SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994 Commission File No. 1-2931
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
CBS INC.
A NEW YORK CORPORATION I.R.S. EMPLOYER NO. 13-0590730
51 West 52 Street, New York, NY 10019
Telephone Number (212) 975-4321
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common stock, $2.50 par value New York Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days. YES X NO .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part II of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of February 28, 1995 was $3,253,849,686.
As of February 28, 1995 there were 61,352,900 shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for Annual Meeting of
Shareholders to be held May 10, 1995 (Part III).
<PAGE>
PART I
Item 1. Business.
The registrant, CBS Inc. ("CBS")*, conducts its domestic and international
operations either directly or through subsidiaries and joint ventures.
The operations of CBS are carried out primarily by the CBS/Broadcast Group.
Other activities of CBS include various activities not directly associated
with the Group, i.e., The CBS/FOX Company, Radford Studio Center Inc. and
other miscellaneous activities. In addition, a multi-faceted strategic
partnership between CBS and Westinghouse Broadcasting Company, Inc. ("Group
W") was announced in July 1994. (See caption "Other Activities".)
CBS/Broadcast Group
The CBS/Broadcast Group, through the CBS Television Network, distributes a
comprehensive schedule of news and public affairs broadcasts, entertainment
and sports programming and feature films to 206 independently-owned
affiliated stations and the seven CBS owned and operated television
stations, which in the aggregate serve the 50 states and the District of
Columbia, and to certain overseas affiliated stations. The CBS Operations
and Administration Division operates the technical facilities used to
produce and distribute programs of the CBS News, Sports and Entertainment
Divisions. This division is also responsible for providing facilities
management, personnel services, management information systems and
administrative support services to CBS, including the CBS/Broadcast Group,
and to unaffiliated companies for a fee. The CBS/Broadcast Group consists
of seven divisions, whose operations are briefly described below:
The CBS Entertainment Division produces and otherwise acquires entertainment
series and other programs, and acquires feature films, for distribution by
the CBS Television Network for broadcast.
The CBS Television Network Division operates the CBS Television Network and,
through its CBS Marketing and Communications and CBS Sales units, is
responsible for sales of advertising time for CBS Television Network
broadcasts and related marketing research, merchandising and sales promotion
activities. Through its CBS Affiliate Relations unit, this division is also
responsible for the full range of ongoing activities and mutual concerns
between the CBS Television Network and the 206 independently-owned
affiliated stations.
The CBS Enterprises Division, operating primarily through the CBS Broadcast
International and CBS Video units, is responsible for the worldwide
distribution of CBS-owned news and public affairs broadcasts, sports and
entertainment programming and feature films to broadcast and other media
(including cable, airlines and home video, in the latter case through The
CBS/Fox Company) and the acquisition of broadcast and non-broadcast rights
in independently produced programs where permitted by law.
* Except as the context otherwise requires, references to CBS in this
Annual Report mean CBS Inc. and include its subsidiaries.
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The CBS News Division operates a worldwide news organization which produces
regularly scheduled news and public affairs broadcasts and special reports
forthe CBS Television and Radio Networks. This division also produces
certain news-oriented programming for broadcast in the early morning daypart
and in designated hours during prime time. CBS News Productions, a unit of
the CBS News Division, produces documentaries for sale to other media outlets.
The CBS Sports Division produces and otherwise acquires sports programs for
distribution by the CBS Television Network for broadcast.
The CBS Television Stations Division operates and serves as sales
representative for the seven CBS-owned television stations (serving New
York, Chicago, Los Angeles, Philadelphia, Minneapolis-St. Paul (which
includes two satellite stations), Green Bay-Appleton (which includes a
satellite station) and Miami). The division also owns and operates Midwest
Sports Channel, a supplier of regional sports programming to cable
subscribers in Minnesota, North Dakota, South Dakota, northern Iowa and
western Wisconsin, and Teleport Minnesota, which provides programming and
technical services to cable operators in the upper Midwest and operates a
service enabling broadcast companies and other clients to transmit video
signals into and out of Minnesota.
In connection with the implementation of a joint venture agreement with
Group W described below under the caption "Other Activities", it is
contemplated that the CBS-owned television station in Philadelphia and
certain assets of the CBS-owned television station in Miami will be
exchanged for other television stations and broadcast assets, and that the
proceeds of this exchange (as well as the retained assets and liabilities of
the Miami station) will be contributed to the joint venture. As more fully
set forth below, this venture will be controlled and managed by Group W.
Pursuant to the advertising sales representation joint venture agreement
with Group W also described under the caption "Other Activities", it is
contemplated that the advertising sales representation operations of the two
companies will be combined in an entity that will represent the television
stations owned or controlled by CBS or Group W. In September 1994, CBS
executed Asset Purchase Agreements for the acquisition of WGPR(TV), Detroit,
and WVEU(TV), Atlanta, from WGPR, Inc. and Broadcast Corporation of Georgia
("BCG"), respectively. Subsequent to the execution of CBS's agreement to
purchase WVEU(TV), the CBS Television Network agreed to affiliate with
another television station in the Atlanta market. Accordingly, CBS has
assigned its rights to acquire WVEU(TV) under its Asset Purchase Agreement
with BCG to WVEU Purchase Inc. CBS's contemplated acquisition of WGPR-TV is
subject to approval by the Federal Communications Commission ("FCC"). (See
caption "Material Licenses and Federal Regulation" for further details.) On
March 1, 1995, CBS executed an Asset Purchase Agreement for the acquisition
of WPRI-TV, Providence, Rhode Island, from Narragansett Television L.P. The
transaction is subject to FCC approval. (See caption "Material Licenses and
Federal Regulation.")
The CBS Radio Division operates the eight CBS-owned AM radio stations
(serving New York, Chicago, Detroit, Los Angeles, Philadelphia,
Minneapolis-St. Paul, St. Louis and San Francisco) and the 13 CBS-owned FM
radio stations (serving the same cities named above, as well as Boston,
Dallas/Fort Worth (two stations), Houston and Washington, D.C.); serves as
broadcast sales representative for the CBS-owned radio stations, 16
independently-owned AM and 24 independently owned FM radio stations; and
operates the CBS Radio Networks, which serve approximately 585 affiliated
stations nationwide.
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Other Activities
The CBS/FOX Company is a partnership in which CBS and a wholly-owned
subsidiary ("Fox Video") of Twentieth Century-Fox Film Corporation each own
a 50% interest. This partnership is engaged in the acquisition from
unrelated third parties of the videocassette rights to feature films and
other, non-theatrical product, and provides marketing activities relating to
the videocassette distribution (by Fox Video) of products produced by CBS
and the partnership. It also engages in selling activities to specialized
accounts of product of CBS and the partnership. In 1994, CBS and Fox Video
agreed to extend the term of the related partnership to February 28, 1997.
Radford Studio Center Inc., a wholly-owned subsidiary of CBS ("Radford"),
owns and operates television and film production facilities at its Studio
Center facility in Studio City, California. CBS, through Radford, became
the sole owner of the Studio Center business and facilities in 1992 when it
acquired the 50 percent partnership interest of MTM Studios, Ltd. in The
CBS/MTM Company.
In July 1994, CBS and Group W announced that they had agreed to a
comprehensive strategic partnership involving long-term affiliation
agreements between the CBS Television Network and television stations owned
by Group W in four major markets (Boston, Baltimore, Pittsburgh and San
Francisco), and the creation of three new joint ventures between the two
companies. The new jointly-held entities will be established, respectively,
to acquire and operate television stations in major markets; to combine the
two companies' current advertising sales representation businesses; and to
produce and distribute television programming. The television station and
sales representation business joint ventures will be controlled and managed
by Group W, which will own a majority voting interest in each of these
entities; CBS and Group W will share equally in the profits and losses of
these ventures. The entity involved in the production and distribution of
programming will become an equal partnership between the two companies upon
the termination of the existing Financial Interest and Syndication
("fin/syn") rules of the FCC, which is expected to occur in November 1995.
In connection with the implementation of the television station joint
venture agreement between CBS and Group W, in 1994 CBS created Station
Partners, a Delaware general partnership that is at present wholly
controlled by CBS, and transferred to Station Partners CBS's interests in
television stations WCAU TV, Philadelphia and WCIX(TV), Miami. In November
1994, Station Partners entered into an Asset Exchange Agreement with a
subsidiary of the National Broadcasting Company, Inc. ("NBC"), pursuant to
which Station Partners will exchange WCAU-TV, and the principal FCC
licenses, broadcasting tower and certain related assets of WCIX(TV), for
NBC's owned television station KCNC TV, Denver; the principal FCC licenses,
broadcasting tower and certain related assets of NBC's owned station
WTVJ(TV), Miami; and $30.0 million. Upon the consummation of this exchange,
which is subject to necessary regulatory approvals and other customary
conditions of closing, Station Partners will become a joint venture between
CBS and Group W, and will also own at that time the assets and liabilities
of WCIX(TV) retained by Station Partners under the Asset Exchange Agreement
with NBC, as well as television station KYW-TV, which is currently Group W's
owned station in Philadelphia.
In a separate agreement also executed in November 1994, another subsidiary
of NBC granted to Station Partners the right to acquire partnership interests
constituting the ownership rights to television station KUTV(TV), Salt Lake
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City, Utah, and rights to the construction permit for KUSG(TV),
St. George, Utah, following NBC's acquisition of those rights from
KUTV(TV)'s existing operators pursuant to a pending agreement. The
consideration for this acquisition will consist of cash and the assumption
of certain obligations collectively representing a total value of $124.0
million. Upon the closing of this transaction, which is subject to
necessary regulatory approvals and other customary conditions of closing,
KUTV(TV) will also be owned by the joint venture between CBS and Group W.
The television station joint venture agreement contemplates the acquisition
by the venture of two additional major market television stations. All
stations owned by the venture will be affiliated with the CBS Television
Network. The ownership structure of the joint venture is intended to result
in non-attribution of the venture-owned stations to CBS for the purposes of
the FCC's multiple ownership rules.
Industry Segment Information
Since 1988, CBS has operated predominantly in a single industry --
broadcasting. Accordingly, there is no requirement for segment reporting.
Competition
The CBS Television Network and CBS-owned television stations compete for
audiences with other television networks and television stations, as well as
with other video media, including cable television, multipoint distribution
services, low power television stations, satellite television services and
videocassettes. In the sale of advertising, the CBS Television Network and
the CBS-owned television stations compete with other networks, other
television stations, cable television systems and program services, and
other advertising media. The CBS Television Network and CBS-owned
television stations also compete with other video media for distribution
rights to television programming. The CBS-owned television stations compete
primarily in their individual markets.
In addition to competing television broadcast stations, cable television
systems and program services represent an especially significant source of
competition for audiences, advertising and program rights to CBS. In
individual markets, cable systems provide competition by offering audiences
additional signals and by supplying a broad array of advertiser- and
subscription-supported video programming not available on conventional
stations.
Further, the CBS Television Network competes with other television networks
to secure affiliations with independently-owned television stations in
markets across the country, which are necessary to ensure the effective
distribution of network programming to a nationwide audience. During 1994,
the competition among the networks for affiliates intensified to an
unprecedented degree. In May 1994, an agreement was announced between Fox
Broadcasting Company ("Fox") and New World Communications Group Inc. ("New
World"), pursuant to which 12 television stations owned or to be acquired by
New World -- including eight CBS affiliates in large cities -- were to
become affiliated with the Fox Television Network. The Fox-New World
agreement was followed by a series of affiliation changes affecting existing
station affiliations of Capital Cities/ABC, Inc., CBS and NBC in more than
30 markets.
CBS has secured other affiliates or entered into station purchase or other
agreements to ensure the distribution of its network programming in all
markets affected by the Fox-New World agreement. In a majority of those
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markets, the replacement stations are UHF (ultra high frequency) stations,
which have relatively weak signals compared to the VHF (very high frequency)
stations with which CBS was formerly affiliated. Despite the affiliation
changes occasioned by the Fox-New World agreement, the CBS Television
Network is still seen on VHF stations in more markets than any other
network. There can be no assurance, however, that the affiliation changes
described above, and possible future changes due to increased competition
among networks for affiliates, may not adversely affect the audience for CBS
Television Network programs. In addition, such increased competition has
resulted in CBS's incurring higher costs for affiliate compensation, and
further increases in such costs are possible.
Current and future technological developments may affect competition within
the television field. Developments in advanced digital technology may
enable competitors to provide "high definition" pictures and sound
qualitatively superior to what television stations now provide. Development
of the technology to compress digital signals may also permit the same
broadcast or cable channel or satellite transponder to carry multiple video
and data services, and could result in an expanded field of competing
services. CBS cannot predict when and to what extent digital technology
will be implemented in the various television services, and whether and how
television stations will be able to make use of the improvements inherent in
it. The FCC has initiated proceedings having the ultimate goal of adopting
a standard for the use of advanced digital technology in terrestrial
television broadcast service.
Recent statutory, judicial and regulatory actions may also affect
competition. The Cable Consumer Protection and Competition Act of 1992
("1992 Cable Act") for the first time required cable systems to obtain
broadcast stations' consent to retransmit the stations' signals, thereby
providing television stations the opportunity to negotiate a fee or other
compensation for such retransmission. (CBS has granted cable systems
carrying the signals of its owned television stations consent to continue to
carry those signals, without compensation, until October 6, 1995.) As an
alternative, the 1992 Cable Act allowed television stations to require cable
systems to carry their signals within their television markets without
compensation. The cable industry has brought legal challenges to the latter
provisions of the 1992 Cable Act (commonly referred to as the "must carry"
provisions), and a split lower court decision upholding them was appealed to
the United States Supreme Court, which in June 1994 remanded the case for
further fact finding.
Telephone companies represent another source of potential competition in the
television field through their efforts to provide both video services and
data transmission services directly to their subscribers' homes. While the
Cable Communications Policy Act of 1984 generally prohibits telephone
companies from providing video programming directly to subscribers' homes
within their service areas, several recent developments may affect
competition. In 1992, the FCC permitted telephone companies, without the
necessity of obtaining a municipal cable franchise, to offer "video dialtone"
distribution services to programmers on a common carrier basis. The U.S.
Court of Appeals for the Fourth and Ninth Circuits recently ruled that the
above statutory restriction on telephone company provision of video
programming violates the First Amendment rights of those companies. U.S.
District Courts in four other circuits have also reached the same conclusion.
In light of these decisions, the FCC has allowed Bell Atlantic-Virginia to
offer its own programming over a video dialtone platform in Fairfax,
Virginia, and commenced a proceeding to establish general rules to govern
such offerings by telephone companies
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generally. Legislative proposals that would provide a regulatory framework
for telephone company entry into the cable television business and into the
provision of future broadband video services in the companies' service areas
are expected to be under active consideration by Congress in 1995. Network
regulations may also affect competition. In 1991, the FCC modified the
fin/syn rules, which had limited the ability of television networks to
acquire any financial interest or syndication rights in television programs
and prohibited the networks from themselves syndicating television programs.
CBS and other television networks appealed this decision to the United States
Court of Appeals for the Seventh Circuit, contending that the rules should
have been eliminated rather than modified. The Court affirmed the FCC's
decision to abrogate the pre-existing rules, but vacated the FCC's
modification of those rules as arbitrary and capricious and remanded the
matter to the FCC. In April 1993, the FCC announced new rules which
eliminate all restrictions on network acquisition of financial interests and
syndication rights in network programming and retain most restrictions on
syndication by the networks themselves. In July 1994, the Seventh Circuit
Court of Appeals affirmed the FCC's decision to adopt the new rules.
The television network operations of CBS and other television networks are
subject to consent decrees entered by the United States District Court for
the Central District of California in 1980. In November 1993, the court
modified the consent decrees to eliminate restrictions parallel to the FCC's
old fin/syn rules, thereby permitting the networks to act to the extent
permitted by the FCC's 1993 rules. The FCC has provided that, unless it
issues an order to the contrary, all its fin/syn restrictions are to "sunset"
two years from the date of the November 1993 modification of the consent
decrees. It has also determined that it will review the rules six months
before they are scheduled to expire and that the burden of proof in this
review will rest on those favoring retention of the rules. The FCC's
decision as to the expiration of its remaining fin/syn rules, subject to such
final review, was also affirmed in the Seventh Circuit's July 1994 decision.
The CBS Radio Network and CBS's owned radio stations compete with other
radio networks, independent radio stations, suppliers of radio programming,
and other advertising media. Competition with CBS's owned radio stations
occurs primarily in their individual market areas, although on occasion
stations outside a market place signals within that area. While such
outside stations may obtain an audience share, they generally do not obtain
any significant share of the advertising within the market.
Developments in radio technology could affect competition in the radio
field. New radio technology, known as "digital audio broadcasting" (DAB),
can provide sound of the quality of compact discs, which is significantly
higher than that now provided by radio networks and stations using analog
technology. CBS, among others, is actively involved in the study and
development of this digital technology, but cannot predict when and to what
extent existing radio networks and stations will be in a position to utilize
it. The FCC has initiated proceedings to consider the development and
implementation of DAB services. The FCC is also currently considering
several applications to establish a nationwide, satellite-delivered DAB
service, which, if approved, could constitute an additional source of
competition to conventional radio stations and networks.
CBS cannot predict the effect on its business or earnings of possible future
competitive, economic, technological, international or industrial changes.
Nor can CBS generally predict the outcome of administrative and judicial
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proceedings or whether new legislation may be enacted or new regulations
adopted that might bear on the broadcast industry or affect CBS's business.
Material Licenses and Federal Regulation
Except as indicated below, all of CBS's television and radio stations
operate under currently effective licenses from the FCC, which is empowered
by the Communications Act of 1934, as amended, to, inter alia, license and
regulate television and radio broadcasting stations. The FCC has authority
to grant or renew broadcast licenses for a maximum term of five years for
television and seven years for radio if it determines that the "public
convenience, interest or necessity" will be served thereby. During a
specified period after an application for renewal of a broadcast station
license has been filed, competing applications seeking a license to
broadcast on the same frequency may be filed with the FCC, and are entitled
to consideration by the FCC in a hearing to evaluate the comparative merits
of the applications. Persons objecting to the license renewal application
may also file petitions to deny during this period.
In Item 1 of CBS's Form 10-K for 1992 (under the caption "Material Licenses
and Federal Regulation"), CBS reported that, on August 3, 1992, it had filed
with the FCC a timely application to renew the television broadcast licenses
for WBBM-TV, Chicago, Illinois. CBS further reported that, on or about
August 18, 1992, Edward Magnus, an individual, filed with the FCC a petition
to deny the WBBM-TV application, to which CBS responded on September 24,
1992. By letter dated November 14, 1994, the FCC dismissed the petition to
deny. CBS also reported that a second petition to deny the WBBM-TV
application was filed on or about November 2, 1992, by the NAACP, and that
on November 23, 1992, CBS filed its opposition. The matter remains pending
before the FCC. CBS believes that the station has been operated in
accordance with all requirements.
In Item 1 of Part II of CBS's Form 10-Q for the quarter ended September 30,
1993, CBS reported that, on August 2, 1993, CBS filed with the FCC a timely
application to renew the television broadcast license for KCBS-TV, Los
Angeles, California. On November 17, 1993, Mark McDermott and Americans for
Responsible Media filed with the FCC a petition to deny the KCBS-TV
application, to which CBS responded on December 14, 1993. By letter dated
November 14, 1994, the FCC dismissed the petition to deny. Thereafter, on
January 11, 1995, the FCC granted the KCBS-TV license renewal application.
In Item 1 of CBS's Form 10-K for 1993 (under the caption "Material Licenses
and Federal Regulation"), CBS reported that, on February 1, 1994, CBS filed
with the FCC a timely application to renew the television broadcast license
for WCBS-TV, New York, New York. CBS's application to renew the WCBS-TV
license was granted by the FCC on January 10, 1995.
In Item 1 of Part II of CBS's Form 10-Q for the quarter ended March 31,
1994, CBS reported that, on April 1, 1994, CBS filed with the FCC a timely
application to renew the television broadcast license for WCAU-TV,
Philadelphia, Pennsylvania. On July 13, 1994, the Philadelphia Lesbian and
Gay Task Force and other groups filed with the FCC a petition to deny the
WCAU-TV application, to which CBS responded on August 22, 1994. CBS believes
that the station has been operated in accordance with all requirements.
The FCC has adopted rules prohibiting common ownership in the same market of
radio and VHF television stations and prohibiting common ownership of
stations with certain overlapping signals ("duopoly"). When those rules
were adopted,
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existing commonly owned stations, including television/radio
combinations and a television duopoly then owned by CBS, were
"grandfathered". In addition, in February 1992, CBS acquired from Midwest
Communications, Inc., a VHF television station and AM and FM radio stations
in Minneapolis, Minnesota, pursuant to an FCC waiver of its rules relating
to television/radio combinations. As a result, absent an FCC waiver, a
transfer of CBS licenses to a third party or a change in control of CBS
could result in the loss of the license of either the television station or
the radio stations in New York, Philadelphia, Chicago, Los Angeles and
Minneapolis, and (as a result of overlapping television signals) the
television station in either New York or Philadelphia. Under the FCC's
waiver policy, however, the FCC will generally look favorably on waiver
applications relating to radio-television station combinations in the top 25
television markets where there would be at least 30 separately owned
broadcast stations after the proposed combination.
As noted in Item 1 of Part I of this Form 10-K (under the caption "The CBS
Television Stations Division"), CBS has entered an Asset Purchase Agreement
to acquire WGPR-TV, Detroit, Michigan from WGPR Inc. ("WGPR"). On October
27, 1994, CBS and WGPR filed an application with the FCC for consent to the
assignment of the broadcast license for the station to CBS. Petitions to
deny that application were separately filed on December 22, 1994 by Spectrum
Detroit ("Spectrum"), a Michigan corporation, and Alexander Serafyn, a
resident of the Detroit area. On January 17, 1995, CBS filed a consolidated
opposition to the petitions. By letter dated February 13, 1995, the FCC
staff requested CBS and WGPR to provide additional information regarding
certain issues raised in the Spectrum petition. CBS and WGPR filed
responses to this letter on February 23, 1995.
As also noted in Item 1 of Part I of this Form 10-K (under the caption "The
CBS Television Stations Division"), CBS has entered an Asset Purchase
Agreement to acquire WPRI-TV, Providence, Rhode Island from Narragansett
Television L.P. An application for consent to the assignment of the
broadcast license for the station to CBS will be filed with the FCC shortly.
Employees
As of December 31, 1994, CBS had approximately 6,400 full-time employees.
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Executive Officers of the Registrant (as of March 8, 1995)
Date of Commencement of
Service as Executive
Officer in Present
Position; Other Positions
Name Age Present Positions Since January 1, 1990
Laurence A. Tisch 72 Chairman of the Board, December 12, 1990;
President and Chief President and Chief
Executive Officer, CBS Executive Officer since
Inc. January 1987; Co-Chairman
of the Board and Co-Chief
Executive Officer, Loews
Corporation (Chairman of
the Board and Co-Chief
Executive Officer, from
March 1988 to October 1994,
and a Director since 1959)
(insurance, tobacco
products, hotels, watches)
Edward Grebow 45 Executive Vice Presi- May 11, 1994; Senior Vice
dent, Administration, President, Administration,
CBS Inc. from February 1988 to May
1994; exeuctive in charge
of CBS Operations and
Administration Division
since June 1988
Ellen Oran Kaden 43 Executive Vice May 11, 1994; Senior Vice
President, General President, General Counsel
Counsel and Secretary, and Secretary, from October
CBS Inc. 1993 to May 1994; Vice
President, General Counsel
and Secretary, from July
1991 to October 1993; Vice
President, Deputy General
Counsel and Secretary
(Acting General Counsel),
from May to July 1991;
Deputy General Counsel,
from April 1989 to July
1991
Peter W. Keegan 50 Executive Vice May 11, 1994; Senior vice
President and Chief President, Finance, from
Financial Officer, March 1988 to May 1994
CBS Inc.
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David Kenin 53 President, CBS Sports, May 9, 1994; Executive
a Division of CBS Inc. Vice President, Program-
ming, USA Network and Sci-
Fi Channel, from December
1990 to April 1994; Senior
Vice President,Programming,
USA Network, from April
1986 to December 1990
Peter A. Lund 54 Vice President, CBS February 23, 1995;
Inc.; President, Executive Vice President,
CBS/Broadcast Group CBS/Broadcast Group and
President, CBS Television
Network Division, from
January 1994 to February
1995; President, CBS
Marketing Division, from
October 1990 to December
1993; President, Multimedia
Entertainment, from March
1987 to October 1990
Anthony C. Malara 58 President, CBS May 31, 1988
Affiliate Relations, a
unit of CBS Television
Network, a Division of
CBS Inc.
Eric W. Ober 53 President, CBS News,a September 1, 1990;
Division of CBS Inc. President, CBS Television
Stations Division, from
March 1987 to August 1990
Johnathan Rodgers 49 President, CBS Tele- September 1, 1990; Vice
vision Stations, a President and General
Division of CBS Inc. Manager, WBBM-TV, from
March 1986 to August 1990
Peter F. Tortorici 45 President, CBS Enter- April 1, 1994; Executive
tainment, a Division Vice President, CBS Enter-
of CBS Inc. tainment Division, from
August 1991 to March 1994;
Senior Vice President,
Program Planning, CBS
Entertainment Division,
from January 1990 to August
1991
James A. Warner 41 President, CBS Enter- December 4, 1989
prises, a Division of
CBS Inc.
Nancy C. Widmann 52 President, CBS Radio, August 1, 1988
a Division of CBS Inc.
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Item 2. Properties.
The principal executive offices of CBS are located in its headquarters
building at 51 West 52 Street, New York, NY 10019.
Major CBS television and/or radio facilities are located at the CBS
Broadcast Center at 524 West 57 Street, New York, NY and the headquarters
building in New York, NY; CBS Television City and Columbia Square in Los
Angeles, CA; and in Chicago, IL; Philadelphia, PA; St. Louis, MO; Boston,
MA; San Francisco, CA; a suburb of Washington, D.C.; Miami, FL; Detroit, MI;
St. Petersburg, FL; Dallas/Fort Worth and Houston, TX; Minneapolis, MN; and
Green Bay, WI.
Of the foregoing real estate properties, all are owned by CBS except as
described below:
The CBS Radio Division occupies radio studios and offices in St. Louis, MO
(leases expire December 31, 2002); Boston, MA (lease expires December 31,
2006); San Francisco, CA (lease expires December 31, 2000); Dallas, TX
(lease expires December 31, 1996); Houston, TX (lease expires March 31,
1999); Detroit, MI (lease expires April 30, 1998); and Minneapolis, MN
(lease expires December 31, 1997).
CBS, through its wholly-owned subsidiary, Radford Studio Center Inc., owns
and operates a television and film production facility lot in Studio City,
CA, which includes 16 sound stages. Although some of these facilities are
made available to the CBS Entertainment Division, most are leased to third
parties. The first phase of an eight-year project to construct an
additional seven stages was commenced in November 1994.
CBS owns and leases other domestic real properties (including transmitter
sites), and leases foreign real properties, used in connection with its
business activities.
In 1993, CBS and the City of New York consummated an agreement whereby, for
a 15-year period, CBS agreed to maintain current principal operations and
specified levels of employment in New York City, and in consideration
thereof the City of New York granted to CBS annual tax abatements,
investment incentives, and certain other concessions. Over such period, the
abatements and concessions are expected to aggregate approximately $48.5
million, and will reduce CBS's annual operating costs accordingly. Included
among a series of interrelated transactions among CBS, the City and certain
of its administrative units, and the New York State Power Authority, was
CBS's conveyance of fee title to its Broadcast Center properties, located on
West 57th Street in Manhattan, to the New York City Industrial Development
Agency for a period of 15 years with a lease of those properties back to
CBS. Such conveyance is expressly subject to CBS's retaining a reversionary
interest in the properties, so that title in fee will revert to CBS at the
end of the 15-year term, or prior thereto in the event of the occurrence of
certain contingencies.
In 1993, CBS acquired the Ed Sullivan Theater and an adjacent 13-story
office building in New York City. The Ed Sullivan Theater has been
designated a landmark theater by the New York City Landmark Preservation
Commission. CBS has renovated the theater for use as a television
production facility, and the Landmark Commission granted its approval of the
renovation. The Ed Sullivan
- 12 -<PAGE>
Theater currently serves as the home of the LATE SHOW with DAVID LETTERMAN.
Item 3. Legal Proceedings.
(a) In Item 1 of Part II of CBS's 10-Q for the quarter ended September 30,
1994, Registrant reported on the status of seven shareholders lawsuits
(three in the Supreme Court of the State of New York, three in the Chancery
Court in Delaware and one in the Federal Court for the Southern District of
New York) in which CBS and its Chief Executive Officer, Laurence A. Tisch,
were named defendants following announcement of discussions regarding a
possible merger with QVC, Inc. ("QVC"). Following announcement that such
discussions had been terminated, as previously reported in said Item 1, on
July 15, 1994, the three complaints filed in Delaware Chancery Court were
consolidated by the filing of an Amended Complaint, which dropped CBS and
Laurence A. Tisch as defendants. On September 23, 1994, counsel for each of
the three plaintiffs who had filed suit in the Supreme Court of the State of
New York, purportedly on behalf of all common shareholders of CBS excluding
the defendants, executed stipulations voluntarily discontinuing those
lawsuits. Those voluntary Stipulations of Discontinuance have been filed
with the New York County Supreme Court. On August 23, 1994, counsel for the
plaintiff in the Federal Court action, who had also purportedly sued on
behalf of all common shareholders other than defendants, filed a voluntary
Stipulation of Dismissal in the Federal Court, thereby ending that
proceeding. Accordingly, all of these cases are now concluded.
(b) There are no active pending legal proceedings to which CBS is a party,
or to which any of its property is subject, other than (a) routine
litigation incidental to the business, and (b) proceedings before the FCC
with respect to the renewal of certain radio broadcast and television
broadcast licenses reported in Item 1 under the caption "Material Licenses
and Federal Regulation". In addition, various other legal actions,
governmental proceedings and other claims (including those relating to
environmental investigations and remediation resulting from the operations
of discontinued businesses) are pending or, with respect to certain claims,
unasserted.
Item 4. Submission of Matters to a Vote of Security Holders.
Inapplicable.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
Incorporated herein by this reference and made a part of this Item 5 are the
materials included under the captions "Stock Data" and "Dividends" at page
44 of Item 8 of this Report. There were approximately 10,657 holders of
CBS common stock as of February 28, 1995.
Item 6. Selected Financial Data.
Incorporated herein by this reference and made a part of this Item 6 is the
information set forth for the years 1990 through 1994 in Item 7 of this
Report under the captions or opposite the line items and at the pages
identified below:
- 13 -<PAGE>
"Management's Financial Commentary":
"Net sales", page 19;
"Income (loss) from continuing operations", page 19;
"Per share of common stock: Continuing operations", page 19;
"Dividends per common share", page 19;
"Long-term debt" and "Preference stock subject to redemption",
page 23; and
"Total assets", page 23.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Incorporated herein by this reference and made a part of this Item 7 are the
materials included under the caption "Management's Financial Commentary" at
pages 18 through 23 of this Report.
Item 8. Financial Statements and Supplementary Data.
Incorporated herein by this reference and made a part of this Item 8 are the
Consolidated Statements of Income, Retained Earnings, Additional Paid-In
Capital and Cash Flows for the years ended December 31, 1994, 1993, and
1992; the Consolidated Balance Sheets as of December 31, 1994, 1993, and
1992; the Notes to Consolidated Financial Statements; the Report of
Independent Certified Public Accountants thereon; the material set forth
under "Quarterly Results of Operations (Unaudited)"; and the material set
forth under "Shareholder Reference Information"; all of which are set forth
at pages 24 through 44 of this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Inapplicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Incorporated herein by this reference and made a part of this Item 10 are
the materials included in CBS's Proxy Statement relating to the 1995 Annual
Meeting of Shareholders (the "1995 Proxy Statement") under the captions
"Information Concerning Nominees for Directors", "Additional Information in
Respect of the Board of Directors and its Committees" and "Non-Employee
Directors' Compensation and Benefits". Definitive copies of the 1995 Proxy
Statement are to be filed with the Commission on or about April 7, 1995.
See also, "Executive Officers of the Registrant", included in Item 1 hereof
pursuant to Instruction 3 to Item 401(b) of Regulation S-K.
- 14 -<PAGE>
Item 11. Executive Compensation.
Incorporated herein by this reference and made a part of this Item 11 are
the materials included under the caption "Executive Compensation" and the
sub-headings thereunder, as set forth in the 1995 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Incorporated herein by this reference and made a part of this Item 12 are
the materials included under the caption "Certain Beneficial Owners and
Security Ownership of Directors and Executive Officers", as set forth in the
1995 Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
Incorporated herein by this reference and made a part of this Item 13 are
the materials included under the caption "Transactions with Management and
Affiliates", as set forth in the 1995 Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The Index to Financial Statements and Schedules filed as a part of
this Report appears on page 17 and the report and consent of the independent
certified public accountants thereon appears on page 25.
The following compensatory plans and management contracts have been filed
(or incorporated by reference) as Exhibits hereunder.
(i) Compensatory Plans: CBS Additional Compensation Plan, CBS Stock
Rights Plan, CBS Pension Plan, CBS Supplemental Executive Retirement
Plan, CBS Supplemental Executive Retirement Plan #2, CBS Excess
Benefits Plan, CBS Senior Executive Life Insurance Plan, CBS Deferred
Compensation Plan, CBS Employee Investment Fund, CBS Retirement Plan
for Outside Directors, CBS Supplemental Employee Investment Fund,
Restricted Stock Plan for Eligible Directors, Tisch Deferred
Compensation Plan.
(ii) Management Contracts: The following executive officers of CBS
are the only executive officers of CBS who have employment agreements:
Edward Grebow, Ellen Oran Kaden, Peter W. Keegan, David Kenin, Peter A.
Lund, Eric W. Ober, Johnathan Rodgers, Peter F. Tortorici, James A.
Warner, Nancy C. Widmann.
(b) No reports on Form 8-K were filed during the fourth quarter of 1994.
(c) The Index to Exhibits begins on page 45.
(d) Not applicable.
- 15 -<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 13, 1995 (Registrant) CBS Inc.
By: /s/Peter W. Keegan
Peter W. Keegan
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/Laurence A. Tisch /s/Henry B. Schacht
Laurence A. Tisch Henry B. Schacht, Director
Chairman of the Board, Dated: March 13, 1995
President and Chief Executive Officer
(principal executive officer)
Dated: March 13, 1995
/s/Peter W. Keegan /s/Edson W. Spencer
Peter W. Keegan Edson W. Spencer, Director
Executive Vice President and Dated: March 13, 1995
Chief Financial Officer
(principal financial and accounting officer)
Dated: March 13, 1995
/s/Michel C. Bergerac /s/Franklin A. Thomas
Michel C. Bergerac, Director Franklin A. Thomas, Director
Dated: March 13, 1995 Dated: March 13, 1995
/s/Harold Brown /s/Preston R. Tisch
Harold Brown, Director Preston R. Tisch, Director
Dated: March 13, 1995 Dated: March 13, 1995
/s/Ellen V. Futter
Ellen V. Futter, Director James D. Wolfensohn, Director
Dated: March 13, 1995 Dated: March 13, 1995
/s/Daniel Yankelovich
Henry A. Kissinger, Director Daniel Yankelovich, Director
Dated: March 13, 1995 Dated: March 13, 1995
- 16 -<PAGE>
INDEX TO FINANCIAL STATEMENTS
PAGE NO.
DESCRIPTION IN
10-K
Management's Financial Commentary 18
Consolidated Financial Statements
Management's Responsibility for Financial Statements 24
Report and Consent of Independent Certified Public Accountants 25
Statements of Income 26
Balance Sheets 27
Statements of Retained Earnings and Additional Paid-In Capital 28
Statements of Cash Flows 29
Notes to Financial Statements 30
Quarterly Results of Operations (unaudited) 43
Shareholder Reference Information 44
Financial statements of 50% or less owned persons, the investments in which
are carried on an equity basis, are omitted because such persons are not
"significant subsidiaries" within the meaning of Rule 1-02(v) of Regulation
S-X.
- 17 -<PAGE>
SUMMARY OF BUSINESS TERMS OF
PROPOSED TELEVISION STATION JOINT VENTURE
BETWEEN CBS INC. AND
WESTINGHOUSE BROADCASTING COMPANY, INC.
Form of Joint
Venture Company: A Delaware general partnership (the
"Partnership") formed pursuant to an
agreement of general partnership (the
"Partnership Agreement") between a
special purpose wholly owned subsidiary
("SPC A") of Westinghouse Broadcasting
Company, Inc. ("Group W"), which is a
subsidiary of Westinghouse Electric
Corporation ("Westinghouse"), and a
special purpose corporation ("SPC B"
and, together with SPC A, the
"Partners") in which Group W will own a
majority voting interest and CBS Inc.
("CBS" and, together with Westinghouse,
the "Parents") will own a minority
voting interest as described in
Schedule A attached hereto.
Notwithstanding anything to the contrary
set forth above, (i) Group W will be
permitted to cause SPC A to be formed as
a special purpose, bankruptcy remote
limited partnership with a newly formed,
special purpose, bankruptcy remote
general partner and (ii) CBS will be
permitted to own its interest in SPC B
through a subsidiary; provided that such
subsidiary, if any, and Group W shall
each remain at least majority owned by
CBS and Westinghouse, respectively, at
all times that such Parent retains its
indirect interest in the Partnership.
Purpose: The purpose of the Partnership will be
to acquire, own, operate, promote,
develop, sell or otherwise dispose of
television stations and their related
licenses, permits, leases, contracts and
other assets (collectively, "Stations")
in the United States, with the Stations <PAGE>
2
owned from time to time by it being
affiliated with the CBS Television
Network, a division of CBS (the
"Network"), and to do all lawful things
necessary, appropriate or advisable
which are related to such purpose.
Term: The term of the Partnership will
commence on the closing date and will
continue until terminated as provided
under "Withdrawal; Termination; Winding
Up, Liquidation and Dissolution" below
or as otherwise required by applicable
law.
Partners;
Partnership Interests: Upon formation of the Partnership, SPC B
will be the sole managing general
partner with full authority to manage
and operate the affairs of the
Partnership (the "Managing General
Partner"). As described in Schedule A
attached hereto, SPC B will have
approximately 50.2563%, and SPC A will
have the remainder, of the general
partnership interest in the Partnership
(each, a "Percentage Interest"), which
represents an allocation that will give
CBS and Group W an equal economic
interest in the Partnership (without
giving effect to any Preferred Interest
or Preferred Equalization Interest).
Contributions: Subject to the fourth paragraph of this
caption, Group W will contribute to the
Partnership, almost entirely through
SPC A (with a small portion of working
capital or other liquid assets being
contributed through SPC B), its Station
in Philadelphia, KYW-TV ("Group W's
Philadelphia Station"). In
consideration for such contribution,
Group W will receive all the common
stock of SPC A and 51 shares of voting
common stock of SPC B, as is described
in Schedule A attached hereto.
<PAGE>
3
Subject to the fourth paragraph of this
caption, CBS will agree to exchange (or
sell) (the "Exchange") on a
substantially tax-free basis, in the
most tax-efficient manner possible, its
existing Station in Philadelphia, WCAU-
TV ("CBS' Philadelphia Station") (and,
in the context of the Exchange that has
been discussed between CBS and Group W
(the "Proposed Exchange"), certain
assets with respect to CBS' existing
Station in Miami, WCIX-TV ("CBS' Miami
Station")), for one or more other
Stations (which, in the context of the
Proposed Exchange, shall include certain
assets with respect to another Station
in Miami (the "Other Miami Station"))
(the "Exchanged Stations") in one or
more other markets selected by CBS. CBS
will agree to contribute to the
Partnership, through SPC B, any after-
tax net proceeds or assets resulting
from the Exchange and, in the case of
the Proposed Exchange, CBS' Miami
Station, including certain assets
received with respect thereto from the
Other Miami Station pursuant to the
Proposed Exchange. If the Exchange
results in a sale solely for cash, SPC A
shall be entitled to a Preferred
Interest described below, and no
adjustment will be made thereto. If the
Proposed Exchange is consummated, then
SPC B shall be entitled to a Preferred
Interest, which shall be reduced to the
extent of any Cash Flow Shortfall (as
defined below) resulting from the
Proposed Exchange as described under
"Preferred Interest" below (and, if in
such case the Cash Flow Shortfall
exceeds $1,300,000, SPC A shall receive
a Preferred Interest in an amount equal
to such excess, as described under
"Preferred Interest" below). If,
however, the Proposed Exchange is not
consummated and an Exchange involving
only CBS' Philadelphia Station is <PAGE>
4
consummated, then SPC A shall be
entitled to a Preferred Interest, which
shall be increased to the extent of any
Cash Flow Shortfall resulting from such
Exchange as described under "Preferred
Interest" below. The CBS Station or
Stations that are to be traded away in
any Exchange are referred to herein as
the "Offered Station(s)". A "Cash Flow
Shortfall" means, with respect to any
Exchange, the amount, if any, by which
the aggregate annual cash flow of the
Exchanged Stations received pursuant to
such Exchange (which, in the context of
the Proposed Exchange, shall be deemed
to include the Other Miami Station
solely for purposes of this calculation)
is less than that of the Offered
Station(s) (which, in the context of the
Proposed Exchange, shall be deemed to
consist of CBS' Philadelphia Station and
CBS' Miami Station solely for purposes
of this calculation) (in each case
determined using calendar-year 1994 cash
flows).
As a result, and after giving effect to
the issuance of the Preferred
Equalization Interests described below,
each of CBS and Group W will share
equally any costs and expenses of
(including any costs and expenses
incurred in connection with a drop-down
of Stations into a captive partnership
to facilitate, and the negotiation and
implementation of, and any taxes
recognized as a result of), and any
profits from, the Exchange. Any cash so
received in connection with the Exchange
will be used by the Partnership to
acquire a Station or Stations selected
* by CBS within years following such
receipt (provided that each such
acquisition shall be of an Eligible
Station (as defined below) in a
* community not served by
and CBS
*Confidential portion omitted and filed separately<PAGE>
5
shall not select any Station that would
result in the violation by Group W of
the FCC (as defined below) multiple
ownership rules or any other applicable
FCC rules and regulations), or, if not
so used, will thereafter be allocated
and distributed to the Partners in
accordance with their respective
Percentage Interests. The structure and
documentation of the Exchange and of any
such acquisition shall be reasonably
satisfactory to Group W.
Notwithstanding the foregoing, if CBS is
unable to enter into a definitive
agreement to effect the Exchange of CBS'
* Philadelphia Station within
following execution of this Summary, or
such earlier time as the parties may
mutually agree, then CBS would be
required to contribute CBS' Philadelphia
Station to the Partnership, and Group W
would be required to sell Group W's
Philadelphia Station for cash (or
exchange it for one or more Stations
selected by Group W (provided that each
such Station shall be an Eligible
Station, and Group W shall not select
any Station that would result in a
violation by CBS of any applicable FCC
rules and regulations)). Group W would
contribute to the Partnership, almost
entirely through SPC A, an amount equal
to the after-tax proceeds from such sale
(computed using the maximum applicable
statutory federal, state and local tax
rates), plus an amount equal to one-
sixth of such federal tax liability.
Such cash contribution will be used by
the Partnership to acquire one or more
* Stations selected by Group W within
following such contribution
(provided that each such acquisition
shall be of an Eligible Station, and
Group W shall not select any Station
that would result in a violation by CBS
of any applicable FCC rules or
*Confidential portion omitted and filed separately<PAGE>
6
regulations), or, if not so used, will
thereafter be allocated and distributed
to the Partners in accordance with their
respective Percentage Interests. The
structure and documentation of any such
acquisition shall be reasonably
satisfactory to CBS. The parties agree
that the provisions of the immediately
preceding paragraph relating to the
sharing of all costs and expenses of,
and any profits from, the Exchange shall
apply equally to any sale or exchange of
Group W's Philadelphia Station pursuant
to this paragraph.
The "Retained Philadelphia Station" is
defined as whichever party's
Philadelphia Station is contributed to
the Partnership and not sold or
Exchanged, the "Exchanged Stations" are
defined as the Station or Stations
acquired for the benefit of the
Partnership in the Exchange or purchased
with the after-tax proceeds of the sale
of the other party's Philadelphia
Station and the "Original Stations" are
defined as the Retained Philadelphia
Station and the Exchanged Stations.
At the time each such contribution is
completed, the Original Stations will be
attributed to Group W and not to CBS,
for purposes of the Federal
Communication Commission ("FCC")
attribution-of-ownership rules.
Each such contribution of Stations by
CBS and Group W will also include an
assignment of all related operating
liabilities (whether accrued or
contingent) associated with such
Stations, which liabilities shall be
assumed by the Partnership. However,
the Partnership will not assume any
third-party indebtedness for borrowed
money or any litigation relating to the
contributed Stations or arising from <PAGE>
7
events occurring prior to the date such
Stations are contributed and will not
assume any environmental, ERISA or tax
liabilities relating to the contributed
Stations; provided, however, that the
foregoing reference to tax liabilities
shall not be deemed to override the
other provisions contained in this
Summary that allocate between the
parties the tax costs and benefits
related to Station acquisitions or
dispositions, such as the Exchange.
The Partnership Agreement also will
provide that within 90 days following
the date the Original Stations are
contributed to the Partnership, the
Partnership's independent auditor will
prepare and deliver to each Parent a
statement as to the amount of Working
Capital as of such date with respect to
the Original Stations contributed by
each Parent. "Working Capital" is
defined as all current assets minus all
current liabilities determined in
accordance with generally accepted
accounting principles. If the Working
Capital of the Original Station(s) being
contributed by one Parent exceeds that
of the Original Station(s) being
contributed by the other Parent (or, if
either party's Philadelphia Station is
sold for cash, the Working Capital of
such Station immediately prior to such
sale) (such excess, plus interest
thereon at the Partnership's short-term
borrowing rate from the date of
contribution to the date of the payment
referred to below, being referred to
herein as the "Excess Amount"), then the
Parent with such excess shall be deemed
to have not contributed an amount of
receivables (or other current assets)
equal to the Excess Amount. In such a
case, the Partnership will act as an
agent for such Parent in collecting such
receivables, holding such current assets
and making a cash distribution, through <PAGE>
8
its respective Partner within 10 days
after the statement is delivered, of an
amount equal to the Excess Amount.
Preferred
Interest: The Partnership will issue to SPC B (in
the event that the Proposed Exchange is
consummated) or to SPC A (in the event
that (i) the Proposed Exchange is
consummated and the Cash Flow Shortfall
exceeds $1,300,000 or (ii) the Proposed
Exchange is not consummated, and an
Exchange involving only CBS'
Philadelphia Station, or a sale or
exchange of Group W's Philadelphia
Station, is consummated) a preferred,
non-voting interest in the Partnership
(the "Preferred Interest"), which will
represent the right to receive from
Distributable Cash (as defined below),
prior to any payment to the Partners in
respect of their Percentage Interests
and pari passu with any payments in
respect of the Preferred Equalization
Interests, an amount per year equal to
the Preferred Interest Amount.
The "Preferred Interest Amount" shall
equal (i) for the first year following
the consummation of the Exchange, (A) in
the event that the Proposed Exchange is
consummated, $1,300,000, minus the Cash
Flow Shortfall, if any (such Cash Flow
Shortfall being adjusted higher or lower
by an amount equal to the quotient of
(1) the amount of cash, if any, paid or
received, as the case may be, by CBS (or
its designee) as part of the Exchange,
the pre-tax portion of which will be
contributed to the Partnership, and
(2) 10) (if such difference calculated
pursuant to this clause (A) is negative
(the "Negative Cash Flow Amount"), then
SPC A shall be entitled to receive a
Preferred Interest with an initial
Preferred Interest Amount equal to the
Negative Cash Flow Amount, expressed as <PAGE>
9
a positive number) or (B) in the event
that the Proposed Exchange is not
consummated, and an Exchange involving
only CBS' Philadelphia Station, or a
sale or exchange of Group W's
Philadelphia Station, is consummated,
$5,194,000, plus the Cash Flow
Shortfall, if any (adjusted as described
above), (ii) for each of the next three
years, the Preferred Interest Amount at
the end of the prior year increased by a
factor equal to the lesser of (x) the
then-current annual percentage increase
in the United States' Gross Domestic
Product (as published by the United
States Department of Commerce) or (y) 4%
per annum and (iii) for each year
thereafter, the Preferred Interest
Amount at the end of the fourth year.
In addition, in the event that any
Exchanged Station (in the case of a
Preferred Interest payable to SPC B) or
the Retained Philadelphia Station (in
the case of a Preferred Interest payable
to SPC A), as the case may be, is sold
by the Partnership, the Preferred
Interest will also represent the right
to receive, out of the proceeds of such
sale, prior to any payment to the
Partners in respect of their Percentage
Interests and pari passu with any
payments in respect of the Preferred
Equalization Interests, an amount equal
to the product of the then-current
Preferred Interest Amount (or pro rata
portion thereof (based on relative cash
flows calculated for the purpose of
determining any Cash Flow Shortfall),
attributable to the Station being sold,
if the Preferred Interest Amount
represents the cash flows of more than
one Station) and the Preferred Interest
Multiple. The "Preferred Interest
Multiple" shall mean (a) in the event of
any sale of a Station referred to in the
first sentence of this paragraph, the <PAGE>
10
multiple of the pre-tax and pre-interest
cash flow received by the Partnership on
such sale (based upon the aggregate
consideration paid, including by
assumption of debt), and (b) in the
event of a liquidation of the
Partnership's assets not resulting in a
sale of any Exchanged Station or the
Retained Philadelphia Station, as the
case may be, with an identifiable
multiple, 10.
Preferred Equalization
Interests: In order to allocate all the financial
benefits and liabilities, including tax
liabilities, arising from the Exchange
(including the receipt of any gain
recognized from the Exchange) or
attributable to the disposition of the
Original Stations, in each case in
accordance with the Partners' respective
Percentage Interests, each Partner will
receive a Preferred Equalization
Interest upon consummation of the
Exchange. The "Preferred Equalization
Interest" will represent the right of a
Partner to receive from Distributable
Cash, prior to any payment to the
Partners in respect of their Percentage
Interests and pari passu with any
payment in respect of any Preferred
Interest (but in no event before the
second anniversary of the formation of
the Partnership), (i) in the case of
SPC B, an amount sufficient to pay to
CBS the sum of the related transaction
costs and the tax (computed at the
maximum applicable statutory federal,
state and local tax rates, and grossed
up at such rates so that such amount is
received on an after-tax basis) on the
amount of taxable gain recognized by
CBS, if any, in connection with the
Exchange under the Internal Revenue Code
of 1986, as amended (the "Code"), and
(ii) in the case of either Partner, an
amount equal to the tax (computed at the <PAGE>
11
maximum applicable statutory federal,
state and local tax rates, and grossed
up at such rates so that such amount is
received on an after-tax basis) on the
amount of taxable income of the
Partnership specially allocated to such
Partner (through an allocation of gain
to such Partner, an allocation of loss
to the other Partner, or in any other
manner with respect to the disposition
of the Original Stations contributed by
such Partner to the Partnership) by
reason of Section 704(c) of the Code.
Each Preferred Equalization Interest
shall include the right to receive
interest from the due date (without
extension) for such Parent's tax return
on which such special allocation is
reflected at a rate per annum equal to
6.83%, compounded annually. The parties
further agree that they shall allocate
the depreciation of the tax basis of the
Original Stations in an appropriate
manner.
Notwithstanding the foregoing, no
Preferred Equalization Interest shall be
issued in connection with any gain
allocated to the Preferred Interest as
described under "Preferred Interest"
above.
Allocations of Profits
and Losses: General. Profits and losses of the
Partnership (for financial accounting
and tax purposes) shall be allocated to
the Partners pro rata in proportion to
their respective Percentage Interests.
Preferred Interest and Preferred
Equalization Interest. Notwithstanding
the foregoing, an amount of profit (for
financial accounting and tax purposes)
equal to the amount of any distribution
made to either SPC A or SPC B, as the
case may be, in respect of the Preferred
Interest and any distribution made to <PAGE>
12
either Partner in respect of the
Preferred Equalization Interest shall be
allocated to such Partner.
Tax Allocations. Allocations of profit,
loss and other items for tax purposes
shall be made as described above, except
as otherwise required by Section 704(c)
of the Code, and the regulations
thereunder. Allocations will be
reflected in capital accounts maintained
pursuant to Section 704(b) of the Code
and the regulations thereunder.
Distributions: Distributions shall be made by the
Partnership to the Partners on a
quarterly basis to the extent of any
Distributable Cash of the Partnership
for the preceding quarterly period.
Distributions to the Partners shall be
made, first, pro rata to either SPC A or
SPC B, as the case may be, in an amount
payable in respect of the Preferred
Interest and to the Partners in an
amount payable, if any, in respect of
their respective Preferred Equalization
Interests, and second, to each Partner
(pro rata in proportion to its
Percentage Interest). Notwithstanding
the foregoing, no distribution shall be
made in respect of a Preferred
Equalization Interest before the second
anniversary of the formation of the
Partnership.
"Distributable Cash" for any quarter
shall mean all available cash on hand
(other than cash received as part of the
Exchange, cash received from the sale or
as part of an exchange of Group W's
Philadelphia Station or any other cash
contributed to the Partnership to permit
it to acquire an Additional Station (as
defined below)) with respect to the
Partnership for such quarter, less
amounts required for Partnership
expenses then due, reasonable working <PAGE>
13
capital and capital expenditure purposes
and for a creation of a reasonable
reserve, if appropriate, for such
quarter.
SPC B will be obligated to make a loan
to each of CBS and Group W of an amount
equal to their respective shares of any
distributions received by SPC B from the
Partnership and the amount of interest
paid by CBS or Group W, as the case may
be, on such loan, unless CBS or Group W,
as the case may be, requests otherwise
with respect to itself. Any such loan
will bear interest at an arms'-length
market interest rate.
Governance Provisions: As described below, the day-to-day
operations of the Partnership will be
conducted by the Partnership's
management. All major strategic and
policy decisions will be made by the
Managing General Partner, through
meetings of both its directors and its
stockholders.
Notwithstanding anything to the contrary
set forth herein, CBS will have an
option, exercisable in its sole
discretion as a result of the occurrence
of a breach by the Partnership of the
carriage requirements of its Affiliation
Agreement (as defined below) with
respect to a Station entitling the
Network to terminate such Affiliation
Agreement, upon a payment to Group W of
$500,000 with respect to the Station or
Stations as to which such breach has
arisen out of the same facts and
circumstances, to acquire, on a Station-
by-Station basis, the right to cause
Group W (i) to grant to CBS a proxy to
vote one share of SPC B common stock
held by Group W on all matters relating
to such Station and (ii) to seek,
together with CBS, to locate new
management to run and operate such <PAGE>
14
Station. In the event that the parties
are unable to agree on such new
management, after good faith
negotiations, then the parties will each
submit their respective choices for new
management to an independent arbitrator,
whose determination would be final. If
the parties are unable to agree on an
independent arbitrator, CBS and Group W
shall designate one such arbitrator and
those two arbitrators will together
designate a third arbitrator.
Day-to-day operations: The executive officers and employees of
Group W, selected by Group W and the
Managing General Partner pursuant to the
Master Service Agreement (as defined
below), will manage the day-to-day
operations of the Partnership and will
make all decisions relating to the
Partnership not otherwise reserved to
the Managing General Partner.
Decisions by Managing
General Partner: Those decisions to be made by SPC B that
are referred to in the following
paragraph, and any other material
decisions that the parties mutually
agree to set forth in the Partnership
Agreement, will require the approval of
the stockholders of SPC B (the
"Stockholders") and the Board of
Directors of SPC B (the "Board"). All
decisions by the Stockholders, other
than with respect to Primary Matters (as
defined below) (which will require a
vote of Stockholders owning more than
75% of the outstanding common stock of
SPC B), will require the affirmative
vote of a majority of the Stockholders.
The Stockholders will meet at least
quarterly. The Stockholders may act by
actual meetings, by telephone conference
or by written consent. Either Parent
can call a meeting of the Stockholders
at any time upon at least five business
days' prior written notice to the other <PAGE>
15
Parent. All decisions by the Board,
which will not include any member
appointed by CBS, will be subject to
approval by the Stockholders, to the
extent permitted by law. Each director
on the Board will serve without
compensation or reimbursement of
expenses by the Managing General
Partner.
Approval by the Managing General Partner
will be required with respect to the
following (each of which will require
both Board and Stockholder approval):
(a) any change in the purposes of the
Partnership from that described under
"Purpose" above;
(b) the sale, transfer or encumbrance of
any interest in the Partnership by
either Partner; or the sale, transfer or
encumbrance of (other than as permitted
under "Transfers of Interests" below)
any interest in either Partner or
options or rights to acquire interest in
either Partner;
(c) any amendment to the Partnership
Agreement;
(d) the making of any allocation of
income or losses or the distribution of
profits or assets or any return of
capital other than as described under
"Allocations of Profits and Losses" and
"Distributions" above;
(e) approval of the Partnership's annual
operating budget as described under
"Operating Budgets" below;
(f) the commencement of any proceeding
for a voluntary winding up or
dissolution of the Partnership;
(g) the incurring of any indebtedness
for borrowed money, the guaranteeing of <PAGE>
16
any obligation of any person or entity
or the granting of any liens; provided,
however, that the foregoing shall not
limit the Partnership's incurrence of
commercial bank indebtedness (i) to the
extent incurred for the purpose
described under "Further Acquisitions"
below or (ii) to the extent such
indebtedness (A) is in an amount not
exceeding 20% of the book asset value of
the Partnership's assets and subject to
a coverage ratio to be agreed upon,
(B) has a maximum floating interest rate
of LIBOR plus .50% and (C) the proceeds
of which are distributed to the Partners
or used in the ordinary course of the
Partnership's business;
(h) the advancing or loaning funds to
any person or entity (other than
advances in the ordinary course of
business);
(i) the making of any unbudgeted
expenditures (including capital
expenditures) in excess of $1,000,000 in
the aggregate in any year, other than
expenditures made in the ordinary course
of the Partnership's business;
(j) the merger of the Partnership with
any other company, business concern,
firm or person, the sale of any
substantial amount of the assets of the
Partnership to any other company,
business concern, firm or person or the
entering into by the Partnership of any
partnership, joint venture or consortium
or acquiring equity securities in
another entity;
(k) the acquisition of (i) any business,
assets or other property for a purchase
price (including liabilities assumed by
the Partnership) in excess of $500,000
in the aggregate in any year, other than
assets and properties acquired in the <PAGE>
17
ordinary course of business or in
accordance with the Partnership's annual
operating budget described under
"Operating Budgets" below, or (ii) any
Station (other than as described under
"Contributions" above and "Further
Acquisitions" below);
(l) the disposition of (i) any business,
assets or other property of the
Partnership having an aggregate fair
market value (without reduction for
Partnership liabilities) in excess of
$500,000 in the aggregate in any year,
other than a disposition in the ordinary
course of business of the Partnership,
or (ii) any Station; and
(m) the removal or replacement of
employees serving as executive officers
of the Partnership.
Without limiting the foregoing, approval
by a vote of Stockholders owning more
than 75% of the outstanding common stock
of SPC B shall be required with respect
to Primary Matters involving the
Partnership or its assets. "Primary
Matters" means any of the events
referred to in paragraphs (a), (b), (c)
(to the extent it would have a material
adverse effect on CBS), (d), (f), (g)
(except any event falling within the
proviso thereto), (j) and (k). In
addition, the Partnership shall be
prohibited from disposing of the
Retained Philadelphia Station without
the consent of CBS, and any disposition
of any other Station by the Partnership
shall be subject to rights of first
offer and first refusal in favor of CBS
(or its designee) on terms to be agreed
upon between CBS and Group W.
Business Plans: Management will propose to the Managing
General Partner a multi-year business
plan for the Partnership at least <PAGE>
18
60 days prior to the consummation of the
Partnership and will propose updates
from time to time as necessary
thereafter. Approval of the business
plan requires the approval of majorities
of the Board and Stockholders.
Operating Budgets: Management will propose to the Managing
General Partner an annual operating
budget at least 60 days prior to the
beginning of each year. Approval of the
annual operating budget requires the
approval of majorities of the Board and
Stockholders. The operating budget will
describe anticipated revenues,
expenditures (capital and operating) and
cash requirements for the following
year.
Management; Employees: All individuals involved in the
management and operation of the
Partnership's business shall be
employees of Group W or its appropriate
affiliates and shall provide their
services for the benefit of the
Partnership pursuant to a master service
agreement among the Partnership, Group W
and its appropriate affiliates (the
"Master Service Agreement"). All terms
of the Master Service Agreement will be
on an arms'-length basis. The
Partnership will not have any employees
of its own and will not establish any
separate employee benefit plans.
Ownership of Property: Unless the Managing General Partner
determines otherwise, all assets and
property owned by the Partnership will
be held and recorded in the name of the
Partnership. All such assets and
property shall be deemed to be owned by
the Partnership as an entity, and no
Partner individually shall have any
ownership of such property.
Affiliation Agreements: The Partnership will enter into an
affiliation agreement with the Network <PAGE>
19
with respect to each Station owned by
the Partnership (an "Affiliation
Agreement"), in substantially the form
of Schedule B attached hereto. Each
Affiliation Agreement will have an
initial term of 10 years and will be
automatically renewable by the Network
for additional successive five-year
terms for so long as CBS (or its
successor) has not sold exchanged,
transferred or otherwise disposed of its
indirect interest in the Partnership to
a third party as a separate, stand-alone
transaction. Upon any breach by the
Partnership of the carriage requirements
of any Affiliation Agreement entitling
the Network to terminate such
Affiliation Agreement, in addition to
any of the remedies therefor provided to
the Network in the Affiliation
Agreement, CBS will have the right, in
its sole discretion, to (i) exercise its
option described under "Governance
Provisions" above with respect to the
applicable Station or (ii) cause Group W
to purchase such Station from the
Partnership or to purchase CBS' entire
interest in SPC B, in each case as
described under "Transfers of Interests"
below.
The Affiliation Agreement with respect
to the Retained Philadelphia Station
will provide for payment by the Network
of annual aggregate compensation on a
full live-clearance basis of the
existing Network program schedule in an
amount equal to the network affiliation
compensation payment being received by
Group W's Philadelphia Station as of
June 1, 1994 (adjusted for full
clearance). Affiliate payment
compensation with respect to any other
VHF Stations owned by the Partnership
will be equal to the greater of their
then-existing affiliate payment
compensation and the affiliate payment <PAGE>
20
compensation then being paid by the
Network to its own affiliate in the
applicable market or, in the case of any
UHF Station owned by the Partnership,
will be equal to the amount of affiliate
compensation, if any, determined by CBS,
in each case adjusted to be on a full
live-clearance basis of the existing
Network program schedule. It is further
understood that the charges to each of
the Stations owned by the Partnership
for the CBS Newsnet will be imposed
(i) in the case of a VHF Station, on a
basis that is consistent with the basis
on which CBS Newsnet fees are charged to
all other CBS affiliates and (ii) in the
case of a UHF Station, on a basis equal
to one-half of the amount that would
otherwise be charged to such Station if
it were a VHF Station in the same
geographic market.
Master Service
Agreement: Pursuant to the Master Service
Agreement, Group W and its appropriate
affiliates will provide all operational,
administrative and data processing
services to the Partnership as may be
necessary or appropriate for the conduct
of its business, including, without
limitation, general management, Station
operations, MIS, tax, facilities
management, legal, accounting,
insurance, benefits/pension, data
processing and treasury/cash management.
There also will be service agreements
relating to production and talent with
respect to Group W's Philadelphia radio
station. All such services to be
provided to the Partnership under the
Master Service Agreement will be
provided on arms'-length terms.
It is further understood that the
parties will agree upon an allocation of
a portion of Group W's management costs
to the Partnership that is between <PAGE>
21
(a) an allocation of only those costs
that are directly allocable to Stations
owned by the Partnership and (b) an
allocation of such management costs in
direct proportion to all Stations owned
or controlled by Group W (including
those owned by the Partnership);
provided, however, that in no event
shall Group W allocate to the
Partnership any management costs
attributable to executive management
(i.e., CEO, CFO, Chief Counsel, VP-Human
Resources) at the Group W level under
the Master Service Agreement or
otherwise (it being understood that the
management costs attributable to
executive management at the Group W
Television level shall be allocated to
the Partnership under the Master Service
Agreement in the manner described
above).
Trademarks: Rights to specified trade names,
trademarks, service marks or logos
related to each Parent will be licensed
on a royalty-free basis to the
Partnership, in each case for use in
accordance with the terms and subject to
the conditions set forth in customary
licensing agreements (which would
terminate one year after a Parent no
longer beneficially owns its interest in
the Partnership); provided, however,
that certain specified trade names,
trademarks, service marks, logos and
call letters used or related to a
specific Station being contributed to
the Partnership shall be contributed to
the Partnership in connection therewith;
and provided further that the terms of a
trademark license agreement will govern
the rights to use certain trade names,
trademarks, service marks and logos of
the Network.
<PAGE>
22
Auditors of the
Partnership: An independent auditor selected by the
CEO and approved by the Stockholders of
the Managing General Partner. This
auditor will not be the auditor for
either of the Parents.
Access and Rights of
Inspection: Each Parent (and its agents) will have
the right to audit and inspect the books
and records of SPC B and the Partnership
and will have free access to such books
and records and to all officers and
employees acting on behalf of SPC B and
the Partnership.
Reports to
Partners: The Partnership will provide to each
Partner and each Parent (a) on an annual
basis, within 90 days after the end of
each year, an audited balance sheet,
related statements of operations and
statements of cash flow; (b) on a
quarterly basis, within 45 days after
the end of each calendar quarter, an
unaudited balance sheet and related
statements of operations and statements
of cash flow; (c) on a monthly basis,
within 30 days after the end of each
calendar month, an unaudited balance
sheet and related statements of
operations and statements of cash flow;
and (d) such other information about the
Partnership's affairs as reasonably
requested by a Partner or Parent. Such
annual, quarterly and monthly
information will be prepared in
accordance with generally accepted
accounting principles (subject, in the
case of such quarterly and monthly
information, to normal year-end
adjustments) and in a form which permits
comparison to the annual operating
budget for the corresponding period and,
in the case of such annual and quarterly
information, to the corresponding
results for the prior year.
<PAGE>
23
Business
Restrictions: The Partnership will not engage in any
activity which would result in either
Parent or any of its affiliates being
deemed to violate applicable FCC laws
and regulations or other applicable
United States laws.
Further
Acquisitions: It is the intention of both parties that
the Partnership (and any other
partnership formed between affiliates of
the Parents to acquire Stations, with
each subsequent reference in this
section to the Partnership referring to
the Partnership or any such other
partnership, as the case may be) acquire
in the aggregate two Stations (the
"Additional Stations") in addition to
the Original Stations. Each Parent
will, except as described in
paragraph (C) of this caption and
without giving effect to any Preferred
Interest or Preferred Equalization
Interests, contribute 50% of the
acquisition costs (including the costs
and expenses associated with negotiating
and effecting such acquisition) of, and
have an indirect 50% economic interest
in, each Additional Station, regardless
of whether such Station is a VHF channel
or a UHF channel. In furtherance of the
foregoing objectives, the parties agree
as follows:
(1) CBS will prepare (and update as
necessary from time to time to reflect
Network affiliation changes) a list
reasonably acceptable to Group W (the
"Eligible List") of the VHF Stations in
the top 30 geographic markets in the
United States that reflect generally
acceptable potential acquisition
targets;
(2) until the Additional Station
Requirement (as defined below) has been
satisfied, each of CBS, Group W and <PAGE>
24
their respective subsidiaries will grant
the Partnership a right of first
opportunity to purchase with respect to
each Eligible Acquisition Opportunity
* (as defined below) (other than
presented to such party (the Parent of
such party being referred to as the
"Offeror Parent"), and CBS will further
grant to the Partnership a right of
first opportunity to purchase a Station
* that would be an
Eligible Acquisition Opportunity but for
the fact that such Station was not
included on the Eligible List; provided,
that, if any Station to be offered to
the Partnership pursuant to this
clause (2) is a UHF Station, CBS may
condition such offer to the Partnership
on (A) CBS' retaining the attributable
interest and operational control of any
such Station (which would involve the
use of a partnership other than the
original Partnership in which CBS
retained voting control of the managing
general partner thereof to the same
extent as Group W shall have such
control in the original Partnership)
and/or (B) a reservation of CBS' right
to terminate the affiliation agreement,
which would require that the Partnership
then sell any such Station, in the event
that CBS has an opportunity to affiliate
with, or acquire, a VHF Station or a
stronger UHF Station in the applicable
geographic market (subject to CBS'
offering any such further acquisition
opportunity to the original Partnership
(in the case of the acquisition of a VHF
Station) or the Partnership (in the case
of a stronger UHF Station)), in which
event such formerly owned UHF Station
will no longer count as one of the two
Additional Stations;
*Confidential portion omitted and filed separately<PAGE>
25
(3) if the other Parent (the "Offeree
Parent") causes the Partnership to
reject such Eligible Acquisition
Opportunity or such other acquisition
opportunity offered pursuant to
clause (2) above, the Offeror Parent
(but not the Offeree Parent) is then
free to make such acquisition outside of
the Partnership; and
(4) if an Offeree Parent causes the
Partnership to reject three Eligible
Acquisition Opportunities that consist
of the opportunity to acquire 100% of an
Eligible Station within a 36-month
period, then the Offeror Parent (in such
circumstance being referred to herein as
the "Controlling Parent") shall have the
unilateral right, without the consent of
the Offeree Parent (in such
circumstance, the "Non-Controlling
Parent") and until the Additional
Station Requirement has been satisfied,
(A) if Westinghouse becomes the
Controlling Parent, to cause the
original Partnership, or (B) if CBS
becomes the Controlling Parent, to cause
a new partnership substantially
identical to the original Partnership to
be formed and to cause such new
partnership, to accept one or two such
Eligible Acquisition Opportunities as
may be necessary to acquire both
Additional Stations, subject to the
following limitations:
(A) no such Eligible Acquisition
Opportunity may involve the
acquisition of an Eligible Station
that was previously offered to the
Partnership and rejected by the
Non-Controlling Parent;
(B) the price paid for the
Additional Station being acquired
in such Eligible Acquisition
Opportunity shall not exceed the
Maximum Price (as defined below);
<PAGE>
26
(C) the Non-Controlling Parent
shall not be required to contribute
more than the outstanding Available
Commitment Amount (as defined
below) for any such Eligible
Acquisition Opportunity; provided
that if the cost of completing such
Eligible Acquisition Opportunity
exceeds the sum of both Parents'
Available Commitment Amounts (such
excess being referred to herein as
the "Shortfall Amount"), the
Controlling Parent shall have the
option of contributing to the
Partnership an amount equal to such
Shortfall Amount, which would
entitle the Controlling Parent to
the corresponding increased
percentage interest in such
Station, subject to the right of
the Non-Controlling Parent to elect
to contribute up to one-half of the
Shortfall Amount to the Partnership
to preserve its relative 50/50
interest in such Station (in which
event the Controlling Parent's
additional contribution would be
reduced on a dollar-for-dollar
basis); provided, however, that,
notwithstanding the foregoing, CBS
hereby agrees not to acquire a
greater than 50% economic and
voting interest in any Additional
Station held by the original
Partnership; and
(D) at the option of either Parent,
in lieu of satisfying all or a
portion of each Parent's
requirement to make a cash
contribution equal to its Available
Contribution Amount referred to in
clause (C) above, the Partnership
will incur indebtedness up to such
aggregate amount, to the extent it
can prudently do so on a non-
recourse basis to the Partners or <PAGE>
27
the Parents; the proceeds of such
borrowing being allocated for the
benefit of the Parents in
accordance with their respective
interests in the Partnership and
used to satisfy their respective
obligations to fund up to their
Available Contribution Amounts for
the Partnership's consummation of
an Eligible Acquisition
Opportunity.
"Additional Station Requirement" shall
have been satisfied when (i) the
Partnership has acquired both Additional
Stations, (ii) Group W and CBS have
mutually agreed in writing to deem such
requirement to have been satisfied or
(iii) (A) four years have elapsed
following the date on which a definitive
agreement is executed with respect to
the Exchange (or the sale of Group W's
Philadelphia Station) or (B) five years
have elapsed following the date of this
Summary, in each case if the Partnership
has not then acquired both Additional
Stations.
"Available Commitment Amount" with
respect to each Parent means
$250,000,000, minus such Parent's share
of the cost of the first Additional
Station acquired by the Partnership.
"Eligible Acquisition Opportunity" shall
mean the opportunity presented by an
Offeror Parent for the Partnership to
acquire more than a 50% interest in an
Eligible Station from a bona fide seller
unaffiliated with the Offeror Parent
(unless otherwise consented to by the
Offeree Parent) on bona fide,
arms'-length terms, subject to normal
and customary closing conditions (unless
otherwise consented to by the Offeree
Parent) and, if the Offeree Parent so
elects within five Business Days <PAGE>
28
following the Offeror Parent's
presentation of the opportunity, on
terms that an independent investment
bank has concluded in a written opinion,
delivered within 15 days following
selection of such investment bank, are
fair, from a financial point of view, to
the Partnership (such investment bank,
the cost of which shall be borne by the
Partnership, having been selected by the
Parents within three Business Days
following the election by the Offeree
Parent to obtain such opinion, or if
they cannot agree within such three-
Business Day period, by the Offeree
Parent within one Business Day from a
list of three nationally-known
investment banks prepared by the Offeror
Parent within one Business Day following
such three-Business Day period);
provided, however, that an Eligible
Acquisition Opportunity shall not
include (i) the opportunity to acquire
less than a majority interest in an
Eligible Station, (ii) the acquisition
of an Eligible Station in connection
with the acquisition of other assets (or
of a company that owns assets other than
television stations), so long as the
acquisition of the Eligible Station is
not a primary reason for the
acquisition, or (iii) unless the Offeror
Parent elects otherwise in its sole
discretion, the opportunity to acquire
an interest in an Eligible Station or
Eligible Stations by means of a swap or
exchange of one or more of the Offeror
Parent's existing owned Stations for
such Eligible Station or Eligible
Stations.
"Eligible Station" shall mean a Station
* that
*Confidential portion omitted and filed separately<PAGE>
29
"Maximum Price" shall mean, with respect
to any Additional Station to be acquired
by the Partnership at the sole direction
of a Controlling Parent, a purchase
price which, when compared to the
trailing 12-month cash flows of such
Additional Station, yields a cash flow
multiple not in excess of the Maximum
Multiple.
The "Maximum Multiple" shall initially
* be
Tax Matters: The Partnership shall timely cause to be
prepared partnership tax returns and
shall provide such information as will
enable each Parent to file its United
States federal, state and local tax
returns.
Events of Default: Events of Default with respect to a
Partner or a Parent shall include:
(a) a transfer by such Partner of its
interest in the Partnership, other than
in accordance with the provisions of the
Partnership Agreement as described under
"Transfers of Interests" below;
(b) such Partner (i) ceasing to be a
special purpose majority-owned
subsidiary of Westinghouse or Group W
(or, in the case of SPC B, SPC B's
minority voting interest and nonvoting
interest ceasing to be owned by CBS or a
majority-owned subsidiary of CBS), other
than in accordance with the provisions
of the Stockholders' Agreement (as
defined below) as described under
"Transfers of Interests" below, or
(ii) in the case of either Partner,
*Confidential portion omitted and filed separately<PAGE>
30
ceasing to have at least one director
unaffiliated with Group W or CBS;
(c) Group W ceasing to be at least a
majority-owned subsidiary of
Westinghouse;
(d) the filing of bankruptcy or the
commencement of any other insolvency
proceeding with respect to such Partner;
or
(e) any material breach by such Partner
or such Parent of the Partnership
Agreement, the Stockholders' Agreement
or the SPC B charter.
Remedies: In the event that either Partner or
Group W, on the one hand, or CBS, on the
other hand, shall not cure an Event of
Default occurring with respect to it (a
"Defaulting Parent") prior to the
expiration of the applicable cure period
(which shall include a 60-day cure
period for an involuntary bankruptcy or
insolvency proceeding with respect to a
Partner), CBS or Group W, respectively
(the "Non-Defaulting Parent"), shall
have the right to cause the purchase of
such Defaulting Parent's indirect
interest in the Partnership for its
Appraised Value. "Appraised Value"
shall be such Parent's share of the
value of the Partnership's net assets on
a going concern basis (without giving
effect to any discount for the lack of
voting rights, the lack of liquidity of
interests in the Partnership or other
customary discounts) based on its share
of each Partner's Percentage Interest,
any Preferred Interest and any Preferred
Equalization Interest, as determined
jointly by two independent appraisers
chosen by the Non-Defaulting Parent and
the Defaulting Parent, respectively;
provided, however, that if such two
appraisers are unable to agree upon the <PAGE>
31
valuation, such appraisers shall choose
a third independent appraiser, which
shall determine the Appraised Value.
The Non-Defaulting Parent will have
30 days from the date of such
determination to elect to exercise its
right to make such purchase, the closing
of which would be within 90 days after
such exercise (or such later date as may
be required in order to obtain any
necessary regulatory approvals in
connection therewith).
Transfers of
Interests: Except as expressly permitted below, no
Partner shall have the right, directly
or indirectly, to sell, transfer, assign
or hypothecate its interest in the
Partnership or in the capital or profits
of the Partnership; provided, however,
that a change of control of either
Parent shall not be deemed to be a
transfer of an interest in the
Partnership by a Partner.
The Parents will enter into a
stockholders' agreement (the
"Stockholders' Agreement") that will
provide, inter alia, that for a period
(the "Restricted Period") of three years
following the date the Partnership
acquires its first Station (whether by
purchase or contribution) (or, solely
with respect to one Parent, such earlier
date as a Change of Control (as defined
below) with respect to the other Parent
shall have occurred), neither Parent
shall have the right to sell, transfer,
assign or hypothecate its interest in
either Partner; provided, however, that
(i) Westinghouse shall be entitled at
any time to sell up to a less than 50%
interest in Group W, the owner of
Westinghouse's indirect interests in
SPC A and SPC B, and Group W shall be
entitled to sell up to a less than 50%
interest in any subsidiary that holds <PAGE>
32
Westinghouse's indirect interests in
SPC A and SPC B (in either case subject
to Westinghouse always owning directly
or indirectly more than a 50% interest
of its initial indirect interest in
SPC A and SPC B), (ii) CBS shall be
entitled at any time to sell up to a 49%
interest in a corresponding company that
CBS may establish to hold its interest
in SPC B and (iii) CBS shall be entitled
at any time to spin off to its
shareholders its interest in SPC B or to
transfer such interest to a subsidiary
and spin off such subsidiary to its
shareholders, in which event Group W
shall then have the same option to
require CBS to repurchase Group W's
indirect interest in the Partnership as
is described with respect to a CBS
Change of Control in the second-to-last
paragraph under this heading "Transfers
of Interests", in each case described in
clause (i), (ii) or (iii) above without
regard to the remaining paragraphs in
this caption.
A "Change of Control" of a Parent is
defined to occur when (i) any person (as
such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of
1934, as amended) is or becomes the
beneficial owner (as such term is used
in such Section 13(d)), directly or
indirectly, of more than 35% of the
total voting power of the voting stock
of such Parent, (ii) CBS sells,
exchanges or otherwise transfers or
disposes of control of the Network or
(iii) during any one-year period,
individuals who at the beginning of such
period constituted the Board of
Directors of such Parent (together with
any new directors whose election by such
Board of Directors or whose nomination
for election by stockholders was
approved by a majority of the directors
who were in office at the beginning of <PAGE>
33
such period or whose election or
nomination for election was previously
so approved) cease, as a result of a
single corporate control transaction or
a group of such related transactions, to
constitute a majority of the Board of
Directors of such Parent then in office.
At any time after the end of the
Restricted Period (or earlier if, as a
result of a change in law or regulation,
a Parent is prohibited from continuing
to own its interest in the Partner(s)),
either Parent shall be permitted to
sell, transfer, assign or hypothecate
all (but not less than all) its indirect
interest in the Partnership (including
any Preferred Interest and Preferred
Equalization Interest) to a third party
subject to the right of first refusal of
the other Parent specified in the second
succeeding paragraph; provided, however,
that if Westinghouse elects to cause
Group W's interests in SPC A and SPC B
to be sold, such sale must be to a
single buyer who in turn agrees not to
divide ownership of such interests or to
change the form of such ownership
without the consent of CBS.
Notwithstanding anything to the
contrary, Westinghouse will be permitted
at its option to cause SPC A to sell its
interest in the Partnership directly
rather than selling Group W's interest
in SPC A; provided, however, that any
such sale must also include a sale of
Group W's interest in SPC B to the same
single buyer, who in turn must have
agreed not to divide ownership of such
interests without the consent of CBS.
In addition, CBS will have the right, at
its sole option, rather than simply
selling its interest in SPC B, to sell
an equivalent direct interest in the
Partnership, which would be created by
the parties' amending the Partnership <PAGE>
34
Agreement to move voting control from
SPC B to SPC A and to cause the
ownership interests in the Partnership
to be readjusted appropriately to
reflect the dissolution of SPC B.
At any time after the end of the
Restricted Period, if either Parent
desires to sell, transfer or assign all
(but not less than all) its interest in
the Partners (or the Partnership), such
Parent (the "Selling Parent") shall
provide written notice to the other
Parent (the "Remaining Parent")
indicating the Selling Parent's
intention to sell its interest in the
Partners (or the Partnership).
Thereafter, the Selling Parent shall be
free to negotiate with any third party
to obtain an offer to buy the Selling
Parent's interest. At any time the
Selling Parent receives a bona fide,
fully financed offer from a third party
(it being understood that the financial
wherewithal of the third party to
fulfill the ongoing obligations of the
Selling Parent, if any, shall be
considered in determining whether such
third party's offer is bona fide), the
Selling Parent will provide written
notice of the terms of such offer to the
Remaining Parent, including the identity
of the prospective buyer, the price
offered, the terms of the prospective
buyer's financing and the other
principal terms of the offer. Following
such notice, the Remaining Parent shall
have 45 days in which to provide in
writing to the Selling Parent its bona
fide and fully financed irrevocable
offer to purchase the Selling Parent's
interest on the same or better terms
(including price and the other key
terms) as the third party's offer. In
the event the Remaining Parent makes
such a matching offer, the Selling
Parent may thereafter sell such interest <PAGE>
35
to the Remaining Parent on such terms,
sell such interest to a third party (but
only to the extent that the terms paid
by such third party are superior to the
terms offered by the Remaining Parent
and subject to the Remaining Parent's
right to match the superior offer) or
continue to hold the interest in the
Partners (or the Partnership).
Moreover, to the extent the Remaining
Parent would be prohibited from
purchasing such interest as a result of
the FCC's attribution-of-ownership
rules, the Remaining Parent shall be
entitled to assign its right of first
refusal to a third party proposed by the
Remaining Parent.
In addition, at any time following the
end of the Restricted Period, if either
Parent elects to sell its interests in
the Partner (or the Partnership), the
other Parent will have the tag-along
right to sell its interest in the
Partner(s) (or the Partnership) along
with and on the same terms as any such
sale by the first Parent.
If a Change of Control of CBS occurs,
then Group W will have the option to
require CBS to repurchase Group W's
indirect interest in the Partnership for
its Appraised Value, to the extent CBS
would then be permitted to purchase such
Stations under the FCC's attribution-of-
ownership rules. Such option will be
exercisable by Group W if it delivers to
CBS, within 90 days following the
occurrence of such Change of Control,
written notice of its irrevocable
election to exercise such option. If
exercised, both parties will seek to
consummate such repurchase as soon as
reasonably practical following such
exercise. The foregoing right, together
with the right set forth in the second
paragraph under "Definitive Agreements; <PAGE>
36
Conditions", shall collectively
represent the sole right of Group W that
is exercisable as a result of a Change
of Control of CBS, and such Change of
Control shall not otherwise affect any
of the affiliation agreements and other
contractual arrangements between the
parties.
Finally, in the event of a termination
by the Network of the Affiliation
Agreement for a Station or a breach by
the Partnership of the carriage
requirements of such Affiliation
Agreement entitling the Network to
terminate such Affiliation Agreement,
CBS shall have the right, in its sole
discretion and in addition to any of the
rights and remedies accruing to CBS or
the Network as a result thereof, whether
under the Affiliation Agreement or
described elsewhere herein, (i) to cause
Group W to purchase such Station from
the Partnership for its Appraised Value
or (ii) to cause Group W to purchase
CBS's entire interest in SPC B for its
Appraised Value.
Withdrawal;
Termination;
Winding Up, Liquidation
and Dissolution: No Partner shall withdraw from the
Partnership or take any action to
dissolve, terminate or liquidate the
Partnership or to require apportionment
or appraisal of the Partnership or any
of its assets except as specifically
permitted in the Partnership Agreement,
and each Partner shall waive any rights
to take such actions under applicable
law.
The Partnership shall dissolve upon
(a) the sale of all or substantially all
its assets; (b) the written agreement of
both Partners (which for SPC A shall
require a majority vote of its directors <PAGE>
37
and a 75% vote of its stockholders and
for SPC B shall require a majority vote
of the Board and a 75% vote of the
Stockholders); or (c) at the option of
CBS, if either Partner is bankrupt or
insolvent or a voluntary or involuntary
petition has been filed for any
arrangement, reorganization,
receivership or trusteeship or is
subject to insolvency proceedings
(subject to a 60-day cure period for
involuntary bankruptcy or insolvency
proceedings).
Upon a dissolution of the Partnership,
all the business and affairs of the
Partnership will be liquidated and wound
up. After payment of all debts of the
Partnership (including debts to the
Partners and their affiliates) and the
expenses of the liquidation, the
proceeds of the liquidation will be
distributed in the following order and
priority: (a) first, to the payment of
any required distributions not yet paid
(including the payment of any amounts
payable in respect of any Preferred
Interest (including, without limitation,
the right of SPC B or SPC A, as
applicable, to receive the payment
described in the third paragraph under
"Preferred Interest" above) and any
Preferred Equalization Interest); and
(b) second, to the Partners pro rata in
accordance with their respective
Percentage Interests. Upon any
liquidation of the Partnership
Agreement, the Master Service Agreement
will be terminated after appropriate
transitional arrangements are made.
Certain Additional
Terms Relating to the
Partners: Each Partner (or, if Group W elects to
form SPC A as a partnership, the general
partner of such partnership) will be a
"bankruptcy remote" corporation, formed <PAGE>
38
solely for the purpose of holding
interests in the Partnership (or acting
as general partner of SPC A), and will
not incur any indebtedness or guarantee
the obligations of any other entity. In
addition, SPC A will require a unanimous
vote of its Board of Directors and a 75%
vote of its stockholders (or its general
partner's Board of Directors and
stockholders), and SPC B will require a
majority vote of the Board and a 75%
vote of the Stockholders, to commence a
bankruptcy or insolvency proceeding.
SPC A (or such general partner) and
SPC B will at all times have at least
one director who is not a director,
officer, employee or significant
stockholder of either Parent or any of
their controlled affiliates. The
Parents will agree not to change the
charter of either Partner (or general
partner) or to permit the merger of
either Partner (or general partner) into
any other entity without the prior
written consent of the other Parent.
Definitive Agreements;
Conditions: Definitive agreements with respect to
the organization of the Partners and
consummation of the Partnership will be
subject to customary and appropriate
conditions, including without limitation
obtaining all required regulatory and
other approvals and will include
customary representations and warranties
(with indemnities for breaches thereof),
including representations and warranties
as to financial statements and
covenants, including covenants
pertaining to the operations of the
parties' respective Philadelphia
Stations during the period between
execution of such agreements and
closing. Each party's obligation to
close will be conditioned on, among
other things, both parties having
received legal opinions from outside <PAGE>
39
counsel dated as of the closing as to
the consummation of the Partnership not
causing a breach of the respective
Parent's debt agreements. Failure to
* satisfy all such conditions by
following execution of this
* Summary (or,
will result in the termination of all
obligations to proceed with the
transactions contemplated with respect
to the Partnership.
In addition, if a Change of Control
(defined for these purposes to include
the execution of a definitive agreement
pursuant to which a Change of Control
will occur upon consummation thereof) of
CBS or Westinghouse occurs following the
execution of this Summary and prior to
execution of a definitive agreement to
effect (a) the Exchange, (b) the sale of
Group W's Philadelphia Station or
(c) the acquisition of an Additional
Station, then Group W or CBS,
respectively, will have the right,
exercisable within 60 days following
such Change of Control by delivery of
written notice to the other party, to
terminate this transaction (and the
sales rep and production/distribution
transactions) or the Partnership
Agreement and all obligations to proceed
with the transactions contemplated with
respect thereto and to cause the
liquidation of the Partnership.
Governing Law: Delaware will be specified as the
governing law for the Partnership
Agreement, and New York will be
specified as the governing law for the
*Confidential portion omitted and filed separately<PAGE>
40
other agreements to be entered into
among the Partnership, the Partners and
the Parents.
Confidentiality;
Press Releases: The parties hereto agree that this
Summary and all information with respect
to the transactions contemplated by this
Summary and all discussions and
negotiations between the parties with
respect to this Summary and the
transactions contemplated hereby are
strictly confidential and shall be
governed by terms substantially
identical to those set forth in the
confidentiality agreement dated
September 23, 1993, among CBS,
Westinghouse and Group W. Prior to the
closing, all press releases and any
other forms of publicity will be
coordinated and, to the extent
practicable, approved by both Parents in
advance. The parties will agree upon an
initial joint press release.
Expenses: Unless otherwise specifically provided
(such as with respect to the Exchange,
the acquisition of Additional Stations
and any severance and other one-time
only costs associated with the
contribution of the Original Stations),
each party will be responsible for its
own expenses incurred in connection with
the transaction.
No Solicitation;
Access: For the period prior to the execution of
a definitive agreement with respect to
this Summary (after which the "first
opportunity to purchase" provisions
described under "Further Acquisitions"
above will apply), neither Parent shall,
nor shall it permit any of its
subsidiaries to, nor shall it authorize
or permit any officer, director or
employee of or any investment banker,
attorney or other advisor or <PAGE>
41
representative of, such Parent or any of
its subsidiaries to (without the prior
written consent of the other Parent),
directly or indirectly, (i) solicit,
initiate or encourage the submission of,
any proposal to sell, or enter into a
joint venture, partnership or other
business combination with respect to its
respective Philadelphia Stations, or any
proposal that such Parent acquire more
than a 50% ownership interest in another
* Station
(B) CBS's acquisition of a
Station or Stations pursuant to the
Exchange and (C) either party's
acquisition of a Station or Stations to
be offered to the Partnership (including
any other partnership between affiliates
of the Parents) in accordance with the
provisions described under "Further
Acquisitions" above) or (ii) participate
in any discussions or negotiations
regarding, or furnish to any person any
information with respect to, or take any
other action to facilitate any inquiries
or the making of any proposal that
constitutes, or may reasonably be
expected to lead to, any such proposal
referred to in clause (i) above. Each
Parent promptly shall advise the other
Parent orally and in writing of any such
request for information or of any such
proposal or any inquiry with respect to
or which could lead to any such
proposal, the identity of the person
making such proposal or inquiry and the
material terms and conditions thereof.
Each party will provide to the other
reasonable access to the books, records,
contracts, properties and personnel of
the other party relating to its
contributed assets (as well as access to
its accountants and counsel) in order to
perform a due diligence review.
*Confidential portion omitted and filed separately<PAGE>
42
Definitive
Documentation: The parties hereby agree to prepare and
enter into definitive documentation with
respect to the terms and provisions
described in this Summary, including the
agreements referred to herein and any
other agreements or documents necessary
to more fully effectuate the purposes of
the parties as set forth in this
Summary, promptly following the
execution and delivery of this Summary.
This Summary shall constitute a binding
commitment by both parties to take such
actions; provided, however, that nothing
contained herein shall be deemed to
create, as of the date of this Summary,
a partnership between CBS, on the one
hand, and Westinghouse and Group W, on
the other hand, or to make CBS, on the
one hand, or either of Westinghouse or
Group W, on the other hand, an agent of
the other for any purpose, none of CBS,
Westinghouse or Group W will take any
action to create an appearance
otherwise, and each of CBS, Westinghouse
and Group W shall use reasonable efforts
to avoid an appearance otherwise.
The parties will agree upon a timetable
and an allocation between their
respective counsel of responsibility for
supplying initial drafts of the
definitive documentation. Such
definitive documentation shall contain
provisions relating to the matters
contemplated by this Summary and, among
other things, such indemnities,
covenants, representations and
warranties, events of default and
termination rights as are agreed upon by
all such parties.
This Summary may be executed in one or
more counterparts, each of which when so
executed and delivered shall be an
original, but all such counterparts
shall together constitute but one and
the same instrument. Neither party <PAGE>
43
shall be entitled to assign its rights
under this Summary other than in
accordance with the provisions governing
transfers of interests in the Partners
and the Partnership described above
under "Transfers of Interests", and any
purported assignment in violation of the
foregoing shall be deemed null and void.
This Summary shall be binding upon and
inure to the benefit of the parties
hereto and their respective successors
and permitted assigns. This Summary
shall be governed by and construed in
accordance with the laws of the State of
New York, but without giving effect to
applicable principles of conflicts of
laws.
CBS INC.,
by /s/Peter W. Keegan
Name: Peter W. Keegan
Title: Executive Vice
President and Chief
Financial Officer
WESTINGHOUSE BROADCASTING COMPANY,
INC.,
by /s/Willard C. Korn
Name: Willard C. Korn
Title: President & CEO
Dated as of October 21, 1994
Accepted and agreed with respect
to the following sections:
"Contributions", "Further Acquisitions",
"Events of Default", "Remedies",
"Transfers of Interests", "Confidentiality;
Press Releases", "Expenses", "No Solicitation;
Access" and "Definitive Documentation"
WESTINGHOUSE ELECTRIC CORPORATION,
by /s/Willard C. Korn
Name: Willard C. Korn
Title: Vice President
<PAGE>
CONFORMED COPY
ASSET EXCHANGE AGREEMENT
between
NBC STATIONS MANAGEMENT, INC.
and
STATION PARTNERS
Dated as of November 21, 1994
CMC-8685<PAGE>
TABLE OF CONTENTS
PAGE
1. Exchange of Assets . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Transfer of KCNC Assets by NBC Sub . . . . . . . . . . . . . . 2
1.2 Transfer of WTVJ Assets by NBC Sub . . . . . . . . . . . . . . 6
1.3 Transfer of WCAU Assets by Partners. . . . . . . . . . . . . . 8
1.4 Transfer of WCIX Assets by Partners. . . . . . . . . . . . . . 12
1.5 Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.6 Value of Exchanged Assets. . . . . . . . . . . . . . . . . . . 14
2. Instruments of Conveyance and Transfer . . . . . . . . . . . . . . . 14
2.1 NBC Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2 CBS Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1 NBC Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 CBS Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4. Assumed Obligations. . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 NBC Sub Obligations. . . . . . . . . . . . . . . . . . . . . . 15
4.2 Partners Obligations . . . . . . . . . . . . . . . . . . . . . 16
5. Closing; Working Capital Adjustment; Qualified Escrow
Account or Qualified Intermediary. . . . . . . . . . . . . . . . . . 17
5.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Working Capital Adjustment . . . . . . . . . . . . . . . . . . 17
5.3 Qualified Escrow Account or
Qualified Intermediary. . . . . . . . . . . . . . . . . . . . 18
6. Representations and Warranties by NBC Sub. . . . . . . . . . . . . . 22
6.1 Organization and Good Standing . . . . . . . . . . . . . . . . 22
6.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.3 No Conflict or Breach. . . . . . . . . . . . . . . . . . . . . 23
6.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.6 Real Property. . . . . . . . . . . . . . . . . . . . . . . . . 25
6.7 Tangible Personal Property . . . . . . . . . . . . . . . . . . 26
6.8 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 27
(i)<PAGE>
6.10 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . 28
6.11 Call Letters . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.12 Operation of the NBC Stations. . . . . . . . . . . . . . . . . 28
6.13 Sufficiency of KCNC Assets . . . . . . . . . . . . . . . . . . 28
6.14 Financial Statements . . . . . . . . . . . . . . . . . . . . . 28
6.15 Undisclosed Obligations. . . . . . . . . . . . . . . . . . . . 29
6.16 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 29
6.17 Litigation; Compliance with Laws . . . . . . . . . . . . . . . 29
6.18 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 29
6.19 Reports; Books and Records . . . . . . . . . . . . . . . . . . 31
6.20 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.21 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.22 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . 32
6.23 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . 32
6.24 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . 34
7. Representations and Warranties by Partners . . . . . . . . . . . . . 34
7.1 Organization and Good Standing . . . . . . . . . . . . . . . . 34
7.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.3 No Conflict or Breach. . . . . . . . . . . . . . . . . . . . . 35
7.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.6 Real Property. . . . . . . . . . . . . . . . . . . . . . . . . 37
7.7 Tangible Personal Property . . . . . . . . . . . . . . . . . . 38
7.8 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 39
7.10 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . 39
7.11 Call Letters . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.12 Operation of the CBS Stations. . . . . . . . . . . . . . . . . 40
7.13 Sufficiency of WCAU Assets . . . . . . . . . . . . . . . . . . 40
7.14 Financial Statements . . . . . . . . . . . . . . . . . . . . . 40
7.15 Undisclosed Obligations. . . . . . . . . . . . . . . . . . . . 40
7.16 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 40
7.17 Litigation; Compliance with Laws . . . . . . . . . . . . . . . 41
7.18 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 41
7.19 Reports; Books and Records . . . . . . . . . . . . . . . . . . 42
7.20 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.21 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.22 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . 43
7.23 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . 44
7.24 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . 45
8. Further Agreements of the Parties. . . . . . . . . . . . . . . . . . 45
8.1 Filings with the FCC . . . . . . . . . . . . . . . . . . . . . 46
8.2 Hart-Scott-Rodino Act. . . . . . . . . . . . . . . . . . . . . 46
8.3 Pre-Closing Covenants. . . . . . . . . . . . . . . . . . . . . 47
(ii)<PAGE>
8.4 No Control . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.6 Access to Information. . . . . . . . . . . . . . . . . . . . . 49
8.7 Consents; Assignment of Agreements . . . . . . . . . . . . . . 49
8.8 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.9 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 51
8.10 Additional Financial Statements. . . . . . . . . . . . . . . . 51
8.11 No Disclosures or Solicitation . . . . . . . . . . . . . . . . 51
8.12 Waiver of Compliance with Bulk Transfer Law. . . . . . . . . . 52
8.13 Other Action . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.14 Modifications to Miami Retransmission
Consent Agreements. . . . . . . . . . . . . . . . . . . . . . 52
8.15 Assignment of Channel 27 Lease . . . . . . . . . . . . . . . . 53
8.16 Updated Schedules. . . . . . . . . . . . . . . . . . . . . . . 53
8.17 WTVJ Tower . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.18 WCIX Tower . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9. Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.1 Continuity of Employment . . . . . . . . . . . . . . . . . . . 55
9.2 Pension Plans. . . . . . . . . . . . . . . . . . . . . . . . . 56
9.3 Defined Contribution Plans . . . . . . . . . . . . . . . . . . 57
9.4 Post-Retirement Medical Benefits
and Life Coverage . . . . . . . . . . . . . . . . . . . . . . 58
9.5 Welfare Benefits - Claims Incurred;
Pre-Existing Conditions . . . . . . . . . . . . . . . . . . . 58
9.6 Multiemployer Plans. . . . . . . . . . . . . . . . . . . . . . 59
10. Conditions Precedent to Closing. . . . . . . . . . . . . . . . . . . 60
10.1 Conditions Precedent to the Obligations
of All Parties. . . . . . . . . . . . . . . . . . . . . . . . 60
10.2 Conditions Precedent to the Obligations
of Partners . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.3 Conditions Precedent to the Obligations
of NBC Sub. . . . . . . . . . . . . . . . . . . . . . . . . . 62
11. Survival of Representations and Warranties;
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11.2 Indemnification by Transferor. . . . . . . . . . . . . . . . . 63
11.3 Indemnification by Transferee. . . . . . . . . . . . . . . . . 64
11.4 General Indemnification Provisions . . . . . . . . . . . . . . 64
12. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(iii)<PAGE>
12.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 67
12.2 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . 68
13. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
13.2 Entire Agreement; No Third Party Beneficiaries. . . . . . . . 69
13.3 Headings; Interpretation. . . . . . . . . . . . . . . . . . . 69
13.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 70
13.5 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . 70
13.6 Separability. . . . . . . . . . . . . . . . . . . . . . . . . 70
13.7 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . 70
13.8 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . 71
13.9 Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . 71
13.10 Specific Performance. . . . . . . . . . . . . . . . . . . . . 71
13.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 72
SCHEDULES
1.1(a)(i) KCNC FCC Licenses
1.1(a)(ii) KCNC Licenses, Permits, Approvals, Etc.
1.1(a)(iv) KCNC Employment Contracts
1.1(a)(v) KCNC Programming Agreements
1.1(a)(vi) KCNC Advertising, Promotional and Sale Agreements
1.1(a)(vii) KCNC Leases and Subleases
1.1(a)(viii) KCNC Retransmission Consent Agreements
1.1(a)(ix) KCNC Maintenance and Service Agreements
1.1(a)(x) KCNC Contracts to Acquire Materials and Services
1.1(a)(xi) KCNC Trademarks, Trade Names and Service Marks
1.1(a)(xii) KCNC Copyrights
1.1(a)(xiii) KCNC Logos, Slogans, Royalties, Privileges, Etc.
1.1(a)(xiv) KCNC Music License Rights
1.1(a)(xv) KCNC Management and Other Systems
1.1(a)(xvi) KCNC Data Handling Equipment
1.1(a)(xviii) KCNC Office Furniture, Furnishings and Fixtures
1.1(a)(xix) KCNC Machinery and Equipment
1.1(a)(xx) KCNC Other Tangible Personal Property
1.1(a)(xxi) KCNC Vehicles
1.1(a)(xxii) KCNC Real Property
1.1(a)(xxiii) KCNC Television Broadcasting Assets
1.1(b)(v) Excluded KCNC Contracts and Agreements
1.1(b)(vi) Excluded KCNC Assets, Properties and Rights
1.2(i) WTVJ Tower Interest
1.2(ii) WTVJ Real Property
1.2(iii) WTVJ Fixtures
1.2(iv) WTVJ Machinery and Equipment
(iv)<PAGE>
1.2(v) WTVJ Other Tangible Personal Property
1.2(vi) WTVJ FCC Licenses
1.2(vii) WTVJ Licenses, Permits, Approvals, Etc.
1.2(viii) WTVJ Leases and Subleases
1.3(a)(i) WCAU FCC Licenses
1.3(a)(ii) WCAU Licenses, Permits, Approvals, Etc.
1.3(a)(iv) WCAU Employment Contracts
1.3(a)(v) WCAU Programming Agreements
1.3(a)(vi) WCAU Advertising, Promotional and Sale Agreements
1.3(a)(vii) WCAU Leases and Subleases
1.3(a)(viii) WCAU Retransmission Consent Agreements
1.3(a)(ix) WCAU Maintenance and Service Agreements
1.3(a)(x) WCAU Contracts to Acquire Materials and Services
1.3(a)(xi) WCAU Trademarks, Trade Names and Service Marks
1.3(a)(xii) WCAU Copyrights
1.3(a)(xiii) WCAU Logos, Slogans, Royalties, Privileges, Etc.
1.3(a)(xiv) WCAU Music License Rights
1.3(a)(xv) WCAU Management and Other Systems
1.3(a)(xvi) WCAU Data Handling Equipment
1.3(a)(xviii) WCAU Office Furniture, Furnishings and Fixtures
1.3(a)(xix) WCAU Machinery and Equipment
1.3(a)(xx) WCAU Other Tangible Personal Property
1.3(a)(xxi) WCAU Vehicles
1.3(a)(xxii) WCAU Real Property
1.3(a)(xxiii) WCAU Television Broadcasting Assets
1.3(b)(v) Excluded WCAU Contracts and Agreements
1.3(b)(vi) Excluded WCAU Assets, Properties and Rights
1.4(i) WCIX Tower Interest
1.4(ii) WCIX Real Property
1.4(iii) WCIX Fixtures
1.4(iv) WCIX Machinery and Equipment
1.4(v) WCIX Other Tangible Personal Property
1.4(vi) WCIX FCC Licenses
1.4(vii) WCIX Licenses, Permits, Approvals, Etc.
1.4(viii) WCIX Leases and Subleases
1.6 Value of Exchanged Assets
6.3(c) NBC Conflicts
6.4 NBC Governmental Consents
6.5 NBC FCC Matters - Exceptions
6.6(c) NBC Real Property - Exceptions
6.6(d) NBC Real Property - Liens, Etc.
6.7(a) NBC Tangible Personal Property - Liens
6.7(b) NBC Tangible Personal Property - Operating
Condition Exceptions
6.8(a) NBC Contracts - Exceptions
6.8(b) KCNC Trade Barter Summary
6.9 NBC Intellectual Property - Exceptions
(v)<PAGE>
6.14 NBC Stations Financial Information
6.15 NBC Undisclosed Obligations
6.16 NBC Material Changes
6.17 NBC Litigation; Compliance with Laws
6.18 NBC Environmental Matters
6.22 NBC Labor Matters
6.22(a) NBC Affected Employees and Exceptions
6.23 NBC Employee Benefits
7.3(c) CBS Conflicts
7.4 CBS Governmental Consents
7.5 CBS FCC Matters - Exceptions
7.6(c) CBS Real Property - Exceptions
7.6(d) CBS Real Property - Liens, Etc.
7.7(a) CBS Tangible Personal Property - Liens
7.7(b) CBS Tangible Personal Property - Operating
Condition Exceptions
7.8(a) CBS Contracts - Exceptions
7.8(b) WCAU Trade Barter Summary
7.9 CBS Intellectual Property - Exceptions
7.14 CBS Stations Financial Information
7.15 CBS Undisclosed Obligations
7.16 CBS Material Changes
7.17 CBS Litigation; Compliance with Laws
7.18 CBS Environmental Matters
7.22 CBS Labor Matters
7.22(a) CBS Affected Employees and Exceptions
7.23 CBS Employee Benefits
8.3(e)(1) NBC Pre-Closing Transactions
8.3(e)(2) CBS Pre-Closing Transactions
EXHIBITS
A-1 Form of NBC Guarantee
A-2 Form of CBS Guarantee
B-1 WTVJ Tower Uses
B-2 Terms of WCAU Easement Agreement
B-3 Terms of WCAU Lease and Service Agreements
B-4 WCIX Tower Uses
C-1 Form of Partners Assumption Agreement
C-2 Form of NBC Sub Assumption Agreement
D-1 Form of Opinion of Counsel to NBC Sub and NBC
D-2 Form of Opinion of FCC Counsel to NBC Sub and NBC
E-1 Form of Opinion of Counsel to Partners and CBS
E-2 Form of Opinion of FCC Counsel to Partners and CBS
(vi)<PAGE>
ASSET EXCHANGE AGREEMENT
ASSET EXCHANGE AGREEMENT, dated as of November 21, 1994
(this "Agreement"), between NBC STATIONS MANAGEMENT, INC., a
Colorado corporation ("NBC Sub"), and STATION PARTNERS, a
Delaware general partnership ("Partners").
W I T N E S S E T H :
WHEREAS, National Broadcasting Company, Inc., a Delaware
corporation ("NBC"), owns all the issued and outstanding stock of
NBC Sub, and CBS Inc., a New York corporation ("CBS"), owns all
the issued and outstanding voting stock of the managing general
partner of Partners and indirectly owns in excess of 99% of the
aggregate partnership interests in Partners;
WHEREAS, immediately following the Closing (as defined in
subsection 5.1), Westinghouse Broadcasting Company, Inc., an
Indiana corporation, or one of its wholly-owned affiliates
(collectively, "Group W"), will acquire a controlling interest in
the voting stock of the managing general partner of Partners and
indirect ownership of approximately 50% of the aggregate
partnership interests in Partners;
WHEREAS, NBC Sub owns and operates television station
KCNC, Denver, Colorado (such station, as the call letters may be
changed from time to time, "Station KCNC"), and television
station WTVJ, Miami, Florida (such station, as the call letters
may be changed from time to time, "Station WTVJ"; and together
with Station KCNC, the "NBC Stations");
WHEREAS, Partners owns and operates television station
WCAU, Philadelphia, Pennsylvania (such station, as the call
letters may be changed from time to time, "Station WCAU"), and
television station WCIX, Miami, Florida (such station, as the
call letters may be changed from time to time, "Station WCIX";
and together with Station WCAU, the "CBS Stations"), each of
which is affiliated with the CBS Television Network;
WHEREAS, NBC Sub and Partners desire to exchange, inter
alia, certain properties and assets of the NBC Stations and the
CBS Stations (collectively, the "Stations") on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, simultaneously with the execution and delivery
- 1 -<PAGE>
of this Agreement, each of NBC and CBS is executing a guarantee
(the "NBC Guarantee" and the "CBS Guarantee", respectively), in
the form of Exhibit A-1 or A-2 attached hereto, as the case may
be, in favor of Partners and NBC Sub, respectively, pursuant to
which NBC and CBS agree to guarantee the performance by NBC Sub
and Partners, respectively, of their respective obligations under
this Agreement; and
WHEREAS, the transaction contemplated by this Agreement is
intended to be a like-kind exchange of assets between NBC Sub and
Partners in accordance with the provisions of Section 1031 of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW THEREFORE, in consideration of the premises and of the
mutual covenants of the parties hereto, it is hereby agreed as
follows:
1. Exchange of Assets.
1.1 Transfer of KCNC Assets by NBC Sub. (a) Subject to
the satisfaction or waiver of the conditions set forth in this
Agreement, and on the basis of the representations, warranties,
covenants and agreements set forth in this Agreement, and except
as provided in subsection 1.1(b), at the Closing, NBC Sub shall
exchange, convey, assign, transfer and deliver to Partners, and
Partners shall receive from NBC Sub, all the assets, rights,
properties, claims and contracts owned or held by NBC Sub which
are used or useful in the conduct of the operations of Station
KCNC, including the following:
(i) all licenses, permits and authorizations (the
"KCNC FCC Licenses") issued by the Federal Communications
Commission (the "FCC"), including any renewals thereof or
any pending applications therefor, relating to the conduct
of the operations of Station KCNC, which are listed or
described on Schedule 1.1(a)(i) hereto;
(ii) all licenses, permits, franchises, releases,
certificates of compliance, consents, approvals,
authorizations and other similar rights issued by any
federal, state or municipal authority (other than the KCNC
FCC Licenses), including any renewals thereof or any pending
applications therefor, relating to the conduct of the
operations of Station KCNC, which are listed or described on
Schedule 1.1(a)(ii) hereto;
(iii) the call letters "KCNC-TV";
- 2 -<PAGE>
(iv) all employment contracts and similar agreements
relating to the conduct of the operations of Station KCNC,
which are listed or described on Schedule 1.1(a)(iv) hereto;
(v) all programming agreements and similar agreements
relating to the conduct of the operations of Station KCNC,
which are listed or described on Schedule 1.1(a)(v) hereto;
(vi) all advertising, promotional, sale and similar
agreements relating to the conduct of the operations of
Station KCNC, which are listed or described on Schedule
1.1(a)(vi) hereto;
(vii) all leases and subleases and similar agreements
relating to the conduct of the operations of Station KCNC,
with respect to real or personal property (including tower
leases), which are listed or described on Schedule
1.1(a)(vii) hereto;
(viii) all rights relating to retransmission by cable
system operators of the signal of Station KCNC, which are
set forth in the agreements listed or described on Schedule
1.1(a)(viii) hereto;
(ix) all maintenance, service and similar agreements
relating to the conduct of the operations of Station KCNC,
which are listed or described on Schedule 1.1(a)(ix) hereto;
(x) all contracts to acquire materials and services
and similar agreements relating to the conduct of the
operations of Station KCNC, which are listed or described on
Schedule 1.1(a)(x) hereto;
(xi) all trademarks, trademark registrations and
trademark applications, trade names and service marks and
similar rights relating to the conduct of the operations of
Station KCNC which are listed or described on Schedule
1.1(a)(xi) hereto, including all rights to sue for past
infringement thereof;
(xii) all copyrights, copyright applications and
copyright registrations and similar rights relating to the
conduct of the operations of Station KCNC which are listed
or described on Schedule 1.1(a)(xii) hereto, including all
rights to sue for past infringement thereof;
(xiii) all logos, slogans, jingles, licenses (other than
those licenses referred to in subclause (ii) above),
- 3 -<PAGE>
royalties and privileges and similar rights relating to the
conduct of the operations of Station KCNC which are listed
or described on Schedule 1.1(a)(xiii) hereto, including all
rights to sue for past infringement thereof;
(xiv) all music license rights and similar agreements
relating to the conduct of the operations of Station KCNC
which are listed or described on Schedule 1.1(a)(xiv)
hereto, including all rights to sue for past infringement
thereof;
(xv) all management and other systems (including
computers and peripheral equipment), data bases, computer
software, computer discs and similar assets relating to the
conduct of the operations of Station KCNC which are listed
or described on Schedule 1.1(a)(xv) hereto (but with respect
to computer software and management information systems,
only to the extent transferable);
(xvi) all data handling equipment (excluding computers)
relating to the conduct of the operations of Station KCNC
which are listed or described on Schedule 1.1(a)(xvi)
hereto;
(xvii) all business records, tangible data, documents,
files, logs and all other books and records, in each case
relating to the conduct of the operations of Station KCNC,
including general financial, accounting and personnel
records, tax returns, all FCC filings and applications,
manuals and executed copies of all contracts to be assigned
hereunder (but with respect to any of the foregoing not
exclusively so relating to the conduct of the operations of
Station KCNC, only to the extent so related);
(xviii) all office furniture, furnishings and fixtures
used or useful in the conduct of the operations of Station
KCNC which are listed or described on Schedule 1.1(a)(xviii)
hereto, and all warranties and guarantees, if any, express
or implied, existing for the benefit of NBC Sub in
connection therewith to the extent transferable;
(xix) all machinery and equipment used or useful in the
conduct of the operations of Station KCNC which are listed
or described on Schedule 1.1(a)(xix) hereto, and all
warranties and guarantees, if any, express or implied,
existing for the benefit of NBC Sub in connection therewith
to the extent transferable;
- 4 -<PAGE>
(xx) all materials, supplies, tools, inventory, spare
parts and other tangible personal property not otherwise set
forth on another Schedule referred to in this subsection 1.1
used or useful in the conduct of the operations of Station
KCNC which are listed or described on Schedule 1.1(a)(xx)
hereto, and all warranties and guarantees, if any, express
or implied, existing for the benefit of NBC Sub in
connection therewith to the extent transferable;
(xxi) all vehicles used or useful in the conduct of the
operations of Station KCNC which are listed or described on
Schedule 1.1(a)(xxi) hereto (together with the items listed
or described on Schedules 1.1(a)(xv), (xvi), (xix), (xx) and
(xxiii), the "KCNC Equipment");
(xxii) all real property and leasehold interests and
estates in real property used or useful in the conduct of
the operations of Station KCNC which are listed or described
on Schedule 1.1(a)(xxii) hereto, and all easements,
privileges, rights-of-way, riparian and other water rights,
lands underlying any adjacent streets or roads,
appurtenances, licenses, permits and other rights pertaining
to or accruing to the benefit of such real property and
leasehold interests and estates in real property, and all
buildings, structures, towers and improvements situated,
mounted and located thereon and used or useful in the
conduct of the operations of Station KCNC which are listed
or described on Schedule 1.1(a)(xxii) hereto (collectively,
the "KCNC Real Property");
(xxiii) all television broadcasting assets used or useful
in the conduct of the operations of Station KCNC which are
listed or described on Schedule 1.1(a)(xxiii) hereto; and
(xxiv) all Net Working Capital (as defined in subsection
5.2) relating to Station KCNC, subject to adjustment as
provided in subsection 5.2 and other than that constituting
the Excess Working Capital Amount (as defined in subsection
5.2), if any.
The foregoing assets being exchanged, conveyed, assigned,
transferred and delivered to Partners by NBC Sub are sometimes
hereinafter referred to as the "KCNC Assets".
(b) It is expressly understood and agreed that the KCNC
Assets shall not include the following (collectively, the
"Excluded KCNC Assets"):
- 5 -<PAGE>
(i) cash (other than petty cash located on the KCNC
Real Property), bank accounts, cash equivalents and other
similar types of investments, certificates of deposit,
U.S. Treasury bills and other marketable securities;
(ii) that portion of Net Working Capital relating to
Station KCNC, if any, that consists of the Excess Working
Capital Amount;
(iii) all insurance policies, insurance programs,
insurance reserves and related bonds of any nature (and
any dividends or claims payable in respect thereof), but
only to the extent issued by the General Electric Company
or an entity controlled by it or relating to the conduct
of the operations of Station KCNC prior to the Closing
Date;
(iv) all claims for and rights to refunds or credits
with respect to (x) any federal, state, local, foreign or
other governmental income, profits, franchise, sales, use,
payroll, withholding, occupation, property, excise,
transfer or other taxes, including interest, penalties and
statutory additions related thereto (collectively,
"Taxes"), paid by NBC Sub or its affiliates relating to
the conduct of the operations of Station KCNC for all
periods, or portions thereof, ending prior to the Closing
Date and (y) Taxes paid by NBC Sub or its affiliates
pursuant to subsection 11.2(iv) or that are otherwise
borne by NBC Sub or its affiliates (including, in each
case, any related interest received from the relevant
taxing authority);
(v) the contracts and agreements listed or described on
Schedule 1.1(b)(v) hereto;
(vi) all assets, properties and rights listed or
described on Schedule 1.1(b)(vi) hereto; and
(vii) all claims, judgments and other rights of any
nature to the extent related to the items set forth in
subclauses (i) through (vi) above.
1.2 Transfer of WTVJ Assets by NBC Sub. Subject to the
satisfaction or waiver of the conditions set forth in this
Agreement, and on the basis of the representations, warranties,
covenants and agreements set forth in this Agreement, at the
- 6 -<PAGE>
Closing, NBC Sub shall exchange, convey, assign, transfer and
deliver to Partners, and Partners shall receive from NBC Sub, the
following assets, rights, properties and contracts owned or held
by NBC Sub which are used or useful in the conduct of the
operations of Station WTVJ, wherever located:
(i) the interest in the transmitting tower which is
listed or described on Schedule 1.2(i) hereto (the "WTVJ
Tower"), except that NBC Sub shall retain an easement with
respect to, and shall lease, space on the WTVJ Tower by
entering into easement and lease agreements with Partners in
form and substance reasonably satisfactory to NBC Sub and
Partners in connection with the uses and having the terms
set forth on Parts A and B of Exhibit B-1;
(ii) all real property and leasehold interests and
estates in real property which are listed or described on
Schedule 1.2(ii) hereto, and all easements, privileges,
rights-of-way, riparian and other water rights, lands
underlying any adjacent streets or roads, appurtenances,
licenses, permits and other rights pertaining to or accruing
to the benefit of such real property and leasehold interests
and estates in real property, and all buildings, structures
and improvements situated, mounted and located thereon and
which are listed or described on Schedule 1.2(ii) hereto
(together with the interest listed or described on Schedule
1.2(i), the "WTVJ Real Property", and together with the KCNC
Real Property, the "NBC Real Property"), except that NBC Sub
shall retain an easement with respect to, and shall lease,
space on the WTVJ Tower and in the building at the base
thereof by entering into easement and lease agreements with
Partners in form and substance reasonably satisfactory to
NBC Sub and Partners in connection with the uses and having
the terms set forth on Parts A and B of Exhibit B-1;
(iii) all fixtures relating to the WTVJ Tower or the
WTVJ Real Property which are listed or described on Schedule
1.2(iii) hereto, and all warranties and guarantees, if any,
express or implied, existing for the benefit of NBC Sub in
connection therewith to the extent transferable;
(iv) all machinery and equipment used or useful in the
conduct of the operations of the WTVJ Tower or located on
the WTVJ Real Property which are listed or described on
Schedule 1.2(iv) hereto, and all warranties and guarantees,
if any, express or implied, existing for the benefit of NBC
Sub in connection therewith to the extent transferable;
- 7 -<PAGE>
(v) all materials, supplies, tools, inventory, spare
parts and other tangible personal property used or useful in
the conduct of the operations of the WTVJ Tower or located
on the WTVJ Real Property which are listed or described on
Schedule 1.2(v) hereto, and all warranties and guarantees,
if any, express or implied, existing for the benefit of NBC
Sub in connection therewith to the extent transferable;
(vi) all licenses, permits and authorizations (the
"WTVJ FCC Licenses") issued by the FCC, including any
renewals thereof or any pending applications therefor,
relating to the conduct of the operations of Station WTVJ or
to the WTVJ Tower which are listed or described on Schedule
1.2(vi) hereto; provided, however, that NBC Sub shall retain
all rights to use the call letters "WTVJ-TV", but only for
so long as NBC Sub actually uses such call letters for its
television station in the Miami, Florida area;
(vii) all licenses, permits, franchises, releases,
certificates of compliance, consents, approvals,
authorizations and other similar rights issued by any
federal, state or municipal authority (other than the WTVJ
FCC Licenses), including any renewals thereof or any pending
applications therefor, relating to the WTVJ Tower or the
WTVJ Real Property which are listed or described on Schedule
1.2(vii) hereto;
(viii) all leases and subleases and similar agreements,
with respect to real or personal property, relating to the
WTVJ Tower or the WTVJ Real Property which are listed or
described on Schedule 1.2(viii) hereto; and
(ix) all business records, documents, files, logs and
other books and records, in each case relating to the
foregoing assets referred to in clauses (i) through (viii)
above, including all FCC filings and applications, manuals
and executed copies of all agreements to be assigned
hereunder (but with respect to any of the foregoing not
exclusively so relating to such foregoing assets, only to
the extent so related).
The foregoing assets being exchanged, conveyed, assigned,
transferred and delivered to Partners by NBC Sub are hereinafter
referred to as the "WTVJ Assets" (collectively with the KCNC
Assets, the "NBC Assets").
