Surviving Corporation, (3) Christina Spade, the Executive Vice President, Chief Financial Officer of CBS, will serve as Executive Vice President and Chief Financial Officer of the Surviving
Corporation and (4) Christa A. DAlimonte, the Executive Vice President, General Counsel and Secretary of Viacom, will serve as Executive Vice President, General Counsel and Secretary of the Surviving Corporation. As of the Effective Time,
Mr. Ianniello and Mses. DAlimonte and Spade will report to Mr. Bakish.
The Merger Agreement further provides that, as of
the Effective Time, the Surviving Corporation Board will consist of thirteen members, comprised of (1) six directors of CBS in office as of immediately prior to the Effective Time (together with any of their replacements who are recommended and
approved in accordance with the bylaws of the Surviving Corporation, the
Initial CBS Directors
), as follows: Candace K. Beinecke, Barbara M. Byrne, Brian Goldner, Linda M. Griego, Susan Schuman and Frederick O. Terrell, (2) four
directors of Viacom in office as of immediately prior to the Effective Time (together with any of their replacements who are recommended and approved in accordance with the bylaws of the Surviving Corporation, the
Initial Viacom
Directors
), as follows: Judith McHale, Ronald Nelson, Charles E. Phillips, Jr. and Nicole Seligman, (3) two directors designated by NAI, as follows: Shari E. Redstone, who will serve as the Surviving Corporations non-executive Chair,
and Robert N. Klieger, and (4) Mr. Bakish, as Chief Executive Officer of the Surviving Corporation (the foregoing directors, the
Post-Merger Directors
). If any of the foregoing Initial CBS Directors or Initial Viacom Directors, as
of immediately prior to the Effective Time, (A) is not a director of CBS (in the case of an Initial CBS Director) or of Viacom (in the case of an Initial Viacom Director) who is unaffiliated with NAI, (B) fails to qualify as an independent
director under the listing standards of the New York Stock Exchange and the applicable rules of the Securities and Exchange Commission (
SEC
) or (C) declines to or is otherwise incapable of serving on the Surviving
Corporation Board for any reason, the special transaction committee of CBS (in the case of an Initial CBS Director) or Viacom (in the case of an Initial Viacom Director) will be entitled to select an alternative member of the Surviving Corporation
Board who is (x) independent under applicable stock exchange and SEC rules and unaffiliated with NAI (an
Unaffiliated Independent Director
), (y) reasonably acceptable to the special transaction committee of the other
party and (z) acceptable to NAI, and such director will become, upon appointment, an Initial CBS Director or an Initial Viacom Director, as applicable. In addition, the Merger Agreement provides that the Surviving Corporation will have, as of the
Effective Time, (1) an Audit Committee, chaired by Ms. Byrne, an Initial CBS Director, (2) a Compensation Committee, chaired by Mr. Goldner, an Initial CBS Director, and (3) a Nominating and Governance Committee, chaired by Ms. Seligman, an Initial
Viacom Director.
As of the Effective Time, the certificate of incorporation and bylaws of the Surviving Corporation will be amended and
restated. The amended and restated bylaws will provide that, among other things, for a period of two years following the closing of the Merger (the
Closing
) and the other transactions contemplated by the Merger Agreement
(collectively, the
Transactions
), unless the Surviving Corporation Board adopts a resolution to the contrary that is approved by (1) a majority of the Unaffiliated Independent Directors then in office, (2) two of the Initial CBS
Directors then in office and (3) two of the Initial Viacom Directors then in office (clauses (1) through (3), collectively, the
Requisite Approval
), (i) the number of directors constituting the entire Surviving Corporation Board
will be fixed at thirteen members and (ii) any vacancy on the Surviving Corporation Board resulting from the departure of any Initial CBS Director or any Initial Viacom Director will be filled by a nominee approved with the Requisite Approval upon
the recommendation of the Nominating and Governance Committee (acting by a majority vote) following customary public company practices. In the event of any vacancy on the Surviving Corporation Board resulting from the departure of any NAI-affiliated
director, such vacancy may be filled by the stockholders of the Surviving Corporation in accordance with the amended and restated bylaws and the amended and restated certificate of incorporation, which will reflect certain of these and other
governance provisions.
As of the Effective Time, the bylaws of the Surviving Corporation will also provide that the approval of the
Surviving Corporation Board acting with the Requisite Approval will be required for, among other things, the termination or removal, or the material modification of the duties, authority, reporting relationships or compensation, of certain executive
officers for a period of two years following the Closing (or, in the case of the Chairman and Chief Executive Officer of CBS, 15 months).
No
Solicitation; Change of Recommendation
The Merger Agreement provides that, during the period from the date of the Merger Agreement
until the Effective Time or, if earlier, the termination of the Merger Agreement as permitted by its terms, each of CBS and Viacom will be subject to certain restrictions on its ability to solicit alternative acquisition proposals from third
parties, to provide
non-public
information to third parties, to engage in discussions with third parties regarding alternative acquisition proposals and to enter into any agreement constituting a Comet
Acquisition Proposal (as defined in the Merger Agreement) or a Venus Acquisition Proposal (as defined in the Merger Agreement), as applicable, subject to customary exceptions. In addition, the CBS Board and the Viacom Board have committed to
recommend that their respective stockholders adopt the Merger Agreement, subject to customary exceptions permitting a change of recommendation in certain circumstances.
Conditions
Consummation of the Merger is
subject to certain customary conditions, including adoption of the Merger Agreement by the holders of a majority of the outstanding shares of CBS Class A Common Stock and by the holders of a majority of the outstanding shares of Viacom
Class A Common Stock, the shares of CBS Common Stock to be issued in the Merger having been approved for listing on the New York Stock Exchange, the effectiveness of the registration statement of CBS pursuant to which shares of CBS Common Stock
to be issued in the Merger will be registered with the SEC, the receipt of specified regulatory approvals, the receipt by each of CBS and Viacom of certain tax opinions and the resignation of certain directors and officers of CBS and Viacom. The
obligation of each of CBS and Viacom to consummate the Merger is also conditioned upon the other partys representations and warranties being true and correct (subject to certain materiality qualifications, including qualifications with respect
to a Venus Material Adverse Effect and qualifications with respect to a Comet Material Adverse Effect (as such terms are defined in the Merger Agreement), as applicable), and the other party having performed in all material respects its obligations
under the Merger Agreement.
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