10-K 1 10-K REPORT FOR 12/31/94 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). 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. - 2 - 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. - 3 - 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 - 4 - 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 - 5 - 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 - 6 - 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 - 7 - 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, - 8 - 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. - 9 - 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. - 10 - 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. - 11 - 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 - 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 - "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 - 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 - 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 - 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 - EX-2 2 EX-2-A 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 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. 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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. 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. 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 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 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); 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 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 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 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 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 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 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 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 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 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; 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 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 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 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 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 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 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 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 EX-2 3 EX-2-B CONFORMED COPY ASSET EXCHANGE AGREEMENT between NBC STATIONS MANAGEMENT, INC. and STATION PARTNERS Dated as of November 21, 1994 CMC-8685 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) 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) 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) 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) 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) 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) 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 - 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 - (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 - 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 - (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 - (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 - 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 - (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 - 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 - (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 - (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 - 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), - 12 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - (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 - 38 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 49 - 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 - (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", - 51 - 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 - 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, - 53 - 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 - 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. - 55 - 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 - 56 - 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, - 57 - 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 - 58 - 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 - 59 - 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, - 60 - 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 - 61 - 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 - 62 - 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 - 63 - 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 - 64 - 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 - 65 - 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 - 66 - 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 - 67 - 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 - 68 - 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 - 69 - 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 - 70 - 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 - 71 - 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 - 72 - 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 - 73 - 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, - 74 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - CONFORMED COPY PURCHASE AGREEMENT between NBC SUBSIDIARY (KUTV-TV), INC. and STATION PARTNERS Dated as of November 21, 1994 CMC-8686 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) 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) 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) 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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.; - 10 - (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 - 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. - 12 - 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 - 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 - 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 - 15 - 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 - 16 - 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 - 17 - 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 - 18 - 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 - 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. - 20 - 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 - (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 - 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. - 23 - 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 - (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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - "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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - 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 - EX-4 4 EX-4-B(VI) CONFORMED COPY CBS INC. _____________________________ CREDIT AGREEMENT Dated as of August 26, 1994 ______________________________ THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Agent CMC-8378 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) 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) 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) 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - "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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - 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 - (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 - 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 - 58 - 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 - 59 - 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 - 60 - 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 - 61 - 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 - 62 - 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 - 63 - 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 - 64 - 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 - 65 - (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 - 66 - 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 - 67 - 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 - 68 - 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 - 69 - 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 - 70 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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. - 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: - 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 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: - 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 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. - 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: - 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 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): - 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 - 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: - 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, 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 - 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 - 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, 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. - 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. 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. - 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%). 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 - 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_________________________ EX-10 5 EX-10-C CBS PENSION PLAN AS AMENDED AND RESTATED (INCLUDING AMENDMENTS THROUGH JANUARY 1, 1995) CMC-8612 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) 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) 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) 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) 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) 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - APPENDIX A--ACTUARIAL EQUIVALENCIES CBS PENSION PLAN Interest: 6% per annum Mortality: 1971 TPF&C Forecast Mortality - 61 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - 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 - (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 - 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 - (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 - 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 - 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 - EX-10 6 EX-10-H 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 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) (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) 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) 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) 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) 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - 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. - 30 - (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 - 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 - 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 - 33 - 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 - 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 - (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 - 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 - 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 - 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 - 39 - 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 - 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 - 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. -42 - 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 - 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 - 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 - 45 - 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. - 46 - 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. - 47 - 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 - 48 - 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. - 49 - 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. - 50 - 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 - 51 - 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 - 52 - 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. - 53 - 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 - 54 - 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. - 55 - 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 - 56 - 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 - 57 - 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 - 58 - 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 - 59 - 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 - 60 - 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 - 61 - 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 - 62 - 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. - 63 - 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 - 64 - 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 - 65 - 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 - 66 - 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 - 67 - 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 - 68 - 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. - 69 - 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 - 70 - 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 - 71 - 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 - 72 - 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 - 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 - 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 - EX-10 7 EX-10-K 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 - (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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - APPENDIX A Name of Non-Qualified Deferred Compensation Plan: The Tisch Deferred Compensation Plan EX-10 8 EX-10-L 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - "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 - 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 - 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 - 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 - 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 - 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 - (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 - 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 - (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 - 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 - (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 - 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 - (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 - 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 - 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 - (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 - (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 - 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 - 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 - APPENDIX A Name of Non-Qualified Deferred Compensation Plan: CBS Supplemental Employee Investment Fund EX-10 9 EX-10-N 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 - 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 - 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 - 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 - 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 - 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 - 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 - EX-10 10 EX-10-O 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 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 - 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 - 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 - 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 - 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 - EX-10 11 EX-10-P 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. 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 - 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 - 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 - 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 - EX-10 12 EX-10-Q 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 - 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 - 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 - 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 - 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 - 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 - EX-10 13 EX-10-R 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 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - EX-10 14 EX-10-S 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 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 - 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 - 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 - 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 - EX-10 15 EX-10-T 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"). 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 - (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": - 3 - (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 - 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 - (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 - 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 - 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 - 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: 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 - 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. EX-10 16 EX-10-U 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"). 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 - (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": - 3 - (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 - 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 - (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 - 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 - 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) - 8 - 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: 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. - 2 - 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. EX-10 17 EX-10-V 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"). - 1 - (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 - $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. - 3 - (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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - EX-11 18 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. 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. EX-12 19 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. EX-21 20 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 EX-99 21 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. - 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. EX-27 22
5 1,000,000 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 15 87 436 13 0 948 1005 486 2160 793 507 197 90 0 80 2160 3712 3725 2823 2823 0 0 47 437 155 282 0 0 0 282 3.74 3.74