1.3 Transfer of WCAU Assets by Partners. (a) Subject to
the satisfaction or waiver of the conditions set forth in this
- 8 -<PAGE>
Agreement, and on the basis of the representations, warranties,
covenants and agreements set forth in this Agreement, and except
as provided in subsection 1.3(b), at the Closing, Partners shall
exchange, convey, assign, transfer and deliver to NBC Sub, and
NBC Sub shall receive from Partners, all the assets, rights,
properties, claims and contracts owned or held by Partners which
are used or useful in the conduct of the operations of Station
WCAU, including the following:
(i) all licenses, permits and authorizations (the
"WCAU FCC Licenses") issued by the FCC, including any
renewals thereof or any pending applications therefor,
relating to the conduct of the operations of Station WCAU
which are listed or described on Schedule 1.3(a)(i) hereto;
(ii) all licenses, permits, franchises, releases,
certificates of compliance, consents, approvals,
authorizations and other similar rights issued by any
federal, state or municipal authority (other than the WCAU
FCC Licenses), including any renewals thereof or any pending
applications therefor, relating to the conduct of the
operations of Station WCAU which are listed or described on
Schedule 1.3(a)(ii) hereto;
(iii) the call letters "WCAU-TV";
(iv) all employment contracts and similar agreements
relating to the conduct of the operations of Station WCAU,
which are listed or described on Schedule 1.3(a)(iv) hereto;
(v) all programming agreements and similar agreements
relating to the conduct of the operations of Station WCAU,
which are listed or described on Schedule 1.3(a)(v) hereto;
(vi) all advertising, promotional, sale and similar
agreements relating to the conduct of the operations of
Station WCAU, which are listed or described on Schedule
1.3(a)(vi) hereto;
(vii) all leases and subleases and similar agreements
relating to the conduct of the operations of Station WCAU,
with respect to real or personal property (including tower
leases), which are listed or described on Schedule
1.3(a)(vii) hereto;
(viii) all rights relating to retransmission by cable
system operators of the signal of Station WCAU which are set
forth in the agreements listed or described on Schedule
1.3(a)(viii) hereto;
- 9 -<PAGE>
(ix) all maintenance, service and similar agreements
relating to the conduct of the operations of Station WCAU,
which are listed or described on Schedule 1.3(a)(ix) hereto;
(x) all contracts to acquire materials and services
and similar agreements relating to the conduct of the
operations of Station WCAU, which are listed or described on
Schedule 1.3(a)(x) hereto;
(xi) all trademarks, trademark registrations and
trademark applications, trade names and service marks and
similar rights relating to the conduct of the operations of
Station WCAU which are listed or described on Schedule
1.3(a)(xi) hereto, including all rights to sue for past
infringement thereof;
(xii) all copyrights, copyright applications and
copyright registrations and similar rights relating to the
conduct of the operations of Station WCAU which are listed
or described on Schedule 1.3(a)(xii) hereto, including all
rights to sue for past infringement thereof;
(xiii) all logos, slogans, jingles, licenses (other than
those licenses referred to in subclause (ii) above),
royalties and privileges and similar rights relating to the
conduct of the operations of Station WCAU which are listed
or described on Schedule 1.3(a)(xiii) hereto, including all
rights to sue for past infringement thereof;
(xiv) all music license rights and similar agreements
relating to the conduct of the operations of Station WCAU
which are listed or described on Schedule 1.3(a)(xiv)
hereto, including all rights to sue for past infringement
thereof;
(xv) all management and other systems (including
computers and peripheral equipment), data bases, computer
software, computer discs and similar assets relating to the
conduct of the operations of Station WCAU which are listed
or described on Schedule 1.3(a)(xv) hereto (but with respect
to computer software and management information systems,
only to the extent transferable);
(xvi) all data handling equipment (excluding computers)
relating to the conduct of the operations of Station WCAU
which are listed or described on Schedule 1.3(a)(xvi)
hereto;
- 10 -<PAGE>
(xvii) all business records, tangible data, documents,
files, logs and all other books and records, in each case
relating to the conduct of the operations of Station WCAU,
including general financial, accounting and personnel
records, tax returns, all FCC filings and applications,
manuals and executed copies of all contracts to be assigned
hereunder (but with respect to any of the foregoing not
exclusively so relating to the conduct of the operations of
Station WCAU, only to the extent so related);
(xviii) all office furniture, furnishings and fixtures
used or useful in the conduct of the operations of Station
WCAU which are listed or described on Schedule 1.3(a)(xviii)
hereto, and all warranties and guarantees, if any, express
or implied, existing for the benefit of Partners in
connection therewith to the extent transferable;
(xix) all machinery and equipment used or useful in the
conduct of the operations of Station WCAU which are listed
or described on Schedule 1.3(a)(xix) hereto, and all
warranties and guarantees, if any, express or implied,
existing for the benefit of Partners in connection therewith
to the extent transferable;
(xx) all materials, supplies, tools, inventory, spare
parts and other tangible personal property not otherwise set
forth on another Schedule referred to in this subsection 1.3
used or useful in the conduct of the operations of Station
WCAU which are listed or described on Schedule 1.3(a)(xx)
hereto, and all warranties and guarantees, if any, express
or implied, existing for the benefit of Partners in
connection therewith to the extent transferable;
(xxi) all vehicles used or useful in the conduct of the
operations of Station WCAU which are listed or described on
Schedule 1.3(a)(xxi) hereto (together with the items listed
or described on Schedules 1.3(a)(xv), (xvi), (xix), (xx) and
(xxiii), the "WCAU Equipment");
(xxii) all real property and leasehold interests and
estates in real property used or useful in the conduct of
the operations of Station WCAU which are listed or described
on Schedule 1.3(a)(xxii) hereto, and all easements,
privileges, rights-of-way, riparian and other water rights,
lands underlying any adjacent streets or roads,
appurtenances, licenses, permits and other rights pertaining
to or accruing to the benefit of such real property and
leasehold interests and estates in real property, and all
- 11 -<PAGE>
buildings, structures, towers and improvements situated,
mounted and located thereon and used or useful in the
conduct of the operations of Station WCAU which are listed
or described on Schedule 1.3(a)(xxii) hereto (collectively,
the "WCAU Real Property"); provided, however, that Partners
shall retain an easement with respect to space on the main
and auxiliary towers used by Station WCAU (collectively, the
"WCAU Tower") and in the building at the base thereof which
it will grant to CBS pursuant to an easement agreement among
Partners, CBS and NBC Sub in form and substance reasonably
satisfactory to Partners, CBS and NBC Sub in connection with
the uses and having the terms set forth on Exhibit B-2; and
provided, further, that on the Closing Date, NBC Sub shall
enter into lease and service agreements with CBS in form and
substance reasonably satisfactory to NBC Sub and CBS and
containing the terms set forth on Exhibit B-3;
(xxiii) all television broadcasting assets used or useful
in the conduct of the operations of Station WCAU which are
listed or described on Schedule 1.3(a)(xxiii) hereto; and
(xxiv) all Net Working Capital relating to Station WCAU,
subject to adjustment as provided in subsection 5.2 and
other than that constituting the Excess Working Capital
Amount, if any.
The foregoing assets being exchanged, conveyed, assigned,
transferred and delivered to NBC Sub by Partners are sometimes
hereinafter referred to as the "WCAU Assets".
(b) It is expressly understood and agreed that the WCAU
Assets shall not include the following (collectively, the
"Excluded WCAU Assets"):
(i) cash (other than petty cash located on the WCAU
Real Property), bank accounts, cash equivalents and other
similar types of investments, certificates of deposit,
U.S. Treasury bills and other marketable securities;
(ii) that portion of Net Working Capital relating to
Station WCAU, if any, that consists of the Excess Working
Capital Amount;
(iii) all insurance policies, insurance programs,
insurance reserves and related bonds of any nature (and
any dividends or claims payable in respect thereof),
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but only to the extent relating to the conduct of the
operations of Station WCAU prior to the Closing Date;
(iv) all claims for and rights to refunds or credits
with respect to (x) any Taxes paid by Partners or its
affiliates relating to the conduct of the operations of
Station WCAU for all periods, or portions thereof, ending
prior to the Closing Date and (y) Taxes paid by Partners
or its affiliates pursuant to subsection 11.2(iv) or that
are otherwise borne by Partners or its affiliates
(including, in each case, any related interest received
from the relevant taxing authority);
(v) the contracts and agreements listed or described on
Schedule 1.3(b)(v) hereto;
(vi) all assets, properties and rights listed or
described on Schedule 1.3(b)(vi) hereto; and
(vii) all claims, judgments and other rights of any
nature to the extent related to the items set forth in
subclauses (i) through (vi) above.
1.4 Transfer of WCIX Assets by Partners. Subject to the
satisfaction or waiver of the conditions set forth in this
Agreement, and on the basis of the representations, warranties,
covenants and agreements set forth in this Agreement, at the
Closing, Partners shall exchange, convey, assign, transfer and
deliver to NBC Sub, and NBC Sub shall receive from Partners, the
following assets, rights, properties and contracts owned or held
by Partners which are used or useful in the conduct of the
operations of Station WCIX, wherever located:
(i) the interest in the transmitting tower which is
listed or described on Schedule 1.4(i) hereto (the "WCIX
Tower"), except that Partners shall retain an easement with
respect to space on the WCIX Tower by entering into an
easement agreement with NBC Sub in form and substance
reasonably satisfactory to NBC Sub and Partners in
connection with the uses and having the terms set forth on
Part A of Exhibit B-4;
(ii) all real property and leasehold interests and
estates in real property which are listed or described on
Schedule 1.4(ii) hereto, and all easements, privileges,
rights-of-way, riparian and other water rights, lands
underlying any adjacent streets or roads, appurtenances,
- 13 -<PAGE>
licenses, permits and other rights pertaining to or accruing
to the benefit of such real property and leasehold interests
and estates in real property, and all buildings, structures
and improvements situated, mounted and located thereon and
which are listed or described on Schedule 1.4(ii) hereto
(together with the interest listed or described on Schedule
1.4(i), the "WCIX Real Property", and together with the WCAU
Real Property, the "CBS Real Property"), except that
Partners shall retain an easement with respect to space on
the WCIX Tower and in the building at the base thereof by
entering into an easement agreement with NBC Sub in form and
substance reasonably satisfactory to NBC Sub and Partners in
connection with the uses and having the terms set forth on
Part A of Exhibit B-4;
(iii) all fixtures relating to the WCIX Tower or the
WCIX Real Property which are listed or described on Schedule
1.4(iii) hereto, and all warranties and guarantees, if any,
express or implied, existing for the benefit of Partners in
connection therewith to the extent transferable;
(iv) all machinery and equipment used or useful in the
conduct of the operations of the WCIX Tower or located on
the WCIX Real Property which are listed or described on
Schedule 1.4(iv) hereto, and all warranties and guarantees,
if any, express or implied, existing for the benefit of
Partners in connection therewith to the extent transferable;
(v) all materials, supplies, tools, inventory, spare
parts and other tangible personal property used or useful in
the conduct of the operations of the WCIX Tower or located
on the WCIX Real Property which are listed or described on
Schedule 1.4(v) hereto, and all warranties and guarantees,
if any, express or implied, existing for the benefit of
Partners in connection therewith to the extent transferable;
(vi) all licenses, permits and authorizations (the
"WCIX FCC Licenses") issued by the FCC, including any
renewals thereof or any pending applications therefor,
relating to the conduct of the operations of Station WCIX or
to the WCIX Tower which are listed or described on Schedule
1.4(vi) hereto; provided, however, that Partners shall
retain all rights to use the call letters "WCIX-TV", but
only for so long as Partners actually uses such call letters
for its television station in the Miami, Florida area;
(vii) all licenses, permits, franchises, releases,
certificates of compliance, consents, approvals,
- 14 -<PAGE>
authorizations and other similar rights issued by any
federal, state or municipal authority (other than the WCIX
FCC Licenses), including any renewals thereof or any pending
applications therefor, relating to the WCIX Tower or the
WCIX Real Property which are listed or described on Schedule
1.4(vii) hereto;
(viii) all leases and subleases and similar agreements,
with respect to real or personal property, relating to the
WCIX Tower or the WCIX Real Property which are listed or
described on Schedule 1.4(viii) hereto; and
(ix) all business records, documents, files, logs and
other books and records, in each case relating to the
foregoing assets referred to in clauses (i) through (viii)
above, including all FCC filings and applications, manuals
and executed copies of all agreements to be assigned
hereunder (but with respect to any of the foregoing not
exclusively so relating to such foregoing assets, only to
the extent so related).
The foregoing assets being exchanged, conveyed, assigned,
transferred and delivered to NBC Sub by Partners are hereinafter
referred to as the "WCIX Assets" (collectively with the WCAU
Assets, the "CBS Assets").
1.5 Exchange. In exchange for the conveyance,
assignment, transfer and delivery to NBC Sub of the CBS Assets on
the Closing Date as provided in subsections 1.3 and 1.4 hereof,
subject to the terms and conditions of this Agreement, NBC Sub
shall, on the Closing Date, (i) convey, assign, transfer and
deliver to Partners the NBC Assets as provided in subsections 1.1
and 1.2 hereof, and (ii) transfer $30,000,000 by wire transfer of
immediately available funds (A) to the Qualified Escrow Account
or Qualified Intermediary contemplated by subsection 5.3(a)
hereof or (B) if all arrangements with respect to such Qualified
Escrow Account or Qualified Intermediary have not been finalized
within 15 days of the date that all other conditions to the
Closing hereunder have been fulfilled or satisfied, to Partners.
1.6 Value of Exchanged Assets. As listed or described on
Schedule 1.6 to be agreed upon and delivered at the Closing, (a)
the NBC Assets consisting of tangible personal property are being
exchanged for the CBS Assets consisting of tangible personal
property; (b) the NBC Assets consisting of real property are
being exchanged for the CBS Assets consisting of real property;
and (c) the NBC Assets consisting of intangible property are
being exchanged for the CBS Assets consisting of
- 15 -<PAGE>
intangible property. The parties to this Agreement further agree
that the values on the Closing Date of the respective NBC Assets
and the respective CBS Assets will be reflected on such Schedule
1.6 and the parties will not take any position inconsistent with
such values and will prepare and file all returns and reports
relating to the exchange contemplated by this Agreement,
including all federal, state and local Tax returns, in a manner
which is consistent with such Schedule 1.6.
2. Instruments of Conveyance and Transfer.
2.1 NBC Assets. On the Closing Date, NBC Sub shall (a)
deliver or cause to be delivered to Partners such fully executed
deeds, endorsements, consents, assignments and other good and
sufficient instruments of conveyance and assignment, all in
recordable form, where applicable, as shall be effective to vest
in Partners all right, title and interest of NBC Sub in and to
the NBC Assets, and (b) transfer to Partners originals (where
possible) or copies of all the contracts, agreements,
commitments, books, records, files, certificates, licenses,
permits, plans and specifications and other data relating to the
NBC Assets, including computer tapes and computer-generated
records. All materials referred to in clause (b) above shall be
delivered to Partners in the form and order in which they are
maintained by or on behalf of NBC Sub.
2.2 CBS Assets. On the Closing Date, Partners shall (a)
deliver or cause to be delivered to NBC Sub such fully executed
deeds, endorsements, consents, assignments and other good and
sufficient instruments of conveyance and assignment, all in
recordable form, where applicable, as shall be effective to vest
in NBC Sub all right, title and interest of Partners in and to
the CBS Assets, and (b) transfer to NBC Sub originals (where
possible) or copies of all the contracts, agreements,
commitments, books, records, files, certificates, licenses,
permits, plans and specifications and other data relating to the
CBS Assets, including computer tapes and computer-generated
records. All materials referred to in clause (b) above shall be
delivered to NBC Sub in the form and order in which they are
maintained by or on behalf of Partners.
3. Further Assurances.
3.1 NBC Assets. From time to time after the Closing
Date, NBC Sub will execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, such other instruments
of conveyance, assignment, transfer and delivery and will take or
cause to be taken such other actions as Partners may reasonably
- 16 -<PAGE>
request in order to more effectively exchange, convey, assign,
transfer and deliver to Partners any of the NBC Assets, or to
enable Partners to protect, exercise and enjoy all rights and
benefits with respect thereto, and as otherwise may be
appropriate to carry out the transactions contemplated by this
Agreement.
3.2 CBS Assets. From time to time after the Closing
Date, Partners will execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, such other instruments
of conveyance, assignment, transfer and delivery and will take or
cause to be taken such other actions as NBC Sub may reasonably
request in order to more effectively exchange, convey, assign,
transfer and deliver to NBC Sub any of the CBS Assets, or to
enable NBC Sub to protect, exercise and enjoy all rights and
benefits with respect thereto, and as otherwise may be
appropriate to carry out the transactions contemplated by this
Agreement.
4. Assumed Obligations.
4.1 NBC Sub Obligations. On the Closing Date, Partners
shall deliver to NBC Sub an undertaking (the "Partners Assumption
Agreement") in the form attached hereto as Exhibit
C-1. Pursuant to the Partners Assumption Agreement, Partners
shall, on and as of the Closing Date, assume and agree to
perform, pay and discharge when due, the liabilities and
obligations of NBC Sub listed or described therein, but in each
case only insofar as each such liability or obligation relates to
the period from and after the opening of business on the Closing
Date (the "NBC Sub Obligations"). Partners is not assuming, and
shall not be deemed to have assumed, any liability or obligation
of NBC Sub, or any current or former employee of NBC Sub, of any
kind or nature whatsoever, except as expressly provided in the
immediately preceding sentence or in the Partners Assumption
Agreement. Without limiting the foregoing, Partners shall not be
deemed to assume (i) any taxes of NBC or NBC Sub, whether or not
accrued, assessed or currently due and payable, relating to
operations or events occurring prior to the opening of business
on the Closing Date (other than as expressly provided in this
Agreement), (ii) any liabilities (including any environmental
liabilities) relating to or arising out of any Excluded KCNC
Assets, (iii) any obligations which may arise (whether before or
after the Closing Date) for commissions earned prior to Closing
by sales representatives of Station KCNC who were employed or
retained by or on behalf of Station KCNC prior to the Closing for
the sale of advertising time on Station KCNC or (iv) any
liabilities (including any environmental liabilities) relating to
- 17 -<PAGE>
or arising out of any NBC Assets with respect to any claim, cause
of action, proceeding or other litigation pending or threatened
as of the opening of business on the Closing Date or which is
initiated at any time thereafter to the extent based on acts,
facts, circumstances, events or conditions occurring or existing
on or prior to the opening of business on the Closing Date (other
than any current liabilities actually included as part of the Net
Working Capital transferred by NBC Sub to Partners pursuant to
subsections 1.1 and 5.2). Pursuant to subsection 11.2(i), NBC
Sub agrees to pay, perform and discharge, and to indemnify
Partners and its affiliates against and hold them harmless from,
all obligations and liabilities relating to the NBC Assets other
than those which Partners has expressly agreed to assume pursuant
to the second sentence of this subsection 4.1.
4.2 Partners Obligations. On the Closing Date, NBC Sub
shall deliver to Partners an undertaking (the "NBC Sub Assumption
Agreement" and, together with the Partners Assumption Agreement,
the "Assumption Agreements") in the form attached hereto as
Exhibit C-2. Pursuant to the NBC Sub Assumption Agreement, NBC
Sub shall, on and as of the Closing Date, assume and agree to
perform, pay and discharge when due, the liabilities and
obligations of Partners listed or described therein, but in each
case only insofar as each such liability or obligation relates to
the period from and after the opening of business on the Closing
Date (the "Partners Obligations"). NBC Sub is not assuming, and
NBC Sub shall not be deemed to have assumed, any liability or
obligation of Partners, or any current or former employee of
Partners, of any kind or nature whatsoever, except as expressly
provided in the immediately preceding sentence or in the NBC Sub
Assumption Agreement. Without limiting the foregoing, NBC Sub
shall not be deemed to assume (i) any taxes of Partners or CBS,
whether or not accrued, assessed or currently due and payable,
relating to operations or events occurring prior to the opening
of business on the Closing Date (other than as expressly provided
in this Agreement), (ii) any liabilities (including any
environmental liabilities) relating to or arising out of any
Excluded WCAU Assets, (iii) any obligations which may arise
(whether before or after the Closing Date) for commissions earned
prior to Closing by sales representatives of Station WCAU who
were employed or retained by or on behalf of Station WCAU prior
to the Closing for the sale of advertising time on Station WCAU
or (iv) any liabilities (including any environmental liabilities)
relating to or arising out of any CBS Assets with respect to any
claim, cause of action, proceeding or other litigation pending or
threatened as of the opening of business on the Closing Date or
which is initiated at any time thereafter to the extent based on
acts, facts, circumstances, events or conditions occurring or
- 18 -<PAGE>
existing on or prior to the opening of business on the Closing
Date (other than any current liabilities actually included as
part of the Net Working Capital transferred by Partners to NBC
Sub pursuant to subsections 1.3 and 5.2). Pursuant to subsection
11.2(i), Partners agrees to pay, perform and discharge, and to
indemnify NBC Sub and its affiliates against and hold them
harmless from, all obligations and liabilities relating to the
CBS Assets other than those which NBC Sub has expressly agreed to
assume pursuant to the second sentence of this subsection 4.2.
5. Closing; Working Capital Adjustment; Qualified Escrow
Account or Qualified Intermediary.
5.1 Closing. The closing with respect to the
transactions provided for in this Agreement, upon the terms and
subject to the conditions set forth in this Agreement (the
"Closing"), shall take place at the offices of Simpson Thacher &
Bartlett located at 425 Lexington Avenue, New York, New York
10017-3954 at 10:00 a.m., New York City time, on the last
business day of the calendar month in which the last of the
conditions specified in subsections 10.1, 10.2 and 10.3 has been
fulfilled (or waived), except that if the last business day is a
holiday, the Closing shall take place on the first business day
thereafter, or at such other time and place as shall be agreed
upon by the parties hereto. The actual date of the Closing is
herein called the "Closing Date". At the Closing, NBC Sub shall
execute (or cause to be executed) and deliver the documents
referred to in subsection 10.2 and Partners shall execute (or
cause to be executed) and deliver the documents referred to in
subsection 10.3.
5.2 Working Capital Adjustment. Within 90 days following
the Closing Date, each party's auditor will prepare and deliver
to both parties a statement as to the amount of Net Working
Capital as of the Closing Date for each of Station KCNC and
Station WCAU (each, a "Net Working Capital Statement"). "Net
Working Capital" with respect to any Station means (i) all
current assets relating to such Station including receivables
valued net of any reserves established in respect thereof,
prepaid programming rights and other similar prepaid expenses,
but excluding cash (other than petty cash located on the KCNC
Real Property or the WCAU Real Property, as the case may be),
bank accounts, cash equivalents and other similar types of
investments, certificates of deposit, U.S. Treasury bills and
other marketable securities, minus (ii) all current operating
liabilities relating to such Station including all trade and
sundry payables and all payment obligations pursuant to
programming contracts and license agreements, but excluding any
- 19 -<PAGE>
cash overdraft or other liability associated with checks written
prior to the Closing Date, in each case determined in accordance
with generally accepted accounting principles. If the parties
and their auditors are unable to reconcile their respective Net
Working Capital Statements within 10 days following receipt
thereof, then the two accountants shall select a third accountant
(independent of either party or its affiliates), who shall
prepare and deliver to each of the parties within 90 days of its
being selected its own Net Working Capital Statement that shall
be binding on both parties as to the respective amounts of Net
Working Capital. If the Net Working Capital of Station KCNC or
Station WCAU, as the case may be, exceeds the Net Working Capital
of the other of these two Stations as of the Closing Date (such
excess, plus interest thereon from the Closing Date through the
date of payment referred to below, being referred to herein as
the "Excess Working Capital Amount"), then the party responsible
for contributing such Excess Working Capital Amount shall be
deemed to have not conveyed to the other party an amount of
receivables (or other current assets) equal to the Excess Working
Capital Amount. In such case, the other party hereby agrees to
act as an agent on behalf of such first party in collecting such
receivables, holding such current assets and making a cash
payment of an amount equal to the Excess Working Capital Amount
to such first party within 10 days after the final Net Working
Capital Statement is delivered to both parties.
5.3 Qualified Escrow Account or Qualified Intermediary.
(a) Selection of Escrow Agent or Qualified Intermediary.
Partners shall select and enter into an agreement, in form and
substance reasonably satisfactory to NBC Sub, with either (i) an
escrow agent (the "Escrow Agent") to establish a "Qualified
Escrow Account" or (ii) a "Qualified Intermediary", in either
case as provided in Treasury Regulation Section 1.1031(k)-1(g).
Partners shall select the Escrow Agent or Qualified Intermediary
subject to the consent of NBC Sub, which consent shall not be
unreasonably withheld. Immediately upon such selection, Partners
shall notify NBC Sub thereof.
(b) Assignment to Qualified Intermediary. If a Qualified
Intermediary is selected by Partners, Partners shall assign its
rights under this Agreement to such Qualified Intermediary prior
to Closing; provided, however, that such assignment shall not
release Partners from its obligations hereunder. Partners shall
notify NBC Sub promptly following the consummation of such
assignment. Nothing in this assignment or in these arrangements
with the Escrow Agent or a Qualified
- 20 -<PAGE>
Intermediary contemplated by this subsection 5.3 will alter the
fact that at Closing title to the NBC Assets shall pass directly
from NBC Sub to Partners and title to the CBS Assets shall pass
directly from Partners to NBC Sub.
(c) Disclosure; No Delay; Expenses. Both parties shall
fully disclose all relevant aspects of the foregoing arrangements
in the FCC Applications (as defined in subsection 8.1). Partners
agrees that it shall not exercise its rights under this
subsection 5.3 in a manner that could reasonably be expected to
delay the occurrence of the Closing Date by more than 15 days.
Partners further agrees that it, and not NBC Sub, shall bear the
obligation to pay, reimburse and indemnify (on such terms as may
be agreed to between Partners and the Escrow Agent or the
Qualified Intermediary) the Escrow Agent or the Qualified
Intermediary, as the case may be, for all fees, expenses and
losses that may be incurred by the Escrow Agent or the Qualified
Intermediary pursuant to the transactions contemplated by this
subsection 5.3.
(d) Further Assurances. Both parties shall, and shall
cause each of their affiliates to, execute and deliver such
documents, agreements and other certificates, in form and
substance reasonably satisfactory to each party, and take any and
all other actions as are reasonably necessary or desirable in
furtherance of the transactions contemplated hereby.
(e) General Indemnification. (i) Partners agrees to
indemnify and hold NBC Sub and its affiliates harmless against
and in respect of all claims, losses, damages, liabilities,
assessments, fines, judgments, consultants' fees, administrative
costs, actions, suits, proceedings, interest, penalties and
expenses (including settlement costs and any reasonable legal or
other expenses for investigating or defending any actions or
threatened actions or for enforcing such rights of indemnity and
defense) (individually a "Loss" and collectively "Losses")
incurred or suffered by NBC Sub and its affiliates in connection
with, arising out of or as a result of NBC Sub or one of its
affiliates being deemed an owner of any property (other than the
NBC Assets) acquired on behalf of or transferred to Partners
pursuant to the agreement between Partners and either an Escrow
Agent or a Qualified Intermediary in accordance with the actions
taken pursuant to this subsection 5.3, other than with respect to
tax matters, which are covered by subsection 5.3(f).
(ii) Promptly after receipt by an indemnified party under
this subsection 5.3(e) of notice of any claim or the commencement
of any action, the indemnified party shall, if a
- 21 -<PAGE>
claim in respect thereof is to be made against Partners under
this subsection 5.3(e), notify Partners in writing of the claim
or the commencement of that action, provided that the failure to
notify Partners shall not relieve it from any liability which it
may have to the indemnified party under this subsection 5.3(e).
If any such claim shall be brought against an indemnified party,
and it shall notify Partners thereof, and if Partners shall agree
in writing to indemnify promptly the indemnified party for the
full amount of any Loss sustained, suffered or incurred by the
indemnified party by reason of such claim or action, then
Partners shall be entitled to participate therein, and to assume
the defense thereof with counsel satisfactory to the indemnified
party, and to settle and compromise any such claim or action;
provided, however, that if the indemnified party has elected to
be represented by separate counsel pursuant to the proviso of the
second following sentence, such settlement or compromise shall be
effected only with the consent of the indemnified party, which
consent shall not be unreasonably withheld. If Partners does not
agree to indemnify promptly the full amount of any such Loss as
provided in the immediately preceding sentence, then Partners
shall nevertheless have the right to participate in the defense
of any such claim or action, but such defense and any settlement
or compromise thereof shall at all times be under the sole
discretion and control of the indemnified party. After notice
from Partners to the indemnified party of its election to assume
the defense of such claim or action, Partners shall not be liable
to the indemnified party under this subsection 5.3(e) for any
legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the
indemnified party shall have the right to employ counsel to
represent it if, in the indemnified party's reasonable judgment,
it is advisable for the indemnified party to be represented by
separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the indemnified party. NBC Sub
and Partners each agree to render to each other such assistance
as may reasonably be requested in order to ensure the proper and
adequate defense of any such claim or proceeding.
(f) Tax Indemnification. (i) Partners shall indemnify
NBC Sub and its affiliates and hold them harmless from (A) all
liabilities for Federal, state and local income, franchise or
similar taxes attributable solely to an increase in the amount of
gain recognized (as determined under Section 1031(b) of the Code
and Treasury Regulation Section 1.1031(j)-1(b)(3)) by NBC Sub
upon the receipt of the CBS Assets by reason of the treatment of
any property (other than the NBC Assets) transferred to Partners
- 22 -<PAGE>
pursuant to an agreement between Partners and the Escrow Agent or
the Qualified Intermediary as property owned by NBC Sub and
transferred as "like kind" property by NBC Sub to Partners and
(B) all liability for reasonable legal fees and expenses
attributable to any item in clause (A) above (including an
assertion by any taxing authority to such effect).
(ii) Partners and its affiliates, and NBC Sub and its
affiliates, shall treat any property (other than the NBC Assets)
transferred to Partners pursuant to an agreement between Partners
and the Escrow Agent or the Qualified Intermediary as property
not owned by NBC Sub and not transferred as "like kind" property
by NBC Sub to Partners, unless there is a final determination
(within the meaning of Section 1313 of the Code) to the contrary.
(iii) If any taxing authority shall formally or
informally raise with NBC Sub an issue (including by issuing IDRs
or similar requests for information in the course of an audit)
that could result in a claim which, if successful, might result
in an indemnity payment to NBC Sub or one of its affiliates
pursuant to subsection 5.3(f)(i) (a "Tax Claim"), NBC Sub shall
promptly notify Partners in writing of such Tax Claim. If notice
of a Tax Claim is not given to Partners within a sufficient
period of time to allow Partners to effectively contest such Tax
Claim, or in reasonable detail to apprise Partners of the nature
of the Tax Claim, in each case taking into account the facts and
circumstances with respect to such Tax Claim, Partners shall not
be liable to NBC Sub or any of its affiliates to the extent that
Partners' position is actually prejudiced as a result thereof.
NBC Sub shall promptly take such action (and cause its
affiliates to take such action) in connection with contesting
such Tax Claim (including pursuing all administrative appeals,
proceedings, hearings and conferences with the relevant taxing
authority, and all judicial determinations and appeals of
judicial determinations) as directed by Partners from time to
time ("Tax Contests"). NBC Sub shall not settle any Tax Claim
without the prior written consent of Partners, which consent
shall not be unreasonably withheld, and shall not make any formal
or informal communication to any relevant taxing authority
concerning any Tax Claim without affording to Partners the
opportunity for the participation of Partners (unless Partners
shall otherwise direct). Partners shall, at its own expense and
in its sole discretion, control the conduct of any Tax Contest,
including choosing counsel to represent the taxpayer with respect
to the underlying Tax Claim, negotiating with the applicable
taxing authority any settlement or resolution of the underlying
- 23 -<PAGE>
Tax Claim, choosing the forum in which to pursue a judicial
determination of the underlying Tax Claim (unless such Tax Claim
cannot be severed from an unrelated material claim made by the
relevant taxing authority against NBC Sub or any of its
affiliates, in which case NBC Sub may, after reasonably taking
into account the preferences expressed by Partners, choose such
forum), choosing whether or not to appeal any adverse judicial
determination of the underlying Tax Claim, and preparing all
written submissions and conducting all proceedings with respect
to the underlying Tax Claim. Partners may determine in its sole
discretion whether NBC Sub or its representatives shall attend
any meeting with the relevant taxing authority to discuss any Tax
Claim and to negotiate the settlement or resolution of such Tax
Claim; and Partners shall keep NBC Sub regularly informed
concerning the progress of such discussions or negotiations and
the results of each such meeting with the relevant tax authority.
NBC Sub shall cooperate fully and in good faith with Partners in
the conduct of any Tax Contest, including executing any forms,
authorizations, powers of attorney or other documents reasonably
useful or necessary to the conduct of any Tax Contest by
Partners, promptly providing to Partners copies of any written
communication and reports of any unwritten communication with any
tax authority regarding any Tax Claim, providing Partners with
access to the premises of NBC Sub or its affiliates for purposes
of reviewing relevant information in the possession of NBC Sub or
any of its affiliates or meeting with the relevant taxing
authorities concerning any Tax Claim, providing Partners with
access to the representatives or advisors of NBC Sub responsible
for the preparation of any return or related schedule or similar
document on which the transaction underlying the Tax Claim is
presented, and providing Partners with access to all schedules,
workpapers and other information used in preparing the
presentation of such transaction on any return or related
schedule or similar document.
If Partners or NBC Sub, as the case may be, shall
determine as provided above that a Tax Contest will be conducted
by paying the tax claimed and seeking a refund, Partners shall
advance to NBC Sub on an interest-free basis sufficient funds to
pay the tax and interest, penalties and additions to tax asserted
by the relevant taxing authority payable with respect thereto.
If Partners shall have advanced any such funds to NBC Sub and the
amount of tax, interest, penalties and additions to tax is
subsequently determined to be less than previously asserted by
the relevant taxing authority, then any refund of such funds to
NBC Sub (including any offset against any tax, interest, penalty
or addition to tax, and any increase in net operating loss or
- 24 -<PAGE>
other loss or credit carryback or carryforward), together with
any interest paid or credited by such taxing authority with
respect to such refund, shall be paid by NBC Sub to Partners
promptly upon receipt thereof (including by way of any offset or
increase described in the preceding parenthetical clause).
NBC Sub may, at any time before or during the conduct of
any Tax Contest with respect to any Tax Claim, assume control of
such Tax Contest at its own expense, by waiving all rights to
indemnification by Partners with respect to such Tax Claim.
(iv) For purposes of this subsection 5.3(f), "NBC Sub"
shall include not only NBC Sub but also each member of the
affiliated group of corporations of which NBC Sub is a member
(now or in the future), all within the meaning of Section 1504 of
the Code and the regulations thereunder.
(g) Effect of Representations and Warranties.
Notwithstanding anything to the contrary contained herein or in
the Assumption Agreements, the indemnification obligations of
Partners in favor of NBC Sub and its affiliates set forth in
subsections 5.3(e) and 5.3(f) shall be absolute and
unconditional, and shall be enforceable without regard to the
existence or accuracy of any representations or warranties given
by Partners.
6. Representations and Warranties by NBC Sub.
NBC Sub represents and warrants to Partners as follows:
6.1 Organization and Good Standing. NBC Sub is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado and has the requisite
power and authority to own, lease and operate the NBC Assets.
NBC Sub has all requisite corporate power and authority to enter
into this Agreement and any other agreement contemplated hereby,
to perform its obligations hereunder and thereunder, and to
convey good and marketable title to Partners with respect to the
NBC Assets. NBC Sub is duly authorized, qualified or licensed to
do business as a foreign corporation, and is in good standing, in
each of the jurisdictions in which its right, title or interest
in or to any of the NBC Assets, or the conduct of the business of
the NBC Stations, requires such authorization, qualification or
licensing, except where the failure to so qualify or to be in
good standing could not individually or in the aggregate
reasonably be expected to have a Section 6 Material Adverse
- 25 -<PAGE>
Effect (as defined below).
6.2 Authority. The execution, delivery and performance
by it of this Agreement and any other agreements or documents
executed or to be executed by it in connection herewith, and the
consummation of the transactions contemplated hereby and thereby,
have been duly and validly authorized by all necessary corporate
and stockholder action. This Agreement has been, and any other
agreements or documents to be executed by it in connection
herewith will be, duly executed and delivered by it and
constitutes, or will constitute, a legal, valid and binding
obligation of NBC or NBC Sub, as the case may be, enforceable
against it in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
6.3 No Conflict or Breach. The execution, delivery and
performance of this Agreement and any other agreements
contemplated hereby by it and the consummation by it of the
transactions contemplated hereby and thereby do not and will not:
(a) conflict with or constitute a violation of the
certificate of incorporation or bylaws of NBC or NBC Sub;
(b) conflict with or constitute a violation of (with or
without the giving of notice or the lapse of time or both)
any provision of any law, judgment, order, decree, rule or
regulation of any legislative body, court, governmental or
regulatory authority or arbitrator which is applicable to or
relates to NBC, NBC Sub or any of the NBC Assets, which
individually or in the aggregate could reasonably be
expected to have a Section 6 Material Adverse Effect; or
(c) except with respect to the agreements listed or
described on Schedule 6.3(c) hereto (with or without the
giving of notice or the lapse of time or both), violate or
conflict with, constitute a default under, result in a
breach, acceleration or termination of any provision of,
require notice to or the consent of any third party under,
or result in the creation of any Lien (as defined below)
upon all or any portion of the NBC Assets pursuant to, any
contract, agreement, commitment, indenture, mortgage, deed
- 26 -<PAGE>
of trust, lease, licensing agreement, note or other
instrument or obligation to which NBC or NBC Sub is a party
or by which NBC, NBC Sub or any of the NBC Assets is bound,
which individually or in the aggregate could reasonably be
expected to have a Section 6 Material Adverse Effect.
Unless otherwise specified, the term "Section 6 Material
Adverse Effect" as used in this Agreement shall mean a material
adverse effect on, or material adverse change in, (i) the NBC
Assets taken as a whole, (ii) the business, results of operations
or financial or other condition of Station KCNC or (iii) the
ability of NBC or NBC Sub to perform their respective obligations
under this Agreement or any other agreement contemplated hereby.
6.4 Consents. Except as set forth on Schedule 6.4
hereto, no consent, approval or authorization of, or designation,
declaration or filing with, or notice to, any legislative body,
court, governmental or regulatory authority or arbitrator
(including the FCC, the Federal Trade Commission ("FTC") and the
Department of Justice ("DOJ")) under any provision of any law,
judgment, order, decree, rule or regulation is required on the
part of NBC or NBC Sub in connection with the execution, delivery
and performance of this Agreement or any other agreement
contemplated hereby, the consummation of the transactions
contemplated hereby and thereby, or to ensure that Station KCNC
or the other NBC Assets can be operated or used after the Closing
as presently operated or used.
6.5 Licenses, Permits and Approvals. (a) Except as set forth on
Schedule 6.5 hereto, NBC Sub holds the licenses, permits and authorizations
issued by the FCC (the "NBC FCC Licenses") and all other material licenses,
permits, franchises, releases, certificates of compliance, consents,
approvals and authorizations of governmental authorities
necessary for or used in the ownership or operations of Station
KCNC and the NBC Assets, and each of the NBC FCC Licenses is, and
all such licenses, permits, franchises, releases, certificates of
compliance, consents, approvals and authorizations are, in full
force and effect, and all regulatory fees imposed by the FCC
pursuant to the Budget Reconciliation Act of 1993 with respect to
the NBC FCC Licenses have been timely paid. Schedules 1.1(a)(i)
and (ii) and 1.2(vi) and (vii) hereto contain a true and complete
list or description of the NBC FCC Licenses currently in effect
and all such licenses, permits, franchises, releases,
certificates of compliance, consents, approvals and
authorizations (showing in each case, the expiration date).
- 27 -<PAGE>
Except as set forth on Schedule 6.5 hereto, no application,
action or proceeding is pending for the renewal or modification
of any of the NBC FCC Licenses or any of such licenses, permits,
franchises, releases, certificates of compliance, consents,
approvals or authorizations, and no application, petition,
objection, opposition, action or proceeding is pending or, to the
best of NBC Sub's and NBC's knowledge, threatened that may result
in the denial of an application for renewal, the revocation,
modification, nonrenewal or suspension of any of the NBC FCC
Licenses or any of such licenses, permits, franchises, releases,
certificates of compliance, consents, approvals or
authorizations, the issuance of a cease-and-desist order, or the
imposition of any administrative or judicial sanction with
respect to NBC Sub, NBC or any of the NBC Assets that may
materially adversely affect the rights of NBC Sub under any of
such NBC FCC Licenses or any of such licenses, permits,
franchises, releases, certificates of compliance, consents,
approvals or authorizations. In the event of any such action, or
the filing or issuance of any such action or order, or of NBC
Sub's or NBC's learning of the threat thereof, NBC Sub shall
notify Partners of the same in writing and shall take all
reasonable measures, at NBC Sub's expense, to contest in good
faith or seek removal or rescission of such action or order.
(b) All documents required by 47 C.F.R. Section 73.3526
to be kept in the public inspection file are in such file, other
than documents the absence of which in the aggregate would be
immaterial to the conduct of the operations of the NBC Stations
or the ability of any of NBC, NBC Sub or either NBC Station to
renew the NBC FCC Licenses with respect to either NBC Station,
and such file will be maintained in proper order and complete up
to and through the Closing Date, except for such immaterial
documents.
6.6 Real Property. (a) Owned. Schedules
1.1(a)(xxii)(A) and 1.2(i) and (ii)(A) hereto contain a true and
complete description of all real property owned of record or
beneficially by NBC Sub which is used or useful in connection
with the WTVJ Tower or any of the KCNC Assets, and all buildings,
structures, towers and improvements situated, mounted and located
thereon (the "NBC Improvements"), and all easements, privileges,
rights-of-way, riparian and other water rights, lands underlying
any adjacent streets or roads, appurtenances, licenses, permits
and other rights pertaining to or accruing to the benefit of such
property.
(b) Leased. Schedules 1.1(a)(xxii)(B) and 1.2(ii)(B)
- 28 -<PAGE>
hereto contain a true and complete description of all real
property leased by NBC Sub which is used or useful in connection
with the WTVJ Tower or any of the KCNC Assets. Each of the
leases representing a leasehold interest included in the NBC Real
Property (the "NBC Real Property Leases") is a legal, valid and
binding obligation of the parties thereto that is enforceable in
accordance with its terms and is in full force and effect, NBC
Sub enjoys peaceful and undisturbed possession thereunder and, to
the best of the knowledge of NBC and NBC Sub, there are no
defaults thereunder and no circumstances or events have occurred
which, with notice or the passage of time or both, could
constitute one or more defaults under any of the NBC Real
Property Leases.
(c) Compliance. Except as set forth on Schedule 6.6(c)
hereto, all the NBC Real Property is in compliance with
applicable laws, including zoning, land use and building code
laws, ordinances and regulations necessary to conduct the
operations of the NBC Stations thereon as presently conducted,
and the transactions contemplated by this Agreement could not
reasonably be expected to result in the revocation of any permit
or variance, except to the extent that any such non-compliance,
violation or revocation, individually or in the aggregate, could
not reasonably be expected to have a material adverse effect on
either the KCNC Real Property or the WTVJ Real Property, in each
case taken as a whole. Except as set forth on Schedule 6.6(c)
hereto, all the NBC Improvements are in good condition and repair
and are fit for the purpose for which they are presently utilized
and conform to generally accepted industry practice. Without in
any way limiting the foregoing, the WTVJ Tower is in compliance
with, and, taking into consideration all of the uses to be made
of the WTVJ Tower by Partners, NBC Sub and any lessees (or any of
their respective affiliates) as reflected on Exhibit B-1, will be
in compliance with applicable Dade County South Florida Building
Code requirements.
(d) Title to NBC Real Property. Except as specifically
set forth on Schedule 6.6(d) hereto, NBC Sub has, and Partners
will receive on the Closing Date, (i) good and insurable fee
simple title to all the NBC Real Property that is owned by NBC
Sub and (ii) good and valid title to all the NBC Real Property
that is leased by NBC Sub, in each case free and clear of all
claims, liens, mortgages, pledges, imperfections of title,
easements, covenants, restrictions, options, rights of refusal,
security interests, charges, leases, encumbrances,
- 29 -<PAGE>
licenses or sublicenses and other restrictions of any kind and
nature (collectively, "Liens").
6.7 Tangible Personal Property. Schedules 1.1(a)(xv),
(xvi), (xviii) through (xxi) and (xxiii) and 1.2(iii) through (v)
hereto contain a true and complete list of all machinery,
equipment, transmitters, antennae, furniture, furnishings,
fixtures, vehicles, materials, supplies, tools, inventory, spare
parts and other tangible personal property used in the conduct of
the operations of Station KCNC (other than the Excluded KCNC
Assets) or otherwise included as NBC Assets. NBC Sub has, and
Partners will receive on the Closing Date, good and marketable
title to all such tangible personal property, free and clear of
all Liens, except as specifically set forth on Schedule 6.7(a)
hereto. Except as set forth on Schedule 6.7(b) hereto, all such
tangible personal property is in good operating condition and
repair and has been maintained in a manner consistent with
generally accepted industry practice and in a manner that permits
operation of the NBC Stations in compliance in all material
respects with any applicable FCC rules and regulations.
6.8 Contracts. Schedules 1.1(a)(iv) through (x) and
1.2(viii) hereto contain a true and complete list or description
of all material contracts, employment contracts, programming
agreements, advertising, promotional and sale agreements, leases,
subleases, retransmission consent agreements, maintenance and
service agreements, contracts to acquire materials and services
and other agreements relating to the conduct of the operations of
Station KCNC (other than the Excluded KCNC Assets) or related to
the other NBC Assets (the "NBC Contracts"). The redacted
sections of the retransmission consent agreements that were
furnished to Partners or its representatives pursuant to this
Agreement do not include any provisions which are material to the
portions of such retransmission consent agreements being assigned
to Partners hereunder. Except as set forth on Schedule 6.8(a)
hereto, all the NBC Contracts are in full force and effect and
are valid and enforceable in all material respects in accordance
with their respective terms. To the best knowledge of NBC and
NBC Sub, except as specified in Schedule 6.8(a) hereto, none of
NBC, NBC Sub or their respective affiliates are in breach or
default in the performance of any obligation thereunder and no
event has occurred or has failed to occur whereby, with or
without the giving of notice of the lapse of time or both, a
default or breach will be deemed to have occurred thereunder or
any of the other parties thereto have been or will be released
therefrom or will be entitled to refuse to perform thereunder,
except for such breaches, defaults and events which individually
- 30 -<PAGE>
or in the aggregate could not reasonably be expected to have a
Section 6 Material Adverse Effect. No other party to any such
NBC Contract has made or asserted, or, to the best of the
knowledge of NBC and NBC Sub, has, any defense, setoff or
counterclaim under any such NBC Contract, no such other party has
exercised any option granted to it to cancel or terminate its
agreement, to shorten the term of its agreement, or to renew or
extend the term of its agreement and none of NBC, NBC Sub or any
of their respective affiliates has received any notice to that
effect. True and complete copies of all documents relating to
the NBC Contracts have been delivered or made available to
Partners or its representatives. Schedule 6.8(b) hereto contains
a true and complete current trade barter summary with respect to
Station KCNC, including applicable asset and liability balances
with respect thereto (which Schedule shall be updated as of the
Closing).
6.9 Intellectual Property. Schedules 1.1(a)(xi) through
(xiv) hereto contain a true and complete list or description of,
and NBC Sub owns free and clear of any Liens, all trademarks,
trademark registrations and trademark applications, trade names,
service marks, copyrights, copyright applications and copyright
registrations, logos, slogans, jingles, licenses, royalties,
privileges and music rights relating to the conduct of the
operations of Station KCNC (other than the Excluded KCNC Assets)
(the "NBC Intellectual Property"). Except as set forth on
Schedule 6.9 hereto, there are no agreements with third parties
which limit or restrict in any material manner the right of
Station KCNC to use or register any of the NBC Intellectual
Property. Station KCNC is not being operated in a manner that
infringes any trademark, copyright or other intellectual property
right of any third party or otherwise violates the rights of any
third party, and no claim has been made or, to the best of the
knowledge of NBC and NBC Sub, threatened alleging any such
violation. To the best of the knowledge of NBC and NBC Sub,
there has been no material violation by others of any right of
NBC, NBC Sub or their respective affiliates in any of the NBC
Intellectual Property. Except as set forth on Schedule 6.9
hereto, all registrations for the NBC Intellectual Property are
valid and in good standing. True and complete copies of all
documents relating to the NBC Intellectual Property have been
delivered or made available to Partners or its representatives.
6.10 No Solicitation. To the best of the knowledge of
NBC and NBC Sub, none of NBC, NBC Sub or any of their respective
affiliates or affiliated television stations has solicited any
NBC Affected Employee for employment following the Closing Date
- 31 -<PAGE>
with any of NBC, NBC Sub or any of their respective affiliates or
affiliated television stations.
6.11 Call Letters. NBC Sub has the right to the use of
the call letters "KCNC" pursuant to the rules and regulations of
the FCC.
6.12 Operation of the NBC Stations. The NBC Stations
have been and are being operated in accordance with the NBC FCC
Licenses and are being operated in all material respects in
compliance with the Communications Act of 1934 and the rules,
regulations and policies thereunder and all records, documents
and logs that are required to be maintained pursuant to such
rules, regulations and policies have been properly maintained,
except those the absence of which in the aggregate would be
immaterial to the conduct of the operations of the NBC Stations
or the ability of any of NBC, NBC Sub or any NBC Station to renew
the NBC FCC Licenses with respect to any NBC Stations.
6.13 Sufficiency of KCNC Assets. The KCNC Assets and all
other rights to be conveyed to Partners hereunder are sufficient
to carry on the conduct of the operations of Station KCNC as
presently conducted.
6.14 Financial Statements. NBC and NBC Sub have
delivered to Partners or its representatives the financial
statements which are listed or described on Schedule 6.14 hereto
(the "NBC Stations Financial Information"). Except as set forth
on Schedule 6.14 hereto, the NBC Stations Financial Information
is complete and correct in all material respects and has been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis and fairly presents the
information purported to be presented therein as of the dates and
for the periods indicated therein.
6.15 Undisclosed Obligations. Except as disclosed on
Schedule 6.15 hereto or on any other Schedule to this Agreement,
neither NBC nor NBC Sub has any liability or obligation of any
kind with respect to Station KCNC or the NBC Assets, whether
accrued, absolute, fixed or contingent, known or unknown, other
than (a) liabilities and obligations not being assumed by
Partners under this Agreement or the Partners Assumption
Agreement, and (b) current operating liabilities included in the
calculation of Net Working Capital relating to Station KCNC.
6.16 Absence of Certain Changes. Since the end of the
last fiscal quarter prior to the Closing, the NBC Stations have
- 32 -<PAGE>
been operated in the usual and ordinary course consistent with
past practice and, except as set forth on Schedule 6.16 hereto,
there has been no transaction, event or condition that
individually or in the aggregate has had or could reasonably be
expected to have a Section 6 Material Adverse Effect.
6.17 Litigation; Compliance with Laws. Except as set
forth on Schedule 6.17 hereto, (a) there is no claim, litigation,
proceeding or governmental investigation pending or, to the best
of the knowledge of NBC and NBC Sub, threatened, or any order,
injunction or decree outstanding, against any of NBC or NBC Sub,
which if adversely determined could individually or in the
aggregate reasonably be expected to have a Section 6 Material
Adverse Effect, (b) each of NBC and NBC Sub is in material
compliance with all other laws, statutes, rules, regulations,
orders and licensing requirements of federal, state, local and
foreign agencies and authorities applicable to Station KCNC or
any of the NBC Assets (including those relating to antitrust and
trade regulation and civil rights), and (c) no notice has been
received by NBC or NBC Sub alleging any such non-compliance.
Clause (b) of this subsection 6.17 does not relate to compliance
with environmental laws, as to which subsection 6.18 is
applicable, or compliance with labor laws, as to which subsection
6.22 is applicable.
6.18 Environmental Matters. (a) Except as set forth on
Schedule 6.18(a) hereto, with respect to Station KCNC or any of the
NBC Assets, NBC, NBC Sub and their respective affiliates are in compliance
with all federal, state and local laws, regulations, rules, orders, decrees,
ordinances and common law relating to pollution, the protection of human
health or the environment, including laws relating to emissions,
discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern
("Environmental Laws"), except where such violations or
liabilities individually or in the aggregate could not reasonably
be expected to have a Section 6 Material Adverse Effect.
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, radiation (including radio-frequency
radiation), toxic substances, petroleum and petroleum products
and any other substance regulated by or that could result in
liability under any Environmental Laws, including those
substances listed pursuant to 42 U.S.C. Section 9601(14) and (33), PCBs
(as defined below) and asbestos.
- 33 -<PAGE>
(b) Except as set forth on Schedule 6.18(b) hereto, there
are no past or present actions, activities, circumstances,
conditions, events or incidents, including the release, emission,
discharge or disposal of any Materials of Environmental Concern,
at any property or facility currently or formerly owned, operated
or leased by NBC Sub or NBC that could form the basis of any
claim or proceeding against NBC, NBC Sub or their respective
affiliates with respect to Station KCNC or any of the NBC Assets
that individually or in the aggregate could reasonably be
expected to have a Section 6 Material Adverse Effect (or that
could form the basis after the Closing of any material claim
against CBS or Partners arising out of actions, activities,
circumstances, conditions, events or incidents prior to the
Closing).
(c) Except as set forth on Schedule 6.18(c) hereto, (i)
there are no underground storage tanks located on any NBC Real
Property or any of the properties subject to the NBC Real
Property Leases, (ii) there is no asbestos contained in or
forming part of any building, building component, structure or
office space located on any NBC Real Property or any of the
properties subject to the NBC Real Property Leases, (iii) no
polychlorinated biphenyls (PCBs) are used or stored at any NBC
Real Property or any of the properties subject to the NBC Real
Property Leases, and (iv) none of the electrical equipment
located at any NBC Real Property or any of the properties subject
to the NBC Real Property Leases contains any PCBs, except in each
case, in amounts that, individually or in the aggregate, could
not reasonably be expected to have a Section 6 Material Adverse
Effect. Except as set forth on Schedule 6.18(c) hereto, there
are no on-site or off-site locations where NBC or NBC Sub has
stored, disposed or arranged for the disposal of Materials of
Environmental Concern which relate in any way to Station KCNC or
any of the NBC Assets.
(d) Except as set forth on Schedule 6.18(d) hereto, none
of NBC, NBC Sub or any of their respective affiliates has
received any notice of violation, alleged violation,
noncompliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws which
relate in any way to Station KCNC or any of the NBC Assets.
(e) Materials of Environmental Concern have not been
transported or disposed of from the property now or previously
owned or used in connection with the NBC Assets or the business
of Station KCNC in a manner or to a location which could
reasonably be expected to give rise to liability under
- 34 -<PAGE>
Environmental Laws which liability could reasonably be expected
to have a Section 6 Material Adverse Effect.
(f) NBC and NBC Sub hold, and are in compliance with, all
permits, licenses, registrations or other authorizations required
under Environmental Laws ("Necessary Permits") which relate to
Station KCNC or any of the NBC Assets, except where the failure
to hold or be in compliance with any Necessary Permit could not
reasonably be expected to have, individually or in the aggregate,
a Section 6 Material Adverse Effect. Except as set forth on
Schedule 6.18(f) hereto, no modification, revocation, reissuance,
alteration, transfer, or amendment of the Necessary Permits, or
any review by, or approval of, any third party of the Necessary
Permits is required in connection with the execution or delivery
by NBC or NBC Sub of this Agreement or the documents executed or
to be executed in connection herewith, or the consummation of the
transactions contemplated hereby or thereby, or the operation,
use and enjoyment of the NBC Assets by Partners following such
consummation.
6.19 Reports; Books and Records.
(a) All material returns, reports and statements required to be
filed by NBC, NBC Sub or any of their respective affiliates with
respect to either NBC Station with the FCC have been filed and
complied with and are complete and correct in all material
respects as filed.
(b) The books and records of and relating to Station KCNC
and Station WTVJ that have been delivered by NBC, NBC Sub or any
of their respective affiliates to CBS, Partners or any of their
respective affiliates in connection with the transactions
contemplated by this Agreement have been maintained in accordance
with good business practice on a consistent basis and accurately
reflect and evidence the transactions of such NBC Station in all
respects.
6.20 Insurance. NBC, NBC Sub and their respective
affiliates have at all times maintained in full force and effect
property damage, liability and other insurance with respect to
the NBC Assets with financially sound and reputable insurers at
levels of coverage reasonable and customary in the broadcasting
industry.
6.21 Taxes. All federal, state, local and foreign
income, franchise, sales, use, property, excise, payroll and
other tax returns and reports required to be filed by law where
the failure to file such returns on a duly and timely basis could
result in a material Lien on the NBC Assets or the imposition on
- 35 -<PAGE>
Partners of any material liability for taxes or assessments have
been duly and timely filed in the proper form with the
appropriate governmental authority. All taxes, fees and
assessments of whatever nature due or payable pursuant to said
returns or otherwise have been paid, except for such amounts as
are being contested diligently, in the appropriate forum and in
good faith, where the failure to pay or contest such amounts
could result in a material Lien on the NBC Assets or the
imposition on Partners of any material liability for any taxes or
assessments. There are no tax audits pending and no outstanding
agreements or waivers extending the statutory period of
limitations applicable to any federal, state or local income tax
return for any period, the result of which could result in a
material Lien on the NBC Assets or the imposition on Partners of
any material liability for any taxes or assessments. There are
no governmental investigations or other legal, administrative or
tax proceedings pursuant to which NBC Sub is or could be made
liable for any taxes, penalties, interest or other charges, the
liability for which could extend to Partners as transferee of the
NBC Assets, or which could result in a material Lien on the NBC
Assets and, to the best of NBC Sub's knowledge, no event has
occurred that could impose on Partners any material liability for
any taxes, penalties or interest due or to become due from NBC
Sub.
6.22 Labor Matters. Except as set forth on Schedule 6.22
hereto, (a) NBC and NBC Sub are in compliance with all applicable
laws respecting employment and employment practices, terms and
conditions of employment and wages and hours with respect to
employees of Station KCNC other than those set forth on Schedule
6.22(a) hereto (the "NBC Affected Employees"), and none of them
is engaged in any unfair labor practice with respect to such
employees, except where the failure to be in such compliance, or
being engaged in an unfair labor practice, could not reasonably
be expected to have, individually or in the aggregate, a Section
6 Material Adverse Effect; (b) no NBC Affected Employee is
represented by any other union or collective bargaining agent and
there are no other collective bargaining or other labor
agreements with respect to any NBC Affected Employee, and to the
best of the knowledge of NBC and NBC Sub, no union is attempting
to organize any such employees; (c) there is no unfair labor
practice charge or complaint against NBC, NBC Sub or any of their
respective affiliates with respect to any NBC Affected Employees
pending before the National Labor Relations Board, any state
labor relations board or any court or tribunal and, to the best
of the knowledge of NBC and NBC Sub, none is or has been
threatened; (d) there is no labor strike, dispute, request for
- 36 -<PAGE>
representation, slowdown or stoppage actually pending against or
affecting NBC, NBC Sub or any of their respective affiliates
involving NBC Affected Employees and, to the best of the
knowledge of NBC and NBC Sub, none is or has been threatened; and
(e) no grievances that individually or in the aggregate could
reasonably be expected to have a Section 6 Material Adverse
Effect and no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and, to the best of
the knowledge of NBC and NBC Sub, none is or has been threatened.
6.23 Employee Benefits. (a) Schedule 6.23(a) hereto
lists each "employee benefit plan" (within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) and any other material employee plan,
agreement or arrangement maintained or otherwise contributed to
by NBC, NBC Sub or any of their respective affiliates for the
benefit of any NBC Affected Employees (the "NBC Plans"). Copies
or descriptions of the NBC Plans have been or will be furnished
or made available to Partners or its representatives.
(b) Each NBC Plan has been administered and is in
material compliance with the terms of such plan and all
applicable laws, rules and regulations except where the failure
to so comply could not individually or in the aggregate
reasonably be expected to result in a Section 6 Material Adverse
Effect. Additionally, none of NBC, NBC Sub or any trustee,
administrator or other fiduciary of any NBC Plan has engaged in
any transaction or acted in a manner that could, or has failed to
act so as to, (i) result in any material liability for breach of
fiduciary duty under ERISA or any other applicable law or (ii)
result in fines, penalties, taxes or related charges under (x)
Section 502(c), (i) or (l) of ERISA, (y) Section 4071 of ERISA or
(z) Chapter 43 of the Code, in each case where any such event
individually or in the aggregate could reasonably be expected to
result in a Section 6 Material Adverse Effect.
(c) No "reportable event" (as such term is used in
section 4043 of ERISA), "prohibited transaction" (as such term is
used in section 4975 of the Code or section 406 of ERISA) or
"accumulated funding deficiency" (as such term is used in section
412 or 4971 of the Code) has heretofore occurred with respect to
any NBC Plan and neither NBC nor NBC Sub has incurred any
liability to the Pension Benefit Guaranty Corporation with
respect to any NBC Plan subject to Title IV of ERISA other than
liability for premiums, in each case where any such event
individually or in the aggregate could reasonably be expected to
result in a Section 6 Material Adverse Effect.
- 37 -<PAGE>
(d) There are no pending or, to the best of the knowledge
of NBC and NBC Sub, threatened, actions, claims or lawsuits which
have been asserted or instituted involving or arising out of any
NBC Plan, with respect to the operation or administration of such
plan (other than routine benefit claims) where an adverse
determination individually or in the aggregate could reasonably
be expected to result in a Section 6 Material Adverse Effect.
(e) None of NBC, NBC Sub or any "Commonly Controlled
Entity" (as defined in Section 414 of the Code) of NBC or NBC Sub
has any liability in respect of any "multiemployer plan" (as such
term is defined in section 3(37) of ERISA, a "Multiemployer
Plan") and none of NBC, NBC Sub or any Commonly Controlled Entity
of NBC or NBC Sub has incurred any withdrawal liability which
remains unsatisfied in an amount that individually or in the
aggregate could reasonably be expected to result in a Section 6
Material Adverse Effect. Additionally, NBC Sub (i) has not
previously announced an intention to withdraw without completing
withdrawal, and (ii) has no present intention to withdraw (other
than by reason of the transactions contemplated by this
Agreement), in each case from a Multiemployer Plan with respect
to the NBC Assets; and no action has been taken, and no
circumstances exist, that alone or with the passage of time could
result in either a partial or complete withdrawal from such
Multiemployer Plan by NBC Sub with respect to the NBC Assets.
(f) Except as set forth on Schedule 6.23(f) hereto, no
NBC Plan exists which could result in the payment to any NBC
Affected Employee of any money or other property or rights or
accelerate or provide any other rights or benefits to any such
employee as a result of the transactions contemplated by this
Agreement, whether or not such payment would constitute a
parachute payment within the meaning of Section 280G of the Code.
6.24 Certain Fees. None of NBC, NBC Sub or any of their
respective affiliates, nor any of their respective officers,
directors or employees, on behalf of NBC, NBC Sub or such
affiliates, has retained or dealt with any broker or finder or
incurred any other liability for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated
by this Agreement.
7. Representations and Warranties by Partners.
Partners represents and warrants to NBC Sub as follows:
7.1 Organization and Good Standing. Partners is a
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general partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the
requisite power and authority to own, lease and operate the CBS
Assets. The copy of the Partnership Agreement of Partners, dated
as of August 23, 1994 (the "Partnership Agreement"), that has
been delivered to NBC is complete and correct and is presently in
effect without amendment or modification. Partners has all
requisite partnership power and authority to enter into this
Agreement and any other agreement contemplated hereby, to perform
its obligations hereunder and thereunder, and to convey good and
marketable title to NBC Sub with respect to the CBS Assets.
Station Holdings B Inc., a Delaware corporation and a corporation
of which CBS owns all the issued and outstanding voting stock on
and prior to the Closing Date, is the managing general partner
(the "Managing General Partner") of Partners and has all
requisite power and authority to enter into this Agreement and
any other agreement contemplated hereby on behalf of Partners.
Partners is duly authorized, qualified or licensed to do business
as a general partnership, and is in good standing, in each of the
jurisdictions in which its right, title or interest in or to any
of the CBS Assets, or the conduct of the business of the CBS
Stations, requires such authorization, qualification or
licensing, except where the failure to so qualify or to be in
good standing could not individually or in the aggregate
reasonably be expected to have a Section 7 Material Adverse
Effect (as defined below).
7.2 Authority. The execution, delivery and performance
by it of this Agreement and any other agreements or documents
executed or to be executed by it in connection herewith, and the
consummation of the transactions contemplated hereby and thereby,
have been duly and validly authorized by all necessary
partnership and managing general partner action. This Agreement
has been, and any other agreements or documents to be executed by
it in connection herewith will be, duly executed and delivered by
it and constitutes, or will constitute, a legal, valid and
binding obligation of CBS or Partners, as the case may be,
enforceable against it in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
7.3 No Conflict or Breach. The execution, delivery and
performance of this Agreement and any other agreements
- 39 -<PAGE>
contemplated hereby by it and the consummation by it of the
transactions contemplated hereby and thereby do not and will not:
(a) conflict with or constitute a violation of the
certificate of incorporation or bylaws of CBS or the
Partnership Agreement of Partners;
(b) conflict with or constitute a violation of (with or
without the giving of notice or the lapse of time or both)
any provision of any law, judgment, order, decree, rule or
regulation of any legislative body, court, governmental or
regulatory authority or arbitrator which is applicable to or
relates to CBS, Partners or any of the CBS Assets, which
individually or in the aggregate could reasonably be
expected to have a Section 7 Material Adverse Effect; or
(c) except with respect to the agreements listed or
described on Schedule 7.3(c) hereto (with or without the
giving of notice or the lapse of time or both), violate or
conflict with, constitute a default under, result in a
breach, acceleration or termination of any provision of,
require notice to or the consent of any third party under,
or result in the creation of any Lien (as defined below)
upon all or any portion of the CBS Assets pursuant to, any
contract, agreement, commitment, indenture, mortgage, deed
of trust, lease, licensing agreement, note or other
instrument or obligation to which CBS or Partners is a party
or by which CBS, Partners or any of the CBS Assets is bound,
which individually or in the aggregate could reasonably be
expected to have a Section 7 Material Adverse Effect.
Unless otherwise specified, the term "Section 7 Material
Adverse Effect" as used in this Agreement shall mean a material
adverse effect on, or material adverse change in, (i) the CBS
Assets taken as a whole, (ii) the business, results of operations
or financial or other condition of Station WCAU or (iii) the
ability of CBS or Partners to perform their respective
obligations under this Agreement or any other agreement
contemplated hereby.
7.4 Consents. Except as set forth on Schedule 7.4
hereto, no consent, approval or authorization of, or designation,
declaration or filing with, or notice to, any legislative body,
court, governmental or regulatory authority or arbitrator
(including the FCC, the FTC and the DOJ) under any provision of
any law, judgment, order, decree, rule or regulation is required
- 40 -<PAGE>
on the part of CBS or Partners in connection with the execution,
delivery and performance of this Agreement or any other agreement
contemplated hereby, the consummation of the transactions
contemplated hereby and thereby, or to ensure that Station WCAU
or the other CBS Assets can be operated or used after the Closing
as presently operated or used.
7.5 Licenses, Permits and Approvals. (a) Except as set
forth on Schedule 7.5 hereto, Partners holds the licenses,
permits and authorizations issued by the FCC (the "CBS FCC
Licenses") and all other material licenses, permits, franchises,
releases, certificates of compliance, consents, approvals and
authorizations of governmental authorities necessary for or used
in the ownership or operations of Station WCAU and the CBS
Assets, and each of the CBS FCC Licenses is, and all such
licenses, permits, franchises, releases, certificates of
compliance, consents, approvals and authorizations are, in full
force and effect, and all regulatory fees imposed by the FCC
pursuant to the Budget Reconciliation Act of 1993 with respect to
the CBS FCC Licenses have been timely paid. Schedules 1.3(a)(i)
and (ii) and 1.4(vi) and (vii) hereto contain a true and complete
list or description of the CBS FCC Licenses currently in effect
and all such licenses, permits, franchises, releases,
certificates of compliance, consents, approvals and
authorizations (showing in each case, the expiration date).
Except as set forth on Schedule 7.5 hereto, no application,
action or proceeding is pending for the renewal or modification
of any of the CBS FCC Licenses or any of such licenses, permits,
franchises, releases, certificates of compliance, consents,
approvals or authorizations, and no application, petition,
objection, opposition, action or proceeding is pending or, to the
best of Partners' and CBS' knowledge, threatened that may result
in the denial of an application for renewal, the revocation,
modification, nonrenewal or suspension of any of the CBS FCC
Licenses or any of such licenses, permits, franchises, releases,
certificates of compliance, consents, approvals or
authorizations, the issuance of a cease-and-desist order, or the
imposition of any administrative or judicial sanction with
respect to Partners, CBS or any of the CBS Assets that may
materially adversely affect the rights of Partners under any of
such CBS FCC Licenses or any of such licenses, permits,
franchises, releases, certificates of compliance, consents,
approvals or authorizations. In the event of any such action, or
the filing or issuance of any such action or order, or of
Partners' or CBS' learning of the threat thereof, Partners shall
notify NBC Sub of same in writing and shall take all reasonable
- 41 -<PAGE>
measures, at Partners' expense, to contest in good faith or seek
removal or rescission of such action or order.
(b) All documents required by 47 C.F.R. Section 73.3526
to be kept in the public inspection file are in such file, other
than documents the absence of which in the aggregate would be
immaterial to the conduct of the operations of the CBS Stations
or the ability of any of CBS, Partners or either CBS Station to
renew the CBS FCC Licenses with respect to either CBS Station,
and such file will be maintained in proper order and complete up
to and through the Closing Date, except for such immaterial
documents.
7.6 Real Property. (a) Owned. Schedules
1.3(a)(xxii)(A) and 1.4(i) and (ii)(A) hereto contain a true and
complete description of all the real property owned of record or
beneficially by Partners which is used or useful in connection
with the WCIX Tower or any of the WCAU Assets, and all buildings,
structures, towers and improvements situated, mounted and located
thereon (the "CBS Improvements"), and all easements, privileges,
rights-of-way, riparian and other water rights, lands underlying
any adjacent streets or roads, appurtenances, licenses, permits
and other rights pertaining to or accruing to the benefit of such
property.
(b) Leased. Schedules 1.3(a)(xxii)(B) and 1.4(ii)(B)
hereto contain a true and complete description of all real
property leased by Partners which is used or useful in connection
with the WCIX Tower or any of the WCAU Assets. Each of the
leases representing a leasehold interest included in the CBS Real
Property (the "CBS Real Property Leases") is a legal, valid and
binding obligation of the parties thereto that is enforceable in
accordance with its terms and is in full force and effect,
Partners enjoys peaceful and undisturbed possession thereunder
and, to the best of the knowledge of CBS and Partners, there are
no defaults thereunder and no circumstances or events have
occurred which, with notice or the passage of time or both, could
constitute one or more defaults under any of the CBS Real
Property Leases.
(c) Compliance. Except as set forth on Schedule 7.6(c)
hereto, all the CBS Real Property is in compliance with
applicable laws, including zoning, land use and building code
laws, ordinances and regulations necessary to conduct the
operations of the CBS Stations thereon as presently conducted,
and the transactions contemplated by this Agreement could not
reasonably be expected to result in the revocation of any permit
- 42 -<PAGE>
or variance, except to the extent that any such non-compliance,
violation or revocation, individually or in the aggregate, could
not reasonably be expected to have a material adverse effect on
either the WCAU Real Property or the WCIX Real Property, in each
case taken as a whole. Except as set forth on Schedule 7.6(c)
hereto, all the CBS Improvements are in good condition and repair
and are fit for the purpose for which they are presently utilized
and conform to generally accepted industry practice. Without in
any way limiting the foregoing, the WCIX Tower is in compliance
with, and, taking into consideration all of the uses to be made
of the WCIX Tower by NBC Sub, Partners and any lessees (or any of
their respective affiliates) as reflected on Exhibit B-4, will be
in compliance with applicable Dade County South Florida Building
Code requirements.
(d) Title to CBS Real Property. Except as specifically
set forth on Schedule 7.6(d) hereto, Partners has, and NBC Sub
will receive on the Closing Date, (i) good and insurable fee
simple title to all the CBS Real Property that is owned by
Partners and (ii) good and valid title to all the CBS Real
Property that is leased by Partners, in each case free and clear
of all Liens.
7.7 Tangible Personal Property. Schedules 1.3(a)(xv),
(xvi), (xviii) through (xxi) and (xxiii) and 1.4(iii) through (v)
hereto contain a true and complete list of all machinery,
equipment, transmitters, antennae, furniture, furnishings,
fixtures, vehicles, materials, supplies, tools, inventory, spare
parts and other tangible personal property used in the conduct of
the operations of Station WCAU (other than the Excluded WCAU
Assets) or otherwise included as CBS Assets. Partners has, and
NBC Sub will receive on the Closing Date, good and marketable
title to all such tangible personal property, free and clear of
all Liens, except as specifically set forth on Schedule 7.7(a)
hereto. Except as set forth on Schedule 7.7(b) hereto, all such
tangible personal property is in good operating condition and
repair and has been maintained in a manner consistent with
generally accepted industry practice and in a matter that permits
operation of the CBS Stations in compliance in all material
respects with any applicable FCC rules and regulations.
7.8 Contracts. Schedules 1.3(a)(iv) through (x) and
1.4(viii) hereto contain a true and complete list or description
of all material contracts, employment contracts, programming
agreements, advertising, promotional and sale agreements, leases,
subleases, retransmission consent agreements, maintenance and
service agreements, contracts to acquire materials and services
- 43 -<PAGE>
and other agreements relating to the conduct of the operations of
Station WCAU (other than the Excluded WCAU Assets) or related to
the other CBS Assets (the "CBS Contracts"). Except as set forth
on Schedule 7.8(a) hereto, all the CBS Contracts are in full
force and effect and are valid and enforceable in all material
respects in accordance with their respective terms. To the best
knowledge of CBS and Partners, except as specified in Schedule
7.8(a) hereto, none of CBS, Partners or their respective
affiliates are in breach or default in the performance of any
obligation thereunder and no event has occurred or has failed to
occur whereby, with or without the giving of notice of the lapse
of time or both, a default or breach will be deemed to have
occurred thereunder or any of the other parties thereto have been
or will be released therefrom or will be entitled to refuse to
perform thereunder, except for such breaches, defaults and events
which individually or in the aggregate could not reasonably be
expected to have a Section 7 Material Adverse Effect. No other
party to any such CBS Contract has made or asserted, or, to the
best of the knowledge of Partners and CBS, has, any defense,
setoff or counterclaim under any such CBS Contract, no such other
party has exercised any option granted to it to cancel or
terminate its agreement, to shorten the term of its agreement or
to renew or extend the term of its agreement and none of CBS,
Partners or any of their respective affiliates has received any
notice to that effect. True and complete copies of all documents
relating to the CBS Contracts have been delivered or made
available to NBC Sub or its representatives. Schedule 7.8(b)
hereto contains a true and complete current trade barter summary
with respect to Station WCAU, including applicable asset and
liability balances with respect thereto (which Schedule shall be
updated as of the Closing).
7.9 Intellectual Property. Schedules 1.3(a)(xi) through
(xiv) hereto contain a true and complete list or description of,
and Partners owns free and clear of any Liens, all trademarks,
trademark registrations and trademark applications, trade names,
service marks, copyrights, copyright applications and copyright
registrations, logos, slogans, jingles, licenses, royalties,
privileges and music rights relating to the conduct of the
operations of Station WCAU (other than the Excluded WCAU Assets)
(the "CBS Intellectual Property"). Except as set forth on
Schedule 7.9 hereto, there are no agreements with third parties
which limit or restrict in any material manner the right of
Station WCAU to use or register any of the CBS Intellectual
Property. Station WCAU is not being operated in a manner that
infringes any trademark, copyright or other intellectual property
right of any third party or otherwise
- 44 -<PAGE>
violates the rights of any third party, and no claim has been
made or, to the best of the knowledge of CBS and Partners,
threatened alleging any such violation. To the best of the
knowledge of CBS and Partners, there has been no material
violation by others of any right of CBS, Partners or their
respective affiliates in any of the CBS Intellectual Property.
Except as set forth on Schedule 7.9 hereto, all registrations for
the CBS Intellectual Property are valid and in good standing.
True and complete copies of all documents relating to the CBS
Intellectual Property have been delivered or made available to
NBC Sub or its representatives.
7.10 No Solicitation. To the best of the knowledge of
CBS and Partners, none of CBS, Partners or any of their
respective affiliates or affiliated television stations has
solicited any CBS Affected Employee for employment following the
Closing Date with any of CBS, Partners or any of their respective
affiliates or affiliated television stations.
7.11 Call Letters. Partners has the right to the use of
the call letters "WCAU" pursuant to the rules and regulations of
the FCC.
7.12 Operation of the CBS Stations. The CBS Stations
have been and are being operated in accordance with the CBS FCC
Licenses and are being operated in all material respects in
compliance with the Communications Act of 1934 and the rules,
regulations and policies thereunder and all records, documents
and logs that are required to be maintained pursuant to such
rules, regulations and policies have been properly maintained,
except those the absence of which in the aggregate would be
immaterial to the conduct of the operations of the CBS Stations
or the ability of Partners or any CBS Station to renew the CBS
FCC Licenses with respect to any CBS Stations.
7.13 Sufficiency of WCAU Assets. The WCAU Assets and all
other rights to be conveyed to NBC Sub hereunder are sufficient
to carry on the conduct of the operations of Station WCAU as
presently conducted.
7.14 Financial Statements. CBS and Partners have
delivered to NBC Sub or its representatives the financial
statements which are listed or described on Schedule 7.14 hereto
(the "CBS Stations Financial Information"). Except as set forth
on Schedule 7.14 hereto, the CBS Stations Financial Information
is complete and correct in all material respects and has been
prepared in accordance with generally accepted accounting
- 45 -<PAGE>
principles applied on a consistent basis and fairly presents the
information purported to be presented therein as of the dates and
for the periods indicated therein.
7.15 Undisclosed Obligations. Except as disclosed on
Schedule 7.15 hereto or on any other Schedule to this Agreement,
neither CBS nor Partners has any liability or obligation of any
kind with respect to Station WCAU or the CBS Assets, whether
accrued, absolute, fixed or contingent, known or unknown, other
than (a) liabilities and obligations not being assumed by NBC Sub
under this Agreement or the NBC Sub Assumption Agreement, and (b)
current operating liabilities included in the calculation of Net
Working Capital relating to Station WCAU.
7.16 Absence of Certain Changes. Since the end of the
last fiscal quarter prior to the Closing, the CBS Stations have
been operated in the usual and ordinary course consistent with
past practice and, except as set forth on Schedule 7.16 hereto,
there has been no transaction, event or condition that
individually or in the aggregate has had or could reasonably be
expected to have a Section 7 Material Adverse Effect.
7.17 Litigation; Compliance with Laws. Except as set
forth on Schedule 7.17 hereto, (a) there is no claim, litigation,
proceeding or governmental investigation pending or, to the best
of the knowledge of CBS and Partners, threatened, or any order,
injunction or decree outstanding, against any of CBS or Partners,
which if adversely determined could individually or in the
aggregate reasonably be expected to have a Section 7 Material
Adverse Effect, (b) each of CBS and Partners is in material
compliance with all other laws, statutes, rules, regulations,
orders and licensing requirements of federal, state, local and
foreign agencies and authorities applicable to Station WCAU or
any of the CBS Assets (including those relating to antitrust and
trade regulation and civil rights) and (c) no notice has been
received by CBS or Partners alleging any such non-compliance.
Clause (b) of this subsection 7.17 does not relate to compliance
with environmental laws, as to which subsection 7.18 is
applicable, or compliance with labor laws, as to which subsection
7.22 is applicable.
7.18 Environmental Matters. (a) Except as set forth on
Schedule 7.18(a) hereto, with respect to Station WCAU or any of
the CBS Assets, CBS, Partners and their respective affiliates are
in compliance with all Environmental Laws, except where such
violations or liabilities individually or in the aggregate could
not reasonably be expected to have a Section 7 Material Adverse
Effect.
- 46 -<PAGE>
(a) Except as set forth on Schedule 7.18(b) hereto, there
are no past or present actions, activities, circumstances,
conditions, events or incidents, including the release, emission,
discharge or disposal of any Materials of Environmental Concern,
at any property or facility currently or formerly owned, operated
or leased by Partners or CBS that could form the basis of any
claim or proceeding against CBS, Partners or their respective
affiliates with respect to Station WCAU or any of the CBS Assets
that individually or in the aggregate could reasonably be
expected to have a Section 7 Material Adverse Effect (or that
could form the basis after the Closing of any material claim
against NBC or NBC Sub arising out of actions, activities,
circumstances, conditions, events or incidents prior to the
Closing).
(b) Except as set forth on Schedule 7.18(c) hereto, (i)
there are no underground storage tanks located on any CBS Real
Property or any of the properties subject to the CBS Real
Property Leases, (ii) there is no asbestos contained in or
forming part of any building, building component, structure or
office space located on any CBS Real Property or any of the
properties subject to the CBS Real Property Leases, (iii) no
polychlorinated biphenyls (PCBs) are used or stored at any CBS
Real Property or any of the properties subject to the CBS Real
Property Leases, and (iv) none of the electrical equipment
located at any CBS Real Property or any of the properties subject
to the CBS Real Property Leases contains any PCBs, except in each
case, in amounts that, individually or in the aggregate, could
not reasonably be expected to have a Section 7 Material Adverse
Effect. Except as set forth on Schedule 7.18(c) hereto, there
are no on-site or off-site locations where CBS or Partners has
stored, disposed or arranged for the disposal of Materials of
Environmental Concern which relate in any way to Station WCAU or
any of the CBS Assets.
(c) Except as set forth on Schedule 7.18(d) hereto, none
of CBS, Partners or any of their respective affiliates has
received any notice of violation, alleged violation,
noncompliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws which
relate in any way to Station WCAU or any of the CBS Assets.
(d) Materials of Environmental Concern have not been
transported or disposed of from the property now or previously
owned or used in connection with the CBS Assets or the business
of Station WCAU in a manner or to a location which could
reasonably be expected to give rise to liability under
- 47 -<PAGE>
Environmental Laws which liability could reasonably be expected
to have a Section 7 Material Adverse Effect.
(e) CBS and Partners hold, and are in compliance with,
all Necessary Permits which relate to Station WCAU or any of the
CBS Assets, except where the failure to hold or be in compliance
with any Necessary Permit could not reasonably be expected to
have, individually or in the aggregate, a Section 7 Material
Adverse Effect. Except as set forth on Schedule 7.18(f) hereto,
no modification, revocation, reissuance, alteration, transfer, or
amendment of the Necessary Permits, or any review by, or approval
of, any third party of the Necessary Permits is required in
connection with the execution or delivery by CBS or Partners of
this Agreement or the documents executed or to be executed in
connection herewith, or the consummation of the transactions
contemplated hereby or thereby, or the operation, use and
enjoyment of the CBS Assets by NBC and NBC Sub following such
consummation.
7.19 Reports; Books and Records. (a) All material returns,
reports and statements required to be filed by CBS, Partners or any of
their respective affiliates with respect to either CBS Station with the
FCC have been filed and complied with and are complete and correct in
all material respects as filed.
(b) The books and records of and relating to Station WCAU
and Station WCIX that have been delivered by CBS, Partners or any
of their respective affiliates to NBC, NBC Sub or any of their
respective affiliates in connection with the transactions
contemplated by this Agreement have been maintained in accordance
with good business practice on a consistent basis and accurately
reflect and evidence the transactions of such CBS Station in all
respects.
7.20 Insurance. CBS, Partners and their respective
affiliates have at all times maintained in full force and effect
property damage, liability and other insurance with respect to
the CBS Assets with financially sound and reputable insurers at
levels of coverage reasonable and customary in the broadcasting
industry.
7.21 Taxes. All federal, state, local and foreign
income, franchise, sales, use, property, exercise, payroll and
other tax returns and reports required to be filed by law where
the failure to file such returns on a duly and timely basis could
result in a material Lien on the CBS Assets or the imposition on
NBC Sub or any material liability for taxes or assessments have
- 48 -<PAGE>
been duly and timely filed in the proper form with the
appropriate governmental authority. All taxes, fees and
assessments of whatever nature due or payable pursuant to said
returns or otherwise have been paid, except for such amounts as
are being contested diligently, in the appropriate forum and in
good faith, where the failure to pay or contest such amounts
could result in a material Lien on the CBS Assets or the
imposition on NBC Sub of any material liability for any taxes or
assessments. There are no tax audits pending and no outstanding
agreements or waivers extending the statutory period of
limitations applicable to any federal, state or local income tax
return for any period, the result of which could result in a
material Lien on the CBS Assets or the imposition on NBC Sub of
any material liability for any taxes or assessments. There are
no governmental investigations or other legal, administrative or
tax proceedings pursuant to which Partners is or could be made
liable for any taxes, penalties, interest or other charges, the
liability for which could extend to NBC Sub as transferee of the
CBS Assets, or which could result in a material Lien on the CBS
Assets and, to the best of Partner's knowledge, no event has
occurred that could impose on NBC Sub any material liability for
any taxes, penalties or interest due or to become due from
Partners.
7.22 Labor Matters. Except as set forth on Schedule 7.22
hereto, (a) CBS and Partners are in compliance with all
applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours with
respect to employees of Station WCAU other than those set forth
on Schedule 7.22(a) hereto (the "CBS Affected Employees"), and
none of them is engaged in any unfair labor practice with respect
to such employees, except where the failure to be in such
compliance, or being engaged in an unfair labor practice, could
not reasonably be expected to have, individually or in the
aggregate, a Section 7 Material Adverse Effect; (b) no CBS
Affected Employee is represented by any other union or collective
bargaining agent and there are no other collective bargaining or
other labor agreements with respect to any CBS Affected Employee,
and to the best of the knowledge of CBS and Partners, no union is
attempting to organize any such employees; (c) there is no unfair
labor practice charge or complaint against CBS, Partners or any
of their respective affiliates with respect to any CBS Affected
Employees pending before the National Labor Relations Board, any
state labor relations board or any court or tribunal and, to the
best of the knowledge of CBS and Partners, none is or has been
threatened; (d) there is no labor strike, dispute, request for
representation, slowdown or stoppage actually pending against or
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affecting CBS, Partners or any of their respective affiliates
involving CBS Affected Employees and, to the best of the
knowledge of CBS and Partners, none is or has been threatened;
and (e) no grievances that individually or in the aggregate could
reasonably be expected to have a Section 7 Material Adverse
Effect and no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and, to the best of
the knowledge of CBS and Partners, none is or has been
threatened.
7.23 Employee Benefits. (a) Schedule 7.23(a) hereto
lists or describes each "employee benefit plan" (within the
meaning of section 3(3) of ERISA) and any other material employee
plan, agreement or arrangement maintained or otherwise
contributed to by CBS, Partners or any of their respective
affiliates for the benefit of any CBS Affected Employees (the
"CBS Plans"). Copies or descriptions of the CBS Plans have been
or will be furnished or made available to NBC Sub or its
representatives.
(b) Each CBS Plan has been administered and is in
material compliance with the terms of such plan and all
applicable laws, rules and regulations except where the failure
to so comply could not individually or in the aggregate
reasonably be expected to result in a Section 7 Material Adverse
Effect. Additionally, none of CBS, Partners or any trustee,
administrator or other fiduciary of any CBS Plan has engaged in
any transaction or acted in a manner that could, or has failed to
act so as to, (i) result in any material liability for breach of
fiduciary duty under ERISA or any other applicable law or (ii)
result in fines, penalties, taxes or related charges under (x)
Section 502(c), (i) or (l) of ERISA, (y) Section 4071 of ERISA or
(z) Chapter 43 of the Code, in each case where any such event
individually or in the aggregate could reasonably be expected to
result in a Section 7 Material Adverse Effect.
(c) No "reportable event" (as such term is used in
section 4043 of ERISA), "prohibited transaction" (as such term is
used in section 4975 of the Code or section 406 of ERISA) or
"accumulated funding deficiency" (as such term is used in section
412 or 4971 of the Code) has heretofore occurred with respect to
any CBS Plan and neither CBS nor Partners has incurred any
liability to the Pension Benefit Guaranty Corporation with
respect to any CBS Plan subject to Title IV of ERISA other than
liability for premiums, in each case where any such event
individually or in the aggregate could reasonably be expected to
result in a Section 7 Material Adverse Effect.
- 50 -<PAGE>
(d) There are no pending or, to the best of the knowledge
of CBS and Partners, threatened, actions, claims or lawsuits
which have been asserted or instituted involving or arising out
of any CBS Plan, with respect to the operation or administration
of such plan (other than routine benefit claims) where an adverse
determination individually or in the aggregate could reasonably
be expected to result in a Section 7 Material Adverse Effect.
(e) None of CBS, Partners or any "Commonly Controlled
Entity" (as defined in Section 414 of the Code) of CBS or
Partners has any liability in respect of any Multiemployer Plan
and none of CBS, Partners or any Commonly Controlled Entity of
CBS or Partners has incurred any withdrawal liability which
remains unsatisfied in an amount that individually or in the
aggregate could reasonably be expected to result in a Section 7
Material Adverse Effect. Additionally, Partners (i) has not
announced an intention to withdraw without completing withdrawal,
and (ii) has no present intention to withdraw (other than by
reason of the transactions contemplated by this Agreement), in
each case from a Multiemployer Plan with respect to the CBS
Assets; and no action has been taken, and no circumstances exist,
that alone or with the passage of time could result in either a
partial or complete withdrawal from such Multiemployer Plan by
Partners with respect to the CBS Assets.
(f) Except as set forth on Schedule 7.23(f) hereto, no
CBS Plan exists which could result in the payment to any CBS
Affected Employee of any money or other property or rights or
accelerate or provide any other rights or benefits to any such
employee as a result of the transactions contemplated by this
Agreement, whether or not such payment would constitute a
parachute payment within the meaning of Section 280G of the Code.
7.24 Certain Fees. None of CBS, Partners or any of their
respective affiliates, nor any of their respective officers,
directors or employees, on behalf of CBS, Partners or such
affiliates, has retained or dealt with any broker or finder or
incurred any other liability for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated
by this Agreement.
8. Further Agreements of the Parties.
For purposes of this Agreement, (i) with respect to the
exchange, conveyance, assignment, transfer and delivery of the
NBC Assets, NBC Sub shall be referred to as the "Transferor",
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Partners shall be referred to as the "Transferee", the NBC Assets
shall be referred to as the "Transferred Assets", Station KCNC
shall be referred to as the "Transferred Station" and the NBC Sub
Obligations shall be referred to as the "Assumed Obligations";
and (ii) with respect to the exchange, conveyance, assignment,
transfer and delivery of the CBS Assets, Partners shall be
referred to as the "Transferor", NBC Sub shall be referred to as
the "Transferee", the CBS Assets shall be referred to as the
"Transferred Assets", Station WCAU shall be referred to as the
"Transferred Station" and the Partners Obligations shall be
referred to as the "Assumed Obligations".
8.1 Filings with the FCC. (a) As soon as practicable,
but in no event later than 30 days after the date of this
Agreement, each of the Transferee and the Transferor shall file
with the FCC a complete application requesting its approval and
consent to the transactions contemplated by this Agreement (the
"FCC Applications"); provided that the parties shall cooperate
with each other in the preparation of the FCC Applications and
shall in good faith and with due diligence take all reasonable
steps necessary to expedite the processing of the FCC
Applications and to secure such consents or approvals as
expeditiously as practicable. If the Closing shall not have
occurred for any reason within the initial effective periods of
the granting of FCC approval of any of the FCC Applications, and
neither party shall have terminated this Agreement under
subsection 12.1, the parties shall jointly request and use their
respective best efforts to obtain one or more extensions of the
effective periods of such grants. Neither party will knowingly
take, or fail to take, any action the intent or reasonably
anticipated consequence of which would be to cause the FCC not to
grant approval of the FCC Applications, or to cause the FCC to
interfere in a manner damaging to the ability to operate the
Stations in the manner contemplated to be operated by NBC Sub or
Partners, as the case may be, following the Closing. The parties
agree to oppose any requests for reconsideration or judicial
review of the granting of approval of the FCC Applications.
(b) The Transferor shall publish the notices required by
the rules and regulations of the FCC relative to the filing of
the FCC Applications. Copies of all applications, documents and
papers filed after the date hereof and prior to the Closing, or
filed after the Closing with respect to the transactions under
this Agreement, by the Transferee or the Transferor with the FCC
shall be mailed to the other simultaneously with the filing of
the same with the FCC. The Transferor shall comply with all
requirements which the FCC may impose on a licensee relating to
- 52 -<PAGE>
its assignments. Each party shall bear its own costs and
expenses (including the fees and disbursements of its counsel) in
connection with the preparation of the portion of the application
to be prepared by it and in connection with the processing of
that application. All filing and grant fees, if any, paid to the
FCC, shall be borne by the Transferee. None of the information
contained in any filing made by the Transferee or the Transferor
with the FCC with respect to the transactions contemplated by
this Agreement shall contain any untrue statement of a material
fact.
8.2 Hart-Scott-Rodino Act. Within 30 days after the
execution of this Agreement, the Transferee and the Transferor
shall, in cooperation with each other, file (or cause to be
filed) with each of the DOJ and the FTC any reports or
notifications that may be required to be filed by them under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act") in connection with the transactions contemplated by this
Agreement. The Transferee and the Transferor shall promptly
comply with all requests for further documents and information
made by the DOJ or the FTC, shall use their best efforts to
obtain early termination of all waiting periods under the HSR
Act, and shall furnish to the other all such information in its
possession as may be necessary for the completion of the reports
or notifications to be filed by the other. All fees due from any
party to the FTC or the DOJ under the HSR Act in connection with
the filing of any of those reports or notifications shall be
borne by the respective Transferee.
8.3 Pre-Closing Covenants. From the date of this
agreement through the Closing Date, the Transferor shall:
(a) cause the business of the NBC Stations or the CBS
Stations, as the case may be, to be operated in the usual
and ordinary course consistent with past practices and (i)
in compliance with the FCC Licenses applicable to such
Stations and (ii) in compliance in all material respects
with the Communications Act of 1934 and the rules and
regulations of the FCC and all other applicable laws,
ordinances, regulations, rules or orders;
(b) use reasonable best efforts, consistent with its past
practices, (i) to preserve the business organization of such
Transferred Station intact and to preserve the goodwill and
business of the advertisers, suppliers and others having
business relations with such Transferred Station, (ii) to
retain the services of the employees of such Transferred
Station, and (iii) to preserve all trademarks, trade names,
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service marks and copyrights and related registrations of
such Transferred Station, and all slogans and logos, owned
by such Transferred Station or in which such Transferred
Station has any rights;
(c) not sell, transfer, lease or otherwise dispose of any
of the Transferred Assets, or agree to do any of the
foregoing, other than in the ordinary course of the
Transferor's business consistent with past practice;
(d) not permit or allow any of the Transferred Assets to
become subject to any Liens, other than those listed or
described on Schedule 6.6(d) or 6.7(a) or on Schedule 7.6(d)
or 7.7(a) hereto, as the case may be;
(e) except with the Transferee's prior written approval,
which approval with respect to clause (i) below shall not be
unreasonably withheld, not (i) enter into or renew any
lease, commitment or other agreement with respect to any of
the Transferred Assets providing for payments by the
Transferor or the Transferee, except in the ordinary course
of business and consistent with past practices (other than
as listed or described on Schedule 8.3(e)(1) or Schedule
8.3(e)(2) hereto, as the case may be), (ii) enter into any
new time sale or programming agreement for the Transferred
Station, or cause the acceleration of payments under any
such agreement, except in the ordinary course of business
and consistent with past practices, (iii) cause or take any
action to allow any material lease, commitment or other
agreement to lapse (other than in accordance with its
terms), to be modified in any adverse respect, or otherwise
to become impaired in any material manner, except in the
ordinary course of business where such actions, individually
or in the aggregate, could not reasonably be expected to
have a Section 6 Material Adverse Effect or a Section 7
Material Adverse Effect, as the case may be, (iv) grant or
agree to grant any general increases in the rates of
salaries or compensation payable to employees of the
Transferred Station, other than in the ordinary course of
business consistent with past practices, (v) grant or agree
to grant any severance or any specific bonus or increase to
any executive or management employee of the Transferred
Station whose total annual compensation after the increase
would be at an annual rate in excess of $50,000 (including
any such increase pursuant to any pension, profit sharing or
other plan or commitment), other than bonuses or salary
increases in the ordinary course of business consistent with
past practices, or (vi) with respect to the Transferred
- 54 -<PAGE>
Station, provide for any new profit sharing, pension,
retirement or other employment benefits for employees or any
increase in any existing profit sharing or benefits,
establish any new employee benefit plan or amend or modify
any existing employee benefit plan, or otherwise incur any
obligation or liability under any employee benefit plan
materially different in nature or amount from obligations or
liabilities incurred during similar periods in prior years;
(f) maintain in full force and effect property damage,
liability and other insurance with respect to the
Transferred Assets at levels of coverage reasonable and
customary in the broadcasting industry with respect to
similar assets;
(g) refrain from taking any action (or failing to take
any action) if such action (or failure to take any action)
could reasonably be expected to result in the expiration,
revocation, suspension or adverse modification of any of the
FCC Licenses with respect to any of the NBC Stations or the
CBS Stations, as the case may be, and prosecute with due
diligence any applications to any governmental authority
material to the operation of the business, assets or
properties of such Station; and
(h) refrain, and shall cause each of its affiliates and
each of the NBC Stations or the CBS Stations, as the case
may be, to refrain, from agreeing, whether in writing or
otherwise, to take any action inconsistent with any of the
foregoing.
8.4 No Control. Between the date of this Agreement and
the Closing Date, the Transferee shall not, directly or
indirectly, control, supervise or direct, or attempt to control,
supervise or direct, the operations of the Transferred Station
owned by the Transferor, but such operations shall be solely the
responsibility of the Transferor, and, subject to the provisions
of subsection 8.3, shall be in its complete discretion.
8.5 Expenses. Each of the parties shall bear its own
expenses incurred in connection with the negotiation and
preparation of this Agreement and in connection with all
obligations required to be performed by it under this Agreement,
except where specific expenses have been otherwise allocated by
this Agreement.
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8.6 Access to Information. Prior to the Closing, the
Transferee and its directors, officers, employees, affiliates,
non-employee representatives (including financial advisors,
attorneys and accountants) and agents (collectively, its
"Representatives") may make such investigation of the Transferred
Assets and Transferred Station as it may desire, and the
Transferor shall give to the Transferee and to its
Representatives, upon reasonable notice, full access during
normal business hours throughout the period prior to the Closing
to all of the Transferred Assets, including all the assets,
books, commitments, agreements, records and files of the
Transferred Station and the Transferor shall furnish to the
Transferee during that period all documents and copies of
documents and information concerning the businesses and affairs
of the Transferred Station to be transferred by the Transferor as
the Transferee reasonably may request. The Transferee shall
treat, and shall cause its Representatives to treat, all such
information and documents and all other information and documents
delivered pursuant to this Agreement as "Information" under the
Confidentiality Letter Agreement dated August 30, 1994 between
NBC and Partners and accepted and agreed to by CBS, and will
comply with, and cause its Representatives to comply with, their
respective obligations thereunder. If the exchanges contemplated
by this Agreement are not consummated for any reason, the
Transferee shall return to the Transferor all such information
and documents and shall destroy any copies thereof as soon as
practicable. The Transferee's obligations under this subsection
8.6 shall survive the termination of this Agreement.
8.7 Consents; Assignment of Agreements. The Transferor
shall use reasonable efforts (but shall not be required to make
any payment) to obtain at the earliest practicable date all
consents and approvals referred to in subsections 6.3(c) and 6.4
or in subsections 7.3(c) and 7.4, as the case may be, provided
that no payment shall be made by any Transferred Station, and no
contract or other agreement shall be modified to increase the
amount payable thereunder or to otherwise modify the terms
thereof in a manner adverse to any such Station, in order to
obtain any such consent or approval without first obtaining the
written consent of the Transferee. If the consent to the
assignment to the Transferee of any programming agreement is not
obtained and pursuant to the terms of the agreement the
programming supplier has the right to, and does, terminate the
agreement and requires payment of all remaining license fees or
obtains any damages of any kind for such termination, the
Transferor shall pay any such fees or
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damages (and indemnify and hold harmless the Transferee with
respect to such fees or damages, as provided in subsection
11.2(v)). The Transferor shall furnish the Transferee with a
copy of all consents and approvals referred to in subsections
6.3(c) and 6.4 or in subsections 7.3(c) and 7.4, as the case may
be, obtained pursuant hereto.
8.8 Taxes. (a) Sales Taxes; Transfer and Recording
Fees. The Transferor and the Transferee shall each pay out of
its own funds 50% of (i) any state or local sales and use Taxes
payable in connection with the transactions contemplated by this
Agreement, (ii) any stamp or transfer Taxes, real property Taxes
or recording fees payable in connection with the transactions
contemplated by this Agreement and (iii) any registration fees
and expenses payable in connection with the transactions
contemplated by this Agreement. The Transferor shall comply, and
shall cause the Transferred Station to be transferred by it to
comply, with any requirements for obtaining an available
exemption from any such Taxes or other fees.
(b) Tax Apportionment. In the case of any taxable period
that includes (but does not begin on) the Closing Date (the "Tax
Period"):
(i) real, personal and intangible property Taxes
(collectively, "Property Taxes") of each of NBC and its
subsidiaries for the assets transferred pursuant to
subsections 1.1 and 1.2, on the one hand, and the Property
Taxes of each of CBS and its controlled affiliates,
including Partners, on the other hand, for the assets
transferred pursuant to subsections 1.3 and 1.4, for the
pre-Closing tax period shall be equal to the amount of such
Property Taxes for the entire Tax Period multiplied by a
fraction, the numerator of which is the number of full days
during the Tax Period that are in the pre-Closing tax period
and the denominator of which is the number of days in the
Tax Period; and
(ii) the Taxes (other than Property Taxes) of each of
NBC and its subsidiaries, on the one hand, and each of CBS
and its controlled affiliates, including Partners, on the
other hand, for the pre-Closing tax period shall be computed
as if such taxable period ended as of the opening of
business on the Closing Date.
(c) Tax Compliance. The Transferor and the Transferee
shall each be responsible, with respect to their respective
Transferred Assets, for preparing and filing all federal, state,
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local and other tax returns, paying all tax liabilities and
conducting tax audits that relate to operations or events
affecting tax periods ending on or prior to the Closing Date,
including tax returns the due date of which is after the Closing
Date.
8.9 Further Assurances. At any time and from time to
time after the Closing, each of the parties shall, without
further consideration, execute and deliver to the other such
additional instruments and shall take such other action as the
other may request to carry out the transactions contemplated by
this Agreement. The Transferor and the Transferee will notify
the other parties hereto immediately of any litigation,
arbitration or administrative proceeding pending (including any
FCC complaint proceeding), or to their knowledge, threatened,
against any party hereto which challenges the transactions
contemplated by this Agreement. For a period of three years
after the Closing, each party shall grant the other reasonable
access during normal business hours upon reasonable prior notice
to the books and records of that party to the extent necessary to
comply with any applicable law or governmental rule or request
relating to the period during which the other party operated the
Transferred Station with respect thereto.
8.10 Additional Financial Statements. The Transferor
shall promptly deliver to the Transferee copies of all monthly,
quarterly and annual financial statements relating to the NBC
Stations or the CBS Stations, as the case may be, that are
required to be prepared by it under the terms of its by-laws or
partnership agreement, as the case may be, as currently in effect
during the period from the date of this Agreement to the Closing
Date. Without limiting the foregoing, from time to time prior to
the Closing, the Transferor shall promptly deliver to the
Transferee copies of annual and quarterly financial statements
with respect to the NBC Stations or the CBS Stations, as the case
may be, containing substantially the same amount of information
as those financial statements referred to on Schedule 6.14 or
7.14, as the case may be. All financial statements delivered
pursuant to this subsection 8.10 shall be in accordance with the
books and records of the Transferor.
8.11 No Disclosures or Solicitation. To accord to the
Transferee the full value of its exchange, (a) the Transferor
shall not at any time disclose to anyone any information with
respect to any confidential or secret aspect of the operations of
the Transferred Station, and (b) from the date of this Agreement
until the date which is six months after the Closing Date, (i) if
NBC Sub is the Transferor, neither NBC, NBC Sub nor any of their
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owned television stations shall solicit for employment any NBC
Affected Employee (other than any NBC Affected Employee whose
employment with Station KCNC has been terminated by CBS,
Partners, Group W or any of their owned television stations) and
(ii) if Partners is the Transferor, neither CBS, Partners, Group
W nor any of their owned television stations shall solicit for
employment any CBS Affected Employee (other than any CBS Affected
Employee whose employment with Station WCAU has been terminated
by NBC, NBC Sub or any of their owned television stations), in
each case who was employed by the Transferred Station at any time
during the period beginning on the date of this Agreement and
ending on the Closing Date. The Transferor acknowledges that the
remedy at law for breach of the provisions of this subsection
8.11 will be inadequate and that, in addition to any other remedy
the Transferee may have, it will be entitled to an injunction
restraining any such breach or threatened breach, without any
bond or other security being required.
8.12 Waiver of Compliance with Bulk Transfer Law. The
Transferor and the Transferee each waive compliance by the other
party with the provision of any bulk sales act relating to bulk
transfers in any jurisdiction wherein any of the Transferred
Assets are located, if applicable to this transaction; provided
that the Transferor shall indemnify and hold the Transferee
harmless from any obligations, losses, liabilities and expenses
(including reasonable attorneys' fees) asserted by third parties
or incurred by Transferee as a result of noncompliance with any
such act.
8.13 Other Action. None of the parties to this Agreement
shall take any action that would result in the condition set
forth in subsection 10.2(a) or 10.3(a), as the case may be, not
being satisfied at and as of the time of the Closing. Subject to
the terms and conditions hereof, each of the parties shall use
its best efforts to cause the fulfillment at the earliest
practicable date of all of the conditions to the obligations of
the parties to consummate the exchanges under this Agreement.
Without limiting the generality of the foregoing, the Transferor
shall execute and deliver to the Transferee (or the Transferee's
title insurer) such reasonable and customary affidavits,
certificates and documentation relating to the Transferor's
ownership and title to the NBC Real Property or the CBS Real
Property, as the case may be, as shall be reasonably required in
connection with the Transferee's obtaining an owner's policy of
title insurance with respect to such property.
8.14 Modifications to Miami Retransmission Consent
Agreements. (a) Each of NBC Sub and Partners shall use its best
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efforts to cause, prior to the Closing Date, each of its
arrangements with or must-carry demands to cable system operators
for transmission of the signal of Station WTVJ or Station WCIX,
as the case may be, to be modified to provide that, as of and
following the Closing Date, Station WTVJ will be carried on
channel position 6 (or such other channel position as Station
WCIX occupies as of the date of this Agreement) and Station WCIX
will be carried on channel position 4 (or such other channel
position as Station WTVJ occupies as of the date of this
Agreement). NBC Sub and Partners shall coordinate with each
other in all communications in furtherance of the foregoing to
those cable system operators referred to above on which either
Station WTVJ or Station WCIX is carried.
(b) NBC Sub shall use its reasonable best efforts to
secure for the benefit of Partners, prior to the Closing Date,
the agreement of each cable system operator which transmits the
signal of Station WTVJ but not the signal of Station WCIX outside
Station WTVJ's Area of Dominant Influence to transmit the signal
of Station WCIX on the channel position held by Station WTVJ on
such cable system in such areas, it being understood that
reasonable best efforts for these purposes shall not be deemed to
include any payment, but shall include a request by Station WTVJ
to such cable systems to change Station WTVJ's then current
channel position on such cable systems or, if necessary, to
discontinue carriage of the signal of Station WTVJ on such cable
systems.
8.15 Assignment of Channel 27 Lease. Partners shall use
its reasonable best efforts to obtain for NBC Sub, prior to the
Closing Date, the consent of Skinner Broadcasting, Inc. to the
assignment by Partners to NBC Sub of the agreement relating to
the retransmission of the signal of Station WCIX on low power
television station W27AQ, Fort Lauderdale, Florida, licensed to
Skinner Broadcasting, Inc., modified to relate to the
retransmission of the signal of Station WTVJ, on terms acceptable
to NBC Sub, it being understood that reasonable best efforts for
these purposes shall not be deemed to include any payment.
8.16 Updated Schedules. Prior to the Closing, NBC Sub
shall update Schedules 1.1(a)(i) through (xxiii), 1.2(i) through
(viii), 6.8(b) and 6.22(a) and Partners shall update Schedules
1.3(a)(i) through (xxiii), 1.4(i) through (viii), 7.8(b) and
7.22(a), in each case to reflect any actions taken or omitted to
be taken by such Transferor in accordance with the provisions of
subsection 8.3 during the period commencing on the date of this
Agreement and ending immediately prior to the Closing; provided,
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however, that NBC Sub shall update Schedule 6.22(a) and Partners
shall update Schedule 7.22(a) only to update the list of
employees of Station KCNC or Station WCAU, as the case may be,
and not to alter in any way the exceptions to the NBC Affected
Employees or the CBS Affected Employees, as the case may be.
8.17 WTVJ Tower. (a) The following 7 Gigahertz
microwave paths for Station WCIX (the "WCIX Microwave Paths")
will be ensured, throughout the term of the lease agreement
between NBC Sub and Partners described in Part B of Exhibit B-1
hereto (the "Lease Term"), on a basis which does not result in
"interference" (as defined below):
Transmission
Point Direction Reception Point
WCIX Studio Northbound WTVJ Tower
WCIX Studio Northbound WTVJ Tower
WTVJ Tower Southbound WCIX Studio
WTVJ Tower Southbound WCIX Studio
WTVJ Tower Southbound WCIX Studio
WTVJ Tower Northbound Ft Lauderdale
Ft Lauderdale Southbound WTVJ Tower
If the WCIX Microwave Paths cannot be ensured for Station
WCIX at NBC Sub's cost, then NBC Sub shall cause Station WTVJ to
convert microwave paths to and from the WTVJ Studio and
transmitter to fiber optics facilities.
The proposed frequency schedule for the WCIX Microwave
Paths is as follows:
Transmission
Point Direction Reception Point Frequency
WCIX Studio Northbound WTVJ Tower 10H or V (7 GHz)
WCIX Studio Northbound WTVJ Tower 1H or V (7 GHz)
WTVJ Tower Southbound WCIX Studio 8H or V (7 GHz)
WTVJ Tower Southbound WCIX Studio 6H or V (7 GHz)
WTVJ Tower Southbound WCIX Studio 4H or V (7 GHz)
WTVJ Tower Northbound Ft Lauderdale 3V (7 GHz)
Ft Lauderdale Southbound WTVJ Tower 9V (7 GHz)
On any date (the "Certification Date") which is on or
prior to the date 120 days following the date hereof, NBC Sub
shall certify (in accordance with the EIA/TIA Standard for
Electrical Performance for Television Systems) to Partners that
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the use by both Station WCIX and Station WTVJ of the above-listed
frequency schedule with any combination of channels determined by
NBC Sub (the "Allocation") does not result in interference (as
defined below) on the WCIX Microwave Paths; provided that
Partners shall cause Station WCIX to provide reasonable access
and cooperation to the employees of NBC Sub and Station WTVJ in
connection with the foregoing. NBC Sub will guarantee that the
use by Station WTVJ of the frequencies and channels provided in
the Allocation will not thereafter result in interference on the
WCIX Microwave Paths throughout the Lease Term. If NBC Sub
either cannot make such certification or fails to guarantee such
result, then NBC Sub shall cause Station WTVJ to promptly convert
microwave paths to and from the WTVJ Studio and transmitter to
fiber optics facilities to the extent necessary to eliminate such
interference. In the event that, following the Certification
Date, Station WCIX experiences interference on the WCIX Microwave
Paths for any other reason, NBC Sub and Station WTVJ shall
cooperate with Partners and Station WCIX to cause the party or
parties causing such interference to cease doing so, and will use
reasonable efforts (not including the payment of money) through
the local frequency coordinating committee to resolve the
situation to Partners' reasonable satisfaction.
From and after the Certification Date throughout the Lease
Term, each of NBC Sub and Partners agrees that it will cause
Station WTVJ and Station WCIX, respectively, not to change any
antenna, frequency or channel upon which the Allocation was based
without the prior written approval of the other party, which
shall not be unreasonably withheld or delayed.
As used herein, "interference" means that the ratio of the
peak-to-peak luminance signal (blanking to reference white or
0.714 volt or 100 IRE) to the weighted rms noise voltage would be
less than 67 dB, calculated in accordance with the EIA/TIA
Standard for Electrical Performance for Television Systems or its
successor as from time to time in effect.
(b) NBC Sub shall complete the construction with respect
to the expansion of the WTVJ Tower transmitter building at its
own expense, shall obtain Certificates of Occupancy for all
structures so completed, and shall relocate the transmitter and
receiver equipment referred to in Part B of Exhibit B-1 hereto to
the segregated 2,200 square foot area in the transmitter building
referred to in Part B of Exhibit B-1.
8.18 WCIX Tower. Partners shall complete the
construction of the Phase I and the Phase II transmitter
buildings relating to the WCIX Tower at its own expense, shall
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obtain Certificates of Occupancy for all structures so completed,
and shall relocate the transmitter and receiver equipment
referred to in Part A of Exhibit B-4 hereto to the segregated 600
square foot area in the Phase II transmitter building referred to
in Part A of Exhibit B-4. All improvements to such 600 square
foot area in the Phase II section shall be made by Partners at
its own expense.
9. Employee Matters.
9.1 Continuity of Employment. Except as indicated on
Schedule 6.22(a) hereto or Schedule 7.22(a) hereto, as the case
may be, the parties hereto intend that there shall be continuity
of employment with respect to all the Transferred Employees (as
defined below). The Transferee shall offer (or, in the case of
Partners, shall cause Group W to offer) employment as a successor
employer immediately after the Closing to (i) if NBC Sub is the
Transferee, the CBS Affected Employees, and (ii) if Partners is
the Transferee, the NBC Affected Employees, including in each
case those on vacation (but not including those employees who are
on leave of absence, disability or layoff), who were employed by
the Transferred Station immediately prior to the Closing (the
"Transferred Employees"), on terms that are substantially similar
in the aggregate (including salary, continuity of service, job
responsibility and location) to those provided to such employees
immediately prior to the Closing. Any NBC Affected Employee or
CBS Affected Employee (i) on leave of absence or disability who
returns to active employment within one year (or eighteen months
in the case of individuals who are disabled due to an injury or
illness for which workers compensation benefits are payable)
after the Closing shall be offered employment by the Transferee
(or, in the case of Partners, by Group W) on such date and shall
thereupon become a Transferred Employee; or (ii) on layoff shall
retain any rights of recall against the Transferee (or, in the
case of Partners, against Group W), and, in the event of such
recall, shall become a Transferred Employee on such date.
Nothing in this subsection 9.1 shall interfere with or curtail
the ability of the Transferee (or, in the case of Partners, of
Group W) to make employment decisions with respect to the
Transferred Employees subsequent to the Closing. The Transferee
(or, in the case of Partners, Group W) shall assume as part of
the Assumed Obligations all post-Closing obligations arising
under the Transferor's union contracts.
9.2 Pension Plans. (a) No assets or liabilities with
respect to any Transferred Employees shall be transferred as a
result of this Agreement from either The GE Pension Plan, as
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amended June 27, 1994 (the "GE Pension Plan"), or The CBS Pension
Plan (collectively, the "Pension Plans") to any plan or
arrangement established by the Transferee or any other employer
for the benefit of any such Transferred Employees. Benefits
payable to any Transferred Employees under any Pension Plan
(including, for the purposes of this subsection 9.2, any related
supplemental nonqualified plan maintained for the benefit of any
Transferred Employee whose benefits under the Transferor's plans
would otherwise have been limited under the Code (a "SERP"))
through the Closing shall be payable to such Transferred
Employees pursuant to the terms of, and at the time and in the
amounts provided under, such Pension Plan based upon such
Transferred Employees' years of service with, and compensation
received from, the Transferor through the Closing (including
periods of employment with any other employer which is taken into
account under such Pension Plan). All Transferred Employees who
are not fully vested as of the Closing in benefits accrued as of
such date under any Pension Plan (other than a SERP) shall become
fully vested in such accrued benefits. All Transferred Employees
who are not fully vested as of the Closing Date in benefits
accrued as of such date under any applicable Transferor SERP
shall be granted service credit for service with the Transferee
(or, in the case of Partners, Group W) for the purpose of vesting
in such Transferor SERP.
(b) As soon as practicable after the Closing, except as
otherwise provided in subsection 9.6, the Transferee shall cause
the Transferred Employees to be enrolled in The Westinghouse
Pension Plan or The GE Pension Plan (and any available SERP), as
the case may be, pursuant to the provisions of the applicable
plan of the Transferee (or, in the case of Partners, Group W).
Subject to any necessary approvals of both of the applicable
pension boards, all such employees shall be granted service
credit under each such plan of the Transferee (or, in the case of
Partners, Group W) for purposes of eligibility and vesting, but
not for accrual purposes, for creditable service performed prior
to Closing.
(c) Subject to any necessary approvals of both of the
applicable pension boards, for the purpose of determining
eligibility for early retirement, Transferred Employees shall be
granted credit for service with the Transferor under each of the
Transferee's (or, in the case of Partners, Group W's) plans
providing benefits to early retirees. Transferred Employees
shall be entitled to only those early retirement benefits
provided by each party as Transferee, and each party as
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Transferee shall be solely responsible for the payment of all
such benefits.
9.3 Defined Contribution Plans. (a) On or before the
Closing, the Transferor shall cause each Transferred Employee who
is a participant in The CBS Employee Investment Fund or The GE
Savings and Security Program, as amended June 27, 1994 (the "GE
Savings and Security Program"; and together with The CBS Employee
Investment Fund, the "Defined Contribution Plans"), as the case
may be, to become fully vested, to the extent not already vested,
as of the Closing in his or her account balance under each such
plan. Any loan outstanding as of the Closing Date to a
Transferred Employee secured by such employee's account in a
Transferor Defined Contribution Plan shall continue to be payable
by the Transferred Employee in accordance with the terms of the
loan after the Closing Date. As soon as practicable following
the Closing Date, each party as Transferee (or, in the case of
Partners, Group W) shall provide a system of payroll deductions
whereby such Transferred Employee can continue to repay
outstanding amounts owed to the Transferor in a manner
substantially similar to that previously utilized by the
Transferee or, at the Transferee's (or, in the case of Partners,
Group W's) option, substantially similar to that utilized by the
Transferor prior to the Closing Date. Promptly following each
payroll period of the Transferee (or, in the case of Partners,
Group W), each party as Transferee shall pay to each party as
Transferor the total amount of such payroll deductions from all
Transferred Employees so situated (net of any amount owed to such
party as Transferor under this subsection), to be credited
against the outstanding balance of such Transferred Employees'
loans from the Transferor plan.
(b) As soon as practicable after the Closing, the
Transferee shall cause the Transferred Employees to be enrolled
in The Westinghouse Savings Program or The GE Savings and
Security Program, as the case may be, pursuant to the provisions
of each respective plan of the Transferee (or, in the case of
Partners, Group W). Subject to any necessary approvals of both
of the applicable pension boards, all such employees shall be
granted service credit under each such plan for purposes of
eligibility and vesting for creditable service performed prior to
Closing.
9.4 Post-Retirement Medical Benefits and Life Coverage.
Each Transferor shall retain its respective obligations and
liabilities for post-retirement medical benefits and life
coverage in respect of any employee who retires prior to
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or on the Closing. Unless otherwise provided pursuant to the
applicable Transferor plan, any Transferred Employee who retires
after the close of business on the Closing Date shall be entitled
to only such post-retirement medical benefits and life coverage
as are provided by the Transferee (or, in the case of Partners,
Group W).
9.5 Welfare Benefits - Claims Incurred; Pre-Existing
Conditions. (a) At the close of business on the Closing Date,
all Transferred Employees shall cease participation in all the
Transferor's benefit plans, except with respect to benefits
accrued as of, or claims incurred prior to, the Closing Date, and
excepting, however, participation with respect to the
Transferor's plans which, by their terms, permit continuing
eligibility based on termination for transfer to a successor
employer. The Transferor shall retain responsibility for and
continue to pay all medical, life insurance, disability and other
welfare plan expenses and benefits for each Transferred Employee
with respect to claims incurred by such employees or their
covered dependents under the CBS Plans or the NBC Plans, as the
case may be, on or prior to the Closing. Expenses and benefits
with respect to claims incurred by Transferred Employees or their
covered dependents after the Closing shall be the responsibility
of the Transferee to the extent provided in the applicable plan
of the Transferee (or, in the case of Partners, of Group W). For
purposes of this subsection, a claim is deemed incurred when the
services that are the subject of the claim are performed; in the
case of life insurance, when the death occurs, in the case of
long-term disability benefits, when the disability occurs and, in
the case of a hospital stay, when the participant first enters
the hospital. For the balance of the calendar year in which the
Closing occurs, the Transferee (or, in the case of Partners,
Group W) shall maintain the same holiday and vacation schedules
(and eligibility requirements therefor) as were in effect for the
Transferor immediately prior to the Closing.
(b) With respect to any welfare benefit plans (within the
meaning of section 3(1) of ERISA) maintained by the Transferee
(or, in the case of Partners, by Group W) for the benefit of any
Transferred Employees on or after the Closing, each party shall
(i) cause to be waived any pre-existing condition limitations,
(ii) give effect, in determining any deductible and maximum out-
of-pocket limitations, to claims incurred and amounts paid by,
and amounts reimbursed to, such employees with respect to similar
plans maintained by the Transferor prior to the Closing and (iii)
permit those Transferred Employees who are eligible as of the
Closing Date to
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participate in the Transferor's applicable welfare plan(s) to
participate immediately in the applicable welfare plan(s) of the
Transferee (or, in the case of Partners, Group W) and permit
those Transferred Employees not so eligible to participate in the
applicable welfare plan(s) of the Transferee (or, in the case of
Partners, Group W) at such time as provided under the plans of
the Transferee (or, in the case of Partners, Group W), granting
credit for eligibility purposes for service with the Transferor.
