
Forfeitures, if any, shall be utilized to reduce future Matching Employer
Contributions, to defray administrative expenses of the BIP, and to restore
Participants' Accounts in accordance with Paragraph 10.3(b).
15.3 Limitation on Annual Additions:
------------------------------
(a) Basic Limitation. Subject to the adjustments
----------------
hereinafter set forth, the maximum Annual Addition for any Plan Year to a
Participant's Accounts under this BIP shall in no event exceed the lesser of:
(i) $30,000 (as adjusted by the Internal Revenue
Service for increases in cost of living in accordance with Section 415(d) and
the applicable regulations)
(ii) 25% of the amount of a Participant's annual
Earnings.
57
<PAGE>
(b) Limitation for Participants in a Combination of Plans.
-----------------------------------------------------
Notwithstanding the foregoing, in the case of a Participant who participates in
this BIP and a qualified defined benefit plan maintained by an Employer, the sum
of the defined benefit plan fraction (as defined in Code Section 415(e)(2)) and
the defined contribution plan fraction (as defined in Code Section 415(e)(3))
for any year shall not exceed 1.0. Notwithstanding the foregoing, as of January
1, 1987, an amount shall be subtracted from the numerator of the defined
contribution plan fraction, in accordance with IRS Notice 87-21, so that the sum
of the defined benefit plan fraction and defined contribution plan fraction
computed under Section 415(e)(1) of the Code does not exceed 1.0.
(c) Aggregation of Plans. For purposes of this Paragraph,
--------------------
all qualified defined benefit plans maintained by an Employer shall be treated
as a single plan, and all qualified defined contribution plans maintained by an
Employer shall be treated as a single plan.
(d) Definition of Employer. For purposes of this Paragraph
----------------------
, the term "Employer" shall include any Affiliated Company, as defined in
Paragraph 2.4 hereof and as modified by Section 415(h) of the Code.
(e) Excess Annual Additions Precluded. Prior to the
---------------------------------
allocation of contributions in any Plan Year, the Committee shall determine
whether the amount to be allocated would cause the limitations prescribed
hereunder to be exceeded with respect to any Participant. In the event there
would be such an excess, the Annual Additions to this BIP shall be adjusted by
reducing Participant and Employer contributions in such amounts as are
determined by the Committee and in such order elected by the Participant with
the consent of the Committee, but only to the extent necessary to satisfy such
limitations.
(f) Adjustment to Defined Benefit Plan. Notwithstanding the
----------------------------------
provisions of Subparagraphs (a) and (b), in the event that the limitations
prescribed under Subparagraph (b) are exceeded with respect to any Participant
who participates in this BIP and a qualified defined benefit plan maintained by
an Employer, the Participant's benefits under the defined benefit plan shall be
frozen or reduced prior to making any adjustments under this BIP; provided,
however, if in a subsequent year the limitations are increased due to cost of
living adjustments or any other factor, the freeze on the Participant's benefits
shall lapse to the extent that additional benefits may be payable under the
increased limitations.
(g) Disposal of Excess Annual Additions. In the event that,
-----------------------------------
notwithstanding Subparagraphs (e) and (f) hereof, the limitations with respect
to Annual Additions prescribed hereunder are exceeded with respect to any
Participant and such excess arises as a consequence of a reasonable error in
estimating the Participant's Earnings, the allocation of forfeitures, or a
reasonable error in determining the amount of Salary Reduction Contributions
that may be made with respect to any individual under the limits of Section 415
of the Code, such excess amounts shall not be deemed Annual
58
<PAGE>
Additions in that limitation year to the extent corrected hereunder. First,
Salary Reduction Contributions and After-Tax Contributions (together with
earnings thereon) shall be returned to each affected Participant to the extent
that such distribution would reduce the excess amounts in the Participant's
Accounts. These amounts shall be disregarded in applying the limitations of
Paragraphs 15.1 and 15.2. To the extent excess amounts remain after any such
distributions, such excess amounts shall be utilized to reduce Matching Employer
Contributions on behalf of the Participant for the next succeeding Plan Year,
and succeeding Plan Years, as necessary. If the Participant is not covered by
the BBIP at the end of any such succeeding Plan Year, but an excess amount still
exists, such excess amount will be held unallocated in a suspense account. The
suspense account will be applied to reduce Matching Employer Contributions for
Participants in that Plan Year, and succeeding Plan Years, if necessary. The
amount in such suspense account shall be credited to the Accounts of
Participants in the manner provided in Paragraph 5.9.
59
<PAGE>
ARTICLE XVI
-----------
TOP-HEAVY PLAN
--------------
16.1 General Rule: The BIP shall meet the requirements of this Article
------------
XVI in the event that the BIP is or becomes a Top-Heavy Plan.