(c) The Transferee (or, in the case of Partners, Group W)
shall recognize under its welfare plans and vacation policies the
service credited to the Transferred Employees as of the Closing
to the extent recognized under the Transferor's plans or
continuity of service rules (or, with respect to any benefit
under the applicable welfare plans of the Transferee (or, in the
case of Partners, of Group W) as to which there is no comparable
benefit under the applicable welfare plans of the Transferor, to
the extent such service would have been recognized under the
plans of the Transferee (or, in the case of Partners, of Group
W)) as if such service had been rendered to the Transferee (or,
in the case of Partners, Group W) for purposes of any waiting
period, eligibility conditions and benefits; provided, however,
that with respect to post-retirement medical benefits and life
coverage, such credited service shall be recognized solely in the
discretion of the Transferee (or, in the case of Partners, Group
W).
9.6 Multiemployer Plans. (a) With respect to each
Multiemployer Plan, each party as Transferor agrees (i) that if
each other party as Transferee (or, in the case of Partners,
Group W) withdraws in a complete withdrawal, or a partial
withdrawal with respect to operations, from a Multiemployer Plan
during the five plan years immediately following the Closing Date
and fails to make any withdrawal liability payment when due, such
Transferor shall be secondarily liable for any withdrawal
liability it would have had with respect to the operations of
such Plan (but for the application of this subsection 9.6 and
Section 4204 of ERISA and the regulations thereunder), and (ii)
that if all, or substantially all, of the Transferor's assets are
distributed or if the Transferor is liquidated during the five
plan years immediately following the Closing Date, or if a
portion of the Transferor's assets are distributed during such
period such that the posting of a bond is required under Section
4204(a)(3)(A) of ERISA and the regulations thereunder, then each
party as Transferor shall provide such bond as is required under
Section 4204(a)(3)(A) of ERISA and the regulations thereunder.
(b) With respect to each Multiemployer Plan, each
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party as Transferee (or, in the case of Partners, Group W) agrees
(i) that it shall post such bond or place such amount in escrow
as is required under Section 4204(a)(1)(B) of ERISA and the
regulations thereunder, and (ii) that it shall not (A) withdraw
from any such Multiemployer Plan before the last day of the fifth
plan year immediately following the Closing Date, or (B) fail to
make any withdrawal liability payment when due, provided that if
any party as Transferee (or, in the case of Partners, Group W)
does violate either (A) or (B), it shall indemnify and hold
harmless such other party as Transferor against any amount of
withdrawal liability imposed on it as a result of such violation.
10. Conditions Precedent to Closing.
10.1 Conditions Precedent to the Obligations of All
Parties. The obligations of Partners, on the one hand, and NBC
Sub, on the other hand, to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions:
(a) there shall not be in effect any preliminary or
permanent injunction or other order issued by any federal or
state court of competent jurisdiction in the United States
or by any United States federal or state governmental or
regulatory body nor any statute, rule, regulation or
executive order promulgated or enacted by any United States
federal or state governmental authority which restrains,
enjoins or otherwise prohibits the consummation of the
transactions contemplated by this Agreement or any other
agreements contemplated hereby; and
(b) any filings required to be made under the HSR Act
shall have been made, and all applicable waiting periods
thereunder with respect to the transactions contemplated by
this Agreement shall have expired or been terminated.
10.2 Conditions Precedent to the Obligations of Partners.
The obligations of Partners to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions (any
of which may be waived in writing by Partners):
(a) all representations and warranties of NBC Sub under
this Agreement (including the Schedules hereto as updated
pursuant to subsection 8.16) and of NBC under the NBC
Guarantee shall be true and correct in all material
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respects (provided, however, that, notwithstanding the
foregoing, any such representation and warranty that is
qualified as to materiality shall be true and correct in all
respects) at and as of the time of the Closing with the same
effect as though those representations and warranties had
been made again at and as of that time;
(b) NBC Sub shall have performed and complied with each
obligation, covenant and condition required by this
Agreement to be performed or complied with by it prior to or
at the Closing, with such exceptions as could not reasonably
be expected to result in any Section 6 Material Adverse
Effect;
(c) the FCC shall have given all requisite approvals and
consents (without any condition or qualification materially
adverse to Partners or the operations, business, results of
operations or financial or other condition of any Station to
be owned by Partners following the Closing) to the
assignment of any FCC Licenses with respect to any Station
to Partners or NBC Sub and the receipt of control of any
Station by Partners or NBC Sub as provided in this Agreement
and such approvals shall have become a Final Order (as
defined below);
(d) Partners shall have been furnished with the
instruments of conveyance and transfer referred to in
subsection 2.1, in form and substance reasonably
satisfactory to Partners;
(e) NBC Sub shall have transferred $30,000,000 by wire
transfer of immediately available funds (i) to the Qualified
Escrow Account or Qualified Intermediary contemplated by
subsection 5.3(a) hereof or (ii) if all arrangements with
respect to such Qualified Escrow Account or Qualified
Intermediary have not been finalized within 15 days of the
date that all other conditions to the Closing hereunder have
been fulfilled or satisfied, to Partners;
(f) Partners shall have received from each of (i) counsel
to NBC Sub and NBC and (ii) FCC counsel to NBC Sub and NBC,
an opinion, dated the Closing Date, substantially in the
form attached as Exhibits D-1 and D-2 hereto, respectively;
(g) Partners shall have been furnished with a certificate
of an officer of each of NBC and NBC Sub, dated
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the Closing Date, in form and substance reasonably
satisfactory to Partners, certifying to the fulfillment of
the conditions set forth in subsections 10.2(a) and (b);
(h) Partners shall have been furnished with a certificate
of a Secretary or Assistant Secretary of each of NBC and NBC
Sub, dated the Closing Date, in form and substance
reasonably satisfactory to Partners, certifying as to the
attached copy of the resolutions of the Board of Directors
(or a duly authorized committee thereof) of each of NBC and
NBC Sub authorizing the execution, delivery and performance
of, and the transactions contemplated by, this Agreement and
any other agreements contemplated hereby, and stating that
the resolutions thereby certified have not been amended,
modified, revoked or rescinded; and
(i) the closing of the acquisition by Partners shall have
occurred under the Purchase Agreement dated as of the date
hereof between Partners and NBC Subsidiary (KUTV-TV), Inc.
relating to television station KUTV-TV in Salt Lake City,
Utah.
For the purposes of this agreement, "Final Order" shall
mean action by the FCC which (a) has not been vacated,
reversed, stayed, set aside, annulled or suspended, and (b)
with respect to which no appeal, request for stay, or
petition for rehearing, reconsideration or review by any
party or by the FCC on its motion, is pending, and (c) as to
which the time for filing any such appeal, request,
petition, or similar document for the reconsideration or
review by the FCC on its own motion under the express
provisions of the Communications Act of 1934 and the rules
and regulations of the FCC, has expired (or if any such
appeal, request, petition or similar document has been
filed, an FCC order has been upheld in a proceeding pursuant
thereto and no additional review or reconsideration may be
sought).
10.3 Conditions Precedent to the Obligations of NBC Sub.
The obligations of NBC Sub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions (any
of which may be waived in writing by NBC Sub):
(a) all representations and warranties of Partners under
this Agreement (including the Schedules hereto as updated
pursuant to subsection 8.16) and of CBS under the
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CBS Guarantee shall be true and correct in all material
respects (provided, however, that, notwithstanding the
foregoing, any such representation and warranty that is
qualified as to materiality shall be true and correct in all
respects) at and as of the time of the Closing with the same
effect as though those representations and warranties had
been made again at and as of that time;
(b) Partners shall have performed and complied with each
obligation, covenant and condition required by this
Agreement to be performed or complied with by it prior to or
at the Closing, with such exceptions as could not reasonably
be expected to result in any Section 7 Material Adverse
Effect;
(c) the FCC shall have given all requisite approvals and
consents (without any condition or qualification materially
adverse to NBC Sub or the operations, business, results of
operations or financial or other condition of any Station to
be owned by NBC Sub following the Closing) to the assignment
of any FCC Licenses with respect to any Station to NBC Sub
or Partners and the receipt of control of any Station by NBC
Sub or Partners as provided in this Agreement and such
approvals shall have become a Final Order;
(d) NBC Sub shall have been furnished with the
instruments of conveyance and transfer referred to in
subsection 2.2, in form and substance reasonably
satisfactory to NBC Sub;
(e) NBC Sub shall have received from each of (i) counsel
to Partners and CBS and (ii) FCC counsel to Partners and
CBS, an opinion, dated the Closing Date, substantially in
the form attached as Exhibit E-1 and E-2 hereto,
respectively;
(f) NBC Sub shall have been furnished with a certificate
of an officer of each of (i) the Managing General Partner of
Partners and (ii) CBS, dated the Closing Date, in form and
substance reasonably satisfactory to NBC Sub, certifying to
the fulfillment of the conditions set forth in subsections
10.3(a) and (b); and
(g) NBC Sub shall have been furnished with a certificate
of a Secretary or Assistant Secretary (or other appropriate
officer) of each of (i) the Managing General Partner of
Partners and (ii) CBS, dated the Closing Date, in
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form and substance reasonably satisfactory to NBC Sub,
certifying as to the attached copy of the resolutions of the
Managing General Partner of Partners and the Board of
Directors (or a duly authorized committee thereof) of CBS
authorizing the execution, delivery and performance of, and
the transactions contemplated by, this Agreement and any
other agreements contemplated hereby, and stating that the
resolutions thereby certified have not been amended,
modified, revoked or rescinded.
11. Survival of Representations and Warranties;
Indemnification.
11.1 Survival. All representations, warranties,
covenants and agreements contained in this Agreement, and in any
agreements, certificates or other instruments delivered pursuant
to this Agreement, shall survive the Closing and shall remain in
full force and effect; provided that the Transferor shall only be
liable to the Transferee and its affiliates pursuant to
subsection 11.2(ii) below, and the Transferee shall only be
liable to the Transferor and its affiliates pursuant to
subsection 11.3(ii) below, to the extent that written notice of
the claim is delivered within the periods set forth in subsection
11.4(a)(1) below.
11.2 Indemnification by Transferor. The Transferor
agrees to indemnify and hold the Transferee and its affiliates,
and their respective officers, directors, employees and
representatives, harmless against and in respect of all Losses
incurred or suffered by the Transferee and its affiliates, and
their respective officers, directors, employees and
representatives, in connection with, arising out of, or as a
result of each and all of the following: (i) all obligations and
liabilities of the Transferor or its affiliates or related to the
Transferred Assets, whether accrued, absolute, fixed, contingent
or otherwise, other than the Assumed Obligations, as described in
Section 4; (ii) subject to subsection 11.4(a), any breach by the
Transferor or its affiliates of its representations and
warranties contained herein or in the certificate delivered by
the Transferor pursuant to subsection 10.2(g) or 10.3(f), as the
case may be, (which, for this purpose, shall be determined
without giving effect to any "materiality" or "material adverse
effect" limitation set forth therein), (iii) any nonperformance
or breach by the Transferor or its affiliates of any covenant or
other obligation (other than a representation or warranty made by
the Transferor in Section 6 or 7, as the case may be) to be
performed by the Transferor or its affiliates under this
Agreement; (iv) sales, use, income and other Taxes arising at any
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time out of the operations of the Transferred Station or any of
the Transferred Assets prior to the Closing Date (excluding any
Taxes described in subsection 8.8); and (v) the termination of
any programming agreement as a result of the transactions
contemplated by this Agreement, as described in the
second-to-last sentence of subsection 8.7. Notwithstanding
anything to the contrary contained herein or in the Assumption
Agreements, the indemnification obligations of the Transferor in
favor of the Transferee set forth in clauses (i), (iii), (iv) and
(v) above shall be absolute and unconditional, and shall be
enforceable without regard to the existence or accuracy of any
representations or warranties given by the Transferor or the
Transferee.
11.3 Indemnification by Transferee. The Transferee
agrees to indemnify and hold the Transferor and its affiliates
harmless against and in respect of all Losses incurred or
suffered by the Transferor and its affiliates in connection with,
arising out of, or as a result of each and all of the following:
(i) the Assumed Obligations; (ii) subject to subsection 11.4(a),
any breach by the Transferee or its affiliates of its
representations and warranties contained herein (which, for this
purpose, shall be determined without giving effect to any
"materiality" or "material adverse effect" limitation set forth
therein) and; (iii) any nonperformance or breach by the
Transferee or its affiliates of any covenant or other obligation
(other than a representation or warranty made by the Transferee
in Section 6 or 7, as the case may be) to be performed by the
Transferee or its affiliates under this Agreement.
Notwithstanding anything to the contrary contained herein or in
the Assumption Agreements, the indemnification obligation of the
Transferee in favor of the Transferor set forth in clauses (i)
and (iii) above shall be absolute and unconditional, and shall be
enforceable without regard to the existence or accuracy of any
representations or warranties given by the Transferor or the
Transferee.
11.4 General Indemnification Provisions. (a)
Notwithstanding the provisions of subsection 11.2 and 11.3, the
indemnified party shall not be entitled to indemnification for
Losses solely with respect to claims pursuant to subsection
11.2(ii) or 11.3(ii), as the case may be:
(1) unless the indemnified party shall have given written
notice to the indemnifying party, setting forth its
claim for indemnification in reasonable detail: (x)
on or before the date which is two years after the
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Closing Date for Losses arising out of the matters
referred to in Section 6 (other than subsection 6.18
or 6.21) or Section 7 (other than subsection 7.18 or
7.21) of this Agreement, as the case may be; (y) on
or before the date which is five years after the
Closing Date for Losses arising out of the matters
referred to in subsection 6.18 or subsection 7.18 of
this Agreement, as the case may be; or (z) with
respect to Losses arising out of the matters referred
to in subsection 6.21 or 7.21, as the case may be, on
or before the date which is 30 days following
expiration of the applicable statute of limitations
with respect to the Taxes as to which any such claim
relates;
(2) unless the aggregate Loss arising out of any single
breach or series of related breaches shall be at
least equal to $2,000; provided that if the aggregate
sum of each Loss which arises out of a single breach
or series of related breaches that individually is
less than $2,000 shall be at least equal to $100,000,
then, subject to satisfaction of the basket in clause
(3) below, the indemnified party shall be entitled to
indemnification under such subsection 11.2(ii) or
11.3(ii) for all such Losses in excess of $100,000;
and
(3) unless and until the aggregate amount of all Losses
arising therefrom exceeds $300,000, whereupon the
indemnified party shall be entitled to
indemnification under such subsection 11.2(ii) or
11.3(ii) only for the aggregate amount of such Losses
in excess of $300,000; provided that for purposes of
determining the aggregate amount of all Losses for
this clause (3), only such Losses referred to in the
proviso to clause (2) above that are in excess of
$100,000 shall count toward the $300,000 minimum set
forth in this clause (3).
(b) Promptly after (i) receipt by an indemnified party
under this Section 11 of notice of any claim or the commencement
of any action or (ii) the intervention as of right by an
indemnified party under this Section 11 into any action, the
indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 11, notify
the indemnifying party in writing of the claim or the
commencement of or intervention as of right into that action,
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provided that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to the
indemnified party under this Section 11, except if such
notification with respect to any claim to be made pursuant to
subsection 11.2(ii) or 11.3(ii) is given after the applicable
time period specified in subsection 11.4(a)(1) has lapsed. If
any such claim shall be brought against an indemnified party or
if an indemnified party shall intervene as of right in any such
action, and such indemnified party shall notify the indemnifying
party thereof, and if the indemnifying party shall agree in
writing to indemnify promptly the indemnified party for the full
amount of any Loss sustained, suffered or incurred by the
indemnified party by reason of such claim or action, then the
indemnifying party shall be entitled to participate therein, and
to assume the defense thereof with counsel satisfactory to the
indemnified party, and to settle and compromise any such claim or
action; provided, however, that if the indemnified party has
elected to be represented by separate counsel pursuant to the
proviso to the second following sentence, such settlement or
compromise shall be effected only with the consent of the
indemnified party, which consent shall not be unreasonably
withheld. If the indemnifying party does not agree to indemnify
promptly the full amount of any such Loss as provided in the
immediately preceding sentence, then the indemnifying party shall
nevertheless have the right to participate in the defense of any
such claim or action, but such defense and any settlement or
compromise thereof shall at all times be under the sole direction
and control of the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section 11 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however,
that the indemnified party shall have the right to employ counsel
to represent it if, in the indemnified party's reasonable
judgment, it is advisable for the indemnified party to be
represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the
indemnified party. The Transferee and the Transferor each agree
to render to each other such assistance as may reasonably be
requested in order to ensure the proper and adequate defense of
any such claim or proceeding.
(c) The amount of any Loss for which indemnification is
provided under any of subsections 5.3, 11.2 or 11.3 shall be net
of any amounts recovered or recoverable by the indemnified party
under insurance policies with respect to such Loss (collectively,
- 75 -<PAGE>
a "Net Loss") and shall be (i) increased to take account of any
net Tax cost incurred by the indemnified party arising from the
receipt of indemnity payments hereunder (grossed up for such
increase) and (ii) reduced to take account of any net Tax benefit
realized by the indemnified party arising from the incurrence or
payment of any such Net Loss. In computing the amount of any
such Tax cost or Tax benefit, the indemnified party shall be
deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item arising from the
receipt of any indemnity payment hereunder or the incurrence or
payment of any indemnified Net Loss. Any indemnification payment
hereunder shall initially be made without regard to this
subsection and shall be increased or reduced to reflect any such
net Tax cost (including gross-up) or net Tax benefit only after
the indemnified party has actually realized such cost or benefit.
For purposes of this Agreement, an indemnified party shall be
deemed to have "actually realized" a net Tax cost or a net Tax
benefit to the extent that, and at such time as, the amount of
Taxes payable by such indemnified party is increased above or
reduced below, as the case may be, the amount of Taxes that such
indemnified party would be required to pay but for the receipt of
the indemnity payment or the incurrence or payment of such Net
Loss, as the case may be. The amount of any increase or
reduction hereunder shall be adjusted to reflect any final
determination (which shall include the execution of Form 870-AD
or successor form) with respect to the indemnified party's
liability for Taxes and payments between the parties to this
Agreement to reflect such adjustment shall be made if necessary.
Any indemnity payment under this Agreement shall be treated as an
adjustment to the value of the asset upon which its underlying
claim was based, unless a final determination (which shall
include the execution of a Form 870-AD or successor form) with
respect to the indemnified party or any of its affiliates causes
any such payment not to be treated as an adjustment to the value
or the asset for United States federal income tax purposes.
12. Termination.
12.1 Termination. Except with respect to provisions that
expressly survive termination, this Agreement may be terminated:
(a) by written agreement of all of the parties hereto;
(b) by Partners, by written notice to NBC Sub, delivered
not less than 30 days after receipt by NBC Sub of an earlier
written notice from Partners that there have been breaches
or defaults of NBC Sub's covenants and agreements hereunder
which individually or in the aggregate could reasonably be
expected to result in a Section 6 Material Adverse Effect,
- 76 -<PAGE>
provided such breaches and defaults have not been cured to
the reasonable satisfaction of Partners since such earlier
notice;
(c) by NBC Sub, by written notice to Partners, delivered
not less than 30 days after receipt by Partners of an
earlier written notice from NBC Sub that there have been
breaches or defaults of Partners' covenants and agreements
hereunder which individually or in the aggregate could
reasonably be expected to result in a Section 7 Material
Adverse Effect, provided such breaches and defaults have not
been cured to the reasonable satisfaction of NBC Sub since
such earlier notice; or
(d) by NBC Sub or Partners, if the Closing has not taken
place by November 21, 1996;
provided, however, that the party seeking termination pursuant to
clauses (b) through (d) above (A) is not in breach of any of its
representations, warranties, covenants or agreements contained in
this Agreement and (B) has not caused such condition to have
become incapable of fulfillment through its own actions (or
failures to act) that directly result in a breach of a
representation, warranty or covenant by the other party contained
herein.
12.2 Liability. The termination of this Agreement under
subsection 12.1 shall not relieve any party of any liability for
breach of this Agreement prior to the date of termination.
13. Miscellaneous.
13.1 Notices. Any notice or other communication under
this Agreement shall be in writing (including by telecopy or like
transmission) and shall be considered given when delivered
personally, when mailed by registered mail (return receipt
requested) or when telecopied (with confirmation of transmission
having been received) to the parties at the addresses set forth
below (or at such other address as a party may specify by notice
to the other):
if to NBC Sub, to it at:
c/o National Broadcasting Company, Inc.
30 Rockefeller Plaza, Suite 5224
New York, New York 10112
Attention: Warren C. Jenson
Telecopy No.: (212) 246-5430
- 77 -<PAGE>
with copies to:
National Broadcasting Company, Inc.
30 Rockefeller Plaza, Suite 1022
New York, New York 10112
Attention: Stephen F. Stander, Esq.
Telecopy No.: (212) 664-6572; and
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Charles I. Cogut, Esq.
Telecopy No.: (212) 455-2502
if to Partners, to it at:
c/o CBS Inc.
51 West 52nd Street
New York, New York 10019
Attention: Peter W. Keegan
Telecopy No.: (212) 975-6488
with copies to:
CBS Inc.
51 West 52nd Street
New York, New York 10019
Attention: Ellen O. Kaden, Esq.
Telecopy No. (212) 975-7292; and
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: Robert A. Kindler, Esq.
Telecopy No.: (212) 474-3700.
13.2 Entire Agreement; No Third Party Beneficiaries.
This Agreement, including the Schedules hereto, the Exhibits
hereto and the letter dated the date hereof between the parties
hereto, (a) constitutes the entire agreement between the parties
with respect to its subject matter and supersedes any previous
agreement among them relating to the subject matter hereof (other
than the Confidentiality Letter Agreement dated August 30, 1994
between NBC and Partners and accepted and agreed to by CBS which
shall not be superseded hereby) and (b) is not intended to confer
upon any person, including any employee, other than the parties
hereto, NBC, CBS and their respective successors and assigns, any
rights or remedies hereunder.
- 78 -<PAGE>
13.3 Headings; Interpretation. (a) The table of
contents and section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction
or interpretation of this Agreement.
(b) When a reference is made in this Agreement to an
Article, Section, Schedule or Exhibit, such reference shall be to
an Article, Section, Schedule or Exhibit of this Agreement unless
otherwise indicated. Whenever the words "included", "includes"
or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation". All accounting
terms not defined in this Agreement shall have the meanings
determined by generally accepted accounting principles as in
effect from time to time. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The definitions
contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term, and
references to a person are also to its permitted successors and
assigns. Any agreement, instrument or statute defined or
referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as
from time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or consent
and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and
instruments incorporated therein.
13.4 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the law of the State of New
York applicable to agreements made and to be performed in New
York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law.
13.5 Amendment; Waiver. This Agreement may be amended,
supplemented or otherwise modified only by a written instrument
executed by the parties hereto. No waiver by a party of any of
the provisions hereof shall be effective unless explicitly set
forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to
this Agreement, including any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations,
warranties, covenants or agreements contained herein or in any
documents delivered or to be delivered pursuant
- 79 -<PAGE>
to this Agreement or in connection with the Closing hereunder.
The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
13.6 Separability. If any provision of this Agreement is
invalid or unenforceable, the balance of this Agreement shall
remain in full force and effect.
13.7 Assignment. Neither party to this Agreement may
assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the other party to
this Agreement. Any purported assignment in violation of this
subsection shall be void. Notwithstanding anything to the
contrary in this Agreement, but subject to the provisions of
subsection 5.3, Partners shall be permitted to assign its rights
to a Qualified Intermediary in accordance with subsection 5.3(b)
without the consent of the other party. Subject to the two
immediately preceding sentences of this subsection 13.7, this
Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective successors
and assigns.
13.8 Publicity. Promptly upon the execution of this
Agreement, the parties shall issue a joint press release with
respect to the transactions contemplated by this Agreement. So
long as this Agreement is in effect, neither party nor any of
their affiliates shall issue or cause the publication of any
press release or other public announcement with respect to the
transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably
withheld.
13.9 Jurisdiction. The courts of the State of New York
in New York County and the United States District Court for the
Southern District of New York shall have exclusive jurisdiction
over the parties with respect to any dispute or controversy
between them arising under or in connection with this Agreement
and, by execution and delivery of this Agreement, each of the
parties to this Agreement submits to the jurisdiction of those
courts, including the in personam and subject matter jurisdiction
of those courts, waives any objection to such jurisdiction on the
grounds of venue or forum non conveniens, the absence of in
personam or subject matter jurisdiction and any similar grounds,
consents to service of process by mail (in accordance with
subsection 13.1) or any other manner permitted by law. These
consents to jurisdiction shall not be deemed to confer rights on
any person other than the parties to this Agreement.
- 80 -<PAGE>
13.10 Specific Performance. Each of the parties to this
Agreement acknowledge that all the NBC Assets and the CBS Assets
(including the Stations) are of a special, unique and
extraordinary character, and that any breach of this Agreement by
any party hereto could not be compensated for by damages.
Accordingly, if any of the parties breaches its obligations under
this Agreement, the other parties hereto shall be entitled, in
addition to any other remedies that they may have, subject to
obtaining approval of the FCC, to enforcement of this Agreement
by a decree of specific performance requiring that the breaching
party fulfill its obligations under this Agreement.
13.11 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be signed by its duly authorized officer as of
the date first above written.
NBC STATIONS MANAGEMENT, INC.
By: /s/ Warren C. Jenson
Title: Treasurer
STATION PARTNERS
By: STATION HOLDINGS B INC.,
General Partner
By: /s/ Peter W. Keegan
Title: President
- 81 -<PAGE>
CONFORMED COPY
PURCHASE AGREEMENT
between
NBC SUBSIDIARY (KUTV-TV), INC.
and
STATION PARTNERS
Dated as of November 21, 1994
CMC-8686<PAGE>
TABLE OF CONTENTS
PAGE
1. Purchase of KUTV Partnership Interests and Stock . . . . . . . . . . 2
1.1 Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Payment of Purchase Price. . . . . . . . . . . . . . . . . . . 3
2. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Representations and Warranties by NBC Sub. . . . . . . . . . . . . . 4
3.1 Organization and Good Standing . . . . . . . . . . . . . . . . 4
3.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 No Conflict or Breach. . . . . . . . . . . . . . . . . . . . . 5
3.4 The Purchased Entities' Organization . . . . . . . . . . . . . 5
3.5 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Ownership of KUTV Partnership Interests
and KUTV Shares . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . 7
3.9 FCC Licenses . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Call Letters . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Operation of Station KUTV. . . . . . . . . . . . . . . . . . . 9
3.12 Financial Statements; Undisclosed Liabilities. . . . . . . . . 9
3.13 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 9
3.14 Tangible Property. . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Intangible Assets. . . . . . . . . . . . . . . . . . . . . . . 10
3.16 Litigation; Compliance with Laws . . . . . . . . . . . . . . . 11
3.17 List of Agreements, etc. . . . . . . . . . . . . . . . . . . . 11
3.18 Agreements Regarding Employees . . . . . . . . . . . . . . . . 12
3.19 Status of Agreements . . . . . . . . . . . . . . . . . . . . . 12
3.20 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . 12
3.21 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 13
3.22 Reports; Books and Records . . . . . . . . . . . . . . . . . . 15
3.23 Real Property. . . . . . . . . . . . . . . . . . . . . . . . . 15
3.24 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.25 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.26 Transactions with Affiliates . . . . . . . . . . . . . . . . . 18
3.27 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . 18
3.28 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.29 Remaining KUTV Interests; Drag-Along Rights. . . . . . . . . . 19
4. Representations and Warranties by Partners . . . . . . . . . . . . . 19
4.1 Organization and Good Standing . . . . . . . . . . . . . . . . 20
4.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(i)<PAGE>
4.3 No Conflict or Breach. . . . . . . . . . . . . . . . . . . . . 20
4.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.5 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . 21
5. Further Agreements of the Parties. . . . . . . . . . . . . . . . . . 21
5.1 Filings with the FCC . . . . . . . . . . . . . . . . . . . . . 21
5.2 Hart-Scott-Rodino Act. . . . . . . . . . . . . . . . . . . . . 22
5.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.4 Actions under the KUTV Purchase Agreement. . . . . . . . . . . 22
5.5 Pre-Closing Covenants. . . . . . . . . . . . . . . . . . . . . 23
5.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 25
5.7 Access to Information. . . . . . . . . . . . . . . . . . . . . 26
5.8 Consents; Assignment of Agreements . . . . . . . . . . . . . . 26
5.9 No Disclosures or Solicitation . . . . . . . . . . . . . . . . 26
5.10 NBC Affiliation Agreement. . . . . . . . . . . . . . . . . . . 27
5.11 Other Action . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.12 No Control . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.13 Amendment of KUTV Partnership Agreement;
Exercise of Drag-Along Rights . . . . . . . . . . . . . . . . 27
5.14 Property, Plant and Equipment. . . . . . . . . . . . . . . . . 28
5.15 Updated Schedules. . . . . . . . . . . . . . . . . . . . . . . 28
6. Conditions Precedent to Closing. . . . . . . . . . . . . . . . . . . 28
6.1 Conditions Precedent to the Obligations
of All Parties. . . . . . . . . . . . . . . . . . . . . . . . 28
6.2 Conditions Precedent to the Obligations
of Partners . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.3 Conditions Precedent to the Obligations
of NBC Sub. . . . . . . . . . . . . . . . . . . . . . . . . . 30
7. Survival of Representations and Warranties;
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 32
7.3 General Indemnification Provisions . . . . . . . . . . . . . . 34
8. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.2 Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.2 Entire Agreement; No Third Party Beneficiaries . . . . . . . . 39
9.3 Headings; Interpretation . . . . . . . . . . . . . . . . . . . 39
9.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 39
9.5 Amendment; Waiver. . . . . . . . . . . . . . . . . . . . . . . 40
(ii)<PAGE>
9.6 Separability . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.8 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.9 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.10 Specific Performance . . . . . . . . . . . . . . . . . . . . . 41
9.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 41
SCHEDULES
3.3(c) NBC Conflicts
3.4(b) Ownership of Purchased Entities
3.5(a) KUTV Conflicts
3.5(b) NBC Consents and Approvals
3.17 KUTV Agreements
3.18 Agreements Regarding Employees
3.21 Environmental Matters
3.25(d) Tax Returns Filed
4.3(c) CBS Conflicts
4.4 CBS Consents and Approvals
5.5(a)(iv) Permitted Liens
5.5(a)(v) Pre-Closing Transactions
EXHIBITS
A-1 Form of NBC Guarantee
A-2 Form of CBS Guarantee
B Amendments to KUTV Partnership Agreement
C-1 Form of Opinion of Counsel to NBC Sub and NBC
C-2 Form of Opinion of FCC Counsel to NBC Sub and NBC
D Form of Opinion of Counsel to Partners and CBS
(iii)<PAGE>
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of November 21, 1994 (this
"Agreement"), between NBC SUBSIDIARY (KUTV-TV), INC., a Delaware
corporation ("NBC Sub"), and STATION PARTNERS, a Delaware general
partnership ("Partners").
W I T N E S S E T H :
WHEREAS, National Broadcasting Company, Inc., a Delaware
corporation ("NBC"), owns all the issued and outstanding stock of
NBC Sub, and CBS Inc., a New York corporation ("CBS"), owns all
the issued and outstanding voting stock of the managing general
partner of Partners and indirectly owns in excess of 99% of the
aggregate partnership interests in Partners;
WHEREAS, immediately following the closing under the Asset
Exchange Agreement dated as of the date hereof between NBC
Stations Management, Inc. and Partners (the "Asset Exchange
Agreement"), Westinghouse Broadcasting Company, Inc., an Indiana
corporation, or one of its wholly-owned affiliates (collectively,
"Group W"), will acquire a controlling interest in the voting
stock of the managing general partner of Partners and indirect
ownership of approximately 50% of the aggregate partnership
interests in Partners;
WHEREAS, NBC Sub has the right pursuant to the KUTV
Purchase Agreement (as defined below) to acquire, on the closing
date referred to therein (the "KUTV Closing Date"), an aggregate
of 88% of the partnership interests (constituting 100% of the
general partnership interests) in KUTV, L.P., a Delaware limited
partnership (the "Partnership") which owns and operates
television station KUTV, Salt Lake City, Utah ("Station KUTV"),
directly from the holders thereof and indirectly through the
acquisition of all the outstanding shares of capital stock of
VS&A-KUTV, Inc., a Delaware corporation ("VS&A-KUTV");
WHEREAS, NBC Sub desires to sell, and Partners desires to
purchase, all the partnership interests in the Partnership and
all the shares of capital stock of VS&A-KUTV to be purchased by
NBC Sub pursuant to the KUTV Purchase Agreement, subject to the
terms and conditions set forth therein; and
WHEREAS, simultaneously with the execution and delivery of
this Agreement, each of NBC and CBS is executing a guarantee (the
"NBC Guarantee" and the "CBS Guarantee", respectively), in the
form of Exhibit A-1 or A-2 attached hereto, as the case may be,
in favor of Partners and NBC Sub, respectively, pursuant to which
NBC and CBS agree to guarantee the performance by NBC Sub
- 1 -<PAGE>
and Partners, respectively, of their respective obligations under
this Agreement;
NOW THEREFORE, in consideration of the premises and of the
mutual covenants of the parties hereto, it is hereby agreed as
follows:
1. Purchase of KUTV Partnership Interests and Stock.
1.1 Purchase. Subject to the satisfaction or waiver of
the conditions set forth in this Agreement, and on the basis of
the representations, warranties, covenants and agreements set
forth in this Agreement, at the Closing (as defined in Section
2), NBC Sub shall sell, convey, assign, transfer and deliver to
Partners, and Partners shall purchase and acquire from NBC Sub:
(a) all the partnership interests in the Partnership to
be purchased by NBC Sub (the "KUTV Partnership
Interests") pursuant to the Purchase Agreement, dated
August 12, 1994 (the "KUTV Purchase Agreement";
capitalized terms used herein which are not otherwise
defined are used as defined therein), among VS&A
Communications Partners, L.P., a Delaware limited
partnership (the "Agent"), VS&A-Hughes, Inc., a
Delaware corporation, Smith Barney Investors, L.P.,
Primerica Life Insurance Company, Paul Hughes, and
The Travelers Indemnity Company (collectively
referred to as the "KUTV Sellers"); VS&A-Hughes,
L.P., a Delaware limited partnership ("Hughes,
L.P."); KUTV, Inc., a Nevada corporation; and NBC
Sub, subject to the terms and conditions set forth
therein; and
(b) all the shares of capital stock of VS&A-KUTV to be
purchased by NBC Sub (the "KUTV Shares"; and together
with the KUTV Partnership Interests, the "KUTV
Interests") pursuant to the KUTV Purchase Agreement,
subject to the terms and conditions set forth
therein.
1.2 Purchase Price. The aggregate purchase price for
all the KUTV Interests shall be equal to the sum of:
(i) the aggregate purchase price to be paid by NBC Sub
for such KUTV Interests as provided in Section 2 of
the KUTV Purchase Agreement (after giving effect to
all adjustments thereto provided for in Section 3
thereof made as of the Closing Date);
(ii) any amounts paid by NBC Sub in discharge of the
indebtedness for borrowed money under the Credit
Agreement dated as of March 18, 1994 (the "Bank of
- 2 -<PAGE>
Montreal Credit Agreement") among Hughes
Broadcasting Partners, the Partnership and KUTV
Real Estate Company, L.L.C. (as Borrowers) and Bank
of Montreal (as Agent) and First Union National
Bank of North Carolina (as Co-Agent), including
principal, interest, fees, expenses and any
prepayment penalty or indemnity referred to in item
1 of Schedule 2 to the KUTV Purchase Agreement,
whether such amounts are paid directly to the
lenders under the Bank of Montreal Credit Agreement
or by way of additional equity contributions to the
Partnership which are applied solely for such
purpose as contemplated by Section 7.13 of the KUTV
Purchase Agreement, it being understood that any
amounts referred to in this clause (ii) shall be
net of any additional debt of the Partnership which
is put in place at the KUTV Closing the proceeds of
which are paid or distributed to NBC Sub;
(iii) the amount of any reduction as of the Closing Date
in the principal amount of any other items referred
to on schedule 2 to the KUTV Purchase Agreement and
of the non-recourse debt maintained by the
Partnership pursuant to Section 7.3(b) of the KUTV
Partnership Agreement (the "Non-Recourse Debt") as
compared to the respective principal amounts of
such debt which were outstanding on the KUTV
Closing Date occurring other than as a result of a
voluntary prepayment; and
(iv) the amount of any reduction as of the Closing Date
in the amount of the KUTV Equity (as defined in the
KUTV Purchase Agreement) which is made pursuant to
subsection 5.5 of the KUTV Partnership Agreement
and which is based upon an amount of Losses (as
defined in the KUTV Purchase Agreement) which has
been finally determined under the KUTV Purchase
Agreement.
1.3 Payment of Purchase Price. The purchase price for
the KUTV Interests shall be paid at the Closing (as defined in
Section 2 below) by Partners to NBC Sub (or to the designee or
designees of NBC Sub), by wire transfer of federal reserve funds;
provided that to the extent that (i) any payment is made by NBC
Sub to the Agent pursuant to subsection 3.2(b) or 3.2(c) of the
KUTV Purchase Agreement (including any interest thereon as
provided in the second paragraph of subsection 3.2 thereof)
following the Closing, then, within five days of Partners'
receipt of written notice thereof from NBC Sub, Partners shall
pay to NBC Sub (or its designees), by wire transfer or delivery
of a bank or certified check in immediately available funds, an
- 3 -<PAGE>
amount equal to the amount paid by NBC Sub pursuant thereto, and
(ii) any payment is made to NBC Sub by the Agent pursuant to
subsection 3.2(b) or 3.2(c) of the KUTV Purchase Agreement
(including any interest thereon as provided in the second
paragraph of subsection 3.2 thereof) following the Closing, then,
within five days of receipt thereof, NBC Sub shall pay to
Partners, by wire transfer or delivery of a bank or certified
check in immediately available funds, an amount equal to the
amount received by NBC Sub pursuant thereto; and provided further
that if any amounts were withheld from a distribution or payment
that would otherwise have been made to KUTV, Inc. based upon a
Buyer Indemnified Party (as defined in the KUTV Purchase
Agreement) having timely given a notice of a claim for Losses (as
defined in the KUTV Purchase Agreement) the amount of which had
not been finally determined as of the Closing, then, within five
days after final determination of the amount of such Losses,
Partners shall pay to NBC Sub (or its designees), by wire
transfer or delivery of a bank or certified check in immediately
available funds, an amount equal to any amounts so withheld that
are in excess of 12% of such Losses as finally determined.
2. Closing. The closing with respect to the
transactions provided for in this Agreement, upon the terms and
subject to the conditions set forth in this Agreement (the
"Closing"), shall take place at the offices of Simpson Thacher &
Bartlett located at 425 Lexington Avenue, New York, New York
10017-3954 at 10:00 a.m., New York City time, on the last
business day of the calendar month in which the last of the
conditions specified in subsections 6.1, 6.2 and 6.3 has been
fulfilled (or waived), except that if the last business day is a
holiday, the Closing shall take place on the first business day
thereafter, or at such other time and place as shall be agreed
upon by the parties hereto. The actual date of the Closing is
herein called the "Closing Date". At the Closing, NBC Sub shall
execute (or cause to be executed) and deliver the documents
referred to in subsection 6.2 and Partners shall execute (or
cause to be executed) and deliver the documents referred to in
subsection 6.3.
3. Representations and Warranties by NBC Sub.
NBC Sub represents and warrants to Partners as follows:
3.1 Organization and Good Standing. NBC Sub is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. NBC Sub has all
requisite corporate power and authority to enter into this
Agreement and any other agreement contemplated hereby and to
perform its obligations hereunder and thereunder.
- 4 -<PAGE>
3.2 Authority. The execution, delivery and
performance by it of this Agreement and any other agreements or
documents executed or to be executed by it in connection
herewith, and the consummation of the transactions contemplated
hereby and thereby, have been duly and validly authorized by all
necessary corporate and stockholder action. This Agreement has
been, and each other agreement or document to be executed by it
in connection herewith will be, duly executed and delivered by it
and constitutes, or will constitute, a legal, valid and binding
obligation of NBC Sub in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
3.3 No Conflict or Breach. The execution, delivery and
performance of this Agreement and any other agreements
contemplated hereby by it and the consummation by it of the
transactions contemplated hereby and thereby do not and will not:
(a) conflict with or constitute a violation of the
certificate of incorporation or bylaws of NBC Sub;
(b) conflict with or constitute a violation of (with or
without the giving of notice or the lapse of time or both)
any provision of any law, judgment, order, decree, rule or
regulation of any legislative body, court, governmental or
regulatory authority or arbitrator which is applicable to or
relates to NBC Sub; or
(c) with or without the giving of notice or the lapse of
time or both, violate or conflict with, constitute a default
under, result in a breach, acceleration or termination of
any provision of, or, except as set forth on Schedule 3.3(c)
hereto, require notice to or the consent of any third party
under, any contract, agreement, commitment, indenture,
mortgage, deed of trust, lease, licensing agreement, note or
other instrument or obligation to which NBC Sub is a party
or by which NBC Sub is bound, which could, individually or
in the aggregate, reasonably be expected to have a material
adverse effect upon NBC, NBC Sub or the ability of NBC Sub
to perform its obligations under this Agreement or any other
agreement contemplated hereby.
3.4 The Purchased Entities' Organization.
(a) The Partnership is a limited partnership duly
organized, validly existing and in good standing under the
law of Delaware. During the period commencing on the KUTV
- 5 -<PAGE>
Closing Date and ending immediately prior to the Closing,
the Amended and Restated Limited Partnership Agreement of
the Partnership to be dated as of the KUTV Closing Date (the
"KUTV Partnership Agreement") will be in effect without
further amendment or modification from the form attached as
exhibit 7.14 to the KUTV Purchase Agreement, except for any
amendments or modifications permitted by subsection 5.4
hereof or set forth on Exhibit B hereto. The organizational
structure of the other Purchased Entities (the
"Subsidiaries") is set forth in schedule 5.4 to the KUTV
Purchase Agreement.
(b) Except as set forth on schedule 5.4(b) to the KUTV
Purchase Agreement, the Purchased Entities identified on
schedule 5.4 to the KUTV Purchase Agreement are the only
corporations, partnerships, joint ventures or other entities
in which the Partnership, VS&A-KUTV and the other Purchased
Entities own any partnership interests, capital stock or
other equity interest. All the outstanding partnership
interests or capital stock of each Purchased Entity are
validly issued, fully paid and non-assessable, are free from
and were not issued in violation of any preemptive rights,
and, immediately prior to the Closing, will be owned of
record and beneficially by the persons identified on
Schedule 3.4(b) hereto.
(c) Each of the Purchased Entities is duly organized,
validly existing and in good standing under the law of its
jurisdiction of organization and has all requisite power and
authority to own, operate and lease its assets and to
conduct its business as presently conducted. The
Partnership is duly qualified to do business as a foreign
limited partnership in the state of Utah and each Purchased
Entity is duly qualified to do business as a foreign entity
and is in good standing in each jurisdiction where the
failure to do so could reasonably be expected to have a
Material Adverse Effect. As used in this Agreement, the
term "Material Adverse Effect" means a material adverse
effect on the business, results of operations or financial
or other condition of the Purchased Entities taken as a
whole or Station KUTV or on the ability of NBC Sub to
perform its obligations under this Agreement.
3.5 No Conflicts. (a) Subject to receipt of the
consents and approvals referred to in schedule 5.5 of the KUTV
Purchase Agreement and in Schedule 3.5(a) hereto, the execution,
delivery and performance of this Agreement by NBC Sub and the
acquisition of the KUTV Partnership Interests, the KUTV Shares
and, if NBC Sub shall exercise its drag-along rights in
accordance with subsection 5.13(b), the Remaining KUTV Interests
(as defined in subsection 3.29) by Partners will not adversely
- 6 -<PAGE>
affect the properties or assets of the Purchased Entities or the
operation of Station KUTV, will not violate or conflict with any
provision of law, rule or regulation applicable to the Purchased
Entities or the assets or business of the Purchased Entities or
the operation of Station KUTV, will not conflict with, or result
in the breach or termination of, or constitute a default under,
or increase any of the Purchased Entities' obligations or
diminish its rights under, any license, lease, agreement,
commitment or other instrument, or any order, judgment or decree,
to which any of them is a party or by which any of them is bound
or subject, and will not result in the creation of any lien,
security interest, charge or encumbrance upon any of the KUTV
Partnership Interests or the KUTV Shares or any of the assets of
any of the Purchased Entities.
(b) Except as set forth on Schedule 3.5(b), no consent,
approval or authorization of, or designation, declaration or
filing with, or notice to, any governmental authority or third
party is required on the part of NBC Sub or the Purchased
Entities in connection with the execution, delivery and
performance of this Agreement or any other agreement contemplated
hereby and the consummation of the transactions contemplated
hereby and thereby, except for the filing with the Federal
Communications Commission ("FCC") referred to in Section 5.1 and,
if required, the filings with the Federal Trade Commission
("FTC") and the Department of Justice ("DOJ") referred to in
Section 5.2.
3.6 Capitalization. The Partnership holds a 99%
interest in KUTV Real Estate Company, L.L.C. ("KUTV Real
Estate"), and the remaining 1% interest in KUTV Real Estate is
owned by VS&A-KUTV. There are no outstanding subscriptions,
options or rights of any kind to acquire any partnership
interests or any stock of the Purchased Entities, nor are there
any agreements, arrangements or other obligations that might
require (i) NBC Sub to sell or otherwise transfer any of the KUTV
Partnership Interests or the KUTV Shares, except as contemplated
by this Agreement, or (ii) any of the Purchased Entities to sell
or otherwise transfer any partnership interest, capital stock or
other equity interest in any Purchased Entity. Except as set
forth on schedule 5.6 to the KUTV Purchase Agreement, no
Purchased Entity is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of
its capital stock or partnership interests. There are no
existing agreements, arrangements or other obligations that
require or permit any of the KUTV Partnership Interests or the
KUTV Shares to be voted by or at the discretion of anyone else,
and there are no restrictions of any kind on the transfer of the
KUTV Partnership Interests or the KUTV Shares, except as may be
imposed by the Securities Act of 1933, as amended, and applicable
- 7 -<PAGE>
state securities laws and except, as of the date hereof, as set
forth in the Partnership's Amended and Restated Limited
Partnership Agreement dated December 31, 1993 (the "Original KUTV
Partnership Agreement") and, as of the Closing Date, as set forth
in the KUTV Partnership Agreement.
3.7 Ownership of KUTV Partnership Interests and KUTV
Shares. At the Closing, NBC Sub will own, free and clear of any
claim, lien, security interest, mortgage or other encumbrance
(collectively "Liens"), the KUTV Partnership Interests and the
KUTV Shares to be sold by it pursuant to this Agreement and NBC
Sub will own, directly or indirectly, all the partnership
interests in the Partnership other than the interest of KUTV,
Inc. set forth in the KUTV Partnership Agreement. During the
period commencing on the KUTV Closing Date and ending immediately
prior to the Closing, KUTV, Inc. will be the sole limited
partner, and NBC Sub and VS&A-KUTV will be the only general
partners, of the Partnership. The KUTV Shares are all of the
issued and outstanding shares of VS&A-KUTV. At the Closing,
Partners will receive valid title to the KUTV Partnership
Interests and the KUTV Shares, free and clear of any Lien.
3.8 Title to Assets. Except as set forth on Schedule
5.8 to the KUTV Purchase Agreement and except for assets disposed
of in the ordinary course of business consistent with past
operations of the Purchased Entities, the Purchased Entities own
outright, free and clear of any Liens, all property used in their
respective businesses, other than the Real Property (as defined
in section 3.23).
3.9 FCC Licenses.
(a) The Partnership indirectly holds the licenses issued
by the FCC (the "FCC Licenses") and all other material
licenses, permits and authorizations necessary for or used
in the ownership or operations of Station KUTV, and each of
the FCC Licenses is, and all such licenses, permits and
authorizations are, in full force and effect. Schedule 5.9
to the KUTV Purchase Agreement contains a true and complete
list of the FCC Licenses currently in effect as of the date
hereof and all such licenses, permits and authorizations
(showing in each case, the expiration date). Except as
contemplated by Section 7.1 of the KUTV Purchase Agreement,
no application, action or proceeding is pending for the
renewal or modification of any of the FCC Licenses or any of
such licenses, permits or authorizations, and no
application, petition, objection, opposition, action or
proceeding is pending or, to the best of NBC Sub's
knowledge, threatened that may result in the denial of an
application for renewal, the revocation, modification,
nonrenewal or suspension of any of the FCC Licenses or any
- 8 -<PAGE>
of such licenses, permits or authorizations, the issuance of
a cease-and-desist order, or the imposition of any
administrative or judicial sanction with respect to NBC Sub,
the Purchased Entities or Station KUTV that may materially
adversely affect the rights of the Partnership under any
such FCC Licenses, permits or authorizations. In the event
of any such action, or the filing or issuance of any such
action or order against any such entity, or of NBC Sub's
learning of the threat thereof, NBC Sub shall notify
Partners of same in writing and shall cause such entity to
take all reasonable measures, at the Partnership's expense,
to contest in good faith or seek removal or rescission of
such action or order.
(b) All documents required by 47 C.F.R. Section 73.3526
to be kept in the public inspection file are in such file,
other than documents the absence of which in the aggregate
would be immaterial to the business or operations of Station
KUTV or the ability of Station KUTV to renew its FCC
Licenses, and such file will be maintained in proper order
and complete up to and through the Closing Date, except for
such immaterial documents.
3.10 Call Letters. The Partnership has the right to the
use of the call letters "KUTV", pursuant to the rules and
regulations of the FCC.
3.11 Operation of Station KUTV. Station KUTV is being
operated in accordance with the FCC Licenses and is being
operated in all material respects in compliance with the
Communications Act of 1934 and the rules, regulations and
policies thereunder and all records, documents and logs that are
required to be maintained pursuant to such rules, regulations and
policies have been properly maintained, except those the absence
of which in the aggregate would be immaterial to the business or
operations of Station KUTV or the ability of Station KUTV to
renew its FCC Licenses.
3.12 Financial Statements; Undisclosed Liabilities. NBC
Sub has previously delivered or caused to be delivered to
Partners the financial statements described in schedule 5.12 to
the KUTV Purchase Agreement. Except as set forth on schedule
5.12 to the KUTV Purchase Agreement, all those financial
statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and
fairly present the financial position, the results of operations
and changes in financial position of the entities covered thereby
as of the dates and for the periods indicated. Except to the
extent reflected or reserved for in the unaudited balance sheets
of the Partnership as of June 30, 1994, or as disclosed on
schedule 5.12 to the KUTV Purchase Agreement, neither the
- 9 -<PAGE>
Partnership nor KUTV Real Estate has any liability or obligation
of any kind, whether accrued, absolute, fixed or contingent,
known or unknown, other than (a) liabilities and obligations
under leases, commitments and other agreements entered into in
the ordinary course of business, (b) liabilities and obligations
under leases, commitments and other agreements otherwise entered
into in accordance with subsection 5.5 hereof, (c) liabilities
and obligations incurred in the ordinary course of business since
June 30, 1994 which in the aggregate could not reasonably be
expected to have a Material Adverse Effect, and (d) other
liabilities and obligations that individually or in the aggregate
are not material in amount or are set forth in the other
schedules to the KUTV Purchase Agreement or in the Schedules to
this Agreement. VS&A-KUTV has no assets or liabilities or
obligations of any kind, whether accrued, absolute, fixed or
contingent, known or unknown, other than its interests in the
Purchased Entities. As of the Closing all amounts payable by
Station KUTV on or before the date of the Closing under the terms
of Station KUTV's programming agreements will have been paid.
3.13 Absence of Certain Changes. Since June 30, 1994,
the business of Station KUTV has been operated in the usual and
ordinary course consistent with past practice and, except as set
forth on schedule 5.13 to the KUTV Purchase Agreement:
(i) there has been no event or condition that
individually or in the aggregate has had or could reasonably
be expected to have a Material Adverse Effect;
(ii) none of the Purchased Entities has entered into any
transaction or incurred any liability or obligation, except
in the ordinary course of its business;
(iii) the Purchased Entities have not sold or transferred
any of the assets they own, other than in the ordinary
course of business consistent with past practice;
(iv) none of the Purchased Entities has incurred any
indebtedness other than indebtedness to trade creditors
incurred in the ordinary course of business;
(v) the Purchased Entities have not granted or agreed to
grant any increase in any rate or rates of salaries or
compensation or other benefits or bonuses payable to its
employees, except for increases in the ordinary course of
business in accordance with its past employment practices,
nor have they agreed to effect any changes in Station KUTV's
management personnel, policies or employee benefits;
(vi) none of the Purchased Entities has paid, declared or
set aside any distribution, loan, management fee or other
direct or indirect payment or transfer of any kind to NBC
Sub or to KUTV, Inc.;
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(vii) none of the Purchased Entities has changed its
accounting policies or procedures as in effect on December
31, 1993;
(viii) none of the Purchased Entities has repurchased,
redeemed or otherwise acquired any partnership interests or
other securities or any Purchased Entity; and
(ix) none of the Purchased Entities has agreed, whether
in writing or otherwise, to take any action prohibited in
this subsection 3.13.
3.14 Tangible Property. Except as set forth on schedule
5.14 to the KUTV Purchase Agreement, all equipment and other
tangible assets owned by any of the Purchased Entities is in
reasonably good operating condition and in reasonably good
condition of maintenance and repair.
3.15 Intangible Assets. Schedule 5.15 to the KUTV
Purchase Agreement contains a complete list of the trademarks,
trade names, logos, jingles and slogans used in the operations of
Station KUTV. The Partnership owns free and clear of any Liens,
each of the trademarks, trade names, logos, jingles and slogans
shown on schedule 5.15 to the KUTV Purchase Agreement to be owned
by it. Station KUTV is not being operated in a manner that
infringes any patent, copyright or trademark of any third party
or otherwise violates the rights of any third party, and, to the
best knowledge of NBC Sub, no claim has been made or threatened
alleging any such violation. To the best of the knowledge of NBC
Sub, there has been no material violation by others of any right
of the Partnership in any trademark, trade name, logo, jingle or
slogan used in the operations of Station KUTV.
3.16 Litigation; Compliance with Laws. Except as set
forth on schedule 5.16 to the KUTV Purchase Agreement, (a) there
is no claim, litigation, proceeding or governmental investigation
pending or, to the best of the knowledge of NBC Sub, threatened,
or any order, injunction or decree outstanding, against any of
the Purchased Entities, which if adversely determined could
individually, or in the aggregate, (i) reasonably be expected to
have a Material Adverse Effect, (ii) materially delay approval by
the FCC, FTC or DOJ of the transactions contemplated by this
Agreement, or (iii) prevent the consummation of the transactions
contemplated by this Agreement, (b) each Purchased Entity is in
compliance with all other laws, statutes, rules, regulations,
orders and licensing requirements of federal, state, local and
foreign agencies and authorities applicable to the business,
properties and operations of Station KUTV (including those
relating to antitrust and trade regulation, civil rights, labor
and discrimination, safety and health and Environmental Laws),
except for any instances of non-compliance which individually or
- 11 -<PAGE>
in the aggregate could not reasonably be expected to have a
Material Adverse Effect, and (c) no notice has been received by
any of the Purchased Entities alleging any such non-compliance.
3.17 List of Agreements, etc. Schedules 5.17 and 5.18
to the KUTV Purchase Agreement and Schedule 3.17 hereto together
contain, with respect to the Purchased Entities, a complete list
of: (a) all commitments and other agreements for the purchase of
materials, supplies or equipment, other than commitments and
other agreements that were entered into in the ordinary course of
business and involve an expenditure of less than $100,000 for any
one commitment or two or more related commitments; (b) all notes
and agreements relating to any indebtedness, off-balance sheet
financing or interest rate or currency swaps, caps, collars or
other derivative agreements of any of the Purchased Entities; (c)
all leases or other rental agreements under which any of the
Purchased Entities is either lessor or lessee that call for
annual lease payments in excess of $50,000 individually or are
otherwise material to the operations or business of Station KUTV;
(d) all network affiliation agreements; (e) each "barter" or
"trade" agreement involving in excess of $50,000; (f) all
collective bargaining agreements; (g) all commitments and other
agreements relating to the acquisition of programming rights; (h)
all employment and consulting agreements that provide for
compensation in excess of $50,000 a year; and (i) all other
agreements, commitments and understandings (written or oral) that
require payment by any of the Purchased Entities of more than
$100,000 individually or $500,000 in the aggregate or cannot be
terminated by it on less than 60 days notice without liability.
True and complete copies of all written leases, commitments and
other agreements referred to on schedule 5.17 and 5.18 to the
KUTV Purchase Agreement and on Schedule 3.17 hereto and all
organizational documents for the Purchased Entities have been
delivered to Partners or its representatives.
3.18 Agreements Regarding Employees. Except as set
forth in schedule 5.18 to the KUTV Purchase Agreement, in
Schedule 3.18 hereto or in any employment agreement of which a
copy has been furnished to Partners or its representatives, none
of the Purchased Entities is a party to or bound by any fringe
benefit or other non-cash compensation plan, or any pension,
thrift, annuity, retirement, savings, profit sharing or deferred
compensation plan or agreement, or any bonus, vacation, holiday,
sick leave, group insurance, health or other personal insurance
or other incentive or benefit agreement, plan or arrangement.
Except as set forth on schedule 5.18 to the KUTV Purchase
Agreement or in any employment agreement of which a copy has been
furnished to Partners or its representatives, none of the
Purchased Entities has any severance policy and no employee of
Station KUTV is entitled to any severance payment, either by law
or by agreement, upon the termination of his or her employment.
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Except as set forth on schedule 5.18 to the KUTV Purchase
Agreement or in any employment agreement of which a copy has been
furnished to Partners or its representatives, no employment
agreement provides for the payment to any employee of the
Purchased Entities of any money or other property or rights or
accelerates or provides any other rights or benefits as a result
of the transactions contemplated by this Agreement. Except as
set forth on schedule 5.18 to the KUTV Purchase Agreement, no
employee of Station KUTV is represented by any union or other
collective bargaining agent and there are no collective
bargaining or other labor agreements with respect to any employee
of Station KUTV, and to the best of the knowledge of NBC Sub, no
union is attempting to organize any such employees.
3.19 Status of Agreements. All leases, commitments and
other agreements to which any of the Purchased Entities is a
party or by which any of the Purchased Entities is bound were
entered into by it in the ordinary course of business. Each of
the agreements, commitments and leases referred to in subsections
3.17 and 3.18 is presently in full force and effect in accordance
with its terms and none of the Purchased Entities is in default,
and, to the best of the knowledge of NBC Sub, no other party is
in default, under any agreement referred to in subsections 3.17
or 3.18, which default individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect. No
party to any of the leases, commitments and other agreements
referred to in subsections 3.17 and 3.18 has made, asserted or
has any defense, setoff or counterclaim under any of those
agreements or has exercised any option granted to it to cancel or
terminate its agreement, to shorten the term of its agreement or
to renew or extend the term of its agreement and none of the
Purchased Entities has received any notice to that effect.
3.20 Labor Matters. Except as set forth on schedule
5.20 to the KUTV Purchase Agreement, (a) the Purchased Entities
are in compliance with all applicable laws respecting employment
and employment practices, terms and conditions of employment and
wages and hours, and neither of them is engaged in any unfair
labor practice, except where the failure to be in such
compliance, or being engaged in an unfair labor practice, could
not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; (b) there is no unfair
labor practice charge or complaint against the Purchased Entities
pending before the National Labor Relations Board, any state
labor relations board or any court or tribunal and, to the best
of the knowledge of NBC Sub, none is or has been threatened; (c)
there is no labor strike, dispute, request for representation,
slowdown or stoppage actually pending against or affecting the
Purchased Entities or Station KUTV and, to the best of the
knowledge of NBC Sub, none is or has been threatened; and (d) no
- 13 -<PAGE>
grievances that individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect and no arbitration
proceeding arising out of or under any collective bargaining
agreement is pending and, to the best of the knowledge of NBC
Sub, none is or has been threatened.
3.21 Environmental Matters.
(a) Except as set forth on schedule 5.21 to the KUTV
Purchase Agreement or on Schedule 3.21 hereto, the Purchased
Entities and all the property owned, used or leased by the
Purchased Entities is in compliance with all material
federal, state and local laws, regulations, rules, orders,
decrees, ordinances and common law relating to pollution,
the protection of human health or the environment, including
laws relating to emissions, discharges, releases or
threatened releases of Materials of Environmental Concern
(as defined below), or otherwise relating to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of
Environmental Concern ("Environmental Laws"), except where
such violations or liabilities, individually or in the
aggregate, could not reasonably be expected to have a
Material Adverse Effect. "Materials of Environmental
Concern" means chemicals, pollutants, contaminants, wastes,
radiation (including radio-frequency radiation), toxic
substances, petroleum and petroleum products and any other
substance regulated by or that could result in liability
under any Environmental Laws.
(b) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including
the release, emission, discharge or disposal of any Material
of Environmental Concern, that could form the basis of any
claim or proceeding against any of the Purchased Entities
that could reasonably be expected to have a Material Adverse
Effect (or that could form the basis after the Closing of
any material claim against Partners arising out of actions,
activities, circumstances, conditions, events or incidents
prior to the Closing).
(c) Except as set forth on Schedule 5.21 to the KUTV
Purchase Agreement or on Schedule 3.21 hereto, (a) there are
no underground storage tanks located on property owned or
leased by any of the Purchased Entities, (b) there is no
asbestos contained in or forming part of any building,
building component, structure or office space owned or
leased by any of the Purchased Entities, (c) no
polychlorinated biphenyls (PCBs) are used or stored at any
property owned or leased by any of the Purchased Entities
and (d) none of the electrical equipment located at the real
- 14 -<PAGE>
property owned or leased by any of the Purchased Entities
contains any PCBs, except in each case, in amounts that,
individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. Except as set
forth on schedule 5.21 to the KUTV Purchase Agreement or on
Schedule 3.21 hereto, there are no on-site or off-site
locations where any of the Purchased Entities has stored,
disposed or arranged for the disposal of Materials of
Environmental Concern.
(d) Except as set forth on schedule 5.21 to the KUTV
Purchase Agreement or on Schedule 3.21 hereto, none of NBC
Sub or the Purchased Entities has received any notice of
violation, alleged violation, noncompliance, liability or
potential liability regarding environmental matters or
compliance with Environmental Laws.
(e) Materials of Environmental Concern have not been
transported or disposed of from the property now or
previously owned or used by any KUTV Seller or the Purchased
Entities in a manner or to a location which could reasonably
be expected to give rise to liability under Environmental
Laws which liability could reasonably be expected to have a
Material Adverse Effect.
(f) The Purchased Entities hold, and are in compliance
with, all permits, licenses, registrations or other
authorizations required under Environmental Laws ("Necessary
Permits"), except where the failure to hold or be in
compliance with any Necessary Permit could not reasonably be
expected to have, individually or in the aggregate, a
Material Adverse Effect. Except as set forth on schedule
5.21 to the KUTV Purchase Agreement or on Schedule 3.21
hereto, no modification, revocation, reissuance, alteration,
transfer or amendment of the Necessary Permits, or any
review by, or approval of, any third party of the Necessary
Permits, is required in connection with the execution or
delivery by NBC Sub of this Agreement or the consummation of
the transactions contemplated hereby or the operation, use
and enjoyment of the Purchased Entities by Partners
following such consummation.
3.22 Reports; Books and Records.
(a) All material returns, reports and statements required
to be filed by the Purchased Entities with the FCC have been
filed and complied with and are complete and correct in all
material respects as filed.
(b) The books and records of and relating to each
Purchased Entity have been maintained in accordance with
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good business practice on a consistent basis and accurately
reflect and evidence the transactions of such Purchased
Entity in all respects.
3.23 Real Property.
(a) Owned. Schedule 5.23(a) to the KUTV Purchase
Agreement contains a description of all real property owned
by any of the Purchased Entities (the "Land"), including all
improvements located thereon (the "Improvements"; the Land
and the Improvements collectively, the "Real Property").
(b) Leased. Schedule 5.23(b) to the KUTV Purchase
Agreement contains a description of all real property leased
by any of the Purchased Entities (the leases pursuant to
which such real property is leased being the "Real Property
Leases"). Each of the Real Property Leases is valid,
binding and enforceable in accordance with its terms and in
full force and effect and, to the best of the knowledge of
NBC Sub, there are no defaults thereunder and no
circumstances or events have occurred which, with notice of
the passage of time or both, could constitute defaults under
the Real Property Leases.
(c) Improvements. All the Improvements and the
improvements leased by the Purchased Entities pursuant to
the Real Property Leases are in compliance with applicable
zoning and land use laws, ordinances and regulations
necessary to conduct the operations of the Purchase Entities
thereon as presently conducted, except to the extent that
violations, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect
(d) Title to the Real Property. Each of the Purchased
Entities has good and marketable title to all the Real
Property owned by it, free and clear of any Liens of any
nature other than:
(i) easements which do not materially adversely
affect the full use and enjoyment of the Real Property or
the purposes for which it is currently used;
(ii) liens for real estate taxes and assessments not
yet due and payable; and
(iii) as set forth on schedule 5.23(d) to the KUTV
Purchase Agreement.
3.24 Insurance. Station KUTV and KUTV Real Estate have
maintained in full force and effect property damage, liability
and other insurance with financially sound and
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reputable insurers at levels of coverage reasonable and customary
in the broadcasting industry.
3.25 Taxes.
(a) Each of the Purchased Entities has timely filed in
accordance with all applicable laws all Tax returns that it,
or any group of which it was a member, was required to file.
All such Tax returns were correct and complete in all
material respects. All taxes owed by any of the Purchased
Entities (whether or not shown on any Tax return) have been
paid. "Tax" or "Taxes" means any federal, state, local,
foreign or other governmental income, profits, franchise,
sales, use, payroll, withholding, occupation, property,
excise, transfer or other taxes, including interest,
penalties and statutory additions related thereto. Each of
the Purchased Entities has established, or will have
established as of the Closing Date, reserves that, in the
aggregate, are equal in amount to all Taxes not yet due and
payable with respect to all taxable periods or portions
thereof ending on or before the Closing Date, except to the
extent previously paid. No claim has ever been made by a
taxing authority in a jurisdiction where any Purchased
Entity does not file Tax returns that it is or may be
subject to taxation by that jurisdiction. There are no Tax
liens on any of the assets of any of the Purchased Entities.
(b) Each of the Purchased Entities has withheld and paid
all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third
party.
(c) Except as disclosed on schedule 5.25 to the KUTV
Purchase Agreement, there is currently no audit or
examination of any Tax return or Tax liability of any
Purchased Entity and no additional Tax liability of any
Purchased Entity has been asserted or assessed by any taxing
authority.
(d) Schedule 5.25 to the KUTV Purchase Agreement and
Schedule 3.25(d) hereto list all federal, state, local and
foreign income tax returns filed with respect to any of the
Purchased Entities, indicates those returns that have been
audited and indicates those returns which currently are
under audit. NBC Sub has delivered to Partners or its
representatives correct and complete copies of all federal
income Tax returns and examination reports with respect to
the Purchased Entities that were furnished to NBC Sub.
(e) Except as disclosed on schedule 5.25 to the KUTV
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Purchase Agreement, there has been no waiver or extension of
any period of limitations with respect to any Tax made by or
on behalf of any Purchased Entity.
(f) None of the Purchased Entities is a party to any tax
allocation or tax sharing agreement, other than any tax
sharing agreement or arrangement between NBC Sub or any of
its affiliates, on the one hand, and any of the Purchased
Entities, on the other hand, with respect to the income of
the Purchased Entities for the period commencing on the KUTV
Closing Date and ending on the Closing Date. None of the
Purchased Entities (1) has been a member of an affiliated
group filing a consolidated federal income Tax return or (2)
has any liability for the Taxes of any person under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or
otherwise.
(g) None of the Purchased Entities has filed a consent
under Code section 341(f) concerning collapsible
corporations. None of the Purchased Entities has made, is
obligated to make or is a party to an agreement which could
obligate it to make any payments that, as a result of
applicability of Code section 280G, will not be deductible.
NBC Sub is not a foreign person. None of the Purchased
Entities has been a United States real property holding
corporation within the meaning of Code section 897(c)(2)
during the applicable period specified in Code section
897(c)(1)(A)(ii). There has been no change in a method of
accounting within the meaning of Code section 481 by or for
any of the Purchased Entities. All items which could give
rise to a substantial understatement of federal income tax
(within the meaning of Code section 6662(d)) were adequately
disclosed on the Tax returns of the Purchased Entities in
accordance with Code section 6662(d)(2)(B).
(h) There has been no reverse Code section 704(c)
allocation (i.e., a revaluation of the type described in
Treas. Reg. Section 1.704-1(b)(2)(iv)(f)) made by any of the
Purchased Entities.
(i) VS&A-KUTV's basis in its partnership interest in
Hughes, L.P. for federal income tax purposes as of March 23,
1993 was approximately $1,000,000, and such basis has not
changed since that date (until the date of liquidation of
VS&A-KUTV's partnership interest in Hughes, L.P.) other than
for allocations of distributive shares of income and loss of
Hughes, L.P.
3.26 Transactions with Affiliates. Except as disclosed
on schedule 5.26 to the KUTV Purchase Agreement or as
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permitted under Section 5.5 hereof, none of the Purchased
Entities has any outstanding contract, agreement or other
arrangement with NBC Sub or any KUTV Seller or any affiliate of
NBC Sub or any KUTV Seller (including Hughes Broadcasting
Partners, VS&A-Hughes, Inc. and Hughes, L.P.).
3.27 Employee Benefits. (a) Schedule 5.18 to the KUTV
Purchase Agreement lists each "employee benefit plan" (within the
meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), that is maintained
or otherwise contributed to by the Purchased Entities for the
benefit of their employees (the "Affected Employees") (including
pension, profit sharing, stock bonus, medical reimbursement, life
insurance, disability and severance pay plans) (collectively,
"Purchased Entity Plans") and all other material employee benefit
plans and arrangements, payroll practices, agreements, programs,
policies or other arrangements not subject to ERISA that are
maintained or otherwise contributed to by the Purchased Entities
for the benefit of the Affected Employees and providing for
deferred compensation, bonuses, stock options, employee insurance
coverage or any similar compensation or welfare benefit plan
(collectively, "Benefit Arrangements" and, together with the
Purchased Entity Plans, collectively referred to as "Employee
Benefit Programs").
(b) With respect to each Purchased Entity Plan, NBC Sub
has made available to Partners or its representatives a current,
accurate and complete copy (or, to the extent no such copy
exists, an accurate description) thereof (including all existing
amendments thereto that shall become effective at a later date)
and, to the extent applicable, (i) any related trust agreement,
annuity contract or other funding instrument; and (ii) any
summary plan description.
(c) Except as set forth on schedule 5.18 to the KUTV
Purchase Agreement, (i) each Employee Benefit Program has been
established and administered in substantial compliance with the
applicable provisions of ERISA, the Code and the terms of all
documents relating to such programs; (ii) each Purchased Entity
Plan that is intended to be qualified within the meaning of
section 401(a) of the Code has received a favorable determination
letter as to its qualification; (iii) as of the date of this
Agreement no "reportable event" (as such term is used in section
4043 of ERISA), "prohibited transaction" (as such term is used in
section 4975 of the Code or section 406 of ERISA) or "accumulated
funding deficiency" (as such term is used in section 412 or 4971
of the Code) has heretofore occurred with respect to any
Purchased Entity Plan that has a reasonable probability of
resulting in a liability that would have a Material Adverse
Effect; and (iv) there are no pending or, to the best of the
- 19 -<PAGE>
knowledge of NBC Sub, threatened, actions, claims or lawsuits
which have been asserted or instituted involving or arising out
of the Employee Benefit Programs with respect to the operation or
administration of such programs (other than routine benefit
claims).
(d) None of the Purchased Entities, Hughes, L.P. or any
"Commonly Controlled Entity" (as defined in Section 414 of the
Code) of any Purchased Entity maintains or contributes to or has
any liability in respect of any "multiemployer plan" (as such
term is defined in section 3(37) of ERISA) and none of the
Purchased Entities, Hughes, L.P. or any Commonly Controlled
Entity of any Purchased Entity has incurred any material
liability that remains unsatisfied with respect to any such plans
or has incurred any material liability which remains unsatisfied
under Sections 4062, 4063, 4064, 4069 or 4201 of ERISA.
(e) With respect to any Purchased Entity Plan or the plan
of any Commonly Controlled Entity of any Purchased Entity or
Hughes, L.P. which is not a multiemployer plan, but is subject to
Title IV of ERISA, the present value of all obligations under
each such plan (based upon the assumptions used to fund each such
plan) did not, as of the last annual valuation date prior to the
date hereof, exceed the value of the assets of each such plan
allocable to such obligations.
(f) No Employee Benefit Program exists which could result
in the payment to any employee of any Purchased Entity of any
money or other property or rights or accelerate or provide any
other rights or benefits to any such employee as a result of the
transactions contemplated by this Agreement, whether or not such
payment would constitute a parachute payment within the meaning
of Section 280G of the Code.
3.28 Certain Fees. Neither NBC Sub nor any of its
affiliates, nor any of their respective officers, directors or
employees on behalf of NBC Sub or such affiliates, has retained
or dealt with any broker or finder or incurred any other
liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement.
3.29 Remaining KUTV Interests; Drag-Along Rights. At
and as of the time of Closing, all the partnership interests in
the Partnership not otherwise included directly or indirectly in
the KUTV Interests (the "Remaining KUTV Interests") will consist
solely of the 12% limited partnership interest in the Partnership
held by KUTV, Inc. and representing the rights set forth with
respect thereto in the KUTV Partnership Agreement. Upon the
Closing, NBC Sub shall have the right to compel KUTV, Inc. to
sell the Remaining KUTV Interests to Partners on the terms set
forth in the KUTV Partnership Agreement.
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4. Representations and Warranties by Partners.
Partners represents and warrants to NBC Sub as follows:
4.1 Organization and Good Standing. Partners is a
general partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware. The copy of
the Partnership Agreement of Partners, dated as of August 23,
1994 (the "Partnership Agreement"), that has been delivered to
NBC Sub is complete and correct and is presently in effect
without amendment or modification. Partners has all requisite
partnership power and authority to enter into this Agreement and
any other agreement contemplated hereby and to perform its
obligations hereunder and thereunder. Station Holdings B Inc., a
Delaware corporation and a corporation of which CBS owns all the
issued and outstanding voting stock on and prior to the Closing
Date, is the managing general partner (the "Managing General
Partner") of Partners and has all requisite power and authority
to enter into this Agreement and any other agreement contemplated
hereby on behalf of Partners.
4.2 Authority. The execution, delivery and performance
by it of this Agreement and any other agreements or documents
executed or to be executed by it in connection herewith, and the
consummation of the transactions contemplated hereby and thereby,
have been duly and validly authorized by all necessary
partnership and managing general partner action. This Agreement
has been, and each other agreement or document to be executed by
it in connection herewith will be, duly executed and delivered by
it and constitutes, or will constitute, a legal, valid and
binding obligation of Partners in accordance with its terms,
except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing.
4.3 No Conflict or Breach. The execution, delivery and
performance of this Agreement and any other agreements
contemplated hereby by it and the consummation by it of the
transactions contemplated hereby and thereby do not and will not:
(a) conflict with or constitute a violation of the
Partnership Agreement of Partners;
(b) conflict with or constitute a violation of (with or
without the giving of notice or the lapse of time or both)
any provision of any law, judgment, order, decree, rule or
regulation of any legislative body, court, governmental or
regulatory authority or arbitrator which is applicable to or
relates to Partners; or
- 21 -<PAGE>
(c) with or without the giving of notice or the lapse of
time or both, violate or conflict with, constitute a default
under, result in a breach, acceleration or termination of
any provision of, or, except as set forth on Schedule 4.3(c)
hereto, require notice to or the consent of any third party
under, any contract, agreement, commitment, indenture,
mortgage, deed of trust, lease, licensing agreement, note or
other instrument or obligation to which Partners is a party
or by which Partners is bound, which could, individually or
in the aggregate, reasonably be expected to have a material
adverse effect upon CBS, Partners or the ability of Partners
to perform its obligations under this Agreement or any other
agreement contemplated hereby.
4.4 Consents. Except as set forth on Schedule 4.4
hereto, no consent, approval or authorization of, or designation,
declaration or filing with, or notice to, any legislative body,
court, governmental or regulatory authority or arbitrator
(including the FCC, the FTC and the DOJ) under any provision of
any law, judgment, order, decree, rule or regulation is required
on the part of Partners in connection with the execution,
delivery and performance of this Agreement or any other agreement
contemplated hereby and the consummation of the transactions
contemplated hereby and thereby.
4.5 Certain Fees. Neither Partners nor any of its
affiliates, nor any of their respective officers, directors or
employees on behalf of Partners or such affiliates, has retained
or dealt with any broker or finder or incurred any other
liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement.
5. Further Agreements of the Parties.
5.1 Filings with the FCC. (a) As soon as practicable,
but in no event later than 10 business days after the KUTV
Closing Date, each of Partners and NBC Sub shall file with the
FCC a complete application requesting its approval and consent to
the transactions contemplated by this Agreement (the "FCC
Applications"); provided that the parties shall cooperate with
each other in the preparation of the FCC Applications and shall
in good faith and with due diligence take all reasonable steps
necessary to expedite the processing of the FCC Applications and
to secure such consents or approvals as expeditiously as
practicable. If the Closing shall not have occurred for any
reason within the initial effective period of the granting of FCC
approval of the FCC Applications, and neither party shall have
terminated this Agreement under subsection 8.1, the parties shall
jointly request and use their respective best efforts to obtain
one or more extensions of the effective periods
- 22 -<PAGE>
of such grants. Neither party will knowingly take, or fail to
take, any action the intent or reasonably anticipated consequence
of which would be to cause the FCC not to grant approval of the
FCC Applications, or to cause the FCC to interfere in a manner
damaging to the ability to operate Station KUTV in the manner
contemplated to be operated by Partners following the Closing.
The parties agree to oppose any requests for reconsideration or
judicial review of the granting of approval of the FCC
Applications.
(b) NBC Sub shall publish the notices required by the
rules and regulations of the FCC relative to the filing of the
FCC Applications. Copies of all applications, documents and
papers filed after the date hereof and prior to the Closing, or
filed after the Closing with respect to the transactions under
this Agreement, by NBC Sub or Partners with the FCC shall be
mailed to the other simultaneously with the filing of the same
with the FCC. NBC Sub shall comply with all requirements which
the FCC may impose on a licensee relating to its assignments.
Each party shall bear its own costs and expenses (including the
fees and disbursements of its counsel) in connection with the
preparation of the portion of the application to be prepared by
it and in connection with the processing of that application.
All filing and grant fees, if any, paid to the FCC, shall be
borne by Partners. None of the information contained in any
filing made by Partners or NBC Sub with the FCC with respect to
the transaction contemplated by this Agreement shall contain any
untrue statement of a material fact.
5.2 Hart-Scott-Rodino Act. Within 30 days after the
KUTV Closing Date, Partners and NBC Sub shall, in cooperation
with each other, file (or cause to be filed) with each of the DOJ
and the FTC any reports or notifications that may be required to
be filed by them under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act") in connection with the
transactions contemplated by this Agreement. Partners and NBC
Sub shall promptly comply with all requests for further documents
and information made by the DOJ or the FTC, shall use their best
efforts to obtain early termination of all waiting periods under
the HSR Act, and shall furnish to the other all such information
in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other. All fees due
from any party to the FTC or the DOJ under the HSR Act in
connection with the filing of any of those reports or
notifications shall be borne by Partners.
5.3 Expenses. Each of the parties shall bear its own
expenses incurred in connection with the negotiation and
preparation of this Agreement and in connection with all
obligations required to be performed by it under this Agreement,
except where specific expenses have been otherwise allocated by
this Agreement.
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5.4 Actions under the KUTV Purchase Agreement. NBC Sub
will not consent to or approve any amendment to the KUTV
Partnership Agreement, or grant any waiver or consent under
Section 7.3 of the KUTV Purchase Agreement, without having
received the prior written consent or approval of Partners to
such amendment, waiver or consent.
5.5 Pre-Closing Covenants. (a) From the KUTV Closing
Date through the Closing Date, NBC Sub shall (subject to
subsection 5.5(b) hereof):
(i) cause the business of the Purchased Entities to
be operated in the usual and ordinary course consistent
with the past operation of the Purchased Entities and
in compliance with the licenses issued by the FCC (the
"FCC Licenses") applicable to Station KUTV and in
compliance in all material respects with the
Communications Act of 1934 and the rules and
regulations of the FCC and all other applicable laws,
ordinances, regulations, rules or orders; provided,
however, that, notwithstanding anything to the contrary
in this Agreement, NBC Sub may cause the Partnership's
indebtedness under the Bank of Montreal Credit
Agreement to be discharged and/or refinanced as
contemplated in subsection 7.13 of the KUTV Purchase
Agreement and may cause the Partnership to execute and
deliver all agreements and other instruments, and to
take all other actions, as may be necessary in
connection therewith, provided that the terms of any
such refinanced debt shall be, in the aggregate, no
more onerous to the Partnership than those in the Bank
of Montreal Credit Agreement; and provided further that
the terms of such refinanced debt shall not include any
penalty for prepayment or any fee payable as a result
of the Closing;
(ii) use reasonable best efforts, consistent with the
past operation of the Purchased Entities, (1) to preserve
the business organization of the Purchased Entities and
Station KUTV intact and to preserve the goodwill and
business of the advertisers, suppliers and others having
business relations with any of the Purchased Entities or
Station KUTV, (2) to retain the services of the employees of
the Purchased Entities and Station KUTV, and (3) to preserve
all trademarks, trade names, service marks and copyrights
and related registrations of the Purchased Entities and
Station KUTV, and all slogans and logos, owned by any of the
Purchased Entities or Station KUTV or in which any of the
Purchased Entities or Station KUTV has any rights;
- 24 -<PAGE>
(iii) not sell, transfer, lease or otherwise dispose of
any material assets of any of the Purchased Entities or
Station KUTV, or agree to do any of the foregoing, other
than in the ordinary course of business consistent with past
practice;
(iv) not permit or allow any material assets of any of
the Purchased Entities or Station KUTV to become subject to
any Liens, other than those listed or described on Schedule
5.5(a)(iv);
(v) except with Partners' prior written approval, which
approval with respect to clause (1) below shall not be
unreasonably withheld, not (1) enter into or renew any
lease, commitment or other agreement with respect to any of
the Purchased Entities or Station KUTV providing for
payments by NBC Sub or Partners, except in the ordinary
course of business and consistent with past practices (other
than as listed or described on Schedule 5.5(a)(v) hereto),
(2) enter into any new time sale or programming agreement
for Station KUTV, or cause the acceleration of payments
under any such agreement, except in the ordinary course of
business and consistent with the past operation of Station
KUTV, (3) except as provided in Section 5.10 hereof, cause
or take any action to allow any material lease, commitment
or other agreement to lapse (other than in accordance with
its terms), to be modified in any adverse respect, or
otherwise to become impaired in any material manner, except
in the ordinary course of business where such actions,
individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (4) grant or
agree to grant any general increases in the rates of
salaries or compensation payable to employees of the
Purchased Entities or Station KUTV, other than in the
ordinary course of business consistent with the past
operation of Station KUTV, (5) grant or agree to grant any
severance or any specific bonus or increase to any executive
or management employee of the Purchased Entities or Station
KUTV whose total annual compensation after the increase
would be at an annual rate in excess of $50,000 (including
any such increase pursuant to any pension, profit sharing or
other plan or commitment), other than bonuses or salary
increases in the ordinary course of business consistent with
the past operation of the Purchased Entities or Station
KUTV, or (6) with respect to the Purchased Entities or
Station KUTV, provide for any new profit sharing, pension,
retirement or other employment benefits for employees or any
increase in any existing profit sharing or benefits,
establish any new employee benefit plan or amend or modify
any existing employee benefit plan, or otherwise incur any
obligation or liability under any employee benefit plan
- 25 -<PAGE>
materially different in nature or amount from obligations or
liabilities incurred during similar periods in prior years;
(vi) maintain in full force and effect property damage,
liability and other insurance with respect to the assets of
the Purchased Entities at levels of coverage which are
consistent with past practice;
(vii) refrain from taking any action (or failing to take
any action) if such action (or failure to take any action)
could reasonably be expected to result in the expiration,
revocation, suspension or adverse modification of any of the
FCC Licenses with respect to Station KUTV, and prosecute
with due diligence any applications to any governmental
authority material to the operation of the business, assets
or properties of the Purchased Entities or Station KUTV; and
(viii) refrain, and shall cause the Purchased Entities to
refrain, from agreeing, whether in writing or otherwise, to
take any action inconsistent with any of the foregoing.
(b) Notwithstanding anything in this Agreement to the
contrary, Partners acknowledges and agrees that, from time to
time during the period from the KUTV Closing Date through the
Closing, NBC Sub may cause VS&A-KUTV to distribute to NBC Sub all
net income attributable to its interest in the Partnership, and
may cause the Partnership to distribute to NBC Sub and VS&A-KUTV
all net income of the Partnership, in each case for the period
from the KUTV Closing Date through the Closing Date in accordance
with Section 5 of the KUTV Partnership Agreement, subject to any
distributions required to be made to KUTV, Inc. pursuant thereto;
provided, however, that NBC Sub shall cause the difference (which
may be a positive or negative number) between (i) the aggregate
amount of current assets (as defined in subsection 3.1(e) of the
KUTV Purchase Agreement) of the Purchased Entities as of the
close of business on the Closing Date and (ii) the aggregate
amount of the liabilities (as defined in subsection 3.1(e) of the
KUTV Purchase Agreement, but excluding the Non-Recourse Debt) of
the Purchased Entities as of the close of business on the Closing
Date to equal the amount determined pursuant to subsection 3.1 of
the KUTV Purchase Agreement of the difference between (x) the
aggregate amount of current assets (as defined in subsection
3.1(e) of the KUTV Purchase Agreement) of the Purchased Entities
as of the close of business on the KUTV Closing Date and (y) the
aggregate amount of the liabilities (as defined in subsection
3.1(e) of the KUTV Purchase Agreement, but excluding the Non-
Recourse Debt) of the Purchased Entities as of the close of
business on the KUTV Closing Date; and provided further that, in
order to equalize such amounts in the manner provided above, NBC
- 26 -<PAGE>
Sub may contribute to the Partnership such amounts of capital as
are necessary, or may cause the Partnership to issue to NBC Sub a
promissory note or notes (which shall be non-interest bearing and
due and payable in full on the date which is 30 days following
the Closing Date) in the requisite amounts.
5.6 Further Assurances. At any time and from time to
time after the Closing, each of the parties shall, without
further consideration, execute and deliver to the other such
additional instruments and shall take such other action as the
other may request to carry out the transactions contemplated by
this Agreement. NBC Sub and Partners will notify the other party
hereto immediately of any litigation, arbitration or
administrative proceeding pending (including any FCC complaint
proceeding), or to their knowledge, threatened, against any party
hereto which challenges the transactions contemplated by this
Agreement. For a period of one year after the Closing, NBC Sub
shall grant Partners reasonable access during normal business
hours upon reasonable prior notice to the books and records of
NBC Sub with respect to the Purchased Entities to the extent
necessary to comply with any applicable law or governmental rule
or request relating to the period during which NBC Sub operated
the Purchased Entities.
5.7 Access to Information. During the period beginning on the
KUTV Closing Date and ending on the Closing Date, Partners and its directors,
officers, employees, affiliates, non-employee representatives
(including financial advisors, attorneys and accountants) and
agents (collectively, its "Representatives") may make such
investigation of the KUTV Interests, the Purchased Entities as it
may desire, and NBC Sub shall give to Partners and to its
Representatives, upon reasonable notice, full access during
normal business hours throughout the period beginning on the KUTV
Closing Date and ending on the Closing Date to all the assets,
books, commitments, agreements, records and files of the
Purchased Entities and NBC Sub shall furnish to Partners during
that period all documents and copies of documents and information
concerning the businesses and affairs of the Purchased Entities
to be transferred by NBC Sub as Partners reasonably may request.
Partners shall treat, and shall cause its Representatives to
treat, all such information and documents and all other
information and documents delivered pursuant to this Agreement as
"Information" under the Confidentiality Letter Agreements dated
August 30, 1994 and September 22, 1994 between NBC and Partners
and accepted and agreed to by CBS, and will comply with, and
cause its Representatives to comply with, their respective
obligations thereunder. If the transaction contemplated by this
Agreement is not consummated for any reason, Partners shall
return to NBC Sub all such information and documents and shall
destroy any copies
- 27 -<PAGE>
thereof as soon as practicable. NBC Sub's obligations under this
subsection 5.7 shall survive the termination of this Agreement.
From time to time prior to the Closing, NBC Sub shall promptly
deliver to Partners copies of annual and quarterly financial
statements with respect to the Purchased Entities.
5.8 Consents; Assignment of Agreements. From and after
the KUTV Closing Date, NBC Sub shall use reasonable efforts (but
shall not be required to make any payment) to obtain at the
earliest practicable date all consents and approvals referred to
in subsection 3.4. NBC Sub shall furnish Partners with a copy of
all consents and approvals obtained pursuant hereto.
5.9 No Disclosures or Solicitation. To accord to
Partners the full value of its purchase hereunder, (a) NBC Sub
shall not at any time disclose to anyone any information with
respect to any confidential or secret aspect of the operations of
the Partnership or Station KUTV, and (b) from the date of this
Agreement until the date which is six months after the Closing
Date, NBC Sub shall not solicit for employment any employee of
Station KUTV who was employed by Station KUTV at any time during
the period beginning on the date of this Agreement and ending on
the Closing Date, provided that the foregoing shall not apply
with respect to any employee who is provided or otherwise made
available by NBC or any of its affiliates to any Purchased
Entity. NBC Sub acknowledges that the remedy at law for breach
of the provisions of this subsection 5.9 will be inadequate and
that, in addition to any other remedy Partners may have, it will
be entitled to an injunction restraining any such breach or
threatened breach, without any bond or other security being
required.
5.10 NBC Affiliation Agreement. NBC Sub agrees to cause
the affiliation agreement between NBC and the Partnership with
respect to Station KUTV to be terminated as of the Closing Date,
without any liability or obligation on the part of the
Partnership.
5.11 Other Action. Subject to the terms and conditions
hereof, each of the parties shall use its best efforts to cause
the fulfillment at the earliest practicable date of all of the
conditions to the obligations of the parties to consummate the
purchase under this Agreement.
5.12 No Control. Between the date of this Agreement and
the Closing, Partners shall not, directly or indirectly, control,
supervise or direct, or attempt to control, supervise or direct,
the operations of the Partnership or Station KUTV, but such
operations shall be solely the responsibility of the KUTV Sellers
prior to the KUTV Closing, and of NBC Sub following the KUTV
Closing Date and prior to the Closing.
- 28 -<PAGE>
5.13 Amendment of KUTV Partnership Agreement; Exercise
of Drag-Along Rights. (a) NBC Sub shall attempt to cause, on or
prior to the Closing, VS&A-KUTV, Partners and KUTV, Inc. to amend
the KUTV Partnership Agreement solely in order to effect the
amendments set forth on Exhibit B attached hereto and any other
amendments permitted under subsection 5.4 hereof; provided that
KUTV, Inc. agrees to enter into a letter agreement, in form and
substance satisfactory to NBC Sub, pursuant to which KUTV, Inc.
shall agree to pay to NBC Sub an amount equal to 12% of any
Losses (as defined in the KUTV Purchase Agreement) for which any
Buyer Indemnified Party (as defined in the KUTV Purchase
Agreement) is entitled to indemnification pursuant to subsection
10.2 of the KUTV Purchase Agreement.
(b) In the event that NBC Sub shall fail to effect the
amendments and agreement set forth in subsection 5.13(a), then,
subject to the satisfaction or waiver of the conditions set forth
in this Agreement, and on the basis of the representations,
warranties, covenants and agreements set forth in this Agreement,
at the Closing, NBC Sub shall exercise its drag-along rights to
cause the Remaining KUTV Interests to be sold to Partners on the
terms set forth in the KUTV Partnership Agreement.
5.14 Property, Plant and Equipment. NBC Sub shall
provide to Partners a list of the property, plant and equipment
of Station KUTV and of the Purchased Entities as soon as
reasonably practicable following the KUTV Closing Date and at the
Closing.
5.15 Updated Schedules. Prior to the Closing, NBC Sub
shall update Schedules 3.17, 3.18 and 3.25(d) to reflect any
actions taken or omitted to be taken by NBC Sub in accordance
with the provisions of subsection 5.5 during the period
commencing on the date of this Agreement and ending immediately
prior to the Closing.
6. Conditions Precedent to Closing.
6.1 Conditions Precedent to the Obligations of All
Parties. The obligations of Partners, on the one hand, and NBC
Sub, on the other hand, to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions:
(a) there shall not be in effect any preliminary or
permanent injunction or other order issued by any federal or
state court of competent jurisdiction in the United States
or by any United States federal or state governmental or
regulatory body nor any statute, rule, regulation or
executive order promulgated or enacted by any United States
federal or state governmental authority which restrains,
- 29 -<PAGE>
enjoins or otherwise prohibits the consummation of the
transactions contemplated by this Agreement or any other
agreements contemplated hereby;
(b) any filings required to be made under the HSR Act
shall have been made, and all applicable waiting periods
thereunder with respect to the transactions contemplated by
this Agreement shall have expired or been terminated;
(c) the KUTV Closing Date shall have occurred; and
(d) all the conditions set forth in Section 10 of the
Asset Exchange Agreement shall have been satisfied or
waived.
6.2 Conditions Precedent to the Obligations of Partners.
The obligations of Partners to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions (any
of which may be waived in writing by Partners):
(a) all representations and warranties of NBC Sub under
this Agreement (including the Schedules hereto as updated
pursuant to subsection 5.15) and of NBC under the NBC
Guarantee shall be true and correct (provided, however, that
for purposes of this subsection 6.2(a), the representations
and warranties of NBC Sub in subsections 3.15, 3.16, 3.19,
3.20, 3.23(b) and 3.27(c) hereof that are made to the best
of the knowledge of NBC Sub shall be made to the best of the
knowledge of NBC Sub and the Purchased Entities) at and as
of the time of the Closing with the same effect as though
those representations and warranties had been made at and as
of that time, with such exceptions as do not either (i)
individually (without aggregating such breach with any other
breaches of representations or warranties hereunder) result
in a Material Adverse Effect or (ii) in the aggregate,
result in the value of the Purchased Entities as a whole
being reduced by 50 percent or more as compared to the value
of the Purchased Entities assuming that no breaches existed;
(b) NBC Sub shall have performed and complied with each
obligation, covenant and condition (excluding any
representation or warranty made by NBC Sub in Section 3)
required by this Agreement to be performed or complied with
by it prior to or at the Closing, with such exceptions as
would not result in any Material Adverse Effect;
(c) the FCC shall have given all requisite approvals and
consents (without any condition or qualification materially
adverse to Partners or its affiliates or to the
- 30 -<PAGE>
operations, business, results of operations or financial or
other condition of Station KUTV) to the assignment of any
FCC Licenses with respect to Station KUTV to Partners and
the acquisition of control of Station KUTV by Partners as
provided in this Agreement and such approvals shall have
become a Final Order (as defined below);
(d) Partners shall have received certificates for the
KUTV Shares, duly endorsed in blank or accompanied by signed
stock powers, and evidence of the transfer of the KUTV
Interests on the books and records of the Partnership, in
form and substance reasonably satisfactory to Partners and
its counsel, as shall be effective to vest in Partners all
right, title and interest in and to the KUTV Shares and the
KUTV Partnership Interests free and clear of any Liens;
(e) (i) if NBC Sub shall exercise its drag-along rights
in accordance with subsection 5.13(b), then Partners shall
have received the Remaining KUTV Interests on the terms set
forth in the KUTV Partnership Agreement, and shall have
received evidence of such transfer of the Remaining KUTV
Interests on the books and records of the Partnership, in
form and substance reasonably satisfactory to Partners and
its counsel, as shall be effective to vest in Partners all
right, title and interest in and to the Remaining KUTV
Interests free and clear of any Liens, or (ii) if NBC Sub
shall not exercise its drag-along rights in accordance with
subsection 5.13(b), then NBC Sub shall have caused KUTV,
Inc., VS&A-KUTV and NBC Sub, as withdrawing general partner,
to execute and deliver to Partners for its execution the
amendments to the KUTV Partnership Agreement contemplated by
subsection 5.13(a);
(f) Partners shall have been furnished with (i) a
certificate of an officer of NBC Sub, dated the Closing
Date, in form and substance reasonably satisfactory to
Partners, certifying to the fulfillment of the conditions
set forth in subsections 6.2(a) and (b), and (ii) from each
of counsel to NBC Sub and NBC and FCC counsel to NBC Sub and
NBC, an opinion, dated the Closing Date, substantially in
the form attached as Exhibits C-1 and C-2 hereto,
respectively; and
(g) Partners shall have been furnished with a certificate
of a Secretary or Assistant Secretary of NBC Sub, dated the
Closing Date, in form and substance reasonably satisfactory
to Partners, certifying as to the attached copy of the
resolutions of the Board of Directors (or a duly authorized
committee thereof) of each of NBC and NBC Sub authorizing
the execution, delivery and performance of, and the
transactions contemplated by, this Agreement and any other
agreements contemplated hereby, and stating that
- 31 -<PAGE>
the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
For the purposes of this agreement, "Final Order" shall
mean action by the FCC which (a) has not been vacated,
reversed, stayed, set aside, annulled or suspended, and (b)
with respect to which no appeal, request for stay, or
petition for rehearing, reconsideration or review by any
party or by the FCC on its motion, is pending, and (c) as to
which the time for filing any such appeal, request,
petition, or similar document for the reconsideration or
review by the FCC on its own motion under the express
provisions of the Communications Act of 1934 and the rules
and regulations of the FCC, has expired (or if any such
appeal, request, petition or similar document has been
filed, an FCC order has been upheld in a proceeding pursuant
thereto and no additional review or reconsideration may be
sought).
6.3 Conditions Precedent to the Obligations of NBC Sub.
The obligations of NBC Sub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions (any
of which may be waived in writing by NBC Sub):
(a) all representations and warranties of Partners under
this Agreement and of CBS under the CBS Guarantee shall be
true and correct in all material respects (provided,
however, that, notwithstanding the foregoing, any such
representation and warranty that is qualified as to
materiality shall be true and correct in all respects) at
and as of the time of the Closing with the same effect as
though those representations and warranties had been made at
and as of that time, with such exceptions as do not
individually (without aggregating such breach with any other
breaches of representations or warranties hereunder) result
in a material adverse effect on the ability of Partners to
perform its obligations under this Agreement;
(b) Partners shall have performed and complied in all
material respects with each obligation, covenant and
condition required by this Agreement to be performed or
complied with by it prior to or at the Closing;
(c) the FCC shall have given all requisite approvals and
consents (without any condition or qualification materially
adverse to NBC Sub or its affiliates) to the assignment of
any FCC Licenses with respect to Station KUTV to Partners
and the acquisition of control of Station KUTV
- 32 -<PAGE>
by Partners as provided in this Agreement and such approvals
shall have become a Final Order;
(d) NBC Sub shall have received the wire transfer of
federal reserve funds in the amount provided in subsection
1.3(a);
(e) NBC Sub shall have been furnished with (i) a
certificate of an officer of the Managing General Partner of
Partners, dated the Closing Date, in form and substance
reasonably satisfactory to NBC Sub, certifying to the
fulfillment of the conditions set forth in subsections
6.3(a) and (b), and (ii) from counsel to Partners and CBS,
an opinion, dated the Closing Date, substantially in the
form attached as Exhibit D hereto; and
(f) NBC Sub shall have been furnished with a certificate
of a Secretary or Assistant Secretary (or other appropriate
officer) of the Managing General Partner of Partners, in
form and substance reasonably satisfactory to NBC Sub,
certifying as to the attached copy of the resolutions of the
Managing General Partner of Partners and the Board of
Directors (or a duly authorized committee thereof) of CBS
authorizing the execution, delivery and performance of, and
the transactions contemplated by, this Agreement and any
other agreements contemplated hereby, and stating that the
resolutions thereby certified have not been amended,
modified, revoked or rescinded.
7. Survival of Representations and Warranties;
Indemnification.
7.1 Survival. All representations and warranties of NBC
Sub and Partners contained in this Agreement shall survive the
Closing Date, but neither party shall be liable to the other for
breach of any representation or warranty set forth in Section 3
or Section 4 hereof (or in the certificate delivered pursuant to
subsection 6.2(f) or subsection 6.3(e)), as the case may be,
except to the extent that notice of a claim is asserted in
writing and delivered to Partners (in the case of any claim by
any NBC Indemnified Party (as defined in subsection 7.2(b)
below)) or NBC Sub (in the case of any claim by any CBS
Indemnified Party (as defined in subsection 7.2(a) below)) (i) in
the case of (or to the extent that) any claim by any CBS
Indemnified Party for breach of any representation or warranty by
NBC Sub (other than a claim based upon the representations and
warranties set forth in Section 3.25) which breach is premised
upon facts or circumstances that would have constituted a
misrepresentation or breach of any warranty, covenant or
agreement by the KUTV Sellers under Section 10.2(a) of the KUTV
- 33 -<PAGE>
Purchase Agreement (without giving effect to any limitations
under Sections 10.1 or 10.3 of the KUTV Purchase Agreement) (a
"KUTV Misrepresentation"), on or prior to the date which is the
later of (A) March 31, 1996 and (B) provided that, if a CBS
Indemnified Party acquires actual knowledge of a claim for
indemnification referred to in this clause (i) during the period,
if any, from the Closing until April 30, 1996, such CBS
Indemnified Party provides NBC Sub with notice of such claim
promptly after the acquisition of such actual knowledge of such
claim during such period, one year after the Closing Date; (ii)
in the case of any claim by any CBS Indemnified Party based upon
any representation or warranty set forth in Section 3.25, on or
prior to the expiration of the applicable statute of limitations
with respect to the Taxes to which such representation or
warranty relates; and (iii) in the case of all other such claims
(or parts of claims), on or prior to the date which is two years
after the Closing Date. The maximum aggregate liability of NBC
Sub for indemnification pursuant to subsection 7.2(a) with
respect to any breaches of representations or warranties by NBC
Sub which are premised upon facts or circumstances that would
have constituted a KUTV Misrepresentation shall be an amount
equal to the aggregate purchase price paid for all the KUTV
Interests pursuant to subsection 1.2. Any notice of a claim for
misrepresentation or breach of warranty shall state in reasonable
detail the representation or warranty with respect to which the
claim is made, the alleged basis for the claim and the amount of
liability asserted against the other party by reason of the claim
to the extent known.
7.2 Indemnification. (a) Subject to subsections 7.1
and 7.3, NBC Sub shall indemnify and hold harmless Partners and
its affiliates, and their respective officers, directors,
employees and representatives (collectively, the "CBS Indemnified
Parties"), from and against all losses, liabilities, damages,
fines, judgments, consultants' fees, administrative costs,
settlements and expenses (including reasonable fees and expenses
of counsel) (collectively, "Losses") that any of the CBS
Indemnified Parties may suffer, sustain or become subject to,
arising from or as a result of (i) any breach by NBC Sub of any
of its representations and warranties contained in Section 3 of
this Agreement or in the certificate delivered pursuant to
subsection 6.2(f) (which, for this purpose, shall be determined
without giving effect to any "materiality" or "material adverse
effect" limitation set forth therein); (ii) any nonperformance or
breach by NBC Sub of any covenant or other obligation (other than
a representation or warranty made by NBC Sub in Section 3) to be
performed by NBC Sub under this Agreement; or (iii) directly or
indirectly from (A) the ongoing investigation by the State of
Utah Division of Environmental Response and Remediation ("DERR")
into the petroleum release at the parcel of Real Property located
at 2185 South 3200 West, Salt Lake City, Utah (the
- 34 -<PAGE>
"Investigation") or (B) any activities undertaken to discover,
test, delineate, monitor or remediate any petroleum-related soil
or groundwater contamination emanating or arising from the former
underground storage tank located on that parcel pursuant to any
request or directive by DERR or any other governmental authority
related to or arising from the investigation. NBC Sub's
obligation under clause (iii) above shall terminate and be of no
further force and effect with respect to any Losses arising
following delivery to Partners of a "no further action" letter or
any comparable document from DERR, in form and substance
acceptable to Partners, stating that the Investigation has
terminated and that no further activities will be required of any
party in connection with the petroleum release (it being
understood that any such termination of NBC Sub's obligation
under clause (iii) above shall have no effect on, and shall not
terminate, NBC Sub's obligation to indemnify Partners for
breaches of representations and warranties hereunder, including
subsection 3.21, pursuant to clause (i) above). The amount of
Losses shall be determined without regard to any materiality
qualification or limitation contained in the applicable
representation, warranty, covenant or other agreement of NBC Sub
to which the claim for indemnification relates. Notwithstanding
anything to the contrary contained herein, the indemnification
obligations of NBC Sub set forth in clauses (ii) and (iii) above
shall be enforceable without regard to the existence or accuracy
of any representations or warranties given by NBC Sub herein.
(b) Subject to subsections 7.1 and 7.3, Partners shall
indemnify and hold harmless NBC Sub and its affiliates, and their
respective officers, employees and representatives (collectively,
the "NBC Indemnified Parties"), from and against all Losses that
any of the NBC Indemnified Parties may suffer, sustain or become
subject to arising from or as a result of (i) any breach by
Partners of any of its representations and warranties contained
in Section 4 of this Agreement or in the certificate delivered
pursuant to subsection 6.3(e) (which, for this purpose, shall be
determined without giving effect to any "materiality" or
"material adverse effect" limitation set forth therein); (ii) any
nonperformance or breach by Partners of any covenant or other
obligation (other than a representation or warranty made by
Partners in Section 4) to be performed by Partners under this
Agreement; or (iii) the payment of any Reimbursement Amount
determined pursuant to subsection 7.3(d). The amount of Losses
shall be determined without regard to any materiality
qualification or limitation contained in the applicable
representation, warranty, covenant or other agreement of Partners
to which the claim for indemnification relates. Notwithstanding
anything to the contrary contained herein, the indemnification
obligations of Partners set forth in clause (ii) above shall be
enforceable without regard to the existence of accuracy of any
representations or warranties given by Partners herein.
- 35 -<PAGE>
7.3 General Indemnification Provisions. (a)
Notwithstanding the provisions of subsection 7.2, the indemnified
party shall not be entitled to indemnification for Losses solely
with respect to claims pursuant to subsection 7.2(a)(i) or
7.2(b)(i), as the case may be:
(1) unless the indemnified party shall have given written
notice to the indemnifying party, setting forth its
claim for indemnification in reasonable detail,
within the relevant period set forth in subsection
7.1;
(2) unless the aggregate Loss arising out of any single
breach or series of related breaches shall be at
least equal to $2,000; provided that if the aggregate
sum of each Loss which arises out of a single breach
or series of related breaches that individually is
less than $2,000 shall be at least equal to $100,000,
then, subject to satisfaction of the baskets in
clause (3) below, the indemnified party shall be
entitled to indemnification under such subsection
7.2(a)(i) or 7.2(b)(i) for all such Losses in excess
of $100,000; and
(3) unless and until the aggregate amount of all Losses
arising therefrom exceeds $1,000,000, whereupon the
indemnified party shall be entitled to
indemnification under such subsection 7.2(a)(i) or
7.2(b)(i) only for the aggregate amount of such
Losses in excess of $300,000; provided that for
purposes of determining the aggregate amount of all
Losses for this clause (3), only such Losses referred
to in the proviso to clause (2) above that are in
excess of $100,000 shall count toward the amounts set
forth in this clause (3).
(b) Promptly after receipt by an indemnified party under
this Section 7 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the claim
or the commencement of that action, provided that the failure to
notify the indemnifying party shall not relieve it from any
liability which it may have to the indemnified party under this
Section 7, except if such notification with respect to any claim
to be made pursuant to subsection 7.2(a)(i) or 7.2(b)(i) is given
after the applicable time period specified in subsection 7.1 has
lapsed. If any such claim shall be brought against an
indemnified party, and it shall notify the indemnifying party
thereof, and if the indemnifying party shall agree in writing to
indemnify promptly the indemnified party for the full amount of
any Loss sustained, suffered or incurred by the indemnified party
- 36 -<PAGE>
by reason of such claim or action (and, in the event that NBC Sub
is the indemnifying party, if NBC Sub shall further agree in
writing to waive its rights with respect to the full amount of
any such Loss under subsection 7.3(d)), then the indemnifying
party shall be entitled to participate therein, and to assume the
defense thereof with counsel satisfactory to the indemnified
party, and to settle and compromise any such claim or action;
provided, however, that if the indemnified party has elected to
be represented by separate counsel pursuant to the proviso to the
second following sentence, such settlement or compromise shall be
effected only with the consent of the indemnified party, which
consent shall not be unreasonably withheld. If the indemnifying
party does not agree to indemnify promptly the full amount of any
such Loss as provided in the immediately preceding sentence, then
the indemnifying party shall nevertheless have the right to
participate in the defense of any such claim or action, but such
defense and any settlement or compromise thereof shall at all
times be under the sole direction and control of the indemnified
party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs
of investigation; provided, however, that the indemnified party
shall have the right to employ counsel to represent it if, in the
indemnified party's reasonable judgment, it is advisable for the
indemnified party to be represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall
be paid by the indemnified party. Each of NBC Sub and Partners
agrees to render to each other such assistance as may reasonably
be requested in order to ensure the proper and adequate defense
of any such claim or proceeding.
(c) The amount of any Loss for which indemnification is
provided under any or either of subsections 7.2(a) or 7.2(b)
shall be net of any amounts recovered or recoverable by the
indemnified party under insurance policies with respect to such
Loss (collectively, a "Net Loss") and shall be (i) increased to
take account of any net Tax cost incurred by the indemnified
party arising from the receipt of indemnity payments hereunder
(grossed up for such increase) and (ii) reduced to take account
of any net Tax benefit realized by the indemnified party arising
from the incurrence or payment of any such Net Loss. In
computing the amount of any such Tax cost or Tax benefit, the
indemnified party shall be deemed to recognize all other items of
income, gain, loss, deduction or credit before recognizing any
item arising from the receipt of any indemnity payment hereunder
or the incurrence or payment of any indemnified Net Loss. Any
indemnification payment hereunder shall initially be made without
regard to this paragraph and shall be increased or reduced to
reflect any such net Tax cost (including gross-up) or net Tax
- 37 -<PAGE>
benefit only after the indemnified party has actually realized
such cost or benefit. For purposes of this Agreement, an
indemnified party shall be deemed to have "actually realized" a
net Tax cost or a net Tax benefit to the extent that, and at such
time as, the amount of Taxes payable by such indemnified party is
increased above or reduced below, as the case may be, the amount
of Taxes that such indemnified party would be required to pay but
for the receipt of the indemnity payment or the incurrence or
payment of such Net Loss, as the case may be. The amount of any
increase or reduction hereunder shall be adjusted to reflect any
final determination (which shall include the execution of Form
870-AD or successor form) with respect to the indemnified party's
liability for Taxes and payments between the parties to this
Agreement to reflect such adjustment shall be made if necessary.
Any indemnity payment under this Agreement shall be treated as an
adjustment to the value of the asset upon which its underlying
claim was based, unless a final determination (which shall
include the execution of a Form 870-AD or successor form) with
respect to the indemnified party or any of its affiliates causes
any such payment not to be treated as an adjustment to the value
or the asset for United States federal income tax purposes.
(d) Partners acknowledges and agrees that, with respect
to any claim (including any Third Party Claim) by any CBS
Indemnified Party under subsection 7.2(a)(i) to the extent
relating to a breach of any representations or warranties set
forth in subsections 3.4, 3.5(a) and 3.6 through 3.27, any
payment made by NBC Sub of all or any part of the amount of such
claim to Partners on or prior to April 30, 1996 (or, with respect
to any claim based upon a breach of any representation or
warranty set forth in Section 3.25, on or prior to the date which
is 30 days following expiration of the applicable statute of
limitations with respect to the Taxes to which such
representation and warranty relates) (any such payment, a
"Conditional Indemnity Payment") will be made subject to a
reservation of, and without prejudice to, the right of NBC Sub to
contest (or to continue to contest) such claim (including any
Third Party Claim), and, should the amount of the indemnifiable
Loss with respect to any such claim be settled or be otherwise
determined by any court or arbitrator having jurisdiction with
respect thereto to be less than the amount of the Conditional
Indemnity Payment made in respect of such claim, Partners shall
promptly and in any event within five days of written demand
therefor, reimburse NBC Sub for the difference between the amount
of such Conditional Indemnity Payment and the amount of the
indemnifiable Loss as so determined (any such difference, a
"Reimbursement Amount").
8. Termination.
8.1 Termination. Except with respect to provisions that
expressly survive termination, this Agreement may be terminated:
- 38 -<PAGE>
(a) by written agreement of each of the parties hereto;
(b) by Partners, by written notice to NBC Sub, delivered
not less than 30 days after receipt by NBC Sub of an earlier
written notice from Partners that there have been breaches
or defaults of NBC Sub's covenants and agreements hereunder
which individually or in the aggregate could reasonably be
expected to result in a Material Adverse Effect, provided
such breaches and defaults have not been cured to the
reasonable satisfaction of Partners since such earlier
notice;
(c) by NBC Sub, by written notice to Partners, delivered
not less than 30 days after receipt by Partners of an
earlier written notice from NBC Sub that there have been
breaches or defaults of Partners' covenants and agreements
hereunder which individually or in the aggregate could
reasonably be expected to result in a material adverse
effect on the ability of Partners to perform its obligations
under this Agreement, provided such breaches and defaults
have not been cured to the reasonable satisfaction of NBC
Sub since such earlier notice;
(d) by NBC Sub or Partners, if the KUTV Purchase
Agreement shall have been terminated and the KUTV Closing
Date shall not have occurred; or
(e) by NBC Sub or Partners, if the Closing has not taken
place by November 21, 1996;
provided, however, that the party seeking termination pursuant to
clauses (b) through (e) above (A) is not in breach of any of its
representations, warranties, covenants or agreements contained in
this Agreement or the KUTV Purchase Agreement and (B) has not
caused such condition to have become incapable of fulfillment
through its own actions (or failures to act) that directly result
in a breach of a representation, warranty or covenant by the
other party contained herein.
8.2 Liability. The termination of this Agreement under
subsection 8.1 shall not relieve either party of any liability
for breach of this Agreement prior to the date of termination.
9. Miscellaneous.
9.1 Notices. Any notice or other communication under
this Agreement shall be in writing (including by telecopy or like
transmission) and shall be considered given when delivered
personally, when mailed by registered mail (return receipt
requested) or when telecopied (with confirmation of transmission
- 39 -<PAGE>
having been received) to the parties at the addresses set forth
below (or at such other address as a party may specify by notice
to the other):
if to NBC Sub, to it at:
c/o National Broadcasting Company, Inc.
30 Rockefeller Plaza, Suite 5224
New York, New York 10112
Attention: Warren C. Jenson
Telecopy No.: (212) 246-5430
with copies to:
National Broadcasting Company, Inc.
30 Rockefeller Plaza, Suite 1022
New York, New York 10112
Attention: Stephen F. Stander, Esq.
Telecopy No.: (212) 664-6572; and
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Charles I. Cogut, Esq.
Telecopy No.: (212) 455-2502
if to Partners, to it at:
c/o CBS Inc.
51 West 52nd Street
New York, New York 10019
Attention: Peter W. Keegan
Telecopy No.: (212) 975-6488
with copies to:
CBS Inc.
51 West 52nd Street
New York, New York 10019
Attention: Ellen O. Kaden, Esq.
Telecopy No.: (212) 975-7292; and
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: Robert A. Kindler, Esq.
Telecopy No.: (212) 474-3700.
9.2 Entire Agreement; No Third Party Beneficiaries.
- 40 -<PAGE>
This Agreement, including the Schedules and Exhibits hereto,
(a) constitutes the entire agreement between the parties with
respect to its subject matter and supersedes any previous
agreement among them relating to the subject matter hereof (other
than the Confidentiality Letter Agreements dated August 30, 1994
and September 22, 1994 between NBC and Partners and accepted and
agreed to by CBS which shall not be superseded hereby) and (b) is
not intended to confer upon any person other than the parties
hereto, NBC, CBS and their respective successors and assigns any
rights or remedies hereunder.
9.3 Headings; Interpretation. (a) The table of
contents and section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction
or interpretation of this Agreement.
(b) When a reference is made in this Agreement to an
Article, Section, Schedule or Exhibit, such reference shall be to
an Article, Section, Schedule or Exhibit of this Agreement unless
otherwise indicated. Whenever the words "included", "includes"
or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation". All accounting
terms not defined in this Agreement shall have the meanings
determined by generally accepted accounting principles as in
effect from time to time. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The definitions
contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term, and
references to a person are also to its permitted successors and
assigns. Any agreement, instrument or statute defined or
referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as
from time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or consent
and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and
instruments incorporated therein.
9.4 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the law of the State of New
York applicable to agreements made and to be performed in New
York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law.
9.5 Amendment; Waiver. This Agreement may be amended,
supplemented or otherwise modified only by a written instrument
executed by the parties hereto. No waiver by a party of any of
the provisions hereof shall be effective unless explicitly set
- 41 -<PAGE>
forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to
this Agreement, including any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations,
warranties, covenants or agreements contained herein or in any
documents delivered or to be delivered pursuant to this Agreement
or in connection with the Closing hereunder. The waiver by any
party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach.
9.6 Separability. If any provision of this Agreement is
invalid or unenforceable, the balance of this Agreement shall
remain in full force and effect.
9.7 Assignment. Neither party to this Agreement may
assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the other party to
this Agreement. Any purported assignment in violation of this
subsection shall be void. Subject to the two immediately
preceding sentences of this subsection 9.7, this Agreement will
be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.
9.8 Publicity. Promptly upon the execution of this
Agreement, the parties shall issue a joint press release with
respect to the transactions contemplated by this Agreement. So
long as this Agreement is in effect, neither party nor any of
their affiliates shall issue or cause the publication of any
press release or other public announcement with respect to the
transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably
withheld.
9.9 Jurisdiction. The courts of the State of New York
in New York County and the United States District Court for the
Southern District of New York shall have exclusive jurisdiction
over the parties with respect to any dispute or controversy
between them arising under or in connection with this Agreement
and, by execution and delivery of this Agreement, each of the
parties to this Agreement submits to the jurisdiction of those
courts, including the in personam and subject matter jurisdiction
of those courts, waives any objection to such jurisdiction on the
grounds of venue or forum non conveniens, the absence of in
personam or subject matter jurisdiction and any similar grounds,
consents to service of process by mail (in accordance with
subsection 9.1) or any other manner permitted by law. These
consents to jurisdiction shall not be deemed to confer rights on
any person other than the parties to this Agreement.
9.10 Specific Performance. Each of the parties to
- 42 -<PAGE>
this Agreement acknowledges that all the KUTV Interests are of a
special, unique and extraordinary character, and that any breach
of this Agreement by any party hereto could not be compensated
for by damages. Accordingly, if any of the parties breaches its
obligations under this Agreement, the other parties hereto shall
be entitled, in addition to any other remedies that they may
have, subject to obtaining approval of the FCC, to enforcement of
this Agreement by a decree of specific performance requiring that
the breaching party fulfill its obligations under this Agreement.
9.11 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be signed by its duly authorized officer as of
the date first above written.
NBC SUBSIDIARY (KUTV-TV), INC.
By: /s/ Warren C. Jenson
Title: Treasurer
STATION PARTNERS
By: STATION HOLDINGS B INC.,
General Partner
By: /s/ Peter W. Keegan
Title: President
- 43 - <PAGE>
CONFORMED COPY
CBS INC.
_____________________________
CREDIT AGREEMENT
Dated as of August 26, 1994
______________________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
CMC-8378<PAGE>
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it
is attached but is inserted for convenience of reference only.
PAGE
Section 1. Definitions and Accounting Matters . . . . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . . 15
1.03 Classes and Types of Loans. . . . . . . . . . . . . . . . . . 16
Section 2. Commitments, Loans and Prepayments . . . . . . . . . . . . . 16
2.01 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.02 Borrowings of Syndicated Loans. . . . . . . . . . . . . . . . 17
2.03 Money Market Loans. . . . . . . . . . . . . . . . . . . . . . 19
2.04 Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . 24
2.05 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 24
2.06 Changes of Commitments. . . . . . . . . . . . . . . . . . . . 29
2.07 Facility Fee. . . . . . . . . . . . . . . . . . . . . . . . . 30
2.08 Lending Offices . . . . . . . . . . . . . . . . . . . . . . . 30
2.09 Several Obligations; Remedies Independent . . . . . . . . . . 30
2.10 Prepayments of Loans and Conversions or
Continuations of Loans. . . . . . . . . . . . . . . . . . . 31
2.11 Replacement of Banks. . . . . . . . . . . . . . . . . . . . . 31
Section 3. Payments of Principal and Interest . . . . . . . . . . . . . 32
3.01 Repayment of Loans. . . . . . . . . . . . . . . . . . . . . . 32
Section 4. Payments; Pro Rata Treatment; Computations;
Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.01 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.02 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . . 35
4.03 Computations. . . . . . . . . . . . . . . . . . . . . . . . . 36
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . . . . . . . 36
4.05 Certain Notices . . . . . . . . . . . . . . . . . . . . . . . 37
4.06 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . 38
4.07 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . 39
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . . . . . . . 41
5.01 Additional Costs. . . . . . . . . . . . . . . . . . . . . . . 41
5.02 Limitation on Types of Loans. . . . . . . . . . . . . . . . . 45
5.03 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . 46
(i)<PAGE>
5.04 Treatment of Affected Loans . . . . . . . . . . . . . . . . . 46
5.05 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 47
5.06 U.S. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 6. Conditions Precedent . . . . . . . . . . . . . . . . . . . . 49
6.01 Initial Extension of Credit . . . . . . . . . . . . . . . . . 49
6.02 Initial and Subsequent Extensions of Credit . . . . . . . . . 50
Section 7. Representations and Warranties . . . . . . . . . . . . . . . 51
7.01 Corporate Existence . . . . . . . . . . . . . . . . . . . . . 51
7.02 Financial Condition . . . . . . . . . . . . . . . . . . . . . 52
7.03 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.04 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.05 Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.06 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.07 Use of Credit . . . . . . . . . . . . . . . . . . . . . . . . 53
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.10 Investment Company Act. . . . . . . . . . . . . . . . . . . . 54
7.11 Environmental Matters . . . . . . . . . . . . . . . . . . . . 54
7.12 True and Complete Disclosure. . . . . . . . . . . . . . . . . 54
Section 8. Covenants of the Company . . . . . . . . . . . . . . . . . . 54
8.01 Financial Statements Etc. . . . . . . . . . . . . . . . . . . 55
8.02 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.03 Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . 58
8.04 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.05 Prohibition of Fundamental Changes. . . . . . . . . . . . . . 59
8.06 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . 60
8.07 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . 61
8.08. Accuracy and Completeness of Information . . . . . . . . . . 62
8.09 Transactions with Affiliates. . . . . . . . . . . . . . . . . 62
8.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 62
8.11 Lines of Business . . . . . . . . . . . . . . . . . . . . . . 62
Section 9. Events of Default. . . . . . . . . . . . . . . . . . . . . . 62
Section 10. The Agent . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.01 Appointment, Powers and Immunities.. . . . . . . . . . . . . 66
10.02 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . 67
10.03 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.04 Rights as a Bank, the Issuing Bank and the
Swingline Bank.. . . . . . . . . . . . . . . . . . . . . . 67
10.05 Indemnification. . . . . . . . . . . . . . . . . . . . . . . 68
(ii)<PAGE>
10.06 Non-Reliance on Agent and other Banks. . . . . . . . . . . . 68
10.07 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . 69
10.08 Resignation or Removal of Agent. . . . . . . . . . . . . . . 69
10.09 Letter of Credit Collateral Account. . . . . . . . . . . . . 69
Section 11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 71
11.01 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.03 Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . 72
11.04 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . 73
11.05 Successors and Assigns . . . . . . . . . . . . . . . . . . . 74
11.06 Assignments and Participations . . . . . . . . . . . . . . . 74
11.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.08 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 77
11.10 Governing Law; Submission to Jurisdiction. . . . . . . . . . 77
11.11 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 78
11.12 Treatment of Certain Information;
Confidentiality. . . . . . . . . . . . . . . . . . . . . . 78
EXHIBIT A-1 - Form of Syndicated Note
EXHIBIT A-2 - Form of Money Market Note
EXHIBIT A-3 - Form of Money Market Note
EXHIBIT B - Form of Opinion of Counsel to
the Company
EXHIBIT C - Form of Opinion of Special New York
Counsel to Chase
EXHIBIT D - Form of Money Market Quote Request
EXHIBIT E - Form of Money Market Quote
EXHIBIT F - Form of Confidentiality Agreement
(iii)<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of August 26, 1994, between:
CBS INC., a corporation duly organized and validly existing under
the laws of the State of New York (the "Company"); each of the
lenders that is a signatory hereto identified under the caption
"BANKS" on the signature pages hereto or that, pursuant to
Section 11.06(b) hereof, shall become a "Bank" hereunder
(individually, a "Bank" and, collectively, the "Banks"); and THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking
association, as agent for the Banks (in such capacity, together
with its successors in such capacity, the "Agent").
The Company has requested that the Banks extend credit
to it in an aggregate principal or face amount not exceeding
$500,000,000 at any one time outstanding and the Banks are
prepared to extend such credit upon the terms and conditions
hereof. Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
"Affiliate" shall mean any Person which directly or
indirectly controls, or is under common control with, the Company
and, if such Person is an individual, any member of the immediate
family (including parents, spouse and children) of such
individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and
any Person who is controlled by any such member or trust. As
used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control
with") shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership
interests, by contract or otherwise). Notwithstanding the
foregoing, no individual shall be deemed to be an Affiliate
solely by reason of his or her being a director, officer or
employee of the Company or any of its Subsidiaries and the
Company and its Subsidiaries shall not be deemed to be Affiliates
of each other.
"Applicable Lending Office" shall mean, for each Bank
- 1 -<PAGE>
and for each Type of Loan, the "Lending Office" of such Bank (or
of an affiliate of such Bank) designated for such Type of Loan on
the signature pages hereof or such other office of such Bank (or
of an affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Company as the office by which its
Loans of such Type are to be made and maintained.
"Applicable Letter of Credit Fee Percentage" shall
mean, as of any day (i) with respect to any Standby Letter of
Credit, a rate per annum equal to the Applicable Percentage used
to determine the margin applicable to Eurodollar Loans for such
day and (ii) with respect to any Trade Letter of Credit, a rate
per annum agreed to in writing by the Company and the Issuing
Bank prior to the issuance thereof or, in the absence of any such
agreement, a rate per annum equal to the Applicable Percentage
used to determine the margin applicable to Eurodollar Loans for
such day.
"Applicable Percentage" shall mean on any date the
applicable percentage set forth below under "Eurodollar Loan
Margin" or "Facility Fee", as the case may be, based upon (A) the
Company Ratings applicable on such date or (B) the Leverage Ratio
as of the relevant Determination Date:
Eurodollar
Loan Margin Facility Fee
Category 1 .1700% .0800%
A+ or higher by S&P;
A1 or higher by Moody's; or
a Leverage Ratio lower than 1.5
Category 2 .2000% .1000%
A or A- by S&P;
A2 or A3 by Moody's; or
a Leverage Ratio of 1.5 or
higher and lower than 2.5
Category 3 .2750% .1250%
BBB+ or BBB by S&P;
Baa1 or Baa2 by Moody's; or
a Leverage Ratio of 2.5 or
higher and lower than 3.5
- 2 -<PAGE>
Category 4 .3625% .1875%
BBB- by S&P;
Baa3 by Moody's; or
a Leverage Ratio of 3.5 or
higher and lower than 4.5
Category 5 .5000% .2500%
BB+ or lower by S&P;
Ba1 or lower by Moody's; or
a Leverage Ratio of 4.5 or
higher
For purposes of the foregoing, (i) if the Company Ratings
established or deemed to have been established by Moody's and S&P
shall fall within different Categories, both of such ratings
shall be deemed to fall within the higher of such Categories
(determined on the basis that Category 1 is the highest
Category), except that (A) if such ratings differ by more than
one Category, then both of such ratings shall be deemed to fall
in the Category immediately below the higher of such Categories,
and (B) if the rating assigned by either Rating Agency shall fall
within Category 4 or Category 5 then both ratings shall be deemed
to fall within the Category in which the lower rating falls and
(ii) if the Company Ratings and the Leverage Ratio shall fall or
be deemed to fall within different Categories, the Applicable
Percentage shall be determined by reference to the higher of such
Categories. If any rating established or deemed to have been
established by Moody's or S&P shall be changed (other than as a
result of a change in the rating system of Moody's or S&P), such
change shall be effective as of the date on which it is first
announced by the applicable Rating Agency. If the rating system
of Moody's or S&P shall change, or if either such Rating Agency
shall not have a Company Rating in effect for a reason outside
the reasonable control of the Company, the Applicable Percentage
shall be determined as set forth above by reference to the
Company Rating (if any) not affected by such change and still in
effect and to the Leverage Ratio.
"Bankruptcy Code" shall mean the Federal Bankruptcy
Code of 1978, as amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum
equal to the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change
in any interest rate provided for herein based upon the Base Rate
- 3 -<PAGE>
resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean (a) Syndicated Loans that
bear interest at rates based upon the Base Rate and (b) Swingline
Loans.
"Basic Documents" shall mean, collectively, this
Agreement and the Letter of Credit Documents.
"Business Day" shall mean (a) any day on which
commercial banks are not authorized or required to close in New
York City and (b) if such day relates to the giving of notices or
quotes in connection with a LIBOR Auction or to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or the Interest Period for, a Eurodollar
Loan or a LIBOR Market Loan (as applicable) or a notice by the
Company with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, any day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Capital Lease Obligations" shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"Chase" shall mean The Chase Manhattan Bank (National
Association).
"Class" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Account" shall have the meaning assigned to
such term in Section 10.09(a) hereof.
"Commitment" shall mean, as to each Bank, the
obligation of such Bank to make Syndicated Loans pursuant to
Section 2.01 hereof, and to issue or participate in Letters of
Credit pursuant to Section 2.05 hereof, in an aggregate principal
or face amount at any one time outstanding up to but not
- 4 -<PAGE>
exceeding the amount set opposite such Bank's name on the
signature pages hereof under the caption "Commitment" (as the
same may be reduced at any time or from time to time pursuant to
Section 2.06 hereof).
"Commitment Percentage" shall mean, with respect to any
Bank, the ratio of (a) the amount of the Commitment of such Bank
to (b) the aggregate amount of the Commitments of all of the
Banks.
"Commitment Termination Date" shall mean the fifth
anniversary of the date hereof or, if such anniversary is not a
Business Day, the Business Day immediately preceding such
anniversary.
"Company Rating" shall mean, as of any date of
determination thereof, the rating most recently published by
Standard & Poor's or Moody's relating to the unsecured,
unguaranteed senior debt securities of the Company then
outstanding.
"Continue", "Continuation" and "Continued" shall refer
to the continuation pursuant to Section 2.10 hereof of a
Eurodollar Loan from one Interest Period to the next Interest
Period.
"Continuing Director" shall mean, at any date, an
individual (a) who, on the date hereof, is a member of the Board
of Directors of the Company, (b) who, as of such date, has been a
member of such Board of Directors for at least the 12 preceding
months, or (c) who has been approved to be a member of such Board
of Directors by a majority of the other Continuing Directors then
in office.
"Convert", "Conversion" and "Converted" shall refer to
the conversion pursuant to Section 2.10 hereof of one Type of
Syndicated Loan into another Type of Syndicated Loan, which (at
its sole discretion) may be accompanied by the transfer by a Bank
of a Loan from one Applicable Lending Office to another.
"Default" shall mean an Event of Default or an event
that with notice or lapse of time or both would become an Event
of Default. It is acknowledged and agreed that any event that
with notice or lapse of time under any note, agreement, indenture
or other document evidencing or relating to any Indebtedness of
the Company or any of its Subsidiaries that would constitute an
- 5 -<PAGE>
Event of Default under Section 9(b) hereof shall constitute a
Default hereunder.
"Determination Date" shall mean at any time the date of
the most recent fiscal quarter end as of which the Leverage Ratio
shall have been determined by the Company and set forth in a
certificate delivered pursuant to Section 8.01 hereof; provided,
that until the first such certificate shall be delivered,
"Determination Date" shall mean June 30, 1994.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"EBITDA" shall mean, for any period, the sum (without
duplication) of the following for the Company and its
Subsidiaries for such period: (i) income from continuing
operations before income taxes and extraordinary items plus
(ii) interest expense plus (iii) depreciation of fixed assets
plus (iv) amortization of goodwill and other intangible assets.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade
or business that is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which the
Company is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Code, described
in Section 414(m) or (o) of the Code of which the Company is a
member.
"Eurodollar Loans" shall mean Syndicated Loans that
bear interest at rates based on rates referred to in the
definition of "Fixed Base Rate" in this Section 1.01.
"Event of Default" shall have the meaning assigned to
such term in Section 9 hereof.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the
- 6 -<PAGE>
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for
such Business Day shall be the average rate charged to Chase on
such Business Day on such transactions as determined by the
Agent.
"Fee Letter" shall mean the letter agreement dated July
28, 1994 between the Company and Chase referred to therein as the
"Fee Letter".
"Fixed Base Rate" shall mean, with respect to any Fixed
Rate Loan for the Interest Period therefor, the arithmetic mean
(rounded upwards, if necessary, to the nearest 1/16 of 1%), as
determined by the Agent, of the rates per annum quoted by the
respective Reference Banks at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) on the date two
Business Days prior to the first day of such Interest Period for
the offering by the respective Reference Banks to leading banks
in the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to
the principal amount of such Eurodollar Loan or LIBOR Market Loan
to be made by the respective Reference Banks. If any Reference
Bank is not participating in any Fixed Rate Loans during the
Interest Period therefor, the Fixed Base Rate for such Loans for
such Interest Period shall be determined by reference to the
amount of such Loans that such Reference Bank would have made or
had outstanding had it been participating in such Loan; provided
that in the case of any LIBOR Market Loan, the Fixed Base Rate
for such Loan shall be determined with reference to deposits of
$25,000,000. Each Reference Bank agrees to furnish such
information at the request of the Agent; provided that if any
Reference Bank does not timely furnish such information for
determination of any Fixed Base Rate, the Agent shall determine
such Fixed Base Rate on the basis of the information timely
furnished by the remaining Reference Banks.
"Funded Debt" shall mean (a) all Indebtedness of the
Company and its Subsidiaries (determined on a consolidated basis)
for borrowed money (i) having a maturity of more than 12 months
from the date as of which the amount thereof is to be determined
or having a maturity of less than 12 months but by its terms
being renewable or extendible beyond 12 months from such date at
the option of the Company or a Subsidiary or (ii) classified and
accounted for as long term debt or the current portion of long
term debt on a consolidated balance sheet of the Company and its
Subsidiaries or (iii) arising hereunder and (b) all amounts
- 7 -<PAGE>
payable by the Company and its Subsidiaries to redeem preferred
stock of the Company (other than the Company's $10 Convertible
Series B Preference Stock) which by its terms must be redeemed by
the Company under any circumstances (other than solely at the
option of the Company) on or before the Commitment Termination
Date.
"Fixed Rate Loans" shall mean Eurodollar Loans and, for
the purposes of the definition of "Fixed Base Rate" in this
Section 1.01 and in Section 5 hereof, LIBOR Market Loans.
"GAAP" shall mean generally accepted accounting
principles applied on a basis consistent with those that, in
accordance with the last sentence of Section 1.02(a) hereof, are
to be used in making the calculations for purposes of determining
compliance with this Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person,
or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss,
and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other
similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used
as a verb shall have a correlative meaning.
"Indebtedness" shall mean, for any Person: (a)
obligations created, issued or incurred by such Person for
borrowed money (whether by loan, the issuance and sale of debt
securities or the sale of Property to another Person subject to
an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of
Property or services, other than trade accounts payable (other
than for borrowed money) arising in the ordinary course of
business; (c) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d)
obligations of such Person in respect of letters of credit or
- 8 -<PAGE>
similar instruments issued or accepted by banks and other
financial institutions for account of such Person; (e) Capital
Lease Obligations of such Person; and (f) Indebtedness of others
Guaranteed by such Person.
"Interest Period" shall mean:
(a) with respect to any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or
Converted from a Loan of another Type or the last day of the
next preceding Interest Period for such Loan and ending on
the numerically corresponding day in the first, second,
third, sixth or ninth or (with the approval of all of the
Banks) twelfth calendar month thereafter, as the Company may
select as provided in Section 4.05 hereof (or such longer
period as may be requested by the Company and agreed to by
all of the Banks), except that each Interest Period that
commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end
on the last Business Day of the appropriate subsequent
calendar month;
(b) With respect to any Set Rate Loan, the period
commencing on the date such Set Rate Loan is made and ending
on the Business Day falling at least seven days thereafter
selected by the Company as provided in Section 2.03(b)
hereof; and
(c) With respect to any LIBOR Market Loan, the period
commencing on the date such LIBOR Market Loan is made and
ending on the numerically corresponding day in the calendar
month thereafter selected by the Company as provided in
Section 2.03(b) hereof, except that each Interest Period
that commences on the last Business Day of a calendar month
(or any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end
on the last Business Day of the appropriate subsequent
calendar month.
Notwithstanding the foregoing: (i) if any Interest Period would
otherwise end after the Commitment Termination Date, such
Interest Period shall end on the Commitment Termination Date;
(ii) each Interest Period that would otherwise end on a day that
is not a Business Day shall end on the next succeeding Business
Day (or, in the case of an Interest Period for a Eurodollar Loan
or a LIBOR Market Loan, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next
- 9 -<PAGE>
preceding Business Day); and (iii) notwithstanding clause (i)
above, no Interest Period for any Eurodollar Loan or a LIBOR
Market Loan shall have a duration of less than one month and, if
the Interest Period for any Eurodollar or LIBOR Market Loan would
otherwise be a shorter period, such Loan shall not be available
hereunder for such period.
"Issuing Bank" shall mean Chase, as the issuer of
Letters of Credit under Section 2.05 hereof, together with its
successors and assigns in such capacity.
"Letter of Credit" shall have the meaning assigned to
such term in Section 2.05 hereof.
"Letter of Credit Documents" shall mean, with respect
to any Letter of Credit, collectively, any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit)
governing or providing for (a) the rights and obligations of the
parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such
obligations, each as the same may be modified and supplemented
and in effect from time to time.
"Letter of Credit Interest" shall mean, for each Bank,
such Bank's participation interest (or, in the case of the
Issuing Bank, the Issuing Bank's retained interest) in the
Issuing Bank's liability under Letters of Credit and such Bank's
rights and interests in Reimbursement Obligations and fees,
interest and other amounts payable in connection with Letters of
Credit and Reimbursement Obligations.
"Letter of Credit Liability" shall mean, without
duplication, at any time and in respect of any Letter of Credit,
the sum of (a) the undrawn face amount of such Letter of Credit
plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations of the Company at such time due and
payable in respect of all drawings made under such Letter of
Credit. For purposes of this Agreement, a Bank (other than the
Issuing Bank) shall be deemed to hold a Letter of Credit
Liability in an amount equal to its participation interest in the
related Letter of Credit under Section 2.05 hereof, and the
Issuing Bank shall be deemed to hold a Letter of Credit Liability
in an amount equal to its retained interest in the related Letter
of Credit after giving effect to the acquisition by the Banks
- 10 -<PAGE>
other than the Issuing Bank of their participation interests
under said Section 2.05.
"Leverage Ratio" shall mean, on any date, the ratio of
Funded Debt on such date to EBITDA for the period of four
consecutive fiscal quarters of the Company ending on such date.
"LIBO Margin" shall have the meaning assigned to such
term in Section 2.03(c)(ii)(C) hereof.
"LIBOR Auction" shall mean a solicitation of Money
Market Quotes setting forth LIBO Margins based on the LIBO Rate
pursuant to Section 2.03 hereof.
"LIBOR Market Loans" shall mean Money Market Loans
interest rates on which are determined on the basis of LIBO Rates
pursuant to a LIBOR Auction.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such Property. For purposes of this
Agreement and the other Basic Documents, a Person shall be deemed
to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating to
such Property.
"Loans" shall mean Syndicated Loans, Money Market Loans
and Swingline Loans.
"Majority Banks" shall mean, subject to the last
paragraph of Section 11.04 hereof, Banks having more than 50% of
the aggregate amount of the Commitments or, if the Commitments
shall have terminated, Banks holding more than 50% of the
aggregate unpaid principal amount of the Loans.
"Margin Stock" shall mean "margin stock" within the
meaning of Regulations U and X.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the financial condition of the Company and its
Subsidiaries taken as a whole, (b) the ability of the Company to
pay the principal of or interest on the Loans or the
Reimbursement Obligations or other amounts payable in connection
therewith, (c) the validity or enforceability of any of the Basic
- 11 -<PAGE>
Documents or (d) the rights and remedies of the Banks and the
Agent under any of the Basic Documents.
"Material Subsidiary" shall mean, at any time of
determination, any Subsidiary of the Company if, at such time,
such Subsidiary would qualify as a "significant subsidiary" under
Regulation S-X of the Securities and Exchange Commission as in
effect on the date hereof.
"Money Market Borrowing" shall have the meaning
assigned to such term in Section 2.03(b) hereof.
"Money Market Loan Limit" shall have the meaning
assigned to such term in Section 2.03(c)(ii) hereof.
"Money Market Loans" shall mean the loans provided for
by Section 2.03 hereof.
"Money Market Quote" shall mean an offer in accordance
with Section 2.03(c) hereof by a Bank to make a Money Market Loan
with one single specified interest rate.
"Money Market Quote Request" shall have the meaning
assigned to such term in Section 2.03(b) hereof.
"Moody's" shall mean Moody's Investors Service, Inc.,
or any successor thereof.
"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and that is
covered by Title IV of ERISA.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Permitted Investments" shall have the meaning assigned
to such term in the last paragraph of Section 10.09 hereof.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
- 12 -<PAGE>
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any
principal of any Loan, any Reimbursement Obligation or any other
amount under this Agreement, or any other Basic Document that is
not paid when due (whether at stated maturity, by acceleration or
otherwise), a rate per annum during the period from and including
the due date to but excluding the date on which such amount is
paid in full equal to 2% plus the Base Rate as in effect from
time to time (provided that, if the amount so in default is
principal of a Eurodollar Loan or a Money Market Loan and the due
date thereof is a day other than the last day of the Interest
Period therefor, the "Post-Default Rate" for such principal shall
be, for the period from and including such due date to but
excluding the last day of such Interest Period, 2% plus the
interest rate for such Loan as provided in Section 3.02 hereof
and, thereafter, the rate provided for above in this definition).
"Prime Rate" shall mean the rate of interest from time
to time announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of
Chase, located on the date hereof at 1 Chase Manhattan Plaza, New
York, New York 10081.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"Quarterly Dates" shall mean the last Business Day of
each March, June, September and December in each year, the first
of which shall be the first such day after the date of this
Agreement.
"Rating Agency" shall mean Moody's or Standard &
Poor's.
"Reference Banks" shall mean Chase, Bank of America
National Trust and Savings Association and Credit Suisse (or
their respective Applicable Lending Offices, as the case may be).
"Regulations A, D, U and X" shall mean, respectively,
Regulations A, D, U and X of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be
modified and supplemented and in effect from time to time.
- 13 -<PAGE>
"Regulatory Change" shall mean, with respect to any
Bank, any change after the date of this Agreement in Federal,
state or foreign law or regulations (including, without
limitation, Regulation D) or the adoption or making after such
date of any interpretation, directive or request applying to a
class of banks including such Bank of or under any Federal, state
or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reimbursement Obligations" shall mean, at any time,
the obligations of the Company then outstanding, or that may
thereafter arise in respect of all Letters of Credit then
outstanding, to reimburse amounts paid by the Issuing Bank in
respect of any drawings under a Letter of Credit.
"S&P" shall mean Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc., or any successor thereto.
"Set Rate" shall have the meaning assigned to such term
in Section 2.03(c)(ii)(D) hereof.
"Set Rate Auction" shall mean a solicitation of Money
Market Quotes setting forth Set Rates pursuant to Section 2.03
hereof.
"Set Rate Loans" shall mean Money Market Loans the
interest rates on which are determined on the basis of Set Rates
pursuant to a Set Rate Auction.
"Standby Letter of Credit" shall mean any Letter of
Credit that is not a Trade Letter of Credit.
"Subsidiary" shall mean, with respect to any Person,
any corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of
the board of directors or other persons performing similar
functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such
- 14 -<PAGE>
Person and one or more Subsidiaries of such Person.
"Swingline Bank" shall mean Chase, as the maker of
Swingline Loans under Section 2.04 hereof, together with its
successors and assigns in such capacity.
"Swingline Borrowing Notice" shall have the meaning
assigned to such term in Section 2.04(b) hereof.
"Swingline Commitment" shall mean the obligation of the
Swingline Bank to make Swingline Loans pursuant to Section 2.04
hereof in an aggregate amount at any one time outstanding up to
but not exceeding $25,000,000 (as the same may be reduced at any
time or from time to time pursuant to Section 2.06 hereof).
"Swingline Interest" shall have the meaning assigned to
such term in Section 11.06(b) hereof.
"Swingline Loans" shall mean the loans provided for by
Section 2.04 hereof.
"Syndicated Loans" shall mean the loans provided for by
Section 2.01 hereof, which may be Base Rate Loans and/or
Eurodollar Loans.
"Tisch Family" shall mean Laurence A. Tisch, Preston R.
Tisch, the members of their immediate families (including
siblings, parents, spouses, children and other lineal
descendants) and Persons directly or indirectly controlled by
either of them and/or any such member or members of either of
their immediate families. A "member" of the Tisch Family shall
mean Laurence Tisch, Preston R. Tisch, any such member or any
such Person.
"Trade Letter of Credit" shall mean a commercial or
documentary letter of credit issued in connection with a trade
transaction.
"Type" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Wholly Owned Subsidiary" shall mean, with respect to
any Person, any corporation, partnership or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
- 15 -<PAGE>
one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial
matters required to be delivered to the Banks hereunder shall
(unless otherwise disclosed to the Banks in writing at the time
of delivery thereof) be prepared, and all calculations for the
purpose of determining compliance with this Agreement shall be
made, in accordance with generally accepted accounting principles
applied on a basis consistent with those used in the preparation
of the latest financial statements furnished to the Banks
hereunder (which, prior to the delivery of the first financial
statements under Section 8.01 hereof, shall mean the unaudited
financial statements as at June 30, 1994 referred to in
Section 7.02 hereof); provided that if a change in generally
accepted accounting principles shall have affected the
computation of the Leverage Ratio and (i) the Company shall have
objected to computing the Leverage Ratio on such basis at the
time of delivery of such financial statements or (ii) the
Majority Banks shall so object in writing within 30 days after
delivery of such financial statements, then the Company and the
Banks (acting through the Agent) shall negotiate in good faith to
agree upon amendments to this Agreement appropriate to reflect
such change, and pending agreement on such amendments such
computation shall be made on a basis consistent with that used in
the preparation of the latest financial statements as to which
such objection shall not have been made (which, if objection is
made in respect of the first financial statements delivered under
Section 8.01 hereof, shall mean the latest unaudited financial
statements referred to in Section 7.02 hereof).
(b) At the request of any Bank (through the Agent),
the Company shall promptly deliver to such Bank (i) a description
in reasonable detail of any material variation between the
application of accounting principles employed in the preparation
of any annual or quarterly financial statement under Section 8.01
hereof and the application of accounting principles employed in
the preparation of the next preceding annual or quarterly
financial statements as to which no objection has been made in
accordance with the last sentence of subsection (a) above and
(ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
1.03 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan
- 16 -<PAGE>
refers to whether such Loan is a Money Market Loan, a Swingline
Loan or a Syndicated Loan, each of which constitutes a Class.
The "Type" of a Loan refers to whether such Loan is a Base Rate
Loan, a Eurodollar Loan, a Set Rate Loan or a LIBOR Market Loan,
each of which constitutes a Type. Loans may be identified by
both Class and Type.
Section 2. Commitments, Loans and Prepayments.
2.01 Loans. Each Bank severally agrees, on the terms
and conditions of this Agreement, to make loans to the Company in
Dollars during the period from and including the date hereof to
but not including the Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not
exceeding the amount of the Commitment of such Bank as in effect
from time to time, provided that in no event shall the aggregate
principal amount of all Loans plus the aggregate amount of all
Letter of Credit Liabilities exceed the aggregate amount of the
Commitments as in effect from time to time. Subject to the terms
and conditions of this Agreement, during such period the Company
may borrow, repay and reborrow the amount of the Commitments by
means of Base Rate Loans and Eurodollar Loans and may Convert
Loans of one Type into Loans of another Type (as provided in
Section 2.10 hereof) or Continue Loans of one Type as Loans of
the same Type (as provided in Section 2.10 hereof); provided that
no more than fifteen (or such higher number as the Agent may
agree to) separate Interest Periods in respect of Eurodollar
Loans from each Bank may be outstanding at any one time; and
provided, further, that (unless the Agent otherwise agrees) prior
to the date falling 15 days after the date hereof, all Eurodollar
Loans must have an Interest Period of one month's duration, and,
to the extent that prior to such date a Eurodollar Loan would not
satisfy such conditions, such Loan shall be made as a Base Rate
Loan.
2.02 Borrowings of Syndicated Loans. (a) The Company
shall give the Agent notice of each borrowing hereunder as
provided in Section 4.05 hereof. Not later than 1:00 p.m. New
York time on the date specified for each borrowing of Syndicated
Loans hereunder, each Bank shall make available the amount of the
Syndicated Loan or Loans to be made by it on such date to the
Agent, at account number NYAO-DI-900-9-000002 maintained by the
Agent with Chase at the Principal Office, in immediately
available funds, for account of the Company. The amount so
received by the Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Company by depositing
the same, in immediately available funds, in an account of the
- 17 -<PAGE>
Company maintained with Chase at the Principal Office designated
by the Company.
(b) In the event that the Company does not repay any
Swingline Loan made by the Swingline Bank by 2:00 p.m. New York
time on the last day of the Interest Period applicable thereto,
at any time thereafter until the unpaid principal amount of such
Swingline Loan shall have been paid in full, the Swingline Bank
may, and the Company hereby irrevocably authorizes and empowers
(which power is coupled with an interest) the Swingline Bank to,
deliver, on behalf of the Company, to the Agent under
Section 2.02(a) hereof a notice of borrowing of Syndicated Loans
that are Base Rate Loans in an amount equal to the then unpaid
principal amount of such Swingline Loan. In the event that the
power of the Swingline Bank to give such notice of borrowing on
behalf of the Company is terminated for any reason whatsoever
(including, without limitation, a termination resulting from the
occurrence of an event specified in clause (f) or (g) of
Section 9 hereof with respect to the Company), or the Swingline
Bank is otherwise precluded for any reason whatsoever from giving
a notice of borrowing on behalf of the Company as provided in the
preceding sentence, each Bank shall, upon notice from the
Swingline Bank, promptly purchase from the Swingline Bank a
participation in (or, if and to the extent specified by the
Swingline Bank, an assignment in) such Swingline Loan in the
amount of the Base Rate Loan it would have been obligated to make
pursuant to such notice of borrowing. Each Bank shall, not later
than 4:00 p.m. New York time on the Business Day on which such
notice is given (if such notice is given by 2:15 p.m. New York
time) or 9:00 a.m. New York time on the next succeeding Business
Day (if such notice is given after 2:15 p.m. New York time), make
available the amount of the Base Rate Loan to be made by it (or
the amount of the participation or assignment to be purchased by
it, as the case may be) to the Agent at the account specified in
Section 2.02(a) hereof and the amount so received by the Agent
shall promptly be made available to the Swingline Bank by
remitting the same, in immediately available funds, to the
Swingline Bank. Promptly following its receipt of any payment in
respect of such Swingline Loan, the Swingline Bank shall pay to
each Bank that has acquired a participation in such Loan such
Bank's proportionate share of such payment. Anything in this
Agreement to the contrary notwithstanding (including, without
limitation, in Section 6.02 hereof), the obligation of each Bank
to make its Base Rate Loan (or purchase its participation or
assignment in such Swingline Loan, as the case may be) pursuant
to this Section 2.02(b) is unconditional under any and all
circumstances whatsoever and shall not be subject to set-off,
counterclaim or defense to payment that such Bank may have or
- 18 -<PAGE>
have had against the Company, the Agent, the Swingline Bank or
any other Bank and, without limiting any of the foregoing, shall
be unconditional irrespective of (i) the occurrence of any
Default, (ii) the financial condition of the Company, any
Subsidiary, any Affiliate, the Agent, the Swingline Bank or any
other Bank or (iii) the termination or cancellation of the
Commitments. The Company agrees that any Bank so purchasing a
participation (or assignment) in such Swingline Loan may exercise
all rights of set-off, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such
Bank were a direct holder of a Swingline Loan in the amount of
such participation.
2.03 Money Market Loans.
(a) In addition to borrowings of Syndicated Loans, at
any time prior to the Commitment Termination Date the Company
may, as set forth in this Section 2.03, request the Banks to make
offers to make Money Market Loans to the Company in Dollars. The
Banks may, but shall have no obligation to, make such offers and
the Company may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section 2.03. Money
Market Loans may be LIBOR Market Loans or Set Rate Loans (each a
"Type" of Money Market Loan), provided that:
(i) there may be no more than fifteen (or such
higher number as the Agent may agree to) different Interest
Periods for both Syndicated Loans and Money Market Loans
outstanding at the same time (for which purpose Interest
Periods described in different lettered clauses of the
definition of the term "Interest Period" shall be deemed to
be different Interest Periods even if they are coterminous);
(ii) the aggregate principal amount of all Loans
plus the aggregate amount of all Letter of Credit
Liabilities at any one time outstanding shall not exceed the
aggregate amount of the Commitments at such time; and
(iii) the aggregate principal amount of all Money
Market Loans at any one time outstanding shall not exceed
the aggregate amount of the Commitments at such time.
(b) When the Company wishes to request offers to make
Money Market Loans, it shall give the Agent (which shall promptly
notify the Banks) notice (a "Money Market Quote Request") so as
to be received no later than 11:00 a.m. New York time on (x) the
fourth Business Day prior to the date of borrowing proposed
therein, in the case of a LIBOR Auction or (y) the Business Day
- 19 -<PAGE>
next preceding the date of borrowing proposed therein, in the
case of a Set Rate Auction (or, in any such case, such other time
and date as the Company and the Agent, with the consent of the
Majority Banks, may agree). The Company may request offers to
make Money Market Loans for up to six (or such higher number as
the Agent may agree to) different Interest Periods in a single
notice (for which purpose Interest Periods in different lettered
clauses of the definition of the term "Interest Period" shall be
deemed to be different Interest Periods even if they are
coterminous); provided that the request for each separate
Interest Period shall be deemed to be a separate Money Market
Quote Request for a separate borrowing (a "Money Market
Borrowing"). Each such notice shall be substantially in the form
of Exhibit D hereto and shall specify as to each Money Market
Borrowing:
(i) the proposed date of such borrowing, which
shall be a Business Day;
(ii) the aggregate amount of such Money Market
Borrowing, which shall be at least $10,000,000 (or a larger
multiple of $1,000,000) but shall not cause the limits
specified in Section 2.03(a) hereof to be violated;
(iii) the duration of the Interest Period
applicable thereto;
(iv) whether the Money Market Quotes requested for
a particular Interest Period are quotes for LIBOR Market
Loans or Set Rate Loans; and
(v) if the Money Market Quotes requested are
quotes for Set Rate Loans, the date on which the Money
Market Quotes are to be submitted if it is before the
proposed date of borrowing (the date on which such Money
Market Quotes are to be submitted is called the "Quotation
Date").
Except as otherwise provided in this Section 2.03(b), no Money
Market Quote Request shall be given within five Business Days (or
such other number of days as the Company and the Agent, with the
consent of the Majority Banks, may agree) of any other Money
Market Quote Request (unless the auction thereby requested shall
be abandoned).
(c) (i) Each Bank may submit one or more Money Market
Quotes, each containing an offer to make a Money Market Loan
in response to any Money Market Quote Request; provided
- 20 -<PAGE>
that, if the Company's request under Section 2.03(b) hereof
specified more than one Interest Period, such Bank may make
a single submission containing one or more Money Market
Quotes for each such Interest Period. Each Money Market
Quote must be submitted to the Agent not later than
(x) 2:00 p.m. New York time on the fourth Business Day prior
to the proposed date of borrowing, in the case of a LIBOR
Auction or (y) 10:00 a.m. New York time on the Quotation
Date, in the case of a Set Rate Auction (or, in any such
case, such other time and date as the Company and the Agent,
with the consent of the Majority Banks, may agree); provided
that any Money Market Quote may be submitted by Chase (or
its Applicable Lending Office) only if Chase (or such
Applicable Lending Office) notifies the Company of the terms
of the offer contained therein not later than (x) 1:00 p.m.
New York time on the fourth Business Day prior to the
proposed date of borrowing, in the case of a LIBOR Auction
or (y) 9:45 a.m. New York time on the Quotation Date, in the
case of a Set Rate Auction. Subject to Sections 5.02(b),
5.03, 6.02 and 9 hereof, any Money Market Quote so made
shall be irrevocable except with the consent of the Agent
given on the instructions of the Company.
(ii) Each Money Market Quote shall be
substantially in the form of Exhibit E hereto and shall
specify:
(A) the proposed date of borrowing and the
Interest Period therefor;
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which
principal amount shall be at least $5,000,000 (or a
larger multiple of $1,000,000); provided that the
aggregate principal amount of all Money Market Loans
for which a Bank submits Money Market Quotes (x) may be
greater or less than the Commitment of such Bank but
(y) may not exceed the principal amount of the Money
Market Borrowing for a particular Interest Period for
which offers were requested;
(C) in the case of a LIBOR Auction, the margin
above or below the applicable LIBO Rate (the "LIBO
Margin") offered for each such Money Market Loan,
expressed as a percentage (rounded upwards, if
necessary, to the nearest 1/10,000th of 1%) to be added
to or subtracted from the applicable LIBO Rate;
- 21 -<PAGE>
(D) in the case of a Set Rate Auction, the rate
of interest per annum (rounded upwards, if necessary,
to the nearest 1/10,000th of 1%) offered for each such
Money Market Loan (the "Set Rate"); and
(E) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Company, no
Money Market Quote shall contain qualifying, conditional or
similar language or propose terms other than or in addition
to those set forth in the applicable Money Market Quote
Request and, in particular, no Money Market Quote may be
conditioned upon acceptance by the Company of all (or some
specified minimum) of the principal amount of the Money
Market Loan for which such Money Market Quote is being made,
provided that the submission by any Bank containing more
than one Money Market Quote may be conditioned on the
Company not accepting offers contained in such submission
that would result in such Bank making Money Market Loans
pursuant thereto in excess of a specified aggregate amount
(the "Money Market Loan Limit").
(d) The Agent shall (x) in the case of a Set Rate
Auction, as promptly as practicable after the Money Market Quote
is submitted (but in any event not later than 10:15 a.m. New York
time on the Quotation Date) or (y) in the case of a LIBOR
Auction, by 4:00 p.m. New York time on the day a Money Market
Quote is submitted, notify the Company of the terms (i) of any
Money Market Quote submitted by a Bank that is in accordance with
Section 2.03(c) hereof and (ii) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a previous
Money Market Quote submitted by such Bank with respect to the
same Money Market Quote Request. Any such subsequent Money
Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a
manifest error in such former Money Market Quote. The Agent's
notice to the Company shall specify (A) the aggregate principal
amount of the Money Market Borrowing for which offers have been
received and (B) the respective principal amounts and LIBO
Margins or Set Rates, as the case may be, so offered by each Bank
(identifying the Bank that made each Money Market Quote).
(e) Not later than 11:00 a.m. New York time on (x) the
third Business Day prior to the proposed date of borrowing, in
the case of a LIBOR Auction or (y) the Quotation Date, in the
case of a Set Rate Auction (or, in any such case, such other time
and date as the Company and the Agent, with the consent of the
Majority Banks, may agree), the Company shall notify the Agent of
- 22 -<PAGE>
its acceptance or nonacceptance of the offers so notified to it
pursuant to Section 2.03(d) hereof (which notice shall specify
the aggregate principal amount of offers from each Bank for each
Interest Period that are accepted, it being understood that the
failure of the Company to give such notice by such time shall
constitute nonacceptance) and the Agent shall promptly notify
each affected Bank. The notice from the Agent shall also specify
the aggregate principal amount of offers for each Interest Period
that were accepted and the lowest and highest Money Market
Margins and Money Market Rates that were accepted for each
Interest Period. The Company may accept any Money Market Quote
in whole or in part (provided that any Money Market Quote
accepted in part shall be at least $5,000,000 or a larger
multiple of $1,000,000); provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set
forth in the related Money Market Quote Request;
(ii) the aggregate principal amount of each Money
Market Borrowing shall be at least $10,000,000 (or a larger
multiple of $1,000,000) but shall not cause the limits
specified in Section 2.03(a) hereof to be violated;
(iii) acceptance of offers may, subject to clause
(v) below, be made only in ascending order of LIBO Margins
or Set Rates, as the case may be, in each case beginning
with the lowest rate so offered;
(iv) the Company may not accept any offer where
the Agent has advised the Company that such offer fails to
comply with Section 2.03(c)(ii) hereof or otherwise fails to
comply with the requirements of this Agreement (including,
without limitation, Section 2.03(a) hereof);
(v) the aggregate principal amount of each Money
Market Borrowing from any Bank may not exceed any applicable
Money Market Loan Limit of such Bank.
If offers are made by two or more Banks with the same LIBO
Margins or Set Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which offers are
accepted for the related Interest Period, the principal amount of
Money Market Loans in respect of which such offers are accepted
shall be allocated by the Company among such Banks as nearly as
possible (in amounts of at least $5,000,000 or larger multiples
of $1,000,000) in proportion to the aggregate principal amount of
such offers. Determinations by the Company of the amounts of
- 23 -<PAGE>
Money Market Loans shall be conclusive in the absence of manifest
error.
(f) Any Bank whose offer to make any Money Market Loan
has been accepted in accordance with the terms and conditions of
this Section 2.03 shall, not later than 1:00 p.m. New York time
on the date specified for the making of such Loan, make the
amount of such Loan available to the Agent at account number
NYAO-DI-900-9-000002 maintained by the Agent with Chase at the
Principal Office in immediately available funds, for account of
the Company. The amount so received by the Agent shall, subject
to the terms and conditions of this Agreement, be made available
to the Company on such date by depositing the same, in
immediately available funds, in an account of the Company
maintained with Chase at the Principal Office designated by the
Company.
2.04 Swingline Loans.
(a) The Swingline Bank hereby agrees, on the terms and
conditions of this Agreement, to make loans to the Company in
Dollars during the period from and including the date hereof to
but not including the Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not
exceeding the Swingline Commitment; provided that (i) the
aggregate unpaid principal amount of all Swingline Loans,
together with the aggregate unpaid principal amount of all
Syndicated Loans and all Money Market Loans and the aggregate
amount of all Letter of Credit Liabilities at any one time
outstanding, may not exceed the aggregate amount of the
Commitments and (ii) the aggregate unpaid principal amount of all
Swingline Loans may not exceed $25,000,000. Subject to the terms
of this Agreement, the Company may borrow, repay and reborrow the
amount of the Swingline Commitment by means of Base Rate Loans.
(b) The Company shall, not before noon and not later
than 4:00 p.m. New York time on the date on which the Company
proposes to borrow a Swingline Loan, give the Agent (which shall
promptly notify the Swingline Bank and the Banks) notice of such
borrowing (a "Swingline Borrowing Notice"), which notice shall be
irrevocable and effective only upon receipt by the Agent and
shall specify the principal amount of the Swingline Loan to be
borrowed (which shall be at least $10,000,000 and in larger
multiples of $1,000,000). Not later than 4:30 p.m. New York
time, on the date specified in each Swingline Borrowing Notice
hereunder, the Swingline Bank shall, subject to the terms of this
Agreement, make the amount of the Swingline Loan to be made by it
on such date available to the Agent in account number
- 24 -<PAGE>
NYAO-DI-900-9-000002 maintained by the Agent with Chase at the
Principal Office in immediately available funds, for account of
the Company. The amount so received by the Agent shall, subject
to the terms and conditions of this Agreement, be made available
to the Company on such date by depositing the same, in
immediately available funds, in an account of the Company
maintained with Chase at the Principal Office designated by the
Company.
2.05 Letters of Credit. Subject to the terms and
conditions of this Agreement, the Commitments may be utilized,
upon the request of the Company, in addition to the Loans
provided for by Section 2.01(a) hereof, by the issuance by the
Issuing Bank of letters of credit (collectively, "Letters of
Credit") for account of the Company or any of its Subsidiaries
(as specified by the Company), provided that in no event shall
(i) the aggregate amount of all Letter of Credit Liabilities,
together with the aggregate principal amount of the Loans, exceed
the aggregate amount of the Commitments as in effect from time to
time, (ii) the outstanding aggregate amount of all Letter of
Credit Liabilities exceed $25,000,000 and (iii) the expiration
date of any Letter of Credit extend beyond the earlier of the
Commitment Termination Date and the date twelve months following
the issuance of such Letter of Credit. The following additional
provisions shall apply to Letters of Credit:
(a) The Company shall give the Agent at least three
Business Days' irrevocable prior notice (effective upon
receipt) specifying the Business Day (which shall be no
later than 30 days preceding the Commitment Termination
Date) each Letter of Credit is to be issued and the account
party or parties therefor and describing in reasonable
detail the proposed terms of such Letter of Credit
(including the beneficiary thereof) and the nature of the
transactions or obligations proposed to be supported thereby
(including whether such Letter of Credit is to be a
commercial letter of credit or a standby letter of credit).
Upon receipt of any such notice, the Agent shall advise the
Issuing Bank of the contents thereof.
(b) On each day during the period commencing with the
issuance by the Issuing Bank of any Letter of Credit and
until such Letter of Credit shall have expired or been
terminated, the Commitment of each Bank shall be deemed to
be utilized for all purposes of this Agreement in an amount
equal to such Bank's Commitment Percentage of the then
undrawn face amount of such Letter of Credit. Each Bank
(other than the Issuing Bank) agrees that, upon the issuance
- 25 -<PAGE>
of any Letter of Credit hereunder, it shall automatically
acquire a participation in the Issuing Bank's liability
under such Letter of Credit in an amount equal to such
Bank's Commitment Percentage of such liability, and each
Bank (other than the Issuing Bank) thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor
and not as surety, and shall be unconditionally obligated to
the Issuing Bank to pay and discharge when due, its
Commitment Percentage of the Issuing Bank's liability under
such Letter of Credit.
(c) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment under such Letter of
Credit, the Issuing Bank shall promptly notify the Company
(through the Agent) of the amount to be paid by the Issuing
Bank as a result of such demand and the date on which
payment is to be made by the Issuing Bank to such
beneficiary in respect of such demand. Notwithstanding the
identity of the account party of any Letter of Credit, the
Company hereby unconditionally agrees to pay and reimburse
the Agent for the account of the Issuing Bank for the amount
of each demand for payment under such Letter of Credit not
later than the Reimbursement Date (as defined below) for
such payment, without presentment, demand, protest or other
formalities of any kind. For purposes of the preceding
sentence, the "Reimbursement Date" for any payment under a
Letter of Credit shall mean (i) the date of such payment, if
the Issuing Bank shall have notified the Company at or
before 3:00 p.m. New York time on such date that the Issuing
Bank intends to make such payment on such date, or (ii) the
first Business Day following such date of payment, in all
other cases. Nothing in this Agreement shall release the
Issuing Bank from any claim by the Company for gross
negligence in honoring or failing to honor any demand for
payment under a Letter of Credit.
(d) Forthwith upon its receipt of a notice referred to
in clause (c) of this Section 2.05, the Company shall advise
the Agent whether or not the Company intends to borrow
hereunder to finance its obligation to reimburse the Issuing
Bank for the amount of the related demand for payment and,
if it does, submit a notice of such borrowing as provided in
Section 4.05 hereof. In the event that the Company fails to
so advise the Agent, or if the Company fails to reimburse
the Issuing Bank for a payment under a Letter of Credit by
the Reimbursement Date (as defined in the preceding
paragraph (c)), the Agent shall give each Bank prompt notice
of the amount of the demand for payment, specifying such
- 26 -<PAGE>
Bank's Commitment Percentage of the amount of the related
demand for payment.
(e) Each Bank (other than the Issuing Bank) shall pay
to the Agent for account of the Issuing Bank at the
Principal Office in Dollars and in immediately available
funds, the amount of such Bank's Commitment Percentage of
any payment under a Letter of Credit upon notice by the
Issuing Bank (through the Agent) to such Bank requesting
such payment and specifying such amount. Each such Bank's
obligation to make such payment to the Agent for account of
the Issuing Bank under this clause (e), and the Issuing
Bank's right to receive the same, shall be absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the failure of
any other Bank to make its payment under this clause (e),
the financial condition of the Company (or any other account
party), the existence of any Default or the termination of
the Commitments. Each such payment to the Issuing Bank
shall be made without any offset, abatement, withholding or
reduction whatsoever. If any Bank shall default in its
obligation to make any such payment to the Agent for account
of the Issuing Bank, for so long as such default shall
continue the Agent may at the request of the Issuing Bank
withhold from any payments received by the Agent under this
Agreement for account of such Bank the amount so in default
and, to the extent so withheld, pay the same to the Issuing
Bank in satisfaction of such defaulted obligation.
(f) Upon the making of each payment by a Bank to the
Issuing Bank pursuant to clause (e) above in respect of any
Letter of Credit, such Bank shall, automatically and without
any further action on the part of the Agent, the Issuing
Bank or such Bank, acquire (i) a participation in an amount
equal to such payment in the Reimbursement Obligation owing
to the Issuing Bank by the Company hereunder and under the
Letter of Credit Documents relating to such Letter of Credit
and (ii) a participation in a percentage equal to such
Bank's Commitment Percentage in any interest or other
amounts payable by the Company hereunder and under such
Letter of Credit Documents in respect of such Reimbursement
Obligation (other than the commissions, charges, costs and
expenses payable to the Issuing Bank pursuant to clause (g)
of this Section 2.05). Upon receipt by the Issuing Bank
from or for account of the Company of any payment in respect
of any Reimbursement Obligation or any such interest or
other amount (including by way of setoff or application of
proceeds of any collateral security) the Issuing Bank shall
- 27 -<PAGE>
promptly pay to the Agent for account of each Bank entitled
thereto, such Bank's Commitment Percentage of such payment,
each such payment by the Issuing Bank to be made in the same
money and funds in which received by the Issuing Bank. In
the event any payment received by the Issuing Bank and so
paid to the Banks hereunder is rescinded or must otherwise
be returned by the Issuing Bank, each Bank shall, upon the
request of the Issuing Bank (through the Agent), repay to
the Issuing Bank (through the Agent) the amount of such
payment paid to such Bank, with interest at the rate
specified in clause (j) of this Section 2.05.
(g) The Company shall pay to the Agent for account of
each Bank (ratably in accordance with their respective
Commitment Percentages) a letter of credit fee in respect of
each Letter of Credit in an amount equal to the Applicable
Letter of Credit Fee Percentage of the daily average undrawn
face amount of such Letter of Credit for the period from and
including the date of issuance of such Letter of Credit (i)
in the case of a Letter of Credit that expires in accordance
with its terms, to and including such expiration date and
(ii) in the case of a Letter of Credit that is drawn in full
or is otherwise terminated other than on the stated
expiration date of such Letter of Credit, to but excluding
the date such Letter of Credit is drawn in full or is
terminated (such fee to be non-refundable, to be paid in
arrears on each Quarterly Date and on the Commitment
Termination Date and to be calculated for any day after
giving effect to any payments made under such Letter of
Credit on such day). In addition, the Company shall pay to
the Agent for account of the Issuing Bank all commissions,
charges, costs and expenses in the amounts customarily
charged by the Issuing Bank from time to time with respect
to the issuance of each Letter of Credit and drawings and
other transactions relating thereto.
(h) Promptly following the end of each calendar month,
the Issuing Bank shall deliver (through the Agent) to each
Bank and the Company a notice describing the aggregate
amount of all Letters of Credit outstanding at the end of
such month. Upon the request of any Bank from time to time,
the Issuing Bank shall deliver any other information
reasonably requested by such Bank with respect to each
Letter of Credit then outstanding.
(i) The issuance by the Issuing Bank of each Letter of
Credit shall, in addition to the conditions precedent set
forth in Section 6 hereof, be subject to the condition
- 28 -<PAGE>
precedent that such Letter of Credit shall be in such form,
contain such terms and support such transactions as shall be
satisfactory to the Issuing Bank consistent with its then
current practices and procedures with respect to letters of
credit of the same type.
(j) To the extent that any Bank shall fail to pay any
amount required to be paid pursuant to clause (e) or (f) of
this Section 2.05 on the due date therefor, such Bank shall
pay interest to the Issuing Bank (through the Agent) on such
amount from and including such due date to but excluding the
date such payment is made, provided that if such Bank shall
fail to make such payment to the Issuing Bank within three
Business Days of such due date, then, retroactively to the
due date, such Bank shall be obligated to pay interest on
such amount at the Post-Default Rate.
(k) The issuance by the Issuing Bank of any
modification or supplement to any Letter of Credit hereunder
shall be subject to the same conditions applicable under
this Section 2.05 to the issuance of new Letters of Credit,
and no such modification or supplement shall be issued
hereunder unless either (i) the respective Letter of Credit
affected thereby would have complied with such conditions
had it originally been issued hereunder in such modified or
supplemented form or (ii) each Bank shall have consented
thereto.
The Company hereby indemnifies and holds harmless each Bank and
the Agent from and against any and all claims and damages,
losses, liabilities, costs or expenses that such Bank or the
Agent may incur (or that may be claimed against such Bank or the
Agent by any Person whatsoever) by reason of or in connection
with the execution and delivery or transfer of or payment or
refusal to pay by the Issuing Bank under any Letter of Credit;
provided that the Company shall not be required to indemnify any
Bank or the Agent for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused
by (x) the willful misconduct or gross negligence of the Issuing
Bank in determining whether a request presented under any Letter
of Credit complied with the terms of such Letter of Credit or
(y) in the case of the Issuing Bank, such Bank's failure to pay
under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of such
Letter of Credit. Nothing in this Section 2.05 is intended to
limit the other obligations of the Company, any Bank or the Agent
under this Agreement.
- 29 -<PAGE>
2.06 Changes of Commitments.
(a) The aggregate amount of the Commitments and the
Swingline Commitment shall be automatically reduced to zero on
the Commitment Termination Date.
(b) The Company shall have the right at any time or
from time to time (i) so long as no Syndicated Loans, Money
Market Loans, Swingline Loans or Letter of Credit Liabilities are
outstanding, to terminate the Commitments and (ii) to reduce the
aggregate unused amount of the Commitments (for which purpose use
of the Commitments shall be deemed to include the aggregate
amount of Letter of Credit Liabilities and the aggregate
principal amount of all Loans); provided that (A) the Company
shall give notice of each such termination or reduction as
provided in Section 4.05 hereof, (B) each partial reduction shall
be in an aggregate amount at least equal to $10,000,000 and
(C) the aggregate amount of the Commitments shall at no time be
less than the amount of the Swingline Commitment as then in
effect.
(c) The Company shall have the right at any time or
from time to time (i) to terminate the Swingline Commitment and
(ii) to reduce the aggregate unused amount of the Swingline
Commitment; provided that (A) the Company shall give notice of
each such termination or reduction as provided in Section 4.05
hereof and (B) each partial reduction shall be in an aggregate
amount at least equal to $10,000,000.
(d) The Commitments and the Swingline Commitment once
terminated or reduced may not be reinstated.
2.07 Facility Fee. The Company shall pay to the Agent
for account of each Bank a facility fee on the daily average
amount of such Bank's Commitment, for the period from and
including the date of this Agreement to but not including the
earlier of the date such Commitment is terminated and the
Commitment Termination Date, at a rate per annum equal to
Applicable Percentage as in effect from time to time. Accrued
facility fee shall be payable on each Quarterly Date and on the
earlier of the date the Commitments are terminated and the
Commitment Termination Date.
2.08 Lending Offices. The Loans of each Type made by
each Bank shall be made and maintained at such Bank's Applicable
Lending Office for Loans of such Type.
- 30 -<PAGE>
2.09 Several Obligations; Remedies Independent. The
failure of any Bank to make any Loan to be made by it on the date
specified therefor shall not relieve any other Bank of its
obligation to make its Loan on such date, but neither any Bank
nor the Agent shall be responsible for the failure of any other
Bank to make a Loan to be made by such other Bank, and no Bank
shall have any obligation to the Agent or any other Bank for the
failure by such Bank to make any Loan required to be made by such
Bank. The amounts payable by the Company at any time hereunder
to each Bank shall be a separate and independent debt and each
Bank shall be entitled to protect and enforce its rights arising
out of this Agreement and it shall not be necessary for any other
Bank or the Agent to consent to, or be joined as an additional
party in, any proceedings for such purposes.
2.10 Prepayments of Loans and Conversions or
Continuations of Loans.
(a) Subject to Section 4.04 hereof, the Company shall
have the right to prepay Syndicated Loans or to Convert
Syndicated Loans of one Type into Syndicated Loans of another
Type or Continue Syndicated Loans of one Type as Syndicated Loans
of the same Type, at any time or from time to time, provided
(a) the Company shall give the Agent notice of each such
prepayment, Conversion or Continuation as provided in
Section 4.05 hereof (and, upon the date specified in any such
notice of prepayment, the amount to be prepaid shall become due
and payable hereunder), (b) the Eurodollar Loans may be prepaid
or Converted only on the last day of an Interest Period for such
Loan and (c) prior to the date falling 15 days after the date
hereof, all Eurodollar Loans must have an Interest Period of one
month's duration, and, to the extent that prior to such date a
Eurodollar Loan would not satisfy such conditions, such Loan may
not be Converted into a Eurodollar Loan.
Notwithstanding the foregoing, and without limiting the
rights and remedies of the Banks under Section 9 hereof, in the
event that any Event of Default shall have occurred and be
continuing, the Agent may (and at the request of the Majority
Banks shall) suspend the right of the Company to Convert any
Syndicated Loan into a Eurodollar Loan, or to Continue any
Syndicated Loan as a Eurodollar Loan, in which event all
Eurodollar Loans shall be Converted (on the last day(s) of the
respective Interest Periods therefor) or Continued, as the case
may be, as Base Rate Loans.
(b) Money Market Loans may not be prepaid.
- 31 -<PAGE>
2.11 Replacement of Banks. Provided that no Default
shall have occurred and be continuing, the Company may, at any
time, terminate the Commitment of or replace any Bank that has
requested compensation from the Company pursuant to Section 5.01
or 5.06 hereof or exercised any right under Section 5.03 or 5.04
hereof, or that has declined to consent to any modification or
amendment to this Agreement requested by the Company, by giving
not less than ten Business Days' prior notice to the Agent (which
shall promptly notify such Bank), that it intends to terminate
the Commitment of such Bank or to replace such Bank with respect
to its rights and obligations (including, without limitation, its
Loans and Letter of Credit Interest outstanding and its
Commitment) as a "Bank" under this Agreement (collectively, the
"Transferred Interest") with one or more banks (including, but
not limited to, any other Bank under this Agreement) selected by
the Company and acceptable to the Agent, the Issuing Bank and the
Swingline Bank (none of which shall unreasonably withhold its
consent). Upon the effective date of any termination or
replacement under this Section 2.11 (and as a condition thereto),
the Company shall pay to the Bank being replaced an amount equal
to all principal, interest, fees and other amounts then owing to
such Bank hereunder in respect of the Transferred Interest
whereupon each replacement bank shall become a "Bank" for all
purposes of this Agreement having a Commitment in the amount of
such Bank's Commitment assumed by it and all of its rights and
obligations under this Agreement of "Bank(s)" holding the
Transferred Interest and such Commitment of the Bank being
replaced shall be terminated upon such effective date and all of
such Bank's rights and obligations under this Agreement
(including, if such Bank is the Issuing Bank or the Swingline
Bank, its Letter of Credit Commitment and its Swingline
Commitment) shall terminate (provided that the obligations of the
Company under Sections 5.01, 5.05, 5.06 and 11.03 hereof to such
Bank, and the obligations of such Bank under Section 10.05
hereof, shall survive such replacement as provided in
Section 11.07 hereof). Notwithstanding the foregoing provisions
of this Section 2.11, the Company may not terminate the
Commitment of any Bank as provided above in this Section 2.11 at
any time that any Letter of Credit or Swingline Loan is
outstanding unless the Company replaces such Bank as provided
above in this Section 2.11. If the Commitment of any Bank that
is a Reference Bank (or whose Applicable Lending Office is a
Reference Bank, as the case may be) shall terminate (other than
pursuant to Section 9 hereof), such Bank shall thereupon cease to
be a Reference Bank and, if as a result of the foregoing, there
shall only be two Reference Banks remaining, then the Agent
(after consultation with the Company) shall, by notice to the
Company and the Banks, designate another Bank as a Reference
- 32 -<PAGE>
Bank, so that there shall at all times be at least three
Reference Banks.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the Agent
for account of each Bank the entire outstanding principal amount
of each of such Bank's Syndicated Loans, and each Syndicated Loan
shall mature, on the Commitment Termination Date.
(b) The Company hereby promises to pay to the Agent
for account of each Bank that makes any Money Market Loan the
entire outstanding principal amount of such Money Market Loan,
and such Money Market Loan shall mature, on the last day of the
Interest Period for such Loan.
(c) The Company hereby promises to pay to the Agent
for account of the Swingline Bank, the entire outstanding
principal amount of each Swingline Loan, and each Swingline Loan
shall mature, on the fifth Business Day after the date such
Swingline Loan is made.
3.02 Interest. The Company hereby promises to pay to
the Agent for account of each Bank and the Swingline Bank
interest on the unpaid principal amount of each Loan made by such
Bank and the Swingline Bank, as the case may be, for the period
from and including the date of such Loan to but excluding the
date such Loan shall be paid in full, at the following rates per
annum:
(i) during such periods as such Loan is a Base Rate
Loan, the Base Rate as in effect from time to time;
(ii) during such periods as such Loan is a Eurodollar
Loan, for each Interest Period relating thereto, the Fixed
Base Rate for such Loan for such Interest Period plus the
Applicable Percentage;
(iii) if such Loan is a LIBOR Market Loan, the Fixed
Base Rate for such Loan for the Interest Period therefor
plus (or minus) the LIBO Margin quoted by the Bank making
such Loan in accordance with Section 2.03 hereof; and
(iv) if such Loan is a Set Rate Loan, the Set Rate for
such Loan for the Interest Period therefor quoted by the
Bank making such Loan in accordance with Section 2.03
hereof.
- 33 -<PAGE>
Notwithstanding the foregoing, the Company hereby promises to pay
to the Agent for account of each Bank interest at the applicable
Post-Default Rate on any principal of any Loan made by such Bank,
on any Reimbursement Obligation held by such Bank and on any
other amount payable by the Company hereunder to or for account
of such Bank, that shall not be paid in full when due (whether at
stated maturity, by acceleration or otherwise), for the period
from and including the due date thereof to but excluding the date
the same is paid in full. Accrued interest on each Loan shall be
payable (i) in the case of a Base Rate Loan, quarterly on the
Quarterly Dates, (ii) in the case of Set Rate Loans, LIBOR Market
Loans and Eurodollar Loans, on the last day of the Interest
Period therefor and, if such Interest Period is longer than three
months (in the case of a Eurodollar Loan or a LIBOR Market Loan),
at three-month intervals following the first day of such Interest
Period, (iii) in the case of Syndicated Loans, upon the
Conversion of a Syndicated Loan of one Type to a Syndicated Loan
of another Type, (but only on the principal amount so Converted),
and (iv) in the case of any Loan, upon the payment or prepayment
thereof (but only on the principal amount so paid or prepaid),
except that interest payable at the Post-Default Rate shall be
payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any
change therein, the Agent shall give notice thereof to such of
the Banks and the Swingline Bank to which such interest is
payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein,
all payments of principal, interest, Reimbursement Obligations
and other amounts to be made by the Company under this Agreement
and the Fee Letter, shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to
the Agent at account number NYAO-DI-900-9-000002 maintained by
the Agent with Chase at the Principal Office, not later than
1:00 p.m. New York time on the date on which such payment shall
become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding
Business Day), provided that if a new Syndicated Loan is to be
made by any Bank on a date the Company is to repay any principal
of an outstanding Syndicated Loan of such Bank, such Bank shall
apply the proceeds of such new Syndicated Loan to the payment of
the principal to be repaid and only an amount equal to the
difference between the principal to be borrowed and the principal
to be repaid shall be made available by such Bank to the Agent as
- 34 -<PAGE>
provided in Section 2.02 hereof or paid by the Company to the
Agent pursuant to this Section 4.01, as the case may be.
(b) Any Bank, Issuing Bank or Swingline Bank for whose
account any such payment is to be made, may (but shall not be
obligated to) debit the amount of any such payment which is not
made by such time to any ordinary deposit account of the Company
with such Bank, Issuing Bank or Swingline Bank, as the case may
be (with notice to the Company and the Agent), provided that such
Bank's, Issuing Bank's or Swingline Bank's (as the case may be)
failure to give such notice shall not affect the validity
thereof.
(c) The Company shall, at the time of making each
payment under this Agreement for account of any Bank, Issuing
Bank or Swingline Bank, specify to the Agent the Loans,
Reimbursement Obligations or other amounts payable by the Company
hereunder to which such payment is to be applied (and in the
event that it fails to so specify, or if an Event of Default
referred to in Section 9(a) hereof has occurred and is
continuing, the Agent may distribute such payment to the Banks in
such manner as the Majority Banks may determine to be
appropriate, subject to Section 4.02 hereof).
(d) Except to the extent otherwise provided in the
last sentence of Section 2.05(e) hereof, each payment received by
the Agent under this Agreement for account of any Bank, any
Issuing Bank or the Swingline Bank shall be paid promptly to such
Bank, such Issuing Bank or the Swingline Bank (as the case may
be), in immediately available funds, for account of the
Applicable Lending Office of such Bank, such Issuing Bank or the
Swingline Bank (as the case may be) for the Loan in respect of
which such payment is made.
(e) If the due date of any payment under this
Agreement would otherwise fall on a day that is not a Business
Day, such date shall be extended to the next succeeding Business
Day, and interest shall be payable for any principal so extended
for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein: (a) each borrowing of Loans of a
particular Class from the Banks under Section 2.01 hereof shall
be made from the Banks, each payment of facility fee under
Section 2.07 hereof shall be made for account of the Banks, and
each termination or reduction of the amount of the Commitments
under Section 2.06 hereof shall be applied to the respective
Commitments of the Banks, pro rata according to the amounts of
- 35 -<PAGE>
their respective Commitments; (b) the making, Conversion and
Continuation of Loans of a particular Type (other than
Conversions provided for by Section 5.04 hereof) shall be made
pro rata among the Banks, according to the amounts of their
respective Commitments in the case of making Loans, and according
to the amounts of their respective Syndicated Loans, in the case
of Conversion and Continuation of Loans, and the then current
Interest Period for each Eurodollar Loan shall be coterminous;
(c) each payment or prepayment of principal of Syndicated Loans
by the Company shall be made for account of the Banks pro rata in
accordance with the respective unpaid principal amounts of the
Syndicated Loans held by them, provided that if immediately prior
to giving effect to any such payment in respect of any Syndicated
Loans the outstanding principal amount of the Syndicated Loans
shall not be held by the Banks pro rata in accordance with their
respective Commitments in effect at the time such Loans were made
(by reason of a failure of a Bank to make a Loan hereunder in the
circumstances described in the last paragraph of Section 11.04
hereof), then such payment shall be applied to the Syndicated
Loans in such manner as shall result, as nearly as is
practicable, in the outstanding principal amount of the
Syndicated Loans being held by the Banks pro rata in accordance
with their respective Commitments; and (d) each payment of
interest on Syndicated Loans by the Company shall be made for
account of the Banks pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective
Banks.
4.03 Computations. Interest on Money Market Loans and
Eurodollar Loans and letter of credit fees shall be computed on
the basis of a year of 360 days and actual days elapsed
(including the first day but, except as otherwise provided in
Section 2.05(g) hereof, excluding the last day) occurring in the
period for which payable and interest on Base Rate Loans and
Reimbursement Obligations and facility fee shall be computed on
the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable.
Notwithstanding the foregoing, for each day that the Base Rate is
calculated by reference to the Federal Funds Rate, interest on
Base Rate Loans and Reimbursement Obligations shall be computed
on the basis of a year of 360 days and actual days elapsed.
4.04 Minimum Amounts. Each borrowing, Conversions and
partial prepayment of principal of Loans shall, except to the
extent otherwise expressly provided herein, be in an aggregate
amount at least equal to $10,000,000 (borrowings, Conversions or
prepayments of or into Loans of different Types or, in the case
- 36 -<PAGE>
of Eurodollar Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings, Conversions
and prepayments for purposes of the foregoing, one for each Type
or Interest Period), provided that the aggregate principal amount
of Eurodollar Loans having the same Interest Period shall be in
an amount at least equal to $10,000,000 or a larger multiple of
$1,000,000 and, if any Eurodollar Loans would otherwise be in a
lesser principal amount for any period, such Loans shall be Base
Rate Loans during such period.
4.05 Certain Notices. Except as otherwise provided in
Section 2.03 hereof with respect to Money Market Loans and 2.04
hereof with respect to Swingline Loans, notices by the Company to
the Agent of terminations or reductions of the Commitments and of
borrowings, Conversions, Continuations and optional prepayments
of Loans, of Types of Loans and of the duration of Interest
Periods shall be irrevocable and shall be effective only if
received by the Agent not later than 10:00 a.m. New York time (or
in the case of borrowings of Base Rate Loans, 12:00 noon New York
time) on the number of Business Days prior to the date of the
relevant termination, reduction, borrowing, Conversion,
Continuation or prepayment or the first day of such Interest
Period specified below:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitments 1
Borrowing or prepayment of
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the
amount of the Commitments to be terminated or reduced. Each such
notice of borrowing, Conversion, Continuation or optional
prepayment shall specify the Loans to be borrowed, Converted,
Continued or prepaid and the amount (subject to Section 4.04
hereof) and Type of each Loan to be borrowed, Converted,
Continued or prepaid and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business
Day). The Agent shall promptly notify the Banks of the contents
- 37 -<PAGE>
of each such notice. In the event that the Company fails to
select the Type of Syndicated Loan, or the duration of any
Interest Period for any Eurodollar Loan, within the time period
and otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current
Interest Period for such Loan or (if outstanding as a Base Rate
Loan) will remain as, or (if not then outstanding) will be made
as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Bank or the Company (the
"Payor") prior to the date on which the Payor is to make payment
to the Agent of (in the case of a Bank) the proceeds of a Loan to
be made by such Bank hereunder or (in the case of the Company) a
payment to the Agent for account of one or more of the Banks
hereunder (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required
to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made
the Required Payment to the Agent, the recipient(s) of such
payment shall, on demand, repay to the Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date (the "Advance Date")
such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such day and, if such recipient(s) shall
fail promptly to make such payment, the Agent shall be entitled
to recover such amount, on demand, from the Payor, together with
interest as aforesaid, provided that if neither the recipient(s)
nor the Payor shall return the Required Payment to the Agent
within three Business Days of the Advance Date, then,
retroactively to the Advance Date, the Payor and the recipient(s)
shall each be obligated to pay interest on the Required Payment
as follows:
(i) if the Required Payment shall represent a payment
to be made by the Company to the Banks, the Company and the
recipient(s) shall each be obligated retroactively to the
Advance Date to pay interest in respect of the Required
Payment at the Post-Default Rate (and, in case the
recipient(s) shall return the Required Payment to the Agent,
without limiting the obligation of the Company under
Section 3.02 hereof to pay interest to such recipient(s) at
the Post-Default Rate in respect of the Required Payment)
and
- 38 -<PAGE>
(ii) if the Required Payment shall represent proceeds
of a Loan to be made by the Banks to the Company, the Payor
and the Company shall each be obligated retroactively to the
Advance Date to pay interest in respect of the Required
Payment at the rate of interest provided for such Required
Payment pursuant to Section 3.02 hereof (and, in case the
Company shall return the Required Payment to the Agent,
without limiting any claim the Company may have against the
Payor in respect of the Required Payment).
The foregoing provisions of this Section 4.06 shall apply mutatis
mutandis to the Reimbursement Obligations owing to the Issuing
Bank and to the Swingline Loans made by the Swingline Bank.
4.07 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien or
counterclaim a Bank, the Issuing Bank or the Swingline Bank may
otherwise have, each of the Banks, the Issuing Bank and the
Swingline Bank shall be entitled, at its option, to offset
balances held by it for account of the Company at any of its
offices, in Dollars or in any other currency, against any
principal of or interest on any of such Bank's, the Issuing
Bank's or the Swingline Bank's Loans, Reimbursement Obligations
or Swingline Loans (as the case may be), or any other amount
payable to such Bank, the Issuing Bank or the Swingline Bank (as
the case may be) hereunder, which is not paid when due within any
applicable grace period (regardless of whether such balances are
then due to the Company), in which case it shall promptly notify
the Company and the Agent thereof, provided that such Bank's, the
Issuing Bank's or the Swingline Bank's (as the case may be)
failure to give such notice shall not affect the validity
thereof.
(b) If any Bank shall obtain payment of any principal
of or interest on any Syndicated Loan owing to it by the Company,
or in respect of its interest in any Reimbursement Obligation or
Swingline Loan, through the exercise of any right of set-off,
bankers' lien or counterclaim or similar right or otherwise
(other than as expressly provided in this Agreement), and, as a
result of such payment, such Bank shall have received a greater
percentage of the principal of or interest on its Syndicated
Loans, or in respect of its interest in any Reimbursement
Obligation or Swingline Loan, then due hereunder by the Company
than the percentage received by any other Bank, it shall promptly
purchase from such other Banks participations in (or, if and to
the extent specified by such Bank, direct interests in) the
- 39 -<PAGE>
Syndicated Loans, Reimbursement Obligations or Swingline Loans,
respectively, owing to such other Banks (or in interest due
thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end
that all the Banks shall share the benefit of such excess payment
(net of any expenses which may be incurred by such Bank in
obtaining or preserving such excess payment) pro rata in
accordance with the unpaid principal and/or interest on the
Syndicated Loans, Reimbursement Obligations or Swingline Loans,
respectively, owing to each of the Banks, provided that if at the
time of such payment the outstanding principal amount of the
Syndicated Loans shall not be held by the Banks pro rata in
accordance with their respective Commitments in effect at the
time such Loans were made (by reason of a failure of a Bank to
make a Loan hereunder in the circumstances described in the last
paragraph of Section 11.04 hereof), then such purchases of
participations and/or direct interests shall be made in such
manner as will result, as nearly as is practicable, in the
outstanding principal amount of the Syndicated Loans being held
by the Banks pro rata according to the amounts of such
Commitments. To such end all the Banks shall make appropriate
adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise
be restored.
(c) The Company agrees that any Bank so purchasing
such a participation (or direct interest) referred to in
clause (b) above (or in interest due thereon, as the case may be)
may, to the extent enforceable under applicable law, exercise all
rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Bank were
a direct holder of Loans or other amounts (as the case may be)
owing to such Bank in the amount of such participation.
(d) Nothing contained herein shall require any Bank,
the Issuing Bank or the Swingline Bank to exercise any such right
of set-off, banker's lien or counterclaim or shall permit or
affect the right of any Bank, the Issuing Bank or the Swingline
Bank to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of the
Company.
(e) If under any applicable bankruptcy, insolvency or
other similar law, any Bank receives a secured claim in lieu of a
set-off to which this Section 4.07 applies, such Bank shall, to
the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Banks
entitled under this Section 4.07 to share in the benefits of any
recovery on such secured claim.
- 40 -<PAGE>
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from
time to time such amounts as such Bank may determine to be
necessary to compensate such Bank for any costs that such Bank
determines are attributable to its making or maintaining of any
Fixed Rate Loans, its issuance of any Letters of Credit, its
acquisition of any Letter of Credit Interest or its obligation to
make any Fixed Rate Loans, to issue any Letters of Credit or to
acquire any Letter of Credit Interest, or any reduction in any
amount receivable by such Bank hereunder in respect of any of
such Loans, Letters of Credit, Letter of Credit Interest or
obligation, or in respect of any Reimbursement Obligation (such
increases in costs and reductions in amounts receivable being
herein called "Additional Costs"), resulting from any Regulatory
Change that:
(i) shall subject any Bank (or its Applicable
Lending Office for any of such Loans) to any tax, duty or
other charge in respect of such Loans, Letters of Credit,
Letter of Credit Interest or Reimbursement Obligation or
changes the basis of taxation of any amounts payable to such
Bank under this Agreement in respect of any of such Loans,
Letters of Credit, Letter of Credit Interest or
Reimbursement Obligation (excluding any such taxes imposed
on or with respect to the net income of any Bank and similar
taxes imposed on any Bank, in each case by the jurisdiction
(or any political subdivision thereof) under the laws of
which such Bank is organized or in which such Bank has its
principal place of business or Applicable Lending Office);
or
(ii) imposes or modifies any reserve, special
deposit or similar requirements (other than, in the case of
any Bank for any period as to which the Company is required
to pay any amount under paragraph (e) below, the reserves
against "Eurocurrency liabilities" under Regulation D
therein referred to) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities
of, such Bank (including, without limitation, any of such
Loans, any deposits referred to in the definition of "Fixed
Base Rate" in Section 1.01 hereof, any Letters of Credit,
any Letter of Interest or any Reimbursement Obligation), or
any commitment of such Bank (including, without limitation,
- 41 -<PAGE>
the Commitment of such Bank) hereunder; or
(iii) imposes any other condition affecting this
Agreement (or any of such extensions of credit or
liabilities) or its Commitment.
In the event that, by reason of any Regulatory Change, any Bank
incurs Additional Costs based on or measured by the excess above
a specified level of the amount of a category of deposits or
other liabilities of such Bank that includes deposits by
reference to which the interest rate on Eurodollar Loans is
determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank that includes
Eurodollar Loans, the Bank shall be entitled to compensation in
respect thereof under this Section 5.01(a) based upon allocations
and attributions made by such Bank in good faith, which may
include marginal or average allocations and attributions and
allocations and attributions made on a "first-in-first-out" or
"last-in-first-out" basis. If any Bank requests compensation
from the Company under this Section 5.01(a) in connection with
any Eurodollar Loans or its obligation to make any Eurodollar
Loans, the Company may, by notice to such Bank (with a copy to
the Agent), suspend the obligation of such Bank thereafter to
make or Continue Eurodollar Loans or to Convert Loans into
Eurodollar Loans, until the Regulatory Change giving rise to such
request ceases to be in effect (in which case the provisions of
Section 5.04 hereof shall be applicable), provided that such
suspension shall not affect the right of such Bank to receive the
compensation so requested.
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01, in the event that, by reason
of any Regulatory Change, any Bank becomes subject to
restrictions on the amount of such a category of liabilities or
assets that it may hold, then, if such Bank so elects by notice
to the Company (with a copy to the Agent), the obligation of such
Bank to make or Continue or Convert Loans into Eurodollar Loans
hereunder shall be suspended until such Regulatory Change ceases
to be in effect (in which case the provisions of Section 5.04
hereof shall be applicable).
(c) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Bank from time to time on
request such amounts as such Bank may determine to be necessary
to compensate such Bank (or, without duplication, the bank
holding company of which such Bank is a subsidiary) for any costs
that it determines are attributable to the maintenance by such
- 42 -<PAGE>
Bank (or any Applicable Lending Office or such bank holding
company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the
force of law and whether or not failure to comply therewith would
be unlawful) of any court or governmental or monetary authority
resulting from any Regulatory Change of capital in respect of its
Commitment, the Swingline Commitment, its Loans, its Letters of
Credit, its Letter of Credit Interests or its obligation
hereunder to issue Letters of Credit or acquire Letter of Credit
Interests (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or
equity of such Bank (or any Applicable Lending Office or such
bank holding company) to a level below that which such Bank (or
any Applicable Lending Office or such bank holding company) could
have achieved but for such law, regulation, interpretation,
directive or request).
(d) Each Bank shall notify the Company of any event
occurring after the date of this Agreement entitling such Bank to
compensation under paragraph (a) or (c) of this Section 5.01 as
promptly as practicable, but in any event within 45 days, after
such Bank obtains actual knowledge thereof; provided that (i) if
any Bank fails to give such notice within 45 days after it
obtains actual knowledge of such an event, such Bank shall, with
respect to compensation payable pursuant to this Section 5.01 in
respect of any costs resulting from such event, only be entitled
to payment under this Section 5.01 for costs incurred from and
after the date 45 days prior to the date that such Bank does give
such notice, (ii) each Bank will designate a different Applicable
Lending Office for the Loans of such Bank affected by such event
if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such
Bank, be disadvantageous to such Bank, except that such Bank
shall have no obligation to designate an Applicable Lending
Office located in the United States of America and (iii) each
Bank claiming any additional amounts payable pursuant to this
Section 5.01 shall use reasonable efforts (consistent with legal
and regulatory restrictions) to file any certificate or documents
reasonably requested in writing by the Company if the making of
such a filing would avoid the need for or reduce the amount of
any additional amounts that may thereafter accrue and would not,
in the reasonable determination of such Bank, be otherwise
disadvantageous to such Bank. No Bank shall be entitled to make
any claim under this Section 5.01 with respect to any LIBOR
Market Loan if it shall have been aware of the circumstances
giving rise to such claim at the time it submitted the Money
Market Quote with respect to such Loan. Each Bank will furnish
to the Company a certificate setting forth the basis and amount
- 43 -<PAGE>
of each request by such Bank for compensation under paragraph (a)
or (c) of this Section 5.01, including a statement of the
circumstances giving rise to such request and the method by which
such amount has been determined. Determinations and allocations
by any Bank for purposes of this Section 5.01, including
determinations of the effect of any Regulatory Change pursuant to
paragraph (a) or (b) of this Section 5.01, or of the effect of
capital maintained pursuant to paragraph (c) of this
Section 5.01, on its costs or rate of return of maintaining Loans
or its obligation to make Loans, or on amounts receivable by it
in respect of Loans, and of the amounts required to compensate
such Bank under this Section 5.01, shall be conclusive, provided
that such determinations and allocations are made on a reasonable
basis.
(e) Without limiting the effect of the foregoing, the
Company shall pay to each Bank on the last day of the Interest
Period therefor (or, if such Bank shall not have notified the
Company on or before the second Business Day preceding such day
of the amount payable to such Bank under this paragraph (c) on
such day, on the second Business Day following the date of such
notice) so long as such Bank is maintaining reserves against
"Eurocurrency liabilities" under Regulation D (or, unless the
provisions of paragraph (b) above are applicable, so long as such
Bank is, by reason of any Regulatory Change, maintaining reserves
against any other category of liabilities that includes deposits
by reference to which the interest rate on Eurodollar Loans or
LIBOR Market Loans is determined as provided in this Agreement or
against any category of extensions of credit or other assets of
such Bank that includes any Eurodollar Loans or LIBOR Market
Loans) an additional amount (determined by such Bank and notified
to the Company through the Agent) equal to the product of the
following for each Eurodollar Loan or LIBOR Market Loan for each
day during such Interest Period:
(i) the principal amount of such Eurodollar Loan
or LIBOR Market Loan outstanding on such day; and
(ii) the remainder of (x) a fraction the numerator
of which is the rate (expressed as a decimal) at which
interest accrues on such Eurodollar Loan or LIBOR Market
Loan for such Interest Period as provided in this Agreement
(less the Applicable Margin) and the denominator of which is
one minus the effective rate (expressed as a decimal),
taking into account the overall amount of such Bank's
Eurocurrency Liabilities (as defined in Regulation D) or
other categories of liabilities against which reserves must
be maintained, at which such reserve requirements are
- 44 -<PAGE>
imposed on such Bank on such day minus (y) such numerator;
and
(iii) 1/360;
provided that no Bank shall be entitled to any additional amount
under this Section 5.01(e) with respect to any Interest Period
unless such Bank requests such additional amount as provided in
this Section 5.01(e) within 45 days after the last day of such
Interest Period.
5.02 Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if, on or prior to the
determination of any Fixed Base Rate for any Interest Period:
(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the
relevant deposits referred to in the definition of "Fixed
Base Rate" in Section 1.01 hereof are not being provided in
the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for either Type of
Fixed Rate Loans as provided herein; or
(b) the Majority Banks determine (or any Bank that has
outstanding a Money Market Quote with respect to a LIBOR
Market Loan determines), which determination shall be
conclusive, and notify (or notifies, as the case may be) the
Agent that the relevant rates of interest referred to in the
definition of "Fixed Base Rate" in Section 1.01 hereof upon
the basis of which the rate of interest for Eurodollar Loans
(or LIBOR Market Loans, as the case may be) for such
Interest Period is to be determined will not cover the cost
to such Banks (or to such quoting Bank), excluding any cost
for which a claim may be made by such Banks (or such quoting
Bank) under Section 5.01 or 5.06 hereof, of making or
maintaining Eurodollar Loans (or LIBOR Market Loans, as the
case may be) for such Interest Period;
then the Agent shall give the Company and each Bank prompt notice
thereof (including a statement in reasonable detail of the
circumstances giving rise to such notice) and, so long as such
condition remains in effect, the Banks (or such quoting Bank)
shall be under no obligation to make additional Eurodollar Loans
or to Continue or Convert Loans into Eurodollar Loans (or to make
LIBOR Market Loans, as the case may be) (if such determination
shall have been made with respect to Eurodollar Loans) the
Company shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Loans, prepay such Loans
- 45 -<PAGE>
or Convert the Eurodollar Loans into Base Rate Loans in
accordance with Section 2.10 hereof.
5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
Bank or its Applicable Lending Office to honor its obligation to
make or maintain Eurodollar Loans or LIBOR Market Loans
hereunder, then such Bank shall promptly give the Company notice
(including a statement in reasonable detail of the circumstances
giving rise to such notice) thereof (with a copy to the Agent)
and such Bank's obligation to make or Continue, or to Convert
Loans into Eurodollar Loans shall be suspended until such time as
such Bank may again make and maintain Eurodollar Loans (in which
case such Bank shall notify the Company as promptly as
practicable and the provisions of Section 5.04 hereof shall be
applicable), and such Bank shall no longer be obligated to make
any LIBOR Market Loan that it has offered to make.
5.04 Treatment of Affected Loans. If the obligation
of any Bank to make a particular Type of Fixed Rate Loans or to
Continue, or to Convert Syndicated Loans into Eurodollar Loans
shall be suspended pursuant to Section 5.01 or 5.03 hereof, such
Bank's Eurodollar Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest
Period(s) for Eurodollar Loans (or, in the case of a Conversion
required by Section 5.01(b) or 5.03 hereof, on such earlier date
as such Bank may specify to the Company with a copy to the Agent
as being necessary to comply with applicable law) and, unless and
until such Bank gives notice as provided below (which such Bank
agrees to do as promptly as practicable) that the circumstances
specified in Section 5.01 or 5.03 hereof that gave rise to such
Conversion no longer exist:
(a) to the extent that such Bank's Eurodollar Loans
have been so converted, all payments and prepayments of
principal that would otherwise be applied to such Bank's
Eurodollar Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans that would otherwise be made or
Continued by such Bank as Eurodollar Loans shall be made or
Continued instead as Base Rate Loans and all Loans of such
Bank that would otherwise be Converted into Eurodollar Loans
shall remain as Base Rate Loans.
If such Bank gives notice to the Company with a copy to the Agent
that the circumstances specified in Section 5.01 or 5.03 hereof
that gave rise to the Conversion of such Bank's Eurodollar Loans
- 46 -<PAGE>
pursuant to this Section 5.04 no longer exist (which such Bank
agrees to do promptly upon such circumstances ceasing to exist)
at a time when Eurodollar Loans made by other Banks are
outstanding, such Bank's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest
Period(s) for such Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Loans held by the Banks
holding Eurodollar Loans and by such Bank are held pro rata (as
to principal amounts, Types and Interest Periods) in accordance
with their respective Commitments.
5.05 Compensation. The Company shall pay to the Agent
for account of each Bank, upon the request of such Bank through
the Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss,
cost or expense that such Bank determines is attributable to:
(a) any payment or prepayment of a Fixed Rate Loan or
a Set Rate Loan or Conversion of a Eurodollar Loan made by
such Bank for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9 hereof) on a
date other than the last day of the Interest Period for such
Loan; or
(b) any failure by the Company for any reason
(including, without limitation, the failure of any of the
conditions precedent specified in Section 6 hereof to be
satisfied) to borrow a Fixed Rate Loan or a Set Rate Loan
(with respect to which, in the case of a Money Market Loan,
the Company has accepted a Money Market Quote) from such
Bank on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02
or 2.03(b) hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid, Converted or not
borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of
the then current Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan that
would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Loan provided for herein
minus the Applicable Percentage used to determine such rate, in
the case of a Eurodollar Loan, over (ii) the amount of interest
that otherwise would have accrued on such principal amount at a
rate per annum equal to the interest component of the amount such
- 47 -<PAGE>
Bank would have bid in the London interbank market (if such Loan
is a Eurodollar Loan or a LIBOR Market Loan) or the United States
secondary certificate of deposit market (if such Loan is a Set
Rate Loan) for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such
Bank).
5.06 U.S. Taxes.
(a) The Company agrees to pay to each Bank that is not
a U.S. Person such additional amounts as are necessary in order
that the net payment of any amount due to such non-U.S. Person
hereunder after deduction for or withholding in respect of any
U.S. Tax imposed with respect to such payment (or in lieu
thereof, payment of such U.S. Tax by such non-U.S. Person), will
not be less than the amount stated herein to be then due and
payable, provided that the foregoing obligation to pay such
additional amounts shall not apply:
(i) to any payment to a Bank hereunder unless such
Bank is, on the date hereof (or on the date it becomes a
Bank as provided in Section 11.06(b) hereof) and on the date
of any change in the Applicable Lending Office of such Bank,
either entitled to submit a Form 1001 (relating to such Bank
and entitling it to a complete exemption from withholding on
all interest to be received by it hereunder in respect of
the Loans) or Form 4224 (relating to all interest to be
received by such Bank hereunder in respect of the Loans), or
(ii) to any U.S. Tax imposed solely by reason of the
failure by such non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity
or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition
to relief or exemption from such U.S. Tax.
For the purposes of this Section 5.06(a), (w) "Form 1001" shall
mean Form 1001 (Ownership, Exemption, or Reduced Rate
Certificate) of the Department of the Treasury of the United
States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of
America (or in relation to either such Form such successor and
related forms as may from time to time be adopted by the relevant
- 48 -<PAGE>
taxing authorities of the United States of America to document a
claim to which such Form relates), (y) "U.S. Person" shall mean a
citizen, national or resident of the United States of America, a
corporation, partnership or other entity created or organized in
or under any laws of the United States of America, or any estate
or trust that is subject to Federal income taxation regardless of
the source of its income and (z) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed
by or on behalf of the United States of America or any taxing
authority thereof or therein, excluding any such taxes imposed on
or with respect to the net income of any Bank and similar taxes
imposed on any Bank, in each case by the jurisdiction (or any
political subdivision thereof) under the laws of which such Bank
is organized or in which such Bank has its principal place of
business or Applicable Lending Office.
(b) Within 30 days after paying any amount to the
Agent or any Bank from which it is required by law to make any
deduction or withholding, and within 30 days after it is required
by law to remit such deduction or withholding to any relevant
taxing or other authority, the Company shall deliver to the Agent
for delivery to such non-U.S. Person evidence satisfactory to
such Person of such deduction, withholding or payment (as the
case may be). Any Bank claiming any additional amounts payable
pursuant to this Section 5.06 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the
Company or to change the jurisdiction of its Applicable Lending
Office if the making of such a filing or change of such
Applicable Lending Office would avoid the need for or reduce the
amount of any additional amounts that may thereafter accrue and
would not, in the reasonable determination of such Bank, be
otherwise disadvantageous to such Bank.
(c) If a Bank receives a refund in respect of any U.S.
Taxes that such Bank determines in its sole judgment is
attributable to U.S. Taxes for which it has received additional
amounts under this Section 5.06, such Bank shall pay to the
Company the amount thereof promptly after such Bank's receipt
thereof. No Bank shall have any obligation to make a claim for
any refund of U.S. Taxes.
Section 6. Conditions Precedent.
6.01 Initial Extension of Credit . The obligation of
any Bank to make its initial extension of credit hereunder
(whether by making a Loan or issuing a Letter of Credit) is
subject to the conditions precedent that the Agent shall have
- 49 -<PAGE>
received the following documents, each of which shall be
satisfactory to the Agent (and to the extent specified below, to
each Bank) in form and substance:
(a) Corporate Documents. Certified copies of the
charter and by-laws (or equivalent documents) of the Company
and of all corporate authority for the Company (including,
without limitation, resolutions and evidence of the
incumbency of officers) with respect to the execution,
delivery and performance of the Basic Documents and each
other document to be delivered by the Company from time to
time in connection herewith and the extensions of credit
hereunder (and the Agent and each Bank may conclusively rely
on such certificate until it receives notice in writing from
the Company to the contrary).
(b) Opinion of Counsel to the Company. An opinion of
Thomas McKee, Esq., Associate General Counsel of the
Company, substantially in the form of Exhibit B hereto and
covering such other matters as the Agent or any Bank may
reasonably request (and the Company hereby instructs such
counsel to deliver such opinion to the Banks and the Agent),
provided that the matters to be covered by such opinion may
be divided between an opinion of Mr. McKee and an opinion of
Cravath, Swaine & Moore in a manner satisfactory to the
Majority Banks.
(c) Opinion of Special New York Counsel to Chase. An
opinion of Milbank, Tweed, Hadley & McCloy, special New York
counsel to Chase, substantially in the form of Exhibit C
hereto (and Chase hereby instructs such counsel to deliver
such opinion to the Banks).
(d) Other Documents. Such other documents as the
Agent, any Bank, the Swingline Bank, the Issuing Bank or
special New York counsel to Chase may reasonably request.
The obligation of any Bank to make its initial extension of
credit hereunder is also subject to the payment by the Company of
such fees as the Company shall have agreed to pay or deliver to
any Bank or the Agent in connection herewith, including, without
limitation, the reasonable fees and expenses of Milbank, Tweed,
Hadley & McCloy, special New York counsel to Chase in connection
with the negotiation, preparation, execution and delivery of this
Agreement and the other Basic Documents and the extensions of
credit hereunder (to the extent that statements for such fees and
expenses have been delivered to the Company).
- 50 -<PAGE>
6.02 Initial and Subsequent Extensions of Credit. The
obligation of any Bank to make any Loan or otherwise extend any
credit (including such Bank's initial Loan or other extension of
credit) to the Company upon the occasion of each borrowing
hereunder or other extension of credit hereunder, the obligation
of the Issuing Bank to issue any Letter of Credit and the
obligation of the Swingline Bank to make any Swingline Loan
(including its initial Swingline Loan), is subject to the further
conditions precedent that, both immediately prior to the making
of such Loan or other extension of credit and also after giving
effect thereto or to the intended use thereof:
(a) no Default shall have occurred and be continuing;
(b) the representations and warranties made by the
Company in Section 7 hereof (other than (i) the last
sentence of Section 7.02 hereof, (ii) Section 7.03 hereof,
(iii) Section 7.08 hereof or (iv) Section 7.11 hereof) shall
be true on and as of the date of the making of such Loan
with the same force and effect as if made on and as of such
date; and
(c) the aggregate principal amount of the Loans
outstanding or to be made on such date (giving effect to any
payments or prepayments made on such date), together with
the aggregate amount of all Letter of Credit Liabilities
outstanding, shall not exceed the aggregate amount of the
Commitments then in effect.
Each notice of borrowing or request for the issuance of a Letter
of Credit by the Company hereunder, and each Swingline Borrowing
Notice, shall constitute a certification by the Company to the
effect set forth in the preceding sentence (both as of the date
of such notice or request and, unless the Company otherwise
notifies the Agent prior to the date of such borrowing or
issuance, as of the date of such borrowing or issuance).
Section 7. Representations and Warranties. The
Company represents and warrants to the Agent and the Banks that:
7.01 Corporate Existence. Each of the Company and its
Material Subsidiaries: (a) is a corporation, partnership or
other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization;
(b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business
substantially as now being or as proposed to be conducted; and
- 51 -<PAGE>
(c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it
makes such qualification necessary and where failure so to
qualify could reasonably be expected (either individually or in
the aggregate) to have a Material Adverse Effect.
7.02 Financial Condition. The Company has heretofore
furnished to each of the Banks a consolidated balance sheet of
the Company and its Subsidiaries as at December 31, 1993 and the
related consolidated statements of income, retained earnings and
cash flow of the Company and its Subsidiaries for the fiscal year
ended on said date, with the opinion thereon of Coopers &
Lybrand, and the unaudited consolidated balance sheet of the
Company and its Subsidiaries as at June 30, 1994 and the related
consolidated statements of income, retained earnings and cash
flow of the Company and its Subsidiaries for the three-month
period ended on such date. All such financial statements are
complete and correct in all material respects and fairly present
the consolidated financial condition of the Company and its
Subsidiaries as at said dates and the consolidated results of
their operations for the fiscal year and three-month period ended
on said dates (subject, in the case of such financial statements
as at March 31, 1994, to normal year-end audit adjustments), all
in accordance with generally accepted accounting principles and
practices applied on a consistent basis. Since December 31,
1993, there has been no material adverse change in the
consolidated financial condition taken as a whole of the Company
and its Subsidiaries from that set forth in said financial
statements as at said date, it being acknowledged that changes
relating to the Company's industry in general and not
specifically to the Company do not constitute such a material
adverse change.
7.03 Litigation. There are no legal or arbitral
proceedings, or any proceedings by or before any governmental or
regulatory authority or agency, now pending or (to the knowledge
of the Company) threatened against the Company or any of its
Subsidiaries that could reasonably be expected (either
individually or in the aggregate) to have a Material Adverse
Effect.
7.04 No Breach. None of the execution and delivery of
this Agreement and the other Basic Documents, the consummation of
the transactions herein and therein contemplated or compliance
with the terms and provisions hereof and thereof will conflict
with or result in a breach of, or require any consent under, the
charter or by-laws of the Company, or any applicable law or
regulation, or any order, writ, injunction or decree of any court
- 52 -<PAGE>
or governmental authority or agency, or any agreement or
instrument to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their Property is bound
or to which any of them is subject, or constitute a default under
any such agreement or instrument.
7.05 Action. The Company has all necessary corporate
power, authority and legal right to execute, deliver and perform
its obligations under each of the Basic Documents; the execution,
delivery and performance by the Company of each of the Basic
Documents have been duly authorized by all necessary corporate
action on its part (including, without limitation, any required
shareholder approvals); and this Agreement has been duly and
validly executed and delivered by the Company and constitutes,
and each of the the other Basic Documents when executed and
delivered will constitute, its legal, valid and binding
obligation, enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of
creditors' rights and (b) the application of general principles
of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
7.06 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency, or any securities
exchange, are necessary for the execution, delivery or
performance by the Company of the Basic Documents or for the
legality, validity or enforceability hereof or thereof.
7.07 Use of Credit. None of the Company nor any of
its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock and no part of the proceeds of any
extension of credit hereunder will be used to buy or carry any
Margin Stock.
7.08 ERISA. Each Plan, and, to the knowledge of the
Company, each Multiemployer Plan, is in compliance with, and has
been administered in compliance with, the applicable provisions
of ERISA, the Code and any other Federal or State law, to the
extent noncompliance could reasonably be expected to result in a
Material Adverse Effect. No event or condition has occurred and
is continuing as to which the Company would be under an
obligation to furnish a report to the Banks under Section 8.01(e)
hereof that (individually or in the aggregate) could reasonably
- 53 -<PAGE>
be expected to have a Material Adverse Effect.
7.09 Taxes. The Company and its Subsidiaries are
members of an affiliated group of corporations filing
consolidated returns for Federal income tax purposes, of which
the Company is the "common parent" (within the meaning of
Section 1504 of the Code) of such group. The Company and its
Subsidiaries have filed all Federal income tax returns and all
other material tax returns that are required to be filed by them
and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by the Company or any of its
Subsidiaries. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Company,
adequate.
7.10 Investment Company Act. Neither the Company nor
any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
7.11 Environmental Matters. The Company is not aware
of (a) any failures on the part of the Company or any of its
Subsidiaries to comply with laws, rules, regulations, orders or
decrees relating to the protection of employee health and safety
or the environment, or (b) any events, conditions or
circumstances involving employee health and safety or
environmental pollution or contamination, that, individually or
in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
7.12 True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished
in writing by or on behalf of the Company to the Agent or any
Bank in connection with the negotiation, preparation or delivery
of this Agreement and the other Basic Documents or included
herein or therein or delivered pursuant hereto or thereto, when
taken as a whole do not contain any untrue statement of material
fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under
which they were made, not misleading.
Section 8. Covenants of the Company. The Company
covenants and agrees with the Banks and the Agent that, so long
as any Commitment, the Swingline Commitment, any Loan or any
Letter of Credit Liability is outstanding and until payment in
full of all amounts payable by the Company hereunder:
- 54 -<PAGE>
8.01 Financial Statements Etc. The Company shall
deliver to each of the Banks:
(a) as soon as available and in any event within 45
days after the end of each of the first three quarterly
fiscal periods of each fiscal year of the Company, (i) a
copy of the Quarterly Report on Form 10Q filed by the
Company with the Securities and Exchange Commission or, if
such a Quarterly Report shall not have been filed, (ii)
consolidated statements of income, retained earnings and
cash flow of the Company and its Subsidiaries for such
period and the related consolidated balance sheet of the
Company and its Subsidiaries as at the end of such period,
setting forth in each case in comparative form the
corresponding consolidated figures for the corresponding
periods in the preceding fiscal year and accompanied by a
certificate of a senior financial officer of the Company,
which certificate shall state that said financial statements
fairly present the consolidated financial condition and
results of operations of the Company and its Subsidiaries in
accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such period
(subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 90
days after the end of each fiscal year of the Company, (i) a
copy of the Annual Report on Form 10K filed by the Company
with the Securities and Exchange Commission or, if such an
Annual Report shall not have been filed, (ii) consolidated
statements of income, retained earnings and cash flow of the
Company and its Subsidiaries for such fiscal year and the
related consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, setting
forth in each case in comparative form the corresponding
consolidated figures for the preceding fiscal year and
accompanied by an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that said financial statements fairly
present the consolidated financial condition and results of
operations of the Company and its Subsidiaries as at the end
of, and for, such fiscal year in accordance with generally
accepted accounting principles;
(c) promptly upon their becoming available, copies of
all registration statements (other than with respect to
employee benefit or similar plans) and regular periodic
reports, if any, that the Company shall have filed with the
Securities and Exchange Commission (or any governmental
- 55 -<PAGE>
agency substituted therefor) or any national securities
exchange;
(d) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so
mailed;
(e) as soon as possible, and in any event within 30
days after the Company knows that any of the events or
conditions specified below with respect to any Plan or
Multiemployer Plan has occurred or exists, a statement
signed by a senior financial officer of the Company setting
forth details respecting such event or condition and the
action, if any, that the Company or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC
by the Company or an ERISA Affiliate with respect to such
event or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC
has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on
or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA
shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the
Code); and any request for a waiver under
Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041(c) of
ERISA of a notice of intent to terminate any Plan or
any action taken by the Company or an ERISA Affiliate
to terminate any Plan under Section 4041(c) of ERISA;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or
the receipt by the Company or any ERISA Affiliate of a
notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer
Plan;
- 56 -<PAGE>
(iv) the complete or partial withdrawal from a
ployer Plan by the Company or any ERISA Affiliate that
results in a material liability of the Company or any
of its Subsidiaries under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary
liability as a result of a purchaser default) or the
receipt by the Company or any ERISA Affiliate of notice
from a Multiemployer Plan that it is in reorganization
or insolvency pursuant to Section 4241 or 4245 of ERISA
or that it intends to terminate or has terminated under
Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the Company
or any ERISA Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days and
which could reasonably be expected to have a Material
Adverse Effect; and
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a
part if the Company or an ERISA Affiliate fails to
timely provide security to the Plan in accordance with
the provisions of said Sections;
(f) promptly after the Company knows or has reason to
believe that any Default has occurred, a notice of such
Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible,
a description of the action that the Company has taken or
proposes to take with respect thereto;
(g) promptly after the Company obtains knowledge of
any event or circumstance that, in the good faith judgment
of the Company, could reasonably be expected to have a
Material Adverse Effect that has not been disclosed herein,
in the other Basic Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other
writing furnished to the Banks for use in connection with
the transactions contemplated hereby or thereby, a notice
describing such event or circumstance; and
(h) from time to time such other information regarding
the financial condition, operations, business or prospects
of the Company or any of its Subsidiaries (including,
- 57 -<PAGE>
without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under
ERISA) as any Bank or the Agent may reasonably request and
as shall be reasonably available to the Company.
The Company will furnish to each Bank, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate of a senior financial officer of the Company
(i) to the effect that, to the best knowledge of such officer, no
Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable
detail and describing the action that the Company has taken or
proposes to take with respect thereto) and (ii) setting forth in
reasonable detail the computations necessary to determine whether
the Company is in compliance with Section 8.07 hereof as of the
end of the respective quarterly fiscal period or fiscal year.
8.02 Litigation. The Company will promptly give to
each Bank notice of all legal or arbitral proceedings, and of all
proceedings by or before any governmental or regulatory authority
or agency, and any material development in respect of such legal
or other proceedings, affecting the Company or any of its
Subsidiaries, except proceedings that could not reasonably be
expected (either individually or in the aggregate) to have a
Material Adverse Effect.
8.03 Existence, Etc. The Company will, and will cause
each of its Subsidiaries to:
(a) preserve and maintain its legal existence and
(except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect) all of its
rights, privileges, licenses and franchises (provided that
nothing in this Section 8.03 shall prohibit the merger,
consolidation, amalgamation, liquidation, winding up or
dissolution of any Subsidiary of the Company or any
transaction expressly permitted under Section 8.05 hereof);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements could (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the
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date on which penalties attach thereto, except for any such
tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained;
(d) maintain all of its Properties used or useful in
its business in good working order and condition, ordinary
wear and tear excepted (except where the failure to do so
could not reasonably be expected to have a Material Adverse
Effect);
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with
generally accepted accounting principles consistently
applied; and
(f) permit representatives of any Bank or the Agent,
during normal business hours, to examine, copy and make
extracts from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such
Bank or the Agent (as the case may be).
8.04 Insurance. The Company will, and will cause each
of its Subsidiaries to, maintain insurance with financially sound
and reputable insurance companies, or through self-insurance,
with respect to Property and risks of a character usually
maintained by corporations engaged in the same or similar
business similarly situated, against loss, damage and liability
of the kinds and in the amounts customarily maintained by such
corporations.
8.05 Prohibition of Fundamental Changes. The Company
will not enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution). The Company will not convey,
sell, lease, transfer or otherwise dispose of, in one transaction
or a series of transactions, substantially all of its business or
Property, whether now owned or hereafter acquired.
Notwithstanding the foregoing provisions of this Section 8.05,
the Company may merge or consolidate with any other Person if
(i) either (a) the Company is the surviving corporation or (b)
both (1) the successor corporation is organized and existing
under the laws of any state in the United States of America or
the laws of the District of Columbia and expressly assumes the
obligations of the Company under the Basic Documents and any
promissory notes issued under Section 11.06(e) hereof by an
instrument satisfactory to the Agent and the Majority Banks in
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form and substance and (2) the sole purpose of such merger or
consolidation is to effect a reincorporation of the Company in
such state or the District of Columbia, as the case may be, and
(ii) after giving effect thereto no Default would exist
hereunder.
8.06 Limitation on Liens. The Company will not, nor
will it permit any of its Subsidiaries to, create, incur, assume
or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except:
(a) Liens existing on the date of this Agreement;
(b) Liens on property of, or on any shares of stock or
indebtedness of, any corporation existing at the time such
corporation becomes a Subsidiary of the Company;
(c) Liens on property of, or on any shares of stock or
indebtedness of, any corporation existing at the time such
corporation is merged into or consolidated with the Company
or a Subsidiary of the Company or at the time of a sale,
lease or other disposition of the properties of a
corporation as an entirety or substantially as an entirety
to the Company or a Subsidiary of the Company;
(d) Liens on property existing at the time of the
acquisition thereof or to secure the payment of all or any
part of the purchase price or construction cost thereof or
to secure any Indebtedness incurred prior to, at the time of
or within six months after, the acquisition or completion of
such property for the purpose of financing all or any part
of the purchase price or construction cost thereof;
(e) Liens to secure all or part of the cost of
repairing, altering, constructing, improving or developing
such property as is, in the opinion of the Board of
Directors, substantially unimproved or to secure
Indebtedness incurred for the purpose of financing any such
cost;
(f) Liens on capital stock issued by, or partnership
or other similar interests in, any Subsidiary of the Company
provided that the Indebtedness secured by such Lien is also
secured by Liens which if incurred by the Company or a
Subsidiary of the Company would be covered by clause (d) or
(e) of this Section 8.06 on property of such Subsidiary
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constituting at least 80% of the book value of its tangible
assets;
(g) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or that are being
contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the
books of the Company or the affected Subsidiaries, as the
case may be, in accordance with GAAP;
(h) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in
the ordinary course of business that are not overdue for a
period of more than 30 days or that are being contested in
good faith and by appropriate proceedings and Liens securing
judgments but only to the extent for an amount and for a
period not resulting in an Event of Default under
Section 9(h) hereof;
(i) pledges or deposits under worker's compensation,
unemployment insurance and other social security
legislation;
(j) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(k) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of Property or
minor imperfections in title thereto that, in the aggregate,
are not material in amount, and that do not in any case
materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the
business of the Company or any of its Subsidiaries;
(l) other Liens incurred in the ordinary course of
business that do not secure the repayment of Indebtedness;
and
(m) additional Liens upon real and/or personal
Property created after the date hereof, provided that the
aggregate obligations secured thereby and incurred on and
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after the date hereof shall not exceed $100,000,000 in the
aggregate at any one time outstanding.
8.07 Leverage Ratio. The Company will not permit the
Leverage Ratio to exceed 5.25 to 1 at any time.
8.08. Accuracy and Completeness of Information. All
written information furnished after the date hereof by the
Company and its Subsidiaries to the Agent and the Banks in
connection with this Agreement and the other Basic Documents and
the transactions contemplated hereby and thereby will be true,
complete and accurate in every material respect, or (in the case
of projections) based on reasonable estimates, on the date as of
which such information is stated or certified.
8.09 Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Company will not, nor
will it permit any of its Subsidiaries to, directly or
indirectly, enter into any transaction directly or indirectly
with or for the benefit of an Affiliate that is not in the best
interest of the Company and its Subsidiaries. A transaction
shall be deemed to be in the best interest of the Company and its
Subsidiaries (a) where the monetary or business consideration
provided by the Company and its Subsidiaries in the relevant
transaction or series of related transactions has a present value
(as determined by any reasonable method) of less than
$25,000,000, if the management or the Board of Directors of the
Company determines that the transaction or the series of related
transactions is in the best interest of the Company and its
Subsidiaries; and (b) where the monetary or business
consideration provided by the Company and its Subsidiaries in the
relevant transaction has a present value (as determined by any
reasonable method) of $25,000,000 or more, a majority of
disinterested directors of the Company determines that the
transaction or the series of related transactions is in the best
interest of the Company and its Subsidiaries.
8.10 Use of Proceeds. The Company will use the
proceeds of the Loans hereunder and Letters of Credit issued
hereunder solely for general corporate purposes, including,
without limitation, as a liquidity facility to pay commercial
paper (in compliance with all applicable legal and regulatory
requirements); provided that (i) neither the Agent, any Bank, the
Issuing Bank nor the Swingline Bank shall have any responsibility
as to any such use and (ii) the proceeds of any Swingline Loan
may not be used to repay any other Swingline Loan.
8.11 Lines of Business. The primary lines of business
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of the Company and its Subsidiaries, determined on a consolidated
basis, shall be in the media industry.
Section 9. Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur
and be continuing:
(a) The Company shall: (i) default in the payment of
any principal of any Loan or any Reimbursement Obligation
when due (whether at stated maturity or at mandatory or
optional prepayment); or (ii) default in the payment of any
interest on any Loan, any fee or any other amount payable by
it hereunder or under any other Basic Document when due and
such default shall have continued unremedied for three or
more Business Days; or
(b) The Company or any of its Subsidiaries shall
default in the payment when due of any principal of or
interest on any of its other Indebtedness aggregating
$100,000,000 or more; or any default or similar event
specified in any note, agreement, indenture or other
document evidencing or relating to any such Indebtedness
shall occur and any applicable grace periods shall have
expired if the effect of such event is to cause, or to
permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to
cause, such Indebtedness to become due, or to be prepaid in
full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity; or
(c) Any representation, warranty or certification made
or deemed made herein or in any other Basic Document (or in
any modification or supplement hereto or thereto) by the
Company, or any certificate furnished to any Bank, the
Issuing Bank, the Swingline Bank or the Agent pursuant to
the provisions hereof or thereof, shall prove to have been
false or misleading as of the time made or furnished in any
material respect; or
(d) The Company shall default in the performance of
any of its obligations under any of Sections 8.01(f), 8.05,
8.06, 8.07 or 8.09 hereof; or the Company shall default in
the performance of any of its other obligations in this
Agreement or any other Basic Document and such default shall
continue unremedied for a period of thirty or more days
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after notice thereof to the Company by the Agent, any Bank,
the Issuing Bank or the Swingline Bank; or
(e) The Company or any of its Material Subsidiaries
shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; or
(f) The Company or any of its Material Subsidiaries
shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee,
examiner or liquidator of itself or of all or a substantial
part of its Property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case
under the Bankruptcy Code, (iv) file a petition seeking to
take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code
or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without
the application or consent of the Company or any of its
Material Subsidiaries, in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the
like of the Company or such Material Subsidiary or of all or
any substantial part of its Property, or (iii) similar
relief in respect of the Company or such Material Subsidiary
under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days; or
an order for relief against the Company or such Material
Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment of
money in excess of $100,000,000 in the aggregate shall be
rendered by one or more courts, administrative tribunals or
other bodies having jurisdiction against the Company or any
of its Subsidiaries and the same shall not be discharged (or
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provision shall not be made for such discharge), or a stay
of execution thereof shall not be procured, within 30 days
from the date of entry thereof and the Company or the
relevant Subsidiary shall not, within said period of 30
days, or such longer period during which execution of the
same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 8.01(e)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or
condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur
or shall be reasonably likely to incur a liability to a
Plan, a Multiemployer Plan or PBGC (or any combination of
the foregoing) that could reasonably be expected (either
individually or in the aggregate) to have a Material Adverse
Effect; or
(j) Continuing Directors shall cease to constitute a
majority of the Board of Directors of the Company; or
(k) Any Person (other than a member of the Tisch
Family) or two or more Persons (other than members of the
Tisch Family) acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of 20% or more of the
outstanding shares of voting stock of the Company without
the approval of a majority of the Continuing Directors of
the Company as evidenced by a duly adopted resolution
thereof;
THEREUPON: (i) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 9 with respect
to the Company, the Agent, upon request of the Majority Banks,
or, with respect to the Swingline Commitment and Swingline Loans
by the Swingline Bank, shall, by notice to the Company, cancel
the Commitments and/or Swingline Commitment and declare the
principal amount then outstanding of, and the accrued interest
on, the Loans, the Reimbursement Obligations and all other
amounts payable by the Company hereunder (including, without
limitation, any amounts payable under Section 5.05 hereof) to be
forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest
or other formalities of any kind, all of which are hereby
expressly waived by the Company; and (ii) in the case of the
occurrence of an Event of Default referred to in clause (f) or
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(g) of this Section 9 with respect to the Company, the
Commitments and the Swingline Commitment shall automatically be
canceled and the principal amount then outstanding of, and the
accrued interest on, the Loans, the Reimbursement Obligations and
all other amounts payable by the Company hereunder (including,
without limitation, any amounts payable under Section 5.05
hereof) shall automatically become immediately due and payable
without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Company.
In addition, if the Agent (or the Majority Banks
through the Agent) so requests by notice to the Company upon or
following a declaration by the Agent pursuant to the preceding
paragraph that the principal amount then outstanding of, and
accrued interest on, the Loans and Reimbursement Obligations and
all other amounts payable by the Company hereunder have become
due and payable, the Company agrees that it shall, (and, in the
case of any Event of Default referred to in clause (f) or (g) of
this Section 9 with respect to the Company, forthwith, without
any demand or the taking of any other action by the Agent or such
Banks) provide cover for the Letter of Credit Liabilities by
paying to the Agent immediately available funds in an amount
equal to the then aggregate undrawn face amount of all Letters of
Credit, which funds shall be held by the Agent subject to and in
accordance with Section 10.09 hereof.
Section 10. The Agent.
10.01 Appointment, Powers and Immunities. Each Bank,
the Issuing Bank and the Swingline Bank hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder
with such powers as are specifically delegated to the Agent by
the terms of this Agreement, together with such other powers as
are reasonably incidental thereto. The Agent (which term as used
in this sentence and in Section 10.05 and the first sentence of
Section 10.06 hereof shall include reference to its affiliates
and its own and its affiliates' officers, directors, employees
and agents): (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement, and shall not by
reason of this Agreement be a trustee for any Bank, the Issuing
Bank or the Swingline Bank; (b) shall not be responsible to the
Banks, the Issuing Bank or the Swingline Bank for any recitals,
statements, representations or warranties contained in this
Agreement, or in any certificate or other document referred to or
provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, or
any other document referred to or provided for herein or for any
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failure by the Company or any other Person to perform any of its
obligations hereunder or thereunder; (c) shall not be required to
initiate or conduct any litigation or collection proceedings
hereunder; and (d) shall not be responsible to the Banks, the
Issuing Bank or the Swingline Bank for any action taken or
omitted to be taken by it hereunder or under any other document
or instrument referred to or provided for herein or in connection
herewith, except for its own gross negligence or willful
misconduct. The Agent may use non-employee agents and attorneys-
in-fact and shall not be responsible to the Banks, the Issuing
Bank or the Swingline Bank for the negligence or misconduct of
any such agents or attorneys-in-fact selected by it in good
faith.
10.02 Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication
(including any thereof by telephone or telecopy) believed by it
to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by the Agent. As to any matters not expressly
provided for by this Agreement, the Agent shall in all cases be
fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Majority
Banks, and such instructions of the Majority Banks and any action
taken or failure to act pursuant thereto shall be binding on all
of the Banks.
10.03 Defaults. The Agent, the Issuing Bank and the
Swingline Bank shall not be deemed to have knowledge or notice of
the occurrence of a Default unless it has received notice from a
Bank or the Company specifying such Default and stating that such
notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of a Default, the Agent
shall give prompt notice thereof to the Banks or to the Company,
as the case may be. The Agent shall (subject to Sections 10.01
and 10.07 hereof) take such action with respect to such Default
as shall be directed by the Majority Banks, provided that, unless
and until the Agent shall have received such directions, the
Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interest of the Banks.
10.04 Rights as a Bank, the Issuing Bank and the
Swingline Bank. With respect to its Commitment and the Swingline
Commitment, the Loans made by it, its Letter of Credit Interests
and its interests acquired under Section 2.02(b) hereof in
Swingline Loans, Chase (and any successor acting as Agent) in its
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capacity as a Bank, the Issuing Bank or the Swingline Bank
hereunder shall have the rights and powers provided hereby and
may exercise the same as though it were not acting as the Agent,
and the term "Bank" or "Banks", "Issuing Bank" or "Swingline
Bank" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. Chase (and any successor
acting as Agent) and its affiliates may (without having to
account therefor to any Bank) accept deposits from, lend money to
and generally engage in any kind of banking, trust or other
business with the Company (and any Subsidiary or Affiliate) as if
it were not acting as the Agent, and Chase and its subsidiaries
and affiliates may accept fees and other consideration from the
Company for services in connection with this Agreement or
otherwise without having to account for the same to the Banks.
10.05 Indemnification. The Banks agree to indemnify
the Agent (to the extent not reimbursed under Section 11.03
hereof, but without limiting the obligations of the Company under
said Section 11.03), ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other
documents contemplated by or referred to herein or the
transactions contemplated hereby (including, without limitation,
the costs and expenses which the Company is obligated to pay
under Section 11.03 hereof but excluding, unless a Default has
occurred and is continuing, normal administrative costs and
expenses incident to the performance of its agency duties
hereunder) or the enforcement of any of the terms hereof or of
any such other documents, provided that no Bank shall be liable
for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
10.06 Non-Reliance on Agent and other Banks. Each
Bank agrees that it has, independently and without reliance on
the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Company and the Subsidiaries and decision to
enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. The Agent
shall not be required to keep itself informed as to the
performance or observance by the Company of this Agreement or any
other document referred to or provided for herein or to inspect
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the properties or books of the Company or any Subsidiary. Except
for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning
the affairs, financial condition or business of the Company or
any Subsidiary (or any of their affiliates) which may come into
the possession of the Agent or any of its affiliates.
10.07 Failure to Act. Except for action expressly
required of the Agent hereunder the Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it
shall receive further assurances to its reasonable satisfaction
from the Banks of their indemnification obligations under
Section 10.05 hereof against any and all liability and expense
which may be incurred by it by reason of taking or continuing to
take any such action.
10.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving notice thereof
to the Banks and the Company and the Agent may be removed at any
time with or without cause by the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right
to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Majority Banks and shall have accepted
such appointment within 30 days after the retiring Agent's giving
of notice of resignation or the Majority Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the
Banks, after consultation with the Company, appoint a successor
Agent, which shall be a bank which has an office in New York, New
York with a combined capital and surplus of at least
$300,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section 10
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
the Agent.
10.09 Letter of Credit Collateral Account.
(a) In the event that the Company shall be required
pursuant to the last paragraph of Section 9 hereof to provide
cover for Letter of Credit Liabilities, the Agent shall establish
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with Chase a separate cash collateral account (the "Collateral
Account") in the name and under the control of the Agent into
which there shall be deposited from time to time certain amounts
required or contemplated to be paid to the Agent as provided in
the last paragraph of Section 9 hereof or otherwise.
(b) As collateral security for the prompt payment in
full when due (whether at stated maturity, by acceleration or
otherwise) of its obligations hereunder, the Company hereby
pledges and grants to the Agent, for the benefit of the Banks,
the Issuing Bank and the Agent as provided herein, a security
interest in all of its right, title and interest in and to the
Collateral Account and the balances from time to time standing to
the credit of the Collateral Account (and the investments and
reinvestments therein provided for below). The balances from
time to time standing to the credit of the Collateral Account
shall not constitute payment of any obligations hereunder until
applied by the Agent as provided herein. Anything in this
Agreement to the contrary notwithstanding, funds standing to the
credit of the Collateral Account shall be subject to withdrawal
only as provided in this Section 10.09.
(c) Amounts standing to the credit of the Collateral
Account shall be invested and reinvested by the Agent in such
Permitted Investments as the Company shall specify to the Agent
from time to time (provided that the approval of the Agent shall
be required for investments and reinvestments to be made during
any period while an Event of Default has occurred and is
continuing), which investments and reinvestments shall be held in
the Collateral Account in the name and be under the control of
the Agent.