16.2 Top-Heavy Plan:
--------------
(a) Test for Top-Heaviness. Subject to the aggregation rules set
----------------------
forth in subsection (b), the BIP shall be considered a Top-Heavy Plan pursuant
to Section 416(g) of the Code in any Plan Year if, as of the Determination Date,
the value of the cumulative Account Balances of all Key Employees exceeds sixty
percent (60%) of the value of the cumulative Account Balances of all of the
Employees as of such Date, excluding former Key Employees and excluding any
Employee who has not performed services for the Employer during the five (5)
consecutive Plan Year period ending on the Determination Date, but taking into
account in computing the ratio any distributions made during the five (5)
consecutive Plan Year period ending on the Determination Date. For purposes of
the above ratio, the Account Balance of a Key Employee shall be counted only
once each Plan Year.
(b) Aggregation and Coordination With Other Plans. For purposes of
---------------------------------------------
determining whether the BIP is a Top-Heavy Plan and for purposes of meeting the
requirements of this Article XVI, the BIP shall be aggregated and coordinated
with other qualified plans in a Required Aggregation Group and may be aggregated
or coordinated with other qualified plans in a Permissive Aggregation Group. If
such Required Aggregation Group is Top-Heavy, this BIP shall be considered a
Top-Heavy Plan. If such Permissive Aggregation Group is not Top-Heavy, this BIP
shall not be a Top-Heavy Plan.
16.3 Definitions: For the purpose of determining whether the BIP is Top-
-----------
Heavy, the following definitions shall be applicable:
(a) Determination and Valuation Dates. The term "Determination
---------------------------------
Date" shall mean, in the case of any Plan Year, the last day of the preceding
Plan Year. The value of an individual's Account Balance shall be determined as
of the Valuation Date next preceding the Determination Date and shall include
any contribution actually made after such Valuation Date but on or before the
Determination Date.
(b) Key Employee. An individual shall be considered a Key Employee
------------
if he is an Employee or former Employee who at any time during the current Plan
Year or any of the four (4) preceding Plan Years met the requirements of Code
Section 416(i)(1) and the regulations thereunder.
60
<PAGE>
(c) Non-Key Employee. The term "Non-Key Employee" shall mean any
----------------
Employee who is a Participant and who is not a Key Employee.
(d) Beneficiary. Whenever the term "Key Employee", "former Key
-----------
Employee", or "Non-Key Employee" is used herein, it includes the Beneficiary or
Beneficiaries of such individual.
(e) Required Aggregation Group. The term "Required Aggregation Group"
--------------------------
shall mean all other qualified defined benefit and defined contribution plans
maintained by the Employer in which a Key Employee participates, and each other
plan of the Employer which enables any plan in which a Key Employee participates
to meet the requirements of Section 401(a)(4) or 410 of the Code.
(f) Permissive Aggregation Group. The term "Permissive Aggregation
----------------------------
Group" shall mean all other qualified defined benefit and defined contribution
plans maintained by the Employer that meet the requirements of Sections
401(a)(4) and 410 of the Code when considered with a Required Aggregation Group.
16.4 Requirements Applicable if BIP is Top-Heavy: In the event the BIP
-------------------------------------------
is determined to be Top-Heavy for any Plan Year, the following requirements
shall be applicable:
(a) Minimum Allocation.
------------------
(i) In the case of a Non-Key Employee who is covered under this
BIP but does not participate in any qualified defined benefit plan maintained by
the Employer, the Minimum Allocation of contributions plus forfeitures allocated
to the account of each such Non-Key Employee who has not separated from service
at the end of a Plan Year in which the BIP is Top-Heavy shall equal the lesser
of three percent (3%) of Compensation for such Plan Year or the largest
percentage of Compensation provided on behalf of any Key Employee for such Plan
Year. The Minimum Allocation provided hereunder may not be suspended or
forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code. The Minimum
Allocation shall be made for a Non-Key Employee for each Plan Year in which the
BIP is Top-Heavy, even if he has not completed a Year of Service in such Plan
Year or if he has declined to elect to have Salary Reduction Contributions made
on his behalf.
(ii) A Non-Key Employee who is covered under this BIP and under a
qualified defined benefit plan maintained by the Employer shall not be entitled
to the Minimum Allocation under this BIP but shall receive the minimum benefit
provided under the terms of the qualified defined benefit plan.
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(b) Top-Heavy Vesting Schedule.
--------------------------
(i) A Non-Key Employee is at all times one hundred percent
(100%) vested in the full value of his Account attributable to his Salary
Reduction Contributions, After-Tax Contributions, and Rollover Contributions.
(ii) Fewer than Two Years of Vesting Service. A Non-Key
---------------------------------------
Employee whose employment is terminated prior to age sixty-five (65) and prior
to the completion of two (2) or more full Years of Vesting Service shall not be
entitled to any Matching Employer Contributions under the BIP.
(iii) Two or More Years of Vesting Service. A Non-Key
------------------------------------
Employee whose employment is terminated after age sixty-five (65) or after the
completion of two (2) or more full Years of Vesting Service shall be one hundred
percent (100%) vested in the full value of his Account attributable to Matching
Employer Contributions under the BIP.
Notwithstanding the foregoing provisions of this Paragraph 16.4(b), at any
time this BIP is a top-heavy plan, in no event will a Participant's vested
percentage interest in the portion of his account attributable to Matching
Employer Contributions be less than his vested percentage interest determined
under Paragraph 10.2 of the BIP.