(d) At any time following the occurrence and during
the continuance of an Event of Default, the Agent may (and, if
instructed by the Majority Banks, shall) in its (or their)
discretion at any time and from time to time elect to liquidate
any such investments and reinvestments and credit the proceeds
thereof to the Collateral Account and apply or cause to be
applied such proceeds and any other balances standing to the
credit of the Collateral Account to the payment of the
obligations of the Company in respect of the Letters of Credit
and thereafter to the other obligations of the Company hereunder.
(e) So long as no Event of Default shall have occurred
and be continuing, on any date on which the aggregate amount of
funds standing to the credit of the Collateral Account as cover
for Letter of Credit Liabilities exceeds the aggregate amount of
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Letter of Credit Liabilities, the Agent shall promptly deliver to
the Company, against receipt but without any recourse, warranty
or representation whatsoever, that portion of the balance in the
Collateral Account equal to such excess.
(f) The Company shall pay to the Agent from time to
time such fees as the Agent normally charges for similar services
in connection with the Agent's administration of the Collateral
Account and investments and reinvestments of funds therein.
For purposes of this Section 10.09, "Permitted
Investments" shall mean: (a) direct obligations of the United
States of America, or of any agency thereof, or obligations
guaranteed as to principal and interest by the United States of
America, or of any agency thereof, in either case maturing not
more than 90 days from the date of acquisition thereof;
(b) certificates of deposit issued by any bank or trust company
organized under the laws of the United States of America or any
state thereof and having capital, surplus and undivided profits
of at least $500,000,000, maturing not more than 90 days from the
date of acquisition thereof; and (c) commercial paper rated A-1
or better or P-1 by Standard & Poor's or Moody's, respectively,
maturing not more than 90 days from the date of acquisition
thereof.
10.10 Agency Fee. The Company shall pay to the Agent
an agency fee as provided in the Fee Letter.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of the Agent,
any Bank, the Issuing Bank or the Swingline Bank to exercise and
no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement shall operate
as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
11.02 Notices. All notices, requests and other
communications provided for herein (including, without
limitation, any modifications of, or waivers, requests or
consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telex or telecopy), or, with
respect to notices given pursuant to Section 2.03 hereof, by
telephone, confirmed in writing by telecopier by the close of
business on the day the notice is given, delivered (or
- 71 -<PAGE>
telephoned, as the case may be) to the intended recipient at the
"Address for Notices" specified below its name on the signature
pages hereof); or, as to any party, at such other address as
shall be designated by such party in a notice to each other
party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when
transmitted by telex or telecopier or personally delivered or, in
the case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
11.03 Expenses, Etc. The Company agrees to pay or
reimburse each of the Banks, the Issuing Bank, the Swingline Bank
and the Agent for: (a) all reasonable out-of-pocket costs and
expenses of the Agent (including, without limitation, the
reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy,
special New York counsel to Chase) in connection with (i) the
negotiation, preparation, execution and delivery of this
Agreement and the other Basic Documents and the extension of
credit hereunder and (ii) the negotiation or preparation of any
modification, supplement or waiver requested or consented to by
the Company of any of the terms of this Agreement or any of the
other Basic Documents (whether or not consummated); (b) all
reasonable out-of-pocket costs and expenses of the Banks and the
Agent (including, without limitation, the reasonable fees and
expenses of legal counsel) in connection with (i) any Default and
any enforcement or collection proceedings resulting therefrom,
including, without limitation, all manner of participation in or
other involvement with (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout or restructuring
negotiations or proceedings (whether or not the workout or
restructuring contemplated thereby is consummated) and (ii) the
enforcement of this Section 11.03; and (c) all transfer, stamp,
documentary or other similar taxes, assessments or charges levied
by any governmental or revenue authority in respect of this
Agreement or any of the other Basic Documents or any other
document referred to herein or therein.
The Company hereby agrees to indemnify the Agent, each
Bank, the Issuing Bank and the Swingline Bank and their
respective directors, officers, employees and agents from, and
hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them
arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or
litigation or other proceedings) relating to any actual or
proposed use by the Company or any Subsidiary of the proceeds of
any of the Loans, including, without limitation, the reasonable
- 72 -<PAGE>
fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified (an "indemnitee"), any
officer, director or employee of such indemnitee or any officer,
director or employee of the Person of whom such indemnitee is an
officer, director or employee). If the Company is obligated to
pay any amount under this paragraph to any indemnitee by reason
of the gross negligence or willful misconduct of any party to
this Agreement, such party shall (in addition to any other
liability it may have) reimburse the Company for the amount of
such payment.
11.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may
be amended or modified only by an instrument in writing signed by
the Company and the Majority Banks (or the Agent acting with the
consent of the Majority Banks) and, if the rights or obligations
hereunder of the Swingline Bank are affected thereby, Swingline
Bank, and, if the rights of the Issuing Bank are affected
thereby, the Issuing Bank, and any provision of this Agreement
may be waived by the Majority Banks (or the Agent acting with the
consent of the Majority Banks) and, if the rights or obligations
hereunder of the Swingline Bank are affected thereby, the
Swingline Bank and, if the rights of the Issuing Bank are
affected thereby, the Issuing Bank; provided that (a) no
amendment, modification or waiver shall, unless by an instrument
signed by all of the Banks or by the Agent acting with the
consent of all of the Banks: (i) increase or extend the term, or
extend the time or waive any requirement for the reduction or
termination, of the Commitments or the Swingline Commitment,
(ii) extend the date fixed for the payment of principal of or
interest on any Loan, the Reimbursement Obligations or any fee
hereunder, (iii) reduce the amount of any payment of principal
thereof or Reimbursement Obligations or the rate at which
interest is payable thereon or any fee is payable hereunder,
(iv) alter the terms of this Section 11.04, (v) amend the
definition of the term "Majority Banks" or (vi) waive any of the
conditions precedent set forth in Section 6 hereof; (b) any
amendment of Section 10 hereof shall require the consent of the
Agent; and (c) any modification of any of the rights or
obligations of the Swingline Bank or Issuing Bank shall require
the consent of the Swingline Bank or Issuing Bank (as the case
may be). No amendment or modification of any provision of this
Agreement (other than Section 6 hereof) shall be deemed to
constitute a waiver of any of the conditions precedent set forth
- 73 -<PAGE>
in Section 6 hereof for purposes of clause (a)(vi) of the
preceding sentence.
Anything in this Agreement to the contrary
notwithstanding, if:
(i) at a time when the conditions precedent set forth
in Section 6 hereof to any Syndicated Loan hereunder are, in
the opinion of the Majority Banks, satisfied, any Bank shall
fail to fulfill its obligations to make such Loan,
(ii) any Bank shall fail to pay to the Agent for the
account of the Issuing Bank the amount of such Bank's
Commitment Percentage of any payment under a Letter of
Credit pursuant to Section 2.05(e) hereof or
(iii) any Bank shall fail to pay to the Agent for the
account of the Swingline Bank any amount required to be paid
by such Bank to purchase a Swingline Interest pursuant to
Section 2.02(b) hereof
then, for so long as such failure shall continue, such Bank shall
(unless the Majority Banks, determined as if such Bank were not a
"Bank" hereunder, shall otherwise consent in writing) be deemed,
solely for purposes relating to amendments, modifications,
waivers or consents under this Agreement or any of the other
Basic Documents (including, without limitation, under this
Section 11.04), to have no Loans, Letter of Credit Liabilities or
Commitments, shall not be treated as a "Bank" hereunder when
performing the computation of Majority Banks, and shall have no
rights under the preceding paragraph of this Section 11.04;
provided that any action taken by the other Banks with respect to
the matters referred to in clause (a) of the preceding paragraph
shall not be effective as against such Bank.
11.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
11.06 Assignments and Participations.
(a) The Company may not assign any of its rights or
obligations hereunder, other than pursuant to a transaction
permitted by Section 8.05, without the prior consent of all of
the Banks, the Issuing Bank, the Swingline Bank and the Agent.
(b) Each Bank may assign any of its Loans, its
Commitment, its interest acquired under Section 2.02(b) hereof in
- 74 -<PAGE>
Swingline Loans ("Swingline Interest") and its Letter of Credit
Interest (but only with the consent of the Company, the Swingline
Bank and the Agent and, in the case of the Commitment or a Letter
of Credit Interest, the Issuing Bank); provided that (i) no such
consent by the Company or the Agent shall be required in the case
of any assignment to another Bank; (ii) any such partial
assignment shall be in an amount at least equal to $15,000,000;
and (iii) each assignment by a Bank of any of its Loans, its
Commitment, its interest acquired under Section 2.02(b) hereof in
Swingline Loans or Letter of Credit Interest shall be made in
such manner so that the same portion of each of its Loans, its
Commitment, its Swingline Interest and Letter of Credit Interest
is assigned to the respective assignee. Upon execution and
delivery by the assignee to the Company, the Agent, the Issuing
Bank and the Swingline Bank of an instrument in writing pursuant
to which such assignee agrees to become a "Bank" hereunder (if
not already a Bank) having the Commitment, Loans, and, if
applicable, Letter of Credit Interest specified in such
instrument, and upon consent thereto by the Company, the Agent
and the Issuing Bank, to the extent required above, the assignee
shall have, to the extent of such assignment (unless otherwise
provided in such assignment with the consent of the Company, the
Agent and the Issuing Bank), the obligations, rights and benefits
of a Bank hereunder holding the Commitment, Loans and, if
applicable, Swingline Interest and Letter of Credit Interest (or
portions thereof) assigned to it (in addition to the Commitment,
Loans, Swingline Interest and Letter of Credit Interest, if any,
theretofore held by such assignee) and the assigning Bank shall,
to the extent of such assignment, be released from the Commitment
(or portion thereof) so assigned. Upon each such assignment the
assigning Bank shall pay the Agent an assignment fee of $2,500.
(c) The Swingline Bank may not (except as provided in
Section 2.02(b) hereof) assign or sell participations in all or
any part of the Swingline Loans or the Swingline Commitment;
provided that, with the prior consent of the Company, which
consent shall not be unreasonably withheld or delayed, the
Swingline Bank may assign to another Bank all of its obligations,
rights and benefits in respect of the Swingline Loans and the
Swingline Commitment. Upon the effectiveness of any such
assignment, the assignee shall have the obligations, rights and
benefits of a Swingline Bank hereunder holding the Swingline
Commitment and Swingline Loans assigned to it, and the assigning
Swingline Bank shall be released from its Swingline Commitment so
assigned.
(d) A Bank may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loans,
- 75 -<PAGE>
Swingline Interest or Letter of Credit Interest held by it, or in
its Commitment, in which event each purchaser of a participation
(a "Participant"), except as otherwise provided in
Section 4.07(c) hereof, shall not have any other rights or
benefits under this Agreement or any Basic Document (the
Participant's rights against such Bank in respect of such
participation to be those set forth in the agreements executed by
such Bank in favor of the Participant). All amounts payable by
the Company to any Bank under Section 5 hereof in respect of
Loans, Swingline Interest, Letter of Credit Interest held by it,
and its Commitment, shall be determined as if such Bank had not
sold or agreed to sell any participations in such Loans,
Swingline Interest, Letter of Credit Interest and Commitment, and
as if such Bank were funding each of such Loan, Swingline
Interest, Letter of Credit Interest and Commitment in the same
way that it is funding the portion of such Loan, Letter of Credit
Interest and Commitment in which no participations have been
sold. In no event shall a Bank that sells a participation agree
with the Participant to take or refrain from taking any action
hereunder or under any other Basic Document except that such Bank
may agree with the Participant that it will not, without the
consent of the Participant, agree to (i) increase or extend the
term, or extend the time or waive any requirement for the
reduction or termination, of such Bank's Commitment, (ii) extend
the date fixed for the payment of principal of or interest on the
related Loan or Loans, Swingline Interest, Reimbursement
Obligations or any portion of any fee hereunder payable to the
Participant, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a
level below the rate at which the Participant is entitled to
receive such interest or fee, (v) alter the rights or obligations
of the Company to prepay the related Loans or (vi) consent to any
modification, supplement or waiver hereof or of any of the other
Basic Documents to the extent that the same, under Section 11.04
hereof, requires the consent of each Bank.
(e) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 11.06,
any Bank may (without notice to the Company, the Agent or any
other Bank and without payment of any fee) (i) assign and pledge
all or any portion of its Loans to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank and (ii) assign all
or any portion of its rights under this Agreement and its Loans
to an affiliate. No such assignment shall release the assigning
Bank from its obligations hereunder. In order to facilitate any
such assignment and pledge to a Federal Reserve Bank, the Company
- 76 -<PAGE>
agrees to deliver to the assigning Bank at its request promissory
notes evidencing the principal and interest obligations owed to
such assigning Bank hereunder, such promissory notes to be
substantially in the form of Exhibit A-1, A-2 or A-3 hereof (as
appropriate), to be dated the date hereof and otherwise to be
duly completed.
(f) A Bank may furnish any information concerning the
Company or any of its Subsidiaries in the possession of such Bank
from time to time to assignees and participants (including
prospective assignees and participants), subject, however, to the
provisions of Section 11.12(b) hereof.
(g) Anything in this Section 11.06 to the contrary
notwithstanding, no Bank may assign or participate any interest
in any Loan, Commitment, Swingline Commitment, Swingline Interest
or Letter of Credit Interest held by it hereunder to the Company
or any of its Affiliates or Subsidiaries without the prior
consent of each Bank.
11.07 Survival. The obligations of the Company under
Sections 5.01, 5.05, 5.06 and 11.03 hereof, and the obligations
of the Banks under Section 10.05 hereof, shall survive the
repayment of the Loans and Reimbursement Obligations and the
termination of the Commitments. In addition, each representation
and warranty made, or deemed to be made by a notice of any
extension of credit (whether by means of a Loan or a Letter of
Credit), herein or pursuant hereto shall survive the making of
such representation and warranty, and no Bank shall be deemed to
have waived, by reason of making any extension of credit
hereunder (whether by means of a Loan or a Letter of Credit), any
Default that may arise by reason of such representation or
warranty proving to have been false or misleading,
notwithstanding that such Bank or the Agent may have had notice
or knowledge or reason to believe that such representation or
warranty was false or misleading at the time such extension of
credit was made.
11.08 Captions. The table of contents and captions
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.09 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
- 77 -<PAGE>
11.10 Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with,
the law of the State of New York. The Company hereby submits to
the nonexclusive jurisdiction of the United States District Court
for the Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company irrevocably
waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.
11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE
AGENT, THE BANKS, THE ISSUING BANK AND THE SWINGLINE BANK HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
11.12 Treatment of Certain Information;
Confidentiality.
(a) The Company acknowledges that from time to time
financial advisory, investment banking and other services may be
offered or provided to the Company or one or more of its
Subsidiaries (in connection with this Agreement or otherwise) by
any Bank, the Issuing Bank, the Swingline Bank or by one or more
subsidiaries or affiliates of such Bank, the Issuing Bank or the
Swingline Bank and the Company hereby authorizes each Bank, the
Issuing Bank and the Swingline Bank to share any information
delivered to such Bank by the Company and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of
such Bank, the Issuing Bank or the Swingline Bank to enter into
this Agreement, to any such subsidiary or affiliate, it being
understood that any such subsidiary or affiliate receiving such
information shall be bound by the provisions of clause (b) below
as if it were a Bank hereunder. Such authorization shall survive
the repayment of the Loans and Reimbursement Obligations and the
termination of the Commitments and the Swingline Commitment.
(b) Each Bank, the Issuing Bank, the Swingline Bank
and the Agent agree (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance
with their customary procedures for handling confidential
information of the same nature and in accordance with safe and
- 78 -<PAGE>
sound banking practices, any non-public information supplied to
it by the Company pursuant to this Agreement that is identified
by the Company as being confidential at the time the same is
delivered to the Banks, the Issuing Bank, the Swingline Bank or
the Agent, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel
for any of the Banks, the Issuing Bank, the Swingline Bank or the
Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Agent, the Issuing Bank, the Swingline Bank or any other Bank
(or to Chase Securities, Inc.), (v) in connection with any
litigation to which any one or more of the Banks, the Issuing
Bank, the Swingline Bank or the Agent is a party, (vi) to a
subsidiary or affiliate of such Bank, the Issuing Bank or the
Swingline Bank as provided in clause (a) above or (vii) to any
assignee or participant (or prospective assignee or participant)
so long as such assignee or participant (or prospective assignee
or participant) first executes and delivers to the respective
Bank a Confidentiality Agreement substantially in the form of
Exhibit F hereto and (y) in no event shall any Bank, the Issuing
Bank, the Swingline Bank or the Agent be obligated or required to
return any materials furnished by the Company. The obligations
of any assignee that has executed a Confidentiality Agreement in
the form of Exhibit F hereto shall be superseded by this
Section 11.12 upon the date upon which such assignee becomes a
Bank hereunder pursuant to Section 11.06 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
CBS INC.
By /s/ Louis J. Rauchenberger, Jr.
Title: Vice President and
Treasurer
Address for Notices:
51 West 52nd Street
New York, New York 10019
Attention:
Telex No.:
Telecopier No.: (212) 975-3668
Telephone No.: (212) 975-6831
- 79 -<PAGE>
BANKS
Commitment THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
$500,000,000
By /s/ Robert T. Smith
Title: Vice President
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention:
Telex No.:
Telecopier No.: (212) 552-4905
Telephone No.: (212) 552-4967
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By /s/ Robert T. Smith
Title: Vice President
Address for Notices to
Chase as Agent:
The Chase Manhattan Bank
(National Association)
4 Metrotech Center -- 13th Floor
Brooklyn, New York 11245
Attention: New York Agency
Telex No.: 6720516
(Answerback: CMBNYAUW)
Telecopier No.: (718) 242-6910
Telephone No.: (718) 242-7979
- 80 -<PAGE>
EXHIBIT A-1
[Form of Syndicated Note]
PROMISSORY NOTE
$_______________ August 26, 1994
New York, New York
FOR VALUE RECEIVED, CBS INC., a New York corporation
(the "Company"), hereby promises to pay to __________________
(the "Bank"), for account of its respective Applicable Lending
Offices provided for by the Credit Agreement referred to below,
at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York
10081, the principal sum of _______________ Dollars (or such
lesser amount as shall equal the aggregate unpaid principal
amount of the Syndicated Loans made by the Bank to the Company
under the Credit Agreement), in lawful money of the United States
of America and in immediately available funds, on the dates and
in the principal amounts provided in the Credit Agreement, and to
pay interest on the unpaid principal amount of each such
Syndicated Loan, at such office, in like money and funds, for the
period commencing on the date of such Syndicated Loan until such
Syndicated Loan shall be paid in full, at the rates per annum and
on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Syndicated Loan made by
the Bank to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Bank on its books
and, prior to any transfer of this Note, endorsed by the Bank on
the schedule attached hereto or any continuation thereof,
provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of
the Company to make a payment when due of any amount owing under
the Credit Agreement or hereunder in respect of the Syndicated
Loans made by the Bank.
This Note is one of the Syndicated Notes referred to in
the Credit Agreement dated as of August 26, 1994 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement") between the Company, the lenders named therein and
The Chase Manhattan Bank (National Association), as Agent, and
evidences Syndicated Loans made by the Bank thereunder. Terms
used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
<PAGE>
- 2-
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of Loans upon the terms and conditions
specified therein.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Bank to any other
Person.
This Note shall be governed by, and construed in
accordance with, the law of the State of New York.
CBS INC.
By_________________________
Title:
<PAGE>
- 3 -
SCHEDULE OF SYNDICATED LOANS
This Note evidences Syndicated Loans made under the
within-described Credit Agreement to the Company, on the dates,
in the principal amounts, of the Types, bearing interest at the
rates and having Interest Periods of the durations set forth
below, subject to the payments and prepayments of principal set
forth below:
Amount
Made, Principal Paid,
Cont'd Amount Type Maturity Prepaid, Unpaid
or of of Interest Date of Cont'd or Principal Notation
Converted Loan Loan Rate Loan Converted Amount Made by
<PAGE>
EXHIBIT A-2
[Form of Money Market Note]
PROMISSORY NOTE
August 26, 1994
New York, New York
FOR VALUE RECEIVED, CBS INC., a New York corporation
(the "Company"), hereby promises to pay to __________________
(the "Bank"), for account of its respective Applicable Lending
Offices provided for by the Credit Agreement referred to below,
at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York
10081, the aggregate unpaid principal amount of the Money Market
Loans made by the Bank to the Company under the Credit Agreement,
in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Money Market Loan, at
such office, in like money and funds, for the period commencing
on the date of such Money Market Loan until such Money Market
Loan shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
The date, amount, Type, interest rate and maturity date
of each Money Market Loan made by the Bank to the Company, and
each payment made on account of the principal thereof, shall be
recorded by the Bank on its books and, prior to any transfer of
this Note, endorsed by the Bank on the schedule attached hereto
or any continuation thereof, provided that the failure of the
Bank to make any such recordation or endorsement shall not affect
the obligations of the Company to make a payment when due of any
amount owing under the Credit Agreement or hereunder in respect
of the Money Market Loans made by the Bank.
This Note is one of the Money Market Notes referred to
in the Credit Agreement dated as of August 26, 1994 (as modified
and supplemented and in effect from time to time, the "Credit
Agreement") between the Company, the lenders named therein
(including the Bank) and The Chase Manhattan Bank (National
Association), as Agent, and evidences Money Market Loans made by
the Bank thereunder. Terms used but not defined in this Note
have the respective meanings assigned to them in the Credit
Agreement.
- 2 -
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of Money Market Loans upon the terms and
conditions specified therein.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Bank to any other
Person.
This Note shall be governed by, and construed in
accordance with, the law of the State of New York.
CBS INC.
By_________________________
Title:
<PAGE>
- 3 -
SCHEDULE OF LOANS
This Note evidences Loans made under the within-
described Credit Agreement to the Company, on the dates, in the
principal amounts, of the Types, bearing interest at the rates
and maturing on the dates set forth below, subject to the
payments and prepayments of principal set forth below:
Principal
Date Amount Type Maturity Amount Unpaid
of of of Interest Date of Paid or Principal Notation
Loan Loan Loan Rate Loan Prepaid Amount Made by
<PAGE>
EXHIBIT A-3
[Form of Swingline Note]
PROMISSORY NOTE
$_______________ August 26, 1994
New York, New York
FOR VALUE RECEIVED, CBS INC., a New York corporation
(the "Company"), hereby promises to pay to __________________
(the "Bank"), for account of its respective Applicable Lending
Offices provided for by the Credit Agreement referred to below,
at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York
10081, the principal sum of _______________ Dollars (or such
lesser amount as shall equal the aggregate unpaid principal
amount of the Swingline Loans made by the Bank to the Company
under the Credit Agreement), in lawful money of the United States
of America and in immediately available funds, on the dates and
in the principal amounts provided in the Credit Agreement, and to
pay interest on the unpaid principal amount of each such
Swingline Loan, at such office, in like money and funds, for the
period commencing on the date of such Swingline Loan until such
Swingline Loan shall be paid in full, at the rates per annum and
on the dates provided in the Credit Agreement.
The date and amount of each Swingline Loan made by the
Bank to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Bank on its books
and, prior to any transfer of this Note, endorsed by the Bank on
the schedule attached hereto or any continuation thereof,
provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of
the Company to make a payment when due of any amount owing under
the Credit Agreement or hereunder in respect of the Swingline
Loans made by the Bank.
This Note is the Swingline Note referred to in the
Credit Agreement dated as of August 26, 1994 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement") between the Company, the lenders named therein and
The Chase Manhattan Bank (National Association), as Agent, and
evidences Swingline Loans made by the Bank thereunder. Terms
used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.<PAGE>
- 2 -
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of Loans upon the terms and conditions
specified therein.
Except as permitted by Section 11.06(c) of the Credit
Agreement, this Note may not be assigned by the Bank to any other
Person.
This Note shall be governed by, and construed in
accordance with, the law of the State of New York.
CBS INC.
By_________________________
Title:
<PAGE>
- 3 -
SCHEDULE OF SWINGLINE LOANS
This Note evidences Swingline Loans made under the
within-described Credit Agreement to the Company, on the dates
and in the principal amounts set forth below, subject to the
payments and prepayments of principal set forth below:
Prin-
Date cipal Amount Unpaid
Made Amount Paid Prin-
or of or cipal Notation
Prepaid Loan Prepaid Amount Made by
<PAGE>
EXHIBIT B
[Form of Opinion of Counsel to the Company]
__________, 199_
To the Banks party to the
Credit Agreement referred to
below and The Chase
Manhattan Bank (National Association), as Agent
Ladies and Gentlemen:
I am the Associate General Counsel of CBS Inc. (the
"Company"), and I have participated on behalf of the Company in
the negotiation, execution and delivery of the Credit Agreement
(the "Credit Agreement") dated as of August __, 1994, between the
Company, the lenders named therein and The Chase Manhattan Bank
(National Association), as Agent, providing for extensions of
credit to be made by said lenders to the Company in an aggregate
principal or face amount not exceeding $500,000,000 at any one
time outstanding. Terms defined in the Credit Agreement are used
herein as defined therein. This opinion is being delivered
pursuant to Section 6.01(b) of the Credit Agreement.
In rendering the opinion expressed below, I have
examined:
(a) the Credit Agreement; and
(b) such corporate records of the Company and such
other documents as I have deemed necessary as a
basis for the opinions expressed below.
In my examination, I have assumed the genuineness of
all signatures, the authenticity of all documents submitted to me
as originals and the conformity with authentic original documents
of all documents submitted to me as copies. When relevant facts
were not independently established, I have relied upon statements
of governmental officials and upon representations made in or
pursuant to the Credit Agreement and certificates of appropriate
representatives of the Company.
In rendering the opinions expressed below, I have
assumed, with respect to all of the documents referred to in this
opinion letter, that (except, to the extent set forth in the
opinions expressed below, as to the Company):
<PAGE>
- 2 -
(i) such documents have been duly authorized by, have
been duly executed and delivered by, and
constitute legal, valid, binding and enforceable
obligations of, all of the parties to such
documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly
organized and validly existing and have the power
and authority (corporate or other) to execute,
deliver and perform such documents.
Based upon and subject to the foregoing and subject
also to the comments and qualifications set forth below, and
having considered such questions of law as I have deemed
necessary as a basis for the opinions expressed below, I am of
the opinion that:
1. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of New York. Each Material Subsidiary of the Company
is duly organized, validly existing and in good standing in
the state of its incorporation.
2. The Company has all requisite corporate power to
execute and deliver, and to perform its obligations under,
the Credit Agreement. The Company has all requisite
corporate power to borrow under the Credit Agreement and to
incur liability in respect of Letters of Credit under the
Credit Agreement.
3. The execution, delivery and performance by the
Company of the Credit Agreement, and the borrowings and
incurrence of liability in respect of Letters of Credit by
the Company under the Credit Agreement, have been duly
authorized by all necessary corporate action on the part of
the Company.
4. The Credit Agreement has been duly executed and
delivered by the Company.
5. The Credit Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as may be
<PAGE>
- 3 -
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
the rights of creditors generally and except as the
enforceability of the Credit Agreement is subject to the
application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law),
including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief or
any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
6. No authorization, approval or consent of, and no
filing or registration with, any governmental or regulatory
authority or agency of the United States of America or the
State of New York is required on the part of the Company for
the execution, delivery or performance by the Company of the
Credit Agreement or for the borrowings or the application
for and incurrence of liability in respect of any Letter of
Credit by the Company under the Credit Agreement.
7. The execution, delivery and performance by the
Company of, and the consummation by the Company of the
transactions contemplated by, the Credit Agreement do not
and will not (a) violate any provision of its charter or
by-laws, (b) violate any applicable law, rule or regulation,
(c) violate any order, writ, injunction or decree of any
court or governmental authority or agency or any arbitral
award applicable to the Company or any of its Subsidiaries
of which I have knowledge (after due inquiry) or (d) result
in a breach of, constitute a default under, require any
consent under, or result in the acceleration or required
prepayment of any indebtedness pursuant to the terms of, any
agreement or instrument of which I have knowledge (after due
inquiry) to which the Company is a party or by which it is
bound or to which it is subject, or result in the creation
or imposition of any Lien upon any Property of the Company
pursuant to the terms of any such agreement or instrument.
8. I have no knowledge (after due inquiry) of any
legal or arbitral proceedings, or any proceedings by or
before any governmental or regulatory authority or agency,
pending or threatened against or affecting the Company or
any of its Subsidiaries or any of their respective
Properties in which there exists a reasonable prospect of a
result that would have a Material Adverse Effect.
The foregoing opinions are subject to the following
comments and qualifications:<PAGE>
- 4 -
(A) The enforceability of Section 11.03 of the Credit
Agreement may be limited by laws rendering unenforceable
(i) indemnification contrary to Federal or state securities
laws and the public policy underlying such laws and (ii) the
release of a party from, or the indemnification of a party
against, liability for its own wrongful or negligent acts
under certain circumstances.
(B) The enforceability of provisions in the Credit
Agreement to the effect that terms may not be waived or
modified except in writing may be limited under certain
circumstances.
(C) I express no opinion as to (i) the effect of the
laws of any jurisdiction in which any Bank is located (other
than the State of New York) that limit the interest, fees or
other charges such Bank may impose, (ii) the second sentence
of Section 11.10 of the Credit Agreement, insofar as such
sentence relates to the subject matter jurisdiction of the
United States District Court for the Southern District of
New York to adjudicate any controversy related to the Credit
Agreement or (iii) the waiver of inconvenient forum set
forth in Section 11.10 of the Credit Agreement with respect
to proceedings in the United States District Court for the
Southern District of New York.
The foregoing opinions are limited to matters involving
the Federal laws of the United States and the law of the State of
New York, and I do not express any opinion as to the laws of any
other jurisdiction.
At the request of the Company, this opinion letter is,
pursuant to Section 6.01(b) of the Credit Agreement, provided to
you by me in my capacity as _______________ of the Company and
may not be relied upon by any Person for any purpose other than
in connection with the transactions contemplated by the Credit
Agreement without, in each instance, my prior written consent.
Very truly yours,
<PAGE>
EXHIBIT C
[Form of Opinion of Special New York Counsel to Chase]
__________, 199_
To the Banks party to the
Credit Agreement referred to
below and The Chase
Manhattan Bank (National Association), as Agent
Ladies and Gentlemen:
We have acted as special New York counsel to Chase in
connection with (i) the Credit Agreement dated as of August 26,
1994 (the "Credit Agreement") between CBS Inc. (the "Company"),
the lenders named therein and The Chase Manhattan Bank (National
Association), as Agent, providing for extensions of credit to be
made by said lenders to the Company in an aggregate principal or
face amount not exceeding $500,000,000 at any one time
outstanding. Terms defined in the Credit Agreement are used
herein as defined therein. This opinion is being delivered
pursuant to Section 6.01(c) of the Credit Agreement.
In rendering the opinion expressed below, we have
examined:
(a) the Credit Agreement; and
(b) such corporate records of the Company and such
other documents as we have deemed necessary as a
basis for the opinions expressed below.
In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us
as originals and the conformity with authentic original documents
of all documents submitted to us as copies. When relevant facts
were not independently established, we have relied upon
statements of governmental officials and upon representations
made in or pursuant to the Credit Agreement and certificates of
appropriate representatives of the Company.
In rendering the opinions expressed below, we have
assumed, with respect to all of the documents referred to in this
opinion letter, that:
(i) such documents have been duly authorized by, have
been duly executed and delivered by, and (except<PAGE>
- 2 -
to the extent set forth in the opinions below as
to the Company) constitute legal, valid, binding
and enforceable obligations of, all of the parties
to such documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly
organized and validly existing and have the power
and authority (corporate or other) to execute,
deliver and perform such documents.
Based upon and subject to the foregoing and subject
also to the comments and qualifications set forth below, and
having considered such questions of law as we have deemed
necessary as a basis for the opinions expressed below, we are of
the opinion that the Credit Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of
creditors generally and except as the enforceability of the
Credit Agreement is subject to the application of general
principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation,
(a) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (b) concepts
of materiality, reasonableness, good faith and fair dealing.
The foregoing opinions are subject to the following
comments and qualifications:
(A) The enforceability of Section 11.03 of the Credit
Agreement may be limited by laws rendering unenforceable (i)
indemnification contrary to Federal or state securities laws
and the public policy underlying such laws and (ii) the
release of a party from, or the indemnification of a party
against, liability for its own wrongful or negligent acts
under certain circumstances.
(B) The enforceability of provisions in the Credit
Agreement to the effect that terms may not be waived or
modified except in writing may be limited under certain
circumstances.
(C) We express no opinion as to (i) the effect of the
laws of any jurisdiction in which any Bank is located (other<PAGE>
- 3 -
than the State of New York) that limit the interest, fees or
other charges such Bank may impose, (ii) Section 4.07(c) of
the Credit Agreement, (iii) the second paragraph of
Section 11.01 of the Credit Agreement, (iv) the second
sentence of Section 11.10 of the Credit Agreement, insofar
as such sentence relates to the subject matter jurisdiction
of the United States District Court for the Southern
District of New York to adjudicate any controversy related
to the Credit Agreement, or (v) the waiver of inconvenient
forum set forth in Section 11.10 of the Credit Agreement
with respect to proceedings in the United States District
Court for the Southern District of New York.
The foregoing opinions are limited to matters involving
the Federal laws of the United States and the law of the State of
New York, and we do not express any opinion as to the laws of any
other jurisdiction.
This opinion letter is, pursuant to Section 6.01(c) of
the Credit Agreement, provided to you by us in our capacity as
special New York counsel to Chase and may not be relied upon by
any Person for any purpose other than in connection with the
transactions contemplated by the Credit Agreement without, in
each instance, our prior written consent.
Very truly yours,
<PAGE>
EXHIBIT D
[Form of Money Market Quote Request]
[Date]
To: The Chase Manhattan Bank (National Association), as
Agent
From: CBS Inc.
Re: Money Market Quote Request
Pursuant to Section 2.03 of the Credit Agreement dated as of
August 26, 1994 (the "Credit Agreement") between CBS Inc., the
lenders named therein and The Chase Manhattan Bank (National
Association), as Agent, we hereby give notice that we request
Money Market Quotes for the following proposed Money Market
Borrowing(s):
Borrowing Quotation Interest
Date Date[*1] Amount[*2] Type[*3] Period[*4]
Terms used herein have the meanings assigned to them in the
Credit Agreement.
CBS INC.
By_________________________
Title:
__________________________
* All numbered footnotes appear on the last page of this
Exhibit.
<PAGE>
- 2 -
__________________________
[1] For use if a Set Rate in a Set Rate Auction is requested to
be submitted before the Borrowing Date.
[2] Each amount must be $10,000,000 or a larger multiple of
$1,000,000.
[3] Insert either "LIBO Margin" (in the case of LIBOR Market
Loans) or "Set Rate" (in the case of Set Rate Loans).
[4] One, two, three or six months, in the case of a LIBOR Market
Loan or, in the case of a Set Rate Loan, a period of up to
180 days after the making of such Set Rate Loan and ending
on a Business Day.<PAGE>
EXHIBIT E
[Form of Money Market Quote]
To: The Chase Manhattan Bank (National Association), as Agent
Attention:
Re: Money Market Quote to
CBS Inc. (the "Borrower")
This Money Market Quote is given in accordance with
Section 2.03(c) of the Credit Agreement dated as of August 26,
1994 (the "Credit Agreement") between CBS Inc., the lenders named
therein and The Chase Manhattan Bank (National Association), as
Agent. Terms defined in the Credit Agreement are used herein as
defined therein.
In response to the Borrower's invitation dated __________,
199_, we hereby make the following Money Market Quote(s) on the
following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Money Market Loan(s) in the
following principal amount[s], for the following Interest
Period(s) and at the following rate(s):
Borrowing Quotation Interest
Date Date[*1] Amount[*2] Type[*3] Period[*4] Rate[*5]
provided that the Company may not accept offers that would result
in the undersigned making Money Market Loans pursuant hereto in
excess of $___________ in the aggregate (the "Money Market Loan
Limit").
__________________________
* All numbered footnotes appear on the last page of this
Exhibit.<PAGE>
- 2 -
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set
forth in the Credit Agreement, irrevocably obligate[s] us to make
the Money Market Loan(s) for which any offer(s) (is/are)
accepted, in whole or in part (subject to the third sentence of
Section 2.03(e) of the Credit Agreement and any Money Market Loan
Limit specified above).
Very truly yours,
[NAME OF BANK]
By_________________________
Authorized Officer
Dated: __________, ____
__________________________
[1] As specified in the related Money Market Quote Request.
[2] The principal amount bid for each Interest period may not
exceed the principal amount requested. Bids must be made
for at least $5,000,000 (or a larger multiple of
$1,000,000).
[3] Indicate "LIBO Margin" (in the case of LIBOR Market Loans)
or "Set Rate" (in the case of Set Rate Loans).
[4] One, two, three or six months, in the case of a LIBOR Market
Loan or, in the case of a Set Rate Loan, a period of up to
180 days after the making of such Set Rate Loan and ending
on a Business Day, as specified in the related Money Market
Quote Request.
[5] For a LIBOR Market Loan, specify margin over or under the
London interbank offered rate determined for the applicable
Interest Period. Specify percentage (rounded to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS". For
a Set Rate Loan, specify rate of interest per annum (rounded
to the nearest 1/10,000 of 1%).
<PAGE>
EXHIBIT F
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement dated as of August 26, 1994 (the
"Credit Agreement"), between CBS Inc. (the
"Company"), the lenders named therein and The
Chase Manhattan Bank (National Association), as
Agent.
Dear Ladies and Gentlemen:
As a Bank party to the Credit Agreement, we have agreed
with the Company pursuant to Section 11.12 of the Credit
Agreement to use reasonable precautions to keep confidential,
except as otherwise provided therein, all non-public information
identified by the Company as being confidential at the time the
same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 11.12, we are permitted to
provide you, as a prospective [holder of a participation in the
Loans (as defined in the Credit Agreement)] [assignee Bank], with
certain of such non-public information subject to the execution
and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such
information will not be made available to you until your
execution and return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you
agree (on behalf of yourself and each of your affiliates,
directors, officers, employees and representatives and for the
benefit of us and the Company) that (A) such information will not
be used by you except in connection with the proposed
[participation][assignment] mentioned above and (B) you shall use
reasonable precautions, in accordance with your customary
procedures for handling confidential information and in
accordance with safe and sound banking practices, to keep such<PAGE>
- 2 -
information confidential, provided that nothing herein shall
limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process,
(ii) to your counsel or to counsel for any of the Banks or the
Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Agent or any other Bank (or to Chase Securities, Inc.),
(v) in connection with any litigation to which you or any one or
more of the Banks or the Agent are a party, (vi) to a subsidiary
or affiliate of yours as provided in Section 11.12(a) of the
Credit Agreement or (vii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first
executes and delivers to you a Confidentiality Agreement
substantially in the form hereof and (y) that in no event shall
you be obligated to return any materials furnished to you
pursuant to this Confidentiality Agreement.
If you are a prospective assignee, your obligations
under this Confidentiality Agreement shall be superseded by
Section 11.12 of the Credit Agreement on the date upon which you
become a Bank under the Credit Agreement pursuant to
Section 11.06 thereof.
Please indicate your agreement to the foregoing by
signing as provided below the enclosed copy of this
Confidentiality Agreement and returning the same to us.
Very truly yours,
[INSERT NAME OF BANK]
By_________________________
The foregoing is agreed to
as of the date of this letter.
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By_________________________
<PAGE>
CBS
PENSION
PLAN
AS AMENDED AND RESTATED
(INCLUDING AMENDMENTS THROUGH JANUARY 1, 1995)
CMC-8612
<PAGE>
CBS PENSION PLAN
CONTENTS
ARTICLE PAGE
I PURPOSE OF THE PLAN; THE TRUST. . . . . . . . . . . . . . . . 1
1.01 Purpose of the Plan; Combination and
Amendment of Prior Plans. . . . . . . . . . . . . . . 1
1.02 Purpose of the Trust; Merger and
Amendment of Prior Trusts . . . . . . . . . . . . . . 1
1.03 Application. . . . . . . . . . . . . . . . . . . . . . . 1
1.04 Meanings of Terms. . . . . . . . . . . . . . . . . . . . 2
II PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . 2
2.01 Employees who were Plan Participants
on December 31, 1988. . . . . . . . . . . . . . . . . 2
2.02 Other Employees As Participants. . . . . . . . . . . . . 2
2.03 Termination and Reemployment . . . . . . . . . . . . . . 3
III RETIREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.01 Termination of Employment as Retirement. . . . . . . . . 3
3.02 Calculation of Normal Retirement Benefit . . . . . . . . 3
3.03 News Correspondents Normal Retirement Benefit. . . . . . 4
3.04 Early Retirement Benefit . . . . . . . . . . . . . . . . 4
3.05 General Provision on Retirement Subsequent
To Normal Retirement Date . . . . . . . . . . . . . . 4
3.06 Payment of Retirement Benefit. . . . . . . . . . . . . . 5
3.07 Reemployment Subsequent to Retirement and
Continued Employment After Age 65 . . . . . . . . . . 5
IV TERMINATION OF PARTICIPATION . . . . . . . . . . . . . . . . 6
4.01 No Employer Obligation to Continue Employment
of a Participant; Termination of Employment
as Termination of Participation . . . . . . . . . . . 6
4.02 Effect of Interruption of Employment . . . . . . . . . . 7
4.03 Calculation of Termination Benefit . . . . . . . . . . . 7
4.04 Optional Termination Benefit as Annuity
Commencing at Age 55. . . . . . . . . . . . . . . . . 8
4.05 Special Provisions Applicable to Former
Participants in New Employment Following
Transfer of Operations to Unaffiliated Entity . . . . 8
V DEATH . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(i)<PAGE>
5.01 Calculation of Death Benefit . . . . . . . . . . . . . . 9
5.02 Death after Termination of Participation and
Prior to Receipt of Benefits. . . . . . . . . . . . . 10
5.03 Payment of Death Benefit; Special Provisions
Applicable to Married Participants. . . . . . . . . . 10
5.04 Commencement of Death Benefit Payments . . . . . . . . . 11
VI ELECTION OF CERTAIN BENEFITS. . . . . . . . . . . . . . . . . 11
6.01 Choice of Optional Benefits. . . . . . . . . . . . . . . 11
6.02 Procedure for Electing Optional Benefit. . . . . . . . . 12
6.03 Annuity Provision For Married Participants . . . . . . . 13
6.04 Election by Married Participants; Spousal
Consent . . . . . . . . . . . . . . . . . . . . . . . 13
6.05 Death Prior to First Payment . . . . . . . . . . . . . . 14
6.06 Commencement of Benefits . . . . . . . . . . . . . . . . 14
6.07 Continued Employment After Age 70-1/2;
Commencement of Payments. . . . . . . . . . . . . . . 15
6.08 Direct Rollovers . . . . . . . . . . . . . . . . . . . . 15
6.09 Provision for Single Sum if Installments are
Less Than $25.00 or if Present Value is
Not Greater Than $3,500 . . . . . . . . . . . . . . . 17
6.10 Limitations of Benefits. . . . . . . . . . . . . . . . . 18
VII EMPLOYMENT BY OTHER EMPLOYERS AND BY NONPENSION
SUBSIDIARIES; LEAVE OF ABSENCE; PERMANENT DISABILITY . . . . 19
7.01 Employment by Another Employer Concurrent
with Termination. . . . . . . . . . . . . . . . . . . 19
7.02 Granting of Leaves of Absence. . . . . . . . . . . . . . 19
7.03 Leaves of Absence Under IBEW Agreement . . . . . . . . . 20
7.04 Consequences of a Permanent Disability . . . . . . . . . 20
VIII METHOD OF PROVIDING BENEFITS. . . . . . . . . . . . . . . . . 21
8.01 Employers' Payments to Trust . . . . . . . . . . . . . . 21
8.02 Refund of Employer Contributions . . . . . . . . . . . . 21
8.03 Transfer of Trust Assets to Trustees
Under NY Credit Union Plan. . . . . . . . . . . . . . 21
IX MERGER OF PENSION PLANS . . . . . . . . . . . . . . . . . . . 22
9.01 Definitions Applicable to Plan Mergers . . . . . . . . . 22
9.02 Merger Procedure and Calculation of Benefits . . . . . . 22
9.03 Continuance of Payments to Previously Retired
Participants of a Merged Plan . . . . . . . . . . . . 25
(ii)<PAGE>
9.04 Treatment of Insurance and Annuity Policies
under a Merged Plan . . . . . . . . . . . . . . . . . 25
9.05 Treatment of Voluntary Participant Contri-
butions under a Merged Plan . . . . . . . . . . . . . 26
9.06 No Reduction of Benefits . . . . . . . . . . . . . . . . 26
X THE PENSION COMMITTEE; ADMINISTRATION . . . . . . . . . . . . 27
10.01 Committee as "Administrator"; Powers. . . . . . . . . . 27
10.02 Resignation, Removal or Death of Committee
Members . . . . . . . . . . . . . . . . . . . . . . . 27
10.03 Committee Action and Rules. . . . . . . . . . . . . . . 27
10.04 Retention of Experts. . . . . . . . . . . . . . . . . . 28
10.05 Allocation and Delegation of Authority. . . . . . . . . 28
10.06 Compensation. . . . . . . . . . . . . . . . . . . . . . 28
XI THE TRUSTEE AND INVESTMENT MANAGERS . . . . . . . . . . . . . 29
11.01 Appointment of Trustee(s) . . . . . . . . . . . . . . . 29
11.02 Appointment of Investment Manager(s). . . . . . . . . . 29
XII THE ACTUARY . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.01 Appointment and Removal of Actuary. . . . . . . . . . . 29
12.02 Duties of Actuary . . . . . . . . . . . . . . . . . . . 29
XIII RESPONSIBILITY OF FIDUCIARIES . . . . . . . . . . . . . . . . 29
13.01 Discharge of Fiduciary Duties . . . . . . . . . . . . . 29
13.02 Liability for Other Fiduciaries' Acts . . . . . . . . . 30
13.03 Indemnification . . . . . . . . . . . . . . . . . . . . 30
13.04 Service in More Than One Fiduciary Capacity . . . . . . 30
13.05 Direction of Investment of Trust Funds. . . . . . . . . 30
XIV TERMINATION; AMENDMENT. . . . . . . . . . . . . . . . . . . . 30
14.01 Procedure and Conditions for Amendment or
Termination . . . . . . . . . . . . . . . . . . . . . 30
14.02 Disposition of Trust upon Termination . . . . . . . . . 32
14.03 Form of Termination Distribution. . . . . . . . . . . . 35
14.04 Return to Employers . . . . . . . . . . . . . . . . . . 35
XV CLAIMS PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . 35
15.01 Submission and Review of Claims . . . . . . . . . . . . 35
XVI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 36
(iii)<PAGE>
16.01 Maintenance of Records; Use of Forms;
Notices and Communications. . . . . . . . . . . . . . 36
16.02 Consents and Determinations by Employers'
Boards and by Pension Committee; Non-
Discrimination. . . . . . . . . . . . . . . . . . . . 37
16.03 Limitation of Participant's Interest;
Restriction on Alienation of Benefits;
Effect of Qualified Domestic Relations
Orders. . . . . . . . . . . . . . . . . . . . . . . 38
16.04 Payment in the Event of Incapacity. . . . . . . . . . . 38
XVII TOP HEAVY RULES . . . . . . . . . . . . . . . . . . . . . . . 39
17.01 Applicability of Article. . . . . . . . . . . . . . . . 39
17.02 When Plan is Considered Top-Heavy . . . . . . . . . . . 39
17.03 Applicable Definitions. . . . . . . . . . . . . . . . . 40
17.04 Requirements Applicable if Plan is Top-Heavy . . . . . 42
XVIII DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 44
18.01 Act . . . . . . . . . . . . . . . . . . . . . . . . . . 44
18.02 Actuarial Equivalent. . . . . . . . . . . . . . . . . . 44
18.03 Actuary . . . . . . . . . . . . . . . . . . . . . . . . 44
18.04 Affiliated Company. . . . . . . . . . . . . . . . . . . 44
18.05 Anniversary Year. . . . . . . . . . . . . . . . . . . . 45
18.06 Average Compensation. . . . . . . . . . . . . . . . . . 45
18.07 Beneficiaries . . . . . . . . . . . . . . . . . . . . . 47
18.08 Break in Service. . . . . . . . . . . . . . . . . . . . 47
18.09 Broadcasters. . . . . . . . . . . . . . . . . . . . . . 47
18.10 CBS . . . . . . . . . . . . . . . . . . . . . . . . . . 47
18.11 Code. . . . . . . . . . . . . . . . . . . . . . . . . . 47
18.12 Compensation. . . . . . . . . . . . . . . . . . . . . . 47
18.13 Continuous Employment Period. . . . . . . . . . . . . . 51
18.14 Covered Compensation. . . . . . . . . . . . . . . . . . 51
18.15 Direct Rollover Distribution. . . . . . . . . . . . . . 52
18.16 Early Retirement Benefit. . . . . . . . . . . . . . . . 52
18.17 Early Retirement Date . . . . . . . . . . . . . . . . . 53
18.18 Employee. . . . . . . . . . . . . . . . . . . . . . . . 53
18.19 Employers . . . . . . . . . . . . . . . . . . . . . . . 54
18.20 Fiduciary . . . . . . . . . . . . . . . . . . . . . . . 54
18.21 15-Year Certain Annuity . . . . . . . . . . . . . . . . 54
18.22 Hour of Service . . . . . . . . . . . . . . . . . . . . 54
18.23 Investment Manager. . . . . . . . . . . . . . . . . . . 56
18.24 Joint and Full Survivor Annuity . . . . . . . . . . . . 56
18.25 Joint and Two-Thirds Survivor Annuity . . . . . . . . . 56
18.26 Leave of Absence. . . . . . . . . . . . . . . . . . . . 56
18.27 Life Annuity. . . . . . . . . . . . . . . . . . . . . . 56
18.28 Non-pension Subsidiary. . . . . . . . . . . . . . . . . 56
(iv)<PAGE>
18.29 Normal Retirement Benefit . . . . . . . . . . . . . . . 56
18.30 Normal Retirement Date. . . . . . . . . . . . . . . . . 57
18.31 Optional Benefit. . . . . . . . . . . . . . . . . . . . 57
18.32 Participant . . . . . . . . . . . . . . . . . . . . . 57
18.33 Pension Committee . . . . . . . . . . . . . . . . . . . 57
18.34 Pension Subsidiary. . . . . . . . . . . . . . . . . . . 57
18.35 Permanently Disabled. . . . . . . . . . . . . . . . . . 57
18.36 Plan. . . . . . . . . . . . . . . . . . . . . . . . . . 58
18.37 Plan Year . . . . . . . . . . . . . . . . . . . . . . . 58
18.38 Retirement. . . . . . . . . . . . . . . . . . . . . . . 58
18.39 Subsidiary. . . . . . . . . . . . . . . . . . . . . . . 58
18.40 10-year Certain Annuity . . . . . . . . . . . . . . . . 58
18.41 Termination Benefit . . . . . . . . . . . . . . . . . . 58
18.42 Termination Date. . . . . . . . . . . . . . . . . . . . 58
18.43 Trust . . . . . . . . . . . . . . . . . . . . . . . . . 59
18.44 Trust Agreement . . . . . . . . . . . . . . . . . . . . 59
18.45 Trustee . . . . . . . . . . . . . . . . . . . . . . . . 59
18.46 Union Employee. . . . . . . . . . . . . . . . . . . . . 59
18.47 Union Pension Compensation. . . . . . . . . . . . . . . 59
18.48 Vested Benefit. . . . . . . . . . . . . . . . . . . . . 60
18.49 Year of Service . . . . . . . . . . . . . . . . . . . . 60
18.50 Years . . . . . . . . . . . . . . . . . . . . . . . . . 62
XIX RESTRICTED PARTICIPANTS . . . . . . . . . . . . . . . . . . . 62
19.01 Limitation on Payments to Restricted
Participants. . . . . . . . . . . . . . . . . . . . . 62
XX ADOPTION BY SUBSIDIARIES. . . . . . . . . . . . . . . . . . . 63
20.01 Procedure for Adoption. . . . . . . . . . . . . . . . . 63
20.02 Adoption of Trust Agreement . . . . . . . . . . . . . . 63
XXI INTERPRETATION; CONSTRUCTION. . . . . . . . . . . . . . . . . 64
21.01 Effect of Pension Committee's Decisions . . . . . . . . 64
21.02 Law to be Applied; Pronouns . . . . . . . . . . . . . . 64
XXII SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . 65
APPENDIX A ACTUARIAL EQUIVALENTS, MORTALITY RATES . . . . . . . . . . 66
APPENDIX B PROVISIONS APPLICABLE TO FORMER 1942 PLAN
PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . 69
APPENDIX C PROVISIONS APPLICABLE TO WCAU PLAN PARTICIPANTS . . . . . 71
APPENDIX D PROVISIONS APPLICABLE TO PARTICIPANTS IN PRIOR
PLANS . . . . . . . . . . . . . . . . . . . . . . . . 78
(v)<PAGE>
CBS PENSION PLAN
I
PURPOSE OF THE PLAN; THE TRUST
1.01 The purpose of the CBS Pension Plan is to provide
income upon retirement to employees who are participants in the
Plan, and to provide for certain other benefits in the event of
the early retirement, termination of employment or permanent
disability of any such employee and for certain survivors'
benefits in the event of the death of any such employee prior to
his retirement. In order to increase the benefits on a more
uniform basis, two pension plans under which CBS and certain
pension subsidiaries were Employers (referred to herein as the
1942 Plan and the 1960 Plan) were combined in a single plan in
1969, which is the CBS Pension Plan (the "Plan").
1.02 In order to aid in the proper execution of the Plan,
effective as of October 1, 1969, the 1942 Trust Agreement was
amended to incorporate therein the provisions of the 1960 Trust
Agreement and the 1960 Trust was merged into the 1942 Trust,
resulting in a single trust which is governed by the Trust
Agreement and shall be availed of solely to aid in the proper
execution of the Plan.
1.03 The CBS Pension Plan has been amended from time to
time to incorporate certain changes required by law and certain
other changes. This Plan constitutes an amendment to and
restatement of the CBS Pension Plan as in effect on December 31,
1988. This amendment and restatement includes various amendments
made to comply with the Tax Reform Act of 1986 and related and
subsequent legislation, regulations and other guidance effective
at various dates. This amendment and restatement is generally
effective as of January 1, 1989, with respect to employees who
are employed (or continue in employment) on and after such date
unless another effective date is set forth herein or in Board of
Directors or committee resolutions or otherwise required by law.
It is the intention of the Employers that this amended and
restated Plan and the Trust shall continue to meet the
requirements of the Employee Retirement Income Security Act of
1974 (ERISA) and shall continue to be qualified and exempt under
Section 401(a) and 501(a) of the Internal Revenue Code of 1986,
as amended from time to time.
The rights of any participant whose employment terminated
before any amendment or restatement of this Plan shall be
determined by the provisions of this Plan, or any other pension
plan under which he was covered, if any, as in effect at the time
- 1 -<PAGE>
of his termination of employment, unless specifically otherwise
provided herein or required by law.
1.04 The terms used in the Plan and in the Trust Agreement
which are defined in Article XVIII shall have the respective
meanings ascribed thereto in said Article. The terms and
provisions applicable to 1942 Plan participants are described in
Appendix B. The terms and provisions applicable to participants
in the WCAU Trust Fund Retirement Plan for Certain Groups of
Employees are described in Appendix C. The terms and provisions
applicable to certain other groups of employees with respect to
whom certain special provisions apply hereunder are described in
Appendix D.
II
PARTICIPATION
2.01 Each employee who was a participant in this Plan on
December 31, 1988 shall continue as a participant under the Plan
after such date.
2.02 Each employee who was not a participant on
December 31, 1988 shall become a participant on
(a) the date his employment commences on a "full-time
basis" which term shall mean employment for which the
customary work schedule is full time for the location at
which he is employed;
(b) the date his employment commences on a part-time
basis if he completes at least 1,000 hours of service during
the 12-month period commencing on the date such employment
commences; or
(c) the first day of the anniversary year in which he
completes 1,000 hours of service following the date his
employment commences on a part-time basis if he does not
complete at least 1,000 hours of service during the 12-month
period commencing on the date such employment commences.
2.03 Any person whose employment (and participation) shall
have terminated and who shall again become an employee shall
become a participant in the Plan on the date of his reemployment,
subject to the provisions of Section 2.02; provided, however,
that in no event shall any such person be entitled to the
duplication of benefits for any period of employment.
- 2 -<PAGE>
III
RETIREMENT
3.01 Except as otherwise provided in Section 4.02 and
Section 7.01, each participant whose employment by any of the
Employers shall terminate on his early retirement date or on or
subsequent to his normal retirement date for any reason other
than his death shall be deemed to have retired.
3.02 Except as otherwise provided in Section 3.03or
Appendices C or D, each participant who shall retire on his
normal retirement date shall be entitled to receive a normal
retirement benefit which shall be the amount per annum computed
as follows:
(a) 1.3% of the participant's average compensation up
to the participant's covered compensation multiplied by the
number of years, up to a maximum of 35, included in his
continuous employment period; plus
(b) 1.7% of the participant's average compensation in
excess of the participant's covered compensation multiplied
by the number of years, up to a maximum of 35, included in
his continuous employment period.
In addition to the benefit provided under the foregoing
provisions of this Section 3.02, each participant shall be
entitled to receive a supplemental benefit equal to one dollar
($1) per month for each year, up to a maximum of thirty-five
(35), included in his continuous employment period. The
supplemental benefit payable to a participant who retires before
his normal retirement date shall be calculated in the same manner
as the early retirement benefit or termination benefit, whichever
is applicable to such participant. The supplemental benefit
shall be paid in the same form as the early retirement benefit,
normal retirement benefit, or termination benefit, as applicable,
and shall be considered as part of the applicable benefit for all
purposes of the Plan. In addition, any participant who retires
on or after his early retirement date, and who does not elect to
receive his early retirement benefit in the form of a single sum,
shall receive a supplemental benefit equal to two dollars ($2)
per month for each year, up to a maximum of thirty-five (35),
included in his continuous employment period. Such benefit shall
commence at the same time as payment of the early retirement
benefit and shall be paid as a monthly annuity until the
participant attains sixty-five (65) or dies, whichever first
occurs.
- 3 -<PAGE>
Notwithstanding the foregoing, the normal retirement benefit
of any participant shall in no event be less than the accrued
benefit of such participant on December 31, 1988, as determined
under the terms of the Plan in effect on December 31, 1988.
3.03 Each participant who shall have been a news
correspondent and who shall retire (whether on or subsequent to
his normal retirement date) shall be entitled to receive a normal
retirement benefit which shall be the amount equal to the excess
of (a) the amount to which such participant would have been
entitled under Section 3.02 if said Section were applicable to
him over (b) the amount which shall be the actuarial equivalent
as a life annuity of the aggregate of the amounts paid by one or
more of his Employers as contributions to a pension, welfare or
retirement fund or trust of the American Federation of Television
and Radio Artists with respect to his employment prior to
January 1, 1964.
3.04 Each participant who shall retire on his early
retirement date shall be entitled to receive an early retirement
benefit.
3.05 Except as otherwise provided in Section 3.03, each
participant who shall retire subsequent to his normal retirement
date shall be entitled to receive a retirement benefit which is
not less than the actuarial equivalent as a life annuity of the
amount to which such participant would have been entitled if he
had retired on his normal retirement date. The foregoing
notwithstanding, except as provided in Section 3.07, the present
value of a participant's retirement benefit shall not be
increased under this Section 3.05 to an amount which exceeds the
value of such retirement benefit determined as though such
retirement commenced on May 10, 1989.
3.06 Subject to the provisions of Article VI, the amount
per annum which each participant shall be entitled to receive as
provided in this Article III shall be payable in equal monthly
installments commencing as promptly as shall be practicable after
the date on which such participant shall retire and continuing
during the life of such participant.
3.07 In the event that any person who is in receipt (or who
has received) a termination benefit, early retirement benefit, or
normal retirement benefit is reemployed prior to the attainment
of age 65, and as a result of such reemployment is again eligible
to participate in the Plan, the payment of any benefits he is
then receiving shall be suspended and any election of an optional
benefit shall become void. All of his prior years shall be
- 4 -<PAGE>
restored to him, and upon his subsequent termination of
employment the benefits he is entitled to receive shall be based
on his compensation and years before the period of his prior
termination and thereafter up to his subsequent termination of
employment, and shall be adjusted to reflect the actuarial value
of any benefits previously paid to him. In no event, however,
shall the actuarial value of the benefit payable to such a person
upon his subsequent termination of employment be less than the
actuarial value of the benefit such person was receiving
immediately prior to his reemployment.
In the event that such a person is reemployed in "qualified
reemployment" on or after the attainment of age 65, or in the
event that a participant continues in "qualified employment"
after age 65, and as a result of such reemployment or continued
employment is eligible to participate in the Plan, his benefits
shall be suspended until the earlier of his subsequent retirement
or the date upon which benefits are required to commence pursuant
to Section 6.07, and any election of an optional benefit shall
become void. No suspension of benefits shall occur hereunder
after a participant has attained age 65 until such participant is
given, by personal delivery or first-class mail, a notification
containing the specific reasons that benefits are suspended, a
copy and general description of the Plan provisions relating to
the suspension, a statement that applicable Department of Labor
regulations are found in Section 2530.203-3 of Volume 29 of the
Code of Federal Regulations, and a description of the procedures
for obtaining a review of suspension. Upon the earlier of his
subsequent retirement or commencement of benefits pursuant to
Section 6.07, the benefits payable to a participant hereunder
shall be recalculated to take into account his compensation and
years before the period of his prior termination and thereafter
up to his subsequent retirement, and, if the participant
previously received payment of his benefits as a single sum in
accordance with Section 6.01(e), shall be further adjusted to
reflect the value of any benefits previously paid to him. In no
event, however, shall the actuarial value of the benefit payable
to such a person upon his subsequent retirement be less than the
actuarial value of the benefit such person was receiving
immediately prior to his reemployment. The term "qualified
reemployment" shall mean the completion of 40 or more hours of
service per month or the receipt of compensation for any such
hours of service performed on each of eight or more days during
any month.
For any month in which a participant continues in employment,
other than "qualified reemployment", after age 65, the benefits
payable upon the earlier of his subsequent retirement or
- 5 -<PAGE>
commencement of benefits pursuant to Section 6.07, shall be
increased actuarially to reflect the delayed commencement of
payments, but only to the extent the value of such an increase
exceeds the value of any continued benefit accruals under the
Plan with respect to any such period of service after age 65.
Such benefit amount shall be further adjusted to take into
account his compensation and years before the period of his prior
termination and thereafter up to his subsequent retirement, and,
if the participant previously received payment of his benefits as
a single sum in accordance with Section 6.01(e), shall be further
adjusted to reflect the value of any benefits previously paid to
him.
IV
TERMINATION OF PARTICIPATION
4.01 Nothing contained in the Plan or in the Trust
Agreement shall require any Employer to continue any participant
in its employ or require any participant to continue in the
employ of any Employer. If the employment of any participant by
any Employer shall terminate prior to the first date which could
have been the participant's early retirement date, for any reason
whatsoever, other than the participant's death, then, except as
otherwise provided in Sections 4.02, 4.05, 7.01, 7.03 or 18.49,
participation shall forthwith terminate.
4.02 Interruption of the employment of any participant by
any of the Employers, and interruption of the successive
employment of any participant by two or more of the Employers, by
reason of his substantially full-time employment
(a) by one or more of the Employers in a position of
such a nature or requiring the rendering of services on such
terms that such participant is not an employee within the
meaning of Section 18.18, or
(b) by a non-pension subsidiary in any position and
on any terms
shall, for all purposes of the Plan and Trust Agreement, be
disregarded in determining the continuity of his employment by
such Employer or Employers, but, except (i) to the extent that
the period of any such interruption shall be concurrent with the
period of a leave of absence which is to be included in the
period of employment of such participant, or (ii) as otherwise
provided in Section 18.49, or (iii) if said Section 18.49 shall
not be applicable, as may be determined by the Board of Directors
of CBS in accordance with regulations issued by the Secretary of
- 6 -<PAGE>
the Treasury, the same shall not be included in the period of
employment of such participant by any of the Employers for any
purpose. If, upon the termination of any period of such
interruption, the participant whose employment was so interrupted
shall not, concurrently with such termination, become an employee
within the meaning of Section 18.18, his participation shall
terminate effective upon the termination of the period of such
interruption, except as otherwise provided in Section 18.49.
4.03 In the event that any participant's participation
shall terminate prior to the first date which could have been an
early retirement date for him for any reason whatsoever, other
than his death, then, if on his termination date his continuous
employment period shall be five (5) or more years, he shall be
entitled to receive a termination benefit the annual amount of
which shall be as follows:
(a) If such participant shall not have been a news
correspondent and his continuous employment period shall be
five (5) or more years on his termination date, such
termination benefit shall be the actuarial equivalent as a
life annuity commencing on his normal retirement date of the
amount determined in the manner provided in Section 3.02 and
computed as if such participant's termination date were his
normal retirement date.
(b) If such participation shall have been a news
correspondent, such termination benefit shall be the excess
of (1) the amount which would be computed with respect to him
in accordance with whichever would be applicable to him of
the foregoing paragraph (a) if he had not been a news
correspondent over (2) the amount which shall be the
actuarial equivalent as a life annuity commencing on his
normal retirement date of the aggregate of the amounts paid
by one or more of his Employers as contributions to a
pension, welfare or retirement fund or trust of the American
Federation of Television and Radio Artists with respect to
his employment prior to January 1, 1964.
Subject to Article VI and Section 4.04, the amount per annum
which each participant shall be entitled to receive as provided
in this Section shall be payable in equal monthly installments
commencing as promptly as shall be practicable after such
participant's normal retirement date and continuing during the
life of such participant.
4.04 Each participant who shall be entitled to receive a
termination benefit may elect to receive, in lieu of his
- 7 -<PAGE>
termination benefit provided in Section 4.03, a benefit which
shall be the actuarial equivalent of such termination benefit,
payable in equal monthly installments commencing on the first day
of any month, coincident with or subsequent to his 55th birthday
and prior to his normal retirement date, and continuing during
his life, subject to Article VI and Appendix C. Such month shall
be designated by such participant in a written notice delivered
to the pension committee at least 30 days prior to the date on
which the first payment is to be made.
4.05 Any contrary provision of this Plan concerning the
termination of participation, vesting of benefits or continuous
employment period notwithstanding, the Board of Directors of CBS
may authorize, on a nondiscriminatory basis, a former participant
in the Plan who has ceased employment with CBS or an Affiliated
Company, and has commenced specified New Employment as a result
of a transfer of operations to an entity which is not an
Affiliated Company, and who was not vested in a benefit on the
specified Transfer of Employment Date, to become entitled to
payment from the Plan of the benefit accrued as of such date if
such person shall subsequently complete that number of years of
service in continuous employment in specified New Employment
which, when added to the years of service credited to such person
under the Plan up to the specified Transfer of Employment Date,
equals 5. The Board of Directors of CBS shall determine a
participant's Transfer of Employment Date and New Employment to
which this Section shall apply in each case in which
authorization under this Section is granted.
V
DEATH
5.01 Subject to Appendix D, the beneficiaries of each
participant who shall die while he is a participant and prior to
his retirement, and whose continuous employment period on the
date of his death shall be five or more years, shall be entitled
to receive as a death benefit:
(a) if such participant shall die prior to the first
date which could have been an early retirement date for him,
a benefit which shall be the actuarial equivalent of the
normal retirement benefit which such participant would have
been entitled to receive if the date of his death had been
his normal retirement date, modified as follows:
(1) unreduced for the period between the date
the participant would have attained age 62 if he had
lived and the date of his normal retirement;
- 8 -<PAGE>
(2) reduced at the rate of 4% for each year in
the period between the date the participant would have
attained age 55 and the date he would have attained
age 62; and
(3) reduced actuarially for each year, or part
thereof, in the period between the date of the
participant's death and the date he would have
attained age 55;
(b) if such participant shall die on or after the
first date which could have been an early retirement date for
him and prior to his normal retirement date, a benefit which
shall be the actuarial equivalent of the early retirement
benefit which such participant would have been entitled to
receive if he had retired on the date of his death,
(c) if such participant shall die on or subsequent to
his normal retirement date, a benefit which shall be the
actuarial equivalent of the normal retirement benefit which
such participant would have been entitled to receive if he
had retired on the date of his death.
5.02 The beneficiaries of each participant who shall die
after he shall have ceased to be a participant and prior to
becoming entitled to receive any payments under the Plan shall be
entitled to receive as a death benefit the actuarial equivalent
as of the date of the death of such participant of the death
benefit, if any, they would have been entitled to receive in
accordance with Section 5.01 if such participant had died on the
date he retired or on his termination date, as the case may be.
5.03 Each of the death benefits referred to in Sections
5.01 and 5.02 shall be paid to the beneficiaries entitled thereto
in such equal installments (including in a single sum) and at
such times (or time) as the beneficiary shall elect (in
accordance with Article VI); provided, however, that if the
beneficiary shall elect that any part of such death benefit shall
be paid more than 60 days subsequent to the date on which the
beneficiaries of such participant shall have complied with all
reasonable conditions which the pension committee shall have
specified, then the amount or amounts paid as such death benefit
shall be the actuarial equivalent of such death benefit; provided
further, however, that in the event a benefit is payable pursuant
to the provisions of Sections 5.01 or 5.02 on account of the
death of a participant who was married at the date of his death,
the benefit shall be payable to the spouse of such participant in
an annuity for such spouse's life unless such spouse has
- 9 -<PAGE>
consented, in a written, notarized statement, to a different
beneficiary or a different form of benefit. The pension
committee shall furnish to each participant a general written
explanation in nontechnical terms of the availability of the
optional death benefits under the Plan including the spousal
annuity form of benefit. A participant also has a right to
receive a written explanation of the terms and conditions of the
spousal annuity and the financial effect upon him, given in terms
of dollars per annuity payment; the participant's right to make
and the effect of an election to waive the qualified joint and
survivor annuity form of benefit; the rights of the participant's
spouse; and the right to make, and the effect of, a revocation of
a previous election to waive the qualified joint and survivor
annuity.
5.04 Notwithstanding anything in this Article V to the
contrary, the payment of any benefit hereunder shall commence
within 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
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.
VI
ELECTION OF CERTAIN BENEFITS
6.01 Each participant may, in accordance with the
procedures of Section 6.05 and subject to Appendix C, elect to
receive, in lieu of his early retirement benefit, normal
retirement benefit or termination benefit, as the case may be,
(a) a 10-year certain annuity,
(b) a 15-year certain annuity,
(c) a joint and full survivor annuity,
(d) a joint and two-thirds survivor annuity, or
(e) a single sum;
provided, however, that any optional benefit referred to in the
foregoing clauses (a) through (e) shall satisfy the requirements
of Section 401(a)(9) of the Internal Revenue Code; provided,
further, however, that no participant shall be entitled to elect
any optional benefit which will result in the payment of less
than $25 to him or any beneficiary in any installment, except the
last, paid as a part of such optional benefit. Any such optional
benefit elected in lieu of the early retirement benefit or normal
- 10 -<PAGE>
retirement benefit to which a participant is entitled shall be
the actuarial equivalent of such early retirement benefit or
normal retirement benefit, as the case may be, provided, however,
that in the case of a single sum payable to a participant, such
optional benefit shall be the actuarial equivalent of the
participant's normal retirement benefit calculated as though such
benefit commenced on the participant's normal retirement date
(without regard to any actuarial subsidy for an early retirement
benefit commencing prior to normal retirement date) or, if later,
the date of the participant's termination. Any such optional
benefit elected in lieu of the termination benefit to which a
participant is entitled shall be the actuarial equivalent of such
termination benefit. If, by reason of the restriction set forth
in the second proviso of the first sentence of this Section, a
participant shall not be entitled to elect any optional benefit
described in this Section, he shall nevertheless in that instance
be entitled to elect to receive, in lieu of the early retirement
benefit, normal retirement benefit or termination benefit, as the
case may be, the actuarial equivalent of such benefit in a single
sum. Such election shall be made in accordance with the
provisions of Section 6.02.
In any case where a participant elects an optional benefit
within 60 days of his retirement or termination, and requests
that such optional benefit commence as soon as practicable after
the date of such retirement or termination, the benefit amount
shall be calculated retroactive to the date of such retirement or
termination. In any case where an election of an optional
benefit is made later than 60 days following retirement or
termination, the benefit amount shall be calculated as of the
date the participant's written notice is received by the pension
committee or, if later, the date which the participant shall
elect.
6.02 Except as otherwise provided in Section 6.04, any
election to receive an optional benefit in lieu of an early
retirement benefit, a normal retirement benefit or a termination
benefit, as the case may be, shall be set forth in a written
notice signed by the participant and delivered to the pension
committee on or before such date as the pension committee shall
specify.
6.03 Notwithstanding any provision herein to the contrary,
unless a different manner of payment is elected pursuant to the
Plan:
(a) a participant who is married on the date the
payment of his early retirement benefit, normal retirement
- 11 -<PAGE>
benefit or termination benefit, as the case may be, shall
commence or be made, shall receive the actuarial equivalent
thereof in the manner of a qualified joint and survivor
annuity which shall be a joint and two-thirds survivor
annuity, and
(b) a participant who is not married on the date the
payment of his early retirement benefit, normal retirement
benefit or termination benefit, as the case may be, shall
commence or be made, shall receive the actuarial equivalent
thereof in such other manner as may be provided in Article
III, IV or V.
6.04 The request for an optional benefit pursuant to
Section 6.01 shall be made in writing on a form prescribed by the
pension committee and shall be subject to the following
conditions:
(a) The pension committee shall furnish to each
participant within a reasonable period of time prior to such
participant's annuity starting date, a general written
explanation in nontechnical terms of the availability of the
various optional benefits under the Plan including the joint
and two-thirds survivor annuity. If the participant is
married, such explanation shall include a written explanation
of the terms and conditions of the joint and two-thirds
survivor annuity and the financial effect upon him, given in
terms of dollars per annuity payment; the participant's right
to make and the effect of an election to waive the qualified
joint and survivor annuity form of benefit; the rights of the
participant's spouse; and the right to make, and the effect
of, a revocation of a previous election to waive the
qualified joint and survivor annuity; and
(b) A request to receive an optional benefit in lieu
of an early retirement benefit, normal retirement benefit, or
termination benefit may be made at any time after receipt of
the information described in paragraph (a) hereof and before
the date benefits are due to commence. Any such request may
be changed during that period.
(c) Notwithstanding the above, any election by a
married participant not to receive benefits in the form
described in Section 6.03(a) shall be valid only if made
within 90 days of the date benefits are to commence.
Further, no election or revocation of an election which would
cause the spouse of a participant to not receive the benefit
- 12 -<PAGE>
described in Section 6.03(a) shall be effective without the
written, notarized consent of the spouse.
6.05 If any participant who shall have elected to receive
any benefit pursuant to Article VI shall die prior to his normal
retirement date and prior to the date on which the first payment
would have been made to him under such benefit, no payments shall
be made under such benefit to the beneficiary of such
participant, but such beneficiary shall be entitled to the
benefits provided under Article V.
6.06 Notwithstanding any provision contained in Articles
III, IV, V or VI relating to the manner of payment, payment of a
benefit to which any participant first becomes entitled shall
commence, unless such participant shall elect otherwise
hereunder, not later than the 60th day after the close of the
calendar year in which occurs his 65th birthday or his retirement
in a calendar year thereafter, whichever shall last occur,
provided, however, that any participant shall have the right, to
be exercised in accordance with the procedures of Section 6.04,
to elect to defer the commencement of payment of the benefits to
which the participant has become entitled until a date subsequent
to that provided above, subject only to the conditions (a) that
the elected deferred commencement date cannot be later than the
first day of the month following the month in which the
participant attains age 70; and (b) that all distributions under
this Plan shall comply with the incidental death benefit
requirements of Section 401(a)(9)(G) of the Code and the
regulations (including Treas. Reg. Section 1.401(a)(9)-2) and
other guidance issued thereunder; and (c) that such participant
may only elect a payment option which insures that payment of the
participant's benefits will be distributed over a period not
extending beyond the life expectancy of such participant (or in
the case of a married participant the life expectancy of the
participant and the participant's spouse). Such election shall
be in writing and shall state the amount and form of the benefit
to which the participant is entitled and the date on which
benefit payments shall commence.
6.07 Notwithstanding the foregoing, 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 attains age 70-1/2, regardless of whether his
employment with an Employer is terminated as of such date;
provided, however, that if a participant shall have attained age
70-1/2 before January 1, 1988, the benefits payable to such
- 13 -<PAGE>
participant shall commence to be distributed not later than the
April 1 following the calendar year in which he terminates
employment.
If benefits are to be paid in accordance with the provisions
of this Section 6.07, the participant may elect, prior to the
time such benefits must commence, to receive payment of his or
her benefits in one of the optional forms available under Section
6.01, but such election shall be subject to the payment option
restriction set forth in subparagraphs (b) and (c) of Section
6.04. If a participant fails to make such an election, benefits
shall be paid in the normal form of payment under Article III or
Section 6.03, whichever is applicable. If a participant remains
in employment with an Employer, such benefit form shall continue
to apply to all benefits accrued by such participant under the
Plan after his attainment of age 70-1/2 shall continue in effect
on and after his retirement date. All distributions under this
Plan shall comply with the incidental death benefit requirements
of Section 401(a)(9)(G) of the Code and the regulations
(including Treas. Reg. Section 1.401(a)(9)-2) and other guidance
issued thereunder.
As of each January 1 following the Plan Year in which
distribution commences, the participant's benefit shall be
adjusted to reflect any additional benefits accrued in the
immediately preceding Plan Year.
6.08 At the written request of a distributee (which shall
mean 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), and upon
receipt of the written consent of the pension committee, 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 part of any distribution otherwise to be made
hereunder 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 (a) through
(d). For purposes of this Section 6.08, the following terms have
the following meanings:
(1) The term "eligible rollover distribution"
means any distribution of all or any portion of the
balance to the credit of the distributee, except that
- 14 -<PAGE>
an eligible rollover distribution does not include:
any distribution 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; or any distribution to
the extent such distribution is required under Section
401(a)(9) of the Code; or any distribution 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).
(2) The term "eligible retirement plan" means an
individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, or a
qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to a surviving spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity.
(a) A direct rollover distribution shall only be made
to one eligible retirement plan; a distributee may not elect
to have a direct rollover distribution apportioned between or
among more than one eligible retirement plan.
(b) Direct rollover distributions shall be made in
cash in the form of a check made out to the trustee of the
eligible retirement plan, in accordance with procedures
established by the pension committee.
(c) Amounts attributable to after-tax employee
contributions shall be distributed directly to the
distributee and may not be distributed in a direct rollover
distribution.
(d) No direct rollover distribution shall be made
unless the distributee furnishes the pension committee with
such information as the pension committee shall require,
including but not limited to: the name of the recipient
eligible retirement plan, a representation from a
representative of the recipient plan that it is an eligible
retirement plan, and any account number or other identifying
information.
- 15 -<PAGE>
6.09 Notwithstanding any provision contained in Articles
III, IV or V relating to the manner of payment of an early
retirement benefit, a normal retirement benefit, a termination
benefit or a death benefit, if such a benefit payable to a
participant or his beneficiary would result in the payment of
less than $25 in any installment (except the last), then in lieu
of payment of such benefit in installments, the actuarial
equivalent of such benefit shall be paid in a single sum to such
participant or his beneficiary as promptly as shall be
practicable after the date of the participant's retirement,
termination or death, so long as the present value of the
participant's accrued benefit is not greater than $3,500, or the
participant and, if the participant is married, his spouse,
consent to such payment. For the purposes of determining the
present value of a participant's accrued benefit herein, the
interest rate used shall not be greater than the rate which would
be used by the Pension Benefit Guaranty Corporation for purposes
of determining the present value of a lump sum distribution on
plan termination on the first day of the plan year in which
payment of such benefit commences.
6.10 Notwithstanding any provision of the Plan to the
contrary, the total annual benefit payable to any participant
under this Plan and all other qualified defined benefit plans
maintained by the Employer shall not exceed the limitations on
benefits payable under Section 415 of the Code. The limitations
and other provisions of Section 415 of the Code with respect to
benefits and annual additions, including any permissible
grandfather and transition rules under the Code and other tax
statutes, hereby are incorporated by reference; provided,
however, that the Section 415 limitation in effect in the year of
payment, as adjusted in accordance with Section 415(d) of the
Code and the regulations and other guidance issued thereunder,
shall be applied to determine the benefits payable to such
participant. For purposes of applying the limitations under
Section 415, compensation shall be determined under Treas. Reg.
Section 1.415-2(d)(11)(i).
If a Participant's benefits under this Plan commence prior to
age 62, the maximum dollar benefit shall be decreased so that it
is the actuarial equivalent of the maximum benefit beginning at
age 62, with a reduction for each month by which the benefits
begin before age 62. If the benefits payable under this Plan
commence after the Participant's social security retirement age,
the maximum dollar benefit shall be increased so that it is the
actuarial equivalent of the maximum benefit beginning at the
Participant's social security retirement age. Actuarial
equivalence under this Article shall be calculated using the 1971
- 16 -<PAGE>
TPF&C Forecast Mortality Table, setback three years, and an
interest rate equal to five (5) percent (or such other interest
rate and mortality assumptions as provided and to the extent
required by Section 415 of the Code).
If the benefits under this Plan are aggregated with benefits
under another defined benefit plan for purposes of such Section
415, the pension committee and the plan administrator of such
other plan jointly shall determine the method by which benefits
shall be reduced or frozen in order to meet the limitations. If
an individual is a participant at any time in this Plan and a
defined contribution plan (as defined in Section 414(i) of the
Code) maintained by the Employer, the sum of the defined benefit
fraction and the defined contribution fraction shall not exceed
1.0. The rules for determining the defined benefit fraction and
the defined contribution fraction under Section 415 of the Code
hereby are incorporated by reference. Benefits under this Plan
shall be reduced or frozen prior to a reduction of annual
additions in any defined contribution plan in order to meet the
limitations of Section 415(e) of the Code.
For purposes of this Article, the term "Employer" shall
include any "Affiliated Company," as defined in Section 18.04
hereof and modified by Section 415(h) of the Code.
VII
EMPLOYMENT BY OTHER EMPLOYERS AND BY NONPENSION
SUBSIDIARIES; LEAVE OF ABSENCE; PERMANENT DISABILITY
7.01 If the employment of any participant by any Employer
shall terminate, whether prior to, on or subsequent to his normal
retirement date, and, concurrently with such termination of
employment, such participant shall become an employee of any
other Employer, such termination of employment shall be
disregarded for all purposes of the Plan and the Trust Agreement
and such participant shall continue to be a participant (as an
employee of such other Employer).
7.02 The board of directors of any of the Employers or the
board of directors of any non-pension subsidiary may at any time,
prospectively or retroactively, grant to any person a leave of
absence from the employ of such Employer or such non-pension
subsidiary, as the case may be. Such leave of absence may
commence and/or may be granted prior to, concurrently with or
subsequent to such person's having become a participant. If such
leave shall be granted (or shall have been granted), then,
(a) if such board of directors shall so direct (or
- 17 -<PAGE>
shall have so directed), such person shall, for all purposes
of the Plan and the Trust Agreement, be deemed to be (or to
have been) in the employ of such Employer or such non-pension
subsidiary, as the case may be, during the period of such
leave of absence, or
(b) if such board of directors shall so direct (or
shall have so directed), the period of such leave of absence
shall, for all purposes of the Plan and Trust Agreement, be
disregarded in determining the continuity of employment of
such person, but the same shall not be included in the period
of employment of such participant by such Employer or such
non-pension subsidiary, as the case may be, for any other
purpose, except that if such board of directors shall so
direct, the same may be included in such period of employment
for the purpose of determining eligibility for a termination
benefit under Section 4.03 (and a death benefit under Section
5.01 or Section 5.02) but not for the purpose of determining
the amount of such benefit.
Any board of directors empowered to grant a leave of absence
pursuant to this Section and to determine the compensation of any
person for the purposes of the Plan and the Trust Agreement for
the period of such leave of absence pursuant to paragraph (d) of
Section 18.12 may delegate such powers, as well as the right to
direct whether clause (a) or clause (b) of this Section shall be
applicable to the person in question, to one or more officers of
CBS or of the other Employer or the person in question, to one or
more officers of CBS or of the other Employer or the non-pension
subsidiary in whose employ such person shall be, subject to such
conditions as such board of directors may prescribe; provided
that such board of directors shall not delegate the right to
direct that clause (a) of this Section shall apply to any leave
of absence of 31 days or more and provided that each exercise of
such delegated power shall be in writing, signed by the person
exercising it and delivered to the pension committee.
7.03 Pursuant to clause (a) of Section 7.02, any employee
whose employment is subject to CBS's June 6, 1982 collective
bargaining agreement with the International Brotherhood of
Electrical Workers shall be deemed to be employed by CBS during
the period of a leave of absence granted pursuant to Section
5.07(f) and Section 5.07(g) of that agreement.
7.04 If any employee shall become permanently disabled
prior to his normal retirement date, then, notwithstanding the
provisions of Section 4.01, such employee shall be considered to
be an employee and a participant during the period commencing on
- 18 -<PAGE>
the date as of which the determination of such permanent
disability is made by that third-party designated by CBS to make
determinations concerning eligibility under CBS's long-term
disability plan, and ending on whichever shall occur first of (a)
such participant's normal retirement date, or, if later, the date
such participant ceases to be eligible for benefits under CBS's
long-term disability plan, (b) the date of such participant's
death, (c) the date as of which such participant is no longer
permanently disabled (as determined by such third-party) and (d)
the date of receipt by the pension committee of a notice from
such participant that he does not desire to have the provisions
of this Section apply to him. During the period in which a
participant shall be a participant by reason of the provisions of
this Section, he shall furnish the third-party with such
documentation as it shall reasonably request and he shall submit
to such periodic medical examinations as the third-party shall
reasonably request, and in the event of and upon his failure to
do so, the provisions of this Section shall no longer apply to
such participant.
VIII
METHOD OF PROVIDING BENEFITS
8.01 Each of the Employers shall pay to the Trustee such
amounts at such times as the actuary shall determine as proper to
provide the benefits under the Plan, in accordance with the
funding method then in effect, of the participants who shall then
be employees of such Employer.
8.02 All contributions by the Employers to the Trust are
conditioned upon their being allowed as a deduction for federal
income tax purposes. Except as otherwise provided in Paragraph
14.04, once a contributin is made to this Plan by an Employer on
behalf of the participants, it is not refundable to the Employer
unless the contribution:
(a) was made as a result of 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 an 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 Plan and
under (b) must be made within one year from the date of
disallowance of the tax deduction.
- 19 -<PAGE>
8.03 Anything herein to the contrary notwithstanding, the
pension committee shall direct the Trustee to transfer, as of
December 29, 1989, to the trustee of the trust established under
a pension plan maintained by the CBS (NY) Employees' Federal
Credit Union (the "Credit Union") for the benefit of participants
employed by the Credit Union of December 29, 1989 (the "Credit
Union Participants"), an amount from the Trust sufficient by
actuarial determination made on the basis of the assumptions used
by the Pension Benefit Guaranty Corporation for Plan terminations
occurring in December 1989, to fund the accrued benefits (whether
or not vested), determined as of December 13, 1989 of each such
participant. After December 13, 1989, Credit Union Participants
shall accrue no further benefits under this Plan. The sum of the
present values of all such accrued benefits shall be the amount
so transferred, and such transfer in respect of all such
participants shall be in lieu of all other benefits payable to
such participants under the Plan.
IX
MERGER OF PENSION PLANS
9.01 As used in this Article, the term "secondary plan"
means a retirement benefit plan which (a) constitutes a qualified
plan under Section 401(a) of the Code and, if any such plan is a
trusteed plan, the trust under such plan which is exempt from
taxation under Section 501(a) of the Code, and (b) is maintained
for the benefit of eligible employees by (i) a subsidiary of CBS
(any such secondary plan being hereinafter further identified as
a "subsidiary secondary plan") or (ii) CBS in respect of
employees in a particular group, unit, division, class or
category (any such secondary plan being hereinafter further
identified as a "CBS unit secondary plan"). The provisions of
this Article, when specifically applied by action of the Board of
Directors of CBS, shall govern the merger of a secondary plan
into the Plan.
9.02 This procedure for merging a secondary plan into the
Plan under the provisions of this Article shall be as follows:
(a) an effective date of merger (hereinafter the
"plan merger date") shall be established (i) by the boards of
directors of CBS and the applicable CBS subsidiary if the
merger involves a subsidiary secondary plan or (ii) by the
Board of Directors of CBS if the merger involves a CBS unit
secondary plan;
(b) the Board of Directors of CBS shall determine the
- 20 -<PAGE>
classification of the secondary plan as "career pay", "career
average" or "final pay", as the case may be in each instance;
(c) effective as of the plan merger date, the
secondary plan shall be amended, by the board of directors of
the applicable CBS subsidiary if the merger involves a
subsidiary secondary plan or by the Board of Directors of CBS
if the merger involves a CBS unit secondary plan, to be and
become identical with the Plan as in effect on that date;
(d) if the merger involves a subsidiary secondary
plan, the board of directors of the applicable CBS subsidiary
shall (i) adopt the Plan effective as of the plan merger
date, (ii) agree to be bound by the terms of the Plan and to
make contributions to the Trust thereunder as may be required
and (iii) if the secondary plan is a trusteed plan, authorize
and direct the trustee of the trust thereunder to transfer
all assets of such trust to the Trustee of the Trust under
the Plan to be held thereafter in accordance with the terms
of the Trust Agreement and unsegregated from the other assets
of the Trust;
(e) the benefits accrued in respect of each
participant in the secondary plan as of the plan merger date
shall be as follows:
(1) in the case of a secondary plan classified
as a "career pay" plan: the accrued normal retirement
benefit, as a life annuity, at such date determined
under the provisions of such plan (as in effect
immediately prior to amendment as required by the
merger);
(2) in the case of a secondary plan classified
as a "career average" plan: the product obtained by
multiplying (i) the normal retirement benefit, as a
life annuity, at the later of such date and his normal
retirement date (as defined in Section 18.30 of the
Plan), determined under the provisions of such plan
(as in effect immediately prior to amendment as
required by the merger), assuming constant earnings
and appropriately adjusted for minimum and maximum
salary and/or periods of recognizable service in
accordance with the terms of the secondary plan, by
(ii) a fraction, the numerator of which shall be the
number of years (including monthly fractions thereof)
of his service under the secondary plan and the
denominator of which shall be the greater of (a) the
- 21 -<PAGE>
combined total of his years of service (including
monthly fractions thereof) under the secondary plan
and the Plan to normal retirement date and (b) the
number of years (including monthly fractions thereof)
of his service under the secondary plan;
(3) in the case of a secondary plan classified
as a "final pay" plan: the product obtained by
multiplying (i) the normal retirement benefit, as a
life annuity, at his normal retirement date,
determined under the provisions of the secondary plan
(as in effect immediately prior to amendment as
required by merger), based on his service to his
normal retirement date under the Plan, but computed on
his "average compensation" (as that term is defined in
Section 18.06 of the Plan) at such retirement and
appropriately adjusted for minimum and maximum salary
and/or periods of recognizable service in accordance
with the terms of the secondary plan, by (ii) a
fraction determined as set forth in division (ii) of
paragraph (2) of this subsection;
(f) benefits shall be payable upon the retirement or
termination under the Plan of a participant who was a
participant in a secondary plan in an amount equal to the sum
of the accrued benefits vested in him under (i) the secondary
plan at his retirement or termination date, computed under
the applicable paragraph of subsection (e) above, inclusive
of any portion of the benefit attributable to required
employee contributions under the secondary plan, and (ii) the
Plan for the period of his participation from the plan merger
date; benefits accrued under a secondary plan are deemed to
vest at the earlier of the date on which they would have
vested under the secondary plan (as in effect immediately
prior to amendment as required by the merger) and the date on
which they would have vested under the Plan if its provisions
for vesting had been applicable;
(g) notwithstanding the provisions of subsection (f),
the benefits payable upon retirement or termination under the
Plan of a participant who was a participant in a secondary
plan shall not exceed the greater of (i) the amount of
benefits payable under the Plan if his entire period of
service had been under the Plan for pension credit purposes
and (ii) the accrued benefits vested in him under the
secondary plan at the plan merger date, nor shall it be less
than the amount of the participant's required contributions
under the secondary plan, plus interest thereon, compounded
- 22 -<PAGE>
annually, at the rate of interest then in use for such
purposes under the secondary plan to the date of the
participant's retirement, termination or death under the
Plan;
(h) in determining eligibility for an early
retirement benefit under Section 3.04, a termination benefit
under Section 4.03 or a death benefit under Section 5.01 or
5.02, but not in determining the amount of any such benefit,
a participant who became such on a plan merger date shall be
deemed to have been an employee during the period immediately
prior to the plan merger date of his continuous employment on
a full-time and active basis by CBS and/or any corporation,
partnership or other form of business organization, and its
predecessors, before CBS or a subsidiary acquired control or
ownership thereof or acquired ownership of all or a portion
of the assets thereof or succeeded to all or a portion of the
business thereof.
9.03 All retired or terminated employees (or their
beneficiaries) who at the plan merger date were entitled to, or
were receiving, benefits under a secondary plan shall continue,
or remain entitled, to receive such benefits, determined under
the terms of such plan as in effect on the date of their
retirement or termination, as the case may be. Payment of such
benefits shall be made from the Trust under the Plan.
9.04 In the event of merger of a secondary plan under which
benefits are funded by life insurance or annuity policies, the
Board of Directors of CBS and, as may be applicable, the board of
directors of a subsidiary shall determine the disposition of any
such policies; provided, however, that no disposition shall
result in forfeiture of the interest vested in any individual at
the plan merger date in the cash surrender value of a policy
issued in his name, and further provided that if the Board of
Directors of CBS directs that any such policies shall be
distributed to participants, the distribution shall be made only
on the condition that neither the policies nor the right to
receive benefits thereunder shall be subject to alienation or
assignment by the recipient.
9.05 In the event of a merger of a secondary plan to which
participants voluntarily made contributions, the amount of a
participant's voluntary contributions as of the plan merger date,
plus interest thereon, compounded annually, at the rate then in
use for such purposes under the secondary plan from the plan
merger date to his retirement or termination date, shall be paid
as an addition to his retirement, termination or death benefit,
- 23 -<PAGE>
as the case may be, unless the Board of Directors of CBS and, as
may be applicable, the board of directors of a subsidiary
determine that a refund shall be made of such voluntary
contributions, in which case interest, compounded annually, at
the rate then in use for such purposes under the secondary plan,
shall be paid on such amount from the plan merger date to the
date of refund.
9.06 Notwithstanding anything hereinbefore to the contrary,
in the case of any merger or consolidation of the Plan and/or the
Trust hereunder with, or transfer of the assets or liabilities of
the Plan and/or Trust to, any other plan, the terms of such
merger, consolidation or transfer shall be such that each
participant would receive (in the event of termination of this
Plan or its successors immediately thereafter) a benefit which is
no less than he would have received in the event of termination
of this Plan immediately before such merger, consolidation or
transfer. Subject to the approval of the Plans Administration
Committee, the Trustee shall accept a transfer of assets and
liabilities accrued by a participant under any other plan which
transfer shall be in accordance with the requirements of Section
414(l) of the Code. In no event shall the accrued benefit of any
such participant under this Plan immediately after such transfer
be less than the accrued benefit of such participant under the
transferor plan immediately prior to such transfer. In addition,
any distribution, withdrawal, or other rights available to each
affected participant under the terms of the transferor plan as of
the date of such transfer which are protected under Section
411(d)(6) of the Code shall continue to be available with respect
to such transferred accrued benefits. In the case of any such
transactions, the order of priorities set forth in Section 14.02
shall be revised as necessary to satisfy the requirements of
Section 414(l) of the Code and the regulations and other guidance
issued thereunder.
X
THE PENSION COMMITTEE; ADMINISTRATION
10.01 The pension committee shall be the "administrator" of
the Plan within the meaning of Section 3(16) of the Act, and
shall have the power to administer and construe the Plan in its
sole discretion, determine questions of law and fact arising
under the Plan, including the right to determine eligibility for
participation or benefits, direct disbursements by the Trustee
and exercise the other rights and powers specified herein. All
determinations and decisions of the pension committee shall be
final and binding on all affected individuals. The pension
committee shall consist of such number of members designated by
- 24 -<PAGE>
the Board of Directors of CBS as such Board of Directors shall
from time to time determine.
10.02 Any member of the pension committee may at any time
resign by giving written notice of such resignation to the
pension committee and to CBS. The Board of Directors of CBS may
at any time remove one or more of the members of the pension
committee by giving written notice of such removal to the pension
committee and to each member so removed. In the event of the
resignation, removal or death of any member of the pension
committee, the successor of such member shall be designated by
the Board of Directors of CBS.
10.03 A quorum for the transaction of business by the
pension committee shall consist of a majority of the members then
acting. All action taken by the pension committee at any meeting
shall be by the vote of a majority of those present. No member
of the pension committee shall participate in any decision which
constitutes an exercise of discretion by the pension committee
relating specifically to such member. Any action may be taken by
the pension committee without a meeting upon the written approval
of a majority of the members then acting. The pension committee
may at any time adopt rules, not inconsistent with the provisions
of the Plan and the Trust Agreement, for the administration of
the Plan and the transaction of its business, and may at any time
revoke or amend any such rules theretofore adopted.
10.04 The pension committee and CBS may each retain
auditors, accountants and legal counsel and the pension committee
and CBS may each retain such other persons as it deems
appropriate in connection with administering the Plan. Any
member of the pension committee may himself act in any such
capacity, and any such auditors, accountants and legal counsel
may be persons acting in a similar capacity for any of the
Employers and may be employees of any of the Employers. To the
extent permitted by law the opinion of any such auditor,
accountant or legal counsel shall be full and complete authority
and protection in respect of any action taken, suffered or
omitted by the pension committee in good faith and in accordance
with such opinion.
10.05 The pension committee members may allocate
responsibility among themselves, and the pension committee may
designate other persons to carry out its fiduciary
responsibilities under the Plan. All of the members of the
pension committee at any time acting hereunder may, by a written
instrument, designate each or any of such members, severally, or
any two or more of them, jointly, and/or any one or more other
- 25 -<PAGE>
persons, severally or jointly, to execute on behalf of the
pension committee all documents and other instruments proper,
necessary or desirable in order to effectuate the purposes of the
Plan and the Trust Agreement, and any member of the pension
committee at any time hereunder may similarly revoke any such
designation.
10.06 Each member of the pension committee who shall not be
an employee shall be entitled to receive, as compensation for his
services hereunder and under the Trust Agreement, such fees as
may from time to time be agreed upon between CBS and such member.
Said compensation and the fees and expenses of the actuary and
the reasonable expenses incurred by the pension committee in the
administration of the Plan and the Trust, including, but not
limited to, the fees and compensation of the persons referred to
in Sections 10.04 and 10.05, and premium payments to the Pension
Benefit Guaranty Corporation shall be paid by the Trustee from
the Trust to the extent the same are not paid by the Employer.
XI
THE TRUSTEE AND INVESTMENT MANAGERS
11.01 The Board of Directors of CBS shall appoint one or
more Trustees, each of which shall have sole responsibility for
all or any part of the Trust, as designated by such Board of
Directors.
11.02 The Retirement Plans Committee of the Board of
Directors of CBS (or its duly authorized designees) may at any
time or from time to time appoint one or more investment
managers, each of which shall in its sole discretion direct the
Trustee in the investment or reinvestment of all or part of the
Trust, as designated by such Committee of the Board of Directors
(or its duly authorized designees).
XII
THE ACTUARY
12.01 There shall at all times be acting as actuary
hereunder such person, co-partnership or corporation as the Board
of Directors of CBS shall designate for such purpose. The Board
of Directors of CBS may at any time remove the actuary then
acting hereunder, and in such event shall forthwith designate a
successor.
12.02 The actuary shall annually determine the amount of the
payment to be made by each of the Employers pursuant to the
provisions of Section 8.01, and shall notify such Employer and
- 26 -<PAGE>
the pension committee of such determination. The actuary shall
determine the actuarial equivalents referred to in the Plan.
The actuary shall perform such other duties as the Employers and
the pension committee shall respectively request.
XIII
RESPONSIBILITY OF FIDUCIARIES
13.01 Each fiduciary under the Plan shall discharge his
duties with respect to the Plan solely in the interests of the
participants, former participants, their respective beneficiaries
and with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct
of an enterprise of a like character and with like aims.
13.02 No fiduciary under the Plan shall be liable for an act
or omission of another person in carrying out any fiduciary
responsibility where such fiduciary responsibility is allocated
to such other person by the Plan or pursuant to a procedure
established in the Plan except as otherwise provided in Section
405 of the Act.
13.03 CBS and each Employer hereby indemnifies each member
of the pension committee, each officer, and each employee of CBS
and any Employer against any liabilities or expenses, including
attorneys' fees, reasonably incurred by him in connection with
any actual or threatened legal action to which he might become a
party by reason of being a fiduciary with respect to the Plan,
except to the extent that he shall be adjudged in such action to
be liable for gross negligence or willful misconduct in the
performance of his duties as a fiduciary.
13.04 Any person or group of persons may serve in more than
one fiduciary capacity with respect to the Plan.
13.05 The Trustee and/or any investment manager appointed
hereunder shall have the authority to direct the investment of
the trust funds under any Trust Agreement over which it has
discretion pursuant to Article XI.
XIV
TERMINATION; AMENDMENT
14.01 Any of the Employers may, at any time, by resolution
of its board of directors, terminate the Plan with respect to the
then employees of such Employer, and all of the Employers may, at
any time and from time to time, by resolutions of their
- 27 -<PAGE>
respective boards of directors (or their duly authorized
designees), amend the Plan for any reason whatever, provided,
however, that
(a) No such termination or amendment shall result in
the ultimate payment to any participant who shall then be
alive (and/or his beneficiaries), or to the beneficiaries of
any participant who shall not then be alive, of benefits
having a value less than the actuarial equivalent of the
vested benefit of such participant on the date of such
termination or amendment, nor shall, to the extent prohibited
under Section 411(d)(6) of the Code any amendment result in
depriving a participant of the right to elect an optional
form of benefit which, but for the provisions of such
amendment, such participant (or his or her beneficiaries)
would have been entitled to elect with respect to his or her
vested benefit; 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.
(b) No such amendment shall increase the duties,
responsibilities or obligations of any member of the pension
committee or of the Trustee unless he or it shall consent
thereto.
(c) Notwithstanding the foregoing, if the Plan is
amended to affect the nonforfeitable percentage of a
participant's retirement benefit, each participant with at
least three years of service may elect, within a reasonable
period after the adoption of the amendment, to have his
nonforfeitable percentage computed under the Plan without
regard to such amendment. The period during which the
election may be made shall commence with the date the
amendment is adopted or the change made and shall end on the
latest of 60 days after: (1) the amendment is adopted; (2)
the amendment becomes effective; or (3) the participant is
issued written notice of the amendment.
(d) Notwithstanding any such termination or
amendment, no part of the contributions theretofore made by
any of the Employers and no other part of the corpus of the
Trust and no part of the income from either such
contributions or such other corpus shall at any time be used
for, or diverted to, purposes other than for the exclusive
benefit of the participants and/or their respective
beneficiaries, except that, if, incident to and/or as a
- 28 -<PAGE>
result of any such termination of the Plan, the Trust shall be
terminated in whole, and if, at such termination of the Trust,
there shall be any corpus thereof and/or income therefrom
remaining after the satisfaction of all liabilities, both fixed
and contingent, with respect to the participants and their
respective beneficiaries, then, to the extent that such remaining
corpus and/or income shall be due to erroneous actuarial
computations during the previous life of the Trust, the same may
be paid to the Employers.
14.02 If the Trust shall be terminated at any time pursuant
to the provisions of Section 11.01 of the Trust Agreement with
respect to the then employees of any or all of the Employers, or
if any or all of the Employers shall permanently discontinue
contributions to the Trust, that part of the corpus thereof and
the income therefrom then held by the Trustee and resulting from
the aggregate contributions made by such Employer or Employers
for the participants at any time in its or their employ shall be
disposed of in the following order of preference:
(a) Said part of said corpus and income shall first
be applied to pay each participant who has made contributions
under the Plan (or his joint annuitant or beneficiary) an
amount equal to the benefit attributable to the participant's
voluntary or mandatory contributions and any interest
credited thereon as of the date of termination of the Plan,
less any contributory benefits theretofore received by the
participant (or his joint annuitant or beneficiary).
(b) The balance of said corpus and income then
remaining shall first be applied to the satisfaction of all
liabilities, both fixed and contingent, with respect to the
participants who shall be or shall have been employees of
said Employer or Employers and who shall have vested benefits
and their respective beneficiaries, that became payable three
or more years before the date of termination of the Trust, or
that could have become payable on or before the beginning of
such three-year period had the participant elected an early
retirement benefit, or that could have become payable three
or more years before the date of termination of the Trust had
a participant's normal retirement date occurred prior to the
beginning of such three-year period; provided that
(a) the portion of any benefit payable to a
participant or his beneficiary (or that could have
been payable) shall be based on the provisions of this
Plan in effect five years prior to the date of
termination of the Trust and, for this purpose, the
- 29 -<PAGE>
first calendar year in which an amendment became
effective, or was adopted, if later, shall constitute
the first year an amendment was in effect, and
(2) if any benefit payable under this Plan had
been reduced, either by amendment or by reason of the
manner in which such benefit is being paid, during the
three-year period ending on the date of termination of
the Trust, then the lowest benefit in pay status
during such three-year period shall be considered the
benefit in pay status for purposes of this category
(b).
(c) The balance of said corpus and income then
remaining to the extent that the amount of a benefit has not
been provided in the foregoing paragraphs (a) and (b) shall
be allocated to provide any benefit provided under this Plan
for a participant whose employment terminated prior to the
date of termination of the Trust, or any immediate or
deferred benefit that would have been payable to or on behalf
of a participant had his employment terminated for a reason
other than death on the date of termination of the Trust;
provided that the amount of any benefit to be provided under
this category (c) shall be determined as follows:
(1) the portion of the benefit payable to a
participant or his beneficiary (or that could have
been payable) based on the provisions of this Plan in
effect five years prior to the date of termination of
the Trust and, for this purpose, the first calendar
year in which an amendment became effective, or was
adopted if later, shall constitute the first year an
amendment was in effect, plus
(2) the portion of any benefit payable to a
participant or his beneficiary which would have been
included in (i) above had this Plan or a Plan
amendment been in effect five years prior to the date
of termination of the Trust, determined as follows:
20% for each calendar year (less than five) that this
Plan or an amendment thereto was in effect, multiplied
by the amount that would have been included under
subparagraph (1) for such participant or beneficiary
had this Plan or the amendment been in effect for five
calendar years as of the date of termination of the
Trust; provided that no benefit payable under this
paragraph (c) shall exceed an amount with an actuarial
equivalent of a monthly benefit in the form of a life
- 30 -<PAGE>
only annuity commencing at age 65 equal to $750
multiplied by a fraction, the numerator of which shall
be the contribution and benefit base determined under
Section 230 of the Social Security Act in effect at
the date of termination of the Trust and the
denominator of which shall be such contribution and
benefit base in effect in calendar year 1974.
(d) The balance of said part of said corpus and
income then remaining to the extent that the amount of any
benefit has not been provided in the foregoing paragraphs
(a), (b) and (c) shall be allocated to provide any benefit
payable under this Plan to or on behalf of a participant
whose employment shall have terminated prior to the date of
termination of the Trust, or that would have been payable to
or on behalf of a participant had his employment terminated
for a reason other than death on the date of termination, in
the following order of preference:
(1) to any participant who had retired on his
normal retirement date prior to the date of
termination of the Trust or who was eligible to retire
on the date of such termination;
(2) to any participant who had retired on his
early retirement date prior to the effective date of
termination of the Trust, or who was eligible to
retire on the date of such termination;
(3) to any participant whose benefits had vested
prior to the date of such termination but whose
employment shall not have terminated.
(e) The balance of said part of said corpus and
income then remaining to the extent that the amount of any
benefit under this Plan shall not have been provided in the
foregoing paragraphs (a), (b), (c) and (d) shall be allocated
to provide any benefit accrued under this Plan, without
regard to the satisfaction of its vesting requirements for
the benefit of those participants whose participation shall
not have terminated and whose normal retirement dates shall
be subsequent to the date of termination of the Trust, pro
rata to the actuarial equivalents of the termination benefits
which they would have received had they been entitled to
receive their respective termination benefits on the date of
termination of the Trust.
If the assets of the Trust applicable to any of the above
- 31 -<PAGE>
paragraphs are insufficient to provide full benefits for all
persons in the respective groups, the benefits otherwise payable
to such persons shall be reduced proportionately. The actuary
shall calculate the allocation of the assets of the Trust in
accordance with the above paragraphs, and certify his
calculations to the pension committee. No liquidation of assets
and payments of benefits (or provision therefor) shall be made by
the Trustee until such time as it is advised by the Employers in
writing that any requirements of the Act governing termination of
pension plans have been, or shall be, complied with, or that
appropriate authorizations, waivers, exemptions or variances have
been, or shall be, obtained.
14.03 Subject to the foregoing provisions of this Article
XIV, any distribution after termination of this Plan may be made,
in whole or in part, to the extent that no discrimination in
value results, in cash, in securities or other assets in kind, or
in nontransferable annuity contracts, as the pension committee in
its discretion shall determine.
14.04 In no event shall the Employers receive any amounts
from the Trust upon termination of this Plan, except that, and
notwithstanding any other provision of this Plan, the Employers
shall receive such amounts, if any, as may remain after the
satisfaction of all liabilities of this Plan and arising out of
any variations between actual requirements and expected actuarial
equivalents.
XV
CLAIMS PROCEDURE
15.01 All claims for benefits under the Plan by a
participant or his beneficiaries shall be made in writing to a
person designated by the pension committee for such purpose. If
the designated person receiving a claim for benefits believes
that the claim should be denied, he shall notify the claimant in
writing of the denial of the claim within 90 days after his
receipt thereof unless he shall prior to the end of such 90-day
period notify the claimant of any special circumstances requiring
an extension of time, not to exceed an additional 90-day period,
to respond to such claim and the date by which it is expected a
decision will be rendered. Such notice shall (a) set forth the
specific reason or reasons for the denial, making reference to
the pertinent provisions of the Plan or of Plan documents on
which the denial is based, (b) describe any additional material
or information that must be received before the claim request may
be reconsidered and explain the reason why such material or
information, if any, is needed, and (c) inform the claimant of
- 32 -<PAGE>
his right pursuant to this Article XV to request review of the
decision by the pension committee. A claimant who believes that
he has submitted all available and relevant information may
appeal the denial of a claim to the pension committee by
submitting a written request for review to the pension committee
within 60 days after the date on which such denial is received.
Such period may be extended by the pension committee for good
cause shown. The person making the request for review may
examine pertinent Plan documents and the request for review may
discuss any issue relevant to the claim. The pension committee
shall decide whether or not to grant the claim within 60 days
after receipt of the request for review, but this period may be
extended by the pension committee for up to an additional 60 days
in special circumstances. The pension committee's decision shall
be in writing, shall include specific reasons for the decision
and shall refer to pertinent provisions of the Plan or of Plan
documents on which the decision is based.
XVI
MISCELLANEOUS
16.01 Each of the Employers and the pension committee shall
respectively keep such records, and each of the Employers and the
pension committee shall each reasonably give notice to the other
of such information, as shall be proper, necessary or desirable
to effectuate the purposes of the Plan and the Trust Agreement,
including, without in any manner limiting the foregoing, records
and information with respect to the ages and compensation of
employees, elections by participants and their beneficiaries,
payments of benefits to participants and their beneficiaries and
consents granted and determinations made under the Plan and under
the Trust Agreement. Neither any of the Employers nor the
pension committee shall be required to duplicate any records kept
by the other. In order to receive any payment of benefits within
such periods as are specified in the Plan, each participant shall
cooperate with the pension committee to provide such information
as it may reasonably require in order to enable the pension
committee to administer the Plan in the manner provided herein
and in the Trust Agreement. To the extent that the Employers and
the pension committee shall prescribe forms for use by the
participants and their beneficiaries in communicating with the
Employers and the pension committee, and shall establish periods
during which communications may be received by the Employers and
the pension committee from participants and their beneficiaries,
the Employers, their boards of directors and the pension
committee shall respectively be protected in disregarding any
notice or communication for which a form shall so have been
prescribed and which shall not be made in such form, and any
- 33 -<PAGE>
notice or communication for the receipt of which a period shall
so have been established and which shall not be received during
such period; the Employers and the pension committee shall
respectively also be protected in acting upon any notice or other
communication from any participant or from the beneficiaries of
any participant reasonably believed to be genuine and accurate.
16.02 All consents of the board of directors of each of the
Employers and all consents of the pension committee herein
provided for may be granted or withheld, to the extent permitted
by law, in the sole and absolute discretion of said board of
directors or of the pension committee, as the case may be, and,
if granted, may be granted to the extent permitted by law, on
such terms and conditions as said board of directors or the
pension 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 pension committee shall likewise be
made to the extent permitted by law, in the sole and absolute
discretion of said board of directors or the pension committee,
as the case may be. Neither the board of directors of any of the
Employers nor the pension 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 Plan
and the Trust, shall discriminate in favor of employees who are
officers, stockholders, persons whose principal duties consist in
supervising the work of other persons employed by any of the
Employers or highly compensated employees.
16.03 The sole interest of each participant and his
beneficiaries under the Plan shall be to receive the benefit
payments provided in the Plan as and when the same shall become
due and payable in accordance with the terms hereof, and neither
any participant nor any of his beneficiaries shall have any
right, title or interest in, to or under any portion of the
assets of the Trust. The right of any participant, both before
and after retirement or termination of participation, and of any
beneficiary of any participant, to receive any payment becoming
due under the provisions of the Plan shall not be subject to
alienation or assignment, and, if any participant or beneficiary
shall attempt to assign, transfer or dispose of any such right,
or if any such right shall be subjected to attachment, execution,
garnishment, sequestration or other seizure under legal,
equitable or other process, it shall ipso facto pass and be
transferred to such one or more individuals as may be appointed
by the pension committee from among the spouse, descendants,
parents, brothers and sisters of such participant or beneficiary,
and in such shares and proportions as the pension committee may
- 34 -<PAGE>
appoint; provided, however, that notwithstanding any appointment
so made, the pension committee may at any time reappoint a
participant or a beneficiary who, under the Plan, would, except
for the foregoing provisions of this Section 16.03, be entitled
to receive such payment, to receive any payments thereafter
becoming due either in whole or in part, and any appointment made
by the pension committee pursuant to the foregoing provisions may
be revoked by the pension committee at any time and a further
appointment may be made by it.
Nothing contained in the foregoing paragraph shall prohibit
the payment of benefits to an "alternate payee" pursuant to a
"qualified domestic relations order", as said quoted terms are
defined in, and in accordance with, Section 206(d) of the Act.
The pension committee shall establish reasonable procedures for
determining the qualified status of any domestic relations order
and for administering distributions under any such order.
16.04 If the pension committee shall determine that a
participant, terminated participant or any other person entitled
to a benefit under this Plan (the "recipient") is unable to care
for his affairs because of illness, accident, or mental or
physical incapacity, or because the recipient is a minor, the
pension committee may direct that any benefit payment due the
recipient be paid to his duly appointed legal representative, or,
if no such representative is appointed, to the recipient's
spouse, child, parent, or other blood relative, or to a person
with whom the recipient resides or who has incurred expense on
behalf of the recipient. Any such payment so made shall be a
complete discharge of the liabilities of the Plan with respect to
the recipient.
XVII
TOP HEAVY RULES
17.01 The Plan shall meet the requirements of this Article
XVII in the event that the Plan is or becomes a top-heavy plan.
17.02 (a) Subject to the aggregation rules set forth in
paragraph (b), the Plan shall be considered a top-heavy plan
pursuant to Section 416(b) of the Code in any plan year if, as of
the determination date, the present value of the cumulative
accrued benefits of all key employees exceeds sixty percent (60%)
of the present value of the cumulative accrued benefits of all of
the employees as of such date, excluding former key employees and
excluding any employee who has not received compensation from the
Employer during the five (5) consecutive plan year period ending
on the determination date, but taking into account in computing
- 35 -<PAGE>
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 present value of a key employee's accrued
benefit shall be counted only once each plan year,
notwithstanding the fact that an individual may be considered a
key employee for more than one reason in any plan year. The
accrued benefit of an employee other than a key employee shall be
determined under (a) the method, if any, that uniformly applies
for accrual purposes under all defined benefit plans maintained
by the Employer, or (b) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Section 411(b)(1)(C) of
the Code. Present value for the purposes of this paragraph shall
be calculated using the mortality table set forth in Appendix A
with respect to post-retirement mortality and an interest rate of
six percent (6%).
(b) Aggregation and Coordination with Other Plans.
For purposes of determining whether a plan is a top-heavy
plan and for purposes of meeting the requirements of this
Article XVII, the plan 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 Plan shall be considered
a top-heavy plan. If such permissive aggregation group is
not top-heavy, this Plan shall not be a top-heavy plan.
17.03 For the purpose of determining whether the Plan 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 amount of
an individual's accrued benefit and the present value thereof
shall be determined as of the valuation date. The term
"valuation date" means the valuation date for minimum funding
purposes under the Plan on or next preceding 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:
(1) was an officer of an Employer who has annual
compensation from the Employer in the applicable plan
year in excess of 150% of the dollar limitation under
- 36 -<PAGE>
Section 415(c)(1)(A) of the Internal Revenue Code;
provided, however, that the number of individuals
treated as key employees by reason of being officers
hereunder shall not exceed the lesser of fifty (50) or
ten percent (10%) of all employees, and provided
further, that if the number of employees treated as
officers is limited to fifty (50) hereunder, the
individuals treated as key employees shall be those
who, while officers, received the greatest annual
compensation in the applicable plan year and any of
the four (4) preceding plan years, or
(2) was one of the ten (10) employees owning or
considered as owning the largest interests in the
Employer who has annual compensation from the Employer
in the applicable plan year exceeding the dollar
limitation under Section 415(c)(1)(A) of the Code as
increased under Section 415(d) of the Code; or
(3) was a more than five percent (5%) owner of
the Employer; or
(4) was a more than one percent (1%) owner of
the Employer whose annual compensation from the
Employer in the applicable plan year exceeded
$150,000.
For purposes of determining who is a key employee,
ownership shall mean ownership of the outstanding stock of
CBS or of the total combined voting power of all stock of
CBS, taking into account the constructive ownership rules of
Section 318 of the Code, as modified by Section 416(i)(1) of
the Code.
For purposes of paragraph (1), but not for purposes of
(2), (3) and (4), except for purposes of determining
compensation under (4), the term "Employer" shall include an
entity aggregated with an Employer pursuant to Section
414(b), (c) or (m) of the Internal Revenue Code.
For purposes of paragraph (2), an employee (or former
employee) who has some ownership interest is considered to be
one of the top ten (10) owners unless at least ten (10) other
employees (or former employees) own a greater interest than
such employee (or former employee); provided that if an
employee has the same ownership interest as another employee,
the employee having greater annual compensation from the
Employer is considered to have the larger ownership
interests.
- 37 -<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. If an individual is a key employee by reason of
the foregoing sentence as well as a key employee in his own
right, both the present value of his inherited accrued
benefit and the present value of his own accrued benefit will
be considered his accrued benefit for purposes of determining
whether the Plan is a top-heavy plan.
(e) Compensation and Compensation Limitation. For
purposes of this Article XVII, except as otherwise
specifically provided, the term "compensation" means the
amount stated on an employee's Form W-2 for the calendar year
that ends with or within the plan year.
(f) Required Aggregation Group. The term "required
aggregation group" shall mean all other qualified defined
bene fit and defined contribution plans, including terminated
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.
(g) Permissive Aggregation Group. The term
"permissive aggregation group" shall mean other qualified
defined benefit and defined contribution plans maintained by
the Employer that meet the requirements of Section 401(a)(4)
and 410 of the Code when considered with a required
aggregation group.
17.04 In the event the Plan is determined to be top-heavy
for any plan year, the following requirements shall be
applicable.
(a) The minimum annual retirement benefit accrued
under the Plan by each non-key employee shall equal the
product of such employee's average compensation for the
testing period and the lesser of 2% per year of minimum
benefit service or 20%. The minimum annual retirement
benefit shall be determined without regard to an employee's
primary Social Security benefit. All accruals derived from
Employer contributions, whether or not attributable to years
in which the Plan is top-heavy, may be used in determining
- 38 -<PAGE>
whether an employee's minimum annual retirement benefit has
been satisfied. The minimum annual retirement benefit may
not be suspended or forfeited under Section 411(a)(3)(B) or
411(a)(3)(D) of the Code.
(b) For purposes of determining minimum benefits for
a top-heavy plan, the following definitions shall apply:
(1) Year of Minimum Benefit Service. The term
"year of minimum benefit service" means a year of
service within the meaning of Section 18.49 except
that years of minimum benefit service shall not
include years of service completed in a plan year
beginning before January 1, 1984 or any year of
service thereafter in the event the Plan was not a
top-heavy plan in the plan year ending during such
year of service.
(2) Annual Retirement Benefit. The term "annual
retirement benefit" means a benefit payable annually
in the form of a life annuity (with no ancillary
benefits) beginning at age sixty-five (65). A benefit
received in a form other than a single life annuity or
commencing at a date other than at age sixty-five (65)
shall be the actuarial equivalent of such benefit;
provided, however, that no adjustment shall be made
for pre-retirement ancillary benefits.
(3) Testing Period. The term "testing period"
means the number of consecutive years of minimum
benefit service, not exceeding five (5), during which
a non-key employee's compensation is the highest.
(c) Top Heavy Vesting Schedule.
(1) 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
service shall not be entitled to any benefits under
the Plan.
(2) Two or More Years of Service. A non-key
employee whose employment is terminated prior to age
sixty-five (65) but after completion of two (2) or
more years of service shall be entitled to receive the
actuarial equivalent of the vested percentage of his
annual retirement benefit, determined in accordance
- 39 -<PAGE>
with the following schedule:
Vested
Years of Service Percentage
2 20%
3 40%
4 60%
5 or more 100%
The vesting schedule under this paragraph (c) shall
apply to a non-key employee's benefit under the Plan
accrued before or while the Plan is a top-heavy plan.
(3) Vesting Percentage. In the event that the
Plan previously was a top-heavy plan but subsequently
is not a top-heavy plan, the vesting schedule under
paragraph (c) shall be changed to the following
vesting schedule: zero vesting for 0 to 4 years of
service and 100% vesting for 5 or more years of
service; provided, however, that any non-key employee
who has completed at least 3 or more years of service
and who had at least one hour of service while the
Plan was a top-heavy plan, shall be entitled to elect,
within a reasonable period, which of the above two
vesting schedules is applicable to his benefit.
(d) 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 by 1.25.
XVIII
DEFINITIONS
18.01 Act. The Act shall mean the Employee Retirement
Income Security Act of 1974, as it may be amended from time to
time.
18.02 Actuarial equivalent. The actuarial equivalent of a
benefit, determined pursuant to Appendix A and subject to
Appendix B, at any time, shall be a benefit determined by the
actuary as being equivalent to said first mentioned benefit at
such time, based upon an assumption of interest, compounded
annually, and an assumption of mortality in effect at such time.
- 40 -<PAGE>
18.03 Actuary. Actuary shall mean the person, co-
partnership or corporation provided for in Section 12.01.
18.04 Affiliated Company. Affiliated Company shall mean any
corporation or other entity that is required to be aggregated
with CBS pursuant to Sections 414(b), (c), (m), or (o) of the
Code, but only to the extent so required.
18.05 Anniversary Year. The anniversary year of any
employee shall be each 12-month period commencing on the first
day of the calendar month in which his employment commences.
18.06 Average Compensation. The average compensation of any
participant shall be twelve times the average of his compensation
during those 60 consecutive months included in the last 120 of
the months included in his continuous employment period which
shall yield the highest such average. If a participant has less
than 60 consecutive months of compensation, his average
compensation shall be twelve times the average of his consecutive
months of compensation.
In calculating the participant's average compensation, as
used for calculation of benefits under this Plan other than
benefits accrued prior to the first Plan Year beginning after
December 31, 1988, the amount of compensation taken into account
in any 12 consecutive month period shall not exceed $200,000 or
such other limit in effect under Section 401(a)(17) for the Plan
Year in which such 12 consecutive month period begins, adjusted
in accordance with Section 401(a)(17) of the Code and the
regulations issued thereunder. In determining the amount of any
participant's average compensation, the limitations of Section
401(a)(17) of the Code shall be applied to all applicable 12-
consecutive month periods (including periods beginning in Plan
Years which begin before January 1, 1989); provided, however,
that in no case shall a participant's normal retirement benefit
be less than his normal retirement benefit determined as of
December 31, 1988, as determined below. Effective for 12-
consecutive month periods which commence in Plan Years beginning
on and after January 1, 1994, the foregoing limitations shall be
applied by applying a dollar limitation on the amount of
compensation taken into account of $150,000, adjusted in
accordance with Section 401(a)(17) of the Code and the
regulations and other guidance issued thereunder; provided,
however, that in no case shall a participant's normal retirement
benefit be less than his normal retirement benefit determined as
of December 31, 1993, as determined below.
Notwithstanding the foregoing, for Plan Years beginning on
- 41 -<PAGE>
and after January 1, 1989 and ending prior to January 1, 1994,
each Section 401(a)(17) employee's normal retirement benefit
under this Plan will be the greater of:
(1) the employee's normal retirement benefit as
of December 31, 1988, frozen in accordance with
Treasury Regulation section 1.401(a)(4)-13, or
(2) the employee's normal retirement benefit
determined with respect to the benefit formula
applicable for the Plan Years beginning on or after
January 1, 1989, as applied to the employee's
continuous employment period taken into account under
the Plan for purposes of determining such employee's
normal retirement benefit.
For Plan Years beginning on and after January 1, 1994, each
Section 401(a)(17) employee's normal retirement benefit under
this Plan will be the greater of the normal retirement benefit
determined for the employee under (1) or (2) below, where:
(1) is the employee's normal retirement benefit
determined with respect to the benefit formula
applicable for the Plan Years beginning on or after
January 1, 1994, as applied to the employee's
continuous employment period taken into account under
the Plan for purposes of determining such employee's
normal retirement benefit, and
(2) is the sum of:
(i) the employee's normal retirement benefit
as of December 31, 1993, frozen in accordance
with Treasury Regulation section 1.401(a)(4)-13,
and
(ii) the employee's normal retirement benefit
determined under the benefit formula applicable
for the Plan Years beginning on or after January
1, 1994, as applied to the employee's continuous
employment period for Plan Years beginning on or
after January 1, 1994.
For purposes of the above limitations only, in determining
average compensation, the rules of Section 414(q)(6) of the Code
shall apply, except that in applying such rules, the term
"family" shall include only the spouse of the employee and any
lineal descendants of the employee who have not attained age 19
- 42 -<PAGE>
before the close of the Plan Year. A "Section 401(a)(17)
employee" means an employee whose normal retirement benefit as of
a date on or after January 1, 1989, is based on average
compensation for a period prior to January 1, 1989 that exceeded
$200,000 and/or an employee whose normal retirement benefit as of
a date on or after January 1, 1994, is based on average
compensation for a period prior to January 1, 1994 that exceeded
$150,000.
18.07 Beneficiaries. The beneficiaries of any participant
shall be the spouse of such participant or, if such spouse shall
have consented thereto in a writing acknowledging the effect of
such consent and witnessed by a notary public, or if such
participant is not married, the person or persons designated by
such participant to receive the death benefits, if any, of such
participant provided for in Section 5.01, 5.02, 6.03(a) or 6.04
and, if and to the extent that such a designation shall not be in
force, such participant's executors or administrators.
18.08 Break in Service. A break in service for any employee
shall mean, with respect to any anniversary year, the completion
of less than 501 hours of service.
18.09 Broadcasters. Broadcasters shall mean CBS and all
other Employers engaged in the business of radio and/or
television broadcasting.
18.10 CBS. CBS shall mean CBS Inc., a New York corporation.
18.11 Code. Code shall mean the Internal Revenue Code of
1986, as amended from time to time.
18.12 Compensation. The compensation, of any employee with
respect to any period of time shall be the regular compensation
paid or payable to him with respect to such period of time,
exclusive of overtime compensation, commissions and bonus and
additional compensation payments (including in such additional
compensation payments, in the case of any employee of any
broadcaster, additional payments made by reason of such
employee's performing services in connection with any program or
programs); provided, however, that:
(a) Except as otherwise provided in paragraph (c) of
this Section, the compensation with respect to any period of
time of any employee, other than a news correspondent, who
performs services in connection with any program or programs,
who shall be an employee of any broadcaster and the terms of
whose employment shall be such that (i) he may, with the
- 43 -<PAGE>
consent of such broadcaster, render services to others in
connection with sponsored programs broadcast over the
facilities of such broadcaster, (ii) he receives stated
compensation from such broadcaster during the periods when he
renders services exclusively to such broadcaster and
exclusively in connection with sustaining programs and (iii)
such compensation is reduced during the periods when he
renders services, whether or not exclusively to such
broadcaster, wholly or in part in connection with sponsored
programs, shall be the stated compensation (determined under
the provisions of this Section) referred to in the foregoing
clause (ii) receivable by such employee with respect to such
period of time.
(b) Except as otherwise provided in paragraph (c) of
this Section, the compensation with respect to any period of
time of any news correspondent who shall be an employee of
any broadcaster and the terms of whose employment shall be
such that (i) he may render services in connection with
sponsored and/or sustaining programs broadcast over the
facilities of such broadcaster, and (ii) he receives stated
minimum compensation from such broadcaster which may or may
not be subject to reduction by reason of other compensation
received by him in connection with such sponsored and/or
sustaining programs, shall be the stated minimum compensation
(determined under the provisions of this Section) referred to
in the foregoing clause (ii) receivable by such employee with
respect to such period of time.
(c) (i) Subject to the provisions of division (ii)
of this paragraph, if the terms of employment of any employee
of any broadcaster, including a news correspondent, who
performs services in connection with any program or programs
shall provide that, for pension plan purposes, the
compensation of such employee shall be an amount less than
the compensation determined in accordance with the other
provisions of this Section, the compensation of such employee
for such period of time shall be the applicable amount so
provided.
(ii) The compensation of any union employee all
or part of whose regular compensation shall constitute
union pension compensation with respect to any period
of time shall be his compensation during such period
of time determined in accordance with the provisions
of this Section but reduced by that part of such
employee's regular compensation for such period which
shall constitute union pension compensation; provided,
- 44 -<PAGE>
however, that the compensation of employees employed
at KNX (AM), Los Angeles, whose employment is subject
to collective bargaining agreements between CBS and
both the Writers Guild of America, West, Inc. and the
American Federation of Television and Radio Artists
shall not be reduced by reason of payments made by CBS
with respect to such employees to the American
Federation of Television and Radio Artists Pension and
Welfare Funds; further provided, however, that
effective for benefits accruing after March 10, 1992,
the compensation of any employee who performs
"hyphenate service" and who is subject to a written
collective bargaining agreement(s) that specifically
provides for CBS contributions to more than one
pension, welfare, or retirement fund or trust shall
not be reduced by that part of such employee's regular
compensation which shall constitute union pension
compensation for the period during which "hyphenate
service" is performed. "Hyphenate service" shall mean
service performed by an employee for whom a portion of
his employment is subject to a collective bargaining
agreement(s) under which his Employer is required to
make contributions to a pension, welfare, or
retirement fund or trust (other than the Trust), and
who is designated by the pension committee as
performing "hyphenate service".
(d) The compensation of any employee then on leave of
absence from the employ of his then Employer shall, for the
period of such leave of absence, be such amount, not less
than the compensation (determined under the provisions of
this Section) received by him for the period of such leave of
absence and not greater than his compensation would have been
if his compensation had been continued during the period of
such leave of absence at the rate receivable by him
immediately preceding the commencement of such leave of
absence, as the board of directors of such Employer shall
have determined or shall determine prior to the commencement
of, during or within a reasonable time after the end of such
leave of absence.
(e) If the rate of compensation of any participant
shall be reduced, his compensation after such reduction shall
be such amount, not less than his compensation (determined
under the provisions of this Section) during the period
subsequent to such reduction and not greater than his
compensation (so determined) would have been if there had
- 45 -<PAGE>
been no such reduction, as the board of directors of his then
Employer shall determine.
(f) If at any time the terms of employment of any
employee are such that he is entitled to receive commissions
in connection with the sale of time, programs, announcements,
products or services, and if, at such time, the compensation
of such employee (determined under the provisions of this
Section) shall be at a rate of less than $20,000 (or such
other amount as has been, or shall be, approved by the Board
of Directors of CBS) per annum, the compensation of such
employee for the part (which may be all) of the calendar year
during which he shall be entitled to receive such commissions
shall be whichever shall be the lesser of (i) compensation
for such part at the rate of such approved amount per annum
or (ii) the total of (A) his compensation for such part
determined under the provisions of this Section and (B) the
amount of such commissions receivable by him for such part.
(g) If at any time an employee shall become
permanently disabled, his compensation during the period in
which he shall be permanently disabled shall be deemed to be
the same as his compensation (determined under the provisions
of this Section) immediately prior to the time when he became
permanently disabled.
(h) For the purpose of determining, in accordance
with paragraph (d) of Section 18.49, the amount of benefits
under the Plan accrued by any employee for any of the last
120 months of employment prior to termination of employment
for which he has been credited with less than a full year of
service for any twelve consecutive month period ending within
such 120-month period, the compensation of such employee with
respect to each such partial year shall be annualized to
project proportionately the monthly earnings that would have
been paid had a full year of service been credited to the
participant.
18.13 Continuous Employment Period. The continuous
employment period of any participant shall be the total years of
service of the participant, exclusive, however, of the following
portions of said period:
(a) If such participant shall have been an employee
of any corporation prior to the date on which such
corporation be came a subsidiary, that portion of said
continuous period during which such corporation shall not
have been a subsidiary, except such portion, if any,
- 46 -<PAGE>
determined by the Board of Directors of CBS to be a part of
such period in accordance with regulations issued by the
Secretary of the Treasury.
(b) Notwithstanding the foregoing, in granting a
leave of absence the board of directors of an Employer may
determine that a participant's continuous employment period
shall include all or any part of a portion of time which
otherwise would be excluded under an exclusion set forth in
the preceding paragraphs of this Section.
(c) In no event shall the continuous employment
period as of January 1, 1989 of any employee be less than
such period determined in accordance with the Plan, as
amended to December 31, 1988.
18.14 Covered Compensation. Covered compensation of a
participant shall mean, for any plan year, the average (without
indexing) of the taxable wage bases in effect for each calendar
year during the 35-year period ending with the last day of the
calendar year in which the participant attains (or will attain)
Social Security retirement age, as defined in Section 415(b)(8)
of the Code. In determining covered compensation for any plan
year, the taxable wage base for the current plan year and any
subsequent plan year shall be assumed to be the same as the
taxable wage base in effect as of the beginning of the plan year
for which a determination is being made. Covered compensation
for any plan year after the 35-year period described in the first
sentence of this Section 18.14 is the participant's covered
compensation for the plan year during which the participant
attained Social Security retirement age. A participant's covered
compensation for any plan year before the 35-year period
described in the first sentence of this Section 18.14 is the
taxable wage base in effect as of the beginning of the plan year.
Covered compensation shall be automatically adjusted for each
plan year.
Any benefit which is in pay status under the Plan shall not
be decreased by reason of any post-termination Social Security
benefit increase which is effective after the date of first
receipt of such benefit under the Plan by a participant or
beneficiary. In the case of a benefit to which a participant has
a nonforfeitable interest under the Plan, if such participant
terminates employment and does not subsequently return to
employment and resume participation in the Plan, such benefit
shall not be decreased by reason of any post-termination Social
Security benefit increase effective after such termination of
employment. If such participant returns to employment and
- 47 -<PAGE>
resumes participation in the Plan, such benefit will not be
decreased by reason of any post-termination Social Security
benefit increase effective during the period of the termination
of employment to the extent such benefit increase would decrease
the benefits to which the participant would have been entitled if
he had not returned to employment after his termination. For
purposes of this Section, the term "post-termination Social
Security benefit increase" means any increase in a benefit level
or wage base under Title II of the Social Security Act (whether
such increase is a result of an amendment of such Title II or is
a result of the application of the provisions of such Title II)
occurring after the earlier of such participant's termination of
employment or commencement of benefits under the Plan.
18.15 Direct Rollover Distribution. Direct rollover
distribution means a distribution made in accordance with Section
6.08.
18.16 Early Retirement Benefit. The early retirement
benefit of any participant shall be the normal retirement benefit
which such participant would have been entitled to receive if his
early retirement date had been his normal retirement date,
unreduced if his early retirement date shall occur after
attainment of age 62, and reduced, if his early retirement date
shall occur prior to the attainment of age 62, at the rate of 4%
for each year of part thereof in the period between his early
retirement date and the date of his 62nd birthday.
18.17 Early Retirement Date. Except as otherwise provided
in Section 4.02, Section 7.01 and Appendix C, if the employment
of any participant by any of the Employers shall terminate prior
to his normal retirement date and on or after whichever shall be
the latest of (a) his 55th birthday and (b) the date on which he
shall have completed a 10-year continuous employment period, his
early retirement date shall be the date of such termination of
employment.
18.18 Employee. Employee shall mean any person employed by
any of the Employers on a full-time and active basis and any
person who in regularly scheduled part-time employment completes
at least one year of service excluding any "leased employees" as
defined by Section 414(n) of the Code, as amended, and excluding
persons the terms and conditions of whose employment are subject
to the provisions of a collective bargaining agreement, except to
the extent that (i) the terms and conditions of such collective
bargaining agreement provide for eligibility for participation in
the Plan or (ii) the Board of Directors of CBS determines that
persons included in such group, unit, division, class or category
- 48 -<PAGE>
shall be eligible for participation under the Plan. In
determining eligibility to participate in the Plan and
eligibility for an early retirement benefit under Section 3.04, a
termination benefit under Section 4.03 or a death benefit under
Section 5.01 or 5.02, but not in determining the amount of such
benefit, any person shall be deemed to have been an employee
during the entire period of his continuous employment by one or
more Employers, other subsidiaries, any other affiliated company
and any predecessor corporation of CBS or any entity merged,
consolidated or liquidated into CBS or its predecessor if and to
the extent (i) the Board of Directors of CBS so directs
consistent with regulations issued by the Secretary of the
Treasury or (ii) provided in the Plan.
Employee shall also mean any person who is employed or who in
regularly scheduled part-time employment completes at least one
year of service and (i) who is thus employed by any foreign
subsidiary of CBS to which U.S. Social Security coverage has been
extended by an agreement entered into by CBS under Section
3121(1) of the Code, (ii) as to whom no contributions under any
other funded plan of deferred compensation are being provided by
any other person with respect to the remuneration paid to such
individual by the foreign subsidiary and (iii) who is a citizen
of the United States. For purposes of the Plan only, CBS shall
be deemed to be the Employer of such employees.
18.19 Employers. Employers shall mean CBS and all pension
subsidiaries.
18.20 Fiduciary. A fiduciary shall mean any person to the
extent that he (a) exercises any discretionary authority or
discretionary control respecting management of the Plan or
exercises any authority or control respecting management or
disposition of its assets, (b) renders investment advice for a
fee or other compensation, direct or indirect, with respect to
any moneys or other property of the Plan, or has any authority or
responsibility to do so, or (c) has any discretionary authority
or discretionary responsibility in the administration of the
Plan.
18.21 15-Year Certain Annuity. A 15-year certain annuity
shall mean an annuity under which equal monthly installments are
payable during the life of a participant and, in the event of the
death of such participant prior to the payment of 180 such
installments, there is payable either (a) the balance of such
installments on such dates as the participant would have received
them if he had lived or (b) the commuted value thereof.
- 49 -<PAGE>
18.22 Hour of Service. An hour of service for a person
employed in regularly scheduled part-time employment shall mean
each hour for which he shall be directly or indirectly paid or
entitled to payment
(a) for services he performs for CBS; or except as
otherwise specified in the Plan, solely for purposes of
determining eligibility to participate in the Plan and the
extent to which his benefits shall have vested, and subject
to the provisions of this Section 18.22,
(b) for services he performs for any Affiliated
Company, or any predecessor corporation of CBS, or
corporation merged, consolidated, or liquidated into CBS or
its predecessor, or a corporation substantially all of the
assets of which were acquired by CBS to the extent the Board
of Directors of CBS so directs consistent with regulations
issued by the Secretary of the Treasury.
For a person employed on a full-time basis, 190 hours of
service shall be credited for each calendar month in which he has
actually performed at least one hour of service.
In addition to the foregoing, the following provisions shall
apply, where appropriate, to the computation of hours of service.
Any employee may be credited with hours of service for each
calendar month in which he has a leave of absence of at least one
calendar day. Any employee shall be credited with hours of
service for any period for which back pay, irrespective of
mitigation of damages, may be awarded or agreed to by CBS or an
affiliated company, in which event such hours of service shall be
credited to each anniversary year to which each such award
pertains. Except as otherwise provided in Section 7.03, an
employee shall be credited with hours of service for any period
for which he is directly or indirectly paid or entitled to
payments by CBS or any affiliated company for reasons (such as
vacations, sickness or disability) other than for his performance
of services, and such hours of service and the computation period
or periods to which such hours shall be credited shall be
determined in accordance with Section 2530.200b-2 of the
regulations prescribed by the Secretary of Labor.
Notwithstanding any other provision of the Plan, in no event
shall any person be credited with hours of service for any period
prior to January 1, 1976 during which he was employed on other
than a full-time basis. In addition to the above, a person shall
be credited with up to 501 hours of service, but only for
purposes of determining whether a break in service has occurred,
for any absence from work during which no duties are performed
- 50 -<PAGE>
due to the pregnancy of the employee, the birth of a child of the
employee, the placement of a child with the employee in
connection with the adoption of such child by the employee,
caring for such a child for a period immediately following birth
or placement, or, to the extent legally required, any other event
for which a leave of absence is required to be granted under the
Family and Medical Leave Act of 1993 or the Uniformed Services
Employment and Reemployment Rights Act and related regulations.
For these purposes, eight hours shall be credited for each day of
such an absence. Such hours shall be credited in the year of
absence if necessary to avoid a break in service in such year, or
if not necessary, in the following year.
18.23 Investment Manager. Investment Manager shall mean a
fiduciary appointment by the Board of Directors of CBS who (a)
has the authority to direct the investment and reinvestment of
all or any part of the trust funds under any Trust Agreement; (b)
is registered as an investment adviser under the Investment
Advisers Act of 1940, is a bank as defined in the Investment
Advisers Act of 1940 or is an insurance company qualified to
perform services described in clause (a) above under the laws of
more than one state; and (c) has acknowledged in writing that it
is a fiduciary with respect to the Plan.
18.24 Joint and Full Survivor Annuity. A joint and full
survivor annuity shall mean an annuity under which equal monthly
installments are payable during the lives of a participant and
another designated by him and equal monthly installments in the
same amount are payable during the life of the survivor of them.
18.25 Joint and Two-Thirds Survivor Annuity. A joint and
two-thirds survivor annuity shall mean an annuity under which
equal monthly installments are payable during the lives of a
participant and another designated by him and equal monthly
installments in two-thirds of the original amount are payable
during the life of the survivor of them.
18.26 Leave of Absence. Leave of Absence shall mean a leave
of absence from the employ of any Employer or any non-pension
subsidiary granted as provided in Section 7.02 pursuant to rules
determined by the pension committee under uniform policies that
do not discriminate in favor of employees who are officers,
stockholders, persons whose principal duties consist of
supervising the work of other persons employed by any of the
Employers or highly compensated employees.
18.27 Life Annuity. A life annuity shall mean an annuity
under which equal monthly installments are payable during the
- 51 -<PAGE>
life of a participant.
18.28 Non-pension subsidiary. Non-pension subsidiary shall
mean a subsidiary which shall not have adopted the Plan.
18.29 Normal retirement benefit. The normal retirement
benefit of a participant who shall not be a news correspondent
shall be the amount determined with respect to such participant
in accordance with Section 3.02 as of his normal retirment age
and the normal retirement benefit of a participant who shall be a
news correspondent shall be the excess of such amount over the
amount determined with respect to such participant in accordance
with clause (b) of Section 3.03.
18.30 Normal retirement date. The normal retirement date of
a participant shall, if his birthday shall occur on the first day
of a calendar month, be the day of his 65th birthday, or, if his
birthday shall not occur on the first day of a calendar month, be
the first day of the calendar month next succeeding the calendar
month in which his 65th birthday shall occur. In all events,
however, a participant shall have a nonforfeitable interest in
the normal retirement benefit upon attainment of age 65.
18.31 Optional Benefit. The optional benefit of a
participant shall be the benefit elected by such participant
pursuant to Section 6.01 in lieu of his normal retirement benefit
or in lieu of his termination benefit or the benefit elected by
such participant pursuant to Section 4.04 in lieu of his
termination benefit.
18.32 Participant. Participant shall mean both an employee
who shall continue as a participant under the Plan as provided in
Section 2.01 and an employee who shall become a participant under
the Plan as provided in Section 2.02.
18.33 Pension Committee. Pension committee shall mean the
committee provided for in Section 10.01.
18.34 Pension Subsidiary. Pension subsidiary shall mean a
subsidiary which shall have adopted the Plan.
18.35 Permanently Disabled. A participant shall be deemed
to be permanently disabled when in the opinion of that third-
party designated by CBS to make determinations concerning
eligibility under CBS's long-term disability plan based upon a
medical certificate from a physician or physicians satisfactory
to such third-party: such participant during the first thirty
(30) months of any period of continuous disability requiring the
- 52 -<PAGE>
regular care of a licensed physician, by reason of injury,
illness or disease, is unable to perform the duties of his
occupation or profession of substantially similar economic
status, except approved rehabilitative employment; and thereafter
during the continuance of such period of disability that the
participant is unable to engage in any gainful occupation or
profession for which he is reasonably fitted by education,
experience, capability or training, except approved
rehabilitative employment.
18.36 Plan. Plan shall mean the Plan as herein set forth.
18.37 Plan Year. Plan year shall mean a calendar year.
18.38 Retirement. Retirement shall mean retirement from the
employ of any of the Employers as provided in Section 3.01.
18.39 Subsidiary. Subsidiary shall mean any corporation
which, at the time with respect to which such term is used, is
controlled by CBS by reason of the beneficial ownership (directly
or, through one or more intermediaries, indirectly) by CBS of a
sufficient number of shares of stock of such corporation, of any
class or classes, to enable CBS, pursuant to the provisions of
such corporation's certificate of incorporation, to elect at
least a majority of the total authorized number of such
corporation's directors.
18.40 10-Year Certain Annuity. 10-year certain annuity
shall mean an annuity under which equal monthly installments are
payable during the life of a participant and, in the event of the
death of such participant prior to the payment of 120 such
installments, there is payable either (a) the balance of such
installments on such dates as the participant would have received
them if he had lived or (b) the commuted value thereof.
18.41 Termination Benefit. The termination benefit of a
participant who shall not be a news correspondent shall be the
amount determined with respect to such participant in accordance
with Section 3.02 and the termination benefit of a participant
who shall be a news correspondent shall be the excess of such
amount over the amount determined with respect to such
participant in accordance with clause (b) of Section 3.03.
18.42 Termination Date. The termination date of a
participant shall be the date on which his participation shall
terminate in accordance with Section 4.01 or Section 4.02.
18.43 Trust. Trust shall mean the trust created by and
- 53 -<PAGE>
under the Trust Agreement and which is a result of the merger of
the 1960 Trust into the 1942 Trust, and, except as used in
Section 1.02, where it shall have only such meaning, shall also
mean that trust or any additional trust or trusts as may be
created pursuant to a trust agreement to aid in the proper
execution of the Plan and, as used in Section 14.02, shall mean
all such trusts as may at that time exist.
18.44 Trust Agreement. Trust Agreement shall mean the trust
agreement with Morgan Guaranty Trust Company of New York, as
trustee, dated as of October 1, 1969, which is a result of the
amendment of the 1942 Trust Agreement and the incorporation
therein of the provisions of the 1960 Trust Agreement, and,
except as used in Section 1.02, where it shall have only such
meaning, shall also mean that trust agreement or any additional
trust agreement or trust agreements as may be entered into for
the purpose of creating a trust to aid in the proper execution of
the Plan and, as used in Section 14.02, shall mean all such trust
agreements as may at that time exist.
18.45 Trustee. Trustee shall mean Morgan Guaranty Trust
Company of New York as trustee under the Trust Agreement, and its
successors as such trustee, and shall also mean that trustee or
any additional trustee or trustees, and its and their successors,
as may be serving under a trust agreement entered into for the
purpose of creating a trust to aid in the proper execution of the
Plan and, as used in Section 14.02, shall mean all such trustees
as at that time serve under a trust agreement.
18.46 Union Employee. Union employee shall mean an employee
any part of whose employment is subject to a collective
bargaining agreement in connection with which his Employer is
required to make contributions to a pension, welfare or
retirement fund or trust for such employee (other than the
Trust).
18.47 Union Pension Compensation. The union pension
compensation of an employee shall be all amounts paid to him by
his Employer in connection with his employment under terms and
conditions which are subject to a collective bargaining agreement
pursuant to which his Employer makes contributions to a pension,
welfare or retirement fund or trust for such employee (other than
the Trust).
18.48 Vested Benefit. The vested benefit of any participant
on any date shall be the amount determined as follows:
(a) If such participant shall be alive on such date
- 54 -<PAGE>
and if his normal retirement date shall be concurrent with or
prior to such date, the actuarial equivalent on such date of
that portion of his normal retirement benefit which shall not
therefore have been paid shall be determined.
(b) If such participant shall be alive on such date
and if his termination date shall have been prior to such
date, and if he shall have been entitled to receive a normal
termination benefit, the actuarial equivalent on such date of
that portion of his normal termination benefit which shall
not therefore have been paid shall be determined.
(c) If such participant shall be alive on such date
and if his participation shall not have terminated prior to
such date and if such date shall be prior to his normal
retirement date, and if, in the event that his termination
date had been such date, he would have been entitled to
receive a normal termination benefit, the actuarial
equivalent of what would have been his normal termination
benefit if his termination date had been on such date shall
be determined.
(d) If such participant shall have died prior to such
date and shall have elected an optional benefit under which
any amount was payable subsequent to his death, that portion,
if any, of such amount which shall not theretofore have been
paid to such participant (or if he shall have died prior to
receiving any payment, to his beneficiaries) shall be
determined.
(e) If the aggregate of the amounts determined under
the foregoing paragraphs (a), (b), (c) and (d) with respect
to all of the participants shall not exceed the value on such
date of the corpus (including any accumulated income) of the
Trust, the amount so determined with respect to each
participant shall be the vested benefit of such participant.
18.49 Year of Service. A year of service for any employee
shall mean each anniversary year in which he shall complete at
least 1,000 hours of service, subject, however, to the following:
(a) Solely for the purpose of determining the extent
to which the benefits of an employee whose employment shall
have commenced on other than a full-time basis shall have
vested, if such an employee shall not have completed a year
of service in the anniversary year in which he became a
participant or in the following anniversary year, he shall
- 55 -<PAGE>
nevertheless be credited with one year of service for the
anniversary year in which he became a participant.
(b) Any period in which service shall have been
performed by an employee prior to a break in service shall
not be included in determining such employee's years of
service unless
(i) such services shall have been performed
prior to January 1, 1989, in which event the period in
which such services shall have been performed shall be
included in determining such employee's years of
service in accordance with the break in service rules
under the Plan in effect prior to such date or
(ii) such services shall have been performed
after December 31, 1988 by an employee whose benefits
shall have vested on or before such break in service,
or, if such benefits shall not have vested the number
of consecutive anniversary years during which such
break in service shall have continued shall be less
than five.
(c) For employees who complete one or more hours of
service on or after January 1, 1988, the period in which
services shall have been performed by an employee after his
normal retirement date shall be included in determining his
years of service.
(d) Solely for the purpose of determining the amount
of benefits under the Plan for a person who is employed on a
full-time basis, such employee shall be credited with
employment on a full-time basis only if he completes at least
2,280 hours of service in an anniversary year. Such an
employee who does not complete such number of hours of
service shall be credited with a partial year of service
expressed as a fraction, the numerator of which shall be at
least the number of calendar months credited during such
anniversary plan year and the denominator of which shall be
12.
(e) Solely for the purpose of determining the amount
of benefits under the Plan for a person who is a regularly
scheduled part-time employee, such employee shall receive
credit for a year of service only if he completes at least
1,800 hours of service in an anniversary year. Such an
employee who does not complete at least 1,800 hours of
service in an anniversary year shall be credited with a
- 56 -<PAGE>
partial year of service expressed as a fraction, the
numerator of which shall be at least the number of hours of
service completed during such anniversary year and the
denominator of which shall be 1,800; provided, however, that
an employee shall not be credited with a year of service or
part thereof if he completes less than 1,000 hours of service
in an anniversary year unless such employee shall have
commenced participation or recommenced participation or
terminated participation on a date other than the first day
of any anniversary year, in which event he shall be credited
with a partial year of service if his hours of service in
such anniversary year are equal to or exceed the product
obtained by multiplying 1,000 by a fraction, the numerator of
which shall be the number of months he was employed in such
anniversary year and the denominator of which shall be 12.
Such partial year of service shall be expressed as a
fraction, the numerator of which shall be his hours of
service in such anniversary year and the denominator of which
shall be 1,800.
18.50 Years. The years included in any period herein
referred to shall be the number of full calendar months included
in such period divided by 12.
XIX
RESTRICTED PARTICIPANTS
19.01 Subject to the limitations expressed in Sections
19.01(a) through (c), if this Plan is terminated, the benefit of
any highly compensated employee (as defined under Code Section
414(q) and the regulations and other guidance issued thereunder)
and any highly compensated former employee shall be limited to a
benefit that is nondiscriminatory under Code Section 401(a)(4).
In addition, the annual benefit payments to each of the 25
highest paid employees of all of the Employers shall be
restricted to an amount equal to the payments that would be made
on behalf of such employee under a single life annuity that is
the actuarial equivalent of the employee's accrued benefit and
the employee's other benefits under the Plan. The foregoing
restrictions shall not apply, however, if:
(a) after payment to an affected employee of all
benefits, the value of Plan assets equals or exceeds 110
percent of the value of current liabilities (as defined in
Code Section 412(l)(7)), or
(b) the value of the benefits for the affected
employee is less than one percent of the value of current
- 57 -<PAGE>
liabilities before distribution, or
(c) the value of benefits payable to the affected
employee does not exceed the amount described in Code Section
411(a)(11)(A).
For purposes of the foregoing subparagraphs (a) and (b), the
term "benefits" includes any periodic income, withdrawal values
payable to a living employee, and any death benefits not provided
for by insurance on the employee's life.
XX
ADOPTION BY SUBSIDIARIES
20.01 Any non-pension subsidiary may, by resolution of its
board of directors, at any time, with the consent of the Board of
Directors of CBS, adopt the Plan for the exclusive benefit of its
employees eligible to participate thereunder. Such adoption
shall be effective as of the first day of any calendar month,
except that in the case of a non-pension subsidiary into which a
pension subsidiary is merged, such adoption by such non-pension
subsidiary may be effective as of the effective date of the
merger.
20.02 Each such non-pension subsidiary shall enter into an
appropriate agreement with the other Employers and the Trustee
pursuant to which such non-pension subsidiary shall become a
party to the Trust Agreement.
XXI
INTERPRETATION; CONSTRUCTION
21.01 Subject to the provisions of Article XV, in the event
that any disputed matter shall arise under the Plan or under the
Trust Agreement, including, without limiting the generality of
the foregoing, matters relating to the eligibility of any person
to participate under the Plan, the participation of any person
under the Plan, the amount of any benefit payable under the Plan
and the interpretation of the provisions of the Plan and of the
Trust Agreement, the decision of the pension committee upon such
matter shall be binding and conclusive upon all persons
including, but not limited to, each of the Employers, all persons
at any time in the employ of any of the Employers, the Trustee,
the participants and former participants, their respective
beneficiaries and the respective successors, assigns, executors,
administrators, heirs, next-of-kin and distributees of all of the
foregoing.
- 58 -<PAGE>
21.02 To the extent that state law shall not be preempted by
the provisions of the Act or any other laws of the United States
heretofore or hereafter enacted, as the same may be amended from
time to time, the terms and provisions of the Plan shall be
construed and regulated by the laws of the State of New York.
Anything in the Plan to the contrary notwithstanding, no
provision hereof shall be so construed as to violate the
requirements of the Act. To the extent that the context shall
permit, any masculine pronoun used in the Plan or in the Trust
Agreement shall be construed to include also the similar feminine
pronoun, any singular word so used shall be construed to include
also the similar plural word and any plural word so used shall be
construed to include also the similar singular word.
XXII
SIGNATURE
The Plan as herein amended and restated has hereby been
approved and adopted to be effective as of January 1, 1989
(except as otherwise provided herein) this 30th day of December,
1994.
CBS INC. by the
PLANS ADMINISTRATION COMMITTEE
Alvan L. Bobrow
Vice President and Director of
Taxes
Joan Showalter
Senior Vice President, Human
Resources
Louis J. Rauchenberger, Jr.
Vice President and Treasurer
Dated: December 30, 1994
51 West 52nd Street
New York, New York 10019
- 59 -<PAGE>
APPENDIX A
Actuarial Equivalents
A. For a benefit under the Plan in the form of an annuity,
actuarial equivalencies shall be calculated at an assumed
interest rate of 6% per annum, compounded annually, and
utilizing the 1971 TPF&C Forecast Mortality Table, setback 3
years, as adopted by the committee for purposes of the Plan.
B. For a benefit under the Plan payable in a lump sum form,
equivalency shall be determined utilizing the 1971 TPF&C
Forecast Mortality Table, setback 3 years and the rate of
interest equal to the lesser of (i) the yield on U.S.
Treasury Bonds due or allocable in ten or more years,
averaged over the 12-month period ending on each August 31 or
(ii) the interest rate which would be used (as of January 1
of the plan year in which the distribution is made) by the
Pension Benefit Guaranty Corporation for purposes of
determining the present value of a participant's benefits
under the Plan if the Plan had terminated on the date
distribution is made with insufficient assets to provide
benefits guaranteed by the Pension Benefit Guaranty
Corporation on that date (the "Applicable Interest Rate").
The interest rate under (i) shall be determined as of each
August 31 and shall be used for the next following plan year,
provided however that the change in interest rate under (i)
from one plan year to the next shall not exceed 1/2
percentage point.
C. For a benefit under the Plan, payment of which commences
after normal retirement date, factors shall be calculated
with only interest during the deferred period from normal
retirement date to date of commencement of payment of
benefits at 6% per annum, compounded annually, and then
converted to an annuity at the income commencement date
utilizing the 1971 TPF&C Forecast Mortality Table, setback 3
years.
Notwithstanding the foregoing, a benefit shall not be less
than the amount of the life annuity which was accrued as of
December 31, 1986, converted (if an optional form of benefit
is elected) based on factors in effect on that date.
(References herein to TPF&C means Towers, Perrin, Forster &
Crosby, consultants to Management.)
- 60 -<PAGE>
APPENDIX A--ACTUARIAL EQUIVALENCIES
CBS PENSION PLAN
Interest: 6% per annum
Mortality: 1971 TPF&C Forecast Mortality
- 61 -<PAGE>
CBS PENSION PLAN
ANNUAL RATES OF MORTALITY
Age Annual Annual
Nearest Rate of Rate of
Birthday Mortality Birthday Mortality
20 .000524 50 .005501
21 .000543 51 .006106
22 .000566 52 .006744
23 .000589 53 .007418
24 .000615 54 .008124
25 .000644 55 .008866
26 .000676 56 .009577
27 .000712 57 .010313
28 .000751 58 .011113
29 .000794 59 .012091
30 .000842 60 .013216
31 .000895 61 .014452
32 .000953 62 .015773
33 .001018 63 .017202
34 .001089 64 .018935
35 .001168 65 .020982
36 .001253 66 .023475
37 .001348 67 .026287
38 .001454 68 .029332
39 .001571 69 .032595
40 .001700 70 .036284
41 .001862 71 .040205
42 .002082 72 .044043
43 .002352 73 .047723
44 .002674 74 .051474
45 .003041 75 .055566
46 .003453 76 .060364
47 .003907 77 .066249
48 .004400 78 .072953
49 .004933 79 .080085
Basis: 1971 TPF&C Forecast Mortality
- 62 -<PAGE>
APPENDIX B
Provisions Applicable to
Former 1942 Plan Participants
B.01 Special Provisions for 1942 Plan Participants. The
provisions of this Appendix B shall apply to participants in the
Plan who were 1942 participants, as defined below. In the event
of any conflict between the provisions of this Appendix and any
other Article of the Plan, the provisions of this Appendix shall
govern for such persons. In no case shall any provision of this
Appendix B cause the reduction or elimination of any
participant's accrued benefit (including optional forms of
benefit and the manner and timing thereof) in violation of
Section 411(d)(6) of the Code or Section 204(g) of ERISA.
B.02 Revisions to existing plan provisions: The Articles as
amended, and which apply only to 1942 participants, are as
follows:
(a) Section 18.02 of the Plan shall be modified by adding
at the end thereof the following:
Notwithstanding the foregoing, the actuarial
equivalent of a lump sum form of benefit in the case
of a 1942 participant shall be the 1942 actuarial
equivalent of such benefit at such time.
B.03 Additional definitions of terms: In addition to those
terms defined in Article XVIII, the following words and phrases,
as used in this Appendix, shall have the following meanings:
(a) 1942 Participant. 1942 participant shall mean a person
who was a participant (including a person who was a limited
participant) under the 1942 Plan prior to December 26, 1968
and who be came a participant under the Plan on December 26,
1968 pursuant to Section 2.01 of the Plan as then in effect.
(b) 1942 Plan. 1942 Plan shall mean the pension plan
effective December 26, 1942 under which CBS and certain pension
subsidiaries were Employers, as amended to December 25, 1968.
(c) 1942 Actuarial Equivalent. The 1942 actuarial
equivalent of any benefit shall be a benefit determined by the
actuary as being equivalent to said first mentioned benefit based
upon the following interest and mortality assumptions:
(1) If and to the extent that said benefit first
referred to in this Section is or is related to that portion
of a benefit provided by annual contributions made in part
- 63 -<PAGE>
prior to December 26, 1947: Interest at the rate of 2-1/2%
per annum, compounded annually; mortality where applicable in
accordance with the 1937 Standard Annuity Mortality Table
with ages set back one year.
(2) If and to the extent that said benefit first
referred to in this Section is or is related to that portion
of a benefit provided by annual contributions made in whole
subsequent to December 26, 1946: Interest at the rate of 2-
1/2% per annum compounded annually, prior to normal
retirement date or any earlier date as of which an optional
benefit is elected, and at the rate of 2% per annum,
compounded annually, subsequent to normal retirement date or
such earlier date; mortality where applicable in accordance
with the 1937 Standard Annuity Mortality Table with ages set
back one year.
- 64 -<PAGE>
APPENDIX C
Provisions Applicable to
WCAU Plan Participants
C.01 Special Provisions for WCAU Plan Participants.
Effective December 1, 1994, employees of CBS employed at WCAU-TV
("WCAU") and represented by Local 1241, International Brotherhood
of Electrical Workers and who were formerly eligible to
participate in the WCAU Trust Fund Retirement Plan for Certain
Groups of Employees became eligible to participate in the Plan.
In connection therewith, all of the assets and liabilities of the
WCAU plan were transferred to this Plan. The provisions of this
Appendix C shall apply to participants in the Plan who were WCAU
plan participants, as defined below. Except to the extent
otherwise provided in this Appendix C, all of the foregoing
Articles of the Plan and the provisions of Appendix A of this
Plan shall apply to all WCAU plan participants. In no case shall
any of the provisions of this Plan or this Appendix C cause a
reduction or elimination of any participant's accrued benefit
(including optional forms of benefit and the manner and timing
thereof) in violation of Section 411(d)(6) of the Code or Section
204(g) of the Act. Notwithstanding anything in the Plan to the
contrary, a termination of employment shall be deemed to have
occurred with respect to WCAU plan participants on account of the
disposition of WCAU, provided that the acquiring entity does not
continue to maintain the WCAU plan after the date of acquisition.
C.02 Revisions to existing plan provisions: The Articles
as amended, and which apply only to WCAU plan participants, are
as follows:
(a) Notwithstanding anything in Section 3.02 to the
contrary:
(1) the normal retirement benefit of a WCAU plan
participant shall be determined as the greater of:
(i) such participant's frozen WCAU plan benefit; or
(ii) the benefit otherwise determined under the
provisions of Section 3.02 taking into account all of
such participant's service with WCAU in determining
such participant's continuous employment period and
taking into account all of the compensation paid to
such participant by WCAU.
(2) the normal retirement benefit of a deferred
vested WCAU plan participant shall be determined as
120 percent of the individual's frozen WCAU plan
benefit determined at normal retirement age.
- 65 -<PAGE>
(3) the monthly pension payable to any WCAU plan
retiree shall be increased by 20 percent beginning
with the first payment payable after December 1, 1994.
(b) Notwithstanding anything to the contrary in Section
4.04, a WCAU plan participant who shall be entitled to
receive a termination benefit may elect to receive, in lieu
of his termination benefit provided in Section 4.03, a
benefit which shall be the actuarial equivalent of such
termination benefit, payable in equal monthly installments
commencing on the first day of any month, coincident with or
subsequent to his 50th birthday and prior to his normal
retirement date, and continuing during his life, subject to
Article VI. Such month shall be designated by such
participant in a written notice delivered to the pension
committee at least 30 days prior to the date on which the
first payment is to be made.
(c) Notwithstanding anything to the contrary in Section
6.01, a WCAU plan participant may elect the following
optional forms of benefit:
(i) the WCAU plan participant may elect to have the
portion of his accrued benefit attributable to his
frozen WCAU plan benefit paid to him in the form of
installments over a period not to exceed 10 years, as
elected by the participant. The remainder of such
participant's accrued benefit must be paid only in one
of the other optional forms of benefit available under
Article VI of the Plan, or
(ii) the WCAU plan participant may elect to have his
entire accrued benefit paid in the form of a joint and
fifty percent survivor annuity based on the actuarial
factors otherwise applicable under the terms of the
WCAU plan, or
(iii) effective as of January 1, 1988, the WCAU plan
participant may elect to have his entire accrued
benefit paid in the form of a single lump sum payment
based on the actuarial factors otherwise applicable
under the Plan; provided, however, that the
participant will never be entitled to less than the
WCAU actuarial equivalent of his frozen WCAU plan
benefit paid in such form.
(d) Notwithstanding anything to the contrary in Section
6.03, in no event will the qualified joint and survivor
annuity payable to a WCAU plan participant be less than the
- 66 -<PAGE>
WCAU actuarial equivalent of such participant's frozen WCAU
plan benefit paid in the form of a joint and fifty percent
survivor annuity.
(e) The continuous employment period of any WCAU plan
participant determined under Section 18.13 of the Plan shall
include all periods of employment otherwise credited to such
participant under the WCAU plan for benefit accrual and
vesting purposes as of December 1, 1994, plus all years of
service with the Employers under the Plan on and after
December 1, 1994.
(f) Early Retirement Benefit. Notwithstanding Section
18.16 of the Plan, a WCAU plan participant may retire on a
WCAU plan early retirement date and shall be entitled to the
actuarial equivalent of the benefit otherwise determined
under Section 3.02 as modified in this Appendix C or the WCAU
actuarial equivalent of a frozen WCAU plan benefit.
(g) WCAU Plan Early Retirement Date. If a WCAU plan
participant terminates employment prior to his normal
retirement date and on or after whichever shall be the latest
of (i) his 50th birthday and (ii) the date on which he shall
have completed a 10-year continuous employment period, his
WCAU plan early retirement date solely for the benefit
described in subparagraph (g) of this Section C.02 shall be
the date of such termination of employment. In order to be
eligible for the early retirement benefit described in
Section 18.16 of the Plan, such a participant must meet the
requirements for early retirement otherwise specified in
Section 18.17 of the Plan.
C.03 Provisions related to employee contributions. The
following provisions shall apply solely to employee contributions
under the WCAU plan:
(a) Notwithstanding anything to the contrary in Section
3.02 as modified by this Appendix C, in addition to the
normal retirement benefit of a deferred vested or actively
employed WCAU plan participant as described herein, in the
event a participant does not withdraw his accumulation, he
shall be entitled to a normal retirement benefit equal to the
amount otherwise determined hereunder plus the WCAU plan
benefit attributable to such accumulation.
(b) In the case of participants whose accrued benefit
under this Plan is attributable in whole or in part to assets
transferred to this Plan from the WCAU plan, in no event
shall a participant's retirement benefit be less in
- 67 -<PAGE>
equivalent actuarial value than the participant's statutory
accumulated contributions. Such amount of retirement benefit
shall be computed by dividing the statutory accumulated
contributions by an actuarial factor determined based on the
1971 TPF&C Forecast Mortality Table, setback three years, and
an interest rate specified in Section 417(e) of the Code.
(c) Effective as soon as administratively feasible after
December 1, 1994, a deferred vested or actively employed WCAU
plan participant may elect to receive a return of his
accumulations; provided, however, that no such payment shall
be made to an unmarried participant unless he shall waive the
normal form of payment in the form of a life annuity and
provided, further, that no such payment shall be made to a
married participant unless his spouse consents to such
payment in writing and such consent is notarized or witnessed
by a Plan representative and such consent affirmatively
waives the requirements that such amounts be paid in the form
of a qualified joint and survivor annuity and otherwise meets
the requirements set forth in Section 6.04. If a Plan
participant makes the above-described election, such election
must be made within the time period specified by the pension
committee or its delegate. A participant who fails to make
the election within the specified time period may not elect
to receive his accumulation prior to such participant's
termination of employment.
C.04 Additional definitions of terms: In addition to those
terms defined in Article XVIII, the following words and phrases,
as used in this Appendix, shall have the following meanings:
(a) Accumulation. Accumulation shall mean amounts
transferred to the Fund from the WCAU plan that represent
amounts accumulated for a WCAU plan participant by reason of
his contributions made to the WCAU plan prior to December 1,
1994, if any, and not withdrawn or returned to the
participant or his beneficiary, plus any interest credited
thereon at the rate of 5% per annum to the date of
withdrawal.
(b) Contributions. The contributions for any WCAU Plan
participant shall be the mandatory amounts paid by the
participant under Section 1201 of the WCAU plan during his
period of participation in the WCAU plan.
(c) Deferred Vested WCAU Plan Participant. Deferred
vested WCAU plan participant shall mean a person who was a
participant under the WCAU plan prior to December 1, 1994 and
who had terminated employment with WCAU prior to that date
- 68 -<PAGE>
but had not commenced receipt of a pension under the WCAU
plan as of December 1, 1994.
(d) Frozen WCAU Plan Benefit. An individual's frozen WCAU
plan benefit shall be the normal retirement benefit to which
such participant was entitled under the WCAU plan as of
November 30, 1994 (including any benefit to which any Plan
participant was entitled under the WCAU plan as of such date)
based on the terms of such plan then in effect and payable in
the form of a life annuity commencing at normal retirement
age. For purposes of determining the amount of an active or
deferred vested WCAU plan participant's frozen WCAU plan
benefit accrued under the WCAU plan and that is payable in a
different form or that commences on a different date than
such normal retirement benefit, the participant's frozen WCAU
plan benefit shall be determined on the basis of the WCAU
actuarial equivalent factors.
(e) Joint and Fifty Percent Survivor Annuity. Joint and
fifty percent survivor annuity means an annuity under which
an amount is payable to the participant for life with fifty
percent of the amount of such benefit payable after the
participant's death to his surviving eligible spouse or other
named beneficiary for life. The reduced amount payable to a
participant under a joint and fifty percent survivor annuity
shall be determined in accordance with the actuarial factors
under the WCAU plan.
(f) Statutory Accumulated Contributions. Statutory
accumulated contributions means amounts transferred to the
Fund from the WCAU plan that represent amounts accumulated
for a participant by reason of his contributions made to the
WCAU plan prior to December 1, 1994, if any, and not
withdrawn or returned to the participant or his beneficiary,
with annual compound interest for the number of completed
months following the first payment of participant
contributions through the date on which the interest is being
calculated. Interest shall be credited at the following
rates: (a) through December 31, 1975 at the rate specified
for purposes of the WCAU actuarial equivalent, in the manner
described in the WCAU plan; (b) from January 1, 1976 through
December 31, 1987, at the rate of five percent compounded
annually; (c) from January 1, 1988 through the "determination
date," (i.e., the date on which the participant's retirement
benefit is scheduled to commence or, if earlier, the date on
which such participant's contributions are withdrawn), at a
rate of 120 percent of the Federal mid-term rate (as in
effect under Section 1274 of the Code for the first day of
each Plan Year); and (d) from the "determination date"
- 69 -<PAGE>
through the participant's normal retirement date, at a rate
equal to the interest rate which would be used under the Plan
under Section 417(e)(3) of the Code, as in effect on the
determination date. The portion of such a participant's
accrued benefit attributable to Employer contributions, as of
any date of determination, shall be equal to the excess, if
any, of his total accrued benefit over the portion of his
accrued benefit attributable to his statutory accumulated
contributions as of such date.
(g) WCAU Actuarial Equivalent. The WCAU actuarial
equivalent of any benefit shall be a benefit determined by
the actuary as being equivalent to said first mentioned
benefit based upon the following interest and mortality
assumptions:
(1) If and to the extent that said benefit first
referred to in this Section is or is related to that portion
of a benefit attributable to service prior to January 1,
1970: Interest at the rate of 3% per annum, compounded
annually; mortality where applicable in accordance with the
Ga 51 Mortality Table for males.
(2) If and to the extent that said benefit first
referred to in this Section is or is related to that portion
of a benefit attributable to service on or after January 1,
1970: Interest at the rate of 4-1/2% per annum compounded
annually; mortality where applicable in accordance with the
Ga 51 Mortality Table for males with TPF&C projection.
(h) WCAU Plan. WCAU plan shall mean the WCAU Trust Fund
Retirement Plan for Certain Groups of Employees in effect on
December 1, 1994 which was merged into this Plan effective
December 1, 1994. The WCAU plan shall include the provisions
of the WCAU Retirement Plan which became effective on July 1,
1955, the benefits of which are provided under Group Annuity
Contract No. GA-442, executed October 19, 1955, between WCAU
Inc. and The Prudential Insurance Company of America, and the
Amended WCAU Retirement Plan for Certain Groups of Employees
which became effective January 1, 1959, the benefits of which
are provided under the Trust Agreement made as of January 1,
1967 between CBS and Morgan Guaranty Trust Company of New
York, as the same may have been, or may be amended.
(i) WCAU Plan Participant. WCAU plan participant shall
mean an active employee who was a participant under the WCAU
plan prior to December 1, 1994 and who became or continued as
a participant under the Plan on December 1, 1994.
- 70 -<PAGE>
(j) WCAU Plan Retiree. WCAU plan retiree shall mean a
person who was a participant under the WCAU plan prior to
December 1, 1994 and who had commenced receipt of a pension
in the form of an annuity and who was in pay status as of
December 1, 1994.
- 71 -<PAGE>
APPENDIX D
Provisions Applicable to
Participants In Prior Plans
D.01 Special Provisions for Prior Plan Participants. The
provisions of this Appendix D shall apply to participants in the
Plan who were participants in the HRW Plan or the Steinway & Sons
Pension Trust Plan, as defined below. Except to the extent
otherwise provided in this Appendix D, all of the foregoing
Articles of the Plan and the provisions of Appendix A of this
Plan shall apply to all such participants. In no case shall any
provision of this Appendix D cause the reduction or elimination
of any participant's accrued benefit (including optional forms of
benefit and the manner and timing thereof) in violation of
Section 411(d)(6) of the Code or Section 204(g) of ERISA.
D.02 Revisions to existing plan provisions for HRW
Participants: The Articles as amended, and which apply only to
HRW participants, are as follows:
(a) Notwithstanding anything to the contrary in Section
3.02, each HRW participant shall, for purposes of determining
both his or her eligibility for, and the amount of, an early
retirement, termination, normal retirement or death benefit under
the Plan, be deemed to have been an employee during his or her
continuous employment period with CBS and/or HRW before
January 1, 1972. The provisions of the preceding sentence
notwithstanding, for HRW participants who in addition were
participants in the HRW Plan on December 31, 1971, (i) the amount
of any such benefit shall be reduced by the actuarial equivalent
of all amounts which such participant shall have withdrawn at any
time from his or her account under the HRW Plan and (ii) the
portion of any such benefit, the calculation of which is measured
by or based upon service for the period ended December 31, 1971,
shall be whichever is greater of (A) that proportionate benefit
amount attributable to such service under the terms of this Plan
and (B) that proportionate benefit amount attributable to such
service which shall be the total of (1) the amount which shall be
the actuarial equivalent as a life annuity of such participant's
benefit under Group Annuity Contract No. 328 executed
December 14, 1944 between John C. Winston Company and Aetna Life
Insurance Company, and (2) the amount which shall be the
actuarial equivalent as a life annuity of the value of such
participant's account under the HRW Plan, as of December 31,
1971, as heretofore determined by the trustee under such Plan
(the amount computed pursuant to this clause (2) hereinafter
referred to as the "HRW Amount") plus imputed interest on the HRW
Account
- 72 -<PAGE>
(i) for the period January 1, 1972 to
September 30, 1974, with respect to the account of
each participant in the HRW Plan at the rate of 5% per
annum,
(ii) for the period commencing October 1, 1974 or
any applicable later date, and ending October 31, 1978
with respect to the account of each participant in the
HRW Plan that was held as of October 1, 1974 or any
applicable later date in a funding account pursuant to
Group Annuity Contract No. AC 2852 between Equitable
Life Assurance Society and the trustee under the HRW
Plan, at such rate per annum as was guaranteed by such
insurance company pursuant to such Group Annuity
Contract and on and after November 1, 1978 at the rate
of 5% per annum and/or
(iii) for any period commencing on or after
October 1, 1974, with respect to the account of each
participant in the HRW Plan whose account remains in,
or is transferred to, any similar equity account under
the HRW Plan, at the rate of 5% per annum compounded
annually.
(b) Notwithstanding anything to the contrary in Section
5.01 of the Plan, the beneficiaries of an HRW participant who was
a participant in the HRW Plan on December 31, 1971 and who shall
die while a participant in this Plan shall, even though not
entitled to receive the specified death benefit by reason of
failure to satisfy the requirements therefor of that Section,
nevertheless be entitled to receive as a death benefit the
actuarial equivalent as of the date of death of the amounts
described in and determined in accordance with clauses (1) and
(2) of Section D.02(a) of Appendix D, reduced by the actuarial
equivalent of all amounts which such participant shall have
withdrawn from his or her account under the HRW Plan subsequent
to January 1, 1972, and such benefit shall be treated as and
payable in the manner set forth in Section 5.03.
(c) In addition to those terms defined in Article XVIII,
the following words and phrases, as used in this Appendix, shall
have the following meanings:
(i) HRW. HRW shall mean Holt, Rinehart and
Winston, Inc., a New York corporation and its
predecessors, which corporation was merged into CBS as
of December 31, 1974.
(ii) HRW Participant. HRW participant shall mean a
- 73 -<PAGE>
who was an employee of HRW (whether or not he was a
participant in the HRW Plan) and who became a
participant under the Plan on January 1, 1972.
(iii) HRW Plan. HRW Plan shall mean the Holt,
Rinehart and Winston, Inc. Profit Sharing Plan
effective January 1, 1960 and terminated as of
December 31, 1971 to the extent that no person could
become a participant therein and no contributions
could be made thereunder after such date.
D.03 Revisions to existing plan provisions for participants
in the Steinway & Sons Pension Trust Plan: The Articles as
amended, and which apply only to former participants in the
Steinway & Sons Pension Trust Plan, are as follows:
(a) Notwithstanding anything to the contrary in Article
II, each person who became an employee on October 1, 1972 and who
was a participant under the Steinway & Sons Pension Trust Plan
immediately prior thereto became a participant under the Plan as
of said date, and anything herein to the contrary
notwithstanding, in determining eligibility for a benefit under
this Plan, but not in determining the amount of such benefit, any
such participant who attained his 55th birthday prior to
October 1, 1972 shall be deemed to have completed ten years of
continuous employment as of October 1, 1972.
(b) Notwithstanding anything to the contrary in Section
3.02, each participant who shall have become a participant on
October 1, 1972, having been a participant in the Steinway & Sons
Pension Trust Plan immediately prior thereto, and who shall
retire on or subsequent to his normal retirement date shall be
entitled to receive a normal retirement benefit which shall be
the amount per annum equal to the total of:
(1) the amount of the normal retirement benefit to
which such participant is entitled under Section 3.02
in respect to his continuous employment period
subsequent to September 30, 1972, and
(2) the product obtained by multiplying (i) the
amount of normal retirement income, on an annualized
basis, which he would have received under the Steinway
& Sons Pension Trust Plan at his normal retirement
date under the Plan, based on his service to
September 30, 1972 but computed on his "average
compensation" (as that term is defined in
Section 13.03 of the Plan) at his normal retirement
date under the Plan and appropriately adjusted for
- 74 -<PAGE>
and maximum salary and/or periods of recognizable
service in accordance with the terms of the Steinway &
Sons Pension Trust Plan, by (ii) a fraction the
numerator of which shall be the number of years
(including monthly fractions of a year) of his
continuous employment by Steinway & Sons prior to
October 1, 1972 and the denominator of which shall be
the number of years (including monthly fractions of a
year) from commencement of his continuous employment
with Steinway & Sons to his normal retirement date
under the Plan.
(c) In addition to those terms defined in Article XVIII,
the following phrase, as used in this Appendix, shall have the
following meaning:
(i) Steinway & Sons Pension Trust Plan. Steinway
& Sons Pension Trust Plan shall mean the Pension Trust
Plan established by Steinway & Sons October 1, 1957,
as amended July 1, 1960 and December 2, 1964.
- 75 - <PAGE>
CBS EMPLOYEE INVESTMENT FUND
FOR ELIGIBLE EMPLOYEES OF CBS INC. AND
CERTAIN OF ITS SUBSIDIARIES
AS AMENDED AND RESTATED
(INCLUDING AMENDMENTS THROUGH JANUARY 1, 1995)
CMC-8613
<PAGE>
CBS EMPLOYEE INVESTMENT FUND
CONTENTS
ARTICLE PAGE
I. THE PURPOSE OF THE PLAN; THE TRUST . . . . . 1
A. The Investment Fund. . . . . . . . . . . 1
B. The Trust. . . . . . . . . . . . . . . . 1
C. Application. . . . . . . . . . . . . . . 1
D. Definitions
(applicable to the Plan and the Trust) . 2
II. PARTICIPATION . . . . . . . . . . . . . . . . . 2
A. Eligibility. . . . . . . . . . . . . . . 2
B. Participation. . . . . . . . . . . . . . 3
III. ACCOUNTS. . . . . . . . . . . . . . . . . . . . 3
A. Participants' A accounts . . . . . . . . 3
B. Participants' B accounts . . . . . . . . 3
C. Participants' C accounts . . . . . . . . 4
D. Employers' C accounts. . . . . . . . . . 4
E. Participants' D accounts . . . . . . . . 4
F. Participants' E accounts . . . . . . . . 4
G. Participants' numbered C and D accounts. 4
IV. EMPLOYEE CONTRIBUTIONS; CONTRIBUTION ELECTIONS;
INVESTMENT DIRECTIONS; CONVERSION DIRECTIONS . 5
Contribution Elections Generally . . . . . . 5
(i) The required basic contribution and the
voluntary supplemental contribution. . . 5
A. Nature . 5
1. Election of required basic
contribution; Modifications. . . 5
2. Election of voluntary supplemental
contribution; Modifications. . . 6
3. Suspension . . . . . . . . . 7
B. Investment Direction . . . . . . . . 7
1. Crediting units to A, B and/or E
accounts . . . . . . . . . . 7
2. Modification . . . . . . . . 7
C. Withholding by Employers and/or deferral,
and payment to Trustee . . . . . . . 8
(ii) The periodic special contribution. . . . 8
A. Nature . . . . . . . . . . . . . . . 8
1. Cash payment . . . . . . . . 8
2. Limitation of amount . . . . 9
3. Investment direction . . . . 9
(i)<PAGE>
(iii) Limitations. . . . . . . . . . . . . 10
A. Special Rules - Actual Deferral
Percentage Tests . . . . . . . . . . 10
B. General Rules. . . . . . . . . . . . 15
C. Limitation on Before-Tax Contributions 15
D. Actual Contribution Percentage Tests . 17
E. Multiple Use Test. . . . . . . . . . 21
F. Highly Compensated Eligible Employees. 21
(iv) Conversion directions. . . . . . . . 21
V. EMPLOYERS' MATCHING CONTRIBUTIONS. . . . . . 22
VI. TERMINATION OF PARTICIPATION; WITHDRAWALS;
DETERMINATION AND PAYMENT OF BENEFITS. . . . 24
A. Termination of participation . . . . . . 24
B. Withdrawals. . . . . . . . . . . . . . . 25
1. Request for withdrawal; Payment. . . 25
2. Withdrawal before five years or twice
within five-year period; Suspension of
authorization. . . . . . . . . . . . 26
3. Restrictions on withdrawals before age
59-1/2 . . . . . . . . . . . . . . . 26
C. Termination benefit. . . . . . . . . . . 29
1. Termination of employment - A, B , D,
and E units. . . . . . . . . . . . . 29
2. Termination of employment after three
years, after 65th birthday, or by reason
of death or disability - C units . . 29
3. Other termination of employment - C
units . . . . . . . . . . . . . . 29
4. Re-employment after termination. . . 30
5. Inclusion of numbered units and
accounts . . . . . . . . . . . . . 30
D. Amounts withheld or deferred in month of
termination. . . . . . . . . . . . . . . 30
E. Manner of payment; Elections . . . . . . 30
1. Distribution election. . . . . . . . 30
2. Lump sum death benefit election . . 32
3. Modification or revocation of election 32
4. Spousal consent in certain cases . . 33
F. Payment by Trustee . . . . . . . . . . . 33
1. Distribution election - lump sum
payment. . . . . . . . . . . . . . . 33
(a) Cash . . . . . . . . . . . . . . 33
(b) CBS Stock. . . . . . . . . . . . 34
2. Distribution election - installment
payment. . . . . . . . . . . . . . . 35
(a) Cash . . . . . . . . . . . . . . 35
(b) CBS Stock. . . . . . . . . . . . 37
3. Withholding. . . . . . . . . . . . . 38
(ii)<PAGE>
4. Commencement of payment. . . . . . . 38
5. Minimum Required Distributions . . . 38
6. Inclusion of numbered units and
accounts . . . . . . . . . . . . . 39
7. Unclaimed benefit payment. . . . . . 39
8. Incapacitated recipients . . . . . . 39
G. Loans to Participants. . . . . . . . . . 39
1. Governing rules. . . . . . . . . . . 39
2. Collateral . . . . . . . . . . . . . 40
3. Deduction of loan proceeds . . . . . 41
4. Interest rate(s) . . . . . . . . . . 41
5. Repayment. . . . . . . . . . . . . . 41
6. Default; Collection of unpaid amount . 42
7. Loan requests. . . . . . . . . . . . 42
8. Reinvestment of repayments . . . . . 43
9. Qualified domestic relations order(s). 43
10. Payment to beneficiaries/alternate
payees . . . . . . . . . . . . . . . 43
H. Direct Rollover Distributions. . . . . . 43
VII. THE COMMITTEE . . . . . . . . . . . . . . . . . 45
A. Appointment and removal; Investment
managers . . . . . . . . . . . . . . . . 45
B. Additional members; Successors . . . . . 45
C. Majority decision. . . . . . . . . . . . 45
D. Powers and duties of additional and
successor members. . . . . . . . . . . . 46
E. Absence of requirement for security. . . 46
VIII. ADMINISTRATION. . . . . . . . . . . . . . . . . 46
A. Committee as "administrator" . . . . . . 46
B. Retention of auditors, accountants, legal
counsel. . . . . . . . . . . . . . . . . 46
C. Allocation and delegation of authority . 47
D. Compensation . . . . . . . . . . . . . . 47
E. Communications, forms. . . . . . . . . . 47
F. Determinations; Discretion, non-
discrimination . . . . . . . . . . . . . 48
G. Determinations, binding. . . . . . . . . 48
H. Claims; Procedure on denial of claims. . 48
I. Relations with Trustee . . . . . . . . . 49
J. Fiduciary duties . . . . . . . . . . . . 49
K. Non-assignability of benefits. . . . . . 50
L. Pass-through rights as to CBS Stock. . . 51
1. Voting . . . . . . . . . . . . . . . 51
2. Tender or exchange offers. . . . . . 51
IX. DEFINITIONS. . . . . . . . . . . . . . . . . 52
A. Definitions (in alphabetical order). . . 52
(iii)<PAGE>
B. Construction . . . . . . . . . . . . . . 65
X. ADOPTION BY SUBSIDIARIES . . . . . . . . 66
A. Adoption - CBS consent . . . . . . . . . 66
B. Party to Trust Agreement . . . . . . . . 66
XI. AMENDMENT; TERMINATION . . . . . . . . . . . 66
A. Amendment by CBS . . . . . . . . . . . . 66
B. Termination - effect on accounts . . . . 67
C. Merger, consolidation, transfer. . . . . 68
1. CBS News Special Projects Inc. . . . 68
2. CBS News Special Projects Inc. . . . 69
3. Transfer of assets and liabilities
accrued under another plan . . . . . 69
D. Return of matching Employer contributions. 69
XII. LIMITATIONS. . . . . . . . . . . . . . . . . 69
A. Maximum annual addition. . . . . . . . . 69
B. "Annual addition". . . . . . . . . . . . 70
C. Participation in another defined contribution
plan or in more than one defined benefit
plan maintained by Employer; "Employer". 71
D. Participation in Investment Fund and CBS
Pension Plan or other applicable defined
benefit plan . . . . . . . . . . . . . . 71
E. Definitions. . . . . . . . . . . . . . . 71
1. Defined benefit plan fraction. . . . 71
2. Defined contribution plan fraction . 72
F. Non-applicability. . . . . . . . . . . . 72
G. Reduction of contributions in event of
exceeding limitation on annual additions
or limitation applicable to combination
of plans . . . . . . . . . . . . . . . . 72
H. Reduction/freezing of benefits under
defined benefit plan prior to making
adjustments. . . . . . . . . . . . . . . 73
I. Treatment of excess arising from errors. 73
XIII. INTERPRETATION; CONSTRUCTION . . . . . . . . 74
XIV. TOP-HEAVY PLAN . . . . . . . . . . . . . . . 74
A. Effective date if Investment Fund determined
to be a top-heavy plan . . . . . . . . . 74
B. Determination of a top-heavy plan. . . . 74
C. Definitions. . . . . . . . . . . . . . . 75
D. Requirements if Investment Fund determined
to be a top-heavy plan . . . . . . . . . 78
(iv)<PAGE>
XV. MIDWEST COMMUNICATIONS, INC. TRANSACTION . . 79
A. Transfer of Accounts from Midwest
Communications, Inc. Retirement Savings
Plan to Investment Fund. . . . . . . . . 79
1. Eligibility of Midwest's non-union
employees to participate in Investment
Fund; Transfer; "Transferred
Amount(s)" 79
2. Eligibility of Midwest's union employees
to participate in Investment Fund;
Transfer; "Transferred Amount(s)". . 79
3. Procedures for Transferred Amounts . 79
B. Merger of WCCO Television, Inc. AFTRA
401(k) Plan into Investment Fund . . . . 81
1. Eligibility of WCCO Television, Inc.
employees to participate in Investment
Fund; Transfer; "Transferred Amount(s)" 81
2. Procedures for Transferred Amounts . 81
XVI. MERGER OF RADFORD STUDIO CENTER INC. 401(k)
TAX SHELTERED SAVINGS PLAN AND TRUST . . 82
1. Eligibility of Radford Studio Center
Inc. employees to participate in
Investment Fund; Transfer; "Transferred
Amount(s)" . . . . . . . . . . . . . 82
2. Procedures for Transferred Amounts . 83
XVII. SIGNATURE. . . . . . . . . . . . . . . . . . 84
(v)<PAGE>
CBS EMPLOYEE INVESTMENT FUND
I. THE PURPOSE OF THE PLAN; THE TRUST.
A. The purpose of the Investment Fund, the plan embodied
herein, is to provide Employees of CBS and certain of its
subsidiaries who are eligible to participate therein a convenient
way both to save for their retirement and to become shareholders
of CBS. It is intended that at all times the Investment Fund and
the related Trust will constitute a plan qualified under
Section 401(a) and exempt under Section 501(a) of the Internal
Revenue Code, as amended ("the Code"), and will comply with the
requirements of Section 401(k) of the Code and of the Employee
Retirement Income Security Act of 1974 ("ERISA"). The Investment
Fund embodied herein constitutes an amendment to and restatement
of the Investment Fund in effect on July 31, 1993. Nothing in
this amendment and restatement shall have the effect of reducing
any participant's rights to accrued benefits (including optional
forms of benefit) under the terms of the Investment Fund in
effect on July 31, 1993. With respect to periods prior to
August 1, 1993, certain provisions of the Investment Fund applied
solely to individuals who participated in the CBS Stock Purchase
Plan prior to its termination and to former participants who were
CRG employees affected by the sale of CBS Records Inc. to Sony
Corporation. Such participants' or former participants' rights
with respect to these provisions shall be governed by the terms
of the Investment Fund in effect on July 31, 1993.
B. As a part of the Investment Fund, and solely to aid in
the proper execution thereof, CBS and the other Employers have
entered into the Trust Agreement. The Trust has been created
solely to aid in the proper execution of the Investment Fund and
shall be availed of solely for such purpose. Each provision of
the Trust Agreement shall be deemed to be a provision hereof as
fully as if it were set forth herein.
C. The Investment Fund, as amended to July 31, 1993, shall
continue to be applicable to all former Employees whose
employment (and participation) terminated prior to August 1,
1993, except as otherwise provided herein. The Investment Fund,
as amended as of August 1, 1993 and as may be amended thereafter,
shall be applicable to all Employees who are or become eligible
to participate therein on or after such date. Nothing contained
in the Investment Fund shall be deemed to increase the number or
value of the C units credited as of July 31, 1993 to the account
of any participant or any former participant whose participation
terminated prior to August 1, 1993.
- 1 -<PAGE>
D. Certain terms used herein and in the Trust Agreement
are defined and set forth in alphabetical order in Paragraph A of
Article IX hereof.
II. PARTICIPATION.
A. Each person who, on August 1, 1993 or on the first day
of any monthly accounting period commencing subsequent to such
date,
(1) is an Employee of one or more of the Employers and
either (a) during the 12-month period preceding such date or,
in the case of an Employee employed on other than a full-time
basis, during any 12-month period subsequent to December 31,
1975 preceding such date has been such an Employee, or (b) is
included in a group determined by the Board to be eligible to
participate in the Investment Fund after employment by one or
more of the Employers during such period of less than one year
as the Board has determined, and during such period has
continuously been such an Employee, and
(2) has completed a year of service
shall become eligible to participate in the Investment Fund on
the first day of his earliest payroll period commencing with
or within such monthly accounting period. Any participant and
any Employee eligible to participate in the Investment Fund
whose employment terminated or who incurs a break in service
and who shall again become an Employee shall be eligible to
participate in the Investment Fund on the date he is
reemployed or returns from a break in service, as the case may
be. Any person eligible to participate in the CBS News
Special Projects Inc. Employee Investment Fund shall be
excluded from participation in this Investment Fund as of the
date such person becomes eligible to participate in the CBS
News Special Projects Inc. Employee Investment Fund. Any
person who was eligible to participate in the CBS News Special
Projects Inc. Employee Investment Fund and is subsequently
employed or reemployed by CBS shall be immediately eligible to
participate in this Investment Fund upon such date of
employment or reemployment.
B. Each new Employee who shall become eligible to participate
in the Investment Fund and who shall file with CBS his election
to do so shall become a participant therein. A participant may
be such by reason of his concurrent employment by two or more
Employers. Any such participant shall be entitled to participate
in the Investment Fund as an Employee of each such Employer. In
- 2 -<PAGE>
no event, however, shall a "leased employee," as defined in
Section 414(n) of the Internal Revenue Code, be entitled to
participate in the Investment Fund.
III. ACCOUNTS.
A. CBS shall cause to be established a separate A account for
each participant, and within such account a separate after-tax
subaccount and a separate before-tax subaccount to account
respectively for contributions to the account made on an
after-tax and made on a before-tax basis, which shall be used in
connection with the investment by the Trustee of specified
portions (if any) of such participant's contributions in
securities and other properties of every nature other than
securities issued by CBS or any of its subsidiaries.
B. CBS shall cause to be established a separate B account for
each participant, and within such account a separate after-tax
subaccount and a separate before-tax subaccount to account
respectively for contributions to the account made on an
after-tax and made on a before-tax basis, which shall be used in
connection with the investment by the Trustee of specified
portions (if any) of such participant's contributions in
securities and other properties of every nature other than common
stocks and other than securities issued by CBS or any of its
subsidiaries.
C. CBS shall cause to be established a separate C account for
each participant which shall be used in connection with the
investment by the Trustee of Employers' matching contributions
allocated to such participant in CBS Stock.
D. CBS shall cause to be established a separate C account for
each Employer which shall be used with respect to such Employer's
matching contributions and the allocation thereof to the
participants who shall be Employees of such Employer.
E. CBS shall cause to be established a separate D account for
each participant, and within such account a separate after-tax
subaccount and a separate before-tax subaccount to account
respectively for contributions to the account made on an
after-tax and made on a before-tax basis, which shall be used in
connection with the investment in CBS Stock by the Trustee of
specified portions (if any) of such participant's contributions.
F. CBS shall cause to be established a separate E account for
each participant, and within such account a separate after-tax
subaccount and a separate before-tax subaccount to account
- 3 -<PAGE>
respectively for contributions to the account made on an
after-tax and made on a before-tax basis, which shall be used in
connection with the investment by the Trustee of specified
portions (if any) of such participant's contributions in
securities and other properties of every nature other than
securities issued by CBS or any of its subsidiaries.
G. When a tender or exchange offer or other offer to purchase
CBS Stock (other than on an all-cash basis) is made, CBS shall
cause to be established a separate, numerically designated C
account and D account (hereinafter described as a C-# and D-#
account, respectively) for each participant who shall have
instructed the Trustee, pursuant to subparagraph 2 of Paragraph L
of Article VIII, to tender or sell shares of CBS Stock
representing C units credited to such participant's C account and
D units credited to such participant's D account. Such newly
established, numerically designated C and D accounts shall be
used only in connection with the investment by the Trustee of the
securities or other property received by the Trustee with respect
to such participant's C and D units, and held by the Trustee in
separate, numerically designated C and D Funds (hereafter
respectively described as a C-# and D-# Fund), as a consequence
of the closing of such a transaction. The C-# and the D-#
account of a participant shall be respectively credited with
numerically designated C and D units (hereinafter described as
C-# and D-# units) representing such participant's proportional
share of the C-# and D-# Funds, as initially valued and as
periodically thereafter valued on a valuation date.
IV. EMPLOYEE CONTRIBUTIONS; CONTRIBUTION ELECTIONS;
INVESTMENT DIRECTIONS; CONVERSION DIRECTIONS.
Three methods of making contributions to the Investment Fund
are provided: the required basic contribution and the voluntary
supplemental contribution (both pursuant to contribution
elections) and the periodic special contribution.
Each contribution election of a participant with respect to
the required basic contribution and the voluntary supplemental
contribution shall be made on such form as CBS may from time to
time prescribe and shall specify the participant's:
(i) designation of the percent of his salary to constitute the
contribution amount; (ii) investment direction as to the mode of
investment of such contribution and (iii) election (a) to have
such contribution amount (or, with respect to the voluntary
supplemental contribution, a portion thereof) treated as an
"after-tax" contribution and his authorization to his Employer to
withhold from his salary and pay to the Trustee the contribution
- 4 -<PAGE>
amount for conversion to unit credits in his after-tax
subaccount(s) and/or (b) to have such contribution amount (or,
with respect to the voluntary supplemental contribution, a
portion thereof) treated as a "before-tax" contribution and his
salary deferral agreement with his Employer to defer payment to
him of, and to pay to the Trustee, the contribution amount for
conversion to unit credits in his before-tax subaccount(s). For
purposes of Section 401(k) of the Code only, all amounts
designated by a participant as before-tax contributions and
credited to his before-tax subaccounts shall be considered
Employer contributions made pursuant to a participant's election.
(i) The required basic contribution and the voluntary
supplemental contribution:
A. 1. As a part of, or concurrently with, his participation
election, each Employee shall file with CBS a contribution
election, with respect to such Employee's required basic
contribution for and during those of such Employee's payroll
periods for which such contribution election shall be in effect,
which shall designate either 1, 1-1/2, 2, 2-1/2, or, if
applicable, 3 or 4 percent of such Employee's salary from his
Employer during such periods as such contribution and which shall
include an election to have all of such contribution amount
treated either as an after-tax or as a before-tax contribution.
At any time after filing a contribution election with respect to
a required basic contribution, except as otherwise provided in
Paragraph A of Article VI hereof or subparagraph 2 of Paragraph B
of said Article VI, a participant may file a modification thereof
either to designate a different permitted percent of his salary
as his required basic contribution, or to change his election as
to the after-tax or before-tax treatment of such contribution
amount, or both.
2. At the time of his participation election, or at any
time thereafter (except during any period when a suspension of
his contribution election for his required basic contribution is
in effect), a participant whose required basic contribution is
the maximum basic contribution may also file with CBS a
contribution election providing for his Employer to pay to the
Trustee as such Employee's voluntary supplemental contribution to
the Investment Fund the percentage therein specified, which may
be any whole or half number from one-half to ten, of such
Employee's salary from such Employer for those of such Employee's
payroll periods for which contribution elections for his required
basic contribution and for a voluntary supplemental contribution
shall be in effect. Notwithstanding the foregoing, in no event
shall the participant's voluntary supplemental contributions when
- 5 -<PAGE>
added to the participant's required basic contributions exceed
12-1/2 percent of the Employee's salary. Any participant who has
filed a contribution election for a voluntary supplemental
contribution may at any time thereafter file with CBS a
modification of such contribution election for his voluntary
supplemental contribution as then in effect which shall provide
that his Employer shall pay to the Trustee as such participant's
voluntary supplemental contribution to the Investment Fund a
specified percentage of such participant's salary from such
Employer different from the percentage provided in such
participant's voluntary supplemental contribution contribution
election as then in effect. The percentage specified in such a
modification shall be any whole or half number from zero to ten.
A participant, in filing a contribution election (or modification
thereof) with respect to his voluntary supplemental contribution,
shall designate which portion (which may be all, or none, or any
percentage thereof divisible by five) of the amount of his salary
so designated shall be treated as an after-tax contribution and
which portion treated as a before-tax contribution, the total of
such portions not to exceed 100 percent of the voluntary
supplemental contribution amount.
3. Any participant may also at any time file with CBS a
suspension of such participant's contribution election for his
required basic contribution as then in effect which shall provide
that his Employer shall not pay to the Trustee as such
participant's required basic contribution to the Investment Fund
any portion of such participant's salary from such Employer.
Such a suspension of a participant's contribution election for
his required basic contribution shall automatically cause a
suspension of his contribution election, if any, then in effect
for a voluntary supplemental contribution. Except as otherwise
provided in Paragraph A of Article VI hereof or subparagraph 2 of
Paragraph B of said Article VI, any such participant may at any
time file a new contribution election with CBS.
B. 1. As a part of every contribution election each Employee
shall also file with CBS such Employee's direction with respect
to the portion of such Employee's required basic contribution
(and voluntary supplemental contribution, if any) for each of his
payroll periods for which such investment direction shall be in
effect which is to be (a) converted to A units and credited to
such Employee's A account, (b) converted to B units and credited
to such Employee's B account, (c) converted to D units and
credited to such Employee's D account and (d) converted to E
units and credited to such Employee's E account. Up to 100
percent of the total of an Employee's required basic contribution
and, if any, voluntary supplemental contribution may be directed
- 6 -<PAGE>
to be converted to A units, B units, D units or E units. All
conversions under the Investment Fund shall be effected in
accordance with the provisions of subparagraph 5 of Paragraph B
of Article IX hereof.
2. Subject to such conditions as CBS shall prescribe on a
uniform basis, any participant may from time to time file with
CBS a modification of such participant's investment direction as
made in connection with a contribution election or elections then
in effect. Such modification shall become effective on the next
date (of which there shall be not fewer than two in any calendar
year) which CBS shall specify for the effective date of such
modifications.
C. Each Employer shall withhold and/or defer from the payment
of the salary of each participant for each payroll period with
respect to which there shall be a contribution election or
elections of such participant in effect the percentage of the
salary of such participant specified in such election or
elections and, as of and as promptly as shall be practicable
after the valuation date which shall be nearest to the last day
of the monthly accounting period in which such payroll period
shall end, (1) such Employer shall pay to the Trustee the
aggregate amount of such Employer's said withholdings and/or
deferrals for the payroll periods ending in such monthly
accounting period, and (2) CBS or its designee shall convert the
amounts so paid to it into A units, B units, D units and E units,
credit such units to the A accounts, B accounts, D accounts and E
accounts of the respective participants whose contributions are
so paid to it and credit such amounts to the A Fund, the B Fund,
the D Fund and the E Fund, all in conformity with the respective
investment directions of such participants for such payroll
periods. Such credits as result from contributions elected to be
made on an after-tax basis shall be credited to the after-tax
subaccounts of the A, B, D and E accounts of the respective
participants, and such credits as result from contributions
elected to be made on a before-tax basis shall be credited to the
before-tax subaccounts of the A, B, D and E accounts of the
respective participants.
(ii) the periodic special contribution:
A. 1. At such intervals and subject to such conditions as
CBS shall prescribe on a uniform basis, each participant who at
that time has in effect a contribution election for a required
basic contribution shall be provided the opportunity to make a
periodic special contribution, on an after-tax basis, by a cash
payment to the Investment Fund.
- 7 -<PAGE>
2. The amount of any periodic special contribution of a
participant may be in such amount as such participant shall elect
but not in excess of:
(a) 140 percent of the total of all his actual
contributions, if any, made by him to the Investment Fund
through payroll authorizations at any time from the date
he first became a participant in the Investment Fund to
June 30, 1977 (which amount shall be described as a
participant's "past frozen credit"), plus
(b) the difference, if any, between (i) the total of
(y) the aggregate amount he could have contributed to the
Investment Fund as required basic contributions and
voluntary supplemental contributions subsequent to
June 30, 1977 if at all times subsequent to that date he
had had in effect payroll authorizations (throughout the
period ended December 31, 1983) and contribution elections
(throughout the period commencing January 1, 1984) for the
required basic contribution and the voluntary supplemental
contribution for the maximum percentage of base salary
permitted plus (z) the withdrawals made by him subsequent
to June 30, 1977, and (ii) the total of all his actual
contributions made as required basic contributions,
voluntary supplemental contributions and periodic special
contributions to the Investment Fund subsequent to
June 30, 1977.
3. At the time of making a periodic special contribution,
a participant shall also file with CBS an investment direction
with respect to the portion, if any, of such contribution which
is to be converted to A units and credited to such participant's
after-tax subaccount of his A account and with respect to the
portion, if any, of such contribution which is to be converted to
B units and credited to such participant's after-tax subaccount
of his B account and with respect to the portion, if any, of such
contribution which is to be converted to D units and credited to
such participant's after-tax subaccount of his D account and with
respect to the portion, if any, of such contribution which is to
be converted to E units and credited to such participant's
after-tax subaccount of his E account. Such proportion, if any,
elected in such an investment direction shall be a percentage of
100 percent which is a whole number divisible by five.
(iii) limitations:
A. Notwithstanding anything contained in the foregoing
provisions of this Article IV, the following rules and
- 8 -<PAGE>
limitations shall apply to a participant's before-tax basic
required contributions and, if applicable, before-tax voluntary
supplemental contributions. If the Committee shall at any time
determine that the spread between the then-current percentage of
salary being contributed to the Investment Fund by means of
before-tax contributions for (i) "highly compensated eligible
Employees" and (ii) the remaining eligible Employees, is such
that before-tax contributions under the Investment Fund would
fail to satisfy either of the "actual deferral percentage tests"
for the current plan year (assuming such percentages had been and
would continue in constant effect for the entire plan year), the
Committee, in its sole discretion, may unilaterally reduce, on a
prospective basis, the maximum percentage of salary with respect
to which such "highly compensated eligible Employees" elected to
defer as before-tax contributions under the Investment Fund. The
participant's salary deferral agreement incorporated in his
contribution election shall be automatically adjusted, without
any further action on the part of such participant or his
Employer, to conform to the new limitation imposed by the
Committee and unless such participant otherwise instructs the
Committee in a written notice, his after-tax contribution
agreement incorporated in his contribution election (if one is
then in effect) also shall be automatically adjusted so as to
increase the percentage of his salary which shall be contributed
pursuant thereto by the amount of such automatic adjustment. The
Committee, in its sole discretion, may at any time remove any
limitation imposed by it under this provision and any
modifications to the participant's contribution election
resulting from such limitation shall automatically cease to be
effective and such contribution election shall continue in effect
under the terms that existed immediately prior to such
modifications.
For purposes of this Paragraph A, the following terms shall
have the following meanings:
"actual deferral percentage tests" shall mean either of the
following:
1. the "actual deferral percentage" for the group of "highly
compensated eligible Employees" is not more than the
"actual deferral percentage" for all other eligible
Employees multiplied by 1.25; or
2. the excess of the "actual deferral percentage" for the
group of "highly compensated eligible Employees" over that
of all other eligible Employees is not more than two
percentage points, and the "actual deferral percentage"
- 9 -<PAGE>
for the group of "highly compensated eligible Employees"
is not more than the "actual deferral percentage" of all
other eligible Employees multiplied by 2.0.
"Actual deferral percentage" with respect to any group of
active eligible Employees for a plan year shall mean the
average of the ratios (calculated separately for each eligible
Employee in the group) of
1. the amount of before-tax contributions authorized by the
eligible Employee to be paid to the Investment Fund for
such plan year, to
2. the eligible Employee's salary for such plan year.
For purposes of determining "actual deferral percentages",
any eligible Employee who is suspended from participation
shall be treated as an eligible Employee.
In the case of a "highly compensated eligible Employee"
who is subject to the family aggregation requirements of
Section 414(q)(6) of the Code, the combined "actual deferral
percentage" for the family group (which is treated as one
"highly compensated eligible Employee") is determined by
combining the before-tax contributions that are paid to the
Investment Fund on behalf of all eligible family members for
such plan year. In all events, "actual deferral percentages"
will be determined in accordance with all of the applicable
requirements (including to the extent applicable, the plan
aggregation requirements) of Section 401(k) of the Code, and
the regulations issued thereunder.
The term "highly compensated eligible Employees" include
those participants who meet the definition of "highly
compensated Employee" as determined under Section 414(q) of
the Code and the regulations issued thereunder. The term
"highly compensated Employee" includes highly compensated
active Employees and highly compensated former Employees. A
highly compensated active Employee means an Employee of the
Employer or an affiliated company who performs services for
the Employer or an affiliated company during the current plan
year (the "determination year") and who, during the preceding
plan year (the "look-back year"), was an Employee who (i)
received compensation in excess of $75,000 (adjusted at the
same time and in the same manner as under Section 415(d) of
the Code), (ii) received compensation in excess of $50,000
(adjusted at the same time and in the same manner as under
Section 415(d) of the Code) and was a member of the "top-paid
- 10 -<PAGE>
group," or (iii) was an officer earning more than 50 percent
of the dollar limitation under Section 415(b)(1)(A) of the
Code. A "highly compensated active Employee" also includes an
Employee described in the preceding sentence if (i) the term
"determination year" is substituted for the term "look-back
year" and the Employee was one of the 100 Employees who earned
the most compensation during the determination year, or (ii)
the Employee was at any time during the determination year or
the look-back year a five-percent owner of the Employer as
defined in Section 416(i)(1) of the Code.
The "top-paid group" shall include all Employees who are
in the top 20 percent of all Employees on the basis of
compensation. For purposes of determining the number of
Employees in the "top-paid group," the following Employees
shall be excluded: (i) Employees who have not completed six
months of service; (ii) Employees who normally work less than
17-1/2 hours per week; (iii) Employees who normally work
during not more than six months during any calendar year; (iv)
Employees who have not attained age 21; and (v) Employees who
are nonresident aliens receiving no United States source
income within the meaning of Section 861(a)(3) and Section
911(d)(2) of the Code.
For purposes of determining the number of Employees who
will be considered "officers," no more than 50 Employees (or
if less, the greater of three Employees or 10 percent of the
Employees), excluding those Employees who are excluded for
purposes of determining the "top-paid group" under the
preceding paragraph, shall be treated as officers. If, for
any year, no officer has earned more than 50 percent of the
dollar limitation under Section 415(b)(1)(A) of the Code, the
highest paid officer of the Employer or an affiliated company
shall be treated as having earned such amount.
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. An Employee who separated from service before
January 1, 1987 will be a highly compensated former Employee
only if the Employee was a five-percent owner or received
compensation in excess of $50,000 during the Employee's
separation year (or the year preceding such separation year)
or any year ending on or after such Employee's 55th birthday
- 11 -<PAGE>
(or the last year ending before such Employee's 55th
birthday).
If during the determination year, a highly compensated
Employee is a five-percent owner or one of the 10 most highly
compensated Employees on the basis of compensation paid during
such determination year, then such Employee shall be subject
to the family aggregation requirements of Section 414(q)(6) of
the Code, and the compensation and contributions paid to or on
behalf of all family members who are Employees shall be
aggregated with and attributable to the highly compensated
Employee. Except as otherwise provided in the Plan, family
members shall include the highly compensated Employee's spouse
and lineal ascendants or descendants and the spouse of such
lineal ascendants or descendants.
For purposes of determining highly compensated Employees,
"compensation" shall be determined in the same manner as
"annual compensation" in Article XII of the Plan, increased by
before-tax contributions under a cafeteria plan (as defined in
Section 125 of the Code) maintained by the Employer or an
affiliated company.
The determination of highly compensated eligible Employees
may be made by the Committee on the basis of the calendar year
election or the substantiation guidelines in accordance with
such regulations, notices or other guidance issued under
Section 414(q) of the Code.
If after the close of any plan year the Committee shall
determine that the Investment Fund failed to satisfy either of
the "actual deferral percentage tests", the Committee may
utilize any combination of the following methods to assure
that the Investment Fund complies with one or both of the
"actual deferral percentage tests":
1. The "excess deferrals" and the income allocable thereto
shall be distributed to the applicable "highly compensated
eligible Employees" as soon as practicable after the end
of such plan year, but no later than 12 months after the
close of such plan year; the amount of income allocable to
each affected highly compensated eligible Employee's
excess deferrals shall be determined by multiplying the
income for the plan year allocable to the eligible
Employee's before-tax contributions (defined below) by a
fraction, the numerator of which is the highly compensated
eligible Employee's excess deferrals for the plan year and
the denominator of which is the sum of: (A) the eligible
- 12 -<PAGE>
Employee's account balance attributable to before-tax
contributions as of the first day of the plan year, plus
(B) the eligible Employee's before-tax contributions for
the plan year. The income for the plan year allocable to
each affected highly compensated eligible Employee's
before-tax contributions shall be determined by
subtracting the amount in the denominator of the
above-described fraction from the account balance
attributable to before-tax contributions determined as of
the last day of the plan year. The amount of excess
deferrals that may be distributed under this Paragraph A
with respect to any participant for any plan year shall be
reduced by the amount of any excess before-tax
contributions previously distributed pursuant to Paragraph
C, if any, for such plan year; or
2. The "excess deferrals" shall be recharacterized as
after-tax contributions in accordance with regulations
issued under Section 401(k)(3) of the Code to the extent
required to comply with either of the "actual deferral
percentage tests".
"Excess deferrals" shall mean, with respect to each
"highly compensated eligible Employee", the amount equal to
total before-tax contributions made on behalf of the eligible
Employee (determined prior to the application of the leveling
procedure described below) minus the product of the eligible
Employee's "actual deferral percentage" (determined after
application of the leveling procedure described below)
multiplied by the eligible Employee's salary. In accordance
with the regulations issued under Section 401(k) of the Code,
"excess deferrals" shall be determined by a leveling procedure
under which the "actual deferral percentage" of the "highly
compensated eligible Employee" with the highest such
percentage shall be reduced to the extent required to satisfy
either of the "actual deferral percentage tests" or, if it
results in a lower reduction, to the extent required to cause
such "highly compensated eligible Employee's" "actual deferral
percentage" to equal the "actual deferral percentage" of the
"highly compensated eligible Employee" with the next highest
"actual deferral percentage". This leveling procedure shall
be repeated until the requirements of either of the "actual
deferral percentage tests" are first satisfied. The
determination and correction of excess deferrals of a highly
compensated eligible Employee whose actual deferral percentage
is determined under the family aggregation requirements of
Section 401(k) and Section 414(q)(6) of the Code is
accomplished by reducing the family unit's actual deferral
- 13 -<PAGE>
percentage under the leveling procedure described in this
paragraph and allocating the excess deferrals among the family
group in proportion to the before-tax contributions made on
behalf of each family member that are combined to determine
the family unit's actual deferral percentage.
B. Notwithstanding anything contained in the foregoing
provisions of this Article IV or in the provisions of Article V,
the provisions on limitations set forth in Article XII shall
apply to limit Employee and Employer matching contributions in
any calendar year which exceed those specified in Article XII.
C. Notwithstanding anything contained in the foregoing
provisions of this Article IV or in the provisions of Article V,
in no event may the amount of an eligible Employee's before-tax
contributions to the Plan, in addition to all such before-tax
contributions under all other cash or deferred arrangements (as
defined in Section 401(k) of the Code) in which an eligible
Employee participates, exceed $7,000 (adjusted for increases in
the cost-of-living under Section 402(g) of the Code) in any
calendar year. If in any calendar year an eligible Employee's
total before-tax contributions under the Investment Fund, in
addition to all such salary reduction contributions under all
other qualified cash or deferred arrangements (as defined in
Section 401(k) of the Code) maintained by the Employer or an
affiliated company in which the eligible Employee participates,
exceed $7,000 (as adjusted), the excess before-tax contributions
(before-tax contributions in excess of $7,000 (as adjusted))
together with earnings thereon shall be distributed to the
eligible Employee as soon as practicable after the Committee
determines that the excess before-tax contribution was made, but
no later than April 15 of the calendar year following the
calendar year in which the excess before-tax contribution was
made. If an eligible Employee participates in another cash or
deferred arrangement which is not maintained by an Employer or an
affiliated company in any calendar year and his total before-tax
contributions under the Investment Fund and such other plan
exceed $7,000 (as adjusted) in a calendar year, he may request to
receive a distribution of the amount of the excess before-tax
contributions (a deferral in excess of $7,000 (as adjusted)) that
is attributable to before-tax contributions in the Investment
Fund together with earnings thereon, notwithstanding any
limitations on distributions contained in the Investment Fund.
Such distribution shall be made by the April 15 following the
plan year of the excess before-tax contributions provided that
the eligible Employee notifies the Committee of the amount of the
excess before-tax contributions that is attributable to
before-tax contributions to the Investment Fund and requests such
- 14 -<PAGE>
a distribution. The eligible Employee's notice must be received
by the Committee no later than the March 1 following the plan
year of the excess before-tax contributions. In the absence of
such notice, the amount of such excess before-tax contributions
attributable to before-tax contributions to the Investment Fund
shall be subject to all requirements on withdrawals and
distributions in the Investment Fund. The amount of excess
before-tax contributions that may be distributed under this
Paragraph C with respect to any eligible Employee for any
calendar year shall be reduced by the amount of any excess
deferrals previously distributed pursuant to Paragraph A of this
Article IV, if any, for such year. The amount of earnings
allocable to each affected Employee's excess before-tax
contributions shall be determined by multiplying the income for
the plan year allocable to the Employee's before-tax
contributions by a fraction, the numerator of which is the
Employee's excess before-tax contributions for the calendar year,
and the denominator of which is the sum of: (A) the Employee's
account balance attributable to before-tax contributions as of
the first day of the calendar year, plus (B) the Employee's
before-tax contributions for the calendar year. The earnings for
the calendar year allocable to each affected Employee's
before-tax contributions shall be determined by subtracting the
amount in the denominator of the above-described fraction from
the account balance attributable to before-tax contributions
determined as of the last day of the calendar year.
D. Notwithstanding anything contained in the foregoing
provisions of this Article IV or in the provisions of Article V,
the following rules and limitations shall apply to a
participant's after-tax basic required contributions, after-tax
voluntary supplemental contributions, Employers' matching
contributions, and, if applicable, after-tax periodic special
contributions. If the Committee shall at any time determine that
the spread between the Employers' matching contributions and the
then current percentage of salary being contributed to the
Investment Fund by means of after-tax contributions for (1)
"highly compensated eligible Employees" of the Employers, and (2)
the remaining eligible Employees is such that Employers' matching
contributions and after-tax contributions under the Investment
Fund would fail to satisfy either of the "actual contribution
percentage tests" or the "multiple use test" for the current plan
year (assuming such percentages had been and would continue in
constant effect for the plan year), the Committee, in its sole
discretion, may unilaterally reduce, on a prospective basis, the
maximum percentage of salary with respect to which "highly
compensated eligible Employees" elected to contribute as
after-tax contributions under the Investment Fund. The
- 15 -<PAGE>
participant's after-tax contribution agreement incorporated in
his contribution election shall be automatically adjusted,
without any further action on the part of such participant or his
Employer, to conform to the new limitation imposed by the
Committee. The Committee, in its sole discretion, may at any
time remove any limitation imposed by it under this provision and
any modifications to the participant's contribution election
resulting from such limitation shall automatically cease to be
effective and such contribution election shall continue in effect
under the terms that existed immediately prior to such
modifications.
For purposes of this Paragraph D, the following terms shall
have the following meanings:
"Actual contribution percentage test" shall mean either of the
following:
1. The "actual contribution percentage" for the group of
"highly compensated eligible Employees" is not more than
the "actual contribution percentage" for all other
eligible Employees multiplied by 1.25; or
2. The excess of the "actual contribution percentage" for the
group of "highly compensated eligible Employees" over that
of all other eligible Employees is not more than two
percentage points, and the "actual contribution
percentage" for the group of "highly compensated eligible
Employees" is not more than the "actual contribution
percentage" of all other eligible Employees multiplied by
2.0.
"Actual contribution percentage" with respect to any specified
group of active eligible Employees for a plan year shall mean
the average of the ratios (calculated separately for each
eligible Employee in the group) of:
1. the amount of Employers' matching contributions and
after-tax contributions, plus the amount of any before-tax
contributions recharacterized pursuant to Article IV, the
amount of any before-tax contributions treated as
Employers' matching contributions for purposes of the
"actual contribution percentage test", contributed to the
Investment Fund on behalf of each such eligible Employee
for such plan year, to
2. the eligible Employee's salary for such plan year.
- 16 -<PAGE>
For purposes of determining "actual contribution
percentages", any eligible Employee who is suspended from
participation shall be treated as an eligible Employee. In
the case of a "highly compensated eligible Employee" who is
subject to the family aggregation requirements of Section
414(q)(6) of the Code, the combined "actual contribution
percentage" for the family group (which is treated as one
"highly compensated eligible Employee") is determined by
combining the matching contributions, after-tax contributions,
recharacterized before-tax contributions, and before-tax
contributions used as Employers' matching contributions for
purposes of the "actual contribution percentage test" that are
paid to the Investment Fund on behalf of all eligible family
members for such plan year. In all events, "actual
contribution percentages" will be determined in accordance
with all of the applicable requirements (including to the
extent applicable, the plan aggregation requirements) of
Section 401(m) of the Code and the regulations issued
thereunder.
The term "highly compensated eligible Employee" shall have
the same meaning as in Article IV, Paragraph A.
The term "multiple use test" shall mean the rules
prohibiting the multiple use of the alternative limitation
described in Section 401(k)(3)(A)(ii)(II) and Section
401(m)(2)(A)(ii) of the Code, and the provisions of Treas.
Reg. Section 1.401(m)-2(b) and any further guidance issued
thereunder.
If after the close of any plan year the Committee shall
determine that the Investment Fund failed to satisfy either of
the "actual contribution percentage tests", the Committee may
utilize any combination of the following methods to assure
that the Investment Fund complies with one or more of the
"actual contribution percentage tests":
1. The "excess aggregate contributions" made with respect to
"highly compensated eligible Employees" with respect to
such plan year, and any income allocable thereto,
determined in accordance with regulations issued under
Section 401(m) of the Code, shall be distributed to the
applicable "highly compensated eligible Employees" in an
amount equal to each such Employee's after-tax
contributions (including recharacterized before-tax
contribution) as soon as practicable after the end of such
plan year, but no later than 12 months after the close of
such plan year.
- 17 -<PAGE>
2. If the Investment Fund fails to satisfy either of the
"actual contribution percentage tests" following the
distribution of after-tax contributions and income
described under (1) above, the remaining "excess aggregate
contributions" made on behalf of "highly compensated
eligible Employees" with respect to such plan year, and
the income allocable thereto, determined in accordance
with regulations under Section 401(m) of the Code shall be
distributed to the applicable "highly compensated eligible
Employees" as soon as practicable after the end of such
plan year, but no later than 12 months after the close of
such plan year.
3. Before-tax contributions may be treated as Employer
matching contributions solely for the purposes of
satisfying either of the "actual contribution percentage
tests".
"Excess aggregate contributions" shall mean with respect
to each "highly compensated eligible Employee," the amount
equal to the total Employer matching contributions made on his
behalf and his after-tax contributions (including the amount
of any before-tax contributions recharacterized pursuant to
Article IV) determined prior to the application of the
leveling procedure described below minus the product of the
eligible Employee's contribution percentage, determined after
the application of the leveling procedure described below,
multiplied by the eligible Employee's compensation. Under the
leveling procedure, the contribution percentage of the "highly
compensated eligible Employee" with the highest such
percentage is reduced to the extent required to enable the
Plan to satisfy either of the "actual contribution percentage
tests", or it results in a lower reduction, to the extent
required to cause such eligible Employee's contribution
percentage to equal that of the "highly compensated eligible
Employee" with the next highest contribution percentage. This
leveling procedure is repeated until the Plan complies with
either of the "actual contribution percentage tests". In no
case shall the amount of "excess aggregate contributions" with
respect to any "highly compensated eligible Employee" exceed
the after-tax contributions and Employer matching
contributions made on behalf of such eligible Employee in any
plan year.
E. Notwithstanding anything to the contrary in this Article
IV, Employer matching contributions, before-tax contributions and
after-tax contributions may not be made to this Investment Fund
in violation of the "multiple use test." If such multiple use
- 18 -<PAGE>
occurs, the actual contribution percentages for all "highly
compensated eligible Employees" (determined after applying the
"actual deferral percentage" and "actual contribution percentage"
tests) shall be reduced in accordance with Treas. Reg. Section
1.401(m)-2(c) and any further guidance issued thereunder in order
to prevent such multiple use of the alternative limitation.
F. Notwithstanding anything in the Investment Fund to the
contrary, if the rate of the Employers' matching contributions
(determined after application of the corrective mechanisms
described in Paragraph A, Paragraph C and Paragraph D)
discriminates in favor of "highly compensated eligible
Employees," the Employer matching contribution attributable to
any excess deferrals, excess before-tax contributions of each
affected "highly compensated eligible Employee" shall be charged
to the participant's C account and credited to his Employer's C
account so that the rate of Employer matching contributions is
nondiscriminatory. Any such charges shall be made no later than
the end of the plan year following the plan year for which the
Employer's matching contribution was made.
(iv) conversion directions:
Subject to such conditions as CBS shall prescribe on a uniform
basis, any participant may from time to time file with CBS a
direction (i) to the effect that, as of and as promptly as shall
be practicable after the valuation date nearest to the next date
(of which there shall be not fewer than two in any calendar year)
which CBS shall specify for the purpose, CBS or its designee
shall charge to such participant's A account, D account or E
account all or the portion specified in such direction of the A
units, D units or E units credited to such account immediately
prior to such valuation date, shall convert the value of such A
units, D units or E units so charged to B units and shall credit
such B units to such participant's B account or (ii) to the
effect that, as of and as promptly as shall be practicable after
such valuation date, CBS or its designee shall charge to such
participant's B account, D account or E account all or the
portion specified in such direction of the B units, D units or E
units credited to such account immediately prior to such
valuation date, shall convert the value of such B units, D units
or E units so charged to A units and shall credit such A units to
such participant's A account or (iii) to the effect that, as of
and as promptly as shall be practicable after such valuation
date, CBS or its designee shall charge to such participant's A
account, B account or E account all or the portion specified in
such direction of the A units, B units or E units credited to
such account immediately prior to such valuation date, shall
- 19 -<PAGE>
convert the value of such A units, B units or E units so charged
to D units and shall credit such D units to such participant's D
account, or (iv) to the effect that, as of and as promptly as
shall be practicable after such valuation date, CBS or its
designee shall charge to such participant's A account, B account
or D account all or the portion specified in such direction of
the A units, B units or D units credited to such account
immediately prior to such valuation date, shall convert the value
of such A units, B units or D units so charged to E units and
shall credit such E units to such participant's E account, and
CBS or its designee shall so effect such charges, conversions and
credits and shall also effect corresponding credits and charges
of the values of such units to the A Fund, the B Fund, the D Fund
or the E Fund. Following such charges, conversions and credits,
the units whose value have been thus converted shall retain the
after-tax or before-tax character which was attributable to the
units immediately prior to the conversion.
V. EMPLOYERS' MATCHING CONTRIBUTIONS.
Except as otherwise provided in the last sentence of this
Article V, as of and as promptly as shall be practicable after
each valuation date, (a) each Employer shall pay to the Trustee,
as such Employer's matching contribution, the amount which,
together with the value of the C units credited to such
Employer's C account as of such valuation date (prior to
effecting the credits thereto as of such valuation date provided
for in subparagraph 1 of Paragraph B of Article VI hereof and
subparagraph 3 of Paragraph C of said Article VI), will enable
CBS or its designee to effect the credits hereinafter in this
Article V referred to in the C accounts of those participants
whose required basic contributions shall be or shall have been
paid to the Trustee by such Employer as of such valuation date,
and (b) CBS or its designee shall convert the amount of such
Employer's matching contribution so paid to it to C units, credit
such C units to such Employer's C account, credit to the C
account of each of said participants the number of C units the
value of which shall be equal to 100 percent of such
participant's required basic contribution so paid to the Trustee,
charge to such Employer's C account all of the C units so
credited to the C accounts of said participants and credit the
amount of such Employer's matching contribution to the C Fund.
Notwithstanding the foregoing provisions of this Article V, no
Employer shall make a matching contribution as of any valuation
date in excess of whichever shall be greater of the amount of
such Employer's earnings and profits for such Employer's taxable
year in which such valuation date shall occur or the amount of
such Employer's earnings and profits as of the end of such
- 20 -<PAGE>
taxable year, prior, in either case, to any charge for such
contribution; if and to the extent that any Employer shall not be
able to make such a matching contribution because it shall have
insufficient such earnings and profits, the other Employers
shall, in such proportions as CBS shall determine and subject to
the same limitations based upon their earnings and profits, make
such matching contribution on behalf of such first-mentioned
Employer. With respect to a participant whose required basic
contribution is the maximum permitted amount of 2-1/2 percent of
his or her salary and for whom the numerical total of his or her
attained years of age plus the full years of his or her
continuous employment period equals 55 or greater, the Employer's
matching contribution to be credited to such participant's C
account shall be increased to be of a value equal to (i) 120
percent of his or her required basic contribution if the
participant has not attained age 50 or (ii) 160 percent of his or
her required basic contribution if the participant has attained
age 50. Such increased rate of Employer's matching contribution
shall become effective as of and as promptly as shall be
practicable after the valuation date following January 1 of the
year in which a participant shall satisfy the one or several
requirements for entitlement thereto, but shall be made only if
the total of the participant's required basic contribution
election and voluntary supplemental contribution election as then
in effect, as a percentage of the participant's salary, equals or
exceeds such increased rate. The manner for payment, conversion,
charging and crediting of Employer's matching contributions at
such increased rates shall be identical to that provided in the
first sentence of this Article, and the making thereof shall not
be deemed to contravene the final sentence of this paragraph. No
Employer matching contributions shall be made with respect to
voluntary supplemental contributions or periodic special
contributions of a participant.
Subject to such conditions as CBS shall prescribe on a uniform
basis, a participant who has attained age 55 may thereafter from
time to time, but not more than twice, file with CBS a direction
to the effect that, as of and as promptly as shall be practicable
after the valuation date nearest to the next date (of which there
shall be not fewer than two in any calendar year) which CBS shall
specify for the purpose, CBS or its designee shall charge to such
participant's C account all, or the portion designated by the
participant, of the vested C units credited to such account
immediately prior to such valuation date, shall convert the value
of such vested C units so charged to B units and shall credit
such B units to such participant's B account in a separate
before-tax subaccount therein to be designated the participant's
"converted C/B unit subaccount". A participant shall not have
- 21 -<PAGE>
the right to withdraw any of the amounts credited to such a
subaccount prior to the termination of his or her employment (and
participation), and the limited conversion privilege herein
provided is separate and distinct from the "C unit conversion
election" relating to the payment of a termination benefit which
is set forth in subparagraph 3 of Paragraph E of Article VI of
the Investment Fund.
VI. TERMINATION OF PARTICIPATION; WITHDRAWALS;
DETERMINATION AND PAYMENT OF BENEFITS.
A. Nothing contained herein shall require any Employer to
continue any participant in its employ, or require any
participant to continue in the employ of any Employer, or require
any Employer to continue to pay compensation to any participant
during a leave of absence, or require any Employer to pay
compensation to any participant during a leave of absence at the
same rate as prior to the commencement thereof. Except as
otherwise provided in the next sentence of this Paragraph A, if
the employment of any participant by an Employer shall terminate
for any reason whatever, including his death, his participation
in the Investment Fund shall terminate as of the date of such
termination of employment. In any event, (a) if, concurrently
with the termination of the employment of a participant by any of
the Employers, such participant shall become an employee of a
non-Fund subsidiary, or (b) if a participant shall either (i) be
transferred to a group of employees not determined by the Board
to be eligible to participate in the Investment Fund or
(ii) become an employee whose principal terms and conditions of
employment are subject to the terms of a collective bargaining
agreement which does not provide for eligibility for
participation in the Investment Fund, his participation in the
Investment Fund shall not terminate until the business day on
which he shall no longer be an Employee of any of the Employers
or an employee of any non-Fund subsidiary and he shall be deemed
to have suspended his contribution election as then in effect for
those of his consecutive payroll periods which shall be
co-extensive with the period during which he shall be an employee
of a non-Fund subsidiary or any employee included in such an
ineligible group or an employee whose principal employment terms
and conditions are subject to such a collective bargaining
agreement, as the case may be, and such contribution election
shall not be subject to renewal during such payroll periods.
B. 1. Prior to any valuation date, a participant may file
with CBS a request to have paid to him as of such valuation date
the amount equal to whichever shall be the lesser of (a) the
- 22 -<PAGE>
amount specified in, or computed in accordance with, such request
or (b) the amount equal to the sum of the value as of such
valuation date of the A units then credited to such participant's
after-tax subaccount of his A account, the B units then credited
so such participant's after-tax subaccount of his B account, the
D units then credited to such participant's after-tax subaccount
of his D account, and the E units then credited to such
participant's after-tax subaccount of his E account. Such
request shall specify the extent, if any, to which after-tax
subaccount A units, after-tax subaccount B units, after-tax
subaccount D units and after-tax subaccount E units shall
respectively be charged to such participant's A account, B
account, D account and E account to effect such withdrawal. CBS
or its designee shall, as of and as promptly as shall be
practicable after such valuation date, effect the charges so
specified to such accounts, effect corresponding charges of the
value of such units to the A Fund, the B Fund, the D Fund and the
E Fund and make such payment to such participant. After a
participant has attained age 59-1/2, the foregoing provisions
limiting the right of withdrawal to the value only of the A
and/or B and/or D and/or E units in his after-tax subaccounts
shall lapse, and the withdrawal may be requested and effected of
amounts which include the value of the A and/or B and/or D and/or
E units in his before-tax as well as in his after-tax subaccounts
then credited to such participant's accounts, subject however to
the limitation of Section B.2 below.
2. If any participant shall effect a withdrawal of his
required basic contributions as of a valuation date which shall
be less than five full years subsequent to the valuation date (if
any) as of which he shall last have effected a withdrawal of his
required basic contributions, such withdrawal shall be deemed to
be a suspension of all of such participant's contribution
election as then in effect for those of his consecutive payroll
periods the last of which shall be the last payroll period ending
within the twelfth monthly accounting period commencing
subsequent to such first-mentioned valuation date, and such
contribution election shall not be subject to renewal during such
payroll periods.
3. Prior to his attainment of age 59-1/2, a participant
who has already withdrawn the maximum amount allowable under this
Article VI may, in accordance with the foregoing procedures,
request a withdrawal, to meet a bona fide financial emergency, of
amounts which include all or a portion of credits then credited
as units in his A and/or B and/or D and/or E accounts in the
before-tax subaccounts thereof. In considering and making
determinations upon such hardship requests, the Committee will
- 23 -<PAGE>
act on the basis of positive evidence which the participant will
be required to furnish, and will make its determinations on a
uniform and nondiscriminatory basis. Consent for such hardship
withdrawals will be granted if and only to the extent that the
Committee determines that (i) the distribution is necessary in
light of immediate and heavy financial needs of the participant,
(ii) the distribution will not exceed the amount required to meet
such financial needs, and (iii) funds to meet such financial
needs are not reasonably available from other resources of the
participant. Such determination shall be made in accordance with
the following guidelines:
(a) Demonstration of Need. The participant must establish
an immediate and heavy financial need for a withdrawal of
funds pursuant to this section. The Committee shall
determine, in a nondiscriminatory manner and in accordance
with the provisions of Section 401(k) of the Code, whether a
participant has a financial hardship. For this purpose, the
term "financial hardship" shall be determined in accordance
with the regulations issued pursuant to Section 401(k) of the
Code and any other notices or rulings of general applicability
issued under Section 401(k) of the Code and, to the extent
permitted by such regulations, shall be limited to any
financial need arising from: (1) medical expenses previously
incurred or expenses necessary to obtain medical care not
covered by insurance and arising from serious illness,
accident or total disability of the participant or any member
of his family, (2) expenses relating to the payment of tuition
for the next 12 months of post-secondary education of a
participant, his spouse or dependent, (3) the expenses
(excluding mortgage payments) required for the purchase 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 (5) expenses arising
from circumstances of sufficient severity that a participant
is confronted by present or impending financial ruin or his
family is clearly endangered by present or impending want or
deprivation.
(b) Amount of Hardship Withdrawal. The amount of any
withdrawal by a participant under subsection (a) above shall
not exceed the amount required to meet the immediate financial
need created by the hardship. In no event may the amount of
any withdrawal exceed the lesser of: (1) the total value of
the participant's before-tax contributions determined as of
December 31, 1988 (taking into account earnings and losses
attributable to such amounts), plus the total amount of the
- 24 -<PAGE>
participant's before-tax contributions that are made after
December 31, 1988, or (2) the value of all before-tax
contributions made to the Plan (taking into account earnings
and losses attributable to such amounts).
(c) Availability of Other Resources. In order to make a
withdrawal under this paragraph, the participant must
establish that he cannot relieve the financial hardship with
assets that are reasonably available to the participant from
other resources of the participant. For this purpose, the
Committee may reasonably rely upon a participant's
representation that the financial hardship cannot be relieved
through: (i) reimbursement or compensation by insurance or
otherwise, (ii) reasonable liquidation of the participant's
assets, to the extent such liquidation would not itself cause
an immediate and heavy financial need, (iii) cessation of
before-tax contributions and after-tax contributions under the
Investment Fund, or (iv) nontaxable (at the time of the loan)
loans from plans maintained by the Employer or by any other
employer or by borrowing from commercial sources on reasonable
commercial terms (except to the extent any such borrowing
would fail to alleviate the hardship or the repayment of such
borrowing would cause a financial hardship). A participant's
resources shall be deemed to include those assets of his
spouse and minor children that are reasonably available to the
participant. In the absence of such representations, a
participant shall be deemed to have no other resources
reasonably available if: (i) the participant has obtained all
withdrawals, distributions and loans currently available to
the participant under the Investment Fund and all other plans
maintained by the Employer or an affiliated company (except to
the extent any such borrowing would fail to alleviate the
hardship or the repayment of such borrowing would cause a
financial hardship); (ii) the participant agrees to cease all
before-tax contributions and after-tax contributions under the
Investment Fund as well as all similar contributions to all
other plans maintained by the Employer or an affiliated
company for a period of at least 12 months from the date of
the hardship withdrawal; and (iii) the amount of the
participant's before-tax contributions under the Investment
Fund and under all plans maintained by the Employer or an
affiliated company for the year following the year of the
withdrawal are limited to the applicable limit under Section
402(g) of the Code for such year minus the participant's
before-tax contributions for the year of the hardship
withdrawal.
C. 1. Except as otherwise provided in Paragraph E of this
- 25 -<PAGE>
Article VI, each participant whose employment (and participation)
shall terminate at any time for any reason whatever shall be
entitled to receive as a termination benefit the amount equal to
the value on the valuation date immediately following or
coincident with his termination date of the A units credited to
his A account, of the B units credited to his B account, of the D
units credited to his D account and of the E units credited to
his E account, all as of such termination date.
2. Except as otherwise provided in Paragraph E of this
Article VI, each participant whose employment (and participation)
shall terminate either (a) for any reason on or subsequent to his
65th birthday or (b) at any time by reason of his death or his
disability or (c) at any time prior to his 65th birthday when his
continuous employment period shall be three or more years, shall
be entitled to receive as a termination benefit the amount equal
to the value on the valuation date immediately following or
coincident with his termination date of the C units credited to
his C account as of such termination date.
3. Except as otherwise provided in Paragraph E of this
Article VI, each participant whose employment (and participation)
shall terminate, other than by reason of his death or his
disability, at any time prior to his 65th birthday when his
continuous employment period shall be less than three years,
shall be entitled to receive as a termination benefit the amount
equal to the value on the valuation date immediately following or
coincident with his termination date of the vested C units
credited to his C account as of such termination date. CBS or
its designee shall, as of and as promptly as shall be practicable
after such valuation date, charge to such former participant's C
account and credit to his Employer's C account the unvested C
units credited to such former participant's C account as of such
termination date; provided, however, that if such participant
returns to employment before incurring a one-year break in
service, he shall be entitled to repay to the Investment Fund the
amount of his termination benefit attributable to his C account
if such repayment is made prior to the second anniversary of his
resumption of employment. In that event, such participant shall
have credited to his C account the unvested C units which were
credited to his account as of his prior termination date and the
Employer's C account shall be charged in an identical amount.
4. If a participant whose employment terminated and who
received a termination benefit is reemployed and repays the full
amount of his termination benefit to the Investment Fund prior to
incurring five consecutive one-year breaks-in-service, there
shall be restored to the A account, B account, D account, E
- 26 -<PAGE>
account and C account of such participant the number of A units,
B units, D units, E units and C units, respectively, that have a
value as of the valuation date immediately following or
coincident with the date of such repayment equal to the value of
the number of units that had been credited to each such account
as of the date of such termination of employment.
5. All references to "C units", "D units", "C accounts"
and "D accounts" above in this Paragraph C shall be deemed to
include any and all C-# units, D-# units, C-# accounts and D-#
accounts which may be in existence at the relevant time or times.
D. Upon the termination of a participant's employment (and
participation) at any time for any reason whatever, and upon the
termination of a participant's employment (but not his
participation) under the circumstances referred to in the third
sentence of Paragraph A of this Article VI, his Employer shall
repay to such former participant (or, in the event of his death,
to his executors or administrators) or to such participant any
amounts withheld or deferred from his salary, pursuant to a
contribution election in effect prior to such termination, with
respect to payroll periods ending in the monthly accounting
period in which his termination date shall occur, or his
employment shall terminate under said circumstances, as the case
may be.