(c) Limitations on Annual Additions and Benefits. For purposes of
--------------------------------------------
computing the defined benefit plan fraction and defined contribution plan
fraction as set forth in Sections 415(e)(2)(B) and 415(e)(3)(B) of the Code, the
dollar limitations on benefits and annual additions applicable to a limitation
year shall be multiplied by 1.0 rather than 1.25.
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ARTICLE XVII
------------
SIGNATURE
---------
The Plan as herein amended and restated has hereby been approved and
adopted to be effective as of the 1st day of May 1999.
BLOCKBUSTER INC.
By:___________________________
Title: _______________________
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APPENDIX A
SPECIAL PROVISIONS APPLICABLE TO CERTAIN PARTICIPANTS
This Appendix sets forth provisions applicable to Participants who
participated or were eligible to participate in certain plans maintained by the
Company and Affiliated Companies prior to May 1, 1999. All accrued benefits in
such plans, including the timing and form of optional forms of payment, that are
required to be protected under Code Section 411(d)(6) have been protected in the
BIP.
Blockbuster Plan
The following provisions apply to Employees who were participants in
the Blockbuster Entertainment Retirement and Savings Plan (the "Merged Plan") or
who were employed by a participating employer in the Merged Plan ("Blockbuster
Participant") on December 31, 1995 and who subsequently became Participants in
the BIP.
1. Service: - Notwithstanding anything to the contrary in Article IV
--------
or any other provision of the BIP, a Blockbuster Participant's Eligibility
Service and Vesting Service under the BIP shall include the Participant's
eligibility service and vesting service as of December 31, 1995 under the terms
of the Merged Plan. For purposes of calculating Eligibility Service and Vesting
Service on and after January 1, 1996, the date of hire of a Blockbuster Plan
Participant shall be January 1, 1996.
In no event shall such Participant be credited with less Eligibility
Service and Vesting Service under the BIP than the service with which the
Participant was credited under the terms of the Merged Plan on December 31,
1995.
2. Vesting: - Notwithstanding anything to the contrary in Article X
--------
or any other provision of the BIP, each Blockbuster Participant on December 31,
1995 shall become vested in the Matching Employer Contributions to the BIP,
together with any matching contributions or nonelective employer contribution
made to the Blockbuster Plan prior to January 1, 1996, in accordance with the
following schedule:
Years of Completed Vested
Vesting Service Percentage
-------------------- ----------
Less than 1 0%
1 - 2 25%
2 - 3 50%
3 - 4 75%
4 or more 100%
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APPENDIX B
DIVISIONS NOT INCLUDED IN BLOCKBUSTER INVESTMENT PLAN
Notwithstanding the provisions of Section 2.17 of the Plan, the following
operations of Blockbuster Inc. are not included in the definition of Employer
under this Plan:
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APPENDIX C
Affiliated Companies Designated As Employer Under the
Blockbuster Investment Plan as of May 1, 1999
In accordance with Paragraph 2.17 of the Plan, the following Affiliated
Companies adopted the Plan effective May 1, 1999 or such other date as
indicated:
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APPENDIX D
INVESTMENT FUNDS
AS OF JULY 1, 2000
Capital Preservation
--------------------
Certus Interest Income Fund
---------------------------
The fund seeks to preserve principal while offering a competitive and predicable
rate of return. This fund is invested in investment contracts (including
synthetic contracts) issued and endorsed by insurance companies and banks in
which the interest rate is typically fixed for the term of the contract.
Fixed-Income
------------
Putnam Income Fund
------------------
The fund invests in corporate and government bonds. It is designed to offer a
lower level of risk with lower level of potential earnings.
Growth and Income
-----------------
The George Putnam Fund of Boston (balanced fund)
------------------------------------------------
The fund seeks a balance of capital growth and current income by investing in a
well-diversified portfolio composed mostly of stocks and corporate and U.S.
government bonds.
The Putnam Fund for Growth & Income (value fund)
------------------------------------------------
The fund seeks capital growth and current income by investing mainly in
attractively priced stocks of mature companies that offer long-term growth
potential while also providing income.
Growth
------
Putnam Investors Fund
---------------------
The fund seeks long-term growth of capital by investing mainly in blue-chip
stocks -- those of large, well-established companies -- selected from a broad
range of industries. The fund targets companies that are enjoying rising sales
and profits and that have dominant positions within their industries.
__________________________
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Putnam S&P 500 Index Fund
-------------------------
For investors seeking a return, before the assessment of fees, that closely
approximates the return of the S&P 500 Index, which is an indicator of U.S.
stock market performance.
Putnam Voyager Fund
-------------------
Seeks capital appreciation by investing mainly in a combination of stocks of
small companies expected to grow over time as well as stocks of larger, more
established corporations.
Viacom Inc. Stock Fund
----------------------
The fund consists of Viacom Inc. common stock in class B nonvoting shares. The
value of this fund depends on the market value of Viacom class B stock.
Blockbuster Inc. Stock Fund
---------------------------
The fund consists of Blockbuster Inc. common stock. The value of this fund
depends on the market value of Blockbuster common stock.
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