E. 1. (a) Any participant may file with CBS an election to
have his termination benefit (other than a termination benefit
payable by reason of his death) paid in a single payment or in a
series of monthly or annual installments over a period not
exceeding the lesser of 20 years or the life expectancy of such
participant or the life expectancy of such participant and any
individual designated as a beneficiary by such participant,
provided that if the beneficiary is not the spouse of the
participant, the present value of the installments payable to the
participant shall at least equal 50 percent of the present value
of the total installments payable to the participant and his
beneficiary. Such single payment or the first such installment
payment shall be made at the time specified in such election but
not later than April 1 of the calendar year following the later
of the calendar year in which such participant attains age
70-1/2, or the year in which such participant retires. If a
participant is receiving his termination benefit in a series of
installments and dies before his entire interest has been
distributed to him, the balance of his termination benefit shall
continue to be paid in such installments or, if his beneficiary
so elects, in a single payment.
- 27 -<PAGE>
(b) Any participant may file with CBS an election to
have a termination benefit payable by reason of his death paid in
a single payment to be paid to his beneficiary at the time
specified in such election but not later than five years after
the date of his death or in a series of monthly or annual
installments to an individual designated as his beneficiary over
a period not exceeding the lesser of 20 years or the life
expectancy of such beneficiary and beginning at the time
specified in such election but not later than one year after the
date of his death (or if the participant's beneficiary is his
surviving spouse, the date on which the participant would have
attained age 70-1/2).
(c) Any participant may also, not less than 30 days
prior to his termination date, modify or revoke any distribution
election theretofore made by him. If any participant shall not
have a distribution election in effect on his termination date,
his termination benefit shall, subject to the provisions of a
stock election of such former participant then in effect, be paid
to him (or in the event of his death, to his beneficiaries) in a
single payment, provided, that if the value on the valuation date
coincident with or immediately following such termination date of
the A units credited to his A account as of such termination
date, of the B units credited to his B account as of such
termination date, of the D units credited to his D account as of
such termination date, of the E units credited to his E account
as of such termination date, and of the C units credited to his C
account as of such termination date shall exceed $3,500, his
termination benefit shall not be immediately distributed without
his consent. If any participant does not consent to such a
distribution, the termination benefit will not be paid until the
earliest of his attainment of age 70-1/2, his consent to a
distribution, or his death. Upon the earliest of such dates, his
entire termination benefit shall be paid to him or his
beneficiary in accordance with the participant's distribution
election. The value of his termination benefit shall be
determined as of the earliest to occur of the valuation date
coincident with or (i) immediately following his attainment of
age 70-1/2, or (ii) immediately following the receipt by CBS on
or prior to the 15th day of the month of his consent to an
immediate distribution, or (iii) immediately following his death.
2. (a) A distribution election shall be set forth in a
written notice given to the Committee and, if made, such notice
shall be given during the 90-day period before the date the
payment of his termination benefit shall commence, which period
shall be extended, if necessary, to include at least the 90 days
after the date the information referred to in section (b) of this
- 28 -<PAGE>
subparagraph 2 shall have been given to such participant;
provided, however, that if such participant shall have given
notice less than 90 days before the date on which the payment of
his termination benefit shall commence of his intent to terminate
employment, such election period shall end on the later of such
date or the 14th day after the date on which such notice shall
have been given, which period shall be extended, if necessary, to
include at least 15 days after the information referred to in
section (b) of this subparagraph 2 shall have been given to such
participant. Elections hereunder shall be revocable during such
election period.
(b) Within seven days after the commencement of such
election period, or, if earlier, nine months prior to a
participant's attainment of age 55, such participant shall be
furnished with a notice written in non-technical terms of the
availability of the distribution election.
3. Any participant may, in accordance with the provisions
of section (a) of subparagraph 2 of this Paragraph E, file with
CBS an election to have that portion of his termination benefit
consisting of the value of the D units credited to his D account
and/or the value of the vested C units credited to his C account
paid to him (or, in the event of his death, to his
beneficiaries), to the extent possible, in shares of CBS Stock in
lieu of in cash ("a stock election"), or, alternatively, to have
such value of such D units (a "D unit conversion election")
and/or of such vested C units (a "C unit conversion election")
converted as of his termination date to units in his A and/or B
and/or E account(s) as he may designate. (In the case of a C
unit conversion election, such value shall be converted to units
in said participant's before-tax subaccount(s); in the case of a
D unit conversion election, that portion of such value
representing the before-tax subaccount in said participant's D
account shall be converted to units in his before-tax
subaccount(s) and that portion of such value representing the
after-tax subaccount in his D account shall be converted to units
in his after-tax subaccount(s).) Any participant may also, in
accordance with such provisions of said section (a), revoke any
such election theretofore made by him.
4. Notwithstanding any other provisions of Paragraph E of
this Article VI, if a participant is married, any designation of
a beneficiary other than the participant's spouse shall be given
effect only if such spouse consents in writing to such
designation and such consent acknowledges that such spouse is
thereby waiving in favor of such other beneficiary the right to
receive the amount payable hereunder upon the death of the
- 29 -<PAGE>
participant and such consent is witnessed by a notary public.
The preceding sentence shall not apply to a designation by a
participant who establishes to the satisfaction of the Committee
that his spouse cannot be located. No designation of a
beneficiary made before a participant is married shall be given
effect after the participant becomes married.
F. 1. If any former participant shall have in effect a
distribution election referred to in section (b) of
subparagraph 1 of Paragraph E of this Article VI, or if any
former participant shall have in effect a distribution election
referred to in section (a) of said subparagraph 1 and shall die
prior to the payment of his termination benefit in full:
(a) As of and as promptly as shall be practicable
after the valuation date immediately following or
coincident with such former participant's termination date
(if such distribution election shall be one referred to in
said section (b)) or the valuation date immediately
following or coincident with the date of such former
participant's death (if such distribution election shall
be one referred to in said section (a) and such
participant shall die prior to the payment of his entire
termination benefit in full), as the case may be:
(i) CBS or its designee shall determine the value
of the A units credited to such former participant's A
account as of such termination date or as of the date
of the death of such former participant, as the case
may be, the value of the B units credited to such
former participant's B account as of such date and the
value of the E units credited to such former
participant's E account as of such date, and, if a
stock election, a D unit conversion or a C unit
conversion election of such former participant shall
not be in effect, also the value of the D units and
the vested C units credited to such former
participant's D account and C account, respectively,
as of such date.
(ii) CBS or its designee shall charge such
units (whether A units and/or B units and/or D units
and/or E units and/or vested C units) to such
respective accounts and charge the respective values
thereof to the A Fund and/or the B Fund and/or the D
Fund and/or the E Fund and/or the C Fund, as the case
may be.
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(iii) If such distribution election shall be one
referred to in said section (a) or said section (b),
the Trustee shall pay to such former participant or
his beneficiaries, as the case may be, the amounts so
charged to the A Fund and/or the B Fund and/or the D
Fund and/or the E Fund and/or the C Fund.
(b) If a stock election of such former participant
shall be in effect, as of and as promptly as shall be
practicable after the applicable valuation date referred
to in section (a) of this subparagraph 1:
(i) The Trustee shall distribute to such former
participant or his beneficiaries, as the case may be,
the largest possible number of full shares of CBS
Stock, registered in the name of such former
participant or his beneficiaries, the value of which
shall be equal to or less than the value of the D
units and the vested C units credited to the D account
and C account, respectively, of such former
participant as of his termination date or as of the
date of the death of such former participant, as the
case may be.
(ii) CBS or its designee shall charge the D
units and the vested C units the value of which is so
distributed to the D account and the C account,
respectively, of such former participant and charge
the value thereof to the D Fund and the C Fund,
respectively.
(iii) The Trustee shall pay to such former
participant or his beneficiaries, as the case may be,
the amount equal to the value of the D units and the
vested C units credited to the D account and the C
account of such former participant as of such date and
not so charged to such D account or C account and
charge such amount to the D Fund or the C Fund, as the
case may be.
2. If any former participant shall have in effect a
distribution election referred to in section (a) of
subparagraph 1 of Paragraph E of this Article VI:
(a) As of and as promptly as shall be practicable
after the valuation date immediately following or
coincident with such former participant's termination date
- 31 -<PAGE>
or the filing by such participant of the aforementioned
distribution election, whichever shall be the later, and
(I) if such distribution election shall be one requiring
monthly installments, as of and as promptly as shall be
practicable after each subsequent valuation date or
(II) if such distribution election shall be one requiring
annual installments, as of and as promptly as shall be
practicable after each subsequent valuation occurring
during the same calendar month as such first-mentioned
valuation date, and in either case, to and including the
valuation date as of which such former participant's
termination benefit shall have been paid in full, or to
and including the valuation date immediately following the
date of such former participant's death (if such former
participant shall die prior to the payment of his
termination benefit in full), as the case may be:
(i) CBS or its designee shall determine the value
of the A units then credited to such former
participant's A account and the B units then credited
to such former participant's B account and the E units
then credited to such former participant's E account,
and, if a stock election or a D unit or C unit
conversion election of such former participant shall
be in effect, also the value of the D units and the
vested C units then credited to such former
participant's D account and C account, respectively.
(ii) The Trustee shall pay to such former
participant or his beneficiaries, as the case may be,
that fraction of the respective amounts determined
pursuant to the provisions of subsection (i) of this
section (a) the numerator of which shall be one and
the denominator of which shall be the total number of
installments specified to be paid in the distribution
election of such former participant minus the number
of such installments paid as of valuation dates prior
to the valuation date first referred to in this
section (a).
(iii) CBS or its designee shall charge to the A
account of such former participant and to the B
account of such former participant and to the E
account of such former participant, and, if a stock
election or a D unit or C unit conversion election of
such former participant shall not be in effect, also
to the D account and C account of such former
participant, the fraction determined pursuant to the
- 32 -<PAGE>
provisions of subsection (ii) of this section (a) of the
respective numbers of the A units and the B units and the
E units, and, if such stock election or a D unit or C unit
conversion election shall not be in effect, also any D
units and vested C units credited to such accounts as of
the valuation date first referred to in this section (a)
and make corresponding charges to the A Fund and/or the B
Fund and/or the E Fund and/or the D Fund and/or the C
Fund.
(b) If a stock election of such former participant
shall be in effect as of and as promptly as shall be
practicable after the valuation date first referred to in
section (a) of this subparagraph 2, and (I) if such former
participant's distribution election shall be one requiring
monthly installments, as of and as promptly as shall be
practicable after each subsequent valuation date, or
(II) if such distribution election shall be one requiring
annual installments, as of and as promptly as shall be
practicable after each subsequent valuation date occurring
during the same calendar month as such first-mentioned
valuation date, and, in either case to and including the
valuation date as of which such former participant's
termination benefit shall have been paid in full, or to
and including the valuation date next preceding the date
of such former participant's death (if such former
participant shall die prior to the payment of his
termination benefit in full), as the case may be:
(i) The Trustee shall distribute to such former
participant or his beneficiaries, as the case may be,
the largest possible number of full shares of CBS
Stock, registered in the name of such former
participant or his beneficiaries, as the case may be,
the value of which shall be equal to or less than the
value of the fraction determined pursuant to the
provisions of subsection (ii) of section (a)
of this subparagraph 2 of the D units and the vested C
units credited to the D account and the C account of
such former participant as of such valuation date.
(ii) CBS or its designee shall charge the D
units and the vested C units the value of which is so
distributed to the D account and the C account of such
former participant and charge the value thereof to the
D Fund and the C Fund, respectively.
(iii) If said distribution election is one
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referred to in said section (a), concurrently with the
last distribution of CBS Stock to such former
participant or his beneficiaries, as the case may be,
the Trustee shall pay to him or them the amount equal
to the value as of the valuation date as of which such
distribution is made of the D units and the vested C
units credited to the D account and the C account of
such former participant as of such valuation date and
not theretofore charged thereto and CBS or its
designee shall charge such D units and C units to such
D account and C account and charge such amount to the
D Fund and the C Fund, respectively.
3. All payments made by the Trustee to any former
participant (and/or his beneficiaries) pursuant to the foregoing
provisions of this Paragraph F shall be subject to such
withholding and to such other deductions as shall at the time of
such payment be required by reason of any income tax or other
law, whether of the United States or of any other jurisdiction,
and, in the case of payments to beneficiaries of former
participants, the delivery to the Trustee of all appropriate tax
waivers and other documents.
4. Notwithstanding anything contained herein to the
contrary, the payment of any benefits to any former participant
(and/or his beneficiaries) shall commence, unless such former
participant (and/or his beneficiaries) shall elect otherwise
hereunder, not later than the 60th day after the close of the
calendar year in which occurs his 65th birthday or his retirement
in a calendar year thereafter, whichever shall last occur.
5. Notwithstanding anything contained herein to the
contrary, if a participant shall attain age 70-1/2 on or after
January 1, 1988, whether or not such participant continues as an
Employee, such participant shall commence receiving minimum
required distributions in accordance with the requirements of
Section 401(a)(9) of the Code and the regulations and other
guidance thereunder. If such participant fails to request a
withdrawal in accordance with the otherwise applicable provisions
of Article VI, he shall receive minimum distributions for each
year beginning no later than April 1 of the calendar year
following the year in which he attains age 70-1/2 and by each
December 31 thereafter based on the participant's life expectancy
determined without recalculation. Such minimum required
distributions shall continue to be made until the participant's
entire interest has been paid. In all events, distributions will
comply with the incidental death benefits requirements of Section
401(a)(9)(G) of the Code and the regulations issued thereunder.
- 34 -<PAGE>
6. To the extent practicable, the foregoing provisions of
this Paragraph F pertinent to the valuation, charging and
distributions with respect to the D units of a participant shall
be applicable to the D-# units credited to a D-# account of a
participant, and those with respect to the vested C units of a
participant shall be applicable to the vested C-# units credited
to a C-# account of a participant, at the time in question, and
if the application of such provisions shall not be practicable in
any given circumstances, the Committee shall make or direct to be
made an equitable and reasonable determination of the matter.
7. Any benefits payable to a participant or beneficiary
which are not claimed for a period of five years from the date of
entitlement, as determined by the Committee and following a
diligent effort to locate such participant or beneficiary, shall
with the approval of the Committee be charged to such former
participant's or beneficiary's accounts and credited to his
Employer's C account; provided, however, that if a claim for such
forfeited benefits is made by the participant or beneficiary, all
such amounts shall be reinstated to the accounts of the
participant or beneficiary.
8. If the Committee shall determine that a participant,
terminated participant, or any other person entitled to a benefit
under the Investment Fund (the "Recipient") is unable to care for
his affairs because of illness, accident, or mental or physical
incapacity, or because the Recipient is a minor, the Committee
may direct that any benefit payment due the Recipient be paid to
his duly appointed legal representative; or if no such
representative is appointed, to the Recipient's spouse, child,
parent, or other blood relative, or to a person with whom the
Recipient resides or who has incurred expense on behalf of the
Recipient. Any such payment so made shall be a complete
discharge of the liabilities of the Investment Fund with respect
to the Recipient.
G. 1. The Committee, as defined in Article VIIA, may
determine to make a loan to any participant who then qualifies as
an Employee under Article IX, Paragraph A, subparagraph 26, or is
otherwise a "party in interest" with respect to the Investment
Fund under Section 3(14) of ERISA. The total amount of each loan
will be subject to the following rules:
(a) The loan must be for a minimum of $1,000. Loans
above the minimum amount may be made only in multiples of
$100.
- 35 -<PAGE>
(b) The maximum amount of the loan will be limited to
the lesser of:
(i) $50,000 (reduced by the highest
outstanding balance of any loan from the Investment
Fund during the one-year period ending on the date
before the date such loan is made), or
(ii) one-half of the market value of the vested
portions of all the participant's separate accounts on
the date that such loan was made.
(c) A participant may have only two outstanding loans
at any one time and may not have more than one loan per
calendar year. One of the outstanding loans must be for a
primary residence.
2. Any loan to a participant shall be secured by the
pledge of all the participant's right, title and interest in the
vested portion of the participant's accounts in the Investment
Fund, provided, however, that in no event shall more than 50
percent of the vested portion of the participant's account,
determined at the time the loan is made, be pledged as collateral
for the loan. Such pledge shall be evidenced by the execution of
a promissory note by the participant, which promissory note shall
provide that, in the event of any default by the participant on a
loan repayment, the Committee shall be authorized (to the extent
permitted by law) to deduct the amount of the loan outstanding
and any unpaid interest due thereon from the participant's wages
or salary to be thereafter paid by the Employer, and to take any
and all other actions necessary and appropriate to enforce
collection of the unpaid loan.
3. There shall be deducted from the accounts of a
participant to whom a loan is made an amount having a value equal
to the principal amount of the loan. The proceeds of any loan
shall be charged against the accounts of the borrowing
participant according to the order in which items (i) and (ii)
are presented, as the amounts described in each successive
paragraph are exhausted: (i) before-tax subaccounts; and (ii)
after-tax subaccounts. The loan proceeds shall be deducted from
the various investment funds in which the participant's accounts
are invested in accordance with directions received from the
participant and subject to rules prescribed by the Committee.
4. The rate of interest charged on any loan to a
participant shall be a reasonable rate of interest determined by
the Committee taking into consideration interest rates being
- 36 -<PAGE>
charged under generally prevailing market conditions. The
Committee shall not discriminate among participants in the matter
of interest rates, but loans granted at different times may bear
different interest rates if, in the opinion of the Committee, the
difference in rates is justified by a change in general economic
conditions.
5. Loans shall be repaid in accordance with the following
procedures:
(a) Any loan to a participant shall be repaid within
five years of the date on which the loan is made (or upon
the participant's termination of employment with Employer,
if earlier), except that in the case of a loan to a
participant that is used to acquire a principal residence
of the participant, such loan may be repaid over a longer
period of time, not to exceed 15 years, as determined by
the Committee. Repayments of principal and interest on
any loan shall be made by substantially level payments
(not less frequently than quarterly) by payroll deduction
and shall be applied to reduce the principal as well as
the accrued interest of the loan.
(b) The Committee shall have the sole responsibility
for assuring that a participant timely makes all loan
repayments. Each loan repayment shall be paid to the
Investment Fund, and shall be accompanied by written
instructions from the Committee that: (1) identify the
participant on whose behalf the loan repayment is being
made; and (2) specify the separate accounts of the
participant to which the loan repayment should be credited
and the investment of the loan repayment in accordance
with the investment procedures of Article IV.
(c) A participant may prepay the entire outstanding
loan balance with respect to the loan at any time without
penalty.
(d) The Committee may implement a reasonable loan
set-up charge for all loans.
6. In the event of a default by a participant on a loan
repayment, all remaining payments on the loan shall be
immediately due and payable. In the case of any participant who
is not entitled to a distribution under Article VI, the Committee
shall, to the extent permitted by law, deduct the total amount of
the loan outstanding and any unpaid interest due thereon from the
wages or salary payable to the participant by the Employer in
- 37 -<PAGE>
accordance with the participant's promissory note. In addition,
the Committee shall take any and all other actions necessary and
appropriate to enforce collection of the unpaid loan, although
foreclosure on the note and attachment of security shall not
occur until a distributable event occurs under the Investment
Fund with respect to before-tax contributions. In the case of
any participant or beneficiary who is entitled to a distribution
or withdrawal under Article VI, the Committee shall deduct the
total amount of the loan outstanding and any unpaid interest due
thereon from the amounts to be distributed from the participant's
separate accounts under the Investment Fund in order to satisfy
the amount due.
7. A request by a participant for a loan shall be made in
writing to the Committee [and shall specify the amount of the
loan and the separate accounts of the participant from which the
loan should be made]. The terms and conditions on which the
Committee shall approve loans shall be applied on a uniform and
reasonably equivalent basis with respect to all participants. If
a participant's request for a loan is approved by the Committee,
the Committee shall cause the loan to be made in a lump sum
payment of cash to the participant.
8. All loan repayments by the participant shall be
credited to such separate accounts and reinvested in accordance
with the Employee's investment directions pursuant to Article IV,
Paragraph (B).
9. Notwithstanding the foregoing, no loan shall be made
to 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
accounts, it may prohibit such participant from obtaining a loan
until the alternate payee's rights under such order are
satisfied.
10. In the event that a payment is required to be made to
a beneficiary upon the death of a participant or an alternate
payee pursuant to a qualified domestic relations order, within
the meaning of Section 414(p) of the Code, while the participant
whose account is the subject of such order has a loan
outstanding, the Committee, in its discretion, may direct that
the participant's promissory note be transferred to the
beneficiary or the alternate payee, as applicable.
- 38 -<PAGE>
H. 1. At the written request of a distributee (which shall
mean a participant, a surviving spouse of a participant, or a
spouse or former spouse of a participant that is an alternative
payee under a qualified domestic relations order), and upon
receipt of the written consent of the Committee, 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 part of any distribution otherwise to be made
hereunder 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 2
through 6. For purposes of this Paragraph H, the following terms
have the following meanings:
(a) The term "eligible rollover distribution" means any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution 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 10
years or more; or any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code;
or any distribution 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).
(b) The term "eligible retirement plan" means an
individual retirement account described in Section 408(a) of
the Code, an individual retirement annuity described in
Section 408(b) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to a surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
2. A direct rollover distribution shall only be made to
one eligible retirement plan; a distributee may not elect to have
a direct rollover distribution apportioned between or among more
than one eligible retirement plan.
3. Direct rollover distributions shall be made in cash in
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the form of a check made out to the trustee of the eligible
retirement plan, in accordance with procedures established by the
Committee, plus shares of CBS Stock otherwise distributable
hereunder to the distributee, which shares shall be registered in
a manner necessary to effectuate a direct rollover under Section
401(a)(31) of the Code.
4. Amounts distributable to after-tax Employee
contributions shall be distributed directly to the distributee
and may not be distributed in a direct rollover distribution.
5. No direct rollover distribution shall be made unless
the distributee furnishes the Committee with such information as
the Committee shall require, including but not limited to: the
name of the recipient eligible retirement plan, a representation
from a representative of the recipient plan that it is an
eligible retirement plan, and any account number or other
identifying information.
6. If a distributee's distribution is otherwise to be
paid in the form of installment payments, the distributee must
make a separate direct rollover distribution request with respect
to each calendar year during which installment payments are made.
VII. THE COMMITTEE.
A. There shall at all times be at least three individuals,
any or all of whom may be participants, acting as a Committee
hereunder to administer the Investment Fund. Any Committee
member may at any time resign by giving written notice of such
resignation to CBS, to the other Committee member or Committee
members, if any, then acting hereunder and to the Trustee; any
such resignation shall become effective immediately upon the
delivery of such notice to CBS. CBS may at any time remove any
or all of the Committee members then acting hereunder by giving
written notice of such removal to all of the Committee members
then acting hereunder and to the Trustee; any such removal shall
become effective immediately upon the delivery of such notice to
the Committee member so removed. The Committee (or its duly
authorized designees) may at any time or from time to time
appoint one or more investment managers, each of which shall in
its sole discretion direct the Trustee in the investment or
reinvestment of all or part of the Trust Fund under the Trust
Agreement as designated by such Committee (or its duly authorized
designees).
B. CBS may, at any time and from time to time, and, if there
shall at any time be less than three Committee members acting
- 40 -<PAGE>
hereunder, CBS shall, designate one or more individuals to act as
an additional or successor Committee member or additional or
successor Committee members by giving written notice of such
designation to the Committee member or members, if any, then
acting hereunder, to each such designee and to the Trustee.
C. In the event of any disagreement among the Committee
members at any time acting hereunder and authorized to act with
respect to any matter, the decision of a majority of such
Committee members authorized to act upon such matter shall be
controlling and shall be binding and conclusive upon all persons,
including, without in any manner limiting the generality of the
foregoing, the Employers, the other Committee member or Committee
members, the Trustee, all persons at any time in the employ of
any of the Employers and the participants, the former
participants and their respective beneficiaries, and upon the
respective successors, assigns, executors and administrators of
all of the foregoing.
D. Each additional and each successor Committee member at any
time acting hereunder shall have all of the rights and powers
(including discretionary rights and powers) and all of the
privileges and immunities hereby conferred upon the original
Committee members, and all of the duties and obligations so
imposed upon the original Committee members.
E. No Committee member at any time acting hereunder shall be
required to give any bond or other security for the faithful
performance of his duties as such Committee member.
VIII. ADMINISTRATION.
A. The Committee shall be the "administrator" of the
Investment Fund within the meaning of Section 3(16)(A) of the Act
and shall have the power to administer and construe the
Investment Fund, determine questions of fact and law arising
under the Investment Fund, direct disbursements by the Trustee
and exercise the other rights and powers specified herein.
B. CBS and the Committee may each retain auditors,
accountants and legal counsel selected by it, and CBS and the
Committee may each retain such other persons as it deems
appropriate in connection with administering the Investment Fund.
Any Committee member may himself act in any such capacity, and
any such auditors, accountants and legal counsel may be persons
acting in a similar capacity for any Employer and may be
Employees of any Employer. To the extent permitted by law, the
opinion of any such auditor, accountant or legal counsel shall be
- 41 -<PAGE>
full and complete authority and protection in respect of any
action taken, suffered or omitted by the Committee in good faith
and in accordance with such opinion.
C. The Committee members may allocate responsibility among
themselves, and the Committee may designate other persons to
carry out its fiduciary responsibilities under the Investment
Fund, and, without in any manner limiting the generality of the
foregoing, may, by a written instrument, (1) designate each or
any of the Committee members and/or any other person or persons,
severally or jointly, to execute, on behalf of the Committee, all
documents and other instruments proper, necessary or desirable in
order to effectuate the purposes of the Investment Fund and
(2) revoke or change any such designation theretofore made. Any
Committee member, acting by himself, may similarly revoke any
such designation theretofore made. Any third party may rely upon
the continued effectiveness of any such designation until such
third party shall have notice of the change or revocation
thereof.
D. Each Committee member who shall not be an Employee shall
be entitled to receive, as compensation for his services
hereunder, such fees as he and CBS may from time to time agree.
CBS shall pay such compensation and shall also pay (and/or
reimburse the Committee for) the reasonable expenses incurred by
it in the administration of the Investment Fund, including the
fees and compensation of the persons referred to in Paragraphs A
and B of this Article VIII.
E. To the extent that the Employers and/or the Committee
shall prescribe forms for use by the participants, the former
participants and their respective beneficiaries in communicating
with any Employer, the Committee or the Trustee, the Committee
shall establish periods during which communications may be
received or shall designate representatives to whom
communications shall be delivered, and the Employer, the
Committee and the Trustee shall respectively be protected in
disregarding any notice or communication for which a form shall
so have been prescribed and which shall not be made in such form,
and any notice or communication for the receipt of which a period
shall so have been established and which shall not be received
during such period, and any notice or communication for the
receipt of which a representative shall have been designated and
which shall not be received by such representative. Each
Employer, the Committee and the Trustee shall respectively also
be protected in acting upon any notice or other communication
purporting to be signed by any person and reasonably believed to
be genuine and accurate.
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F. To the extent permitted by law, all determinations
hereunder by an Employer or the Committee shall be made in the
sole and absolute discretion of such Employer or of the
Committee, as the case may be. Neither any Employer nor the
Committee, in making any determination, or in taking any action,
in connection with the administration of the Investment Fund,
shall discriminate in favor of Employees who are officers or
shareholders of any Employer or persons whose principal duties
consist of supervising the work of other Employees or persons who
are highly compensated Employees.
G. Subject to the applicable provisions of paragraph H of
this Article VIII, in the event that any disputed matter shall
arise hereunder, including, without in any manner limiting the
generality of the foregoing, any matter relating to the
eligibility of any person to participate in the Investment Fund,
the participation of any person therein, the amounts payable to
any person hereunder and the applicability and interpretation of
the provisions hereof, the decision of the Committee upon such
matter shall be binding and conclusive upon all persons,
including, without in any manner limiting the generality of the
foregoing, the Employers, the Trustee, all persons at any time in
the employ of any of the Employers and the participants, the
former participants and their respective beneficiaries, and upon
the respective successors, assigns, executors and administrators
of all of the foregoing.
H. All claims for benefits under the Investment Fund by a
participant or his beneficiary shall be made in writing to a
person designated by the Committee for such purpose. If the
designated person receiving a claim for benefits believes that
the claim should be denied, he shall notify the claimant in
writing of the denial of the claim within 90 days after his
receipt thereof unless he shall prior to the end of such 90-day
period notify the claimant of any special circumstances requiring
an extension of time, not to exceed an additional 90-day period,
to respond to such claim and the date by which it is expected a
decision will be rendered. Such notice shall (1) set forth the
specific reason or reasons for the denial, making reference to
the pertinent provisions of the Investment Fund or of Investment
Fund documents on which the denial is based, (2) describe any
additional material or information that must be received before
the claim request may be reconsidered and explain the reason why
such material or information, if any, is needed and (3) inform
the claimant of his right pursuant to this Paragraph H to request
review of the decision by the Committee. A claimant who believes
that he has submitted all available and relevant information may
appeal the denial of a claim to the Committee by submitting a
- 43 -<PAGE>
written request for review to the Committee within 60 days after
the date on which such denial is received. Such period may be
extended by the Committee for good cause shown. The person
making the request for review may examine pertinent Investment
Fund documents and the request for review may discuss any issues
relevant to the claim. The Committee shall decide whether or not
to grant the claim within 60 days after receipt of the request
for review, but this period may be extended by the Committee for
up to an additional 60 days in special circumstances. The
Committee's decision shall be in writing, shall include specific
reasons for the decision and shall refer to pertinent provisions
of the Investment Fund or of Investment Fund documents on which
the decision is based.
I. Notwithstanding anything in the Trust Agreement to the
contrary, the Board of Directors of CBS shall have the sole power
to (1) appoint the Trustee, (2) remove any Trustee then acting
hereunder by giving written notice of such removal to such
Trustee, to the other Employers and to the Committee and (3)
approve or disapprove the accounting by a retiring Trustee
referred to in the Trust Agreement. The Trustee shall have sole
responsibility for the Trust Fund, except as may otherwise be
designated by the Board of Directors of CBS in accordance with
law.
J. Each fiduciary under the Investment Fund shall discharge
his duties with respect to the Investment Fund solely in the
interests of the participants and their beneficiaries with the
care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. No fiduciary
under the Investment Fund shall be liable for an act or omission
of another person in carrying out any fiduciary responsibility
where such fiduciary responsibility is allocated to such other
person by the Investment Fund or pursuant to a procedure
established in the Investment Fund except as otherwise provided
in Section 405 of the Act. CBS hereby indemnifies each member of
the Committee, each officer, and each Employee of the Employers
against any liabilities or expenses, including attorneys' fees,
reasonably incurred by him in connection with any actual or
threatened legal action to which he might become a party by
reason of being a fiduciary with respect to the Investment Fund
except to the extent that he shall be adjudged in such action to
be liable for gross negligence or willful misconduct in the
performance of his duties as a fiduciary. Any person or group of
persons may serve in more than one fiduciary capacity with
respect to the Investment Fund.
- 44 -<PAGE>
K. The sole interest of each participant, each former
participant and each beneficiary of a participant or former
participant hereunder shall be to receive the benefits provided
for herein as and when the same shall become due and payable in
accordance with the terms hereof, and neither any participant nor
any former participant nor any beneficiary of a participant or
former participant shall have any right, title or interest in or
to the Trust Fund or to any other monies or other properties at
any time held by or receivable by the Trustee. The right of any
participant or any former participant and of any beneficiary of
any participant or former participant to receive or have applied
to his use any payment becoming due hereunder shall not be
subject to alienation or assignment, and, if any such participant
or former participant or beneficiary shall attempt to assign,
transfer or otherwise dispose of any such right, or if any such
right shall be subjected to attachment, execution, garnishment,
sequestration or other seizure under any legal, equitable or
other process, it shall, if and to the extent that the Committee
shall so determine, pass and be transferred to such one or more
as may be appointed by the Committee from among the beneficiaries
of such participant or former participant and the spouse and
blood relatives of such participant, former participant or
beneficiary, and in such proportions as the Committee shall
determine.
Nothing contained in the foregoing paragraph shall
prohibit the payment of benefits to an 'alternate payee' pursuant
to a 'qualified domestic relations order,' as said quoted terms
are defined in, and in accordance with, Section 206(d) of the
Act. Distributions pursuant to a 'qualified domestic relations
order' may be made prior to the participant's attainment of
'earliest retirement age.' The Committee is authorized and
directed to develop procedures for the administration of
'qualified domestic relations orders' including procedures
authorizing a suspension of activity in a participant's account
pending a final determination as to whether such an order will be
submitted for review by the Committee and whether any such
submitted order is qualified.
L. 1. All CBS Stock (including fractional shares)
representing D units credited to a participant's D account and/or
C units credited to a participant's C account as of the valuation
date preceding by the shortest practicable interval a record date
established generally for fixing the right of holders of CBS
Stock to vote shall be voted by the Trustee in accordance with
instructions from such participant. CBS shall provide
participants with notices and proxy or information statements
when voting rights are to be exercised, the content of which must
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be generally the same as that provided to record holders of CBS
Stock. Fractional shares shall be voted by the Trustee on a
combined basis, so as to reflect the instructions of the
participants with respect to such shares. The Trustee shall vote
all CBS Stock for which it has not received participants'
instructions, including all CBS Stock held by it as of such
record date but which is not as of that date allocated to
participants' accounts, in the same manner as a majority of the
CBS Stock representing all of the D units and C units, together,
credited to the D accounts and C accounts of participants who
have submitted voting instructions is voted.
2. In the event that a tender or exchange offer or other
offer to purchase CBS Stock is made by an individual or entity
for all or a portion of the outstanding CBS Stock or the CBS
Stock held in the Trust Fund, the Trustee shall not tender or
sell any CBS Stock held by it in the D Fund or the C Fund except
upon specific written instructions from each participant
directing that the CBS Stock representing D units credited to the
participant's D account and/or C units credited to the
participant's C account be so tendered or sold. CBS shall
provide participants with notices and information with respect to
any such offer in a timely fashion so as to permit each
participant an opportunity to submit instructions to the Trustee
with respect to his tendering or not tendering the CBS Stock
representing such D units and/or C units credited to such
participant's D account and/or C account.
IX. DEFINITIONS.
A. As used herein and in the Trust Agreement, the following
terms shall have the following respective meanings:
1. "A account", as used with respect to a participant,
shall mean the separate account which is required to be
established with respect to such participant as provided in
Paragraph A of Article III hereof.
2. "Account", as used with respect to a participant,
shall mean each of his A account, his B account, his D
account, his E account and his C account, including any loans
made to the participant under Article VI, Paragraph G, the
funds of which are attributable to such accounts, and, as used
with respect to an Employer, shall mean its C account.
2B. "Act" shall mean the Employee Retirement Income
Security Act of 1974, as it may be amended from time to time.
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2C. "Affiliated company" shall mean a member with CBS of
a controlled group of corporations within the meaning of
Section 1563(a) of the Internal Revenue Code (the "Code"),
determined without regard to Sections 1563(a)(4) and (e)(3)(C)
of the Code, or a member with CBS of a group of trades or
businesses (whether or not incorporated) under common control
as determined by the Secretary of the Treasury pursuant to
Regulations issued under Section 414(c) of the Code.
2D. "After-tax subaccount", as used with respect to a
participant, shall mean the subaccount established within such
participant's A, B, D and E accounts, respectively, to account
for contributions thereto made as after-tax contributions.
3. "A Fund" shall mean the separate fund established
pursuant to the provisions of the Trust Agreement.
3B. "Anniversary year". The anniversary year of any
Employee shall be each 12-month period commencing on the first
day of the calendar month in which his employment commences.
4. "A unit" shall mean a unit in the A Fund.
5. "B account", as used with respect to a participant,
shall mean the separate account which is required to be
established with respect to such participant as provided in
Paragraph B of Article III hereof.
5B. "Before-tax subaccount", as used with respect to a
participant, shall mean the subaccount established within such
participant's A, B, D and E accounts, respectively, to account
for contributions thereto made as before-tax contributions.
6. "Beneficiaries", as used with respect to a
participant or a former participant, shall mean the surviving
spouse of such participant or, if such participant has no
spouse or if the spouse of such participant shall have
consented thereto in a writing acknowledging that such spouse
is thereby waiving in favor of such other beneficiaries the
right to receive the amount payable hereunder upon the death
of such participant, and such consent is witnessed by a notary
public, the person or persons designated by such participant
or former participant to receive any payments provided for in
Paragraph F of Article VI hereof, and, if and to the extent
that such a designation shall not be in force at the time of
such payment, his spouse, or if he has no spouse, his
executors or administrators.
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7. "B Fund" shall mean the separate fund established
pursuant to the provisions of the Trust Agreement.
8. "Board" shall mean both the Board of Directors of CBS
and any committee which shall be designated by said Board of
Directors from among its members and which shall have the
authority of said Board of Directors with respect to the
Investment Fund and the Trust.
8B. "Break in service", as used with respect to an
Employee, shall mean any anniversary year in which he
completes less than 501 hours of service.
Solely for purposes of determining whether a break in
service has occurred, if an Employee is absent from work by
reason of her pregnancy, the birth of a child of the Employee,
or the placement of a child with the Employee in connection
with the adoption of such child by the Employee or for
purposes of caring for such child for a period beginning
immediately following such birth or placement, the Employee
shall be credited with the hours of service which otherwise
would normally have been credited to the Employee but for such
absence, but in no event less than eight hours of service per
day of such absence and more than 501 hours with respect to
any one such pregnancy, birth or placement. Such hours of
service shall be credited to the calendar year in which the
absence from work begins only if the effect of so doing would
be to prevent the occurrence of a break in service in such
calendar year, and in any other case to the immediately
following calendar year.
9. "B unit" shall mean a unit in the B Fund.
10. "Business day" shall mean a day which is not a
Saturday, a Sunday or a legal holiday.
11. "C account", as used with respect to a participant,
shall mean the separate account which is required to be
established with respect to such participant as provided in
Paragraphs C and (except as such term is used in Article V) E
of Article III hereof, and, as used with respect to an
Employer, shall mean the separate account which the Trustee is
required to establish with respect to such Employer as
provided in Paragraph D of said Article III.
12. "CBS" shall mean CBS Inc.
13. "CBS fiscal year" shall mean the period of 12
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consecutive monthly accounting periods used by CBS in the
maintenance of its accounts.
14. "CBS Pension Plan" shall mean the pension plan
adopted by CBS on December 16, 1942, as amended prior to
December 26, 1968, and the pension plan adopted by CBS
stockholders on April 20, 1960, as amended prior to
December 26, 1968, as said pension plans were further amended
and combined, effective December 26, 1968, as in effect at the
time with respect to which said term is used.
15. "CBS Stock" shall mean the common stock of CBS, $2.50
par value, or any other common stock which CBS is authorized
to issue at the time with respect to which such term is used.
16. "C Fund" shall mean the separate fund established
pursuant to the provisions of the Trust Agreement and (except
as such term is used in Article V) shall include any and all
C-# Funds.
17. "Code" shall mean the Internal Revenue Code of 1954
as in effect at the time with respect to which such term is
used.
18. "Committee" shall mean the administrative committee
provided for in Paragraph A of Article VII hereof.
19. "Continuous employment period", as used with respect
to a participant, shall mean such participant's total years of
service.
19B. "Contribution" shall mean, unless the context shall
otherwise clearly require, each of (a) a participant's
contribution in any category, (b) an Employer contribution and
(c) an Employer's matching contribution. In particular, a
participant's "required basic contribution" shall mean that
contribution described in subparagraph 1 of Paragraph A of
Part (i) of Article IV hereof; a participant's "voluntary
supplemental contribution" shall mean that contribution
described in subparagraph 2 of Paragraph A of Part (i) of
Article IV hereof; and a participant's "periodic special
contribution" shall mean that contribution described in
Part (ii) of Article IV hereof.
20. "Contribution election", as used with respect to a
participant and with respect to any time, shall mean such
participant's election referred to in Article IV hereof.
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21. "Conversion direction", as used with respect to a
participant and with respect to any time, shall mean such
participant's conversion direction referred to in Part (iv) of
Article IV hereof, as modified prior to the time with respect
to which such term is used.
22. "C unit" shall mean a unit in the C Fund and (except
as such term is used in Article V) shall include any and all
C-# units.
22B. "C unit conversion election", as used with respect to
a participant, shall mean such participant's election referred
to in subparagraph 3 of Paragraph E of Article VI hereof.
22C. "D account", as used with respect to a participant,
shall mean the separate account which is required to be
established with respect to such participant as provided in
Paragraph E of Article III hereof.
22D. "D Fund" shall mean the separate fund established
pursuant to the provisions of the Trust Agreement and shall
include any and all D-# Funds.
22E. "Disability" shall mean a state of physical or mental
incapacity of a participant such that, in the opinion of the
Committee based upon a certificate from a physician or
physicians satisfactory to the Committee, such participant, by
reason of injury, illness or disease, is unable to fulfill the
requirements of his position as an Employee of his Employer.
22F. "Distribution election", as used with respect to a
participant, shall mean such participant's election referred
to in subparagraph 1 of Paragraph E of Article VI hereof or a
determination of the Committee not inconsistent with law in
lieu thereof.
23. "D unit" shall mean a unit in the D Fund and shall
include any and all D-# units.
24. "D unit conversion election", as used with respect to
a participant, shall mean such participant's election referred
to in subparagraph 3 of Paragraph E of Article VI hereof.
25. "E account", as used with respect to a participant,
shall mean the separate account which is required to be
established with respect to such participant as provided in
Paragraph F of Article III hereof.
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25B. "Earnings and profits" shall have the same meaning as
when used in Section 316(a) of the Code.
25C. "E Fund" shall mean the separate fund established
pursuant to the provisions of the Trust Agreement.
26. "Employee" shall mean a person who (a) is principally
employed in the United States and/or is a citizen of the
United States, (b) is not included in a group determined by
the Board not to be eligible for participation in the
Investment Fund and (c) is either (i) employed by one or more
of the Employers as an executive or an office employee or as
an employee in a classification of hourly employees specified
by the Board whose terms and conditions of employment are not
subject to the provisions of a collective bargaining agreement
and who (in any such category of employment) is a participant
under the CBS Pension Plan or would have been such but for his
failure to meet the age requirements thereof or (ii) employed
by one or more of the Employers as an employee whose principal
terms and conditions of employment are subject to the
provisions of a collective bargaining agreement which provides
for eligibility for participation in the Investment Fund or
(iii) employed by one or more of the Employers in a group
determined by the Board to be eligible for participation in
the Investment Fund. "Employee" shall also mean a person
(i) who is employed by any foreign subsidiary of CBS to which
U.S. Social Security coverage has been extended by an
agreement entered into by CBS under Section 3121(1) of the
Internal Revenue Code, (ii) as to whom no contributions under
any other funded plan of deferred compensation are being
provided by any other person with respect to the remuneration
paid to such individual by the foreign subsidiary and
(iii) who is a citizen of the United States; for the purposes
of the Investment Fund only, CBS shall be deemed to be the
Employer of such Employees, provided, however, that "Employee"
shall not include "leased employees" as defined in
Section 414(n) of the Code.
27. "Employer" shall mean each of (a) CBS, (b) each
subsidiary which executes the Trust Agreement as of June 29,
1969 and (c) each subsidiary which adopts the Investment Fund
and becomes a party to the Trust Agreement as provided in
Paragraphs A and B of Article X hereof.
27B. "Employer contributions", as used with respect to
a participant, shall mean those contributions made to such
participant's A account and/or B account and/or D account
and/or E account on a before-tax basis pursuant to a salary
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deferral agreement with his Employer forming part of his
contribution election as in effect from time to time.
28. "Employer's matching contribution" shall mean a
payment made to the Trustee by an Employer as provided in
Article V hereof.
28B. "E unit" shall mean a unit in the E Fund.
28C. "Fiduciary" shall mean any person to the extent that
he (a) exercises any discretionary authority or discretionary
control respecting management of the Investment Fund or
exercises any authority or control respecting management or
disposition of its assets, (b) renders investment advice for a
fee or other compensation, direct or indirect, with respect to
any moneys or other property of the Investment Fund, or has
any authority or responsibility to do so, or (c) has any
discretionary authority or discretionary responsibility in the
administration of the Investment Fund.
29. "Former participant" shall mean a person whose
participation in the Investment Fund shall have terminated as
provided in Paragraph A of Article VI hereof.
30. "Fund" shall mean each of the A Fund, the B Fund, the
D Fund, the E Fund and the C Fund.
30B. "Hour of service", as used with respect to any person
employed in regularly scheduled part-time employment, shall
mean each hour for which he shall be directly or indirectly
paid or entitled to payment
(a) for services he performs for CBS; or,
except as expressly provided in the Investment Fund, solely
for purposes of determining eligibility to participate therein
and the extent to which his C units shall have vested, and
subject to the provisions of this Section 30A,
(b) for services he performs for any affiliated
company, or any predecessor corporation of CBS, or corporation
merged, consolidated, or liquidated into CBS or its
predecessor, or a corporation substantially all of the assets
of which were acquired by CBS to the extent the Board of
Directors of CBS so directs consistent with Regulations issued
by the Secretary of the Treasury.
With respect to every person employed on a full-time
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basis, 190 hours of service shall be credited for each
calendar month in which he has actually performed at least one
hour of service.
In addition to the foregoing, the following
provisions shall apply, where appropriate, to the computation
of hours of service. Any Employee may be credited with hours
of service for each calendar month in which he has a leave of
absence of at least one calendar day. Any Employee may be
credited with years of service for any period for which back
pay, irrespective of mitigation of damages, may be awarded or
agreed to by CBS or an affiliated company, in which event such
hours of service shall be credited to each anniversary year to
which each such award pertains. An Employee shall be credited
with hours of service for any period for which he is directly
or indirectly paid or entitled to payment by CBS or any
affiliated company for reasons (such as vacations, sickness or
disability) other than for his performance of services, and
such hours of service and the computation period or periods to
which such hours shall be credited shall be determined in
accordance with Section 2530.200b-2 of the Regulations
prescribed by the Secretary of Labor. Notwithstanding any
other provision of the Investment Fund, in no event shall any
person be credited with hours of service for any period prior
to January 1, 1976 during which he was employed on other than
a full-time basis.
31. "Investment direction", as used with respect to a
participant and with respect to any time, shall mean such
participant's direction referred to in subparagraph 1 of
Paragraph B of Part (i) or in subparagraph 3 of Paragraph A of
Part (ii) of Article IV hereof, as modified prior to the time
with respect to which such term is used.
32. "Investment Fund" shall mean the plan embodied
herein.
32B. "Investment manager" shall mean a fiduciary appointed
by the Board of Directors of CBS who (a) has the authority to
direct the investment and reinvestment of all or any part of
the Trust Fund under the Trust Agreement; (b) is registered as
an investment adviser under the Investment Advisers Act of
1940, is a bank as defined in the Investment Advisers Act of
1940 or is an insurance company qualified to perform services
described in clause (a) above under the laws of more than one
state; and (c) has acknowledged in writing that it is a
fiduciary with respect to the Investment Fund.
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33. "Leave of absence" shall mean a leave of absence from
the employ of one or more of the Employers granted,
prospectively or retroactively, to an Employee at any time for
a specific purpose.
34. "Monthly accounting period" shall mean each calendar
month.
35. "Non-Fund subsidiary" shall mean a subsidiary which
is not an Employer.
36. "Participant", as used with respect to the Investment
Fund, shall mean an Employee of one or more of the Employers
who shall have become a participant in the Investment Fund as
provided in Paragraph B of Article II hereof and whose
participation shall not have terminated as provided in
Paragraph A of Article VI hereof. Such term shall, if the
context shall permit, include a former participant.
37. "Participant's contributions", as used with respect
to a participant, shall mean the amount of such participant's
salary withheld and/or deferred by his Employer pursuant to
such participant's contribution election and paid to the
Trustee by such Employer as provided in Paragraph C of
Part (i) of Article IV hereof.
38. "Participation election" shall mean the election of
an Employee to become a participant.
39. "Participation period", as used with respect to a
participant, shall mean the period during which such
participant shall be a participant in the Investment Fund.
40. "Payroll period", as used with respect to a
participant, shall mean the regular period (whether weekly or
biweekly or semimonthly or otherwise) on the basis of which
such participant's Employer pays such participant's salary.
41. "Plan year" shall mean a calendar year.
42. "Salary", as used with respect to a participant, with
respect to an Employer and with respect to a payroll period,
shall mean the regular compensation paid by such Employer to
such participant for such payroll period, inclusive of all
amounts of regular compensation deferred by such participant
in accordance with his contribution election which are
contributed to such participant's A account and/or B account
and/or D account and/or E account on a before-tax basis as
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Employer contributions, but excluding bonus payments, overtime
compensation, deferred compensation and additional
compensation of every other kind so paid, or, in the case of
certain categories of Employees whose regular compensation is
not payable entirely on a weekly or biweekly or semimonthly
salary basis, such other compensation as, and to the extent
that, the Board shall determine. Notwithstanding any
provision in the Investment Fund to the contrary, in no event
may the contributions made to the Investment Fund by or on
behalf of any participant in any plan year exceed the maximum
percentage allowed under subparagraphs 1 and 2 of Paragraph
(i)A of Article IV and Article V multiplied by the Employee's
salary not in excess of $200,000 for any plan year beginning
after December 31, 1988, and prior to January 1, 1994, or
$150,000 for any plan year beginning after December 31, 1993
(or, with respect to either such dollar amount, such larger
amount as the Secretary of the Treasury may determine for such
plan year under Section 401(a)(17) of the Internal Revenue
Code). Such dollar limitation on the amount of salary taken
into account shall also be applied for purposes of the
limitations of Paragraph (iii) of Article IV. For purposes of
this dollar limitation only, in determining the salary of any
Employee, the rules of Section 414(q)(6) of the Internal
Revenue Code shall apply, except that in applying such rules,
the term "family" shall include only the spouse of the
Employee and any lineal descendants of the Employee who have
not attained age 19 before the close of the year.
43. "Stock election", as used with respect to a
participant, shall mean such participant's election referred
to in subparagraph 3 of Paragraph E of Article VI hereof.
44. "Subsidiary" shall mean a corporation which is
controlled by CBS, directly or indirectly.
45. "Taxable year" shall have the same meaning as when
used in Section 441(b) of the Code.
46. "Termination benefit", as used with respect to a
participant, shall mean the benefit which such participant
shall be entitled to receive by reason of the termination of
his participation (as provided in Paragraphs C, E and F of
Article VI hereof).
47. "Termination date", as used with respect to a
participant, shall mean the date of the termination of such
participant's participation as provided in Paragraph A of
Article VI hereof.
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48. "Trust" shall mean the trust created by and under the
Trust Agreement.
49. "Trust Agreement" shall mean the trust agreement by
and among the Employers and the Trustee, dated as of June 29,
1969, including the successor Trust Agreement dated September 1, 1986,
as the same may at any time and from time to time be amended.
50. "Trustee", as used with respect to any time, shall
mean the Trustee acting under the Trust Agreement at such
time.
51. "Trust Fund" shall mean all property which shall be
held by the Trustee, as trustee under the Trust Agreement, at
the time with respect to which such term is used.
52. "Unit" shall mean each of an A unit, a B unit, a D
unit, an E unit and a C unit.
53. "Unvested C units", as used with respect to a
participant and with respect to any time, shall mean those of
the C units credited to such participant's C account as of
such time which shall not be vested C units.
54. "Valuation date" shall mean the last business day of
a calendar month.
55. "Value", as used generally, shall mean fair market
value, as used with respect to a unit and as of July 31, 1969,
shall mean $1.00 and as used with respect to a unit and as of
a date subsequent to July 31, 1969, shall mean the value of
the Fund in which such unit is held at such date divided by
the number of units which are then held in said Fund.
56. "Vested C units", as used as of a valuation date or a
termination date with respect to (a) a participant whose
continuous employment period on such date is three or more
years of service or (b) a participant whose 65th birthday is
not subsequent to such date or (c) a former participant whose
participation shall have terminated by reason of his death or
his disability, shall mean all of the C units credited to such
participant's C account as of such date; said term, as so used
with respect to a participant whose continuous employment
period on such date is less than three full years, whose 65th
birthday is subsequent to such date and whose participation
shall not have terminated by reason of his death or his
disability, shall mean 33-1/3 percent of the C units credited
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to such participant's C account as of such date multiplied by
the number of years of service included in his continuous
employment period on such date.
57. "Withdrawal" shall mean a payment made to a
participant as provided in subparagraph 1 of Paragraph B of
Article VI hereof.
58. "Year" shall mean any period of 12 consecutive
monthly accounting periods.
59. "Year of service", as used with respect to an
Employee or a participant, as the case may be, shall mean each
anniversary year in which he shall complete at least 1,000
hours of service, subject, however, to the following:
(a) Solely with respect to eligibility of an Employee
employed on other than a full-time basis, such Employee shall
be credited with a year of service if he completes 1,000 hours
of service in his first anniversary year following
December 31, 1975.
(b) Solely for the purpose of determining the extent
to which such participant shall have a vested interest in the
C units, if such participant shall not have completed a year
of service in the anniversary year in which he became a
participant, or in the preceding plan year, he shall
nevertheless be credited with one year of service for the
anniversary year in which he became a participant.
(c) The period in which services shall have been
performed by an Employee prior to a break in service shall not
be included in determining his years of service unless
(i) such services shall have been performed prior
to January 1, 1976, in which event the period in which
such services shall have been performed shall be included
in determining such Employee's years of service in
accordance with the break in service rules under the
Investment Fund in effect prior to such date or
(ii) such services shall have been performed after
December 31, 1975 by an Employee who shall have a vested
interest in the C units prior to such break in service,
or, if no C units shall have vested, the number of
consecutive anniversary years during which such break in
service shall have continued shall be less than the
greater of five or the number of years of service that
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shall have been accumulated immediately preceding such
break in service.
(d) The period in which services shall have been
performed by an Employee after five or more consecutive
one-year breaks in service shall not be included in
determining years of service for the purpose of causing his
vested interest in the C units, as of the date immediately
preceding such a break in service, to be increased.
60. The terms "C-# account", "C-# Fund" and "C-# units"
shall mean the account, Fund and units provided for and
described in Paragraph G of Article III.
61. The terms "D-# account", "D-# Fund" and "D-# units"
shall mean the account, Fund and units provided for and
described in Paragraph G of Article III.
B. For the purposes hereof:
1. To the extent that the context shall permit, any
masculine pronoun used herein shall be construed to include
also the similar feminine pronoun, any singular word so used
shall be construed to include also the similar plural word and
any plural word so used shall be construed to include also the
similar singular word.
2. Any reference herein to any date or day shall be
deemed to be a reference to the close of business on such date
or day.
3. Terms used herein with respect to a participant which
are defined in Paragraph A of this Article IX shall have the
same respective meanings when used with respect to an
Employee.
4. If any Employer shall at any time grant (or shall at
any time have granted) to an Employee a leave of absence from
his employment by such Employer, whether such leave shall
commence (or shall have commenced) and/or shall be granted (or
shall have been granted) prior to, at the time of, or
subsequent to such Employee's having become a participant,
such Employee shall be deemed to be (or to have been) in the
employ of such Employer during such leave of absence. That
portion of the period of such leave of absence which shall
commence on the actual commencement of such leave of absence
shall not be deemed to interrupt the continuity of such
participant's participation period, but shall not be included
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therein unless such Employee shall receive a salary from his
Employer during all or a portion of such leave of absence and
shall make contributions during such period.
5. In order to convert an amount to a number of units as
of any date, such amount shall be divided by the value of one
such unit on such date, in order to convert a number of units
to an amount as of any date, such number shall be multiplied
by the value of one such unit on such date, and in order to
convert a number of units of one classification, whether A, B,
D, E or C, into a number of units of another classification as
of any date, such first-mentioned number shall be multiplied
by the value of one unit of such classification first referred
to on such date and the product thus determined shall be
divided by the value of one unit of such other classification
on such date.
X. ADOPTION BY SUBSIDIARIES.
A. Any subsidiary may, pursuant to a resolution of its board
of directors, with the consent of the Board, adopt the Investment
Fund for the exclusive benefit of its employees eligible to
participate therein. Such adoption shall be effective as of the
first day of any monthly accounting period specified by such
subsidiary and consented to by the Board.
B. Each subsidiary adopting the Investment Fund as provided
in Paragraph A of this Article X shall enter into an agreement
with the other Employers and the Trustee pursuant to which such
subsidiary shall become a party to the Trust Agreement.
XI. AMENDMENT; TERMINATION.
A. CBS may, at any time and from time to time, pursuant to a
resolution of the Board, by a written instrument delivered to the
Trustee and to the other Employers, amend the Investment Fund,
and any Employer may, pursuant to a resolution of its board of
directors, by a written instrument delivered to the Trustee and
to the other Employers, terminate the Investment Fund with
respect to its Employees; provided, however, that (1) no such
amendment or termination shall adversely affect the units
credited to any participant's or former participant's accounts on
the date of such amendment or termination, nor shall, to the
extent prohibited under Section 411(d)(6) of the Code, any
amendment result in depriving a participant of the right to elect
an optional form of benefit which, but for the provisions of such
amendment, such participant (or his or her beneficiaries) would
have been entitled to elect with respect to his or her vested
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benefit, (2) no such amendment shall adversely affect any
participant's or former participant's interest in those of the C
units credited to his C account on the date of such amendment
which would be vested C units if the date of such amendment were
his termination date, (3) no such amendment shall result in a
change in the substance of Paragraph B of this Article XI with
respect to participants who are such on the date of such
amendment, (4) notwithstanding any such amendment and
notwithstanding any such termination, it shall be impossible,
whether by operation or natural termination of the Trust or
pursuant to the provisions of this Paragraph A, or by the
happening of a contingency or by arrangement or by any other
means, for any part of the corpus of or the income from the Trust
to be used for, or diverted to, purposes other than the exclusive
benefit of the participants, the former participants and their
respective beneficiaries, (5) no such amendment shall increase
the duties, responsibilities or obligations of any Committee
member unless he shall consent thereto, (6) no such amendment
shall increase the duties, responsibilities or obligations of the
Trustee unless it shall consent thereto and (7) no such amendment
shall increase the duties, responsibilities or obligations of an
Employer unless it shall consent thereto.
B. In the event of, and upon, an Employer's termination of
the Investment Fund 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, (1) the interest in his C account of each
participant who shall be or shall have been an Employee of such
Employer shall vest and CBS or its designee shall, as of and as
promptly as shall be practicable after the valuation date
concurrent with, or next succeeding, the date of such termination
or permanent discontinuance, allocate the C units in such
Employer's C account pro rata to the C units in the C accounts of
the participants who shall have been Employees of such Employer
on the date of such termination or permanent discontinuance, and
(2) the Trustee shall, as of and as promptly as shall be
practicable after the valuation date next succeeding whichever
shall occur first of such participant ceasing to be an Employee
of CBS and all subsidiaries and the termination of the Trust, pay
or distribute to such participant (or his beneficiaries) in the
manner provided in Paragraph F of Article VI hereof the benefits
to which he is (or they are) entitled. In the event of, and
upon, the termination of the Investment Fund by an Employer with
respect to some but less than all of the Employees of such
Employer (a "partial termination"), (1) the interest in the C
account of each participant affected by such partial termination
shall vest and (2) as of and as promptly as shall be practicable
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after the valuation date concurrent with, or next succeeding, the
date of such partial termination, (a) CBS or its designee shall
allocate the C units in such Employer's C account pro rata to the
C units in the C accounts of the participants affected by such
partial termination and (b) the Trustee shall pay or distribute
to each such participant (or his beneficiaries) in the manner
provided in Paragraph F of Article VI hereof the benefits to
which he is (or they are) entitled.
C. In the event of any merger or consolidation of the
Investment Fund and/or the Trust hereunder with, or transfer of
the assets or liabilities of the Investment Fund and/or Trust to,
any other plan, the terms of such merger, consolidation or
transfer shall be such that each participant would receive (in
the event of termination of the Investment Fund or its successor
immediately thereafter) a benefit which is no less than he would
have received in the event of termination of the Investment Fund
immediately prior to such merger, consolidation or transfer.
1. Anything herein to the contrary notwithstanding, the
Committee shall direct the Trustee to transfer, as of January 1,
1991, to the trustee of the trust established under the CBS News
Special Projects Inc. Employee Investment Fund maintained by CBS
News Special Projects Inc. for the benefit of employees of CBS
News Special Projects Inc. who were Employees of CBS Inc.
participating in the Investment Fund immediately prior to employ
with CBS News Special Projects Inc. an amount from the Trust
equal to the balance in such participants' accounts determined as
of the transfer date. After December 31, 1990, the former CBS
Inc. Employees described above shall be entitled to no further
allocations under this Investment Fund.
2. Anything herein to the contrary notwithstanding, the
Committee shall direct the Trustee to transfer, as of the
transfer date, to the trustee of the trust established under the
CBS News Special Projects Inc. Employee Investment Fund
maintained by CBS News Special Projects Inc. for the benefit of
employees of CBS News Special Projects Inc. who were Employees of
CBS Inc. participating in the Investment Fund immediately prior
to employ with CBS News Special Projects Inc., an amount from the
Trust equal to the balance in such participants' accounts
determined as of the transfer date. Effective with the transfer
date, the former CBS Inc. Employees described above shall be
entitled to no further allocations under this Investment Fund.
3. Subject to the approval of the Plans Administration
Committee, the Trustee shall accept a transfer of assets and
liabilities accrued by a participant under any other plan which
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transfer shall be in accordance with the requirements
of Section 414(1) of the Code. In no event shall the accrued
benefit of any such participant under this Investment Fund
immediately after such transfer be less than the accrued benefit
of such participant under the transferor plan immediately prior
to such transfer. In addition, any distribution, withdrawal, or
other rights available to each affected participant under the
terms of the transferor plan as of the date of such transfer
which are protected under Section 411(d)(6) of the Code shall
continue to be available with respect to such transferred account
balances.
D. Notwithstanding anything hereinbefore to the contrary, a
matching contribution hereunder by any Employer which (1) was
made under a mistake of fact or (2) was conditioned upon
deduction of such contribution under Section 404 of the Internal
Revenue Code (the "Code) and such deduction is disallowed, shall
be returned to the Employer within one year after the payment of
the contribution or the disallowance of the deduction (to the
extent disallowed), whichever may be applicable.
XII. LIMITATIONS.
A. Subject to the adjustments hereinafter set forth, the
maximum annual addition to a participant's account shall in no
event exceed the lesser of (1) $30,000 (adjusted annually,
effective January 1, 1988, to reflect increases in the cost of
living, in accordance with Regulations issued by the Secretary of
the Treasury under Section 415 of the Internal Revenue Code
("Code")) or (2) 25 percent of his annual compensation.
B. For the purpose of Paragraph A of this Article XII:
1. "Annual addition" shall mean, as used with respect to
a participant, the sum for any calendar year of (1) the
Employer's contributions (including before-tax required basic
contributions, before-tax voluntary supplemental contributions
and Employer matching contributions); (2) any forfeitures under
the applicable terms, if any, of the Investment Fund; (3) the
participant's after-tax contributions; and (4) amounts described
in Section 415(l)(1) and Section 419(d)(2) of the Internal
Revenue Code. Notwithstanding the foregoing, annual additions
for any calendar year beginning before January 1, 1987 shall
include a participant's after-tax contributions only to the
extent greater than the lesser of (a) such participant's
after-tax contributions in excess of six percent of his
compensation or (b) one-half of such participant's after-tax
contributions; provided, however, with respect to calendar years
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prior to January 1, 1976, the amount of a participant's
contributions for each year shall be deemed to be an amount equal
to the excess of the aggregate of the participant's contributions
prior to January 1, 1976 (without regard to such contributions
made on or after October 1, 1973 under the terms of the
Investment Fund in effect as of such date) over 10 percent of his
compensation for each calendar year of his participation in the
Investment Fund prior to such date, multiplied by a fraction, the
numerator of which shall be 1 and the denominator of which shall
be the number of calendar years during which he was a participant
prior to January 1, 1976.
2. "Annual compensation" shall mean a participant's wages
within the meaning of Section 3401(a) of the Code and all other
payments of compensation to an Employee by his Employer (in the
course of the Employer's trade or business) for which the
Employer is required to furnish the Employee a written statement
under Section 6041(d), Section 6051(a)(3) and Section 6052 of the
Code, determined without regard to any rules under Section
3401(a) of the Code 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) of the Code), and including amounts paid or
reimbursed by the Employer for moving expenses incurred by the
Employee.
C. The limitations set forth in this Article with respect to
any participant who at any time participates in any other defined
contribution plan maintained by the Employer or in more than one
defined benefit plan maintained by the Employer shall apply as if
the total annual addition allocated to the participant under all
such defined contribution plans in which the participant so
participates are allocated under a single plan and as if the
total benefits payable to the participant under all defined
benefit plans maintained by the Employer are payable from a
single plan.
For purposes of this Article, the term "Employer" shall
include any affiliated company as defined in Paragraph 2B. of
Article IX hereof and modified by Section 415(h) of the Code.
D. In the case of a person who is a participant both in the
Investment Fund and the CBS Pension Plan or any other applicable
defined plan, the sum of the defined benefit plan fraction and
the defined contribution plan fraction (as each such term is
hereinafter defined) for any calendar year shall not exceed 1.0.
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E. For the purpose of determining the sum referred to in
Paragraph D of this Article XII, the following shall apply:
(1) "Defined benefit plan fraction" shall mean a fraction,
(i) the numerator of which shall be the annual benefit payable
with respect to a participant under the CBS Pension Plan and any
other applicable defined benefit plan determined without regard
to the limitation provisions required by Section 415(b) of the
Code and (ii) the denominator of which shall be the maximum
benefit payable under such Section, increased as provided by
Section 415(e)(2)(B) of the Code as amended by the Tax Equity and
Fiscal Responsibility Act of 1982 ("TEFRA"); provided, however,
that in the case of any participant in the CBS Pension Plan whose
benefit is described in Section 6.04C thereof prior to increasing
the denominator of the fraction pursuant to Section 415(e)(2)(B)
of the Code, the numerator of the defined benefit plan fraction
shall be deemed not to exceed the denominator of such fraction.
(2) "Defined contribution plan fraction" shall mean a
fraction, (i) the numerator of which shall be the aggregate
annual additions (as hereinafter defined), with respect to a
participant in the Investment Fund or any other defined
contribution plan maintained by an Employer, determined as of the
close of the calendar year in which such additions accrued,
determined without regard to the limitation provisions required
by Section 415(c) of the Code, and (ii) the denominator of which
shall be the aggregate maximum annual additions determined by
applying the provisions of said Section 415(c) for each calendar
year of the participant's service, taking into account the
transition rules for years ending prior to January 1, 1983
prescribed under the Investment Fund or other applicable plans
and under the Act and TEFRA, including the rules of
Section 415(e)(3) of the Code as amended by TEFRA, unless the
Committee elects to apply the rules of Section 415(e)(6) of the
Code, as added by TEFRA; provided, however, that in the case of
calendar years prior to January 1, 1976 prior to increasing the
denominator of the fraction pursuant to Section 415(e)(3)(B) or
Section 415(e)(6)(B) of the Code, the numerator of the defined
contribution plan factor shall be deemed not to exceed the
denominator of such fraction.
F. The limitation referred to in Paragraph D of this
Article XII shall not apply with respect to any participant who
on September 2, 1974 was a participant both in the Investment
Fund and the CBS Pension Plan if the defined benefit fraction
with respect to such a person shall not be increased, by
amendment or otherwise, after September 2, 1974 and no
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contributions to his account are made under the Investment Fund
after such date.
G. If, prior to the allocation of contributions on behalf of
any participant, it is determined that the limitation on annual
additions prescribed under Paragraph A hereof or the limitation
applicable to a combination of plans prescribed under Paragraph D
hereof would be exceeded in any year, contributions shall be
reduced, in the following order, but only to the extent necessary
to satisfy the limitations:
(1) First, periodic special contributions shall be reduced;
(2) Second, after-tax voluntary supplemental contributions
shall be reduced;
(3) Third, before-tax voluntary supplemental contributions
shall be reduced;
(4) Fourth, after-tax required basic contributions shall be
reduced;
(5) Fifth, before-tax required basic contributions shall be
reduced;
(6) Sixth, Employer matching contributions shall be reduced.
Any amount which may not be allocated to the account of a
participant by reason of (2), (3), (4) or (5) hereof shall not be
withheld and/or deferred from his salary but shall be paid to
him. Any amount which may not be allocated to the account of a
participant by reason of (6) hereof shall be retained in the
general assets of the Employer, if the Board of Directors of CBS
so directs, or paid to such participant upon such terms and
conditions as the Board of Directors of CBS may from time to time
prescribe.
H. Notwithstanding the provisions of Paragraph G, in the
event that the limitations prescribed under Paragraph D would be
exceeded with respect to any participant who participates in the
Investment Fund and the CBS Pension Plan or any other applicable
defined benefit plan, the benefits under the defined benefit plan
shall be reduced or frozen prior to making any adjustments under
the Investment Fund.
I. In the event that, notwithstanding Paragraph G hereof, the
limitations with respect to annual additions prescribed hereunder
are exceeded with respect to any participant and such excess
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arises as a consequence of the crediting of forfeitures to the
participant's account or a reasonable error in estimating the
participant's compensation or a reasonable error in determining
the amount of before-tax contributions that may be made with
respect to any individual within the limits of Section 415 of the
Code, such excess shall be disposed of by returning to the
participant his after-tax contributions, if any, for the year in
which the excess arose, together with the earnings thereon, but
only to the extent necessary to cause the annual additions to the
participant's account to equal, but not exceed, the limitations
prescribed hereunder. In the event that after such contributions
and earnings are returned there remains an excess, before-tax
contributions, if any, for the year in which the excess arose,
shall be returned to the participant, but only to the extent
necessary to cause the annual additions to the participant's
account to equal, but not exceed, the limitations prescribed
hereunder. In the event that after such contributions are
returned there remains an excess, such excess shall be held in a
suspense account and allocated to the account of the participant
in succeeding years or, if his employment has terminated and
there remains an amount standing to his credit in a suspense
account, among the accounts of all participants. Any before-tax
or after-tax contributions that are returned to the participant
in accordance with this Paragraph shall not be taken into account
in applying the limitations of Paragraphs (iii)(A), (iii)(C) and
(iii) (D) of Article IV.
XIII. INTERPRETATION; CONSTRUCTION.
Anything in the Investment Fund or the Trust Agreement to the
contrary notwithstanding, no provision thereof shall be so
construed as to violate the requirements of the Act. To the
extent that state law shall not be preempted by the provisions of
the Act or any other laws of the United States heretofore or
hereafter enacted, as the same may be amended from time to time,
the Investment Fund shall be administered, construed and enforced
according to the laws of the State of New York.
XIV. TOP-HEAVY PLAN.
A. Effective January 1, 1984, the Investment Fund shall meet
the requirements of this Article XIV in the event that the
Investment Fund is or becomes a top-heavy plan.
B. 1. Subject to the aggregation rules set forth in
subparagraph 2 of this Paragraph B, the Investment Fund shall be
considered a top-heavy plan pursuant to Section 416(g) of the
Code in any plan year beginning after December 31, 1983 if, as of
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the determination date, the present value of the cumulative
accrued benefits of all Key Employees exceeds 60 percent of the
present value of the cumulative accrued benefits of all of the
Employees as of such date, excluding former Key Employees and,
except for the plan year beginning January 1, 1984, excluding any
Employee who has not received compensation from the Employer
during the five consecutive plan year period ending on the
determination date, but taking into account in computing the
ratio any distributions made during the five consecutive plan
year period ending on the determination date. For purposes of
the above ratio, the present value of a Key Employee's accrued
benefit shall be counted only once each plan year,
notwithstanding the fact that an individual may be considered a
Key Employee for more than one reason in any plan year.
2. For purposes of determining whether the Investment
Fund is a top-heavy plan and for purposes of meeting the
requirements of this Article XIV, the Investment Fund 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 Investment
Fund shall be considered a top-heavy plan. If such permissive
aggregation group is not top-heavy, this Investment Fund shall
not be a top-heavy plan.
C. For the purpose of determining whether the Investment Fund
is top-heavy, the following definitions shall be applicable:
1. 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 amount of an
individual's accrued benefit and the present value thereof shall
be determined as of the valuation date and shall include any
contribution actually made after such valuation date but on or
before the determination date. The term "valuation date" means
the most recent value determination date defined in
subparagraph 54 of Paragraph A of Article IX hereof occurring
within a 12-month period ending on the determination date.
2. 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 preceding plan
years:
(a) was an officer of the Employer who has annual
compensation from the Employer in the applicable plan year in
excess of 150 percent of the dollar limitation under
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Section 415(c)(1)(A) of the Code; provided, however, that the
number of individuals treated as Key Employees by reason of
being officers hereunder shall not exceed the lesser of 50 or
10 percent of all Employees, and provided further that if the
number of Employees treated as officers is limited to 50
hereunder, the individuals treated as Key Employees shall be
those who, while officers, received the greatest annual
compensation in the applicable plan year and any of the four
preceding plan years (without regard to the limitation set
forth in Section 416(d) of the Code); or
(b) was one of the 10 Employees owning or considered
as owning the largest interests in the Employer who has annual
compensation from the Employer in the applicable plan year in
excess of the dollar limitation under Section 415(c)(1)(A) of
the Code as increased under Section 415(d) of the Code; or
(c) was a more than five percent owner of the
Employer; or
(d) was a more than one percent owner of the Employer
whose annual compensation from the Employer in the applicable
plan year exceeded $150,000.
For purposes of determining who is a Key Employee,
ownership shall mean ownership of the outstanding stock of the
Employer or of the total combined voting power of all stock of
the Employer, taking into account the constructive ownership
rules of Section 318 of the Code, as modified by
Section 416(i)(1) of the Code.
For purposes of section (a) of this subparagraph but not
for purposes of sections (b), (c) and (d) of this subparagraph
(except for purposes of determining compensation under
section (d) of this subparagraph), the term "Employer" shall
include any entity aggregated with an Employer pursuant to
Section 414(b), (c) or (m) of the Code.
For purposes of section (b) of this subparagraph, an
Employee (or former Employee) who has some ownership interest is
considered to be one of the top 10 owners unless at least 10
other Employees (or former Employees) own a greater interest than
such Employee (or former Employee); provided that if an Employee
has the same ownership interest as another Employee, the Employee
having greater annual compensation from the Employer is
considered to have the larger ownership interest.
3. Non-Key Employee. The term "Non-Key Employee" shall
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mean any Employee who is a participant and who is not a Key
Employee.
4. 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. If
an individual is a Key Employee by reason of the foregoing
sentence as well as a Key Employee in his own right, both the
present value of his inherited accrued benefit and the present
value of his own accrued benefit will be considered his accrued
benefit for purposes of determining whether the Investment Fund
is a top-heavy plan.
5. Compensation and Compensation Limitation. For
purposes of this Article XIV, except as otherwise specifically
provided, the term "compensation" means the amount stated on an
Employee's Form W-2 for the calendar year that ends with or
within the plan year; provided that the annual compensation of a
Key Employee taken into account under the Investment Fund shall
not exceed $200,000, for plan years beginning before January 1,
1994, or $150,000, for plan years beginning after December 31,
1993, and in either case adjusted for increases in the cost of
living pursuant to regulations issued under Section 401(a)(17) of
the Code.
6. Required Aggregation Group. The term "required
aggregation group" shall mean all other qualified defined benefit
and defined contribution plans, including terminated 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.
7. 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
Internal Revenue Code when considered with a required aggregation
group.
8. Present Value of Accrued Benefit. The present value
of an individual's accrued benefit shall mean the sum of the
value as of the most recent valuation date of the A units
credited to his A account, the B units credited to his B account,
the D units credited to his D account, the E units credited to
his E account and the C units credited to his C account as of the
determination date and contributions due as of the determination
date.
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D. In the event the Investment Fund is determined to be
top-heavy for any plan year, the following requirements shall be
applicable.
1. Minimum Allocation. (a) In the case of a Non-Key
Employee who is covered under this Investment Fund 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 Investment Fund is top-heavy shall equal the
lesser of three percent 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 Sections
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 Investment Fund 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.
(b) A Non-Key Employee who is covered under this
Investment Fund and under a qualified defined benefit plan
maintained by the Employer shall not be entitled to the minimum
allocation under this Investment Fund but shall receive the
minimum benefit provided under the terms of the qualified defined
benefit plan.
2. 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 by 1.25.
XV. MIDWEST COMMUNICATIONS, INC. TRANSACTION.
A. Transfer of Accounts from the Midwest Communications, Inc.
Retirement Savings Plan to Investment Fund:
1. All individuals who were salaried, nonunion employees
of Midwest Communications, Inc. and who were eligible to
participate in the Midwest Communications, Inc. Retirement
Savings Plan as of February 5, 1992, shall be eligible to
participate in the Investment Fund with respect to compensation
earned after April 5, 1992. Amounts credited to the accounts of
such Participants of the Midwest Communications, Inc. Retirement
Savings Plan who are participants under the Investment Fund shall
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be transferred to the Investment Fund effective April 30, 1992
("Transferred Amount(s)").
2. All individuals who were union employees of Midwest
Communications, Inc. and who were eligible to participate in the
Midwest Communications, Inc. Retirement Savings Plan shall be
eligible to participate in the Investment Fund as of the date
specified by the individual collective bargaining agreement with
respect to compensation earned after the date specified in such
agreement. Amounts credited to the accounts of such Participants
of the Midwest Communications, Inc. Retirement Savings Plan who
are participants under the Investment Fund shall be transferred
to the Investment Fund effective as of the valuation date
following the date specified in the particular collective
bargaining agreement for their eligibility to participate in the
Investment Fund ("Transferred Amount(s)").
3. Transferred Amounts shall be subject to the following
procedures:
(i) Allocation and Accounting for Transferred Amounts:
The portion of a participant's Transferred Amount representing
before-tax contributions shall be allocated to his Before-Tax
Account; the portion representing rollover contributions shall
be allocated to his Rollover Contribution Account; and the
remaining portion shall be allocated to the participant's
Employer Matching Contribution Account.
(ii) Investment of Transferred Amounts: Transferred
Amounts shall be invested in Funds A, B, D and E as directed
by the participant in accordance with the investment
provisions of Article III and IV. In the event the
participant fails to issue an investment direction, the
Transferred Amounts shall be invested in Fund B.
(iii) Vesting in Transferred Amounts: A participant's
vested interest in his Transferred Amount shall be determined
in accordance with the rules of subparagraph 56 of Paragraph A
of Article IX hereof, provided that all prior service credit
with Midwest Communications, Inc. shall be treated as service
with CBS Inc., and further provided that a participant's
vested interest in the Transferred Amounts under the
Investment Fund shall be no less than his vested interest
under the Transferor Plan determined as of the date such
amounts are transferred to this Investment Fund.
(iv) Distribution and Withdrawals of Transferred
Amounts: The requirements of Article VI shall govern the
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withdrawal and distribution of Transferred Amounts in the same
manner as if such amounts were originally contributed to this
Investment Fund, provided that in the event former
Participants in the Midwest Communications, Inc. Retirement
Savings Plan had Rollover Contribution Accounts thereunder,
these amounts will be available for withdrawal under the
withdrawal rules of Section 7.1 of that Plan, to wit:
"Withdrawals from Rollover Account: A Participant may
withdraw from his Rollover Account an amount not less than the
lesser of One Thousand Dollars or the balance of such Account
and not in excess of the amount of such Account balance as of
the Valuation Date that next follows by at least thirty days
(or such shorter period as the Administrator may by uniform
rule allow) the date on which the Administrator receives a
complete and accurate written withdrawal application from the
Participant in form prescribed by the Administrator. Such
withdrawal distribution shall be made by the Trustee as soon
as administratively practicable following such Valuation
Date." Section 2.28 of the Midwest Communications, Inc.
Retirement Savings Plan provides that the Valuation Date is
the last day of each calendar month and such interim dates as
the Administrator may from time to time specify pursuant to
Section 5.2(B).
B. Merger of WCCO Television, Inc. AFTRA 401(k) Plan into
Investment Fund:
1. All individuals who were Participants in the WCCO
Television, Inc. AFTRA 401(k) Plan as of August 21, 1992 shall
be eligible to participate in the Investment Fund with respect
to compensation earned after August 23, 1992. Amounts
credited to the accounts of such Participants of the WCCO
Television, Inc. AFTRA 401(k) Plan who are participants under
the Investment Fund shall be transferred to the Investment
Fund effective September 2, 1992 ("Transferred Amount(s)").
Effective August 31, 1992, the participants shall direct the
Trustee of the CBS Employee Investment Fund to transfer the
total of their account balance(s) in the WCCO Television, Inc.
AFTRA 401(k) Plan to the designated Fund account(s) under the
Investment Fund.
2. Transferred Amounts shall be subject to the following
procedures:
(i) Allocation and Accounting for Transferred Amounts:
The portion of a participant's Transferred Amount representing
before-tax contributions shall be allocated to his Before-Tax
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Account; the portion representing rollover contributions shall
be allocated to his Rollover Contribution Account.
(ii) Investment of Transferred Amounts: Transferred
Amounts shall be invested in Funds A, B and D as directed by
the participant in accordance with the investment provisions
of Article III and IV. In the event the participant fails to
issue an investment direction, the Transferred Amounts shall
be invested in Fund B.
(iii) Vesting in Transferred Amounts: A participant's
vested interest in his Transferred Amount shall be determined
in accordance with the rules of subparagraph 56 of Paragraph A
of Article IX hereof, provided that all prior service credit
with Midwest Communications, Inc. shall be treated as service
with CBS Inc., and further provided that a participant's
vested interest in the Transferred Amounts under the
Investment Fund shall be no less than his vested interest
under the Transferor Plan determined as of the date such
amounts are transferred to this Investment Fund.
(iv) Distribution and Withdrawals of Transferred
Amounts: The requirements of Article VI shall govern the
withdrawal and distribution of Transferred Amounts in the same
manner as if such amounts were originally contributed to this
Investment Fund, provided that in the event former
Participants in the WCCO Television, Inc. AFTRA 401(k) Plan
had Rollover Contribution Accounts thereunder, these amounts
will be available for withdrawal under the withdrawal rules of
Section 7.1 of that Plan, to wit:
"Withdrawals from Rollover Account: A Participant may
withdraw from his Rollover Account an amount not less than the
lesser of One Thousand Dollars or the balance of such Account
and not in excess of the amount of such Account balance as of
the Valuation Date that next follows by at least thirty days
(or such shorter period as the Administrator may by uniform
rule allow) the date on which the Administrator receives a
complete and accurate written withdrawal application from the
Participant in form prescribed by the Administrator. Such
withdrawal distribution shall be made by the Trustee as soon
as administratively practicable following such Valuation
Date." Section 2.27 of the WCCO Television, Inc. AFTRA 401(k)
Plan provides that the Valuation Date is the last day of each
calendar month and such interim dates as the Administrator may
from time to time specify pursuant to Section 5.2(B).
- 73 -<PAGE>
XVI. MERGER OF RADFORD STUDIO CENTER INC. 401(k) TAX
SHELTERED SAVINGS PLAN AND TRUST.
1. All individuals who were employees of Radford Studio
Center Inc. and who were eligible to participate in the
Radford Studio Center Inc. 401(k) Tax Sheltered Savings Plan
and Trust as of November 30, 1994, shall be eligible to
participate in the Investment Fund with respect to
compensation earned after November 30, 1994. Amounts credited
to the accounts of such participants of the Radford Studio
Center Inc. 401(k) Tax Sheltered Savings Plan who are
participants under the Investment Fund shall be transferred to
the Investment Fund effective as of December 1, 1994 ("Radford
Transferred Amount(s)").
2. Radford Transferred Amounts shall be subject to the
following procedures:
(i) Allocation and Accounting for Radford Transferred
Amounts: The portion of a participant's Radford Transferred
Amount representing before-tax contributions shall be
allocated to his Before-Tax Account.
(ii) Investment of Radford Transferred Amounts: Radford
Transferred Amounts shall be invested in Funds A, B, D, and E
as directed by the participant in accordance with provisions
of Article III and IV. In the event the participant fails to
issue an investment direction, the Radford Transferred Amounts
shall be invested in Fund B.
(iii) Vesting in Radford Transferred Amounts: A participant
shall be fully vested in his interest in the Radford
Transferred Amount.
(iv) Distribution and Withdrawals of Radford Transferred
Amounts: The requirements of Article VI shall govern the
withdrawal and distribution of Radford Transferred Amounts in
the same manner as if such amounts were originally contributed
to this Investment Fund.
- 74 -<PAGE>
XVII. SIGNATURE.
The Investment Fund as herein amended and restated has hereby
been approved and adopted to be effective as of January 1, 1989
(except as otherwise provided herein) this 30th day of December,
1994.
CBS INC. by the
PLANS ADMINISTRATION COMMITTEE
Alvan L. Bobrow
Vice President and Director of Taxes
Joan Showalter
Senior Vice President, Human Resources
Louis J. Rauchenberger, Jr.
Vice President and Treasurer
Dated: December 30, 1994
5l West 52nd Street
New York, New York 10019
- 75 - <PAGE>
CBS INC.
THE TISCH DEFERRED COMPENSATION PLAN
1. PURPOSE OF PLAN
CBS Inc. hereby establishes a Deferred Compensation Plan
(the "Plan") for the benefit of Mr. Laurence Tisch as a means of
deferring a portion of current compensation to accumulate
resources for retirement.
2. ELIGIBILITY
Participation in this Plan is limited to Mr. Tisch.
3. PLAN ADMINISTRATION
(i). Plan Administrative Committee. This Plan shall be
administered by the Administrative Committee (the "Committee").
The Committee shall consist of at least three members, who shall
be appointed by the Compensation Committee of the Board of
Directors of CBS, to serve until their successors are appointed
and qualified. The Committee shall act by affirmative vote of a
majority of its members at a meeting or in writing without a
meeting. The Committee shall appoint a secretary who may be, but
need not be, one of its own members. The secretary shall keep
complete records of the administration of the Plan. The
Committee may authorize each and any one of its members to
perform routine acts and to sign documents on its behalf.
- 1 -<PAGE>
(ii). Plan Administration. The Committee may appoint such
persons or establish such subcommittees, employ such attorneys,
agents, accountants, or investment advisors as necessary or
desirable to advise or assist it in the performance of its duties
hereunder, and the Committee may rely upon their respective
written opinions or certifications.
Administration of the Plan shall consist of interpreting and
carrying out the provisions of the Plan. The Committee shall
determine the Participant's rights in the Plan and the nature and
amount of benefits to be received therefrom. The Committee shall
decide any disputes which may arise under the Plan. The
Committee may provide rules and regulations for the
administration of the Plan consistent with its terms and
provisions. Any construction or interpretation of the Plan and
any determination of fact in administering the Plan made in good
faith by the Committee shall be final and conclusive for all Plan
purposes.
4. DEFERRAL AND PAYMENT OF COMPENSATION
(i). Deferral Amount. Amounts to be deferred under the
Plan shall be mandatory. For any year in which the employee is a
Participant, his deferral shall consist of all cash remuneration
from CBS payable to such Participant to the extent that his total
compensation from CBS, regardless of source or type, otherwise
taxable to that individual during the current calendar year for
- 2 -<PAGE>
Federal purposes and deemed to be "applicable employee
remuneration" for purposes of Section 162(m) of the Code shall
exceed $1,000,000 in the aggregate. To the extent deemed
necessary by the Committee in order to ensure that the mandatory
deferral requirement of the Plan is complied with, amounts of
cash remuneration otherwise payable to the Participant may be
withheld until any uncertainty as to the timing of such
Participant's reaching the $1,000,000 limitation has been
resolved.
(ii). Deferral Period and Form and Timing of Payment
(a) All amounts deferred under this Plan, including
investment returns, shall be payable to the Participant in a
single sum on the first business day of the year following the
year of such individual's termination of employment with CBS, for
any reason.
(b) Notwithstanding any provisions of this Plan to the
contrary, upon the termination of employment of the Participant
for any reason during a two-year period commencing with the
occurrence of a Change of Control, as defined for purposes of
Section 11 of this Plan, all amounts deferred under this Plan,
including investment returns, credited with respect to the
Participant, shall be distributable to the Participant in a
single sum on the next business day following such termination.
5. DEFERRED ACCOUNTS AND INVESTMENT RETURNS ON AMOUNTS IN
DEFERRED ACCOUNTS
- 3 -<PAGE>
A deferred compensation account ("Deferred Account") will be
established on a bookkeeping-only basis on behalf of the
Participant, and the amount of deferred compensation will be
credited to the Participant's Deferred Account as of the first of
the month coincident with or next following the month in which a
deferral becomes effective. The Participant's Deferred Account
will be credited monthly with a "rate of return" on the total
deferred amount accrued as of the first of the month coincident
with or next following the date deferred compensation is credited
to the Participant's Deferred Account. Such "rate of return"
shall be based upon a money market fund.
The Participant's Deferred Account shall be credited monthly with
the "rate of return" until the amount in the Participant's
Deferred Account is distributed to the Participant on the
distribution date(s) determined pursuant to Section 4(ii) hereof.
The Participant shall receive a quarterly statement of the
balance credited to his Deferred Account. The Participant in
this Plan shall not have any preferred claim on, or any
beneficial ownership interest in, any assets of CBS on account of
the benefits provided hereunder and the Participant's rights
created under this Plan shall be unsecured contractual rights of
the Participant against CBS.
6. FINANCIAL HARDSHIP PAYMENTS
In the event of a severe financial hardship occasioned by an
- 4 -<PAGE>
emergency, including, but not limited to, illness, disability, or
personal injury sustained by the Participant or a member of the
Participant's immediate family, the Participant may apply to
receive a distribution earlier than initially elected. The
Committee may, in its sole discretion, either approve or deny the
request. The determination made by the Committee will be final
and binding on all parties. If the request is granted, the
payments will be accelerated only to the extent reasonably
necessary to alleviate the financial hardship.
7. DEATH OF PARTICIPANT
If the Participant's death occurs before a full distribution
of the amounts credited to the Participant's Deferred Account is
made, a lump sum payment shall be made to the beneficiary
designated by the Participant to receive such amounts. This
payment shall be made as soon as practicable following
notification that death has occurred, but no earlier than the
first business day of the calendar year following that in which
the death occurred. In the absence of any such designation,
payment shall be made to the personal representative, executor or
administrator of the Participant's estate.
8. IMPACT ON OTHER BENEFIT PLANS
Retirement benefits under the CBS Pension Plan maintained by
- 5 -<PAGE>
CBS are based upon earnings actually paid to the Participant
during any given Plan Year, provided that under current law no
more than $150,000 (as indexed for cost-of-living increases
pursuant to the relevant provisions of the Code) of actual
compensation may be taken into account in any plan year. If the
Participant terminates employment with a right to a vested
benefit under the CBS Pension Plan, and if the actual income for
pension purposes were reduced because of a deferral under this
Plan, CBS will provide a supplemental pension (payable pursuant
to the Supplemental Executive Retirement Plan) equal to the
difference between the actual benefit payable from the CBS
Pension Plan (or the Supplemental Executive Retirement Plan) and
the benefit that such Participant would have received had income
not been deferred. If such a supplemental benefit is due, such
benefit shall be subject to all of the provisions and be made in
accordance with the terms and conditions of the Supplemental
Executive Retirement Plan.
9. NON-ASSIGNABILITY OF INTEREST
The interest herein and the right to receive distributions
under this Plan may not be anticipated, alienated, sold,
transferred, assigned, pledged, encumbered, or subjected to any
charge or legal process, and if any attempt is made to do so, or
the Participant becomes bankrupt, the interests of the
Participant under the Plan may be terminated by the Committee,
- 6 -<PAGE>
which, in its sole discretion, may cause the same to be held or
applied for the benefit of one or more of the dependents of such
Participant or make any other disposition of such interests that
it deems appropriate.
10. SOURCE OF PAYMENTS
CBS will pay all benefits arising under the Plan and all
costs, charges, and expenses relating thereto out of its general
assets. Nothing in this Plan shall be interpreted or construed
to require CBS in any manner to fund any obligation to the
Participant hereunder. Nothing contained in this Plan nor any
action taken hereunder shall create, or be construed to create, a
trust of any kind, or a fiduciary relationship between CBS and
the Participants. Notwithstanding the foregoing, CBS shall
establish a trust (known as a "rabbi trust") to hold funds
intended to provide benefits hereunder and the assets of such
trust shall be subject to the claim of the general creditors of
CBS in the event of bankruptcy or insolvency of CBS.
11. AMENDMENTS TO PLAN
CBS reserves the right to suspend, amend, or otherwise
modify or terminate this Plan at any time, without notice.
However, this Plan may not be suspended, amended, otherwise
modified, or terminated after a Change of Control without the
written consent of the Participant. A "Change of Control" shall
- 7 -<PAGE>
mean the approval by CBS shareholders of a "Business Combination
Transaction," the expiration of an "Offer," the occurrence of a
"Concentration of Equity Ownership," or a change during a two-
year period in the majority of the Corporation's directors unless
each new director was elected by two-thirds of the directors
still in office who were in office at the start of that period.
"Business Combination Transaction" means one of the following
transactions which has been approved by CBS shareholders: the
sale of all or substantially all of the Corporation's assets, the
adoption of a plan for its liquidation or dissolution, or a
consolidation or merger following which the shareholders of CBS
do not have the same proportionate ownership of common stock of
the surviving corporation as they did of CBS immediately prior
thereto. "Offer" means a tender offer or exchange offer after
the consummation of which the offeror is the beneficial owner of
more than 25% of the Corporation's voting stock, including at
least some shares of common stock purchased in such offer.
"Concentration of Equity Ownership" means the acquisition by any
person of more than 25% of the Corporation's voting stock.
12. EFFECTIVE DATE AND PLAN YEAR
This Plan shall become effective as of January 1, 1995. It
shall operate on a calendar year basis thereafter.
- 8 -<PAGE>
TRUST UNDER THE TISCH DEFERRED COMPENSATION PLAN
(A) This Agreement made this 18th day of January, 1995 by and
between CBS Inc.(Company) and Merrill Lynch Trust Company of
America, an Illinois corporation (Trustee).
(B) WHEREAS, Company has adopted the nonqualified deferred
compensation Plan as listed in Appendix A.
(C) WHEREAS, Company has incurred or expects to incur
liability under the terms of such Plan with respect to the
individual participating in such Plan.
(D) WHEREAS, Company wishes to establish a trust (hereinafter
called Trust ) and to contribute to the Trust assets that shall
be held therein, subject to the claims of the Company s creditors
in the event of the Company s Insolvency, as herein defined,
until paid to the Plan participant and his beneficiaries in such
manner and at such times as specified in the Plan;
(E) WHEREAS, it is the intention of the parties that this
Trust shall constitute an unfunded arrangement and shall not
affect the status of the Plan as an unfunded plan maintained for
the purpose of providing deferred compensation for a select group
of management or highly compensated employees for the purposes of
Title I of the Employee Retirement Income Security Act of 1974;
(F) WHEREAS, it is the intention of Company to make
contributions to the Trust to provide itself with a source of
funds to assist it in the meeting of its liabilities under the
Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and
agree that the Trust shall be comprised, held and disposed of as
follows:
SECTION 1. Establishment of Trust
(A) Company hereby deposits with Trustee in trust $1,000
(insert amount deposited), which shall become the principal of
the Trust to be held, administered and disposed of by Trustee as
provided in this Trust Agreement.
(B) The Trust hereby established shall be irrevocable.
(C) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I,
- 1 -<PAGE>
subchapter J, chapter 1, subtitle A of the Internal Revenue Code
of 1986, as amended, and shall be construed accordingly.
(D) The principal of the Trust, and any earnings thereon,
shall be held separate and apart from other funds of Company
and shall be used exclusively for the uses and purposes of
the Plan participant and general creditors as herein set
forth. The Plan participant and his beneficiaries shall have
no preferred claim on, or any beneficial ownership interest
in, any assets of the Trust. Any rights created under the
Plan and this Trust Agreement shall be mere unsecured
contractual rights of the Plan participant and his
beneficiaries against Company. Any assets held by the Trust
will be subject to the claims of the Company's general
creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(E) Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other
property in trust with Trustee to augment the principal to be
held, administered and disposed of by Trustee as provided in
this Trust Agreement. Neither Trustee nor the Plan participant
or beneficiary shall have any right to compel such additional
deposits.
SECTION 2. Payments to The Plan Participant and His
Beneficiaries
(A) Company shall deliver to Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in
respect of the Plan participant (and his beneficiaries), that
provides a formula or other instructions acceptable to
Trustee for determining the amount so payable, the form in
which such amount is to be paid (as provided for or available
under the Plan), and the time of commencement for payment of
such amounts. The Payment Schedule shall be delivered to
Trustee not more than (30) business days nor fewer than (15)
business days prior to the first date on which a payment is
to be made to the Plan participant. Any change to a Payment
Schedule shall be delivered to Trustee not more than (30)
days nor fewer than (15) days prior to the date on which the
first payment is to be made in accordance with the changed
Payment Schedule. Except as otherwise provided herein,
Trustee shall make payments to the Plan participant and his
beneficiaries in accordance with such Payment Schedule. The
Trustee shall make provisions for the reporting and
withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of
- 2 -<PAGE>
benefits pursuant to the terms of the Plan and shall pay
amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and
paid by Company. Company shall on a timely basis provide
Trustee specific information as to the amount of taxes to be
withheld and Company shall be obligated to receive such
withheld taxes from Trustee and properly pay and report such
amounts to the appropriate taxing authorities.
(B) The entitlement of the Plan participant or his
beneficiaries to benefits under the Plan shall be determined
by Company or such party as it shall designate under the
Plan, and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.
(C) Company may make payment of benefits directly to the
Plan participant or his beneficiaries as they become due
under the terms of the Plan. Company shall notify Trustee of
its decision to make payment of benefits directly prior to
the time amounts are payable to the participant or his
beneficiaries. In addition, if the principal of the Trust,
and any earnings thereon, are not sufficient to make payments
of benefits in accordance with the terms of the Plan, Company
shall make the balance of each such payment as it falls due.
Trustee shall notify Company where principal and earnings are
not sufficient.
(D) Trustee shall have no responsibility to determine
whether the Trust is sufficient to meet the liabilities under
the Plan, and shall not be liable for payments or Plan
liabilities in excess of the value of the Trust's assets.
SECTION 3. Trustee Responsibility Regarding Payments to
Trust Beneficiary When Company is Insolvent.
(A) Trustee shall cease payment of benefits to the Plan
participant and his beneficiaries if the Company is
Insolvent. Company shall be considered "Insolvent" for
purposes of this Trust Agreement if (i) Company is unable to
pay its debts as they become due, or (ii) Company is subject
to a pending proceeding as a debtor under the United States
Bankruptcy Code.
(B) At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of
the Trust shall be subject to claims of general creditors of
Company under federal and state law as set forth below.
(1) The Board of Directors of Company shall have the
- 3 -<PAGE>
duty to inform Trustee in writing of Company's Insolvency.
If a person claiming to be a creditor of Company alleges in
writing to Trustee that Company has become Insolvent, Trustee
shall determine whether Company is Insolvent and, pending
such determination, Trustee shall discontinue payment of
benefits to the Plan participant or his beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person
claiming to be a creditor alleging that Company is Insolvent,
Trustee shall have no duty to inquire whether Company is
Insolvent. Trustee may in all events rely on such evidence
concerning Company's solvency as may be furnished to Trustee
and that provides Trustee with a reasonable basis for making
a determination concerning Company's solvency.
(3) If at any time Trustee has determined that
Company is Insolvent, Trustee shall discontinue payments to
the Plan participant or his beneficiaries and shall hold the
assets of the Trust for the benefit of Company's general
creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of the Plan participant or his
beneficiaries to pursue their rights as general creditors of
Company with respect to benefits due under the Plan or
otherwise.
(4) Trustee shall resume the payment of benefits to
the Plan participant or his beneficiaries in accordance with
Section 2 of this Trust Agreement only after Trustee has
determined that Company is not Insolvent (or is no longer
Insolvent).
(C) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant
to Section 3(B) hereof and subsequently resumes such
payments, the first payment following such discontinuance
shall include the aggregate amount of all payments due to the
Plan participant or his beneficiaries under the terms of the
Plan for the period of such discontinuance, less the
aggregate amount of any payments made to the Plan participant
or his beneficiaries by Company in lieu of payments provided
for hereunder during any such period of discontinuance;
provided that Company has given Trustee information with
respect to such payments made during the period of
discontinuance prior to resumption of payments by the
Trustee.
SECTION 4. Payments to Company
Except as provided in Section 3 hereof, after the Trust has
- 4 -<PAGE>
become irrevocable, Company shall have no right or power to
direct Trustee to return to Company or to divert to others
any of the Trust assets before all payment of benefits have
been made to the Plan participant and his beneficiaries
pursuant to the terms of the Plan.
SECTION 5. Investment Authority
In no event may Trustee invest in securities (including stock
or rights to acquire stock) or obligations issued by Company,
other than a de minimis amount held in common investment
vehicles in which Trustee invests. All rights associated with
assets of the Trust shall be exercised by Trustee, and shall
in no event be exercisable by or rest with the Plan
participant.
SECTION 5A. Trustee s Investment Powers
The Trustee shall have the power to invest and reinvest the
Fund solely in a money market fund, to wit: Merrill Lynch
Institutional Money Market Fund.
SECTION 6. Disposition of Income
(A) During the term of this Trust, all income received by the
Trust, net of expenses and taxes, shall be accumulated and
reinvested.
SECTION 7. Accounting by Trustee
Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other
transactions required to be made, including such specific
records as shall be agreed upon in writing between Company
and Trustee. Within 45 days following the close of each
calendar year and within 45 days after the removal or
resignation of Trustee, Trustee shall deliver to Company a
written account of its administration of the Trust during
such year or during the period from the close of the last
preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements and
other transactions effected by it, including a description of
all securities and investments purchased and sold with the
cost or net proceeds of such purchases or sales (accrued
interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the
Trust at the end of such year or as of the date of such
removal or resignation, as the case may be. Trustee may
- 5 -<PAGE>
satisfy its obligation under this Section 7 by rendering to
Company monthly statements setting forth the information
required by this Section separately for the month covered by
the statement.
SECTION 8. Responsibility of Trustee
(A) Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that Trustee
shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by Company
which is contemplated by, and in conformity with, the terms
of the Plan(s) or this Trust and is given in writing by
Company. Trustee shall also incur no liability to any person
for any unreasonable failure to act in the absence of
direction, request or approval from the Company which is
reasonably contemplated by, and in reasonable conformity
with, the terms of this Trust. In the event of a dispute
between Company and a party, Trustee may apply to a court of
competent jurisdiction to resolve the dispute.
(B) If Trustee undertakes or defends any litigation
arising in connection with this Trust, Company agrees to
indemnify against Trustee s costs, expenses and liabilities
(including, without limitation, attorney s fees and expenses)
relating thereto and to be primarily liable for such
payments. If Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, Trustee may obtain
payment from the Trust.
(C) Company hereby indemnifies Trustee and each of its
affiliates (collectively, the "Indemnified Parties") against,
and shall hold them harmless from, any and all loss, claims,
liability, and expense, including reasonable attorneys' fees,
imposed upon or incurred by any Indemnified Party as a result
of any acts taken, in accordance with the directions from the
Company or any designee of the Company, or by reason of the
Indemnified Party's good faith execution of its duties with
respect to the Trust, including, but not limited to, its
holding of assets of the Trust, the Company's obligations in
the foregoing regard to be satisfied promptly by the Company,
provided that in the event the loss, claim, liability or
expense involved is determined by a no longer appealable
final judgment entered in a lawsuit or proceeding to have
resulted from the negligence or misconduct of the Trustee,
- 6 -<PAGE>
Trustee shall promptly on request thereafter return to the
Company, with interest at the Prime Rate as determined by
Chemical Bank, any amount previously received by the Trustee
under this Section with respect to such loss, claim,
liability or expense.
(D) Trustee may consult with legal counsel (who may also
be counsel for Company generally) with respect to any of its
duties or obligations hereunder.
(E) Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or
obligations hereunder.
(F) Trustee shall have, without exclusion, all powers
conferred on Trustee by applicable law, unless expressly
provided otherwise herein, provided.
(G) Notwithstanding any powers granted to Trustee pursuant
to this Trust Agreement or to applicable law, Trustee shall
not have any power that could give this Trustee the objective
of carrying on a business and dividing the gains therefrom,
within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the
Internal Revenue Code.
SECTION 9. Compensation and Expenses of Trustee
Company shall pay all administrative and Trustee s fees and
expenses. If not so paid, the fees and expenses shall be paid
from the Trust.
SECTION 10. Resignation and Removal of Trustee
(A) Trustee may resign at any time by written notice to
Company, which shall be effective 30 days after receipt of such
notice unless Company and Trustee agree otherwise.
(B) Trustee may be removed by Company on 30 days notice or
upon shorter notice accepted by Trustee.
(C) Upon a Change of Control, as defined herein, Trustee
may not be removed by Company for 5 years.
(D) If Trustee resigns within 5 years after a Change of
Control, as defined herein, Company shall apply to a court of
competent jurisdiction for the appointment of a successor
- 7 -<PAGE>
Trustee or for instructions.
(E) Upon resignation or removal of Trustee and appointment
of a successor Trustee, all assets shall subsequently be
transferred to the successor Trustee. The transfer shall be
completed within 60 days after receipt of notice of
resignation, removal or transfer, unless Company extends the
time limit, provided that Trustee is provided assurance by
Company satisfactory to Trustee that all fees and expenses
reasonably anticipated will be paid.
(F) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the
effective date or resignation or removal under paragraph(s)
(A) (or (B) of this Section. If no such appointment has been
made, Trustee may apply to a court of competent jurisdiction
for appointment of a successor or for instructions. All
expenses of Trustee in connection with the proceeding shall
be allowed as administrative expenses of the Trust.
(G) Upon settlement of the account and transfer of the
Trust assets to the successor Trustee, all rights and
privileges under this Trust Agreement shall vest in the
successor Trustee and all responsibility and liability of
Trustee with respect to the Trust and assets thereof shall
terminate subject only to the requirement that Trustee
execute all necessary documents to transfer the Trust assets
to the successor Trustee.
SECTION 11. Appointment of Successor
(A) If Trustee resigns or is removed in accordance with
Section 10(A) or (B) hereof, Company may appoint any third
party, such as a bank trust department or other party that
may be granted corporate trustee powers under state law, as a
successor to replace Trustee upon resignation or removal.
The appointment shall be effective when accepted in writing
by the new Trustee, who shall have all of the rights and
powers of the former Trustee, including ownership rights in
the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by Company or
the successor Trustee to evidence the transfer.
(B) The successor Trustee need not examine the records and
act of any prior Trustee and may retain or dispose of
existing Trust assets, subject to Sections 7 and 8 hereof.
The successor Trustee shall not be responsible for and
Company shall indemnify and defend the successor Trustee from
- 8 -<PAGE>
any claim or liability resulting from any action or inaction
of any prior Trustee or from any other past event, or any
condition existing at the time it becomes successor Trustee.
SECTION 12. Amendment or Termination
(A) This Trust Agreement may be amended by a written
instrument executed by Trustee and Company. Notwithstanding
the foregoing, no such amendment shall conflict with the
terms of the Plan or shall make the Trust revocable, after it
has been irrevocable in accordance with Section 1(B) hereof.
(B) The Trust shall not terminate until the date on which
Plan participants and their beneficiaries are no longer
entitled to benefits pursuant to the terms of the Plan unless
sooner revoked in accordance with Section 1(B) hereof. Upon
termination of the Trust any assets remaining in the Trust
shall be returned to Company.
(C) Upon written approval of the participant or
beneficiaries entitled to payment of benefits pursuant to the
terms of the Plan, Company may terminate this Trust prior to
the time all benefit payments under the Plan have been made.
All assets in the Trust at termination shall be returned to
Company.
(D) Sections 1 to 14 of this Trust Agreement may not be
amended by Company for 5 years following a Change of Control
as defined herein.
SECTION 13. Miscellaneous
(A) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
(B) Benefits payable to the Plan participant and his
beneficiaries under this Trust Agreement may not be
anticipated, assigned (either at law or in equity), alienated,
pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(C) This Trust Agreement shall be governed by and
construed in accordance with the laws of the state in which
Trustee is incorporated as set forth above.
(D) For purposes of this Trust, Change of Control shall
mean the approval by CBS shareholders of a Business
- 9 -<PAGE>
Combination Transaction, the expiration of an Offer, the
occurrence of a Concentration of Equity Ownership, or a
change during a two-year period in the majority of the
Corporation s directors unless each new director was elected
by two-thirds of the directors still in office who were in
office at the start of that period. Business Combination
Transaction means one of the following transactions which
has been approved by CBS shareholders: the sale of all or
substantially all of the Corporation s assets, the adoption
of a plan for its liquidation or dissolution , or a
consolidation or merger following which the shareholders of
CBS do not have the same proportionate ownership of common
stock of the surviving corporation as they did of CBS
immediately prior thereto. Offer means a tender offer or
exchange offer after the consummation of which the offeror is
the beneficial owner of more than 25% of the Corporation s
voting stock, including at least some shares of common stock
purchased in such offer. Concentration of Equity Ownership
means the acquisition by any person of more than 25% of the
Corporation s voting stock.
SECTION 14. Effective Date
The effective date of this Trust Agreement shall be January 1,
1995.
CBS INC.
(Company)
By:/s/LOUIS J. RAUCHENBERGER, JR.
Title: Vice President and
Treasurer
MERRILL LYNCH TRUST COMPANY OF AMERICA
(Trustee)
By:/s/CHRIS ROSIN
Title: Trust Officer
- 10 -<PAGE>
APPENDIX A
Name of Non-Qualified Deferred Compensation Plan:
The Tisch Deferred Compensation Plan
CBS SUPPLEMENTAL EMPLOYEE INVESTMENT FUND
CBS Inc. hereby establishes the CBS Supplemental Employee
Investment Fund, a nonqualified unfunded plan, for the exclusive
benefit of select key management and highly compensated employees
who participate in the CBS Employee Investment Fund.
ARTICLE I
INTRODUCTION
Section 1.1 NAME OF PLAN. The name of this Plan is the "CBS
Supplemental Employee Investment Fund."
Section 1.2 EFFECTIVE DATE. The effective date of this Plan
is January 1, 1995. This Plan shall not apply to
any Participant who has retired or terminated from
active service with CBS prior to the Effective
Date.
Section 1.3 PURPOSE. The purpose of this Plan is to provide a
means by which an Eligible Employee may be
provided benefits which otherwise would be
provided as pre-tax contributions, after-tax
contributions, or Employer Matching Contributions
under the Employee Investment Fund in the absence
of certain restrictions imposed by applicable law
on the dollar amount of Salary that can be taken
into account under the Employee Investment Fund.
- 1 -<PAGE>
ARTICLE II
DEFINITIONS
Capitalized items which are not defined herein shall have the
meaning ascribed to them in the Employee Investment Fund.
Whenever reference is made herein to "this Plan," such reference
shall be to this CBS Supplemental Employee Investment Fund.
Section 2.1 "Account" shall mean a Participant's individual
account as described in Section 3.2 of this Plan.
Section 2.2 "Beneficiary" shall mean the person or persons
designated by the Participant to receive any
payments provided for under Section 3.8, and, if
and to the extent that such designation shall not
be in force at the time of such payment, his
spouse, or if he has no spouse, his executors or
administrators.
Section 2.3 "Board" shall mean the Board of Directors of CBS
Inc.
Section 2.4 "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
Section 2.5 "Committee" shall mean the Committee established
under Section 4.1 of the Plan or its designee.
Section 2.6 "CBS" shall mean CBS Inc. and any of its
affiliated companies as may be authorized to
participate in this Plan by the Board.
Section 2.7 "Compensation Limitation" shall mean the
- 2 -<PAGE>
limitation on Salary that is required to be taken
into account in determining contributions under
the Employee Investment Fund in accordance with
Section 401(a)(17) of the Code and the regulations
and other guidance issued thereunder for plan
years beginning on and after January 1, 1994, as
indexed for increases in the cost-of-living under
Section 401(a)(17)(B) of the Code.
Section 2.8 "Eligible Employee" shall mean an employee of CBS
who is designated by the Committee pursuant to
Section 4.1 as eligible to participate in this
Plan.
Section 2.9 "Employee Deferrals" shall mean the portion of a
Participant's Salary which he elects to defer
under the terms of this Plan and shall include
Required Basic Deferrals and Voluntary Deferrals.
Section 2.10 "Employee Investment Fund" shall mean the CBS
Employee Investment Fund as amended from time to
time.
Section 2.11 "Employer Match" shall mean the amounts credited
in accordance with Section 3.4 of this Plan.
Section 2.12 "Excess Salary" shall mean the amount of the
Participant's Salary equal to the difference
between: (i) his actual Salary for the Plan Year
up to $235,840 (without regard to any cost-of-
living adjustments); and (ii) his Salary for the
- 3 -<PAGE>
Plan Year up to the Compensation Limitation.
Section 2.13 "Participant" shall mean an Eligible Employee who
participates in this Plan pursuant to Article III.
An Eligible Employee shall remain a Participant
under this Plan until all amounts payable on his
behalf from this Plan have been paid.
Section 2.14 "Plan Year" shall mean the calendar year.
Section 2.15 "Required Basic Contributions" shall mean the pre-
tax contributions or after-tax contributions made
to the Employee Investment Fund by or on behalf of
a Participant as required basic contributions with
respect to which Employer Matching Contributions
under Employee Investment Fund are made.
Section 2.16 "Required Basic Deferrals" shall mean the
deferrals made by a Participant under Section
3.3(A) hereunder with respect to which Employer
Match amounts are credited under Section 3.4.
Section 2.17 "Targeted Investment Options" shall mean those
investment options designed in Section 3.6 as
measurements of the rate of return to be credited
on amounts deferred hereunder.
Section 2.18 "Voluntary Deferrals" shall mean the deferrals
made by a Participant under Section 3.3(B)
hereunder, if any, after a Participant has elected
to make Required Basic Deferrals.
Section 2.19 "Voluntary Supplemental Contributions" shall mean
- 4 -<PAGE>
the pre-tax contributions or after-tax
contributions made to the Employee Investment Fund
by or on behalf of a Participant as voluntary
supplemental contributions.
ARTICLE III
PARTICIPATION
Section 3.1 PARTICIPATION.
(A) EMPLOYEE DEFERRALS PARTICIPATION: An
Eligible Employee may elect to participate in the
Required Basic Deferrals feature of the Plan for a
Plan Year if he has elected to make the maximum
allowable pre-tax Required Basic Contribution and
pre-tax Voluntary Supplemental Contribution to the
Employee Investment Fund for the Plan Year. An
Eligible Employee who is eligible and elects to
participate in the Required Basic Deferrals
feature of the Plan may further elect to
participate in the Voluntary Deferrals feature of
the Plan. In order to participate in the
foregoing features of the Plan, a Participant must
file an election with the Committee, in accordance
with Section 3.3 and the rules and regulations
established by the Committee.
(B) EMPLOYER MATCH PARTICIPATION: An
Eligible Employee will participate in the Employer
- 5 -<PAGE>
Match feature of this Plan for a Plan Year if:
(i) he has elected to have the maximum allowable
pre-tax Required Basic Contribution and pre-tax
Voluntary Supplemental Contribution to the
Employee Investment Fund for the Plan Year; (ii)
as a result of the application of the Compensation
Limitation, he loses the opportunity to be
credited with Employer Matching Contributions
under the Employee Investment Fund based on the
amount of his Excess Salary; and (iii) he has
elected to defer a Required Basic Deferral
hereunder.
Section 3.2 ESTABLISHMENT OF PLAN ACCOUNTS. CBS shall
establish an Account for each Participant. During
each Plan Year, each Participant's Account will be
credited with the amount of the Participant's
Employee Deferrals elected under Section 3.3, if
any, and the Employer Match with which the
Participant is entitled to be credited with under
Section 3.4, if any. Such amounts shall be
credited, as a bookkeeping entry only, to the
Participant's Account at such times as the
Participant's Required Basic Contributions,
Voluntary Supplemental Contributions, or Employer
Matching Contributions would have been made to the
Employee Investment Fund.
- 6 -<PAGE>
Section 3.3 EMPLOYEE DEFERRALS. Participants may make
Employee Deferrals as described in Section 3.3(A)
and Section 3.3(B) for any Plan Year, subject to
the limitation in Section 3.5.
(A) AMOUNT OF EMPLOYEE REQUIRED BASIC
DEFERRALS. A Participant who meets the
requirements of Section 3.1(A) for a Plan Year may
elect to have Required Basic Deferrals credited to
his Account for such Plan Year. For each Plan
Year, the amount of Required Basic Deferrals that
may be credited to a Participant's Account shall
equal the Participant's Required Basic
Contribution percentage applicable under the
Employee Investment Fund multiplied by the
Participant's Excess Salary. If the Participant
elects to make the Required Basic Deferral, he
will be entitled to an Employer Match credited
under Section 3.4 hereof.
(B) AMOUNT OF VOLUNTARY DEFERRALS. A
Participant who meets the requirements of Section
3.1(A) and has elected to make a Required Basic
Deferral under Section 3.3(A) for a Plan Year may
then elect to have Voluntary Deferrals credited to
his Account for such Plan Year. For each Plan
Year, a Participant may elect a Voluntary Deferral
equal to any percentage of Excess Salary in
- 7 -<PAGE>
one-half percent increments; provided, however,
that the total amount of Required Basic Deferrals
and Voluntary Deferrals cannot exceed twelve and
one-half percent of Excess Salary.
(C) ELECTION OF EMPLOYEE DEFERRALS. An
election by a Participant to commence Employee
Deferrals must be made prior to January 1 of a
Plan Year to be effective for Employee Deferrals
with respect to that Plan Year. The election will
be effective on a prospective basis beginning with
the payroll period that occurs as soon as
administratively practicable following January 1
of that Plan Year. Notwithstanding the foregoing,
if an Eligible Employee first becomes a
Participant after January 1 of a Plan Year, his
election to commence Employee Deferrals must be
made within 30 days of his participation. The
election will be effective on a prospective basis
beginning with the payroll period that occurs as
soon as administratively practicable following
receipt of the election by the Committee. Any
election previously made remains in effect unless
the Eligible Employee amends or suspends such
election as set forth in this Plan.
(D) AMENDMENT OR SUSPENSION OF ELECTION. A
Participant may change his election under this
- 8 -<PAGE>
Plan any time during the Plan Year by filing an
election on a prescribed form. Any such change or
new election will become effective as of the first
payroll period in the calendar quarter which
begins after the date such election is received by
the Committee (or as soon as practicable
thereafter). Participants may elect to suspend
all their Employee Deferrals, if any, by filing a
written election with the Committee on prescribed
forms. Such a suspension election shall be
effective as soon as practicable after it is
received by the Committee. In order to resume
such Employee Deferrals, a Participant must follow
the procedure described in subsection (B) above as
though he were a new Participant. A Participant
will not be permitted to make up suspended
Employee Deferrals.
Section 3.4 CREDITING OF EMPLOYER MATCH. Subject to the
limitation in Section 3.5, for each Plan Year, the
amount of Employer Match that will be credited to
the Account of a Participant who meets the
requirements of Section 3.1(B) shall equal the
amount of such Participant's Required Basic
Deferrals.
Section 3.5 OVERALL LIMITATION ON AMOUNTS CREDITED TO AN
ACCOUNT. Notwithstanding anything to the contrary
- 9 -<PAGE>
in this Plan, in no event shall the amounts
credited to a Participant's Account under Sections
3.3 and 3.4 with respect to a Plan Year, when
combined with all actual contributions made to the
Employee Investment Fund with respect to such Plan
Year by or on behalf of the Participant (to wit:
Required Basic, Voluntary Supplemental, Periodic
Special, if any, and Employer Matching Contribu-
tions) exceed the dollar limitation amount
referred to in Section 415(c) of the Code (as
indexed for cost-of-living increases for such Plan
Year). If amounts in excess of the foregoing
combined plan limitation are credited under this
Plan for any Participant, the overall amounts
credited hereunder for the affected Participant
shall be reduced in the following order: (i)
reductions in future deferrals shall be made in
the following order to the extent necessary to
meet the foregoing limitation: Voluntary
Deferrals under Section 3.3(B), Required Basic
Deferrals under Section 3.3(A), and Employer
Matches under Section 3.4; thereafter (ii)
amounts already credited under this Plan shall be
forfeited in the following order to the extent
necessary to meet the foregoing limitation:
Employer Matches under Section 3.4, Voluntary
- 10 -<PAGE>
Deferrals under Section 3.3(B), and Required Basic
Deferrals under Section 3.3(A).
Section 3.6 CHANGES IN AMOUNTS CREDITED TO AN ACCOUNT.
Additional amounts shall be credited to a Partici-
pant's Account to reflect the earnings or losses
that would have been earned had the deferred
amounts been invested in the following Targeted
Investment Options, as elected by the Participant:
Supplemental Fund Q (AIM Value Fund), Supplemental
Fund R (Franklin U.S. Government Securities Fund),
or Supplemental Fund S (Merrill Lynch Capital
Fund). Notwithstanding the foregoing, the
Employer Match amounts credited under Section 3.4
shall be credited with additional amounts to
reflect the earnings or losses that would have
been earned had the deferred amounts been invested
entirely in CBS common stock. A Participant shall
be notified of the amount credited as a bookkeep-
ing entry to his Account as soon as practicable
following the end of each Plan Year.
Section 3.7 VESTING OF AMOUNTS IN A PARTICIPANT'S ACCOUNT.
Subject to Section 3.5, a Participant shall be
vested in the portion of his Account attributable
to any Employer Match to the same extent as such
Participant is vested in any Employer Matching
Contributions credited to his account under the
- 11 -<PAGE>
Employee Investment Fund. Subject to Section 3.5,
a Participant shall be fully vested in Employee
Deferrals at all times.
Section 3.8 DISTRIBUTION OF AMOUNTS CREDITED TO A
PARTICIPANT'S ACCOUNT. All amounts payable from a
Participant's Account shall be paid in cash.
Payments of the vested portion of a Participant's
account shall be made in one of the following
forms, as elected by the Participant: (i) a
single sum cash payment made as soon as
practicable following the Participant's
termination of employment, or (ii) annual
installments over a period of ten years commencing
on February 1 of the year following the year in
which such Participant's employment terminates.
If a Participant elects to receive payment of his
Account in the form of annual installments, the
amount of each annual installment shall be the
value of the Participant's Account as of December
31 of the year preceding the installment payment,
divided by the number of installments remaining to
be paid. A Participant shall make an irrevocable
election regarding the form of payment at the same
time the Participant is eligible to make his first
deferral election under Section 3.3(C). The
Participant's election of a form of payment shall
- 12 -<PAGE>
apply to all future amounts credited to the
Participant's Account. If the Participant dies
before the distribution of all amounts credited to
his Account, the remaining amount of his vested
Account shall be paid to the Participant's
Beneficiary in the same form and at the same time
as such payments would have been made if the
Participant had survived until all payments were
made.
ARTICLE IV
PLAN ADMINISTRATION
Section 4.1 COMMITTEE. This Plan shall be administered by the
Retirement Plans Committee of the Board of
Directors of CBS. The Committee or its designee
shall have full authority in its discretion to
administer and interpret this Plan, make payments
to Participants, and maintain records hereunder,
which authority shall include the discretionary
authority to determine eligibility for benefits
hereunder and the proper amounts to be credited to
each Participant's Account. All decisions by the
Committee shall be final and binding on all
parties affected by the decisions.
Section 4.2 DELEGATED RESPONSIBILITIES. The Committee shall
have the authority to delegate any or all of its
- 13 -<PAGE>
responsibilities to the Plans Administration
Committee.
Section 4.3 CLAIMS PROCEDURE. The Committee or its designee
shall have the exclusive right in its discretion
to interpret the Plan and to decide any and all
matters arising thereunder. In the event of a
claim by a Participant as to the amount of any
distribution or method of payment under the Plan,
such person will be given notice in writing of any
denial within 90 days of the filing of such claim
unless special circumstances require an extension
of such period, which notice will set forth the
reason for the denial, the Plan provisions on
which the denial is based, an explanation of what
other material or information, if any, is needed
to perfect the claim, and an explanation of the
claims review procedure. The Participant may
request a review of such denial within 60 days of
the date of receipt of such denial by filing
notice in writing with the Committee or its
designee. The Participant will have the right to
review pertinent Plan documents and to submit
issues and comments in writing. The Committee or
its designee will respond in writing to a request
for review within 60 days of receiving it, unless
special circumstances require an extension of such
- 14 -<PAGE>
period. The Committee or its designee, at its
discretion, may request a meeting to clarify any
matters deemed appropriate. All decisions by the
Committee or its designee shall be final and
binding on all parties affected by the decisions.
Section 4.4 AMENDMENT AND TERMINATION. The Plans
Administration Committee may amend, modify, or
terminate this Plan at any time provided, however,
that no such amendment, modification, or
termination shall reduce any benefit under this
Plan to which a Participant or the Participant's
Beneficiary is entitled under Article III prior to
the date of such amendment or termination, and in
which such Participant or Beneficiary would have
been vested if such benefit had been provided
under the Employee Investment Fund, unless the
Participant or Beneficiary becomes entitled to an
amount equal to the actuarial value, to be
determined in the sole discretion of the Plans
Administration Committee, of such benefit under
another plan, program, or practice adopted CBS.
However, this Plan may not be suspended, amended,
otherwise modified, or terminated after a Change
of Control without the written consent of each
affected Participant. A "Change of Control"
shall mean the approval by CBS shareholders of a
- 15 -<PAGE>
"Business Combination Transaction," the expiration
of an "Offer," the occurrence of a "Concentration
of Equity Ownership," or a change during a two-
year period in the majority of the Corporation's
directors unless each new director was elected by
two-thirds of the directors still in office who
were in office at the start of that period.
"Business Combination Transaction" means one of
the following transactions which has been approved
by CBS shareholders: the sale of all or
substantially all of the Corporation's assets, the
adoption of a plan for its liquidation or
dissolution, or a consolidation or merger
following which the shareholders of CBS do not
have the same proportionate ownership of common
stock of the surviving corporation as they did of
CBS immediately prior thereto. "Offer" means a
tender offer or exchange offer after the
consummation of which the offeror is the
beneficial owner of more than 25% of the
Corporation's voting stock, including at least
some shares of common stock purchased in such
offer. "Concentration of Equity Ownership" means
the acquisition by any person of more than 25% of
the Corporation's voting stock.
Section 4.5 SOURCE OF PAYMENTS. CBS will pay all benefits
- 16 -<PAGE>
arising under the Plan and all costs, charges and
expenses relating thereto out of the trust
established for this purpose pursuant to Section
4.7, or out of its general assets.
Section 4.6 NONASSIGNABILITY OF BENEFITS. Except as otherwise
required by law, neither any benefit payable
hereunder nor the right to receive any future
benefit under this Plan may be anticipated,
alienated, sold, transferred, assigned, pledged,
encumbered, or subjected to any charge or legal
process, and if any attempt is made to do so, or a
person eligible for any benefits under this Plan
becomes bankrupt, the interest under this Plan of
the person affected may be terminated by the Plans
Administration Committee which, in its sole
discretion, may cause the same to be held or
applied for the benefit of one or more of the
dependents of such person or make any other
disposition of such benefits that it deems
appropriate.
Section 4.7 PLAN UNFUNDED. Nothing in this Plan shall be
interpreted or construed to require CBS in any
manner to fund any obligation to the Participants,
terminated Participants, or Beneficiaries
hereunder. Nothing contained in this Plan nor any
action taken hereunder shall create, or be
- 17 -<PAGE>
construed to create, a trust of any kind, or a
fiduciary relationship between CBS and the
Participants, terminated Participants,
Beneficiaries, or any other persons. Any funds
which may be accumulated in order to meet any
obligation under this Plan shall, for all
purposes, continue to be a part of the general
assets of CBS; provided, however, that CBS shall
establish a trust to hold funds intended to
provide benefits hereunder to the extent the
assets of such trust become subject to the claims
of the general creditors of CBS in the event of
bankruptcy or insolvency of CBS. To the extent
that any Participant, terminated Participant, or
Beneficiary acquires a right to receive payments
from CBS under this Plan, such rights shall be no
greater than the rights of any unsecured general
creditor of CBS.
Section 4.8 APPLICABLE LAW. All questions pertaining to the
construction, validity, and effect of this Plan
shall be determined in accordance with the laws of
the State of New York, to the extent not pre-
empted by Federal Law.
Section 4.9 LIMITATION OF RIGHTS: This Plan is a voluntary
undertaking on the part of CBS. Neither the
establishment of the Plan nor the payment of any
- 18 -<PAGE>
benefits hereunder, nor any action of CBS, the
Committee, or its designee shall be held or
construed to be a contract of employment between
CBS and any Eligible Employee or to confer upon
any person any legal right to be continued in the
employ of CBS. CBS expressly reserves the right
to discharge, discipline, or otherwise terminate
the employment of any Eligible Employee at any
time. Participation in this Plan gives no right
or claim to any benefits beyond those which are
expressly provided herein and all rights and
claims hereunder are limited as set forth in this
Plan.
Section 4.10 SEVERABILITY. In the event any provision of this
Plan shall be held illegal or invalid, or would
serve to invalidate the Plan, that provision shall
be deemed to be null and void, and the Plan shall
be construed as if it did not contain that
provision.
Section 4.11 HEADINGS, GENDER AND NUMBER. The headings to the
Articles and Sections of this Plan are inserted
for reference only, and are not to be taken as
limiting or extending the provisions hereof.
Unless the context clearly indicates to the
contrary, in interpreting this Plan, the masculine
shall include the feminine, and the singular shall
include the plural.
- 19 -<PAGE>
Section 4.12 INCAPACITY. If the Committee or its designee
shall determine that a Participant, terminated
Participant, or any other person entitled to a
benefit under this Plan (the "Recipient") is
unable to care for his affairs because of illness,
accident, or mental or physical incapacity, or
because the Recipient is a minor, the Committee or
its designee may direct that any benefit payment
due the Recipient be paid to his duly appointed
legal representative; or if no such representative
is appointed, to the Recipient's spouse, child,
parent, or other blood relative, or to a person
with whom the Recipient resides or who has
incurred expense on behalf of the Recipient. Any
such payment so made shall be a complete discharge
of the liabilities of the Plan with respect to the
Recipient.
Section 4.13 BINDING EFFECT AND RELEASE. All persons accepting
benefits under this Plan shall be deemed to have
consented to the terms of this Plan. Any final
payment or distribution to any person entitled to
benefits under the Plan shall be in full
satisfaction of all claims against the Plan, the
Committee or its designee and CBS arising by
virtue of this Plan.
- 20 -<PAGE>
TRUST UNDER THE CBS SUPPLEMENTAL
EMPLOYEE INVESTMENT FUND PLAN
(A) This Agreement made this 18th day of January, 1995, by
and between CBS Inc. and Merrill Lynch Trust Company of
America, an Illinois corporation.
(B) WHEREAS, Company has adopted the nonqualified deferred
compensation Plan as listed in Appendix A.
(C) WHEREAS, Company has incurred or expects to incur
liability under the terms of such Plan with respect to the
individuals participating in such Plan.
(D) WHEREAS, Company wishes to establish a trust
(hereinafter called Trust ) and to contribute to the Trust
assets that shall be held therein, subject to the claims of the
Company s creditors in the event of the Company s Insolvency, as
herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in
the Plan;
(E) WHEREAS, it is the intention of the parties that this
Trust shall constitute an unfunded arrangement and shall not
affect the status of the Plan as an unfunded plan maintained for
the purpose of providing deferred compensation for a select group
of management or highly compensated employees for the purposes of
Title I of the Employee Retirement Income Security Act of 1974;
(F) WHEREAS, it is the intention of Company to make
contributions to the Trust to provide itself with a source of
funds to assist in the meeting of its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust
and agree that the Trust shall be comprised, held and disposed of
as follows:
SECTION 1. Establishment of Trust
(A) Company hereby deposits with Trustee in trust $1,000
(insert amount deposited), which shall become the principal of
the Trust to be held, administered and disposed of by Trustee as
provided in this Trust Agreement.
(B) The Trust hereby established shall be irrevocable.
- 1 -<PAGE>
(C) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Internal Revenue Code
of 1986, as amended, and shall be construed accordingly.
(D) The principal of the Trust, and any earnings thereon,
shall be held separate and apart from other funds of Company
and shall be used exclusively for the uses and purposes of Plan
participants and general creditors as herein set forth. Plan
participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets
of the Trust. Any rights created under the Plan(s) and this
Trust Agreement shall be mere unsecured contractual rights of
Plan participants and their beneficiaries against Company. Any
assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the
event of Insolvency, as defined in Section 3(a) herein.
(E) Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property
in trust with Trustee to augment the principal to be held,
administered and disposed of by Trustee as provided in this Trust
Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional
deposits.
SECTION 2. Payments to Plan Participants and Their
Beneficiaries
(A) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of
each Plan participant (and his or her beneficiaries), that
provides a formula or other instructions acceptable to Trustee
for determining the amount so payable, the form in which such
amount is to be paid (as provided for or available under the
Plan), and the time of commencement for payment of such
amounts. The Payment Schedule shall be delivered to Trustee not
more than (30) business days nor fewer than (15) business days
prior to the first date on which a payment is to be made to the
Plan participant. Any change to a Payment Schedule shall be
delivered to Trustee not more than (30) days nor fewer than
(15) days prior to the date on which the first payment is to be
made in accordance with the changed Payment Schedule. Except
as otherwise provided herein, Trustee shall make payments to
Plan participants and their beneficiaries in accordance with
such Payment Schedule. The Trustee shall make provisions for
- 2 -<PAGE>
the reporting and withholding of any federal, state or local
taxes that may be required to be withheld with respect to the
payment of benefits pursuant to the terms of the Plan and shall
pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and
paid by Company. Company shall on a timely basis provide
Trustee specific information as to the amount of taxes to be
withheld and Company shall be obligated to receive such
withheld taxes from Trustee and properly pay and report such
amounts to the appropriate taxing authorities.
(B) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan(s) shall be determined
by Company or such party as it shall designate under the Plan,
and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.
(C) Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under
the terms of the Plan. Company shall notify Trustee of its
decision to make payment of benefits directly prior to the time
amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plan, Company shall make the
balance of each payment as it falls due. Trustee shall notify
Company where principal and earnings are not sufficient.
(D) Trustee shall have no responsibility to determine whether
the Trust is sufficient to meet the liabilities under the Plan,
and shall not be liable for payments or Plan liabilities in
excess of the value of the Trust's assets.
SECTION 3. Trustee Responsibility Regarding Payments to
Trust Beneficiary When Company is Insolvent.
(A) Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is
Insolvent. Company shall be considered "Insolvent" for
purposes of this Trust Agreement if (i) Company is unable to
pay its debts as they become due, or (ii) Company is subject to
a pending proceeding as a debtor under the United States
Bankruptcy Code.
- 3 -<PAGE>
(B) At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of
the Trust shall be subject to claims of general creditors of
Company under federal and state law as set forth below.
(1) The Board of Directors and the Chief Executive
Officer of Company shall have the duty to inform Trustee in
writing of Company's Insolvency. If a person claiming to be a
creditor of Company alleges in writing to Trustee that Company
has become Insolvent, Trustee shall determine whether Company
is Insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Plan participants or their
beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person
claiming to be a creditor alleging that Company is Insolvent,
Trustee shall have no duty to inquire whether Company is
Insolvent. Trustee may in all events rely on such evidence
concerning Company's solvency as may be furnished to Trustee
and that provides Trustee with a reasonable basis for making a
determination concerning Company's solvency.
(3) If at any time Trustee has determined that Company
is Insolvent, Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the assets
of the Trust for the benefit of Company's general creditors.
Nothing in this Trust Agreement shall in any way diminish any
rights of Plan participants or their beneficiaries to pursue
their rights as general creditors of Company with respect to
benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section
2 of this Trust Agreement only after Trustee has determined
that Company is not Insolvent (or is no longer Insolvent).
(C) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to
Section 3(B) hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the
aggregate amount of all payments due to Plan participants or
their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any
payments made to Plan participants or their beneficiaries by
- 4 -<PAGE>
Company in lieu of payments provided for hereunder during any
such period of discontinuance; provided that Company has given
Trustee information with respect to such payments made during
the period of discontinuance prior to resumption of payments by
the Trustee.
SECTION 4. Payments to Company
Except as provided in Section 3 hereof, after the Trust has
become irrevocable, Company shall have no right or power to
direct Trustee to return to Company or to divert to others any
of the Trust assets before all payment of benefits have been
made to Plan participants and their beneficiaries pursuant to
the terms of the Plan.
SECTION 5. Investment Authority
With respect to contributions attributable to Employer Match
amounts under the plan only, Trustee shall be authorized to
invest in securities (including stock or rights to acquire
stock) issued by Company. All rights associated with assets of
the Trust shall be exercised by Trustee or the person
designated by Trustee, and shall in no event be exercised by or
rest with Plan participants, except that: (1) voting rights
with respect to Trust assets will be exercised by Company, and
(2) dividend rights with respect to Trust assets will rest with
Company.
Company shall have the right, at anytime, and from time to time
in its sole discretion, to substitute assets of equal fair
market value for any asset held by the Trust. This right is
exercised by Company in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity.
SECTION 5A. Trustee s Investment Powers
(1) Subject to subsection (2) below, with respect to Employee
Deferrals under the plan only, the Trustee shall have the power
in investing and reinvesting the Fund in its sole discretion:
(A) To invest and reinvest in mutual funds or such other
investments designed to generate a rate of return comparable to
Fund Q (AIM Value Fund), Fund R (Franklin U.S. Government
Securities Fund), and Fund S (Merrill Lynch Capital Fund) as
elected by the Participants in accordance with the Plan;
- 5 -<PAGE>
(B) To invest and reinvest in any property, real, personal,
or mixed, wherever situated and whether or not productive of
income or consisting of wasting assets, including without
limitation, common and preferred stock, bonds, notes,
debentures (including convertible stocks and securities but not
including any stock or security of the Trustee, or any
affiliate thereof), leaseholds, mortgages, certificates of
deposit or demand or time deposits (including any such deposits
with the Trustee), shares of investment companies and mutual
funds, insurance policies and annuity contracts, without being
limited to the classes of property in which trustees are
authorized to invest by any law or any rule of court of any
state and without regard to the proportion any such property
may bear to the entire amount of the Fund;
(C) To invest and reinvest all or any portion of the Fund
collectively through the medium of any common, collective or
commingled trust fund that may be established and maintained by
the Trustee for plans or programs which are not tax qualified,
subject to the instrument or instruments establishing such
trust fund or funds and with the terms of such instrument or
instruments, as from time to time amended, being incorporated
into this Agreement to the extent of the equitable share of the
Fund in any such common, collective or commingled trust fund;
(D) To retain any property at any time received by the
Trustee;
(E) To sell or exchange any property held by it at public or
private sale, for cash or on credit, to grant and exercise
options for the purchase or exchange thereof, to exercise all
conversion or subscription rights pertaining to any such
property and to enter into any covenant or agreement to
purchase any property in the future;
(F) To participate in any plan of reorganization,
consolidation, merger, combination, liquidation, or other
similar plan relating to property held by it and to consent to
or oppose any such plan or any action thereunder or any
contract, lease, mortgage, purchase, sale or other action by
any person;
(G) To deposit any property held by it with any protective,
reorganization or similar committee, to delegate discretionary
- 6 -<PAGE>
power thereto, and to pay part of the expenses and compensation
thereof and any assessments levied with respect to any such
property to be deposited;
(H) To extend the time of payments of any obligation held by
it;
(I) To hold uninvested any moneys received by it, without
liability for interest thereon, until such moneys shall be
invested, reinvested or disbursed;
(J) For the purposes of the Trust, to borrow money from
others, to issues its promissory note or notes therefor, and to
secure the repayment thereof by pledging any property held by
it;
(K) To manage, administer, operate, insure, repair, improve,
develop, preserve, mortgage, lease or otherwise deal with, for
any period, any real property or any oil, mineral or gas
properties, royalties, interests or rights held by it directly
or through any corporation or partnership, either alone or by
joining with others, using other Trust assets for any such
purposes, to modify, extend, renew, waive or otherwise adjust
any provision of any such mortgage or lease and to make
provision for amortization of the investment in or depreciation
of the value of such property;
(L) to employ suitable agents, accountants and counsel, who
may be counsel to the Company of the Trustee, and to pay their
reasonable expenses and compensation from the Fund to the
extent not paid by the Company;
(M) To cause any property held by it to be registered and
held in the name of the name of one or more nominees, with or
without the additions of words indicating that such securities
are held in a fiduciary capacity, and to hold securities in
bearer form;
(N) To settle, compromise or submit to arbitration any
claims, debts or damages due or owing to or from the Trust,
respectively, to commence or defend suits or legal proceedings
to protect any interest of the Trust, and to represent the
Trust in all suits or legal proceedings in any court or before
any other body or tribunal; provided, however, that the Trustee
shall not be required to take any action unless it shall have
been indemnified by the Company to its reasonable satisfaction
against liability or expenses it might incur therefrom;
- 7 -<PAGE>
(O) To organize under the laws of any state a corporation or
trust for the purpose of acquiring and holding title to any
property which it is authorized to acquire hereunder and to
exercise with respect thereto any or all of the powers set
forth herein;
(P) To pay premiums on any insurance policy, or annuity
policy under which the Trust is the Beneficiary, at the
direction of the Committee under the Plan, in order to
safeguard the benefits payable to the Participants and
Beneficiaries under the Plan or to borrow against the cash
value of any insurance or annuity policy or policies held by
the Trustee, only if the Trustee is directed to do so by the
Committee under the Plan;
(Q) To change the insured individual of any insurance policy
held by the Trustee, if the insured ceases to be entitled to
benefits under the Plan, to another employee entitled to
benefits under the Plan, as directed by the Committee under the
Plan;
(R) To change the terms of any policies of insurance, as
directed by the Committee under the Plan and as agreed to by
the insurance carrier;
(S) To exercise all of the further rights, powers, options and
privileges granted, provided for, or vested in trustees generally
under the laws of the state in which the Trustee is incorporated
as set forth above, so that the powers conferred upon the Trustee
herein shall not be in limitation of any authority conferred by
law, but shall be in addition thereto;
(T) Generally, to do all acts, whether or not expressly
authorized, that the Trustee may deem necessary or desirable for
the protection of the Fund;
(2) Notwithstanding anything herein to the contrary, the Trustee
shall invest all contributions attributable to Employer Match
amounts under the plan, as designated by Company, in Company stock
at all times.
SECTION 6. Disposition of Income
(A) During the term of this Trust, all income received by the
Trust, net of expenses and taxes, shall be accumulated and
reinvested.
- 8 -<PAGE>
SECTION 7. Accounting by Trustee
Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other
transactions required to be made, including such specific
records as shall be agreed upon in writing between Company and
Trustee. Within 45 days following the close of each calendar
year and within 45 days after the removal or resignation of
Trustee, Trustee shall deliver to Company a written account of
its administration of the Trust during such year or during the
period from the close of the last preceding year to the date of
such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it,
including a description of all securities and investments
purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being
shown separately), and showing all cash, securities and other
property held in the Trust at the end of such year or as of the
date of such removal or resignation, as the case may be.
Trustee may satisfy its obligation under this Section 7 by
rendering to Company monthly statements setting forth the
information required by this Section separately for the month
covered by the statement.
SECTION 8. Responsibility of Trustee
(A) Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that Trustee
shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by Company
which is contemplated by, and in conformity with, the terms of
the Plan(s) and this Trust and is given in writing by Company.
Trustee shall also incur no liability to any person for any
unreasonable failure to act in the absence of direction,
request or approval from the Company which is reasonably
contemplated by, and in reasonable conformity with, the terms
of this Trust. In the event of a dispute between Company and a
party, Trustee may apply to a court of competent jurisdiction
to resolve the dispute.
(B) If Trustee undertakes or defends any litigation arising
in connection with this Trust, Company agrees to indemnify
- 9 -<PAGE>
against Trustee s costs, expenses and liabilities (including,
without limitation, attorney s fees and expenses) relating
thereto and to be primarily liable for such payments. If
Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the
Trust.
(C) Company hereby indemnifies Trustee and each of its
affiliates (collectively, the "Indemnified Parties") against,
and shall hold them harmless from, any and all loss, claims,
liability, and expense, including reasonable attorneys' fees,
imposed upon or incurred by any Indemnified Party as a result
of any acts taken, in accordance with the directions from the
Company or any designee of the Company, or by reason of the
Indemnified Party's good faith execution of its duties with
respect to the Trust, including, but not limited to, its
holding of assets of the Trust, the Company's obligations in
the foregoing regard to be satisfied promptly by the Company,
provided that in the event the loss, claim, liability or
expense involved is determined by a no longer appealable final
judgment entered in a lawsuit or proceeding to have resulted
from the negligence or misconduct of the Trustee, Trustee shall
promptly on request thereafter return to the Company, with
interest at the Prime Rate as determined by Chemical Bank, any
amount previously received by the Trustee under this Section
with respect to such loss, claim, liability or expense.
(D) Trustee may consult with legal counsel (who may also be
counsel for Company generally) with respect to any of its
duties or obligations hereunder.
(E) Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or
obligations hereunder.
(F) Trustee shall have, without exclusion, all powers
conferred on Trustee by applicable law, unless expressly
provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, Trustee
shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from
conversion of the policy to a different form) other than to a
successor Trustee, or to loan to any person the proceeds of any
borrowing against such policy.
- 10 -<PAGE>
(G) However, notwithstanding the provisions of Section 8(E)
above, Trustee may loan to Company the proceeds of any
borrowing against an insurance policy held as an asset of the
Trust.
(H) Notwithstanding any powers to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have
any power that could give this Trust the objective of carrying
on a business and dividing the gains therefrom, within the
meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
SECTION 9. Compensation and Expenses of Trustee
Company shall pay all administrative and Trustee s fees and
expenses. If not so paid, the fees and expenses shall be paid from
the Trust.
SECTION 10. Resignation and Removal of Trustee
(A) Trustee may resign at any time by written notice to
Company, which shall be effective 30 days after receipt of such
notice unless Company and Trustee agree otherwise
(B) Trustee may be removed by Company on 30 days notice or upon
shorter notice accepted by Trustee.
(C) Upon a Change of Control, as defined herein, Trustee may
not be removed by Company for 5 years.
(D) If Trustee resigns within 5 years after a Change of
Control, as defined herein, Company shall apply to a court of
competent juridiction for the appointment of a successor
Trustee or for instructions.
(E) Upon resignation or removal of Trustee and appointment of
a successor Trustee, all assets shall subsequently be
transferred to the successor Trustee. The transfer shall be
completed within 60 days after receipt of notice of
resignation, removal or transfer, unless Company extends the
time limit, provided that Trustee is provided assurance by
Company satisfactory to Trustee that all fees and expenses
reasonably anticipated will be paid.
- 11 -<PAGE>
(F) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the
effective date or resignation or removal under paragraph(s) (A)
(or (B) of this Section. If no such appointment has been made,
Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses
of Trustee in connection with the proceeding shall be allowed
as administrative expenses of the Trust.
(G) Upon settlement of the account and transfer of the Trust
assets to the successor Trustee, all rights and privileges
under this Trust Agreement shall vest in the successor Trustee
and all responsibility and liability of Trustee with respect to
the Trust and assets thereof shall terminate subject only to
the requirement that Trustee execute all necessary documents to
transfer the Trust assets to the successor Trustee.
SECTION 11. Appointment of Successor
(A) If Trustee resigns or is removed in accordance with
Section 10(A) or (B) hereof, Company may appoint any third
party, such as a bank trust department or other party that may
be granted corporate trustee powers under state law, as a
successor to replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the
new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets.
The former Trustee shall execute any instrument necessary or
reasonably requested by Company or the successor Trustee to
evidence the transfer.
(B) The successor Trustee need not examine the records and
act of any prior Trustee and may retain or dispose of existing
Trust assets, subject to Sections 7 and 8 hereof. The
successor Trustee shall not be responsible for and Company
shall indemnify and defend the successor Trustee from any claim
or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing
at the time it becomes successor Trustee.
SECTION 12. Amendment or Termination
(A) This Trust Agreement may be amended by a written
instrument executed by Trustee and Company. Notwithstanding
- 12 -<PAGE>
the foregoing, no such amendment shall conflict with the terms
of the Plan or shall make the Trust revocable, since the Trust
is irrevocable in accordance with Section 1(B) hereof.
(B) The Trust shall not terminate until the date on which
Plan participants and their beneficiaries are no longer
entitled to benefits pursuant to the terms of the Plan unless
sooner revoked in accordance with Section 1(B) hereof. Upon
termination of the Trust any assets remaining in the Trust
shall be returned to Company.
(C) Upon written approval to participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the
Plan, Company may terminate this Trust prior to the time all
benefit payments under the Plan have been made. All assets in
the Trust at termination shall be returned to Company.
(D) Sections 1 to 15 of this Trust Agreement may not be
amended by Company for 5 years following a Change of Control as
defined herein.
SECTION 13. Miscellaneous
(A) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
(B) Benefits payable to Plan participants and their
beneficiaries under this Trust Agreement may not be
anticipated, assigned (either at law or in equity), alienated,
pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(C) This Trust Agreement shall be governed by and construed
in accordance with the laws of the state in which Trustee is
incorporated as set forth above.
(D) For purposes of this Trust, Change of Control shall
mean the approval by CBS shareholders of a Business Combination
Transaction, the expiration of an Offer, the occurrence of a
Concentration of Equity Ownership, or a change during a two-
year period in the majority of the Corporation s directors
unless each new director was elected by two-thirds of the
directors still in office who were in office at the start of
that period. Business Combination Transaction means one of
the following transactions which has been approved by CBS
- 13 -<PAGE>
shareholders: the sale of all or substantially all of the
Corporation s assets, the adoption of a plan for its
liquidation or dissolution , or a consolidation or merger
following which the shareholders of CBS do not have the same
proportionate ownership of common stock of the surviving
corporation as they did of CBS immediately prior thereto.
Offer means a tender offer or exchange offer after the
consummation of which the offeror is the beneficial owner of
more than 25% of the Corporation s voting stock, including at
least some shares of common stock purchased in such offer.
Concentration of Equity Ownership means the acquisition by any
person of more than 25% of the Corporation s voting stock.
SECTION 14. Effective Date
The effective date of this Trust Agreement shall be January 1,
1995.
CBS INC.
(Company)
By:/s/LOUIS J. RAUCHENBERGER, JR.
Title: Vice President and
Treasurer
MERRILL LYNCH TRUST COMPANY OF AMERICA
(Trustee)
By:/s/CHRIS ROSIN
Title: Trust Officer
- 14 -<PAGE>
APPENDIX A
Name of Non-Qualified Deferred Compensation Plan:
CBS Supplemental Employee Investment Fund <PAGE>
AGREEMENT made as of the 1st day of January, 1995, by and
between CBS Inc. ("CBS"), a New York corporation, having its
principal office at 51 West 52 Street, New York, New York 10019,
and ERIC OBER ("Executive"), residing at 415 East 52 Street, New
York, New York 10022.
W I T N E S S E T H
WHEREAS, Executive will be performing services as an
executive of the CBS News Division ("CND") of CBS; and
WHEREAS, CBS desires to secure the continued services of
Executive as an executive of CND, and Executive is willing to
continue such services, upon the terms, provisions and conditions
hereinafter set forth:
NOW, THEREFORE, in consideration of the promises and the
mutual covenants hereinafter contained, it is agreed upon between
CBS and Executive as follows:
1. CBS hereby employs Executive, and Executive hereby
accepts employment, as an executive of CND (currently as
President of CND), for a three year term commencing January 1,
1995 and ending December 31, 1997. Executive shall perform such
services as may from time to time be assigned to him by
President, CBS/Broadcast Group.
2.a. CBS agrees to pay Executive, and Executive agrees to
accept from CBS, for his services hereunder base salary at the
rate of five hundred and twenty-five thousand dollars ($525,000)
- 1 -<PAGE>
from January 1, 1995 to August 31, 1995; five hundred and fifty
thousand dollars ($550,000) for the period September 1, 1995
through August 31, 1996; five hundred seventy-seven thousand and
five hundred dollars ($577,500) per annum for the period
September 1, 1996 through August 31, 1997; six hundred and six
thousand and four hundred dollars ($606,400) per annum for the
period September 1, 1997 through December 31, 1997. Base salary
shall be payable bi-weekly or in such other manner as CBS may
designate for employees generally.
b. In addition to the base salary set forth above, Executive
shall receive a minimum bonus consisting of a payment from the
CBS Executive Incentive Plan and, if necessary to reach the
minumum 45% of base salary, an additional amount. The bonuses
shall be payable in February of each of the years 1995, 1996,
1997 and 1998. The minimum bonus payable in 1995 and 1996 shall
be two hundred and sixty thousand ($260,000). In 1997 and 1998
the minimum bonus payable shall be two hundred and seventy-three
thousand dollars ($273,000).
3. Executive shall be included in all plans now existing or
hereafter adopted for the general benefit of CBS employees, such
as pension plans, investment funds and group or other insurance
plans and benefits, if and to the extent that he is and remains
eligible to participate thereunder, and subject to the provisions
of such plans as the same may be in effect from time to time.
- 2 -<PAGE>
Executive will also be eligible to be considered for
participation in other CBS benefit plans, including the
Supplemental Executive Retirement Plan (SERP) and the Stock
Rights Plan or any successor plans thereto, in which
participation is limited to CBS executives in positions
comparable to Executive's. To the extent Executive participates
in any benefit plan, such participation shall be based upon
Executive's base salary, except SERP, which shall be based upon
salary plus fifty percent (50%) of EIP. Since plans in this
latter category are administered under procedures that are not
subject to contractual arrangements, eligibility for
consideration is no guarantee of actual participation because the
CBS Board of Directors' discretion, or that of the appropriate
committee of such Board, in granting participation, is absolute.
4. Executive agrees to devote all of his business time and
attention to the affairs of CND, except during vacation periods
and reasonable periods of illness or other incapacity consistent
with the practices of CBS for executives in comparable positions,
and agrees that his services shall be completely exclusive to CBS
during the term hereof.
5.a. Executive acknowledges that he has been furnished a
copy of the Policy Notes for the President concerning Conflicts
of Interest ("Conflicts Policy") dated December 13, 1989, and
- 3 -<PAGE>
a copy of the "CBS Policy Summary" issued in January 1979.
Executive further acknowledges that he has read and fully
understands all of the requirements thereof, and acknowledges
that at all times during the term hereof, he shall perform his
services hereunder in full compliance with the Conflicts Policy
and the CBS Policy Summary and with any revisions thereof or
additions thereto.
b. News Executive acknowledges that he has been furnished
a copy of CBS News Standards ("Standards") dated April 4, 1976
and all amendments and additions thereto, a copy of the Policy
Notes from the President concerning Conflicts of Interests
("Conflicts Policy") dated September 22, 1980, and a copy of the
"CBS Policy Summary" issued in January 1979.
6. If, during the term of this Agreement, CBS removes
Executive from his position as President of CND, and offers
Executive another position within CBS, Executive shall have the
option of accepting such position or of leaving CBS and receiving
severance pursuant to Paragraph 7, below.
7.a. If, during the term of this Agreement, the employment
of Executive by CBS should be terminated by CBS for cause, which
for these purposes is defined as (i) fraud, misappropriation or
embezzlement on the part of Executive, (ii) Executive's willful
failure to perform services hereunder or (iii) Executive's
- 4 -<PAGE>
intentional breach of the provisions of paragraph 4 or of
paragraph 5 hereof, then CBS's obligations hereunder shall
immediately thereupon terminate.
b. If, prior to June 30, 1996 the employment of Executive by
CBS should be terminated by CBS other than for cause, Executive
shall be entitled to receive an amount equal to the remainder of
base salary to which he would be entitled pursuant to this
Agreement, or severance in an amount in accord with Company
policy in effect on September 1, 1990, whichever is greater. CBS
shall have the option of paying severance due on a monthly basis,
or in a single lump sum discounted to present value (using the
one-year Treasury bill rate in effect on the date of
termination). If CBS elects to pay severance on a monthly basis,
Executive shall still be free to accept other employment while
continuing to receive severance.
c. If, after June 30, 1996, the employment of Executive by
CBS should be terminated by CBS other than for cause, Executive
shall be entitled to receive an amount equal to the remainder of
base salary to which he would be entitled pursuant to this
Agreement, or severance in an amount in accord with Company
policy in effect on September 1, 1990, whichever is greater.
Such amount shall be paid in a single lump sum on a
non-discounted basis.
- 5 -<PAGE>
d. If, at the end of the term of this Agreement, CBS elects
not to continue Executive's employment, Executive shall be
eligible for severance pay in accord with the Company policy on
severance pay which was in effect on September 1, 1990.
8. This Agreement contains the entire understanding of the
parties with respect to the subject matter thereof, supersedes
any and all prior agreements of the parties with respect to the
subject matter thereof, and cannot be changed or extended except
by a writing signed by both parties hereto. This Agreement shall
be binding upon and inure to the benefit of the parties and their
respective legal representatives, executors, heirs,
administrators, successors and assigns. This Agreement and all
matters and issues collateral thereto shall be governed by the
laws of the State of New York applicable to contracts performed
entirely therein. If any provision of this Agreement, as applied
to either party or to any circumstance, shall be adjudged by a
court to be void or unenforceable, the same shall in no way
affect any other provision of this Agreement or the validity or
enforceability thereof.
9. All notices or other communications hereunder shall be
given in writing and shall be deemed given if served personally
or mailed by registered or certified mail, return receipt
requested, to the parties at their addresses above indicated, or
- 6 -<PAGE>
at such other addresses as they may hereafter designate in
writing.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
CBS INC.
By: /S/ HOWARD STRINGER
/S/ ERIC OBER (Executive)
- 7 - <PAGE>
AGREEMENT made as of the 18th day of April, 1994, by and
between CBS Inc. ("CBS"), a New York corporation, having its
principal office at 51 West 52 Street, New York, New York 10019,
and JAMES A. WARNER ("Executive"), residing at 3 Fountain Square,
Larchmont, New York 10538.
W I T N E S S E T H:
WHEREAS, Executive has been retained to perform services as
an executive of the CBS Enterprises Division ("CBE") of CBS; and
WHEREAS, CBS desires to secure the services of Executive as
an executive of CBE, and Executive is willing to perform such
services, upon the terms, provisions and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the promises and the
mutual covenants hereinafter contained, it is agreed upon between
CBS and Executive as follows:
1. CBS hereby employs Executive, and Executive hereby
accepts employment, as an executive of CBE (currently as
President of CBE), for a period commencing June 1, 1994 and
ending December 31, 1997. Executive will report to the President
of the CBS Broadcast Group. Executive will be the most senior
executive responsible for distribution of CBS programs to all
domestic and international ancillary markets and for
identification of opportunities for CBS investment and
participation in domestic and international programming and media
ventures. Executive will also participate in the expansion of <PAGE>
in-house production resources, the acquisition of ancillary
distribution rights for programming and the operation of the
CBS/FOX home video joint venture. Executive will directly
supervise the most senior executives of CBS Broadcast
International and CBS Video, and have a close working
relationship with the most senior executive of CBS International
programming.
2. CBS agrees to pay Executive, and Executive agrees to
accept from CBS, for his services hereunder base salary at the
rate of Three Hundred Thousand Dollars ($300,000) per annum.
Executive's salary shall be subject to increase in accordance
with Company policy and guidelines. Base salary shall be payable
bi-weekly or in such other manner as CBS may designate for
employees of comparable stature. In addition, Executive shall
receive in February of 1995, 1996, 1997, and 1998, a bonus of no
less than seventy thousand dollars ($70,000), consisting of a
payment from the CBS Executive Incentive Plan and, if necessary
to reach the seventy thousand dollar ($70,000) figure, an
additional amount.
3. Executive shall be included in all plans now existing
or hereafter adopted for the general benefit of CBS employees and
for the specific benefit of employees at the division president
level, such as pension plans, investment funds and group or other
- 2 -<PAGE>
insurance plans and benefits, if and to the extent that he is and
remains eligible to participate thereunder, and subject to the
provisions of such plans as the same may be in effect from time
to time. Executive will also be eligible for participation in
other CBS benefit plans, including the Executive Incentive Plan,
Supplemental Executive Retirement Plan (SERP) and the Stock
Rights Plan or any successor plans thereto, in which
participation is limited to CBS executives in positions
comparable to Executive's. To the extent Executive participates
in any benefit plan, such participation shall be based upon
Executive's base salary. Since plans in this latter category are
administered under procedures that are not subject to contractual
arrangements, eligibility for consideration is no guarantee of
actual participation because the CBS Board of Directors'
discretion, or that of the appropriate committee of such Board,
in granting participation, is absolute. In addition, Executive
will be entitled to four weeks of annual vacation. While
Executive's services will require travel to other cities,
Executive's primary duties will be in New York City, where
Executive will be provided with an office, full-time secretary,
support services, and business reimbursement appropriate to his
position.
- 3 -<PAGE>
4. Executive agrees to devote all of his business time and
attention to the affairs of CBE, except during vacation periods
and reasonable periods of illness or other incapacity consistent
with the practices of CBS for executives in comparable positions,
and agrees that his business/professional services shall be
completely exclusive to CBS during the term hereof.
5. Executive acknowledges that he has been furnished a
copy of the Policy Notes from the President concerning Conflicts
of Interest ("Conflicts Policy") dated December 13, 1989, and a
copy of the "CBS Policy Summary" issued in January 1979.
Executive further acknowledges that he has read and fully
understands all of the requirements thereof, and acknowledges
that at all times during the term hereof, he shall perform his
services hereunder in full compliance with the Conflicts Policy
and the CBS Policy Summary and with any revisions thereof or
additions thereto.
6.a. If, during the term of this Agreement, the employment
of Executive by CBS should be terminated by CBS for cause, which
for these purposes is defined as (i) fraud, misappropriation or
embezzlement on the part of Executive, (ii) Executive's willful
failure to perform services hereunder or (iii) Executive's
intentional breach of the provisions of paragraph 4 or of
- 4 -<PAGE>
paragraph 5 hereof, then CBS's obligations hereunder shall
immediately thereupon terminate.
b. If, during the term of this Agreement, the employment
of Executive by CBS should be terminated by CBS other than for
cause (as defined in paragraph 6.a., above), Executive shall be
entitled to receive severance pay in accordance with Company
policy in effect at the time of termination, but in no case less
than one (1) year's base salary.
7. This Agreement contains the entire understanding of the
parties with respect to the subject matter thereof, supersedes
any and all prior agreements of the parties with respect to the
subject matter thereof, and cannot be changed or extended except
by a writing signed by both parties hereto. This Agreement shall
be binding upon and inure to the benefit of the parties and their
respective legal representatives, executors, heirs,
administrators, successors and assigns, it being understood that
no assignment of this Agreement, in whole or in part, will
relieve either party of it obligations hereunder. This Agreement
and all matters and issues collateral thereto shall be governed
by the laws of the State of New York applicable to contracts
performed entirely therein. If any provision of this Agreement,
as applied to either party or to any circumstance, shall be
adjudged by a court to be void or unenforceable, the same shall
- 5 -<PAGE>
in no way affect any other provision of this Agreement or the
validity or enforceability thereof.
8. All notices or other communications hereunder shall be
given in writing and shall be deemed given if served personally
or mailed by registered or certified mail, return receipt
requested, to the parties at their addresses above indicated, or
at such other addresses as they may hereafter designate in
writing.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
CBS INC.
By: /S/ HOWARD STRINGER
By: /S/ JAMES A. WARNER
(Executive)
- 6 - <PAGE>
AGREEMENT made as of the ____ day of June, 1994, by and
between CBS Inc. ("CBS"), a New York corporation, having its
principal office at 51 West 52 Street, New York, New York 10019,
and JOHNATHAN RODGERS ("Executive"), residing at 843 Chalmers
Place, Chicago, Illinois 60614.
W I T N E S S E T H:
WHEREAS, Executive has been retained to perform services as
an executive of the CBS Television Stations Division ("CTS") of
CBS; and
WHEREAS, CBS desires to secure the continued services of
Executive as an executive of CTS, and Executive is willing to
continue such services, upon the terms, provisions and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the
mutual covenants hereinafter contained, it is agreed upon between
CBS and Executive as follows:
1. CBS hereby employs Executive, and Executive hereby
accepts employment, as an executive of CTS (currently as
President of CTS), for a four-year term commencing June 27, 1994,
and ending June 26, 1998. Executive shall perform such services
as may from time to time be assigned to him by the President,
CBS/Broadcast Group or the Executive Vice-President,
CBS/Broadcast Group.
2. CBS agrees to pay Executive, and Executive agrees to
accept from CBS, for his services hereunder base salary at the
rate of four hundred thousand dollars ($400,000) per annum. <PAGE>
Executive's base salary shall be subject to merit review, and the
potential of increase, in accordance with CBS compensation
guidelines and practices. Base salary shall be payable bi-weekly
or in such other manner as CBS may designate for employees
generally.
3. Executive shall be included in all plans now existing
or hereafter adopted for the general benefit of CBS employees,
such as pension plans, investment funds and group or other
insurance plans and benefits, if and to the extent that he is and
remains eligible to participate thereunder, and subject to the
provisions of such plans as the same may be in effect from time
to time. Executive will also be eligible to be considered for
participation in other CBS benefit plans, including the Executive
Incentive Plan, Supplemental Executive Retirement Plan (SERP) and
the Stock Rights Plan or any successor plans thereto, in which
participation is limited to CBS executives in positions
comparable to Executive's. To the extent Executive participates
in any benefit plan, such participation shall be based upon
Executive's base salary. Since plans in this latter category are
administered under procedures that are not subject to contractual
arrangements, eligibility for consideration is no guarantee of
actual participation because the CBS Board of Directors'
discretion, or that of the appropriate committee of such Board,
in granting participation, is absolute.
- 2 -<PAGE>
4. Executive agrees to devote all of his business time and
attention to the affairs of CTS, except during vacation periods
and reasonable periods of illness or other incapacity consistent
with the practices of CBS for executives in comparable positions,
and agrees that his services shall be completely exclusive to CBS
during the term hereof.
5. Executive acknowledges that he has been furnished a
copy of the Policy Notes from the President concerning Conflicts
of Interest ("Conflicts Policy") dated December 13, 1989, and a
copy of the "CBS Policy Summary." Executive further acknowledges
that he has read and fully understands all of the requirements
thereof, and acknowledges that at all times during the term
hereof, he shall perform his services hereunder in full
compliance with the Conflicts Policy and the CBS Policy Summary
and with any revisions thereof or additions thereto.
6.a. If, during the term of this Agreement, the employment
of Executive by CBS should be terminated by CBS for cause, which
for these purposes is defined as (i) fraud, misappropriation or
embezzlement on the part of Executive, (ii) Executive's willful
failure to perform services hereunder or (iii) Executive's
intentional breach of the provisions of paragraph 4 or of
paragraph 5 hereof, then CBS's obligations hereunder shall
immediately thereupon terminate.
- 3 -<PAGE>
b. If, during the term of this Agreement, the employment
of Executive by CBS should be terminated by CBS other than for
cause, Executive shall be entitled to receive severance pay in
accordance with Company policy in effect at the time of
termination or one year's base salary, whichever is greater.
7. This Agreement contains the entire understanding of the
parties with respect to the subject matter thereof, supersedes
any and all prior agreements of the parties with respect to the
subject matter thereof, and cannot be changed or extended except
by a writing signed by both parties hereto. This Agreement shall
be binding upon and inure to the benefit of the parties and their
respective legal representatives, executors, heirs,
administrators, successors and assigns. This Agreement and all
matters and issues collateral thereto shall be governed by the
laws of the State of New York applicable to contracts performed
entirely therein. If any provision of this Agreement, as applied
to either party or to any circumstance, shall be adjudged by a
court to be void or unenforceable, the same shall in no way
affect any other provision of this Agreement or the validity or
enforceability thereof.
8. All notices or other communications hereunder shall be
given in writing and shall be deemed given if served personally
or mailed by registered or certified mail, return receipt
requested, to the parties at their addresses above indicated, or
- 4 -<PAGE>
at such other addresses as they may hereafter designate in
writing.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
CBS INC.
By: /S/ HOWARD STRINGER
Signed: /S/ JOHNATHAN RODGERS
(Executive)
- 5 - <PAGE>
AGREEMENT made as of the 15th day of April, 1994 by and between
CBS Inc. ("CBS"), a New York corporation, having its principal
office at 51 West 52 Street, New York, New York 10019, and DAVID
KENIN ("Executive"), residing at 274 Cedar Court, Wyckoff, New
Jersey 07481.
W I T N E S S E T H:
WHEREAS, CBS desires to secure the services of Executive as an
executive of CBS, and Executive is willing to continue such
services, upon the terms, provisions and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants hereinafter contained, it is agreed upon between CBS and
Executive as follows:
1. CBS hereby employs Executive, and Executive hereby accepts
employment, as an executive of CBS (specifically as President of
CBS Sports ("CSD")), for a term commencing May 9, 1994 and ending
December 31, 1998. Executive's office shall be in New York City.
Executive shall report to the President of the CBS Television
Network ("CTN") and Executive Vice President of the CBS Broadcast
Group.
2.a. CBS agrees to pay Executive, and Executive agrees to
accept from CBS, for his services hereunder base salary at the rate
of four hundred fifty thousand dollars ($450,000) per annum for the
period May 2, 1994 through May 1, 1995, four hundred seventy-five
- 1 -<PAGE>
thousand dollars ($475,000) per annum for the period May 2, 1995
through May 1, 1996, five hundred thousand dollars ($500,000) per
annum for the period May 2, 1996 through May 1, 1997, and five
hundred twenty-five thousand dollars ($525,000) per annum for the
period May 2, 1997 through December 31, 1998. Base salary shall be
payable bi-weekly or in such other manner as CBS may designate for
employees generally.
b. In addition to the base salary set forth above, Executive
shall receive a minimum bonus consisting of a payment from the CBS
Executive Incentive Plan and, if necessary to reach the minimum, an
additional amount. The bonuses shall be payable in February of
each of the years 1995, 1996, 1997, 1998 and 1999. The minimum
bonus payable in each year shall be two hundred fifty thousand
dollars ($250,000).
c. In addition, in order to offset benefits which Executive
is foregoing with his present employer by accepting employment with
CBS, Executive shall receive the following payments:
1.(a) Three hundred thousand dollars ($300,000)
signing bonus, payable on May 16, 1994.
2.(a) One hundred thousand dollars ($100,000)
bonus, twenty-five thousand dollars ($25,000) of
which shall be payable on June 1st of each year
1994, 1995, 1996 and 1997.
d. It is understood that this contract is firm except for
termination for cause as defined in Paragraph 6.
3. Executive shall be included in all plans now existing or
- 2 -<PAGE>
hereafter adopted for the general benefit of CBS employees, such as
pension plans, investment funds and group or other insurance plans
(including the Senior Executive Life Insurance Plan) and benefits,
if and to the extent that he is and remains eligible to participate
thereunder, and subject to the provisions of such plans as the same
may be in effect from time to time. Executive will also be
eligible to be considered for participation in other CBS benefit
plans, including the Supplemental Executive Retirement Plan (SERP)
and the Stock Rights Plan or any successor plans thereto, in which
participation is limited to CBS executives in positions comparable
to Executive's. To the extent Executive participates in any
benefit plan, such participation shall be based upon Executive's
base salary, except SERP, which shall be based upon fifty percent
(50%) of EIP. Since plans in this latter category are administered
under procedures that are not subject to contractual arrangements,
eligibility for consideration is no guarantee of actual
participation because the CBS Board of Directors' discretion, or
that of the appropriate committee of such Board, in granting
participation, is absolute.
4. Executive agrees to devote all of his business time and
attention to the affairs of CSD, except during vacation periods and
reasonable periods of illness or other incapacity consistent with
the practices of CBS for executives in comparable positions, and
agrees that his services shall be completely exclusive to CBS
- 3 -<PAGE>
during the term hereof.
5. Executive acknowledges that he has been furnished a copy
of the Policy Notes from the President concerning Conflicts of
Interest ("Conflicts Policy") dated December 13, 1989, and a copy
of the "CBS Policy Summary" issued in January 1979. Executive
further acknowledges that he has read and fully understands all of
the requirements thereof, and acknowledges that at all times during
the term hereof, he shall perform his services hereunder in full
compliance with the Conflicts Policy and the CBS Policy Summary and
with any revisions thereof or additions thereto.
6.a. If, during the term of this Agreement, the employment of
Executive by CBS should be terminated by CBS for cause, which for
these purposes is defined as (i) fraud, misappropriation or
embezzlement on the part of Executive, (ii) Executive's willful
failure to perform services hereunder or (iii) Executive's
intentional breach of the provisions of paragraph 4 or of paragraph
5 hereof, then CBS's obligations hereunder shall immediately
thereupon terminate; provided however, that in the event of any
intentional breach of the provisions of paragraph 4 or paragraph 5
hereof, Executive shall be given written notice of the material
breach and have the right to cure within the next three business
days.
b. If CBS terminates this agreement for other than cause then
Executive shall receive all base and bonus payments and other
- 4 -<PAGE>
payments to cover benefits that would have accrued to Executive had
he remained at CBS until December 31, 1998. These payments cover
such items as retirement, medical, life insurance and other
benefits that accrue to Executive as part of his benefit package.
Executive shall be under no duty to mitigate these damages and may
accept employment without reduction of damages provided in this
paragraph. These payments and $400,000 in other payments are to
reduce the loss of pension, deferred compensation and other
benefits Executive forfeited to accept this position.
7. This Agreement contains the entire understanding of the
parties with respect to the subject matter thereof, supersedes any
and all prior agreements of the parties with respect to the subject
matter thereof, and cannot be changed or extended except by a
writing signed by both parties hereto. This Agreement shall be
binding upon and inure to the benefit of the parties and their
respective legal representatives, executors, heirs, administrators,
successors and assigns. This Agreement and all matters and issues
collateral thereto shall be governed by the laws of the State of
New York applicable to contracts performed entirely therein. If
any provision of this Agreement, as applied to either party or to
any circumstance, shall be adjudged by a court to be void or
unenforceable, the same shall in no way affect any other provision
of this Agreement or the validity or enforceability thereof.
- 5 -<PAGE>
8. All notices or other communications hereunder shall be
given in writing and shall be deemed given if served personally or
mailed by registered or certified mail, return receipt requested,
to the parties at their addresses above indicated, or at such other
addresses as they may hereafter designate in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
CBS INC.
By: /S/ HOWARD STRINGER
/S/ DAVID KENIN (Executive)
- 6 - <PAGE>
AGREEMENT made as of the 1st day of April, 1994, by and
between CBS Inc. ("CBS"), a New York corporation, having its
principal office at 51 West 52 Street, New York, New York 100l9,
and PETER TORTORICI ("Executive"), 7800 Beverly Boulevard, Los
Angeles, California 90036.
WHEREAS, CBS desires to secure the services of
Executive as an executive of the CBS Entertainment Division
("CED"), and Executive is willing to furnish such services, upon
the terms, provisions and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants hereinafter contained, it is agreed upon
between CBS and Executive as follows:
1. CBS hereby employs Executive, and Executive hereby
accepts employment, as an executive of CED (as its President),
for a four-year term commencing June 1, 1994, and continuing
through May 31, 1998 (the "Term"). Each successive year of the
Term is herein referred to as a "Contract Year", with the first
Contract Year to commence June 1, 1994, and continue through May
31, 1995, and each successive Contract Year thereafter to
commence on June 1 and continue through May 31 of the applicable
Contract Year. During the Term, Executive shall report to the
President, CBG, and shall be based in Los Angeles, California.
So long as this agreement is not terminated pursuant to paragraph <PAGE>
10 below and Executive is rendering services hereunder, there
shall be no higher exective of CED, and Executive shall have full
authority and power to run CED, including the hiring and
replacement of personnel for CED and the setting of projects for
development and production, such projects to include series and
other production commitments.
2. For all services to be rendered by Executive hereunder
and for all rights granted to CBS by Executive hereunder, CBS
agrees that, subject to all terms and conditions of this
agreement, Executive shall receive a base salary of One Million
Dollars ($1,000,000) per annum during each Contract Year of the
Term. Such base salary shall serve as the basis for determining
all benefits payable to Executive, in accordance with paragraph 7
below, for each Contract Year.
3. In addition to the base salary provided for in
paragraph 2 above, for each Contract Year of the Term, if during
the "broadcast season" (as defined below) which commences during
such Contract Year, CBS' overall schedule of primetime network
programming attains a 9.0 or better national rating by the
Nielsen Television Index of the Nielsen Media Research (the
"Nielsen's") (i.e., the Nielsen's national household rating for
CBS' overall schedule of primetime programming equals or exceeds
9.0), as averaged over the entire broadcast season, Executive
- 2 -
<PAGE>
shall be eligible to receive the folowing performance bonus for
the applicable Contract Year:
1994/95 broadcast season: $500,000
1995/96 broadcast season: $600,000
1996/97 broadcast season: $700,000
1997/98 broadcast season: $800,000
Each bonus payable pursuant to this paragraph 3 shall be paid to
Executive at the end of the broadcast season (i.e., May 31) for
which such bonus is earned.
For purposes hereof, "broadcast season" shall be defined as
the period commencing in September and concluding in April of
each year, the exact dates of which shall be as recognized by the
Nielsen's, in determining the ratings for each applicable
broadcast season. If during the Term hereof, a television
measurement service other than the Nielsen's is used as the
service of record for the majority of primetime advertising
agreements between the CBS Television Network and its client
advertisers, then such other service shall be substituted for the
Nielsen's, and all references in this paragraph 3 and in
paragraph 4 below shall be deemed to refer to such other service,
and if such service uses a measurement system different from the
Nielsen's ratings measurement system, then measurement numbers in
the new system which are equivalent to the Nielsen's ratings
- 3 -
<PAGE>
numbers shall be substituted for the Nielsen's numbers referred
to in this paragraph 3 and in paragraph 4 below (so that
equivalent ratings, or other measurement standards, are used in
evaluating whether Executive has attained the goals set forth
herein for determining what bonuses, if any, are payable to
Executive pursuant to this paragraph 3 and to paragraph 4 below).
4. In addition to the base salary provided for in
paragraph 2 above and the performance bonuses provided for in
paragraph 3 above, Executive shall also be eligible to receive
additional performance bonuses for each Contract Year, to be
determined on the basis of attaining one or more of the
following goals during the applicable Contract Year:
(a) If during the broadcast season commencing in the
applicable Contract Year CBS' schedule of daytime network
programming attains the highest national rating by the Nielsen's
(i.e., CBS finishes first in the Nielsen's national daytime
household ratings), as averaged over the entire broadcast season,
a bonus payment of One Hundred Thousand Dollars ($100,000) will
be earned by and payable to Executive.
(b) If during the broadcast season commencing in the
applicable Contract Year CBS' schedule of latenight network
programming attains the highest national rating by the Nielsen's
(i.e., CBS finishes first in the Nielsen's national latenight
- 4 -<PAGE>
household ratings), as averaged over the entire broadcast season,
a bonus payment of One Hundred Thousand Dollars ($100,000) will
be earned by and payable to Executive.
(c) If during the broadcast season commencing in the
applicable Contract Year CBS' regularly scheduled primetime
network programming attains among adults aged 25 to 54 a 7.8 or
better national rating by the Nielsen's (i.e., the Nielsen's
national household rating for adults 25 to 54 for CBS' regularly
scheduled primetime programming equals or exceeds 7.8), as
averaged over the entire broadcast season, a bonus payment of One
Hundred Thousand Dollars ($100,000) will be earned by and payable
to Executive.
(d) If in the calendar year ending during the
applicable Contract Year the profits from CBS' television network
equal or exceed the profits which were earned by CBS' television
network for the prior calendar year, a bonus payment of One
Hundred Thousand Dollars ($100,000) will be earned by and payable
to Executive.
(e) If during the broadcast season in the applicable
Contract Year at least one new primetime entertainment series of
six or more episodes is first broadcast on the CBS Television
Network and attains an overall national rating by the Nielsen's
which places it in the top twenty-five primetime programs, as
- 5 -<PAGE>
determined over the entire broadcast season, a bonus payment of
One Hundred Thousand Dollars ($100,000) will be earned by and
payable to Executive.
All bonuses payable pursuant to subparagraphs (a) through
(c) and subparagraph (e) of this paragraph 4 shall be paid to
Executive at the end of the broadcast season (i.e., May 31) for
which they are earned, and each bonus payable pursuant to
subparagraph (d) of this paragraph 4 shall be paid to Executive
on the May 31 following the end of the calendar year for which
the profits are measured in determining whether a bonus is
payable pursuant to subparagraph (d).
5. In addition to the base salary payable pursuant to
paragraph 2 above and the bonuses, if any, payable pursuant to
paragraphs 3 and 4 above, CBS agrees to pay to Executive deferred
compensation in the sum of $125,000 for each Contract Year of the
Term. The deferred compensation shall be payable upon the
termination of Executive's services at CBS; provided, however,
that Executive's rights to receive the deferred compensation
payable for each Contract Year shall vest only upon completion of
Executive's services in the applicable Contract Year, and if
Executive's services are terminated prior to the end of the Term
of this agreement, then only such deferred compensation as has
vested by such date shall be payable to Executive.
- 6 -<PAGE>
6. (a) Reference is hereby made to the loan agreement
enterted into by CBS and Executive dated December 31, 1993 (the
"Loan Agreement"), pursuant to which CBS loaned to Executive the
principal sum of Three Hundred Fifty Thousand Dollars ($350,000)
(the "Principal"), with such loan to bear interest at the rate of
eight percent (8%) per annum and to be repaid in full (including
all accrued interest) on or before November 30, 1994 (the
"Maturity Date"). Executive and CBS have agreed and do hereby
agree to amend the Loan Agreement, to extend the Maturity Date
from November 30, 1994, to the earlier of June 1, 1998, or the
termination of this agreement.
(b) In addition to all sums payable to Executive
pursuant to paragraphs 2, 3, 4 and 5 hereinabove, CBS hereby
agrees that over the course of the Term of this agreement, pro
rata portions of the Principal, plus all accrued interest
thereon, which would otherwise be due and payable pursuant to the
Loan Agreement, will be forgiven by CBS, in accordance with the
provisions of this paragraph 6. Such right of Executive to have
the loan forgiven hereunder shall vest in four equal portions
during the four Contract Years of the Term (i.e., at the end of
each Contract Year one-fourth (1/4) of the Principal, plus all
accrued interest thereon, shall be forgiven). Upon the vesting
of such right at the end of each Contract Year, CBS agrees that
- 7 -<PAGE>
with respect to the portion of the loan which is forgiven, CBS
shall forever waive and forego the right to receive repayment of
such portion of the Principal of the loan, plus all accrued
interest thereon. In addition to such pro rata forgiveness of
the loan amounts, CBS shall pay to Executive amounts equal to the
taxes due from Executive to the Internal Revenue Service and any
other taxing authorities by reason of CBS' forgiveness of the
loan, computed at the statutory rates applicable to Executive and
grossed up at such rates so that such amounts received by
Executive pursuant to this sentence shall be on an after-tax
basis, such amounts to be payable to Executive on or before April
15 of each Contract Year, for the pro rata portion of the loan
payments forgiven during such Contract Year. CBS acknowledges
that Executive shall have no obligation to make any payments of
either the Principal or any interest thereon during the Term of
this agreement, so long as Executive performs all services
required of him hereunder. If at any time during the Term CBS
terminates this agreement for cause (as defined in paragraph 10
below), then the full amount of the remaining Principal which was
not forgiven prior to the date of such termination, plus all
accrued interest thereon, shall immediately become due and
payable, in accordance with the terms of the Loan Agreement. If
at any time during the Term CBS terminates this agreement other
- 8 -<PAGE>
than for cause (as defined in paragraph 10 below), then the full
amount of the loan (including all accrued interest) shall be
deemed to be forgiven, and Executive shall have no further
obligation with respect to the loan.
7. Executive shall be included in all plans now existing
or hereafter adopted for the general benefit of CBS employees,
such as pension plans, investment funds and group or other
insurance plans and benefits, if and to the extent that he is and
remains eligible to participate thereunder, and subject to the
provisions of such plans as the same may be in effect from time
to time. Executive shall be entitled to participate in CBS'
Executive Life Insurance plan, subject to and in accordance with
the provisions of such plan. Executive will also be eligible for
participation and recommended to be considered for participation
in all other CBS benefit plans in which participation is limited
to CBS executives in positions comparable to his (i.e., CBS
executive segment 1), including the Executive Incentive Plan
("EIP") or any successor plan to EIP and the Stock Rights Plan
("SRP") or any successor plan to SRP. Notwithstanding anything
else contained in this paragraph 7, since EIP and SRP are
administered under procedures that are not subject to contractual
arrangements, eligibility for consideration is no guarantee of
actual participation because the CBS Board of Directors'
- 9 -<PAGE>
discretion, or that of the appropriate committee of such Board,
in granting participation, is absolute. Without limiting the
foregoing, Executive acknowledges that the bonuses provided for
hereinabove in paragraphs 3 and 4 above shall be inclusive of any
and all EIP awards that might otherwise be payable to Executive.
The amounts of the bonuses, if any, payable pursuant to
paragraph 3 above shall be used as the sole basis for calculating
any Supplemental Executive Retirement Plan ("SERP") awards
payable to Executive hereunder (i.e., Executive shall be entitled
to receive as SERP one-half of the amount of the actual
performance bonus payable to Executive pursuant to paragraph 3
for each applicable Contract Year).
8. Executive agrees to devote all of his business time and
attention to the affairs of CBS, except during vacation periods
and reasonable periods of illness or other incapacity consistent
with the practices of CBS for executives in comparable positions,
and agrees that his services shall be completely exclusive to CBS
during the Term hereof.
9. Executive acknowledges that he has been furnished a
copy of the Policy Notes from the President concerning Conflicts
of Interest ("Conflicts Policy") dated December 13, 1989.
Executive further acknowledges that he has read and fully
understands all of the requirements thereof, and acknowledges
- 10 -<PAGE>
that at all times during the Term hereof, he shall perform his
services hereunder in full compliance with the Conflicts Policy
and the CBS Policy Summary and with all revisions thereof or
additions thereto including without limitation any notice
provisions therein (notwithstanding any notice provisions to the
contrary which may be contained in paragraph 15 of this
agreement).
10. If, during the Term of this agreement, the employment
of Executive by CBS should be terminated by CBS for cause, which
for these purposes is defined as (i) fraud, misappropriation or
embezzlement on the part of Executive, (ii) Executive's willful
failure to perform services hereunder or (iii) Executive's
intentional breach of the provisions of paragraph 8 or of
paragraph 9 hereof or for Executive's incapacity, then CBS shall
immediately have the right to terminate this agreement; provided,
however, that in the event of any intentional breach of the
provisions of paragraph 8 or paragraph 9 hereof (as referred to
in subdivision (iii) above), Executive shall have the right to
cure within a reasonable period of time (not to exceed 10 days)
after CBS' notice to Executive of the breach; and provided
further, that in the event of Executive's incapacity CBS may
terminate this agreement effective only after the expiration of a
period the length of which shall be determined by the CBS
- 11 -<PAGE>
Personnel Department pursuant to the then applicable CBS sick
leave policy for CBS exempt staff employees as though such policy
were applicable to this agreement but in any event not less than
four (4) consecutive weeks. If CBS terminates this agreement by
reason of Executive's incapacity, Executive shall continue to
receive for the remainder of the term of this agreement, the base
salary in effect at the time of disability (pursuant to paragraph
2 hereof), reduced by the maximum amount of salary which may be
insured under the CBS Long Term Disability ("LTD") Plan at the
time of disability, regardless of whether Executive elects to
obtain full benefits to which he is entitled under CBS' LTD Plan.
Nothing herein shall obligate CBS to utilize Executive's
services, and CBS shall have fulfilled all of its obligations
hereunder by payment to Executive of the applicable base salary
(as provided for in paragraph 2 above) plus all other payments
which accrue and vest during the Term of this agreement (pursuant
to paragraphs 3, 4 and 5 above) plus any benefits to which
Executive is entitled pursuant to paragraph 6 above for the Term
of this agreement.
If during the Term hereof CBS elects to terminate
Executive's employment hereunder for any reason other than cause
(as hereinabove defined), Executive shall have no duty to
mitigate, and shall be entitled to receive his base salary as
- 12 -<PAGE>
provided for in paragraph 2 above for the remainder of the Term
following such termination plus his bonus, if any, payable
pursuant to paragraphs 3 and 4 for the first Contract Year, if
such bonus has not already been paid prior to the date of
termination other than for cause, plus a pro rata portion of any
bonus(es) that would otherwise become payable to Executive
pursuant to paragraphs 3 and 4 for the Contract Year in which he
is terminated, with the portion to be a direct percentage of the
Contract Year completed by Executive prior to such termination,
(all such payments described in this sentence to be collectively
referred to as the "Remaining Payments"). Following any such
termination, CBS shall have no obligation whatsoever to make any
payments to Executive, other than the Remaining Payments provided
for in the preceding sentence; provided, however, that the
remainder of the Principal and accrued interest that would
otherwise be due under the Loan Agreement shall be foregiven in
accordance with the provisions of paragraph 6 hereinabove.
Notwithstanding anything contained in this agreement (including
without limitation anything contained in paragraph 7 above),
Executive shall not be entitled to receive any serverance pay
upon the termination of this agreement or of Executive's
employment hereunder at any time during the Term of this
agreement.
- 13 -<PAGE>
11. Subject to the other provisions of this paragraph and
subject to CBS' policies regarding vacation, during each calendar
year of the Term, Executive shall be entitled to four (4) weeks
vacation with pay. The actual time of such vacation shall be
subject to CBS approval. For any fraction of a calendar year
during the Term, such vacation shall be prorated in accordance
with CBS' normal practices.
12. In accordance with the then applicable CBS policy, CBS
shall reimburse Executive for the cost of his reasonable, actual
and necessary business and travel expenses incurred in connection
with his services hereunder.
13. CBS shall own all right, title and interest in
perpetuity to the results of Executive's services and all
artistic materials and intellectual properties which are, in
whole or in part, created, developed or produced by Executive
during the Term of this agreement and which are suggested by or
related to Executive's employment hereunder or any activities to
which Executive is assigned, and Executive shall not have or
claim to have any right, title or interest therein of any kind or
nature. Nothing in the preceding sentence is intended to
constitute a waiver of CBS' conflict of interest policies.
14. This agreement contains the entire understanding of the
parties with respect to the subject matter hereof, and (upon
- 14 -<PAGE>
commencement of the Term) supersedes any and all prior agreements
of the parties with respect to the subject matter thereof, and
cannot be changed or extended except by a writing signed by both
parties hereto. This agreement shall be binding upon and inure
to the benefit of the parties and their respective legal
representatives, executors, heirs, administrators, successors and
assigns. This agreement and all matters and issues collateral
thereto shall be governed by the laws of the State of New York
applicable to contracts performed entirely therein. If any
provision of this agreement, as applied to either party or to any
circumstance, shall be adjudged by a court to be void or
unenforceable, the same shall in no way affect any other
provision of this agreement or the validity or enforceability
thereof.
15. All notices or other communications hereunder shall be
given in writing and shall be deemed given (and shall be
effective upon being given) if served personally or mailed by
registered or certified mail, return receipt requested, to the
parties at their addresses above indicated, or at such other
addresses as they may hereafter designate in writing; provided,
however, that for any notice or other communication sent by mail,
- 15 -<PAGE>
the date of giving such notice or communication shall be deemed
effective three (3) days after the date of mailing.
IN WITNESS WHEREOF, the parties have executed this agreement
as of the day and year first above written.
CBS INC.
By: /S/ HOWARD STRINGER
Signed: /S/ PETER TORTORICI
("Executive")
- 16 - <PAGE>
AGREEMENT made as of the day of June, 1994, by and
between CBS Inc. ("CBS"), a New York corporation, having its
principal office at 51 West 52 Street, New York, New York 10019,
and NANCY C. WIDMANN ("Executive"), residing at 1748 Shippan
Avenue, Stamford, Connecticut 06902.
W I T N E S S E T H:
WHEREAS, Executive has been performing services as President
of the CBS Radio Division ("CRD") of CBS; and
WHEREAS, CBS desires to secure the continued services of
Executive as President of CRD, and Executive is willing to
continue such services, upon the terms, provisions and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, it is agreed upon between
CBS and Executive as follows:
1. CBS hereby employs Executive, and Executive hereby
accepts employment, as President of CRD for a four (4) year term
commencing January 3, 1994, and ending January 2, 1998.
Executive shall perform such services as may from time to time be
assigned to her by the President, CBS Broadcast Group or the
Executive Vice-President, CBS Broadcast Group.
2. CBS agrees to pay Executive, and Executive agrees to
accept from CBS, for her services hereunder base salary at the <PAGE>
rate of Two Hundred Ninety-Five Thousand Dollars ($295,000) per
annum. Executive's base salary shall be subject to merit review,
and the potential of increase, in accordance with CBS
compensation guidelines and practices. Base salary shall be
payable bi-weekly or in such other manner as CBS may designate
for employees generally.
3. Executive shall be included in all plans now existing or
hereafter adopted for the general benefit of CBS employees, such
as pension plans, investment funds and group or other insurance
plans and benefits, if and to the extent that she is and remains
eligible to participate thereunder, and subject to the provisions
of such plans as the same may be in effect from time to time.
Executive will also be eligible to be considered for
participation in other CBS benefit plans in which participation
is limited to CBS executives in positions comparable to
Executive's. Since plans in this latter category are
administered under procedures that are not subject to contractual
arrangements, eligibility for consideration is no guarantee of
actual participation because the CBS Board of Directors'
discretion, or that of the appropriate committee of such Board,
in granting participation, is absolute.
4. Executive agrees to devote all of her business time and
attention to the affairs of CRD, except during vacation periods
- 2 - <PAGE>
and reasonable periods of illness or other incapacity consistent
with the practices of CBS for employees of equivalent executive
level, and agrees that her services shall be completely exclusive
to CBS during the term hereof.
5(a) If, during the term of this Agreement, the employment
of Executive by CBS should be terminated by CBS for cause, which
for these purposes is defined as (i) fraud, misappropriation or
embezzlement on the part of Executive, (ii) Executive's willful
failure to perform services hereunder or (iii) Executive's
intentional breach of the provisions of paragraph 4 hereof, then
CBS's obligations hereunder shall immediately thereupon
terminate.
(b) If during the term of this Agreement, the employment of
Executive by CBS should be terminated by CBS other than for cause
(as defined above), then Executive shall receive a lump sum
payment in an amount equal to one year's base salary (at the rate
in effect at the time of termination), or severance pay in
accordance with CBS policy, whichever is greater.
7. Executive acknowledges that she has been furnished a
copy of the Policy Notes from the President concerning Conflicts
of Interest ("Conflicts Policy") dated December 13, 1989, and a
copy of the "CBS Policy Summary". Executive further acknowledges
that she has read and fully understands all the requirements
- 3 -<PAGE>
thereof, and acknowledges that at all times during the Employment
Period she shall perform her services hereunder in full
compliance with the Conflicts Policy and the CBS Policy Summary
and with any revisions thereof or additions thereto.
8. This Agreement contains the entire understanding of the
parties with respect to the subject matter thereof, supersedes
any and all prior agreements of the parties with respect to the
subject matter thereof, and cannot be changed or extended except
by a writing signed by both parties hereto. This Agreement shall
be binding upon and inure to the benefit of the parties and their
respective legal representatives, executors, heirs,
administrators, successors and assigns. This Agreement and all
matters and issues collateral thereto shall be governed by the
laws of the State of New York applicable to contracts performed
entirely therein. If any provision of this Agreement, as applied
to either party or to any circumstance, shall be adjudged by a
court to be void or unenforceable, the same shall in no way
affect any other provision of this Agreement or the validity or
enforceability thereof.
9. All notices or other communications hereunder shall be
given in writing and shall be deemed given if served personally
or mailed by registered or certified mail, return receipt
- 4 -<PAGE>
requested, to the parties at their addresses above indicated, or
at such other addresses as they may hereafter designate in
writing.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
CBS Inc.
By: /S/ HOWARD STRINGER
Signed: /S/ NANCY WIDMANN
- 5 - <PAGE>
EXECUTION COPY
EMPLOYMENT AGREEMENT made as of June 27,
1994, by and between CBS INC. ("CBS"), a New
York Corporation having its principal office
at 51 West 52nd Street, New York, New York
10019 ("Principal Office"), and the person
("Executive") set forth on the signature page
hereof, who resides at the address specified
in Schedule A.
RECITALS:
WHEREAS, Executive is presently employed by CBS with
the title and in the position (such title and position, the
"Executive Position") specified in Schedule A; and
WHEREAS, CBS desires to secure the continued services
of Executive in such Executive Position, and Executive is willing
to continue to provide such services, upon the terms, provisions
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and
the mutual covenants hereinafter contained, CBS and Executive
agree as follows:
SECTION 1. Employment. CBS hereby agrees to continue
to employ executive in the Executive Position, and Executive
hereby accepts such employment.
SECTION 2. Term. The employment of Executive by CBS
as provided in Section 1 shall continue to and include the date
specified in Schedule A (the "Term"), unless further extended or
earlier terminated as hereinafter provided. The term shall
automatically be renewed for successive one calendar year terms
unless either party gives at least 180 calendar days written
notice before the end of the Term of its intention not to renew
the Term.
SECTION 3. Position and Authority. Executive shall
continue to be employed by CBS in the Executive Position and
shall have the responsibilities and authority specified in
Schedule A (including, without limitation, having the persons or
departments specified in Schedule A continue to report to
Executive), and shall continue to report directly and only to the
person specified in Schedule A (such responsibilities, authority
and the line of reporting, the "Executive's Authority and Line of
Reporting").
<PAGE>
SECTION 4. Place of Performance. Executive may not,
without Executive's consent, be required to perform Executive's
duties at any location that is more than 15 miles from CBS's
Principal Office, except for necessary travel on CBS business to
an extent substantially consistent with present business travel
obligations.
SECTION 5. Compensation and Expenses.
(a) Salary. Executive shall receive the base salary
specified in Schedule A. Base salary shall be payable bi-weekly
or in such other manner as CBS may designate for executives
generally.
(b) Bonuses. Executive shall receive the bonuses
specified in Schedule A, upon the terms and conditions specified
in Schedule A. Such bonuses shall be paid to Executive each
February 28 with respect to the bonus amount for the previous
calendar year.
(c) Benefits. Executive shall be included in all
plans now existing or hereafter adopted for the general benefit
of CBS employees, such as pension plans, medical (including,
without limitation, post-retirement medical coverage), dental and
disability plans, investment funds and group or other insurance
plans and benefits, if and to the extent that the Executive is
and remains eligible to participate thereunder, and subject to
the provisions of such plans as the same may be in effect from
time to time. It is agreed that Executive will be proposed for a
grant pursuant to the CBS Stock Rights Plan or any successor plan
thereto at each meeting of the Board during the Term when such
grants are proposed for comparable senior executives at CBS.
Executive will receive a grant at each such meeting at least
equal to the maximum grant approved for any other comparable
senior executive at CBS. Executive will be included in the
Senior Executive Life Insurance Plan and the Executive Incentive
Plan and any successor plans thereto and in any other CBS benefit
plans in which participation is limited to CBS executives in
positions comparable to the Executive Position.
(d) Vacation. Executive shall be entitled to at least
the same vacation as Executive is currently entitled.
(e) Perquisites. CBS shall make available to
Executive at least those perquisites presently granted Executive.
- 2 -
<PAGE>
(f) Expenses. CBS shall reimburse Executive for all
reasonable out-of-pocket expenses incurred by Executive in
connection with the business of CBS and in performance of
Executive Duties under this Agreement.
SECTION 6. Termination by CBS. CBS shall have the
right to terminate Executive's employment at any time for
"Cause". For purposes of this Agreement, "Cause" shall mean (a)
termination by action of a majority of the members of the CBS
Board of Directors, acting on the written opinion of counsel,
because of Executive's willful and continued refusal, without
proper cause, to substantially perform Executive's duties under
this Agreement; or (b) the conviction of Executive of a felony or
of an act of fraud or embezzlement against CBS or any of its
divisions, subsidiaries or affiliates (which through lapse of
time or otherwise is not subject to appeal). Such termination
shall be effected by written notice thereof, personally hand
delivered by CBS to Executive, and, except as hereinafter
provided, shall be effective as of the thirtieth calendar day
after such notice; provided, however, that if within such 30
calendar day period Executive shall cease Executive's refusal and
shall use Executive's best efforts to perform such obligations,
the termination shall not be effective.
SECTION 7. Termination by Death. In the event
Executive dies during the Term, Executive's employment shall
terminate (effective on the date of Executive's death) and the
provisions of Section 10 shall be applicable.
SECTION 8. Termination by Disability. In the event
that Executive suffers a disability which prevents Executive from
substantially performing Executive's duties under this Agreement
for a period of at least 180 consecutive or non-consecutive
calendar days within and 365-calendar day period has elapsed, to
terminate Executive's employment hereunder upon 30 calendar days
written notice to Executive and the provisions of Section 10
shall be applicable.
SECTION 9. Termination by Executive. Termination.
Notwithstanding any other provision of this Agreement, Executive
may terminate Executive's employment by written notice served
upon CBS within 30 calendar days after Executive has knowledge of
an event constituting "Good Reason". For purposes of this
Agreement, the following circumstances shall constitute "Good
Reason":
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<PAGE>
(i) any action by CBS which results in a diminution,
except in insignificant respects, in the Executive Position
or in the Executive's Authority and Line of Reporting;
(ii) any failure by CBS to timely pay the amounts or
provide the benefits described in Section 5 of this
Agreement, other than an isolated failure not occurring in
bad faith and which is remedied promptly after receipt of
written notice thereof given by Executive;
(iii) any failure by CBS to require any successor to be
bound by the terms of this Agreement; or
(iv) any action by CBS that would result in a violation
of Section 4.
SECTION 10. Effect of Termination.
(a) For Cause; Without Good Reason; Death. In the
event of termination of this Agreement (i) by CBS for Cause, (ii)
by Executive without Good Reason or (iii) by reason of the death
or disability of the Executive, CBS shall pay Executive (or
Executive's beneficiary in the event of Executive's death) any
base salary or other compensation earned (and a pro rata portion
of the bonus payable with respect to the year in which
termination occurred) but not paid to Executive prior to the
effective date of such termination and, in the case of
termination by reason of death, CBS shall pay Executive's
beneficiary any death benefits that Executive is entitled to
under CBS policies in effect on Executive's date of death.
(b) Without Cause; For Good Reason. In the event of
termination of this Agreement (i) by CBS other than for Cause or
(ii) by Executive for Good Reason, CBS shall pay Executive the
sum of (A) the amount described in Section 10(a) of this
Agreement, (B) the amount equal to the total of the amount that
would have been payable as base salary for the remainder of the
Term, (C) all bonus compensation to which Executive would have
been entitled pursuant to Section 5(b) (less any amount of bonus
included in the calculation of the amount set forth in the
previous clause (A)), assuming full satisfaction of any objective
performance criteria, (D) an amount of additional pension
benefits such that Executive shall receive the amount of pension
benefits (calculated on an after-tax basis) to which Executive
would have been entitled had Executive remained employed by CBS
- 4 -
<PAGE>
in accordance with the terms of this Agreement, and continued to
participate in the pension plans maintained by CBS, throughout
the Term, and (E) the continuation during the Term of all
benefits (other than participation in the CBS Stock Rights Plan
or any successor plan) and perquisites set forth in Sections 5(c)
and (e), notwithstanding the fact that Executive may no longer by
an employee eligible to participate in one or more of the
employee benefit plans maintained by CBS.
(c) Disability. In the event of termination of this
Agreement by reason of disability, CBS shall continue to pay
Executive Executive's base salary at the time of such termination
for the remainder of the Term, reduced by the maximum amount of
salary which may be insured under the CBS Long Term Disability
Plan at the time of disability.
SECTION 11. Excise Taxes. In the event that Executive
shall have imposed upon him the tax which is imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the
"Code") or by any successor provision, by reason of any payment
of benefit which executive has received under this Agreement, CBS
shall pay as additional compensation to Executive that amount
which, after taking into account all taxes (including any tax
which shall be imposed by Code Section 4999) imposed upon such
amount by any federal, state or local government, shall be equal
to the amount of said tax imposed by Code Section 4999.
SECTION 12. Acceleration and Expiration of Options and
SARs. Any options to purchase capital stock of CBS ("Options")
or Stock Appreciation Rights ("SARs") granted by CBS to Executive
that have not yet become exercisable shall become exercisable
upon the earliest to occur of (a) the termination of Executive's
employment as a result of Executive's death or disability; (b)
the termination of Executive's employment by CBS other than for
Cause; and (c) the termination of Executive's employment with CBS
by Executive with Good Reason. Notwithstanding the foregoing,
all Options or SARs, whether currently exercisable or not, shall
expire and cease to be exercisable as follows:
(a) If CBS terminates Executive's employment for
Cause, immediately upon the effective date of such
termination;
(b) If Executive terminates Executive's employment
with CBS other than for Good Reason, immediately upon the
effective date of such termination;
- 5 -
<PAGE>
(c) If Executive dies while employed by CBS, 6
calendar months after Executive's death (but in no event
later than the date the Term would expire without giving
effect to any automatic renewal); and
(d) If Executive's employment is terminated as a
result of disability, 6 calendar months after the effective
date of such termination (but in no event later than the
date the Term would expire without giving effect to any
automatic renewal).
SECTION 13. No Mitigation; No Offset. Executive shall
be under no obligation to mitigate damages or the amount of any
payment provided for under this Agreement by seeking other
employment or otherwise and there shall be no offset against
amounts due Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that
Executive may obtain.
SECTION 14. Indemnification. Throughout the Term and
thereafter, CBS shall indemnify Executive to the fullest extent
not prohibited by law against any and all expenses, fees
(including reasonable legal fees), liabilities and obligations of
any nature whatsoever paid or incurred by Executive in connection
with any suit, proceeding, inquiry, hearing or investigation
arising out of or related to (a) the fact that Executive is or
was an employee, officer, director, or agent of CBS; (b) anything
done or not done by Executive in any such capacity or (c)
enforcement of the terms of this Agreement.
SECTION 15. Exclusive Agreement; Conflicts.
(a) Exclusive Agreement. Executive agrees to devote all
customary business time and attention to the affairs of CBS,
except during vacation periods and reasonable periods of illness
or other incapacity consistent with the practices of CBS for
executives in comparable positions, and agrees that Executive's
services shall be completely exclusive to CBS during the term
hereof.
(b) Conflicts Policy. Executive acknowledges that
Executive has been furnished a copy of the "Policy Notes from the
President" concerning conflicts of interest ("Conflicts Policy"),
dated December 13, 1989, and a copy of the "CBS Policy Summary".
Executive further acknowledges that Executive has read and fully
understands all the requirements thereof, and acknowledges that
- 6 -
<PAGE>
at all times during the Term Executive shall perform Executive's
services hereunder in full compliance with the Conflicts Policy
and the CBS Policy Summary and with any revisions thereof or
additions thereto.
SECTION 16. Entire Agreement. This Agreement contains
the entire understanding of the parties with respect to the
subject matter thereof, supersedes any and all prior agreements
of the parties with respect to the subject matter thereof, and
cannot be changed or extended except by a writing signed by both
parties hereto. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective legal
representatives, executors, heirs, administrators, successors and
assigns.
SECTION 17. Governing Law. This Agreement and all
matters and issues collateral thereto shall be governed by the
laws of the State of New York applicable to contracts performed
entirely therein.
SECTION 18. Severability. If any provision of this
Agreement, as applied to either party or to any circumstance,
shall be adjudged by a court to be void and unenforceable, the
same shall in no way affect any other provision of this Agreement
or the validity or enforceability thereof.
SECTION 19. Notices. All notices or other
communications hereunder shall be given in writing and shall be
deemed given if served personally or mailed by registered or
certified mail, return receipt requested, to the parties at their
respective addresses above indicated, or at such other address or
addresses as they may hereafter designate in writing.
SECTION 20. Condition to Effectiveness.
Notwithstanding the signature below of an authorized
representative of CBS, this Agreement shall not be effective
unless and until the CBS Board of Directors approves the
Agreement on or before July 31, 1994. All payments required to
be made under this Agreement on and from the date hereof trough
the date the CBS Board of Directors approves this Agreement that
- 7 -
<PAGE>
are in excess of Executive's present compensation shall be made
to Executive within 3 business days of such approval.
IN WITNESS WHEREOF, the parties have executed this
Agreement on June 27, 1994.
CBS INC.,
By /s/ Laurence A. Tisch
_______________________
Laurence A. Tisch
By /s/ Ellen Oran Kaden
_______________________
Ellen Oran Kaden (Executive)
- 8 -
<PAGE>
SCHEDULE A
Ellen Oran Kaden
Executive's Residence: 211 Central Park West (Apt. 11G)
New York, NY 10024
Executive Position: The Executive shall have the title and
position of Executive Vice President,
General Counsel and Secretary.
Term: From June 27, 1994 through and including
June 30, 1999
Base Salary and Bonuses: The base salary and bonuses received by
Executive shall be determined by CBS but
shall be at least the following for each
period indicated:
BASE SALARY BONUS TOTAL
From June 27,
1994, to but
excluding $425,000 $300,000 $725,000
June 30, 1995:
From June 30,
1995, to but
excluding $445,000 $200,000 $645,000
June 30, 1996:
From June 30,
1996, to but
excluding $470,000 $210,000 $680,000
June 30, 1997:
From June 30,
1997, to but
excluding $490,000 $220,000 $710,000
June 30, 1998:
From June 30,
1998, to and
including $515,000 $235,000 $750,000
June 30, 1999:
<PAGE>
Executive Authority and Line of Reporting:
(a) Executive shall continue to report directly and only to the
Chief Executive Officer of CBS and the CBS Board of
Directors.
(b) Executive shall continue to have Executive's current
responsibilities and authority, including, without
limitation:
(i) the persons or departments set forth in the
organizational chart attached hereto as Exhibit 1 shall
continue to report to Executive;
(ii) responsibility for the oversight of all legal affairs
of CBS and the divisions, departments, subsidiaries and
affiliates thereof (collectively the "Corporation")
including, without limitation, all legal matters pertaining
to: all corporate transactions (acquisitions, dispositions,
joint ventures, partnerships, and so on); all claims
asserted by or against the Corporation and all litigation
and administrative proceedings involving or affecting the
Corporation; compliance with federal, state and local
statutory and regulatory requirements (including without
limitation, FCC, SEC, DOL, EEOC, NLRB and environmental
requirements); all contracts and agreements pertaining to
the acquisition or disposition of rights and interests in
programming and the production, licensing, distribution,
advertising and promotion of programming; pre-broadcast
clearances and review; labor and employment relations;
trademarks and copyrights; facilities and real estate; and
Washington affairs;
(iii) responsibility for the retention of outside counsel
and the supervision of all services supplied by outside
counsel; and
(iv) responsibility for all legal matters with respect to
the CBS Board of Directors (including, without limitation,
minutes, agendas, resolutions, annual meetings and formation
of committees).
- 2 -
<PAGE>
Exhibit 1 With Respect to Employment Agreement
Made as of June 27, 1994, between
CBS Inc. and Ellen Oran Kaden
Graphic material contained in Exhibit 1 to Schedule A depicts
organizational charts that set forth the persons or departments
that report to Ellen Oran Kaden.
<PAGE>
EXECUTION COPY
EMPLOYMENT AGREEMENT made as of June 27,
1994, by and between CBS INC. ("CBS"), a New
York Corporation having its principal office
at 51 West 52nd Street, New York, New York
10019 ("Principal Office"), and the person
("Executive") set forth on the signature page
hereof, who resides at the address specified
in Schedule A.
RECITALS:
WHEREAS, Executive is presently employed by CBS with
the title and in the position (such title and position, the
"Executive Position") specified in Schedule A; and
WHEREAS, CBS desires to secure the continued services
of Executive in such Executive Position, and Executive is willing
to continue to provide such services, upon the terms, provisions
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and
the mutual covenants hereinafter contained, CBS and Executive
agree as follows:
SECTION 1. Employment. CBS hereby agrees to continue
to employ executive in the Executive Position, and Executive
hereby accepts such employment.
SECTION 2. Term. The employment of Executive by CBS
as provided in Section 1 shall continue to and include the date
specified in Schedule A (the "Term"), unless further extended or
earlier terminated as hereinafter provided. The term shall
automatically be renewed for successive one calendar year terms
unless either party gives at least 180 calendar days written
notice before the end of the Term of its intention not to renew
the Term.
SECTION 3. Position and Authority. Executive shall
continue to be employed by CBS in the Executive Position and
shall have the responsibilities and authority specified in
Schedule A (including, without limitation, having the persons or
departments specified in Schedule A continue to report to
Executive), and shall continue to report directly and only to the
person specified in Schedule A (such responsibilities, authority
and the line of reporting, the "Executive's Authority and Line of
Reporting").
<PAGE>
SECTION 4. Place of Performance. Executive may not,
without Executive's consent, be required to perform Executive's
duties at any location that is more than 15 miles from CBS's
Principal Office, except for necessary travel on CBS business to
an extent substantially consistent with present business travel
obligations.
SECTION 5. Compensation and Expenses.
(a) Salary. Executive shall receive the base salary
specified in Schedule A. Base salary shall be payable bi-weekly
or in such other manner as CBS may designate for executives
generally.
(b) Bonuses. Executive shall receive the bonuses
specified in Schedule A, upon the terms and conditions specified
in Schedule A. Such bonuses shall be paid to Executive each
February 28 with respect to the bonus amount for the previous
calendar year.
(c) Benefits. Executive shall be included in all
plans now existing or hereafter adopted for the general benefit
of CBS employees, such as pension plans, medical (including,
without limitation, post-retirement medical coverage), dental and
disability plans, investment funds and group or other insurance
plans and benefits, if and to the extent that the Executive is
and remains eligible to participate thereunder, and subject to
the provisions of such plans as the same may be in effect from
time to time. It is agreed that Executive will be proposed for a
grant pursuant to the CBS Stock Rights Plan or any successor plan
thereto at each meeting of the Board during the Term when such
grants are proposed for comparable senior executives at CBS.
Executive will receive a grant at each such meeting at least
equal to the maximum grant approved for any other comparable
senior executive at CBS. Executive will be included in the
Senior Executive Life Insurance Plan and the Executive Incentive
Plan and any successor plans thereto and in any other CBS benefit
plans in which participation is limited to CBS executives in
positions comparable to the Executive Position.
(d) Vacation. Executive shall be entitled to at least
the same vacation as Executive is currently entitled.
(e) Perquisites. CBS shall make available to
Executive at least those perquisites presently granted Executive.
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<PAGE>
(f) Expenses. CBS shall reimburse Executive for all
reasonable out-of-pocket expenses incurred by Executive in
connection with the business of CBS and in performance of
Executive Duties under this Agreement.
SECTION 6. Termination by CBS. CBS shall have the
right to terminate Executive's employment at any time for
"Cause". For purposes of this Agreement, "Cause" shall mean (a)
termination by action of a majority of the members of the CBS
Board of Directors, acting on the written opinion of counsel,
because of Executive's willful and continued refusal, without
proper cause, to substantially perform Executive's duties under
this Agreement; or (b) the conviction of Executive of a felony or
of an act of fraud or embezzlement against CBS or any of its
divisions, subsidiaries or affiliates (which through lapse of
time or otherwise is not subject to appeal). Such termination
shall be effected by written notice thereof, personally hand
delivered by CBS to Executive, and, except as hereinafter
provided, shall be effective as of the thirtieth calendar day
after such notice; provided, however, that if within such 30
calendar day period Executive shall cease Executive's refusal and
shall use Executive's best efforts to perform such obligations,
the termination shall not be effective.
SECTION 7. Termination by Death. In the event
Executive dies during the Term, Executive's employment shall
terminate (effective on the date of Executive's death) and the
provisions of Section 10 shall be applicable.
SECTION 8. Termination by Disability. In the event
that Executive suffers a disability which prevents Executive from
substantially performing Executive's duties under this Agreement
for a period of at least 180 consecutive or non-consecutive
calendar days within and 365-calendar day period has elapsed, to
terminate Executive's employment hereunder upon 30 calendar days
written notice to Executive and the provisions of Section 10
shall be applicable.
SECTION 9. Termination by Executive. Termination.
Notwithstanding any other provision of this Agreement, Executive
may terminate Executive's employment by written notice served
upon CBS within 30 calendar days after Executive has knowledge of
an event constituting "Good Reason". For purposes of this
Agreement, the following circumstances shall constitute "Good
Reason":
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<PAGE>
(i) any action by CBS which results in a diminution,
except in insignificant respects, in the Executive Position
or in the Executive's Authority and Line of Reporting;
(ii) any failure by CBS to timely pay the amounts or
provide the benefits described in Section 5 of this
Agreement, other than an isolated failure not occurring in
bad faith and which is remedied promptly after receipt of
written notice thereof given by Executive;
(iii) any failure by CBS to require any successor to be
bound by the terms of this Agreement; or
(iv) any action by CBS that would result in a violation
of Section 4.
SECTION 10. Effect of Termination.
(a) For Cause; Without Good Reason; Death. In the
event of termination of this Agreement (i) by CBS for Cause, (ii)
by Executive without Good Reason or (iii) by reason of the death
or disability of the Executive, CBS shall pay Executive (or
Executive's beneficiary in the event of Executive's death) any
base salary or other compensation earned (and a pro rata portion
of the bonus payable with respect to the year in which
termination occurred) but not paid to Executive prior to the
effective date of such termination and, in the case of
termination by reason of death, CBS shall pay Executive's
beneficiary any death benefits that Executive is entitled to
under CBS policies in effect on Executive's date of death.
(b) Without Cause; For Good Reason. In the event of
termination of this Agreement (i) by CBS other than for Cause or
(ii) by Executive for Good Reason, CBS shall pay Executive the
sum of (A) the amount described in Section 10(a) of this
Agreement, (B) the amount equal to the total of the amount that
would have been payable as base salary for the remainder of the
Term, (C) all bonus compensation to which Executive would have
been entitled pursuant to Section 5(b) (less any amount of bonus
included in the calculation of the amount set forth in the
previous clause (A)), assuming full satisfaction of any objective
performance criteria, (D) an amount of additional pension
benefits such that Executive shall receive the amount of pension
benefits (calculated on an after-tax basis) to which Executive
would have been entitled had Executive remained employed by CBS
- 4 -
<PAGE>
in accordance with the terms of this Agreement, and continued to
participate in the pension plans maintained by CBS, throughout
the Term, and (E) the continuation during the Term of all
benefits (other than participation in the CBS Stock Rights Plan
or any successor plan) and perquisites set forth in Sections 5(c)
and (e), notwithstanding the fact that Executive may no longer by
an employee eligible to participate in one or more of the
employee benefit plans maintained by CBS.
(c) Disability. In the event of termination of this
Agreement by reason of disability, CBS shall continue to pay
Executive Executive's base salary at the time of such termination
for the remainder of the Term, reduced by the maximum amount of
salary which may be insured under the CBS Long Term Disability
Plan at the time of disability.
SECTION 11. Excise Taxes. In the event that Executive
shall have imposed upon him the tax which is imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the
"Code") or by any successor provision, by reason of any payment
of benefit which executive has received under this Agreement, CBS
shall pay as additional compensation to Executive that amount
which, after taking into account all taxes (including any tax
which shall be imposed by Code Section 4999) imposed upon such
amount by any federal, state or local government, shall be equal
to the amount of said tax imposed by Code Section 4999.
SECTION 12. Acceleration and Expiration of Options and
SARs. Any options to purchase capital stock of CBS ("Options")
or Stock Appreciation Rights ("SARs") granted by CBS to Executive
that have not yet become exercisable shall become exercisable
upon the earliest to occur of (a) the termination of Executive's
employment as a result of Executive's death or disability; (b)
the termination of Executive's employment by CBS other than for
Cause; and (c) the termination of Executive's employment with CBS
by Executive with Good Reason. Notwithstanding the foregoing,
all Options or SARs, whether currently exercisable or not, shall
expire and cease to be exercisable as follows:
(a) If CBS terminates Executive's employment for
Cause, immediately upon the effective date of such
termination;
(b) If Executive terminates Executive's employment
with CBS other than for Good Reason, immediately upon the
effective date of such termination;
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<PAGE>
(c) If Executive dies while employed by CBS, 6
calendar months after Executive's death (but in no event
later than the date the Term would expire without giving
effect to any automatic renewal); and
(d) If Executive's employment is terminated as a
result of disability, 6 calendar months after the effective
date of such termination (but in no event later than the
date the Term would expire without giving effect to any
automatic renewal).
SECTION 13. No Mitigation; No Offset. Executive shall
be under no obligation to mitigate damages or the amount of any
payment provided for under this Agreement by seeking other
employment or otherwise and there shall be no offset against
amounts due Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that
Executive may obtain.
SECTION 14. Indemnification. Throughout the Term and
thereafter, CBS shall indemnify Executive to the fullest extent
not prohibited by law against any and all expenses, fees
(including reasonable legal fees), liabilities and obligations of
any nature whatsoever paid or incurred by Executive in connection
with any suit, proceeding, inquiry, hearing or investigation
arising out of or related to (a) the fact that Executive is or
was an employee, officer, director, or agent of CBS; (b) anything
done or not done by Executive in any such capacity or (c)
enforcement of the terms of this Agreement.
SECTION 15. Exclusive Agreement; Conflicts.
(a) Exclusive Agreement. Executive agrees to devote all
customary business time and attention to the affairs of CBS,
except during vacation periods and reasonable periods of illness
or other incapacity consistent with the practices of CBS for
executives in comparable positions, and agrees that Executive's
services shall be completely exclusive to CBS during the term
hereof.
(b) Conflicts Policy. Executive acknowledges that
Executive has been furnished a copy of the "Policy Notes from the
President" concerning conflicts of interest ("Conflicts Policy"),
dated December 13, 1989, and a copy of the "CBS Policy Summary".
Executive further acknowledges that Executive has read and fully
understands all the requirements thereof, and acknowledges that
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<PAGE>
at all times during the Term Executive shall perform Executive's
services hereunder in full compliance with the Conflicts Policy
and the CBS Policy Summary and with any revisions thereof or
additions thereto.
SECTION 16. Entire Agreement. This Agreement contains
the entire understanding of the parties with respect to the
subject matter thereof, supersedes any and all prior agreements
of the parties with respect to the subject matter thereof, and
cannot be changed or extended except by a writing signed by both
parties hereto. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective legal
representatives, executors, heirs, administrators, successors and
assigns.
SECTION 17. Governing Law. This Agreement and all
matters and issues collateral thereto shall be governed by the
laws of the State of New York applicable to contracts performed
entirely therein.
SECTION 18. Severability. If any provision of this
Agreement, as applied to either party or to any circumstance,
shall be adjudged by a court to be void and unenforceable, the
same shall in no way affect any other provision of this Agreement
or the validity or enforceability thereof.
SECTION 19. Notices. All notices or other
communications hereunder shall be given in writing and shall be
deemed given if served personally or mailed by registered or
certified mail, return receipt requested, to the parties at their
respective addresses above indicated, or at such other address or
addresses as they may hereafter designate in writing.
SECTION 20. Condition to Effectiveness.
Notwithstanding the signature below of an authorized
representative of CBS, this Agreement shall not be effective
unless and until the CBS Board of Directors approves the
Agreement on or before July 31, 1994. All payments required to
be made under this Agreement on and from the date hereof trough
the date the CBS Board of Directors approves this Agreement that
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<PAGE>
are in excess of Executive's present compensation shall be made
to Executive within 3 business days of such approval.
IN WITNESS WHEREOF, the parties have executed this
Agreement on June 27, 1994.
CBS INC.,
By /s/ Laurence A. Tisch
_______________________
Laurence A. Tisch
By /s/ Peter W. Keegan
_______________________
Peter W. Keegan (Executive)
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<PAGE>
SCHEDULE A
Peter W. Keegan
Executive's Residence: 1192 Park Avenue (Apt. 6E)
New York, NY 10128
Executive Position: The Executive shall have the title and
position of Executive Vice President and
Chief Accounting and Financial Officer
of CBS.
Term: From June 27, 1994 through and including
December 31, 1999
Base Salary and Bonuses: The base salary and bonuses received by
Executive shall be determined by CBS but
shall be at least the following for each
period indicated:
BASE SALARY BONUS TOTAL
From June 27,
1994, to but
excluding $450,000 $320,000 $770,000
June 30, 1995:
From June 30,
1995, to but
excluding $472,000 $213,000 $685,000
June 30, 1996:
From June 30,
1996, to but
excluding $495,000 $225,000 $720,000
June 30, 1997:
From June 30,
1997, to but
excluding $520,000 $235,000 $755,000
June 30, 1998:
From June 30,
1998, to but
excluding $545,000 $245,000 $790,000
June 30, 1999:
<PAGE>
BASE SALARY BONUS TOTAL
From June 30,
1999, to and
including $287,500 $260,000 $547,500
December 31, 1999:
Executive Authority and Line of Reporting:
(a) Executive shall continue to report directly and only to the
Chief Executive Officer of CBS and the CBS Board of
Directors.
(b) Executive shall continue to have Executive's current
responsibilities and authority, including, without
limitation:
(i) the persons or departments set forth in the
organizational chart attached hereto as Exhibit 1 shall
continue to report to Executive; and
(ii) Executive shall continue to be responsible for
supervision, directly or indirectly, of all financial
personnel of CBS and all departments, divisions and
subsidiaries thereof.
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<PAGE>
Exhibit 1 With Respect to Employment Agreement
Made as of June 27, 1994, between
CBS Inc. and Peter W. Keegan
Graphic material contained in Exhibit 1 to Schedule A depicts
organizational charts that set forth the persons or departments
that report to Peter W. Keegan.
<PAGE>
AGREEMENT made as of the 23rd day of February, 1995, by and
between CBS Inc. ("CBS"), a New York corporation, having its
principal office at 51 West 52 Street, New York, New York 10019,
and PETER LUND ("Executive"), residing at 100 Warwick Road,
Bronxville, New York 10708.
W I T N E S S E T H:
WHEREAS, Executive has been performing services as an
executive of the CBS Broadcast Group ("CBG") of CBS pursuant to
an agreement between Executive and CBS, made as of January 31,
1994 (the "Existing Agreement"); and
WHEREAS, CBS desires to secure the services of Executive as
President of CBS Broadcast Group and Executive is willing to
perform such services, upon the terms, provisions and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the
mutual covenants hereinafter contained, it is agreed upon between
CBS and Executive as follows:
1. This Agreement supersedes, cancels and replaces the
Existing Agreement between CBS and Executive in all respects on
and as of February 23, 1995.
2. (a) CBS hereby employs Executive, and Executive hereby
accepts employment as President, CBS Broadcast Group for a term
commencing February 23, 1995 and ending March 1, 1998 (the
"Employment Term").
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<PAGE>
(b) Executive shall report directly and only to the
person who is Chairman, President and Chief Executive Officer of
CBS (all titles being currently held by Laurence A. Tisch) and
the Board of Directors of CBS. In the event of a corporate
reorganization or restructuring, Executive shall continue to be
employed by CBS as President of CBG and shall have the
responsibilities and authority specified in this Agreement, and
shall continue to report to the person(s) who hold the title(s)
of President and Chief Executive Officer. Subject to CBS's
policies, Executive shall have full discretion for the operations
of CBG. Financial commitments undertaken by Executive must
adhere to established practices and policies of CBS.
(c) All officers, employees and other personnel of CBG
shall report only to Executive either directly or through such
channels as Executive in his discretion shall specify. Executive
shall have full authority to manage CBG, including its personnel,
business and operations. Without limiting the generality of the
foregoing, Executive shall have the authority to initiate action,
hire, replace and terminate personnel in accordance with CBS
personnel policies and practices.
3. CBS agrees to pay Executive, and Executive agrees to
accept from CBS for his services hereunder, a total salary of
- 2 -<PAGE>
$1,750,000 per annum for the first contract year, $2,000,000 for
the second contract year, $2,200,000 for the third contract year,
and $42,308 for the period from the end of the third contract
year until March 1, 1998 (the "Stub Period"). Such total salary
is composed of a base salary and a guaranteed bonus payment for
each contract year, but shall be paid solely as salary for the
Stub Period.
(a) CBS agrees that Executive shall receive such base
salary at the rate of not less than $1,400,000 per annum for the
first contract year, not less than $1,600,000 per annum for the
second contract year and not less than $1,800,000 per annum for
the third contract year. Executive's base salary shall be
payable in equal bi-weekly installments or in such other manner
as CBS may designate for employees generally.
(b) CBS agrees that Executive shall receive bonus
payments of $350,000 for the first contract year, payable in
February of 1996, $400,000 for the second contract year, payable
in February of 1997, and $400,000 for the third contract year,
payable in February of 1998. The foregoing bonus payments are
intended to substitute for what otherwise would be due to
Executive under the CBS Executive Incentive Plan ("EIP") and
shall be credited against any such EIP award to Executive.
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<PAGE>
(c) Should Executive become disabled and unable to
render all or substantially all of his duties, he shall continue
to receive until March 1, 1998 his base salary (in effect at the
time of disability), reduced by the maximum amount of salary
which is insured under the CBS Long Term Disability ("LTD") Plan
at the time of disability. In addition, with respect to the year
in which Executive becomes disabled, he shall receive a pro rated
portion of his guaranteed bonus to the date of disability.
(d) In the event of the death of Executive, salary and
bonus payments to be paid pursuant to this Agreement shall cease
immediately. Notwithstanding the foregoing, the estate of
Executive shall receive all salary payments due through the date
of Executive's death, a pro rated portion of his guaranteed bonus
to the date of death, and all of the proceeds under all insurance
plans covering Executive pursuant to Paragraph 5 or a successor
plan.
4. The Company agrees to pay Executive as deferred
compensation a net amount equal to the sum of (i) $1,050,715.12
(representing the sum of $1,000,000 plus accrued interest on the
amount deferred under the Existing Agreement through February 23,
1995) plus (ii) interest thereon from February 23, 1995, which
shall be compounded annually. Such interest will be calculated
- 4 -<PAGE>
initially at the rate in effect on the date hereof for 13-week
United States Treasury Bills and thereafter adjusted on the first
day of each succeeding calendar quarter commencing April 1, 1995
to be, for the following quarter, the rate in effect on that date
for the 13-week United States Treasury Bills. The entire amount
of such deferred compensation is irrevocably vested in Executive
and shall be paid as a net amount when this Agreement ends
(including, without limitation, due to death, disability or under
paragraph 9 hereof) or when Executive leaves CBS for any reason,
whichever occurs first. Executive shall not, at any time, have a
right to accelerate payment of this deferred compensation. Such
deferred compensation shall not be funded and the Company shall
make such payments out of general corporate assets.
5. Executive shall be included in all plans now existing
or hereafter adopted for the general benefit of CBS Employees,
such as pension plans, investment funds and group medical,
disability or other insurance plans and benefits, subject to the
provisions of such plans as the same may be in effect from time
to time. Executive will also participate in other CBS benefit
plans, including the Executive Incentive Plan, Supplemental
Executive Retirement Plan (SERP) and the Stock Rights Plan or any
successor plans thereto, in which participation is limited to CBS
- 5 -<PAGE>
executives in positions comparable to or lesser than Executive's.
To the extent Executive participates in any benefit plan, such
participation shall be based upon Executive's base salary, unless
otherwise indicated in the plan document. It is agreed that
Executive will be recommended for a minimum grant of four
thousand (4,000) stock options each year of the Employment Term
pursuant to the CBS Stock Rights Plan and that CBS will use its
best efforts to cause the Board of Directors to exercise its sole
and exclusive authority to grant such options. The grant of
options to Executive shall be considered by the CBS Board of
Directors during the term of this Agreement when such grants are
proposed for comparable senior executives at CBS which shall be
no less frequently than annually. In no event shall Executive
receive a stock option grant which is less than the greater of
(i) 4,000 options or (ii) the number of options granted that year
to any other CBG executive.
6. Executive shall be entitled to 4 weeks vacation with
pay, and vacation shall be governed in accordance with CBS
policy.
7. Executive agrees to devote all customary business time
and attention to the affairs of CBS, except during vacation
periods and reasonable periods of illness or other incapacity
- 6 -<PAGE>
consistent with the practices of CBS for executives in comparable
positions, and agrees that his services shall be completely
exclusive to CBS during the term hereof.
8. Executive acknowledges that he has been furnished a
copy of the "Policy Notes from the President" concerning
conflicts of interest ("Conflicts Policy"), dated December 13,
1989, and a copy of the "CBS Policy Summary." Executive further
acknowledges that he has read and fully understands all the
requirements thereof, and acknowledges that at all times during
the Employment Period he shall perform his services hereunder in
full compliance with the Conflicts Policy and the CBS Policy
Summary and with any revisions thereof or additions thereto.
9. (a) If, during the term of this Agreement, CBS
properly terminates the employment of Executive for Cause, then
CBS's obligations hereunder, except pursuant to paragraphs 4 and
11 (provided that the exception for paragraph 11 shall not apply
to any claim, loss, liability, judgment or expense resulting from
the Cause for which Executive has been terminated), shall
terminate immediately. For all purposes of this Agreement,
"Cause" shall mean on the part of Executive any of the following:
(i) rendering business-related services for others, if such
violative act is not cured within fifteen (15) days after written
- 7 -<PAGE>
notice specifying the alleged breach in detail; (ii)
misappropriating or embezzling assets of CBS or committing an act
of fraud or other dishonesty as to CBS; (iii) being convicted in
a court of law of committing any other act of misappropriation,
embezzlement, fraud or dishonesty; (iv) failure to render
material services under this Agreement other than by reason of
disability, unless such failure is cured within fifteen (15) days
after written notice specifying the alleged breach in detail; or
(v) intentionally violating material policies and procedures of
CBS, which are consistently applied to other similarly situated
executives of CBS and are not inconsistent with this Agreement,
after Executive has received written notice that continued
violation of such policies could result in his termination.
(b) If, during the term of this Agreement, the
employment of Executive by CBS should be terminated by CBS other
than for Cause (as defined above) or it is terminated by
Executive for Good Reason (as hereafter defined):
(i) if it is at any time after March 1, 1996, but
during the term of this contract, then Executive shall
immediately receive a lump sum payment in an amount equal to the
balance of all base salary payments and guaranteed bonuses called
for by this Agreement or severance pay in accordance with CBS's
- 8 -<PAGE>
present policy, whichever is greater (and in no event shall the
amount of such payment be less than one (1) year of base salary
and bonus payment pursuant to this Agreement at Executive's then-
existing rates); or
(ii) if it is prior to March 1, 1996, then
Executive shall remain on payroll receiving the full amount of
base salary and guaranteed bonus provided for herein in an
advisory capacity until March 1, 1996 during which time he may
accept no other employment and, after which time, the terms
provided in paragraph 9(b)(i) shall apply.
(iii) "Good Reason" shall mean any of the
following (without the Executive's prior express written consent)
which, on written notice received from the Executive, CBS shall
not have cured within fifteen (15) days; (A) the repeated failure
of CBS to pay Executive any compensation due and owing hereunder
(it being agreed that written notice in respect of a repeated
failure need be given only one time); (B) removing the Executive
from his title or position as President of CBG; (C) inserting any
other person in the chain of authority between the Executive and
Laurence A. Tisch (or his replacement as Chairman, President and
Chief Executive Officer); (D) diminishing in any substantial way
the Executive's authority for the management and operation of
- 9 -<PAGE>
CBG, or (E) diminishing in any substantial way the functions of
CBG.
(c) If, during the term of this Agreement, Laurence A.
Tisch should cease for any reason to be the CEO of CBS and if
Executive's authority changes in a material and substantial
manner, Executive may resign from CBS, in which event the
provisions of paragraph 9(b) shall obtain. In no event shall the
provisions of this paragraph 9(d) be interpreted to diminish or
affect the rights of Executive under paragraph 9(b).
10. CBS and Executive agree that, beginning not later than
July 1, 1997, if this Agreement is then in effect, and if both
parties desire to continue their relationship, they will engage
in good faith discussions looking to an extension of this
Agreement, or to a successor employment agreement, to become
effective on or before the expiration of this Agreement.
11. CBS shall protect, indemnify and hold harmless
Executive and any entity claiming under or through him from and
against any claim, loss, liability, judgment and expense
(including reasonable attorneys' fees) arising from or relating
to Executive's employment by CBS.
12. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by
- 10 -<PAGE>
arbitration held in New York City and administered by the
American Arbitration Association in accordance with its
Commercial Arbitration Rules, and judgment on the award rendered
by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
13. This Agreement contains the entire understanding of the
parties with respect to the subject matter thereof, supersedes
any and all prior agreements of the parties with respect to the
subject matter thereof, and cannot be changed or extended except
by a writing signed by both parties hereto. This Agreement shall
be binding upon and inure to the benefit of the parties and their
respective legal representatives, executors, heirs,
administrators, successors and assigns. This Agreement and all
matters and issues collateral thereto shall be governed by the
laws of the State of New York applicable to contracts performed
entirely therein. If any provision of this Agreement, as applied
to either party or to any circumstance, shall be adjudged by a
court to be void and unenforceable, the same shall in no way
affect any other provision of this Agreement or the validity or
enforceability thereof.
14. All notices or other communications hereunder shall be
given in writing and shall be deemed given if served personally
- 11 -<PAGE>
or mailed by registered or certified mail, return receipt
requested, to the parties at their respective addresses above
indicated, or at such other address or addresses as they may
hereafter designate in writing. Any notice to Executive also
shall be sent in the same manner to:
Franklin, Weinrib, Rudell & Vassallo, P.C.
488 Madison Avenue
New York, New York 10022
Attn: Michael I. Rudell, Esq.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of February 23, 1995.
CBS INC.
By /s/Laurence A. Tisch
Laurence A. Tisch
/s/Peter A. Lund
Peter A. Lund
Executive
- 12 - <PAGE>
EXHIBIT 11
(page 1 of 2)
CBS INC. and SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share amounts)
___________________
PRIMARY
Year Ended December 31
1994 1993 1992
Earnings:
Income before cumulative effects
of changes in accounting principles $281,558 $326,188 $162,479
Post-tax interest on convertible
debentures* 3,288 12,259
Dividends on preference stock (11,263) (12,500) (12,500)
Accretion on Series B preference stock (153) (188) (188)
Income before cumulative effects
of changes in accounting principles
applicable to common shares 270,142 316,788 162,050
Cumulative effects of changes in
accounting principles _______ _______ (81,472)
Net income applicable to common shares $270,142 $316,788 $ 80,578
Shares:
Weighted average number of common
shares outstanding 72,210 73,985 67,115
Common stock equivalents:
Conversion of debentures* 3,245 9,765
Other _______ 460 200
Adjusted shares 72,210 77,690 77,080
Per share:
Income before cumulative effects
of changes in accounting principles $ 3.74 $ 4.08 $ 2.10
Cumulative effects of changes in
accounting principles ______ _____ (1.05)
Net income $ 3.74 $ 4.08 $ 1.05
*The debentures were converted in May 1993. Conversion was assumed for all
prior periods.<PAGE>
EXHIBIT 11
(page 2 of 2)
CBS INC. and SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share amounts)
____________________
FULLY DILUTED
Year Ended December 31
1994 1993 1992
Earnings:
Income before cumulative effects
of changes in accounting principles $281,558 $326,188 $162,479
Post-tax interest on convertible
debentures* _______ 3,288 12,259
Income before cumulative effects
of changes in accounting principles
applicable to common shares 281,558 329,476 174,738
Cumulative effects of changes in
accounting principles _______ _______ (81,472)
Net income applicable to common shares $281,558 $329,476 $ 93,266
Shares:
Weighted average number of common
shares outstanding 72,210 73,985 67,115
Common stock equivalents:
Conversion of debentures* 3,245 9,765
Other 511 460 200
Assumed conversion of preference B stock 3,846 4,320 4,320
Adjusted shares 76,567 82,010 81,400
Per share:
Income before cumulative effects of
changes in accounting principles $ 3.68 $ 4.02 $ 2.15
Cumulative effects of changes in
accounting principles _____ _____ (1.00)
Net income $ 3.68(a) $ 4.02(a) $ 1.15(b)
*The debentures were converted in May 1993. Conversion was assumed for all
prior periods.
(a) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is not required by APB Opinion No. 15 because it
results in dilution of less than 3%.
(b) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is contrary to APB Opinion No. 15 because it
produces an anti-dilutive effect.<PAGE>
EXHIBIT 12
CBS Inc.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
YEAR ENDED DECEMBER 31,
1994(1) 1993 1992 1991 1990(3)
Income (loss) from Continuing
Operations before
Income Taxes $437.0 $479.3 $227.0 ($178.6) $101.3
Add:
Fixed charges 64.7 65.6 89.8 78.3 88.2
Amortization of Capitalized
Interest 6.4 4.3 3.4 3.7 4.3
Less:
Capitalized Interest (3.6) (6.4) (10.2) (8.4) (8.3)
Adjusted Earnings $504.5 $542.8 $310.0 $(105.0) $185.5
Interest Cost (2) $50.6 $48.8 $71.9 $58.8 $68.5
Interest Factor Portion of Rentals 14.1 16.8 17.9 19.5 19.7
Fixed Charges $64.7 $65.6 $89.8 $78.3 $88.2
Ratio of Earnings to Fixed Charges 7.80:1 8.27:1 3.45:1 * 2.10:1
(1) In connection with its $1.1 billion common stock repurchase, consummated in
September 1994, the Company included unaudited pro forma net income and
earnings per share of common stock for the year ended December 31, 1994 in
footnote 12 of its 1994 Annual Report. The Ratio of Earnings to Fixed
Charges for this pro forma information was 6.92 to 1.
(2) Includes amortization of debt discount and amortization of debt issue
expenses.
(3) In connection with its $2 billion common stock repurchase, consummated in
February 1991, the Company included a 1990 Unaudited Pro Forma Consolidated
Condensed Income Statement in footnote 15 to its 1990 Annual Report. The
Ratio of Earnings to Fixed Charges for this income statement was .34 to 1.
(*) The ratio of earnings to fixed charges is less than a one-to-one coverage
and the earnings are inadequate to cover fixed charges.
The amount of coverage deficiency is $183.3.
<PAGE>
SUBSIDIARIES OF CBS INC.*
% of Voting
State or Shares Held by
Country of Immediate Con-
Incorporation trolling Parent
------------- ---------------
Amadea Film Productions, Inc. Texas l00
Aspenfair Music, Inc. California l00
Bala Cynwyd Associates** Pennsylvania 50
Beverlyfax Music, Inc. California l00
Black Rock Enterprises Inc. New York 100
Caroline Film Productions, Inc. California 100
CBS Broadcast International of Canada 100
Canada Limited
CBS Broadcast Services Ltd. England 100
CBS Pension Trustees U.K. England 100
CBS FMX Stereo Inc. New York l00
CBS/FOX Company, The** New York 50
CBS News Communications Inc. New York 100
CBS News Special Projects Inc. New York 100
CBS Overseas Inc. New York 100
CBS Urban Renewal Corporation New Jersey l00
Columbia Television, Inc. New York l00
Erica Film Productions, Inc. California 100
Granite Holdings Inc. New York 100
Katy Film Productions, Inc. North Carolina 100
Lauren Film Productions, Inc. New York 100
Meadowlands Parkway Associates** New Jersey 50
Midwest Sports Channel Inc. Minnesota l00
Network Television Association*** Delaware 33.33
Radford Productions Limited England 100
Radford Studio Center Inc. California 100
Station Holdings A Inc. Delaware 100
Station Partners** Delaware 1
Station Holdings B Inc. Delaware 100
Station Partners** Delaware 99
-----------------------------------------------------------------
* Inactive subsidiaries of the Registrant are not included in
this listing.
** General partnership
*** Non-profit trade association
EXHIBIT 99
To Be Incorporated By Reference Into Form S-8
Registration Statements Nos. 2-87270, 2-58540 and 2-33-2098
UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represents a fundamental change
in the information set forth in the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the registration statement is on Form S-3 or Form
S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
<PAGE>
- 2 -
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
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